8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 19, 2004

FLEXTRONICS INTERNATIONAL LTD.

(Exact Name of Registrant as Specified in Its Charter)

	Singapore
	(State or Other Jurisdiction of Incorporation)
0-23354		Not Applicable
(Commission File Number)		(IRS Employer Identification No.)

One Marina Boulevard, #28-00, Singapore	018989
(Address of Principal Executive Offices)	(Zip Code)

(65) 6890 7188

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	Item 7. Financial Statements and Exhibits.
	Item 12. Results of Operations and Financial Condition.
SIGNATURE
EXHIBIT INDEX
EXHIBIT 99.01

Item 7. Financial Statements and Exhibits.

(c)	Exhibits.
	The following exhibit is filed herewith:

Exhibit No.	Exhibit Title
99.01	Press Release, dated July 19, 2004, issued by Flextronics International Ltd.*

* This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

Item 12. Results of Operations and Financial Condition.

     On July 19, 2004, Flextronics International Ltd. (the “Company”) issued a press release announcing its results for the first fiscal quarter ended June 30, 2004. A copy of the press release is attached as Exhibit 99.01 to this Current Report.

     The press release includes non-GAAP operating results. Non-GAAP operating results are not based on any standardized methodology prescribed by U.S. generally accepted accounting principles (“GAAP”) and are not necessarily comparable to similar measures presented by other companies. Non-GAAP operating results should not be considered in isolation or as a substitute for operating results prepared in accordance with GAAP. The Company has provided a reconciliation of non-GAAP operating results to GAAP operating results in the Schedules of the attached press release.

     Management utilizes non-GAAP operating results as a performance measure and furnishes the information in order to provide investors with additional information to analyze the Company’s operating results and facilitate period to period comparisons. Non-GAAP operating results exclude after-tax intangibles amoritization, restructuring and other charges. Management uses non-GAAP operating results as a measure of enterprise-wide performance. The Company reports non-GAAP operating results to provide its investors with an alternative method for assessing its operating results in a manner that is focused on what it believes to be its core business operations. In addition, since the Company has historically reported non-GAAP operating results to the investment community, the Company believes the inclusion of non-GAAP numbers provides consistency in its financial reporting.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FLEXTRONICS INTERNATIONAL LTD.
Date: July 19, 2004	By:	/s/ Robert R.B. Dykes
		Robert R.B. Dykes
		President, Systems Group and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit Title
99.01	Press Release, dated July 19, 2004, issued by Flextronics International Ltd.*

* This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

EX-99.01

Exhibit 99.01

Flextronics contacts:
Thomas J. Smach
Senior Vice President of Finance
+1.408.576.7722
investor_relations@flextronics.com

Renee Brotherton
Senior Director of Corporate Marketing
+1.408.576.7189
renee.brotherton@flextronics.com

FLEXTRONICS ANNOUNCES FIRST QUARTER RESULTS
- - Revenues Increased 25% Year-Over-Year;
- - GAAP Net Income Increased $364 Million Year-Over-Year

Singapore, July 19, 2004 – Flextronics (NASDAQ: FLEX) today announced results for its first quarter ended June 30, 2004 as follows:

(USD in millions, except EPS)	Three Months Ended
	June 30, 2004		June 30, 2003
Net sales	$	3,880.4	$	3,106.7
GAAP net income (loss)	$	74.3	$	(289.7	)
Net income, excluding amortization, restructuring and other charges (1)	$	78.3	$	20.4
Diluted GAAP EPS	$	0.13	$	(0.56	)
Diluted EPS excluding amortization, restructuring and other charges (1)	$	0.14	$	0.04

(1) The non-GAAP financial measures disclosed in this release exclude certain amounts that are included in the most directly comparable GAAP measures. Non-GAAP results exclude after-tax intangibles amortization, restructuring and other charges, as applicable. The Company recorded intangible amortization expense of $8.7 million and $8.8 million during the quarters ended June 30, 2004 and June 30, 2003, respectively. The Company also recorded restructuring charges of $23.6 million and $327.1 million during the quarters ended June 30, 2004 and June 30, 2003, respectively, which were primarily related to the closures and consolidations of various manufacturing facilities. The tax benefit relating to the restructuring and other charges during the quarter ended June 30, 2004 includes $25.0 million relating to the establishment of a deferred tax asset resulting from a tax law change in Hungary that replaced a tax holiday incentive with a tax credit incentive. See Schedule 1 attached to this press release for a reconciliation of non-GAAP results to Generally Accepted Accounting Principles (“GAAP”) results.

