Singapore
|
|
Not Applicable
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
2 Changi South Lane,
|
|
|
Singapore
|
|
486123
|
(Address of registrant’s principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
|
|
|
|
|
Class
|
|
Outstanding at July 26, 2017
|
Ordinary Shares, No Par Value
|
|
532,376,353
|
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
/s/ DELOITTE & TOUCHE LLP
|
|
San Jose, California
|
|
August 1, 2017
|
|
|
As of June 30, 2017
|
|
As of March 31, 2017
|
||||
|
(In thousands, except share amounts)
(Unaudited) |
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,582,197
|
|
|
$
|
1,830,675
|
|
Accounts receivable, net of allowance for doubtful accounts of $57,842 and $57,302 as of June 30, 2017 and March 31, 2017, respectively
|
2,325,845
|
|
|
2,192,704
|
|
||
Inventories
|
3,601,175
|
|
|
3,396,462
|
|
||
Other current assets
|
1,049,092
|
|
|
967,935
|
|
||
Total current assets
|
8,558,309
|
|
|
8,387,776
|
|
||
Property and equipment, net
|
2,346,440
|
|
|
2,317,026
|
|
||
Goodwill
|
1,039,069
|
|
|
984,867
|
|
||
Other intangible assets, net
|
453,957
|
|
|
362,181
|
|
||
Other assets
|
619,213
|
|
|
541,513
|
|
||
Total assets
|
$
|
13,016,988
|
|
|
$
|
12,593,363
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
|
|
||
Bank borrowings and current portion of long-term debt
|
$
|
45,661
|
|
|
$
|
61,534
|
|
Accounts payable
|
4,781,036
|
|
|
4,484,908
|
|
||
Accrued payroll
|
359,353
|
|
|
344,245
|
|
||
Other current liabilities
|
1,572,198
|
|
|
1,613,940
|
|
||
Total current liabilities
|
6,758,248
|
|
|
6,504,627
|
|
||
Long-term debt, net of current portion
|
2,918,871
|
|
|
2,890,609
|
|
||
Other liabilities
|
530,091
|
|
|
519,851
|
|
||
Shareholders’ equity
|
|
|
|
|
|
||
Flex Ltd. shareholders’ equity
|
|
|
|
|
|
||
Ordinary shares, no par value; 582,889,873 and 581,534,129 issued, and 532,650,518 and 531,294,774 outstanding as of June 30, 2017 and March 31, 2017, respectively
|
6,677,832
|
|
|
6,733,539
|
|
||
Treasury stock, at cost; 50,239,355 shares as of June 30, 2017 and March 31, 2017
|
(388,215
|
)
|
|
(388,215
|
)
|
||
Accumulated deficit
|
(3,447,938
|
)
|
|
(3,572,648
|
)
|
||
Accumulated other comprehensive loss
|
(119,476
|
)
|
|
(128,143
|
)
|
||
Total Flex Ltd. shareholders’ equity
|
2,722,203
|
|
|
2,644,533
|
|
||
Noncontrolling interests
|
87,575
|
|
|
33,743
|
|
||
Total shareholders’ equity
|
2,809,778
|
|
|
2,678,276
|
|
||
Total liabilities and shareholders’ equity
|
$
|
13,016,988
|
|
|
$
|
12,593,363
|
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands, except per share amounts)
(Unaudited) |
||||||
Net sales
|
$
|
6,008,272
|
|
|
$
|
5,876,813
|
|
Cost of sales
|
5,601,340
|
|
|
5,470,818
|
|
||
Gross profit
|
406,932
|
|
|
405,995
|
|
||
Selling, general and administrative expenses
|
250,811
|
|
|
239,546
|
|
||
Intangible amortization
|
19,901
|
|
|
21,598
|
|
||
Interest and other, net
|
26,876
|
|
|
24,399
|
|
||
Other charges (income), net
|
(36,165
|
)
|
|
3,529
|
|
||
Income before income taxes
|
145,509
|
|
|
116,923
|
|
||
Provision for income taxes
|
20,799
|
|
|
11,194
|
|
||
Net income
|
$
|
124,710
|
|
|
$
|
105,729
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.24
|
|
|
$
|
0.19
|
|
Diluted
|
$
|
0.23
|
|
|
$
|
0.19
|
|
Weighted-average shares used in computing per share amounts:
|
|
|
|
|
|
||
Basic
|
530,268
|
|
|
544,631
|
|
||
Diluted
|
538,633
|
|
|
551,029
|
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands)
(Unaudited) |
||||||
Net income
|
$
|
124,710
|
|
|
$
|
105,729
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||
Foreign currency translation adjustments, net of zero tax
|
10,836
|
|
|
9,861
|
|
||
Unrealized (loss) gain on derivative instruments and other, net of zero tax
|
(2,169
|
)
|
|
1,348
|
|
||
Comprehensive income
|
$
|
133,377
|
|
|
$
|
116,938
|
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands)
(Unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
124,710
|
|
|
$
|
105,729
|
|
Depreciation, amortization and other impairment charges
|
131,396
|
|
|
129,500
|
|
||
Changes in working capital and other
|
(117,590
|
)
|
|
28,703
|
|
||
Net cash provided by operating activities
|
138,516
|
|
|
263,932
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(124,851
|
)
|
|
(159,103
|
)
|
