Slide 1: Results for Q1 Fiscal 2020
Results for Q1 Fiscal 2020 Earnings Announcement: July 25, 2019 (Quarter Ended June 28, 2019)
Slide 2: Risks and Non-GAAP Disclosures
Risks and Non-GAAP Disclosures This presentation contains forward-looking statements within the meaning of U.S. securities laws. All statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the fu
Slide 3: Business Update
Business Update Revathi Advaithi, CEO
Slide 4: Q1 FY2020 Business Summary
Q1 FY2020 Business Summary Revenue ($M) Adj. Operating Adj. Earnings Free Cash Income ($M) Per Share Flow ($M) Adj. Operating Margin 6,399 3.4% 2.9% $0.27 114 208 6,176 188 $0.24 (185) 18-Jun 19-Jun 18-Jun 19-Jun 18-Jun 19-Jun 18-Jun 19-Jun • Revenue, adj. operating income, and adj. EPS were all wit
Slide 5: Approach to Managing the Business
Approach to Managing the Business Manage Drive Pursue Generate portfolio to disciplined, design-led free cash flow improve mix and sustainable manufacturing and have profitability execution for better margins prudent capital allocation Accelerating our business strategy and evaluating all opportunit
Slide 6: Progress to Date
Progress to Date • Thoughtful but swift decision to exit low margin, high volatility products • CEC booking higher percentage of design-led wins with greater margin • Emphasis to grow in Industrial capturing new technology trends • Focus on managing factory variances consistent to revenue and mix ch
Slide 7: Decision Criteria to Manage the Portfolio
Decision Criteria to Manage the Portfolio • Typically within an industry segment we already serve or immediately adjacent • Leverage existing global footprint • Market volatility is low and product lifecycles are longer • Operating margin is mid single digits or higher • Technology or design advanta
Slide 8: Capital Allocation Framework
Capital Allocation Framework • Reinvest organically in our businesses to deliver accretive ROIC • Repurchase stock to offset share dilution and consistent with prior commitments • Targeted M&A to expand longer product lifecycle businesses and design and engineering capabilities 120 • Maintain a heal
Slide 9: Q1 2020 Financial Results
Q1 2020 Financial Results Chris Collier, CFO
Slide 10: Q1 FY2020 Income Statement Summary
Q1 FY2020 Income Statement Summary ($M, except per share amounts) Prior Yr Current Qtr June 29, 2018 June 28, 2019 Net sales $6,399 $6,176 Adjusted operating income 188 208 Adjusted net income 128 138 Adjusted EPS $0.24 $0.27 GAAP income before income taxes 142 64 GAAP net income 116 45 GAAP EPS 0.2
Slide 11: Quarterly Financial Highlights
Quarterly Financial Highlights Adj. Gross Profit ($M) Adj. SG&A (incl. R&D) ($M) Adj. Operating Income ($M) Adj. Gross Margin % of Revenue Adj. Operating Margin 6.5% 6.5% 3.5% 3.4% 3.2% 413 225 2.9% 404 208 196 188 18-Jun 19-Jun 18-Jun 19-Jun 18-Jun 19-Jun Our cost discipline has resulted in improve
Slide 12: Q1 FY2020 Business Group Performance
Q1 FY2020 Business Group Performance Adjusted Operating Targeted Adjusted Revenue Income Operating Margin ($M) Y/Y Growth ($M) 7.4% HRS $1,178 -3% $87 6 9 5.8% IEI $1,637 13% $95 4 6 1.4% CEC $1,859 -5% $26 2.5 3.5 2.0% CTG $1,502 -16% $30 2 4 Corporate Services & Other* -- ($31) -- Total $6,176 -3%
Slide 13: Cash Flow Generation Highlights
Cash Flow Generation Highlights 3-Months Adjusted Operating Cash Flow ($M) Ended ($M) (Jun 28, 2019) 283 246 237 GAAP net income $45 120 Depreciation, amortization and other impairment 190 charges (15) Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Change in working capital and other 2 Adjusted net cash provide
Slide 14: Second Quarter Fiscal 2020 Guidance – September 2019
Second Quarter Fiscal 2020 Guidance – September 2019 Guidance Business Group Outlook (Y/Y) Revenue $6,100 - $6,500 million HRS +/- low single digits Adjusted Operating Income $220 - $250 million Adjusted Earnings Per Share $0.29 - $0.33 IEI Up mid to high single digits GAAP Loss Before Income Taxes
Slide 15: Summary
Summary • Flex’s performance was in-line with guidance despite geopolitical issues • We are accelerating our portfolio mix strategy to improve the financial performance of our business • We have made substantial progress to improve our performance by beginning to reduce exposure to high-volatility,
Slide 16: For more information, go to investors.flex.com
For more information, go to investors.flex.com 15
Slide 17: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended June 28, 2019 June 29, 2018 ($Thousands, except per share amounts) GAAP income before income taxes $64,109 $141,637 Intangible amortization 17,082 18,517 Stock-based compensation expense 15,227 20,953 Customer related
Slide 18: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended June 28, 2019 June 29, 2018 ($Thousands) GAAP gross profit $352,759 $377,854 Stock-based compensation expense 2,940 5,404 Customer related asset impairments 483 12,352 Restructuring charges 47,405 2,310 New revenue sta
Slide 19: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended June 28, 2019 June 28, 2019 ($Thousands) ($Thousands) Segment Income: Reconciliation of segment income to income before Communication & Enterprise Compute $26,147 income taxes Total Segment Income $207,860 Consumer Tec
Slide 20: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended Quarter-ended Quarter-ended Quarter-ended ($Thousands) June 28, 2019 March 31, 2019 December 31, 2018 September 28, 2018 June 29, 2018 Net cash used in operating activities ($656,866) ($642,418) ($621,010) ($764,331) (
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