Fabrinet Announces Second Quarter Fiscal Year 2023 Financial Results

 

FABRINET

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

 

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

December 30,
2022

June 24,
2022

Assets

 

 

Current assets

 

 

Cash and cash equivalents

$

250,829

 

$

197,996

 

Short-term restricted cash

 

 

 

220

 

Short-term investments

 

276,778

 

 

280,157

 

Trade accounts receivable, net of allowance for doubtful accounts of $1,521 and $1,271, respectively

 

520,024

 

 

439,330

 

Contract assets

 

13,578

 

 

13,464

 

Inventories

 

536,536

 

 

557,145

 

Prepaid expenses

 

9,483

 

 

11,626

 

Other current assets

 

40,543

 

 

25,233

 

Total current assets

 

1,647,771

 

 

1,525,171

 

Non-current assets

 

 

Long-term restricted cash

 

 

 

149

 

Property, plant and equipment, net

 

302,282

 

 

292,277

 

Intangibles, net

 

3,319

 

 

3,508

 

Operating right-of-use assets

 

2,805

 

 

4,084

 

Deferred tax assets

 

11,212

 

 

9,800

 

Other non-current assets

 

635

 

 

652

 

Total non-current assets

 

320,253

 

 

310,470

 

Total Assets

$

1,968,024

 

$

1,835,641

 

Liabilities and Shareholders’ Equity

 

 

Current liabilities

 

 

Long-term borrowings, current portion, net

$

12,156

 

$

12,156

 

Trade accounts payable

 

438,475

 

 

439,684

 

Fixed assets payable

 

18,920

 

 

9,085

 

Contract liabilities

 

3,636

 

 

1,982

 

Operating lease liabilities, current portion

 

2,005

 

 

2,319

 

Income tax payable

 

2,470

 

 

2,898

 

Accrued payroll, bonus and related expenses

 

21,940

 

 

20,374

 

Accrued expenses

 

22,465

 

 

24,758

 

Other payables

 

27,528

 

 

25,231

 

Total current liabilities

 

549,595

 

 

538,487

 

Non-current liabilities

Long-term borrowings, non-current portion, net

6,078

15,202

Deferred tax liability

 

5,934

 

 

6,001

 

Operating lease liability, non-current portion

 

476

 

 

1,476

 

Severance liabilities

 

20,335

 

 

18,384

 

Other non-current liabilities

 

1,475

 

 

2,409

 

Total non-current liabilities

 

34,298

 

 

43,472

 

Total Liabilities

 

583,893

 

 

581,959

 

Shareholders’ equity

 

 

Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of December 30, 2022 and June 24, 2022)

Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,251,581 shares and 39,048,700 shares issued at December 30, 2022 and June 24, 2022, respectively; and 36,590,939 shares and 36,436,683 shares outstanding at December 30, 2022 and June 24, 2022, respectively)

 

 

 

393

 

 

 

 

 

390

 

 

Additional paid-in capital

 

194,366

 

 

196,667

 

Less: Treasury shares (2,660,642 shares and 2,612,017 shares as of December 30, 2022 and June 24, 2022, respectively)

 

(152,362

)

 

(147,258

)

Accumulated other comprehensive income (loss)

 

(2,714

)

 

(12,793

)

Retained earnings

 

1,344,448

 

 

1,216,676

 

Total Shareholders’ Equity

 

1,384,131

 

 

1,253,682

 

Total Liabilities and Shareholders’ Equity

$

1,968,024

 

$

1,835,641

 

 

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 30,
2022

December 24,
2021

December 30,
2022

December 24,
2021

Revenues

$

668,656

 

$

566,633

 

$

1,324,085

 

$

1,109,955

 

Cost of revenues

 

(583,441

)

 

(497,262

)

 

(1,156,114

)

 

(976,987

)

Gross profit

 

85,215

 

 

69,371

 

 

167,971

 

 

132,968

 

Selling, general and administrative expenses

 

(18,930

)

 

(17,791

)

 

(39,495

)

 

(38,378

)

Expenses related to reduction in workforce

 

 

 

(135

)

 

 

 

(135

)

Operating income

 

66,285

 

 

51,445

 

 

128,476

 

 

94,455

 

Interest income

 

2,334

 

 

295

 

 

3,893

 

 

1,056

 

Interest expense

 

(389

)

 

(238

)

 

(780

)

 

(274

)

Foreign exchange gain (loss), net

 

(3,904

)

 

(364

)

 

(1,819

)

 

1,408

 

Other income (expense), net

 

(68

)

 

(1,055

)

 

(209

)

 

(1,315

)

