IRVINE, CA -- Multi-Fineline Electronix swung to a net profit in its fiscal fourth quarter as cost-cutting maneuvers overcame lower overall sales.

For the period ended Sept. 30, the flex circuit fabricator and assembler reported net income of $5.9 million, up from a net loss of $18.5 million, Net sales in the quarter were $172.9 million, down 8% from last year, as lower sales to a key customer were partially offset by a significant increase in sales to the company's newer customer group.

Net sales increased 32% sequentially, driven by new program ramps. Gross margin was up 15.6 percentage points sequentially to 10.1%.

In a statement, chief executive Reza Meshgin said, "We had a strong fiscal fourth quarter with net sales results at the high end of our guidance range, gross margin exceeding our guidance range and a return to profitability.

The company's restructuring initiatives are finished and generated $56 million in annual cost savings, exceeding initial expectations, Meshgin said.

MFlex was heavily dependent on smartphone sales, particularly to Apple. As Apple has trimmed its business with the fabricator, MFlex has responded by widening its customer base. Net sales to the newer customers in the quarter increased $36.2 million year-over-year to approximately $58.7 million. These customers represented approximately 34% of total net sales in the quarter, with one accounting for approximately 16% of net sales. Meanwhile, Apple accounted for 60% of net sales during the fourth quarter, down from 73% a year ago. 

Mflex guided for December quarter net sales of $180 million to $210 million and gross margin between 6 and 8%.

"We expect another sequential increase in net sales during the December quarter driven by anticipated demand across our customer base," Meshgin said. "Our gross margin expectations reflect the benefits of our recently completed restructuring plan, as well as a more normalized product mix compared to the September quarter. As a result of our improved cost structure, we expect to generate another quarter of net income. Looking further ahead, we intend to focus on continued customer and product diversification while maintaining solid relationships with our current customers. We expect this, in conjunction with continued cost management, to lessen the variability in our quarterly results and produce solid profitability in the 2015 calendar year."

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