UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

August 15, 2011

 

 

Fabrinet

(Exact name of registrant as specified in its charter)

 

 

 

Cayman Islands		001-34775		Not Applicable
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

Walker House

87 Mary Street

George Town

Grand Cayman

KY1-9005

Cayman Islands

(Address of principal executive offices, including zip code)

+66 2-524-9600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02

Results of Operations and Financial Condition.

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

This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 – Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit No.		Description
99.1		Press release dated August 15, 2011

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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.

 

Date: August 15, 2011

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release dated August 15, 2011

Exhibit 99.1

Fabrinet Announces Fourth Quarter and Fiscal Year 2011 Financial Results

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

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

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

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

Business Outlook

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

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

 

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Conference Call Information

 

What:		Fabrinet fourth quarter and fiscal year 2011 financial results conference call
When:		Monday, August 15, 2011
Time:		5:00 p.m. ET
Live Call:		(866) 383-8108, domestic
		(617) 597-5343, international
		Passcode 81183910
Replay:		(888) 286-8010, domestic
		(617) 801-6888, international Passcode 32425461
Webcast:		http://investor.fabrinet.com/ (live and replay)

This press release and any other information related to the call will also be posted on Fabrinet’s website at http://investor.fabrinet.com. A recorded version of this webcast will be available approximately two hours after the call and will be archived on Fabrinet’s website for a period of one year.

About Fabrinet

Fabrinet provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, final assembly and test. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the People’s Republic of China and the United States. For more information visit: http://www.fabrinet.com.

Safe Harbor

“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include all of the statements under the “Business Outlook” section relating to our forecasted operating results for the first quarter of fiscal year 2012. These forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: less customer demand for our products and services than forecasted; less growth in the optical communications, industrial lasers and sensors markets than we forecast; difficulties expanding into additional markets, such as the semiconductor processing, biotechnology, metrology and material processing markets; increasing competition in the optical manufacturing services markets; difficulties in delivering products and services that compete effectively from a price and performance perspective; our reliance on a limited number of customers and suppliers; difficulties in accurately forecasting demand for our services; difficulties in managing our operating costs; difficulties in managing and operating our business in multiple countries (including in the U.S., Thailand and the People’s Republic of China) and other important factors as described in Fabrinet reports and documents filed from time to time with the Securities and Exchange Commission (SEC), including the factors described under the sections captioned “Risk Factors” in our quarterly report on Form 10-Q, filed on May 4, 2011 and our annual report on Form 10-K, filed on September 8, 2010. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

 

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Use of Non-GAAP Financials

The Company refers to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding the Company’s ongoing operational performance. Non-GAAP net income excludes stock-based compensation expenses, executive separation costs and our costs in connection with our recent follow-on offering. We have excluded these items in order to enhance investors’ understanding of our ongoing operations. The use of these non-GAAP financial measures has material limitations because they should not be used to evaluate our company without reference to their corresponding GAAP financial measures. As such, we compensate for these material limitations by using these non-GAAP financial measures in conjunction with GAAP financial measures.

These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in financial and operational decision making. In addition, these non-GAAP financial measures are used to measure company performance for the purposes of determining employee incentive plan compensation.

SOURCE: Fabrinet

 

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

 

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Fabrinet

Consolidated Balance Sheets

As of June 24, 2011 and June 25, 2010

 

