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As filed with the Securities and Exchange Commission on September 30, 1997
Registration No. 333-20623
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FLEXTRONICS INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
Singapore Not Applicable
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
Blk 514, Chai Chee Lane #04-13
Singapore 469029
(65) 449-5255
(Address and telephone number of principal executive offices)
MICHAEL E. MARKS
Chairman of the Board and Chief Executive Officer
Flextronics International Ltd.
2241 Lundy Avenue
San Jose, California 95131
(408) 428-1300
(Name, address and telephone number of agent for service)
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Copies to:
GORDON K. DAVIDSON
DAVID K. MICHAELS
Fenwick & West
Two Palo Alto Square
Palo Alto, California 94306
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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223,321 Shares
Flextronics International Ltd.
Ordinary Shares
(S$.01 par value per share)
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This Prospectus relates to the public offering, which is not being
underwritten, of 223,321 Ordinary Shares, S$.01 par value per share, of
Flextronics International Ltd. ("Flextronics", the "Company" or the
"Registrant"). All 223,321 shares (the "Shares") may be offered by certain
shareholders of the Company or by pledgees, donees, transferees or other
successors in interest that receive such shares as a gift, partnership
distribution or other non-sale related transfer (the "Selling Shareholders") who
received such shares in connection with the acquisition by statutory merger of
Fine Line Printed Circuit Design, Inc. ("Fine Line") through a merger of Fine
Line with and into a wholly- owned subsidiary of the Company, Flextronics
International USA, Inc. See "The Merger." The Shares were issued pursuant to an
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), provided by Section 4(2) thereof.
The Shares may be offered by the Selling Shareholders from time to time
in transactions in the over-the-counter market, in negotiated transactions, or
a combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions). See "Sale of the Shares."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear certain expenses in connection with the
registration of the Shares being offered and sold by the Selling Shareholders.
The Ordinary Shares are quoted on the Nasdaq National Market under the symbol
FLEXF. On September 29, 1997 the average of the high and low price for the
Ordinary Shares was $46.06 per share.
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The Selling Shareholders and any broker-dealers or agents that
participate with the Selling Shareholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Sale of the Shares"
herein for a description of indemnification arrangements.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is September 30, 1997
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company, any Selling Shareholder or by any other person. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that information herein is correct as of any time
subsequent to the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any security other than the securities
covered by this Prospectus, nor does it constitute an offer to or solicitation
of any person in any jurisdiction in which such offer or solicitation may not
lawfully be made.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, information statements and
other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at 75 Park Place,
New York, New York 10007 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained by mail from the
Public Reference Branch of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Ordinary Shares of the Company
are quoted on the Nasdaq National Market, and such material may also be
inspected at the offices of Nasdaq Operations, 1735 K Street, N.W. Washington,
D.C. 20006.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Ordinary
Shares offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information regarding the Company and the Ordinary Shares offered hereby,
reference is hereby made to the Registration Statement and to the exhibits and
schedules filed therewith. The Registration Statement, including the exhibits
and schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and copies of all or any part thereof may be obtained from such
office upon payment of the prescribed fees.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission (File No. 0-23354)
pursuant to the Exchange Act are incorporated herein by reference: (a) Annual
Report on Form 10-K for the fiscal year ended March 31, 1997 including, without
limitation, the information included under the following captions: (i) "Summary
Consolidated Financial Data", (ii) "Risk Factors", (iii) "Selected Consolidated
Financial Data", (iv) "Management's Discussion and Analysis of Financial
Condition and Results of Operations", (v) "Business", (vi) "Management", and
(vii) "Consolidated Financial Statements"; (b) Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1997, (c) the Company's Current Report on Form
8-K as amended on Form 8-K/A for the event reported on February 2, 1996; (d) the
Company's Current Report on Form 8-K for the event reported on April 11, 1997;
(e) the Company's Current Report on Form 8-K as amended on Form 8-K/A for the
event reported on August 11, 1997; (f) the description of the Company's Ordinary
Shares, S$.01 par value per share, contained in its Registration Statement on
Form 8-A dated January 31, 1994, including any amendment or report filed for the
purpose of updating such description; and (g) all other documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Shares.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the request of any such person, a copy of
any or all of the documents which are incorporated herein
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by reference (other than exhibits to such information, unless such exhibits are
specifically incorporated by reference into the information this Prospectus
incorporates). Requests should be directed to Flextronics International Ltd.,
2241 Lundy Avenue, San Jose, California 95131, Attention Michael E. Marks,
Chairman of the Board and Chief Executive Officer, telephone (408) 428-1300.
THE COMPANY
Flextronics International Ltd. ("Flextronics" or the "Company") is a
provider of advanced contract manufacturing services to original equipment
manufacturers ("OEMs") in the communications, computer, consumer electronics
and medical device industries. Flextronics offers a full range of services
including product design, printed circuit board ("PCB") fabrication and
assembly, materials procurement, inventory management, final system assembly
and testing, packaging and distribution. The components, subassemblies and
finished products manufactured by Flextronics incorporate advanced
interconnect, miniaturization and packaging technologies, such as surface mount
("SMT"), chip-on-board ("COB"), ball grid array ("BGA") and miniaturized
gold-plated PCB technology.
Flextronics is incorporated in Singapore under the Companies Act,
Chapter 50 of Singapore (the "Companies Act"). The Company's principal
executive offices are located at 514 Chai Chee Lane #04-13, Bedok Industrial
Estate, Singapore 469029, and its telephone number is (65) 449-5255. The
address of the Company's principal U.S. office is 2090 Fortune Drive, San Jose,
California 95131, and its telephone number is (408) 428-1300.
