Wire Stories

Fabrinet Announces Fourth Quarter and Fiscal Year 2022 Financial Results

  • Record Fourth Quarter Revenue of $587.9 Million and Fiscal Year 2022 Revenue of $2.26 Billion
  • Record Fourth Quarter GAAP and Non-GAAP Net Income per Share Exceeded Guidance

BANGKOK--(BUSINESS WIRE)--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 its fourth quarter and fiscal year ended June 24, 2022.

Seamus Grady, Chief Executive Officer of Fabrinet, said, “We delivered strong fourth quarter results with revenue at the upper end of our guidance range and net income per share that exceeded our guidance. With strong ongoing demand trends, we are optimistic that we can continue to execute well and extend our track record of success in fiscal 2023 and beyond.”

Fourth Quarter Fiscal Year 2022 Financial Highlights GAAP Results

  • Revenue for the fourth quarter of fiscal year 2022 was $587.9 million, compared to $509.6 million for the fourth quarter of fiscal year 2021.
  • GAAP net income for the fourth quarter of fiscal year 2022 was $56.2 million, compared to $42.4 million for the fourth quarter of fiscal year 2021.
  • GAAP net income per diluted share for the fourth quarter of fiscal year 2022 was $1.51, compared to $1.13 for the fourth quarter of fiscal year 2021.

Non-GAAP Results

  • Non-GAAP net income for the fourth quarter of fiscal year 2022 was $62.6 million, compared to $49.4 million for the fourth quarter of fiscal year 2021.
  • Non-GAAP net income per diluted share for the fourth quarter of fiscal year 2022 was $1.68, compared to $1.31 for the fourth quarter of fiscal year 2021.

Fiscal Year 2022 Financial Highlights GAAP Results

  • Revenue for fiscal year 2022 was $2.26 billion, compared to $1.88 billion for fiscal year 2021.
  • GAAP net income for fiscal year 2022 was $200.4 million, compared to $148.3 million for fiscal year 2021.
  • GAAP net income per diluted share for fiscal year 2022 was $5.36, compared to $3.95 for fiscal year 2021.

Non-GAAP Results

  • Non-GAAP net income for fiscal year 2022 was $229.2 million, compared to $175.5 million for fiscal year 2021.
  • Non-GAAP net income per diluted share for fiscal year 2022 was $6.13, compared to $4.67 for fiscal year 2021.

Share Repurchase Program Expanded

Fabrinet also announced that its Board of Directors has approved the repurchase of up to an additional $78.7 million of Fabrinet’s ordinary shares, bringing the aggregate authorization under Fabrinet’s existing share repurchase program to $247.2 million, with $100.0 million currently remaining.

Business Outlook

Based on information available as of August 15, 2022, Fabrinet is issuing guidance for its first quarter of fiscal year 2023, a 14-week quarter ending September 30, 2022, as follows:

  • Fabrinet expects first quarter revenue to be in the range of $620 million to $640 million.
  • GAAP net income per diluted share is expected to be in the range of $1.51 to $1.58, based on approximately 37.6 million fully diluted shares outstanding.
  • Non-GAAP net income per diluted share is expected to be in the range of $1.72 to $1.79, based on approximately 37.6 million fully diluted shares outstanding.

Conference Call Information

What:

 

Fabrinet Fourth Quarter Fiscal Year 2022 Financial Results Call

When:

August 15, 2022

Time:

 

5:00 p.m. ET

Live Call and Replay:

