SAN JOSE, Calif., May 5, 2021 /PRNewswire/ -- Flex
(NASDAQ: FLEX) today announced results for its fourth quarter and
fiscal year ended March 31, 2021.
Fourth Quarter Fiscal Year 2021 Highlights:
- Net Sales: $6.3 billion
- GAAP Income Before Income Taxes: $260
million
- Adjusted Operating Income: $310
million
- GAAP Net Income: $240
million
- Adjusted Net Income: $248
million
- GAAP Earnings Per Share: $0.47
- Adjusted Earnings Per Share: $0.49
Fiscal Year 2021 Results of Operations:
- Net Sales: $24.1 billion
- GAAP Income Before Income Taxes: $714
million
- Adjusted Operating Income: $1.0
billion
- GAAP Net Income: $613
million
- Adjusted Net Income: $795
million
- GAAP Earnings Per Share: $1.21
- Adjusted Earnings Per Share: $1.57
An explanation and reconciliation of non-GAAP financial measures
to GAAP financial measures is presented in Schedules II and V
attached to this press release.
"We are very pleased with our strong fourth quarter results,"
said Revathi Advaithi, Chief Executive Officer for Flex. "Our
progress on our multi-year transformation during fiscal 2021 is
reflected in our overall solid performance during a very
challenging global environment this past year, and I am confident
that we will continue our positive momentum in FY22."
First Quarter Fiscal Year 2022 Guidance
- Revenue: $5.9 billion to
$6.3 billion
- GAAP Income Before Income Taxes: $160
million to $200 million
- Adjusted Operating Income: $240
million to $280 million
- GAAP EPS: $0.26 to $0.32 which includes $0.05 for stock-based compensation expense and
$0.03 for net intangible
amortization
- Adjusted EPS: $0.34 to
$0.40
Fiscal Year 2022 Guidance
- Revenue: $25 billion to
$26 billion
- GAAP EPS: $1.30 to $1.45 which includes $0.21 for stock-based compensation expense and
$0.09 for net intangible
amortization
- Adjusted EPS: $1.60 to
$1.75
Webcast and Conference Call
The Flex management team will host a conference call today at
8:00 AM (PT) / 11:00 AM (ET), to review fourth quarter and
fiscal 2021 results. A live webcast of the event and slides will be
available on the Flex Investor Relations website at
http://investors.flex.com. An audio replay and transcript will also
be available after the event on the Flex Investor Relations
website.
About Flex
Flex (Reg. No. 199002645H) is the manufacturing partner of
choice that helps a diverse customer base design and build products
that improve the world. Through the collective strength of a global
workforce across 30 countries and responsible, sustainable
operations, Flex delivers technology innovation, supply chain, and
manufacturing solutions to diverse industries and end markets.
Contacts
Investors & Analysts
David Rubin
Vice President, Investor Relations
(408) 577-4632
David.Rubin@flex.com
Media & Press
Silvia Gianelli
Senior Director, Corporate Communications
(408) 797-7130
Silvia.Gianelli@flex.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. securities laws, including statements related
to future expected revenues and earnings per share. These
forward-looking statements involve risks and uncertainties that
could cause the actual results to differ materially from those
anticipated by these forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements. These risks include: the effects of the COVID-19
pandemic on our business, results of operations and financial
condition; that we many not achieve our future revenues and
earnings; the effects that the current macroeconomic environment
could have on our business and demand for our products;
uncertainties and risks relating to our ability to successfully
complete a transaction for our Nextracker business, including the
potential initial public offering of our Nextracker business,
including the possibility that we may not be able to consummate the
transaction on the expected timeline or at all, or that we will
achieve the anticipated benefits of the transaction; the effects
that current credit and market conditions could have on the
liquidity and financial condition of our customers and suppliers,
including any impact on their ability to meet their contractual
obligations to us; the challenges of effectively managing our
operations, including our ability to control costs and manage
changes in our operations; litigation and regulatory investigations
and proceedings; our compliance with legal and regulatory
requirements; the possibility that benefits of the Company's
restructuring actions may not materialize as expected; that the
expected revenue and margins from recently launched programs may
not be realized; our dependence on industries that continually
produce technologically advanced products with short product life
cycles; the short-term nature of our customers' commitments and
rapid changes in demand may cause supply chain and other issues
which adversely affect our operating results; our dependence on a
small number of customers; the impact of component shortages,
including their impact on our revenues; our industry is extremely
competitive; we may be exposed to financially troubled customers or
suppliers; geopolitical risk, including the termination and
renegotiation of international trade agreements and trade policies,
including the impact of tariffs and related regulatory actions; the
success of certain of our activities depends on our ability to
protect our intellectual property rights and we may be exposed to
claims of infringement or breach of license agreements; a breach of
our IT or physical security systems, or violation of data privacy
laws, may cause us to incur significant legal and financial
exposure; we may be exposed to product liability and product
warranty liability; and that recently proposed changes or future
changes in tax laws in certain jurisdictions where we operate could
materially impact our tax expense. In addition, the COVID-19
pandemic increases the likelihood and potential severity of many of
the foregoing risks.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities. Any securities to
be offered in any offering may not be sold nor may offers to buy be
accepted prior to the time a registration statement becomes
effective.
