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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 third quarter ended September 30, 2015. Net income of $13.7 million, or $0.54 per diluted share, increased 131 percent from $5.9 million, or $0.24 per diluted share, in the same period last year.
Reza Meshgin, Chief Executive Officer of MFLEX, commented, "With outstanding operational execution during the third quarter, we achieved our fifth consecutive quarter of strong profitability with earnings per share more than doubling year-over-year. We saw a sequential increase in net sales driven by new programs that ramped during the third quarter. Gross margin also increased sequentially and exceeded our guidance range as we effectively managed the launch and ramp of these new programs. Additionally, we generated strong cash flows during the quarter, growing our cash position to $168.5 million, an all-time high for MFLEX."
Net sales for third quarter 2015 were $165.7 million, in line with the Company's guidance range, compared to $172.9 million for the same period last year. Net sales to the Company's largest customer increased 28 percent year-over-year, offset by an expected year-over-year decline with a Korea-based customer, as well as recent weakness with a China-based customer due to market changes within the high-end smartphone segment in China.
Gross margin for the quarter was 13.6 percent, exceeding the Company's guidance range, compared to 10.1 percent in the same period of the prior year. The 350 basis point increase in gross margin was primarily due to a favorable product mix, as well as lower manufacturing overhead.
The Company generated $30.7 million in cash flows from operating activities during the third quarter, increasing the Company's cash and cash equivalents balance to $168.5 million at September 30, 2015. MFLEX continues to maintain a strong balance sheet with no debt.
Non-GAAP net income for third quarter 2015 was $14.3 million, or $0.57 per diluted share, compared to non-GAAP net income of $6.9 million, or $0.28 per diluted share, in the same period of the prior year. A reconciliation of GAAP net income and net income per share to non-GAAP net income and net income per share is provided in the table at the end of this press release.
For fourth quarter 2015, the Company expects net sales to be between $170 and $200 million and gross margin to range between 10.5 and 13 percent, based on anticipated production build plans, net sales volume and product mix.
Commenting on the outlook, Mr. Meshgin noted, "We anticipate another sequential increase in net sales during the fourth quarter as we deliver a full quarter of volume production on various new programs. We expect this, coupled with our strong results year-to-date, to support significant profitability for full year 2015, demonstrating that we are squarely back on track with our new operating model."
MFLEX (www.mflex.com) 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.