||
Proceeds from the disposition of property and equipment
|
5,476
|
|
|
15,722
|
|
||
Acquisition of businesses, net of cash acquired
|
(213,718
|
)
|
|
(9,492
|
)
|
||
Proceeds from divestiture of businesses, net of cash held in divested businesses
|
(616
|
)
|
|
14,828
|
|
||
Other investing activities, net
|
(18,549
|
)
|
|
26,261
|
|
||
Net cash used in investing activities
|
(352,258
|
)
|
|
(111,784
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from bank borrowings and long-term debt
|
—
|
|
|
75,018
|
|
||
Repayments of bank borrowings and long-term debt
|
(7,554
|
)
|
|
(92,222
|
)
|
||
Payments for repurchases of ordinary shares
|
(73,864
|
)
|
|
(94,715
|
)
|
||
Net proceeds from issuance of ordinary shares
|
696
|
|
|
3,966
|
|
||
Other financing activities, net
|
57,628
|
|
|
12,901
|
|
||
Net cash used in financing activities
|
(23,094
|
)
|
|
(95,052
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
(11,642
|
)
|
|
14,669
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(248,478
|
)
|
|
71,765
|
|
||
Cash and cash equivalents, beginning of period
|
1,830,675
|
|
|
1,607,570
|
|
||
Cash and cash equivalents, end of period
|
$
|
1,582,197
|
|
|
$
|
1,679,335
|
|
|
|
|
|
|
|
||
Non-cash investing activity:
|
|
|
|
|
|
||
Unpaid purchases of property and equipment
|
$
|
84,472
|
|
|
$
|
85,571
|
|
Non-cash proceeds from sale of Wink
|
$
|
59,000
|
|
|
$
|
—
|
|
•
|
Communications & Enterprise Compute ("CEC"), which includes telecom business of radio access base stations, remote radio heads, and small cells for wireless infrastructure; networking business which includes optical, routing, broadcasting, and switching products for the data and video networks; server and storage platforms for both enterprise and cloud-based deployments; next generation storage and security appliance products; and rack level solutions, converged infrastructure and software-defined product solutions;
|
•
|
Consumer Technologies Group ("CTG"), which includes consumer-related businesses in connected living, wearables, gaming, augmented and virtual reality, fashion, and mobile devices; and including various supply chain solutions for notebook personal computers ("PC"), tablets, and printers; in addition, CTG is expanding its business relationships to include supply chain optimization for non-electronics products such as footwear and clothing;
|
•
|
Industrial and Emerging Industries ("IEI"), which is comprised of energy and metering, semiconductor and capital equipment, office solutions, industrial, home and lifestyle, industrial automation and kiosks, and lighting; and
|
•
|
High Reliability Solutions ("HRS"), which is comprised of medical business, including consumer health, digital health, disposables, precision plastics, drug delivery, diagnostics, life sciences and imaging equipment; automotive business, including vehicle electrification, connectivity, autonomous vehicles, and clean technologies; and defense and aerospace businesses, focused on commercial aviation, defense and military.
|
|
As of June 30, 2017
|
|
As of March 31, 2017
|
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
2,527,603
|
|
|
$
|
2,537,623
|
|
Work-in-progress
|
471,773
|
|
|
279,493
|
|
||
Finished goods
|
601,799
|
|
|
579,346
|
|
||
|
$
|
3,601,175
|
|
|
$
|
3,396,462
|
|
|
HRS
|
|
CTG
|
|
IEI
|
|
CEC
|
|
Amount
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance, beginning of the year
|
$
|
420,935
|
|
|
$
|
111,223
|
|
|
$
|
337,707
|
|
|
$
|
115,002
|
|
|
$
|
984,867
|
|
Additions (1)
|
36,627
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,627
|
|
|||||
Divestitures (2)
|
—
|
|
|
(3,475
|
)
|
|
—
|
|
|
—
|
|
|
(3,475
|
)
|
|||||
Foreign currency translation adjustments (3)
|
21,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,050
|
|
|||||
Balance, end of the period
|
$
|
478,612
|
|
|
$
|
107,748
|
|
|
$
|
337,707
|
|
|
$
|
115,002
|
|
|
$
|
1,039,069
|
|
(1)
|
The goodwill generated from the Company’s acquisition of AGM Automotive ("AGM") completed during the
three-month period ended
June 30, 2017
is primarily related to value placed on the acquired employee workforces, service offerings and capabilities of the acquired business. The goodwill is not deductible for income tax purposes. See note 12 for additional information.
