As filed with the Securities and Exchange Commission on September 22, 1999
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
FLEXTRONICS INTERNATIONAL LTD.
(Exact Name of Registrant as Specified in Its Charter)
Singapore 0-23354 Not Applicable
(State or Other Jurisdiction (Commission file number) (I.R.S. Employer
of Incorporation) Identification No.)
----------------------
514 Chai Chee Lane #04-13
1 Bedok Industrial Estate
Singapore 469029
(65) 449-5255
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
--------------------
Michael E. Marks
Chief Executive Officer
Flextronics International Ltd.
514 Chai Chee Lane #04-13
1 Bedok Industrial Estate
Singapore 469029
(65) 449-5255
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
--------------------
Copies to:
Gordon K. Davidson, Esq.
David K. Michaels, Esq.
Tram T. Phi, Esq.
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
--------------------
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, 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, 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: |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Title of Each Proposed Proposed
Class of Securities Amount to be Maximum Offering Maximum Aggregate Amount of
to be Registered Registered Price per Share (1) Offering Price (1) Registration Fee(2)
==================================================================================================
<S> <C> <C> <C> <C>
Ordinary Shares, S$.01
par value per share 2,688,342 $58.8438 $158,192,125 $43,977
==================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(f). The price per share and aggregate offering price are based
upon the average of the high and low prices for Registrant's ordinary
shares on September 20, 1999, as reported on the Nasdaq National Market
pursuant to Rule 457(c).
(2) 1,048,700 of the ordinary shares to which this Registration Statement
relates were part of, and included in, the ordinary shares of the
Registrant previously registered on Form S-3, Registration No. 333-77515,
for which a filing free was previously paid in the amount of $17,155.
Accordingly, an additional filing fee of $26,822 is payable in connection
with the Registration Statement.
Pursuant to Rule 429 promulgated under the Securities Act of 1933, as
amended, the Prospectus which constitutes part of this Registration Statement is
a combined prospectus and also relates to 1,048,700 of the Registrant's ordinary
shares previously registered on Form S-3, Registration No. 333-77515. This
Registration Statement also constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 333-77515. Such Post-Effective Amendment shall become
effective concurrently with the effectiveness of this Registration Statement in
accordance with Section 8(c) of the Securities Act of 1933, as amended.
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER ___, 1999
PROSPECTUS
FLEXTRONICS INTERNATIONAL LTD.
Up To 2,688,342 Ordinary Shares
---------------
The 2,688,342 ordinary shares covered by this prospectus were previously
issued by Flextronics in its acquisitions of Neutronics Electronic Industries
Holding AG, DTM Products, Inc., Energipilot AB, FICO Forest Industrial Co.
Limited and Kyrel EMS Oy. These ordinary shares may be offered and sold over
time by the shareholders named in this prospectus under the heading "Selling
Shareholders," by their pledgees or donees, or by other transferees that receive
the ordinary shares in transfers other than public sales.
The selling shareholders may sell their Flextronics shares in the open
market at prevailing market prices, or in private transactions at negotiated
prices. They may sell the shares directly, or may sell them through
underwriters, brokers or dealers. Underwriters, brokers, or dealers may receive
discounts, concessions or commissions from the selling shareholders or from the
purchaser, and this compensation might be in excess of the compensation
customary in the type of transaction involved. See "Plan of Distribution."
We will not receive any of the proceeds from the sale of these shares.
The ordinary shares are quoted on the Nasdaq National Market under the
symbol "FLEX." On September 21, 1999, the closing sale price of the ordinary
shares was $59.00 per share.
---------------
This investment involves a high degree of risk. See "Risk Factors"
beginning on page 3.
---------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is September ___, 1999.
<PAGE>
TABLE OF CONTENTS
Page
Where you can find more information.......................................... 2
Forward Looking Statements................................................... 2
The Company.................................................................. 3
Enforcement of Civil Liabilities ............................................ 3
Risk Factors................................................................. 3
Use of Proceeds.............................................................. 10
Selling Shareholders......................................................... 10
Plan of Distribution......................................................... 12
Legal Matters................................................................ 12
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available on the SEC's
website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" information from other
documents that we file with them, which means that we can disclose important
information by referring to those documents. The information incorporated by
reference is considered to be part of this prospectus, and information that we
file later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below, and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 prior to the sale of all the shares covered
by this prospectus:
o our Annual Report on Form 10-K for the fiscal year ended March 31,
1999;
o our Quarterly Report on Form 10-Q for the quarter ended June 25, 1999;
and
o the description of our ordinary shares contained in our Registration
Statement on Form 8-A dated January 31, 1994.
