0001193125-20-223682 | 10-K | XBRL Viewer

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Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Jun. 26, 2020	Aug. 07, 2020	Dec. 27, 2019
Cover [Abstract]
Document Type	10-K
Current Fiscal Year End Date	--06-26
Amendment Flag	false
Document Period End Date	Jun. 26, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001408710
Entity Registrant Name	Fabrinet
Trading Symbol	FN
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Interactive Data Current	Yes
Security Exchange Name	NYSE
Title of 12(b) Security	Ordinary Shares
Document Annual Report	true
Document Transition Report	false
Entity File Number	001-34775
Entity Incorporation, State or Country Code	E9
Entity Tax Identification Number	98-1228572
Entity Address, Address Line One	c/o Intertrust Corporate Services (Cayman) Limited
Entity Address, Address Line Two	190 Elgin Avenue
Entity Address, City or Town	George Town
Entity Address, Country	KY
Entity Address, Postal Zip Code	KY1-9005
City Area Code	66
Local Phone Number	2-524-9600
Entity Common Stock, Shares Outstanding		36,744,258
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 2.3

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Current assets
Cash and cash equivalents	$ 225,430	$ 180,839
Short-term restricted cash	7,402
Short-term investments	262,693	256,493
Trade accounts receivable, net	272,665	260,602
Contract assets	13,256	12,447
Inventories	309,786	293,612
Other receivable	24,310
Prepaid expenses	5,399	8,827
Other current assets	13,915	11,015
Total current assets	1,134,856	1,023,835
Non-current assets
Long-term restricted cash		7,402
Property, plant and equipment, net	228,274	210,686
Intangibles, net	4,312	3,887
Operating right-of-use assets	8,068
Goodwill		3,705
Deferred tax assets	5,675	5,679
Other non-current assets	202	124
Total non-current assets	246,531	231,483
Total Assets	1,381,387	1,255,318
Current liabilities
Long-term borrowings, current portion, net	12,156	3,250
Trade accounts payable	251,603	257,617
Fixed assets payable	15,127	7,317
Contract liabilities	1,556	2,239
Operating lease liabilities, current portion	1,979
Income tax payable	2,242	1,801
Accrued payroll, bonus and related expenses	19,265	16,510
Accrued expenses	12,104	8,997
Other payables	21,514	15,317
Total current liabilities	337,546	313,048
Non-current liabilities
Long-term borrowings, non-current portion, net	39,514	57,688
Deferred tax liability	4,729	3,561
Operating lease liabilities, non-current portion	5,873
Severance liabilities	17,379	15,209
Other non-current liabilities	1,937	2,713
Total non-current liabilities	69,432	79,171
Total Liabilities	406,978	392,219
Commitments and contingencies (Note 22)
Shareholders' equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of June 26, 2020 and June 28, 2019)
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 38,471,967 shares and 38,230,753 shares issued as of June 26, 2020 and June 28, 2019, respectively; and 36,727,864 shares and 36,841,650 shares outstanding as of June 26, 2020 and June 28, 2019, respectively)	385	382
Additional paid-in capital	175,610	158,299
Less: Treasury shares (1,744,103 shares and 1,389,103 shares as of June 26, 2020 and June 28, 2019, respectively)	(68,501)	(47,779)
Accumulated other comprehensive loss	(1,147)	(2,386)
Retained earnings	868,062	754,583
Total Shareholders' Equity	974,409	863,099
Total Liabilities and Shareholders' Equity	$ 1,381,387	$ 1,255,318

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 26, 2020	Jun. 28, 2019
Preferred shares, shares authorized	5,000,000	5,000,000
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, shares issued	0	0
Preferred shares, shares outstanding	0	0
Ordinary shares, shares authorized	500,000,000	500,000,000
Ordinary shares, par value	$ 0.01	$ 0.01
Ordinary shares, shares issued	38,471,967	38,230,753
Ordinary shares, shares outstanding	36,727,864	36,841,650
Treasury stocks, shares	1,744,103	1,389,103

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($)
shares in Thousands, $ in Thousands

12 Months Ended

Jun. 26, 2020

Jun. 28, 2019

Jun. 29, 2018

Revenues

$ 1,641,836

$ 1,584,335

$ 1,371,925

Cost of revenues

(1,455,731)

(1,405,111)

(1,218,513)

Gross profit

186,105

179,224

153,412

Selling, general and administrative expenses

(68,374)

(55,067)

(57,812)

(329)

(1,516)

(1,776)

Operating income

117,402

122,641

93,824

Interest income

7,592

6,699

3,925

Interest expense

(3,044)

(5,381)

(3,606)

Foreign exchange gain (loss), net

(3,797)

1,406

(6,587)

Other income (expense), net

1,089

868

473

Income before income taxes

119,242

126,233

88,029

Income tax expense

(5,763)

(5,278)

(3,862)

Net income

113,479

120,955

84,167

Other comprehensive income (loss), net of tax:

Change in net unrealized gain (loss) on available-for-sale securities

538

2,043

(1,019)

Change in net unrealized gain (loss) on derivative instruments

570

(1)

Change in retirement benefit plan – prior service cost

528

(2,537)

^[1]

Change in foreign currency translation adjustment

(397)

(634)

111

Total other comprehensive income (loss), net of tax

1,239

(1,129)

(909)

Net comprehensive income

$ 114,718

$ 119,826

$ 83,258

Earnings per share

Basic

$ 3.07

$ 3.29

$ 2.26

Diluted

$ 3.01

$ 3.23

$ 2.21

Weighted average number of ordinary shares outstanding (thousands of shares)

Basic

36,908

36,798

37,257

Diluted

37,665

37,415

38,035

[1]	Prior service cost is the change in Projected Benefit Obligation resulting from changes to employee benefits from local law changes.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Ordinary Shares	Additional Paid-in Capital	Treasury Shares	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning Balance at Jun. 30, 2017	$ 681,574	$ 373	$ 133,293		$ (348)	$ 548,256
Beginning Balance (in shares) at Jun. 30, 2017		37,340,496
Net income	84,167					84,167
Other comprehensive loss	(909)				(909)
Share-based compensation	22,581		22,581
Issuance of ordinary shares	1,436	$ 4	1,432
Issuance of ordinary shares (in shares)		383,237
Repurchase shares held as treasury shares	(42,401)			$ (42,401)
Tax withholdings related to net share settlement of restricted share units	(5,509)		(5,509)
Ending Balance at Jun. 29, 2018	740,939	$ 377	151,797	(42,401)	(1,257)	632,423
Ending Balance (in shares) at Jun. 29, 2018		37,723,733
Net income	120,955					120,955
Other comprehensive loss	(1,129)				(1,129)
Cumulative effect adjustment from adoption of ASC 606	1,205					1,205
Share-based compensation	17,157		17,157
Issuance of ordinary shares	(1)	$ 5	(6)
Issuance of ordinary shares (in shares)		507,020
Repurchase shares held as treasury shares	(5,378)			(5,378)
Tax withholdings related to net share settlement of restricted share units	(10,649)		(10,649)
Ending Balance at Jun. 28, 2019	863,099	$ 382	158,299	(47,779)	(2,386)	754,583
Ending Balance (in shares) at Jun. 28, 2019		38,230,753
Net income	113,479					113,479
Other comprehensive loss	1,239				1,239
Share-based compensation	22,203		22,203
Issuance of ordinary shares		$ 3	(3)
Issuance of ordinary shares (in shares)		241,214
Repurchase shares held as treasury shares	(20,722)			(20,722)
Tax withholdings related to net share settlement of restricted share units	(4,889)		(4,889)
Ending Balance at Jun. 26, 2020	$ 974,409	$ 385	$ 175,610	$ (68,501)	$ (1,147)	$ 868,062
Ending Balance (in shares) at Jun. 26, 2020		38,471,967

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - shares	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Treasury stocks, shares	355,000	100,000	1,289,103

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Cash flows from operating activities
Net income	$ 113,479	$ 120,955	$ 84,167
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	30,875	29,944	29,087
Loss (gain) on disposal and impairment of property, plant and equipment	329	(4)	18
Loss on disposal of intangibles		149	447
Loss on impairment of goodwill	3,514
(Gain) loss from sales and maturities of available-for-sale securities	(96)	135	364
Accretion of premiums on short-term investments	(508)	(592)	(506)
Amortization of deferred debt issuance costs	26		994
Allowance for doubtful accounts (reversal)	240	36	(23)
Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts	1,963	(6,980)	4,222
Unrealized loss on fair value of interest rate swaps	1,672	2,591
Amortization of fair value at hedge inception of interest rate swaps	(1,220)
Share-based compensation	22,203	17,157	22,581
Deferred income tax	1,262	879	(2,074)
Other non-cash expenses	(619)	(450)	332
Changes in operating assets and liabilities
Trade accounts receivable	(12,260)	(13,494)	17,852
Contract assets	(809)	(2,570)
Inventories	(16,174)	(44,598)	(19,868)
Other current assets and non-current assets	(182)	(2,777)	(4,464)
Trade accounts payable	(5,990)	38,807	3,502
Contract liabilities	(683)	2,239
Income tax payable	442	1,092	(1,267)
Severance liabilities	2,802	3,343	1,801
Other current liabilities and non-current liabilities	10,394	1,532	915
Net cash provided by operating activities	150,660	147,394	138,080
Cash flows from investing activities
Purchase of short-term investments	(196,373)	(233,080)	(152,908)
Proceeds from sales of short-term investments	48,808	99,142	61,795
Proceeds from maturities of short-term investments	142,508	54,215	67,417
Funds provided to customer to support transfer of manufacturing operations (Note 10)	(24,310)
Purchase of property, plant and equipment	(42,327)	(18,661)	(33,825)
Purchase of intangibles	(1,180)	(282)	(1,577)
Proceeds from disposal of property, plant and equipment	1,626	599	449
Net cash used in investing activities	(71,248)	(98,067)	(58,649)
Cash flows from financing activities
Payment of debt issuance costs	(153)
Proceeds from short-term borrowings			5,000
Repayment of short-term borrowings			(1,003)
Proceeds from long-term borrowings	60,938
Repayment of long-term borrowings	(70,079)	(3,250)	(11,212)
Proceeds from issuance of ordinary shares under employee share option plan			1,436
Repayment of finance lease liabilities	(400)	(468)	(417)
Repurchase of ordinary shares	(20,722)	(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	(4,889)	(10,649)	(5,509)
Net cash used in financing activities	(35,305)	(23,223)	(54,106)
Net increase in cash, cash equivalents and restricted cash	44,107	26,104	25,325
Movement in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period	188,241	161,433	137,137
Increase in cash, cash equivalents and restricted cash	44,107	26,104	25,325
Effect of exchange rate on cash, cash equivalents and restricted cash	484	704	(1,029)
Cash, cash equivalents and restricted cash at end of period	232,832	188,241	161,433
Cash paid for
Interest	1,688	2,605	2,219
Taxes	8,466	7,637	1,352
Cash received for interest	9,676	5,811	3,945
Non-cash investing and financing activities
Construction, software and equipment related payables	$ 15,127	$ 7,317	$ 5,144

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$ 225,430	$ 180,839	$ 158,102
Restricted cash	7,402	7,402	3,331
Cash, cash equivalents and restricted cash	$ 232,832	$ 188,241	$ 161,433

Business and organization

12 Months Ended

Jun. 26, 2020

Business and organization

1.	Business and organization

General

Fabrinet (“Fabrinet” or the “Parent Company”) was incorporated on August 12, 1999, and commenced operations on January 1, 2000. The Parent Company is an exempted company incorporated in the Cayman Islands, British West Indies. The “Company” refers to Fabrinet and its subsidiaries as a group.

The Company provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (“OEMs”) of complex products, such as optical communication components, modules and

sub-systems,

industrial lasers, automotive components, medical devices and sensors. The Company 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, complex printed circuit board assembly, advanced packaging, integration, final assembly and testing. The Company focuses primarily on the production of

low-volume,

high-mix

products. The principal subsidiaries of Fabrinet include Fabrinet Co., Ltd. (“Fabrinet Thailand”), Casix, Inc. (“Casix”), Fabrinet West, Inc. (“Fabrinet West”) and Fabrinet UK Limited (“Fabrinet UK”).

Summary of significant accounting policies

12 Months Ended

Jun. 26, 2020

Summary of significant accounting policies

2.	Summary of significant accounting policies

Principles of consolidation

The Company utilizes a

52-53

week fiscal year ending on the Friday in June closest to June 30. Fiscal year 2020 ended on June 26, 2020 and consisted of 52 weeks. Fiscal year 2019 ended on June 28, 2019 and consisted of 52 weeks. Fiscal year 2018 ended on June 29, 2018 and consisted of 52 weeks.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include Fabrinet and its subsidiaries. All inter-company accounts and transactions have been eliminated.

Use of estimates

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amount of total revenues and expenses during the year. The Company bases estimates on historical experience and various assumptions about the future that are believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under different conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies, which are discussed below. Significant assumptions are used in accounting for share-based compensation, allowance for doubtful accounts, income taxes, inventory obsolescence, goodwill and valuation of intangible assets related to business acquisitions, among others. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. In the event that estimates or assumptions prove to be different from actual results, adjustments will be made in subsequent periods to reflect more current information. Additionally, the extent to which the evolving COVID-19 pandemic impacts the Company’s consolidated financial statements will depend on a number of factors, including the magnitude and duration of the pandemic. These estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 that could result in material impacts to our consolidated financial statements in future reporting periods.

Reclassifications

For presentation purposes, certain prior period amounts have been reclassified to conform to the current period presentation.

The reclassifications have been made to the consolidated balance sheet as of June 28, 2019 and the consolidated statement of cash flows for fiscal year ended June 28, 2019 as following table:


	Year ended June 28, 2019
(amount in thousands)	As previously reported			Reclassification			After reclassified
Consolidated Balance Sheets
Current liabilities
Fixed assets payable	$	—		$	7,317		$	7,317
Finance lease liabilities, current portion	$	398		$	(398	)	$	—
Other payables	$	22,236		$	(6,919	)	$	15,317
Non-current liabilities
Finance lease liabilities, non-current portion	$	102		$	(102	)	$	—
Other non-current liabilities	$	2,611		$	102		$	2,713

Consolidated Statement of Cash Flows
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on fair value of interest rate swaps	$	—		$	2,591		$	2,591
Severance liabilities	$	3,343		$	(3,343	)	$	—
(Reversal of) Inventory obsolescence	$	(563	)	$	563		$	—
Changes in operating assets and liabilities
Inventories	$	(44,035	)	$	(563	)	$	(44,598	)
Other current assets and non-current assets	$	(186	)	$	(2,591	)	$	(2,777	)
Severance liabilities	$	—		$	3,343		$	3,343

These reclassifications do not affect the Company’s net income, cash flows or shareholders’ equity.

Changes in accounting policies

Except for the adoption of the new lease accounting standard and the derivatives and hedging standard described within the

sub-heading

“New Accounting Pronouncements – adopted by the Company”, the Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements.

Foreign currency transactions and translation

The consolidated financial statements are presented in United States dollars (“$” or “USD”). The functional currency of Fabrinet and most of its subsidiaries is the USD.

With respect to subsidiaries that use USD as their functional currency, transactions denominated in a currency other than USD are translated into USD at the rates of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate prevailing at the consolidated balance sheet dates. Transaction gains and losses are included in foreign exchange gain (loss) in the accompanying consolidated statements of operations and comprehensive income.

Fabrinet translates the assets and liabilities of its subsidiaries that do not use USD as their functional currency into USD using exchange rates in effect at the end of each period. Revenue and expenses for such

subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation adjustment included in accumulated other comprehensive income (loss) (“AOCI”) in the Company’s consolidated balance sheets.

Cash and cash equivalents

All highly liquid investments with original maturities of three months or less at the date of purchase are classified as cash equivalents. Cash and cash equivalents consist of cash deposited in checking accounts, time deposits with maturities of less than three months, money market accounts, and short-term investments with maturities of three months or less at the date of purchase.

Short-term investments

Management determines the appropriate classification of its investments at the time of purchase and

re-evaluates

the designations at each balance sheet date. The Company may sell certain of the Company’s short-term investments prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management. The maturities of the Company’s short-term investments generally range from three months to three years. The Company’s short-term investments, which consist of investments in U.S. Treasury, fixed income securities, liquidity funds that invest in short-term debt securities and certificates of deposit and time deposits, have been classified and accounted for as

available-for-sale.

The Company’s investments in marketable securities are classified as

available-for-sale

securities and reported at fair value. Unrealized gains and losses related to changes in the fair value of securities are recognized in AOCI in the Company’s consolidated balance sheets. Changes in the fair value of

available-for-sale

securities impact the Company’s net income only when such securities are sold or when other-than-temporary impairment is recognized. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis.

The Company reviews its short-term investments on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issue and the Company’s intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that an other-than-temporary decline exists in one of these securities, the Company will write down these investments to fair value.

Trade accounts receivable

Accounts receivable are carried at anticipated realizable value. The Company assesses the collectability of its accounts receivable based on specific customer circumstances, current economic trends, historical experience with collection and the age of past due receivables and provides an allowance for doubtful receivables based on a review of all outstanding amounts at the period end. Bad debts are

written-off

when identified.

Unanticipated changes in the liquidity or financial position of the Company’s customers may require revision to its allowances for doubtful accounts.

Contract assets

A contract asset is recognized when the Company has recognized revenues prior to generating an invoice for payment. Contract assets are classified separately within the consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional. The Company reviews contract assets for impairment on a quarterly basis, or when events or changes in circumstances indicate that their carrying amount may not be recoverable.

Contract liabilities

A contract liability is recognized when the Company has advance payment arrangements with customers. The contract liabilities balance is normally recognized as revenue within six months.

Inventory

Inventory is stated at the lower of cost or market value. Cost is estimated using the standard costing method, computed on a

first-in,

first-out

basis, with adjustments for variances to reflect actual costs not in excess of net realizable market value. Market value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The Company assesses the valuation of inventory on a quarterly basis and writes down the value for estimated excess and obsolete inventory based upon estimates of future demand.

Leases

Operating leases

The Company determines if an arrangement contains a lease at inception. The Company applies the guidance in ASC 842 to determine whether a contract is, or contains, a lease. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Operating leases are included in operating lease right of use (“ROU”) assets and operating lease liabilities within the Company’s consolidated balance sheets. The Company rents certain real estate under agreements that are classified as operating leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred. Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not account for lease components (e.g., fixed payments including rent) separately from the

non-lease

components (e.g., common-area maintenance costs).

Finance leases

Finance leases are accounted for in a manner similar to financed purchases. The

right-of-use

asset is amortized to amortization expense. Interest expense is recorded in connection with the lease liability.

Property, plant and equipment

Land is stated at historical cost. Other property, plant and equipment, except for construction in process and machinery under installation, are stated at historical cost less accumulated depreciation. Repair and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method to

write-off

the cost of each asset to its residual value over its estimated useful life as follows:


Land improvements			10 years
Building and building improvements			5 - 30 years
Leasehold improvements			Shorter of useful life or lease term

Manufacturing equipment			3 - 7 years
Office equipment			3 - 7 years
Motor vehicles			3 - 5 years
Computer hardware			3 - 5 years

Construction in process and machinery under installation is stated at historic cost and depreciation begins after it is constructed and fully installed and is ready for its intended use in the operations of the Company.

Gains and losses on disposal are determined by comparing proceeds with carrying amounts and are included in other income in the consolidated statements of operations and comprehensive income.

The Company reviews long-lived assets or asset groups for recoverability on a quarterly basis for any events or changes in circumstances that indicate that their carrying amount may not be recoverable. Recoverability of long-lived assets or asset groups is measured by comparing their carrying amount to the projected undiscounted cash flows that the long-lived assets or asset groups are expected to generate. If such assets are considered to be impaired, the impairment loss recognized, if any, is the amount by which the carrying amount of the long-lived assets exceeds its fair value.

Intangibles

Intangibles are stated at historical cost less amortization. Amortization of customer relationships is calculated using the accelerated method as to reflect the pattern in which the economic benefits of the intangible assets are consumed. Amortization of other intangibles is calculated using the straight-line method.

Intangible assets are reviewed for impairment quarterly or more frequently whenever changes or circumstances indicate the carrying amount of related assets may not be recoverable.

Goodwill

Goodwill arising from acquisition is primarily attributable to the ability to expand future products and services and the assembled workforce. Goodwill is reviewed annually for impairment or more frequently whenever circumstances indicate that the carrying amount of a reporting unit may exceed its fair value. The impairment charge is based on that difference and is limited to the amount of goodwill allocated to that unit. The Company conducts impairment testing for goodwill at the reporting unit level. Reporting units may be operating segments as a whole, or an operation one level below an operating segment, referred to as a component. The Company has determined that its reporting unit is Fabrinet UK.

The Company may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reportable segment’s carrying value is greater than its fair value. If the Company’s qualitative assessment indicates it is more likely than not that the fair value of a reporting unit exceeds its carrying value, no further analysis is required and goodwill is not impaired. Otherwise, the Company performs a quantitative goodwill impairment test to determine if goodwill is impaired. The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reportable segment exceeds the carrying value of the net assets associated with the segment, goodwill is not considered impaired. If the carrying value of the net assets associated with the reportable segment exceeds the fair value of the segment, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reportable segment’s goodwill. The reporting unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash, investments, and debt.

Goodwill is not deductible for tax purposes. Accordingly, if goodwill is impaired for financial reporting purposes, there is no impact on deferred taxes.

Treasury shares

Treasury share purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury shares. Gains and losses in excess of par value on the subsequent reissuance of shares are credited or charged to additional

paid-in

capital in the consolidated balance sheets using the average-cost method.

Borrowing costs

Borrowing costs are accounted for on an accrual basis and are charged to the consolidated statements of operations and comprehensive income in the year incurred, except for interest costs on general and specific borrowings attributable to finance certain qualifying assets. Such costs to finance qualifying assets are capitalized during the period of time that is required to complete and prepare the assets for their intended use, as part of the cost of the assets. All other borrowing costs are expensed as incurred.

Where funds are not borrowed for a specific acquisition, construction or production of assets, the capitalization rate used to determine the amount of interest to be capitalized is the weighted average interest rate applicable to the Company’s outstanding borrowings during the year. Where funds are borrowed specifically for the acquisition, construction or production of assets, the amount of borrowing costs eligible for capitalization on the respective assets is determined as the actual borrowing costs are incurred on that borrowing during the respective periods.

Fair value of financial instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs for the valuation of an asset or liability as of the measurement date. The three levels of inputs that may be used to measure fair value are defined as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs for similar assets and liabilities in active markets other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 inputs that are significant to the fair value measurement and unobservable (i.e. supported by little or no market activity), which require the reporting entity to develop its own valuation techniques and assumptions.

The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The carrying amounts of certain financial instruments, which include cash and cash equivalents, trade accounts receivable, contract assets, trade accounts payable, and contract liabilities, approximate their fair values due to their short maturities. The carrying amounts of borrowings approximate their fair values as the applicable interest rate is based on market interest rates. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.

Derivatives

The derivative assets and liabilities are measured at fair value and recognized on the consolidated balance sheets by offset fair value amounts under master netting arrangements. For presentation in consolidated balance sheets, the Company may choose not to separate a derivative into its current and

non-current

portion as follows:

•

A derivative whose fair value is a net liability is classified in total as current.

•

A derivative whose fair value is a net asset and whose current portion is an asset is classified in total as

non-current.

If the current portion is liability, it should be presented as current liability.

For presentation in consolidated statements of cash flows are classified in the same line item as the underlying item.

The Company applies hedge accounting to arrangements that qualify and are designated for cash flow or fair value hedge accounting treatment. Hedge accounting is discontinued prospectively if the hedging relationship ceases to be effective or the hedging or hedged items cease to exist as a result of maturity, sale, termination or cancellation.

Derivatives designated and qualifying as hedges of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges which include foreign currency forward contracts and interest rate swap. In a cash flow hedging relationship, the change in the fair value of the hedging derivative is initially recorded in AOCI in the consolidated balance sheets, gain or loss on the derivative instrument is reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The reclassified amounts are presented in the same income statement line item as the earnings effect of the hedged item.

In accordance with the fair value measurement guidance, the Company’s accounting policy is to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The Company executes derivative instruments with financial institutions that are credit-worthy, which the Company defines as institutions that hold an investment grade credit rating.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, short-term investments, derivatives, accounts receivable and contract assets.

Cash, cash equivalents and short-term investments are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties. The Company limits its short-term investments in marketable securities to securities with a maturity not in excess of three years and securities that are rated A1,

P-1,

F1, or better.

The Company enters into derivative contracts with financial institutions with reputable credit and monitors the credit profiles of these counterparties.

The Company performs ongoing credit evaluations for credit worthiness of its customers and usually does not require collateral from its customers. Management has implemented a program to closely monitor near term cash collection and credit exposures to mitigate any material losses.

Revenue recognition

The Company derives revenues primarily from the assembly of products under supply agreements with its customers and the fabrication of customized optics and glass. The Company recognizes revenue relating to

contracts with customers that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration to which the Company expects to be entitled in exchange for such goods or services. In order to meet this requirement, the Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations under the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations under the contract, and (5) recognize revenue when a performance obligation is satisfied. Revenue is recognized net of any taxes collected from customers, which is subsequently remitted to governmental authorities.

A performance obligation is a contractual promise to transfer a distinct good or service to the customer. In contracts with multiple performance obligations, the Company identifies each performance obligation and

evaluates whether the performance obligation is distinct within the context of the contract at contract inception. The majority of the Company’s contracts have a single performance obligation, as the promise to transfer the individual goods or services is not separately identifiable from other promises under the contracts and, therefore, is not distinct.

