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)

April 29, 2013

 

 

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.)

c/o Intertrust Corporate Services (Cayman) Limited

190 Elgin Avenue

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 April 29, 2013, Fabrinet issued a press release regarding its financial results for the fiscal quarter ended March 29, 2013. 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 April 29, 2013

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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: April 29, 2013

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release dated April 29, 2013

Exhibit 99.1

Fabrinet Announces Third Quarter 2013 Financial Results

BANGKOK, Thailand – April 29, 2013 – Fabrinet (NYSE: FN), a leading provider of advanced optical packaging and 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 2013 ended March 29, 2013.

Fabrinet reported total revenue of $155.6 million for the third quarter of fiscal 2013, an increase of 11.9% compared to total revenue of $139.0 million for the comparable period in fiscal 2012. GAAP net income for the third quarter of fiscal 2013 was $21.1 million, or $0.61 per diluted share, compared to a GAAP net loss of ($46.3) million, or ($1.35) per diluted share, in the third quarter of fiscal 2012. Non-GAAP net income in the third quarter of fiscal 2013 was $11.5 million, or $0.33 per diluted share, an increase of 16.8% compared to non-GAAP net income of $9.9 million, or $0.28 per diluted share, in the same period a year ago.

Tom Mitchell, Chief Executive Officer of Fabrinet, said, “While overall industry demand remains muted, I am pleased that our third quarter results demonstrate the consistency of our operating model, with revenue and earnings per share performance above expectations. Our customer relationships remain strong and we continue to have success with new customers and new programs from existing customers. The net result is that we have continuing confidence in our ability to deliver profitable growth over the long-term.”

Business Outlook

Based on information available as of April 29, 2013, Fabrinet is issuing guidance for the fourth quarter of fiscal 2013 as follows:

Fabrinet expects fourth quarter revenue to be in the range of $148 million to $152 million. Non-GAAP net income per share is expected to be in the range of $0.26 to $0.28, assuming approximately 35 million fully diluted shares outstanding.

Conference Call Information

 

What:		Fabrinet Third Quarter 2013 Financial Results Conference Call
When:		Monday, April 29, 2013
Time:		5:00 p.m. ET
Live Call:		(888) 357-3694, domestic
		(253) 237-1137, international
		Passcode: 34166014
Replay:		(855) 859-2056, domestic
		(404) 537-3406, international
		Passcode: 34166014
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 is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, 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, advanced packaging, integration, final assembly and test. Fabrinet focuses on production

 

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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: www.fabrinet.com.

Forward-Looking Statements

“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 2013. 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 materials processing markets; increased 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 across multiple countries (including the U.S., Thailand and the People’s Republic of China); and other important factors as described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the section captioned “Risk Factors” in our quarterly report on Form 10-Q, filed on February 5, 2013. 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, income (expense) related to flooding and follow-on offering expenses. 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.

 

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Fabrinet

Unaudited Condensed Consolidated Balance Sheets

As of March 29, 2013 and June 29, 2012

 

(in thousands of U.S. dollars, except share data)		March 29, 2013				June 29, 2012
Assets
Current assets
Cash and cash equivalents		$	157,479			$	115,507
Trade accounts receivable, net			122,926				128,253
Inventory, net			94,310				103,223
Deferred tax assets			2,158				4,088
Prepaid expenses			2,605				3,571
Other current assets			7,593				6,029
Total current assets			387,071				360,671
Non-current assets
Property, plant and equipment, net			98,173				97,923
Intangibles, net			196				380
Deferred tax assets			2,435				1,764
Deposits and other non-current assets			655				624
Total non-current assets			101,459				100,691
Total assets		$	488,530			$	461,362
Liabilities and Shareholders’ Equity
Current liabilities
Long-term loans from banks, current portion		$	9,668			$	9,668
Trade accounts payable			74,329				86,000
Construction-related payable			—				2,222
Income tax payable			1,171				353
Deferred tax liability			1,761				1,405
Accrued payroll, bonus and related expenses			7,442				5,181
Accrued expenses			3,254				2,630
Other payables			4,760				6,601
Liabilities to third parties due to flood losses			48,390				61,198
Total current liabilities			150,775				175,258
Non-current liabilities
Long-term loans from banks, non-current portion			21,660				28,911
Severance liabilities			5,464				4,420
Other non-current liabilities			1,618				2,064
Total non-current liabilities			28,742				35,395
Total liabilities			179,517				210,653
Commitments and contingencies
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value;no shares issued and outstanding as of March 29, 2013 and June 29, 2012)			—				—
Ordinary shares (500,000,000 shares authorized, $0.01 par value;
34,626,335 shares and 34,470,829 shares issued and outstanding as of March 29, 2013 and June 29, 2012, respectively)			346				345
Additional paid-in capital			69,938				65,462
Retained earnings			238,729				184,902
Total shareholders’ equity			309,013				250,709
Total Liabilities and Shareholders’ Equity		$	488,530			$	461,362

 

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Fabrinet

Unaudited Condensed Consolidated Statements of Operations

For the three and nine months ended March 29, 2013 and March 30, 2012 

 