You may request a copy of these filings, at no cost, by writing or
telephoning us at:
Flextronics International Ltd.
2245 Lundy Drive
San Jose, California 95131
Attention: Laurette F. Slawson
Treasurer and Director of Investor Relations
Telephone: (408) 428-1300
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement, other than any information
superseded by a later document filed with the SEC and incorporated by reference
in this prospectus. We have not authorized anyone else to provide you with
different information. The selling shareholders may not make an offer of these
shares in any state where the offer is not permitted. You should not assume that
the information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
FORWARD LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. This Act provides a "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify these
statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact we
make in this prospectus, prospectus supplement or in any document incorporated
by reference are forward-looking. In particular, the
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<PAGE>
statements herein regarding industry prospects and our future results of
operations or financial position are forward-looking statements. Forward-looking
statements reflect our current expectations and are inherently uncertain. Our
actual results may differ significantly from our expectations. The section
entitled "Risk Factors" that appears in our Annual Report on Form 10-K for the
year ended March 31, 1999 and in the prospectus supplement accompanying this
prospectus describe some, but not all, of the factors that could cause these
differences.
THE COMPANY
Flextronics is a leading provider of advanced electronics manufacturing
services to original equipment manufacturers in the telecommunications,
networking, computer, consumer electronics and medical device industries. We
provide a wide range of integrated services, from initial product design to
volume production and fulfillment. Our manufacturing services range from printed
circuit board fabrication and assembly to complete product assembly and test. We
believe that we have developed particular strengths in advanced interconnect,
miniaturization and packaging technologies. In addition, we provide advanced
engineering services, including product design, PCB layout, quickturn
prototyping and test development. Throughout the production process, we offer
logistics services, such as materials procurement, inventory management,
packaging and distribution. Our principal executive offices are located at 514
Chai Chee Lane, #04-13, 1 Bedok Industrial Estate, Singapore 469029 and our
telephone number is 65-449-5255.
ENFORCEMENT OF CIVIL LIABILITIES
We are incorporated in Singapore under the Companies Act. Some of our
directors and executive officers reside in Singapore. All or a substantial
portion of the assets of such persons, and a substantial portion of our assets,
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 Flextronics 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.
We have been advised by our 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.
RISK FACTORS
You should carefully consider the following factors as well as the other
information contained or incorporated by reference in this prospectus before
deciding to invest in our ordinary shares. These factors could cause our future
results to differ materially from those expressed or implied in forward-looking
statements made by us.
There are risks associated with the expansion of our operations
We have grown rapidly in recent periods, and this growth may not continue.
Internal growth will require us to develop new customer relationships and expand
existing ones, improve our operational and information systems and further
expand our manufacturing capacity.
We plan to further expand our manufacturing capacity by expanding our
facilities and by adding new equipment. This expansion involves significant
risks. For example:
o we may not be able to attract and retain the management personnel and
skilled employees necessary to support expanded operations;
o we may not efficiently and effectively integrate new operations,
expand existing ones and manage geographically dispersed operations;
o we may incur cost overruns;
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o we may encounter construction delays, equipment delays or shortages,
labor shortages and disputes and production start-up problems that
could adversely affect our growth and our ability to meet customers'
delivery schedules; and
o we may not be able to obtain funds for this expansion, and we may not
be able to obtain loans or operating leases with attractive terms.
In addition, we expect to incur new fixed operating expenses associated
with our expansion efforts, including substantial increases in depreciation
expense and rental expense, that will increase our cost of sales. If our
revenues do not increase sufficiently to offset these expenses, our operating
results would be adversely affected. Our expansion, both through acquisitions
and internal growth, has contributed to our incurring significant accounting
charges and experiencing volatility in our operating results. We may continue to
experience volatility in operating results in connection with future expansion
efforts.
