- Fourth Quarter Revenue of $509.6 Million
Exceeds Guidance
- Record Fiscal Year 2021 Revenue of $1.88
Billion
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
fourth quarter and fiscal year ended June 25, 2021.
Seamus Grady, Chief Executive Officer of Fabrinet, said, “We had
a strong finish to a record year with revenue and profitability
that exceeded our guidance ranges. Demand trends across our
business continue to be healthy, with particular fourth quarter
strength from the telecom market. With efficient execution, we
delivered excellent operating margins during the fourth quarter,
which helped propel operating income and net income to record
levels for fiscal year 2021.”
Grady continued, “We remain optimistic about demand trends and
confident in our ability to execute, positioning us to continue
delivering strong results as we enter our new fiscal year.”
Fourth Quarter Fiscal Year 2021 Financial Highlights
GAAP Results
- Revenue for the fourth quarter of fiscal year 2021 was $509.6
million, compared to $405.1 million for the fourth quarter of
fiscal year 2020.
- GAAP net income for the fourth quarter of fiscal year 2021 was
$42.4 million, compared to GAAP net income of $28.0 million for the
fourth quarter of fiscal year 2020.
- GAAP net income per diluted share for the fourth quarter of
fiscal year 2021 was $1.13, compared to GAAP net income per diluted
share of $0.75 for the fourth quarter of fiscal year 2020.
Non-GAAP Results
- Non-GAAP net income for the fourth quarter of fiscal year 2021
was $49.4 million, compared to non-GAAP net income of $36.0 million
for the fourth quarter of fiscal year 2020.
- Non-GAAP net income per diluted share for the fourth quarter of
fiscal year 2021 was $1.31, compared to non-GAAP net income per
diluted share of $0.96 for the fourth quarter of fiscal year
2020.
Fiscal Year 2021 Financial Highlights
GAAP Results
- Revenue for fiscal year 2021 was $1,879.4 million, compared to
$1,641.8 million for fiscal year 2020.
- GAAP net income for fiscal year 2021 was $148.3 million,
compared to GAAP net income of $113.5 million for fiscal year
2020.
- GAAP net income per diluted share for fiscal year 2021 was
$3.95, compared to GAAP net income per diluted share of $3.01 for
fiscal year 2020.
Non-GAAP Results
- Non-GAAP net income for fiscal year 2021 was $175.5 million,
compared to non-GAAP net income of $140.6 million for fiscal year
2020.
- Non-GAAP net income per diluted share for fiscal year 2021 was
$4.67, compared to non-GAAP net income per diluted share of $3.73
for fiscal year 2020.
Business Outlook
Based on information available as of August 16, 2021, Fabrinet
is issuing guidance for its first fiscal year 2022 quarter ending
September 24, 2021, as follows:
- Fabrinet expects first quarter revenue to be in the range of
$510 million to $530 million.
- GAAP net income per diluted share is expected to be in the
range of $1.08 to $1.15, based on approximately 37.5 million fully
diluted shares outstanding.
- Non-GAAP net income per diluted share is expected to be in the
range of $1.29 to $1.36, based on approximately 37.5 million fully
diluted shares outstanding.
Conference Call Information
What:
Fabrinet Fourth Quarter Fiscal Year 2021
Financial Results Call
When:
Monday, August 16, 2021
Time:
5:00 p.m. ET
Live Call:
(888) 357-3694, domestic
(253) 237-1137, international
Passcode: 2199846
Replay:
(855) 859-2056, domestic
(404) 537-3406, international
Passcode: 2199846
Webcast:
http://investor.fabrinet.com/ (live and
replay)
This press release and any other information related to the call
will also be posted on Fabrinet’s website at
http://investor.fabrinet.com. A recorded version of this webcast
will be available approximately two hours after the call and 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,
Israel and the United Kingdom. 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 about demand
trends and ability to continue to deliver strong results in fiscal
year 2022; 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
first quarter of fiscal year 2022. 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: the
effects of the COVID-19 pandemic on our business, particularly the
possibility of (1) the growing global economic downturn, (2)
extended shutdowns at any of our manufacturing facilities,
especially if the pandemic intensifies or returns in various
geographic areas, (3) continued disruption to our supply chain,
which could increase our costs and affect our ability to procure
parts and materials, especially if the pandemic intensifies or
returns in various geographic areas, and (4) regional downward
demand adjustments from our customers, particularly those in areas
affected by the pandemic; 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, the U.S. and the U.K.); 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
Quarterly Report on Form 10-Q, filed with the SEC on May 4, 2021.
