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26, 202029, 2018☐ Not Applicable
incorporation or organization)
Identification No.)
Symbol(s)
on which registered (Title of each class)(Name of exchange on which registered) (§Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K (section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. ☐ (Check one):Large accelerated filer ☒ ☒ Accelerated filer ☐ ☐ (Do not check if smaller reporting company)☐ Smaller reporting company ☐ Emerging growth company ☐ 29, 2017,27, 2019, the last business day of the registrant’s most recently completed second fiscal quarter, shares held by$1.1$2.3 billion, based on the closing price for the registrant’s ordinary shares as reported on the New York Stock Exchange on such date.13, 2018,7, 2020, the registrant had 36,454,14636,744,258 ordinary shares, $0.01 par value, outstanding.20182020 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form
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2020.test.testing. Although we focus primarily on we have received from our customers, we believe we are a global leader in providing these services to the optical communications, industrial lasers and automotive markets.29, 201826, 2020 (“fiscal year 2018”2020”) decreasedincreased by $48.6$57.5 million, or 3.4%3.6%, from $1.42$1.58 billion for the year ended June 30, 201728, 2019 (“fiscal year 2017”2019”) to $1.37$1.64 billion for fiscal year 2018.2020. Our revenues from lasers, sensors and other markets as a percentage of total revenues increaseddecreased from 22.0% for25.2% in fiscal year 20172019 to 27.1% for24.0% in fiscal year 2018,2020, while our revenues from optical communications products as a percentage of total revenues have decreasedincreased from 78.0% for74.8% in fiscal year 20172019 to 72.9% for76.0% in fiscal year 2018.
We are organized and operate in a single segment. See Note 20, Business segments and geographic information of Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report onForm 10-K, which is incorporated herein by reference.
rapid expansion of data center infrastructures. Carrier demand for optical communications network equipment has increased as a direct result of higher network utilization and increased demand for bandwidth capacity. The increase in network traffic volumes has been driven by increasing demand for voice, data and video services delivered over wired and wireless Internet protocol, or IP, networks. The bandwidth demands for data center access have been largely driven by social media applications and cloud services, and continue to increase very rapidly.
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In March 2018, we began laying the groundwork for a new facility in Israel, where we expect to continue our proven model of providing local NPI services, helping our customers with design for manufacturability and then transferring those programs to Thailand for volume manufacturing.
Equipped with
development requirements of their new products and assist them to build prototypes, as well as source materials, optimize manufacturing processes and develop schedules to bring these products to volume production. We maintain a real-time roadmap for the packaging requirements of our customers and the industry in general. Our advanced packaging team develops and maintains generic recipes that are readily available to be tailored and refined for the specific new applications of our customers, which helps to further accelerate prototype development and product delivery time.
expediting, warehousing and financing materials from thousands of suppliers. We have created a proprietary set of automated manufacturing resource planning tools to manage our inventory. We have also implemented inventory management strategies with certain suppliers that enable us to use inventory on an
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technologies to extend our product portfolio and continue to gain market share in the optics industry. Our internally developed and licensed technologies include the following:
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year 2019, Lumentum Operations LLC contributed 20% of our total revenues.
techniques and other tools to improve product and service quality. In addition, we generally offer a warranty ranging from one to five years on the products that we assemble. Generally, this warranty is limited to our workmanship and our liability is capped at the price of the product.
ITEM 1A. |
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For example, in the six months ended June 26, 2020, we experienced some order cancelations and delays with respect to certain products that we manufacture for our customers due toyear 2018years 2020 and fiscal year 2017,2019, we had three customers and one customer, Lumentum Operations LLC,respectively, that contributed 10% or more of our total revenues. This customer accounted for 16%During fiscal year 2020, Lumentum Operations LLC, Acacia Communications, Inc. and 17%Infinera Corporation contributed 19%, 10% and 10%, respectively, of our total revenues during the respectiverevenues. During fiscal years.year 2019, Lumentum Operations LLC contributed 20% of our total revenues. Dependence on a small number of customers means that a reduction in orders from, a loss of, or other adverse actions by any one of these customers would reduce our revenues and could have a material adverse effect on our business, financial condition and operating results.continual uncertainty in global economiesthe impact of the U.S.-China trade dispute, and the impactsimpact of Brexit. Certain of our customers have gone out of business, declared bankruptcy, been acquired, or announced their withdrawal from segments of the optics market. We generate significant accounts payable and inventory for the services that we provide to our customers, which could expose us to substantial and potentially unrecoverable costs if we do not receive payment from our customers.Reliancethoseour customers substantial purchasing power and leverage in negotiating contracts with us. In addition, although we enter into master supply agreements with our
customers may result in a smaller number of large customers whose size and purchasing power give them increased leverage that may result in, among other things, decreases in our average selling prices. In addition to pricing pressures, this consolidation may also reduce overall demand for our manufacturing services if customers obtain new capacity to manufacture products
For example, in the six months ended June 26, 2020, we experienced some order cancelations and delays with respect to telecom products that we manufacture for our customers due to
Natural disasters (like the 2011 flooding in Thailand), epidemics, acts of terrorism and other political and economic developments could harm our business, financial condition, and operating results.
Natural disasters, such as the 2011 flooding in Thailand, where most of our manufacturing operations are located, could severely disrupt our manufacturing operations and increase our supply chain costs. These events, over which we have little or no control, could cause a decrease in demand for our services, make it difficult or impossible for us to manufacture and deliver products and for our suppliers to deliver components allowing us to manufacture those products, require large expenditures to repair or replace our facilities, or create delays and inefficiencies in our supply chain. For example, the 2011 flooding in Thailand forced us to temporarily shut down all of our manufacturing facilities in Thailand and cease production permanently at our Chokchai facility in Thailand, which adversely affected our ability to meet our customers’ demands during fiscal year 2012. In some countries in which we operate, including the PRC and Thailand, potential outbreaks of infectious diseases such as the H1N1 influenza virus, severe acute respiratory syndrome (“SARS”) or bird flu could disrupt our manufacturing operations, reduce demand for our customers’ products and increase our supply chain costs. In addition, increased international political instability, evidenced by the threat or occurrence of terrorist attacks,
enhanced national security measures, conflicts in the Middle East and Asia, strained international relations arising from these conflicts and the related decline in consumer confidence and economic weakness, may hinder our ability to do business. Any escalation in these events or similar future events may disrupt our operations and the operations of our customers and suppliers, and may affect the availability of materials needed for our manufacturing services. Such events may also disrupt the transportation of materials to our manufacturing facilities and finished products to our customers. These events have had, and may continue to have, an adverse impact on the U.S. and world economy in general, and customer confidence and spending in particular, which in turn could adversely affect our total revenues and operating results. The impact of these events on the volatility of the U.S. and world financial markets also could increase the volatility of the market price of our ordinary shares and may limit the capital resources available to us, our customers and our suppliers.
We are not fully insured against all potential losses. Natural disasters or other catastrophes could adversely affect our business, financial condition and operating results.
Our current property and casualty insurance covers loss or damage to our property and third-party property over which we have custody and control, as well as losses associated with business interruption, subject to specified exclusions and limitations such as coinsurance, facilities locationsub-limits and other policy limitations and covenants. Even with insurance coverage, natural disasters or other catastrophic events, including acts of war, could cause us to suffer substantial losses in our operational capacity and could also lead to a loss of opportunity and to a potential adverse impact on our relationships with our existing customers resulting from our inability to produce products for them, for which we might not be compensated by existing insurance. This in turn could have a material adverse effect on our business, financial condition and operating results.
$0.08.
connection with trade- and service-related foreign exchange transactions and foreign debt service. As of June 29, 2018,26, 2020, the U.S. dollar had depreciatedappreciated approximately 6%5.5% against the GBP since June 30, 2017.29, 2018. Any appreciation in the value of the RMB and GBP against the U.S. dollar could negatively impact our operating results.
dispute, including increased tariffs on materials that we use in manufacturing, which could adversely affect our business, financial condition and operating result.
regions, which would harm our business, financial condition and operating results.
foreign-owned enterprises, in particular. The PRC has made significant progress in the promulgation of laws and regulations pertaining to economic matters such as corporate organization and governance, foreign investment,
Our
We rely upon the capacity, availability and security of our information technology hardware and software infrastructure. For instance, we use a combination of standard and customized software platforms to manage, record, and report all aspects ofsimilar future events may disrupt our operations and in many instances, enablethe operations of our customers and suppliers and may affect the availability of materials needed for our manufacturing services. Such events may also disrupt the transportation of materials to remotely access certain areasour manufacturing facilities and finished products to our customers. These events have had, and may continue to have, an adverse impact on the U.S. and world economy in general, and customer confidence and spending in particular, which in turn could adversely affect our total revenues and operating results. The impact of these events on the volatility of the U.S. and world financial markets also could increase the volatility of the market price of our databasesordinary shares and may limit the capital resources available to monitor yields, inventory positions,work-in-progress statusus, our customers and vendor quality data. our suppliers.
Despite our implementation of security measures, our systems are vulnerable to damages from computer viruses, naturalnot fully insured against all potential losses. Natural disasters unauthorized access and other similar disruptions. Any system failure, accident or security breach could result in disruptions to our operations. To the extent that any disruptions, cyber-attack or other security breach results in acatastrophes could adversely affect our business, financial condition and operating results.
turn could have a material adverse effect on our business, financial condition and operating results.
Volatility
rates. Uncertainty about worldwide economic conditions poses a risk as businesses may further reduce or postpone spending in response to reduced budgets, tight credit, negative financial news and declines in income or asset values, which could adversely affect our business, financial condition and operating results and increase the volatility of our share price. In addition, our ability to access capital markets may be restricted, which could have an impact on our ability to react to changing economic and business conditions and could also adversely affect our business, operating results and financial condition and operating results.
If we fail to adequately expand our manufacturing capacity, we will not be able to grow our business, which would harm our business, financial condition and operating results. Conversely, if we expand too much or too rapidly, we may experience excess capacity, which would harm our business, financial condition and operating results.
We may not be able to pursue many large customer orders or sustain our historical growth rates if we do not have sufficient manufacturing capacity to enable us to commit to provide customers with specified quantities of products. If our customers do not believe that we have sufficient manufacturing capacity, they may: (1) outsource all of their production to another source that they believe can fulfill all of their production requirements; (2) look to a second source for the manufacture of additional quantities of the products that we currently manufacture for them; (3) manufacture the products themselves; or (4) otherwise decide against using our services for their new products.
Most recently, we expanded our manufacturing capacity by building a new facility in Chonburi, Thailand, which was completed in March 2017. We may continue to devote significant resources
However, if we expand our manufacturing capacity and are unable to promptly utilizepredict or estimate the additional space due to reduced demand for our services, an inability to win new projects, new customers or penetrate new markets, or if the optics industry does not grow as we expect, we may experience periods of excess capacity, which could harmultimate impact on our business or business prospects. The ultimate significance of
condition.
not all defects are immediately detectible. The testing procedures of our customers are generally limited to the evaluation of the products that we manufacture under likely and foreseeable failure scenarios. For various reasons (including, among others, the occurrence of performance problems that are unforeseeable at the time of testing or that are detected only when products are fully deployed and operated under peak stress conditions), these products may fail to perform as expected after their initial acceptance by a customer.
gains until March 6, 2039.
taxation and a significant degree of judgment by management. If any taxationtax authorities are successful in challenging our financing or transfer pricing policies, our income tax expense may be adversely affected and we could become subject to interest and penalty charges, which may harm our business, financial condition and operating results.
On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) was enacted into law. The TCJ Act provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended (the “Code”), that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. While we are able to make reasonable estimates of the impact of the reduction in corporate rate, the final impact of the TCJ Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions we may take.
We may encounter difficulties completing or integrating acquisitions, asset purchases and other types of transactions that we may pursue in the future, which could disrupt our business, cause dilution to our shareholders and harm our business, financial condition and operating results.
We have grown and may continue to grow our business through acquisitions, asset purchases and other types of transactions, including the transfer of products from our customers and their suppliers. Most recently, we acquired Fabrinet UK in September 2016. Acquisitions and other strategic transactions typically involve many risks, including the following:
the integration of the acquired assets, information systems and facilities into our business may be difficult, time-consuming and costly, and may adversely impact our profitability;
we may lose key employees of the acquired companies or divisions;
we may issue additional ordinary shares, which would dilute our current shareholders’ percentage ownership in us;
we may incur indebtedness to pay for the transactions;
we may assume liabilities, some of which may be unknown at the time of the transactions;
we may record goodwill andnon-amortizable intangible assets that will be subject to impairment testing and potential periodic impairment charges;
we may incur amortization expenses related to certain intangible assets;
we may devote significant resources to transactions that may not ultimately yield anticipated benefits;
we may incur greater than expected expenses or lower than expected revenues;
we may assume obligations with respect to regulatory requirements, including environmental regulations, which may prove more burdensome than expected; or
we may become subject to litigation.
Acquisitions are inherently risky, and we can provide no assurance that the acquisition of Fabrinet UK or any future acquisitions will be successful or will not harm our business, financial condition and operating results.
We may not be able to obtain capital when desired on favorable terms, if at all, or without dilution to our shareholders.
our internal controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which would have an adverse effect on our share price.
We are subject to governmental export and import controls in several jurisdictions that could subject us to liability or impair our ability to compete in international markets.
We are subject to governmental export and import controls in Thailand, the PRC, the United Kingdom and the United States that may limit our business opportunities. Various countries regulate the import of certain technologies and have enacted laws that could limit our ability to export or sell the products we manufacture. The export of certain technologies from the United States, the United Kingdom and other nations to the PRC is barred by applicable export controls, and similar prohibitions could be extended to Thailand, thereby limiting our ability to manufacture certain products. Any change in export or import regulations or related legislation, shift in approach to the enforcement of existing regulations, or change in the countries, persons or technologies targeted by such regulations, could limit our ability to offer our manufacturing services to existing or potential customers, which could harm our business, financial condition and operating results.
We are subject to the risk of increased tariffs on products and goods we purchase fromoff-shore sources (including Chinese sources) and directly or indirectly imported into the United States.
The U.S. Presidential Administration has recently implemented or announced plans to impose tariffs on a wide-range of products and goods manufactured in China that directly or indirectly are imported into the Unites States. In response, various countries and economic regions have announced plans or intentions to impose retaliatory tariffs on a wide-range of products they import from the United States. These newly imposed or threatened U.S. tariffs and retaliatory tariffs could have the effect of increasing the cost of materials we use to manufacture certain products, which could result in lower margins. The tariffs could also result in disruptions to our supply chain, as suppliers struggle to fill orders from companies trying to purchase goods in bulk ahead of announced tariffs. Although we currently believe that the incremental costs to us of these tariffs will be
immaterial, should the amount of these tariffs increase, should they be applied to additional categories of components used in our manufacturing activities and should we for any reason be unable to pass on such tariffs to our customers, our operating results would be harmed.
cause our other income and expense to vary from expectations. As of June 29, 2018,26, 2020, we did not record any impairment charges associated with our investment portfolio of marketable securities,short-term investments, and although we believe our current investment portfolio has little risk of material impairment, we cannot predict future market conditions or market liquidity, or credit availability, and can provide no assurance that our investment portfolio will remain materially unimpaired.
analysts cover us, the market price of our ordinary shares could be adversely impacted. If one or more of the analysts who covers us downgrades our ordinary shares or publishes misleading or unfavorable research about our business, our market price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our ordinary shares could decrease, which could cause the market price or trading volume of our ordinary shares to decline.
ITEM 1B. |
ITEM 2. |
general administration purposes. The following table presents the approximate square footage of our principal facilities as of June United Kingdom,U.S., the United StatesU.K., Israel and the Cayman Islands that are used for manufacturing and/or29, 2018: Owned 1,028,0001,042,000 square feet Owned 517,000573,000 square feet 300,000 square feet Owned 72,000 square feet 71,000 square feet 28,000 square feet 23,000 square feet (4) 1,700 square feet The lease periods for the buildingsSeptember 30, 2018,various dates: September 30, 2020, and March 31, 2021, respectively.or September 30, 2023.2020.2025.2019.2022.
ITEM 5. |
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Fiscal Year 2018 | High | Low | ||||||
Fourth Quarter (March 31, 2018—June 29, 2018) | $ | 37.73 | $ | 27.69 | ||||
Third Quarter (December 30, 2017—March 30, 2018) | $ | 33.92 | $ | 24.02 | ||||
Second Quarter (September 30, 2017—December 29, 2017) | $ | 38.89 | $ | 28.35 | ||||
First Quarter (July 1, 2017—September 29, 2017) | $ | 47.02 | $ | 34.41 | ||||
Fiscal Year 2017 | High | Low | ||||||
Fourth Quarter (April 1, 2017—June 30, 2017) | $ | 46.58 | $ | 31.97 | ||||
Third Quarter (December 31, 2016—March 31, 2017) | $ | 49.63 | $ | 33.98 | ||||
Second Quarter (October 1, 2016—December 30, 2016) | $ | 46.50 | $ | 36.42 | ||||
First Quarter (June 25, 2016—September 30, 2016) | $ | 45.01 | $ | 33.91 |
The equity compensation plan information required by this item, which includes a summary of the number of outstanding equity awards granted to employees and directors, as well as the number of securities remaining available for future issuance, under our equity compensation plans as of June 29, 2018, is incorporated by reference to our Proxy Statement for our 2018 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of our fiscal year ended June 29, 2018.
authorization, bringing the aggregate authorization to $60.0$110.0 million. The repurchased shares will be held as treasury stock. During the year ended June 26, 2020, 355,000 shares were repurchased under the program, at an average price per share of $58.37, for an aggregate purchase price of $20.7 million. As of June 29, 2018,26, 2020, we had a remaining authorization to purchase up to an additional $17.6$41.5 million worth of our ordinary shares.