Additional information concerning these, and other risks is
described under "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our
annual report on Form 10-K for the fiscal year ended March 31, 2020 and our quarterly report on Form
10-Q for the fiscal quarter ended December
31, 2020. The forward-looking statements in this press
release are based on current expectations and Flex assumes no
obligation to update these forward-looking statements. Our share
repurchase program does not obligate the Company to repurchase a
specific number of shares and may be suspended or terminated at any
time without prior notice.
SCHEDULE
I
|
|
FLEX
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
Three-Month
Periods Ended
|
|
|
March 31,
2021
|
|
March 31,
2020
|
GAAP:
|
|
|
|
|
Net sales
|
$
|
6,266
|
|
|
$
|
5,484
|
|
|
Cost of
sales
|
5,732
|
|
|
5,103
|
|
|
Restructuring
charges
|
25
|
|
|
15
|
|
|
Gross
profit
|
509
|
|
|
366
|
|
|
Selling, general and
administrative expenses
|
211
|
|
|
201
|
|
|
Intangible
amortization
|
15
|
|
|
15
|
|
|
Restructuring
charges
|
1
|
|
|
2
|
|
|
Interest, net
(2)
|
36
|
|
|
36
|
|
|
Other charges
(income), net (2)
|
(14)
|
|
|
67
|
|
|
Income before income
taxes
|
260
|
|
|
45
|
|
|
Provision for income
taxes
|
20
|
|
|
(3)
|
|
|
Net Income
|
$
|
240
|
|
|
$
|
48
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
GAAP
|
$
|
0.47
|
|
|
$
|
0.10
|
|
|
Non-GAAP
|
$
|
0.49
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
Diluted shares used
in computing per share amounts
|
507
|
|
|
506
|
|
|
|
|
|
|
|
See Schedule II for
the reconciliation of GAAP to non-GAAP financial measures. See the
accompanying notes on
Schedule V attached to this press release.
|
|
|
|
|
|
FLEX
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
Twelve-Month
Periods Ended
|
|
|
March 31,
2021
|
|
March 31,
2020
|
GAAP:
|
|
|
|
|
Net sales
|
$
|
24,124
|
|
|
$
|
24,210
|
|
|
Cost of
sales
|
22,349
|
|
|
22,681
|
|
|
Restructuring
charges
|
88
|
|
|
190
|
|
|
Gross
profit
|
1,687
|
|
|
1,339
|
|
|
Selling, general and
administrative expenses
|
817
|
|
|
834
|
|
|
Intangible
amortization
|
62
|
|
|
64
|
|
|
Restructuring
charges
|
13
|
|
|
26
|
|
|
Interest, net
(2)
|
148
|
|
|
174
|
|
|
Other charges
(income), net (2)
|
(67)
|
|
|
82
|
|
|
Income before income
taxes
|
714
|
|
|
159
|
|
|
Provision for income
taxes
|
101
|
|
|
71
|
|
|
Net Income
|
$
|
613
|
|
|
$
|
88
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
GAAP
|
$
|
1.21
|
|
|
$
|
0.17
|
|
|
Non-GAAP
|
$
|
1.57
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
Diluted shares used
in computing per share amounts
|
506
|
|
|
512
|
|
|
|
|
|
|
|
See Schedule II for
the reconciliation of GAAP to non-GAAP financial measures. See the
accompanying notes on
Schedule V attached to this press release.
