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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 19, 2019

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.)

c/o Intertrust Corporate Services (Cayman) Limited

190 Elgin Avenue

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Ordinary Shares, $0.01 par value

New 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 August 19, 2019, Fabrinet issued a press release regarding its financial results for the fiscal quarter and year ended June 28, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Form 8-K and the exhibit attached 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		Press release dated August 19, 2019

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/ Toh-Seng Ng
		Toh-Seng Ng Executive Vice President, Chief Financial Officer

Date: August 19, 2019

EX-99.1

Exhibit 99.1

Fabrinet Announces Fourth Quarter and Fiscal Year 2019 Financial Results

•

Fiscal Year 2019 Revenue Increases 15% from Fiscal Year 2018

•

GAAP and Non-GAAP Net Income Grow 44% and 26%, Respectively

•

Cash Flow From Operations of $147.4 Million Up 7% From Prior Year

BANGKOK, Thailand – August 19, 2019 – 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 28, 2019.

Seamus Grady, Chief Executive Officer of Fabrinet, said, “We are pleased with our strong revenue and earnings performance in the fourth quarter, which represented quarterly records for the company. These results reflect the diversity of our customers and the markets that we serve.”

Grady continued, “These strong fourth quarter results also capped the best fiscal year in our history, as we generated record revenue, profitability and operating cash flows, on a full year basis. While we expect first quarter revenue and EPS to moderate from our record fourth quarter performance, we remain optimistic that our leadership as a trusted manufacturing partner positions us for continued success in fiscal 2020 and beyond.”

Fourth Quarter Fiscal Year 2019 Financial Highlights

GAAP Results

•

Revenue for the fourth quarter of fiscal year 2019 was $405.1 million, compared to revenue of $345.3 million for the comparable period in fiscal year 2018.

•

GAAP net income for the fourth quarter of fiscal year 2019 was $33.0 million, compared to GAAP net income of $22.8 million for the fourth quarter of fiscal year 2018. GAAP net income for the fourth quarter of fiscal year 2019 included a foreign exchange gain of $1.8 million, or $0.05 per diluted share, compared to a foreign exchange loss of ($0.9) million, or ($0.02) per diluted share, for the fourth quarter of fiscal year 2018.

•

GAAP net income per diluted share for the fourth quarter of fiscal year 2019 was $0.88, compared to GAAP net income per diluted share of $0.60 for the fourth quarter of fiscal year 2018.

Non-GAAP Results

•

Non-GAAP net income for the fourth quarter of fiscal year 2019 was $37.6 million, compared to non-GAAP net income of $30.7 million for the fourth quarter of fiscal year 2018. Non-GAAP net income for the fourth quarter of fiscal year 2019 included a foreign exchange gain of $1.8 million, or $0.05 per diluted share, compared to a foreign exchange loss of ($0.9) million, or ($0.02) per diluted share, for the fourth quarter of fiscal year 2018.

•

Non-GAAP net income per diluted share for the fourth quarter of fiscal year 2019 was $1.00, compared to non-GAAP net income per diluted share of $0.81 for the same period a year ago.

Fiscal Year 2019 Financial Highlights

GAAP Results

•

Revenue for fiscal year 2019 was $1,584.3 million, an increase of 15% compared to revenue of $1,371.9 million for fiscal year 2018.

•

GAAP net income for fiscal year 2019 was $121.0 million, an increase of 44% compared to GAAP net income of $84.2 million for fiscal year 2018. GAAP net income for fiscal year 2019 included a foreign exchange gain of $1.4 million, or $0.04 per diluted share, compared to a foreign exchange loss of ($6.6) million, or ($0.17) per diluted share, for fiscal year 2018.

•

GAAP net income per diluted share for fiscal year 2019 was $3.23, compared to GAAP net income per diluted share of $2.21 for fiscal year 2018.

