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Multi-Fineline Electronix, Inc., a leading global provider of high-quality, technologically advanced flexible printed circuits and assemblies, today reported financial results for its second quarter ended June 30, 2015. Net sales for the second quarter of 2015 were $152.8 million, an increase of 17 percent, compared to net sales of $130.8 million for the same period last year.
Gross margin for the quarter was 12.2 percent, compared to (5.5) percent in the prior year second calendar quarter. The significant increase in gross margin was primarily due to higher sales, lower overhead and improved efficiencies resulting from the Company's 2014 restructuring, and shipments of certain previously written down flex assemblies driven by a program change, partially offset by expenses associated with preparing for new program ramps.
Net income for the second quarter of 2015 was $11.9 million or $0.47 per diluted share, compared to a net loss of $(28.8) million, or $(1.19) per diluted share, for the same period last year. The second quarter of 2015 included a $3 million tax benefit associated with the reversal of certain tax reserves. Calendar second quarter of 2014 included $8.4 million of pre-tax impairment and restructuring charges.
Reza Meshgin, Chief Executive Officer of MFLEX, commented, "Our second quarter results were in line with our guidance range and importantly, we consistently generated another quarter of strong profitability. This is our fourth consecutive profitable quarter under our new operating model, and we have now achieved significant profitability through a complete seasonal business cycle. This demonstrates that our new model can support profitability in both seasonally strong periods like the second half of 2014, as well as seasonally slower quarters."
The Company's largest customer represented 72 percent of net sales, with sales to newer customers accounting for 26 percent, or $39.9 million. Of these newer customers, one comprised 15 percent of net sales during the quarter.
The Company had cash and cash equivalents of $142.9 million at June 30, 2015. MFLEX continues to maintain a strong balance sheet with no debt.
Non-GAAP net income for the second quarter of 2015 was $12.5 million, or $0.49 per diluted share, compared to a non-GAAP net loss of $(20.7) million, or $(0.86) per diluted share, in the same period of the prior year. Non-GAAP net income excludes the impact of stock-based compensation expense, impairment and restructuring charges related to the Company's restructuring and valuation allowance related to restructuring. A reconciliation of GAAP net income (loss) and net income (loss) per share to non-GAAP net income (loss) and net income (loss) per share is provided in the table at the end of this press release.
For the third quarter of 2015, the Company expects net sales to be between $155 and $185 million and gross margin to range between 10 and 12 percent, based on anticipated production build plans, new product ramps, net sales volume and product mix.
Commenting on the outlook, Mr. Meshgin noted, "We anticipate a sequential increase in net sales driven by the new programs we expect to ramp during the third quarter. As is typical of new program ramps, our results will be highly dependent on the timing of the ramps across our customer base. We believe sequential net sales growth will continue into the December quarter, which has historically been our strongest quarter, supporting our expectations for healthy year-over-year sales growth and significant profitability for full year 2015."
MFLEX is a global provider of high-quality, technologically advanced flexible printed circuits and assemblies to the electronics industry. The Company is one of a limited number of manufacturers that provides a seamless, integrated end-to-end flexible printed circuit solution for customers, ranging from design and application engineering, prototyping and high-volume manufacturing to turnkey component assembly and testing. The Company targets its solutions within the electronics market and, in particular, focuses on applications where flexible printed circuits are the enabling technology in achieving a desired size, shape, weight or functionality of an electronic device. Current applications for the Company's products include smartphones, tablets, computer/data storage, portable bar code scanners, personal computers, wearables and other consumer electronic devices. MFLEX's common stock is quoted on the Nasdaq Global Select Market under the symbol MFLX.