Risks of Acquisitions
Acquisitions have represented a significant portion of our growth strategy,
and we intend to continue to pursue attractive acquisition opportunities. Our
acquisitions during the last two fiscal years represented a significant
expansion of our operations. Acquisitions involve a number of risks and
challenges, including:
o diversion of management's attention;
o the need to integrate acquired operations;
o potential loss of key employees and customers of the acquired
companies;
o lack of experience operating in the geographic market of the acquired
business; and
o an increase in our expenses and working capital requirements.
To integrate acquired operations, we must implement our management
information systems and operating systems and assimilate and manage the
personnel of the acquired operations. The difficulties of this integration may
be further complicated by geographic distances. The integration of acquired
businesses may not be successful and could result in disruption to other parts
of our business.
Any of these and other factors could adversely affect our ability to
achieve anticipated levels of profitability at acquired operations or realize
other anticipated benefits of an acquisition. Furthermore, any future
acquisitions may require additional debt or equity financing, which could
increase our leverage or be dilutive to our existing shareholders. No assurance
can be given that we will consummate any acquisitions in the future.
Our customer requirements and operating results vary significantly
Electronics manufacturing service providers must provide increasingly rapid
product turnaround for their customers. We generally do not obtain firm,
long-term purchase commitments from our customers, and over the past few years
we have experienced reduced lead-times in customer orders. Customers may cancel
their orders, change production quantities or delay production for a number of
reasons. Cancellations, reductions or delays by a significant customer or by a
group of customers would adversely affect our results of operations.
In addition to the variable nature of our operating results due to the
short-term nature of our customers' commitments, other factors may contribute to
significant fluctuations in our results of operations. These factors include:
o the timing of customer orders;
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o the volume of these orders relative to our capacity;
o market acceptance of customers' new products;
o changes in demand for customers' products and product obsolescence;
o the timing of our expenditures in anticipation of future orders;
o our effectiveness in managing manufacturing processes;
o changes in the cost and availability of labor and components;
o changes in our product mix;
o changes in economic conditions;
o local factors and events that may affect our production volume, such
as local holidays; and
o seasonality in customers' product requirements.
One of our significant end-markets is the consumer electronics market. This
market exhibits particular strength towards the end of the year in connection
with the holiday season. As a result, we have experienced relative strength in
our revenues in the third fiscal quarter.
We make significant decisions, including the levels of business that we
will seek and accept, production schedules, component procurement commitments,
personnel needs and other resource requirements, based on our estimates of
customer requirements. The short-term nature of our customers' commitments and
the possibility of rapid changes in demand for their products reduces our
ability to estimate accurately future customer requirements. On occasion,
customers may require rapid increases in production, which can stress our
resources and reduce margins. Although we have increased our manufacturing
capacity and plan further increases, there can be no assurance we will have
sufficient capacity at any given time to meet our customers' demands. In
addition, because many of our costs and operating expenses are relatively fixed,
a reduction in customer demand can adversely affect our gross margins and
operating income.
Our customer base is concentrated in the electronics industry
Our five largest customers accounted for approximately 62% of consolidated
net sales in fiscal 1999 and 57% in fiscal 1998. Our largest customers during
fiscal 1999 were Philips, Ericsson and Cisco accounting for approximately 18%,
16% and 13% of consolidated net sales, respectively. Sales to our five largest
customers have represented a majority of our net sales in recent periods. The
identity of our principal customers has varied from year to year, and our
principal customers may not continue to purchase services from us at current
levels, if at all. Significant reductions in sales to any of these customers, or
the loss of major customers, would have a material and adverse effect on us. We
can not assure the timely replacement of expired, canceled, or reduced contracts
with new business. See "--Our customer requirements and operating results vary
significantly."
Factors affecting the electronics industry in general could have a material
adverse effect on our customers and, as a result, on us. These factors include:
o the inability of our customers to adapt to rapidly changing technology
and evolving industry standards, which results in short product life
cycles;
o the inability of our customers to develop and market their products,
some of which are new and untested. If customers' products become
obsolete or fail to gain widespread commercial acceptance, our
business may be materially and adversely affected; and
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<PAGE>
o recessionary periods in our customers' markets.
