SAN JOSE -- Multek's struggles continued in its latest quarter, as the board fabricator saw two sites closed and a complete revamping of its focus initiated.

During the March quarter, Flextronics began closing Multek factories in Boeblingen, Germany, and Sao Paulo, Brazil. Those restructurings will be complete during the current quarter, the firm said.

The Boeblingen site employed 450 workers and was one of the older yet more respected fabrication shops in Europe, having once been run by HP.

The Brazil site, at 96,000 sq. ft., was said to be the largest in South America. It was opened in 1974.

Following the shutdowns, Multek will have one site (Sheldahl) in the US and one in China.

"We are consolidating Multek footprint and rationalizing its operations in the similar fashion how we attacked our power businesses this past year, which is now profitable and expanding into new power products," said chief executive officer Mike McNamara on a conference call this week. "We are confident that the steps we're taking will drive operating efficiencies and results in an optimization of our system which will lower the revenue level required to achieve better margins."

Multek has diminished Flextronics' overall operating margins by 20 to 20 basis points during the past few quarters, which translates to $15 million to $18 million in lower earnings. Company executives believe the plant closures coupled with higher sales will boost margins.

"With the closure of the two factories, we should be at profitability by the end of the year," said chief financial officer Paul Read. "[W]e're anticipating some revenue increases with Multek at the back end of the year with some new programs that we've been booking with the new technologies that we've invested in and we're starting to see the orders flow through for that."

Read added that Multek should see profitability by year end in the low "single digit numbers."

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