RISK FACTORS
The following risk factors should be considered carefully in addition
to the other information in this Prospectus before purchasing the Ordinary
Shares offered hereby. The discussion in this Prospectus, and in the documents
incorporated by reference herein, contains certain forward-looking statements,
such as statements of the Company's plans, objectives, expectations and
intentions. The cautionary statements made in this Prospectus, and in the
documents incorporated by reference herein, should be read as being applicable
to all related forward-looking statements wherever they appear in this
Prospectus and in such incorporated documents. The Company's actual results
could differ materially from those discussed in this Prospectus and in the
documents incorporated by reference herein. Factors that could cause or
contribute to such differences include those discussed below, as well as those
discussed elsewhere herein and in such incorporated documents.
RISKS OF KARLSKRONA ACQUISITION
On March 27, 1997, the Company acquired from Ericsson Business Networks
AB ("Ericsson") two manufacturing facilities (the "Karlskrona Facilities")
located in Karlskrona, Sweden and related inventory, equipment and other assets
for approximately $82.4 million in cash. The acquisition of the Karlskrona
Facilities and the execution of a multi-year purchase agreement between the
Company and Ericsson (the "Purchase Agreement") represent a significant
expansion of the Company's operations, and entail a number of risks. In
particular, the Karlskrona Facilities had operated as captive manufacturing
facilities for Ericsson prior to March 27, 1997 and are now being integrated
into the Company's ongoing manufacturing operations. This requires optimizing
production lines, implementing new management information systems, implementing
the Company's operating systems, and assimilating and managing existing
personnel. The difficulties of this integration may be further complicated by
the geographical distance of the Karlskrona Facilities from the Company's other
operations in East Asia and North America. In addition, the acquisition of the
Karlskrona Facilities and the execution of the Purchase Agreement (the
"Karlskrona Acquisition") has increased and will continue to increase the
Company's expenses and working capital requirements, and has burdened the
Company's management resources. In the event the Company is unsuccessful in
integrating these operations, the Company would be materially adversely
affected.
As a result of the Karlskrona Acquisition, sales to Ericsson represent,
and the Company expects will continue to represent, a large portion of its net
sales. See "-- Customer Concentration; Dependence on Electronics Industry."
Prior to the Karlskrona Acquisition, Ericsson was not a substantial customer of
the Company. The Company has no experience operating in Sweden, and there can be
no assurance that the Company can achieve acceptable levels of profitability, or
reduce costs and prices to Ericsson over time as contemplated by the Purchase
Agreement. In addition, there can be no assurance that the Company will not
encounter difficulties in meeting Ericsson's expectations as to product quality
and timeliness. If Ericsson's requirements exceed the volume anticipated by the
Company, the Company may be unable to meet these requirements on a timely basis.
The Company's inability to meet Ericsson's volume, quality, timeliness and cost
requirements, and to quickly resolve any other issues with Ericsson, could have
a material adverse effect on the Company and its results of operations. There
can also be no assurance that Ericsson will purchase a sufficient quantity of
products from the Company to meet the Company's expectations or that the Company
will utilize a sufficient portion of the capacity of the Karlskrona Facilities
to achieve profitable operations.
The Company intends to use the Karlskrona Facilities to manufacture
products for OEMs other than Ericsson. The Company has no commitments by any
third party to purchase manufacturing services to be provided at the Karlskrona
Facilities, and no assurance can be given that the Company will be successful in
marketing and providing manufacturing services to third parties from the
Karlskrona Facilities. Ericsson also has certain rights to be consulted on the
management of the Karlskrona Facilities and to approve the use of the Karlskrona
Facilities for Ericsson's competitors, or for other customers where such use
might adversely affect Ericsson's access to production capacity at the
facilities. Further, no assurances can be given as to the Company's ability to
expand manufacturing capacity at the Karlskrona Facilities.
The Purchase Agreement contains cost reduction targets and price
limitations and imposes on the Company certain manufacturing quality
requirements, and there can be no assurance that the Company can achieve
acceptable levels of profitability under the Purchase Agreement or reduce costs
and prices to Ericsson over time as contemplated by the Purchase Agreement. In
addition, the Purchase Agreement requires that the Company maintain a ratio of
equity to total liabilities, debt and equity of at least 25%, and a current
ratio of at least 120%. Further, the Purchase Agreement prohibits the Company
from selling or relocating the equipment
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acquired in the transaction without Ericsson's consent. A material breach by the
Company of any of the terms of the Purchase Agreement could allow Ericsson to
repurchase the assets conveyed to the Company at the Company's book value or to
obtain other relief, including the cancellation of outstanding purchase orders
or termination of the Purchase Agreement. Ericsson also has certain rights to be
consulted on the management of the Karlskrona Facilities and to approve the use
of the Karlskrona Facilities for Ericsson's competitors or for other customers
where such use might adversely affect Ericsson's access to production capacity
at the facilities. In addition, without Ericsson's consent, the Company may not
enter into any transactions that could adversely affect its ability to continue
to supply products and services to Ericsson under the Purchase Agreement or its
ability to reduce costs and prices to Ericsson. As a result of these rights,
Ericsson may, under certain circumstances, retain a significant degree of
control over the Karlskrona Facilities and their management.
INCREASED LEVERAGE
At June 30, 1997, the Company had consolidated indebtedness of
approximately $163.6 million (including bank borrowings, long-term debt and
capitalized lease obligations, and excluding $9.0 million of liabilities
relating to the Astron acquisition that the Company intends to repay in the
Company's Ordinary Shares). The Company's indebtedness at June 30, 1997 included
$111.0 million borrowed on March 27, 1997, which substantially increased the
Company's leverage. The Company's ratio of indebtedness to shareholders' equity
increased from approximately 75.6% at June 30, 1996 to 184.8% at June 30, 1997.
The degree to which the Company is leveraged could have important
consequences to the Company and its shareholders, including the following: (i)
the Company's ability to obtain additional financing in the future for working
capital, capital expenditures, product development, acquisitions or other
purposes may be limited or impaired; (ii) the Company's operating flexibility
with respect to certain matters will be limited by covenants that limit the
ability of the Company and certain of its subsidiaries to incur additional
indebtedness, grant liens, make capital expenditures, pay dividends, redeem
capital stock or prepay certain subordinated indebtedness and enter into sale
and leaseback transactions; and (iii) the Company's degree of leverage may make
it more vulnerable to economic downturns, may limit its ability to pursue other
business opportunities and may reduce its flexibility in responding to changing
business and economic conditions.
