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)
May 7, 2012
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)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On May 7, 2012, Fabrinet issued a press release regarding its financial results for the fiscal quarter ended March 30, 2012. 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 May 7, 2012 | |
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/ Paul Kalivas | |
| Paul Kalivas General Counsel and Secretary | ||
Date: May 7, 2012
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press release dated May 7, 2012 | |
Exhibit 99.1
Fabrinet Announces Third Quarter 2012 Financial Results
BANGKOK, Thailand – May 7, 2012 – 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 third quarter of fiscal 2012, ended March 30, 2012.
Fabrinet reported total revenue of $139.0 million for the third quarter of fiscal 2012, a decrease of 28.7% compared to revenue of $194.9 million for the comparable period in fiscal 2011. GAAP net loss in the third quarter was $(46.3) million, or $(1.35) per diluted share compared to GAAP net income of $16.7 million, or $0.49 per diluted share in the third quarter of 2011. Non-GAAP net income in the third quarter was $9.9 million, or $0.28 per diluted share, a decrease of 48.0% compared to non-GAAP net income of $19.0 million, or $0.55 per share in the third quarter of 2011.
Tom Mitchell, Chief Executive Officer of Fabrinet, said, “I am pleased to report that through the continued hard work and dedication of our staff, we remain on a strong recovery path. We are excited that building 6 is complete and fully available for customers. Despite the recent flooding, we continue to win new business and customer confidence in our value proposition remains solid.”
Business Outlook
Based on information available as of May 7, 2012, Fabrinet is issuing guidance for the fourth quarter of fiscal 2012 as follows:
The company expects fourth quarter revenue to be in the range of $139 million to $143 million. Non-GAAP net income per share is expected to be in the range of $0.25 to $0.27, based on approximately 34.9 million fully diluted, weighted average shares outstanding.
Conference Call Information
| What: | Fabrinet Third Quarter 2012 Financial Results Conference Call | |
| When: | Monday, May 7, 2012 | |
| Time: | 5:00 p.m. ET | |
| Live Call: | (888) 357-3694, domestic | |
| (253) 237-1137, international | ||
| Passcode 73411596 | ||
| Replay: | (855) 859-2056, domestic | |
| (404) 537-3406, international | ||
| Passcode 73411596 | ||
| 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
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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 fourth quarter of fiscal year 2012 and our statements regarding our recovery and customer demand for our products and services. 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: difficulties in realizing recoveries from our insurance carriers in the amounts and within the timeframes that we expect; 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 new markets; our reliance on a limited number of customers and suppliers; difficulties in accurately forecasting demand for our services; 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 February 8, 2012 and our annual report on Form 10-K, filed on August 31, 2011. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financials
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 and other expenses in relation to flood. 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:
Abhi Kanitkar
ICR, Inc.
(617) 956-6735
ir@fabrinet.com
Page 2
Fabrinet
Unaudited Condensed Consolidated Balance Sheets
As of March 30, 2012 and June 24, 2011
| (in thousands of U.S. dollars, except share data) | March 30, 2012 |
June 24, 2011 |
||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 125,410 | $ | 127,282 | ||||
| Trade accounts receivable, net |
118,484 | 117,705 | ||||||
| Inventories, net |
98,877 | 106,467 | ||||||
| Investment in leases |
— | 448 | ||||||
| Deferred tax assets |
3,948 | 1,308 | ||||||
