Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

______________________

FORM 8-K

______________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

February 3, 2025

______________________

Fabrinet

(Exact name of registrant as specified in its charter)

______________________


Cayman Islands	001-34775	98-1228572
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

c/o Intertrust Corporate Services

One Nexus Way, Camana Bay

Grand Cayman

KY1-9005

Cayman Islands

(Address of principal executive offices, including zip code)

+66 2-524-9600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Ordinary Shares, $0.01 par value

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 3, 2025, Fabrinet issued a press release regarding its financial results for its fiscal quarter ended December 27, 2024. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information in this Item 2.02 and the press release attached hereto as Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.


Exhibit No.						Description

99.1						Press release dated February 3, 2025
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		FABRINET

	By:	/s/ CSABA SVERHA
		Csaba Sverha
		Executive Vice President, Chief Financial Officer

Date: February 3, 2025

Exhibit 99.1

Fabrinet Announces Second Quarter Fiscal Year 2025 Financial Results

•Record Second Quarter Revenue and Earnings Per Share Above Guidance Ranges

BANGKOK, Thailand – February 3, 2025 – 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 27, 2024.

Seamus Grady, Chief Executive Officer of Fabrinet, said, “With continued business momentum, we exceeded our guidance for revenue and net income per share in the second quarter. Our telecom performance was very strong and benefited from both increasing demand for datacenter interconnect products as well as early progress from recent systems wins. While datacom demand has slightly moderated near-term we continue to anticipate more rapid growth as next-generation products ramp production. With several positive trends, we are very optimistic as we look to the third quarter and beyond.”

Second Quarter Fiscal Year 2025 Financial Highlights

GAAP Results

•Revenue for the second quarter of fiscal year 2025 was $833.6 million, compared to $712.7 million for the second quarter of fiscal year 2024.

•GAAP net income for the second quarter of fiscal year 2025 was $86.6 million, compared to $69.1 million for the second quarter of fiscal year 2024.

•GAAP net income per diluted share for the second quarter of fiscal year 2025 was $2.38, compared to $1.89 for the second quarter of fiscal year 2024.

Non-GAAP Results

•Non-GAAP net income for the second quarter of fiscal year 2025 was $95.1 million, compared to $76.1 million for the second quarter of fiscal year 2024.

•Non-GAAP net income per diluted share for the second quarter of fiscal year 2025 was $2.61, compared to $2.08 for the second quarter of fiscal year 2024.

Share Repurchase Program Expanded

Fabrinet also announced that its Board of Directors has approved an expansion of its share repurchase program, authorizing the repurchase of up to an additional $100.0 million of Fabrinet’s ordinary shares. The addition brings the aggregate authorization under Fabrinet’s existing share repurchase program to $534.3 million.

Business Outlook

Based on information available as of February 3, 2025, Fabrinet is issuing guidance for its third fiscal quarter ending March 28, 2025, as follows:

•Fabrinet expects third quarter revenue to be in the range of $850 million to $870 million.

•GAAP net income per diluted share is expected to be in the range of $2.32 to $2.40, based on approximately 36.3 million fully diluted shares outstanding.

•Non-GAAP net income per diluted share is expected to be in the range of $2.55 to $2.63, based on approximately 36.3 million fully diluted shares outstanding.

Guidance for non-GAAP net income per diluted share excludes share-based compensation expenses and certain non-recurring items. A reconciliation of non-GAAP net income per diluted share to the corresponding GAAP measure is available at the end of this press release.

Conference Call Information


What:						Fabrinet Second Quarter Fiscal Year 2025 Financial Results Call
When:						February 3, 2025
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, and Israel. For more information visit: www.fabrinet.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include: (1) our anticipation that datacom revenue will see more rapid growth as next-generation products ramp production; 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 2025. 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: changes in general economic conditions, either globally or in our markets, and the risk of recession or an economic downturn; continued disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials; less customer demand for our products and services than forecasted; less growth in the optical communications, automotive, 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 and the U.S.); 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 5, 2024. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, we provide investors with certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. We believe these non-GAAP financial measures provide investors with useful supplemental information 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, we use some of these non-GAAP financial measures to measure company performance for the purposes of determining employee incentive plan compensation.

