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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________
(Mark One)
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2023
OR
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from__________to__________
Commission File Number: 001-34775
____________________________
FABRINET
(Exact name of registrant as specified in its charter)
____________________________
Cayman Islands
(State or other jurisdiction of
incorporation or organization)
98-1228572
(I.R.S. Employer
Identification No.)

c/o Intertrust Corporate Services
One Nexus Way, Camana Bay
Grand Cayman
Cayman Islands
(Address of principal executive offices)

KY1-9005
(Zip Code)
+66 2-524-9600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Ordinary Shares, $0.01 par valueFNNew York Stock Exchange
____________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  x    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    x  No
As of April 28, 2023, the registrant had 36,297,059 ordinary shares, $0.01 par value, outstanding.

1

Table of Contents
FABRINET
FORM 10-Q
QUARTER ENDED MARCH 31, 2023
Table of Contents
Page No.

2

Table of Contents

RISK FACTORS SUMMARY

You should carefully consider the information set forth below under the heading “Risk Factors” in Part II, Item 1A before deciding whether to invest in our securities. Below is a summary of the principal risks associated with an investment in our securities.

Our sales depend on a small number of customers. A reduction in orders from any of these customers, the loss of any of these customers, or a customer exerting significant pricing and margin pressures on us could harm our business, financial condition and operating results.

Consolidation in the markets we serve could harm our business, financial condition and operating results.

If the optical communications market does not expand as we expect, our business may not grow as fast as we expect.

Our quarterly revenues, gross profit margins and operating results have fluctuated significantly and may continue to do so in the future, which may cause the market price of our ordinary shares to decline or be volatile.

If we are unable to continue diversifying our precision optical and electro-mechanical manufacturing services across other markets within the optics industry, or if these markets do not grow as fast as we expect, our business may not grow as fast as we expect.

We face significant competition in our business. If we are unable to compete successfully against our current and future competitors, our business, financial condition and operating results could be harmed.

Cancellations, delays or reductions of customer orders and the relatively short-term nature of the commitments of our customers could harm our business, financial condition and operating results.

Our exposure to financially troubled customers or suppliers could harm our business, financial condition and operating results.

We purchase some of the critical materials used in certain of our products from a single source or a limited number of suppliers. Supply shortages have in the past, and could in the future, impair the quality, reduce the availability or increase the cost of materials, which could harm our revenues, profitability and customer relations.

Managing our inventory is complex and may require write-downs due to excess or obsolete inventory, which could cause our operating results to decrease significantly in a given fiscal period.

If we fail to adequately expand our manufacturing capacity, we will not be able to grow our business, which would harm our business, financial condition and operating results. Conversely, if we expand too much or too rapidly, we may experience excess capacity, which would harm our business, financial condition and operating results.

We may experience manufacturing yields that are lower than expected, potentially resulting in increased costs, which could harm our business, operating results and customer relations.

If the products that we manufacture contain defects, we could incur significant correction costs, demand for our services may decline and we may be exposed to product liability and product warranty claims, which could harm our business, financial condition, operating results and customer relations.

If we fail to attract additional skilled employees or retain key personnel, our business, financial condition and operating results could suffer.

Fluctuations in foreign currency exchange rates and changes in governmental policies regarding foreign currencies could increase our operating costs, which would adversely affect our operating results.

We conduct operations in a number of countries, which creates logistical and communications challenges for us and exposes us to other risks and challenges that could harm our business, financial condition and operating results.

We are subject to governmental export and import controls in several jurisdictions that subject us to a variety of risks, including liability, impairment of our ability to compete in international markets, and decreased sales and customer orders.

We are subject to risks related to the ongoing U.S.-China trade dispute, including increased tariffs on materials that we use in manufacturing, which could adversely affect our business, financial condition and operating results.

Political unrest and demonstrations, as well as changes in the political, social, business or economic conditions in Thailand, could harm our business, financial condition and operating results.

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We expect to continue to invest in our manufacturing operations in the People's Republic of China ("PRC"), which will continue to expose us to risks inherent in doing business in the PRC, any of which risks could harm our business, financial condition and operating results.

Natural disasters, epidemics (including COVID-19), acts of terrorism and political and economic developments could harm our business, financial condition and operating results.

Unfavorable worldwide economic conditions (including inflation and supply chain disruptions) may negatively affect our business, financial condition and operating results.

The loan agreements for our long-term debt obligations and other credit facilities contain financial ratio covenants that may impair our ability to conduct our business.

The phase-out of the London Interbank Offered Rate ("LIBOR") could affect interest rates under our existing credit facility agreement, as well as our ability to seek future debt financing.

