Flex Ltd. has recently released its 10-K report, providing a detailed look at its business operations. The company operates through two segments, Flex Agility Solutions (FAS) and Flex Reliability Solutions (FRS). FAS offers flexible supply and manufacturing systems for communications, enterprise, and cloud solutions, lifestyle products, and consumer devices. On the other hand, FRS provides complex ramps with specialized production models and critical environments for automotive, health solutions, and industrial solutions. Flex also offers various services, including design and engineering, supply chain, manufacturing, logistics, and value-added fulfillment.
The company reported revenues from continuing operations of $26.4 billion in the fiscal year ended March 31, 2024. It operates approximately 100 facilities in 30 countries across four continents, with total manufacturing capacity of approximately 27 million square feet. The net sales by region for the fiscal year ended March 31, 2024, were as follows: Americas * $12,232 million (46%), Asia * $8,540 million (32%), and Europe * $5,643 million (22%). Net sales by country were led by Mexico with $6,935 million (26%), followed by China with $5,117 million (19%), and the U.S. with $3,598 million (14%).
In fiscal year 2024, Flex reported a decrease in net sales of approximately 7%, or $2.1 billion, compared to the prior year. The gross profit totaled $1.9 billion, representing a decrease of 6% from the prior year, primarily driven by higher restructuring charges. However, the net income totaled $0.9 billion, representing an increase of 28% compared to fiscal year 2023, due to factors such as a net $0.2 billion income tax benefit in fiscal year 2024 attributed primarily to the release of a U.S. deferred tax asset valuation allowance.
Cash provided by operating activities increased by approximately $0.4 billion, primarily driven by the $0.2 billion increase in net income and improvement in net working capital, offset by a change in deferred income taxes. Flex reported adjusted free cash flow of $0.8 billion for fiscal year 2024, compared to $0.3 billion for fiscal year 2023. Cash used in investing activities decreased to a cash outflow of $0.5 billion for fiscal year 2024, compared with a cash outflow of $0.6 billion for fiscal year 2023.
Flex continues to monitor potential supply chain disruptions, including disruptions in international commerce as a result of attacks on shipping vessels in the Red Sea. The company is also monitoring and responding to the conflict in Ukraine and the Israel-Hamas war, with no material impact on its business operations and financial performance as of the date of the report. Flex believes that its strategy is positioning it to take advantage of the long-term, future growth prospects for outsourcing of advanced manufacturing capabilities, design and engineering services, and after-market services. Today the company's shares have moved 0.5% to a price of $29.3. Check out the company's full 10-K submission here.