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; depreciation of fair value uplift; 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, these
non-GAAP financial measures are used to measure company performance
for the purposes of determining employee incentive plan
compensation.
FABRINET
CONSOLIDATED BALANCE
SHEETS
(in thousands of U.S. dollars, except
share data and par value)
June 25, 2021
June 26, 2020
Assets
Current assets
Cash and cash equivalents
$
302,969
$
225,430
Short-term restricted cash
—
7,402
Short-term investments
244,963
262,693
Trade accounts receivable, net
336,547
272,665
Contract assets
11,878
13,256
Inventories
422,133
309,786
Other receivable
—
24,310
Prepaid expenses
11,398
5,399
Other current assets
22,619
14,508
Total current assets
1,352,507
1,135,449
Non-current assets
Long-term restricted cash
154
—
Property, plant and equipment, net
241,129
228,274
Intangibles, net
4,371
4,312
Operating right-of-use assets
6,699
8,068
Deferred tax assets
9,428
5,675
Other non-current assets
1,834
202
Total non-current assets
263,615
246,531
Total Assets
$
1,616,122
$
1,381,980
Liabilities and Shareholders’
Equity
Current liabilities
Long-term borrowings, current portion,
net
$
12,156
$
12,156
Trade accounts payable
346,555
251,603
Fixed assets payable
19,206
15,127
Contract liabilities
1,680
1,556
Operating lease liabilities, current
portion
2,593
1,979
Income tax payable
3,612
2,242
Accrued payroll, bonus and related
expenses
20,464
19,265
Accrued expenses
17,134
8,979
Other payables
20,958
21,514
Total current liabilities
444,358
334,421
Non-current liabilities
Long-term borrowings, non-current portion,
net
27,358
39,514
Deferred tax liability
5,107
4,729
Operating lease liabilities, non-current
portion
3,850
5,873
Severance liabilities
19,485
17,379
Other non-current liabilities
3,444
5,655
Total non-current liabilities
59,244
73,150
Total Liabilities
503,602
407,571
Commitments and contingencies
Shareholders’ equity
Preferred shares (5,000,000 shares
authorized, $0.01 par value; no shares issued and outstanding as of
June 25, 2021 and June 26, 2020)
—
—
Ordinary shares (500,000,000 shares
authorized, $0.01 par value; 38,749,045 shares and 38,471,967
shares issued as of June 25, 2021 and June 26, 2020, respectively;
and 36,765,456 shares and 36,727,864 shares outstanding as of June
25, 2021 and June 26, 2020, respectively)
388
385
Additional paid-in capital
189,445
175,610
Less: Treasury shares (1,983,589 shares
and 1,744,103 shares as of June 25, 2021 and June 26, 2020,
respectively)
(87,343
)
(68,501
)
Accumulated other comprehensive loss
(6,266
)
(1,147
)
Retained earnings
1,016,296
868,062
Total Shareholders’ Equity
1,112,520
974,409
Total Liabilities and Shareholders’
Equity
$
1,616,122
$
1,381,980
FABRINET
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
Three Months Ended
Years Ended
(in thousands of U.S. dollars, except per
share data)
June 25, 2021
June 26, 2020
June 25, 2021
June 26, 2020
Revenues
$
509,567
$
405,113
$
1,879,350
$
1,641,836
Cost of revenues
(448,483
)
(358,489
)
(1,657,987
)
(1,455,731
)
Gross profit
61,084
46,624
221,363
186,105
Selling, general and administrative
expenses
(17,489
)
(18,185
)
(70,567
)
(68,374
)
Expenses related to reduction in
workforce
—
(313
)
(43
)
(329
)
Operating income
43,595
28,126
150,753
117,402
Interest income
627
1,512
3,783
7,592
Interest expense
(302
)
(232
)
(1,100
)
(3,044
)
Foreign exchange gain (loss), net
284
(848
)
508
(3,797
)
Other income (expense), net
(3,863
)
112
(3,460
)
1,089
Income before income taxes
40,341
28,670
150,484
119,242