 

https://investor.fabrinet.com/events-and-presentations/events

A recorded version of this webcast will be available approximately two hours after the call and accessible at http://investor.fabrinet.com. The webcast 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, automotive components, medical devices, 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 testing. 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 United States of America, the People’s Republic of China, Israel and the United Kingdom. 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: (1) our optimism about our ability to extend our track record of success in fiscal 2023 and beyond; and (2) all of the statements under the “Business Outlook” section regarding our expected revenue, GAAP and non-GAAP net income per share, and fully diluted shares outstanding for the first quarter of fiscal year 2023. 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: the effects of the COVID-19 pandemic on our business, particularly the possibility of (1) the growing global economic downturn, (2) extended shutdowns at any of our manufacturing facilities, especially if the pandemic intensifies or returns in various geographic areas, (3) continued disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials, especially if the pandemic intensifies or returns in various geographic areas, and (4) regional downward demand adjustments from our customers, particularly those in areas affected by the pandemic; 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 small number of customers and suppliers; difficulties in managing our operating costs; difficulties in managing and operating our business across multiple countries (including Thailand, the People’s Republic of China, Israel, the U.S. and the U.K.); 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 with the SEC on May 3, 2022. 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

We refer to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding our ongoing operational performance. Non-GAAP net income excludes: share-based compensation expenses; depreciation of fair value uplift; amortization of intangibles; severance payment and others; other expenses in relation to reduction in workforce; and amortization of deferred debt issuance costs. We have excluded these items in order to enhance investors’ understanding of our underlying 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 making financial and operational decisions. In addition, these non-GAAP financial measures are used to measure company performance for the purposes of determining employee incentive plan compensation.

 

FABRINET

CONSOLIDATED BALANCE SHEETS

 

(in thousands of U.S. dollars, except share data and par value)

June 24, 2022

June 25, 2021

Assets

 

 

Current assets

 

 

Cash and cash equivalents

$

197,996

 

$

302,969

 

Short-term restricted cash

 

220

 

 

 

Short-term investments

 

280,157

 

 

244,963

 

Trade accounts receivable, net of allowance for doubtful accounts of $1,271 and $100, respectively

 

439,330

 

 

336,547

 

Contract assets

 

13,464

 

 

11,878

 

Inventories

 

557,145

 

 

422,133

 

Prepaid expenses

 

11,626

 

 

11,398

 

Other current assets

 

25,233

 

 

22,619

 

Total current assets

 

1,525,171

 

 

1,352,507

 

Non-current assets

 

 

Long-term restricted cash

 

149

 

 

154

 

Property, plant and equipment, net

 

292,277

 

 

241,129

 

Intangibles, net

 

3,508

 

 

4,371

 

Operating right-of-use assets

 

4,084

 

 

6,699

 

Deferred tax assets

 

9,800

 

 

9,428

 

Other non-current assets

 

652

 

 

1,834

 

Total non-current assets

 

310,470

 

 

263,615

 

Total Assets

$

1,835,641

 

$

1,616,122

 

Liabilities and Shareholders’ Equity

 

 

Current liabilities

 

 

Long-term borrowings, current portion, net

$

12,156

 

$

12,156

 

Trade accounts payable

 

439,684

 

 

346,555

 

Fixed assets payable

 

9,085

 

 

19,206

 

Contract liabilities

 

1,982

 

 

1,680

 

Capital lease liability, current portion

 

10

 

 

 

Operating lease liabilities, current portion

 

2,319

 

 

2,593

 

Income tax payable

 

2,898

 

 

3,612

 

Accrued payroll, bonus and related expenses

 

20,374

 

 

20,464

 

Accrued expenses

 

24,758

 

 

17,134

 

Other payables

 

25,221

 

 

20,958

 

Total current liabilities

 

538,487

 

 

444,358

 

Non-current liabilities

 

 

Long-term borrowings, non-current portion, net

 

15,202

 

 

27,358

 

Deferred tax liability

 

6,001

 

 

5,107

 

Capital lease liability, non-current portion

 

75

 

 

 

Operating lease liabilities, non-current portion

 

1,476

 

 

3,850

 

Severance liabilities

 

18,384

 

 

19,485

 

Other non-current liabilities

 

2,334

 

 

3,444

 

Total non-current liabilities

 

43,472

 

 

59,244

 

Total Liabilities

 

581,959

 

 

503,602

 

Commitments and contingencies

Shareholders’ equity

Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of June 24, 2022 and June 25, 2021)

 

Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,048,700 shares and 38,749,045 shares issued as of June 24, 2022 and June 25, 2021, respectively; and 36,436,683 shares and 36,765,456 shares outstanding as of June 24, 2022 and June 25, 2021, respectively)

390

388

Additional paid-in capital

 

196,667

 

 

189,445

 

Less: Treasury shares (2,612,017 shares and 1,983,589 shares as of June 24, 2022 and June 25, 2021, respectively)

 

(147,258

)

 

(87,343

)

Accumulated other comprehensive loss

 

(12,793

)

 

(6,266

)

Retained earnings

 

1,216,676

 

 

1,016,296

 

Total Shareholders’ Equity

 

1,253,682

 

 

1,112,520

 

Total Liabilities and Shareholders’ Equity

$

1,835,641

 

$

1,616,122

 

 

FABRINET

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 

Three Months Ended

Year Ended

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

June 24, 2022

June 25, 2021

June 24, 2022

June 25, 2021

Revenues

$

587,874

 

$

509,567

 

$

2,262,224

 

$

1,879,350

 

Cost of revenues

 

(512,941

)

 

(448,483

)

 

(1,983,630

)

 

(1,657,987

)

Gross profit

 

74,933

 

 

61,084

 

 

278,594

 

 

221,363

 

Selling, general and administrative expenses

 

(18,529

)

 

(17,489

)

 

(73,941

)

 

(70,567

)

Expenses related to reduction in workforce

 

 

 

 

 

(135

)

 

(43

)

Operating income

 

56,404

 

 

43,595

 

 

204,518

 

 

150,753

 

Interest income

 

735

 

 

627

 

 

2,205

 

 

3,783

 

Interest expense

 

(85

)

 

(302

)

 

(432

)

 

(1,100

)

Foreign exchange gain (loss), net

 

1,304

 

 

284

 

 

2,302

 

 

508

 

Other income (expense), net

 

(276

)

 

(3,863

)

 

(1,627

)

 

(3,460

)

Income before income taxes

 

58,082

 

 

40,341

 

 

206,966

 

 

150,484

 

Income tax expense

 

(1,893

)

 

2,072

 

 

(6,586

)

 

(2,143

)

Net income

 

56,189

 

 

42,413

 

 

200,380

 

 

148,341

 

Other comprehensive income (loss), net of tax:

 

 

 

 

Change in net unrealized gain (loss) on available-for-sale securities

 

(2,711

)

 

(245

)

 

(6,326

)

 

(1,182

)

Change in net unrealized gain (loss) on derivative instruments

 

(3,321

)

 

717

 

 

(578

)

 

(5,106

)

Change in net retirement benefits plan – prior service cost

 

174

 

 

163

 

 

622

 

 

584

 

Change in foreign currency translation adjustment

 

(47

)

 

38

 

 

(245

)

 

585

 

Total other comprehensive income (loss), net of tax

 

(5,905

)

 

673

 

 

(6,527

)

 

(5,119

)

Net comprehensive income

$

50,284

 

$

43,086

 

$

193,853

 

$

143,222

 

Earnings per share

 

 

 

 

Basic

$

1.53

 

$

1.15

 

$

5.43

 

$

4.02

 

Diluted

$

1.51

 

$

1.13

 

$

5.36

 

$

3.95

 

Weighted-average number of ordinary shares outstanding (thousands of shares)

 

 

 

 

Basic

 

36,668

 

 

36,857

 

 

36,876

 

 

36,872

 

Diluted

 

37,222

 

 

37,676

 

 

37,394

 

 

37,555

 

FABRINET

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

Year Ended

(in thousands of U.S. dollars)

June 24,
2022

 

June 25,
2021

Cash flows from operating activities

 

 

 

Net income for the period

$

200,380

 

 

$

148,341

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

Depreciation and amortization

 

38,738

 

 

 

36,252

 

Gain on disposal of property, plant and equipment

 

(101

)

 

 

13

 

Gain from sales and maturities of available-for-sale securities

 