		Three Months Ended								Nine Months Ended
		March 29,				March 30,				March 29,				March 30,
(in thousands of U.S. dollars)		2013				2012				2013				2012
Revenues		$	155,557			$	139,019			$	481,608			$	421,975
Cost of revenues			(139,302	)			(124,138	)			(429,261	)			(375,281	)
Gross profit			16,255				14,881				52,347				46,694
Selling, general and administrative expenses			(6,801	)			(6,586	)			(18,447	)			(18,543	)
Income (expense) related to flooding			11,419				(55,623	)			21,064				(95,888	)
Operating income (loss)			20,873				(47,328	)			54,964				(67,737	)
Interest income			302				209				761				628
Interest expense			(239	)			(64	)			(788	)			(206	)
Foreign exchange gain, net			978				714				1,085				1,314
Other income			139				57				512				213
Income (loss) before income taxes			22,053				(46,412	)			56,534				(65,788	)
Income tax (expense) benefit			(927	)			87				(2,707	)			1,864
Net income (loss)		$	21,126			$	(46,325	)		$	53,827			$	(63,924	)
Earnings (loss) per share
Basic		$	0.61			$	(1.35	)		$	1.56			$	(1.86	)
Diluted			0.61				(1.35	)			1.55				(1.86	)
Weighted average number of ordinary shares outstanding
(thousands of shares)
Basic			34,596				34,440				34,532				34,353
Diluted			34,909				34,440	*			34,794				34,353	*

 

*	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

Unaudited Condensed Consolidated Statements of Cash Flows

For the nine months ended March 29, 2013 and March 30, 2012

 

		Nine Months Ended
		March 29,				March 30,
(in thousands of U. S. dollars)		2013				2012
Cash flows from operating activities
Net income (loss) for the period		$	53,827			$	(63,924	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation			7,512				6,995
Amortization of intangibles			185				288
Gain on disposal of property, plant and equipment			(23	)			(7	)
Income related to flooding			(21,064	)			—
Proceeds from insurers for business interruption losses related to flooding			4,741				—
Proceeds from insurers for inventory losses related to flooding			11,419				—
(Reversal of) allowance for doubtful accounts			(94	)			28
Unrealized gain on exchange rate and fair value of derivative			(1,566	)			(1,364	)
Share-based compensation			3,969				3,930
Deferred income tax			1,615				(2,331	)
Other non-cash expenses			598				637
(Reversal of ) inventory obsolescence			(589	)			528
Loss from written-off assets and liabilities to third parties due to flood losses			—				83,871
Changes in operating assets and liabilities
Trade accounts receivable			3,421				(807	)
Inventory			8,945				(9,550	)
Other current assets and non-current assets			(2,775	)			(2,758	)
Trade accounts payable			(11,671	)			(17,289	)
Income tax payable			818				(1,038	)
Other current liabilities and non-current liabilities			48				2,929
Liabilities to third parties due to flood losses			(8,059	)			—
Net cash provided by operating activities			51,257				138
Cash flows from investing activities
Purchase of property, plant and equipment			(8,634	)			(26,394	)
Purchase of intangibles			(1	)			(17	)
Purchase of assets for lease under direct financing leases			—				(2,940	)
Proceeds from direct financing leases			—				1,217
Proceeds from disposal of property, plant and equipment			25				22
Proceeds from insurers in settlement of claims related to flood damage			4,904				—
Net cash used in investing activities			(3,706	)			(28,112	)
Cash flows from financing activities
Receipt of long-term loans from banks			—				28,000
Repayment of long-term loans from banks			(7,251	)			(3,381	)
Proceeds from issuance of ordinary shares under employee share option plans			528				984
Withholding tax related to net share settlement of restricted share units			(21	)			—
Net cash (used in) provided by financing activities			(6,744	)			25,603
Net increase (decrease) in cash and cash equivalents		$	40,807			$	(2,371	)

 

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Fabrinet

Unaudited Condensed Consolidated Statements of Cash Flows

For the nine months ended March 29, 2013 and March 30, 2012

		Nine Months Ended
		March 29,				March 30,
(in thousands of U.S. dollars)		2013				2012
Movement in cash and cash equivalents
Cash and cash equivalents at beginning of period		$	115,507			$	127,282
Increase (decrease) in cash and cash equivalents			40,807				(2,371	)
Effect of exchange rate on cash and cash equivalents			1,165				499
Cash and cash equivalents at end of period		$	157,479			$	125,410

 

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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 29, 2013				March 29, 2013				March 30, 2012				March 30, 2012				March 29, 2013				March 29, 2013				March 30, 2012				March 30, 2012
		Net income				Diluted EPS				Net loss				Diluted EPS				Net income				Diluted EPS				Net loss				Diluted EPS
GAAP measures			21,126				0.61				(46,325	)			(1.35	)			53,827				1.55				(63,924	)			(1.86	)
Items reconciling GAAP net income (loss) & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses			275				0.01				381				0.01				919				0.03				1,292				0.04
Total related to gross profit			275				0.01				381				0.01				919				0.03				1,292				0.04
Related to selling, general and administrative expenses:
Share-based compensation expenses			1,062				0.03				958				0.03				3,050				0.09				2,638				0.08
Follow-on offering expenses			472				0.01				—				—				472				0.01				—				—
Total related to selling, general and administrative expenses			1,534				0.04				958				0.03				3,522				0.10				2,638				0.08
Related to other incomes and other expenses:
(Income) expense related to flooding			(11,419	)			(0.32	)			55,623				1.59				(21,064	)			(0.60	)			95,888				2.76
Total related to other incomes and other expenses			(11,419	)			(0.32	)			55,623				1.59				(21,064	)			(0.60	)			95,888				2.76
Related to income tax expense (benefit)
Income tax expense (benefit)			—				—				(780	)			(0.02	)			907				0.03				(3,202	)			(0.09	)
Total related to income tax expense (benefit)			—				—				(780	)			(0.02	)			907				0.03				(3,202	)			(0.09	)
Total related to net income & EPS			(9,610	)			(0.27	)			56,182				1.61				(15,716	)			(0.45	)			96,616				2.78
Non-GAAP measures			11,516				0.33				9,857				0.28				38,111				1.08				32,692				0.94
Shares used in computing diluted net income per share
GAAP diluted shares							34,909								34,440								34,794								34,353
Non-GAAP diluted shares							35,225								34,915								35,132								34,777

 

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