|
(2)
|
During the
three-month period ended
June 30, 2017
, the Company disposed of Wink Labs Inc. ("Wink"), a business within the CTG segment, and recorded an aggregate reduction of goodwill of
$3.5 million
accordingly, which is included as an offset to the gain on sale recorded in other charges (income), net on the condensed consolidated statement of operations.
|
(3)
|
During the
three-month period ended
June 30, 2017
, the Company recorded
$21.1 million
of foreign currency translation adjustments primarily related to the goodwill associated with the acquisition of Mirror Controls International ("MCi"), as the U.S. Dollar fluctuated against the Euro.
|
|
As of June 30, 2017
|
|
As of March 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer-related intangibles
|
$
|
373,694
|
|
|
$
|
(117,189
|
)
|
|
$
|
256,505
|
|
|
$
|
260,704
|
|
|
$
|
(105,912
|
)
|
|
$
|
154,792
|
|
Licenses and other intangibles
|
278,237
|
|
|
(80,785
|
)
|
|
197,452
|
|
|
283,897
|
|
|
(76,508
|
)
|
|
207,389
|
|
||||||
Total
|
$
|
651,931
|
|
|
$
|
(197,974
|
)
|
|
$
|
453,957
|
|
|
$
|
544,601
|
|
|
$
|
(182,420
|
)
|
|
$
|
362,181
|
|
Fiscal Year Ending March 31,
|
Amount
|
||
|
(In thousands)
|
||
2018 (1)
|
$
|
59,369
|
|
2019
|
72,587
|
|
|
2020
|
63,414
|
|
|
2021
|
59,227
|
|
|
2022
|
50,646
|
|
|
Thereafter
|
148,714
|
|
|
Total amortization expense
|
$
|
453,957
|
|
(1)
|
Represents estimated amortization for the remaining
nine
-month period ending
March 31, 2018
.
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands)
|
||||||
Cost of sales
|
$
|
3,319
|
|
|
$
|
2,433
|
|
Selling, general and administrative expenses
|
18,477
|
|
|
21,364
|
|
||
Total share-based compensation expense
|
$
|
21,796
|
|
|
$
|
23,797
|
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands, except per share amounts)
|
||||||
Net income
|
$
|
124,710
|
|
|
$
|
105,729
|
|
Shares used in computation:
|
|
|
|
|
|
||
Weighted-average ordinary shares outstanding
|
530,268
|
|
|
544,631
|
|
||
Basic earnings per share
|
$
|
0.24
|
|
|
$
|
0.19
|
|
|
|
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
||
Net income
|
$
|
124,710
|
|
|
$
|
105,729
|
|
Shares used in computation:
|
|
|
|
|
|
||
Weighted-average ordinary shares outstanding
|
530,268
|
|
|
544,631
|
|
||
Weighted-average ordinary share equivalents from stock options and awards (1)
|
8,365
|
|
|
6,398
|
|
||
Weighted-average ordinary shares and ordinary share equivalents outstanding
|
538,633
|
|
|
551,029
|
|
||
Diluted earnings per share
|
$
|
0.23
|
|
|
$
|
0.19
|
|
|
As of June 30, 2017
|
|
As of March 31, 2017
|
||||
|
(In thousands)
|
||||||
4.625% Notes due February 2020
|
$
|
500,000
|
|
|
$
|
500,000
|
|
Term Loan, including current portion, due in installments through November 2021
|
700,000
|
|
|
700,000
|
|
||
Term Loan, including current portion, due in installments through June 2022
|
502,500
|
|
|
502,500
|
|
||
5.000% Notes due February 2023
|
500,000
|
|
|
500,000
|
|
||
4.75% Notes due June 2025
|
596,078
|
|
|
595,979
|
|
||
Other
|
182,046
|
|
|
169,671
|
|
||
Debt issuance costs
|
(16,092
|
)
|
|
(16,007
|
)
|
||
Total
|
$
|
2,964,532
|
|
|
$
|
2,952,143
|
|
Fiscal Year Ending March 31,
|
Amount
|
||
|
(In thousands)
|
||
2018 (1)
|
$
|
37,373
|
|
2019
|
46,670
|
|
|
2020
|
542,801
|
|
|
2021
|
111,917
|
|
|
2022
|
803,406
|
|
|
Thereafter
|
1,438,457
|
|
|
Total
|
$
|
2,980,624
|
|
(1)
|
Represents scheduled repayment for the remaining
nine
-month period ending
March 31, 2018
.
