<PAGE> 1
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) NOVEMBER 19, 1996
FLEXTRONICS INTERNATIONAL LTD.
(Exact name of registrant as specified in charter)
SINGAPORE 0-23354 NOT APPLICABLE
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
514 CHAI CHEE LANE #04-13, BEDOK INDUSTRIAL ESTATE, SINGAPORE 469029
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (65) 449-5255
N/A
(Former name or former address, if changed since last report.)
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ITEM 5. Other Events
(a) On November 19, 1996, Flextronics International Ltd.
("Flextronics" or the "Company" or the "Registrant") entered into a letter of
intent with Ericsson Business Networks AB ("Ericsson") to acquire Ericsson's
production unit in Karlskrona, Sweden (the "Karlskrona Facility"). The
Karlskrona Facility manufactures sub units from business communication systems,
such as the MD110 PBX, Eripax, as well as components for DECT-based systems for
business cordless and radio access (DRA 1900). Flextronics intends to continue
such business and will also offer employment with Flextronics to approximately
900 of the 1,000 current employees at the Karlskrona Facility.
(b) On November 25, 1996, Flextronics acquired Fine Line
Printed Circuit Design, Inc., a California corporation ("Fine Line"), by the
statutory merger (the "Merger") of Fine Line with and into Flextronics
International USA, Inc., a California corporation and a wholly-owned subsidiary
of Flextronics ("Flextronics USA"). The Merger was accomplished pursuant to that
certain Agreement and Plan of Reorganization dated as of November 25, 1996, by
and among Flextronics, Flextronics USA and Fine Line, and a related Agreement of
Merger (collectively, the "Merger Agreements"). The Merger of Fine Line with and
into Flextronics USA occurred following the approval of the Merger Agreements by
the shareholders of Fine Line by written consent, which was received on November
25, 1996, and satisfaction of certain other closing conditions. As a result of
the Merger, the Registrant became the owner of 100% of the issued and
outstanding Common Stock of Fine Line and each outstanding share of Common Stock
of Fine Line was converted into 0.20099 of an Ordinary Share of the Registrant.
The terms of the Merger Agreements were the result of arms-length negotiations
among the parties.
A total of approximately 223,321 Ordinary Shares of the
Registrant will be issued to former Fine Line shareholders in exchange for the
acquisition by the Registrant of all outstanding Fine Line capital stock. The
shares issued to the shareholders of Fine Line were issued pursuant to the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended.
Fine Line is a circuit board layout and prototype
operation. The Registrant intends to continue such business.
ITEM 7. Financial Statements, Pro Forma Information and Exhibits
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
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(c) Exhibits. The following documents are filed as exhibits to the
report:
Exhibit
Number
20.1 Press Release of the Registrant dated November 19, 1996,
announcing the letter of intent to acquire the Karlskrona
Facility.
20.2 Press Release of the Registrant dated October 17, 1996,
announcing the Registrant's intent to acquire Fine Line.
20.3 Press Release of the Registrant dated December 4, 1996,
announcing the completion of the Registrant's acquisition of
Fine Line.
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SIGNATURES
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 hereunto duly authorized.
Flextronics International Ltd.
----------------------------------
(Registrant)
Date: December 9, 1996 By /s/Michael E. Marks
----------------------------
Name: Michael E. Marks
Title: Chairman of the Board and
Chief Executive Officer
<PAGE> 5
Index to Exhibits
Exhibit No. Description of Document
- ----------- -----------------------
20.1 Press Release of the Registrant dated
November 19, 1996, announcing the letter of
intent to acquire the Karlskrona Facility.
20.2 Press Release of the Registrant dated October
17, 1996, announcing the Registrant's intent
to acquire Fine Line.
20.3 Press Release of the Registrant dated
December 4, 1996, announcing the completion
of the Registrant's acquisition of Fine Line.
<PAGE> 1
EXHIBIT 20.1
FLEXTRONICS INTERNATIONAL SIGNS LETTER OF INTENT TO
ACQUIRE ERICSSON BUSINESS NETWORKS AB MANUFACTURING
OPERATIONS
FLEXTRONICS EXPECTS $350 MILLION IN ADDITIONAL ANNUAL REVENUES
SAN JOSE, CA, USA, NOVEMBER 19, 1996 - Flextronics International and Ericsson
Business Networks AB have signed a letter of intent to sell Ericsson's
production unit in Karlskrona in the south of Sweden to the US/Singapore based
company Flextronics International Ltd. According to the preliminary agreement,
Flextronics will take over all the manufacturing activities including the
production plants. The approximately 900 of total 1,000 employees at Ericsson
Business Networks in Karlskrona, involved in the production and affected by this
outsourcing, will be offered employment by Flextronics.