Income tax expense
2,072
(646
)
(2,143
)
(5,763
)
Net income
42,413
28,024
148,341
113,479
Other comprehensive income (loss), net of
tax:
Change in net unrealized gain (loss) on
available-for-sale securities
(245
)
1,941
(1,182
)
538
Change in net unrealized gain (loss) on
derivative instruments
717
7,289
(5,106
)
570
Change in retirement benefit plan – prior
service cost
163
50
584
528
Change in foreign currency translation
adjustment
38
(44
)
585
(397
)
Total other comprehensive income (loss),
net of tax
673
9,236
(5,119
)
1,239
Net comprehensive income
$
43,086
$
37,260
$
143,222
$
114,718
Earnings per share
Basic
$
1.15
$
0.76
$
4.02
$
3.07
Diluted
$
1.13
$
0.75
$
3.95
$
3.01
Weighted average number of ordinary shares
outstanding (thousands of shares)
Basic
36,857
36,723
36,872
36,908
Diluted
37,676
37,571
37,555
37,665
CONSOLIDATED STATEMENTS OF
CASH FLOWS
Years Ended
(in thousands of U. S. dollars)
June 25, 2021
June 26, 2020
Cash flows from operating
activities
Net income
$
148,341
$
113,479
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
36,252
30,875
Loss (gain) on disposal and impairment of
property, plant and equipment
13
329
Loss on impairment of goodwill
—
3,514
Gain from sales and maturities of
available-for-sale securities
(187
)
(96
)
Accretion of premiums on short-term
investments
2,093
(508
)
Amortization of deferred debt issuance
costs
32
26
(Reversal of) allowance for doubtful
accounts
(343
)
240
Unrealized (gain) loss on exchange rate
and fair value of foreign currency forward contracts
(859
)
1,963
Unrealized loss on fair value of interest
rate swaps
—
1,672
Amortization of fair value at hedge
inception of interest rate swaps
(1,299
)
(1,220
)
Share-based compensation
25,462
22,203
Deferred income tax
(3,473
)
1,262
Other non-cash expenses
(450
)
(619
)
Changes in operating assets and
liabilities
Trade accounts receivable
(63,810
)
(12,260
)
Contract assets
1,378
(809
)
Inventories
(112,349
)
(16,174
)
Other current assets and non-current
assets
(15,190
)
(775
)
Trade accounts payable
96,312
(5,990
)
Contract liabilities
124
(683
)
Income tax payable
1,353
442
Severance liabilities
3,180
2,802
Other current liabilities and non-current
liabilities
2,085
10,987
Net cash provided by operating
activities
118,665
150,660
Cash flows from investing
activities
Purchase of short-term investments
(244,329
)
(196,373
)
Proceeds from sales of short-term
investments
79,439
48,808
Proceeds from maturities of short-term
investments
179,532
142,508
Funds repayment from (provided to)
customer to support transfer of manufacturing operations (Note
10)
24,310
(24,310
)
Purchase of property, plant and
equipment
(42,532
)
(42,327
)
Purchase of intangibles
(1,952
)
(1,180
)
Proceeds from disposal of property, plant
and equipment
90
1,626
Net cash used in investing activities
(5,442
)
(71,248
)
Cash flows from financing
activities
Payment of debt issuance costs
—
(153
)
Proceeds from long-term borrowings
—
60,938
Repayment of long-term borrowings
(12,188
)
(70,079
)
Repayment of finance lease liabilities
(100
)
(400
)
Repurchase of ordinary shares
(18,842
)
(20,722
)
Withholding tax related to net share
settlement of restricted share units
(11,624
)
(4,889
)
Net cash used in financing activities
(42,754
)
(35,305
)
Net increase in cash, cash equivalents
and restricted cash
$
70,469
$
44,107
Movement in cash, cash equivalents and
restricted cash
Cash, cash equivalents and restricted cash
at beginning of period
$
232,832
$
188,241
Increase in cash, cash equivalents and
restricted cash
70,469
44,107
Effect of exchange rate on cash, cash