Sales of finished goods

The Company manufactures products that are customized to customers’ specifications; however, control of the products is typically transferred to the customer at the point in time the product is either shipped or delivered, depending on the terms of the arrangement, as the criteria for over time recognition are not met. On evaluation of the contracts, the Company identified that there were no contractual rights to bill profit for work in progress in the event of a contract termination, which is expected to be infrequent. Further, in limited circumstances, contracts provide for substantive acceptance by the customer, which results in the deferral of revenue until formal notice of acceptance is received from the customer. Judgment may be required in determining if an acceptance clause provides for substantive acceptance.

Certain customers may request the Company to store finished products at the Company’s warehouse where customers bear risks of loss themselves. In these instances, the Company receives a written request from the customer asking the Company to hold the inventory at the Company’s warehouse and refrain from using the ordered goods to fulfill other customer orders. In these situations, revenue is only recognized when the completed goods are ready for shipment and transferred to the Company’s warehouse.

Customers generally are obligated to purchase finished goods that the Company has manufactured according to their demand requirements. Materials that are not consumed by customers within a specified period of time, or are no longer required due to a product’s cancellation or

end-of-life,

are typically designated as excess or obsolete inventory under the Company’s contracts. Once materials are designated as either excess or obsolete inventory, customers are typically required to purchase such inventory from the Company even if the customer has chosen to cancel production of the related products. The excess or obsolete inventory is shipped to the customer and revenue is recognized upon shipment.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. In determining the net consideration to which the Company expects to be entitled, the Company evaluates whether the price is subject to refund or adjustment. The Company generally does not grant return privileges, except for in the case of defective products during the warranty period. The Company generally provides a warranty of between one to five years on any given product.

These standard warranties are assurance-type warranties

and the Company does not offer any services in addition to the assurance that the product will continue to work as specified.

The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. The Company recognized revenue net of rebates and other similar allowances. Revenues are recognized only if these estimates can be reasonably and reliably determined. The Company bases its estimates on historical results taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Services

The Company provides services for customers that are related to the Company’s manufacturing activities. In many cases, although the nature of work performed is that of a service, revenue is only

cognized upon shipment

of the product because the customer has specific requirements as to how many items can be shipped at any given point in time, i.e. at point-in-time. The related costs are expensed as incurred.

Service revenues of $90.5 million, $106.1 million and $73.5 million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

Contract Costs

The incremental costs of obtaining a contract with a customer are recognized as an asset (not expensed as incurred) if such costs are expected to be recovered. Incremental costs of obtaining a contract are costs that the Company would not have incurred if the contract had not been obtained (e.g., sales commissions or similar incentive payments linked directly to new or modified customer contracts). Costs that would have been incurred regardless of whether a customer contract was obtained (e.g., costs of pursuing the

contract

, legal advice, etc.) are expensed as incurred, unless such costs are explicitly chargeable to the customer. During the

years

ended June 26, 2020 and June 28, 2019, the Company did not have any incremental costs of obtaining a contract.

Shipping and Handling

Shipping costs billed to customers are recorded as revenue. Shipping and handling expense related to costs incurred to deliver product are recognized within cost of goods sold. The Company accounts for shipping and handling activities that occur after control has transferred as a fulfillment cost, as opposed to a separate performance obligation, and the costs of shipping and handling are recognized concurrently with the related revenue.

Warranty provision

Provisions for estimated expenses relating to product warranties are made at the time the products are sold using historical experience. Generally, this warranty is limited to workmanship and the Company’s liability is capped at the price of the product. The provisions will be adjusted when experience indicates an expected settlement will differ from initial estimates.

Warranty cost allowances (reversal) of $0.02 million, $0.07 million and $(0.02) million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

Share-based compensation

Share-based compensation is recognized in the consolidated financial statements based on grant-date fair value. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The Company estimates the fair value of share option awards utilizing the Black-Scholes-Merton option-pricing model (“BSM”), net of estimated forfeitures. For restricted share units and performance share units, the fair values are based on the market value of our ordinary shares on the date of grant.

Employee contribution plan

The Company operates a defined contribution plan, known as a provident fund, in its subsidiaries in Thailand and the United Kingdom. The assets of these plans are in separate trustee-administered funds. The

provident fund is funded by matching payments from employees and by the subsidiaries on a monthly basis. Current contributions to the provident fund are accrued and paid to the fund manager on a monthly basis. The Company sponsors the Fabrinet U.S. 401(k) Retirement Plan (the “401(k) Plan”), a Defined Contribution Plan under ERISA, at its subsidiaries in the United States, which provides retirement benefits for its eligible employees through tax deferred salary deductions.

Severance liabilities

Under labor protection laws applicable in Thailand and the Company’s subsidiary in Thailand’s employment policy, all employees of such subsidiary with more than 120 days of service are entitled to severance pay on forced termination or retrenchment or in the event that the employee reaches the retirement age of 55. The entitlement to severance pay is determined according to an employee’s individual employment tenure with the Company and is subject to a maximum benefit of 400 days of salary unless otherwise agreed upon in an employee’s employment contract. For employees of other subsidiaries who have a specific termination date, the entitlement to severance pay is determined according to their employment tenure, until their designated termination date.

The Company accounts for these severance liabilities based on an actuarial valuation using the Projected Unit Credit Method, which apply the long-term Thai government bond yield as a discount rate. There are no separate plan assets held in respect to these liabilities.

The Company’s subsidiary in the U.K. operates a defined benefit pension plan that defines the pension benefit an employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. The defined benefit obligation is calculated using the projected unit credit method. Annually the Company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating the estimated period of the future payments (discount rate). The plan assets are held separately from those of the Company in independently administered funds and are measured at fair value.

Severance liabilities are recognized in the Company’s consolidated balance sheet under

non-current

liabilities. The related expenses, if incurred during the period, are recognized in the Company’s consolidated statements of operations and comprehensive income as selling, general and administrative expenses. Prior service cost is initially recognized to other comprehensive income (loss) at the date of plan amendment. Such prior service cost is amortized as expenses as a component of net periodic pension cost

using

the weighted average remaining years of service to full eligibility date

for

active employees.

Annual leave

Employee entitlements to annual leave are recognized when

earned by

the employee. On termination of employment, accrued employee entitlement to annual leave is paid in cash.

Income taxes

The Company uses the asset and liability method of accounting for income taxes, whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Fabrinet’s subsidiaries are subject to income tax audits by the respective tax authorities in all of the jurisdictions in which they operate. The determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations.

The Company recognizes liabilities based on its estimate of whether, and the extent to which, additional tax liabilities are

more-likely-than-not.

If the Company ultimately determines that the payment of such a liability is not probable, then it reverses the liability and recognizes a tax benefit during the period in which the determination is made that the liability is no longer probable. The recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that the Company makes certain estimates and judgments. Changes to these estimates or a change in judgment may have a material impact on the Company’s tax provision in a future period.

The authoritative guidance provides for recognition of deferred tax assets if the realization of such deferred tax assets is more likely than not to occur based on an evaluation of both positive and negative evidence and the relative weight of the evidence. A company shall reduce its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is “more likely than not” (i.e., a likelihood of greater than 50 percent) that some portion or all of the deferred tax assets will not be realized. The valuation allowance shall be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The valuation allowance shall be monitored and considered from all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is not needed.

The accounting standard clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return.

The Company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” to be sustained upon examination by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The accounting interpretation also provides guidance on measurement methodology, derecognition thresholds, financial statement classification and disclosures, recognition of interest and penalties, and accounting for the cumulative-effect adjustment at the date of adoption.

New Accounting Pronouncements—not yet adopted by the Company

In December 2019, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2019-12,

“Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. This ASU will be effective for the Company in the first quarter of fiscal year 2022. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13

, “Fair Value Measurement (Topic 820), Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU is intended to improve the effectiveness of disclosures in the notes to the financial statements, including (1) the development of a framework that promotes consistent decisions by the FASB about disclosure requirements and (2) the appropriate exercise of discretion by reporting entities. The amendment modifies the disclosure requirements on transferring between level 1 and level 2 and valuation processes of level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, including interim periods within those

fiscal years. The Company assessed the preliminary impact from the adoption of this update and expected no impact on its consolidated financial statements.

In June 2016, the FASB issued ASU

2016-13,

“Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which establishes a new credit impairment model for financial assets measured at amortized cost and

available-for-sale

debt securities. The FASB issued subsequent amendments to Topic 326, including ASU

2018-19,

ASU

2019-04,

ASU

2019-05,

ASU

2019-11

and ASU

2020-02,

which provided further guidance and transition relief. For public business entities, this update is effective for fiscal years beginning after December 15

, 2019, including interim periods within those fiscal years. This ASU will be effective for the Company in the first quarter of fiscal year 2021. Early adoption is permitted. The Company assessed the preliminary impact

from

the

adoption

of this update

and expected

no impact on its consolidated financial statements.

New Accounting Pronouncements—adopted by the Company

On June 29, 2019, the Company adopted the new lease accounting standard, Accounting Standards Codification (“ASC”) Topic 842, which provides guidance for the recognition and disclosure of lease arrangements. The Company adopted ASC 842 using the modified retrospective transition approach. Accordingly, the Company’s comparative financial statements as of June 28, 2019 have not been adjusted. ASC 842 also provides practical expedients for the Company’s ongoing accounting. The Company elected the short-term lease recognition exemption for its operating leases with a term of less than 12 months, which will not require recognition of ROU assets or lease liabilities for these leases.

For periods prior to adoption of ASC 842, the Company is required to present disclosures in accordance with ASC Topic 840. Future minimum lease payments due under

non-cancelable

operating leases as of June 28, 2019 were as follows:


(amount in thousands)
2020	$	1,746
2021		1,342
2022		1,219
2023		1,172
Thereafter		230

Total future minimum operating lease payments	$	5,709

The most significant impact of the adoption of ASC 842 was the recognition of ROU assets and lease liabilities for operating leases with a term of greater than 12 months, while the accounting for finance leases will remain substantially unchanged. See Note

for further details.

On June 29, 2019, the Company adopted ASU

2017-12,

“Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU

2017-12

simplifies existing hedge accounting guidance in order to better portray the economic impact of risk management activities in the financial statements, including eliminating the separate measurement and presentation of hedge ineffectiveness. Prior to the adoption of ASU

2017-12,

the Company was required to separately measure and reflect the amount by which the hedging instrument did not offset the changes in the fair value or cash flows of hedged items, and to record the ineffective portion as earnings. Upon the adoption of ASU

2017-12,

the Company no longer recognizes hedge ineffectiveness as earnings, but instead records the entire changes in the fair value of the hedged instruments as other comprehensive income. Amounts recorded as other comprehensive income are subsequently reclassified to earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings. See Note 7 for further details.

In March 2020, the FASB issued ASU

2020-04,

“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which temporarily simplifies the accounting for

contract modifications, including hedging relationships, due to the transition from LIBOR and other interbank offered rates to alternative reference interest rates. For example, entities can elect not to remeasure the contracts at the modification date or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. This ASU was effective for the Company in the third quarter of fiscal year 2020 with no impact to the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU

2017-04,

“Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU

2017-04

modifies the concept of impairment assessment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. Public companies that are SEC filers should adopt the amendment for annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This ASU will be effective for the Company in the first quarter of fiscal 2021. The Company early adopted this ASU in the fourth quarter of fiscal 2020 with no impact to the Company’s consolidated financial statements.

Revenues from contracts with customers

12 Months Ended

Jun. 26, 2020

Revenues from contracts with customers

3.	Revenues from contracts with customers

Contract Assets and Liabilities

A contract asset is recognized when the Company has recognized revenues prior to an invoice for payment. Contract assets are classified separately on the consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional. No impairment for contract assets was recorded for the years ended June 26, 2020 and June 28, 2019.

A contract liability is recognized when the Company has advance payment arrangements with customers. The contract liabilities balance is normally recognized as revenue within six months.

The following tables summarize the activity in the Company’s contract assets and contract liabilities during the

years

ended June 26, 2020 and June 28, 2019:


(amount in thousands)	Contract Assets
Beginning balance, June 28, 2019	$	12,447
Revenue recognized		73,476
Amounts collected or invoiced		(72,667	)

Ending balance, June 26, 2020	$	13,256


(amount in thousands)	Contract Assets
Beginning balance, June 30, 2018	$	—
Cumulative effect adjustment upon adoption of ASC 606		9,877
Revenue recognized		112,739
Amounts collected or invoiced		(110,169	)

Ending balance, June 28, 2019	$	12,447


(amount in thousands)	Contract Liabilities
Beginning balance, June 28, 2019	$	2,239
Advance payment received during the year		9,278
Revenue recognized		(9,961	)

Ending balance, June 26, 2020	$	1,556


(amount in thousands)	Contract Liabilities
Beginning balance, June 30, 2018	$	—
Advance payment received during the year		4,458
Revenue recognized		(2,219	)

Ending balance, June 28, 2019	$	2,239

Revenue by Geographic Area

and End Market

Total revenues are attributed to a particular geographic area based on

the bill-to-location of

the Company’s customers. The Company operates primarily in three geographic regions: North America, Asia-Pacific and Europe.

The following table presents total revenues by geographic regions:


(amount in thousands, except percentages)	Year ended June 26, 2020		As a % of Total Revenues			Year ended June 28, 2019		As a % of Total Revenues
North America	$	830,888		50.6	%	$	756,278		47.7	%
Asia-Pacific		552,923		33.7			608,386		38.4
Europe		258,025		15.7			219,671		13.9

	$	1,641,836		100.0	%	$	1,584,335		100.0	%

The following table sets forth revenues by end market.


(amount in thousands, except percentages)	Year ended June 26, 2020		As a % of Total Revenues			Year ended June 28, 2019		As a % of Total Revenues
Optical communications	$	1,248,174		76.0	%	$	1,184,936		74.8	%
Lasers, sensors and other		393,662		24.0			399,399		25.2

	$	1,641,836		100.0	%	$	1,584,335		100.0	%

Income taxes

12 Months Ended

Jun. 26, 2020

Income taxes

4.	Income taxes

Cayman Islands

Fabrinet is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, Fabrinet is not subject to tax in the Cayman Islands on income or capital gains until March 6, 2039.

Income of the Company exempted from corporate income tax in the Cayman Islands amounted to $101.9 million, $104.6 million and $58.4 million for the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

Thailand

Fabrinet Thailand is where the majority of the Company’s operations and production takes place. The Company

s not subject to tax from July 2012 through June 2020 on income generated from the manufacture of products at Pinehurst Building 6, and is not subject to tax from July 2018 through June 2026 on income generated from the manufacture of products at its Chonburi campus.

After June 2020, 50% of our income generated from products manufactured at our Pinehurst campus will be exempted from tax through June 2025.

Such preferential tax treatment is

contingent on various factors, including the export of our customers’ products out of Thailand and our agreement not to move our manufacturing facilities out of our current province in Thailand for at least

15 years

from the date on which preferential tax treatment was granted. Currently, the corporate income tax rate for our Thai subsidiary is

People’s Republic of China

The corporate income tax rate for Casix is 25%.

The United States

The Tax Cuts and Jobs Act (“Tax Reform Act”) enacted on December 22, 2017 provided for significant changes to U.S. tax law. Among other provisions, the Tax Reform Act reduced the U.S. corporate income tax

rate to 21% effective January 1, 2018.

Accordingly, the Company’s U.S. subsidiaries were subject to a Federal statutory tax rate

of 21%

for fiscal year 2020 and fiscal year 2019.

The United Kingdom

The corporate income tax rate for U.K. subsidiaries is 19%.

The Company’s income tax expense consisted of the following:


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019		June 29, 2018
Current	$	6,274		$	4,384	$	5,457
Deferred		(511	)		894		(1,595	)

Total income tax expense	$	5,763		$	5,278	$	3,862

The reconciliation between the Company’s taxes that would arise by applying the statutory tax rate of the country of the Company’s principal operations, Thailand, to the Company’s effective tax charge is shown below:


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019			June 29, 2018
Income before income taxes (1)	$	119,242		$	126,233		$	88,029

Tax expense calculated at a statutory corporate income tax rate of 20%		23,848			25,247			17,606
Effect of income taxes from locations with tax rates different from Thailand		577			977			2,657

Income not subject to tax (2)		(20,797	)		(21,161	)		(12,824	)
Income tax on unremitted earnings		1,221			1,260			1,007
Effect of different tax rate in relation to deferred tax utilization		—			—			423
Effect of foreign exchange rate adjustment		382			603			(134	)
Tax rebate from research and development application		(1,228	)		(649	)		(454	)
Provision for uncertain income tax position		(641	)		(229	)		277
Utilization of loss carryforward		—			—			(3,224	)
Valuation allowance (reversal of)		2,446			—			(1,587	)
Others		(45	)		(770	)		115

Corporate income tax expense	$	5,763		$	5,278		$	3,862

(1)	Income before income taxes was mostly generated from domestic income in the Cayman Islands.

(2)

Income not subject to tax relates to income earned in the Cayman Islands and income subject to an investment promotion privilege for Pinehurst Building 6 and the Company’s Chonburi campus. Income not subject to tax per ordinary share on a diluted basis was $0.55, $0.57, and $0.34 for the years ended June 26, 2020, June 28, 2019, and June 29, 2018, respectively.

The Company’s deferred tax assets and deferred tax liabilities, net of valuation allowance, at each balance sheet date are as follows:


	As of
(amount in thousands)	June 26, 2020		June 28, 2019
Deferred tax assets:
Depreciation	$	1,219	$	1,957
Severance liability		2,958		2,012
Reserves and allowance		1,405		1,485
Net operating loss carryforwards		—		1,616
Others		321		13

Total	$	5,903	$	7,083


	As of
(amount in thousands)	June 26, 2020			June 28, 2019
Deferred tax liabilities:
Temporary differences from intangibles and changes in the fair value of assets acquired	$	(336	)	$	(590	)
Deferred tax from unremitted earnings		(4,620	)		(4,123	)
Others		—			(252	)

Total		(4,956	)		(4,965	)

Net	$	947		$	2,118

The changes in the valuation allowances of deferred tax assets were as follows:


(amount in thousands)	Valuation allowances of deferred tax assets
Balance as of June 30, 2017	$	6,399
Reversal		(5,234	)

Balance as of June 29, 2018		1,165
Additional		126

Balance as of June 28, 2019		1,291
Additional		2,437

Balance as of June 26, 2020	$	3,728

During fiscal year 2018, one of the Company’s subsidiaries in the U.S. generated taxable income sufficient for the utilization of loss carryforwards due to better operating performance and effective control of operating expenses and management determined that it was more likely than not that future taxable income would be sufficient to allow the benefit of the loss to be realized. As of June 29, 2018, such subsidiary in the U.S. reversed certain deferred tax assets valuation allowance as management expected it was more likely than not that such subsidiary would realize profits in subsequent fiscal years so that the loss carryforwards could be partially utilized. Consequently, as of June 28, 2019, such subsidiary have assessed and set up a partial valuation allowance for the deferred tax assets at the same level as in fiscal year 2018. However, in fiscal year 2020, such subsidiary in the U.S. generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future; therefore, management believes it is more likely than not that all of the deferred tax assets of such subsidiary will not be utilized. Thus, a full valuation allowance of $ 2.1 million for the deferred tax assets was set up as of June 26, 2020.

During fiscal year 2020, one of the Company’s subsidiaries in the U.K. also generated net operating loss and management expected that such subsidiary

would continue to have net operating losses in the foreseeable future; therefore, management believes it is more likely than not that all of the deferred tax assets of such

subsidiary

will not be utilized

Thus

, a full valuation allowance

of $1.6 million

for the deferred tax assets was set up as of June 26, 2020

Income tax liabilities have not been established for withholding tax and other taxes that would be payable on the unremitted earnings of Fabrinet Thailand. Such amounts of Fabrinet Thailand are permanently reinvested; unremitted earnings for Fabrinet Thailand totaled $112.3 million and $109.7 million as of June 26, 2020 and June 28, 2019, respectively. Unrecognized deferred tax liabilities for such unremitted earnings were $7.0 million and $6.9 million as of June 26, 2020 and June 28, 2019, respectively.

Deferred tax liabilities of $1.1 million and $1.3 million have been established for withholding tax on the unremitted earnings of Casix for the years ended June 26, 2020 and June 28, 2019, respectively, which are included in

non-current

deferred tax liability in the consolidated balance sheets.

Uncertain income tax positions

Interest and penalties related to uncertain income tax positions are recognized in income tax expense. The Company had approximately $0.5 million and $0.8 million of accrued interest and penalties related to uncertain income tax positions on the consolidated balance sheets as of June 26, 2020 and June 28, 2019, respectively. The Company

recorded

(reversed) interest and penalties of $0.1 million, $(0.1) million and $0.3 million for the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively, in the consolidated statements of operations and comprehensive income. With regard to the Thailand jurisdiction, tax years 2015 through 2019 remain open to examination by the local authorities.

The following table indicates the changes to the Company’s uncertain income tax positions for the years ended June 26, 2020, June 28, 2019 and June 29, 2018 included in other

non-current

liabilities.


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019			June 29, 2018
Beginning balance	$	1,323		$	1,445		$	1,420
Additions during the year		157			235			25
Release of tax positions of prior years		(510	)		(357	)		—

Ending balance	$	970		$	1,323		$	1,445

Earnings per ordinary share

12 Months Ended

Jun. 26, 2020

Earnings per ordinary share

5. Earnings per ordinary share

Basic earnings per ordinary share is computed by dividing reported net income by the weighted average number of ordinary shares outstanding during each period. Diluted earnings per ordinary share is computed by calculating the effect of potential dilutive ordinary shares outstanding during the year using the treasury stock method. Dilutive ordinary equivalent shares consist of share options, restricted share units and performance share units. The earnings per ordinary share was calculated as follows:


	Years Ended
(amount in thousands except per share amounts)	June 26, 2020		June 28, 2019		June 29, 2018
Net income attributable to shareholders	$	113,479	$	120,955	$	84,167

Weighted-average number of ordinary shares outstanding (thousands of shares)		36,908		36,798		37,257
Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares)		757		617		778

Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares)		37,665		37,415		38,035

Basic earnings per ordinary share	$	3.07	$	3.29	$	2.26
Diluted earnings per ordinary share	$	3.01	$	3.23	$	2.21
Outstanding performance share units excluded from the computation of diluted earnings per ordinary share (thousands of shares) (1)		99		401		284

(1)	These performance share units were not included in the computation of diluted earnings per ordinary share because they are not expected to vest based on the Company’s current assessment of the related performance obligations.

Cash, cash equivalents and short-term investments

12 Months Ended

Jun. 26, 2020

Cash, cash equivalents and short-term investments

6.	Cash, cash equivalents and short-term investments

The Company’s cash, cash equivalents,

and short-term investments by category is as follows:


					Fair Value
(amount in thousands)	Carrying Cost		Unrealized Gain/ (Loss)		Cash and Cash Equivalents		Marketable Securities		Other Investments
As of June 26, 2020
Cash	$	218,117	$	—	$	218,117	$	—	$	—
Cash equivalents		7,313		—		7,313		—		—
Liquidity funds		41,051		—		—		—		41,051
Certificates of deposit and time deposits		11,800		—		—		—		11,800
Corporate debt securities		159,220		948		—		160,168		—
U.S. agency and U.S. Treasury securities		49,130		544		—		49,674		—

Total	$	486,631	$	1,492	$	225,430	$	209,842	$	52,851


As of June 28, 2019
Cash	$	178,019	$	—	$	178,019	$	—	$	—
Cash equivalents		2,820		—		2,820		—		—
Liquidity funds		20,552		—		—		—		20,552
Certificates of deposit and time deposits		35,028		—		—		—		35,028
Corporate debt securities		130,959		297		—		131,256		—
U.S. agency and U.S. Treasury securities		69,552		105		—		69,657		—

Total	$	436,930	$	402	$	180,839	$	200,913	$	55,580

The cash equivalents include short-term bank deposits, investments in money market funds, and marketable securities with maturities of three months or less at the date of purchase. The effective interest rate on short term bank deposits was 1.8% and 1.9% per annum for the years ended June 26, 2020 and June 28, 2019, respectively.

As of June 26, 2020 and June 28, 2019, 63% and 58%, respectively, of our cash and cash equivalents were held by the Parent Company.

The following table summarizes the cost and estimated fair value of short-term investments classified as

available-for-sale

securities based on stated effective maturities as of June 26, 2020:


	June 26, 2020				June 28, 2019
(amount in thousands)	Carrying Cost		Fair Value		Carrying Cost		Fair Value
Due within one year	$	76,127	$	76,196	$	69,746	$	69,830
Due between one to five years		132,223		133,646		130,765		131,083

Total	$	208,350	$	209,842	$	200,511	$	200,913

During the year ended June 26, 2020, the Company recognized a realized gain of $0.1 million from sales and maturities of

available-for-sale

securities.

As of June 26, 2020 and June 28, 2019, the Company considered the decline in market value of its short-term investments portfolio to be temporary in nature and did not consider any of its securities other-than-temporarily impaired. The Company typically invests in highly-rated securities, and its investment policy

generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. No impairment losses were recorded for the years ended June 26, 2020 and June 28, 2019.

Fair value of financial instruments

12 Months Ended

Jun. 26, 2020

Fair value of financial instruments

7.	Fair value of financial instruments

Fair value is defined as the exchange price that would be recei

ed for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs for the valuation of an asset or liability as of the measurement date. The three levels of inputs that may be used to measure fair value are defined as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for assets or liabilities, either directly or indirectly. If the assets or liabilities have a specified (contractual) term, Level 2 inputs must be observable for substantially the full term of assets or liabilities.

Level 3 inputs are unobservable inputs for assets or liabilities, which require the reporting entity to develop its own valuation techniques and assumptions.

