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Wednesday, Feb 21, 2024

M-Flex to Close China Factory, R&D in U.K.

Irvine-based printed circuit board maker Multi-Fineline Electronix Inc. will consolidate its factories in China and close a research and development center in the U.K. as part of a restructuring plan intended to return the company to profitability.

The company, better known as M-Flex, expects to save about $50 million annually by consolidating its assembly operation into two manufacturing plants in Suzhou and shutter its R&D lab in Cambridge, U.K.

The production equipment and vacated buildings owned by M-Flex will be sold. The restructuring will reduce its total manufacturing floor space by about a third, according to the company.

The company expects to take a charge of $40 million to $60 million in write-downs in the March and June quarters for production equipment and buildings, severance payments, moving costs and other liabilities associated with the initiative.

The company also expects to take a $14 million hit for building improvements in those quarters.

The moves, expected to be completed by June, will bring it back to profitability, the company said.

M-Flex posted a loss of $65.5 million in its fiscal year ending in September, compared to a $29,000 profit the prior year.

It has faced steep sales declines and mounting losses this year as it reduces inventory and production.

M-Flex cut more 4,000 employees companywide in the last few years. The bulk of its workers remain in China.

M-Flex, which makes flexible circuit boards used in cellphones, smartphones and other mobile devices, is known to supply components to Apple Inc. and often tracks the Cupertino-based consumer electronics maker on the tech-heavy Nasdaq.

Its shares are down 2.3% in earlier afternoon trading to a market value of about $351.9 million.

Late last year reports surfaced that United Engineers Ltd., one of Singapore’s oldest companies, is looking to sale its majority stake in M-Flex.

It owns about 62% of the company, which it acquired as part of a $725 million deal last year for Singapore-based WBL Corp. Ltd.

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