| Prepaid expenses and other current assets |
7,046 | 4,466 | ||||||
|
|
|
|
|
|||||
| Total current assets |
353,765 | 357,676 | ||||||
|
|
|
|
|
|||||
| Non-current assets |
||||||||
| Property, plant and equipment, net |
96,391 | 75,410 | ||||||
| Intangibles, net |
466 | 892 | ||||||
| Investment in leases |
— | 1,163 | ||||||
| Deferred tax assets |
1,871 | 1,953 | ||||||
| Deposits and other non-current assets |
662 | 681 | ||||||
|
|
|
|
|
|||||
| Total non-current assets |
99,390 | 80,099 | ||||||
|
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|
|
|
|||||
| Total assets |
$ | 453,155 | $ | 437,775 | ||||
|
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|
|
|||||
| Liabilities and Shareholders’ Equity |
||||||||
| Current liabilities |
||||||||
| Long-term loans from banks, current portion |
$ | 9,668 | $ | 4,398 | ||||
| Trade accounts payable |
75,274 | 92,563 | ||||||
| Construction payable |
4,236 | 2,475 | ||||||
| Income tax payable |
820 | 1,858 | ||||||
| Deferred tax liability |
1,283 | 1,056 | ||||||
| Accrued payroll, profit sharing and related expenses |
6,997 | 7,677 | ||||||
| Accrued expenses |
4,412 | 3,986 | ||||||
| Other payables |
8,353 | 3,796 | ||||||
| Liabilities to third parties due to flood losses |
61,198 | — | ||||||
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|
|
|
|||||
| Total current liabilities |
172,241 | 117,809 | ||||||
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|
|||||
| Non-current liabilities |
||||||||
| Long-term loans from banks, non-current portion |
31,328 | 11,979 | ||||||
| Severance liabilities |
5,015 | 4,478 | ||||||
| Other non-current liabilities |
2,054 | 1,982 | ||||||
|
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|
|
|
|||||
| Total non-current liabilities |
38,397 | 18,439 | ||||||
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|
|
|
|||||
| Total liabilities |
210,638 | 136,248 | ||||||
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|
|||||
| 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; |
345 | 342 | ||||||
| Additional paid-in capital |
64,727 | 59,816 | ||||||
| Retained earnings |
177,445 | 241,369 | ||||||
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|
|
|
|||||
| Total shareholders’ equity |
242,517 | 301,527 | ||||||
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|
|
|||||
| Total Liabilities and Shareholders’ Equity |
$ | 453,155 | $ | 437,775 | ||||
|
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|
|
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Fabrinet
Unaudited Condensed Consolidated Statements of Operations
For the three and nine months ended March 30, 2012 and March 25, 2011
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (in thousands of U.S. dollars) | March 30, 2012 |
March 25, 2011 |
March 30, 2012 |
March 25, 2011 |
||||||||||||
| Revenues |
$ | 139,019 | $ | 194,851 | $ | 421,975 | $ | 553,222 | ||||||||
| Cost of revenues |
(124,138 | ) | (169,528 | ) | (375,281 | ) | (482,460 | ) | ||||||||
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|
|
|||||||||
| Gross profit |
14,881 | 25,323 | 46,694 | 70,762 | ||||||||||||
| Selling, general and administrative expenses |
(6,586 | ) | (7,516 | ) | (18,543 | ) | (18,294 | ) | ||||||||
| Other expenses in relation to flood |
(55,623 | ) | — | (95,888 | ) | — | ||||||||||
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|
|||||||||
| Operating (loss) income |
(47,328 | ) | 17,807 | (67,737 | ) | 52,468 | ||||||||||
| Interest income |
209 | 143 | 628 | 355 | ||||||||||||
| Interest expense |
(64 | ) | (81 | ) | (206 | ) | (282 | ) | ||||||||
| Foreign exchange gain (loss), net |
714 | 342 | 1,314 | (706 | ) | |||||||||||
| Other income |
57 | 65 | 213 | 80 | ||||||||||||
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|
|||||||||
| (Loss) income before income taxes |
(46,412 | ) | 18,276 | (65,788 | ) | 51,915 | ||||||||||
| Income tax benefit (expense) |
87 | (1,613 | ) | 1,864 | (4,241 | ) | ||||||||||
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|
|||||||||
| Net (loss) income |