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased As Part of Publicly Announced Program | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program | ||||||||||||
April 1, 2018 – April 30, 2018 | — | $ | — | — | $ | 37,592,858 | ||||||||||
May 1, 2018 – May 31, 2018 | 426,734 | $ | 36.30 | 1,165,159 | $ | 22,101,460 | ||||||||||
June 1, 2018 – June 29, 2018 | 123,944 | $ | 36.33 | 1,289,103 | $ | 17,598,987 | ||||||||||
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Total | 550,678 | $ | 36.31 | 1,289,103 | $ | 17,598,987 | ||||||||||
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26, 2020:
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased As Part of Publicly Announced Program | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program | ||||||||||||
March 28, 2020 – April 24, 2020 | — | $ | — | — | $ | 41,499,413 | ||||||||||
April 25, 2020 – May 22, 2020 | — | $ | — | — | $ | 41,499,413 | ||||||||||
May 23, 2020 – June 26, 2020 | — | $ | — | — | $ | 41,499,413 | ||||||||||
Total | — | $ | — | — | $ | 41,499,413 | ||||||||||
ITEM 6. |
Revenues Cost of revenues Gross profit Selling, general and administrative expenses Other income related to flooding, net Expenses related to reduction in workforce Operating income Interest income Interest expense Foreign exchange loss, net Other income (expense) Income before income taxes Income tax expense Net income Other comprehensive (loss) income, net of tax Net comprehensive income Earnings per share: Basic Diluted Weighted average number of ordinary shares outstanding (thousands of shares) Basic Diluted Cash and cash equivalents Marketable securities Restricted cash in connection with business acquisition Working capital(1) Total assets Current and long-term debt Total liabilities Total shareholders’ equity29, 201826, 2020 and June 30, 2017,28, 2019, and for the fiscal years ended June 26, 2020, June 28, 2019 and June 29, 2018 are derived from the audited consolidated financial statements included elsewhere in this Annual Report on Formincluded elsewhere in this Annual Report on Form10-K. The selected financial data as of June 24, 2016, June 26, 2015 and June 27, 2014, and for the fiscal years ended June 26, 2015 and June 27, 2014 are derived from the audited consolidated financial statements not included in this Annual Report on Form Years Ended (amount in thousands, except per share data) June 29,
2018 (fiscal
year 2018) June 30, 2017
(fiscal year
2017) June 24, 2016
(fiscal year
2016) June 26, 2015
(fiscal year
2015) June 27, 2014
(fiscal year
2014) Selected Consolidated Statements of Operations Data: $ 1,371,925 $ 1,420,490 $ 976,747 $ 773,587 $ 677,854 (1,218,513 ) (1,249,030 ) (857,224 ) (685,814 ) (603,621 ) 153,412 171,460 119,523 87,773 74,233 (57,812 ) (65,626 ) (49,753 ) (39,460 ) (27,664 ) — — 36 — 44,748 (1,776 ) — — (1,153 ) — 93,824 105,834 69,806 47,160 91,317 3,925 1,977 1,535 1,253 1,793 (3,606 ) (3,321 ) (1,569 ) (616 ) (713 ) (6,587 ) (1,142 ) (1,916 ) (19 ) (24 ) 473 509 376 (152 ) 797 88,029 103,857 68,232 47,626 93,170 (3,862 ) (6,742 ) (6,335 ) (3,984 ) (1,439 ) 84,167 97,115 61,897 43,642 91,731 (909 ) (939 ) 635 (44 ) — $ 83,258 $ 96,176 $ 62,532 $ 43,598 $ 91,731 $ 2.26 $ 2.63 $ 1.73 $ 1.23 $ 2.63 $ 2.21 $ 2.57 $ 1.68 $ 1.21 $ 2.58 37,257 36,927 35,857 35,354 34,938 38,035 37,852 36,872 35,984 35,589 As of (amount in thousands) June 29, 2018 June 30, 2017 June 24, 2016 June 26, 2015 June 27, 2014 Selected Consolidated Balance Sheet Data: $ 158,102 $ 133,825 $ 142,804 $ 112,978 $ 233,477 $ 174,269 $ 151,450 $ 141,709 $ 142,866 $ — $ 3,331 $ 3,312 $ — $ — $ — $ 284,440 $ 287,752 $ 205,592 $ 150,246 $ 130,885 $ 1,088,018 $ 1,033,075 $ 855,857 $ 672,503 $ 564,557 $ 64,188 $ 71,103 $ 60,407 $ 40,500 $ 16,500 $ 347,079 $ 351,501 $ 301,438 $ 193,559 $ 137,721 $ 740,939 $ 681,574 $ 554,419 $ 478,944 $ 426,836
Years Ended | ||||||||||||||||||||
(amount in thousands, except per share data) | June 26, 2020 (fiscal year 2020) | June 28, 2019 (fiscal year 2019) | June 29, 2018 (fiscal year 2018) | June 30, 2017 (fiscal year 2017) | June 24, 2016 (fiscal year 2016) | |||||||||||||||
Selected Consolidated Statements of Operations Data: | ||||||||||||||||||||
Revenues | $ | 1,641,836 | $ | 1,584,335 | $ | 1,371,925 | $ | 1,420,490 | $ | 976,747 | ||||||||||
Cost of revenues | (1,455,731 | ) | (1,405,111 | ) | (1,218,513 | ) | (1,249,030 | ) | (857,224 | ) | ||||||||||
Gross profit | 186,105 | 179,224 | 153,412 | 171,460 | 119,523 | |||||||||||||||
Selling, general and administrative expenses | (68,374 | ) | (55,067 | ) | (57,812 | ) | (65,626 | ) | (49,753 | ) | ||||||||||
Other income related to flooding, net | — | — | — | — | 36 | |||||||||||||||
Expenses related to reduction in workforce | (329 | ) | (1,516 | ) | (1,776 | ) | — | — | ||||||||||||
Operating income | 117,402 | 122,641 | 93,824 | 105,834 | 69,806 | |||||||||||||||
Interest income | 7,592 | 6,699 | 3,925 | 1,977 | 1,535 | |||||||||||||||
Interest expense | (3,044 | ) | (5,381 | ) | (3,606 | ) | (3,321 | ) | (1,569 | ) | ||||||||||
Foreign exchange gain (loss), net | (3,797 | ) | 1,406 | (6,587 | ) | (1,142 | ) | (1,916 | ) | |||||||||||
Other income (expense), net | 1,089 | 868 | 473 | 509 | 376 | |||||||||||||||
Income before income taxes | 119,242 | 126,233 | 88,029 | 103,857 | 68,232 | |||||||||||||||
Income tax expense | (5,763 | ) | (5,278 | ) | (3,862 | ) | (6,742 | ) | (6,335 | ) | ||||||||||
Net income | 113,479 | 120,955 | 84,167 | 97,115 | 61,897 | |||||||||||||||
Other comprehensive income (loss), net of tax | 1,239 | (1,129 | ) | (909 | ) | (939 | ) | 635 | ||||||||||||
Net comprehensive income | $ | 114,718 | $ | 119,826 | $ | 83,258 | $ | 96,176 | $ | 62,532 | ||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 3.07 | $ | 3.29 | $ | 2.26 | $ | 2.63 | $ | 1.73 | ||||||||||
Diluted | $ | 3.01 | $ | 3.23 | $ | 2.21 | $ | 2.57 | $ | 1.68 | ||||||||||
Weighted average number of ordinary shares outstanding (thousands of shares): | ||||||||||||||||||||
Basic | 36,908 | 36,798 | 37,257 | 36,927 | 35,857 | |||||||||||||||
Diluted | 37,665 | 37,415 | 38,035 | 37,852 | 36,872 |
As of | ||||||||||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||||||||
Selected Consolidated Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 225,430 | $ | 180,839 | $ | 158,102 | $ | 133,825 | $ | 142,804 | ||||||||||
Short-term investments | $ | 262,693 | $ | 256,493 | $ | 174,269 | $ | 151,450 | $ | 141,709 | ||||||||||
Short-term restricted cash | $ | 7,402 | $ | — | $ | 3,331 | $ | 3,312 | $ | — | ||||||||||
Working capital (1) | $ | 330,848 | $ | 296,597 | $ | 284,440 | $ | 287,752 | $ | 205,592 | ||||||||||
Total assets | $ | 1,381,387 | $ | 1,255,318 | $ | 1,088,018 | $ | 1,033,075 | $ | 855,857 | ||||||||||
Long-term borrowings, net | $ | 51,670 | $ | 60,938 | $ | 64,188 | $ | 71,103 | $ | 60,407 | ||||||||||
Total liabilities | $ | 406,978 | $ | 392,219 | $ | 347,079 | $ | 351,501 | $ | 301,438 | ||||||||||
Total shareholders’ equity | $ | 974,409 | $ | 863,099 | $ | 740,939 | $ | 681,574 | $ | 554,419 |
(1) | Working capital is defined as trade accounts receivable plus inventory, less trade accounts payable. |
Years Ended | ||||||||||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | June 26, 2015 | June 27, 2014 | |||||||||||||||
Selected Consolidated Statements of Cash Flow Data: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 138,080 | $ | 70,934 | $ | 47,088 | $ | 52,629 | $ | 66,550 | ||||||||||
Net cash (used in) provided by investing activities | $ | (58,649 | ) | $ | (90,556 | ) | $ | (39,603 | ) | $ | (195,499 | ) | $ | 26,988 | ||||||
Net cash (used in) provided by financing activities | $ | (54,106 | ) | $ | 13,432 | $ | 22,862 | $ | 22,537 | $ | (8,171 | ) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 25,325 | $ | (6,190 | ) | $ | 30,347 | $ | (120,333 | ) | $ | 85,367 |
Years Ended | ||||||||||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||||||||
Selected Consolidated Statements of Cash Flow Data: | ||||||||||||||||||||
Net cash provided by operating activities | $ | 150,660 | $ | 147,394 | $ | 138,080 | $ | 70,934 | $ | 47,088 | ||||||||||
Net cash used in investing activities | $ | (71,248 | ) | $ | (98,067 | ) | $ | (58,649 | ) | $ | (90,556 | ) | $ | (39,603 | ) | |||||
Net cash (used in) provided by financing activities | $ | (35,305 | ) | $ | (23,223 | ) | $ | (54,106 | ) | $ | 13,432 | $ | 22,862 | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 44,107 | $ | 26,104 | $ | 25,325 | $ | (6,190 | ) | $ | 30,347 |
ITEM 7. |
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increasedecrease compared with the portion of those revenues for fiscal year 2018;2020;20192021 selling, general and administrative (“SG&A”) expenses will decreaseincrease compared to our fiscal year 20182020 SG&A expenses;forward lookingforward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on
We provide advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (“OEMs”)
Our customer base includes companies in complex industries that require advanced precision manufacturing capabilities such as optical communications, industrial lasers, automotive and sensors. The products that we manufacture for our OEM customers include selective switching products; tunable transponders and transceivers; active optical cables; solid state, diode-pumped, gas and fiber lasers; and sensors. In many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we produce for them.
We also design and fabricate application-specific crystals, lenses, prisms, mirrors, laser components, and substrates (collectively referred to as “customized optics”) and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products (collectively referred to as “customized glass”). We incorporate our customized optics and glass into many of the products we manufacture for our OEM customers, and we also sell customized optics and glass in the merchant market.
business, see Part I – ITEM 1. BUSINESS.
Years
cash equivalent balances and short-term investments, and cash flows that are generated from operations will be sufficient to meet our domestic and international working capital needs and other capital and liquidity requirements for at least the next 12 months.
Years Ended | ||||||||||||
June 29, 2018 | June 30, 2017 | June 24, 2016 | ||||||||||
Lumentum Operations LLC | 16 | % | 17 | % | 20 | % |
Note 23 of our audited consolidated financial statements. Because we depend upon a small number of
2020.
Years Ended | ||||||||||||
June 29, 2018 | June 30, 2017 | June 24, 2016 | ||||||||||
North America | 46.9 | % | 46.6 | % | 53.8 | % | ||||||
Asia-Pacific | 37.8 | 38.0 | 35.9 | |||||||||
Europe | 15.3 | 15.4 | 10.3 | |||||||||
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| |||||||
100.0 | % | 100.0 | % | 100.0 | % | |||||||
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Years Ended | ||||||||||||
June 26, 2020 | June 28, 2019 | June 29, 2018 | ||||||||||
North America | 50.6 | % | 47.7 | % | 46.9 | % | ||||||
Asia-Pacific | 33.7 | 38.4 | 37.8 | |||||||||
Europe | 15.7 | 13.9 | 15.3 | |||||||||
100.0 | % | 100.0 | % | 100.0 | % | |||||||
The excess or obsolete inventory is shipped to the customer and revenue is recognized upon shipment.
As of June 29, 2018 | As of June 30, 2017 | |||||||||||||||||||||||
(amount in thousands, except percentages) | Currency | $ | % | Currency | $ | % | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Thai baht | 980,778 | $ | 29,568 | 60.7 | 395,123 | $ | 11,628 | 47.3 | ||||||||||||||||
RMB | 18,455 | 2,789 | 5.7 | 26,965 | 3,980 | 16.2 | ||||||||||||||||||
GBP | 12,514 | 16,392 | 33.6 | 6,896 | 8,982 | 36.5 | ||||||||||||||||||
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| |||||||||||||||||
Total | $ | 48,749 | 100.0 | $ | 24,590 | 100.0 | ||||||||||||||||||
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Liabilities | ||||||||||||||||||||||||
Thai baht | 1,401,473 | $ | 42,251 | 84.5 | 1,875,338 | $ | 55,189 | 82.7 | ||||||||||||||||
RMB | 19,893 | 3,007 | 6.0 | 28,451 | 4,200 | 6.3 | ||||||||||||||||||
GBP | 3,615 | 4,735 | 9.5 | 5,625 | 7,326 | 11.0 | ||||||||||||||||||
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| |||||||||||||||||
Total | $ | 49,993 | 100.0 | $ | 66,715 | 100.0 | ||||||||||||||||||
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As of June 26, 2020 | As of June 28, 2019 | |||||||||||||||||||||||
(amount in thousands, except percentages) | Foreign Currency | $ | % | Foreign Currency | $ | % | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Thai baht | 667,955 | $ | 21,617 | 41.8 | 664,860 | $ | 21,628 | 60.0 | ||||||||||||||||
RMB | 158,060 | 22,402 | 43.3 | 53,393 | 7,767 | 21.5 | ||||||||||||||||||
GBP | 6,220 | 7,726 | 14.9 | 5,270 | 6,682 | 18.5 | ||||||||||||||||||
Total | $ | 51,745 | 100.0 | $ | 36,077 | 100.0 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Thai baht | 2,102,392 | $ | 68,039 | 89.5 | 1,961,972 | $ | 63,825 | 90.0 | ||||||||||||||||
RMB | 42,586 | 6,036 | 8.0 | 26,373 | 3,836 | 5.4 | ||||||||||||||||||
GBP | 1,545 | 1,919 | 2.5 | 2,598 | 3,294 | 4.6 | ||||||||||||||||||
Total | $ | 75,994 | 100.0 | $ | 70,955 | 100.0 | ||||||||||||||||||
gains until March 6, 2039.
As of June 30, 2017, we determined that it was more likely than not that deferred tax assets attributable to a subsidiary inour U.S. subsidiaries, the United States would not be realized, primarily due to uncertainties related to the subsidiary’s ability to utilize its net operating loss carryforwards before they expire. Accordingly, we established a valuation allowance for all deferred tax assets. If there is a change in our ability to realize deferred tax assets for which a valuation allowance has been established, then our tax provision may decrease in the period in which we determine that realization is more likely than not. Likewise, if we determine that it is not more likely than not that our deferred tax assets will be realized, then a valuation allowance may be established for such deferred tax assets and our tax provision may increase in the period in which we make the determination. During fiscal year 2018, the subsidiary in the United States generated taxable income sufficient for the utilization of loss carryforwards due to better operating performance and effective control of operating expenses and management determined that it is more likely than not that future taxable income would be sufficient to allow the benefit of the loss to be realized. Therefore, as of June 29, 2018, we partially reversed the deferred tax assets valuation allowance.
The Tax Cuts and Jobs Act or the (“Tax Reform Act, wasAct”) enacted on December 22, 2017 and providesprovided for significant changes to U.S. tax law. Among other provisions, the Tax Reform Act reducesreduced the U.S. corporate income tax rate to 21% effective in 2018. The Tax Reform Act also contains a number, which is the current rate for our U.S. subsidiaries.
As a result of the reduction in the corporate rate, we have remeasured our U.S. deferred tax assets and liabilities as of June 29, 2018 to reflect the lower rate expected to apply when these temporary differences reverse. We provisionally estimate that the remeasurement resulted in a reduction in current income tax expenses of $0.1 million and deferred tax assets of $0.4 million. While we are able to make reasonable estimates of the impact of the reduction in corporate rate, the final impact of the Tax Reform Act may differ from these estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions we may take.
were required.
We reduceperformance obligations in the contract, and (5) recognize revenue for rebates and other similar allowances.when a performance obligation is satisfied. Revenue is recognized only if these estimates can be reliably determined. Our estimates are based on historical results taking into consideration the typenet of customer, the type of transaction, and the specifics of each arrangement.
In additionany taxes collected from customers, which is subsequently remitted to governmental authorities.
For information regardingsale have been resolved. We recognize revenue net of rebates and other similar allowances. Revenues are recognized only if these estimates can be reasonably and reliably determined. We base our estimates on historical results taking into consideration the expected impacttype of customer, the type of transaction and the specifics of each arrangement.
time, i.e. at
We make provisions for estimated excess and obsolete inventory based on regular reviews of inventory quantities on hand on a quarterly basis and the latest forecasts of product demand and production requirements from our customers. If actual market conditions or our customers’ product demands are less favorable than those projected, additional provisions may be required. In addition, unanticipated changes in liquidity or the financial positions of our customers or changes in economic conditions may require additional provisions for inventory due to our customers’ inability to fulfill their contractual obligations. During fiscal year 20182020 and fiscal year 2017,2019, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.3$0.2 million and $0.3$0.2 million, respectively.
allowance of $2.1 million for the deferred tax assets was set up as of June 26, 2020.
on the historical volatility of our share price. We have applied the U.S. Treasury Bill interest rate with a maturity date similar to the expected life of our options as the risk-free interest rate and assumed a dividend yield for periods when we paid dividends.
Years Ended | ||||||||||||
June 29, 2018 | June 30, 2017 | June 24, 2016 | ||||||||||
Revenues | $ | 1,371,925 | $ | 1,420,490 | $ | 976,747 | ||||||
Cost of revenues | (1,218,513 | ) | (1,249,030 | ) | (857,224 | ) | ||||||
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Gross profit | 153,412 | 171,460 | 119,523 | |||||||||
Selling, general and administrative expenses | (57,812 | ) | (65,626 | ) | (49,753 | ) | ||||||
Other income related to flooding, net | — | — | 36 | |||||||||
Expenses related to reduction in workforce | (1,776 | ) | — | — | ||||||||
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Operating income | 93,824 | 105,834 | 69,806 | |||||||||
Interest income | 3,925 | 1,977 | 1,535 | |||||||||
Interest expense | (3,606 | ) | (3,321 | ) | (1,569 | ) | ||||||
Foreign exchange loss, net | (6,587 | ) | (1,142 | ) | (1,916 | ) | ||||||
Other income, net | 473 | 509 | 376 | |||||||||
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Income before income taxes | 88,029 | 103,857 | 68,232 | |||||||||
Income tax expense | (3,862 | ) | (6,742 | ) | (6,335 | ) | ||||||
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Net income | 84,167 | 97,115 | 61,897 | |||||||||
Other comprehensive (loss) income, net of tax | (909 | ) | (939 | ) | 635 | |||||||
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Net comprehensive income | $ | 83,258 | $ | 96,176 | $ | 62,532 | ||||||
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Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Revenues | $ | 1,641,836 | $ | 1,584,335 | $ | 1,371,925 | ||||||
Cost of revenues | (1,455,731 | ) | (1,405,111 | ) | (1,218,513 | ) | ||||||
Gross profit | 186,105 | 179,224 | 153,412 | |||||||||
Selling, general and administrative expenses | (68,374 | ) | (55,067 | ) | (57,812 | ) | ||||||
Expenses related to reduction in workforce | (329 | ) | (1,516 | ) | (1,776 | ) | ||||||
Operating income | 117,402 | 122,641 | 93,824 | |||||||||
Interest income | 7,592 | 6,699 | 3,925 | |||||||||
Interest expense | (3,044 | ) | (5,381 | ) | (3,606 | ) | ||||||
Foreign exchange gain (loss), net | (3,797 | ) | 1,406 | (6,587 | ) | |||||||
Other income (expense), net | 1,089 | 868 | 473 | |||||||||
Income before income taxes | 119,242 | 126,233 | 88,029 | |||||||||
Income tax expense | (5,763 | ) | (5,278 | ) | (3,862 | ) | ||||||
Net income | 113,479 | 120,955 | 84,167 | |||||||||
Other comprehensive income (loss), net of tax | 1,239 | (1,129 | ) | (909 | ) | |||||||
Net comprehensive income | $ | 114,718 | $ | 119,826 | $ | 83,258 | ||||||
Years Ended | ||||||||||||
June 29, 2018 | June 30, 2017 | June 24, 2016 | ||||||||||
Revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of revenues | (88.8 | ) | (87.9 | ) | (87.8 | ) | ||||||
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Gross profit | 11.2 | 12.1 | 12.2 | |||||||||
Selling, general and administrative expenses | (4.2 | ) | (4.6 | ) | (5.1 | ) | ||||||
Other income related to flooding, net | — | — | (0.0 | ) | ||||||||
Expenses related to reduction in workforce | (0.1 | ) | — | — | ||||||||
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| |||||||
Operating income | 6.9 | 7.5 | 7.1 | |||||||||
Interest income | 0.3 | 0.1 | 0.2 | |||||||||
Interest expense | (0.3 | ) | (0.2 | ) | (0.1 | ) | ||||||
Foreign exchange loss, net | (0.5 | ) | (0.1 | ) | (0.2 | ) | ||||||
Other income, net | 0.1 | 0.0 | 0.0 | |||||||||
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Income before income taxes | 6.5 | 7.3 | 7.0 | |||||||||
Income tax expense | (0.3 | ) | (0.5 | ) | (0.7 | ) | ||||||
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Net income | 6.2 | 6.8 | 6.3 | |||||||||
Other comprehensive (loss) income, net of tax | (0.1 | ) | (0.1 | ) | 0.1 | |||||||
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Net comprehensive income | 6.1 | % | 6.7 | % | 6.4 | % | ||||||
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Years Ended | ||||||||||||
June 26, 2020 | June 28, 2019 | June 29, 2018 | ||||||||||
Revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of revenues | (88.7 | ) | (88.7 | ) | (88.8 | ) | ||||||
Gross profit | 11.3 | 11.3 | 11.2 | |||||||||
Selling, general and administrative expenses | (4.2 | ) | (3.5 | ) | (4.2 | ) | ||||||
Expenses related to reduction in workforce | (0.0 | ) | (0.1 | ) | (0.1 | ) | ||||||
Operating income | 7.1 | 7.7 | 6.9 | |||||||||
Interest income | 0.5 | 0.4 | 0.3 | |||||||||
Interest expense | (0.2 | ) | (0.3 | ) | (0.3 | ) | ||||||
Foreign exchange gain (loss), net | (0.2 | ) | 0.1 | (0.5 | ) | |||||||
Other income (expense), net | 0.1 | 0.0 | 0.1 | |||||||||
Income before income taxes | 7.3 | 7.9 | 6.5 | |||||||||
Income tax expense | (0.4 | ) | (0.3 | ) | (0.3 | ) | ||||||
Net income | 6.9 | 7.6 | 6.2 | |||||||||
Other comprehensive income (loss), net of tax | 0.1 | 0.0 | (0.1 | ) | ||||||||
Net comprehensive income | 7.0 | % | 7.6 | % | 6.1 | % | ||||||
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Optical communications | $ | 1,000,256 | $ | 1,108,637 | $ | 727,580 | ||||||
Lasers, sensors, and other | 371,669 | 311,853 | 249,167 | |||||||||
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Total | $ | 1,371,925 | $ | 1,420,490 | $ | 976,747 | ||||||
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Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Optical communications | $ | 1,248,174 | $ | 1,184,936 | $ | 1,000,256 | ||||||
Lasers, sensors, and other | 393,662 | 399,399 | 371,669 | �� | ||||||||
Total | $ | 1,641,836 | $ | 1,584,335 | $ | 1,371,925 | ||||||
We utilize a52-53 week fiscal year ending on the Friday in June closest to June 30. Fiscal year 2018 ended on June 29, 2018 and consisted of 52 weeks. Fiscal year 2017 ended on June 30, 2017 and consisted of 53 weeks. Fiscal year 2016 ended on June 24, 2016 and consisted of 52 weeks.