The Company's ability to generate cash for the repayment of debt will be
dependent upon the future performance of the Company's business, which will in
turn be subject to financial, business, economic and other factors affecting the
business and operations of the Company, including factors beyond its control,
such as prevailing economic conditions.
The Company may seek growth through selective acquisitions, including
significant acquisitions. The Company could incur substantial additional
indebtedness in connection with a significant acquisition, in which event the
Company's leverage would be further increased.
MANAGEMENT OF EXPANSION AND CONSOLIDATION
The Company has experienced rapid expansion in recent years through both
internal growth and acquisitions, with net sales increasing from $100.8 million
in fiscal 1993 to $490.6 million in fiscal 1997, and reaching $196.9 million in
the three months ended June 30, 1997. There can be no assurance that the
Company's historical growth will continue or that the Company will successfully
manage the integration of acquired operations. Expansion has caused, and is
expected to continue to cause, strain on the Company's infrastructure, including
its managerial, technical, financial and other resources. To manage further
growth, the Company must continue to enhance financial controls and hire
additional engineering and sales personnel. The Company's ability to manage any
future growth effectively will require it to attract, train, motivate and manage
new employees successfully, to integrate new employees into its overall
operations and to continue to improve its operational systems. The Company may
experience certain inefficiencies as it integrates new operations and manages
geographically dispersed operations. There can be no assurance that the Company
will be able to manage its expansion effectively, and a failure to do so could
have a material adverse effect on the Company's results of operations. In
addition, the Company's results of operations would be adversely affected if its
new facilities do not achieve growth sufficient to offset increased expenditures
associated with expansion.
Expansion through acquisitions and internal growth has contributed to the
Company's incurring significant accounting charges and experiencing volatility
in its operating results. In the fourth quarter of fiscal 1996, the Company
reported a substantial loss as a result of the write-off of in-process research
and development charges related to the Astron acquisition and closure of a
facility in Malaysia and a facility in China. In fiscal 1997, the Company
reported charges associated with closing its manufacturing facility in Texas,
downsizing manufacturing operations in Singapore, and writing off obsolete
equipment and incurring severance obligations at the nCHIP semiconductor
fabrication facility. There can be no assurance that the Company will not
continue to experience volatility in its operating results or incur write-offs
in connection with expansion, acquisitions and consolidation. Furthermore, the
Company has recently completed the construction of significant new facilities in
Guadalajara, Mexico, Doumen, China, and San Jose, California, resulting in new
fixed and operating expenses, including substantial increases in depreciation
expense that will increase the Company's cost of sales. There can be no
assurances that the Company will utilize a sufficient portion of the capacity of
these facilities to offset the impact of these expenses on its gross margins and
operating income. If revenue levels do not increase sufficiently to offset these
new expenses, the Company's operating results could be materially adversely
affected.
The Company is beginning the process of replacing its management
information systems. The new systems will significantly affect many aspects of
the Company's business including its manufacturing, sales and marketing, and
accounting functions, and the Company's ability to integrate the Karlskrona
Facilities, which must be converted to the new system, and the successful
implementation of these systems will be important to facilitate future growth.
The Company intends to implement the new system incrementally on a regional
basis and currently anticipates that the implementation of the new management
information systems will take at least 18 months. Delays or difficulties could
be encountered in the implementation process, which could cause significant
disruption in operations, including problems with the delivery of its products
or an adverse impact on its ability to access timely and accurate financial and
operating information and could materially increase the cost of implementing the
new management information system. If the Company is not successful in
implementing its new systems or if the Company experiences difficulties in such
implementation, the Company's operating results could be materially adversely
affected.
ACQUISITIONS
Acquisitions have represented a significant portion of the Company's growth
strategy, and the Company intends to continue to pursue attractive acquisition
opportunities. Acquisitions involve a number of risks in addition to those
described under "-- Management of Expansion and Consolidation" that could
adversely affect the Company, including the diversion of management's attention,
the integration and assimilation of the operations and personnel of the acquired
companies, the amortization of acquired intangible assets and the potential loss
of key employees of the acquired companies. The Company may not have had any
experience with technologies, processes and markets involved with the acquired
business and accordingly may lack the management and marketing experience that
will be necessary to successfully operate and integrate the business. The
successful operation of an acquired business will require communication and
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cooperation in product development and marketing among senior executives and key
technical personnel. Given the inherent difficulties involved in completing a
major business combination, there can be no assurance that such cooperation will
occur or that integration of the respective businesses will be successful and
will not result in disruption in one or more sectors of the Company's business.
In addition, there can be no assurance that the Company will retain key
technical, management, sales and other personnel, that the market will favorably
view the Company's entry into a new industry or market or that the Company will
realize any of the other anticipated benefits of the acquisition. Furthermore,
additional acquisitions would require investment of financial resources, and may
require debt or equity financing. No assurance can be given that the Company
will consummate any acquisitions in the future, that any past or future
acquisition by the Company will not materially adversely affect the Company or
that any such acquisition will enhance the Company's business.
Since the Company's acquisition of Astron, the net sales generated by
Astron's then-existing products and services, and by its products and services
then under development, have grown at rates significantly lower than those
anticipated by the Company at the time of the acquisition and significantly
lower than those assumed in the independent valuation used by the Company in
allocating the purchase price of Astron to the assets acquired. The Company has
not yet completed development of other technologies that were material to its
valuation of Astron and which it initially anticipated completing in fiscal 1996
and 1997. The completion of such development is subject to a number of
uncertainties, including potential difficulties in optimizing manufacturing
processes and the potential development of alternative technologies by
competitors that could render Astron's technologies uncompetitive or obsolete.
Accordingly, no assurances can be given as to whether, or when, the Company will
be able to complete the development of such technologies, as to the cost of such
development, or as to potential sales of products based on such technologies.