|
|
Foreign Currency Amount
|
|
Notional Contract Value in USD
|
||||||||||
Currency
|
Buy
|
|
Sell
|
|
Buy
|
|
Sell
|
||||||
|
(In thousands)
|
||||||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|||
CNY
|
1,311,000
|
|
|
—
|
|
|
$
|
192,834
|
|
|
$
|
—
|
|
EUR
|
26,612
|
|
|
102,211
|
|
|
30,241
|
|
|
116,798
|
|
||
HUF
|
18,375,520
|
|
|
—
|
|
|
67,488
|
|
|
—
|
|
||
INR
|
1,577,358
|
|
|
—
|
|
|
23,600
|
|
|
—
|
|
||
MXN
|
2,353,300
|
|
|
—
|
|
|
131,348
|
|
|
—
|
|
||
MYR
|
167,400
|
|
|
39,000
|
|
|
39,058
|
|
|
9,100
|
|
||
RON
|
103,510
|
|
|
—
|
|
|
25,844
|
|
|
—
|
|
||
SGD
|
29,800
|
|
|
—
|
|
|
21,554
|
|
|
—
|
|
||
Other
|
N/A
|
|
|
N/A
|
|
|
45,783
|
|
|
5,396
|
|
||
|
|
|
|
|
|
|
577,750
|
|
|
131,294
|
|
||
Other Foreign Currency Contracts
|
|
|
|
|
|
|
|
|
|
|
|
||
BRL
|
—
|
|
|
415,000
|
|
|
—
|
|
|
125,537
|
|
||
CAD
|
19,008
|
|
|
33,755
|
|
|
14,551
|
|
|
25,840
|
|
||
CHF
|
8,450
|
|
|
31,056
|
|
|
8,800
|
|
|
32,343
|
|
||
CNY
|
1,533,318
|
|
|
—
|
|
|
224,000
|
|
|
—
|
|
||
DKK
|
180,600
|
|
|
158,800
|
|
|
27,596
|
|
|
24,265
|
|
||
EUR
|
1,024,136
|
|
|
1,383,812
|
|
|
1,162,529
|
|
|
1,570,311
|
|
||
GBP
|
35,834
|
|
|
65,131
|
|
|
46,370
|
|
|
84,278
|
|
||
HUF
|
20,442,171
|
|
|
19,619,207
|
|
|
75,078
|
|
|
72,055
|
|
||
INR
|
3,960,000
|
|
|
142,487
|
|
|
61,348
|
|
|
2,200
|
|
||
MXN
|
2,241,024
|
|
|
547,954
|
|
|
125,082
|
|
|
30,584
|
|
||
MYR
|
354,828
|
|
|
81,400
|
|
|
82,790
|
|
|
18,993
|
|
||
PLN
|
137,723
|
|
|
78,591
|
|
|
36,938
|
|
|
21,078
|
|
||
SEK
|
157,797
|
|
|
214,117
|
|
|
18,333
|
|
|
24,978
|
|
||
Other
|
N/A
|
|
|
N/A
|
|
|
82,219
|
|
|
57,243
|
|
||
|
|
|
|
|
|
|
1,965,634
|
|
|
2,089,705
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Notional Contract Value in USD
|
|
|
|
|
|
|
$
|
2,543,384
|
|
|
$
|
2,220,999
|
|
|
Fair Values of Derivative Instruments
|
||||||||||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||
|
Balance Sheet
Location |
|
June 30,
2017 |
|
March 31,
2017 |
|
Balance Sheet
Location |
|
June 30,
2017 |
|
March 31,
2017 |
||||||||
|
(In thousands)
|
||||||||||||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
11,411
|
|
|
$
|
11,936
|
|
|
Other current liabilities
|
|
$
|
2,624
|
|
|
$
|
1,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
10,668
|
|
|
$
|
10,086
|
|
|
Other current liabilities
|
|
$
|
8,411
|
|
|
$
|
9,928
|
|
|
Three-Month Periods Ended
|
||||||||||||||||||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||||||||||||||||||
|
Unrealized loss on
derivative instruments and other |
|
Foreign currency
translation adjustments |
|
Total
|
|
Unrealized gain
(loss) on derivative instruments and other |
|
Foreign currency
translation adjustments |
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Beginning balance
|
$
|
(32,426
|
)
|
|
$
|
(95,717
|
)
|
|
$
|
(128,143
|
)
|
|
$
|
(41,522
|
)
|
|
$
|
(94,393
|
)
|
|
$
|
(135,915
|
)
|
Other comprehensive gain before reclassifications
|
3,020
|
|
|
10,836
|
|
|
13,856
|
|
|
1,493
|
|
|
10,086
|
|
|
11,579
|
|
||||||
Net gains reclassified from accumulated other comprehensive loss
|
(5,189
|
)
|
|
—
|
|
|
(5,189
|
)
|
|
(145
|
)
|
|
(225
|
)
|
|
(370
|
)
|
||||||
Net current-period other comprehensive gain (loss)
|
(2,169
|
)
|
|
10,836
|
|
|
8,667
|
|
|
1,348
|
|
|
9,861
|
|
|
11,209
|
|
||||||
Ending balance
|
$
|
(34,595
|
)
|
|
$
|
(84,881