Year 2000 Compliance
We are aware of the issues associated with programming code in existing
computer systems as the Year 2000 approaches. The Year 2000 computer issue
refers to a condition in computer software where a two digit field rather than a
four digit field is used to distinguish a calendar year. Unless corrected, some
computer programs could be unable to function on January 1, 2000, and thereafter
until corrected, as they will be unable to distinguish the correct date. Such an
uncorrected condition could significantly interfere with the conduct of our
business, could result in disruption of our operations, and could subject it to
potentially significant legal liabilities.
We have been addressing the Year 2000 issue with a project plan divided
into major initiatives:
o enterprise wide applications;
o manufacturing and related equipment and facilities; and
o infrastructure.
We have established geographic regional teams to follow established policies and
guidelines on the remediation of the Year 2000 issue. We created an internal
intranet database to record the status and remediation activity on all internal
equipment.
We are primarily addressing the Year 2000 issue concerning enterprise wide
applications by replacing our management information system with a new
enterprise management information system that is designed to provide enhanced
functionality. We have been advised that our new enterprise management
information system is Year 2000 compliant. We currently have implemented this
new information system in a majority of our facilities in Asia, Central Europe,
Western Europe, and the Americas. We are currently evaluating the implementation
of this new management information system for our recent acquisitions in
Finland, France and Sweden. However, we cannot assure that the new system will
be Year 2000 compliant. The new system will significantly affect many aspects of
our business, including our manufacturing, sales and marketing and accounting
functions. In addition, the successful implementation of this system will be
important to our future growth.
The Year 2000 issue also could affect our infrastructure and production
lines. The possibility also exists that we could inadvertently fail to correct a
Year 2000 problem with a mechanical equipment micro-controller. We believe the
impact of such an occurrence would be minor, as substantial Year 2000 compliant
equipment additions and upgrades have occurred in recent years. We have been in
contact with the manufacturers of mechanical equipment to fully validate the
readiness of our microprocessors. Additional testing is planned during fiscal
2000 to reasonably ensure their Year 2000 readiness.
We sent a Year 2000 Readiness Questionnaire to most of our critical and
significant suppliers. These critical suppliers have been classified into risk
categories and we are in the process of identifying and devoting resources to
verify Year 2000 compliance of these suppliers. We may need to find alternative
suppliers based on the results of the questionnaires. We cannot assure that we
will be able to find suitable alternative suppliers and contract with them on
reasonable prices and terms, and this inability could have a material and
adverse impact on our business and results of operations.
We are currently working with many of our major customers to ensure year
2000 compliance and have been audited by many of our customers. We currently
work with many of our major customers to formulate contingency plans. These
contingency plans include the movement of manufacturing production,
identification of alternative suppliers and logistics companies. We intend to
review our contracts with customers and suppliers with respect to responsibility
for Year 2000 issues and to seek to address these issues in future agreements
with customers and suppliers.
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We have currently incurred in excess of $18.0 million in total hardware,
software, and system related costs in connection with remediation of Year 2000
issues. These costs are primarily costs associated with the implementation of
our new information system and have primarily been capitalized as fixed assets.
We anticipate expending an additional $1.0 million before January 1, 2000 to
complete the implementation of the new information system and address any Year
2000 compliance issues. We cannot assure that the cost estimates associated with
our Year 2000 issues will prove to be accurate or that the actual costs will not
have a material adverse effect on our results of operations and financial
condition.
Risk of Increased Taxes
We have structured our 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. Our taxes could increase if these
tax incentives are not renewed upon expiration, or tax rates applicable to us
are increased. Substantially all of the products manufactured by our Asian
subsidiaries are sold to customers based in North America and Europe. We believe
that profits from our Asian operations are not sufficiently connected to
jurisdictions in North America or Europe to give rise to income taxation there.
However, tax authorities in jurisdictions in North America and Europe could
challenge the manner in which profits are allocated among our subsidiaries, and
we may not prevail in any such challenge. If our Asian profits became subject to
income taxes in other jurisdictions, our worldwide effective tax rate could
increase.
We are significantly leveraged
Our level of indebtedness presents risks to investors, including:
o the possibility that we may be unable to generate cash sufficient to
pay the principal of and interest on the indebtedness when due;
o making us more vulnerable to economic downturns;
o limiting our ability to pursue new business opportunities; and
o reducing our flexibility in responding to changing business and
economic conditions.