The capabilities provided by the technologies under development may not
otherwise be available to the Company. Accordingly, the failure by the Company
to successfully develop such technologies would limit the Company's ability to
compete effectively for business requiring certain advanced capabilities, and
would prevent it from achieving the anticipated benefits of the Astron
acquisition.
CUSTOMER CONCENTRATION; DEPENDENCE ON ELECTRONICS INDUSTRY
A small number of customers are currently responsible for a significant
portion of the Company's net sales. In fiscal 1997 and the first three months of
fiscal 1998, the Company's five largest customers accounted for approximately
46% and 61%, respectively, of net sales. Approximately 13% and 11% of the
Company's net sales for fiscal 1997 were derived from sales to Lifescan and U.S.
Robotics, respectively. Approximately 30% and 10% of the Company's net sales for
the first three months of fiscal 1998 were derived from sales to Ericsson and
Advanced Fibre Communications, respectively. The Company anticipates that a
small number of customers will continue to account for a large portion of its
net sales as it focuses on strengthening and broadening relationships with
leading OEMs.
The composition of the group comprising the Company's largest customers has
varied from year to year, and there can be no assurance that the Company's
principal customers will continue to purchase products and services from the
Company at current levels, if at all. For example, the Company expects that its
sales to Global Village Communications in fiscal 1998 will be significantly
lower than in recent periods. Significant reductions in sales to any of these
customers, or the loss of one or more major customers, would have a material
adverse effect on the Company. The Company generally does not obtain firm
long-term volume purchase commitments from its customers, and over the past few
years has experienced reduced lead-times in customer orders. In addition,
customer contracts can be canceled and volume levels can be changed or delayed.
The timely replacement of canceled, delayed, or reduced contracts with new
business cannot be assured. These risks are exacerbated because a majority of
the Company's sales are to customers in the electronics industry, which is
subject to rapid technological change and product obsolescence. The factors
affecting the electronics industry in general, or any of the Company's major
customers in particular, could have a material adverse effect on the Company.
Credit terms are extended to customers after performing credit evaluations,
which continue throughout a customer's contract period. Credit losses have
occurred in the past, and no assurances can be given that credit losses, which
could be material, will not occur in the future. The Company's concentration of
customers increases the risk that any credit loss would have a material adverse
effect on the Company.
VARIABILITY OF CUSTOMER REQUIREMENTS AND OPERATING RESULTS
Contract manufacturers must provide increasingly rapid product turnaround
and respond to ever-shorter lead times. The Company generally does not obtain
long-term purchase orders but instead works with its customers to anticipate the
volume of future orders. In certain cases, the Company will procure components
without a customer commitment to pay for them, and the Company must continually
make other significant decisions for which it is responsible, including the
levels of business that it will seek and accept, production schedules, personnel
needs and other resource requirements. A variety of conditions, both specific to
the individual customer and generally affecting the industry, may cause
customers to cancel, reduce or delay orders. Cancellations, reductions or delays
by a significant customer or by a group of customers would adversely affect the
Company. On occasion, customers may require rapid increases in production, which
can stress the Company's resources and reduce margins. Although the Company has
increased its manufacturing capacity, there can be no assurance that the Company
will have sufficient capacity at any given time to meet its customers' demands
if such demands exceed anticipated levels.
In addition to the variability resulting from the short-term nature of its
customers' commitments, other factors have contributed, and may contribute in
the future to significant periodic and quarterly fluctuations in the Company's
results of operations. These factors include, among other things: timing of
orders; volume of orders relative to the Company's capacity; customers'
announcements, introductions and market acceptance of new products or new
generations of products; evolution in the life cycles of customers' products;
timing of expenditures in anticipation of future orders; effectiveness in
managing manufacturing processes; changes in cost and availability of labor and
components; product mix; and changes or anticipated changes in economic
conditions. In addition, the Company's net sales are adversely affected by the
observance of local holidays during the fourth fiscal quarter in Malaysia and
China, reduced production levels in Sweden in July, and the reduction in orders
by certain customers in the fourth fiscal quarter reflecting a seasonal slowdown
following the Christmas holiday.
Expansion through acquisition and internal growth has contributed to the
Company's incurring significant accounting charges and to volatility in its
operating results. In the fourth quarter of fiscal 1996, the Company reported a
substantial loss as a result of the write off of in-process research and
development charges related to the Astron acquisition and the closing of
facilities in Malaysia and China. In fiscal 1997, the Company reported charges
associated with closing of its manufacturing facility in Texas, downsizing
manufacturing operations in Singapore and writing-off of obsolete equipment and
incurring severance obligations at the nCHIP semiconductor fabrication facility.
There can be no assurance that the Company will not continue to experience
volatility in its operating results or incur write-offs in connection with
expansion, acquisitions and consolidation.
The market segments served by the Company are also subject to economic
cycles and have in the past experienced, and are likely in the future to
experience, recessionary periods. A recessionary period affecting the industry
segments served by the Company could have a material adverse effect on the
Company's results of operations. Results of operations in any period should not
be considered indicative of the results to be expected for any future period,
and fluctuations in operating results may also result in fluctuations in the
price of the Company's Ordinary Shares. In future periods, the Company's net
sales or results of operations may be below the expectations of public market
analysts and investors. In such event, the price of the Company's Ordinary
Shares would likely be materially adversely affected.
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RAPID TECHNOLOGICAL CHANGE
The markets in which the Company's customers compete are characterized by
rapidly changing technology, evolving industry standards and continuous
improvements in products and services. These conditions frequently result in
short product life cycles. The Company's success will depend to a significant
extent on the success achieved by its customers in developing and marketing
their products, some of which are new and untested. If technologies or standards
supported by customers' products become obsolete or fail to gain widespread
commercial acceptance, the Company's business may be materially adversely
affected.
