UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 28, 2011
Fabrinet
(Exact name of registrant as specified in its charter)
Cayman Islands | 001-34775 | Not Applicable | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Walker House
87 Mary Street
George Town
Grand Cayman
KY1-9005
Cayman Islands
(Address of principal executive offices, including zip code)
+66 2-524-9600
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On January 31, 2011, Fabrinet issued a press release regarding its financial results for the fiscal quarter ended December 24, 2010. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On January 28, 2011, the Board of Directors of Fabrinet appointed Dr. Harpal Gill, age 57, to serve as president and chief operating officer. David T. Mitchell will continue to serve as Fabrinets chief executive officer and chairman of the board of directors.
Dr. Gill has served as Fabrinets executive vice president, chief operating officer since March 2009, executive vice president, operations of Fabrinet Co., Ltd. since July 2007, and executive vice president, operations of Fabrinet USA, Inc. since joining Fabrinet in May 2005. From July 2003 to January 2005, Dr. Gill served as vice president of engineering and then senior vice president of engineering for Maxtor Corporation, a disk drive manufacturer. From January 1999 to July 2003, Dr. Gill served as the vice president of engineering for Read Rite Corporation, a supplier of magnetic recording heads for data storage devices. From June 1996 to October 1998, Dr. Gill served as the managing director of JTS Corp., a disk drive manufacturer. Dr. Gill has also held senior management positions with Seagate Technology and Stanton Automation. Dr. Gill earned a bachelor of science degree in mechanical engineering from Brunel University and a doctor of philosophy degree in engineering from the University of Bradford.
Fabrinet did not amend the terms of Dr. Gills existing employment arrangement in connection with his appointment. A description of the material terms of Dr. Gills existing employment arrangement with Fabrinet is contained in Fabrinets proxy statement for its 2010 annual meeting of stockholders.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. |
Exhibit |
Description | |
99.1 | Press release dated January 31, 2011, entitled Fabrinet Announces Second Quarter 2011 Financial Results |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FABRINET | ||||||
By: | /s/ Mark J. Schwartz | |||||
Mark J. Schwartz Executive Vice President, Chief Financial Officer and Secretary |
Date: January 31, 2011
EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Press release dated January 31, 2011, entitled Fabrinet Announces Second Quarter 2011 Financial Results |
Exhibit 99.1
Fabrinet Announces Second Quarter 2011 Financial Results
BANGKOK, Thailand January 31, 2011 Fabrinet (NYSE: FN), a provider of precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, today announced its financial results for the second quarter of fiscal 2011, ended December 24, 2010.
Fabrinet reported total revenue of $184.6 million for the second quarter of fiscal 2011, an increase of 61% compared to revenue of $114.4 million for the comparable period in fiscal 2010. GAAP net income in the second quarter was $15.8 million, or $0.46 per diluted share, an increase of 42% compared to GAAP net income of $11.1 million, or $0.35 per share in the second quarter of 2010.
Tom Mitchell, Chief Executive Officer of Fabrinet, said, We are pleased to have achieved record revenues in the second quarter and continued our long history of profitability. Our strong revenue and earnings performance was above expectations. We saw strength in all product areas, with growth from optical communications above our overall growth rate. Looking ahead, we continue to be optimistic on the growth of our core markets.
Business Outlook
Based on information available as of January 31, 2011, Fabrinet is issuing guidance for the third quarter of fiscal 2011 as follows:
The company expects third quarter revenue to be in the range of $182 million to $187 million. GAAP net income is expected to be in the range of $0.47 to $0.49 per share, based on approximately 34.6 million fully diluted weighted average shares outstanding.
Conference Call Information
What: | Fabrinet second quarter 2011 financial results conference call | |
When: | Monday, January 31, 2011 | |
Time: | 5:00 p.m. ET | |
Live Call: | (866) 831-6243, domestic | |
(617) 213-8855, international | ||
Passcode 43014867 | ||
Replay: | (888) 286-8010, domestic | |
(617) 801-6888, international | ||
Passcode 76231574 | ||
Webcast: | http://investor.fabrinet.com/ (live and replay) |
This press release and any other information related to the call will also be posted on Fabrinets website at http://investor.fabrinet.com. The webcast will be archived on Fabrinets website for a period of one year.
About Fabrinet
Fabrinet provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, final assembly and test. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the Peoples Republic of China and the United States. For more information visit: http://www.fabrinet.com.
Safe Harbor
Safe Harbor Statement Under U.S. Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include all of the statements under the Business Outlook section relating to our forecasted operating results for the third quarter of fiscal year 2011. These forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: less customer demand for our products and services than forecasted; less growth in the optical communications, industrial lasers and sensors markets than we forecast; difficulties expanding into additional markets, such as the semiconductor processing, biotechnology, metrology and material processing markets; increasing competition in the optical manufacturing services markets; difficulties in delivering products and services that compete effectively from a price and performance perspective; our reliance on a limited number of customers and suppliers; difficulties in accurately forecasting demand for our services; difficulties in managing our operating costs; difficulties in managing and operating our business in multiple countries (including in the U.S., Thailand and the Peoples Republic of China) and other important factors as described in Fabrinet reports and documents filed from time to time with the Securities and Exchange Commission (SEC), including the factors described under the sections captioned Risk Factors in our quarterly report on Form 10-Q, filed on November 3, 2010 and our annual report on Form 10-K, filed on September 8, 2010. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.