First Quarter Results

Net sales for the first quarter were $3.88 billion, which represents an increase of $773.7 million, or 25% over the June 2003 quarter. Excluding restructuring and other charges, net income for the first quarter increased 283% to $78.3 million, or $0.14 per diluted share, compared with $20.4 million, or $0.04 per diluted share in the year ago quarter. GAAP net income for the first quarter increased by $364.0 million to $74.3 million, or $0.13 per diluted share, as compared to a loss of $289.7 million, or a loss of $0.56 per diluted share in the year ago quarter.

The quarterly results reflect continued industry-leading working capital management, with a cash conversion cycle of 19 days and inventory turns in excess of 11 times. In addition, Flextronics generated approximately $166 million in cash flow from operations in the first quarter.

“As I mentioned last quarter, our focus is on continually driving improvements in our financial results, and I am pleased we have again delivered meaningful operating results. We realized the earnings leverage inherent in our business by delivering net income growth that was more than eleven times the 25% increase in our year-over-year quarterly revenues. In addition, compared to the year ago quarter, we increased both gross and operating margins by 110 basis points, and continued to firmly manage our SG&A, driving it down 10 basis points to 3.6% of sales,” said Michael E. Marks, Chief Executive Officer of Flextronics. “The improvement in margins was driven by effective management of our operations, which included aggressive restructuring in prior periods as well as continuous cost reductions. Additionally, a healthier demand environment not only improves our factory utilization and increases overhead absorption, but also provides an opportunity for us to improve our pricing,” added Marks.

Guidance

The Company provided guidance for quarterly earnings per diluted share of $0.15-$0.18 in the September 2004 quarter and $0.21-$0.24 in the December 2004 quarter, excluding amortization, restructuring and other charges. Quarterly GAAP earnings per diluted share are expected to be lower than the guidance provided by approximately $0.01-$0.02 per diluted share reflecting quarterly amortization, restructuring and other charges.

Conference Call and Web Cast

A conference call hosted by Flextronics’ management will be held today at 1:30 p.m. PDT to discuss the Company’s financial results and its outlook. This call will be broadcast via the Internet and may be accessed by logging on to the Company’s website at www.flextronics.com. Additional information in the form of a slide presentation and CEO’s Letter to Shareholders that summarizes and discusses the quarterly results may also be found on the site. A replay of the broadcast will remain available on the Company’s website after the call.

Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software (free download at http://www.microsoft.com/windows/windowsmedia/download/default.asp) and at least a 28.8 Kbps bandwidth connection to the Internet.

About Flextronics

Headquartered in Singapore, Flextronics is the leading Electronics Manufacturing Services (EMS) provider focused on delivering operational services to technology companies. With fiscal year 2004 revenues of US$14.5 billion, Flextronics is a major global operating company with design, engineering, manufacturing and logistics operations in 32 countries and five continents. This global presence allows for manufacturing excellence through a network of facilities situated in key markets and geographies that provide its customers with the resources, technology and capacity to optimize their operations. Flextronics’ ability to provide end-to-end operational services that include innovative product design, test solutions, manufacturing, IT expertise, network services, and logistics has established the Company as the leading EMS provider. For more information, please visit www.flextronics.com.

# # #

This news release, the CEO’s Letter to the Shareholders and the earnings slide presentation contain forward-looking statements within the meaning of federal securities laws and are subject to the safe harbor under those laws. These forward-looking statements include statements related to trends in our industry and end markets, changes in customer demand, future growth and demand trends, pricing, existing and new customer activities, seasonality, anticipated revenues, earnings leverage, operating margins and results, cash flow, profitability, inventory levels, and the expected impact of potential new programs on our anticipated revenues and earnings. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. These risks include the challenges of effectively managing our operations, the risk that we may not obtain anticipated new customer programs, or that if we do, they may be delayed, and may not contribute to our revenue or profitability as expected, or at all, the need for future restructurings, the risks that we may not obtain the benefits anticipated from acquisitions or succeed in integrating acquired companies, our ability to respond to changes in economic trends and to fluctuations in demand for customers’ products and changes in customers’ orders, our dependence on a small number of large customers, our dependence on industries affected by rapid technological change, competition in our industry, risks of shortages of key components, and the other risks described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Factors” in our most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q and current reports on Form 8-K, filed with the SEC. The forward-looking statements in this news release, the CEO’s Letter to the Shareholders and the earnings slide presentation, are based on current expectations, and Flextronics assumes no obligation to update these forward-looking statements.