2019
2019.
Gross profit.Our gross profit decreased by $18.0 million, or 10.5%, to $153.4 million, or 11.2% of total revenues, for fiscal year 2018, compared with $171.5 million, or 12.1% of total revenues, for fiscal year 2017.
SG&A expenses. Our SG&A expenses decreased by $7.8 million, or 11.9%, to $57.8 million, or 4.2% of total revenues, for fiscal year 2018, compared with $65.6 million, or 4.6% of total revenues, for fiscal year 2017. Our SG&A expenses decreased during fiscal year 2018, compared with fiscal year 2017, mainly due to decreases in incentive-based compensation of $9.2 million because we did not achieve the targets under our fiscal year 2018 executive incentive plan, and expenses related to merger and acquisition activities of $1.7 million because we did not acquire any businesses during fiscal year 2018. These decreases were offset by an increase in severance payments of $2.1 million during fiscal year 2018 to the Executive Chairman of our board of directors in connection with his transition tonon-executive Chairman of our board of directors.
Operating income. Our operating income decreased by $12.0 million to $93.8 million, or 6.8% of total revenues, for fiscal year 2018, compared with $105.8 million, or 7.5% of total revenues, for fiscal year 2017.
Interest income. Our interest income increased by $1.9 million to $3.9 million for fiscal year 2018, compared with $2.0 million for fiscal year 2017. The increase was primarily due to an increase in our average outstanding cash and marketable securities balances and interest rates.
Interest expense.Our interest expense increased by $0.3 million to $3.6 million for fiscal year 2018, compared with $3.3 million for fiscal year 2017. The increase was primarily due to an increase in the average interest rate.
Foreign exchange loss, net.We recorded foreign exchange loss, net of $6.6 million for fiscal year 2018, compared with $1.1 million for fiscal year 2017. The increase was primarily due to the fluctuation of the Thai baht and RMB against our functional currency, the U.S. dollar.
Income before income taxes.We recorded income before income taxes of $88.0 million for fiscal year 2018, compared with $103.9 million for fiscal year 2017.
Income tax expense.Our provision for income tax reflects an effective tax rate of 5.0% for fiscal year 2018, compared with an effective tax rate of 5.5% for fiscal year 2017. The decrease in income tax expense was primarily due to the fact that we had more income not subject to tax during fiscal year 2018 as compared with fiscal year 2017. The impact from the Tax Cuts and Jobs Act resulted in a reduction in income tax expense of $0.1 million during fiscal year 2018.
Net income.We recorded net income of $84.2 million, or 6.2% of total revenues, for fiscal year 2018, compared with net income of $97.1 million, or 6.8% of total revenues, for fiscal year 2017.
Other comprehensive (loss) income. Our other comprehensive loss remained flat at $0.9 million, or 0.1% of total revenues for each of fiscal year 2018 and fiscal year 2017.
Comparison of Fiscal Year 2017 with Fiscal Year 2016
Total revenues.Our total revenues increased by $443.7 million, or 45.4%, to $1.42 billion for fiscal year 2017, compared with $976.7 million for fiscal year 2016. This increase was primarily due to (1) an increase in customers’ demand for both optical andnon-optical communication manufacturing services for fiscal year 2017; and (2) the positive impact from an additional week of revenue during fiscal year 2017. Revenues from optical communications products represented 78.0% of our total revenues for fiscal year 2017, compared with 74.5% for fiscal year 2016.
Cost of revenues
2019.
(5) an increase in executive and management expenses of $0.4 million from bonuses and other benefits.
2020, compared with $122.6 million, or 7.7% of total revenues, for fiscal year 2019.
Interest expense.Our interest expense increased by $1.8 million to $3.3 million for fiscal year 2017, compared with $1.6 million for fiscal year 2016.2019. The increase was primarily due to an increase in the average balance of our outstanding bank borrowings.
cash and cash equivalents and short-term investments.
2019.
2019.
2019.
2018. The increase in cost of revenues was primarily due to a proportional increase in sales volume.
26, 2020.
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Net cash provided by operating activities | $ | 138,080 | $ | 70,934 | $ | 47,088 | ||||||
Net cash used in investing activities | $ | (58,649 | ) | $ | (90,556 | ) | $ | (39,603 | ) | |||
Net cash (used in) provided by financing activities | $ | (54,106 | ) | $ | 13,432 | $ | 22,862 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 25,325 | $ | (6,190 | ) | $ | 30,347 | |||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 137,137 | $ | 142,804 | $ | 112,978 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 161,433 | $ | 137,137 | $ | 142,804 |
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Net cash provided by operating activities | $ | 150,660 | $ | 147,394 | $ | 138,080 | ||||||
Net cash used in investing activities | $ | (71,248 | ) | $ | (98,067 | ) | $ | (58,649 | ) | |||
Net cash used in financing activities | $ | (35,305 | ) | $ | (23,223 | ) | $ | (54,106 | ) | |||
Net increase in cash, cash equivalents and restricted cash | $ | 44,107 | $ | 26,104 | $ | 25,325 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 188,241 | $ | 161,433 | $ | 137,137 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 232,832 | $ | 188,241 | $ | 161,433 |
Net cash provided by operating activities increased by $23.8 million, or 50.6%, to $70.9 million for fiscal year 2017, compared with net cash provided by operating activities of $47.1 million for fiscal year 2016. This increase was due to an increase in net income of $35.2$36.8 million from revenue growth, depreciation and amortizationa decrease in cash paid to settle accounts payable of $6.4$35.3 million. These increases in cash were offset by a decrease in cash receipts related to the timing of collection of trade accounts receivable of $31.3 million, from additional investmentsan increase in equipment to support our new facilitygain on exchange rate and fair value of derivative instruments of $11.2 million, an increase in Chonburi, Thailand,ending inventories intended for sale in future quarters of $24.6 million and a decrease in share-based compensation of $16.6 million mainly related to additional grants of equity awards to employees during the year. These were offset with decreases in movement of trade accounts payable, and other current andnon-current liabilities of $18.0 million and $14.6 million, respectively.
$5.4 million.
Net cash used in investing activities increased by $50.9 million, or 128.7%, to $90.6 million for fiscal year 2017, compared with net cash used in investing activities of $39.6 million for fiscal year 2016. The increase was primarily due to an increase of $27.6 million in the purchase of property, plant and equipment primarily for our new facility in Chonburi, Thailand, a net increase of $11.4 million in marketable securities and the net payment of $9.9 million in connection with the acquisition of Fabrinet UK.
intangible assets.
Net cash provided by financing activities decreased by $9.4 million, or 41.2%, to $13.4 million for fiscal year 2017, compared with net cash provided by financing activities of $22.9 million for fiscal year 2016. This decrease was primarily due to a decrease of $50.0 million in proceeds from long-term bank loans, and an increase of $12.1 million in the repayment of long-term bank loans. These were offset by a net increase of short-term loan from bank of $50.8$5.0 million, and (3) the release of restricted cash in connection with a business acquisition of $3.5 million.
Payments Due by Period | ||||||||||||||||||||
(amount in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Long-term debt obligations | $ | 64,188 | $ | 3,250 | $ | 6,500 | $ | 54,438 | $ | — | ||||||||||
Interest expense obligation(1) | 11,490 | 2,490 | 4,853 | 4,147 | — | |||||||||||||||
Capital lease obligations | 967 | 451 | 516 | — | — | |||||||||||||||
Operating lease obligations | 3,631 | 1,263 | 1,485 | 883 | — | |||||||||||||||
Severance liabilities(2) | 10,162 | 400 | 1,826 | 1,602 | 6,334 | |||||||||||||||
Deferred liability in connection with business acquisition | 3,331 | 3,331 | — | — | — | |||||||||||||||
Provision for uncertain income tax position | 2,327 | 653 | 1,648 | 5 | 21 | |||||||||||||||
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| |||||||||||
Total | $ | 96,096 | $ | 11,838 | $ | 16,828 | $ | 61,075 | $ | 6,355 | ||||||||||
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|
|
Payments Due by Period | ||||||||||||||||||||
(amount in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Long-term debt obligations | $ | 51,797 | $ | 12,188 | $ | 27,421 | $ | 12,188 | $ | — | ||||||||||
Interest expense obligation (1) | 1,760 | 751 | 876 | 133 | — | |||||||||||||||
Finance lease obligations | 100 | 100 | — | — | — | |||||||||||||||
Operating lease obligations | 8,448 | 2,313 | 4,514 | 1,464 | 157 | |||||||||||||||
Severance liabilities (2) | 54,218 | 1,284 | 3,183 | 4,726 | 45,025 | |||||||||||||||
Provision for uncertain income tax position | 1,459 | 1,008 | 6 | 286 | 159 | |||||||||||||||
Total | $ | 117,782 | $ | 17,644 | $ | 36,000 | $ | 18,797 | $ | 45,341 | ||||||||||
(1) | Interest expense obligation reflects the interest rate on long-term debt obligation as of June |
(2) | Severance liabilities as of June |
default in the Term Loan Agreement include failure to pay amounts due under the Term Loan Agreement or the related finance documents when due, failure to comply with the covenants under the Term Loan Agreement or the related finance documents, cross default with other indebtedness of the Borrower, events of bankruptcy or insolvency in respect of the Borrower, and the occurrence of any event or series of events that in the opinion of the Bank has or is reasonably likely to have a material adverse effect.
We entered into the Facility Agreement with a consortium of banks on May 22, 2014, which provided for a $200.0 million credit line, comprised of a $150.0 million revolving loan facility and a $50.0 million delayed draw term loan facility with a maturity date of May 22, 2019. The revolving loan facility contained an accordion feature permitting us to request an increase in the facility up to $100.0 million subject to customary terms and conditions and provided that no default or event of default exists at the time of request.
On February 26, 2015, we entered into the Second Amendment to the Facility Agreement. The amendment extended the availability period for draws on the term loan facility from May 21, 2015 to July 31, 2015. It also
allowed us, upon the satisfaction of certain conditions, to designate from time to time one or more of Fabrinet’s subsidiaries as borrowers under the Facility Agreement. On July 31, 2015, we entered into the Third Amendment to the Facility Agreement. The amendment extended the availability period for draws on the term loan facility from July 31, 2015 to July 31, 2016. On July 22, 2016, we entered into the Fourth Amendment to the Facility Agreement to change the timing of filing certain financial information with the bank.
On June 4, 2018, we entered into the Fifth Amendment to the Facility Agreement to (i) reduce the revolving commitments thereunder from $150.0 million to $25.0 million, (ii) extend the termination date of the revolving commitments from May 22, 2019 to June 4, 2023, (iii) refinance the then-existing term loan and revolving loans under the Facility Agreement into a $65.0 million term loan that matures on June 4, 2023 and (iv) reduce the applicable interest rate margins and commitment fees. The revolving loan facility contains an accordion feature permitting us to request an increase in the facility up to $200.0 million subject to customary terms and conditions and provided that no default or event of default exists at the time of request. The revolving loan facility terminates and all amounts outstanding are due and payable in full on June 4, 2023. The principal amount of any drawn term loans must be repaid according to the scheduled quarterly amortization payments, with final payment of all amounts outstanding, plus accrued interest, being due June 4, 2023.
As of June 29, 2018, $64.22020, $51.7 million of the term loan was outstanding under the Credit Facility Agreement and there were available revolving credit facilities of $25.0 million.
In connection with our acquisition of Fabrinet UK in the first quarter of fiscal year 2017, we assumed lease agreements for certain machine and equipment, which are accounted for as capital leases. Agreement.
As of June 29, 2018,26, 2020, we also had certain operating lease arrangements in which the lease payments are calculated using the straight-line method. Our rental expenses under these leases were $1.8$2.1 million, $1.9 million and $1.2$1.8 million for fiscal year 2018,2020, fiscal year 20172019 and fiscal year 2016,2018, respectively.
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Capital expenditures | $ | 30,535 | $ | 56,194 | $ | 55,166 |
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Capital expenditures | $ | 51,317 | $ | 20,834 | $ | 30,535 |
ITEM 7A. |
marketable securitiesshort-term investments totaling $332.4$488.1 million, $285.3$437.3 million and $284.5$332.4 million, as of June 29, 2018,26, 2020, June 30, 201728, 2019 and June 24, 2016,29, 2018, respectively. We have interest rate risk exposure relating to the interest income generated by excess cash invested in highly liquid investments with maturities of three months or less from the original dates of purchase. The cash, cash equivalents, and marketable securitiesshort-term investments are held for working capital purposes. We have not used derivative financial instruments in our investment portfolio. We have not been exposed nor do we anticipate being exposed to material risks due to changes in market interest rates. Declines in interest rates, however, will reduce future investment income. If overall interest rates had declined by 10 basis points during fiscal year 2018,2020, fiscal year 20172019 and fiscal year 2016,2018, our interest income would have decreased by approximately $0.3$0.4 million, $0.3 million and $0.1$0.3 million, respectively, assuming consistent investment levels.2018,2020, fiscal year 20172019 and fiscal year 2016,2018, our interest expense would have increased by approximately $0.1 million, $0.6 million $0.8 million and $0.1$0.6 million, respectively, assuming consistent borrowing levels.
significant currency rate exposure to changes in the exchange rate between the Thai baht, the GBP, the RMB and the U.S. dollar. We must translate foreign currency-denominated results of operations, assets and liabilities for our foreign subsidiaries to U.S. dollars in our audited consolidated financial statements. Consequently, increases and decreases in the value of the U.S. dollar compared with such foreign currencies will affect our reported results of operations and the value of our assets and liabilities on our audited consolidated balance sheets, even if our results of operations or the value of those assets and liabilities has not changed in its original currency. These transactions could significantly affect the comparability of our results between financial periods or result in significant changes to the carrying value of our assets, liabilities and shareholders’ equity.