|
)
|
|
$
|
(119,476
|
)
|
|
$
|
(40,174
|
)
|
|
$
|
(84,532
|
)
|
|
$
|
(124,706
|
)
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands)
|
||||||
Beginning balance
|
$
|
506,522
|
|
|
$
|
501,097
|
|
Transfers of receivables
|
847,004
|
|
|
762,184
|
|
||
Collections
|
(806,034
|
)
|
|
(802,947
|
)
|
||
Ending balance
|
$
|
547,492
|
|
|
$
|
460,334
|
|
|
Three-Month Periods Ended
|
||||||
|
June 30,
2017 |
|
July 1,
2016 |
||||
|
(In thousands)
|
||||||
Beginning balance
|
$
|
22,426
|
|
|
$
|
73,423
|
|
Additions to accrual
|
—
|
|
|
—
|
|
||
Payments
|
—
|
|
|
—
|
|
||
Fair value adjustments
|
(7,000
|
)
|
|
1,835
|
|
||
Ending balance
|
$
|
15,426
|
|
|
$
|
75,258
|
|
|
Fair Value Measurements as of June 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet)
|
$
|
—
|
|
|
$
|
576,460
|
|
|
$
|
—
|
|
|
$
|
576,460
|
|
Deferred purchase price receivable (Note 10)
|
—
|
|
|
—
|
|
|
547,492
|
|
|
547,492
|
|
||||
Foreign exchange contracts (Note 8)
|
—
|
|
|
22,079
|
|
|
—
|
|
|
22,079
|
|
||||
Deferred compensation plan assets:
|
|
|
|
|
|
|
|
|
|
0
|
|
||||
Mutual funds, money market accounts and equity securities
|
7,806
|
|
|
56,041
|
|
|
—
|
|
|
63,847
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
0
|
|
||||
Foreign exchange contracts (Note 8)
|
$
|
—
|
|
|
$
|
(11,035
|
)
|
|
$
|
—
|
|
|
$
|
(11,035
|
)
|
Contingent consideration in connection with business acquisitions
|
—
|
|
|
—
|
|
|
(15,426
|
)
|
|
(15,426
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurements as of March 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds and time deposits (included in cash and cash equivalents of the condensed consolidated balance sheet)
|
$
|
—
|
|
|
$
|
1,066,841
|
|
|
$
|
—
|
|
|
$
|
1,066,841
|
|
Deferred purchase price receivable (Note 10)
|
—
|
|
|
—
|
|
|
506,522
|
|
|
506,522
|
|
||||
Foreign exchange contracts (Note 8)
|
—
|
|
|
22,022
|
|
|
—
|
|
|
22,022
|
|
||||
Deferred compensation plan assets:
|
|
|
|
|
|
|
|
|
|
0
|
|
||||
Mutual funds, money market accounts and equity securities
|
7,062
|
|
|
52,680
|
|
|
—
|
|
|
59,742
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
0
|
|
||||
Foreign exchange contracts (Note 8)
|
$
|
—
|
|
|
$
|
(11,742
|
)
|
|
$
|
—
|
|
|
$
|
(11,742
|
)
|
Contingent consideration in connection with business acquisitions
|
—
|
|
|
—
|
|
|
(22,426
|
)
|
|
(22,426
|
)
|
|
As of June 30, 2017
|
|
As of March 31, 2017
|
|
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
|
Fair Value
Hierarchy |
||||||||
|
(In thousands)
|
||||||||||||||||
4.625% Notes due February 2020
|
$
|
500,000
|
|
|
$
|
526,370
|
|
|
$
|
500,000
|
|
|
$
|
526,255
|
|
|
Level 1
|
Term Loan, including current portion, due in installments through November 2021
|
700,000
|
|
|
699,125
|
|
|
700,000
|
|
|
699,566
|
|
|
Level 1
|
||||
Term Loan, including current portion, due in installments through June 2022 (1)
|
502,500
|
|
|
503,405
|
|
|
502,500
|
|
|
503,756
|
|
|
Level 1
|
||||
5.000% Notes due February 2023
|
500,000
|
|
|
546,820
|
|
|
500,000
|
|
|
534,820
|
|
|
Level 1
|
||||
4.750% Notes due June 2025
|
596,078
|
|
|
639,876
|
|
|
595,979
|
|
|
633,114
|
|
|
Level 1
|
||||
Euro Term Loan due September 2020
|
55,977
|
|
|
55,977
|
|
|
53,075
|
|
|
53,075
|
|
|
Level 1
|
||||
Euro Term Loan due January 2022
|
114,093
|
|
|
114,093
|
|
|
107,357
|
|
|
107,357
|