The following table provides details of

the financial instruments measured at fair value on a recurring basis, including:


	Fair Value Measurements at Reporting Date Using
(amount in thousands)	Level 1		Level 2			Level 3		Total
As of June 26, 2020
Assets
Cash equivalents	$	—	$	7,313		$	—	$	7,313
Liquidity funds		—		41,051			—		41,051
Certificates of deposit and time deposits		—		11,800			—		11,800
Corporate debt securities		—		160,168			—		160,168
U.S. agency and U.S. Treasury securities		—		49,674			—		49,674
Derivative assets		—		2,230	(1)		—		2,230

Total	$	—	$	272,236		$	—	$	272,236

Liabilities
Derivative liabilities	$	—	$	5,273	(2)	$	—	$	5,273


Total	$	—	$	5,273		$	—	$	5,273


	Fair Value Measurements at Reporting Date Using
(amount in thousands)	Level 1		Level 2			Level 3		Total
As of June 28, 2019
Assets
Cash equivalents	$	—	$	2,820		$	—	$	2,820
Liquidity funds		—		20,552			—		20,552
Certificates of deposit and time deposits		—		35,028			—		35,028
Corporate debt securities		—		131,256			—		131,256
U.S. agency and U.S. Treasury securities		—		69,657			—		69,657
Derivative assets		—		2,201	(3)				2,201

Total	$	—	$	261,514		$	—	$	261,514

Liabilities
Derivative liabilities	$	—	$	2,591	(4)	$	—	$	2,591

Total	$	—	$	2,591		$	—	$	2,591

(1)	Foreign currency forward contracts with a notional amount of $125.0 million and Canadian dollars of 0.6 million, and option contract with a notional amount of $1.0 million.

(2)	Interest rate swap agreements with an aggregate notional amount of $125.1 million.

(3)	Foreign currency forward contracts with notional amount of $72.0 million and Canadian dollars of $0.6 million.

(4)	Interest rate swap agreement with a notional amount of $64.2 million.

Derivative financial instruments

The Company utilizes derivative financial instruments to hedge (i) foreign exchange risk associated with certain foreign currency denominated assets and liabilities and other foreign currency transactions, and (ii) interest rate risk associated with its long-term debt.

The Company minimizes the credit risk associated with its derivative instruments by limiting the exposure to any single counterparty and by entering into derivative instruments only with counterparties that meet the Company’s minimum credit quality standard.

Foreign currency forward and option contracts

As a result of foreign currency rate fluctuations, the U.S. dollar equivalent values of the Company’s foreign currency denominated assets and liabilities fluctuate. The Company uses foreign currency forward and option contracts to manage the foreign exchange risk associated with a portion of its foreign currency denominated assets and liabilities and other foreign currency transactions. The Company enters into foreign currency forward and option contracts to hedge fluctuations in the U.S. dollar value of forecasted transactions denominated in Thai baht and Canadian dollars with counterparties that meet the Company’s minimum credit quality standard.

The Company may enter into foreign currency forward contracts

with maturi

ties of

up to 12 months

to hedge fluctuations in the U.S. dollar value of forecasted transactions denominated in Thai baht, including inventory purchases, payroll and other operating expenses. The Company considers these forward contracts as dual-purpose hedges, that hedge both the foreign exchange fluctuation (i) from inception through the forecasted expenditure, and (ii) any subsequent revaluation of the account payable or accrual. The Company may designate the forward contracts that hedge the foreign exchange fluctuation from inception through the forecasted expenditure as cash flow hedges. The gain or loss on a derivative instrument designated and qualified as a cash flow hedging instrument is recorded as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The reclassified amounts are presented in the same income statement line item as the earnings effect of the hedged item. Once the forecasted transactions are recorded, the Company will

discontinue the hedging relationship by

de-designating

the derivative instrument and recording subsequent changes in fair value through contract maturity to foreign exchange gain (loss), net in the consolidated statements of operations and comprehensive income as a natural hedge against the Thai baht denominated assets and liabilities.

The Company may also enter into

non-designated

foreign currency forward and option contracts to provide an offset to the

re-measurement

of foreign currency denominated assets and liabilities and to hedge certain forecasted exposures. Changes in the fair value of these

non-designated

derivatives are recorded through foreign exchange gain (loss), net in the consolidated statements of operations and comprehensive income.

As of June 26, 2020, the Company had 125 outstanding U.S. dollar foreign currency forward contracts against Thai baht with an aggregate notional amount of $125.0 million, one foreign currency contract with notional amount of Canadian dollars 0.6 million and one foreign currency option contract with notional amount of $1.0 million with maturity dates ranging from July 2020 through January 2021.

As of June 26, 2020, hedging relationship over foreign currency forward contracts which designated for hedge accounting had been tested to be highly effective based on the performance of retrospective and prospective regression testing. During the year ended June 26, 2020, the Company recorded an unrealized gain

of $1.1

million

from changes in the fair value of these foreign currency forward contracts, designated as hedging instruments, in other comprehensive income in the consolidated statements of operations and comprehensive income. A

loss

of $

1.6

million

was reclassified from AOCI to foreign exchange gain (loss), net, cost of revenues, and selling, general and administrative expenses in the consolidated statements of operations and comprehensive income from the discontinuance of cash flow hedge. As of June 26, 2020, the amount in AOCI that is expected to be reclassified into earnings within 12 months as

gain

of $2.7 million

During the year ended June 26, 2020, the Company included an unrealized

loss

of $

1.2

million from changes in fair value of foreign currency forward and option contracts which were not designated for hedge accounting in earnings as foreign exchange gain (loss), net in the consolidated statements of operations and comprehensive income.

As of June 28, 2019, the Company had 45 outstanding foreign currency forward contracts with an aggregate notional amount of $72.0 million and one foreign currency forward contract with notional amount of Canadian dollar

0.6

million

with maturity dates from July through September 2019. These foreign currency forward contracts were not designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar value of forecasted transactions denominated in Thai baht and Canadian dollars. During the year

ended June 28, 2019, the Company included unrealized

gain of $

4.8

million from changes in fair value of foreign currency contracts in earnings as foreign exchange gain (loss), net in the consolidated statements of operations and comprehensive income. As of June 28, 2019, the Company had no foreign currency forward contracts designated as cash flow hedges.

Interest rate swap agreements

The Company entered into interest rate swap agreements to mitigate interest rate risk and improve the interest rate profile of the Company’s debt obligations. As of June 26, 2020, the Company had two outstanding interest rate swap agreements with an aggregate notional amount of $125.1 million. As of June 28, 2019, the Company had one outstanding interest rate swap agreement with a notional amount of $64.2 million.

On July 25, 2018, Fabrinet Thailand entered into an interest rate swap agreement to effectively convert the floating interest rate of its term loan under the credit facility agreement with Bank of America (the “BofA Facility Agreement”) to a fixed interest rate

2.86

% per

annum through the scheduled maturity of the term loan in June 2023 (see Note 16). The Company did not designate this interest rate swap for hedge accounting.

On September 3, 2019, the Company drew down a term loan under a new Credit Facility Agreement with the Bank of Ayudhya Public Company Limited (the “Bank”) (see Note 16) and on September 10, 2019, repaid in full the outstanding term loan under the BofA Facility Agreement (see Note 16). In conjunction with the funding of the new term loan, the Company entered into a second interest rate swap agreement. The

combination of both of these interest rate swaps effectively convert the floating interest rate of the Company’s term loan with the Bank to a fixed interest rate of 4.36% per annum through the maturity of the term loan in June 2024.

On September 27, 2019, the Company designated these two interest rate swaps as a cash flow hedge for the Company’s term loan under the Credit Facility Agreement with the Bank. The combination of these two interest rate swaps qualified for hedge accounting based on a regression testing result which proved the hedges are highly effective. In addition, the Company has designated and documented contemporaneously the hedging relationships involving these interest rate swaps. At least quarterly, the Company performs a qualitative effectiveness test on the interest rate swaps to support the continued application of hedge accounting. As of June 26, 2020, the hedging relationship was determined to be highly effective based on the performance of a qualitative effectiveness testing. While the Company intends to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective, the changes in the fair value of the derivatives used as hedges would be reflected in earnings. From September 27, 2019, any gains or losses related to these interest rate swaps will be recorded in AOCI in the consolidated balance sheets, with a portion reclassified from AOCI into earnings at each reporting period based on either the accrued interest amount or the interest payment.

As of June 26, 2020, the amount in AOCI that is expected to be reclassified into earnings within 12 months

as loss

$0.3 million.

Prior to September 27, 2019, these interest rate swaps were not designated as cash flow hedges and all changes in the fair value of these interest rate swaps were reflected in earnings. During the year

ended June 26, 2020 and June 28, 2019, the Company recorded unrealized loss of $1.7 million and $2.6 million, respectively, from changes in the fair value of these interest rate swaps as interest expense in the consolidated statements of operations and comprehensive income.

The following table provides a summary of the impact of derivative gain (loss) of the Company’s foreign currency forward contracts and interest rate swaps which were designated as cash flow hedges on the consolidated statements of operations and other comprehensive income:


		Year Ended
(amount in thousands)	Financial statements line item	June 26, 2020			June 28, 2019
Derivatives gain (loss) recognized in other comprehensive income:
Foreign currency forward contracts	Other comprehensive income	$	1,081		$	—
Interest rate swaps	Other comprehensive income		(910	)		—

Total derivatives gain recognized in other comprehensive income		$	171		$	—

Derivatives loss ( gain) reclassified from accumulated other comprehensive income into earnings:
Foreign currency forward contracts	Cost of revenues	$	2,512		$	—
Foreign currency forward contracts	Selling, general and administrative expenses		105			—
Foreign currency forward contracts	Foreign exchange gain (loss), net		(998	)		—
Interest rate swaps	Interest expense		(1,220	)		—

Total derivatives loss reclassified from accumulated other comprehensive income into earnings		$	399		$	—

Change in net unrealized gain on derivative instruments		$	570		$	—

Fair value of derivatives

The following table provides the fair values of the Company’s derivative financial instruments for the periods presented:


	June 26, 2020						June 28, 2019
(amount in thousands)	Derivative Assets			Derivative Liabilities			Derivative Assets		Derivative Liabilities
Derivatives not designated as hedging instruments
Foreign currency forward and option contracts	$	9		$	(611	)	$	2,201	$	—
Interest rate swaps		—			—			—		(2,591	)

Derivatives designated as hedging instruments
Foreign currency forward contracts		2,814			(83	)		—		—
Interest rate swaps		—			(5,172	)		—		—

Derivatives, gross balances		2,823			(5,866	)		2,201		(2,591	)
Derivatives, gross balances offset in the balance sheet		(593	)		593			—		—

Derivatives, net balances	$	2,230		$	(5,273	)	$	2,201	$	(2,591	)

The Company presents its derivatives at net fair values in the consolidated balance sheets.

The Company’s netting arrangements allow net settlements under certain conditions. The Company’s derivative instruments are typically settled monthly or quarterly.

The Company recorded the fair value of derivative financial instruments in the consolidated balance sheets as follows:


Derivative Financial Instruments		Balance Sheet Line Item
Fair Value of Derivative Assets		Other current assets
Fair Value of Derivative Liabilities		Accrued expenses

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Trade accounts receivable, net

12 Months Ended

Jun. 26, 2020

Trade accounts receivable, net

8.	Trade accounts receivable, net


(amount in thousands)	As of June 26, 2020			As of June 28, 2019
Trade accounts receivable	$	273,001		$	260,698
Less: Allowance for doubtful account		(336	)		(96	)

Trade accounts receivable, net	$	272,665		$	260,602

Inventories

12 Months Ended

Jun. 26, 2020

Inventories

9.	Inventories


(amount in thousands)	As of June 26, 2020		As of June 28, 2019
Raw materials	$	141,522	$	113,321
Work in progress		136,344		141,730
Finished goods		17,950		24,916
Goods in transit		13,970		13,645

Inventories	$	309,786	$	293,612

Other receivable

12 Months Ended

Jun. 26, 2020

Receivables [Abstract]

Other receivable

10.	Other receivable

On October 1, 2019, the Company provided funds in the amount of $24.3 million to a customer to support the customer’s transfer of certain manufacturing operations from Berlin, Germany to the Company’s facilities in Thailand. The customer has agreed to repay this amount by September 30, 2020. As of June 26, 2020, the Company recorded the $24.3 million funds as other receivable in the consolidated balance sheet. For the year ended June 26, 2020, the Company classified these funds as an investing activity in the consolidated statement of cash flows.

Restricted cash

12 Months Ended

Jun. 26, 2020

Restricted cash

11.	Restricted cash

As of June 26, 2020 and June 28, 2019, the Company had one outstanding standby letter of credit of 6.0 million Euros related to the Company’s support of a customer with the transfer of certain manufacturing operations from Berlin, Germany to the Company’s facilities in Thailand. As of June 26, 2020 and June 28, 2019, the standby letter of credit was backed by cash collateral of $7.4 million.

Leases

12 Months Ended

Jun. 26, 2020

Leases

12.

Leases

The Company leases facilities under

non-cancelable

operating lease agreements. The Company leases a portion of its capital equipment and vehicles, certain land and buildings for its facilities in Thailand, the Cayman Islands, China, the U.S., the U.K. and Israel under operating lease arrangements that expire at various dates through 2026. Certain of these lease arrangements provide the Company the ability to extend the lease from one to five years following the expiration of the current term. However, the Company

may

exclude

lease extension options from its ROU assets and lease liabilities as the Company is not reasonably assured that it will exercise these options. None of the lease agreements contain residual value guarantees provided by the lessee. The Company also has one intercompany lease transaction which is a lease of office and manufacturing space between Fabritek and Fabrinet West.

In accordance with ASC 840, rent expense under operating leases amounted to $1.9 million and $1.8 million for the fiscal years ended June 28, 2019 and June 29, 2018, respectively. Amounts of minimum future annual commitments under

non-cancelable

operating and finance leases in accordance with ASC 840 were as follows:


	As of June 28, 2019
(amount in thousands)	Operating leases		Finance leases		Total
2020	$	1,746	$	398	$	2,144
2021		1,342		102		1,444
2022		1,219		—		1,219
2023		1,172		—		1,172
Thereafter		230		—		230

Total future minimum operating lease payments	$	5,709	$	500	$	6,209

Operating leases

The

following table shows the impact of adoption of ASC 842 on the adoption date of June 29, 2019 on the consolidated balance sheets:

Consolidated Balance Sheets


	Impact of Adopting ASC 842
(amount in thousands)	Balance at June 28, 2019		Adjustment		Balance at June 29, 2019
Assets
Operating lease ROU assets	$	—	$	5,370	$	5,370
Liabilities and Shareholders’ Equity
Operating lease liabilities, current	$	—	$	1,601	$	1,601
Operating lease liabilities, non-current	$	—	$	3,769	$	3,769

As of June 26, 2020, the maturities of the Company’s operating lease liabilities were as follows:


(amount in thousands)
2021	$	2,313
2022		2,314
2023		2,200
2024		1,176
2025		288
Thereafter		157

Total undiscounted lease payments		8,448
Less imputed interest		(596	)

Total present value of lease liabilities	$	7,852	(1)

(1)

Includes current portion of operating lease liabilities of $2.0 million.

Rental expense related to the Company’s operating leases is recognized on a straight-line basis over the lease term. Rental expense for long-term leases for the year ended June 26, 2020, June 28, 2019 and June 29, 2018 was $2.1 million, $1.9 million and $1.8 million, respectively. Rental expense for short-term leases for the year ended June 26, 2020, June 28, 2019 and June 29, 2018 was $0.2 million, $0.1 million and de minimis amount, respectively.

Finance leases

In connection with the acquisition of Fabrinet UK, the Company assumed the finance lease commitments for certain equipment, with various expiration dates through September 2020. The equipment can be purchased at

pre-determined

prices upon expiration of such contracts.

As of June 26, 2020, the Company had finance lease liabilities of $0.1 million, which were recorded under other payables in the consolidated balance sheets.

The following summarizes additional information related to the Company’s operating leases and finance leases:


	As of June 26, 2020
Weighted-average remaining lease term (in years)
Operating leases		3.3
Finance leases		0.3
Weighted-average discount rate
Operating leases		3.7	%
Finance leases		4.1	%

The following information represents supplemental disclosure for the statement of cash flows related to operating and finance leases:


(amount in thousands)	Year Ended June 26, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,326
Financing cash flows from finance leases	$	400
ROU assets obtained in exchange for lease liabilities	$	8,068
Finance lease assets	$	80

Property, plant and equipment, net

12 Months Ended

Jun. 26, 2020

Property, plant and equipment, net

13.	Property, plant and equipment, net

The components of property, plant and equipment, net were as follows:


(amount in thousands)	Land and Land Improvements			Building and Building Improvements			Manufacturing Equipment			Office Equipment			Motor Vehicles			Computers			Construction and Machinery Under Installation		Total
As of June 26, 2020
Cost	$	45,099		$	145,912		$	198,036		$	5,600		$	939		$	16,766		$	12,657	$	425,009
Less: Accumulated depreciation		(17	)		(51,393	)		(127,397	)		(4,135	)		(678	)		(12,273	)		—		(195,893	)
Less: Impairment reserve		—			—			(840	)		—			—			(2	)		—		(842	)

Net book value	$	45,082		$	94,519		$	69,799		$	1,465		$	261		$	4,491		$	12,657	$	228,274

As of June 28, 2019
Cost	$	45,080		$	142,909		$	163,795		$	5,029		$	870		$	13,987		$	10,815	$	382,485
Less: Accumulated depreciation		(11	)		(44,736	)		(110,980	)		(3,656	)		(658	)		(10,900	)		—		(170,941	)
Less: Impairment reserve		—			—			(856	)		—			—			(2	)		—		(858	)

Net book value	$	45,069		$	98,173		$	51,959		$	1,373		$	212		$	3,085		$	10,815	$	210,686

Leased assets included in manufacturing equipment comprise certain machine and equipment from finance lease agreements assumed from the acquisition of Fabrinet UK.


(amount in thousands)	As of June 26, 2020			As of June 28, 2019
Cost—Finance leases	$	1,992		$	2,034
Less: Accumulated depreciation		(1,199	)		(1,090	)

Net book value	$	793		$	944

Depreciation expense amounted to $

29.7

million, $

28.7

million and $

27.4

million for the years ended June

2020

, June

2019

and June

2018

, respectively, and has been allocated between cost of revenues and selling, general and administrative expenses in the consolidated statements of operations and comprehensive income.

The cost of fully depreciated property, plant and equipment

written-off

during the years ended June 26, 2020, June 28, 2019 and June 29, 2018 amounted to $2.9 million, $2.0 million and $3.5 million, respectively.

During the year

ended June 26, 2020, June 28, 2019 and June 29, 2018, the Company recognized impairment reserves for property, plant and equipment of

$0.8 million

$0.9 million and zero, respectively.

During the years ended June 26, 2020, June 28, 2019 and June 29, 2018, the Company had no borrowing costs

capitalized

Intangibles

12 Months Ended

Jun. 26, 2020

Intangibles

14.	Intangibles

The following tables present details of the Company’s intangibles:


(amount in thousands)	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net
As of June 26, 2020
Software	$	8,317	$	(5,577	)	$	—		$	2,740
Customer relationships		4,373		(2,691	)		(110	)		1,572
Backlog		119		(119	)		—			—

Total intangibles	$	12,809	$	(8,387	)	$	(110	)	$	4,312


(amount in thousands)	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net
As of June 28, 2019
Software	$	6,582	$	(4,868	)	$	—		$	1,714
Customer relationships		4,373		(2,096	)		(104	)		2,173
Backlog		119		(119	)		—			—

Total intangibles	$	11,074	$	(7,083	)	$	(104	)	$	3,887

In connection with the acquisition of Fabrinet UK, the Company recorded $4.4 million of customer relationships and $0.1 million of backlog in the consolidated balance sheets. As of June 26, 2020 and June 28, 2019, the weighted-average remaining life of customer relationships was 4.6 years and 5.4 years, respectively.

The Company recorded amortization expense relating to intangibles of $1.3 million, $1.2 million and $1.7 million for the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

Based on the carrying amount of intangibles as of June 26, 2020, and assuming no future impairment of the underlying assets, the estimated future amortization during each fiscal year was as follows:


(amount in thousand)
2021	$	1,320
2022		1,542
2023		663
2024		434
2025		205
Thereafter		148

Total	$	4,312

Goodwill

12 Months Ended

Jun. 26, 2020

Goodwill

15.

Goodwill

In connection with the acquisition of Fabrinet UK, the Company recorded goodwill in the consolidated balance sheets.

The changes in the carrying amount of goodwill were as follows:


(amount in thousands)	Goodwill
Balance as of June 28, 2019	$	3,705
Impairment charge		(3,514	)
Foreign currency translation adjustment		(191	)

Balance as of June 26, 2020	$	—

As of June 26, 2020, the Company performed the annual impairment test for goodwill. The impairment test includes both qualitative and quantitative factors to assess the likelihood of an impairment. The reporting

unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities. Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting unit. The quantitative impairment test was performed by using an income approach. Fair value is estimated based on the discounted cash flow model that the subject assets can be expected to generate over their remaining useful life. Key assumptions used to determine projected cash flow were revenue growth rate, estimated costs and operating expenses and discount rates based on a reporting unit’s weighted average cost of capital. As a result of goodwill impairment testing, the carrying amount of the reporting unit exceeded its fair value, and the Company recognized goodwill impairment loss of $3.5 million in selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. As of June 28, 2019, no goodwill impairment had been recognized.

Borrowings

12 Months Ended

Jun. 26, 2020

Borrowings

16.	Borrowings

The Company’s total borrowings, including current and

non-current

portions of long-term borrowings, consisted of the following:

(amount in thousands)


Rate	Conditions		Maturity		As of June 26, 2020			As of June 28, 2019
Long-term borrowings, current portion, net:
Long-term borrowings, current portion					$	12,188		$	3,250
Less: Unamortized debt issuance costs—current portion						(32	)		—

Long-term borrowings, current portion, net					$	12,156			3,250

Long-term borrowings, non-current portion, net:
Term loan borrowings:
1-month LIBOR +1.50% per annum (1)		Repayable in quarterly installments		June 2023	$	—		$	60,938
3-month LIBOR +1.35% per annum (1)		Repayable in quarterly installments		June 2024		51,797			—
Less: Current portion						(12,188	)		(3,250	)
Less: Unamortized debt issuance costs— non-current portion						(95	)		—

Long-term borrowings, non-current portion, net					$	39,514		$	57,688

(1)

We have entered into interest rate swaps that effectively fix a series of our future interest payments on our term loans. Refer to Note 7.

The movements of long-term borrowings were as follows for the years ended June 26, 2020 and June 28, 2019:


	Years ended
(amount in thousands)	June 26, 2020			June 28, 2019
Opening balance	$	60,938		$	64,188
Borrowings during the period		60,938			—
Repayments during the period		(70,079	)		(3,250	)

Closing balance	$	51,797		$	60,938

As of June 26, 2020, the future maturities of long-term borrowings during each fiscal year were as follows:


(amount in thousand)
2021	$	12,188
2022		15,233
2023		12,188
2024		12,188

Total	$	51,797

Credit facilities agreements:

Bank of Ayudhya Public Company Limited

On August 20, 2019, Fabrinet Thailand (the “Borrower”) and Bank of Ayudhya Public Company Limited (the “Bank”) entered into a Credit Facility Agreement (the “Credit Facility Agreement”). The Credit Facility Agreement provides for a facility of 110.0 million Thai baht (approximately $3.6 million based on the applicable exchange rate as of September 27, 2019) and $160.9 million which may be used for, among other things, an overdraft facility, short-term loans against promissory notes, a letter of guarantee facility, a term loan facility and foreign exchange facilities. The Bank may approve any request for extension of credit under the Credit Facility Agreement and may increase or decrease any facility amount in its sole discretion.

Under the Credit Facility Agreement, on August 20, 2019, the Borrower and the Bank entered into a Term Loan Agreement pursuant to which the Borrower drew down on September 3, 2019 a term loan in the original principal amount of $60.9 million. The proceeds from the term loan, together with cash on hand, were used to repay outstanding obligations under the

BofA Facility Agreement.

The term loan accrues interest at

3-month

LIBOR plus 1.35% and is repayable in quarterly installments of $3.0 million, commencing on September 30, 2019. The term loan will mature on June 30, 2024. The Borrower may prepay the term loan in whole or in part at any time without premium or penalty. Any portion of the term loan repaid or prepaid may not be

re-borrowed.

During the year ended June 26, 2020, the Company recorded $1.5 million of interest expense in connection with this term loan.

Any borrowings under the Credit Facility Agreement, including those borrowings under the Term Loan Agreement, are guaranteed by Fabrinet and secured by land and buildings owned by the Borrower in the Pathumthani and Chonburi Provinces in Thailand.

The Term Loan Agreement contains affirmative and negative covenants applicable to the Borrower, including delivery of financial statements and other information, compliance with laws, maintenance of insurance, restrictions on granting security interests or liens on its assets, disposing of its assets, incurring indebtedness and making acquisitions. While the term loan is outstanding, the Borrower is required to maintain a loan to value of the mortgaged real property ratio of not greater than 65%. If the loan to value ratio is not maintained, the Borrower will be required to provide additional security or prepay a portion of the term loan in order to restore the required ratio. The Company is also required to maintain a debt service coverage ratio of at least 1.25 times and a debt to equity ratio less than or equal to 1.0 times. In the case of any payment of a dividend by the Company, its debt service coverage ratio must be at least 1.50 times. As of June 26, 2020, the Company was in compliance with all of its financial covenants under the Term Loan Agreement.