We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our shareholders.

Our investment portfolio may become impaired by deterioration of the capital markets.

We are not fully insured against all potential losses. Natural disasters or other catastrophes could adversely affect our business, financial condition and operating results.

There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with U.S. GAAP. Any changes in estimates, judgments and assumptions could have a material adverse effect on our business, financial condition and operating results.

Our business and operations would be adversely impacted in the event of a failure of our information technology infrastructure and/or cyber security attacks.

Intellectual property infringement claims against our customers or us could harm our business, financial condition and operating results.

Any failure to protect our customers’ intellectual property that we use in the products we manufacture for them could harm our customer relationships and subject us to liability.

We are subject to the risk of increased income taxes, which could harm our business, financial condition and operating results.

We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to continue to devote substantial resources to various compliance initiatives.

If we are unable to meet regulatory quality standards applicable to our manufacturing and quality processes for the products we manufacture, our business, financial condition and operating results could be harmed.

Failure to comply with applicable environmental laws and regulations could have a material adverse effect on our business, financial condition and operating results.

Our share price may be volatile due to fluctuations in our operating results and other factors, including the activities and operating results of our customers or competitors, any of which could cause our share price to decline.

If securities or industry analysts do not publish research or if they publish misleading or unfavorable research about our business, the market price and trading volume of our ordinary shares could decline.

We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. investors.

Our business and share price could be negatively affected as a result of activist shareholders.

Certain provisions in our constitutional documents may discourage our acquisition by a third party, which could limit our shareholders' opportunity to sell shares at a premium.

Our shareholders may face difficulties in protecting their interests because we are incorporated under Cayman Islands law.

Certain judgments obtained against us by our shareholders may not be enforceable.

Energy price volatility may negatively impact our business, financial condition and operating results.
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FABRINET
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands of U.S. dollars, except share data and par value)March 31,
2023
June 24,
2022
Assets
Current assets
Cash and cash equivalents$230,743 $197,996 
Short-term restricted cash 220 
Short-term investments307,980 280,157 
Trade accounts receivable, net of allowance for doubtful accounts of $1,031 and $1,271, respectively
540,343 439,330 
Contract assets21,081 13,464 
Inventories554,247 557,145 
Prepaid expenses10,606 11,626 
Other current assets39,610 25,233 
Total current assets1,704,610 1,525,171 
Non-current assets
Long-term restricted cash 149 
Property, plant and equipment, net308,365 292,277 
Intangibles, net2,471 3,508 
Operating right-of-use assets2,210 4,084 
Deferred tax assets10,487 9,800 
Other non-current assets658 652 
Total non-current assets324,191 310,470 
Total Assets$2,028,801 $1,835,641 
Liabilities and Shareholders’ Equity
Current liabilities
Long-term borrowings, current portion, net$12,156 $12,156 
Trade accounts payable436,085 439,684 
Fixed assets payable20,116 9,085 
Contract liabilities3,249 1,982 
Operating lease liabilities, current portion1,634 2,319 
Income tax payable2,785 2,898 
Accrued payroll, bonus and related expenses28,899 20,374 
Accrued expenses23,428 24,758 
Other payables26,637 25,231 
Total current liabilities554,989 538,487 
Non-current liabilities
Long-term borrowings, non-current portion, net3,039 15,202 
Deferred tax liability6,159 6,001 
Operating lease liability, non-current portion235 1,476 
Severance liabilities21,267 18,384 
Other non-current liabilities1,531 2,409 
Total non-current liabilities32,231 43,472 
Total Liabilities587,220 581,959 
Commitments and contingencies (Note 15)
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of March 31, 2023 and June 24, 2022)
  