|
|
Level 1
|
||||
Total
|
$
|
2,968,648
|
|
|
$
|
3,085,666
|
|
|
$
|
2,958,911
|
|
|
$
|
3,057,943
|
|
|
|
|
Purchase Consideration
|
|
Net Tangible Assets Acquired
|
|
Purchased Intangible Assets
|
|
Goodwill
|
||||||||
AGM
|
$
|
213,718
|
|
|
$
|
69,091
|
|
|
$
|
108,000
|
|
|
$
|
36,627
|
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands)
|
||||||
Net sales:
|
|
|
|
||||
Communications & Enterprise Compute
|
$
|
1,973,333
|
|
|
$
|
2,195,990
|
|
Consumer Technologies Group
|
1,511,969
|
|
|
1,313,782
|
|
||
Industrial & Emerging Industries
|
1,390,599
|
|
|
1,289,015
|
|
||
High Reliability Solutions
|
1,132,371
|
|
|
1,078,026
|
|
||
|
$
|
6,008,272
|
|
|
$
|
5,876,813
|
|
Segment income and reconciliation of income before tax:
|
|
|
|
||||
Communications & Enterprise Compute
|
$
|
48,603
|
|
|
$
|
61,899
|
|
Consumer Technologies Group
|
18,004
|
|
|
24,634
|
|
||
Industrial & Emerging Industries
|
55,376
|
|
|
49,977
|
|
||
High Reliability Solutions
|
90,212
|
|
|
88,536
|
|
||
Corporate and Other
|
(34,278
|
)
|
|
(34,800
|
)
|
||
Total segment income
|
177,917
|
|
|
190,246
|
|
||
Reconciling items:
|
|
|
|
|
|
||
Intangible amortization
|
19,901
|
|
|
21,598
|
|
||
Stock-based compensation
|
21,796
|
|
|
23,797
|
|
||
Other charges (income), net
|
(36,165
|
)
|
|
3,529
|
|
||
Interest and other, net
|
26,876
|
|
|
24,399
|
|
||
Income before income taxes
|
$
|
145,509
|
|
|
$
|
116,923
|
|
•
|
Communications & Enterprise Compute ("CEC"), which includes our telecom business of radio access base stations, remote radio heads, and small cells for wireless infrastructure; our networking business which includes optical, routing, broadcasting, and switching products for the data and video networks; our server and storage platforms for both enterprise and cloud-based deployments; next generation storage and security appliance products; and rack level solutions, converged infrastructure and software-defined product solutions;
|
•
|
Consumer Technologies Group ("CTG"), which includes our consumer-related businesses in connected living, wearables, gaming, augmented and virtual reality, fashion, and mobile devices; and including various supply chain solutions for notebook personal computers ("PC"), tablets, and printers; in addition, CTG is expanding its business relationships to include supply chain optimization for non-electronics products such as footwear and clothing;
|
•
|
Industrial and Emerging Industries ("IEI"), which is comprised of energy and metering, semiconductor and capital equipment, office solutions, industrial, home and lifestyle, industrial automation and kiosks, and lighting; and
|
•
|
High Reliability Solutions ("HRS"), which is comprised of our medical business, including consumer health, digital health, disposables, precision plastics, drug delivery, diagnostics, life sciences and imaging equipment; our automotive business, including vehicle electrification, connectivity, autonomous vehicles, and clean technologies; and our defense and aerospace businesses, focused on commercial aviation, defense and military.
|
|
As of
|
|
As of
|
||||||||||
Property and equipment, net:
|
June 30, 2017
|
|
March 31, 2017
|
||||||||||
|
(In thousands)
|
||||||||||||
China
|
$
|
692,131
|
|
|
29
|
%
|
|
$
|
719,972
|
|
|
31
|
%
|
Mexico
|
556,532
|
|
|
24
|
%
|
|
525,582
|
|
|
23
|
%
|
||
U.S.
