Fabrinet Announces Second Quarter Fiscal Year 2021 Financial Results

Rhea-AI Summary

Fabrinet (NYSE: FN) reported strong financial results for Q2 FY2021, achieving record revenue of $453.8 million, up from $426.2 million in Q2 FY2020. GAAP net income rose to $35.4 million or $0.94 per diluted share, compared to $31.2 million and $0.83 in the prior year. Non-GAAP net income was $41.5 million or $1.10 per diluted share. The company anticipates Q3 revenue between $455 million and $475 million, with net income per diluted share guidance at $0.94 to $1.01. A new building is under construction to support growth.

Positive

• Record revenue of $453.8 million, up 6.0% year-over-year.
• GAAP net income increased to $35.4 million, a 13.4% rise from the previous year.
• Non-GAAP net income grew to $41.5 million, reflecting strong operational performance.
• Guidance for Q3 revenue of $455 million to $475 million indicates continued growth.

Negative

• None.

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 second fiscal quarter ended December 25, 2020.

Seamus Grady, Chief Executive Officer of Fabrinet, said, “We delivered record revenue and profitability that exceeded our guidance ranges in the second quarter. Newer programs helped drive revenue upside while margin improvement contributed to strong profitability in the quarter.”

Grady continued, “Based on our anticipated growth, we have broken ground on construction for an additional building at our Chonburi campus. As we look ahead, we are optimistic that the third quarter will represent another record-breaking quarter for the company.”

Second Quarter Fiscal Year 2021 Financial Highlights

GAAP Results

• Revenue for the second quarter of fiscal year 2021 was $453.8 million, compared to $426.2 million in the second quarter of fiscal year 2020.
• GAAP net income for the second quarter of fiscal year 2021 was $35.4 million, compared to GAAP net income of $31.2 million for the second quarter of fiscal year 2020.
• GAAP net income per diluted share for the second quarter of fiscal year 2021 was $0.94, compared to GAAP net income per diluted share of $0.83 for the second quarter of fiscal year 2020.

Non-GAAP Results

• Non-GAAP net income for the second quarter of fiscal year 2021 was $41.5 million, compared to non-GAAP net income of $37.7 million for the second quarter of fiscal year 2020.
• Non-GAAP net income per diluted share for the second quarter of fiscal year 2021 was $1.10, compared to non-GAAP net income per diluted share of $1.00 for the second quarter of fiscal year 2020.

Business Outlook

Based on information available as of February 1, 2021, Fabrinet is issuing guidance for its third fiscal quarter ending March 26, 2021, as follows:

• Fabrinet expects third quarter revenue to be in the range of $455 million to $475 million.
• GAAP net income per diluted share is expected to be in the range of $0.94 to $1.01, 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 $1.10 to $1.17, based on approximately 37.6 million fully diluted shares outstanding.

Conference Call Information

What:		Fabrinet Second Quarter Fiscal Year 2021 Financial Results Call
When:		Monday, February 1, 2021
Time:		5:00 p.m. ET
Live Call:		(888) 357-3694, domestic (253) 237-1137, international Passcode: 3296178
Replay:		(855) 859-2056, domestic (404) 537-3406, international Passcode: 3296178
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, 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 that the third quarter will represent another record-breaking quarter for the company; 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 third quarter of fiscal year 2021. 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 coronavirus 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 outbreak 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 outbreak intensifies or returns in various geographic areas, and (4) regional downward demand adjustments from our customers, particularly those in areas affected by the outbreak; 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 November 3, 2020. 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; 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 CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands of U.S. dollars, except share data and par value)	December 25, 2020				June 26, 2020
Assets
Current assets
Cash and cash equivalents	$	219,221			$	225,430
Short-term restricted cash	7,402				7,402
Short-term investments	261,817				262,693
Trade accounts receivable, net of allowance for doubtful accounts of $123 and $336 respectively	318,430				272,665
Contract assets	16,223				13,256
Inventories	371,996				309,786
Other receivable	24,310				24,310
Prepaid expenses	3,141				5,399
Other current assets	29,187				14,508
Total current assets	1,251,727				1,135,449
Non-current assets
Long-term restricted cash	153				—
Property, plant and equipment, net	227,670				228,274
Intangibles, net	4,367				4,312
Operating right-of-use assets	7,271				8,068
Deferred tax assets	6,213				5,675
Other non-current assets	236				202
Total non-current assets	245,910				246,531
Total Assets	1,497,637				1,381,980
Liabilities and Shareholders’ Equity
Current liabilities
Long-term borrowings, current portion, net	12,156				12,156
Trade accounts payable	296,948				251,603
Fixed assets payable	7,748				15,127
Contract liabilities	1,804				1,556
Operating lease liabilities, current portion	2,277				1,979
Income tax payable	2,806				2,242
Accrued payroll, bonus and related expenses	17,633				19,265
Accrued expenses	14,504				8,979
Other payables	39,159				21,514
Total current liabilities	395,035				334,421
Non-current liabilities
Long-term borrowings, non-current portion, net	33,436				39,514
Deferred tax liability	4,592				4,729
Operating lease liability, non-current portion	4,737				5,873
Severance liabilities	19,011				17,379
Other non-current liabilities	4,156				5,655
Total non-current liabilities	65,932				73,150
Total Liabilities	460,967				407,571
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of December 25, 2020 and June 26, 2020)	—				—
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 38,698,068 shares and 38,471,967 shares issued at December 25, 2020 and June 26, 2020, respectively; and 36,852,416 shares and 36,727,864 shares outstanding at December 25, 2020 and June 26, 2020, respectively)	387				385
Additional paid-in capital	177,125				175,610
Less: Treasury shares (1,845,652 shares and 1,744,103 shares as of December 25, 2020 and June 26, 2020, respectively)	(75,575)				(68,501)
Accumulated other comprehensive income (loss)	(1,657)				(1,147)
Retained earnings	936,390				868,062
Total Shareholders’ Equity	1,036,670				974,409
Total Liabilities and Shareholders’ Equity	$	1,497,637			$	1,381,980