ITEM 8. |
5862 6065 6166 6267 6368 6570 29, 201826, 2020 and June 30, 201728, 2019 104
18, 2020
(in thousands of U.S. dollars, except share data) | June 29, 2018 | June 30, 2017 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 158,102 | $ | 133,825 | ||||
Restricted cash in connection with business acquisition | 3,331 | — | ||||||
Marketable securities | 174,269 | 151,450 | ||||||
Trade accounts receivable, net | 246,912 | 264,349 | ||||||
Inventory, net | 257,687 | 238,665 | ||||||
Prepaid expenses | 8,061 | 6,306 | ||||||
Other current assets | 5,948 | 4,159 | ||||||
|
|
|
| |||||
Total current assets | 854,310 | 798,754 | ||||||
|
|
|
| |||||
Non-current assets | ||||||||
Restricted cash in connection with business acquisition | — | 3,312 | ||||||
Property, plant and equipment, net | 219,640 | 216,881 | ||||||
Intangibles, net | 4,880 | 5,840 | ||||||
Goodwill | 3,828 | 3,806 | ||||||
Deferred tax assets | 5,280 | 2,905 | ||||||
Othernon-current assets | 80 | 1,577 | ||||||
|
|
|
| |||||
Totalnon-current assets | 233,708 | 234,321 | ||||||
|
|
|
| |||||
Total Assets | $ | 1,088,018 | $ | 1,033,075 | ||||
|
|
|
| |||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Bank borrowings, net of unamortized debt issuance costs | $ | 3,250 | $ | 48,402 | ||||
Trade accounts payable | 220,159 | 215,262 | ||||||
Capital lease liability, current portion | 451 | 344 | ||||||
Income tax payable | 709 | 1,976 | ||||||
Deferred liability in connection with business acquisition | 3,331 | — | ||||||
Accrued payroll, bonus and related expenses | 13,476 | 13,852 | ||||||
Accrued expenses | 9,013 | 9,227 | ||||||
Other payables | 19,728 | 22,209 | ||||||
|
|
|
| |||||
Total current liabilities | 270,117 | 311,272 | ||||||
|
|
|
| |||||
Non-current liabilities | ||||||||
Long-term loan from bank, net of unamortized debt issuance costs | 60,938 | 22,701 | ||||||
Deferred tax liability | 2,284 | 1,981 | ||||||
Capital lease liability,non-current portion | 516 | 1,024 | ||||||
Deferred liability in connection with business acquisition | — | 3,312 | ||||||
Severance liabilities | 10,162 | 8,488 | ||||||
Othernon-current liabilities | 3,062 | 2,723 | ||||||
|
|
|
| |||||
Totalnon-current liabilities | 76,962 | 40,229 | ||||||
|
|
|
| |||||
Total Liabilities | 347,079 | 351,501 | ||||||
|
|
|
| |||||
Commitments and contingencies (Note 19) | ||||||||
Shareholders’ equity | ||||||||
Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of June 29, 2018 and June 30, 2017) | — | — | ||||||
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 37,723,733 shares and 37,340,496 shares issued; and 36,434,630 shares and 37,340,496 shares outstanding as of June 29, 2018 and June 30, 2017, respectively) | 377 | 373 | ||||||
Additionalpaid-in capital | 151,797 | 133,293 | ||||||
Less: Treasury shares (1,289,103 shares and zero shares as of June 29, 2018 and June 30, 2017, respectively) | (42,401 | ) | — | |||||
Accumulated other comprehensive loss | (1,257 | ) | (348 | ) | ||||
Retained earnings | 632,423 | 548,256 | ||||||
|
|
|
| |||||
Total Shareholders’ Equity | 740,939 | 681,574 | ||||||
|
|
|
| |||||
Total Liabilities and Shareholders’ Equity | $ | 1,088,018 | $ | 1,033,075 | ||||
|
|
|
|
(in thousands of U.S. dollars, except share data and par value) | June 26, 2020 | June 28, 2019 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 225,430 | $ | 180,839 | ||||
Short-term restricted cash | 7,402 | — | ||||||
Short-term investments | 262,693 | 256,493 | ||||||
Trade accounts receivable, net | 272,665 | 260,602 | ||||||
Contract assets | 13,256 | 12,447 | ||||||
Inventories | 309,786 | 293,612 | ||||||
Other receivable | 24,310 | — | ||||||
Prepaid expenses | 5,399 | 8,827 | ||||||
Other current assets | 13,915 | 11,015 | ||||||
Total current assets | 1,134,856 | 1,023,835 | ||||||
Non-current assets | ||||||||
Long-term restricted cash | — | 7,402 | ||||||
Property, plant and equipment, net | 228,274 | 210,686 | ||||||
Intangibles, net | 4,312 | 3,887 | ||||||
Operating right-of-use | 8,068 | — | ||||||
Goodwill | — | 3,705 | ||||||
Deferred tax assets | 5,675 | 5,679 | ||||||
Other non-current assets | 202 | 124 | ||||||
Total non-current assets | 246,531 | 231,483 | ||||||
Total Assets | $ | 1,381,387 | $ | 1,255,318 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Long-term borrowings, current portion, net | $ | 12,156 | $ | 3,250 | ||||
Trade accounts payable | 251,603 | 257,617 | ||||||
Fixed assets payable | 15,127 | 7,317 | ||||||
Contract liabilities | 1,556 | 2,239 | ||||||
Operating lease liabilities, current portion | 1,979 | — | ||||||
Income tax payable | 2,242 | 1,801 | ||||||
Accrued payroll, bonus and related expenses | 19,265 | 16,510 | ||||||
Accrued expenses | 12,104 | 8,997 | ||||||
Other payables | 21,514 | 15,317 | ||||||
Total current liabilities | 337,546 | 313,048 | ||||||
Non-current liabilities | ||||||||
Long-term borrowings, non-current portion, net | 39,514 | 57,688 | ||||||
Deferred tax liability | 4,729 | 3,561 | ||||||
Operating lease liabilities, non-current portion | 5,873 | — | ||||||
Severance liabilities | 17,379 | 15,209 | ||||||
Other non-current liabilities | 1,937 | 2,713 | ||||||
Total non-current liabilities | 69,432 | 79,171 | ||||||
Total Liabilities | 406,978 | 392,219 | ||||||
Commitments and contingencies (Note 22) | ||||||||
Shareholders’ equity | ||||||||
Preferred shares (5,000,000 shares authorized, $0.01 par value; 0 shares issued and outstanding as of June 26, 2020 and June 28, 2019) | — | — | ||||||
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 38,471,967 shares and 38,230,753 shares issued as of June 26, 2020 and June 28, 2019, respectively; and 36,727,864 shares and 36,841,650 shares outstanding as of June 26, 2020 and June 28, 2019, respectively) | 385 | 382 | ||||||
Additional paid-in capital | 175,610 | 158,299 | ||||||
Less: Treasury shares (1,744,103 shares and 1,389,103 shares as of June 26, 2020 and June 28, 2019, respectively) | (68,501 | ) | (47,779 | ) | ||||
Accumulated other comprehensive loss | (1,147 | ) | (2,386 | ) | ||||
Retained earnings | 868,062 | 754,583 | ||||||
Total Shareholders’ Equity | 974,409 | 863,099 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 1,381,387 | $ | 1,255,318 | ||||
Years Ended | ||||||||||||
(in thousands of U.S. dollars, except per share data) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Revenues | $ | 1,371,925 | $ | 1,420,490 | $ | 976,747 | ||||||
Cost of revenues | (1,218,513 | ) | (1,249,030 | ) | (857,224 | ) | ||||||
|
|
|
|
|
| |||||||
Gross profit | 153,412 | 171,460 | 119,523 | |||||||||
Selling, general and administrative expenses | (57,812 | ) | (65,626 | ) | (49,753 | ) | ||||||
Other income related to flooding, net | — | — | 36 | |||||||||
Expenses related to reduction in workforce | (1,776 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Operating income | 93,824 | 105,834 | 69,806 | |||||||||
Interest income | 3,925 | 1,977 | 1,535 | |||||||||
Interest expense | (3,606 | ) | (3,321 | ) | (1,569 | ) | ||||||
Foreign exchange loss, net | (6,587 | ) | (1,142 | ) | (1,916 | ) | ||||||
Other income, net | 473 | 509 | 376 | |||||||||
|
|
|
|
|
| |||||||
Income before income taxes | 88,029 | 103,857 | 68,232 | |||||||||
Income tax expense | (3,862 | ) | (6,742 | ) | (6,335 | ) | ||||||
|
|
|
|
|
| |||||||
Net income | 84,167 | 97,115 | 61,897 | |||||||||
|
|
|
|
|
| |||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||
Change in net unrealized (loss) gain on marketable securities | (1,019 | ) | (471 | ) | 443 | |||||||
Change in net unrealized (loss) gain on derivative instruments | (1 | ) | (158 | ) | 192 | |||||||
Change in foreign currency translation adjustment | 111 | (310 | ) | — | ||||||||
|
|
|
|
|
| |||||||
Total other comprehensive (loss) income, net of tax | (909 | ) | (939 | ) | 635 | |||||||
|
|
|
|
|
| |||||||
Net comprehensive income | $ | 83,258 | $ | 96,176 | $ | 62,532 | ||||||
|
|
|
|
|
| |||||||
Earnings per share | ||||||||||||
Basic | $ | 2.26 | $ | 2.63 | $ | 1.73 | ||||||
Diluted | $ | 2.21 | $ | 2.57 | $ | 1.68 | ||||||
Weighted average number of ordinary shares outstanding | ||||||||||||
Basic | 37,257 | 36,927 | 35,857 | |||||||||
Diluted | 38,035 | 37,852 | 36,872 |
Years Ended | ||||||||||||
(in thousands of U.S. dollars, except per share data) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Revenues | $ | 1,641,836 | $ | 1,584,335 | $ | 1,371,925 | ||||||
Cost of revenues | (1,455,731 | ) | (1,405,111 | ) | (1,218,513 | ) | ||||||
186,105 | 179,224 | 153,412 | ||||||||||
Selling, general and administrative expenses | (68,374 | ) | (55,067 | ) | (57,812 | ) | ||||||
Expenses related to reduction in workforce | (329 | ) | (1,516 | ) | (1,776 | ) | ||||||
Operating income | 117,402 | 122,641 | 93,824 | |||||||||
Interest income | 7,592 | 6,699 | 3,925 | |||||||||
Interest expense | (3,044 | ) | (5,381 | ) | (3,606 | ) | ||||||
Foreign exchange gain (loss), net | (3,797 | ) | 1,406 | (6,587 | ) | |||||||
Other income (expense), net | 1,089 | 868 | 473 | |||||||||
Income before income taxes | 119,242 | 126,233 | 88,029 | |||||||||
Income tax expense | (5,763 | ) | (5,278 | ) | (3,862 | ) | ||||||
Net income | 113,479 | 120,955 | 84,167 | |||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
available-for-sale | 538 | 2,043 | (1,019 | ) | ||||||||
570 | (1 | ) | (1 | ) | ||||||||
528 | (2,537 | ) | — | |||||||||
(397 | ) | (634 | ) | 111 | ||||||||
Total other comprehensive income (loss), net of tax | 1,239 | (1,129 | ) | (909 | ) | |||||||
Net comprehensive income | $ | 114,718 | $ | 119,826 | $ | 83,258 | ||||||
Earnings per share | ||||||||||||
$ | 3.07 | $ | 3.29 | $ | 2.26 | |||||||
$ | 3.01 | $ | 3.23 | $ | 2.21 | |||||||
Weighted average number of ordinary shares outstanding (thousands of shares) | ||||||||||||
36,908 | 36,798 | 37,257 | ||||||||||
37,665 | 37,415 | 38,035 |
(in thousands of U.S. dollars, except share data) |
Ordinary Share | Additional Paid-in Capital | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | |||||||||||||||||||||||
Shares | Amount | Total | ||||||||||||||||||||||||||
Balances at June 26, 2015 | 35,437,654 | 354 | 89,390 | — | (44 | ) | 389,244 | 478,944 | ||||||||||||||||||||
Net income | — | — | — | — | — | 61,897 | 61,897 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | 635 | — | 635 | |||||||||||||||||||||
Share-based compensation expense | — | — | 9,927 | — | — | — | 9,927 | |||||||||||||||||||||
Issuance of ordinary shares | 718,792 | 8 | 5,471 | — | — | — | 5,479 | |||||||||||||||||||||
Tax withholdings related to net share settlement of restricted share units | — | — | (2,463 | ) | — | — | — | (2,463 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balances at June 24, 2016 | 36,156,446 | 362 | 102,325 | — | 591 | 451,141 | 554,419 | |||||||||||||||||||||
Net income | — | — | — | — | — | 97,115 | 97,115 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (939 | ) | — | (939 | ) | |||||||||||||||||||
Share-based compensation expense | — | — | 26,507 | — | — | — | 26,507 | |||||||||||||||||||||
Issuance of ordinary shares | 1,184,050 | 11 | 5,886 | — | — | — | 5,897 | |||||||||||||||||||||
Tax withholdings related to net share settlement of restricted share units | — | — | (1,425 | ) | — | — | — | (1,425 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balances at June 30, 2017 | 37,340,496 | 373 | 133,293 | — | (348 | ) | 548,256 | 681,574 | ||||||||||||||||||||
Net income | — | — | — | — | — | 84,167 | 84,167 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (909 | ) | — | (909 | ) | |||||||||||||||||||
Share-based compensation expense | — | — | 22,581 | — | — | — | 22,581 | |||||||||||||||||||||
Issuance of ordinary shares | 383,237 | 4 | 1,432 | — | — | — | 1,436 | |||||||||||||||||||||
Repurchase of 1,289,103 shares held as treasury shares | — | — | — | (42,401 | ) | — | — | (42,401 | ) | |||||||||||||||||||
Tax withholdings related to net share settlement of restricted share units | — | — | (5,509 | ) | — | — | — | (5,509 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balances at June 29, 2018 | 37,723,733 | 377 | 151,797 | (42,401 | ) | (1,257 | ) | 632,423 | 740,939 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of U.S. dollars, except share data) | Ordinary Share | Additional Paid-in Capital | Treasury Shares | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balances at June 30, 2017 | 37,340,496 | 373 | 133,293 | — | (348 | ) | 548,256 | 681,574 | ||||||||||||||||||||
Net income | — | — | — | — | — | 84,167 | 84,167 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (909 | ) | — | (909 | ) | |||||||||||||||||||
Share-based compensation | — | — | 22,581 | — | — | — | 22,581 | |||||||||||||||||||||
Issuance of ordinary shares | 383,237 | 4 | 1,432 | — | — | — | 1,436 | |||||||||||||||||||||
Repurchase of 1,289,103 shares held as treasury shares | — | — | — | (42,401 | ) | — | — | (42,401 | ) | |||||||||||||||||||
Tax withholdings related to net share settlement of restricted share units | — | — | (5,509 | ) | — | — | — | (5,509 | ) | |||||||||||||||||||
Balances at June 29, 2018 | 37,723,733 | 377 | 151,797 | (42,401 | ) | (1,257 | ) | 632,423 | 740,939 | |||||||||||||||||||
Net income | — | — | — | — | — | 120,955 | 120,955 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (1,129 | ) | — | (1,129 | ) | |||||||||||||||||||
Cumulative effect adjustment from adoption of ASC 606 | — | — | — | — | — | 1,205 | 1,205 | |||||||||||||||||||||
Share-based compensation | — | — | 17,157 | — | — | — | 17,157 | |||||||||||||||||||||
Issuance of ordinary shares | 507,020 | 5 | (6 | ) | — | — | — | (1 | ) | |||||||||||||||||||
Repurchase of 100,000 shares held as treasury shares | — | — | — | (5,378 | ) | — | — | (5,378 | ) | |||||||||||||||||||
Tax withholdings related to net share settlement of restricted share units | — | — | (10,649 | ) | — | — | — | (10,649 | ) | |||||||||||||||||||
Balances at June 28, 2019 | 38,230,753 | 382 | 158,299 | (47,779 | ) | (2,386 | ) | 754,583 | 863,099 | |||||||||||||||||||
Net income | — | — | — | — | — | 113,479 | 113,479 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | 1,239 | — | 1,239 | |||||||||||||||||||||
Share-based compensation | — | — | 22,203 | — | — | — | 22,203 | |||||||||||||||||||||
Issuance of ordinary shares | 241,214 | 3 | (3 | ) | — | — | — | — | ||||||||||||||||||||
Repurchase of 355,000 shares held as treasury shares | — | — | — | (20,722 | ) | — | — | (20,722 | ) | |||||||||||||||||||
Tax withholdings related to net share settlement of restricted share units | — | — | (4,889 | ) | — | — | — | (4,889 | ) | |||||||||||||||||||
Balances at June 26, 2020 | 38,471,967 | 385 | 175,610 | (68,501 | ) | (1,147 | ) | 868,062 | 974,409 | |||||||||||||||||||
Years Ended | ||||||||||||
(in thousands of U. S. dollars) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income for the year | $ | 84,167 | $ | 97,115 | $ | 61,897 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
Depreciation and amortization | 29,087 | 23,793 | 17,357 | |||||||||
Loss (gain) on disposal of property, plant and equipment | 18 | (30 | ) | (73 | ) | |||||||
Loss on disposal of intangibles | 447 | — | — | |||||||||
Loss from sales and maturities of marketable securities | 364 | 822 | 194 | |||||||||
Amortization of investment (discount) premium | (506 | ) | (193 | ) | 798 | |||||||
Amortization of deferred debt issuance costs | 994 | 1,396 | 758 | |||||||||
Income related to flooding | — | — | (828 | ) | ||||||||
Proceeds from insurers in settlement of claim related to flood damage | — | — | 272 | |||||||||
Reversal of allowance for doubtful accounts | (23 | ) | (1 | ) | (17 | ) | ||||||
Unrealized loss on exchange rate and fair value of derivative | 4,222 | 1,884 | 1,905 | |||||||||
Share-based compensation | 22,581 | 26,507 | 9,927 | |||||||||
Deferred income tax | (2,074 | ) | 754 | 864 | ||||||||
Othernon-cash expenses | 2,133 | 2,173 | 1,744 | |||||||||
(Reversal of) Inventory obsolescence | (436 | ) | 42 | (521 | ) | |||||||
Loss fromwritten-off inventory due to flood loss | — | — | 233 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Trade accounts receivable | 17,852 | (64,142 | ) | (61,013 | ) | |||||||
Inventory | (19,432 | ) | (53,802 | ) | (50,598 | ) | ||||||
Other current assets andnon-current assets | (4,464 | ) | (2,231 | ) | (5,901 | ) | ||||||
Trade accounts payable | 3,502 | 38,293 | 56,308 | |||||||||
Income tax payable | (1,267 | ) | (67 | ) | 573 | |||||||
Other current liabilities andnon-current liabilities | 915 | (1,379 | ) | 13,209 | ||||||||
|
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| |||||||
Net cash provided by operating activities | 138,080 | 70,934 | 47,088 | |||||||||
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| |||||||
Cash flows from investing activities | ||||||||||||
Purchase of marketable securities | (152,908 | ) | (122,778 | ) | (108,341 | ) | ||||||
Proceeds from sales of marketable securities | 61,795 | 39,578 | 41,836 | |||||||||
Proceeds from maturities of marketable securities | 67,417 | 72,361 | 67,113 | |||||||||
Payments in connection with business acquisition, net of cash acquired | — | (9,917 | ) | — | ||||||||
Purchase of property, plant and equipment | (33,825 | ) | (68,262 | ) | (40,616 | ) | ||||||
Gain on cash settlement of hedged forward contracts | — | — | 34 | |||||||||
Proceeds from disposal of property, plant and equipment | 449 | 230 | 194 | |||||||||
Purchase of intangibles | (1,577 | ) | (1,768 | ) | (379 | ) | ||||||
Proceeds from insurers in settlement of claims related to flood damage | — | — | 556 | |||||||||
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Net cash used in investing activities | (58,649 | ) | (90,556 | ) | (39,603 | ) | ||||||
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Cash flows from financing activities | ||||||||||||
Payment of debt issuance costs | — | — | (654 | ) | ||||||||
Proceeds of short-term loan from bank | 5,000 | 27,500 | 18,000 | |||||||||
Repayment of short-term loan from bank | (1,003 | ) | (157 | ) | (41,500 | ) | ||||||
Proceeds of long-term loan from bank | — | — | 50,000 | |||||||||
Repayment of long-term loan from bank | (11,212 | ) | (18,100 | ) | (6,000 | ) | ||||||
Proceeds from issuance of ordinary shares under employee share option plan | 1,436 | 5,890 | 5,479 | |||||||||
Repayment of capital lease liability | (417 | ) | (276 | ) | — | |||||||
Repurchase of ordinary shares | (42,401 | ) | — | — | ||||||||
Withholding tax related to net share settlement of restricted share units | (5,509 | ) | (1,425 | ) | (2,463 | ) | ||||||
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Net cash (used in) provided by financing activities | (54,106 | ) | 13,432 | 22,862 | ||||||||
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| |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 25,325 | $ | (6,190 | ) | $ | 30,347 | |||||
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|
Years Ended | ||||||||||||
(in thousands of U. S. dollars) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 113,479 | $ | 120,955 | $ | 84,167 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
30,875 | 29,944 | 29,087 | ||||||||||
329 | (4 | ) | 18 | |||||||||
— | 149 | 447 | ||||||||||
of goodwill | 3,514 | — | — | |||||||||
available-for-sale | (96 | ) | 135 | 364 | ||||||||
(508 | ) | (592 | ) | (506 | ) | |||||||
26 | — | 994 | ||||||||||
240 | 36 | (23 | ) | |||||||||
1,963 | (6,980 | ) | 4,222 | |||||||||
1,672 | 2,591 | — | ||||||||||
(1,220 | ) | — | — | |||||||||
22,203 | 17,157 | 22,581 | ||||||||||
1,262 | 879 | (2,074 | ) | |||||||||
non-cash expenses | (619 | ) | (450 | ) | 332 | |||||||
Changes in operating assets and liabilities | ||||||||||||
(12,260 | ) | (13,494 | ) | 17,852 | ||||||||
(809 | ) | (2,570 | ) | — | ||||||||
(16,174 | ) | (44,598 | ) | (19,868 | ) | |||||||
non-current assets | (182 | ) | (2,777 | ) | (4,464 | ) | ||||||
(5,990 | ) | 38,807 | 3,502 | |||||||||
(683 | ) | 2,239 | — | |||||||||
442 | 1,092 | (1,267 | ) | |||||||||
2,802 | 3,343 | 1,801 | ||||||||||
non-current liabilities | 10,394 | 1,532 | 915 | |||||||||
150,660 | 147,394 | 138,080 | ||||||||||
Cash flows from investing activities | ||||||||||||
Purchase of short-term investments | (196,373 | ) | (233,080 | ) | (152,908 | ) | ||||||
Proceeds from sales of short-term investments | 48,808 | 99,142 | 61,795 | |||||||||
Proceeds from maturities of short-term investments | 142,508 | 54,215 | 67,417 | |||||||||
Funds provided to customer to support transfer of manufacturing operations (Note 10) | (24,310 | ) | — | — | ||||||||
Purchase of property, plant and equipment | (42,327 | ) | (18,661 | ) | (33,825 | ) | ||||||
Purchase of intangibles | (1,180 | ) | (282 | ) | (1,577 | ) | ||||||
Proceeds from disposal of property, plant and equipment | 1,626 | 599 | 449 | |||||||||
(71,248 | ) | (98,067 | ) | (58,649 | ) | |||||||
Years Ended | ||||||||||||
(in thousands of U. S. dollars) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Movement in cash, cash equivalents and restricted cash | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | $ | 137,137 | $ | 142,804 | $ | 112,978 | ||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 25,325 | (6,190 | ) | 30,347 | ||||||||
Effect of exchange rate on cash, cash equivalents and restricted cash | (1,029 | ) | 523 | (521 | ) | |||||||
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Cash, cash equivalents and restricted cash at end of period | $ | 161,433 | $ | 137,137 | $ | 142,804 | ||||||
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Supplemental disclosures | ||||||||||||
Cash paid for | ||||||||||||
Interest | $ | 2,219 | $ | 1,924 | $ | 1,091 | ||||||
Taxes | $ | 1,352 | $ | 5,218 | $ | 5,473 | ||||||
Cash received for interest | $ | 3,945 | $ | 1,753 | $ | 1,049 | ||||||
Non-cash investing and financing activities | ||||||||||||
Construction, software related and equipment related payables | $ | 5,144 | $ | 8,434 | $ | 20,628 |
Years Ended | ||||||||||||
(in thousands of U. S. dollars) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Cash flows from financing activities | ||||||||||||
Payment of debt issuance costs | (153 | ) | — | — | ||||||||
Proceeds from short-term borrowings | — | — | 5,000 | |||||||||
Repayment of short-term borrowings | — | — | (1,003 | ) | ||||||||
Proceeds from long-term borrowings | 60,938 | — | — | |||||||||
Repayment of long-term borrowings | (70,079 | ) | (3,250 | ) | (11,212 | ) | ||||||
Proceeds from issuance of ordinary shares under employee share option plan | — | — | 1,436 | |||||||||
Repayment of finance lease liabilities | (400 | ) | (468 | ) | (417 | ) | ||||||
Repurchase of ordinary shares | (20,722 | ) | (5,378 | ) | (42,401 | ) | ||||||
Release of restricted cash held in connection with business acquisition | — | (3,478 | ) | — | ||||||||
Withholding tax related to net share settlement of restricted share units | (4,889 | ) | (10,649 | ) | (5,509 | ) | ||||||
Net cash used in financing activities | (35,305 | ) | (23,223 | ) | (54,106 | ) | ||||||
Net increase in cash, cash equivalents and restricted cash | $ | 44,107 | $ | 26,104 | $ | 25,325 | ||||||
Movement in cash, cash equivalents and restricted cash | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | $ | 188,241 | $ | 161,433 | $ | 137,137 | ||||||
Increase in cash, cash equivalents and restricted cash | 44,107 | 26,104 | 25,325 | |||||||||
Effect of exchange rate on cash, cash equivalents and restricted cash | 484 | 704 | (1,029 | ) | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 232,832 | $ | 188,241 | $ | 161,433 | ||||||
Supplemental disclosures | ||||||||||||
Cash paid for | ||||||||||||
Interest | $ | 1,688 | $ | 2,605 | $ | 2,219 | ||||||
Taxes | $ | 8,466 | $ | 7,637 | $ | 1,352 | ||||||
Cash received for interest | $ | 9,676 | $ | 5,811 | $ | 3,945 | ||||||
Non-cash investing and financing activities | ||||||||||||
Construction, software and equipment related payables | $ | 15,127 | $ | 7,317 | $ | 5,144 |
As of | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Cash and cash equivalents | $ | 158,102 | $ | 133,825 | $ | 142,804 | ||||||
Restricted cash in connection with business acquisition | 3,331 | 3,312 | — | |||||||||
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| |||||||
Cash, cash equivalents and restricted cash | $ | 161,433 | $ | 137,137 | $ | 142,804 | ||||||
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|
As of | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Cash and cash equivalents | $ | 225,430 | $ | 180,839 | $ | 158,102 | ||||||
Restricted cash | 7,402 | 7,402 | 3,331 | |||||||||
Cash, cash equivalents and restricted cash | $ | 232,832 | $ | 188,241 | $ | 161,433 | ||||||
1. |
|
test.testing. The Company focuses primarily on the production ofwhich was formerly known as Exception EMS Ltd.(“Fabrinet UK”). Fiscal year 2017 ended on June 30, 2017 and consisted of 53 weeks. Fiscal year 2016 ended on June 24, 2016 and consisted of 52 weeks.On September 14, 2016, the Company acquired Global CEM Solutions, Ltd. and all of its subsidiaries (collectively, “Fabrinet UK”), a privately-held group located in Wiltshire, United Kingdom. The consolidated financial statements of the Company include the financial position, results of operations and the cash flows of Fabrinet UK commencing as of the acquisition date. See Note 9, Business acquisition for further details on the accounting for this transaction.acquisition,acquisitions, among others. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. In the event that estimates or assumptions prove to differbe different from actual results, adjustments will be made in subsequent periods to reflect more current information. Additionally, the extent to which the evolving COVID-19 pandemic impacts the Company’s consolidated financial statements will depend on a number of factors, including the magnitude and duration of the pandemic. These estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 that could result in material impacts to our consolidated financial statements in future reporting periods.