The events of default in the Term Loan Agreement include failure to pay amounts due under the Term Loan Agreement or the related finance documents when due, failure to comply with the covenants under the Term Loan Agreement or the related finance documents, cross default with other indebtedness of the Borrower, events of bankruptcy or insolvency in respect of the Borrower, and the occurrence of any event or series of events that in the opinion of the Bank has or is reasonably likely to have a material adverse effect.

At June 26, 2020, there was $51.8 million outstanding under the term loan.

Bank of America, N.A.

On May 22, 2014, the Company and a consortium of banks entered into a syndicated senior credit facility agreement led by Bank of America (the “BofA Facility Agreement”). The BofA Facility Agreement provided for a $200.0 million credit line, comprised of a $150.0 million revolving loan facility and a $50.0 million delayed draw term loan facility.

From time to time, the Company amended the BofA Facility Agreement, before repaying all outstanding amounts under the agreement and terminating such agreement on September 10, 2019.

The most recent amendment on June 4, 2018 (i) reduced the revolving commitments thereunder from $150.0 million to $25.0 million, (ii) refinanced the outstanding amounts under the revolving loan and term loan facilities into a $65.0 million term loan which was to be repaid in quarterly installments through the maturity date of June 4, 2023, and (iii) reduced the interest rate margins and commitment fees. The term loan bore interest, at the Company’s option, at a rate per annum equal to a LIBOR rate plus a spread of 1.50% to 2.25%, or a base rate plus a spread of 0.50% to 1.25%. During the year

ended June 26, 2020 and June 28, 2019, the Company recorded $0.5 million and $2.4 million, respectively, of interest expense in connection with this term loan.

On September 10, 2019, the Company fully repaid $61.0 million in principal, accrued interest and other fees under the agreement. The early termination of this agreement did not trigger any early termination fees. A

s of

June 26, 2020, there were no amounts outstanding under the Bof

Facility Agreement. A

June 28, 2019, there was $60.9 million outstanding under the

BofA Facility

Agreement, related to the term loan.

Severance liabilities

12 Months Ended

Jun. 26, 2020

Severance liabilities

17.	Severance liabilities

The following table provides information regarding severance liabilities:


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019
Changes in severance liabilities
Balance, beginning of the fiscal year	$	15,473		$	10,390
Current service cost	$	1,907		$	2,345
Prior service cost (1)		—			2,537
Interest cost		462			352
Benefit paid		(48	)		(274	)
Actuarial ( gain ) loss on obligation		(117	)		130
Foreign currency translation		(4	)		(7	)

Balance, end of the fiscal year	$	17,673		$	15,473


Changes in plan assets
Balance, beginning of the fiscal year	$	317		$	299
Actual return on plan assets	$	(34	)	$	(7	)
Employer contributions		18			36
Benefit paid		—			—
Foreign currency translation		(7	)		(11	)

Balance, end of the fiscal year	$	294		$	317

Underfunded status	$	(17,379	)	$	(15,156	)

(1)

Prior service cost is the change in Projected Benefit Obligation resulting from changes to employee benefits from local law changes.

The amount recognized in the consolidated balance sheets under

non-current

liabilities and

non-current

assets were determined as follows:


(amount in thousands)	As of June 26, 2020		As of June 28, 2019
Non-current assets	$	—	$	53
Non-current liabilities	$	17,379	$	15,209

The following table provides information regarding accumulated benefit obligations:


(amount in thousands)	As of June 26, 2020		As of June 28, 2019
Accumulated benefit obligations	$	11,864	$	10,208

The following table sets forth the plan assets at fair value as of June 26, 2020 and June 28, 2019.


(amount in thousands)			Fair value measurement as of June 26, 2020
	Total		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other (1)	$	294	$	160	$	134

Total Assets	$	294	$	160	$	134


(amount in thousands)			Fair value measurement as of June 28, 2019
	Total		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other (1)	$	317	$	183	$	134

Total Assets	$	317	$	183	$	134

(1)

The “Other” category represents the bid value of the trustees’ insurance policy held with Old Mutual Wealth and the value of assets held with Royal London.

The Trustees have chosen to invest in the following funds:


Fund	% of Total
Old Mutual Wealth Invesco Perpetual High Income		38	%
Old Mutual Wealth Creation Balanced Portfolio		17	%
Royal London Deposit Administration		45	%

The Old Mutual Wealth assets are administered on unit-linked principles and allow access to a range of funds; these have been treated as Level 2 fair value measurement.

The Royal London assets are administered on a deposit administration basis. This is similar to a with profits fund but with a lower exposure to the stock market. The policy is invested in a mix of assets, mainly UK Government bonds and Corporate bonds, the returns of which are smoothed over time. These assets are considered as unobservable inputs and have been treated as Level 3 fair value measurement because the fair value of which is based on the previous year end observable value and other unobservable inputs such as declared rates of bonus plus an enhancement on the policy for this scheme.

The principal actuarial assumptions used were as follows:

Weighted average actuarial assumptions used to determine severance liabilities


	Years Ended
	June 26, 2020	June 28, 2019	June 29, 2018
Discount rate	0.4% - 3.1%	2.3% - 3.2%	2.5% - 3.7%
Future salary increases	3.5% - 10.0%	3.5% - 10.0%	3.5% - 10.0%

Weighted average actuarial assumptions used to determine benefit costs


	Years Ended
	June 26, 2020	June 28, 2019	June 29, 2018
Discount rate	2.3% - 3.2%	2.5% - 3.7%	1.9% - 3.6%
Expected long-term rate of return on assets	2.1%	1.6%	1.9%

Share-based compensation

12 Months Ended

Jun. 26, 2020

Share-based compensation

18.	Share-based compensation

Share-based compensation

In determining the grant date fair value of share option awards, the Company is required to make estimates of expected dividends to be issued, expected volatility of Fabrinet’s ordinary shares, expected forfeitures of the awards, risk free interest rates for the expected term of the awards and expected terms of the awards. Forfeitures are estimated at the time of grant and revised if necessary in subsequent periods if actual forfeitures differ from those estimates. The grant date fair value of restricted share units and performance share units is based on the market value of our ordinary shares on the date of grant.

The effect of recording share-based compensation expense for the years ended June 26, 2020, June 28, 2019 and June 29, 2018 was as follows:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
Share-based compensation expense by type of award:
Restricted share units	$	16,555	$	14,691	$	17,143
Performance share units		5,648		2,466		5,438

Total share-based compensation expense		22,203		17,157		22,581
Tax effect on share-based compensation expense		—		—		—

Net effect on share-based compensation expense	$	22,203	$	17,157	$	22,581

Share-based compensation expense was recorded in the consolidated statements of operations and comprehensive income as follows:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
Cost of revenue	$	6,098	$	5,656	$	6,784
Selling, general and administrative expense		16,105		11,501		15,797

Total share-based compensation expense	$	22,203	$	17,157	$	22,581

The Company did not capitalize any share-based compensation expense as part of any asset costs during the years ended June 26, 2020, June 28, 2019 and June 29, 2018.

Share-based award activity

On December 12, 2019, the Company’s shareholders approved Fabrinet’s 2020 Equity Incentive Plan (the “2020 Plan”). Upon the approval of the 2020 Plan, Fabrinet’s Amended and Restated 2010 Performance Incentive Plan (the “2010 Plan”) was simultaneously terminated. The 2020 Plan provides for the grant of equity awards thereunder with respect to (i) 1,700,000 ordinary shares, plus (ii) up to 1,300,000 ordinary shares that, as of immediately prior to the termination of the 2010 Plan, had been reserved but not issued pursuant to any awards granted under the 2010 Plan and are not subject to any awards thereunder. Upon termination of the 2010 Plan, 1,281,619 ordinary shares were reserved for issuance under the 2020 Plan

pursuant to clause (ii) of the preceding sentence. As of June 26, 2020, there were 51,916 restricted share units outstanding, 3,836 performance share units outstanding and 2,923,551 ordinary shares available for future grant under the 2020 Plan.

As of June 26, 2020, there were 721,514 restricted share units and 436,304 performance share units outstanding under the 2010 Plan. No ordinary shares are available for future grant under the 2010 Plan.

On November

2017

, the Company adopted the

2017

Inducement Equity Incentive Plan (the “

2017

Inducement Plan”) with a reserve of

160,000

ordinary shares authorized for future issuance solely for the granting of inducement share options and equity awards to new employees. The

2017

Inducement Plan was adopted without shareholder approval in reliance on the “employment inducement exemption” provided under the New York Stock Exchange Listed Company Manual. As of

June 26, 2020

, there were an aggregate of

24,327

restricted share units outstanding and

111,347

ordinary shares available for future grant under the

2017

Inducement Plan.

The 2010 Plan, 2017 Inducement Plan and 2020 Plan are collectively referred to as the “Equity Incentive Plans.”

Share options

Share options have been granted to directors and employees. Fabrinet’s board of directors has the authority to determine the type of option and the number of shares subject to an option. Options generally vest and become exercisable over four years and expire, if not exercised, within seven years of the grant date. In the case of a grantee’s first grant, 25 percent of the underlying shares vest 12 months after the vesting commencement date and 1/48 of the underlying shares vest monthly over each of the subsequent 36 months. In the case of any additional grants to a grantee, 1/48 of the underlying shares vest monthly over four years, commencing one month after the vesting commencement date.

The following table summarizes share option activity under the 2010 Plan:


	Number of Shares			Number of Exercisable Options		Weighted- Average Exercise Price		Weighted- Average Grant Date Fair Value
Balance as of June 30, 2017		96,688			96,688	$	15.70
Granted		—					—		—
Exercised		(92,288	)			$	16.02
Forfeited		—					—
Expired		(1,500	)			$	5.75

Balance as of June 29, 2018		2,900			2,900	$	15.16
Granted		—					—		—
Exercised		—					—
Forfeited		—					—
Expired		(2,900	)			$	15.16

Balance as of June 28, 2019		—			—		—

During the year ended June 26, 2020, there was no movement of share option.

The fair value of each share option grant was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and management estimate to determine.

The total fair value of share options vested during the years ended June 26, 2020, June 28, 2019 and June 29, 2018 was nil. The total intrinsic value of options exercised during the years ended June 26, 2020, June 28, 2019 and June 29, 2018 was nil, nil and $2.0 million, respectively. In conjunction with these option exercises, there was no tax benefit realized by the Company due to the fact that it is exempted from income tax.

Valuation Method

—The Company estimated the fair value of the Company’s ordinary shares to be used in the BSM by taking into consideration a number of assumptions, as discussed below.

Expected Dividend

—The Company used zero as an annualized dividend yield since it did not anticipate pay

ing

any cash dividends in the near future.

Expected Volatility

—The Company determined the expected volatility based on the Company’s historical volatility over the last four years.

Risk-Free Interest Rate

—The Company based the risk-free interest rate on the implied yield currently available on U.S. Treasury

zero-coupon

issues with a remaining term equivalent to the expected term of the option.

Expected Term

—Expected terms used in the BSM represent the periods that the company’s share options are expected to be outstanding and are determined based on the Company’s historical experience of similar awards, giving consideration to the contractual terms of the share options, vesting schedules and expectations of future employee behavior.

Vesting Period

—Fabrinet’s share options generally vest and become exercisable over a four-year period, and expire seven years from the date of grant. For an initial grant, 25 percent of the underlying shares subject to an option vest 12 months after the vesting commencement date and 1/48 of the underlying shares vest monthly over each of the subsequent 36 months. In the case of any additional grants to an optionholder, 1/48 of the underlying shares subject to an option vest monthly over four years, commencing one month after the vesting commencement date.

Fair Value

—The fair value of Fabrinet’s share options granted to employees was estimated using the weighted-average for each assumption of expected volatility, risk-free rate of return, and expected term.

Restricted share units and performance share units

Restricted share units and performance share units have been granted under the Equity Incentive

Plans

Restricted share units granted to employees generally vest in equal installments over three or four years on each anniversary of the vesting commencement date. Restricted share units granted to

non-employee

directors generally cliff vest 100% on the first of January,

approximately

one year from the grant date, provided the director continues to serve through such date.

Performance share units granted to executives will vest, if at all, at the end of a

two-year

performance period based on the Company’s achievement of

pre-defined

performance criteria, which consist of revenue and

non-

U.S.

GAAP

gross margin or operating margin targets. The actual number of performance share units that may vest at the end of the performance period ranges from 0% to 100% of the award grant.

The following table summarizes restricted share unit activity under the Equity Incentive Plans:


	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance as of June 30, 2017		1,058,605		$	31.59
Granted		552,637		$	35.95
Issued		(436,867	)	$	27.81
Forfeited		(100,795	)	$	33.62

Balance as of June 29, 2018		1,073,580		$	35.19
Granted		391,328		$	50.02
Issued		(515,482	)	$	34.18
Forfeited		(148,675	)	$	38.42

Balance as of June 28, 2019		800,751		$	42.48
Granted		367,088		$	50.87
Issued		(335,355	)	$	40.98
Forfeited		(34,727	)	$	44.59

Balance as of June 26, 2020		797,757		$	46.88

Expected to vest as of June 26, 2020		697,093		$	46.81

The following table summarizes performance share unit activity under the Equity Incentive Plans:


	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance as of June 30, 2017		227,268		$	40.48
Granted		378,624		$	37.16
Issued		—			—
Forfeited		—			—

Balance as of June 29, 2018		605,892		$	38.41
Granted		201,994		$	48.02
Issued		(227,268	)	$	40.48
Forfeited		(32,118	)	$	40.47

Balance as of June 28, 2019		548,500		$	40.97
Granted		242,310		$	48.65
Issued		—			—
Forfeited		(350,670	)	$	36.99

Balance as of June 26, 2020		440,140		$	48.37

Expected to vest as of June 26, 2020		378,928		$	48.37

The fair value of restricted share units and performance share units is based on the market value of our ordinary shares on the date of grant.

The total fair value of restricted share units and performance share units vested during the year

ended June 26, 2020, June 28, 2019 and June 29, 2018 was $13.7 million, $26.8 million and $12.2 million, respectively. The aggregate intrinsic value of restricted share units and performance share units outstanding as of June 26, 2020 was $73.5 million.

As of June 26, 2020, there was $12.2 million and $5.6 million of unrecognized share-based compensation expense related to restricted share units and performance share units, respectively, under the Equity

Incentive Plans that is expected to be recorded over a weighted-average period of 2.4 years and 1.1 years, respectively.

For the years ended June 26, 2020 and June 28, 2019, the Company withheld an aggregate of 94,141 shares and 235,730 shares, respectively, upon the vesting of restricted share units, based upon the closing share price on the vesting date to settle the employees’ minimum statutory obligation for the applicable income and other employment taxes. For the years ended June 26, 2020 and June 28, 2019, the Company then remitted cash of $4.9 million and $10.6 million, respectively, to the appropriate taxing authorities, and presented it as a financing activity within the consolidated statements of cash flows. The payment had the effect on shares issued by the Company as it reduced the number of shares that would have been issued on the vesting date and was recorded as a reduction of additional

paid-in

capital.

Employee benefit plans

12 Months Ended

Jun. 26, 2020

Retirement Benefits [Abstract]

Employee benefit plans

19.	Employee benefit plans

Employee contribution plan

The Company operates a defi

ed contribution plan, known as a provident fund, in its subsidiaries in Thailand and the United Kingdom. The assets of these plans are in separate trustee-administered funds. The provident fund is funded by matching payments from employees and by the subsidiaries on a monthly basis. Current contributions to the provident fund are accrued and paid to the fund manager on a monthly basis. The Company’s contributions to the provident fund amounted to $5.5 million, $4.8 million and $4.2 million during the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

The Company sponsors the Fabrinet U.S. 401(k) Retirement Plan (“401(k) Plan”), a Defined Contribution Plan under ERISA, at its subsidiaries in the United States which provides retirement benefits for eligible employees through tax deferred salary deductions. The 401(k) Plan allows employees to contribute up to 80% of their annual compensation, subject to annual contributions limits established by the Internal Revenue Service. The Company provides for a 100% match of employees’ contributions to the 401(k) Plan up to the first 6% of annual compensation. All matching contributions are made in cash and vest immediately. The Company’s matching contributions to the 401(k) Plan were $0.7 million, $0.8 million and $0.7 million during the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

Executive incentive plan and employee performance bonuses

For the years ended June 26, 2020 and June 28, 2019, the Company maintained an executive incentive plan with quantitative objectives, based on achieving certain revenue and

non-U.S.

GAAP operating margin or gross margin targets. During the years ended June 26, 2020, June 28, 2019 and June 29, 2018, discretionary merit-based bonus awards were also available to Fabrinet’s

non-executive

employees.

Bonus distributions to employees were $8.7 million, $7.6 million and $4.0 million for the years ended June 26, 2020, June 28, 2019 and June 29, 2018, respectively.

Shareholders' equity

12 Months Ended

Jun. 26, 2020

Shareholders' equity

20.	Shareholders’ equity

Fabrinet’s authorized share capital is 500,000,000 ordinary shares, par value of $0.01 per ordinary share, and 5,000,000 preferred shares, par value of $0.01 per preferred share.

For the year ended June 26, 2020, Fabrinet issued 241,214 ordinary shares upon the vesting of restricted share units and performance share units, net of shares withheld.

For the year ended June 28, 2019, Fabrinet issued 507,020 ordinary shares upon the vesting of restricted share units and performance share units, net of shares withheld.

For the year ended June 29, 2018, Fabrinet issued 92,288 ordinary shares upon the exercise of options, for cash consideration at a weighted average exercise price of $15.56 per share, and 290,949 ordinary shares upon the vesting of restricted share units, net of shares withheld.

All such issued shares are fully paid.

Treasury shares

In August 2017, the Company’s board of directors approved a share repurchase program to permit the Company to repurchase up to $30.0 million worth of its issued and outstanding ordinary shares in the open market in accordance with applicable rules and regulations. In February 2018 and May 2019, the Company’s board of directors approved an increase of $30.0 million and $50.0 million, respectively, to the original share repurchase authorization, bringing the aggregate authorization to $110.0 million.

During the year ended June 26, 2020, 355,000 shares were repurchased under the program, at an average price per share of $58.37, totaling $20.7 million. As of June 26, 2020, the Company had a remaining authorization to purchase up to $41.5 million of its ordinary shares under the share repurchase program. Shares repurchased under the share repurchase program are held as treasury shares.

Accumulated other comprehensive income (loss) ("AOCI")

12 Months Ended

Jun. 26, 2020

Accumulated other comprehensive income (loss)

21.	Accumulated other comprehensive income (loss) (“AOCI”)

The changes in AOCI for the years ended June 26, 2020 and June 28, 2019 were as follows:


(amount in thousands)	Unrealized Gains (Losses) on Available-for-sale Securities			Unrealized Gains (Losses) on Derivative Instruments			Retirement benefit plan - Prior service cost			Foreign Currency Translation Adjustment			Total
Balance as of June 29, 2018	$	(1,091	)	$	33		$	—		$	(199	)	$	(1,257	)
Other comprehensive income before reclassification		1,845			—			(2,537	)		(634	)		(1,326	)
Amounts reclassified from AOCI		198			(1	)		—			—			197
Tax effects		—			—			—			—			—

Other comprehensive income		2,043			(1	)		(2,537	)		(634	)		(1,129	)

Balance as of June 28, 2019		952			32			(2,537	)		(833	)		(2,386	)
Other comprehensive income before reclassification		634			171			—			(397	)		408
Amounts reclassified from AOCI		(96	)		399			528			—			831
Tax effects		—			—			—			—			—

Other comprehensive income		538			570			528			(397	)		1,239

Balance as of June 26, 2020	$	1,490		$	602		$	(2,009	)	$	(1,230	)	$	(1,147	)

The following table presents the

pre-tax

amounts reclassified from AOCI into the consolidated statements of operations and comprehensive income for the years ended June 26, 2020 and June 28, 2019, respectively.


(amount in thousands)		Years ended
AOCI components	Financial statements line item	June 26, 2020			June 28, 2019
Unrealized gains (losses) on available-for-sale securities	Interest income	$	(96	)	$	198
Unrealized gains (losses) on derivative instruments	Cost of revenues		2,512			—
Unrealized gains (losses) on derivative instruments	Selling, general and administrative expenses		105			(1	)
Unrealized gains (losses) on derivative instruments	Foreign exchange loss, net		(998	)		—
Unrealized gains (losses) on derivative instruments	Interest expense		(1,220	)		—
Retirement benefit plan – Prior service cost	Selling, general and administrative expenses		528			—

Total amounts reclassified from AOCI		$	831		$	197

Commitments and contingencies

12 Months Ended

Jun. 26, 2020

Commitments and contingencies

22.	Commitments and contingencies

Letter of credit and bank guarantees

As of June 26, 2020 and June 28, 2019, the Company had one outstanding standby letter of credit of 6.0 million Euros, related to the Company’s support of a customer’s transfer of certain manufacturing operations from Berlin, Germany to the Company’s facilities in Thailand. As of June 26, 2020 and June 28, 2019, the standby letter of credit was backed by cash collateral of $7.4 million.

As of June 26, 2020 and June 28, 2019, there were outstanding bank guarantees given by a bank on behalf of our subsidiary in Thailand for electricity usage and other normal business expenses totaling $1.6 million

and there were other bank guarantees given by a bank on behalf of our subsidiaries in China and the U.K. to support their operations of

$0.1 million and $25 thousand, respectively.

Purchase obligations

Purchase obligations represent legally-binding commitments to purchase inventory and other commitments made in the normal course of business to meet operational requirements. Although open purchase orders are considered enforceable and legally binding, their terms generally give the Company the option to cancel, reschedule and/or adjust its requirements based on its business needs prior to the delivery of goods or performance of services. Obligations to purchase inventory and other commitments are generally expected to be fulfilled within one year.

As of June 26, 2020, the Company had an outstanding commitment to third parties of $11.1 million.

Indemnification of directors and officers

Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Fabrinet’s amended and restated memorandum and articles of association provide for indemnification of directors and officers for actions, costs, charges, losses, damages and expenses incurred in their capacities as such, except that such indemnification does not extend to any matter in respect of any fraud or dishonesty that may attach to any of them.

In accordance with Fabrinet’s form of indemnification agreement for its directors and officers, Fabrinet has agreed to indemnify its directors and officers against certain liabilities and expenses incurred by such persons in connection with claims by reason of their being such a director or officer. Fabrinet maintains a director and officer liability insurance policy that may enable it to recover a portion of any future amounts paid under the indemnification agreements.

Business segments and geographic information

12 Months Ended

Jun. 26, 2020

Business segments and geographic information

23.	Business segments and geographic information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is Fabrinet’s Chief Executive Officer. As of June 26, 2020, June 28, 2019 and June 29, 2018, the Company operated and internally managed a single operating segment. Accordingly, the Company does not accumulate discrete information with respect to separate product lines and does not have separate reportable segments.

Total revenues are attributed to a particular geographic area based on the

bill-to-location

of the Company’s customer. The Company operates in three geographic regions: North America, Asia-Pacific and Europe.

The following table presents total revenues by geographic regions:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
North America	$	830,888	$	756,278	$	643,236
Asia-Pacific		552,923		608,386		519,203
Europe		258,025		219,671		209,486

Total	$	1,641,836	$	1,584,335	$	1,371,925

As of June 26, 2020 and June 28, 2019, the Company had approximately $29.5 million and $31.4 million, respectively, of long-lived assets based in North America, with the substantial remainder of assets based in Asia-Pacific and Europe.

The following table presents revenues by end market:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
Optical communications	$	1,248,174	$	1,184,936	$	1,000,256
Lasers, sensors, and other		393,662		399,399		371,669

Total	$	1,641,836	$	1,584,335	$	1,371,925

Significant customers

Total revenues, by percentage, from individual customers representing 10% or more of total revenues in the respective periods were as follows:


	Years Ended
	June 26, 2020			June 28, 2019			June 29, 2018
Lumentum Operations LLC		19	%		20	%		16	%
Acacia Communications Inc.		10	%		*			*
Infinera Corporation		10	%		*			*

Represents less than 10% of total revenues.

Accounts receivable from individual customers representing 10% or more of accounts receivable as of June 26, 2020 and June 28, 2019, respectively, were as follows:


	As of June 26, 2020			As of June 28, 2019
Lumentum Operations LLC		20	%		23	%
Acacia Communications Inc.		13	%		12	%

Financial instruments

12 Months Ended

Jun. 26, 2020

Financial instruments

24.	Financial instruments

Objectives and significant terms and conditions

The principal financial risks faced by the Company are foreign currency risk and interest rate risk. The Company borrows at floating rates of interest to finance its operations. A minority of sales and purchases and a majority of labor and overhead costs are entered into in foreign currencies. In order to manage the risks arising from fluctuations in currency exchange rates, the Company uses derivative instruments. Trading for speculative purposes is prohibited under Company policies.

The Company enters into short-term foreign currency forward and option contracts to manage foreign currency exposures associated with certain assets, liabilities and other forecasted foreign currency transactions and may designate these instruments as hedging instruments. The foreign currency forward and option contracts generally have maturities of up to twelve months. All foreign currency exchange contracts are recognized on the consolidated balance sheets at fair value. Gain or loss on the Company’s derivative instruments generally offset the assets, liabilities and transactions economically hedged.

Foreign currency risk

The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Thai baht, Chinese Renminbi (“RMB”) and Pound sterling (“GBP”).