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FABRINET CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited)
	Three Months Ended								Six Months Ended
(in thousands of U.S. dollars, except per share data)	December 25, 2020				December 27, 2019				December 25, 2020				December 27, 2019
Revenues	$	453,827			$	426,217			$	890,466			$	825,513
Cost of revenues	(400,806)				(377,059)				(786,965)				(730,368)
Gross profit	53,021				49,158				103,501				95,145
Selling, general and administrative expenses	(17,156)				(17,078)				(34,019)				(33,078)
Expenses related to reduction in workforce	—				(16)				—				(16)
Operating income	35,865				32,064				69,482				62,051
Interest income	1,111				1,940				2,215				4,038
Interest expense	(265)				(181)				(516)				(2,574)
Foreign exchange gain (loss), net	(533)				(988)				(405)				(2,941)
Other income (expense), net	158				397				279				774
Income before income taxes	36,336				33,232				71,055				61,348
Income tax expense	(952)				(2,001)				(2,620)				(4,160)
Net income	35,384				31,231				68,435				57,188
Other comprehensive income (loss), net of tax:
Change in net unrealized gain (loss) on available-for-sale securities	(42)				(82)				(367)				(47)
Change in net unrealized gain (loss) on derivative instruments	2,385				(189)				(823)				(150)
Change in net retirement benefits plan – prior service cost	50				101				223				184
Change in foreign currency translation adjustment	(146)				616				457				247
Total other comprehensive income (loss), net of tax	2,247				446				(510)				{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Fabrinet Announces Second Quarter Fiscal Year 2021 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What was Fabrinet's revenue for Q2 FY2021?", "acceptedAnswer": { "@type": "Answer", "text": "Fabrinet reported revenue of $453.8 million for Q2 FY2021." } }, { "@type": "Question", "name": "How much did Fabrinet earn in net income for Q2 FY2021?", "acceptedAnswer": { "@type": "Answer", "text": "Fabrinet's net income for Q2 FY2021 was $35.4 million." } }, { "@type": "Question", "name": "What is Fabrinet's guidance for Q3 FY2021?", "acceptedAnswer": { "@type": "Answer", "text": "Fabrinet expects Q3 FY2021 revenue between $455 million and $475 million." } }, { "@type": "Question", "name": "What was the non-GAAP net income per diluted share for Q2 FY2021?", "acceptedAnswer": { "@type": "Answer", "text": "The non-GAAP net income per diluted share for Q2 FY2021 was $1.10." } }, { "@type": "Question", "name": "When will Fabrinet's conference call for Q2 results take place?", "acceptedAnswer": { "@type": "Answer", "text": "Fabrinet's conference call for Q2 results is scheduled for February 1, 2021, at 5:00 p.m. ET." } } ] } FAQ What was Fabrinet's revenue for Q2 FY2021? Fabrinet reported revenue of $453.8 million for Q2 FY2021. How much did Fabrinet earn in net income for Q2 FY2021? Fabrinet's net income for Q2 FY2021 was $35.4 million. What is Fabrinet's guidance for Q3 FY2021? Fabrinet expects Q3 FY2021 revenue between $455 million and $475 million. What was the non-GAAP net income per diluted share for Q2 FY2021? The non-GAAP net income per diluted share for Q2 FY2021 was $1.10. When will Fabrinet's conference call for Q2 results take place? Fabrinet's conference call for Q2 results is scheduled for February 1, 2021, at 5:00 p.m. ET. Fabrinet NYSE:FN FN Rankings #977 Ranked by Market Cap N/A Ranked by Dividends FN Latest News Nov 4, 2024 Fabrinet Announces First Quarter Fiscal Year 2025 Financial Results Oct 21, 2024 Fabrinet to Announce First Quarter Fiscal Year 2025 Financial Results on November 4, 2024 Aug 19, 2024 Fabrinet Announces Fourth Quarter and Fiscal Year 2024 Financial Results Jul 29, 2024 Fabrinet to Announce Fourth Quarter and Fiscal Year 2024 Financial Results on August 19, 2024 Jun 14, 2024 Fabrinet Appoints Forbes Alexander to Board of Directors FN Stock Data Market Cap 8.03B Float 36.12M Insiders Ownership 0.38% Institutions Ownership 104.97% Short Percent 5.15% Industry Electronic Components Sector Telephone & Telegraph Apparatus Website Link Country United States of America City SANTA CLARA Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net