Form 8-K

 

 

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)

August 15, 2011

 

 

Fabrinet

(Exact name of registrant as specified in its charter)

 

 

 

Cayman Islands   001-34775   Not Applicable

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

Walker House

87 Mary Street

George Town

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 (see General Instruction A.2):

 

¨ 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))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On August 15, 2011, Fabrinet issued a press release regarding its financial results for the fiscal quarter and year ended June 24, 2011. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or 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    Press release dated August 15, 2011


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/ Mark J. Schwartz

 

Mark J. Schwartz

Executive Vice President, Chief Financial Officer and

Secretary

Date: August 15, 2011


EXHIBIT INDEX

 

Exhibit
No.

  

Description

99.1    Press release dated August 15, 2011
Press Release

Exhibit 99.1

Fabrinet Announces Fourth Quarter and Fiscal Year 2011 Financial Results

BANGKOK, Thailand – August 15, 2011 – Fabrinet (NYSE: FN), a provider of precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, today announced its financial results for the fourth quarter and fiscal year ended June 24, 2011.

Fabrinet reported total revenue of $190.3 million for the fourth quarter of fiscal 2011, an increase of 21% compared to revenue of $157.4 million for the comparable period in fiscal 2010. GAAP net income in the fourth quarter was $16.7 million, or $0.48 per diluted share, an increase of 23% compared to GAAP net income of $13.6 million, or $0.43 per diluted share, in the fourth quarter of 2010. Non-GAAP net income in the fourth quarter was $17.5 million, or $0.50 per diluted share, an increase of 27% compared to non-GAAP net income of $13.7 million, or $0.44 per diluted share, in the fourth quarter of 2010.

For fiscal year 2011, Fabrinet reported total revenue of $743.6 million, an increase of 47% compared to revenue of $505.7 million for fiscal year 2010. GAAP net income in fiscal 2011 was $64.3 million, or $1.87 per diluted share, an increase of 45% compared to GAAP net income of $44.3 million, or $1.41 per diluted share in fiscal 2010. Non-GAAP net income in fiscal 2011 was $68.8 million, or $1.99 per diluted share, an increase of 53% compared to non-GAAP net income of $45.0 million, or $1.43 per share, in fiscal 2010.

Tom Mitchell, Chief Executive Officer of Fabrinet, said, “We are pleased to have achieved record fiscal year results, our 46th consecutive quarter of profitability and results which exceeded our guidance. Our customer relationships remain strong and we are witnessing robust levels of new project activity. The net result is that we have continuing confidence in our ability to penetrate these growing market opportunities, and to deliver profitable results.”

Business Outlook

Based on information available as of August 15, 2011, Fabrinet is issuing guidance for the first quarter of fiscal 2012 as follows:

The company expects first quarter revenue to be in the range of $173 million to $178 million. GAAP net income per share is expected to be in the range of $0.39 to $0.41 with expected non-GAAP net income per share of $0.41 to $0.43, based on approximately 34.5 million fully diluted shares outstanding.

 

Page 1


Conference Call Information

 

What:    Fabrinet fourth quarter and fiscal year 2011 financial results conference call
When:    Monday, August 15, 2011
Time:    5:00 p.m. ET
Live Call:    (866) 383-8108, domestic
   (617) 597-5343, international
   Passcode 81183910
Replay:    (888) 286-8010, domestic
  

(617) 801-6888, international

Passcode 32425461

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 provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, 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, final assembly and test. 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 People’s Republic of China and the United States. For more information visit: http://www.fabrinet.com.

Safe Harbor

“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 all of the statements under the “Business Outlook” section relating to our forecasted operating results for the first quarter of fiscal year 2012. 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: 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 material processing markets; increasing 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 limited number of customers and suppliers; difficulties in accurately forecasting demand for our services; difficulties in managing our operating costs; difficulties in managing and operating our business in multiple countries (including in the U.S., Thailand and the People’s Republic of China) and other important factors as described in Fabrinet reports and documents filed from time to time with the Securities and Exchange Commission (SEC), including the factors described under the sections captioned “Risk Factors” in our quarterly report on Form 10-Q, filed on May 4, 2011 and our annual report on Form 10-K, filed on September 8, 2010. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

 

Page 2


Use of Non-GAAP Financials

The Company refers to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding the Company’s ongoing operational performance. Non-GAAP net income excludes stock-based compensation expenses, executive separation costs and our costs in connection with our recent follow-on offering. We have excluded these items in order to enhance investors’ understanding of our ongoing 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 financial and operational decision making. In addition, these non-GAAP financial measures are used to measure company performance for the purposes of determining employee incentive plan compensation.