Year ended June 28, 2019 | ||||||||||||
(amount in thousands) | As previously reported | Reclassification | After reclassified | |||||||||
Consolidated Balance Sheets | ||||||||||||
Current liabilities | ||||||||||||
Fixed assets payable | $ | — | $ | 7,317 | $ | 7,317 | ||||||
Finance lease liabilities, current portion | $ | 398 | $ | (398 | ) | $ | — | |||||
Other payables | $ | 22,236 | $ | (6,919 | ) | $ | 15,317 | |||||
Non-current liabilities | ||||||||||||
Finance lease liabilities, non-current portion | $ | 102 | $ | (102 | ) | $ | — | |||||
Other non-current liabilities | $ | 2,611 | $ | 102 | $ | 2,713 | ||||||
Consolidated Statement of Cash Flows | ||||||||||||
Cash flows from operating activities | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
Unrealized loss on fair value of interest rate swaps | $ | — | $ | 2,591 | $ | 2,591 | ||||||
Severance liabilities | $ | 3,343 | $ | (3,343 | ) | $ | — | |||||
(Reversal of) Inventory obsolescence | $ | (563 | ) | $ | 563 | $ | — | |||||
Changes in operating assets and liabilities | ||||||||||||
Inventories | $ | (44,035 | ) | $ | (563 | ) | $ | (44,598 | ) | |||
Other current assets and non-current assets | $ | (186 | ) | $ | (2,591 | ) | $ | (2,777 | ) | |||
Severance liabilities | $ | — | $ | 3,343 | $ | 3,343 |
Marketable securities
experience with collection and the age of past due receivables and provides an allowance for doubtful receivables based on a review of all outstanding amounts at the period end. Bad debts are
Payments made under operating
Capital The Company does not account for lease
Certain machine and equipment held under capital components (e.g., fixed payments including rent) separately from the
liability.
Land improvements | 10 years | |||
Building and building improvements | - 30 years | |||
Leasehold improvements | Shorter of useful life or lease term |
Manufacturing equipment | 3 - 7years | |||
Office equipment | 3 - 7years | |||
Motor vehicles | 3 - 5years | |||
Computer hardware | 3 - 5years |
Business acquisition
For the acquisition of Fabrinet UK, the Company allocated the fair value of purchase consideration to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The allocation of consideration to the individual net assets was finalized in the fourth quarter of fiscal year 2017.
The acquired intangible assets, which consist of customer relationships and backlog, are recorded as intangibles in the consolidated balance sheets. The fair value of the acquired intangible assets was determined based on the multi-period excess earnings method. The Company reviews intangibles for impairment whenever changes or circumstances indicate the carrying amount may not be recoverable.
In connection with the business acquisition, $3.4 million of cash, net of foreign currency translation adjustment, for deferred consideration, was placed into an escrow account which is under the Company’s control. However, the Company has contractually agreed to remit this deferred consideration to the sellers of Fabrinet UK, subject to the resolution of claims that the Company may make against the funds with respect to indemnification and other claims within 24 months from the closing date of the transaction. As of June 29, 2018, the cash is presented as restricted cash in the consolidated balance sheets within current assets and the related liability is presented within current liabilities for the deferred consideration. As of June 30, 2017, the cash is presented as restricted cash in the consolidated balance sheets withinnon-current assets and the related liability is presented withinnon-current liabilities for the deferred consideration.
that a reportable segment’s carrying value is greater than its fair value. If the Company’s qualitative assessment indicates it is more likely than not that the fair value of a reporting unit exceeds its carrying value, no further analysis is required and goodwill is not impaired. Otherwise, the Company performs a quantitative goodwill impairment test to determine if goodwill is impaired. The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reportable segment exceeds the carrying value of the net assets associated with the segment, goodwill is not considered impaired. If the carrying value of the net assets associated with the reportable segment exceeds the fair value of the segment, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reportable segment’s goodwill. The reporting unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash, investments, and debt.
rate applicable to the Company’s outstanding borrowings during the year. Where funds are borrowed specifically for the acquisition, construction or production of assets, the amount of borrowing costs eligible for capitalization on the respective assets is determined as the actual borrowing costs are incurred on that borrowing during the respective periods.
• | A derivative whose fair value is a net liability is classified in total as current. |
• | A derivative whose fair value is a net asset and whose current portion is an asset is classified in total as non-current. If the current portion is liability, it should be presented as current liability. |
classified in the same line item as the underlying item.
The Company also enters into derivative contracts that are intended to economically hedge certainthe same income statement line item as the earnings effect of the Company’s risks. The changes in the fair value of the derivatives are recorded directly in earnings as a component of foreign exchange gain (loss) in the consolidated statements of operations and comprehensive income. hedged item.
measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The Company executes derivative instruments with financial institutions that are credit-worthy, which the Company defines as institutions that hold an investment grade credit rating.
contract assets.
Services
The Company provides services for its customers that range from process design to product manufacturing. The Company recognizes service revenues when the services have been performed. The related costs are expensed as incurred.
Services revenue of $57.1 million, $75.4 million and $31.7 million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 29, 2018, June 30, 2017 and June 24, 2016, respectively.
Sales of goods
Revenues from sales of goods are generally recognized whentime the product is either shipped or delivered, depending on the terms of the arrangement, as the criteria for over time recognition are not met. On evaluation of the contracts, the Company identified that there were no contractual rights to bill profit for work in progress in the event of a contract termination, which is expected to be infrequent. Further, in limited circumstances, contracts provide for substantive acceptance by the customer, and when there are no unfulfilled obligations that affectwhich results in the customer’s finaldeferral of revenue until formal notice of acceptance ofis received from the arrangement. Any cost of warranties and remaining obligations that are inconsequential or perfunctory are accrued when the corresponding revenues are recognized.
customer. Judgment may be required in determining if an acceptance clause provides for substantive acceptance.
During the
(Reversal of) warranty
Shipping and handling costs
The Company records costs related to shipping and handling in cost of revenues for all periods presented.
severance pay on forced termination or retrenchment or in the event that the employee reaches the retirement age of 55. The entitlement to severance pay is determined according to an employee’s individual employment tenure with the Company and is subject to a maximum benefit of 10 months400 days of salary unless otherwise agreed upon in an employee’s employment contract. For employees of other subsidiaries who have a specific termination date, the entitlement to severance pay is determined according to their employment tenure, until their designated termination date.
the tax jurisdiction based solely on the technical merits of the position. The term “tax position” refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The accounting interpretation also provides guidance on measurement methodology, derecognition thresholds, financial statement classification and disclosures, recognition of interest and penalties, and accounting for the cumulative-effect adjustment at the date of adoption.
(amount in thousands) | ||||
2020 | $ | 1,746 | ||
2021 | 1,342 | |||
2022 | 1,219 | |||
2023 | 1,172 | |||
Thereafter | 230 | |||
Total future minimum operating lease payments | $ | 5,709 | ||
In January 2017, the FASB issuedThis ASU2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings.” The amendment provides guidance to will be effective for the Company in relation to the disclosurefirst quarter of the impact that ASU2014-09, ASU2016-02 and ASU2016-13 will have on the Company’s financial statements when adopted.fiscal 2021. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements.
In January 2017, the FASB issued ASU2017-01, “Business Combination (Topic 805): Clarifying the Definition of a Business.” This amendment clarifies the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or business.
For public companies,early adopted this ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted for the transactions that occur before the issuance date or effective date of the amendment, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company does not expect that the adoption of this update will have a material impact on its consolidated financial statements.
In August 2016, the FASB issued ASU2016-15, “Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” The amendments in this ASU provide guidance on the presentation of certain cash receipts and cash payments in the statementfourth quarter of cash flows in order to reduce diversity in existing practice. The amendments in ASU2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company will adopt this new update effective June 30, 2018. The Company does not expect that the adoption of this update will have a material impact on its consolidated financial statements.
In February 2016, the FASB issued ASU2016-02, “Lease (Topic 842).” The core principle of Topic 842 is that a lessee should recognize the lease assets and liabilities that arise from leases in the statement of financial position. For public business entities, this update is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements.
In January 2016, the FASB issued ASU2016-01, “Financial Instruments—Overall (Subtopic825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This new guidance requires certain equity investments to be measured at fair value, use of the exit price notion and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. The ASU on recognition and measurement will take effect for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. In addition, in February 2018, the FASB issued ASU2018-03, “Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance clarifies certain aspects of the guidance issued in ASU2016-01 on (1) equity securities without a readily determinable fair value – discontinuation, (2) equity securities without a readily determinable fair value – adjustments, (3) forward contracts and purchased options, (4) presentation requirements for certain fair value option liabilities, and (5) fair value option liabilities denominated in a foreign currency. The Company will adopt this new update effective June 30, 2018. The Company does not expect that the adoption of this update will have a material impact on its consolidated financial statements.
In May 2014, as part of its ongoing efforts to assist in the convergence of accounting principles generally accepted in the United States of America (“U.S. GAAP”), the FASBissued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2017. The FASB has issued several updates to the standard which (1) defer the original effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017 (ASU2015-14); (2) clarify the application of the principal versus agent guidance (ASU2016-08); (3) clarify the guidance on inconsequential and perfunctory promises and licensing (ASU2016-10); and (4) clarify the guidance on certain sections of the guidance providing technical corrections and improvements (ASU2016-10). In May 2016, the FASB issued ASU
2016-12, “Revenue from Contracts with Customers (Topic 606) Narrow-Scope Improvements and Practical Expedients”, to address certain narrow aspects of the guidance including collectability criterion, collection of sales taxes from customers, noncash consideration, contract modifications and completed contracts. This issuance does not change the core principle of the guidance in the initial topic issued in May 2014.
The Company set up a team for the implementation of the new revenue recognition accounting standard, including hiring of external advisors to help with the implementation efforts of ASC 606, as amended. The Company utilized a comprehensive approach to evaluate the impact of adopting ASC 606 on its contract portfolio by reviewing the current revenue accounting policies and practices to identify differences that would result from applying the new guidance to the revenue contracts on amount and timing of revenue recognition.
The Company currently recognizes the majority of its manufacturing revenue when title and risk and rewards of ownership have passed, the price to the buyer is fixed or determinable and recoverability is reasonably assured, which generally is when the goods are shipped. The Company has determined that the new standard will have no substantial changes to its current revenue recognition policy as the Company’s revenues will continue to be recognized at a “point in time” model. However, there will be a portion of revenue contracts that will fall into an “over time” model as the customers take control of the products as they are produced, as opposed to at a “point in time” upon physical delivery. Service revenue will also continue to be recognized at an “over time” model as services are performed.
The Company has substantially completed a review of the accounting systems and processes required to apply this new guidance. Additionally, the Company has completed the majority of the assessment phase and documentation of new policies and is currently in the process of adjusting its accounting policies, operational and financial reporting processes, and relevant internal controls and gathering data for the new disclosure requirements.
ASC 606 allows for either “full retrospective” adoption, meaning the standard is applied to all periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements as of the adoption date. The Company will adopt the standard using the modified retrospective approach, effective as of June 30, 2018.
New Accounting Pronouncements—adopted by the Company
In February 2018, the FASB issued ASU2018-02 “Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU which allows companies to reclassify stranded tax effects in accumulated other comprehensive income (loss) that have been caused by the Tax Cuts and Jobs Act of 2017 (the Act) to retained earnings for each period in which the effect of the change in the U.S. federal corporate income tax rate is recorded. The FASB has made the reclassification optional. In addition, in March 2018, the FASB issued ASU2018-05, “Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which updates the income tax accounting in U.S. GAAP to reflect SEC guidance released on December 22, 2017, when the Act was signed into law. The Company adopted these updates with immaterial impact to the consolidated financial statements.
In August 2017, the FASB issued ASU2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. This ASU is the final version of
Proposed Accounting Standards Update2016-310—Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which has been deleted. During the fiscal year 2018, the Company adopted this update2020 with no impact to the Company’s consolidated financial statements.
In November 2016,
3. | Revenues from contracts with customers |
(amount in thousands) | Contract Assets | |||
Beginning balance, June 28, 2019 | $ | 12,447 | ||
Revenue recognized | 73,476 | |||
Amounts collected or invoiced | (72,667 | ) | ||
Ending balance, June 26, 2020 | $ | 13,256 | ||
(amount in thousands) | Contract Assets | |||
Beginning balance, June 30, 2018 | $ | — | ||
Cumulative effect adjustment upon adoption of ASC 606 | 9,877 | |||
Revenue recognized | 112,739 | |||
Amounts collected or invoiced | (110,169 | ) | ||
Ending balance, June 28, 2019 | $ | 12,447 | ||
(amount in thousands) | Contract Liabilities | |||
Beginning balance, June 28, 2019 | $ | 2,239 | ||
Advance payment received during the year | 9,278 | |||
Revenue recognized | (9,961 | ) | ||
Ending balance, June 26, 2020 | $ | 1,556 | ||
(amount in thousands) | Contract Liabilities | |||
Beginning balance, June 30, 2018 | $ | — | ||
Advance payment received during the year | 4,458 | |||
Revenue recognized | (2,219 | ) | ||
Ending balance, June 28, 2019 | $ | 2,239 | ||
In March 2016, the FASB issued ASU2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for share-based payment award transactions, including, the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Europe.
In March 2016, the FASB issued ASU2016-05, “Derivatives and Hedging (Topic 815),” to clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815, does not, in and of itself, require designation of the hedging relationship, provided that all other hedge accounting criteria continue to be met. This guidance is effective for public entities for financial statements issued for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. During fiscal year 2018, the Company adopted this update with no impact to the consolidated financial statements.
(amount in thousands, except percentages) | Year June 26, 2020 | As a % of Total Revenues | Year June 28, 2019 | As a % of Total Revenues | ||||||||||||
North America | $ | 830,888 | 50.6 | % | $ | 756,278 | 47.7 | % | ||||||||
Asia-Pacific | 552,923 | 33.7 | 608,386 | 38.4 | ||||||||||||
Europe | 258,025 | 15.7 | 219,671 | 13.9 | ||||||||||||
$ | 1,641,836 | 100.0 | % | $ | 1,584,335 | 100.0 | % | |||||||||
(amount in thousands, except percentages) | Year June 26, 2020 | As a % of Total Revenues | Year June 28, 2019 | As a % of Total Revenues | ||||||||||||
Optical communications | $ | 1,248,174 | 76.0 | % | $ | 1,184,936 | 74.8 | % | ||||||||
Lasers, sensors and other | 393,662 | 24.0 | 399,399 | 25.2 | ||||||||||||
$ | 1,641,836 | 100.0 | % | $ | 1,584,335 | 100.0 | % | |||||||||
4. |
|
gains until March 6, 2039.gains. Fabrinet has received this undertaking for a20-year period ending August 24, 2019. As that date approaches, Fabrinet intends to request a renewal with the office of the Clerk of the Cabinet for another 20 years.$64.2 million and $41.0 million infor the years ended June 26, 2020, June 28, 2019 and June 29, 2018, June 30, 2017 and June 24, 2016, respectively.