SCHEDULE 1

FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended June 30, 2004								Three Months Ended June 30, 2003
			Required								Required
	Non-GAAP(1)		Adjustments			GAAP			Non-GAAP(1)		Adjustments			GAAP
Net sales	$	3,880,448				$	3,880,448		$	3,106,677				$	3,106,677
Cost of sales		3,633,516					3,633,516			2,941,636					2,941,636
Restructuring and other charges		—		20,991			20,991			—		308,835			308,835
Gross profit		246,932		(20,991	)		225,941			165,041		(308,835	)		(143,794	)
Selling, general and administrative expenses		141,596					141,596			116,415					116,415
Restructuring and other charges		—		2,597			2,597			—		18,273			18,273
Operating income (loss)		105,336		(23,588	)		81,748			48,626		(327,108	)		(278,482	)
Intangibles amortization		—		8,661			8,661			—		8,817			8,817
Interest and other expense, net		18,286					18,286			25,911					25,911
Loss on early extinguishment of debt		—					—			—		8,695			8,695
Income (loss) before income taxes		87,050		(32,249	)		54,801			22,715		(344,620	)		(321,905	)
Provision for (benefit from) income taxes		8,705		(28,226	)		(19,521	)		2,272		(34,462	)		(32,190	)
Net income (loss)	$	78,345	$	(4,023	)	$	74,322		$	20,443	$	(310,158	)	$	(289,715	)
Earnings (loss) per share:
Basic	$	0.15				$	0.14		$	0.04				$	(0.56	)
Diluted	$	0.14				$	0.13		$	0.04				$	(0.56	)
Shares used in computing per share amounts:
Basic		530,626					530,626			521,100					521,100
Diluted		568,013					568,013			549,995					521,100

(1) The non-GAAP financial measures disclosed in this release exclude certain amounts that are included in the most directly comparable GAAP measures. Non-GAAP results exclude after-tax intangibles amortization, restructuring and other charges, as applicable. The Company recorded intangible amortization expense of $8.7 million and $8.8 million during the quarters ended June 30, 2004 and June 30, 2003, respectively. The Company also recorded restructuring charges of $23.6 million and $327.1 million during the quarters ended June 30, 2004 and June 30, 2003, respectively, which were primarily related to the closures and consolidations of various manufacturing facilities. The tax benefit adjustment of $28.2 million for the quarter ended June 30, 2004 includes $25.0 million relating to the establishment of a deferred tax asset resulting from a tax law change in Hungary that replaced a tax holiday incentive with a tax credit incentive.

SCHEDULE 2

FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

	As of		As of
	June 30, 2004		March 31, 2003
ASSETS
Current Assets:
Cash and cash equivalents, including restricted cash of $83,200 in 2004	$	664,624	$	615,276
Accounts receivable, net		1,896,907		1,871,637
Inventories		1,385,656		1,179,513
Deferred income taxes		6,363		14,244
Other current assets		537,670		581,063
Total current assets		4,491,220		4,261,733
Property, plant and equipment, net		1,616,919		1,625,000
Deferred income taxes		646,715		604,785
Goodwill and other intangibles, net		2,742,110		2,721,432
Prepaid purchase of 55% of Hughes Software Systems		226,461		—
Other assets		470,137		370,987
Total assets	$	10,193,562	$	9,583,937
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Bank borrowings and current portion of long-term debt	$	57,529	$	96,287
Current portion of capital lease obligations		8,210		8,203
Accounts payable		2,439,961		2,145,174
Other current liabilities		1,080,719		1,127,253
		3,586,419		3,376,917
Long-term debt, net of current portion:
Capital lease obligations		13,092		15,084
Zero Coupon Convertible Junior Subordinated Notes due 2008		200,000		200,000
9 7/8 % Senior Subordinated Notes due 2010, net of discount		7,659		7,659
9 3/4 % Euro Senior Subordinated Notes due 2010		181,884		181,422
1 % Convertible Subordinated Notes due 2010		500,000		500,000
6 1/2 % Senior Subordinated Notes due 2013		399,650		399,650
Revolving line of credit due 2008		536,000		220,000
Other		99,067		100,446
Other liabilities		202,263		215,546
Total shareholders’ equity		4,467,528		4,367,213
Total liabilities and shareholders’ equity	$	10,193,562	$	9,583,937