SOURCE: Fabrinet

 

Investor Contact:    Media Contact:
Abhi Kanitkar    Pam Crowley
ICR, Inc.    Crowley Communications
(617) 956-6735    (408) 529-9655
ir@fabrinet.com    pamc@crowleypr.com

 

Page 3


Fabrinet

Consolidated Balance Sheets

As of June 24, 2011 and June 25, 2010

 

(in thousands of U.S. dollars, except share data)    June 24,
2011
     June 25,
2010
 

Assets

     

Current assets

     

Cash and cash equivalents

   $ 127,282       $ 84,942   

Receivable from initial public offering

     —           26,319   

Trade accounts receivable, net

     117,705         101,514   

Inventories, net

     106,467         98,146   

Investment in leases

     448         12   

Deferred income taxes

     1,308         696   

Deposit for land purchase

     —           2,162   

Prepaid expenses and other current assets

     4,466         2,535   
  

 

 

    

 

 

 

Total current assets

     357,676         316,326   
  

 

 

    

 

 

 

Non-current assets

     

Property, plant and equipment, net

     75,410         57,651   

Intangibles, net

     892         1,220   

Investment in leases

     1,163         20   

Deferred income taxes

     1,953         1,626   

Deposits and other non-current assets

     681         582   
  

 

 

    

 

 

 

Total non-current assets

     80,099         61,099   
  

 

 

    

 

 

 

Total assets

   $ 437,775       $ 377,425   
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Current liabilities

     

Long-term loans from banks, current portion

   $ 4,398       $ 6,008   

Trade accounts payable

     92,563         102,977   

Construction payable

     2,475         —     

Income tax payable

     2,914         2,521   

Accrued payroll, profit sharing and related expenses

     7,677         3,895   

Accrued expenses

     3,986         3,567   

Other payables

     3,796         5,935   
  

 

 

    

 

 

 

Total current liabilities

     117,809         124,903   
  

 

 

    

 

 

 

Non-current liabilities

     

Long-term loans from banks, non-current portion

     11,979         14,377   

Severance liabilities

     4,478         3,456   

Other non-current liabilities

     1,982         2,526   
  

 

 

    

 

 

 

Total non-current liabilities

     18,439         20,359   
  

 

 

    

 

 

 

Total liabilities

     136,248         145,262   
  

 

 

    

 

 

 

Shareholders’ equity

     

Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of June 24, 2011 and June 25, 2010, respectively)

     —           —     

Ordinary shares (500,000,000 shares authorized, $0.01 par value; 34,207,579 shares and 33,751,730 shares issued and outstanding as of June 24, 2011 and June 25, 2010, respectively)

     342         337   

Additional paid-in capital

     59,816         54,786   

Retained earnings

     241,369         177,040   
  

 

 

    

 

 

 

Total shareholders’ equity

     301,527         232,163   
  

 

 

    

 

 

 

Total Liabilities and Shareholders’ Equity

   $ 437,775       $ 377,425   
  

 

 

    

 

 

 

 

Page 4


Fabrinet

Consolidated Statements of Operations

For the three and twelve months ended June 24, 2011 and June 25, 2010

 

     Three Months Ended     Twelve Months Ended  
(in thousands of U.S. dollars)    June 24,
2011
    June 25,
2010
    June 24,
2011
    June 25,
2010
 

Revenues

        

Revenues

   $ 190,348      $ 128,005      $ 743,570      $ 424,548   

Revenues, related party

     —          29,406        —          81,164   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     190,348        157,411        743,570        505,712   

Cost of revenues

     (166,363     (138,031     (648,823     (441,370
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     23,985        19,380        94,747        64,342   

Selling, general and administrative expenses

     (6,512     (4,227     (24,806     (16,192
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     17,473        15,153        69,941        48,150   

Interest income

     139        73        494        327   

Interest expense

     (75     (103     (357     (500

Foreign exchange (loss)/gain, net

     (724     91        (1,430     (40

Other income

     136        153        216        153   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     16,949        15,367        68,864        48,090   

Income taxes

     (294     (1,793     (4,535     (3,767
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 16,655      $ 13,574      $ 64,329      $ 44,323   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

        

Basic

   $ 0.49      $ 0.44      $ 1.90      $ 1.44   

Diluted

   $ 0.48      $ 0.43      $ 1.87      $ 1.41   

Weighted average number of ordinary shares outstanding

(thousands of shares)

        

Basic

     34,189        30,950        33,922        30,854   

Diluted

     34,595        31,457        34,407        31,369   

 

Page 5


Fabrinet

Reconciliation of GAAP measures to non-GAAP measures

(in thousands of U.S. dollars, except per share data)

(unaudited)

 

     Three Months Ended      Twelve Months Ended  
     June 24,      June 24,      June 25,      June 25,      June 24,      June 24,      June 25,      June 25,  
     2011      2011      2010      2010      2011      2011      2010      2010  
     Net income      Diluted
EPS
     Net income      Diluted
EPS
     Net income      Diluted
EPS
     Net income      Diluted
EPS
 

GAAP measures

     16,655         0.48         13,574         0.43         64,329         1.87         44,323         1.41   

Items reconciling GAAP net income & EPS to non-GAAP net income & EPS:

                       

Related to cost of revenues:

                       

Share-based compensation expenses

     229         0.01         74         0.00         1,147         0.03         301         0.01   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total related to gross profit

     229         0.01         74         0.00         1,147         0.03         301         0.01   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Related to selling, general and administrative expenses:

                       

Share-based compensation expenses

     573         0.02         87         0.00         2,313         0.07         354         0.01   

Executive separation cost

     —           —           —           —           438         0.01         —           —     

Follow-on offering expenses

     —           —           —           —           617         0.02         —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total related to selling, general and administrative expenses

     573         0.02         87         0.00         3,368         0.10         354         0.01   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total related to net income & EPS

     802         0.02         161         0.01         4,515         0.13         655         0.02   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP measures

     17,457         0.50         13,735         0.44         68,844         1.99         44,978         1.43   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Shares used in computing diluted net income per share

                       

GAAP diluted shares

        34,595            31,457            34,407            31,369   

Non-GAAP diluted shares

        34,743            31,515            34,556            31,433   

 

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