flex-20240628

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-23354

FLEX LTD.

(Exact name of registrant as specified in its charter)


Singapore						Not Applicable
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)


2 Changi South Lane,
Singapore						486123
(Address of principal executive offices)						(Zip Code)

(65) 6876-9899

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Ordinary Shares, No Par Value

FLEX

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s ordinary shares outstanding as of July 19, 2024 was 397,071,279.

Table of Contents

FLEX LTD.

INDEX


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Report of Independent Registered Public Accounting Firm	3
	Condensed Consolidated Balance Sheets (unaudited) — June 28, 2024 and March 31, 2024	4
	Condensed Consolidated Statements of Operations (unaudited) — Three-Month Periods Ended June 28, 2024 and June 30, 2023	5
	Condensed Consolidated Statements of Comprehensive Income (unaudited) — Three-Month Periods Ended June 28, 2024 and June 30, 2023	6
	Condensed Consolidated Statements of Noncontrolling Interest and Shareholders' Equity (unaudited) — Three-Month Periods Ended June 28, 2024 and June 30, 2023	7
	Condensed Consolidated Statements of Cash Flows (unaudited) — Three-Month Periods Ended June 28, 2024 and June 30, 2023	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Flex Ltd., Singapore

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of Flex Ltd. and its subsidiaries (the “Company”) as of June 28, 2024, the related condensed consolidated statements of operations, comprehensive income, noncontrolling interest and shareholders’ equity, and cash flows for the three-month periods ended June 28, 2024 and June 30, 2023, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of March 31, 2024 and the related consolidated statements of operations, comprehensive income, redeemable noncontrolling interest and shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated May 17, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 2024 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ DELOITTE & TOUCHE LLP
San Jose, California
July 26, 2024

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FLEX LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS


	As of June 28, 2024		As of March 31, 2024
	(In millions, except share amounts) (Unaudited)


ASSETS
Current assets:
Cash and cash equivalents	$	2,243	$	2,474
Accounts receivable, net of allowance of $11 and $12, respectively	2,952		3,033
Contract assets	457		249
Inventories	5,839		6,205
Other current assets	1,057		1,031

Total current assets	12,548		12,992
Property and equipment, net	2,228		2,269
Operating lease right-of-use assets, net	573		601
Goodwill	1,139		1,135
Other intangible assets, net	230		245
Other non-current assets	1,019		1,015

Total assets	$	17,737	$	18,257

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings and current portion of long-term debt	$	543	$	—
Accounts payable	4,726		4,468
Accrued payroll and benefits	428		488
Deferred revenue and customer working capital advances	2,265		2,615
Other current liabilities	1,007		968

Total current liabilities	8,969		8,539
Long-term debt, net of current portion	2,672		3,261
Operating lease liabilities, non-current	463		490
Other non-current liabilities	637		642

Total liabilities	12,741		12,932


Shareholders’ equity

Ordinary shares, no par value; 1,500,000,000 authorized, 399,382,891 and 408,101,772 issued, and 399,382,891 and 408,101,772 outstanding, respectively	4,649		5,074

Accumulated earnings	585		446
Accumulated other comprehensive loss	(238)		(195)


Total shareholders’ equity	4,996		5,325
Total liabilities and shareholders' equity	$	17,737	$	18,257

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FLEX LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three-Month Periods Ended
	June 28, 2024		June 30, 2023
	(In millions, except per share amounts) (Unaudited)
Net sales	$	6,314	$	6,892
Cost of sales	5,827		6,399
Restructuring charges	16		17
Gross profit	471		476
Selling, general and administrative expenses	213		235
Restructuring charges	9		6
Intangible amortization	16		20
Operating income	233		215
Interest expense	56		56
Interest income	16		16
Other charges (income), net	1		11

Income from continuing operations before income taxes	192		164
Provision for income taxes	53		17
Net income from continuing operations	139		147
Net income from discontinued operations, net of tax	—		64
Net income	139		211
Net income attributable to noncontrolling interest	—		25
Net income attributable to Flex Ltd.	$	139	$	186

Basic earnings per share from continuing operations	$	0.35	$	0.33
Basic earnings per share from discontinued operations	—		0.09
Basic earnings per share attributable to the shareholders of Flex Ltd.	$	0.35	$	0.42

Diluted earnings per share from continuing operations	$	0.34	$	0.32
Diluted earnings per share from discontinued operations	—		0.09
Diluted earnings per share attributable to the shareholders of Flex Ltd.	$	0.34	$	0.41

Weighted-average shares used in computing per share amounts:
Basic	402		447
Diluted	411		455

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FLEX LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three-Month Periods Ended
	June 28, 2024		June 30, 2023
	(In millions) (Unaudited)
Net income	$	139	$	211
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(16)		(9)
Unrealized gain (loss) on derivative instruments and other	(27)		34
Comprehensive income	$	96	$	236
Comprehensive income attributable to noncontrolling interest	—		25
Comprehensive income attributable to Flex Ltd.	$	96	$	211

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FLEX LTD.

CONDENSED CONSOLIDATED STATEMENTS OF NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY


	Ordinary Shares					Accumulated Other Comprehensive Loss										Total
Three Months Ended June 28, 2024	Shares Outstanding	Amount		Accumulated Earnings (Deficit)		Unrealized Gain (Loss) on Derivative Instruments and Other		Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Gain (Loss)		Total Flex Ltd. Shareholders' Equity		Noncontrolling Interest		Shareholders' Equity
	(In millions) Unaudited
BALANCE AT MARCH 31, 2024	408	$	5,074	$	446	$	4	$	(199)	$	(195)	$	5,325	$	—	$	5,325
Repurchase of Flex Ltd. ordinary shares at cost	(15)	(457)		—		—		—		—		(457)		—		(457)
Issuance of Flex Ltd. vested shares under restricted share unit awards	6	—		—		—		—		—		—		—		—
Net income	—	—		139		—		—		—		139		—		139
Stock-based compensation	—	32		—		—		—		—		32		—		32
Total other comprehensive income (loss)	—	—		—		(27)		(16)		(43)		(43)		—		(43)
BALANCE AT JUNE 28, 2024	399	$	4,649	$	585	$	(23)	$	(215)	$	(238)	$	4,996	$	—	$	4,996


	Ordinary Shares					Accumulated Other Comprehensive Loss										Total
Three Months Ended June 30, 2023	Shares Outstanding	Amount		Accumulated Earnings (Deficit)		Unrealized Gain (Loss) on Derivative Instruments and Other		Foreign Currency Translation Adjustments		Total Accumulated Other Comprehensive Gain (Loss)		Total Flex Ltd. Shareholders' Equity		Noncontrolling Interest		Shareholders' Equity
	(In millions) Unaudited
BALANCE AT MARCH 31, 2023	450	$	6,105	$	(560)	$	(14)	$	(180)	$	(194)	$	5,351	$	355	$	5,706
Repurchase of Flex Ltd. ordinary shares at cost	(9)	(197)		—		—		—		—		(197)		—		(197)



Issuance of Flex Ltd. vested shares under restricted share unit awards	8	—		—		—		—		—		—		—		—
Net income	—	—		186		—		—		—		186		25		211
Stock-based compensation	—	41		—		—		—		—

SEC Form 10-Q filed by Flex Ltd.