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,274,783 shares and 39,048,700 shares issued at March 31, 2023 and June 24, 2022, respectively; and 36,578,909 shares and 36,436,683 shares outstanding at March 31, 2023 and June 24, 2022, respectively)
393 390 
Additional paid-in capital200,141 196,667 
Less: Treasury shares (2,695,874 shares and 2,612,017 shares as of March 31, 2023 and June 24, 2022, respectively)
(156,475)(147,258)
Accumulated other comprehensive income (loss)(6,281)(12,793)
Retained earnings1,403,803 1,216,676 
Total Shareholders’ Equity1,441,581 1,253,682 
Total Liabilities and Shareholders’ Equity$2,028,801 $1,835,641 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)
Three Months EndedNine Months Ended
(in thousands of U.S. dollars, except per share data)March 31,
2023
March 25,
2022
March 31,
2023
March 25,
2022
Revenues$665,281 $564,395 $1,989,366 $1,674,350 
Cost of revenues(579,274)(493,702)(1,735,388)(1,470,689)
        Gross profit86,007 70,693 253,978 203,661 
Selling, general and administrative expenses(18,309)(17,034)(57,804)(55,412)
Restructuring and other related costs(5,872) (5,872)(135)
Operating income61,826 53,659 190,302 148,114 
Interest income3,317 414 7,210 1,470 
Interest expense(399)(73)(1,179)(347)
Foreign exchange gain (loss), net(1,303)(410)(3,122)998 
Other income (expense), net31 (36)(178)(1,351)
Income before income taxes63,472 53,554 193,033 148,884 
Income tax expense(4,117)(2,893)(5,906)(4,693)
Net income59,355 50,661 187,127 144,191 
Other comprehensive income (loss), net of tax:
       Change in net unrealized gain (loss) on available-for-sale securities2,046 (2,455)1,768 (3,615)
       Change in net unrealized gain (loss) on derivative instruments(5,535)666 4,435 2,743 
       Change in net retirement benefits plan – prior service cost113 124 338 448 
       Change in foreign currency translation adjustment(191)(34)(29)(198)
Total other comprehensive income (loss), net of tax(3,567)(1,699)6,512 (622)
Net comprehensive income$55,788 $48,962 $193,639 $143,569 
Earnings per share
       Basic$1.62 $1.37 $5.12 $3.90 
       Diluted$1.60 $1.35 $5.07 $3.85 
Weighted-average number of ordinary shares outstanding (thousands of shares)
       Basic36,608 36,940 36,575 36,945 
       Diluted36,989 37,473 36,895 37,451 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)
For the Three Months Ended March 31, 2023
 Ordinary ShareAdditional
Paid-in
Capital
Treasury
Shares
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
(in thousands of U.S. dollars, except share data)SharesAmount
Balances at December 30, 202239,251,581 $393 $194,366 $(152,362)$(2,714)$1,344,448 $1,384,131 
Net income— — — — — 59,355 59,355 
Other comprehensive income (loss)— — — — (3,567)— (3,567)
Share-based compensation— — 6,719 — — — 6,719 
Issuance of ordinary shares23,202 — — — — —  
Repurchase of 35,232 shares held as treasury shares
— — (4,113)— — (4,113)
Tax withholdings related to net share settlement of restricted share units— — (944)— — — (944)
Balances at March 31, 2023
39,274,783 $393 $200,141 $(156,475)$(6,281)$1,403,803 $1,441,581 
For the Nine Months Ended March 31, 2023
 Ordinary ShareAdditional
Paid-in
Capital
Treasury
Shares
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
(in thousands of U.S. dollars, except share data)SharesAmount
Balances at June 24, 202239,048,700 $390 $196,667 $(147,258)$(12,793)$1,216,676 $1,253,682 
Net income— — — — — 187,127 187,127 
Other comprehensive income (loss)— — — — 6,512 — 6,512 
Share-based compensation— — 21,217 — — — 21,217 
Issuance of ordinary shares226,083 3 (3)— — —  
Repurchase of 83,857 shares held as treasury shares
— — — (9,217)— — (9,217)
Tax withholdings related to net share settlement of restricted share units— — (17,740)— — — (17,740)
Balances at March 31, 2023
39,274,783 $393 $200,141 $(156,475)$(6,281)$1,403,803 $1,441,581 