Ericsson's production plants in Karlskrona manufacture sub units for business
communication systems, such as the MD110 PBX, Eripax, as well as components for
DECT-based systems for business cordless and radio access (DRA 1900). It is the
main manufacturing unit of Business Area Business Networks, with deliveries
worldwide, and a turnover of SEK 2.300 million (USD 350 million).
The outsourcing of the Karlskrona production plants is in line with Ericsson's
strategy to focus on its core competences; to be a supplier of total
communications solutions.
"The Karlskrona production unit is very successful, with a high technical
competence, but it is not part of Ericsson's core activities," said Ronny
Nilsson, Vice President and General Manager of Ericsson Business Networks AB.
"We are pleased that the production will remain in Karlskrona, and are convinced
that the unit has better prospects of development as part of Flextronics, with
whom we will establish a close collaboration," added Ronny Nilsson.
"This is a major milestone for Flextronics that gives us a strong operations
center in Northern Europe, as well as solidifying our position in the
telecommunications industry," said Michael Marks, Chairman and CEO of
Flextronics. We are pleased with this endorsement of our strategy by Ericsson
Business Networks. With the Karlskrona operations, we are well positioned to
penetrate the European market, and we expect to expand these operations to
better serve our worldwide customer base," Marks said.
Ericsson will be an important customer of Flextronics. Negotiations concerning
long-term purchasing and collaboration agreements are in process. A final
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agreement between Ericsson Business Networks and Flextronics International will
be signed after concluded negotiations, and is subject to approval from relevant
authorities.
Flextronics International Ltd. offers advanced contract manufacturing services
of sophisticated electronics for OEMs in the communications, computer, consumer
and medical electronics industries. Flextronics offers a full range of services
including microelectronics packaging and PCBA design and fabrication, materials
procurement, inventory management, PCB assembly, final system box build and
distribution. The company has facilities in North America, Asia and Europe.
Ericsson's 90,000 employees are active in more than 120 countries. Their
combined expertise in switching, radio and networking makes Ericsson a world
leader in telecommunications.
2.
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EXHIBIT 20.2
FLEXTRONICS INTERNATIONAL ANNOUNCES Q2 FY97 RESULTS
October 17, 1996, 4:19 PM EDT
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 17,1996--Flextronics International Ltd.
(NASDAQ: FLEXF) today announced its financial results for the second fiscal
quarter of FY 1997, which ended Sept. 30, 1996.
The company recorded net sales of $122.5M, an increase of 17%, compared to
$104.8M in the second quarter of FY 1996. Net income was $5.5M or $.39 per
share, versus $3.9M or $.30 per share in the second quarter of FY 1996, an
increase in earnings per share of 30%.
According to Michael Marks, Chairman and CEO, "We are very pleased with our
performance for the quarter which resulted in record gross margin of 11.6% on
sales and record net income of 4.5% on sales. Both gross margin and net income
as a percent of sales have improved steadily as we continue to transition to a
broader customer base, which includes more complex communication products."
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year
(in thousands, except per share data) Q2 '97 Q2 '96
<S> <C> <C>
Net Sales $ 122,470 $ 104,816
Operating Income $ 7,407 $ 5,133
Net Income $ 5,514 $ 3,938
Earnings per share $ .39 $ .30
Weighted average ordinary
shares and equivalents 14,320 13,343
</TABLE>
During the quarter, the company completed the purchase of approximately
32 acres of land in Guadalajara, Mexico. The land is intended to be used for the
company's planned development of a new manufacturing campus in Mexico.
Additionally the company began construction of a new 240,000 square foot
facility on its campus located in Doumen, China.
On Oct. 4, 1996 the company announced its intent to acquire Fine Line
Printed Circuit Design Inc. Fine Line is a premier circuit board layout and
prototype operation located in Silicon Valley. The acquisition of Fine Line will
strengthen the company's previously announced strategic initiative related to
product introduction engineering services.
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Flextronics International Ltd. offers advanced contract manufacturing
services of sophisticated electronics for OEMs in the communications, computer,
consumer and medical electronics industries. Flextronics offers a full range of
services including microelectronics packaging and PCBA design and fabrication,
materials procurement, inventory management, PCB assembly, final system box
build and distribution. The company has facilities in North America, Asia and
Europe.
2.