%.
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Current | $ | 5,457 | $ | 5,986 | $ | 5,053 | ||||||
Deferred | (1,595 | ) | 756 | 1,282 | ||||||||
|
|
|
|
|
| |||||||
Total income tax expense | $ | 3,862 | $ | 6,742 | $ | 6,335 | ||||||
|
|
|
|
|
|
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Current | $ | 6,274 | $ | 4,384 | $ | 5,457 | ||||||
Deferred | (511 | ) | 894 | (1,595 | ) | |||||||
Total income tax expense | $ | 5,763 | $ | 5,278 | $ | 3,862 | ||||||
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Income before income taxes(1) | $ | 88,029 | $ | 103,857 | $ | 68,232 | ||||||
Tax expense calculated at a statutory corporate income tax rate of 20% | 17,606 | 20,771 | 13,646 | |||||||||
Effect of income taxes from locations with tax rates different from Thailand | 2,657 | (48 | ) | (3,309 | ) | |||||||
Income not subject to tax(2) | (12,824 | ) | (17,212 | ) | (10,493 | ) | ||||||
Income tax on unremitted earnings | 1,007 | 798 | 527 | |||||||||
Effect of different tax rate in relation to deferred tax utilization | 423 | — | 894 | |||||||||
Effect of foreign exchange rate adjustment | (134 | ) | 667 | 375 | ||||||||
Tax rebate from research and development application | (454 | ) | (226 | ) | (145 | ) | ||||||
Provision for uncertain income tax position | 277 | 260 | 214 | |||||||||
Utilization of loss carryforward | (3,224 | ) | — | — | ||||||||
(Reversal of) valuation allowance(3) | (1,587 | ) | 1,517 | 4,882 | ||||||||
Others | 115 | 215 | (256 | ) | ||||||||
|
|
|
|
|
| |||||||
Corporate income tax expense | $ | 3,862 | $ | 6,742 | $ | 6,335 | ||||||
|
|
|
|
|
|
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Income before income taxes (1) | $ | 119,242 | $ | 126,233 | $ | 88,029 | ||||||
Tax expense calculated at a statutory corporate income tax rate of 20% | 23,848 | 25,247 | 17,606 | |||||||||
Effect of income taxes from locations with tax rates different from Thailand | 577 | 977 | 2,657 | |||||||||
Income not subject to tax (2) | (20,797 | ) | (21,161 | ) | (12,824 | ) | ||||||
Income tax on unremitted earnings | 1,221 | 1,260 | 1,007 | |||||||||
Effect of different tax rate in relation to deferred | — | — | 423 | |||||||||
Effect of foreign exchange rate adjustment | 382 | 603 | (134 | ) | ||||||||
Tax rebate from research and development application | (1,228 | ) | (649 | ) | (454 | ) | ||||||
Provision for uncertain income tax position | (641 | ) | (229 | ) | 277 | |||||||
Utilization of loss carryforward | — | — | (3,224 | ) | ||||||||
Valuation allowance (reversal of) | 2,446 | — | (1,587 | ) | ||||||||
Others | (45 | ) | (770 | ) | 115 | |||||||
Corporate income tax expense | $ | 5,763 | $ | 5,278 | $ | 3,862 | ||||||
(1) | Income before income taxes was mostly generated from domestic income in the Cayman Islands. |
(2) | Income not subject to tax relates to income earned in the Cayman Islands and income subject to an investment promotion privilege for Pinehurst Building |
|
As of | ||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | ||||||
Deferred tax assets: | ||||||||
Depreciation | $ | 2,151 | $ | 1,674 | ||||
Severance liability | 1,518 | 1,127 | ||||||
Reserves and allowance | 1,545 | 1,046 | ||||||
Net operating loss carryforwards | 1,228 | 496 | ||||||
Others | 277 | 10 | ||||||
|
|
|
| |||||
Total | $ | 6,719 | $ | 4,353 | ||||
|
|
|
|
As of | ||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | ||||||
Deferred tax liabilities: | ||||||||
Temporary differences from intangibles and changes in the fair value of assets acquired | $ | (860 | ) | $ | (944 | ) | ||
Deferred tax from unremitted earnings | (2,863 | ) | (2,485 | ) | ||||
|
|
|
| |||||
Total | (3,723 | ) | (3,429 | ) | ||||
|
|
|
| |||||
Net | $ | 2,996 | $ | 924 | ||||
|
|
|
|
As
As of | ||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | ||||||
Deferred tax assets: | ||||||||
Depreciation | $ | 1,219 | $ | 1,957 | ||||
Severance liability | 2,958 | 2,012 | ||||||
Reserves and allowance | 1,405 | 1,485 | ||||||
Net operating loss carryforwards | — | 1,616 | ||||||
Others | 321 | 13 | ||||||
Total | $ | 5,903 | $ | 7,083 | ||||
As of | ||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | ||||||
Deferred tax | ||||||||
Temporary differences from intangibles and changes in the fair value of assets acquired | $ | (336 | ) | $ | (590 | ) | ||
Deferred tax from unremitted earnings | (4,620 | ) | (4,123 | ) | ||||
Others | — | (252 | ) | |||||
Total | (4,956 | ) | (4,965 | ) | ||||
Net | $ | 947 | $ | 2,118 | ||||
(amount in thousands) | Valuation allowances of deferred tax assets | |||
Balance as of June 30, 2017 | $ | 6,399 | ||
Reversal | (5,234 | ) | ||
Balance as of June 29, 2018 | 1,165 | |||
Additional | 126 | |||
Balance as of June 28, 2019 | 1,291 | |||
Additional | 2,437 | |||
Balance as of June 26, 2020 | $ | 3,728 | ||
The changessuch subsidiary in the valuation allowances ofU.S. reversed certain deferred tax assets werevaluation allowance as follows:
(amount in thousands) | Valuation allowances of deferred tax assets | |||
Balance as of June 24, 2016 | $ | 4,882 | ||
Additional | 1,517 | |||
|
| |||
Balance as of June 30, 2017 | 6,399 | |||
Reversal | (5,234 | ) | ||
|
| |||
Balance as of June 29, 2018 | $ | 1,165 | ||
|
|
The Tax Reform Act containsmanagement expected it was more likely than not that such subsidiary would realize profits in subsequent fiscal years so that the loss carryforwards could be partially utilized. Consequently, as of June 28, 2019, such subsidiary have assessed and set up a number of provisions that may impact us in future years. Sincepartial valuation allowance for the Tax Reform Act was recently finalized and ongoing guidance and accounting interpretation is expected over the
next twelve months, the Company has made certain provisional accounting estimates, as permitted under Staff Accounting Bulletin No. 118, and continued to analyze its accounting policies in this area. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the Tax Reform Act will be applied or otherwise administered that is different from the Company’s interpretation.
As the Company completes its analysis of the Tax Reform Act, collects and prepares necessary data, and interprets any additional guidance, it may make adjustments to provisional amounts that it has recorded that may be material in the period in which the adjustments are made. The final accounting analysis will occur no later than one year from the date the Tax Reform Act was enacted.
Currently, the Company has completed its assessment of the impact from the Tax Reform Act. The Company applied the new corporate tax rate to compute its current income tax and remeasured its deferred tax assets at the same level as in fiscal year 2018. However, in fiscal year 2020, such subsidiary in the U.S. generated net operating loss and liabilities formanagement expected that such subsidiary would continue to have net operating losses in the foreseeable future; therefore, management believes it is more likely than not that all U.S. subsidiaries as of June 29, 2018 to reflect the lower rate expected to apply when these temporary differences are utilized. The remeasurement resulted in (1) a reduction in current income tax expenses of $0.1 million and (2) a reduction in deferred tax assets of $0.4 million.
such subsidiary will not be utilized. Thus, a full valuation allowance of $ 2.1 million for the deferred tax assets was set up as of June 26, 2020.
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Beginning balance | $ | 1,420 | $ | 1,420 | $ | 1,420 | ||||||
Additions during the year | 25 | — | — | |||||||||
Reductions for tax positions of prior years | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Ending balance | $ | 1,445 | $ | 1,420 | $ | 1,420 | ||||||
|
|
|
|
|
|
|
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Beginning balance | $ | 1,323 | $ | 1,445 | $ | 1,420 | ||||||
Additions during the year | 157 | 235 | 25 | |||||||||
Release of tax positions of prior years | (510 | ) | (357 | ) | — | |||||||
Ending balance | $ | 970 | $ | 1,323 | $ | 1,445 | ||||||
stock method. Dilutive ordinary equivalent shares consist of share options, restricted share units and performance share units. The earnings per ordinary share was calculated as follows:
Years Ended | ||||||||||||
(amount in thousands except per share amounts) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Net income attributable to shareholders | $ | 84,167 | $ | 97,115 | $ | 61,897 | ||||||
|
|
|
|
|
| |||||||
Weighted-average number of ordinary shares outstanding (thousands of shares) | 37,257 | 36,927 | 35,857 | |||||||||
Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares) | 778 | 925 | 1,015 | |||||||||
|
|
|
|
|
| |||||||
Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares) | 38,035 | 37,852 | 36,872 | |||||||||
|
|
|
|
|
| |||||||
Basic earnings per ordinary share | $ | 2.26 | $ | 2.63 | $ | 1.73 | ||||||
Diluted earnings per ordinary share | $ | 2.21 | $ | 2.57 | $ | 1.68 |
Years Ended | ||||||||||||
(amount in thousands except per share amounts) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Net income attributable to shareholders | $ | 113,479 | $ | 120,955 | $ | 84,167 | ||||||
Weighted-average number of ordinary shares outstanding (thousands of shares) | 36,908 | 36,798 | 37,257 | |||||||||
Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares) | 757 | 617 | 778 | |||||||||
Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares) | 37,665 | 37,415 | 38,035 | |||||||||
Basic earnings per ordinary share | $ | 3.07 | $ | 3.29 | $ | 2.26 | ||||||
Diluted earnings per ordinary share | $ | 3.01 | $ | 3.23 | $ | 2.21 | ||||||
Outstanding performance share units excluded from the computation of diluted earnings per ordinary share (thousands of shares) (1) | 99 | 401 | 284 |
|
6. | Cash, cash equivalents and |
Fair Value | ||||||||||||||||
(amount in thousands) | Carrying Cost | Unrealized Loss | Cash and Cash Equivalents | Marketable Securities | ||||||||||||
As of June 29, 2018 | ||||||||||||||||
Cash | $ | 146,778 | $ | — | $ | 146,778 | $ | — | ||||||||
Cash equivalents | 11,324 | — | 11,324 | — | ||||||||||||
Corporate bonds and commercial papers | 128,441 | (736 | ) | — | 127,705 | |||||||||||
U.S. agency and U.S. treasury securities | 43,734 | (324 | ) | — | 43,410 | |||||||||||
Sovereign and municipal securities | 3,185 | (31 | ) | — | 3,154 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 333,462 | $ | (1,091 | ) | $ | 158,102 | $ | 174,269 | |||||||
|
|
|
|
|
|
|
|
Fair Value | ||||||||||||||||
(amount in thousands) | Carrying Cost | Unrealized Gain (Loss) | Cash and Cash Equivalents | Marketable Securities | ||||||||||||
As of June 30, 2017 | ||||||||||||||||
Cash | $ | 131,240 | $ | — | $ | 131,240 | $ | — | ||||||||
Cash equivalents | 2,585 | — | 2,585 | — | ||||||||||||
Corporate bonds and commercial papers | 98,247 | 27 | — | 98,274 |
Fair Value | ||||||||||||||||
(amount in thousands) | Carrying Cost | Unrealized Gain (Loss) | Cash and Cash Equivalents | Marketable Securities | ||||||||||||
U.S. agency and U.S. treasury securities | 50,768 | (102 | ) | — | 50,666 | |||||||||||
Sovereign and municipal securities | 2,507 | 3 | — | 2,510 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 285,347 | $ | (72 | ) | $ | 133,825 | $ | 151,450 | |||||||
|
|
|
|
|
|
|
|
Fair Value | ||||||||||||||||||||
(amount in thousands) | Carrying Cost | Unrealized Gain/ (Loss) | Cash and Cash Equivalents | Marketable Securities | Other Investments | |||||||||||||||
As of June 26, 2020 | ||||||||||||||||||||
Cash | $ | 218,117 | $ | — | $ | 218,117 | $ | — | $ | — | ||||||||||
Cash equivalents | 7,313 | — | 7,313 | — | — | |||||||||||||||
Liquidity funds | 41,051 | — | — | — | 41,051 | |||||||||||||||
Certificates of deposit and time deposits | 11,800 | — | — | — | 11,800 | |||||||||||||||
Corporate debt securities | 159,220 | 948 | — | 160,168 | — | |||||||||||||||
U.S. agency and U.S. Treasury securities | 49,130 | 544 | — | 49,674 | — | |||||||||||||||
Total | $ | 486,631 | $ | 1,492 | $ | 225,430 | $ | 209,842 | $ | 52,851 | ||||||||||
As of June 28, 2019 | ||||||||||||||||||||
Cash | $ | 178,019 | $ | — | $ | 178,019 | $ | — | $ | — | ||||||||||
Cash equivalents | 2,820 | — | 2,820 | — | — | |||||||||||||||
Liquidity funds | 20,552 | — | — | — | 20,552 | |||||||||||||||
Certificates of deposit and time deposits | 35,028 | — | — | — | 35,028 | |||||||||||||||
Corporate debt securities | 130,959 | 297 | — | 131,256 | — | |||||||||||||||
U.S. agency and U.S. Treasury securities | 69,552 | 105 | — | 69,657 | — | |||||||||||||||
Total | $ | 436,930 | $ | 402 | $ | 180,839 | $ | 200,913 | $ | 55,580 | ||||||||||
(amount in thousands) | Carrying Cost | Fair Value | ||||||
Due within one year | $ | 28,216 | $ | 28,193 | ||||
Due between one to three years | 147,144 | 146,076 | ||||||
|
|
|
| |||||
Total | $ | 175,360 | $ | 174,269 | ||||
|
|
|
|
26, 2020:
June 26, 2020 | June 28, 2019 | |||||||||||||||
(amount in thousands) | Carrying Cost | Fair Value | Carrying Cost | Fair Value | ||||||||||||
Due within one year | $ | 76,127 | $ | 76,196 | $ | 69,746 | $ | 69,830 | ||||||||
Due between one to five years | 132,223 | 133,646 | 130,765 | 131,083 | ||||||||||||
Total | $ | 208,350 | $ | 209,842 | $ | 200,511 | $ | 200,913 | ||||||||
recognized a realized gain of $0.1 million from sales and maturities of
As of June 29, 2018 and June 30, 2017, cash, cash equivalents, and marketable securities included28, 2019.
7. | Fair value of financial instruments |
|
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(amount in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of June 29, 2018 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | — | $ | 11,324 | $ | — | $ | 11,324 | ||||||||
Corporate bonds and commercial papers | — | 127,705 | — | 127,705 | ||||||||||||
U.S. agency and U.S. treasury securities | — | 43,410 | — | 43,410 | ||||||||||||
Sovereign and municipal securities | — | 3,154 | — | 3,154 | ||||||||||||
Derivative assets | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | — | $ | 185,593 | $ | — | $ | 185,593 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 1,745 | (1) | $ | — | $ | 1,745 | |||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | — | $ | 1,745 | $ | — | $ | 1,745 | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(amount in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of June 30, 2017 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | — | $ | 2,585 | $ | — | $ | 2,585 | ||||||||
Corporate bonds and commercial papers | — | 98,274 | — | 98,274 | ||||||||||||
U.S. agency and U.S. treasury securities | — | 50,666 | — | 50,666 | ||||||||||||
Sovereign and municipal securities | — | 2,510 | — | 2,510 | ||||||||||||
Derivative assets | — | 15 | (2) | — | 15 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | — | $ | 154,050 | $ | — | $ | 154,050 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | — | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(amount in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of June 26, 2020 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | — | $ | 7,313 | $ | — | $ | 7,313 | ||||||||
Liquidity funds | — | 41,051 | — | 41,051 | ||||||||||||
Certificates of deposit and time deposits | — | 11,800 | — | 11,800 | ||||||||||||
Corporate debt securities | — | 160,168 | — | 160,168 | ||||||||||||
U.S. agency and U.S. Treasury securities | — | 49,674 | — | 49,674 | ||||||||||||
Derivative assets | — | 2,230 | (1) | — | 2,230 | |||||||||||
Total | $ | — | $ | 272,236 | $ | — | $ | 272,236 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 5,273 | (2) | $ | — | $ | 5,273 | |||||||
Total | $ | — | $ | 5,273 | $ | — | $ | 5,273 | ||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
(amount in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of June 28, 2019 | ||||||||||||||||
Assets | ||||||||||||||||
Cash equivalents | $ | — | $ | 2,820 | $ | — | $ | 2,820 | ||||||||
Liquidity funds | — | 20,552 | — | 20,552 | ||||||||||||
Certificates of deposit and time deposits | — | 35,028 | — | 35,028 | ||||||||||||
Corporate debt securities | — | 131,256 | — | 131,256 | ||||||||||||
U.S. agency and U.S. Treasury securities | — | 69,657 | — | 69,657 | ||||||||||||
Derivative assets | — | 2,201 | (3) | 2,201 | ||||||||||||
Total | $ | — | $ | 261,514 | $ | — | $ | 261,514 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 2,591 | (4) | $ | — | $ | 2,591 | |||||||
Total | $ | — | $ | 2,591 | $ | — | $ | 2,591 | ||||||||
(1) | Foreign currency forward contracts with a notional amount of $125.0 million and Canadian dollars of 0.6 million, and option contract with a notional amount of $1.0 million. |
(2) | Interest rate swap agreements with an aggregate notional amount of $125.1 million. |
(3) | Foreign currency forward contracts with notional amount of |
(4) | Interest rate swap agreement with a notional amount of |
|
financial instrumentsFinancial Instruments
As of June 29, 2018 and June 30, 2017, the Company had no foreign currency forward contracts designated as cash flow hedges. During the year ended June 30, 2017, the Company discontinued cash flow hedges and recognized a gain from unwinding foreign currency forward contracts of $0.3 million as foreign exchange gain, net in the consolidated statements of operations and comprehensive income.
As of June 29, 2018, the Company had five outstanding foreign currency forward contracts with notional amount of $7.0 million, four outstanding foreign currency option contracts with notional amount of $30.0 million and one foreign currency forward contract with notional amount of Canadian dollars 0.4 million with maturity dates from July through October 2018. These foreign currency forward and option contracts were not designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar value of forecasted transactions denominated in Thai baht and Canadian dollars. Duringdollars with counterparties that meet the year ended June 29, 2018,Company’s minimum credit quality standard.
|
(amount in thousands) | As of June 29, 2018 | As of June 30, 2017 | ||||||
Trade accounts receivable | $ | 246,972 | $ | 264,389 | ||||
Less: Allowance for doubtful account | (60 | ) | (40 | ) | ||||
|
|
|
| |||||
Trade accounts receivable, net | $ | 246,912 | $ | 264,349 | ||||
|
|
|
|
|
(amount in thousands) | As of June 29, 2018 | As of June 30, 2017 | ||||||
Raw materials | $ | 100,241 | $ | 88,640 | ||||
Work in progress | 121,797 | 105,732 | ||||||
Finished goods | 20,690 | 33,998 | ||||||
Goods in transit | 17,516 | 13,025 | ||||||
|
|
|
| |||||
260,244 | 241,395 | |||||||
Less: Inventory obsolescence | (2,557 | ) | (2,730 | ) | ||||
|
|
|
| |||||
Inventory, net | $ | 257,687 | $ | 238,665 | ||||
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As of June 28, 2019, the Company had 0 foreign currency forward contracts designated as cash flow hedges.
hedges are highly effective. In addition, the Company has placed $3.4 million of cash, net of foreign currency translation adjustment, for deferred consideration in an escrow account which is underdesignated and documented contemporaneously the Company’s control. However,hedging relationships involving these interest rate swaps. At least quarterly, the Company has contractually agreedperforms a qualitative effectiveness test on the interest rate swaps to remit this deferred considerationsupport the continued application of hedge accounting. As of June 26, 2020, the hedging relationship was determined to be highly effective based on the sellersperformance of Fabrinet UK, subject to the resolution of claims thata qualitative effectiveness testing. While the Company may make againstintends to continue to meet the funds with respect to indemnification and other claims, within 24 months fromconditions for hedge accounting, if hedges do not qualify as highly effective, the closing date ofchanges in the transaction.