|
297,109
|
|
|
13
|
%
|
|
290,463
|
|
|
13
|
%
|
||
Malaysia
|
166,290
|
|
|
7
|
%
|
|
173,410
|
|
|
7
|
%
|
||
Hungary
|
138,627
|
|
|
6
|
%
|
|
132,527
|
|
|
6
|
%
|
||
Other
|
495,751
|
|
|
21
|
%
|
|
475,372
|
|
|
20
|
%
|
||
|
$
|
2,346,440
|
|
|
|
|
|
$
|
2,317,026
|
|
|
|
|
•
|
changes in the macro-economic environment and related changes in consumer demand;
|
•
|
the mix of the manufacturing services we are providing, the number and size of new manufacturing programs, the degree to which we utilize our manufacturing capacity, seasonal demand, shortages of components and other factors;
|
•
|
the effects on our business when our customers are not successful in marketing their products, or when their products do not gain widespread commercial acceptance;
|
•
|
our ability to achieve commercially viable production yields and to manufacture components in commercial quantities to the performance specifications demanded by our customers;
|
•
|
the effects on our business due to our customers’ products having short product life cycles;
|
•
|
our customers’ ability to cancel or delay orders or change production quantities;
|
•
|
our customers’ decision to choose internal manufacturing instead of outsourcing for their product requirements;
|
•
|
our exposure to financially troubled customers;
|
•
|
integration of acquired businesses and facilities;
|
•
|
increased labor costs due to adverse labor conditions in the markets we operate;
|
•
|
changes in tax legislation; and
|
•
|
changes in trade regulations and treaties.
|
|
Three-Month Periods Ended
|
||||
|
June 30, 2017
|
|
July 1, 2016
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
93.2
|
|
|
93.1
|
|
Gross profit
|
6.8
|
|
|
6.9
|
|
Selling, general and administrative expenses
|
4.2
|
|
|
4.1
|
|
Intangible amortization
|
0.3
|
|
|
0.4
|
|
Interest and other, net
|
0.4
|
|
|
0.4
|
|
Other charges (income), net
|
(0.6
|
)
|
|
0.1
|
|
Income before income taxes
|
2.5
|
|
|
1.9
|
|
Provision for income taxes
|
0.3
|
|
|
0.2
|
|
Net income
|
2.2
|
%
|
|
1.7
|
%
|
|
Three-Month Periods Ended
|
||||||||||||
Segments:
|
June 30, 2017
|
|
July 1, 2016
|
||||||||||
|
(In thousands)
|
||||||||||||
Communications & Enterprise Compute
|
$
|
1,973,333
|
|
|
33
|
%
|
|
$
|
2,195,990
|
|
|
37
|
%
|
Consumer Technologies Group
|
1,511,969
|
|
|
25
|
%
|
|
1,313,782
|
|
|
22
|
%
|
||
Industrial & Emerging Industries
|
1,390,599
|
|
|
23
|
%
|
|
1,289,015
|
|
|
22
|
%
|
||
High Reliability Solutions
|
1,132,371
|
|
|
19
|
%
|
|
1,078,026
|
|
|
18
|
%
|
||
|
$
|
6,008,272
|
|
|
|
|
|
$
|
5,876,813
|
|
|
|
|
|
Three-Month Periods Ended
|
||||||||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||||||||
|
(In thousands)
|
||||||||||||
Segment income & margin:
|
|
|
|
|
|
|
|
||||||
Communications & Enterprise Compute
|
$
|
48,603
|
|
|
2.5
|
%
|
|
$
|
61,899
|
|
|
2.8
|
%
|
Consumer Technologies Group
|
18,004
|
|
|
1.2
|
%
|
|
24,634
|
|
|
1.9
|
%
|
||
Industrial & Emerging Industries
|
55,376
|
|
|
4.0
|
%
|
|
49,977
|
|
|
3.9
|
%
|
||
High Reliability Solutions
|
90,212
|
|
|
8.0
|
%
|
|
88,536
|
|
|
8.2
|
%
|
||
Corporate and Other
|
(34,278
|
)
|
|
|
|
(34,800
|
)
|
|
|
||||
Total segment income
|
177,917
|
|
|
3.0
|
%
|
|
190,246
|
|
|
3.2
|
%
|
||
Reconciling items:
|
|
|
|
|
|
|
|
||||||
Intangible amortization
|
19,901
|
|
|
|
|
21,598
|
|
|
|
||||
Stock-based compensation
|
21,796
|
|
|
|
|
23,797
|
|
|
|
||||
Other charges (income), net
|
(36,165
|
)
|
|
|
|
3,529
|
|
|
|
||||
Interest and other, net
|
26,876
|
|
|
|
|
24,399
|
|
|
|
||||
Income before income taxes
|
$
|
145,509
|
|
|
|
|
$
|
116,923
|
|
|
|
|
Three-Month Periods Ended
|
||
|
June 30,
2017 |
|
July 1,
2016 |
Days in trade accounts receivable
|
42 days
|
|
39 days
|
Days in inventory
|
57 days
|
|
59 days
|
Days in accounts payable
|
76 days
|
|
71 days
|
Cash conversion cycle
|
23 days
|
|
27 days
|
|
Three-Month Periods Ended
|
||||||
|
June 30, 2017
|
|
July 1, 2016
|
||||
|
(In thousands)
|
||||||
Net cash provided by operating activities
|
$
|
138,516
|
|
|
$
|
263,932
|
|
Purchases of property and equipment
|
(124,851
|
)
|
|
(159,103
|
)
|
||
Proceeds from the disposition of property and equipment
|
5,476
|
|
|
15,722
|
|
||
Free cash flow
|
$
|
19,141
|
|
|