As of June 26, 2020 and June 28, 2019, the Company had outstanding foreign currency assets and liabilities as follows:


	As of June 26, 2020				As of June 28, 2019
(amount in thousands)	Currency		$		Currency		$
Assets
Thai baht		667,955	$	21,617		664,860	$	21,628
RMB		158,060		22,402		53,393		7,767
GBP		6,220		7,726		5,270		6,682

Total			$	51,745			$	36,077

Liabilities
Thai baht		2,102,392	$	68,039		1,961,972	$	63,825
RMB		42,586		6,036		26,373		3,836
GBP		1,545		1,919		2,598		3,294

Total			$	75,994			$	70,955

The Thai baht assets represent cash and cash equivalents, trade accounts receivable, deposits and other current assets. The Thai baht liabilities represent trade accounts payable, accrued expenses, income tax payable and other payables. The Company manages its exposure to fluctuations in foreign exchange rates by the use of foreign currency contracts and offsetting assets and liabilities denominated in the same currency in accordance with management’s policy. As of June 26, 2020 there were $126.0 million of foreign currency forward and option contracts outstanding on the Thai baht payables. As of June 28, 2019, there were $72.0 million of foreign currency forward contracts outstanding on the Thai baht payables.

The RMB assets represent cash and cash equivalents, trade accounts receivable and other current assets. The RMB liabilities represent trade accounts payable, accrued expenses and other payables. As of June 26, 2020 and June 28, 2019, there were no derivative contracts denominated in RMB.

The GBP assets represent cash, trade accounts receivable, inventory and property, plant and equipment. The GBP liabilities represent trade accounts payable. As of June 26, 2020 and June 28, 2019, there were no derivative contracts denominated in GBP.

For fiscal year 2020, fiscal year 2019, and fiscal year 2018, the Company recorded unrealized loss of $1.2 million, unrealized gain of $4.8 million, and unrealized loss of $1.7 million, respectively, related to derivatives that are not designated as hedging instruments in its consolidated statements of operations and comprehensive income.

Interest Rate Risk

The Company’s principal interest bearing assets are time deposits and short-term investments with maturities of three years or less held with high quality financial institutions. The Company’s principal interest bearing liabilities are bank loans which bear interest at floating rates.

The Company entered into interest rate swap agreements (the “Swap Agreements”) to manage this risk and increase the profile of the Company’s debt obligation. The terms of the Swap Agreements allow the Company to effectively convert the floating interest rate to a fixed interest rate. This locks the variable in interest expenses associated with our floating rate borrowings and results in fixed interest expenses, which is unsusceptible to market rate increase. The Company designated the Swap Agreements as a cash flow hedge, and they qualify for hedge accounting because the hedges are highly effective. While the Company intend to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective, the changes in the fair value of the derivatives used as hedges would be reflected in our earnings. From September 27, 2019, any gains or losses related to these outstanding interest rate swaps will be recorded in accumulated other comprehensive income in the consolidated balance sheets, with subsequent reclassification to interest expense when settled.

Subsequent Event

12 Months Ended

Jun. 26, 2020

Subsequent Event

25.	Subsequent Event

In August 2020, the Company’s board of directors approved the repurchase of up to an additional $58.5 million of Fabrinet’s outstanding ordinary shares, bringing the aggregate authorization under Fabrinet’s existing share repurchase program to $168.5 million.

UNAUDITED QUARTERLY FINANCIAL INFORMATION

12 Months Ended

Jun. 26, 2020

UNAUDITED QUARTERLY FINANCIAL INFORMATION

The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal years ended June 26, 2020 and June 28, 2019:


	Three Months Ended
(in thousands, except per share data)	Jun 26, 2020		Mar 27, 2020		Dec 27, 2019		Sep 27, 2019		Jun 28, 2019		Mar 29, 2019		Dec 28, 2018		Sep 28, 2018
Total revenues	$	405,113	$	411,210	$	426,217	$	399,296	$	405,127	$	398,951	$	403,080	$	377,177

Gross profit	$	46,624	$	44,336	$	49,158	$	45,987	$	46,626	$	46,758	$	45,564	$	40,276

Net income	$	28,024	$	28,267	$	31,231	$	25,957	$	32,957	$	28,635	$	31,513	$	27,850

Basic net income per share:
Net income	$	0.76	$	0.76	$	0.84	$	0.70	$	0.89	$	0.78	$	0.86	$	0.76

Weighted-average shares used in basic net income per share calculations		36,723		36,987		37,011		36,913		36,836		36,891		36,841		36,625

Diluted net income per share:
Net income	$	0.75	$	0.75	$	0.83	$	0.69	$	0.88	$	0.76	$	0.84	$	0.75

Weighted-average shares used in diluted net income per share calculations		37,571		37,797		37,763		37,529		37,511		37,539		37,471		37,140

Summary of significant accounting policies (Policies)

12 Months Ended

Jun. 26, 2020

Principles of consolidation

The Company utilizes a

52-53

Use of Estimates

Use of estimates

Reclassifications

For presentation purposes, certain prior period amounts have been reclassified to conform to the current period presentation.

The reclassifications have been made to the consolidated balance sheet as of June 28, 2019 and the consolidated statement of cash flows for fiscal year ended June 28, 2019 as following table:


	Year ended June 28, 2019
(amount in thousands)	As previously reported			Reclassification			After reclassified
Consolidated Balance Sheets
Current liabilities
Fixed assets payable	$	—		$	7,317		$	7,317
Finance lease liabilities, current portion	$	398		$	(398	)	$	—
Other payables	$	22,236		$	(6,919	)	$	15,317
Non-current liabilities
Finance lease liabilities, non-current portion	$	102		$	(102	)	$	—
Other non-current liabilities	$	2,611		$	102		$	2,713

Consolidated Statement of Cash Flows
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on fair value of interest rate swaps	$	—		$	2,591		$	2,591
Severance liabilities	$	3,343		$	(3,343	)	$	—
(Reversal of) Inventory obsolescence	$	(563	)	$	563		$	—
Changes in operating assets and liabilities
Inventories	$	(44,035	)	$	(563	)	$	(44,598	)
Other current assets and non-current assets	$	(186	)	$	(2,591	)	$	(2,777	)
Severance liabilities	$	—		$	3,343		$	3,343

These reclassifications do not affect the Company’s net income, cash flows or shareholders’ equity.

Changes in accounting policies

Except for the adoption of the new lease accounting standard and the derivatives and hedging standard described within the

sub-heading

“New Accounting Pronouncements – adopted by the Company”, the Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements.

Foreign currency transactions and translation

The consolidated financial statements are presented in United States dollars (“$” or “USD”). The functional currency of Fabrinet and most of its subsidiaries is the USD.

Cash and cash equivalents

Short-term investments

Management determines the appropriate classification of its investments at the time of purchase and

re-evaluates

available-for-sale.

The Company’s investments in marketable securities are classified as

available-for-sale

Trade accounts receivable

written-off

when identified.

Unanticipated changes in the liquidity or financial position of the Company’s customers may require revision to its allowances for doubtful accounts.

Contract assets

Contract liabilities

A contract liability is recognized when the Company has advance payment arrangements with customers. The contract liabilities balance is normally recognized as revenue within six months.

Inventory

Inventory is stated at the lower of cost or market value. Cost is estimated using the standard costing method, computed on a

first-in,

first-out

Leases

Operating leases

non-lease

components (e.g., common-area maintenance costs).

Finance leases

Finance leases are accounted for in a manner similar to financed purchases. The

right-of-use

asset is amortized to amortization expense. Interest expense is recorded in connection with the lease liability.

Property, plant and equipment

write-off

the cost of each asset to its residual value over its estimated useful life as follows:


Land improvements			10 years
Building and building improvements			5 - 30 years
Leasehold improvements			Shorter of useful life or lease term

Manufacturing equipment			3 - 7 years
Office equipment			3 - 7 years
Motor vehicles			3 - 5 years
Computer hardware			3 - 5 years

Gains and losses on disposal are determined by comparing proceeds with carrying amounts and are included in other income in the consolidated statements of operations and comprehensive income.

Intangibles

Intangible assets are reviewed for impairment quarterly or more frequently whenever changes or circumstances indicate the carrying amount of related assets may not be recoverable.

Goodwill

Goodwill is not deductible for tax purposes. Accordingly, if goodwill is impaired for financial reporting purposes, there is no impact on deferred taxes.

Treasury shares

paid-in

capital in the consolidated balance sheets using the average-cost method.

Borrowing costs

Fair value of financial instruments

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Derivatives

non-current

portion as follows:

•

A derivative whose fair value is a net liability is classified in total as current.

•

A derivative whose fair value is a net asset and whose current portion is an asset is classified in total as

non-current.

If the current portion is liability, it should be presented as current liability.

For presentation in consolidated statements of cash flows are classified in the same line item as the underlying item.

Concentration of credit risk

P-1,

F1, or better.

The Company enters into derivative contracts with financial institutions with reputable credit and monitors the credit profiles of these counterparties.

Revenue recognition

Sales of finished goods

end-of-life,

These standard warranties are assurance-type warranties

and the Company does not offer any services in addition to the assurance that the product will continue to work as specified.

Services

The Company provides services for customers that are related to the Company’s manufacturing activities. In many cases, although the nature of work performed is that of a service, revenue is only

cognized upon shipment

of the product because the customer has specific requirements as to how many items can be shipped at any given point in time, i.e. at point-in-time. The related costs are expensed as incurred.

Contract Costs

contract

, legal advice, etc.) are expensed as incurred, unless such costs are explicitly chargeable to the customer. During the

years

ended June 26, 2020 and June 28, 2019, the Company did not have any incremental costs of obtaining a contract.

Shipping and Handling

Warranty provision

Share-based compensation

Employee contribution plan

Severance liabilities

Severance liabilities are recognized in the Company’s consolidated balance sheet under

non-current

using

the weighted average remaining years of service to full eligibility date

for

active employees.

Annual leave

Employee entitlements to annual leave are recognized when

earned by

the employee. On termination of employment, accrued employee entitlement to annual leave is paid in cash.

Income taxes

The Company recognizes liabilities based on its estimate of whether, and the extent to which, additional tax liabilities are

more-likely-than-not.

New Accounting Pronouncements – not yet adopted by the Company

New Accounting Pronouncements—not yet adopted by the Company

In December 2019, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2019-12,

In August 2018, the FASB issued ASU 2018-13

fiscal years. The Company assessed the preliminary impact from the adoption of this update and expected no impact on its consolidated financial statements.

In June 2016, the FASB issued ASU

2016-13,

available-for-sale

debt securities. The FASB issued subsequent amendments to Topic 326, including ASU

2018-19,

ASU

2019-04,

ASU

2019-05,

ASU

2019-11

and ASU

2020-02,

which provided further guidance and transition relief. For public business entities, this update is effective for fiscal years beginning after December 15

from

the

adoption

of this update

and expected

no impact on its consolidated financial statements.

New Accounting Pronouncements-adopted by the Company

New Accounting Pronouncements—adopted by the Company

For periods prior to adoption of ASC 842, the Company is required to present disclosures in accordance with ASC Topic 840. Future minimum lease payments due under

non-cancelable

operating leases as of June 28, 2019 were as follows:


(amount in thousands)
2020	$	1,746
2021		1,342
2022		1,219
2023		1,172
Thereafter		230

Total future minimum operating lease payments	$	5,709

for further details.

On June 29, 2019, the Company adopted ASU

2017-12,

“Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” ASU

2017-12

2017-12,

In March 2020, the FASB issued ASU

2020-04,

“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which temporarily simplifies the accounting for

In January 2017, the FASB issued ASU

2017-04,

“Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU

2017-04

Summary of significant accounting policies (Tables)

12 Months Ended

Jun. 26, 2020

Summary of reclassifications of consolidated balance sheet and consolidated statement of cash flows

The reclassifications have been made to the consolidated balance sheet as of June 28, 2019 and the consolidated statement of cash flows for fiscal year ended June 28, 2019 as following table:


	Year ended June 28, 2019
(amount in thousands)	As previously reported			Reclassification			After reclassified
Consolidated Balance Sheets
Current liabilities
Fixed assets payable	$	—		$	7,317		$	7,317
Finance lease liabilities, current portion	$	398		$	(398	)	$	—
Other payables	$	22,236		$	(6,919	)	$	15,317
Non-current liabilities
Finance lease liabilities, non-current portion	$	102		$	(102	)	$	—
Other non-current liabilities	$	2,611		$	102		$	2,713

Consolidated Statement of Cash Flows
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on fair value of interest rate swaps	$	—		$	2,591		$	2,591
Severance liabilities	$	3,343		$	(3,343	)	$	—
(Reversal of) Inventory obsolescence	$	(563	)	$	563		$	—
Changes in operating assets and liabilities
Inventories	$	(44,035	)	$	(563	)	$	(44,598	)
Other current assets and non-current assets	$	(186	)	$	(2,591	)	$	(2,777	)
Severance liabilities	$	—		$	3,343		$	3,343

Property Plant and Equipment Estimated Useful Life

Depreciation is calculated using the straight-line method to

write-off

the cost of each asset to its residual value over its estimated useful life as follows:


Land improvements			10 years
Building and building improvements			5 - 30 years
Leasehold improvements			Shorter of useful life or lease term

Future Minimum Lease Payments Due Under Non-Cancelable Operating Leases

Future minimum lease payments due under

non-cancelable

operating leases as of June 28, 2019 were as follows:


(amount in thousands)
2020	$	1,746
2021		1,342
2022		1,219
2023		1,172
Thereafter		230

Total future minimum operating lease payments	$	5,709

Revenues from contracts with customers (Tables)

12 Months Ended

Jun. 26, 2020

Schedule of Activity in the Company's Contract Assets

The following tables summarize the activity in the Company’s contract assets and contract liabilities during the

years

ended June 26, 2020 and June 28, 2019:


(amount in thousands)	Contract Assets
Beginning balance, June 28, 2019	$	12,447
Revenue recognized		73,476
Amounts collected or invoiced		(72,667	)

Ending balance, June 26, 2020	$	13,256


(amount in thousands)	Contract Assets
Beginning balance, June 30, 2018	$	—
Cumulative effect adjustment upon adoption of ASC 606		9,877
Revenue recognized		112,739
Amounts collected or invoiced		(110,169	)

Ending balance, June 28, 2019	$	12,447


(amount in thousands)	Contract Liabilities
Beginning balance, June 28, 2019	$	2,239
Advance payment received during the year		9,278
Revenue recognized		(9,961	)

Ending balance, June 26, 2020	$	1,556


(amount in thousands)	Contract Liabilities
Beginning balance, June 30, 2018	$	—
Advance payment received during the year		4,458
Revenue recognized		(2,219	)

Ending balance, June 28, 2019	$	2,239

Disaggregation of Revenue by Geographical Regions

The following table presents total revenues by geographic regions:


(amount in thousands, except percentages)	Year ended June 26, 2020		As a % of Total Revenues			Year ended June 28, 2019		As a % of Total Revenues
North America	$	830,888		50.6	%	$	756,278		47.7	%
Asia-Pacific		552,923		33.7			608,386		38.4
Europe		258,025		15.7			219,671		13.9

	$	1,641,836		100.0	%	$	1,584,335		100.0	%

Revenues by End Market

The following table sets forth revenues by end market.


(amount in thousands, except percentages)	Year ended June 26, 2020		As a % of Total Revenues			Year ended June 28, 2019		As a % of Total Revenues
Optical communications	$	1,248,174		76.0	%	$	1,184,936		74.8	%
Lasers, sensors and other		393,662		24.0			399,399		25.2

	$	1,641,836		100.0	%	$	1,584,335		100.0	%

Income taxes (Tables)

12 Months Ended

Jun. 26, 2020

Income Tax Expense

The Company’s income tax expense consisted of the following:


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019		June 29, 2018
Current	$	6,274		$	4,384	$	5,457
Deferred		(511	)		894		(1,595	)

Total income tax expense	$	5,763		$	5,278	$	3,862

Reconciliation between Taxes that Would Arise by Applying Statutory Tax Rate of Country of Principal Operations to Effective Tax Charge


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019			June 29, 2018
Income before income taxes (1)	$	119,242		$	126,233		$	88,029

Tax expense calculated at a statutory corporate income tax rate of 20%		23,848			25,247			17,606
Effect of income taxes from locations with tax rates different from Thailand		577			977			2,657

Income not subject to tax (2)		(20,797	)		(21,161	)		(12,824	)
Income tax on unremitted earnings		1,221			1,260			1,007
Effect of different tax rate in relation to deferred tax utilization		—			—			423
Effect of foreign exchange rate adjustment		382			603			(134	)
Tax rebate from research and development application		(1,228	)		(649	)		(454	)
Provision for uncertain income tax position		(641	)		(229	)		277
Utilization of loss carryforward		—			—			(3,224	)
Valuation allowance (reversal of)		2,446			—			(1,587	)
Others		(45	)		(770	)		115

Corporate income tax expense	$	5,763		$	5,278		$	3,862

(1)	Income before income taxes was mostly generated from domestic income in the Cayman Islands.

(2)

Deferred Tax Assets and Deferred Tax Liabilities, Net of Valuation Allowance

The Company’s deferred tax assets and deferred tax liabilities, net of valuation allowance, at each balance sheet date are as follows:


	As of
(amount in thousands)	June 26, 2020		June 28, 2019
Deferred tax assets:
Depreciation	$	1,219	$	1,957
Severance liability		2,958		2,012
Reserves and allowance		1,405		1,485
Net operating loss carryforwards		—		1,616
Others		321		13

Total	$	5,903	$	7,083


	As of
(amount in thousands)	June 26, 2020			June 28, 2019
Deferred tax liabilities:
Temporary differences from intangibles and changes in the fair value of assets acquired	$	(336	)	$	(590	)
Deferred tax from unremitted earnings		(4,620	)		(4,123	)
Others		—			(252	)

Total		(4,956	)		(4,965	)

Net	$	947		$	2,118

Summary of Change in Valuation Allowances of Deferred Tax Assets

The changes in the valuation allowances of deferred tax assets were as follows:


(amount in thousands)	Valuation allowances of deferred tax assets
Balance as of June 30, 2017	$	6,399
Reversal		(5,234	)

Balance as of June 29, 2018		1,165
Additional		126

Balance as of June 28, 2019		1,291
Additional		2,437

Balance as of June 26, 2020	$	3,728

Changes to Unrecognized Tax Benefits

The following table indicates the changes to the Company’s uncertain income tax positions for the years ended June 26, 2020, June 28, 2019 and June 29, 2018 included in other

non-current

liabilities.


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019			June 29, 2018
Beginning balance	$	1,323		$	1,445		$	1,420
Additions during the year		157			235			25
Release of tax positions of prior years		(510	)		(357	)		—

Ending balance	$	970		$	1,323		$	1,445

Earnings per ordinary share (Tables)

12 Months Ended

Jun. 26, 2020

Earnings Per Ordinary Share

The earnings per ordinary share was calculated as follows:


	Years Ended
(amount in thousands except per share amounts)	June 26, 2020		June 28, 2019		June 29, 2018
Net income attributable to shareholders	$	113,479	$	120,955	$	84,167

Weighted-average number of ordinary shares outstanding (thousands of shares)		36,908		36,798		37,257
Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares)		757		617		778

Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares)		37,665		37,415		38,035

Basic earnings per ordinary share	$	3.07	$	3.29	$	2.26
Diluted earnings per ordinary share	$	3.01	$	3.23	$	2.21
Outstanding performance share units excluded from the computation of diluted earnings per ordinary share (thousands of shares) (1)		99		401		284

(1)	These performance share units were not included in the computation of diluted earnings per ordinary share because they are not expected to vest based on the Company’s current assessment of the related performance obligations.

Cash, cash equivalents and short-term investments (Tables)

12 Months Ended

Jun. 26, 2020

Cash, Cash Equivalents, and Short-Term Investments

The Company’s cash, cash equivalents,

and short-term investments by category is as follows:


					Fair Value
(amount in thousands)	Carrying Cost		Unrealized Gain/ (Loss)		Cash and Cash Equivalents		Marketable Securities		Other Investments
As of June 26, 2020
Cash	$	218,117	$	—	$	218,117	$	—	$	—
Cash equivalents		7,313		—		7,313		—		—
Liquidity funds		41,051		—		—		—		41,051
Certificates of deposit and time deposits		11,800		—		—		—		11,800
Corporate debt securities		159,220		948		—		160,168		—
U.S. agency and U.S. Treasury securities		49,130		544		—		49,674		—

Total	$	486,631	$	1,492	$	225,430	$	209,842	$	52,851


As of June 28, 2019
Cash	$	178,019	$	—	$	178,019	$	—	$	—
Cash equivalents		2,820		—		2,820		—		—
Liquidity funds		20,552		—		—		—		20,552
Certificates of deposit and time deposits		35,028		—		—		—		35,028
Corporate debt securities		130,959		297		—		131,256		—
U.S. agency and U.S. Treasury securities		69,552		105		—		69,657		—

Total	$	436,930	$	402	$	180,839	$	200,913	$	55,580

Available-for-Sale Securities Based on Stated Effective Maturities

The following table summarizes the cost and estimated fair value of short-term investments classified as

available-for-sale

securities based on stated effective maturities as of June 26, 2020:


	June 26, 2020				June 28, 2019
(amount in thousands)	Carrying Cost		Fair Value		Carrying Cost		Fair Value
Due within one year	$	76,127	$	76,196	$	69,746	$	69,830
Due between one to five years		132,223		133,646		130,765		131,083

Total	$	208,350	$	209,842	$	200,511	$	200,913

Fair value of financial instruments (Tables)

12 Months Ended

Jun. 26, 2020

Financial Instruments Measured at Fair Value on Recurring Basis

The following table provides details of

the financial instruments measured at fair value on a recurring basis, including:


	Fair Value Measurements at Reporting Date Using
(amount in thousands)	Level 1		Level 2			Level 3		Total
As of June 26, 2020
Assets
Cash equivalents	$	—	$	7,313		$	—	$	7,313
Liquidity funds		—		41,051			—		41,051
Certificates of deposit and time deposits		—		11,800			—		11,800
Corporate debt securities		—		160,168			—		160,168
U.S. agency and U.S. Treasury securities		—		49,674			—		49,674
Derivative assets		—		2,230	(1)		—		2,230

Total	$	—	$	272,236		$	—	$	272,236

Liabilities
Derivative liabilities	$	—	$	5,273	(2)	$	—	$	5,273


Total	$	—	$	5,273		$	—	$	5,273


	Fair Value Measurements at Reporting Date Using
(amount in thousands)	Level 1		Level 2			Level 3		Total
As of June 28, 2019
Assets
Cash equivalents	$	—	$	2,820		$	—	$	2,820
Liquidity funds		—		20,552			—		20,552
Certificates of deposit and time deposits		—		35,028			—		35,028
Corporate debt securities		—		131,256			—		131,256
U.S. agency and U.S. Treasury securities		—		69,657			—		69,657
Derivative assets		—		2,201	(3)				2,201

Total	$	—	$	261,514		$	—	$	261,514

Liabilities
Derivative liabilities	$	—	$	2,591	(4)	$	—	$	2,591

Total	$	—	$	2,591		$	—	$	2,591

(1)	Foreign currency forward contracts with a notional amount of $125.0 million and Canadian dollars of 0.6 million, and option contract with a notional amount of $1.0 million.

(2)	Interest rate swap agreements with an aggregate notional amount of $125.1 million.

(3)	Foreign currency forward contracts with notional amount of $72.0 million and Canadian dollars of $0.6 million.

(4)	Interest rate swap agreement with a notional amount of $64.2 million.

Schedule Impacts of Derivative Gain (Loss) of Cash Flow Hedges


		Year Ended
(amount in thousands)	Financial statements line item	June 26, 2020			June 28, 2019
Derivatives gain (loss) recognized in other comprehensive income:
Foreign currency forward contracts	Other comprehensive income	$	1,081		$	—
Interest rate swaps	Other comprehensive income		(910	)		—

Total derivatives gain recognized in other comprehensive income		$	171		$	—

Derivatives loss ( gain) reclassified from accumulated other comprehensive income into earnings:
Foreign currency forward contracts	Cost of revenues	$	2,512		$	—
Foreign currency forward contracts	Selling, general and administrative expenses		105			—
Foreign currency forward contracts	Foreign exchange gain (loss), net		(998	)		—
Interest rate swaps	Interest expense		(1,220	)		—

Total derivatives loss reclassified from accumulated other comprehensive income into earnings		$	399		$	—

Change in net unrealized gain on derivative instruments		$	570		$	—

Schedule of Derivative Financial Instruments

The following table provides the fair values of the Company’s derivative financial instruments for the periods presented:


	June 26, 2020						June 28, 2019
(amount in thousands)	Derivative Assets			Derivative Liabilities			Derivative Assets		Derivative Liabilities
Derivatives not designated as hedging instruments
Foreign currency forward and option contracts	$	9		$	(611	)	$	2,201	$	—
Interest rate swaps		—			—			—		(2,591	)

Derivatives designated as hedging instruments
Foreign currency forward contracts		2,814			(83	)		—		—
Interest rate swaps		—			(5,172	)		—		—

Derivatives, gross balances		2,823			(5,866	)		2,201		(2,591	)
Derivatives, gross balances offset in the balance sheet		(593	)		593			—		—

Derivatives, net balances	$	2,230		$	(5,273	)	$	2,201	$	(2,591	)

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 815
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 815
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579245-113959

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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579240-113959

+ Details

Trade accounts receivable, net (Tables)

12 Months Ended

Jun. 26, 2020

Trade Accounts Receivable, Net


(amount in thousands)	As of June 26, 2020			As of June 28, 2019
Trade accounts receivable	$	273,001		$	260,698
Less: Allowance for doubtful account		(336	)		(96	)

Trade accounts receivable, net	$	272,665		$	260,602

Inventories (Tables)

12 Months Ended

Jun. 26, 2020

Inventories


(amount in thousands)	As of June 26, 2020		As of June 28, 2019
Raw materials	$	141,522	$	113,321
Work in progress		136,344		141,730
Finished goods		17,950		24,916
Goods in transit		13,970		13,645

Inventories	$	309,786	$	293,612

Leases (Tables)

12 Months Ended

Jun. 26, 2020

Future Minimum Lease Payments Due Under Non-Cancelable Operating Leases

Amounts of minimum future annual commitments under

non-cancelable

operating and finance leases in accordance with ASC 840 were as follows:


	As of June 28, 2019
(amount in thousands)	Operating leases		Finance leases		Total
2020	$	1,746	$	398	$	2,144
2021		1,342		102		1,444
2022		1,219		—		1,219
2023		1,172		—		1,172
Thereafter		230		—		230

Total future minimum operating lease payments	$	5,709	$	500	$	6,209

Schedule Of Adoption Of Topic 842 On Operating Lease In Consolidate Financial Position

The

following table shows the impact of adoption of ASC 842 on the adoption date of June 29, 2019 on the consolidated balance sheets:

Consolidated Balance Sheets


	Impact of Adopting ASC 842
(amount in thousands)	Balance at June 28, 2019		Adjustment		Balance at June 29, 2019
Assets
Operating lease ROU assets	$	—	$	5,370	$	5,370
Liabilities and Shareholders’ Equity
Operating lease liabilities, current	$	—	$	1,601	$	1,601
Operating lease liabilities, non-current	$	—	$	3,769	$	3,769

Schedule of operating lease liabilities

As of June 26, 2020, the maturities of the Company’s operating lease liabilities were as follows:


(amount in thousands)
2021	$	2,313
2022		2,314
2023		2,200
2024		1,176
2025		288
Thereafter		157

Total undiscounted lease payments		8,448
Less imputed interest		(596	)

Total present value of lease liabilities	$	7,852	(1)

(1)

Includes current portion of operating lease liabilities of $2.0 million.