Income before income taxes

 

64,258

 

 

50,083

 

 

129,561

 

 

95,330

 

Income tax expense

 

(1,101

)

 

(1,204

)

 

(1,789

)

 

(1,800

)

Net income

 

63,157

 

 

48,879

 

 

127,772

 

 

93,530

 

Other comprehensive income (loss), net of tax:

 

 

 

 

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

 

1,183

 

 

(947

)

 

(278

)

 

(1,160

)

Change in net unrealized gain (loss) on derivative instruments

 

11,188

 

 

3,294

 

 

9,970

 

 

2,077

 

Change in net retirement benefits plan – prior service cost

 

57

 

 

126

 

 

225

 

 

324

 

Change in foreign currency translation adjustment

 

(84

)

 

 

 

162

 

 

(164

)

Total other comprehensive income (loss), net of tax

 

12,344

 

 

2,473

 

 

10,079

 

 

1,077

 

Net comprehensive income

$

75,501

 

$

51,352

 

$

137,851

 

$

94,607

 

Earnings per share

 

 

 

Basic

$

1.73

 

$

1.32

 

$

3.50

 

$

2.53

 

Diluted

$

1.71

 

$

1.30

 

$

3.47

 

$

2.50

 

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

 

 

 

 

Basic

 

36,589

 

 

37,017

 

 

36,558

 

 

36,947

 

Diluted

 

36,939

 

 

37,552

 

 

36,848

 

 

37,440

 

 

FABRINET

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

Six Months Ended

(in thousands of U.S. dollars)

December 30,
2022

December 24,
2021

Cash flows from operating activities

 

 

Net income for the period

$

127,772

 

$

93,530

 

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

 

 

Depreciation and amortization

 

21,596

 

 

19,114

 

(Gain) loss on disposal and impairment of property, plant and equipment

 

(337

)

 

(135

)

(Gain) loss from sales and maturities of available-for-sale securities

 

92

 

 

(13

)

Amortization of discount (premium) of short-term investment

 

565

 

 

2,079

 

Amortization of deferred debt issuance costs

 

16

 

 

16

 

(Reversal of) allowance for doubtful accounts

 

251

 

 

(30

)

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

 

3,086

 

 

(673

)

Amortization of fair value at hedge inception of interest rate swaps

 

(346

)

 

(513

)

Share-based compensation

 

14,498

 

 

15,978

 

Deferred income tax

 

(1,338

)

 

(986

)

Other non-cash expenses

 

(321

)

 

268

 

Changes in operating assets and liabilities

 

 

Trade accounts receivable

 

(79,831

)

 

(48,046

)

Contract assets

 

(114

)

 

(1,270

)

Inventories

 

20,475

 

 

(62,740

)

Other current assets and non-current assets

 

(11,946

)

 

(5,568

)

Trade accounts payable

 

(4,176

)

 

44,078

 

Contract liabilities

 

1,654

 

 

214

 

Income tax payable

 

(577

)

 

(1,323

)

Severance liabilities

 

1,269

 

 

1,708

 

Other current liabilities and non-current liabilities

 

12,812

 

 

1,880

 

Net cash provided by operating activities

 

105,100

 

 

57,568

 

Cash flows from investing activities

 

 

Purchase of short-term investments

 

(74,482

)

 

(78,786

)

Proceeds from sales of short-term investments

 

30,000

 

 

19,463

 

Proceeds from maturities of short-term investments

 

46,925

 

 

57,721

 

Purchase of property, plant and equipment

 

(23,643

)

 

(51,917

)

Purchase of intangibles

 

(412

)

 

(446

)

Proceeds from disposal of property, plant and equipment

 

32

 

 

188

 

Net cash used in investing activities

 

(21,580

)

 

(53,777

)

Cash flows from financing activities

 

 

Repayment of long-term borrowings

 

(9,140

)

 

(6,094

)

Repayment of finance lease liability

 

(5

)

 

 

Repurchase of ordinary shares

 

(5,104

)

 

(4,198

)

Withholding tax related to net share settlement of restricted share units

 

(16,796

)

 

(19,481

)

Net cash used in financing activities

 

(31,045

)

 

(29,773

)

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

$

52,475

 

$

(25,982

)

Movement in cash, cash equivalents and restricted cash

 

 

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

$

198,365

 

$

303,123

 

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

 

52,475

 

 

(25,982

)

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

 

(11

)

 

(296

)

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

$

250,829

 

$

276,845

 

Non-cash investing and financing activities

 

 

Construction, software and equipment-related payables

$

18,920

 

$

28,740

 

 

FABRINET

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