|
|
|
|
|
|
SCHEDULE
II
|
|
|
FLEX
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (1)
|
(In millions,
except per share amounts) *
|
|
|
|
|
|
|
|
Three-Month
Periods Ended
|
|
|
March 31,
2021
|
|
March 31,
2020
|
|
|
|
|
|
GAAP income before
income taxes
|
$
|
260
|
|
|
$
|
45
|
|
|
Intangible
amortization
|
15
|
|
|
15
|
|
|
Stock-based
compensation expense
|
18
|
|
|
18
|
|
|
Customer related
asset impairments (recoveries)
|
(3)
|
|
|
11
|
|
|
Restructuring
charges
|
26
|
|
|
17
|
|
|
Legal and
other
|
(27)
|
|
|
(2)
|
|
|
Interest, net
(2)
|
36
|
|
|
36
|
|
|
Other charges
(income), net (2)
|
(14)
|
|
|
67
|
|
Non-GAAP operating
income
|
$
|
310
|
|
|
$
|
207
|
|
|
|
|
|
|
GAAP provision for
(benefit from) income taxes
|
$
|
20
|
|
|
$
|
(3)
|
|
|
Intangible
amortization benefit
|
2
|
|
|
2
|
|
|
Other tax related
adjustments
|
14
|
|
|
(12)
|
|
|
Tax benefit on
restructuring and other
|
5
|
|
|
41
|
|
Non-GAAP provision
for income taxes
|
$
|
40
|
|
|
$
|
27
|
|
|
|
|
|
|
GAAP net
income
|
$
|
240
|
|
|
$
|
48
|
|
|
Intangible
amortization
|
15
|
|
|
15
|
|
|
Stock-based
compensation expense
|
18
|
|
|
18
|
|
|
Restructuring
charges
|
26
|
|
|
17
|
|
|
Customer related
asset impairments (recoveries)
|
(3)
|
|
|
11
|
|
|
Legal and
other
|
(27)
|
|
|
(2)
|
|
|
Interest and other
charges, net
|
1
|
|
|
66
|
|
|
Adjustments for
taxes
|
(21)
|
|
|
(31)
|
|
Non-GAAP net
income
|
$
|
248
|
|
|
$
|
143
|
|
Diluted earnings
per share:
|
|
GAAP
|
$
|
0.47
|
|
|
$
|
0.10
|
|
|
Non-GAAP
|
$
|
0.49
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
See the accompanying
notes on Schedule V attached to this press release.
|
|
*Amounts may not sum
due to rounding
|
|
|
|
|
|
|
|
|
FLEX
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (1)
|
(In millions,
except per share amounts) *
|
|
|
|
|
|
|
|
Twelve-Month
Periods Ended
|
|
|
March 31,
2021
|
|
March 31,
2020
|
|
|
|
|
|
GAAP income before
income taxes
|
$
|
714
|
|
|
$
|
159
|
|
|
Intangible
amortization
|
62
|
|
|
64
|
|
|
Stock-based
compensation expense
|
79
|
|
|
71
|
|
|
Customer related
asset impairments (recoveries)
|
(7)
|
|
|
106
|
|
|
Restructuring
charges
|
101
|
|
|
216
|
|
|
Legal and
other
|
1
|
|
|
26
|
|
|
Interest, net
(2)
|
148
|
|
|
174
|
|
|
Other charges
(income), net (2)
|
(67)
|
|
|
82
|
|
Non-GAAP operating
income
|
$
|
1,031
|
|
|
$
|
898
|
|
|
|
|
|
|
GAAP provision for
income taxes
|
$
|
101
|
|
|
$
|
71
|
|
|
Intangible
amortization benefit
|
8
|
|
|
8
|
|
|
Other tax related
adjustments
|
11
|
|
|
(31)
|
|
|
Tax benefit on
restructuring and other
|
9
|
|
|
56
|
|
Non-GAAP provision
for income taxes
|
$
|
129
|
|
|
$
|
105
|
|
|
|
|
|
|
GAAP net
income
|
$
|
613
|
|
|
$
|
88
|
|
|
Intangible
amortization
|
62
|
|
|
64
|
|
|
Stock-based
compensation expense
|
79
|
|
|
71
|
|
|
Restructuring
charges
|
101
|
|
|
216
|
|
|
Customer related
asset impairments (recoveries)
|
(7)
|
|
|
106
|
|
|
Legal and
other
|
1
|
|
|
26
|
|
|
Interest and other
charges (income), net
|
(27)
|
|
|
93
|
|
|
Adjustments for
taxes
|
(28)
|
|
|
(34)
|
|
Non-GAAP net
income
|
$
|
795
|
|
|
$
|
632
|
|
Diluted earnings
per share:
|
|
|
|
|
GAAP
|
$
|
1.21
|
|
|
$
|
0.17
|
|
|
Non-GAAP
|
$
|
1.57
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
See the accompanying
notes on Schedule V attached to this press release.
