Fabrinet Announces Third Quarter 2013 Financial Results

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Fabrinet Announces Third 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 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 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 share-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.

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, net122,926128,253
Inventory, net94,310103,223
Deferred tax assets2,1584,088
Prepaid expenses2,6053,571
Other current assets7,5936,029
Total current assets387,071360,671
Non-current assets
Property, plant and equipment, net98,17397,923
Intangibles, net196380
Deferred tax assets2,4351,764
Deposits and other non-current assets655624
Total non-current assets101,459100,691
Total assets$488,530$461,362
Liabilities and Shareholders' Equity
Current liabilities
Long-term loans from bank, current portion$9,668$9,668
Trade accounts payable74,32986,000
Construction-related payable-2,222
Income tax payable1,171353
Deferred tax liability1,7611,405
Accrued payroll, bonus and related expenses7,4425,181
Accrued expenses3,2542,630
Other payables4,7606,601
Liabilities to third parties due to flood losses48,39061,198
Total current liabilities150,775175,258
Non-current liabilities
Long-term loans from bank, non-current portion21,66028,911
Severance liabilities5,4644,420
Other non-current liabilities1,6182,064
Total non-current liabilities28,74235,395
Total liabilities179,517210,653
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)

346345
Additional paid-in capital69,93865,462
Retained earnings238,729184,902

Total shareholders' equity

309,013250,709
Total Liabilities and Shareholders' Equity$488,530$461,362
 
 
Fabrinet
Unaudited Condensed Consolidated Statements of Operations
For the three and nine months ended March 29, 2013 and March 30, 2012
   
Three Months EndedNine Months Ended
March 29, March 30,March 29, March 30,
(in thousands of U.S. dollars, except share data)2013201220132012
 
Revenues$155,557$139,019$481,608$421,975
Cost of revenues(139,302)(124,138)(429,261)(375,281)
Gross profit16,25514,88152,34746,694
Selling, general and administrative expenses(6,801)(6,586)(18,447)(18,543)
Income (expense) related to flooding11,419 (55,623)21,064 (95,888)
Operating income (loss)20,873(47,328)54,964(67,737)
Interest income302209761628
Interest expense(239)(64)(788)(206)
Foreign exchange gain, net9787141,0851,314
Other income139 57 512 213 
Income (loss) before income taxes22,053(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)
Diluted0.61(1.35)1.55(1.86)
 
Weighted average number of ordinary shares outstanding
(thousands of shares)
Basic34,59634,44034,53234,353

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

 
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)20132012
 
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
Depreciation7,5126,995
Amortization of intangibles185288
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 flooding4,741
Proceeds from insurers for inventory losses related to flooding11,419
(Reversal of) allowance for doubtful accounts(94)28
Unrealized gain on exchange rate and fair value of derivative(1,566)(1,364)
Share-based compensation3,9693,930
Deferred income tax1,615(2,331)
Other non-cash expenses598637
(Reversal of ) inventory obsolescence(589)528
Loss from written-off assets and liabilities to third parties due to flood losses83,871
Changes in operating assets and liabilities
Trade accounts receivable3,421(807)
Inventory8,945(9,550)
Other current assets and non-current assets(2,775)(2,758)
Trade accounts payable(11,671)(17,289)
Income tax payable818(1,038)
Other current liabilities and non-current liabilities482,929
Liabilities to third parties due to flood losses(8,059) 
Net cash provided by operating activities51,257 138 
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 leases1,217
Proceeds from disposal of property, plant and equipment2522
Proceeds from insurers in settlement of claims related to flood damage4,904   Read Full Story

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