$
|
120,551
|
|
|
Total
|
|
Less Than
1 Year |
|
1-3 Years
|
|
4-5 Years
|
|
Great Than
5 Years |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Long-term Debt Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
2,968,150
|
|
|
$
|
37,730
|
|
|
$
|
585,434
|
|
|
$
|
905,870
|
|
|
$
|
1,439,116
|
|
Period (2)
|
Total Number of
Shares Purchased (1) |
|
Average Price
Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Approximate Dollar Value of
Shares that May Yet Be Purchased Under the Plans or Programs |
||||||
April 1 - May 5, 2017
|
1,012,915
|
|
|
$
|
15.80
|
|
|
1,012,915
|
|
|
$
|
269,322,239
|
|
May 6 - June 2, 2017
|
2,019,781
|
|
|
$
|
16.40
|
|
|
2,019,781
|
|
|
$
|
236,207,839
|
|
June 3 - June 30, 2017
|
1,462,840
|
|
|
$
|
16.92
|
|
|
1,462,840
|
|
|
$
|
211,458,097
|
|
Total
|
4,495,536
|
|
|
|
|
|
4,495,536
|
|
|
|
|
(1)
|
During the period from
April 1, 2017
through
June 30, 2017
, all purchases were made pursuant to the program discussed below in open market transactions. All purchases were made in accordance with Rule 10b-18 under the Securities Exchange Act of 1934.
|
(2)
|
On August 24, 2016, our Board of Directors authorized the repurchase of our outstanding ordinary shares for up to $500 million. This is in accordance with the share purchase mandate whereby our shareholders approved a repurchase limit of 20% of our issued ordinary shares outstanding at the Annual General Meeting held on the same date as the Board authorization. As of
June 30, 2017
, shares in the aggregate amount of
$211.5 million
were available to be repurchased under the current plan.
|
|
|
FLEX LTD.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
/s/ Michael M. McNamara
|
|
|
Michael M. McNamara
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Date:
|
August 1, 2017
|
|
|
|
/s/ Christopher Collier
|
|
|
Christopher Collier
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
Date:
|
August 1, 2017
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|
Filed
|
|||
Exhibit No.
|
|
Exhibit
|
|
Form
|
|
File No.
|
|
Filing Date
|
|
Exhibit No.
|
|
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.01
|
|
|
Credit Agreement, dated as of June 30, 2017, among Flex Ltd. and certain of its subsidiaries from time to time party thereto, as borrowers, Bank of America, N.A., as Administrative Agent and Swing Line Lender, and the other Lenders party thereto.
|
|
8-K
|
|
000-
23354
|
|
6/30/2017
|
|
10.01
|
|
|
10.02
|
|
|
Scott Offer Offer Letter dated June 14, 2016
|
|
|
|
|
|
|
|
|
|
X
|
10.03
|
|
|
Description of Annual Incentive Bonus Plan for Fiscal 2018.
|
|
|
|
|
|
|
|
|
|
X
|
10.04
|
|
|
Description of Performance Long Term Incentive Plan for Fiscal 2018.
|
|
|
|
|
|
|
|
|
|
X
|
15.01
|
|
|
Letter in lieu of consent of Deloitte & Touche LLP.
|
|
|
|
|
|
|
|
|
|
X
|
31.01
|
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
31.02
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
32.01
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
|
•
|
You completing Section 1 of the Form I-9 and providing, within 3 business days of your start date, the legally required proof of your identity and authorization to work in the United States which
you will need to bring with you on your first day of employment
;
|
•
|
Your execution of the company’s Confidential Information and Inventions Agreement;
|
•
|
The satisfactory completion of your background investigation by the Company.
|
/s/ Scott Offer
|
|
6 . 14 . 16
|
|
9 . 5 . 16
|
|
SIGNATURE
|
|
TODAY'S DATE
|
|
START DATE
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Flex Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael M. McNamara
|
|
Michael M. McNamara
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Flex Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Christopher Collier
|
|
Christopher Collier
|
|
Chief Financial Officer
|
|
•
|
the Quarterly Report on Form 10-Q of the Company for the period ended
June 30, 2017
, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
August 1, 2017
|
/s/ Michael M. McNamara
|
|
|
Michael M. McNamara
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Date:
|
August 1, 2017
|
/s/ Christopher Collier
|
|
|
Christopher Collier
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|