|
|
|
|
*Amounts may not sum
due to rounding
|
|
|
|
|
|
|
|
|
SCHEDULE
III
|
|
|
FLEX
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In
millions)
|
|
|
|
|
|
|
|
As of March 31,
2021
|
|
As of March 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,637
|
|
|
$
|
1,923
|
|
|
Accounts receivable,
net of allowance for doubtful
accounts
|
4,106
|
|
|
2,436
|
|
|
Contract
assets
|
135
|
|
|
282
|
|
|
Inventories
|
3,895
|
|
|
3,785
|
|
|
Other current
assets
|
590
|
|
|
660
|
|
Total current
assets
|
11,363
|
|
|
9,086
|
|
|
|
|
|
Property and
equipment, net
|
2,097
|
|
|
2,216
|
|
Operating lease
right-of-use assets, net
|
642
|
|
|
605
|
|
Goodwill
|
1,090
|
|
|
1,065
|
|
Other intangible
assets, net
|
213
|
|
|
262
|
|
Other
assets
|
431
|
|
|
456
|
|
Total
assets
|
$
|
15,836
|
|
|
$
|
13,690
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
|
|
Bank borrowings and
current portion of long-term debt
|
$
|
268
|
|
|
$
|
149
|
|
|
Accounts
payable
|
5,247
|
|
|
5,108
|
|
|
Accrued
payroll
|
473
|
|
|
364
|
|
|
Other current
liabilities
|
1,846
|
|
|
1,590
|
|
Total current
liabilities
|
7,834
|
|
|
7,211
|
|
|
|
|
|
|
Long-term debt, net
of current portion
|
3,515
|
|
|
2,689
|
|
Operating lease
liabilities, non-current
|
562
|
|
|
529
|
|
Other
liabilities
|
489
|
|
|
430
|
|
|
|
|
|
|
Total shareholders'
equity
|
3,436
|
|
|
2,831
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
15,836
|
|
|
$
|
13,690
|
|
|
|
|
|
|
SCHEDULE
IV
|
|
|
FLEX
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
|
|
|
|
|
|
|
Twelve-Month
Periods Ended
|
|
|
March 31,
2021
|
|
March 31,
2020
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net income
|
$
|
613
|
|
|
$
|
88
|
|
|
Depreciation,
amortization and other impairment charges
(2)
|
569
|
|
|
626
|
|
|
Changes in working
capital and other, net (2)
|
(1,039)
|
|
|
(2,247)
|
|
|
Net cash provided by
(used in) operating activities
|
144
|
|
|
(1,533)
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
Purchases of property
and equipment
|
(351)
|
|
|
(462)
|
|
|
Proceeds from the
disposition of property and equipment
|
85
|
|
|
106
|
|
|
Cash collections of
deferred purchase price
|
—
|
|
|
2,566
|
|
|
Other investing
activities, net
|
64
|
|
|
69
|
|
|
Net cash provided by
(used in) investing activities
|
(202)
|
|
|
2,279
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
Proceeds from bank
borrowings and long-term debt
|
2,065
|
|
|
1,070
|
|
|
Repayments of bank
borrowings and long-term debt
|
(1,142)
|
|
|
(1,316)
|
|
|
Payments for
repurchases of ordinary shares
|
(183)
|
|
|
(260)
|
|
|
Other financing
activities, net
|
3
|
|
|
(2)
|
|
|
Net cash provided by
(used in) financing activities
|
743
|
|
|
(508)
|
|
|
|
|
|
|
Effect of exchange
rates on cash
|
29
|
|
|
(12)
|
|
|
Net increase in cash
and cash equivalents
|
714
|
|
|
226
|
|
|
Cash and cash
equivalents, beginning of year
|
1,923
|
|
|
1,697
|
|
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Cash and cash
equivalents, end of year
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$
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2,637
|
|
|
$
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1,923
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|
|
|
|
|
|
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SCHEDULE
V
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FLEX AND
SUBSIDIARIES
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NOTES TO SCHEDULES
I, II and IV
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(1)
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To supplement Flex's
unaudited selected financial data presented consistent with
Generally Accepted Accounting Principles ("GAAP"), the Company
discloses certain non-GAAP financial measures that exclude certain
charges and gains, including non-GAAP operating income, non-GAAP
net income and non-GAAP net income per diluted share. These
supplemental measures exclude restructuring charges,
customer-related asset impairments (recoveries), stock-based
compensation expense, intangible amortization, other discrete
events as applicable and the related tax effects. These non-GAAP
measures are not in accordance with or an alternative for GAAP and
may be different from non-GAAP measures used by other companies. We
believe that these non-GAAP measures have limitations in that they
do not reflect all of the amounts associated with Flex's results of
operations as determined in accordance with GAAP and that these
measures should only be used to evaluate Flex's results of
operations in conjunction with the corresponding GAAP
measures. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for the
most directly comparable GAAP measures. We compensate for the
limitations of non-GAAP financial measures by relying upon GAAP
results to gain a complete picture of the Company's
performance.