The Company has accounted for this acquisition under the provisions of business combinations accounting, in accordance with Accounting Standards Codification Topic 805—Business Combinations. Accordingly, the estimated fair value of the acquisition consideration was allocatedderivatives used as hedges would be reflected in earnings. From September 27, 2019, any gains or losses related to these interest rate swaps will be recorded in AOCI in the assets acquired and the liabilities assumedconsolidated balance sheets, with a portion reclassified from AOCI into earnings at each reporting period based on their respective fair values oneither the acquisition date. The Company has made certain estimatesaccrued interest amount or the interest payment.
The allocation of consideration to the individual net assets acquired was finalizedall changes in the fourth quarterfair value of fiscal year 2017. As the functional currency of Fabrinet UK is pound sterling (“GBP”), forthese interest rate swaps were reflected in earnings. During the year
Year Ended | ||||||||||
(amount in thousands) | Financial statements line item | June 26, 2020 | June 28, 2019 | |||||||
Derivatives gain (loss) recognized in other comprehensive income: | ||||||||||
Foreign currency forward contracts | Other comprehensive income | $ | 1,081 | $ | — | |||||
Interest rate swaps | Other comprehensive income | (910 | ) | — | ||||||
Total derivatives gain recognized in other comprehensive income | $ | 171 | $ | — | ||||||
Derivatives loss gain) reclassified from accumulated other comprehensive income into earnings:( | ||||||||||
Foreign currency forward contracts | Cost of revenues | $ | 2,512 | $ | — | |||||
Foreign currency forward contracts | Selling, general and administrative expenses | 105 | — | |||||||
Foreign currency forward contracts | Foreign exchange gain (loss), net | (998 | ) | — | ||||||
Interest rate swaps | Interest expense | (1,220 | ) | — | ||||||
Total derivatives loss reclassified from accumulated other comprehensive income into earnings | $ | 399 | $ | — | ||||||
Change in net unrealized gain on derivative instruments | $ | 570 | $ | — | ||||||
June 26, 2020 | June 28, 2019 | |||||||||||||||
(amount in thousands) | Derivative Assets | Derivative Liabilities | Derivative Assets | Derivative Liabilities | ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Foreign currency forward and option contracts | $ | 9 | $ | (611 | ) | $ | 2,201 | $ | — | |||||||
Interest rate swaps | — | — | — | (2,591 | ) | |||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Foreign currency forward contracts | 2,814 | (83 | ) | — | — | |||||||||||
Interest rate swaps | — | (5,172 | ) | — | — | |||||||||||
Derivatives, gross balances | 2,823 | (5,866 | ) | 2,201 | (2,591 | ) | ||||||||||
Derivatives, gross balances offset in the balance sheet | (593 | ) | 593 | — | — | |||||||||||
Derivatives, net balances | $ | 2,230 | $ | (5,273 | ) | $ | 2,201 | $ | (2,591 | ) | ||||||
Duringderivative financial instruments in the consolidated balance sheets as follows:
Derivative Financial Instruments | Balance Sheet Line Item | |
Fair Value of Derivative Assets | Other current assets | |
Fair Value of Derivative Liabilities | Accrued expenses |
8. | Trade accounts receivable, net |
(amount in thousands) | As of June 26, 2020 | As of June 28, 2019 | ||||||
Trade accounts receivable | $ | 273,001 | $ | 260,698 | ||||
Less: Allowance for doubtful account | (336 | ) | (96 | ) | ||||
Trade accounts receivable, net | $ | 272,665 | $ | 260,602 | ||||
9. | Inventories |
(amount in thousands) | As of June 26, 2020 | As of June 28, 2019 | ||||||
Raw materials | $ | 141,522 | $ | 113,321 | ||||
Work in progress | 136,344 | 141,730 | ||||||
Finished goods | 17,950 | 24,916 | ||||||
Goods in transit | 13,970 | 13,645 | ||||||
Inventories | $ | 309,786 | $ | 293,612 | ||||
10. | Other receivable |
11. | Restricted cash |
12. | Leases |
As of June 28, 2019 | ||||||||||||
(amount in thousands) | Operating leases | Finance leases | Total | |||||||||
2020 | $ | 1,746 | $ | 398 | $ | 2,144 | ||||||
2021 | 1,342 | 102 | 1,444 | |||||||||
2022 | 1,219 | — | 1,219 | |||||||||
2023 | 1,172 | — | 1,172 | |||||||||
Thereafter | 230 | — | 230 | |||||||||
Total future minimum operating lease payments | $ | 5,709 | $ | 500 | $ | 6,209 | ||||||
The Company’s allocationJune 29, 2019 on the consolidated balance sheets:
Impact of Adopting ASC 842 | ||||||||||||
(amount in thousands) | Balance at June 28, 2019 | Adjustment | Balance at June 29, 2019 | |||||||||
Assets | ||||||||||||
Operating lease ROU assets | $ | — | $ | 5,370 | $ | 5,370 | ||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Operating lease liabilities, current | $ | — | $ | 1,601 | $ | 1,601 | ||||||
Operating lease liabilities, non-current | $ | — | $ | 3,769 | $ | 3,769 |
(amount in thousands) | ||||
2021 | $ | 2,313 | ||
2022 | 2,314 | |||
2023 | 2,200 | |||
2024 | 1,176 | |||
2025 | 288 | |||
Thereafter | 157 | |||
Total undiscounted lease payments | 8,448 | |||
Less imputed interest | (596 | ) | ||
Total present value of lease liabilities | $ | 7,852 | (1) | |
(1) | Includes current portion of operating lease liabilities of $2.0 million. |
(amount in thousands) | Purchase price allocation | |||
Cash | $ | 474 | ||
Accounts receivable | 4,064 | |||
Inventory | 3,490 | |||
Other current assets | 427 | |||
Property, plant and equipment | 5,678 | |||
Intangibles | 4,492 | |||
Goodwill | 3,883 | |||
Othernon-current assets | 516 | |||
Current liabilities | (6,796 | ) | ||
Deferred tax liabilities | (1,148 | ) | ||
Othernon-current liabilities | (1,563 | ) | ||
|
| |||
Total fair value of assets acquired and liabilities assumed | $ | 13,517 | ||
|
| |||
Total purchase price, net of cash acquired | $ | 13,043 | ||
|
|
year ended June 26, 2020, June 28, 2019 and June 29, 2018 was $2.1 million, $1.9 million and $1.8 million, respectively. Rental expense for short-term leases for the year ended June 26, 2020, June 28, 2019 and June 29, 2018 was $0.2 million, $0.1 million and de minimis amount, respectively.
During the year ended June 30, 2017, the Company incurred approximately $1.5 million in transaction costssheets.
During the year ended June 29, 2018, there were no transaction costs related to the acquisition.
Pro forma results of operations for the acquisition have not been presented as they were not material to the Company’s results of operations.
Identifiable intangibles
The acquired identifiable intangible assets include customer relationships and backlog. The fair value of the identified intangible assets was determined based on the multi-period excess earnings method, which applied the following key assumptions:
| As of June 26, 2020 | |||
Weighted-average remaining lease term (in years) | ||||
Operating leases | 3.3 | |||
Finance leases | 0.3 | |||
Weighted-average discount rate | ||||
Operating leases | 3.7 | % | ||
Finance leases | 4.1 | % |
Customer relationships represent
Backlog represents the fair value of sales orders backlog as of the valuation date. The fair value of $0.1 million will be amortized, using an accelerated amortization method, over the respective estimated useful life of three years.
Goodwill
Goodwill arising from the acquisition is primarily attributable to the ability to expand future productsoperating and services and the assembled workforce. Goodwill is not deductible for tax purposes.
(amount in thousands) | Year Ended June 26, 2020 | |||
Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating cash flows from operating leases | $ | 2,326 | ||
Financing cash flows from finance leases | $ | 400 | ||
ROU assets obtained in exchange for lease liabilities | $ | 8,068 | ||
Finance lease assets | $ | 80 |
13. |
|
(amount in thousands) | Land and Land Improvements | Building and Building Improvements | Manufacturing Equipment | Office Equipment | Motor Vehicles | Computers | Construction and Machinery Under Installation | Total | ||||||||||||||||||||||||
As of June 29, 2018 | ||||||||||||||||||||||||||||||||
Cost | $ | 45,080 | $ | 139,342 | $ | 141,869 | $ | 7,582 | $ | 456 | $ | 21,250 | $ | 8,762 | $ | 364,341 | ||||||||||||||||
Less: Accumulated depreciation | (6 | ) | (38,265 | ) | (86,989 | ) | (4,454 | ) | (334 | ) | (14,653 | ) | — | (144,701 | ) | |||||||||||||||||
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Net book value | $ | 45,074 | $ | 101,077 | $ | 54,880 | $ | 3,128 | $ | 122 | $ | 6,597 | $ | 8,762 | $ | 219,640 | ||||||||||||||||
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As of June 30, 2017 | ||||||||||||||||||||||||||||||||
Cost | $ | 39,096 | $ | 138,578 | $ | 127,085 | $ | 7,688 | $ | 534 | $ | 19,642 | $ | 6,058 | $ | 338,681 | ||||||||||||||||
Less: Accumulated depreciation | (2 | ) | (31,881 | ) | (72,130 | ) | (4,163 | ) | (376 | ) | (13,248 | ) | — | (121,800 | ) | |||||||||||||||||
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Net book value | $ | 39,094 | $ | 106,697 | $ | 54,955 | $ | 3,525 | $ | 158 | $ | 6,394 | $ | 6,058 | $ | 216,881 | ||||||||||||||||
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On December 23, 2016, the Company entered into an agreement to purchase a parcel
(amount in thousands) | Land and Land Improvements | Building and Building Improvements | Manufacturing Equipment | Office Equipment | Motor Vehicles | Computers | Construction and Machinery Under Installation | Total | ||||||||||||||||||||||||
As of June 26, 2020 | ||||||||||||||||||||||||||||||||
Cost | $ | 45,099 | $ | 145,912 | $ | 198,036 | $ | 5,600 | $ | 939 | $ | 16,766 | $ | 12,657 | $ | 425,009 | ||||||||||||||||
Less: Accumulated depreciation | (17 | ) | (51,393 | ) | (127,397 | ) | (4,135 | ) | (678 | ) | (12,273 | ) | — | (195,893 | ) | |||||||||||||||||
Less: Impairment reserve | — | — | (840 | ) | — | — | (2 | ) | — | (842 | ) | |||||||||||||||||||||
Net book value | $ | 45,082 | $ | 94,519 | $ | 69,799 | $ | 1,465 | $ | 261 | $ | 4,491 | $ | 12,657 | $ | 228,274 | ||||||||||||||||
As of June 28, 2019 | ||||||||||||||||||||||||||||||||
Cost | $ | 45,080 | $ | 142,909 | $ | 163,795 | $ | 5,029 | $ | 870 | $ | 13,987 | $ | 10,815 | $ | 382,485 | ||||||||||||||||
Less: Accumulated depreciation | (11 | ) | (44,736 | ) | (110,980 | ) | (3,656 | ) | (658 | ) | (10,900 | ) | — | (170,941 | ) | |||||||||||||||||
Less: Impairment reserve | — | — | (856 | ) | — | — | (2 | ) | — | (858 | ) | |||||||||||||||||||||
Net book value | $ | 45,069 | $ | 98,173 | $ | 51,959 | $ | 1,373 | $ | 212 | $ | 3,085 | $ | 10,815 | $ | 210,686 | ||||||||||||||||
(amount in thousands) | As of June 29, 2018 | As of June 30, 2017 | ||||||
Cost—Capital leases | $ | 2,481 | 2,725 | |||||
Less: Accumulated depreciation | (1,043 | ) | (856 | ) | ||||
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| |||||
Net book value | $ | 1,438 | 1,869 | |||||
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|
(amount in thousands) | As of June 26, 2020 | As of June 28, 2019 | ||||||
Cost—Finance leases | $ | 1,992 | $ | 2,034 | ||||
Less: Accumulated depreciation | (1,199 | ) | (1,090 | ) | ||||
Net book value | $ | 793 | $ | 944 | ||||
14. |
|
(amount in thousands) | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net | ||||||||||||
As of June 29, 2018 | ||||||||||||||||
Software | $ | 6,269 | $ | (4,324 | ) | $ | — | $ | 1,945 | |||||||
Customer relationships | 4,373 | (1,413 | ) | (42 | ) | 2,918 | ||||||||||
Backlog | 119 | (101 | ) | (1 | ) | 17 | ||||||||||
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Total intangibles | $ | 10,761 | $ | (5,838 | ) | $ | (43 | ) | $ | 4,880 | ||||||
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(amount in thousands) | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net | ||||||||||||
As of June 30, 2017 | ||||||||||||||||
Software | $ | 5,944 | $ | (3,850 | ) | $ | — | $ | 2,094 | |||||||
Customer relationships | 4,373 | (606 | ) | (88 | ) | 3,679 | ||||||||||
Backlog | 119 | (51 | ) | (1 | ) | 67 | ||||||||||
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Total intangibles | $ | 10,436 | $ | (4,507 | ) | $ | (89 | ) | $ | 5,840 | ||||||
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(amount in thousands) | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net | ||||||||||||
As of June 26, 2020 | ||||||||||||||||
Software | $ | 8,317 | $ | (5,577 | ) | $ | — | $ | 2,740 | |||||||
Customer relationships | 4,373 | (2,691 | ) | (110 | ) | 1,572 | ||||||||||
Backlog | 119 | (119 | ) | — | — | |||||||||||
Total intangibles | $ | 12,809 | $ | (8,387 | ) | $ | (110 | ) | $ | 4,312 | ||||||
(amount in thousands) | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net | ||||||||||||
As of June 28, 2019 | ||||||||||||||||
Software | $ | 6,582 | $ | (4,868 | ) | $ | — | $ | 1,714 | |||||||
Customer relationships | 4,373 | (2,096 | ) | (104 | ) | 2,173 | ||||||||||
Backlog | 119 | (119 | ) | — | — | |||||||||||
Total intangibles | $ | 11,074 | $ | (7,083 | ) | $ | (104 | ) | $ | 3,887 | ||||||
As of June 29, 2018, respectively.
(amount in thousand) | ||||
2019 | $ | 1,462 | ||
2020 | 1,038 | |||
2021 | 892 | |||
2022 | 657 | |||
2023 | 400 | |||
Thereafter | 431 | |||
|
| |||
Total | $ | 4,880 | ||
|
|
(amount in thousand) | ||||
2021 | $ | 1,320 | ||
2022 | 1,542 | |||
2023 | 663 | |||
2024 | 434 | |||
2025 | 205 | |||
Thereafter | 148 | |||
Total | $ | 4,312 | ||
15. |
|
The changes in |
(amount in thousands) | Goodwill | |||
Balance as of June 30, 2017 | $ | 3,806 | ||
Foreign currency translation adjustment | 22 | |||
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| |||
Balance as of June 29, 2018 | $ | 3,828 | ||
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Goodwill is not deductible for tax purposes. Goodwill is reviewed annually for impairment or more frequently whenever changes or circumstances indicate the carrying amount of goodwill may not be recoverable. were as follows:
(amount in thousands) | ||||
Balance as of June 28, 2019 | $ | 3,705 | ||
Impairment charge | (3,514 | ) | ||
Foreign currency translation adjustment | (191 | ) | ||
Balance as of June 26, 2020 | $ | — | ||
13. Borrowings
16. | Borrowings |
Rate(1) | Conditions | Maturity | As of June 29, 2018 | As of June 30, 2017 | ||||||||||||
Short-term borrowings: | ||||||||||||||||
Revolving borrowing: | ||||||||||||||||
LIBOR + 1.75% per annum | | Repayable in 1 to 6 months |
| July 2017 | (2) | $ | — | $ | 34,000 | |||||||
Short-term borrowings from bank: | ||||||||||||||||
Bank of England base rate +1.85% per annum | | Repayable based on credit terms of secured | | — | 1,003 | |||||||||||
Current portion of long-term borrowings | 3,250 | 13,600 | ||||||||||||||
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| |||||||||||||
3,250 | 48,603 | |||||||||||||||
Less: Unamortized debt issuance costs | — | (201 | ) | |||||||||||||
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$ | 3,250 | $ | 48,402 | |||||||||||||
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Long-term borrowings: | ||||||||||||||||
Term loan borrowing: | ||||||||||||||||
LIBOR + 1.75% per annum | | Repayable in quarterly installments |
| May 2019 | (2) | $ | — | $ | 36,400 | |||||||
LIBOR + 1.50% per annum | | Repayable in quarterly installments |
| June 2023 | (2) | 64,188 | — | |||||||||
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|
| |||||||||||||
64,188 | 36,400 | |||||||||||||||
Less: Current portion | (3,250 | ) | (13,600 | ) | ||||||||||||
Less:Unamortized debt issuance costs | — | (99 | ) | |||||||||||||
|
|
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| |||||||||||||
Non-current portion of long-term borrowings | $ | 60,938 | $ | 22,701 | ||||||||||||
|
|
|
|
Rate | Conditions | Maturity | As of June 26, 2020 | As of June 28, 2019 | ||||||||||||
Long-term borrowings, current portion, net: | ||||||||||||||||
Long-term borrowings, current portion | $ | 12,188 | $ | 3,250 | ||||||||||||
Less: Unamortized debt issuance costs—current portion | (32 | ) | — | |||||||||||||
Long-term borrowings, current portion, net | $ | 12,156 | 3,250 | |||||||||||||
Long-term borrowings, non-current portion, net: | ||||||||||||||||
Term loan borrowings: | ||||||||||||||||
1-month LIBOR +1.50% per annum(1) | Repayable in quarterly installments | | June 2023 | $ | — | $ | 60,938 | |||||||||
3-month LIBOR +1.35% per annum(1) | Repayable in quarterly installments | | June 2024 | 51,797 | — | |||||||||||
Less: Current portion | (12,188 | ) | (3,250 | ) | ||||||||||||
Less: Unamortized debt issuance costs— non-current portion | (95 | ) | — | |||||||||||||
Long-term borrowings, non-current portion, net | $ | 39,514 | $ | 57,688 | ||||||||||||
(1) |
We have entered into interest rate swaps that effectively fix a series of our future interest payments on our term loans. Refer to Note 7. |
|
Years ended | ||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | ||||||
Opening net book amount | $ | 36,400 | $ | 54,500 | ||||
Additional loan during the period | 39,000 | — | ||||||
Repayment during the period | (11,212 | ) | (18,100 | ) | ||||
|
|
|
| |||||
Closing net book amount | $ | 64,188 | $ | 36,400 | ||||
|
|
|
|
Years ended | ||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | ||||||
Opening balance | $ | 60,938 | $ | 64,188 | ||||
Borrowings during the period | 60,938 | — | ||||||
Repayments during the period | (70,079 | ) | (3,250 | ) | ||||
Closing balance | $ | 51,797 | $ | 60,938 | ||||
(amount in thousand) | ||||
2019 | $ | 3,250 | ||
2020 | 3,250 | |||
2021 | 3,250 | |||
2022 | 3,250 | |||
2023 | 51,188 | |||
|
| |||
Total | $ | 64,188 | ||
|
|
(amount in thousand) | ||||
2021 | $ | 12,188 | ||
2022 | 15,233 | |||
2023 | 12,188 | |||
2024 | 12,188 | |||
Total | $ | 51,797 | ||
facilities agreements:
On February 26, 2015, the Company entered into the Second Amendment to the Facility Agreement. The amendment extended the availability period for draws on the term loan facility from May 21, 2015 to July 31, 2015. It also allowed the Company, upon the satisfaction of certain conditions, to designate from
The Company fully drew down the term loan facility of $50.0 million in fiscal year 2016. As of June 30, 2017, $34.0 million of revolving borrowing and $36.4 million of term loan borrowing was outstanding under the Facility Agreement. Borrowings under the revolving credit facility are classified as current liabilities in the audited consolidated balance sheet as the Company has the periodic option to renew or pay, all or a portion of, the outstanding balance at the end of the maturity date, which is in the range of one to six months, without premium or penalty, upon notice to the administrative agent.