Non-GAAP gross profit, non-GAAP operating profit, non-GAAP net income and non-GAAP net income per diluted share exclude: share-based compensation expenses; severance payment and others; restructuring and other related costs; and amortization of deferred debt issuance costs. We have excluded these items in order to enhance investors’ understanding of our underlying operations.

Non-GAAP free cash flow is net cash provided by (used in) operating activities, minus capital expenditures (purchase of property, plant and equipment). We use free cash flow to measure our ability to generate additional cash from our business operations.

There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We urge you to review the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Investor Contact:

Garo Toomajanian

ir@fabrinet.com

FABRINET

CONSOLIDATED BALANCE SHEETS


(in thousands of U.S. dollars, except share data and par value)	December 27, 2024		June 28, 2024
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	403,662	$	409,973

Short-term investments	530,969		448,630
Trade accounts receivable, net of allowance for expected credit losses of $1,245 and $1,629, respectively	680,094		592,452

Inventories	489,159		463,206
Prepaid expenses	17,734		10,620
Other current assets	77,394		87,810
Total current assets	2,199,012		2,012,691
Non-current assets

Property, plant and equipment, net	323,648		307,240
Intangibles, net	2,062		2,321
Operating right-of-use assets	6,397		5,336
Deferred tax assets	10,694		10,446
Other non-current assets	592		485
Total non-current assets	343,393		325,828
Total Assets	$	2,542,405	$	2,338,519
Liabilities and Shareholders’ Equity
Current liabilities

Trade accounts payable	529,016		441,835
Fixed assets payable	20,594		14,380


Operating lease liabilities, current portion	1,676		1,355
Income tax payable	8,214		3,937
Accrued payroll, bonus and related expenses	20,598		22,116
Accrued expenses	29,112		19,916
Other payables	53,950		54,403
Total current liabilities	663,160		557,942
Non-current liabilities

Deferred tax liability	1,039		4,895

Operating lease liability, non-current portion	4,417		3,635
Severance liabilities	27,572		24,093
Other non-current liabilities	3,246		2,209
Total non-current liabilities	36,274		34,832
Total Liabilities	699,434		592,774

Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of December 27, 2024 and June 28, 2024)	—		—
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,585,188 shares and 39,457,462 shares issued as of December 27, 2024 and June 28, 2024, respectively; and 35,981,188 shares and 36,145,242 shares outstanding as of December 27, 2024 and June 28, 2024, respectively)	396		395
Additional paid-in capital	218,449		222,044
Less: Treasury shares (3,604,000 shares and 3,312,220 shares as of December 27, 2024 and June 28, 2024, respectively)	(303,023)		(234,323)
Accumulated other comprehensive income (loss)	2,349		(3,141)
Retained earnings	1,924,800		1,760,770
Total Shareholders’ Equity	1,842,971		1,745,745
Total Liabilities and Shareholders’ Equity	$	2,542,405	$	2,338,519

FABRINET

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 27, 2024		December 29, 2023		December 27, 2024		December 29, 2023

Revenues	$	833,608	$	712,694	$	1,637,836	$	1,398,171
Cost of revenues	(732,759)		(624,364)		(1,437,961)		(1,225,437)
Gross profit	100,849		88,330		199,875		172,734
Selling, general and administrative expenses	(21,206)		(19,316)		(43,237)		(39,745)
Restructuring and other related costs	(46)		—		(103)		—
Operating income	79,597		69,014		156,535		132,989
Interest income	11,314		7,748		22,247		13,646
Interest expense	—		(36)		—		(81)
Foreign exchange gain (loss), net	4,042		(3,788)		(3,053)		(3,373)
Other income (expense), net	(62)		(35)		(81)		(115)
Income before income taxes	94,891		72,903		175,648		143,066
Income tax expense	(8,255)		(3,793)		(11,618)		(8,867)
Net income	86,636		69,110		164,030		134,199
Other comprehensive income (loss), net of tax:
Change in net unrealized gain (loss) on available-for-sale securities	(521)		2,946		6,297		3,894
Change in net unrealized gain (loss) on derivative instruments	(9,416)		8,951		(883)		8,390
Change in net retirement benefits plan – prior service cost	—		8		—		134
Change in foreign currency translation adjustment	428		(206)		76		(106)
Total other comprehensive income (loss), net of tax	(9,509)		11,699		5,490		12,312
Net comprehensive income	$	77,127	$	80,809	$	169,520	$	146,511
Earnings per share
Basic	$	2.40	$	1.90	$	4.53	$	3.70
Diluted	$	2.38	$	1.89	$	4.51	$	3.67
Weighted-average number of ordinary shares outstanding (in thousands of shares)
Basic	36,163		36,328		36,183		36,292
Diluted	36,402		36,639		36,405		36,560

