$500 million is a staggering amount of money to lose under any circumstances. How could any business survive losing that much revenue in one year?
Well, despite losing $500 million thanks to last year’s spectacular SunEdison flameout (and continuing fallout), Flex still managed to grow its energy business 6% in 2016. Until it announced its bankruptcy last year, SunEdison had been Flex’s biggest solar-tracker customer.
SunEdison, once a solar-industry juggernaut with entangling arrangements with a host of other industry powerbrokers, has been going through a painful bankruptcy proceeding for almost a year. The company filed for bankruptcy last April, and the fallout is still being felt throughout the industry at companies like Terraform and Flex.
A loss of that magnitude, revealed by Flex CFO Christopher Collier during the company’s third quarter earnings call last week, would cripple most companies. But Collier said other company divisions picked up the slack, and demand for the tracking solution is rebounding.
In addition, Flex managed to sell off the solar-panel inventory it had acquired through its relationship with SunEdison, mitigating some of the lost revenue.
“Different disruptions are going to happen like SunEdison and we’ve operated in a pretty low economy,” said Michael McNamara, Flex’s CEO and director. “Maybe it will get little bit better going forward and it will help us out.”
McNamara also reassured potential customers that the SunEdison disaster hasn’t scared Flex out of the energy business.
“We would have had an extraordinary year in solar if it had not been with the SunEdison account going upside down,” McNamara said. “We’re pleased the way that’s evolving. [Our] energy [business] is not going to go away, and our position within energy is interesting – it’s in a place where we believe growth will continue.”