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FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)
For the Three Months Ended March 25, 2022
 Ordinary ShareAdditional
Paid-in
Capital
Treasury
Shares
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
(in thousands of U.S. dollars, except share data)SharesAmount
Balances at December 24, 202139,008,996 $390 $185,940 $(91,776)$(5,189)$1,109,826 $1,199,191 
Net income— — — — — 50,661 50,661 
Other comprehensive income (loss)— — — — (1,699)— (1,699)
Share-based compensation— — 5,723 — — — 5,723 
Issuance of ordinary shares30,729 — — — — —  
Repurchase of 237,339 shares held as treasury shares
— — — (24,191)— — (24,191)
Tax withholdings related to net share settlement of restricted share units— — (958)— — — (958)
Balances at March 25, 2022
39,039,725 $390 $190,705 $(115,967)$(6,888)$1,160,487 $1,228,727 
For the Nine Months Ended March 25, 2022
 Ordinary ShareAdditional
Paid-in
Capital
Treasury
Shares
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
(in thousands of U.S. dollars, except share data)SharesAmount
Balances at June 25, 202138,749,045 $388 $189,445 $(87,343)$(6,266)$1,016,296 $1,112,520 
Net income— — — — — 144,191 144,191 
Other comprehensive income (loss)— — — — (622)— (622)
Share-based compensation— — 21,701 — — — 21,701 
Issuance of ordinary shares290,680 2 (2)— — —  
Repurchase of 275,608 shares held as treasury shares
— — — (28,624)— — (28,624)
Tax withholdings related to net share settlement of restricted share units— — (20,439)— — — (20,439)
Balances at March 25, 2022
39,039,725 $390 $190,705 $(115,967)$(6,888)$1,160,487 $1,228,727 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
 Nine Months Ended
(in thousands of U.S. dollars)March 31,
2023
March 25,
2022
Cash flows from operating activities
Net income for the period$187,127 $144,191 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization32,504 28,907 
Non-cash restructuring charges and other related costs2,201  
(Gain) loss on disposal and impairment of property, plant and equipment(1,630)(175)
(Gain) loss from sales and maturities of available-for-sale securities92 (13)
Amortization of discount (premium) of short-term investments300 3,038 
Amortization of deferred debt issuance costs24 24 
(Reversal of) allowance for doubtful accounts(240)(39)
Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts693 (1,422)
Amortization of fair value at hedge inception of interest rate swaps(478)(736)
Share-based compensation21,217 21,701 
Deferred income tax(276)563 
Other non-cash expenses(151)1,067 
Changes in operating assets and liabilities
Trade accounts receivable(98,212)(109,334)
Contract assets(7,617)(1,690)
Inventories2,720 (30,503)
Other current assets and non-current assets(11,807)(11,221)
Trade accounts payable(5,028)55,333 
Contract liabilities1,267 243 
Income tax payable(262)(872)
Severance liabilities1,917 1,883 
Other current liabilities and non-current liabilities17,861 6,952 
Net cash provided by operating activities142,222 107,897 
Cash flows from investing activities
Purchase of short-term investments(154,033)(119,853)
Proceeds from sales of short-term investments30,179 19,463 
Proceeds from maturities of short-term investments97,408 92,862 
Purchase of property, plant and equipment(43,422)(75,327)
Purchase of intangibles(698)(592)
Proceeds from disposal of property, plant and equipment117 229 
Net cash used in investing activities(70,449)(83,218)
Cash flows from financing activities
Repayment of long-term borrowings(12,187)(9,141)
Repayment of finance lease liability(7) 
Repurchase of ordinary shares(9,217)(28,624)
Withholding tax related to net share settlement of restricted share units(17,740)(20,439)
Net cash used in financing activities(39,151)(58,204)
Net increase (decrease) in cash, cash equivalents and restricted cash$32,622 $(33,525)
Movement in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at the beginning of period$198,365 $303,123 
Increase (decrease) in cash, cash equivalents and restricted cash32,622 (33,525)
Effect of exchange rate on cash, cash equivalents and restricted cash(244)(301)
Cash, cash equivalents and restricted cash at the end of period$230,743 $269,297 
Non-cash investing and financing activities
Construction, software and equipment-related payables$20,116 $14,060 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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FABRINET
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Continued)
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited condensed consolidated statements of cash flows:
(in thousands of U.S. dollars)
As of
March 31, 2023
As of
March 25, 2022
Cash and cash equivalents$230,743 $269,140 
Restricted cash 157 
Cash, cash equivalents and restricted cash$230,743 $269,297 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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FABRINET
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(in thousands of U.S. dollars unless otherwise noted)
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 Israel Ltd. (“Fabrinet Israel”).

2.    Accounting policies
Basis of presentation
The accompanying unaudited condensed consolidated financial statements for Fabrinet as of March 31, 2023 and for the three and nine months ended March 31, 2023 and March 25, 2022 include normal recurring adjustments necessary for a fair statement of the financial statements set forth herein, in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or "GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in Fabrinet’s Annual Report on Form 10-K for the year ended June 24, 2022.
The balance sheet as of June 24, 2022 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
The results for the three and nine months ended March 31, 2023 may not be indicative of results for the year ending June 30, 2023 or any future periods.
Use of Estimates
The preparation of the Company’s unaudited condensed 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, allowance for expected credit losses, income taxes, inventory obsolescence, goodwill and valuation of intangible assets related to business acquisition, 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 the Company's 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 unaudited condensed 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, or based upon the occurrence of other factors related to the COVID-19 pandemic that could result in material impacts to the Company's unaudited condensed consolidated financial statements in future reporting periods.
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Fiscal years
The Company utilizes a 52-53 week fiscal year ending on the Friday in June closest to June 30. The three months ended March 31, 2023 and March 25, 2022 consisted of 13 weeks. The nine months ended March 31, 2023 and March 25, 2022 consisted of 40 weeks and 39 weeks, respectively. Fiscal year 2023 will comprise 53 weeks and will end on June 30, 2023.
Adoption of New Accounting Standards
In November 2021, the Financial Accounting Standard Board issued Accounting Standards Update ("ASU") 2021-10, “Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance,” which requires annual disclosures that increase the transparency of transactions involving government assistance, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for all entities within the ASU's scope for financial statements issued for annual periods beginning after December 15, 2021. The Company adopted this standard in the first quarter of fiscal year 2023 with no material impact on its unaudited condensed consolidated financial statements.



