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In calculating
non-GAAP financial measures, we exclude certain items to facilitate
a review of the comparability of the Company's operating
performance on a period-to-period basis because such items are not,
in our view, related to the Company's ongoing operational
performance. We use non-GAAP measures to evaluate the operating
performance of our business, for comparison with forecasts and
strategic plans, for calculating return on investment, and for
benchmarking performance externally against competitors. In
addition, management's incentive compensation is determined using
certain non-GAAP measures. Also, when evaluating potential
acquisitions, we exclude certain of the items described below from
consideration of the target's performance and valuation.
Since we find these measures to be useful, we believe that
investors benefit from seeing results "through the eyes" of
management in addition to seeing GAAP results. We believe
that these non-GAAP measures, when read in conjunction with the
Company's GAAP financials, provide useful information to investors
by offering:
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•
the ability to make more meaningful period-to-period comparisons of
the Company's on-going operating results;
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• the ability to better identify trends in the Company's
underlying business and perform related trend analyses;
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•
a better understanding of how management plans and measures the
Company's underlying business; and
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•
an easier way to compare the Company's operating results against
analyst financial models and operating
results of competitors that
supplement their GAAP results with non-GAAP financial
measures.
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The following are
explanations of each of the adjustments that we incorporate into
non-GAAP measures, as well as the reasons for excluding each of
these individual items in the reconciliations of these non-GAAP
financial measures:
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Stock-based
compensation expense consists of non-cash charges for the
estimated fair value of stock options and unvested restricted share
unit awards granted to employees and assumed in business
acquisitions. The Company believes that the exclusion of these
charges provides for more accurate comparisons of its operating
results to peer companies due to the varying available valuation
methodologies, subjective assumptions and the variety of award
types. In addition, the Company believes it is useful to investors
to understand the specific impact stock-based compensation expense
has on its operating results.
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Intangible
amortization consists primarily of non-cash charges that
can be impacted by, among other things, the timing and magnitude of
acquisitions. The Company considers its operating results without
these charges when evaluating its ongoing performance and
forecasting its earnings trends, and therefore excludes such
charges when presenting non-GAAP financial measures. The Company
believes that the assessment of its operations excluding these
costs is relevant to its assessment of internal operations and
comparisons to the performance of its competitors.
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Customer related
asset impairments (recoveries) may consist of non-cash
impairments of property and equipment to estimated fair value for
customers we have disengaged or are in the process of disengaging
as well as additional provisions for doubtful accounts receivable
for customers that are experiencing financial difficulties and
inventory that is considered non-recoverable that is written down
to net realizable value. In addition, it includes write-downs of
inventory that will not be recovered due to significant reductions
in future customer demand as the Company reduced its exposure to
certain high volatility business in the second quarter of fiscal
year 2020. In subsequent periods, the Company may recover a portion
of the costs previously incurred related to assets impaired or
reduced to net realizable value. These costs and recoveries are
excluded by the Company's management in assessing current operating
performance and forecasting its earnings trends and are therefore
excluded by the Company from its non-GAAP measures.
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Restructuring
charges include severance for rationalization at existing sites
and corporate SG&A functions as well as asset impairment, and
other charges related to the closures and consolidations of certain
operating sites and targeted activities to restructure the
business. These costs may vary in size based on the Company's
initiatives and are not directly related to ongoing or core
business results, and do not reflect expected future operating
expenses. These costs are excluded by the Company's management in
assessing current operating performance and forecasting its
earnings trends and are therefore excluded by the Company from its
non-GAAP measures.
