- 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
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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220815005237/en/
Investor Contact: Garo Toomajanian ir@fabrinet.com
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