Non-GAAP Results

•

Non-GAAP net income for fiscal year 2019 was $142.6 million, an increase of 26% compared to non-GAAP net income of $113.5 million for fiscal year 2018. Non-GAAP net income for fiscal year 2019 included a foreign exchange gain of $1.4 million, or $0.04 per diluted share, compared to a foreign exchange loss of ($6.6) million, or ($0.17) per diluted share, for fiscal year 2018.

•

Non-GAAP net income per diluted share for fiscal year 2019 was $3.81, compared to non-GAAP net income per diluted share of $2.98 for fiscal year 2018.

Business Outlook

Based on information available as of August 19, 2019, Fabrinet is issuing guidance for its first quarter of fiscal year 2020 ending September 27, 2019, as follows:

•

Fabrinet expects first quarter revenue to be in the range of $386 million to $394 million.

•

GAAP net income per diluted share is expected to be in the range of $0.64 to $0.68, based on approximately 37.4 million fully diluted shares outstanding.

•

Non-GAAP net income per diluted share is expected to be in the range of $0.80 to $0.84, based on approximately 37.4 million fully diluted shares outstanding.

Conference Call Information


What:		Fabrinet Fourth Quarter and Fiscal Year 2019 Financial Results Call

When:		Monday, August 19, 2019

Time:		5:00 p.m. ET

Live Call:		(888) 357-3694, domestic (253) 237-1137, international Passcode: 5568615

Replay:		(855) 859-2056, domestic (404) 537-3406, international Passcode: 5568615

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 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 United States of America, the People’s Republic of China 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) statements regarding our expectation that revenue and EPS for the first quarter of fiscal year 2020 will moderate from our performance for the fourth quarter of fiscal year 2019, as well as our expectation that we will have success in fiscal year 2020 and beyond; 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 2020. 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 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, 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 on May 7, 2019. 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; ASC 606 adoption impact on gross profit; severance payments; expenses related to our CFO/CEO search; amortization of intangibles; business combination expenses and consulting fee; amortization of debt issuance costs; and expenses related to reduction in workforce. 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.

SOURCE: Fabrinet

Investor Contact:

Garo Toomajanian

ir@fabrinet.com

FABRINET

CONSOLIDATED BALANCE SHEETS


(in thousands of U.S. dollars, except share data and par value)	June 28, 2019			June 29, 2018
Assets
Current assets
Cash and cash equivalents	$	180,839		$	158,102
Restricted cash in connection with business acquisition		—			3,331
Short-term investments		256,493			174,269
Trade accounts receivable, net		260,602			246,912
Contract assets		12,447			—
Inventory, net		293,612			257,687
Prepaid expenses		8,827			8,061
Other current assets		11,015			5,948

Total current assets		1,023,835			854,310

Non-current assets
Long-term restricted cash		7,402			—
Property, plant and equipment, net		210,686			219,640
Intangibles, net		3,887			4,880
Goodwill		3,705			3,828
Deferred tax assets		5,679			5,280
Other non-current assets		124			80

Total non-current assets		231,483			233,708

Total Assets	$	1,255,318		$	1,088,018

Liabilities and Shareholders’ Equity
Current liabilities
Bank borrowings	$	3,250		$	3,250
Trade accounts payable		257,617			220,159
Contract liabilities		2,239			—
Capital lease liability, current portion		398			451
Income tax payable		1,801			709
Deferred liability in connection with business acquisition		—			3,331
Accrued payroll, bonus and related expenses		16,510			13,476
Accrued expenses		8,997			9,013
Other payables		22,236			19,728

Total current liabilities		313,048			270,117

Non-current liabilities
Long-term loan from bank		57,688			60,938
Deferred tax liability		3,561			2,284
Capital lease liability, non-current portion		102			516
Severance liabilities		15,209			10,162
Other non-current liabilities		2,611			3,062

