0001408710-23-000034.txt : 20231106 0001408710-23-000034.hdr.sgml : 20231106 20231106162236 ACCESSION NUMBER: 0001408710-23-000034 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20231106 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20231106 DATE AS OF CHANGE: 20231106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Fabrinet CENTRAL INDEX KEY: 0001408710 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 981228572 FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34775 FILM NUMBER: 231380268 BUSINESS ADDRESS: STREET 1: FABRINET WEST, INC. STREET 2: 4900 PATRICK HENRY DRIVE CITY: SANTA CLARA STATE: CA ZIP: 95054 BUSINESS PHONE: (408) 748 0900 MAIL ADDRESS: STREET 1: FABRINET WEST, INC. STREET 2: 4900 PATRICK HENRY DRIVE CITY: SANTA CLARA STATE: CA ZIP: 95054 8-K 1 fn-20231106.htm 8-K fn-20231106
0001408710FALSE00014087102023-11-062023-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________
FORM 8-K
______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 6, 2023
______________________
Fabrinet
(Exact name of registrant as specified in its charter)
______________________
Cayman Islands001-3477598-1228572
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

c/o Intertrust Corporate Services
One Nexus Way, Camana Bay
Grand Cayman
KY1-9005
Cayman Islands


(Address of principal executive offices, including zip code)
+66 2-524-9600
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Ordinary Shares, $0.01 par valueFNNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02    Results of Operations and Financial Condition.
On November 6, 2023, Fabrinet issued a press release regarding its financial results for its fiscal quarter ended September 29, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information in this Item 2.02 and the press release attached hereto as Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01    Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FABRINET
By:/s/    CSABA SVERHA
Csaba Sverha
Executive Vice President, Chief Financial Officer
Date: November 6, 2023

EX-99.1 2 fn-20231106xex991q124.htm EX-99.1 Document


Exhibit 99.1
Fabrinet Announces First Quarter Fiscal Year 2024 Financial Results
Record Revenue and Net Income Per Share Exceed Guidance Ranges
BANGKOK, Thailand – November 6, 2023 – Fabrinet (NYSE: FN), a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, today announced its financial results for its first fiscal quarter ended September 29, 2023.

Seamus Grady, Chief Executive Officer of Fabrinet, said, “We had a very strong start to the year with revenue and net income per share that were above our guidance ranges, and also marked new quarterly records. Industry-wide inventory adjustments continue to affect certain programs, but these declines were more than offset by quickly ramping new programs. We continue to carefully manage costs, which resulted in strong bottom-line results. We expect to extend our strong execution into the second quarter, as reflected in our guidance.”
First Quarter Fiscal Year 2024 Financial Highlights
GAAP Results
Revenue for the first quarter of fiscal year 2024, a thirteen-week quarter, was $685.5 million, compared to $655.4 million for the first quarter of fiscal year 2023, a fourteen-week quarter.
GAAP net income for the first quarter of fiscal year 2024 was $65.1 million, compared to $64.6 million for the first quarter of fiscal year 2023.
GAAP net income per diluted share for the first quarter of fiscal year 2024 was $1.78, compared to $1.76 for the first quarter of fiscal year 2023.
Non-GAAP Results
Non-GAAP net income for the first quarter of fiscal year 2024 was $72.8 million, compared to $72.4 million for the first quarter of fiscal year 2023.
Non-GAAP net income per diluted share for the first quarter of fiscal year 2024 was $2.00, compared to $1.97 for the first quarter of fiscal year 2023.
Business Outlook
Based on information available as of November 6, 2023, Fabrinet is issuing guidance for its second fiscal quarter ending December 29, 2023, as follows:
Fabrinet expects second quarter revenue to be in the range of $680 million to $700 million.
GAAP net income per diluted share is expected to be in the range of $1.78 to $1.85, based on approximately 36.5 million fully diluted shares outstanding.
Non-GAAP net income per diluted share is expected to be in the range of $1.98 to $2.05, based on approximately 36.5 million fully diluted shares outstanding.    
Guidance for non-GAAP net income per diluted share excludes share-based compensation expenses and certain non-recurring items. A reconciliation of non-GAAP net income per diluted share to the corresponding GAAP measure is available at the end of this press release.
Conference Call Information
What:
Fabrinet First Quarter Fiscal Year 2024 Financial Results Call
When:
November 6, 2023
Time:5:00 p.m. ET
Live Call and Replay:
https://investor.fabrinet.com/events-and-presentations/events
A recorded version of this webcast will be available approximately two hours after the call and accessible at http://investor.fabrinet.com. The webcast will be archived on Fabrinet’s website for a period of one year.




