U.S. markets close in 6 hours 11 minutes
  • S&P 500

    4,464.08
    -7.29 (-0.16%)
     
  • Dow 30

    35,155.86
    -138.90 (-0.39%)
     
  • Nasdaq

    14,898.19
    +0.85 (+0.01%)
     
  • Russell 2000

    2,258.57
    -7.09 (-0.31%)
     
  • Crude Oil

    83.38
    +1.10 (+1.34%)
     
  • Gold

    1,767.40
    -0.90 (-0.05%)
     
  • Silver

    23.24
    -0.11 (-0.49%)
     
  • EUR/USD

    1.1608
    +0.0007 (+0.06%)
     
  • 10-Yr Bond

    1.6060
    +0.0570 (+3.68%)
     
  • GBP/USD

    1.3729
    +0.0053 (+0.38%)
     
  • USD/JPY

    114.2940
    +0.6170 (+0.54%)
     
  • BTC-USD

    61,275.59
    +467.43 (+0.77%)
     
  • CMC Crypto 200

    1,437.38
    -14.25 (-0.98%)
     
  • FTSE 100

    7,188.12
    -45.91 (-0.63%)
     
  • Nikkei 225

    29,025.46
    +474.56 (+1.66%)
     

Fabrinet Announces Fourth Quarter And Fiscal Year 2021 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·16 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Fourth Quarter Revenue of $509.6 Million Exceeds Guidance

  • Record Fiscal Year 2021 Revenue of $1.88 Billion

BANGKOK, August 16, 2021--(BUSINESS WIRE)--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/

Contacts

Investor Contact:
Garo Toomajanian
ir@fabrinet.com