Total non-current liabilities		79,171			76,962

Total Liabilities		392,219			347,079

Commitments and contingencies
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of June 28, 2019 and June 29, 2018)		—			—
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 38,230,753 shares and 37,723,733 shares issued as of June 28, 2019 and June 29, 2018, respectively; and 36,841,650 shares and 36,434,630 shares outstanding as of June 28, 2019 and June 29, 2018, respectively)		382			377
Additional paid-in capital		158,299			151,797
Less: Treasury shares (1,389,103 shares and 1,289,103 shares as of June 28, 2019 and June 29, 2018, respectively)		(47,779	)		(42,401	)
Accumulated other comprehensive loss		(2,386	)		(1,257	)
Retained earnings		754,583			632,423

Total Shareholders’ Equity		863,099			740,939

Total Liabilities and Shareholders’ Equity	$	1,255,318		$	1,088,018

FABRINET

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME


	Three Months Ended						Twelve Months Ended
(in thousands of U.S. dollars, except per share data)	June 28, 2019			June 29, 2018			June 28, 2019			June 29, 2018
Revenues	$	405,127		$	345,327		$	1,584,335		$	1,371,925
Cost of revenues		(358,501	)		(306,346	)		(1,405,111	)		(1,218,513	)

Gross profit		46,626			38,981			179,224			153,412
Selling, general and administrative expenses		(13,771	)		(16,559	)		(55,067	)		(57,812	)
Expenses related to reduction in workforce		(789	)		—			(1,516	)		(1,776	)

Operating income		32,066			22,422			122,641			93,824
Interest income		1,929			1,371			6,699			3,925
Interest expense		(1,708	)		(1,107	)		(5,381	)		(3,606	)
Foreign exchange gain (loss), net		1,814			(877	)		1,406			(6,587	)
Other income, net		70			35			868			473

Income before income taxes		34,171			21,844			126,233			88,029
Income tax expense		(1,214	)		924			(5,278	)		(3,862	)

Net income		32,957			22,768			120,955			84,167

Other comprehensive loss, net of tax:
Change in net unrealized gain (loss) on available-for-sale securities		644			29			2,043			(1,019	)
Change in net unrealized gain (loss) on derivative instruments		1			—			(1	)		(1	)
Change in retirement benefits plan – prior service cost		(2,537	)		—			(2,537	)		—
Change in foreign currency translation adjustment		(415	)		(1,247	)		(634	)		111

Total other comprehensive loss, net of tax		(2,307	)		(1,218	)		(1,129	)		(909	)

Net comprehensive income		30,650			21,550		$	119,826		$	83,258

Earnings per share
Basic	$	0.89		$	0.62		$	3.29		$	2.26
Diluted	$	0.88		$	0.60		$	3.23		$	2.21

Weighted average number of ordinary shares outstanding (thousands of shares)
Basic		36,836			36,828			36,798			37,257
Diluted		37,511			37,766			37,415			38,035

FABRINET

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Years Ended
(in thousands of U. S. dollars)	June 28, 2019			June 29, 2018
Cash flows from operating activities
Net income	$	120,955		$	84,167
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		29,944			29,087
(Gain) loss on disposal and impairment of property, plant and equipment		(4	)		18
Loss on disposal of intangibles		149			447
Loss from sales and maturities of available-for-sale securities		135			364
Amortization of investment discount		(592	)		(506	)
Amortization of deferred debt issuance costs		—			994
Allowance for doubtful accounts (reversal)		36			(23	)
Unrealized (gain) loss on exchange rate and fair value of derivative		(6,980	)		4,222
Share-based compensation		17,157			22,581
Deferred income tax		879			(2,074	)
Severance liabilities		3,343			1,801
Other non-cash expenses		(450	)		332
(Reversal of) Inventory obsolescence		(563	)		(436	)
Changes in operating assets and liabilities
Trade accounts receivable		(13,494	)		17,852
Contract assets		(2,570	)		—
Inventory		(44,035	)		(19,432	)
Other current assets and non-current assets		(186	)		(4,464	)
Trade accounts payable		38,807			3,502
Contract liabilities		2,239			—
Income tax payable		1,092			(1,267	)
Other current liabilities and non-current liabilities		1,532			915