The Company has made substantial investments in developing advanced
interconnect technological capabilities. These capabilities, primarily MCMs,
miniature gold-finished PCBs and epoxy molding conductive compounds, currently
account for a relatively small portion of the overall market for electronic
interconnect products. The ability of the Company to achieve desired operating
results will depend upon the extent to which customers design, manufacture and
adopt systems based on these advanced technologies. There can be no assurance
that the Company will be able to develop and exploit these technologies
successfully. In addition, there can be no assurance that the Company will be
able to exploit new technologies as they are developed or to adapt its
manufacturing processes, technologies and facilities to address emerging
customer requirements.
COMPETITION
The electronics contract manufacturing industry is extremely competitive
and includes hundreds of companies, several of whom have achieved substantial
market share. The Company competes against numerous domestic and foreign
contract manufacturers, and current and prospective customers also evaluate the
Company's capabilities against the merits of internal production. In addition,
in recent years the electronics contract manufacturing industry has attracted a
significant number of new entrants, including large OEMs with excess
manufacturing capacity, and many existing participants, including the Company,
have substantially expanded their manufacturing capacity by expanding their
facilities and adding new facilities. In the event of a decrease in overall
demand for contract manufacturing services, this increased capacity could result
in substantial pricing pressures, which could adversely affect the Company's
operating results. Certain of the Company's competitors, including Solectron
Corporation and SCI Systems, have substantially greater manufacturing,
financial, research and development and marketing resources than the Company.
The Company believes that the principal competitive factors in the segments of
the contract manufacturing industry in which it operates are cost, technological
capabilities, responsiveness and flexibility, delivery cycles, location of
facilities, product quality and range of services available. Failure to satisfy
any of the foregoing requirements could materially adversely affect the
Company's competitive position.
RISK OF INCREASED TAXES
The Company has structured its operations in a manner designed to maximize
income in countries where tax incentives have been extended to encourage foreign
investment or where income tax rates are low. If these tax incentives are not
renewed upon expiration, if the tax rates applicable to the Company are
rescinded or changed, or if tax authorities successfully challenge the manner in
which profits are recognized among the Company's subsidiaries, the Company's
taxes would increase and its results of operations and cash flow would be
adversely affected. Substantially all of the products manufactured by the
Company's Asian subsidiaries are sold to U.S.-based customers. While the Company
believes that profits from its Asian operations are not sufficiently connected
to the U.S. to give rise to U.S. federal or state income taxation, there can be
no assurance that U.S. tax authorities will not challenge the Company's position
or, if such challenge is made, that the Company would prevail in any such
dispute. If the Company's Asian profits became subject to U.S. income taxes, the
Company's worldwide effective tax rate would increase and its results of
operations and cash flow would be adversely affected. The expansion by the
Company of its operations in North America and
6
<PAGE> 8
Northern Europe may increase its worldwide effective tax rate.
RISKS OF INTERNATIONAL OPERATIONS
The Company has substantial manufacturing operations located in China,
Malaysia, Sweden and the United States. In addition, the Company has recently
constructed a manufacturing campus in Mexico, where the Company has never
manufactured products. The Company's net sales derived from operations outside
of the United States was $327.0 million in fiscal 1997, $161.8 million of which
was derived from operations in Hong Kong and China, and was $148.4 million in
the three months ended June 30, 1997, $50.0 million of which was derived from
operations in Hong Kong and China. The geographical distances between Asia,
North America and Europe create a number of logistical and communications
challenges. Because of the location of manufacturing facilities in a number of
countries, the Company is affected by economic and political conditions in those
countries, including fluctuations in the value of currency, duties, possible
employee turnover, labor unrest, lack of developed infrastructure, longer
payment cycles, greater difficulty in collecting accounts receivable, the
burdens and costs of compliance with a variety of foreign laws and, in certain
parts of the world, political instability. Changes in policies by the U.S. or
foreign governments resulting in, among other things, increased duties, higher
taxation, currency conversion limitations, restrictions on the transfer of
funds, limitations on imports or exports, or the expropriation of private
enterprises could also have a material adverse effect on the Company. The
Company could also be adversely affected if the current policies encouraging
foreign investment or foreign trade by its host countries were to be reversed.
In addition, the attractiveness of the Company's services to its U.S. customers
is affected by U.S. trade policies, such as "most favored nation" status and
trade preferences for certain Asian nations. For example, trade preferences
extended by the United States to Malaysia in recent years were not renewed in
1997.
In particular, the Company's operations and assets are subject to
significant political, economic, legal and other uncertainties in China and
Mexico, where the Company is substantially expanding its operations.
Risks Relating to China. The Company's operations and assets are subject to
significant political, economic, legal and other uncertainties in China,
where the Company is substantially expanding its operations. Under its
current leadership, the Chinese government has been pursuing economic
reform policies, including the encouragement of foreign trade and
investment and greater economic decentralization. No assurance can be
given, however, that the Chinese government will continue to pursue such
policies, that such policies will be successful if pursued, or that such
policies will not be significantly altered from time to time. Despite
progress in developing its legal system, China does not have a
comprehensive and highly developed system of laws, particularly with
respect to foreign investment activities and foreign trade. Enforcement of
existing and future laws and contracts is uncertain, and implementation and
interpretation thereof may be inconsistent. As the Chinese legal system
develops, the promulgation of new laws, changes to existing laws and the
preemption of local regulations by national laws may adversely affect
foreign investors.
The Company could also be adversely affected by the imposition of austerity
measures intended to reduce inflation, the inadequate development or
maintenance of infrastructure or the unavailability of adequate power and
water supplies, transportation, raw materials and parts, or a deterioration
of the general political, economic or social environment in China.
In addition, China currently enjoys Most Favored Nation ("MFN") status
granted by the United States, pursuant to which the United States imposes
the lowest applicable tariffs on Chinese exports to the United States. The
United States annually reconsiders the renewal of MFN trading status for
China. No assurance can be given that China's MFN status will be renewed in
the future years. China's loss of MFN status could adversely affect the
Company by increasing the cost to the U.S. customers of products
manufactured by the Company in China.
The Company maintains certain administrative, procurement and manufacturing
operations in Hong Kong, which may be influenced by the changing political
situation in Hong Kong and by the general state of the Hong Kong economy.
