IRVINE, CA -- Multi-Fineline Electronix saw fiscal third quarter net sales plunge, primarily due to lower sales to a key customer. The company swung to a net loss of $31.5 million, compared to net income of $3.8 million last year.

The flexible printed circuit fabricator and assembler is highly dependent on a small number of customers and end-products smartphones and tablets. During the third quarter, smartphones comprised 78% of net sales and tablets 13%, with consumer electronics making up 8%. Furthermore, one customer made up approximately 59% of net sales and another about 23%. (Apple and Blackberry have traditionally been MFLEX's largest customers. It also supplies Foxconn, Flextronics and Jabil.)

Net sales in the quarter ended June 30 were down 20% from a year ago to $136.1 million, below company's expectations due to soft market conditions and a number programs pushouts to the fiscal fourth quarter.

Gross margin was -3.1%, compared to 9.2% in the prior year on lower sales level and overhead under-absorption. MFLEX took non-cash charges of $7.5 million for goodwill impairment and $3.1 million for a valuation allowance to reduce the value of certain deferred tax assets during the period. MFLEX has capacity of about $300 million to $330 million worth of product per quarter.

The company forecast fiscal fourth quarter net sales of $195 million to $215 million and gross margin of 1 to 3%.

Chief executive Reza Meshgin said, "We believe our third quarter results will serve as an inflection point as we anticipate a meaningful sequential improvement in revenue in the fourth quarter with continued momentum into fiscal 2014. As a result, we expect to return to profitability in the first quarter of fiscal 2014, as well as on a full year basis in fiscal 2014."

MFLEX added two new customers during the quarter and indicated that it is trying to build its base.

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