FABRINET

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Six Months Ended
(in thousands of U.S. dollars)	December 27, 2024		December 29, 2023

Cash flows from operating activities
Net income for the period	$	164,030	$	134,199
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	25,796		24,186

(Gain) loss on disposal of property, plant and equipment and intangibles	(37)		(111)

Amortization of discount (premium) of short-term investments	(2,225)		(1,397)

(Reversal of) allowance for expected credit losses	(384)		1,776
Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts	1,345		3,287

Amortization of fair value at hedge inception of interest rate swaps	—		(154)
Share-based compensation	17,120		14,714
Deferred income tax expense (benefit)	(3,493)		1,117
Other non-cash expenses	30		89
Changes in operating assets and liabilities
Trade accounts receivable	(87,178)		(53,873)

Inventories	(25,953)		104,818
Other current assets and non-current assets	9,536		(16,360)
Trade accounts payable	88,272		(6,980)

Income tax payable	4,304		1,531
Accrued expenses	8,124		4,272
Other payables	186		20,700
Severance liabilities	1,565		1,395
Other current liabilities and non-current liabilities	(1,952)		(3,995)
Net cash provided by operating activities	199,086		229,214
Cash flows from investing activities
Purchase of short-term investments	(155,936)		(164,971)
Proceeds from sales of short-term investments	—		10,000
Proceeds from maturities of short-term investments	82,129		72,824
Purchase of property, plant and equipment	(42,150)		(21,236)
Purchase of intangibles	(227)		(518)
Proceeds from disposal of property, plant and equipment	110		2,048
Net cash used in investing activities	(116,074)		(101,853)
Cash flows from financing activities
Repayment of long-term borrowings	—		(6,094)

Repurchase of ordinary shares	(68,700)		(6,372)
Withholding tax related to net share settlement of restricted share units	(20,714)		(12,352)
Net cash used in financing activities	(89,414)		(24,818)
Net increase (decrease) in cash and cash equivalents	$	(6,402)	$	102,543
Movement in cash and cash equivalents
Cash and cash equivalents at the beginning of period	$	409,973	$	231,368
Increase (decrease) in cash and cash equivalents	(6,402)		102,543
Effect of exchange rate on cash and cash equivalents	91		142
Cash and cash equivalents at the end of period	$	403,662	$	334,053
Non-cash investing and financing activities
Construction, software and equipment-related payables	$	20,594	$	12,983

FABRINET

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED)

Reconciliation of GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin


	Three Months Ended								Six Months Ended
(in thousands of U.S. dollars)	December 27, 2024				December 29, 2023				December 27, 2024				December 29, 2023
Revenues	$	833,608			$	712,694			$	1,637,836			$	1,398,171

Gross profit (GAAP)	$	100,849	12.1	%	$	88,330	12.4	%	$	199,875	12.2	%	$	172,734	12.4	%
Share-based compensation expenses	2,764				1,701				5,662				3,866




Gross profit (Non-GAAP)	$	103,613	12.4	%	$	90,031	12.6	%	$	205,537	12.5	%	$	176,600	12.6	%

Reconciliation of GAAP Operating Profit and GAAP Operating Margin to Non-GAAP Operating Profit and Non-GAAP Operating Margin


	Three Months Ended								Six Months Ended
(in thousands of U.S. dollars)	December 27, 2024				December 29, 2023				December 27, 2024				December 29, 2023
Revenues	$	833,608			$	712,694			$	1,637,836			$	1,398,171