Risks of Competition
The electronics manufacturing services industry is extremely competitive
and includes hundreds of companies, several of which have achieved substantial
market share. Current and prospective customers also evaluate our capabilities
against the merits of internal production. Certain of our competitors, including
Solectron and SCI Systems, have substantially greater market shares than us, and
substantially greater manufacturing, financial, research and development and
marketing resources. In recent years, many participants in the industry,
including us, have substantially expanded their manufacturing capacity. If
overall demand for electronics manufacturing services should decrease, this
increased capacity could result in substantial pricing pressures, which could
adversely affect our operating results.
Risks of International Operations
The geographical distances between Asia, the Americas and Europe create a
number of logistical and communications challenges. Our manufacturing operations
are located in a number of countries, including Austria, Brazil, China, Hungary,
Malaysia, Mexico, Sweden, the United Kingdom and the United States. As a result,
we are affected by economic and political conditions in those countries,
including:
o fluctuations in the value of currencies;
o changes in labor conditions;
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o longer payment cycles;
o greater difficulty in collecting accounts receivable;
o burdens and costs of compliance with a variety of foreign laws;
o political and economic instability;
o increases in duties and taxation;
o imposition of restrictions on currency conversion or the transfer of
funds;
o limitations on imports or exports;
o expropriation of private enterprises; and
o reversal of the current policies, including favorable tax and lending
policies, encouraging foreign investment or foreign trade by our host
countries.
The attractiveness of our services to our U.S. customers can be affected by
changes in 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
addition, some countries in which we operate, such as Brazil, Mexico and
Malaysia, have experienced periods of slow or negative growth, high inflation,
significant currency devaluations and limited availability of foreign exchange.
Furthermore, in countries such as Mexico and China, governmental authorities
exercise significant influence over many aspects of the economy, and their
actions could have a significant effect on us. Finally, we could be adversely
affected by inadequate infrastructure, including lack of adequate power and
water supplies, transportation, raw materials and parts in countries in which we
operate.
RISKS RELATING TO CHINA. Under its current leadership, the Chinese
government has been pursuing economic reform policies. We cannot assure that the
Chinese government will continue to pursue these policies, or that these
policies will be successful if pursued. In addition, China does not have a
comprehensive and highly developed system of laws, and enforcement of laws and
contracts is uncertain. The United States annually reconsiders the renewal of
most favored nation trading status of China. China's loss of most favored nation
status could adversely affect us by increasing the cost to U.S. customers of
products manufactured by us in China.
RISKS RELATING TO MEXICO. The Mexican government exercises significant
influence over many aspects of the Mexican economy and its action could have a
significant effect on private sector entities in general and us in particular.
In addition, during the 1980s, Mexico experienced periods of slow or negative
growth, high inflation, significant devaluation of the peso and limited
availability of foreign exchange.
RISKS RELATING TO HUNGARY. Hungary has undergone significant political and
economic change in recent years. Political, economic, social and other
developments, and changes in laws could have a material and adverse effect on
our business. Annual inflation and interest rates in Hungary have historically
been much higher than those in Western Europe. Exchange rate policies have not
always allowed for the free conversion of currencies at the market rate. Laws
and regulations in Hungary have been, and continue to be, substantially revised
during its transition to a market economy. As a result, laws and regulations may
be applied inconsistently. Also in some circumstances, it may not be possible to
obtain the legal remedies provided for under those laws and regulations in a
reasonably timely manner, if at all.
RISKS RELATING TO BRAZIL. During the past several years, the Brazilian
economy has been affected by significant intervention by the Brazilian
government. The Brazilian government has changed monetary, credit, tariff and
other policies to influence the course of Brazil's economy. The Brazilian
government's actions to control
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inflation and effect other policies have often involved wage, price and exchange
controls as well as other measures such as freezing bank accounts and imposing
capital controls.