About Fabrinet
Fabrinet is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, automotive components, medical devices, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, advanced packaging, integration, final assembly and testing. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the United States of America, the People’s Republic of China, and Israel. For more information visit: www.fabrinet.com.
Forward-Looking Statements
“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include: (1) our optimism that we will be able to extend our strong execution into the second quarter; and (2) all of the statements under the “Business Outlook” section regarding our expected revenue, GAAP and non-GAAP net income per share, and fully diluted shares outstanding for the second quarter of fiscal year 2024. These forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: changes in general economic conditions, either globally or in our markets, and the risk of recession or an economic downturn; continued disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials; less customer demand for our products and services than forecasted; less growth in the optical communications, industrial lasers and sensors markets than we forecast; difficulties expanding into additional markets, such as the semiconductor processing, biotechnology, metrology and materials processing markets; increased competition in the optical manufacturing services markets; difficulties in delivering products and services that compete effectively from a price and performance perspective; our reliance on a small number of customers and suppliers; difficulties in managing our operating costs; difficulties in managing and operating our business across multiple countries (including Thailand, the People’s Republic of China, Israel and the U.S.); and other important factors as described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the section captioned “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on August 22, 2023. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financials
We refer to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding our ongoing operational performance. Non-GAAP net income excludes: share-based compensation expenses; amortization of intangibles; and amortization of deferred debt issuance costs. We have excluded these items in order to enhance investors’ understanding of our underlying operations. The use of these non-GAAP financial measures has material limitations because they should not be used to evaluate our company without reference to their corresponding GAAP financial measures. As such, we compensate for these material limitations by using these non-GAAP financial measures in conjunction with GAAP financial measures.
These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in making financial and operational decisions. In addition, some of these non-GAAP financial measures are used to measure company performance for the purposes of determining employee incentive plan compensation.
Investor Contact:
Garo Toomajanian
ir@fabrinet.com




FABRINET
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands of U.S. dollars, except share data and par value)September 29,
2023
June 30,
2023
Assets
Current assets
Cash and cash equivalents$308,338 $231,368 
Short-term investments362,428 319,100 
Trade accounts receivable, net of allowance for doubtful accounts of $1,768 and $965, respectively
535,006 531,767 
Inventories440,095 519,576 
Prepaid expenses6,328 7,849 
Other current assets39,766 42,880 
Total current assets1,691,961 1,652,540 
Non-current assets
Property, plant and equipment, net306,665 310,350 
Intangibles, net2,598 2,394 
Operating right-of-use assets6,024 1,634 
Deferred tax assets11,363 12,095 
Other non-current assets610 635 
Total non-current assets327,260 327,108 
Total Assets$2,019,221 $1,979,648 
Liabilities and Shareholders’ Equity
Current liabilities
Long-term borrowings, current portion, net$9,117 $12,156 
Trade accounts payable357,106 381,129 
Fixed assets payable9,313 13,526 
Operating lease liabilities, current portion1,587 1,201 
Income tax payable7,013 6,024 
Accrued payroll, bonus and related expenses22,976 23,748 
Accrued expenses24,034 20,447 
Other payables24,287 23,654 
Total current liabilities455,433 481,885 
Non-current liabilities
Deferred tax liability5,117 4,799 
Operating lease liability, non-current portion4,052 66 
Severance liabilities22,269 22,159 
Other non-current liabilities2,181 2,081 
Total non-current liabilities33,619 29,105 
Total Liabilities489,052 510,990 
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of September 29, 2023 and June 30, 2023)
— — 
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,430,970 shares and 39,284,176 shares issued at September 29, 2023 and June 30, 2023, respectively; and 36,330,476 shares and 36,183,682 shares outstanding at September 29, 2023 and June 30, 2023, respectively)
394 393 
Additional paid-in capital202,432 206,624 
Less: Treasury shares (3,100,494 shares as of September 29, 2023 and June 30, 2023)
(194,833)(194,833)
Accumulated other comprehensive income (loss)(7,502)(8,115)
Retained earnings1,529,678 1,464,589 
Total Shareholders’ Equity1,530,169 1,468,658 
Total Liabilities and Shareholders’ Equity$2,019,221 $1,979,648 








FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)

Three Months Ended
(in thousands of U.S. dollars, except per share data)September 29,
2023
September 30,
2022
Revenues$685,477 $655,429 
Cost of revenues(601,073)(572,673)
        Gross profit84,404 82,756 
Selling, general and administrative expenses(20,429)(20,565)
Operating income63,975 62,191 
Interest income5,898 1,559 
Interest expense(45)(391)
Foreign exchange gain (loss), net415 2,085 
Other income (expense), net(80)(141)
Income before income taxes70,163 65,303 
Income tax expense(5,074)(688)
Net income65,089 64,615 
Other comprehensive income (loss), net of tax:
       Change in net unrealized gain (loss) on available-for-sale securities948 (1,461)
       Change in net unrealized gain (loss) on derivative instruments(561)(1,218)
       Change in net retirement benefits plan – prior service cost126 168 
       Change in foreign currency translation adjustment100 246 
Total other comprehensive income (loss), net of tax613 (2,265)
Net comprehensive income$65,702 $62,350 
Earnings per share
       Basic$1.80 $1.77 
       Diluted$1.78 $1.76 
Weighted-average number of ordinary shares outstanding (thousands of shares)
       Basic36,256 36,528 
       Diluted36,481 36,758 












FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended
(in thousands of U.S. dollars)September 29,
2023
September 30,
2022
Cash flows from operating activities
Net income for the period$65,089 $64,615 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization11,961 11,055 
(Gain) loss on disposal and impairment of property, plant and equipment and intangibles12 (9)
(Gain) loss from sales and maturities of available-for-sale securities— 92 
Amortization of discount (premium) of short-term investments(596)442 
(Reversal of) allowance for doubtful accounts803 (91)
Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts(52)(386)
Amortization of fair value at hedge inception of interest rate swaps(88)(191)
Share-based compensation7,733 7,723 
Deferred income tax1,377 (219)
Other non-cash expenses222 (439)
Changes in operating assets and liabilities
Trade accounts receivable(4,138)(24,476)
Inventories79,481 28,808 
Other current assets and non-current assets3,238 (10,661)
Trade accounts payable(24,397)(29,774)
Income tax payable963 (276)
Severance liabilities706 617 
Other current liabilities and non-current liabilities2,735 13,804 
Net cash provided by operating activities145,049 60,634 
Cash flows from investing activities
Purchase of short-term investments(77,692)(25,609)
Proceeds from sales of short-term investments— 30,000 
Proceeds from maturities of short-term investments35,909 29,236 
Purchase of property, plant and equipment(11,435)(10,258)
Purchase of intangibles(180)(11)
Proceeds from disposal of property, plant and equipment318 
Net cash used in investing activities(53,080)23,367 
Cash flows from financing activities
Repayment of long-term borrowings(3,047)(6,094)
Repayment of finance lease liability— (2)
Repurchase of ordinary shares— (4,900)
Withholding tax related to net share settlement of restricted share units(12,147)(16,489)
Net cash used in financing activities(15,194)(27,485)
Net increase (decrease) in cash, cash equivalents and restricted cash$76,775 $56,516 
Movement in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at the beginning of period$231,368 $198,365 
Increase (decrease) in cash, cash equivalents and restricted cash76,775 56,516 
Effect of exchange rate on cash, cash equivalents and restricted cash195 520 
Cash, cash equivalents and restricted cash at the end of period$308,338 $255,401 
Non-cash investing and financing activities
Construction, software and equipment-related payables$9,313 $12,541 




FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Continued)
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:
As of
(in thousands)September 29,
2023
September 30,
2022
Cash and cash equivalents$308,338 $255,260 
Restricted cash— 141 
Cash, cash equivalents and restricted cash$308,338 $255,401 




FABRINET
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

Three Months Ended
September 29,
2023
September 30,
2022
(in thousands of U.S. dollars, except share data)Net incomeDiluted EPSNet incomeDiluted EPS
GAAP measures$65,089 $1.78 $64,615 $1.76 
Items reconciling GAAP net income & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses2,165 0.06 1,915 0.05 
Total related to gross profit2,165 0.06 1,915 0.05 
Related to selling, general and administrative expenses:
Share-based compensation expenses5,568 0.16 5,808 0.16 
Amortization of intangibles— — 83 0.00 
Total related to selling, general and administrative expenses5,568 0.16 5,891 0.16 
Related to other income and expense:
Amortization of deferred debt issuance costs0.00 0.00 
Total related to other income and expense0.00 0.00 
Total related to net income & EPS7,741 0.22 7,814 0.21 
Non-GAAP measures$72,830 $2.00 $72,429 $1.97 
Shares used in computing diluted net income per share
GAAP diluted shares36,481 36,758 
Non-GAAP diluted shares36,481 36,758 




FABRINET
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)Three Months Ended
September 29,
2023
September 30,
2022
Net cash provided by operating activities$145,049 $60,634 
Less: Purchase of property, plant and equipment(11,435)(10,258)
Non-GAAP free cash flow$133,614 $50,376 

FABRINET
GUIDANCE FOR QUARTER ENDING DECEMBER 29, 2023
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
Diluted
EPS
GAAP net income per diluted share:
$1.78 to $1.85
Related to cost of revenues:
Share-based compensation expenses0.05
Total related to gross profit0.05
Related to selling, general and administrative expenses:
Share-based compensation expenses0.15
Total related to selling, general and administrative expenses0.15
Total related to net income & EPS0.20
Non-GAAP net income per diluted share
$1.98 to $2.05


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