- Record First Quarter Revenue of $436.6 Million Exceeds
Guidance
- Record Net Income per Share Exceeds Guidance
- GAAP Net Income per Share Increases 28% and Non-GAAP Net
Income per Share Increases 22% Year-over-Year
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 25, 2020.
Seamus Grady, Chief Executive Officer of Fabrinet, said, “We
have a lot to be optimistic about, as numerous drivers contributed
to our growth and outperformance in the first quarter. Our strategy
is working as strength from newer programs offsets the softness we
see in certain markets.”
Grady continued, “We believe that we can grow faster than the
markets we serve by focusing on attracting new customers, winning
new projects at existing customers, and pursuing new programs that
leverage our advanced precision manufacturing capabilities.”
First Quarter Fiscal Year 2021 Financial Highlights
GAAP Results
- Revenue for the first quarter of fiscal year 2021 was $436.6
million, compared to $399.3 million in the first quarter of fiscal
year 2020.
- GAAP net income for the first quarter of fiscal year 2021 was
$33.1 million, compared to GAAP net income of $26.0 million for the
first quarter of fiscal year 2020.
- GAAP net income per diluted share for the first quarter of
fiscal year 2021 was $0.88, compared to GAAP net income per diluted
share of $0.69 for the first quarter of fiscal year 2020.
Non-GAAP Results
- Non-GAAP net income for the first quarter of fiscal year 2021
was $39.3 million, compared to non-GAAP net income of $32.2 million
for the first quarter of fiscal year 2020.
- Non-GAAP net income per diluted share for the first quarter of
fiscal year 2021 was $1.05, compared to non-GAAP net income per
diluted share of $0.86 for the first quarter of fiscal year
2020.
Business Outlook
Based on information available as of November 2, 2020, Fabrinet
is issuing guidance for its second fiscal quarter ending December
25, 2020, as follows:
- Fabrinet expects second quarter revenue to be in the range of
$420 million to $440 million.
- GAAP net income per diluted share is expected to be in the
range of $0.84 to $0.91, based on approximately 37.7 million fully
diluted shares outstanding.
- Non-GAAP net income per diluted share is expected to be in the
range of $1.00 to $1.07, based on approximately 37.7 million fully
diluted shares outstanding.
Conference Call Information
What:
Fabrinet First Quarter Fiscal Year 2021
Financial Results Call
When:
Monday, November 2, 2020
Time:
5:00 p.m. ET
Live Call:
(888) 357-3694, domestic
(253) 237-1137, international
Passcode: 9490738
Replay:
(855) 859-2056, domestic
(404) 537-3406, international
Passcode: 9490738
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 expectations that our
strategy is working and we will be able to grow faster than the
markets we serve; 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 2021. 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 coronavirus 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 outbreak 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 outbreak
intensifies or returns in various geographic areas, and (4)
regional downward demand adjustments from our customers,
particularly those in areas affected by the outbreak; 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
Annual Report on Form 10-K, filed with the SEC on August 18, 2020.
