ANAHEIM, CA -- Multi-Fineline Electronix today reported fiscal first-quarter net income was $13.5 million, down from $15.1 million a year ago. For the period ended, Dec. 31, the flexible printed circuit fabricator and EMS provider reported net sales of $239.3 million, topping the high end of company guidance but down from $241.2 million the prior year.

Gross margin was 12.2%, down from 14.3% in fiscal 2011, on higher capacity related costs to support anticipated 2012 customer demand, rising labor costs and yuan appreciation. Sequentially, gross margin increased 220 basis points primarily due to improved capacity utilization.

Cash flow from operations was $5.7 million.

For its second fiscal 2012 quarter, the company expects net sales of $210 million and $225 million, and gross margin if 10.5% and 11.5%. Chief executive Reza Meshgin said, "We anticipate continued strong demand for our flex assemblies for both smartphones and tablets in the second quarter of fiscal 2012.  However, we expect lower sequential sales to reduce our capacity utilization and in turn, gross margin during the quarter.  Looking further ahead, with increasing opportunities in the smartphone and tablet industries, we continue to expect year-over-year top line growth and sequential margin expansion in the second half of 2012."