Summary of additional information related to operating and finance lease

The following summarizes additional information related to the Company’s operating leases and finance leases:


	As of June 26, 2020
Weighted-average remaining lease term (in years)
Operating leases		3.3
Finance leases		0.3
Weighted-average discount rate
Operating leases		3.7	%
Finance leases		4.1	%

Schedule of supplemental cash flow information related to operating lease

The following information represents supplemental disclosure for the statement of cash flows related to operating and finance leases:


(amount in thousands)	Year Ended June 26, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	2,326
Financing cash flows from finance leases	$	400
ROU assets obtained in exchange for lease liabilities	$	8,068
Finance lease assets	$	80

Property, plant and equipment, net (Tables)

12 Months Ended

Jun. 26, 2020

Property, Plant and Equipment Net

The components of property, plant and equipment, net were as follows:


(amount in thousands)	Land and Land Improvements			Building and Building Improvements			Manufacturing Equipment			Office Equipment			Motor Vehicles			Computers			Construction and Machinery Under Installation		Total
As of June 26, 2020
Cost	$	45,099		$	145,912		$	198,036		$	5,600		$	939		$	16,766		$	12,657	$	425,009
Less: Accumulated depreciation		(17	)		(51,393	)		(127,397	)		(4,135	)		(678	)		(12,273	)		—		(195,893	)
Less: Impairment reserve		—			—			(840	)		—			—			(2	)		—		(842	)

Net book value	$	45,082		$	94,519		$	69,799		$	1,465		$	261		$	4,491		$	12,657	$	228,274

As of June 28, 2019
Cost	$	45,080		$	142,909		$	163,795		$	5,029		$	870		$	13,987		$	10,815	$	382,485
Less: Accumulated depreciation		(11	)		(44,736	)		(110,980	)		(3,656	)		(658	)		(10,900	)		—		(170,941	)
Less: Impairment reserve		—			—			(856	)		—			—			(2	)		—		(858	)

Net book value	$	45,069		$	98,173		$	51,959		$	1,373		$	212		$	3,085		$	10,815	$	210,686

Leased Assets Under Capital Lease Agreements

Leased assets included in manufacturing equipment comprise certain machine and equipment from finance lease agreements assumed from the acquisition of Fabrinet UK.


(amount in thousands)	As of June 26, 2020			As of June 28, 2019
Cost—Finance leases	$	1,992		$	2,034
Less: Accumulated depreciation		(1,199	)		(1,090	)

Net book value	$	793		$	944

Intangibles (Tables)

12 Months Ended

Jun. 26, 2020

Intangibles

The following tables present details of the Company’s intangibles:


(amount in thousands)	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net
As of June 26, 2020
Software	$	8,317	$	(5,577	)	$	—		$	2,740
Customer relationships		4,373		(2,691	)		(110	)		1,572
Backlog		119		(119	)		—			—

Total intangibles	$	12,809	$	(8,387	)	$	(110	)	$	4,312


(amount in thousands)	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net
As of June 28, 2019
Software	$	6,582	$	(4,868	)	$	—		$	1,714
Customer relationships		4,373		(2,096	)		(104	)		2,173
Backlog		119		(119	)		—			—

Total intangibles	$	11,074	$	(7,083	)	$	(104	)	$	3,887

Estimated Future Amortization of intangibles

Based on the carrying amount of intangibles as of June 26, 2020, and assuming no future impairment of the underlying assets, the estimated future amortization during each fiscal year was as follows:


(amount in thousand)
2021	$	1,320
2022		1,542
2023		663
2024		434
2025		205
Thereafter		148

Total	$	4,312

Goodwill (Tables)

12 Months Ended

Jun. 26, 2020

Changes in Carrying Amount of Goodwill from Acquisition

The changes in the carrying amount of goodwill were as follows:


(amount in thousands)	Goodwill
Balance as of June 28, 2019	$	3,705
Impairment charge		(3,514	)
Foreign currency translation adjustment		(191	)

Balance as of June 26, 2020	$	—

Borrowings (Tables)

12 Months Ended

Jun. 26, 2020

Total Borrowings, Including Revolving and Long-Term Borrowings

The Company’s total borrowings, including current and

non-current

portions of long-term borrowings, consisted of the following:

(amount in thousands)


Rate	Conditions		Maturity		As of June 26, 2020			As of June 28, 2019
Long-term borrowings, current portion, net:
Long-term borrowings, current portion					$	12,188		$	3,250
Less: Unamortized debt issuance costs—current portion						(32	)		—

Long-term borrowings, current portion, net					$	12,156			3,250

Long-term borrowings, non-current portion, net:
Term loan borrowings:
1-month LIBOR +1.50% per annum (1)		Repayable in quarterly installments		June 2023	$	—		$	60,938
3-month LIBOR +1.35% per annum (1)		Repayable in quarterly installments		June 2024		51,797			—
Less: Current portion						(12,188	)		(3,250	)
Less: Unamortized debt issuance costs— non-current portion						(95	)		—

Long-term borrowings, non-current portion, net					$	39,514		$	57,688

(1)

We have entered into interest rate swaps that effectively fix a series of our future interest payments on our term loans. Refer to Note 7.

Movements of Long-Term Loans

The movements of long-term borrowings were as follows for the years ended June 26, 2020 and June 28, 2019:


	Years ended
(amount in thousands)	June 26, 2020			June 28, 2019
Opening balance	$	60,938		$	64,188
Borrowings during the period		60,938			—
Repayments during the period		(70,079	)		(3,250	)

Closing balance	$	51,797		$	60,938

Future Maturities of Long-Term Debt

As of June 26, 2020, the future maturities of long-term borrowings during each fiscal year were as follows:


(amount in thousand)
2021	$	12,188
2022		15,233
2023		12,188
2024		12,188

Total	$	51,797

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
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+ Details

Severance liabilities (Tables)

12 Months Ended

Jun. 26, 2020

Severance Liabilities

The following table provides information regarding severance liabilities:


	Years Ended
(amount in thousands)	June 26, 2020			June 28, 2019
Changes in severance liabilities
Balance, beginning of the fiscal year	$	15,473		$	10,390
Current service cost	$	1,907		$	2,345
Prior service cost (1)		—			2,537
Interest cost		462			352
Benefit paid		(48	)		(274	)
Actuarial ( gain ) loss on obligation		(117	)		130
Foreign currency translation		(4	)		(7	)

Balance, end of the fiscal year	$	17,673		$	15,473


Changes in plan assets
Balance, beginning of the fiscal year	$	317		$	299
Actual return on plan assets	$	(34	)	$	(7	)
Employer contributions		18			36
Benefit paid		—			—
Foreign currency translation		(7	)		(11	)

Balance, end of the fiscal year	$	294		$	317

Underfunded status	$	(17,379	)	$	(15,156	)

(1)

Prior service cost is the change in Projected Benefit Obligation resulting from changes to employee benefits from local law changes.

Severance Liabilities Recognized in Balance Sheet

The amount recognized in the consolidated balance sheets under

non-current

liabilities and

non-current

assets were determined as follows:


(amount in thousands)	As of June 26, 2020		As of June 28, 2019
Non-current assets	$	—	$	53
Non-current liabilities	$	17,379	$	15,209

Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets

The following table provides information regarding accumulated benefit obligations:


(amount in thousands)	As of June 26, 2020		As of June 28, 2019
Accumulated benefit obligations	$	11,864	$	10,208

Schedule of Changes in Fair Value of Plan Assets

The following table sets forth the plan assets at fair value as of June 26, 2020 and June 28, 2019.


(amount in thousands)			Fair value measurement as of June 26, 2020
	Total		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other (1)	$	294	$	160	$	134

Total Assets	$	294	$	160	$	134


(amount in thousands)			Fair value measurement as of June 28, 2019
	Total		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other (1)	$	317	$	183	$	134

Total Assets	$	317	$	183	$	134

(1)

The “Other” category represents the bid value of the trustees’ insurance policy held with Old Mutual Wealth and the value of assets held with Royal London.

Schedule of Allocation of Plan Assets

The Trustees have chosen to invest in the following funds:


Fund	% of Total
Old Mutual Wealth Invesco Perpetual High Income		38	%
Old Mutual Wealth Creation Balanced Portfolio		17	%
Royal London Deposit Administration		45	%

Principal Actuarial Assumptions Used

Weighted average actuarial assumptions used to determine severance liabilities


	Years Ended
	June 26, 2020	June 28, 2019	June 29, 2018
Discount rate	0.4% - 3.1%	2.3% - 3.2%	2.5% - 3.7%
Future salary increases	3.5% - 10.0%	3.5% - 10.0%	3.5% - 10.0%

Weighted average actuarial assumptions used to determine benefit costs


	Years Ended
	June 26, 2020	June 28, 2019	June 29, 2018
Discount rate	2.3% - 3.2%	2.5% - 3.7%	1.9% - 3.6%
Expected long-term rate of return on assets	2.1%	1.6%	1.9%

Share-based compensation (Tables)

12 Months Ended

Jun. 26, 2020

Effect of Recording Share-Based Compensation Expense

The effect of recording share-based compensation expense for the years ended June 26, 2020, June 28, 2019 and June 29, 2018 was as follows:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
Share-based compensation expense by type of award:
Restricted share units	$	16,555	$	14,691	$	17,143
Performance share units		5,648		2,466		5,438

Total share-based compensation expense		22,203		17,157		22,581
Tax effect on share-based compensation expense		—		—		—

Net effect on share-based compensation expense	$	22,203	$	17,157	$	22,581

Share-Based Compensation Expense Recorded in Condensed Consolidated Statements of Operations and Comprehensive Income

Share-based compensation expense was recorded in the consolidated statements of operations and comprehensive income as follows:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
Cost of revenue	$	6,098	$	5,656	$	6,784
Selling, general and administrative expense		16,105		11,501		15,797

Total share-based compensation expense	$	22,203	$	17,157	$	22,581

Share Option Activity

The following table summarizes share option activity under the 2010 Plan:


	Number of Shares			Number of Exercisable Options		Weighted- Average Exercise Price		Weighted- Average Grant Date Fair Value
Balance as of June 30, 2017		96,688			96,688	$	15.70
Granted		—					—		—
Exercised		(92,288	)			$	16.02
Forfeited		—					—
Expired		(1,500	)			$	5.75

Balance as of June 29, 2018		2,900			2,900	$	15.16
Granted		—					—		—
Exercised		—					—
Forfeited		—					—
Expired		(2,900	)			$	15.16

Balance as of June 28, 2019		—			—		—

Restricted Share Unit Activity

The following table summarizes restricted share unit activity under the Equity Incentive Plans:


	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance as of June 30, 2017		1,058,605		$	31.59
Granted		552,637		$	35.95
Issued		(436,867	)	$	27.81
Forfeited		(100,795	)	$	33.62

Balance as of June 29, 2018		1,073,580		$	35.19
Granted		391,328		$	50.02
Issued		(515,482	)	$	34.18
Forfeited		(148,675	)	$	38.42

Balance as of June 28, 2019		800,751		$	42.48
Granted		367,088		$	50.87
Issued		(335,355	)	$	40.98
Forfeited		(34,727	)	$	44.59

Balance as of June 26, 2020		797,757		$	46.88

Expected to vest as of June 26, 2020		697,093		$	46.81

Performance Share Unit Activity

The following table summarizes performance share unit activity under the Equity Incentive Plans:


	Number of Shares			Weighted- Average Grant Date Fair Value Per Share
Balance as of June 30, 2017		227,268		$	40.48
Granted		378,624		$	37.16
Issued		—			—
Forfeited		—			—

Balance as of June 29, 2018		605,892		$	38.41
Granted		201,994		$	48.02
Issued		(227,268	)	$	40.48
Forfeited		(32,118	)	$	40.47

Balance as of June 28, 2019		548,500		$	40.97
Granted		242,310		$	48.65
Issued		—			—
Forfeited		(350,670	)	$	36.99

Balance as of June 26, 2020		440,140		$	48.37

Expected to vest as of June 26, 2020		378,928		$	48.37

Accumulated other comprehensive income (loss) ("AOCI") (Tables)

12 Months Ended

Jun. 26, 2020

Changes in AOCI, Net of Tax

The changes in AOCI for the years ended June 26, 2020 and June 28, 2019 were as follows:


(amount in thousands)	Unrealized Gains (Losses) on Available-for-sale Securities			Unrealized Gains (Losses) on Derivative Instruments			Retirement benefit plan - Prior service cost			Foreign Currency Translation Adjustment			Total
Balance as of June 29, 2018	$	(1,091	)	$	33		$	—		$	(199	)	$	(1,257	)
Other comprehensive income before reclassification		1,845			—			(2,537	)		(634	)		(1,326	)
Amounts reclassified from AOCI		198			(1	)		—			—			197
Tax effects		—			—			—			—			—

Other comprehensive income		2,043			(1	)		(2,537	)		(634	)		(1,129	)

Balance as of June 28, 2019		952			32			(2,537	)		(833	)		(2,386	)
Other comprehensive income before reclassification		634			171			—			(397	)		408
Amounts reclassified from AOCI		(96	)		399			528			—			831
Tax effects		—			—			—			—			—

Other comprehensive income		538			570			528			(397	)		1,239

Balance as of June 26, 2020	$	1,490		$	602		$	(2,009	)	$	(1,230	)	$	(1,147	)

Pre-tax Amounts Reclassified from AOCI into Condensed Consolidated Statements of Operations and Comprehensive Income

The following table presents the

pre-tax

amounts reclassified from AOCI into the consolidated statements of operations and comprehensive income for the years ended June 26, 2020 and June 28, 2019, respectively.


(amount in thousands)		Years ended
AOCI components	Financial statements line item	June 26, 2020			June 28, 2019
Unrealized gains (losses) on available-for-sale securities	Interest income	$	(96	)	$	198
Unrealized gains (losses) on derivative instruments	Cost of revenues		2,512			—
Unrealized gains (losses) on derivative instruments	Selling, general and administrative expenses		105			(1	)
Unrealized gains (losses) on derivative instruments	Foreign exchange loss, net		(998	)		—
Unrealized gains (losses) on derivative instruments	Interest expense		(1,220	)		—
Retirement benefit plan – Prior service cost	Selling, general and administrative expenses		528			—

Total amounts reclassified from AOCI		$	831		$	197

Business segments and geographic information (Tables)

12 Months Ended

Jun. 26, 2020

Total Revenues by Geographic Regions

The following table presents total revenues by geographic regions:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
North America	$	830,888	$	756,278	$	643,236
Asia-Pacific		552,923		608,386		519,203
Europe		258,025		219,671		209,486

Total	$	1,641,836	$	1,584,335	$	1,371,925

Revenues by End Market

The following table sets forth revenues by end market.


(amount in thousands, except percentages)	Year ended June 26, 2020		As a % of Total Revenues			Year ended June 28, 2019		As a % of Total Revenues
Optical communications	$	1,248,174		76.0	%	$	1,184,936		74.8	%
Lasers, sensors and other		393,662		24.0			399,399		25.2

	$	1,641,836		100.0	%	$	1,584,335		100.0	%

Total Revenues by Percentage from Individual Customers Representing Ten Percent or More of Total Revenues

Total revenues, by percentage, from individual customers representing 10% or more of total revenues in the respective periods were as follows:


	Years Ended
	June 26, 2020			June 28, 2019			June 29, 2018
Lumentum Operations LLC		19	%		20	%		16	%
Acacia Communications Inc.		10	%		*			*
Infinera Corporation		10	%		*			*

Represents less than 10% of total revenues.

Accounts Receivable from Individual Customers Representing Ten Percent or More of Accounts Receivable

Accounts receivable from individual customers representing 10% or more of accounts receivable as of June 26, 2020 and June 28, 2019, respectively, were as follows:


	As of June 26, 2020			As of June 28, 2019
Lumentum Operations LLC		20	%		23	%
Acacia Communications Inc.		13	%		12	%

Sales Revenue, Segment

Revenues by End Market

The following table presents revenues by end market:


	Years Ended
(amount in thousands)	June 26, 2020		June 28, 2019		June 29, 2018
Optical communications	$	1,248,174	$	1,184,936	$	1,000,256
Lasers, sensors, and other		393,662		399,399		371,669

Total	$	1,641,836	$	1,584,335	$	1,371,925

Financial instruments (Tables)

12 Months Ended

Jun. 26, 2020

Outstanding Foreign Currency Assets and Liabilities

As of June 26, 2020 and June 28, 2019, the Company had outstanding foreign currency assets and liabilities as follows:


	As of June 26, 2020				As of June 28, 2019
(amount in thousands)	Currency		$		Currency		$
Assets
Thai baht		667,955	$	21,617		664,860	$	21,628
RMB		158,060		22,402		53,393		7,767
GBP		6,220		7,726		5,270		6,682

Total			$	51,745			$	36,077

Liabilities
Thai baht		2,102,392	$	68,039		1,961,972	$	63,825
RMB		42,586		6,036		26,373		3,836
GBP		1,545		1,919		2,598		3,294

Total			$	75,994			$	70,955

Unaudited Quarterly Financial Information (Tables)

12 Months Ended

Jun. 26, 2020

Unaudited Quarterly Financial Information

The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal years ended June 26, 2020 and June 28, 2019:


	Three Months Ended
(in thousands, except per share data)	Jun 26, 2020		Mar 27, 2020		Dec 27, 2019		Sep 27, 2019		Jun 28, 2019		Mar 29, 2019		Dec 28, 2018		Sep 28, 2018
Total revenues	$	405,113	$	411,210	$	426,217	$	399,296	$	405,127	$	398,951	$	403,080	$	377,177

Gross profit	$	46,624	$	44,336	$	49,158	$	45,987	$	46,626	$	46,758	$	45,564	$	40,276

Net income	$	28,024	$	28,267	$	31,231	$	25,957	$	32,957	$	28,635	$	31,513	$	27,850

Basic net income per share:
Net income	$	0.76	$	0.76	$	0.84	$	0.70	$	0.89	$	0.78	$	0.86	$	0.76

Weighted-average shares used in basic net income per share calculations		36,723		36,987		37,011		36,913		36,836		36,891		36,841		36,625

Diluted net income per share:
Net income	$	0.75	$	0.75	$	0.83	$	0.69	$	0.88	$	0.76	$	0.84	$	0.75

Weighted-average shares used in diluted net income per share calculations		37,571		37,797		37,763		37,529		37,511		37,539		37,471		37,140

Summary of Reclassifications of Consolidated Balance Sheet and Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 28, 2019	Jun. 29, 2018
Current liabilities
Fixed assets payable		$ 7,317	$ 7,317
Other payables	$ 21,514	15,317	15,317
Non-current liabilities
Other non-current liabilities	1,937	2,713	2,713
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on fair value of interest rate swaps		2,591
Severance liabilities	2,802		3,343	$ 1,801
Changes in operating assets and liabilities
Inventories	(16,174)	(44,598)	(44,598)	(19,868)
Other current assets and non-current assets	$ (182)	(2,777)	(2,777)	$ (4,464)
Severance liabilities		3,343
As previously reported
Current liabilities
Finance lease liabilities, current portion		398	398
Other payables		22,236	22,236
Non-current liabilities
Finance lease liabilities, non-current portion		102	102
Other non-current liabilities		2,611	2,611
Adjustments to reconcile net income to net cash provided by operating activities
Severance liabilities		3,343
(Reversal of) Inventory obsolescence		(563)
Changes in operating assets and liabilities
Inventories		(44,035)
Other current assets and non-current assets		(186)
Reclassification
Current liabilities
Fixed assets payable		7,317	7,317
Finance lease liabilities, current portion		(398)	(398)
Other payables		(6,919)	(6,919)
Non-current liabilities
Finance lease liabilities, non-current portion		(102)	(102)
Other non-current liabilities		102	$ 102
Adjustments to reconcile net income to net cash provided by operating activities
Unrealized loss on fair value of interest rate swaps		2,591
Severance liabilities		(3,343)
(Reversal of) Inventory obsolescence		563
Changes in operating assets and liabilities
Inventories		(563)
Other current assets and non-current assets		(2,591)
Severance liabilities		$ 3,343

Property Plant and Equipment Estimated Useful Life (Detail)	12 Months Ended
	Jun. 26, 2020
Land improvements
Property, Plant and Equipment, Useful Life	10 years
Building and building improvements \| Maximum
Property, Plant and Equipment, Useful Life	30 years
Building and building improvements \| Minimum
Property, Plant and Equipment, Useful Life	5 years
Leasehold improvements
Leasehold improvements	Shorter of useful life or lease term
Manufacturing equipment \| Maximum
Property, Plant and Equipment, Useful Life	7 years
Manufacturing equipment \| Minimum
Property, Plant and Equipment, Useful Life	3 years
Office equipment \| Maximum
Property, Plant and Equipment, Useful Life	7 years
Office equipment \| Minimum
Property, Plant and Equipment, Useful Life	3 years
Motor vehicles \| Maximum
Property, Plant and Equipment, Useful Life	5 years
Motor vehicles \| Minimum
Property, Plant and Equipment, Useful Life	3 years
Computer hardware \| Maximum
Property, Plant and Equipment, Useful Life	5 years
Computer hardware \| Minimum
Property, Plant and Equipment, Useful Life	3 years

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Accounting Policies [Line Items]
(Reversal of) warranty cost allowances	$ 20	$ 70	$ (20)
Services revenue recognized	$ 90,500	106,100	$ 73,500
Product warranty, description	The Company generally provides a warranty of between one to five years
Incremental cost	$ 0	$ 0
Minimum [Member]
Accounting Policies [Line Items]
Product warranty term	1 year
Maximum [Member]
Accounting Policies [Line Items]
Product warranty term	5 years

Schedule Of Future Minimum Rental Payments For Operating Leases (Detail) $ in Thousands	Jun. 28, 2019 USD ($)
Accounting Policies [Abstract]
2020	$ 1,746
2021	1,342
2022	1,219
2023	1,172
Thereafter	230
Total future minimum operating lease payments	$ 5,709

Schedule of Activity in the Company's Contract Assets and Contract Liabilities (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019
Contract Assets
Beginning balance	$ 12,447
Ending balance	13,256	$ 12,447
Contract Liabilities
Beginning balance	(2,239)
Ending balance	(1,556)	(2,239)
ASU 2014-09 \| Adjustment
Contract Assets
Beginning balance	12,447	0
Cumulative effect adjustment upon adoption of ASC 606		9,877
Revenue recognized	73,476	112,739
Amounts collected or invoiced	(72,667)	(110,169)
Ending balance	13,256	12,447
Contract Liabilities
Beginning balance	2,239	0
Advance payment received during the period	9,278	4,458
Revenue recognized	(9,961)	(2,219)
Ending balance	$ 1,556	$ 2,239

Disaggregation of Revenue by Geographical Regions (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019
Revenues	$ 1,641,836	$ 1,584,335
Revenues, percentage	100.00%	100.00%
North America
Revenues	$ 830,888	$ 756,278
Revenues, percentage	50.60%	47.70%
Asia-Pacific
Revenues	$ 552,923	$ 608,386
Revenues, percentage	33.70%	38.40%
Europe
Revenues	$ 258,025	$ 219,671
Revenues, percentage	15.70%	13.90%

Revenues - Revenues by End Market (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 26, 2020	Mar. 27, 2020	Dec. 27, 2019	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019	Dec. 28, 2018	Sep. 28, 2018	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Revenue from External Customer [Line Items]
Revenues	$ 405,113	$ 411,210	$ 426,217	$ 399,296	$ 405,127	$ 398,951	$ 403,080	$ 377,177	$ 1,641,836	$ 1,584,335	$ 1,371,925
Revenues, percentage									100.00%	100.00%
Optical communications
Revenue from External Customer [Line Items]
Revenues									$ 1,248,174	$ 1,184,936
Revenues, percentage									76.00%	74.80%
Lasers, sensors, and other
Revenue from External Customer [Line Items]
Revenues									$ 393,662	$ 399,399
Revenues, percentage									24.00%	25.20%

Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands

12 Months Ended

Jun. 26, 2020

Jun. 28, 2019

Jun. 29, 2018

Jun. 30, 2017

Income Taxes [Line Items]

Exempted income from corporate income tax

^[1]

$ 20,797

$ 21,161

$ 12,824

Corporate income tax rate

20.00%

Deferred tax liabilities

$ 4,620

$ 4,123

Recorded (reversed) interest and penalties

100

(100)

$ 300

Accrued interest and penalties related to uncertain tax positions

500

800

Valuation allowance

$ 3,728

1,291

1,165

$ 6,399

CAYMAN ISLANDS

Income Taxes [Line Items]

Tax Holiday Additional Renewal Maturity Date

Mar. 06, 2039

Exempted income from corporate income tax

$ 101,900

104,600

$ 58,400

THAILAND

Income Taxes [Line Items]

Reduced corporate Income Tax rate

20.00%

Period income earned from operation of Building 6 is not subject to tax

15 years

Deferred tax liabilities

$ 1,100

1,300

Unrecognized deferred tax liabilities

7,000

6,900

Unremitted earnings

$ 112,300

$ 109,700

Effective Income Tax Rate Reconciliation, Tax Exempt Income, Percent

50.00%

UNITED STATES

Income Taxes [Line Items]

Corporate income tax rate

21.00%

Valuation allowance

$ 2,100

UNITED STATES | Subsidiaries [Member]

Income Taxes [Line Items]

Corporate income tax rate

21.00%

CHINA

Income Taxes [Line Items]

Corporate income tax rate

25.00%

UNITED KINGDOM

Income Taxes [Line Items]

Valuation allowance

$ 1,600

UNITED KINGDOM | Subsidiaries [Member]

Income Taxes [Line Items]

Corporate income tax rate

19.00%

[1]

Income Tax Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
Income Tax Expense (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Income Taxes [Line Items]
Current	$ 6,274	$ 4,384	$ 5,457
Deferred	(511)	894	(1,595)
Total income tax expense	$ 5,763	$ 5,278	$ 3,862

Reconciliation between Taxes that Would Arise by Applying Statutory Tax Rate of Country of Principal Operations to Effective Tax Charge (Detail) - USD ($)
$ in Thousands

12 Months Ended

Jun. 26, 2020

Jun. 28, 2019

Jun. 29, 2018

Reconciliation Of Effective Income Tax Rate [Line Items]

Income before income taxes

^[1]

$ 119,242

$ 126,233

$ 88,029

Tax expense calculated at a statutory corporate income tax rate of 20%

23,848

25,247

17,606

Effect of income taxes from locations with tax rates different from Thailand

577

977

2,657

Income not subject to tax

^[2]

(20,797)

(21,161)

(12,824)

Income tax on unremitted earnings

1,221

1,260

1,007

Effect of different tax rate in relation to deferred tax utilization

423

Effect of foreign exchange rate adjustment

382

603

(134)

Tax rebate from research and development application

(1,228)

(649)

(454)

Provision for uncertain income tax position

(641)

(229)

277

Utilization of loss carryforward

(3,224)

Valuation allowance (reversal of)

2,446

(1,587)

Others

(45)

(770)

115

Total income tax expense

$ 5,763

$ 5,278

$ 3,862

[1]	Income before income taxes was mostly generated from domestic income in the Cayman Islands.
[2]	Income not subject to tax relates to income earned in the Cayman Islands and income subject to an investment promotion privilege for Pinehurst Building 6 and the Company’s Chonburi campus. Income not subject to tax per ordinary share on a diluted basis was $0.55, $0.57, and $0.34 for the years ended June 26, 2020, June 28, 2019, and June 29, 2018, respectively.