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FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
Sept. 30, Sept. 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $122,470 $104,816 $240,739 $190,830
Costs and expenses:
Cost of sales 108,207 94,558 214,350 173,465
Selling, general and
administrative expenses 6,568 4,861 12,179 8,266
Goodwill & intangibles
amortization 288 264 575 519
-------- -------- -------- --------
115,063 99,683 227,104 182,250
Operating income 7,407 5,133 13,635 8,580
Interest expense and other, net 947 289 1,372 769
Income before income taxes 6,460 4,844 12,263 7,811
Provision for income taxes 946 906 1,795 1,188
Net income after income taxes 5,514 3,938 10,468 6,623
Earnings per share:
Net income per share $ 0.39 $ 0.30 $ 0.73 $ 0.51
Weighted average ordinary
shares and equivalents 14,320 13,343 14,305 12,907
</TABLE>
FLEXTRONICS INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, March 31,
1996 1996
ASSETS (Unaudited)
(In thousands, except per share amounts)
<S> <C> <C>
Current assets
Cash $ 14,228 $ 6,546
Accounts receivable, net 72,216 78,114
Inventories 49,955 52,637
Other current assets 4,783 4,087
Total current assets 141,182 141,384
</TABLE>
3.
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<TABLE>
<S> <C> <C>
Property and equipment
At cost 104,859 98,998
Accumulated depreciation (36,158) (37,896)
Net property and equipment 68,701 61,102
Other non-current assets 10,008 12,102
TOTAL ASSETS $ 219,891 $ 214,588
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank borrowings $ 17,989 $ 14,379
Current portion of capital lease
and long-term debt 20,565 20,934
Accounts payable 52,817 64,625
Other current liabilities 17,445 13,770
Total current liabilities 108,816 113,708
Long term debt, less current portion 17,685 17,554
Obligations under capital leases and
deferred income taxes 10,380 11,376
Notes payable to shareholders 380 686
Minority Interest 485 485
Shareholders' equity Ordinary shares, S$0.01 par value:
Authorized -- 100,000,000 shares at
March 31, 1996 and Sept. 30, 1996
Issued and outstanding -- 13,213,289
shares at March 31, 1996 and 13,324,759 86 85
shares at Sept. 30, 1996
Additional paid-in capital 94,283 93,634
Accumulated deficit (12,224) (22,940)
Total shareholders' equity 82,145 70,779
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 219,891 $ 214,588
</TABLE>
4.
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EXHIBIT 20.3
FLEXTRONICS INTERNATIONAL TO ACQUIRE FICO PLASTICS; EXPANSION
IN ASIA STRENGTHENS STRATEGIC INITIATIVES TO REDUCE CUSTOMER
COSTS AND PRODUCT
TIME-TO-MARKET
DECEMBER 4, 1996, 5:16 AM EST
SAN JOSE, Calif.--(BUSINESS WIRE)--Dec. 4, 1996--Flextronics International, a
leading global EMS (Electronic Manufacturing Service) provider, today announced
that the company has signed a Sales and Purchase agreement to acquire FICO
Plastics Ltd., based in Hong Kong.
Closing is anticipated within 60 days.
FICO Plastics, with operations in Shenzhen, Guangdong Provice, China, produces
injection molded plastics for electronics companies throughout Asia. FICO
currently supplies plastics for a number of Flextronics customers including
Microsoft and Visioneer, Inc. The firm employs 400 people in its 70,000
square-foot facilities. Annual revenues are approximately $10 million.
Initially Flextronics will acquire 40 per cent of the company for an undisclosed
amount of cash, with an option to purchase the remainder one year later. It is
anticipated that FICO operations dedicated to Flextronics customers will be
situated within the new 240,000 square-foot building under construction at
Flextronics' campus location in Doumen, China.
"The acquisition of FICO will strengthen our previously announced strategic
initiatives. We are delighted to have another company to work with in reducing
the logistics costs for our customers, as well as their products' time-to-
market," said Michael Marks, Flextronics' chairman and CEO.
Separately, Flextronics stated it has completed the purchase of Fine Line
Printed Circuit Design, Inc., previously
announced on October 4, 1996.
Flextronics International Ltd. (NASDAQ:FLEXF) is a turnkey EMS provider of
sophisticated electronics for OEMs in the medical, consumer, computer and
communications industries.
The company offers a full range of contract manufacturing services including
advanced microelectronics packaging design and fabrication, miniaturized PCB
design and fabrication, PCBA design and assembly, prototype fabrication,
materials procurement, system-level assembly, inventory management and product
distribution. The company serves OEMs from its facilities in North America, Asia
and Europe.