SOURCE: Fabrinet | ||
Investor Contact: | Media Contact: | |
Abhi Kanitkar | Pam Crowley | |
ICR, Inc. | Crowley Communications | |
(617) 956-6735 | (408) 529-9655 | |
ir@fabrinet.com | pamc@crowleypr.com |
Page 2
Fabrinet
Unaudited Condensed Consolidated Balance Sheets
As of December 24, 2010 and June 25, 2010
(in thousands of U.S. dollars, except share data) | December 24, 2010 |
June 25, 2010 |
||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 102,063 | $ | 84,942 | ||||
Receivable from initial public offering |
| 26,319 | ||||||
Trade accounts receivable, net |
123,479 | 101,514 | ||||||
Inventories, net |
106,674 | 98,146 | ||||||
Investment in leases |
7 | 12 | ||||||
Deferred income taxes |
795 | 696 | ||||||
Deposit for land purchase |
| 2,162 | ||||||
Prepaid expenses and other current assets |
2,052 | 2,535 | ||||||
Total current assets |
335,070 | 316,326 | ||||||
Non-current assets |
||||||||
Property, plant and equipment, net |
68,943 | 57,651 | ||||||
Intangibles, net |
976 | 1,220 | ||||||
Investment in leases |
1,861 | 20 | ||||||
Deferred income taxes |
1,847 | 1,626 | ||||||
Deposits and other non-current assets |
630 | 582 | ||||||
Total non-current assets |
74,257 | 61,099 | ||||||
Total assets |
$ | 409,327 | $ | 377,425 | ||||
Liabilities and Shareholders Equity |
||||||||
Current liabilities |
||||||||
Long-term loans from banks, current portion |
$ | 5,468 | $ | 6,008 | ||||
Trade accounts payable |
100,812 | 102,977 | ||||||
Income tax payable |
3,652 | 2,521 | ||||||
Accrued payroll, profit sharing and related expenses |
6,423 | 3,895 | ||||||
Accrued expenses |
4,361 | 3,567 | ||||||
Other payables |
6,091 | 5,935 | ||||||
Total current liabilities |
126,807 | 124,903 | ||||||
Non-current liabilities |
||||||||
Long-term loans from banks, non-current portion |
11,913 | 14,377 | ||||||
Severance liabilities |
4,067 | 3,456 | ||||||
Other non-current liabilities |
1,887 | 2,526 | ||||||
Total non-current liabilities |
17,867 | 20,359 | ||||||
Total liabilities |
144,674 | 145,262 | ||||||
Commitments and contingencies |
||||||||
Shareholders equity |
||||||||
Preferred shares (5,000,000 shares authorized, $0.01 par value; |
| | ||||||
Ordinary shares (500,000,000 shares authorized, $0.01 par value; |
338 | 337 | ||||||
Additional paid-in capital |
56,264 | 54,786 | ||||||
Retained earnings |
208,051 | 177,040 | ||||||
Total shareholders equity |
264,653 | 232,163 | ||||||
Total Liabilities and Shareholders Equity |
$ | 409,327 | $ | 377,425 | ||||
Page 3
Fabrinet
Unaudited Condensed Consolidated Statements of Operations
For the three and six months ended December 24, 2010 and December 25, 2009
Three Months Ended | Six Months Ended | |||||||||||||||
(in thousands of U.S. dollars) | December 24, 2010 |
December 25, 2009 |
December 24, 2010 |
December 25, 2009 |
||||||||||||
Revenues |
||||||||||||||||
Revenues |
$ | 184,631 | $ | 97,893 | $ | 358,371 | $ | 182,137 | ||||||||
Revenues, related party |
| 16,500 | | 29,274 | ||||||||||||
Total revenues |
184,631 | 114,393 | 358,371 | 211,411 | ||||||||||||
Cost of revenues |
(160,968 | ) | (99,520 | ) | (312,932 | ) | (185,578 | ) | ||||||||
Gross profit |
23,663 | 14,873 | 45,439 | 25,833 | ||||||||||||
Selling, general and administrative expenses |
(5,951 | ) | (3,800 | ) | (10,778 | ) | (7,609 | ) | ||||||||
Operating income |
17,712 | 11,073 | 34,661 | 18,224 | ||||||||||||
Interest income |
114 | 81 | 212 | 192 | ||||||||||||
Interest expense |
(90 | ) | (128 | ) | (201 | ) | (289 | ) | ||||||||
Foreign exchange loss, net |
(670 | ) | 26 | (1,048 | ) | (34 | ) | |||||||||
Other income |
11 | | 15 | | ||||||||||||
Income before income taxes |
17,077 | 11,052 | 33,639 | 18,093 | ||||||||||||
Income taxes |
(1,271 | ) | | (2,628 | ) | (855 | ) | |||||||||
Net income |
$ | 15,806 | $ | 11,052 | $ | 31,011 | $ | 17,238 | ||||||||
Earnings per share |
||||||||||||||||
Basic |
$ | 0.47 | $ | 0.36 | $ | 0.92 | $ | 0.56 | ||||||||
Diluted |
$ | 0.46 | $ | 0.35 | $ | 0.90 | $ | 0.55 | ||||||||
Weighted average number of ordinary shares outstanding |
||||||||||||||||
(thousands of shares) |
||||||||||||||||
Basic |
33,768 | 30,856 | 33,765 | 30,782 | ||||||||||||
Diluted |
34,450 | 31,387 | 34,401 | 31,328 |
Page 4