ANAHEIM, CA –
Flexible circuit maker Multi-Fineline Electronix
today said third-quarter net sales unexpectedly declined sequentially due to an ongoing decline in sales to its largest customer.
For the quarter, net sales fell 8% to $104.1 million. M-Flex previously guided for sequential growth between the second and third fiscal quarters. In its fiscal second quarter earnings teleconference, the company forecast demand from its emerging customers would compensate for ongoing softness in sales to its largest customer, whom it declined to name.
In a statement today, M-Flex chairman and chief executive Phil Harding said that although sales to other customers grew 43% sequentially during the quarter, sales to the company's largest customer declined substantially more than expected. In addition, M-Flex expects that net income will decline sequentially from the second quarter to a net loss from operations for the third quarter, before an expected nonrecurring charge to expense transaction costs related to the conditional offer by M-Flex to acquire all outstanding shares of MFS Technology Ltd.
The company expects to take a nonrecurring third-quarter charge of approximately $8 million related to expensing the deferred transaction costs. M-Flex terminated the offer in late June, after shareholders in WBL Corp.,
which owns a large stake in MFS,
voted against the plan.