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In order to support
the Company's strategy and build a sustainable organization, and
after considering that the economic recovery from the pandemic will
be slower than anticipated, the Company has identified certain
structural changes to restructuring the business. These
restructuring actions will eliminate non-core activities primarily
within the Company's corporate function, align the Company's cost
structure with its reorganizing and optimizing of its operations
model along its two reporting segments, and further sharpen its
focus to winning business in end markets where it has competitive
advantages and deep domain expertise. During the three and
twelve-month periods ended March 31, 2021, the Company recognized
approximately $26 million and $101 million of restructuring charges
respectively, most of which related to employee
severance.
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During the first half
of fiscal year 2020 in connection with geopolitical developments
and uncertainties at the time, primarily impacting one customer in
China, the Company experienced a reduction in demand for products
assembled for that customer. As a result, the Company accelerated
its strategic 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. During fiscal
year 2020, the Company recognized $216 million of restructuring
charges. The Company incurred cash charges of approximately $159
million, that were predominantly for employee severance, in
addition to non-cash charges of $57 million, primarily related to
asset impairments.
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Legal and
other consist primarily of costs not directly related to core
business results and may include matters relating to commercial
disputes, government regulatory and compliance, intellectual
property, antitrust, tax, employment or shareholder issues, product
liability claims and other issues on a global basis. Legal and
other costs include 1) certain loss contingencies where losses are
considered probable and estimable accrued in the first quarter of
fiscal year 2021, 2) the gain on the sale of real estate in the
fourth quarter of fiscal 2021 exited as a result of the
disengagement of a certain customer in fiscal year 2020, 3) certain
direct and incremental costs associated with the disengagement of a
certain customer in the second, third, and fourth quarters of
fiscal year 2020, and 4) certain gains resulting from the
recognition of prior year expenses paid to the government now
considered probable of recovery and reasonably estimable due to a
favorable tax ruling received in fiscal year 2020. These costs are
excluded by the Company's management in assessing current operating
performance and forecasting its earnings trends and are therefore
excluded by the Company from its non-GAAP
measures.
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Interest and other
charges (income), net consists of various other types of
items that are not directly related to ongoing or core business
results, such as the gain or losses related to certain
divestitures, debt extinguishment costs and impairment charges or
gains associated with certain non-core investments. The Company
excludes these items because they are not related to the Company's
ongoing operating performance or do not affect core operations.
Excluding these amounts provides investors with a basis to compare
Company performance against the performance of other companies
without this variability.
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In fiscal year 2020,
the Company incurred debt extinguishment costs of $7.2 million,
related to full repayments of the Notes due February 2020 and Term
Loan due November 2021.
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During fiscal year
2020, and in connection with the Company's ongoing assessment of
its investment portfolio strategy, the Company concluded that the
carrying amounts of certain non-core investments were other than
temporarily impaired and recognized a $97.7 million total
impairment, of which $74.8 million was recorded in the fourth
quarter. The impairments in the fourth quarter of fiscal year 2020
were primarily related to Elementum and certain other non-core
investments, reflecting recent market valuation changes, in
addition to capturing additional risks due to the economic
challenges in light of COVID-19. This was offset by a $10.9 million
realized gain from a distribution by one of our non-core
investments in the fourth quarter of fiscal year 2020.
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In fiscal year 2021,
the Company recognized realized gains of approximately $45 million
from distribution by one of our non-core investment funds.
This was offset by a $35 million impairment charge, related to a
certain investment as a result of the Company's ongoing assessment
of recoverability of its investment portfolio and conclusion that
the carrying amount of its investment was other than temporarily
impaired.
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Adjustment for
taxes relates to the tax effects of the various
adjustments that we incorporate into non-GAAP measures in order to
provide a more meaningful measure on non-GAAP net income and
certain adjustments related to non-recurring settlements of tax
contingencies, valuation allowance releases or other non-recurring
tax charges, when applicable.
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(2)
|
Certain prior period
presentations were reclassified to ensure comparability with the
current period presentation. The prior year amounts related to
interest expense (income), net are now presented separately under
Interest, net and the remaining balances under interest and other,
net have been reclassified to other charges (income), net within
the unaudited condensed consolidated statements of operations. In
addition, amortization of Right-of-Use ("ROU") assets for operating
leases is included in changes in working capital and other, net for
all periods presented.
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content:http://www.prnewswire.com/news-releases/flex-reports-fourth-quarter-and-fiscal-2021-results-301283939.html
SOURCE Flex