Operating profit (GAAP)	$	79,597	9.5	%	$	69,014	9.7	%	$	156,535	9.6	%	$	132,989	9.5	%
Share-based compensation expenses	8,438				6,981				17,120				14,714
Severance payment and others	18				—				748				—
Restructuring and other related costs	46				—				103				—

Operating profit (Non-GAAP)	$	88,099	10.6	%	$	75,995	10.7	%	$	174,506	10.7	%	$	147,703	10.6	%

FABRINET

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED)

Reconciliation of GAAP Net Income and EPS to Non-GAAP Net Income and EPS


	Three Months Ended								Six Months Ended
	December 27, 2024				December 29, 2023				December 27, 2024				December 29, 2023
(in thousands of U.S. dollars, except per share data)	Net income		Diluted EPS		Net income		Diluted EPS		Net income		Diluted EPS		Net income		Diluted EPS
GAAP measures	$	86,636	$	2.38	$	69,110	$	1.89	$	164,030	$	4.51	$	134,199	$	3.67
Items reconciling GAAP net income & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses	2,764		0.08		1,701		0.05		5,662		0.16		3,866		0.11


Total related to cost of revenues	2,764		0.08		1,701		0.05		5,662		0.16		3,866		0.11
Related to selling, general and administrative expenses:
Share-based compensation expenses	5,674		0.15		5,280		0.14		11,458		0.31		10,848		0.30



Severance payment and others	18		0.00		—		—		748		0.02		—		—
Total related to selling, general and administrative expenses	5,692		0.15		5,280		0.14		12,206		0.33		10,848		0.30
Related to other income and expense:
Restructuring and other related costs	46		0.00		—		—		103		0.00		—		—
Amortization of deferred debt issuance costs	—		—		8		0.00		—		—		16		0.00
Total related to other income and expense	46		0.00		8		0.00		103		0.00		16		0.00
Total related to net income & EPS	8,502		0.23		6,989		0.19		17,971		0.49		14,730		0.41

Non-GAAP measures	$	95,138	$	2.61	$	76,099	$	2.08	$	182,001	$	5.00	$	148,929	$	4.08
Shares used in computing diluted net income per share (in thousands of shares)
GAAP diluted shares			36,402				36,639				36,405				36,560
Non-GAAP diluted shares			36,402				36,639				36,405				36,560

FABRINET

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED)


(in thousands of U.S. dollars)	Three Months Ended				Six Months Ended
	December 27, 2024		December 29, 2023		December 27, 2024		December 29, 2023
Net cash provided by operating activities	$	115,904	$	84,165	$	199,086	$	229,214
Less: Purchase of property, plant and equipment	(21,900)		(9,801)		(42,150)		(21,236)
Non-GAAP free cash flow	$	94,004	$	74,364	$	156,936	$	207,978

FABRINET

GUIDANCE FOR QUARTER ENDING MARCH 28, 2025

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES


			Diluted EPS
GAAP net income per diluted share			$2.32 to $2.40
Related to cost of revenues:
Share-based compensation expenses			0.08
Total related to cost of revenues			0.08
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			0.23
Non-GAAP net income per diluted share			$2.55 to $2.63

Cover	Feb. 03, 2025
Cover [Abstract]
Document Type	8-K
Document Period End Date	Feb. 03, 2025
Entity Registrant Name	Fabrinet
Entity Incorporation, State or Country Code	E9
Entity File Number	001-34775
Entity Tax Identification Number	98-1228572
Entity Address, Address Line One	c/o Intertrust Corporate Services
Entity Address, City or Town	Grand Cayman
Entity Address, Postal Zip Code	KY1-9005
Entity Address, Country	KY
City Area Code	66 2
Local Phone Number	524-9600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Ordinary Shares, $0.01 par value
Trading Symbol	FN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001408710
Entity Addresses [Line Items]
Entity Address, City or Town	Grand Cayman
Entity Address, Country	KY
Entity Address, Address Line Two	One Nexus Way, Camana Bay

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