Risks of Currency Fluctuations and Hedging Operations
With the recent acquisitions of operations in Sweden, Austria and Brazil, a
significant portion of our business is conducted in the Swedish kronor, European
euro and Brazilian real. In addition, some of our costs, such as payroll and
rent, are denominated in currencies such as the Singapore dollar, the Hong Kong
dollar, the Malaysian ringgit, the Hungarian forint, the Mexican peso, and the
British pound, as well as the kronor, the euro and the real. In recent years,
the Hungarian forint, Brazilian real and Mexican peso have experienced
significant devaluations, and in January 1999 the Brazilian real experienced
further significant devaluations. Changes in exchange rates between these and
other currencies and the U.S. dollar will affect our cost of sales and operating
margins. We cannot predict the impact of future exchange rate fluctuations. We
use financial instruments, primarily forward purchase contracts, to hedge
Japanese yen, European euro, U.S. dollar, and other foreign currency commitments
arising from trade accounts payable and fixed purchase obligations. Because we
hedge only fixed obligations, we do not expect that these hedging activities
will have a material effect on our results of operations or cash flows. However,
our hedging activities may be unsuccessful, and we may change or reduce our
hedging activities in the future.
We depend on key personnel
Our success depends to a larger extent upon the continued services of our
key executives and skilled personnel. Generally our employees are not bound by
employment or non-competition agreements, and there can be no assurance that we
will retain our officers and key employees. We could be materially and adversely
affected by the loss of personnel.
There may be shortages of required electronic components
A substantial majority of our net sales are derived from turnkey
manufacturing in which we are responsible for procuring materials, which
typically results in our bearing the risk of component price increases. At
various times, there have been shortages of certain electronic components.
Component shortages could result in manufacturing and shipping delays or higher
prices, which could have a material adverse effect on us.
Environmental Compliance Risks
We are subject to a variety of environmental regulations relating to the
use, storage, discharge and disposal of hazardous chemicals. Although we believe
that our facilities are currently in material compliance with applicable
environmental laws, we cannot assure that violations will not occur. The costs
and penalties that could result from a violation of environmental laws could
materially and adversely affect us.
The market price of the ordinary shares is volatile
The stock market in recent years has experienced significant price and
volume fluctuations that have affected the market prices of technology
companies. These fluctuations have often been unrelated to or disproportionately
impacted by the operating performance of these companies. The market for the
ordinary shares may be subject to similar fluctuations. Factors such as
fluctuations in our operating results, 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 price of our ordinary shares.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling shareholders.
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SELLING SHAREHOLDERS
The following table sets forth certain information regarding the shares
beneficially owned by the selling shareholders named below as of September 1,
1999, the shares that may be offered and sold from time to time by the selling
shareholders pursuant to this prospectus, assuming each selling shareholder
sells all of the ordinary shares offered in this prospectus, and the nature of
any position, office or other material relationship which each selling
shareholder has had with Flextronics. The selling shareholders named below,
together with any pledgee or donee of any named shareholders, and any person who
may purchase shares offered hereby from any named shareholders in a private
transaction in which they are assigned the shareholders' rights to registration
of their shares, are referred to in this prospectus as the "selling
shareholders."
Except as indicated below, the shares that may be offered and sold pursuant
to this prospectus represent all of the shares beneficially owned by each named
selling shareholder as of September 1, 1999. All of these shares were acquired
by the selling shareholders in connection with our acquisitions of Neutronics,
Energipilot, DTM, FICO and Kyrel. Because the selling shareholders may offer
from time to time all or some of their shares under this prospectus, no
assurances can be given as to the actual number of shares that will be sold by
any selling shareholder or that will be held by the selling shareholder after
completion of the sales.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission that consider shares to be beneficially owned
by any person who has voting or investment power with respect to the shares.
Ordinary shares subject to options that are currently exercisable or exercisable
within 60 days after September 1, 1999 are considered to be outstanding and to
be beneficially owned by the person holding the options for the purpose of
computing the percentage ownership of a person but are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person. Percentage ownership is based upon 49,942,907 outstanding ordinary
shares as of September 1, 1999.
<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Beneficially Owned
Prior to the Offering Shares Being After the Offering
Name Number Percent Offered Number Percent
<S> <C> <C> <C> <C> <C>
Hui Shing Leong (1) ......... 2,076,825 4.2% 918,900 1,157,925 2.3%
Seppo Parhankangas (2) ...... 1,639,642 3.3% 1,639,642 -- --
Richard Pfaffstaller (3) .... 81,300 * 48,800 32,500 *
Walter Mayrhofer (4) ........ 51,000 * 51,000 -- --
Bo Sjunnesson (5) ........... 30,000 * 30,000 -- --
</TABLE>
- ----------
* Less than 1%.