13

 

 

 

(187

)

Amortization of discount (premium) of short-term investment

 

3,691

 

 

 

2,093

 

Amortization of deferred debt issuance costs

 

32

 

 

 

32

 

(Reversal of) allowance for doubtful accounts

 

1,171

 

 

 

(343

)

Unrealized gain on exchange rate and fair value of foreign currency forward contracts

 

(2,832

)

 

 

(859

)

Amortization of fair value at hedge inception of interest rate swaps

 

(937

)

 

 

(1,299

)

Share-based compensation

 

28,048

 

 

 

25,462

 

Deferred income tax

 

(191

)

 

 

(3,473

)

Other non-cash expenses

 

1,390

 

 

 

(450

)

Changes in operating assets and liabilities

 

 

 

Trade accounts receivable

 

(103,970

)

 

 

(63,810

)

Contract assets

 

(1,586

)

 

 

1,378

 

Inventories

 

(135,011

)

 

 

(112,349

)

Other current assets and non-current assets

 

(6,425

)

 

 

(10,753

)

Trade accounts payable

 

93,499

 

 

 

96,312

 

Contract liabilities

 

302

 

 

 

124

 

Income tax payable

 

(761

)

 

 

1,353

 

Severance liabilities

 

1,033

 

 

 

3,181

 

Other current liabilities and non-current liabilities

 

7,763

 

 

 

1,139

 

Net cash provided by operating activities

 

124,246

 

 

 

122,157

 

Cash flows from investing activities

 

 

 

Purchase of short-term investments

 

(198,318

)

 

 

(244,330

)

Proceeds from sales of short-term investments

 

19,463

 

 

 

79,439

 

Proceeds from maturities of short-term investments

 

133,632

 

 

 

179,532

 

Funds repayment from customer to support transfer of manufacturing operations

 

 

 

 

24,310

 

Purchase of property, plant and equipment

 

(89,588

)

 

 

(46,060

)

Purchase of intangibles

 

(995

)

 

 

(1,915

)

Proceeds from disposal of property, plant and equipment

 

263

 

 

 

90

 

Net cash used in investing activities

 

(135,543

)

 

 

(8,934

)

Cash flows from financing activities

 

 

 

Repayment of long-term borrowings

 

(12,188

)

 

 

(12,188

)

Repayment of finance lease liabilities

 

(7

)

 

 

(100

)

Repurchase of ordinary shares

 

(59,915

)

 

 

(18,842

)

Withholding tax related to net share settlement of restricted share units

 

(20,824

)

 

 

(11,624

)

Net cash used in financing activities

 

(92,934

)

 

 

(42,754

)

Net increase (decrease) in cash, cash equivalents and restricted cash

$

(104,231

)

 

$

70,469

 

Movement in cash, cash equivalents and restricted cash

 

 

 

Cash, cash equivalents and restricted cash at the beginning of period

$

303,123

 

 

$

232,832

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

(104,231

)

 

 

70,469

 

Effect of exchange rate on cash, cash equivalents and restricted cash

 

(527

)

 

 

(178

)

Cash, cash equivalents and restricted cash at the end of period

$

198,365

 

 

$

303,123

 

Non-cash investing and financing activities

 

 

 

Construction, software and equipment-related payables

$

9,085

 

 

$

19,206

 

FABRINET

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

 

 

Year Ended

Supplemental disclosures

June 24,
2022

 

June 25,
2021

Cash paid for

 

 

 

Interest

$

2,244

 

$

2,438

Taxes

$

9,296

 

$

7,945

Cash received for interest

$

1,603

 

$

4,445

Non-cash investing and financing activities

 

 

 

Construction, software and equipment related payables

$

9,085

 

$

19,206

 

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows:

 

As of

(amount in thousands)

June 24,
2022

 

June 25,
2021

Cash and cash equivalents

$

197,996

 

$

302,969

Restricted cash

 

369

 

 

154

Cash, cash equivalents and restricted cash

$

198,365

 

