Fabrinet Announces Second Quarter 2013 Financial Results

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Fabrinet Announces Second Quarter 2013 Financial Results

BANGKOK--(BUSINESS WIRE)-- Fabrinet (NYS: 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 second quarter of fiscal 2013 ended December 28, 2012.

Fabrinet reported total revenue of $167.4 million for the second quarter of fiscal 2013, an increase of 73.3% compared to total revenue of $96.6 million for the comparable period in fiscal 2012. GAAP net income for the second quarter of fiscal 2013 was $16.7 million, or $0.48 per diluted share, compared to GAAP net loss of ($33.3) million, or ($0.97) per diluted share, in the second quarter of fiscal 2012. Non-GAAP net income in the second quarter of fiscal 2013 was $13.8 million, or $0.39 per diluted share, an increase of more than 100% compared to non-GAAP net income of $6.2 million, or $0.18 per diluted share, in the same period a year ago.


Tom Mitchell, Chief Executive Officer of Fabrinet, said, "Despite what remains a challenging macro environment, I am pleased with the results that we delivered in the second quarter of fiscal 2013, highlighted by solid revenue and earnings per share growth. We continue to work closely with new and existing customers and we remain committed to delivering value to all of our stakeholders."

Business Outlook

Based on information available as of February 4, 2013, Fabrinet is issuing guidance for the third quarter of fiscal 2013 as follows:

Fabrinet expects third quarter revenue to be in the range of $147 million to $151 million. GAAP net income per share is expected to be in the range of $0.26 to $0.28 with expected non-GAAP net income per share of $0.29 to $0.31, based on approximately 35 million fully diluted shares outstanding.

Conference Call Information

 

What:

 

Fabrinet Second Quarter 2013 Financial Results Conference Call

When:

Monday, February 4, 2013

Time:

5:00 p.m. ET

Live Call:

(888) 357-3694, domestic

(253) 237-1137, international

Passcode: 89547259

Replay:

(855) 859-2056, domestic

(404) 537-3406, international

Passcode: 89547259

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.

Investor Conferences

Management will be presenting at the Stifel Nicolaus Technology Conference in San Francisco on Tuesday, February 5, 2013; the Morgan Stanley Technology, Media & Telecom Conference in San Francisco on Tuesday, February 26, 2013; and the Piper Jaffray Technology, Media and Telecommunications Conference in New York City on Wednesday, March 13, 2013.

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 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.

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 third 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 November 6, 2012. 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 income (expense) related to flooding. 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.

Fabrinet
Unaudited Condensed Consolidated Balance Sheets
As of December 28, 2012 and June 29, 2012
 

December 28,

 

June 29,

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

2012

2012

Assets 
Current assets
Cash and cash equivalents$128,098$115,507
Trade accounts receivable, net131,358128,253
Inventory, net99,681103,223
Deferred tax assets1,7444,088
Prepaid expenses1,3343,571
Other current assets6,934  6,029 
Total current assets369,149  360,671 
Non-current assets
Property, plant and equipment, net98,24897,923
Intangibles, net239380
Deferred tax assets2,9141,764
Deposits and other non-current assets635  624 
Total non-current assets102,036  100,691 
Total assets$471,185 $ 461,362 
Liabilities and Shareholders' Equity
Current liabilities
Long-term loans from banks, current portion$9,668$9,668
Trade accounts payable73,74486,000
Construction-related payable92,222
Income tax payable724353
Deferred tax liability1,6541,405
Accrued payroll, bonus and related expenses5,8055,181
Accrued expenses2,7072,630
Other payables5,5986,601
Liabilities to third parties due to flood losses54,401  61,198 
Total current liabilities154,310  175,258 
Non-current liabilities
Long-term loans from banks, non-current portion24,07728,911
Severance liabilities5,0174,420
Other non-current liabilities1,582  2,064 
Total non-current liabilities30,676  35,395 
Total liabilities184,986  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 December 28, 2012 and June 29, 2012)--
Ordinary shares (500,000,000 shares authorized, $0.01 par value;
34,535,980 shares and 34,470,829 shares issued and
outstanding as of December 28, 2012 and June 29, 2012, respectively)345345
Additional paid-in capital68,25165,462
Retained earnings217,603  184,902 
Total shareholders' equity286,199  250,709 
Total Liabilities and Shareholders' Equity$471,185 $ 461,362 

 

Fabrinet

Unaudited Condensed Consolidated Statements of Operations

For the three and six months ended December 28, 2012 and December 30, 2011

 
 Three Months Ended  Six Months Ended
December 28, December 30,December 28, December 30,
(in thousands of U.S. dollars)2012201120122011
 
Revenues$167,426$96,609$326,051$282,956
Cost of revenues(149,056)(87,680)(289,959)(251,143)
Gross profit18,3708,92936,09231,813
Selling, general and administrative expenses(5,787)(5,319)(11,646)(11,957)
Income (expense) related to flooding4,825 (40,265)9,645 (40,265)
Operating income (loss)17,408(36,655)34,091(20,409)
Interest income271224459419
Interest expense(263)(68)(549)(142)
Foreign exchange (loss) gain, net(170)787107600
Other income183 59 373 156 
Income (loss) before income taxes17,429(35,653)34,481(19,376)
Income tax (expense) benefit(747)2,399 (1,780)1,777 
Net income (loss)$16,682 $(33,254)$32,701 $(17,599)
 
Earnings (loss) per share
Basic$0.48$(0.97)$0.95$(0.51)
Diluted0.48(0.97)0.94(0.51)
 
Weighted average number of ordinary shares outstanding
(thousands of shares)
Basic34,51734,396*34,50134,309*
Diluted34,80434,396*34,73734,309*

* In accordance with the antidilutive provisions of ASC 260-10-45, basic and dilutive shares are the same for the period ended December 30, 2011

 

Fabrinet

Unaudited Condensed Consolidated Statements of Cash Flows

For the six months ended December 28, 2012 and December 30, 2011

 
 Six Months Ended
December 28, December 30,
(in thousands of U. S. dollars)20122011
 
Cash flows from operating activities
Net income (loss) for the period$32,701$(17,599)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation5,0024,937
Amortization of intangibles142199
(Gain) loss on disposal of property, plant and equipment(1)9
Income related to flooding(9,645)-
Proceeds from insurers for business interruption losses related to flooding4,741-
Reversal of allowance for doubtful accounts(36)(24)
Unrealized gain on exchange rate and fair value of derivative(722)(43)
Share-based compensation2,6322,591
Deferred income tax1,443(2,291)
Other non-cash expenses115374
Inventory obsolescence(376)475
Loss from written-off assets and liabilities to third parties due to flood losses-33,263
Changes in operating assets and liabilities
Trade accounts receivable(3,069)19,868
Inventory3,918(12,813)
Other current assets and non-current assets1,342(451)
Trade accounts payable(12,256)(35,511)
Income tax payable371(812)
Other current liabilities and non-current liabilities Read Full Story

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