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
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands of U.S. dollars, except
share data and par value)
September 25, 2020
June 26, 2020
Assets
Current assets
Cash and cash equivalents
$
189,201
$
225,430
Short-term restricted cash
7,402
7,402
Short-term investments
307,238
262,693
Trade accounts receivable, net of
allowance for doubtful accounts of $186 and $336, respectively
289,162
272,665
Contract assets
11,757
13,256
Inventories
339,429
309,786
Other receivable
24,310
24,310
Prepaid expenses
4,095
5,399
Other current assets
7,827
14,508
Total current assets
1,180,421
1,135,449
Non-current assets
Property, plant and equipment, net
227,623
228,274
Intangibles, net
4,147
4,312
Operating right-of-use assets
7,228
8,068
Deferred tax assets
5,766
5,675
Other non-current assets
221
202
Total non-current assets
244,985
246,531
Total Assets
$
1,425,406
$
1,381,980
Liabilities and Shareholders’
Equity
Current liabilities
Long-term borrowings, current portion,
net
$
12,156
$
12,156
Trade accounts payable
284,173
251,603
Fixed assets payable
9,616
15,127
Contract liabilities
966
1,556
Operating lease liabilities, current
portion
2,098
1,979
Income tax payable
2,940
2,242
Accrued payroll, bonus and related
expenses
18,881
19,265
Accrued expenses
10,077
8,979
Other payables
14,542
21,514
Total current liabilities
355,449
334,421
Non-current liabilities
Long-term borrowings, non-current portion,
net
36,475
39,514
Deferred tax liability
4,927
4,729
Operating lease liability, non-current
portion
4,906
5,873
Severance liabilities
17,609
17,379
Other non-current liabilities
5,337
5,655
Total non-current liabilities
69,254
73,150
Total Liabilities
424,703
407,571
Commitments and contingencies
Shareholders’ equity
Preferred shares (5,000,000 shares
authorized, $0.01 par value; no shares issued and outstanding at
September 25, 2020 and June 26, 2020)
—
—
Ordinary shares (500,000,000 shares
authorized, $0.01 par value; 38,680,659 shares and 38,471,967
shares issued at September 25, 2020 and June 26, 2020,
respectively; and 36,936,556 shares and 36,727,864 shares
outstanding at September 25, 2020 and June 26, 2020,
respectively)
387
385
Additional paid-in capital
171,715
175,610
Less: Treasury shares (1,744,103 shares
and 1,744,103 shares at September 25, 2020 and June 26, 2020,
respectively)
(68,501)
(68,501)
Accumulated other comprehensive loss
(3,904)
(1,147)
Retained earnings
901,006
868,062
Total Shareholders’ Equity
1,000,703
974,409
Total Liabilities and Shareholders’
Equity
$
1,425,406
$
1,381,980
FABRINET
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(unaudited)
Three Months Ended
(in thousands of U.S. dollars, except per
share data)
September 25, 2020
September 27, 2019
Revenues
$
436,639
$
399,296
Cost of revenues
(386,159)
(353,309)
Gross profit
50,480
45,987
Selling, general and administrative
expenses
(16,863)
(16,000)
Operating income
33,617
29,987
Interest income
1,104
2,098
Interest expense
(251)
(2,393)
Foreign exchange gain (loss), net
128
(1,953)
Other income (expense), net
121
377
Income before income taxes
34,719
28,116
Income tax expense
(1,668)
(2,159)
Net income
33,051
25,957
Other comprehensive income (loss), net of
tax:
Change in net unrealized gain (loss) on
available-for-sale securities
(325)
35
Change in net unrealized gain (loss) on
derivative instruments
(3,208)
39
Change in net retirement benefits plan –
prior service cost
173
83
Change in foreign currency translation
adjustment
603
(369)
Total other comprehensive income (loss),
net of tax
(2,757)
(212)
Net comprehensive income
$
30,294
$
25,745
Earnings per share
Basic
$
0.90
$
0.70
Diluted
$
0.88
$
0.69
Weighted-average number of ordinary
shares outstanding (thousands of shares)
Basic
36,818
36,913
Diluted
37,383
37,529
FABRINET
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended
(in thousands of U.S. dollars)
September 25, 2020
September 27, 2019
Cash flows from operating
activities
Net income for the period
$
33,051
$
25,957
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
8,570
7,465
(Gain) loss on disposal of property, plant
and equipment
(19)
8
(Gain) loss from sales and maturities of
available-for-sale securities
—
(67)
Amortization of investment discount
481
65
Amortization of deferred debt issuance
costs
8
2
(Reversal of) allowance for doubtful
accounts
(257)
(5)
Unrealized (gain) loss on exchange rate
and fair value of foreign currency forward contracts
(890)
1,479
Unrealized loss (gain) on fair value of
interest rate swaps
—
1,671
Amortization of fair value at hedge