$ | (46,325 | ) | $ | 16,663 | $ | (63,924 | ) | $ | 47,674 | ||||||
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| (Loss) earnings per share |
||||||||||||||||
| Basic |
$ | (1.35 | ) | $ | 0.49 | $ | (1.86 | ) | $ | 1.41 | ||||||
| Diluted |
$ | (1.35 | ) | $ | 0.49 | $ | (1.86 | ) | $ | 1.39 | ||||||
| Weighted average number of ordinary shares outstanding |
||||||||||||||||
| (thousands of shares) |
||||||||||||||||
| Basic |
34,440 | * | 33,969 | 34,353 | * | 33,833 | ||||||||||
| Diluted |
34,440 | * | 34,232 | 34,353 | * | 34,345 | ||||||||||
| * | In accordance with the antidilutive provisions of ASC 260-10-45, basic and dilutive shares are the same for the period ended March 30, 2012. |
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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 | Nine Months Ended | |||||||||||||||||||||||||||||||
| March 30, 2012 |
March 30, 2012 |
March 25, 2011 |
March 25, 2011 |
March 30, 2012 |
March 30, 2012 |
March 25, 2011 |
March 25, 2011 |
|||||||||||||||||||||||||
| Net loss | Diluted EPS | Net income | Diluted EPS | Net loss | Diluted EPS | Net income | Diluted EPS | |||||||||||||||||||||||||
| GAAP measures |
(46,325 | ) | (1.35 | ) | 16,663 | 0.49 | (63,924 | ) | (1.86 | ) | 47,674 | 1.39 | ||||||||||||||||||||
| Items reconciling GAAP net (loss) income & EPS to non-GAAP net income & EPS: |
||||||||||||||||||||||||||||||||
| Related to cost of revenues: |
||||||||||||||||||||||||||||||||
| Share-based compensation expenses |
381 | 0.01 | 440 | 0.01 | 1,292 | 0.04 | 918 | 0.03 | ||||||||||||||||||||||||
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|
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|
|||||||||||||||||
| Total related to gross profit |
381 | 0.01 | 440 | 0.01 | 1,292 | 0.04 | 918 | 0.03 | ||||||||||||||||||||||||
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|||||||||||||||||
| Related to selling, general and administrative expenses: |
||||||||||||||||||||||||||||||||
| Share-based compensation expenses |
958 | 0.03 | 798 | 0.02 | 2,638 | 0.08 | 1,740 | 0.05 | ||||||||||||||||||||||||
| Executive separation cost |
— | — | 438 | 0.01 | — | — | 438 | 0.01 | ||||||||||||||||||||||||
| Follow-on offering expenses |
— | — | 617 | 0.02 | — | — | 617 | 0.02 | ||||||||||||||||||||||||
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|||||||||||||||||
| Total related to selling, general and administrative expenses |
958 | 0.03 | 1,853 | 0.05 | 2,638 | 0.08 | 2,795 | 0.08 | ||||||||||||||||||||||||
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| Related to other expenses: |
||||||||||||||||||||||||||||||||
| Other expenses in relation to flood |
55,623 | 1.59 | — | — | 95,888 | 2.76 | — | — | ||||||||||||||||||||||||
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| Total related to other expenses |
55,623 | 1.59 | — | — | 95,888 | 2.76 | — | — | ||||||||||||||||||||||||
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| Related to income tax (benefit) expense |
||||||||||||||||||||||||||||||||
| Income tax (benefit) expense |
(780 | ) | (0.02 | ) | — | — | (3,202 | ) | (0.09 | ) | — | — | ||||||||||||||||||||
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| Total related to income tax (benefit) expense |
(780 | ) | (0.02 | ) | — | — | (3,202 | ) | (0.09 | ) | — | — | ||||||||||||||||||||
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| Total related to net income & EPS |
56,182 | 1.61 | 2,293 | 0.07 | 96,616 | 2.78 | 3,713 | 0.11 | ||||||||||||||||||||||||
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| Non-GAAP measures |
9,857 | 0.28 | 18,956 | 0.55 | 32,692 | 0.94 | 51,387 | 1.49 | ||||||||||||||||||||||||
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| Shares used in computing diluted net income per share |
||||||||||||||||||||||||||||||||
| GAAP diluted shares |
34,440 | 34,232 | 34,353 | 34,345 | ||||||||||||||||||||||||||||
| Non-GAAP diluted shares |
34,915 | 34,431 | 34,777 | 34,494 | ||||||||||||||||||||||||||||
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