Net cash provided by operating activities		147,394			138,080

Cash flows from investing activities
Purchase of short-term investments		(233,080	)		(152,908	)
Proceeds from sales of short-term investments		99,142			61,795
Proceeds from maturities of short-term investments		54,215			67,417
Payments in connection with business acquisition, net of cash acquired		—			—
Purchase of property, plant and equipment		(18,661	)		(33,825	)
Proceeds from disposal of property, plant and equipment		599			449
Purchase of intangibles		(282	)		(1,577	)

Net cash used in investing activities		(98,067	)		(58,649	)

Cash flows from financing activities
Proceeds of short-term loan from bank		—			5,000
Repayment of short-term loan from bank		—			(1,003	)
Repayment of long-term loan from bank		(3,250	)		(11,212	)
Proceeds from issuance of ordinary shares under employee share option plan		—			1,436
Repayment of capital lease liability		(468	)		(417	)
Repurchase of ordinary shares		(5,378	)		(42,401	)
Release of restricted cash held in connection with business acquisition		(3,478	)		—
Withholding tax related to net share settlement of restricted share units		(10,649	)		(5,509	)

Net cash used in financing activities		(23,223	)		(54,106	)

Net increase in cash, cash equivalents and restricted cash	$	26,104		$	25,325

Movement in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period	$	161,433		$	137,137
Increase (decrease) in cash, cash equivalents and restricted cash		26,104			25,325
Effect of exchange rate on cash, cash equivalents and restricted cash		704			(1,029	)

Cash, cash equivalents and restricted cash at end of period	$	188,241		$	161,433

FABRINET

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

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 same amounts shown in the consolidated statements of cash flows:


(amount in thousands)	As of June 28, 2019		As of June 29, 2018
Cash and cash equivalents	$	180,839	$	158,102
Restricted cash		7,402		3,331

Cash, cash equivalents and restricted cash	$	188,241	$	161,433

FABRINET

RECONCILIATION OF ASC 605 TO ASC 606


	Three Months Ended June 28, 2019
(in thousands of U.S. dollars, except per share data)	As reported under ASC 606			Adjustment			ASC 605
Revenues	$	405,127		$	(1,894	)	$	403,233
Cost of revenues		(357,144	)		1,404			(355,740	)

Gross profit		47,983			(490	)		47,493
Selling, general and administrative expenses		(11,267	)		—			(11,267	)

Operating income		36,716			(490	)		36,226
Interest income		1,929			(10	)		1,919
Interest expense		(1,708	)		—			(1,708	)
Foreign exchange gain, net		1,814			—			1,814
Other income, net		70			—			70

Income before income taxes		38,821			(500	)		38,321
Income tax expense		(1,214	)		—			(1,214	)

Net income		37,607			(500	)		37,107

Other comprehensive loss, net of tax:
Change in net unrealized gain on available-for-sale securities		644			—			644
Change in net unrealized gain on derivative instruments		1			—			1
Change in retirement benefits plan - prior service cost		(2,537	)		—			(2,537	)
Change in foreign currency translation adjustment		(415	)		—			(415	)

Total other comprehensive loss, net of tax		(2,307	)		—			(2,307	)

Net comprehensive income	$	35,300		$	(500	)	$	34,800

Earnings per share
Basic	$	1.02		$	(0.01	)	$	1.01
Diluted	$	1.00		$	(0.01	)	$	0.99

Weighted-average number of ordinary shares outstanding (thousands of shares)
Basic		36,836			—			36,836
Diluted		37,511			—			37,511

FABRINET

RECONCILIATION OF ASC 605 TO ASC 606


	Twelve Months Ended June 28, 2019
(in thousands of U.S. dollars, except per share data)	As reported under ASC 606			Adjustment			ASC 605
Revenues	$	1,584,055		$	(2,560	)	$	1,581,495
Cost of revenues		(1,398,866	)		1,745			(1,397,121	)

Gross profit		185,189			(815	)		184,374
Selling, general and administrative expenses		(40,909	)		—			(40,909	)

