THE NUMBERS:
Three-year growth: 72%
12-month sales through June: $778 million
12-month profit through June: $42 million
Recent market value: $720 million
Employees: 13,400, 231 in OC
Company: circuit board maker
Sales at Anaheim’s Multi-Fineline Electronix Inc., a maker of specialized printed circuit boards for mobile devices, have been buoyed in part by continued demand for smart phones.
The do-all gadgets, made even more popular by Apple Inc.’s iPhone, haven’t seen sales slow down too much during the recession and are expected to see big growth in coming years.
M-Flex, as the company is known, posted 72% revenue growth during the three years ended June 30—a respectable number for a company that deals in consumer electronics, which otherwise have gotten hammered this year.
The company went from $452 million in revenue in the 12 months ended June 2007 to $778 million in the 12 months ended June.
Chief Executive Reza Meshgin said recently M-Flex is seeing a boost as its larger customers ramp up production ahead of the holiday season.
The company has said it’s also in talks with a new, unnamed customer in Asia that’s among the top five biggest cell phone makers.
The strongest part of Multi-Fineline’s business, according to analysts, is from customers Research in Motion Ltd. and Apple, which are set to come out with new devices ahead of the holidays.
“We believe the iPod Touch should ramp aggressively in the third and fourth quarters, adding to continued strong sales growth with Research in Motion,” said Amit Daryanani, a San Francisco analyst at RBC Capital Markets, part of the investment bank arm of Royal Bank of Canada.
The weaker part of Multi-Fineline’s business comes from traditional cell phone makers, including Sony Ericsson Mobile Communications AB, which made up 7% of the company’s sales in the second quarter, and Motorola Inc., which made up 4% of sales.
In December, M-Flex bought Pelikon Ltd., a privately held British maker of high-tech keypads for up to $20 million.
Sales of smart phones, which are loosely defined as cell phones that run an operating system like that of a computer, are expected to grow about 30% next year and 40% in 2011, according to data from El Segundo-based market tracker iSuppli Corp.
Finland’s Nokia Corp., the world’s top maker of cell phones, had 60% of the market for smart phones last year, iSuppli’s data showed. Research in Motion had 23% market share and Apple had 14%.
Multi-Fineline is sporting double-digit growth for its stock this year—shares are up more than 130% since the start of the year on a recent market value of about $720 million.
It’s among a handful of local circuit board manufacturers that have been able to stay competitive here by designing and building more specialized boards in small batches for jobs that often have to be turned around quickly.
Other board makers—mostly in Asia—produce less complex boards that can be made in large volumes on the cheap.
The health of printed circuit board makers—which are loaded with chips and built into consumer electronics, networking gear and industrial devices—is often viewed as a leading barometer for demand.
For the current quarter, Multi-Fineline said it expects sales of $190 million to $205 million, about flat from a year earlier. It didn’t give a profit outlook.
Analysts, on average, are looking for profits of $11 million on sales of $198 million.
The company is seeing increased productivity at its existing factories and is finishing construction of a new factory at its campus in China.
“Improving labor efficiency, as well as yields, has helped us to offset some of the pricing pressure the industry has seen,” Tom Ligouri, finance chief, said.
To meet demand, the company said in a recent call with analysts that it’s set to begin construction of another factory during 2010 in China.
M-Flex also has offices in the Netherlands, Taiwan and Singapore.
