Anaheim, Calif. /PRNewswire via COMTEX News Network/ -- Multi-Fineline Electronix, Inc. announced preliminary financial results for the third quarter of fiscal 2010 ended June 30, 2010, along with its current outlook for the fourth quarter.

 

The company expects to report net sales in the third quarter of approximately $181 million, an increase of approximately 3.7 percent from net sales of $174.5 million in the same period last year. Gross margin during the third quarter of fiscal 2010 is expected to be approximately 12.3 percent, compared to 14.3 percent for the same period in the prior year. The company expects to announce final third quarter results in its regularly scheduled press release and conference call on August 5, 2010, at which time it will provide further comments on the quarter. Details for the call will be announced shortly.

 

Reza Meshgin, Chief Executive Officer of MFLEX, commented, "Our net sales performance in the third quarter was solid due to continued strong demand for our flex assemblies for smartphones and other consumer electronic devices. As anticipated, growth in the quarter was driven by several new programs with existing OEM customers. While ambitious manufacturing and quality improvement initiatives implemented over the last year have helped to improve our operational performance in the initial ramp of new programs, during the third quarter we experienced lower yields than expected mostly due to the complicated nature of one new program. The lower than expected gross margin of 12.3 percent reflects the impact of these lower yields along with a more competitive pricing environment."

 

In addition, the company expects that third quarter net income will be impacted by impairment and restructuring costs and non-cash income tax expenses associated with the consolidation of operations. These costs are expected to range between $3.5 and $4.0 million net of taxes. These actions are expected to improve the company's cost structure in future periods.

 

For the fourth quarter of fiscal 2010, the company currently expects net sales to increase sharply and range between $220 and $240 million. Gross margin is currently expected to range between 13 and 15 percent based on the projected product mix.

 

Commenting on the company's business outlook, Meshgin noted, "The continued ramp of new programs is expected to support another quarter of strong net sales and drive full year net sales growth in fiscal 2010. Gross margins are expected to benefit from the higher projected manufacturing volumes in the fourth quarter. This should more than offset the residual gross margin pressure from the new program ramps along with start-up costs related to MFC3, our new state-of-the art manufacturing facility in China."

 

For more information, visit www.mflex.com.