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Electronics Production | October 28, 2010

Flextronics: Net sales increased 13% sequentially

Net sales for the second quarter ended October 1, 2010 increased 27% to USD 7.4 billion compared to net sales for the quarter ended October 2, 2009 of USD 5.8 billion.
Adjusted operating income increased USD 64 million or 43% to USD 213 million, compared to adjusted operating income of USD 149 million for the year ago quarter. Adjusted net income for the second quarter ended October 1, 2010 was USD 179 million, an increase of USD 75 million or 72%, and adjusted EPS increased USD 0.10 or 77% to USD 0.23, compared to USD 104 million and USD 0.13, respectively, for the year ago quarter. GAAP operating income, net income, and EPS were all up significantly year-over-year.

"We are very pleased with the results and the continued improvement achieved sequentially and year-over-year," said Mike McNamara, CEO of Flextronics. "We continue to improve quarter-over-quarter with sales increasing 13% to USD 7.4 billion. Every market segment and business unit also grew sequentially and year-over-year. Flextronics' asset management has been outstanding which has driven substantial improvements and consistency in our return on invested capital (ROIC). For the quarter, ROIC increased to a record 31.9%, well above the 22.2% of a year ago, and up from 28.8% last quarter."

Paul Read, CFO of Flextronics added, "We improved on our industry leading cash conversion cycle by two days to 12 days, generated USD 509 million in cash flow from operations, and USD 385 million of free cash flow during the quarter. This allowed us to repurchase an additional USD 195 million of our shares for a total of USD 300 million repurchased year-to-date while still increasing our strong cash position to USD 1.8 billion."

Guidance

For the third quarter ending December 31, 2010, revenue is expected to increase to a range of USD 7.5 - 7.7 billion.

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