Operating income		144,280			(815	)		143,465
Interest income		6,699			(10	)		6,689
Interest expense		(5,381	)		—			(5,381	)
Foreign exchange gain, net		1,406			—			1,406
Other income, net		868			—			868

Income before income taxes		147,872			(825	)		147,047
Income tax expense		(5,278	)		—			(5,278	)

Net income		142,594			(825	)		141,769

Other comprehensive loss, net of tax:
Change in net unrealized gain on available-for-sale securities		2,043			—			2,043
Change in net unrealized loss on derivative instruments		(1	)		—			(1	)
Change in retirement benefits plan - prior service cost		(2,537	)		—			(2,537	)
Change in foreign currency translation adjustment		(634	)		—			(634	)

Total other comprehensive loss, net of tax		(1,129	)		—			(1,129	)

Net comprehensive income	$	141,465		$	(825	)	$	140,640

Earnings per share
Basic	$	3.88		$	(0.03	)	$	3.85
Diluted	$	3.81		$	(0.02	)	$	3.79

Weighted-average number of ordinary shares outstanding (thousands of shares)
Basic		36,798			—			36,798
Diluted		37,415			—			37,415

FABRINET

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES


	Three Months Ended										Twelve Months Ended
	June 28, 2019						June 29, 2018				June 28, 2019						June 29, 2018
(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		32,957			0.88			22,768		0.60		120,955			3.23			84,167		2.21
Items reconciling GAAP net income & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses		1271			0.03			1,507		0.04		5,655			0.15			6,784		0.18
Depreciation of fair value uplift		86			0.00			89		0.00		341			0.01			330		0.01
ASC 606 adoption impact on gross profit		—			—			—		—		(31	)		(0.00	)		—		—

Total related to gross profit		1,357			0.04			1,596		0.04		5,965			0.16			7,114		0.19

Related to selling, general and administrative expenses:
Share-based compensation expenses		2,513			0.07			3,370		0.09		11,502			0.31			15,797		0.42
Expenses related to CFO/CEO search		(567	)		(0.02	)		—		—		290			0.01			204		0.01
Amortization of intangibles		163			0.00			199		0.01		694			0.02			780		0.02
Business combination expenses and consulting fee		224			0.01			—		—		552			0.01			117		0.00
Severance payments		171			0.00			2,142		0.06		1,120			0.03			2,142		0.06

Total related to selling, general and administrative expenses		2,504			0.07			5,711		0.15		14,158			0.38			19,040		0.50

Related to other incomes and other expenses:
Expenses related to reduction in workforce		789			0.02			—		—		1,516			0.04			1,776		0.05
Amortization of debt issuance costs		—			—			634		0.02		—			—			1,412		0.04

Total related to other incomes and other expenses		789			0.02			634		0.02		1,516			0.04			3,188		0.08

Total related to net income & EPS		4,650			0.12			7,941		0.21		21,639			0.58			29,342		0.77

Non-GAAP measures		37,607			1.00			30,709		0.81		142,594			3.81			113,509		2.98

Shares used in computing diluted net income per share
GAAP diluted shares					37,511					37,766					37,415					38,035
Non-GAAP diluted shares					37,511					37,766					37,415					38,035

FABRINET

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW


(amount in thousands)	Three Months Ended						Twelve Months Ended
	June 28, 2019			June 29, 2018			June 28, 2019			June 29, 2018
Net cash provided by operating activities	$	41,890		$	48,286		$	147,394		$	138,080
Less: Purchase of property, plant and equipment		(5,450	)		(5,557	)		(18,661	)		(33,825	)

Non-GAAP free cash flow	$	36,440		$	42,729		$	128,733		$	104,255

FABRINET

GUIDANCE FOR QUARTER ENDING SEPTEMBER 27, 2019

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES


	Diluted EPS
GAAP net income per diluted share:	$	0.64 to $0.68
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		0.11
Business combination expenses		0.01

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	$	0.80 to $0.84