Reconciliation between Taxes that Would Arise by Applying Statutory Tax Rate of Country of Principal Operations to Effective Tax Charge (Parenthetical) (Detail) - $ / shares	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Reconciliation Of Effective Income Tax Rate [Line Items]
Tax calculated at a corporate income tax rate, rate	20.00%	20.00%	20.00%
Income (loss) not subject to tax per ordinary share on a diluted basis	$ 0.55	$ 0.57	$ 0.34

Deferred Tax Assets and Deferred Tax Liabilities, Net of Valuation Allowance (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Deferred tax assets:
Depreciation	$ 1,219	$ 1,957
Severance liability	2,958	2,012
Reserves and allowance	1,405	1,485
Net operating loss carryforwards	0	1,616
Others	321	13
Total	5,903	7,083
Deferred tax liabilities:
Temporary differences from intangibles and changes in the fair value of assets acquired	(336)	(590)
Deferred tax from unremitted earnings	(4,620)	(4,123)
Others		(252)
Total	(4,956)	(4,965)
Net	$ 947	$ 2,118

Summary of Change in Valuation Allowances of Deferred Tax Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Reconciliation Of Nol Deferred Tax Assets Valuation Allowance [Line Items]
Beginning Balance	$ 1,291	$ 1,165	$ 6,399
Reserval	2,437	126	(5,234)
Ending Balance	$ 3,728	$ 1,291	$ 1,165

Changes to Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Income Tax Contingency [Line Items]
Beginning balance	$ 1,323	$ 1,445	$ 1,420
Additions during the year	157	235	25
Release of tax positions of prior years	(510)	(357)
Ending balance	$ 970	$ 1,323	$ 1,445

Earnings Per Ordinary Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

3 Months Ended

12 Months Ended

Jun. 26, 2020

Mar. 27, 2020

Dec. 27, 2019

Sep. 27, 2019

Jun. 28, 2019

Mar. 29, 2019

Dec. 28, 2018

Sep. 28, 2018

Jun. 26, 2020

Jun. 28, 2019

Jun. 29, 2018

Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]

Net income attributable to shareholders

$ 28,024

$ 28,267

$ 31,231

$ 25,957

$ 32,957

$ 28,635

$ 31,513

$ 27,850

$ 113,479

$ 120,955

$ 84,167

Weighted-average number of ordinary shares outstanding (thousands of shares)

36,723

36,987

37,011

36,913

36,836

36,891

36,841

36,625

36,908

36,798

37,257

Incremental shares arising from the assumed vesting of restricted share units and performance share units (thousands of shares)

757

617

778

Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares)

37,571

37,797

37,763

37,529

37,511

37,539

37,471

37,140

37,665

37,415

38,035

Basic earnings per ordinary share

$ 0.76

$ 0.84

$ 0.70

$ 0.89

$ 0.78

$ 0.86

$ 0.76

$ 3.07

$ 3.29

$ 2.26

Diluted earnings per ordinary share

$ 0.75

$ 0.83

$ 0.69

$ 0.88

$ 0.76

$ 0.84

$ 0.75

$ 3.01

$ 3.23

$ 2.21

Outstanding performance share units excluded from the computation of diluted earnings per ordinary share (thousands of shares)

^[1]

401

284

[1]	These performance share units were not included in the computation of diluted earnings per ordinary share because they are not expected to vest based on the Company’s current assessment of the related performance obligations.

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Cash, cash equivalents and short-term investments (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Cash, cash equivalents and marketable securities [Line Items]
Cash and cash equivalents and Marketable securities, Carrying Cost	$ 486,631	$ 436,930
Marketable securities, Unrealized Gain/(Loss)	1,492	402
Cash and cash equivalents	225,430	180,839	$ 158,102
Marketable securities	209,842	200,913
Other Investments	52,851	55,580
Certificates of deposit and time deposits
Cash, cash equivalents and marketable securities [Line Items]
Marketable securities, Carrying cost	11,800	35,028
Other Investments	11,800	35,028
Cash
Cash, cash equivalents and marketable securities [Line Items]
Carrying Cost	218,117	178,019
Cash and cash equivalents	218,117	178,019
Cash Equivalents
Cash, cash equivalents and marketable securities [Line Items]
Carrying Cost	7,313	2,820
Cash and cash equivalents	7,313	2,820
Liquidity funds
Cash, cash equivalents and marketable securities [Line Items]
Carrying Cost	41,051	20,552
Other Investments	41,051	20,552
Corporate debt securities
Cash, cash equivalents and marketable securities [Line Items]
Marketable securities, Carrying cost	159,220	130,959
Marketable securities, Unrealized Gain/(Loss)	948	297
Marketable securities	160,168	131,256
U.S. agency and U.S. Treasury securities
Cash, cash equivalents and marketable securities [Line Items]
Marketable securities, Carrying cost	49,130	69,552
Marketable securities, Unrealized Gain/(Loss)	544	105
Marketable securities	$ 49,674	$ 69,657

Available-for-Sale Securities Based on Stated Effective Maturities (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Investments Classified by Contractual Maturity Date [Line Items]
Total	$ 209,842	$ 200,913
Fair Value
Investments Classified by Contractual Maturity Date [Line Items]
Due within one year	76,196	69,830
Due between one to five years	133,646	131,083
Total	209,842	200,913
Carrying Cost
Investments Classified by Contractual Maturity Date [Line Items]
Due within one year	76,127	69,746
Due between one to five years	132,223	130,765
Total	$ 208,350	$ 200,511

Cash, cash equivalents and short-term investments - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019
Cash, cash equivalents and marketable securities [Line Items]
Gain from sales and maturities of available-for-sale securities	$ 100
Impairment losses	$ 0	$ 0
Effective interest rate on short term bank deposits	1.80%	1.90%
Percentage Of Cash And Cash Equivalents Held By Parent Company	63.00%	58.00%
Minimum
Cash, cash equivalents and marketable securities [Line Items]
Maturities period of marketable securities	3 months

Fair Value on Recurring Basis (Detail) - USD ($)
$ in Thousands

Jun. 26, 2020

Jun. 28, 2019

Assets

Derivative assets

^[1]

$ 2,230

Liabilities

Derivative liabilities

^[2]

5,273

Fair Value, Measurements, Recurring

Assets

Derivative assets

2,230

$ 2,201

Total

272,236

261,514

Liabilities

Derivative liabilities

5,273

2,591

Total

5,273

2,591

Fair Value, Measurements, Recurring | Certificates of deposit and time deposits

Assets

Marketable securities

11,800

35,028

Fair Value, Measurements, Recurring | Cash Equivalents

Assets

Marketable securities

7,313

2,820

Fair Value, Measurements, Recurring | Corporate debt securities

Assets

Marketable securities

160,168

131,256

Fair Value, Measurements, Recurring | U.S. agency and U.S. Treasury securities

Assets

Marketable securities

49,674

69,657

Fair Value, Measurements, Recurring | Liquidity funds

Assets

Marketable securities

41,051

20,552

Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring

Assets

Derivative assets

^[3]

2,201

Total

272,236

261,514

Liabilities

Derivative liabilities

^[4]

2,591

Total

5,273

2,591

Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Certificates of deposit and time deposits

Assets

Marketable securities

11,800

35,028

Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Cash Equivalents

Assets

Marketable securities

7,313

2,820

Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Corporate debt securities

Assets

Marketable securities

160,168

131,256

Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. agency and U.S. Treasury securities

Assets

Marketable securities

49,674

69,657

Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Liquidity funds

Assets

Marketable securities

$ 41,051

$ 20,552

[1]	Foreign currency forward and option contracts with a notional amount of $125.0 million and Canadian dollars of $0.6 million, and option contract with a notional amount of $1.0 million.
[2]	Interest rate swap agreements with an aggregate notional amount of $125.1 million.
[3]	Foreign currency forward contracts with notional amount of $72.0 million and Canadian dollars of $0.6 million.
[4]	Interest rate swap agreement with a notional amount of $64.2 million.

Fair Value on Recurring Basis (Parenthetical) (Detail) $ in Millions, $ in Millions	Jun. 26, 2020 USD ($)	Jun. 26, 2020 CAD ($)	Jun. 28, 2019 USD ($)	Jun. 28, 2019 CAD ($)
Foreign currency forward contracts
Fair Value Measurements at Reporting Date Using
Derivative assets, notional amount	$ 125.0	$ 0.6	$ 72.0	$ 0.6
Foreign currency option contracts
Fair Value Measurements at Reporting Date Using
Derivative assets, notional amount	1.0
Interest rate swap \| Fair Value, Measurements, Recurring
Fair Value Measurements at Reporting Date Using
Derivative liabilities, notional amount	$ 125.1		$ 64.2

Fair Value - Additional Information (Detail) $ in Thousands		12 Months Ended
Fair Value - Additional Information (Detail) $ in Thousands	Sep. 03, 2019	Jun. 26, 2020 USD ($) Contract	Jun. 28, 2019 USD ($) Contract
Foreign Currency Fair Value Hedge Derivative [Line Items]
Unrealized gain (loss) on derivatives		$ 399
Derivative, Fixed Interest Rate		2.86%
Foreign currency forward contracts
Foreign Currency Fair Value Hedge Derivative [Line Items]
Number of forward contracts outstanding \| Contract			45
Derivative notional amount		$ 125,000	$ 72,000
Unrealized gain (loss) on derivatives			$ 4,800
Gain (Loss) on Sale of Derivatives		2,700
Foreign currency forward contracts \| Non designated
Foreign Currency Fair Value Hedge Derivative [Line Items]
Unrealized gain (loss) on derivatives		$ 1,200
Foreign currency forward contracts \| Designated as Hedging Instrument
Foreign Currency Fair Value Hedge Derivative [Line Items]
Number of forward contracts outstanding \| Contract		1	0
Gain (Loss) on Sale of Derivatives		$ 1,600
Foreign currency forward contracts \| Designated as Hedging Instrument \| Thailand, baht
Foreign Currency Fair Value Hedge Derivative [Line Items]
Number of forward contracts outstanding \| Contract		125
Unrealized gain (loss) on derivatives		$ 1,100
Foreign currency forward contracts \| Designated as Hedging Instrument \| Minimum \| Thailand, baht
Foreign Currency Fair Value Hedge Derivative [Line Items]
Derivative maturity period		2020-07
Foreign currency forward contracts \| Designated as Hedging Instrument \| Maximum \| Thailand, baht
Foreign Currency Fair Value Hedge Derivative [Line Items]
Derivative maturity period		2021-01
Foreign currency option contracts
Foreign Currency Fair Value Hedge Derivative [Line Items]
Derivative notional amount		$ 1,000
Interest rate swaps
Foreign Currency Fair Value Hedge Derivative [Line Items]
Number of forward contracts outstanding \| Contract		2	1
Derivative notional amount		$ 125,100	$ 64,200
Gains or losses from accumulated other comprehensive income expected to be reclassified		300
Interest rate swaps \| Bank of ayudhya public company \| Bank of america credit facility
Foreign Currency Fair Value Hedge Derivative [Line Items]
Derivative maturity period	2024-06
Long term Debt Fixed Interest Percentage	4.36%
Interest rate swaps \| Non designated
Foreign Currency Fair Value Hedge Derivative [Line Items]
Unrealized gain (loss) on derivatives		1,700	2,600
Canadian dollars forward contract
Foreign Currency Fair Value Hedge Derivative [Line Items]
Derivative notional amount		$ 600	$ 600

Fair Value - Schedule Impacts of Derivative Gain (Loss) of Cash Flow Hedges (Details) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Derivatives gain (loss) recognized in other comprehensive income:
Derivative gain/(loss)	$ 171
Derivatives loss (gain) reclassified from other comprehensive income into earnings:
Derivative gain/(loss)	399
Change in net unrealized loss on derivatives instruments	570	$ (1)	$ (1)
Interest rate swaps \| Other Comprehensive Income (Loss)
Derivatives gain (loss) recognized in other comprehensive income:
Derivative gain/(loss)	(910)
Interest rate swaps \| Interest Expense
Derivatives loss (gain) reclassified from other comprehensive income into earnings:
Derivative gain/(loss)	(1,220)
Foreign currency forward contracts
Derivatives loss (gain) reclassified from other comprehensive income into earnings:
Derivative gain/(loss)		$ 4,800
Foreign currency forward contracts \| Other Comprehensive Income (Loss)
Derivatives gain (loss) recognized in other comprehensive income:
Derivative gain/(loss)	1,081
Foreign currency forward contracts \| Foreign exchange loss,net
Derivatives loss (gain) reclassified from other comprehensive income into earnings:
Derivative gain/(loss)	(998)
Foreign currency forward contracts \| Cost of Revenue
Derivatives loss (gain) reclassified from other comprehensive income into earnings:
Derivative gain/(loss)	2,512
Foreign currency forward contracts \| Selling, General and Administrative Expenses
Derivatives loss (gain) reclassified from other comprehensive income into earnings:
Derivative gain/(loss)	$ 105

Fair Value - Schedule of Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Derivatives designates as hedging instruments:
Derivative ,gross balances (Derivative Assets)	$ 2,823	$ 2,201
Derivative ,gross balances offset in the balance sheet (Derivative Assets)	(593)
Net amounts of derivatives (Derivative Assets)	2,230	2,201
Derivative ,gross balances (Derivative Liabilities)	(5,866)	(2,591)
Derivative ,gross balances offset in the balance sheet (Derivative Liabilities)	593
Net amounts of derivatives (Derivative Liabilities)	(5,273)	(2,591)
Foreign currency forward contracts
Derivatives designates as hedging instruments:
Derivative Assets	2,814
Derivative Liabilities	(83)
Interest rate swaps
Derivatives not designated as hedging instruments
Derivative Liabilities		(2,591)
Derivatives designates as hedging instruments:
Derivative Liabilities	(5,172)
Foreign Currency Forward And Option Contracts
Derivatives not designated as hedging instruments
Derivative Assets	9	$ 2,201
Derivative Liabilities	$ (611)

Trade Accounts Receivable, Net (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade accounts receivable	$ 273,001	$ 260,698
Less: Allowance for doubtful account	(336)	(96)
Trade accounts receivable, net	$ 272,665	$ 260,602

Inventories (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Inventories [Line Items]
Raw materials	$ 141,522	$ 113,321
Work in progress	136,344	141,730
Finished goods	17,950	24,916
Goods in transit	13,970	13,645
Inventories	$ 309,786	$ 293,612

Other receivable - Additional Information (Detail) $ in Thousands	12 Months Ended
	Jun. 26, 2020 USD ($)
Receivables [Abstract]
Other receivable provided to customer	$ 24,300
Other receivable	$ 24,310

Restricted cash - Additional Information (Detail) € in Millions, $ in Millions	Jun. 26, 2020 USD ($)	Jun. 26, 2020 EUR (€)	Jun. 28, 2019 USD ($)	Jun. 28, 2019 EUR (€)
Outstanding letter of credit amount \| €		€ 6.0		€ 6.0
Amount of cash collateral \| $	$ 7.4		$ 7.4

Leases - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018	Jun. 29, 2019
Operating Lease Rental Expense	$ 2,100	$ 1,900	$ 1,800
Operating lease rental expense short term	200	100
Operating lease liability, current portion	1,979			$ 1,601
Rental expense under operating leases		$ 1,900	$ 1,800
Finance Lease, Liability	$ 100
Maximum [Member]
Operating lease expiration year	2026
Lessee operating lease option to extend term	5 years
Minimum [Member]
Lessee operating lease option to extend term	1 year

Leases - Schedule Of Future Minimum Rental Payments For Operating Leases (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Operating Leases [Abstract]
2020		$ 1,746
2021		1,342
2022		1,219
2023	$ 434	1,172
Thereafter	$ 148	230
Total future minimum operating lease payments		5,709
Finance leases [Abstract]
Finance leases,2020		398
Finance leases,2021		102
Finance leases, Future Minimum Payments Due		500
Total Leases Future Minimum Payments Due Current,2020		2,144
Total Leases Future Minimum Payments Due Current,2021		1,444
Total Leases Future Minimum Payments Due Current,2022		1,219
Total Leases Future Minimum Payments Due Current,2023		1,172
Total Leases Future Minimum Payments Due Current ,Thereafter		230
Total Leases Future Minimum Payments Due		$ 6,209

Leases - Schedule Of Adoption Of Topic 842 On Operating Lease In Consolidate Financial Position (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 29, 2019
Assets
Operating lease ROU assets	$ 8,068	$ 5,370
Liabilities and Shareholders' Equity
Operating lease liabilities, current	1,979	1,601
Operating lease liabilities, non-current	$ 5,873	3,769
Accounting Standards Update 2016-02 [Member]
Assets
Operating lease ROU assets		5,370
Liabilities and Shareholders' Equity
Operating lease liabilities, current		1,601
Operating lease liabilities, non-current		$ 3,769

Leases - Schedule Of Operating Lease Liabilities (Detail)
$ in Thousands

Jun. 26, 2020

USD ($)

Leases [Abstract]

$ 2,313

2,314

2,200

1,176

288

157

Total undiscounted lease payments

8,448

Less imputed interest

(596)

Total present value of lease liabilities

$ 7,852

^[1]

[1]	Includes current portion of operating lease liabilities of $2.0 million.

Leases - Summary Of Additional Information Related To Operating And Finance Lease (Detail)	Jun. 26, 2020
Weighted-average remaining lease term (in years)
Operating leases	3 years 3 months 18 days
Finance leases	3 months 18 days
Weighted-average discount rate
Operating leases	3.70%
Finance leases	4.10%

Leases - Schedule Of Supplemental Cash Flow Information Related To Operating Lease (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$ 2,326
Financing cash flows from finance leases	400	$ 468	$ 417
ROU assets obtained in exchange for lease liabilities	8,068
Finance lease assets	$ 80

Property Plant and Equipment Net (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Property, Plant and Equipment [Line Items]
Cost	$ 425,009	$ 382,485
Less: Accumulated depreciation	(195,893)	(170,941)
Less: Impairment reserve	(842)	(858)
Net book value	228,274	210,686
Land and Land Improvements
Property, Plant and Equipment [Line Items]
Cost	45,099	45,080
Less: Accumulated depreciation	(17)	(11)
Net book value	45,082	45,069
Building and Building Improvements
Property, Plant and Equipment [Line Items]
Cost	145,912	142,909
Less: Accumulated depreciation	(51,393)	(44,736)
Net book value	94,519	98,173
Manufacturing Equipment
Property, Plant and Equipment [Line Items]
Cost	198,036	163,795
Less: Accumulated depreciation	(127,397)	(110,980)
Less: Impairment reserve	(840)	(856)
Net book value	69,799	51,959
Office Equipment
Property, Plant and Equipment [Line Items]
Cost	5,600	5,029
Less: Accumulated depreciation	(4,135)	(3,656)
Net book value	1,465	1,373
Motor Vehicles
Property, Plant and Equipment [Line Items]
Cost	939	870
Less: Accumulated depreciation	(678)	(658)
Net book value	261	212
Computers
Property, Plant and Equipment [Line Items]
Cost	16,766	13,987
Less: Accumulated depreciation	(12,273)	(10,900)
Less: Impairment reserve	(2)	(2)
Net book value	4,491	3,085
Construction and Machinery Under Installation
Property, Plant and Equipment [Line Items]
Cost	12,657	10,815
Net book value	$ 12,657	$ 10,815

Property Plant and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 29,700	$ 28,700	$ 27,400
Property, plant and equipment written-off, fully depreciated cost	2,900	2,000	3,500
Capitalized interest expense related to long-term loan	0	0	0
Impairment reserves for property, plant and equipment	842	858
Property, Plant and Equipment
Property, Plant and Equipment [Line Items]
Impairment reserves for property, plant and equipment	$ 800	$ 900	$ 0

Leased Assets Under Capital Lease Agreements (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Property, Plant and Equipment [Line Items]
Cost-Capital leases	$ 1,992	$ 2,034
Less: Accumulated depreciation	(1,199)	(1,090)
Net book value	$ 793	$ 944

Intangibles (Detail) - USD ($) $ in Thousands	12 Months Ended
Intangibles (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 12,809	$ 11,074
Accumulated Amortization	(8,387)	(7,083)
Foreign Currency Translation Adjustment	(110)	(104)
Net	4,312	3,887
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	8,317	6,582
Accumulated Amortization	(5,577)	(4,868)
Net	2,740	1,714
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	4,373	4,373
Accumulated Amortization	(2,691)	(2,096)
Foreign Currency Translation Adjustment	(110)	(104)
Net	1,572	2,173
Backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	119	119
Accumulated Amortization	$ (119)	$ (119)

Intangibles - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Finite-Lived Intangible Assets [Line Items]
Amortization expense related to intangibles	$ 1.3	$ 1.2	$ 1.7
Global CEM Solutions, Ltd. \| Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 4.4
Weighted average remaining life of acquired intangible assets	4 years 7 months 6 days	5 years 4 months 24 days
Global CEM Solutions, Ltd. \| Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 0.1

Estimated Future Amortization of Intangibles (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Finite-Lived Intangible Assets [Line Items]
2021	$ 1,320
2022	1,542
2023	663
2024	434	$ 1,172
2025	205
Thereafter	148	230
Total	$ 4,312	$ 3,887

Goodwill - Additional Information (Detail) - USD ($)	12 Months Ended
Goodwill - Additional Information (Detail) - USD ($)	Jun. 26, 2020	Jun. 28, 2019
Goodwill [Line Items]
Goodwill impairment loss	$ 3,514,000
Goodwill impairment charges		$ 0

Changes in Carrying Amount of Goodwill from Acquisition (Detail) $ in Thousands	12 Months Ended
	Jun. 26, 2020 USD ($)
Goodwill [Line Items]
Beginning Balance	$ 3,705
Impairment charge	(3,514)
Foreign currency translation adjustment	(191)
Ending Balance