On July 1, 1997, sovereignty over Hong Kong was transferred from the
7
<PAGE> 9
United Kingdom to China, and Hong Kong became a Special Administrative
Region ("SAR"). Based on current political conditions and the Company's
understanding of the Basic Law of the Hong Kong SAR of China, the Company
does not believe that the transfer of sovereignty over Hong Kong will have
a material adverse effect on the Company. There can be no assurance,
however, that changes in political, legal or other conditions will not
result in such an adverse effect.
Risks Relating to Mexico. The Mexican government exercises significant
influence over many aspects of the Mexican economy. Accordingly, the
actions of the Mexican government concerning the economy could have a
significant effect on private sector entities in general and the Company in
particular. In addition, during the 1980s, Mexico experienced periods of
slow or negative growth, high inflation, significant devaluations of the
peso and limited availability of foreign exchange. As a result of the
Company's recent expansion in Mexico, economic conditions in Mexico will
affect the Company.
CURRENCY FLUCTUATIONS
While Flextronics transacts business predominantly in U.S. dollars and most
of its revenues are collected in U.S. dollars, a portion of Flextronics' costs
such as payroll, rent and indirect operation costs, are denominated in other
currencies such as Singapore dollars, Swedish kronor, Hong Kong dollars,
Malaysian ringgit, British pounds sterling and Chinese renminbi. Historically,
fluctuations in foreign currency exchange rates have not resulted in significant
exchange losses to the Company. As a result of the Karlskrona Acquisition, a
significant portion of the Company's business has been, and is expected to
continue to be, conducted in Swedish kronor. Changes in the relation of these
and other currencies to the U.S. dollar will affect the Company's cost of goods
sold and operating margins and could result in exchange losses. The impact of
future exchange rate fluctuations on the Company's results of operations cannot
be accurately predicted. The Company has historically not actively engaged in
substantial exchange rate hedging activities. However, in August 1997 the
Company began to engage in hedging activities with respect to its fixed kronor
obligations in Sweden in order to minimize its exposure to fluctuations in
exchange rates for Swedish kronor. There can be no assurance that the Company
will implement any additional hedging techniques or that any of its hedging
activities will be successful.
Over the last five years, the Chinese renminbi has experienced significant
devaluation against most major currencies. The establishment of the current
exchange rate system as of January 1, 1994 produced a significant devaluation of
the renminbi from $1.00 to Rmb 5.7 to approximately $1.00 to Rmb 8.7. The rates
at which exchanges of renminbi into U.S. dollars may take place in the future
may vary, and any material increase in the value of the renminbi relative to the
U.S. dollar would increase the Company's costs and expenses and therefore would
have a material adverse effect on the Company.
LIMITED AVAILABILITY OF COMPONENTS
A substantial majority of the Company's net sales are derived from turnkey
manufacturing in which the Company is responsible for procuring materials, which
typically results in the Company bearing the risk of component price increases.
At various times there have been shortages of certain electronics components,
including DRAMs, memory modules, logic devices, ASICs, laminates, specialized
capacitors and integrated circuits in bare-die form. Component shortages could
result in manufacturing and shipping delays or higher prices which could have a
material adverse effect on the Company.
DEPENDENCE ON KEY PERSONNEL AND SKILLED EMPLOYEES
The Company's success depends to a large extent upon the continued services
of key executives and skilled personnel. Generally, the Company's employees are
not bound by employment or noncompetition agreements. The Company has entered
into service agreements with certain officers, including Ronny Nilsson, Teo Buck
Song, Michael McNamara and Tsui Sung Lam, some of which contain non-competition
provisions and provides its officers and key employees with stock options that
are structured to incentivize such employees to remain with the Company.
However, there can be no assurance as to the ability of the Company to retain
its officers and key employees. The loss of such personnel could have a material
adverse effect on the
8
<PAGE> 10
Company. The Company's business also depends upon its ability to continue to
recruit, train and retain skilled and semi-skilled employees, particularly
administrative, engineering and sales personnel. There is intense competition
for skilled and semi-skilled employees, particularly in the San Jose, California
market, and the Company's failure to recruit, train and retain such employees
could adversely affect the Company's results of operations.
ENVIRONMENTAL COMPLIANCE RISKS
The Company is subject to a variety of environmental regulations relating
to the use, storage, discharge and disposal of hazardous chemicals used during
its manufacturing process. Substrates for its MCMs are manufactured on a
semiconductor-type fabrication line in California owned by the Company. The
Company is also expanding its PCB fabrication operations in China. Proper
handling, storage and disposal of the metals and chemicals used in these
manufacturing processes are important considerations in avoiding environmental
contamination. Although the Company believes that its facilities are currently
in material compliance with applicable environmental laws, and it monitors its
operations to avoid violations arising from human error or equipment failures,
there can be no assurances that violations will not occur. In the event of a
violation of environmental laws, the Company could be held liable for damages
and for the costs of remedial actions and could also be subject to revocation of
its effluent discharge permits. Any such revocations could require the Company
to cease or limit production at one or more of its facilities, thereby having a
material adverse effect on the Company's operations. Environmental laws could
also become more stringent over time, imposing greater compliance costs and
increasing risks and penalties associated with any violation, which could have a
material adverse effect on the Company.
PROTECTION OF INTELLECTUAL PROPERTY
The Company relies on a combination of patent, trade secret and trademark
laws, confidentiality procedures and contractual provisions to protect its
intellectual property. The Company seeks to protect certain of its technology
under trade secret laws, which afford only limited protection. There can be no
assurance that any of the Company's pending patent applications will be issued
or that intellectual property laws will protect the Company's intellectual
property rights. In addition, there can be no assurance that any patent issued
to the Company will not be challenged, invalidated or circumvented or that the
rights granted thereunder will provide competitive advantages to the Company.
