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SAN JOSE -- Flextronics is terminating "certain arrangements" with Nortel Networks to reduce its exposure to the Canadian telecom company as it winds its way through bankruptcy.

The programs would come to an end by July, Nortel said, without disclosing the products or services or their values. Nor did the OEM indicate whether any of the programs or services designated for termination were near the end of their contract life.

Flextronics is said to provide 75% of Nortel's finished product worldwide. For its part, Nortel was recently among Flextronics' largest five customers, but the EMS firm has been working over the past several months to reduce its financial ties.

In an announcement, Nortel said it would purchase $120 million of existing inventory from Flextronics by July, in addition to other quarterly purchases.

CHICAGO – Merger and acquisition activity in the EMS sector slowed slightly in 2008, with a total of 48 EMS companies changing hands in 2008, down three from 2007.

NEW YORK -- IEC Electronics reported December quarter revenue of $15.8 million, up 41% over a year ago.

Operating income was up 141% to $946,000 and net income rose 27% to $532,000 for the company's first fiscal quarter.

Gross margin improved to 14.1%, up 3.8 points from a year ago. Operating income was 6% of sales versus 3.6% for the same period last year. The company pointed to improved product mix, manufacturing efficiency, and a larger customer base, including a new aerospace customer.

In a statement, chairman and CEO Barry Gilbert, said, “We expect continued revenue growth during the balance of the year, and expect to further intensify our market focus in the medical technology sector in the coming quarters. As we all know, the economy is in a deep recession. While some of our customers are indeed experiencing significant difficulties we have others that continue to expand their commercial activity with us."

The company may apply to re-list its common stock on the Nasdaq Capital Market, he said, which could involve a reverse split of the company's common stock.