Total Borrowings, Including Current Portion and Non-Current Portion of Long-Term Borrowings (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019
Debt Instrument [Line Items]
Long-term borrowings, current portion	$ 12,188	$ 3,250
Less: Unamortized debt issuance costs – current portion	(32)
Long-term borrowings, current portion, net	12,156	3,250
Less: Current portion	(12,188)	(3,250)
Less: Unamortized debt issuance costs – non-current portion	(95)
Long-term borrowings, non-current portion, net	$ 39,514	$ 57,688
Loan Payable Due June 2023
Debt Instrument [Line Items]
Rate		1-month LIBOR +1.50% per annum
Margin above rate		1.50%
Conditions		Repayable in quarterly installments
Term		2023-06
Long-term Debt		$ 60,938
Loan Payable Due June 2024
Debt Instrument [Line Items]
Rate	3-month LIBOR +1.35% per annum
Margin above rate	1.35%
Conditions	Repayable in quarterly installments
Term	2024-06
Long-term Debt	$ 51,797

Movements of Long-Term Loans (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019
Debt Instrument [Line Items]
Opening balance	$ 60,938	$ 64,188
Borrowings during the period	60,938
Repayments during the period	(70,079)	(3,250)
Closing balance	$ 51,797	$ 60,938

Future Maturities of Long-Term Debt (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Debt Instrument [Line Items]
2021	$ 12,188
2022	15,233
2023	12,188
2024	12,188
Total	$ 51,797	$ 60,938	$ 64,188

Borrowings - Additional Information (Detail) - USD ($)		12 Months Ended
Borrowings - Additional Information (Detail) - USD ($)	Sep. 10, 2019	Jun. 26, 2020	Jun. 28, 2019	Sep. 27, 2019	Sep. 03, 2019	Aug. 20, 2019	Jun. 04, 2018
Line of Credit Facility [Line Items]
Line of credit facility borrowing capacity	$ 200,000,000.0					$ 160,900,000
Line of credit facility termination date		Sep. 10, 2019
Repayments Of Long term Debt		$ 70,079,000	$ 3,250,000
Bank of Ayudhya Public Company Limited [Member]
Line of Credit Facility [Line Items]
Interest Expense On Debt		$ 1,500,000
Debt Description Of Variable Rate Basis		3-month LIBOR plus 1.35%
Debt Instrument Stated Interest Percentage		1.35%
Debt Instrument Periodic Payment		$ 3,000,000.0
Debt Instrument Maturity Date		Jun. 30, 2024
Credit Facility Agreement [Member] \| Bank of Ayudhya Public Company Limited [Member]
Line of Credit Facility [Line Items]
Line of credit facility borrowing capacity				$ 3,600,000		$ 110,000,000.0
Term Loan Agreement [Member]
Line of Credit Facility [Line Items]
Long Term Debt Outstanding		$ 51,800,000
Term Loan Agreement [Member] \| Bank of Ayudhya Public Company Limited [Member]
Line of Credit Facility [Line Items]
Debt Principal amount					$ 60,900,000
Line Of Credit Covenant Terms		The Term Loan Agreement contains affirmative and negative covenants applicable to the Borrower, including delivery of financial statements and other information, compliance with laws, maintenance of insurance, restrictions on granting security interests or liens on its assets, disposing of its assets, incurring indebtedness and making acquisitions. While the term loan is outstanding, the Borrower is required to maintain a loan to value of the mortgaged real property ratio of not greater than 65%. If the loan to value ratio is not maintained, the Borrower will be required to provide additional security or prepay a portion of the term loan in order to restore the required ratio. The Company is also required to maintain a debt service coverage ratio of at least 1.25 times and a debt to equity ratio less than or equal to 1.0 times. In the case of any payment of a dividend by the Company, its debt service coverage ratio must be at least 1.50 times. As of June 26, 2020, the Company was in compliance with all of its financial covenants under the Term Loan Agreement.
Term Loan Agreement [Member] \| Bank of America [Member]
Line of Credit Facility [Line Items]
Interest Expense On Debt		$ 500,000	2,400,000
LIBOR \| After Fifth Amendment
Line of Credit Facility [Line Items]
Credit line interest rate		LIBOR rate plus a spread of 1.50% to 2.25%,
Base Rate \| After Fifth Amendment
Line of Credit Facility [Line Items]
Credit line interest rate		base rate plus a spread of 0.50% to 1.25%
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility borrowing capacity	150,000,000.0	$ 150,000,000.0					$ 25,000,000.0
Line of credit facility extended termination date		Jun. 04, 2023
Revolving Credit Facility \| Bank of America [Member]
Line of Credit Facility [Line Items]
Repayments Of Long term Debt	61,000,000.0
Term Loan Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility borrowing capacity	$ 50,000,000.0
Line of credit facility amount outstanding							$ 65,000,000.0
Term Loan Credit Facility \| Bank of America [Member]
Line of Credit Facility [Line Items]
Long Term Debt Outstanding		$ 0	$ 60,900,000

Severance Liabilities (Detail) - USD ($)
$ in Thousands

12 Months Ended

Jun. 26, 2020

Jun. 28, 2019

Changes in severance liabilities

Balance, beginning of the fiscal year

$ 15,473

$ 10,390

Current service cost

1,907

2,345

Prior Service cost

(528)

2,537

^[1]

Interest cost

462

352

Benefit paid

(48)

(274)

Actuarial (gain) loss on obligation

(117)

130

Foreign currency translation

(4)

(7)

Balance, end of the fiscal year

17,673

15,473

Changes in plan assets

Balance, beginning of the fiscal year

317

299

Actual return on plan assets

(34)

(7)

Employer contributions

Benefit paid

Foreign currency translation

(7)

(11)

Balance, end of the fiscal year

294

317

Underfunded status

$ (17,379)

$ (15,156)

[1]	Prior service cost is the change in Projected Benefit Obligation resulting from changes to employee benefits from local law changes.

Severance Liabilities - Recognized Non - Current Liabilities And Non - Current Assets in Balance Sheet (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Defined Benefit Plan Disclosure [Line Items]
Non-current assets	$ 0	$ 53
Non-current liabilities	$ 17,379	$ 15,209

Severance Liabilities - Accumulated Benefit Obligations (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Jun. 28, 2019
Defined Benefit Plan Disclosure [Line Items]
Accumulated benefit obligations	$ 11,864	$ 10,208

Severance liabilities - Fair Value of Plan Assets (Detail) - USD ($)
$ in Thousands

Jun. 26, 2020

Jun. 28, 2019

Jun. 29, 2018

Assets:

Assets Other

$ 294

$ 317

$ 299

Level 2

Assets:

Assets Other

160

183

Level 3

Assets:

Assets Other

134

Defined Benefit Plan Other

Assets:

Assets Other

294

317

Defined Benefit Plan Other | Level 2

Assets:

Assets Other

^[1]

160

183

Defined Benefit Plan Other | Level 3

Assets:

Assets Other

^[1]

$ 134

[1]	The “Other” category represents the bid value of the trustees’ insurance policy held with Old Mutual Wealth and the value of assets held with Royal London.

Severance liabilities - Schedule Of Allocation Of Plan Assets (Detail)	Jun. 26, 2020
Old Mutual Wealth Invesco Perpetual High Income
Percentage of Total	38.00%
Old Mutual Wealth Creation Balanced Portfolio
Percentage of Total	17.00%
Royal London Deposit Administration
Percentage of Total	45.00%

Severance liabilities - Assumptions Of Weighted Average Actuarial Of Severance Liabilities (Detail)	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Minimum [Member]
Discount rate	0.40%	2.30%	2.50%
Future salary increases	3.50%	3.50%	3.50%
Maximum [Member]
Discount rate	3.10%	3.20%	3.70%
Future salary increases	10.00%	10.00%	10.00%

Severance liabilities - Assumptions Of Weighted Average Actuarial Of Benefit Costs (Detail)	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Defined Benefit Plan Disclosure [Line Items]
Expected long-term rate of return on assets	2.10%	1.60%	1.90%
Minimum
Defined Benefit Plan Disclosure [Line Items]
Discount rate	2.30%	2.50%	1.90%
Maximum
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.20%	3.70%	3.60%

Effect of Recording Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Share-based compensation expense by type of award:
Restricted share units	$ 16,555	$ 14,691	$ 17,143
Performance share units	5,648	2,466	5,438
Total share-based compensation expense	22,203	17,157	22,581
Tax effect on share-based compensation expense		0	0
Net effect on share-based compensation expense	$ 22,203	$ 17,157	$ 22,581

Share-Based Compensation Expense Recorded in Condensed Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 22,203	$ 17,157	$ 22,581
Cost of Revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	6,098	5,656	6,784
Selling, General and Administrative Expenses
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 16,105	$ 11,501	$ 15,797

Share-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018	Mar. 27, 2020	Dec. 12, 2019	Nov. 02, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation costs capitalized	$ 0	$ 0			$ 0
Shares authorized for future issuance							1,281,619
Shares withheld to settle employee minimum statutory obligation for applicable income and other employment taxes			94,141	235,730
Tax withholdings related to net share settlement of restricted share units			$ 4,889,000	$ 10,649,000	5,509,000
Total fair value of shares vested			$ 0	0	0
Total intrinsic value of options exercised	$ 0			0	2,000,000.0
Stock Plan 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Ordinary available for grant	0		0
Stock Plan 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding						111,347
Shares authorized for future issuance								160,000
Equity Incentive 2020 plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Ordinary available for grant							1,700,000
Shares reserved for future issuance							1,300,000
Performance Share Units \| Stock Plan 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding	436,304		436,304
Performance Share Units \| Stock Plan 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding	3,836		3,836
Performance Share Units \| Executive of the Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award granted vesting period, year			0 years
Performance Share Units \| Executive of the Company \| Vest at the end of the performance period \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage			0.00%
Performance Share Units \| Executive of the Company \| Vest at the end of the performance period \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage			100.00%
Restricted Share Units \| Stock Plan 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding	721,514		721,514
Restricted Share Units \| Stock Plan 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding						24,327
Restricted Share Units \| Stock Plan 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding	2,923,551		2,923,551
Restricted Share Units \| Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	$ 12,200,000		$ 12,200,000
Unrecognized compensation expense, weighted-average period for recognition			2 years 4 months 24 days
Restricted Share Units \| Equity Incentive 2020 plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units outstanding	51,916		51,916
Restricted Share Units \| Vesting Option One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award granted vesting period, year	0 years
Restricted Share Units \| Vesting Option Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award granted vesting period, year	4 years
Restricted Share Units \| Non Employee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award granted vesting period, year	1 year
Restricted Share Units \| Non Employee Director \| Vest on the first of January
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage			100.00%
Performance Share Units \| Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	$ 5,600,000		$ 5,600,000
Unrecognized compensation expense, weighted-average period for recognition			1 year 1 month 6 days
Restricted Share Units and Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total fair value of restricted share units vested			$ 13,700,000	$ 26,800,000	$ 12,200,000
Aggregate intrinsic value of restricted share units outstanding	$ 73,500,000		$ 73,500,000

Share Option Activity (Detail) - $ / shares	12 Months Ended
Share Option Activity (Detail) - $ / shares	Jun. 28, 2019	Jun. 29, 2018	Jun. 30, 2017
Number of shares
Beginning balance	2,900	96,688
Granted	0	0
Exercised	0	(92,288)
Forfeited	0	0
Expired	(2,900)	(1,500)
Ending balance	0	2,900
Number of Exercisable Options
Number of Exercisable Options	0	2,900	96,688
Weighted-Average Exercise Price
Beginning balance	$ 15.16	$ 15.70
Granted	0	0
Exercised	0	16.02
Forfeited	0	0
Expired	15.16	5.75
Ending balance	0	15.16
Weighted-Average Grant Date Fair Value
Granted	$ 0	$ 0

Restricted Share Unit Activity (Detail) - Stock Plan 2010 and 2017 - Restricted Share Units - $ / shares	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Number of restricted share units
Number of share units, Beginning Balance	800,751	1,073,580	1,058,605
Number of share units, Granted	367,088	391,328	552,637
Number of share units, Issued	(335,355)	(515,482)	(436,867)
Number of share units, Forfeited	(34,727)	(148,675)	(100,795)
Number of share units, Ending Balance	797,757	800,751	1,073,580
Number of restricted share units, Expected to vest	697,093
Weighted Average Grant Date Fair Value Per Share
Weighted-average grant date fair value per share, Beginning Balance	$ 42.48	$ 35.19	$ 31.59
Weighted-average grant date fair value per share, Granted	50.87	50.02	35.95
Weighted-average grant date fair value per share, Issued	40.98	34.18	27.81
Weighted-average grant date fair value per share, Forfeited	44.59	38.42	33.62
Weighted-average grant date fair value per share, Ending Balance	46.88	$ 42.48	$ 35.19
Weighted-average grant date fair value per share, Expected to vest	$ 46.81

Performance Share Unit Activity (Detail) - Stock Plan 2010 and 2017 - Performance Share Units - $ / shares	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Number of performance share units
Number of share units, Beginning Balance	548,500	605,892	227,268
Number of share units, Granted	242,310	201,994	378,624
Number of share units, Issued	0	(227,268)
Number of share units, Forfeited	(350,670)	(32,118)
Number of share units, Ending Balance	440,140	548,500	605,892
Expected to vest as of June 29, 2018	378,928
Weighted Average Grant Date Fair Value Per Share
Weighted-average grant date fair value per share, Beginning Balance	$ 40.97	$ 38.41	$ 40.48
Weighted-average grant date fair value per share, Granted	48.65	48.02	37.16
Weighted-average grant date fair value per share, Issued	0	40.48
Weighted-average grant date fair value per share, Forfeited	36.99	40.47
Weighted-average grant date fair value per share, Ending Balance	48.37	$ 40.97	$ 38.41
Weighted-average grant date fair value per share, Expected to vest	$ 48.37

Employee Benefit Plans -Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Defined Contribution and Defined Benefit Plans [Line Items]
Bonus distributions to employees	$ 8.7	$ 7.6	$ 4.0
Provident Fund
Defined Contribution and Defined Benefit Plans [Line Items]
Defined contribution plan, employer annual contribution	5.5	4.8	4.2
Defined Contribution Plan 401k
Defined Contribution and Defined Benefit Plans [Line Items]
Defined contribution plan, employer annual contribution	$ 0.7	$ 0.8	$ 0.7
Employees maximum contribution to 401 (K) Plan	80.00%
Percentage of employees' contribution, eligible for employer match	100.00%
Percentage of employees' annual contribution, eligible for employers match	6.00%

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018	May 31, 2019	Feb. 28, 2018	Aug. 31, 2017
Shareholders Equity [Line Items]
Ordinary shares, authorized share capital	500,000,000	500,000,000
Ordinary shares, par value	$ 0.01	$ 0.01
Preferred shares, shares authorized	5,000,000	5,000,000
Preferred shares, par value	$ 0.01	$ 0.01
Ordinary shares issued upon exercise of options		0	92,288
Ordinary shares issued upon exercise of options, weight average exercise price		$ 0	$ 16.02
Share repurchase program, approved amount						$ 30,000
Share repurchase program, increase in shares authorized for repurchase				$ 50,000	$ 30,000
Treasury Stock, carrying basis	$ 41,500			$ 110,000
Treasury Stock, Shares, Acquired	355,000	100,000	1,289,103
Treasury stock shares repurchased average price	$ 58.37
Tresury stock shares repurchased value	$ 20,722	$ 5,378	$ 42,401
Stock Plan Nineteen Ninety Nine and Twenty Ten
Shareholders Equity [Line Items]
Ordinary shares issued upon exercise of options			92,288
Ordinary shares issued upon exercise of options, weight average exercise price			$ 15.56
Ordinary shares issued upon vesting of restricted shares	241,214	507,020	290,949

Changes in AOCI, Net of Tax (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 863,099	$ 740,939	$ 681,574
Amounts reclassified from AOCI		(1)
Tax effects
Total other comprehensive income (loss), net of tax	1,239	(1,129)	(909)
Ending Balance	974,409	863,099	740,939
Unrealized Gains (Losses) on Available-for-sale Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	952	(1,091)
Other comprehensive income before reclassification	634	1,845
Amounts reclassified from AOCI	(96)	198
Total other comprehensive income (loss), net of tax	538	2,043
Ending Balance	1,490	952	(1,091)
Unrealized Gains (Losses) on Derivative Instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	32	33
Other comprehensive income before reclassification	171
Amounts reclassified from AOCI	399
Tax effects	0
Total other comprehensive income (loss), net of tax	570	(1)
Ending Balance	602	32	33
Retirement benefit plan - Prior service cost
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(2,537)
Other comprehensive income before reclassification	0	(2,537)
Amounts reclassified from AOCI	528
Tax effects	0
Total other comprehensive income (loss), net of tax	528	(2,537)
Ending Balance	(2,009)	(2,537)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(833)	(199)
Other comprehensive income before reclassification	(397)	(634)
Amounts reclassified from AOCI	0
Tax effects	0
Total other comprehensive income (loss), net of tax	(397)	(634)
Ending Balance	(1,230)	(833)	(199)
AOCI Attributable to Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	(2,386)	(1,257)
Other comprehensive income before reclassification	408	(1,326)
Amounts reclassified from AOCI	831	197
Total other comprehensive income (loss), net of tax	1,239	(1,129)
Ending Balance	$ (1,147)	$ (2,386)	$ (1,257)

Pre-tax Amounts Reclassified from AOCI into Condensed Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on derivative instruments	$ 570	$ (1)	$ (1)
Total amounts reclassified from AOCI		(1)
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total amounts reclassified from AOCI	831	197
Reclassification out of Accumulated Other Comprehensive Income \| Interest income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on available-for-sale securities	(96)	198
Reclassification out of Accumulated Other Comprehensive Income \| Cost of revenue
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on derivative instruments	2,512
Reclassification out of Accumulated Other Comprehensive Income \| Selling, general and administrative expenses
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on derivative instruments	105	$ (1)
Retirement benefit plan – Prior service cost	528
Reclassification out of Accumulated Other Comprehensive Income \| Foreign exchange loss, net
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on derivative instruments	(998)
Reclassification out of Accumulated Other Comprehensive Income \| Interest expense
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on derivative instruments	$ (1,220)

Commitments and Contingencies - Additional Information (Detail) $ in Thousands, € in Millions	Jun. 26, 2020 USD ($)	Jun. 26, 2020 EUR (€)	Jun. 28, 2019 USD ($)	Jun. 28, 2019 EUR (€)
Commitments and Contingencies Disclosure [Line Items]
Outstanding bank guarantees given by banks on behalf of the company	$ 1,600
Outstanding letter of credit amount \| €		€ 6.0		€ 6.0
Amount of cash collateral	7,400		$ 7,400
Thailand
Commitments and Contingencies Disclosure [Line Items]
Outstanding commitment to third parties	11,100
CHINA
Commitments and Contingencies Disclosure [Line Items]
Outstanding bank guarantees given by banks on behalf of the company	100
UNITED KINGDOM
Commitments and Contingencies Disclosure [Line Items]
Outstanding bank guarantees given by banks on behalf of the company	$ 25

Business Segments and Geographic Information - Additional Information (Detail) $ in Millions	3 Months Ended		12 Months Ended
	Jun. 26, 2020 USD ($) Segment	Jun. 28, 2019 USD ($) Segment	Jun. 29, 2018 Segment
Segment Reporting Information [Line Items]
Number of operating segment \| Segment	1	1	1
North America
Segment Reporting Information [Line Items]
Long-lived assets \| $	$ 29.5	$ 31.4

Total Revenues by Geographic Regions (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 26, 2020	Mar. 27, 2020	Dec. 27, 2019	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019	Dec. 28, 2018	Sep. 28, 2018	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items]
Revenues	$ 405,113	$ 411,210	$ 426,217	$ 399,296	$ 405,127	$ 398,951	$ 403,080	$ 377,177	$ 1,641,836	$ 1,584,335	$ 1,371,925
North America
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items]
Revenues									830,888	756,278	643,236
Asia-Pacific
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items]
Revenues									552,923	608,386	519,203
Europe
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items]
Revenues									$ 258,025	$ 219,671	$ 209,486

Revenues by End Market (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Revenues by End Market (Detail) - USD ($) $ in Thousands	Jun. 26, 2020	Mar. 27, 2020	Dec. 27, 2019	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019	Dec. 28, 2018	Sep. 28, 2018	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Revenue from External Customer [Line Items]
Revenues	$ 405,113	$ 411,210	$ 426,217	$ 399,296	$ 405,127	$ 398,951	$ 403,080	$ 377,177	$ 1,641,836	$ 1,584,335	$ 1,371,925
Optical communications
Revenue from External Customer [Line Items]
Revenues									1,248,174	1,184,936	1,000,256
Lasers, sensors, and other
Revenue from External Customer [Line Items]
Revenues									$ 393,662	$ 399,399	$ 371,669

Total Revenues by Percentage from Individual Customers Representing Ten Percent or More of Total Revenues (Detail)

12 Months Ended

Jun. 26, 2020

Jun. 28, 2019

Jun. 29, 2018

Revenue, Major Customer [Line Items]

Concentration of risk percentage

100.00%

Revenue | Customer Concentration Risk | Lumentum Operations LLC

Revenue, Major Customer [Line Items]

Concentration of risk percentage

19.00%

20.00%

16.00%

Revenue | Customer Concentration Risk | Acacia Communications Inc

Revenue, Major Customer [Line Items]

Concentration of risk percentage

^[1]

10.00%

Revenue | Customer Concentration Risk | Infinera Corporation

Revenue, Major Customer [Line Items]

Concentration of risk percentage

^[1]

10.00%

[1]	Represents less than 10% of total revenues.

Accounts Receivable from Individual Customers Representing Ten Percent or More of Accounts Receivable (Detail)	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items]
Percentage of account receivable	100.00%	100.00%
Accounts Receivable \| Customer Concentration Risk \| Lumentum Operations LLC
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items]
Percentage of account receivable	20.00%	23.00%
Accounts Receivable \| Customer Concentration Risk \| Acacia Communications Inc
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items]
Percentage of account receivable	13.00%	12.00%

Financial instruments - Additional Information (Detail) - USD ($)	12 Months Ended
	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018	Jun. 29, 2019
Financial Instrument [Line Items]
Amount of unrealized loss recognized in net income on derivatives			$ 1,700,000
Amount of unrealized gain recognized in net income on derivatives	$ 1,200,000	$ 4,800,000
Forward Foreign Currency and Option Contracts
Financial Instrument [Line Items]
Derivative contracts denominated in GBP		0
China, Yuan Renminbi
Financial Instrument [Line Items]
Derivative contracts	0	$ 0
United Kingdom, Pounds
Financial Instrument [Line Items]
Derivative contracts denominated in GBP	$ 0
Foreign currency forward contracts \| Maximum
Financial Instrument [Line Items]
Derivative term of contract	12 months
Foreign currency forward contracts \| Thailand, baht
Financial Instrument [Line Items]
Derivative contracts	$ 126,000,000			$ 72,000,000

Outstanding Foreign Currency Assets and Liabilities (Detail) ฿ in Thousands, ¥ in Thousands, £ in Thousands, $ in Thousands	Jun. 26, 2020 USD ($)	Jun. 26, 2020 THB (฿)	Jun. 26, 2020 CNY (¥)	Jun. 26, 2020 GBP (£)	Jun. 28, 2019 USD ($)	Jun. 28, 2019 THB (฿)	Jun. 28, 2019 CNY (¥)	Jun. 28, 2019 GBP (£)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency assets	$ 51,745				$ 36,077
Foreign currency liabilities	75,994				70,955
Thailand, baht
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency assets	21,617	฿ 667,955			21,628	฿ 664,860
Foreign currency liabilities	68,039	฿ 2,102,392			63,825	฿ 1,961,972
China, Yuan Renminbi
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency assets	22,402		¥ 158,060		7,767		¥ 53,393
Foreign currency liabilities	6,036		¥ 42,586		3,836		¥ 26,373
United Kingdom, Pounds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency assets	7,726			£ 6,220	6,682			£ 5,270
Foreign currency liabilities	$ 1,919			£ 1,545	$ 3,294			£ 2,598

Subsequent Event - Additional Information (Detail) - USD ($) $ in Millions	Aug. 01, 2020	Aug. 31, 2017
Share repurchase program, approved amount		$ 30.0
Subsequent Event [Member]
Stock repurchased during period, value	$ 58.5
Share repurchase program, approved amount	$ 168.5

Unaudited Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Jun. 26, 2020	Mar. 27, 2020	Dec. 27, 2019	Sep. 27, 2019	Jun. 28, 2019	Mar. 29, 2019	Dec. 28, 2018	Sep. 28, 2018	Jun. 26, 2020	Jun. 28, 2019	Jun. 29, 2018
Quarterly Financial Information [Line Items]
Total revenues	$ 405,113	$ 411,210	$ 426,217	$ 399,296	$ 405,127	$ 398,951	$ 403,080	$ 377,177	$ 1,641,836	$ 1,584,335	$ 1,371,925
Gross profit	46,624	44,336	49,158	45,987	46,626	46,758	45,564	40,276	186,105	179,224	153,412
Net income	$ 28,024	$ 28,267	$ 31,231	$ 25,957	$ 32,957	$ 28,635	$ 31,513	$ 27,850	$ 113,479	$ 120,955	$ 84,167
Basic net income per share:
Net income	$ 0.76	$ 0.76	$ 0.84	$ 0.70	$ 0.89	$ 0.78	$ 0.86	$ 0.76	$ 3.07	$ 3.29	$ 2.26
Weighted-average shares used in basic net income per share calculations	36,723	36,987	37,011	36,913	36,836	36,891	36,841	36,625	36,908	36,798	37,257
Diluted net income per share:
Net income	$ 0.75	$ 0.75	$ 0.83	$ 0.69	$ 0.88	$ 0.76	$ 0.84	$ 0.75	$ 3.01	$ 3.23	$ 2.21
Weighted-average shares used in diluted net income per share calculations	37,571	37,797	37,763	37,529	37,511	37,539	37,471	37,140	37,665	37,415	38,035