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3.    Revenues from contracts with customers
Revenue by Geographic Area and End Market
Revenues are attributed to a particular geographic area based on the bill-to-location of the Company’s customers. The Company operates in three geographic regions: North America; Asia-Pacific and others; and Europe.
The following table presents total revenues by geographic region:
(in thousands, except percentages)Three Months Ended
March 31, 2023
As a % of Total
Revenues
Nine Months Ended
March 31, 2023
As a % of Total
Revenues
North America
   U.S.$310,100 $975,098 
   Others (1)
6,035 13,693 
Total revenue in North America316,135 47.5 %988,791 49.7 %
Asia-Pacific and others
   India85,731 247,942 
   Israel85,562 182,732 
   Hong Kong37,120 109,315 
   Malaysia30,688 130,402 
   Thailand16,706 45,420 
   China11,194 60,738 
   Japan10,044 32,129 
   Others2,896 7,957 
Total revenue in Asia-Pacific and others279,941 42.1 %816,635 41.1 %
Europe
   U.K.40,292 103,440 
   Germany14,532 40,975 
   Ireland (2)
176 438 
   Others14,205 39,087 
Total revenue in Europe$69,205 10.4 %$183,940 9.2 %
Total revenue$665,281 100.0 %$1,989,366 100.0 %
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(in thousands, except percentages)Three Months Ended
March 25, 2022
As a % of Total
Revenues
Nine Months Ended
March 25, 2022
As a % of Total
Revenues
North America
   U.S.$292,475 $781,469 
   Others (1)
4,123 8,996 
   Total revenue in North America296,598 52.5 %790,465 47.2 %
Asia-Pacific and others 
   India70,956 210,009 
   Malaysia51,188 163,306 
   Hong Kong17,338 61,575 
   Israel16,883 67,318 
   Japan16,449 47,258 
   China12,843 40,624 
   Others10,559 34,349 
   Total revenue in Asia-Pacific and others196,216 34.8 %624,439 37.3 %
Europe
   Ireland (2)
28,640 133,024 
   U.K.21,632 64,151 
   Germany10,688 28,098 
   Others10,621 34,173 
   Total revenue in Europe$71,581 12.7 %$259,446 15.5 %
         Total revenue$564,395 100.0 %$1,674,350 100.0 %
(1)Others includes revenues from external customers based in our country of domicile, the Cayman Islands, which for each year presented is $0.
(2)Due to change in bill-to-location for a certain customer.
The following table presents revenues by end market:
(in thousands, except percentages)Three Months Ended
March 31, 2023
As a % of Total
Revenues
Nine Months Ended
March 31, 2023
As a % of Total
Revenues
Optical communications$502,615 75.5 %$1,506,232 75.7 %
Lasers, sensors and other162,666 24.5 %483,134 24.3 %
Total$665,281 100.0 %$1,989,366 100.0 %

(in thousands, except percentages)Three Months Ended
March 25, 2022
As a % of Total
Revenues
Nine Months Ended
March 25, 2022
As a % of Total
Revenues
Optical communications$440,003 78.0 %$1,318,087 78.7 %
Lasers, sensors and other124,392 22.0 %356,263 21.3 %
Total$564,395 100.0 %$1,674,350 100.0 %




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Contract Assets and Liabilities
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 unaudited condensed consolidated balance sheets and transferred to accounts receivable when rights to payment become unconditional.
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 nine months ended March 31, 2023:
(in thousands)Contract
Assets
Beginning balance, June 24, 2022
$13,464 
Revenue recognized57,617 
Amounts collected or invoiced(50,000)
Ending balance, March 31, 2023
$21,081 
(in thousands)Contract
Liabilities
Beginning balance, June 24, 2022
$1,982 
Advance payment received during the period13,073 
Revenue recognized(