(1) Mr. Hui Shing Leong is a director of Flextronics, and was a director and
shareholder of Neutronics until its acquisition by Flextronics. Includes to
1,128,800 shares held by Great Empire Limited, an entity affiliated with
Mr. Hui. Shares beneficially owned by Mr. Hui include 29,125 shares subject
to options exercisable within 60 days after September 1, 1999 held by Mr.
Hui.
(2) Mr. Seppo Parhankangas was a director, officer and sole shareholder of
Kyrel until its acquisition by Flextronics.
(3) Mr. Richard Pfaffstaller is an officer of a subsidiary of Flextronics and
was a director, officer and shareholder of Neutronics until its acquisition
by Flextronics. Shares beneficially owned by Mr. Pfaffstaller include
32,500 shares subject to options exercisable within 60 days after September
1, 1999 held by Mr. Pfaffstaller.
(4) Mr. Walter Mayrhofer is an officer of a subsidiary of Flextronics and was a
director, officer and shareholder of Neutronics until its acquisition by
Flextronics.
10
<PAGE>
(5) Mr. Bo Sjunnesson is an officer of a subsidiary of Flextronics, and was a
director, officer and the sole shareholder of Energipilot prior to its
acquisition by Flextronics.
PLAN OF DISTRIBUTION
The selling shareholders may sell or distribute some or all of the shares
from time to time through underwriters or dealers or brokers or other agents or
directly to one or more purchasers, including pledgees, in transactions (which
may involve crosses, block transactions or short sales) on Nasdaq, in privately
negotiated transactions (including sales pursuant to pledges or short sales) or
in the over-the-counter market, or in a combination of these transactions. These
transactions may be effected by the selling shareholders at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed. Brokers,
dealers, agents or underwriters participating in transactions as agent may
receive compensation in the form of discounts, concessions or commissions from
the selling shareholders (and, if they act as agent for the purchaser of the
shares, from such purchaser). The discounts, concessions or commissions as to a
particular broker, dealer, agent or underwriter might be in excess of those
customary in the type of transaction involved. This prospectus also may be used,
with Flextronics' consent, by donees or pledgees of the selling shareholders, or
by other persons acquiring shares and who wish to offer and sell shares under
circumstances requiring or making desirable its use.
The selling shareholders and any underwriters, brokers, dealers or agents
that participate in such distribution may be deemed to be "underwriters" within
the meaning of the Securities Act, and any discounts, commissions or concessions
received by any underwriters, brokers, dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act. Neither
Flextronics nor the selling shareholders can presently estimate the amount of
such compensation.
We will pay substantially all of the expenses incident to this offering of
the shares by the selling shareholders to the public other than commissions and
discounts of underwriters, brokers, dealers or agents. We have agreed to
indemnify the selling shareholders against certain liabilities, including
liabilities arising under the Securities Act, in connection with the offer and
sale of the shares, and selling shareholders may indemnify brokers, dealers,
agents or underwriters that participate in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act.
In order to comply with certain states' securities laws, if applicable, the
shares will be sold in jurisdictions only through registered or licensed brokers
or dealers. In addition, in certain states the shares may not be sold unless the
shares have been registered or qualified for sale in that state or an exemption
from registration or qualification is available and is complied with.
The shares were originally issued to former shareholders of Neutronics,
DTM, Energipilot, FICO and Kyrel in connection with the acquisitions of these
companies pursuant to exemptions from the registration requirements of the
Securities Act provided by Section 4(2) thereof.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for us
by Allen & Gledhill, Singapore.
11
<PAGE>
-----------------
PROSPECTUS
-----------------
September __, 1999
<PAGE>
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:
SEC Registration Fee ........................ $43,977
Printing and engraving expenses ............. 5,000
Legal expenses .............................. 15,000
Blue Sky expenses ........................... 5,000
Accounting fees and expenses ................ 10,000
Miscellaneous ............................... 1,023
-------
Total .................................. $80,000
ITEM 15. Indemnification of Officers and Directors.
As permitted by the laws of Singapore, the Articles of Association of the
Company 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 and Financial Statements and Schedules.
EXHIBIT
NUMBER EXHIBIT TITLE
2.1 Asset Transfer Agreement between Ericsson Business Networks AB and
Flextronics International Sweden AB dated as February 12, 1997.
