United States securities and exchange commission logo
January 30, 2023
Paul R. Lundstrom
Chief Financial Officer
FLEX LTD.
2 Changi South Lane
Singapore, 486123
Re: FLEX LTD.
Form 10-K for the
Year Ended March 31, 2022
File No. 000-23354
Dear Paul R. Lundstrom:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Year Ended March 31, 2022
Liquidity and Capital Resources, page 45
1. Please address the
following comments related to your presentation of net working capital
("NWC") and NWC as a
percentage of annualized net sales:
You describe NWC
and the annualized percentage as "key metrics that measure our
liquidity." Tell us
why you refer to these items as metrics and not non-GAAP
measures.
We note that NWC
is calculated as "current quarter accounts receivable, net of
allowance for
doubtful accounts, plus inventories and contract assets, less accounts
payable" and that
it excludes certain current liabilities. Tell us how your presentation
complies with Item
10(e)(1)(ii)(A) of Regulation S-K, which generally prohibits
excluding charges
or liabilities that required or will require cash settlement from non-
GAAP liquidity
measures. Also see the third bullet of Question 102.10(a) of the
Compliance and
Disclosure Interpretations on Non-GAAP Financial Measures.
Paul R. Lundstrom
FirstName
FLEX LTD.LastNamePaul R. Lundstrom
Comapany
January 30,NameFLEX
2023 LTD.
January
Page 2 30, 2023 Page 2
FirstName LastName
Consolidated Statements of Operations, page 55
2. Please revise your statement of operations to present a separate line
item for equity in
earnings of unconsolidated subsidiaries after income or loss before
income tax expense.
We note from your disclosure in Note 17 that your equity in earnings
of unconsolidated
subsidiaries for the year ended March 31, 2021 was significant to both
pre-tax and net
income. See guidance in Rule 5-03 of Regulation S-X. Also, in periods
where amounts
related to your equity method investments are material to the
financial statements, please
include the disclosures required by ASC 323-10-50-3 and Rule 4-08(g)
of Regulation S-
X.
Notes to the Financial Statements
Note 4. Revenue, page 69
3. Please tell us how you considered the guidance in ASC 606-10-55-89
through 55-91
regarding presentation of disaggregated revenues for the reporting
units identified in Note
21, including Lifestyle, CEC, Automotive, Consumer Devices,
Industrial, and Health
Solutions. We note that your Results of Operations section in MD&A
discusses the
percentage change in revenue for each of these "businesses." Please
advise or revise to
include disclosure of the revenue related to these businesses in your
revenue
disaggregation footnote.
Note 12. Trade Receivables Securitizations, page 83
4. We note that you sell pools of trade receivables under asset-back
securitization
agreements that qualify for sale accounting under ASC 860-10-40-5 and
that the process
begins with the sale of receivables to consolidated special purpose
entities. Please tell us
if you account for transfers of accounts receivables to the special
purposes entities as
sales. If so, tell us how your accounting treatment complies with ASC
860-10-55-17D. If
not, revise your disclosures in future filings to clarify your
accounting treatment.
Note 21. Segments, page 94
5. We note your disclosure that FAS, FRS and Nextracker represent your
three operating and
reportable segments. You further indicate that FAS is comprised of
CEC, Lifestyle and
Consumer Devices reporting units and that FRS is comprised of
Automotive, Health
Solutions and Industrial reporting units. Please tell us how you
analyzed the guidance in
ASC 280-10-50-1 in determining that these reporting units do not meet
the criteria to be
considered operating segments. It appears from your MD&A discussion
that revenue
related to these reporting units is available and your disclosure on
page 43 suggests that
reporting unit margins may also be tracked, as you discuss segment
margin changes for
your Automotive, Industrial, and Health Solutions reporting units.
Paul R. Lundstrom
FLEX LTD.
January 30, 2023
Page 3
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Claire Erlanger at (202) 551-3301 or Andrew Blume at
(202) 551-
3254 with any questions.
FirstName LastNamePaul R. Lundstrom Sincerely,
Comapany NameFLEX LTD.
Division of
Corporation Finance
January 30, 2023 Page 3 Office of
Manufacturing
FirstName LastName