(in thousands of U.S. dollars, except share data)		June 24, 2011				June 25, 2010
Assets
Current assets
Cash and cash equivalents		$	127,282			$	84,942
Receivable from initial public offering			—				26,319
Trade accounts receivable, net			117,705				101,514
Inventories, net			106,467				98,146
Investment in leases			448				12
Deferred income taxes			1,308				696
Deposit for land purchase			—				2,162
Prepaid expenses and other current assets			4,466				2,535
Total current assets			357,676				316,326
Non-current assets
Property, plant and equipment, net			75,410				57,651
Intangibles, net			892				1,220
Investment in leases			1,163				20
Deferred income taxes			1,953				1,626
Deposits and other non-current assets			681				582
Total non-current assets			80,099				61,099
Total assets		$	437,775			$	377,425
Liabilities and Shareholders’ Equity
Current liabilities
Long-term loans from banks, current portion		$	4,398			$	6,008
Trade accounts payable			92,563				102,977
Construction payable			2,475				—
Income tax payable			2,914				2,521
Accrued payroll, profit sharing and related expenses			7,677				3,895
Accrued expenses			3,986				3,567
Other payables			3,796				5,935
Total current liabilities			117,809				124,903
Non-current liabilities
Long-term loans from banks, non-current portion			11,979				14,377
Severance liabilities			4,478				3,456
Other non-current liabilities			1,982				2,526
Total non-current liabilities			18,439				20,359
Total liabilities			136,248				145,262
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of June 24, 2011 and June 25, 2010, respectively)			—				—
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 34,207,579 shares and 33,751,730 shares issued and outstanding as of June 24, 2011 and June 25, 2010, respectively)			342				337
Additional paid-in capital			59,816				54,786
Retained earnings			241,369				177,040
Total shareholders’ equity			301,527				232,163
Total Liabilities and Shareholders’ Equity		$	437,775			$	377,425

 

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Fabrinet

Consolidated Statements of Operations

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

 

		Three Months Ended								Twelve Months Ended
(in thousands of U.S. dollars)		June 24, 2011				June 25, 2010				June 24, 2011				June 25, 2010
Revenues
Revenues		$	190,348			$	128,005			$	743,570			$	424,548
Revenues, related party			—				29,406				—				81,164
Total revenues			190,348				157,411				743,570				505,712
Cost of revenues			(166,363	)			(138,031	)			(648,823	)			(441,370	)
Gross profit			23,985				19,380				94,747				64,342
Selling, general and administrative expenses			(6,512	)			(4,227	)			(24,806	)			(16,192	)
Operating income			17,473				15,153				69,941				48,150
Interest income			139				73				494				327
Interest expense			(75	)			(103	)			(357	)			(500	)
Foreign exchange (loss)/gain, net			(724	)			91				(1,430	)			(40	)
Other income			136				153				216				153
Income before income taxes			16,949				15,367				68,864				48,090
Income taxes			(294	)			(1,793	)			(4,535	)			(3,767	)
Net income		$	16,655			$	13,574			$	64,329			$	44,323
Earnings per share
Basic		$	0.49			$	0.44			$	1.90			$	1.44
Diluted		$	0.48			$	0.43			$	1.87			$	1.41
Weighted average number of ordinary shares outstanding (thousands of shares)
Basic			34,189				30,950				33,922				30,854
Diluted			34,595				31,457				34,407				31,369

 

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Fabrinet

Reconciliation of GAAP measures to non-GAAP measures

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

(unaudited)

 

		Three Months Ended																Twelve Months Ended
		June 24,				June 24,				June 25,				June 25,				June 24,				June 24,				June 25,				June 25,
		2011				2011				2010				2010				2011				2011				2010				2010
		Net income				Diluted EPS				Net income				Diluted EPS				Net income				Diluted EPS				Net income				Diluted EPS
GAAP measures			16,655				0.48				13,574				0.43				64,329				1.87				44,323				1.41
Items reconciling GAAP net income & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses			229				0.01				74				0.00				1,147				0.03				301				0.01
Total related to gross profit			229				0.01				74				0.00				1,147				0.03				301				0.01
Related to selling, general and administrative expenses:
Share-based compensation expenses			573				0.02				87				0.00				2,313				0.07				354				0.01
Executive separation cost			—				—				—				—				438				0.01				—				—
Follow-on offering expenses			—				—				—				—				617				0.02				—				—
Total related to selling, general and administrative expenses			573				0.02				87				0.00				3,368				0.10				354				0.01
Total related to net income & EPS			802				0.02				161				0.01				4,515				0.13				655				0.02
Non-GAAP measures			17,457				0.50				13,735				0.44				68,844				1.99				44,978				1.43
Shares used in computing diluted net income per share
GAAP diluted shares							34,595								31,457								34,407								31,369
Non-GAAP diluted shares							34,743								31,515								34,556								31,433

 

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