Certain schedules have been omitted. The Registrant agrees to furnish
supplementally a copy of any omitted schedule to the Commission upon
request. (Incorporated by reference to Exhibit 2.6 of the Registrant's
Registration Statement on Form S-3, No. 333-21715.)
2.2 Exchange Agreement dated October 19, 1997 by and among the Registrant,
Neutronics Electronic Industries Holding A.G. and the named
shareholders of Neutronics Electronic Industries Holding A.G.
(Incorporated by reference to Exhibit 2 of the Registrant's Current
Report on Form 8-K for event reported on October 30, 1997.)
2.3 Exchange Agreement dated as of June 11, 1999 among the Registrant,
Flextronics Holding Finland Oyj and Seppo Parhankangas. (Incorporated
by reference to Exhibit 2.3 of the Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1999.)
3.1 Memorandum of Association of the Registrant. (Incorporated by
reference to Exhibit 3.1 of the Registrant's Registration Statement on
Form S-1, No. 33-74622.)
3.2 Articles of Association of the Registrant. (Incorporated by reference
to Exhibit 3.2 of the Registrant's Registration Statement on Form S-4,
No. 33-85842.)
II-1
<PAGE>
4.1 Indenture dated as of October 15, 1997 between the Registrant and
State Street Bank and Trust Company of California, N.A., as trustee.
(Incorporated by reference to Exhibit 10.1 of the Registrant's Current
Report on Form 8-K for event reported on October 15, 1997.)
5.1* Opinion and Consent of Allen & Gledhill with respect to the ordinary
shares being registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Moore Stephens.
23.3* Consent of Allen & Gledhill (included in Exhibit 5.1).
24.1 Power of Attorney (included in the signature page of this Registration
Statement).
27.1 Financial Data Schedule. (Incorporated by reference to Exhibit 27.1 of
the Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999.)
* To be filed by amendment.
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.
(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 directors, 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
II-2
<PAGE>
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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in San Jose, State of California on this 22nd day of September,
1999.
FLEXTRONICS INTERNATIONAL LTD.
By: /s/ Michael E. Marks
------------------------------
Michael E. Marks
POWER OF ATTORNEY
KNOW ALL PERSON BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints, jointly and severally, Michael E. Marks and
Robert R.B. Dykes, and each of them, attorneys-in-fact for the undersigned, each
with the power of substitution, for the undersigned in any and all capacities,
to sign any amendments (including post-effective amendments) to the Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons and in the
capacities and on the dates indicated.
Signature Title Date
/s/ Michael E. Marks Chairman of the Board, September 22, 1999
- ------------------------ and Chief Executive Officer
Michael E. Marks (principal executive officer)
/s/ Tsui Sung Lam Director September 22, 1999
- ------------------------
Tsui Sung Lam
/s/ Robert R.B. Dykes President, Systems Group and Chief September 22, 1999
- ----------------------- Financial Officer (principal
Robert R.B. Dykes financial and accounting officer)
/s/ Michael J. Moritz Director September 22, 1999
- -----------------------
Michael J. Moritz
/s/ Richard L. Sharp Director September 22, 1999
- -----------------------
Richard L. Sharp
/s/ Patrick Foley Director September 22, 1999
- -----------------------
Patrick Foley
/s/ Alain Ahkong Director September 22, 1999
- -----------------------
Alain Ahkong
/s/ Hui Shing Leong Director September 22, 1999
- -----------------------
Hui Shing Leong
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
5.1* Opinion and Consent of Allen & Gledhill with respect to the ordinary
shares being registered.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Moore Stephens.
23.3* Consent of Allen & Gledhill (included in Exhibit 5.1).
24.1 Power of Attorney (included in the signature page of this Registration
Statement).
* To be filed by amendment.
Exhibit 23.1
[LETTERHEAD OF ARTHUR ANDERSEN]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated April 21, 1999
included in Flextronics International Ltd.'s Form 10-K for the year ended March
31, 1999.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
San Jose, California
September 22, 1999
Exhibit 23.2
[LETTERHEAD OF MOORE STEPHENS]
Our Reference: 85/25725
Date: 22 September 1999
Flextronics International Limited,
2241 Fortune Drive,
San Jose
CA 95131
USA.
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.
/s/ Moore Stephens
Moore Stephens
