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Fabrinet Announces Fourth Quarter And Fiscal Year 2012 Financial Results

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, executive separation costs, in connection with our follow-on offering, expenses in relation to flood, and expenses related to reduction in workforce. 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
Consolidated Balance Sheets
As of June 29, 2012 and June 24, 2011
     
(in thousands of U.S. dollars, except share data) June 29, 2012 June 24, 2011
Assets
Current assets
Cash and cash equivalents $ 115,507 $ 127,282
Trade accounts receivable, net 128,253 117,705
Inventories, net 103,223 106,467
Investment in leases - 448
Deferred tax assets 4,088 1,308
Prepaid expenses 3,571 2,028
Other current assets 6,029 2,438
Total current assets 360,671 357,676
Non-current assets
Property, plant and equipment, net 97,923 75,410
Intangibles, net 380 892
Investment in leases - 1,163
Deferred tax assets 1,764 1,953
Deposits and other non-current assets 624 681
Total non-current assets 100,691 80,099
Total assets $ 461,362 $ 437,775
Liabilities and Shareholders’ Equity
Current liabilities
Long-term loans from banks, current portion $ 9,668 $ 4,398
Trade accounts payable 86,000 92,563
Construction payable 2,222 2,475
Income tax payable 353 1,858
Deferred tax liability 1,405 1,056
Accrued payroll, profit sharing and related expenses 5,181 7,677
Accrued expenses 2,630 3,986
Other payables 6,601 3,796
Liabilities to third parties due to flood losses 61,198 -
Total current liabilities 175,258 117,809
Non-current liabilities
Long-term loans from banks, non-current portion 28,911 11,979
Severance liabilities 4,420 4,478
Other non-current liabilities 2,064 1,982
Total non-current liabilities 35,395 18,439
Total liabilities 210,653 136,248
Shareholders’ equity
Preferred shares (5,000,000 shares authorized, $0.01 par value;
no shares issued and outstanding as of June 29, 2012 and June 24, 2011, respectively) - -
Ordinary shares (500,000,000 shares authorized, $0.01 par value;
34,470,829 shares and 34,207,579 shares issued and
outstanding as of June 29, 2012 and June 24, 2011, respectively) 345 342
Additional paid-in capital 65,462 59,816
Retained earnings 184,902 241,369
Total shareholders’ equity 250,709 301,527
Total Liabilities and Shareholders’ Equity $ 461,362 $ 437,775

FabrinetConsolidated Statements of OperationsFor the three and twelve months ended June 29, 2012 and June 24, 2011

      Three Months Ended   Twelve Months Ended

June 29,

 

June 24,

June 29,

 

June 24,

(in thousands of U.S. dollars) 2012 2011 2012 2011
 
Revenues $ 142,757 $ 190,348 $ 564,732 $ 743,570
Cost of revenues (127,537 ) (166,363 ) (502,818 ) (648,823 )
 
Gross profit 15,220 23,985 61,914 94,747
Selling, general and administrative expenses (4,923 ) (6,512 ) (23,466 ) (24,806 )
Expenses related to flooding (1,398 ) - (97,286 ) -
Expenses related to reduction in workforce

(1,978

)

-

 

(1,978

)

-

 
 
Operating income (loss) 6,921 17,473 (60,816 ) 69,941
 
Interest income 216 139 844 494
Interest expense (221 ) (75 ) (427 ) (357 )
Foreign exchange gain (loss), net 255 (724 ) 1,569 (1,430 )
Other income 182   136   395   216  
 
Income (loss) before income taxes 7,353 16,949 (58,435 ) 68,864
Income tax benefit (expense) 104   (294 ) 1,968   (4,535 )
 
Net income (loss) $ 7,457   $ 16,655   $ (56,467 ) $ 64,329  
 
Earnings (loss) per share
Basic $ 0.22 $ 0.49 $ (1.64 ) $ 1.90
Diluted $ 0.22 $ 0.48 $ (1.64 ) $ 1.87
 
Weighted average number of ordinary shares outstanding
(thousands of shares)
Basic 34,469 34,189 34,382* 33,922
Diluted 34,624 34,595 34,382* 34,407

*In accordance with the antidilutive provisions of ASC 260-10-45, basic and dilutive shares are the same for twelve months ended June 29, 2012.

Fabrinet
Reconciliation of GAAP measures to non-GAAP measures
(in thousands of U.S. dollars, except per share data)
(unaudited)
  Three Months Ended     Twelve Months Ended
June 29,   June 29,   June 24,   June 24, June 29,   June 29,   June 24,   June 24,
2012   2012 2011   2011 2012   2012 2011   2011
Net income Diluted EPS Net income Diluted EPS Net loss Diluted EPS Net income Diluted EPS
 
GAAP measures 7,457 0.22 16,655 0.48 (56,467 ) (1.64 ) 64,329 1.87
Items reconciling GAAP net income (loss) & EPS to non-GAAP net income & EPS:
Related to cost of revenues:
Share-based compensation expenses 254   0.01   229 0.01 1,546   0.04   1,147 0.03
Total related to gross profit 254   0.01   229 0.01 1,546   0.04   1,147 0.03
 
Related to selling, general and administrative expenses:
Share-based compensation expenses 464 0.01 573 0.02 3,103 0.09 2,313 0.07
Executive separation cost - - - - - - 438 0.01
Follow-on offering expenses -   -   - - -   -   617 0.02
Total related to selling, general and administrative expenses 464   0.01   573 0.02 3,103   0.09   3,368 0.10
 
Related to other expenses:
Expenses related to flooding 1,398 0.04 - - 97,286 2.80 - -
Expenses related to reduction in workforce 1,978   0.06   - - 1,978   0.06   - -
Total related to other expenses 3,376   0.10   - - 99,264   2.85   - -
 
Related to income tax (benefit) expense
Income tax (benefit) expense (893 ) (0.03 ) - - (4,095 ) (0.12 ) - -
Total related to income tax (benefit) expense (893 ) (0.03 ) - - (4,095 ) (0.12 ) - -
 
Total related to net income & EPS 3,201   0.09   802 0.02 99,818   2.87   4,515 0.13
 
Non-GAAP measures 10,658   0.31   17,457 0.50 43,351   1.25   68,844 1.99
 
Shares used in computing diluted net income per share
GAAP diluted shares 34,624 34,595 34,382 34,407
Non-GAAP diluted shares 34,748 34,743 34,769 34,556




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