equivalents and restricted cash
(178
)
484
Cash, cash equivalents and restricted
cash at end of period
$
303,123
$
232,832
Years Ended
Supplemental disclosures
June 25, 2021
June 26, 2020
Cash paid for
Interest
$
2,438
$
1,688
Taxes
$
7,945
$
8,466
Cash received for interest
$
4,445
$
9,676
Non-cash investing and financing
activities
Construction, software and equipment
related payables
$
19,206
$
15,127
The following table provides a reconciliation of cash, cash
equivalents and restricted cash reported within the consolidated
balance sheets that sum to the total of the same amounts shown in
the consolidated statements of cash flows:
As of
(amount in thousands)
June 25, 2021
June 26, 2020
Cash and cash equivalents
$
302,969
$
225,430
Restricted cash
154
7,402
Cash, cash equivalents and restricted
cash
$
303,123
$
232,832
FABRINET
RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES
Three Months Ended
Years Ended
June 25, 2021
June 26, 2020
June 25, 2021
June 26, 2020
(in thousands of U.S. dollars, except per
share data)
Net income
Diluted EPS
Net income
Diluted EPS
Net income
Diluted EPS
Net income
Diluted EPS
GAAP measures
$
42,413
$
1.13
$
28,024
$
0.75
$
148,341
$
3.95
$
113,479
$
3.01
Items reconciling GAAP net income &
EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses
1,380
0.04
1,298
0.03
6,185
0.16
6,098
0.16
Depreciation of fair value uplift
91
0.00
80
0.00
347
0.01
327
0.01
Total related to gross profit
1,471
0.04
1,378
0.03
6,532
0.17
6,425
0.17
Related to selling, general and
administrative expenses:
Share-based compensation expenses
5,340
0.14
2,604
0.07
19,277
0.52
16,105
0.43
Amortization of intangibles
124
0.00
131
0.00
506
0.01
562
0.01
Goodwill impairment charge
—
—
3,514
0.09
—
—
3,514
0.09
Severance payment
—
—
—
—
755
0.02
150
0.00
Total related to selling, general and
administrative expenses
5,464
0.14
6,249
0.17
20,538
0.55
20,331
0.54
Related to other income and other
expenses:
Other expenses in relation to reduction in
workforce
—
—
313
0.01
43
0.00
329
0.01
Amortization of deferred debt issuance
costs
8
0.00
8
0.00
32
0.00
26
0.00
Total related to other incomes and other
expenses
8
0.00
321
0.01
75
0.00
355
0.01
Total related to net income & EPS
6,943
0.18
7,948
0.21
27,145
0.72
27,111
0.72
Non-GAAP measures
$
49,356
$
1.31
$
35,972
$
0.96
$
175,486
$
4.67
$
140,590
$
3.73
Shares used in computing diluted net
income per share
GAAP diluted shares
37,676
37,571
37,555
37,665
Non-GAAP diluted shares
37,676
37,571
37,555
37,665
FABRINET
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(amount in thousands)
Three Months Ended
Years Ended
June 25, 2021
June 26, 2020
June 25, 2021
June 26, 2020
Net cash provided by operating
activities
$
43,508
$
46,212
$
118,665
$
150,660
Less: Purchase of property, plant and
equipment
(13,471
)
(14,845
)
(42,532
)
(42,327
)
Non-GAAP free cash flow
$
30,037
$
31,367
$
76,133
$
108,333
FABRINET
GUIDANCE FOR QUARTER ENDING
SEPTEMBER 24, 2021
RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES
Diluted
EPS
GAAP net income per diluted
share:
$1.08 to $1.15
Related to cost of revenues:
Share-based compensation expenses
0.05
Total related to gross profit
0.05
Related to selling, general and
administrative expenses:
Share-based compensation expenses
0.16
Total related to selling, general and
administrative expenses
0.16
Total related to net income &
EPS
0.21
Non-GAAP net income per diluted
share
$1.29 to $1.36
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210816005677/en/
Investor Contact: Garo Toomajanian ir@fabrinet.com
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