Despite the Company's efforts to protect its proprietary rights, unauthorized
parties may attempt to obtain and use information that the Company regards as
proprietary. Furthermore, there can be no assurance that others will not
independently develop similar technology or design around any patents issued to
the Company. Moreover, effective protection of intellectual property rights may
be unavailable or limited in certain foreign countries in which the Company
operates. In particular, the Company may be afforded only limited protection of
its intellectual property rights in China.
The Company may in the future be notified that it is infringing certain
patent or other intellectual property rights of others, although there are no
such pending lawsuits against the Company or unresolved notices that it is
infringing intellectual property rights of others. No assurance can be given
that in the event of such infringement, licenses could be obtained on
commercially reasonable terms, if at all, or that litigation will not occur. The
failure to obtain necessary licenses or other rights or the occurrence of
litigation arising out of such claims could materially adversely affect the
Company.
CERTAIN PROVISIONS RELATING TO CHANGES IN CONTROL
Certain provisions of the Singapore Companies Act (Chapter 50) and the
Singapore Code on Takeovers and Mergers could make it more difficult for a third
party to acquire control of the Company. Such provisions could limit the price
that certain investors might be willing to pay in the future for Ordinary Shares
of the Company. Certain of such provisions impose various procedural and other
requirements which could make it more difficult for shareholders to effect
certain corporate actions. See "Description of Capital Shares -- Takeovers."
9
<PAGE> 11
VOLATILITY OF MARKET PRICE OF ORDINARY SHARES
The stock market in recent years has experienced significant price and
volume fluctuations that have affected the market prices of technology companies
and that have often been unrelated to or disproportionately impacted by the
operating performance of such companies. There can be no assurance that the
market for the Ordinary Shares will not be subject to similar fluctuations.
Factors such as fluctuations in the operating results of the Company,
announcements of technological innovations or events affecting other companies
in the electronics industry, currency fluctuations and general market conditions
may have a significant effect on the market prices of the Company's securities,
including the Ordinary Shares.
ENFORCEMENT OF CIVIL LIABILITIES
The Company is incorporated in Singapore under the Companies Act. Certain
of its directors and executive officers (and certain experts named in this
Prospectus) reside in Singapore. All or a substantial portion of the assets of
such persons, and a substantial portion of the assets of the Company (other than
its U.S. subsidiaries), are located outside the United States. As a result, it
may not be possible for persons purchasing Ordinary Shares to effect service of
process within the United States upon such persons or the Company or to enforce
against them, in the United States courts, judgments obtained in such courts
predicated upon the civil liability provisions of the federal securities laws of
the United States. The Company has been advised by its Singapore legal advisors,
Allen & Gledhill, that there is doubt as to the enforceability in Singapore,
either in original actions or in actions for the enforcement of judgments of
United States courts, of civil liabilities predicated upon the federal
securities laws of the United States.
DIVIDENDS
Since inception, the Company has not declared or paid any cash dividends on
its Ordinary Shares, and its credit facility prohibits the payment of cash
dividends without the lenders' prior consent. The Company anticipates that all
earnings in the foreseeable future will be retained to finance the continuing
development of its business.
SELLING SHAREHOLDERS
The following table sets forth the number of Ordinary Shares owned by
each of the Selling Shareholders. Except as indicated, none of the Selling
Shareholders has had a material relationship with the Company or with Fine Line
within the past three years other than as a result of the ownership of the
Shares or other securities of the Company or Fine Line. Because the Selling
Shareholders may offer all or some of the Shares which they hold pursuant to the
offering contemplated by this Prospectus, and because there are currently no
agreements, arrangements or understandings with respect to the sale of any of
the Shares, no estimate can be given as to the amount of Shares that will be
held by the Selling Shareholders after completion of this offering. The Shares
offered by this Prospectus may be offered from time to time by the Selling
Shareholders named below:
10.
<PAGE> 12
<TABLE>
<CAPTION>
Number of
Shares
Number of Shares Percent of Registered for
Beneficially Outstanding Sale
Name of Selling Shareholder Owned Shares Hereby(1)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Richard E. Davis, Jr. and
Jacqueline J. Davis 102,505 * 102,505
Paul N. Burns 68,336 * 68,336
John F. Cooper and
Mary I. Cooper 30,148 * 30,148
Joseph Windmiller 22,332 * 22,332
Total 223,321 223,321
</TABLE>
- ------------------
* less than one percent.
(1) This Registration Statement shall also cover any additional Ordinary Shares
which become issuable in connection with the shares registered for sale
hereby by reason of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration
which results in an increase in the number of the Registrant's outstanding
Ordinary Shares.
SALE OF THE SHARES
The Company will receive no proceeds from this offering. The Shares
offered hereby may be sold by the Selling Shareholders from time to time in
transactions in the over-the-counter market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. The Selling Shareholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Selling Shareholders and any broker-dealers or agents that
participate with the Selling Shareholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Shares may not simultaneously engage
in market making activities with respect to the Ordinary Shares of the Company
for a period of two business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, each Selling
Shareholder will be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including, without limitation, Rules 10b-6 and
10b-7 and any
11.
<PAGE> 13
successors thereto, which provisions may limit the timing of purchases and sales
of the Company's Ordinary Shares by the Selling Shareholders.
The Shares were originally issued to former shareholders of Fine Line
in connection with the statutory merger of Fine Line through a merger of Fine
Line with and into Flextronics International USA, Inc., a wholly-owned
subsidiary of the Company, pursuant to an exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof. The Company
has agreed to pay all fees and expenses incident to the filing of this
Registration Statement.
THE MERGER
On November 25, 1996, the Company acquired Fine Line by the statutory
merger (the "Merger") of Fine Line with and into a wholly-owned subsidiary of
the Company, Flextronics International USA, Inc., a California corporation
("Sub"). The Merger was accomplished pursuant to the Agreement and Plan of
Reorganization, dated as of November 25, 1996, among the Company, Fine Line and
Sub, and a related Agreement of Merger (collectively, the "Merger Agreements").