inception of interest rate swaps
(359)
—
Share-based compensation
6,027
5,995
Deferred income tax
56
705
Other non-cash expenses
96
53
Changes in operating assets and
liabilities
Trade accounts receivable
(16,497)
(12,967)
Contract assets
1,499
827
Inventories
(29,643)
(27,898)
Other current assets and non-current
assets
7,812
4,225
Trade accounts payable
33,546
(5,263)
Contract liabilities
(590)
27
Income tax payable
871
733
Severance liabilities
745
811
Other current liabilities and non-current
liabilities
(10,001)
(1,176)
Net cash provided by operating
activities
34,506
2,647
Cash flows from investing
activities
Purchase of short-term investments
(79,103)
(62,880)
Proceeds from sales of short-term
investments
—
49,472
Proceeds from maturities of short-term
investments
33,750
31,673
Purchase of property, plant and
equipment
(12,572)
(6,343)
Purchase of intangibles
(530)
(246)
Proceeds from disposal of property, plant
and equipment
21
—
Net cash (used in) provided by investing
activities
(58,434)
11,676
Cash flows from financing
activities
Payment of debt issuance costs
—
(153)
Proceeds from long-term borrowings
—
60,938
Repayment of long-term borrowings
(3,047)
(60,938)
Repayment of finance lease liability
(100)
(109)
Withholding tax related to net share
settlement of restricted share units
(9,920)
(4,144)
Net cash used in financing activities
(13,067)
(4,406)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(36,995)
9,917
Movement in cash, cash equivalents and
restricted cash
Cash, cash equivalents and restricted cash
at the beginning of period
232,832
188,241
(Decrease) increase in cash, cash
equivalents and restricted cash
(36,995)
9,917
Effect of exchange rate on cash, cash
equivalents and restricted cash
766
(41)
Cash, cash equivalents and restricted
cash at the end of period
$
196,603
$
198,117
Non-cash investing and financing
activities
Construction, software and
equipment-related payables
$
9,616
$
9,816
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 unaudited
condensed consolidated balance sheets that sum to the total of the
same amounts shown in the unaudited condensed consolidated
statements of cash flows:
As of
(amount in thousands)
September 25, 2020
September 27, 2019
Cash and cash equivalents
$
189,201
$
168,535
Restricted cash
7,402
29,582
Cash, cash equivalents and restricted
cash
$
196,603
$
198,117
FABRINET
RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES
Three Months Ended
September 25, 2020
September 27, 2019
(in thousands of U.S. dollars, except per
share data)
Net income
Diluted EPS
Net income
Diluted EPS
GAAP measures
$
33,051
$
0.88
$
25,957
$
0.69
Items reconciling GAAP net income &
EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses
1,825
0.05
1,720
0.05
Depreciation of fair value uplift
84
0.00
79
0.00
Total related to gross profit
1,909
0.05
1,799
0.05
Related to selling, general and
administrative expenses:
Share-based compensation expenses
4,202
0.11
4,275
0.11
Amortization of intangibles
131
0.00
143
0.00
Total related to selling, general and
administrative expenses
4,333
0.12
4,418
0.12
Related to other incomes and other
expenses:
Amortization of deferred debt issuance
costs
8
0.00
2
0.00
Total related to other incomes and other
expenses
8
0.00
2
0.00
Total related to net income & EPS
6,250
0.17
6,219
0.17
Non-GAAP measures
$
39,301
$
1.05
$
32,176
$
0.86
Shares used in computing diluted net
income per share
GAAP diluted shares
37,383
37,529
Non-GAAP diluted shares
37,383
37,529
FABRINET
RECONCILIATION OF NET CASH
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(amount in thousands)
Three Months Ended
September 25, 2020
September 27, 2019
Net cash provided by operating
activities
$
34,506
$
2,647
Less: Purchase of property, plant
and equipment
(12,572
)
(6,343
)
Non-GAAP free cash flow
$
21,934
$
(3,696
)
FABRINET
GUIDANCE FOR QUARTER ENDING
DECEMBER 25, 2020
RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES
Diluted
EPS
GAAP net income per diluted
share:
$0.84 to $0.91
Related to cost of revenues:
Share-based compensation expenses
0.04
Total related to gross profit
0.04
Related to selling, general and
administrative expenses:
Share-based compensation expenses
0.12
Total related to selling, general and
administrative expenses
0.12
Total related to net income &
EPS
0.16
Non-GAAP net income per diluted
share
$1.00 to $1.07
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201102005960/en/
Investor Contact: Garo Toomajanian ir@fabrinet.com
Fabrinet (NYSE:FN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Fabrinet (NYSE:FN)
Historical Stock Chart
From Sep 2023 to Sep 2024