$

303,123

 

FABRINET

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

 

Three Months Ended

Year Ended

 

June 24, 2022

 

June 25, 2021

 

June 24, 2022

 

June 25, 2021

 

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

Net

income

Diluted

EPS

 

Net

income

Diluted

EPS

 

Net

income

Diluted

EPS

 

Net

income

Diluted

EPS

GAAP measures

$

56,189

$

1.51

 

$

42,413

$

1.13

 

$

200,380

$

5.36

 

$

148,341

$

3.95

Items reconciling GAAP net income & EPS to non- GAAP net income & EPS:

 

 

 

 

 

 

 

 

Related to cost of revenues:

 

 

 

 

 

 

 

 

Share-based compensation expenses

 

1,388

 

0.04

 

 

1,380

 

0.04

 

 

5,967

 

0.16

 

 

6,185

 

0.16

Depreciation of fair value uplift

 

 

 

 

91

 

0.00

 

 

92

 

0.00

 

 

347

 

0.01

Total related to gross profit

 

1,388

 

0.04

 

 

1,471

 

0.04

 

 

6,059

 

0.16

 

 

6,532

 

0.17

Related to selling, general and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expenses

 

4,959

 

0.13

 

 

5,340

 

0.14

 

 

22,081

 

0.59

 

 

19,277

 

0.52

Amortization of intangibles

 

94

 

0.00

 

 

124

 

0.00

 

 

422

 

0.01

 

 

506

 

0.01

Severance payment and others

 

 

 

 

 

 

 

105

 

0.00

 

 

755

 

0.02

Total related to selling, general and administrative expenses

5,053

0.13

5,464

0.14

 

22,608

0.60

 

20,538

0.55

Related to other incomes and other expenses:

 

 

 

 

 

 

 

 

 

 

 

Other expenses in relation to reduction in workforce

 

 

 

 

135

 

0.01

 

43

 

0.00

Amortization of deferred debt issuance costs

 

8

 

0.00

 

 

8

 

0.00

 

 

32

 

0.00

 

 

32

 

0.00

Total related to other incomes and other expenses

 

8

 

0.00

 

 

8

 

0.00

 

 

167

 

0.01

 

 

75

 

0.00

Total related to net income & EPS

 

6,449

 

0.17

 

 

6,943

 

0.18

 

 

28,834

 

0.77

 

 

27,145

 

0.72

Non-GAAP measures

$

62,638

$

1.68

 

$

49,356

$

1.31

 

$

229,214

$

6.13

 

$

175,486

$

4.67

Shares used in computing diluted net income per share

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted shares

 

 

37,222

 

 

 

37,676

 

 

 

37,394

 

 

 

37,555

Non-GAAP diluted shares

 

 

37,222

 

 

 

37,676

 

 

 

37,394

 

 

 

37,555

 

FABRINET

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

 

(amount in thousands)

Three Months Ended

Year Ended

June 24, 2022

June 25, 2021

June 24, 2022

June 25, 2021

Net cash provided by operating activities

$

16,349

 

$

42,841

 

$

124,246

 

$

122,157

 

Less: Purchase of property, plant and equipment

 

(14,261

)

 

(12,791

)

 

(89,588

)

 

(46,060

)

Non-GAAP free cash flow

$

2,088

 

$

30,050

 

$

34,658

 

$

76,097

 

 

FABRINET

GUIDANCE FOR QUARTER ENDING SEPTEMBER 30, 2022

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

 

 

Diluted

EPS

GAAP net income per diluted share:

$1.51 to $1.58

Related to cost of revenues:

 

Share-based compensation expenses

0.06

Total related to gross profit

0.06

Related to selling, general and administrative expenses:

 

Share-based compensation expenses

0.15

Total related to selling, general and administrative expenses

0.15

Total related to net income & EPS

0.21

Non-GAAP net income per diluted share

$1.72 to $1.79

 

Contacts

Investor Contact:

Garo Toomajanian

[email protected]

To Top