The Merger of Fine Line with and into Sub occurred following the approval by
written consent of the Merger Agreements by the shareholders of Fine Line and
satisfaction of certain other closing conditions. As a result of the Merger, the
Company became the owner of 100% of the issued and outstanding common stock of
Fine Line. The terms of the Merger Agreements were the result of arm's-length
negotiations among the parties.
A total of 223,321 of the Company's Ordinary Shares were issued to
former Fine Line shareholders in exchange for the acquisition by Sub of all
outstanding Fine Line capital stock. The shares issued to Fine Line shareholders
were issued pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 4(2) thereof.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Brobeck, Phleger & Harrison LLP, Palo Alto, California and Allen
& Gledhill, Singapore.
EXPERTS
The consolidated financial statements of Flextronics International
Ltd., appearing in Flextronics International Ltd.'s Annual Report (Form 10-K)
for the year ended March 31, 1997, have been audited by Ernst & Young,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
12.
<PAGE> 14
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized statement of all estimated
expenses in connection with the issuance and distribution of the securities
being registered:
<TABLE>
<S> <C>
SEC Registration fee..................................... $1,759
Printing and engraving expenses.......................... 5,000
Legal expenses........................................... 5,000
Blue Sky expenses........................................ 1,000
Accounting fees and expenses............................. 1,000
Miscellaneous............................................ 1,000
------
Total........................................... $ 14,759
======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
As permitted by the laws of Singapore, the Articles provide that,
subject to the Companies Act, the Company's directors and officers will be
indemnified by the Company against any liability incurred by them in defending
any proceedings, whether civil or criminal, which relate to anything done or
omitted to have been done as an officer, director or employee of the Company and
in which judgment is given in their favor or in which they are acquitted or in
connection with any application under any statute for relief from liability in
respect thereof in which relief is granted by the court. Directors and officers
may not be indemnified by the Company against any liability which by law would
otherwise attach to them in respect of any negligence, default, breach of duty
or breach of trust of which they may be guilty in relation to the Company.
ITEM 16. EXHIBITS.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.*
5.2 Opinion of Allen & Gledhill.*
23.1 Consent of Ernst & Young Singapore (incorporated by reference to
Exhibit 23.1 to Amendment No.2 to the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 1997, as amended on Form
10-K/A).
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
23.3 Consent of Allen & Gledhill (included in Exhibit 5.2).
24.1 Power of Attorney (included on page II-3 of this Registration
Statement).
- -------------
* Previously filed
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) to include any
prospectus required by section 10(a)(3) of the Securities Act; (ii) to reflect
in the prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that (i) and (ii)
do not apply if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post- effective amendment by (i) and
(ii) is contained in periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
II-1
<PAGE> 15
(2) That, for the purpose of determining any liability under the
Securities Act, each such post- effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to direc- tors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II-2
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant
has duly caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Menlo Park, State of
California on this 29th day of September, 1997.
FLEXTRONICS INTERNATIONAL LTD.
By: /s/ Michael E. Marks
-----------------------------------------
Michael E. Marks
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL E. MARKS Chairman of the Board, and September 29, 1997
- ---------------------------------- Chief Executive Officer
Michael E. Marks (principal executive officer)
*
- ---------------------------------- President, Chief Operating September 29, 1997
Tsui Sung Lam Officer and Director
*
- ---------------------------------- Senior Vice President of Finance September 29, 1997
Robert R.B. Dykes and Administration and Director
(principal financial and accounting
officer)
*
- ---------------------------------- Director September 29, 1997
Bernard J. Lacroute
*
- ---------------------------------- Director September 29, 1997
Michael J. Moritz
*
- ---------------------------------- Chairman, Astron Group Limited September 29, 1997
Stephen J.L. Rees Director
*
- ---------------------------------- Director September 29, 1997
Richard L. Sharp
*By: /s/ MICHAEL E. MARKS
----------------------------
Michael E. Marks
Attorney-in-Fact
</TABLE>
II-3
<PAGE> 17
FLEXTRONICS INTERNATIONAL LTD.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ------------ -------------
<S> <C> <C>
5.1 Opinion of Brobeck, Phleger & Harrison LLP.........................................
5.2 Opinion of Allen & Gledhill, Singapore.............................................
23.1 Consent of Ernst & Young, Singapore (incorporated by reference to Exhibit 23.1
to Amendment No. 2 to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997)..............................................................
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)...............
23.2 Consent of Allen & Gledhill, Singapore (included in Exhibit 5.2)...................
24.1 Power of Attorney (included on Page II-3 of this Registration Statement)...........
</TABLE>
II-4
<PAGE> 1
EXHIBIT 5.2
August 22, 1997
Flextronics International Ltd.
415 Chai Chee Lane #04-13
Bedok Industrial Estate
Singapore 469029
Re: Registration Statement on Form S-3 of Flextronics International Ltd.
--------------------------------------------------------------------
Dear Sirs:
We have acted as Singapore counsel for Flextronics International Ltd. ("the
Company"), a Singapore corporation, in connection with (i) the authorization,
issuance and sale of up to 223,321 ordinary shares of S$0.01 each in the capital
of the Company ("Ordinary Shares"), pursuant to the acquisition by Statutory
merger of Fine Line Printed Circuit Design, Inc. ("Fine Line") through the
merger of Fine Line with and into a wholly-owned subsidiary of the Company,
Flextronics International USA, Inc., as described in the above-referenced
Registration Statement ("the Registration Statement"), and (ii) the preparation
of the Registration Statement under the Securities Act of 1933, as amended.
In this connection, we are familiar with the corporate proceedings taken by the
Company in connection with the issuance and sale of the Ordinary Shares. We have
also reviewed the Registration Statement, as we have made such other
examinations of law and fact as we considered necessary in order to form a basis
for the opinion hereafter expressed.
Based on the foregoing, we are of the opinion that the Ordinary Shares have been
duly authorized, are legally issued and fully-paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.2 to the Registration
Statement and to the reference to this firm under the caption "Legal Matters" in
the Prospectus which is part of the Registration Statement.
Yours faithfully,
Allen & Gledhill
