Flextronics' net debt grows to $633 million; debt ratio remains flat

By Jennifer Lanning Drey

Savannah, Ga., Jan. 20 - Flextronics' net debt rose to $633 million in the third quarter ended Dec. 31 but its debt-to-EBITDA ratio was flat versus the prior quarter at 1.9 times, Paul Read, the company's chief financial officer, reported Thursday during its quarterly earnings conference call.

Total debt remained essentially flat at $2.2 billion.

The company ended the quarter with $1.6 billion in cash, which was down $190 million from the prior quarter, principally reflecting negative free cash flow and $68 million in cash payments to repurchase common stock, he said.

The company reported free cash flow of a use of $120 million for the period.

EBITDA rose to $335 million in the third quarter, up from $317 million in the prior quarter. Year-over-year, EBITDA increased $54 million from the third quarter of 2009

Also during the third quarter, Flextronics redeemed its $302 million outstanding 6¼% senior subordinated notes due 2014.

Its next significant debt maturity is in 2012.

Net sales increase 19%

Flextronics reported net sales of $7.8 billion, up from $6.6 billion in net sales for the same period in 2009. Adjusted net income for the third quarter was $193 million, an increase of $55 million versus the year-ago quarter.

"We continued to see broad-based year-over-year growth across all our market segments and almost all segments had healthy sequential growth for the third consecutive quarter, Read said.

Growth continues to be principally driven by new outsourcing programs, market share gains and the extension of favorable seasonal trends experienced by the mobile and consumer digital segments in the prior quarter, he said.

Flextronics is a Singapore-based company that provides manufacturing services to electronics companies.

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