“We remain committed to our Sketch-to-Scale strategy and are thrilled to have delivered 14 straight quarters of year-over-year operating margin expansion,” said Mike McNamara, CEO at Flex. “We have built a business model that produces outstanding cash flow consistently year after year. We have generated positive operating cash flow in 23 of our past 24 quarters. For the year, cash flow from operations totaled $1.15 billion and free cash flow was $660 million.”
| (US$ in millions, except EPS) | Three-Month Periods Ended | Twelve Month Periods Ended | ||||||
| March 31, 2017 | March 31, 2016 | March 31, 2017 | March 31, 2016 | |||||
| Net sales | $ | 5,863 | $ | 5,773 | $ | 23,863 | $ | 24,419 |
| GAAP income before income taxes | $ | 99 | $ | 69 | $ | 371 | $ | 455 |
| Adjusted operating income | $ | 205 | $ | 200 | $ | 815 | $ | 792 |
| GAAP net income | $ | 87 | $ | 61 | $ | 320 | $ | 444 |
| Adjusted net income | $ | 156 | $ | 161 | $ | 640 | $ | 645 |
| GAAP EPS | $ | 0.16 | $ | 0.11 | $ | 0.59 | $ | 0.79 |
| Adjusted EPS | $ | 0.29 | $ | 0.29 | $ | 1.17 | $ | 1.14 |
An explanation and reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedule II attached to this press release.
Fourth Quarter Fiscal 2017 Results of Operations
Net sales for the fourth quarter ended March 31, 2017 were approximately $5.9 billion, which was at the high end of our guidance range of $5.5 to $5.9 billion.
GAAP income before income taxes was $99 million for the quarter and adjusted operating income was $205 million, above the mid-point of the guidance range of $185 million to $215 million.
Net income on a GAAP basis was approximately $87 million and adjusted net income for the quarter was $156 million. GAAP EPS was $0.16 for the quarter and non-GAAP EPS was $0.29 for the quarter.
Fiscal Year 2017 Results of Operations
Net sales for the fiscal year ended March 31, 2017 were $23.9 billion. Fiscal year 2017 GAAP income before income tax was $371 million and fiscal year 2017 adjusted operating income was $815 million. GAAP EPS was $0.59 and adjusted earnings per diluted share was $1.17 for fiscal year 2017.
Flex's fiscal year 2017 performance illustrates its portfolio evolution to higher margin businesses. The Company's two higher margin business groups, High Reliability Solutions (HRS) and Industrial & Emerging Industries (IEI), combined were $9.1 billion or 38% of net sales in the fiscal year ended March 31, 2017, a $537 million increase from a year ago.
Cash Flow and Balance Sheet
For the twelve-month period ended March 31, 2017, Flex generated net cash from operations of $1.1 billion and free cash flow of $660 million. Strong cash flow generation has funded share repurchases of approximately $90 million and $350 million for the three and twelve-month periods ended March 31, 2017, respectively. The Company remains committed to return over 50% of annual free cash flow to its shareholders. Flex ended the quarter with $1.8 billion of cash on hand and total debt of $3.0 billion. The balance sheet remains strong and is well-positioned to support the business over the long term.
Q1 Fiscal Year 2018 Guidance & Business Outlook
For the first quarter ending June 30, 2017, revenue is expected to be in the range of $5.7 to $6.1 billion, GAAP EPS is expected to be in the range of $0.16 to $0.20 and includes stock-based compensation expense ($0.04), and intangible amortization ($0.04). The Company expects some increased levels of investment in the next couple of quarters to support its long-term vision and growth, while maintaining its commitment to return value to shareholders. Adjusted EPS is expected to be in the range of $0.24 to $0.28 per diluted share and reflects the increased level of investment.
Conference Calls and Web Casts
A conference call hosted by the Flex management team will be held today at 2:00 PM (PT) / 5:00 PM (ET) to discuss the Company's financial results for the fourth quarter ended March 31, 2017. The conference call will be broadcast via the Internet and may be accessed by logging on to the Company's website at www.flex.com. Additional information in the form of a slide presentation may also be found on the Company's site. A replay of the broadcast will remain available on the Company's website afterwards.
