SAN JOSE, CA – Flex posted fiscal first quarter 2020 net sales of $6.2 billion, down 3% year-over-year.
For the quarter ended June 28, GAAP net income was $45 million, down 61.2% compared to the same period last year. Adjusted operating income was $208 million, an increase of 10.6%.
“For the first quarter, I am pleased we achieved adjusted EPS within guidance range and 11% year-over-year growth in adjusted operating profit, with free cash flow of $114 million,” said CEO Revathi Advaithi. “We are repositioning our portfolio to reduce exposure to high-volatility, low-margin business, while investing in design-led wins and higher-margin segments. This acceleration of our strategy to reposition our mix and drive profitable growth, combined with disciplined execution, positions Flex well for the future.”
Flex ended the quarter with approximately $1.9 billion of cash on hand and total debt of approximately $3.2 billion.
The company expects fiscal second quarter revenue of $6.1 billion to $6.5 billion and GAAP loss before income taxes of $15 million to $110 million.
As a result of recent geopolitical developments and uncertainties, primarily impacting one customer in China, Flex has seen a reduction in demand for products assembled for that customer. Due to these circumstances, the company has decided to accelerate its decision to reduce its exposure to certain high-volatility products in both China and India. The company also initiated targeted activities to restructure its business to further reduce and streamline its cost structure.
Flex expects to incur additional restructuring and other charges throughout fiscal 2020 currently estimated in the range of $145 million to $265 million.