Loans under the Facility Agreement bear interest, at Fabrinet’s option, at a rate per annum equal to a LIBOR rate plus a spread of 1.75% to 2.50%, or a base rate, determined in accordance with the Facility Agreement, plus a spread of 0.75% to 1.50%, in each case with such spread determined based on Fabrinet’s consolidated total leverage ratio for the preceding four fiscal quarter period. Interest is due and payable quarterly in arrears for loans bearing interest at the base rate and at the end of an interest period (or at each three-month interval in the case of loans with interest periods greater than three months) in the case of loans bearing interest at the LIBOR rate.
Fabrinet’s obligations under the Facility Agreement are guaranteed by certain of its existing and future direct material subsidiaries. In addition, the Facility Agreement is secured by Fabrinet’s present and future accounts receivable, deposit accounts and cash, and a pledge of the capital stock of certain of Fabrinet’s direct subsidiaries. Fabrinet is required to maintain at least $40.0 million of cash, cash equivalents, and marketable securities at financial institutions located in the United States. Further, Fabrinet is required to maintain any of its deposits accounts or securities accounts with balances in excess of $10.0 million in a jurisdiction where a control agreement, or the equivalent under the local law, can be effected.
The Facility Agreement contains customary affirmative and negative covenants. Negative covenants include, among other things, limitations on liens, indebtedness, investments, mergers, sales of assets, changes in the nature of the business, dividends and distributions, affiliate transactions and capital
expenditures. The Facility Agreement contains financial covenants requiring Fabrinet to maintain: (i) a minimum tangible net worth of not less than $200.0 million plus 50% of quarterly net income, exclusive of quarterly losses; (ii) a minimum debt service coverage ratio of not less than 1.50:1.00; (iii) a maximum senior leverage ratio of not more than 2.50:1.00; and (iv) a minimum quick ratio of not less than 1.10:1.00. Each of these financial covenants is calculated on a consolidated basis for the consecutive four fiscal quarter period then ended.
The Facility Agreement also contains customary events of default including, among other things, payment defaults, breaches of covenants or representations and warranties, cross-defaults with certain other indebtedness, bankruptcy and insolvency events and change in control of Fabrinet, subject to grace periods in certain instances. Upon an event of default, the lenders may terminate their commitments, declare all or a portion of the outstanding obligations payable by Fabrinet to be immediately due and payable and exercise other rights and remedies provided for under the Facility Agreement.
On June 4, 2018 the Company entered into the Fifth Amendment to the Facility Agreement to (i) reducereduced the revolving commitments thereunder from $150.0 million to $25.0 million, (ii) extendrefinanced the termination date ofoutstanding amounts under the revolving commitments from May 22, 2019 to June 4, 2023, (iii) refinance the then-existingloan and term loan and revolving loans under the Facility Agreementfacilities into a $65.0 million term loan which was to be repaid in quarterly installments through the maturity date of June 4, 2023, and (iv) reduce(iii) reduced the applicable interest rate margins and commitment fees. Term loans shall be repaid in quarterly installments, beginning on June 30, 2018, with the remaining outstanding principal and accrued and unpaidThe term loan bore interest, being due and payable on June 4, 2023. After giving effect to the amendment, $65.0 million aggregate principal amount of term loans and no revolving loans were outstanding under the Facility Agreement. In addition, the Fifth Amendment to the Facility Agreement contains an accordion feature permitting the Company to request an increase in the revolving loan facility to provide up to an aggregate of $200.0 million in additional commitments, subject to customary terms and conditions, and provided that no default or event of default exists at the time of such request. The Fifth Amendment is considered debt extinguishment of which the Company recognized interest expenses of $0.1 million from remaining unamortized debt issuance costs in consolidated statements of operations and comprehensive income. As of June 29, 2018, $64.2 million aggregate principal amount of term loans and no revolving loans were outstanding under the Facility Agreement.
After the Fifth Amendment, loans under the Facility Agreement bear interest, at Fabrinet’sCompany’s option, at a rate per annum equal to a LIBOR rate plus a spread of 1.50% to 2.25%, or a base rate plus a spread of 0.50% to 1.25%, determined in accordance with. During the Facility Agreement in each case with such spread determined based on Fabrinet’s consolidated total leverage ratio for the preceding four fiscal quarter period.
Fabrinet’s obligations under the Facility Agreement are guaranteed by certain of its existingyear
Moreover, the Fifth Amendment of Facility Agreement amends customary affirmative and negative covenants. Negative covenants include, among other things, limitations on liens, indebtedness, investments, mergers, sales of assets, changes in the nature of the business, dividends and distributions, affiliate transactions and capital expenditures. The Facility Agreement contains financial covenants requiring Fabrinet to maintain: (1) a minimum tangible net worth of not less than $338.0 million plus 50% of quarterly net income after June 30, 2018, exclusive of quarterly losses; (2) a minimum debt service coverage ratio of not less than 1.50:1.00; (3) a maximum total leverage ratio of not more than 2.50:1.00; and (4) a minimum quick ratio of not less than 1.10:1.00. Each of these financial covenants is calculated on a consolidated basis for the consecutive four fiscal quarter period then ended. As of June 29, 2018,28, 2019, the Company was in compliance with all covenants under the Facility Agreement.
Fabrinet intends to use the proceedsrecorded $0.5 million and $2.4 million, respectively, of the credit line to finance its future expansion in the United States and Thailand, and for general corporate purposes including mergers and acquisitions of complementary manufacturing businesses or technology, although Fabrinet has no current commitments with respect to any such acquisitions.
On July 24, 2017, the Company entered into an interest rate swap agreement (the “Swap Agreement”), which the Company did not designate as hedging instruments. The Swap Agreement was used to mitigate interest rate risk and improve the interest rate profile of the Company’s debt obligations. The terms of the Swap Agreement effectively converted the floating interest rate of the term loans under the Facility Agreement to the fixed interest rate of 1.55% per annum through maturity of the term loan in May 2019. On June 4, 2018, the Company terminated the Swap Agreementexpense in connection with entering into the Fifth Amendment to the Facility Agreement. During the year ended June 29, 2018, the Company included a net gain of $0.1 million from the settlement of the Swap Agreement as interest expenses in the consolidated statements of operations and comprehensive income.
Short-term borrowings from bank
In connection with the acquisition of Fabrinet UK in the first quarter of fiscal year 2017, the Company assumed a secured borrowing agreement. In the first quarter of fiscal year 2018,this term loan.
Undrawn available credit facilities classified by available period of future borrowing as of June 29, 2018 and June 30, 2017 were as follows:
(amount in thousands) | June 29, 2018 | June 30, 2017 | ||||||
Expiring within one year | $ | — | $ | 1,965 | ||||
Expiring beyond one year | $ | 25,000 | $ | 116,000 |
17. |
|
(amount in thousands) | As of June 29, 2018 | As of June 30, 2017 | ||||||
Balance, beginning of the fiscal year | $ | 8,488 | $ | 6,684 | ||||
Charged to selling, general and administrative expenses in the consolidated statements of operations and comprehensive income | 1,674 | 1,804 | ||||||
|
|
|
| |||||
Balance, end of the fiscal year | $ | 10,162 | $ | 8,488 | ||||
|
|
|
|
Years Ended | ||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | ||||||
Changes in severance liabilities | ||||||||
Balance, beginning of the fiscal year | $ | 15,473 | $ | 10,390 | ||||
Current service cost | $ | 1,907 | $ | 2,345 | ||||
Prior service cost (1) | — | 2,537 | ||||||
Interest cost | 462 | 352 | ||||||
Benefit paid | (48 | ) | (274 | ) | ||||
Actuarial ( loss on obligationgain ) | (117 | ) | 130 | |||||
Foreign currency translation | (4 | ) | (7 | ) | ||||
Balance, end of the fiscal year | $ | 17,673 | $ | 15,473 | ||||
Changes in plan assets | ||||||||
Balance, beginning of the fiscal year | $ | 317 | $ | 299 | ||||
Actual return on plan assets | $ | (34 | ) | $ | (7 | ) | ||
Employer contributions | 18 | 36 | ||||||
Benefit paid | — | — | ||||||
Foreign currency translation | (7 | ) | (11 | ) | ||||
Balance, end of the fiscal year | $ | 294 | $ | 317 | ||||
Underfunded status | $ | (17,379 | ) | $ | (15,156 | ) | ||
(1) | Prior service cost is the change in Projected Benefit Obligation resulting from changes to employee benefits from local law changes. |
(amount in thousands) | As of June 29, 2018 | As of June 30, 2017 | ||||||
Present value of defined benefit obligation | $ | 10,162 | $ | 8,488 | ||||
|
|
|
| |||||
Total | $ | 10,162 | $ | 8,488 | ||||
|
|
|
|
(amount in thousands) | As of June 26, 2020 | As of June 28, 2019 | ||||||
Non-current assets | $ | — | $ | 53 | ||||
Non-current liabilities | $ | 17,379 | $ | 15,209 |
(amount in thousands) | As of June 26, 2020 | As of June 28, 2019 | ||||||
Accumulated benefit obligations | $ | 11,864 | $ | 10,208 |
(amount in thousands) | Fair value measurement as of June 26, 2020 | |||||||||||
Total | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
Assets: | ||||||||||||
Other (1) | $ | 294 | $ | 160 | $ | 134 | ||||||
Total Assets | $ | 294 | $ | 160 | $ | 134 | ||||||
(amount in thousands) | Fair value measurement as of June 28, 2019 | |||||||||||
Total | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
Assets: | ||||||||||||
Other (1) | $ | 317 | $ | 183 | $ | 134 | ||||||
Total Assets | $ | 317 | $ | 183 | $ | 134 | ||||||
(1) | The “Other” category represents the bid value of the trustees’ insurance policy held with Old Mutual Wealth and the value of assets held with Royal London. |
Fund | % of Total | |||
Old Mutual Wealth Invesco Perpetual High Income | 38 | % | ||
Old Mutual Wealth Creation Balanced Portfolio | 17 | % | ||
Royal London Deposit Administration | 45 | % |
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Current service cost | $ | 1,751 | $ | 1,451 | $ | 842 | ||||||
Interest cost | 295 | 213 | 203 | |||||||||
Benefit paid | (3,212 | ) | — | (11 | ) | |||||||
Curtailment gain | 707 | — | — | |||||||||
Actuarial loss on obligation | 2,133 | 140 | 173 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,674 | $ | 1,804 | $ | 1,207 | ||||||
|
|
|
|
|
|
unobservable inputs and have been treated as Level 3 fair value measurement because the fair value of which is based on the previous year end observable value and other unobservable inputs such as declared rates of bonus plus an enhancement on the policy for this scheme.
Years Ended | ||||||||||
June 26, 2020 | June 28, 2019 | June 29, 2018 | ||||||||
Discount rate | ||||||||||
| 2.5% - 3.7% | |||||||||
Future salary increases | 3.5% - 10.0% | 3.5% - 10.0% |
Years Ended | ||||||
June 26, 2020 | June 28, 2019 | June 29, 2018 | ||||
Discount rate | 2.3% - 3.2% | 2.5% - 3.7% | 1.9% - 3.6% | |||
Expected long-term rate of return on assets | 2.1% | 1.6% | 1.9% |
18. | Share-based compensation |
|
Share-based compensation expense by type of award: Share options Restricted share units Performance share units Total share-based compensation expense Tax effect on share-based compensation expense Net effect on share-based compensation expense Cost of revenue Selling, general and administrative expense Total share-based compensation expense 29, 2018.29, 2018,26, 2020, June 30, 201728, 2019 and June 24, 201629, 2018 was as follows: Years Ended (amount in thousands) June 29,
2018 June 30,
2017 June 24,
2016 $ — $ — $ 16 17,143 22,412 9,911 5,438 4,095 — 22,581 26,507 9,927 — — — $ 22,581 $ 26,507 $ 9,927
2020
2019
2018 �� $ 16,555 $ 14,691 $ 17,143 5,648 2,466 5,438 22,203 17,157 22,581 — — — $ 22,203 $ 17,157 $ 22,581 Years Ended (amount in thousands) June 29,
2018 June 30,
2017 June 24,
2016 $ 6,784 $ 5,318 $ 1,979 15,797 21,189 7,948 $ 22,581 $ 26,507 $ 9,927
2020
2019
2018 $ 6,098 $ 5,656 $ 6,784 16,105 11,501 15,797 $ 22,203 $ 17,157 $ 22,581 not0t capitalize any share-based compensation expense as part of any asset costs during the years ended June 29, 2018,26, 2020, June 30, 201728, 2019 and June 24, 2016.Fabrinet maintainsfollowing equity incentive plans: the Amended and Restated 1999 Share OptionCompany’s shareholders approved Fabrinet’s 2020 Equity Incentive Plan (the “1999“2020 Plan”),. Upon the approval of the 2020 Plan, Fabrinet’s Amended and Restated 2010 Performance Incentive Plan (the “2010 Plan”) andwas simultaneously terminated. The 2020 Plan provides for the 2017 Inducement Equity Incentivegrant of equity awards thereunder with respect to (i) 1,700,000 ordinary shares, plus (ii) up to 1,300,000 ordinary shares that, as of immediately prior to the termination of the 2010 Plan, (the “2017 Inducement Plan”). The 1999 Plan,had been reserved but not issued pursuant to any awards granted under the 2010 Plan and 2017 Inducement Plan are collectively referrednot subject to as the “Share Option Plans”.Asany awards thereunder. Upon termination of June 29, 2018, there were no outstanding equity awards under the 1999 Plan, and no additional grants may be made under the 1999 Plan.On December 14, 2017, Fabrinet’s shareholders adopted amendments to the 2010 Plan, to increase the number of1,281,619 ordinary shares authorizedwere reserved for issuance under the 20102020 Plan by 2,100,000 shares.
Plan and 2020 Plan are collectively referred to as the “Equity Incentive Plans.”
Number of Shares | Number of Exercisable Options | Weighted- Average Exercise Price | Weighted- Average Grant Date Fair Value | |||||||||||||
Balance as of June 26, 2015 | 792,019 | 758,451 | $ | 16.33 | ||||||||||||
Granted | — | — | — | |||||||||||||
Exercised | (325,530 | ) | $ | 16.83 | ||||||||||||
Forfeited | (755 | ) | $ | 17.10 | ||||||||||||
Expired | (1,400 | ) | $ | 23.62 | ||||||||||||
|
| |||||||||||||||
Balance as of June 24, 2016 | 464,334 | 464,334 | $ | 15.95 | ||||||||||||
Granted | — | — | — | |||||||||||||
Exercised | (367,641 | ) | $ | 16.02 | ||||||||||||
Forfeited | — | — | ||||||||||||||
Expired | (5 | ) | $ | 5.75 | ||||||||||||
|
| |||||||||||||||
Balance as of June 30, 2017 | 96,688 | 96,688 | $ | 15.70 | ||||||||||||
Granted | — | — | — | |||||||||||||
Exercised | (92,288 | ) | $ | 15.56 | ||||||||||||
Forfeited | — | — | ||||||||||||||
Expired | (1,500 | ) | $ | 25.50 | ||||||||||||
|
| |||||||||||||||
Balance as of June 29, 2018 | 2,900 | 2,900 | $ | 15.16 | ||||||||||||
|
| |||||||||||||||
Expected to vest as of June 29, 2018 | 2,900 | $ | 15.16 | |||||||||||||
|
|
activity under the 2010 Plan:
Number of Shares | Number of Exercisable Options | Weighted- Average Exercise Price | Weighted- Average Grant Date Fair Value | |||||||||||||
Balance as of June 30, 2017 | 96,688 | 96,688 | $ | 15.70 | ||||||||||||
Granted | — | — | — | |||||||||||||
Exercised | (92,288 | ) | $ | 16.02 | ||||||||||||
Forfeited | — | — | ||||||||||||||
Expired | (1,500 | ) | $ | 5.75 | ||||||||||||
Balance as of June 29, 2018 | 2,900 | 2,900 | $ | 15.16 | ||||||||||||
Granted | — | — | — | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | — | — | ||||||||||||||
Expired | (2,900 | ) | $ | 15.16 | ||||||||||||
Balance as of June 28, 2019 | — | — | — | |||||||||||||
an option vest 12 months after the vesting commencement date and 1/48 of the underlying shares vest monthly over each of the subsequent 36 months. In the case of any additional grants to an optionee,optionholder, 1/48 of the underlying shares subject to an option vest monthly over four years, commencing one month after the vesting commencement date.
The following table summarizes information for share options outstanding as of June 29, 2018:
Number of Shares Underlying Options | Exercise Price Per Share | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value (amount in thousands) | |||||||||||||
2,900 | $ | 15.16 | 0.13 | |||||||||||||
|
|
|
| |||||||||||||
Options outstanding | 2,900 | 0.13 | $ | 63 | ||||||||||||
|
|
|
|
|
| |||||||||||
Options exercisable | 2,900 | 0.13 | $ | 63 | ||||||||||||
|
|
|
|
|
| |||||||||||
Expected to vest as of June 29, 2018 | 2,900 | 0.13 | $ | 63 | ||||||||||||
|
|
|
|
|
|
As of June 29, 2018, there was no unrecognized compensation cost under the Share Option Plans.
Equity Incentive
The Company has entered into an employment agreement, as amended on August 12, 2016, with one executive
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
Balance as of June 26, 2015 | 1,140,927 | $ | 16.03 | |||||
Granted | 654,589 | $ | 21.15 | |||||
Issued | (507,621 | ) | $ | 15.60 | ||||
Forfeited | (106,493 | ) | $ | 18.34 | ||||
|
| |||||||
Balance as of June 24, 2016 | 1,181,402 | $ | 18.34 | |||||
Granted | 861,356 | $ | 38.95 | |||||
Issued | (853,535 | ) | $ | 21.16 | ||||
Forfeited | (130,618 | ) | $ | 29.31 | ||||
|
| |||||||
Balance as of June 30, 2017 | 1,058,605 | $ | 31.59 | |||||
Granted | 552,637 | $ | 35.95 | |||||
Issued | (436,867 | ) | $ | 27.81 | ||||
Forfeited | (100,795 | ) | $ | 33.62 | ||||
|
| |||||||
Balance as of June 29, 2018 | 1,073,580 | $ | 35.19 | |||||
|
| |||||||
Expected to vest as of June 29, 2018 | 1,012,791 | $ | 34.87 | |||||
|
|
Equity Incentive Plans:
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
Balance as of June 30, 2017 | 1,058,605 | $ | 31.59 | |||||
Granted | 552,637 | $ | 35.95 | |||||
Issued | (436,867 | ) | $ | 27.81 | ||||
Forfeited | (100,795 | ) | $ | 33.62 | ||||
Balance as of June 29, 2018 | 1,073,580 | $ | 35.19 | |||||
Granted | 391,328 | $ | 50.02 | |||||
Issued | (515,482 | ) | $ | 34.18 | ||||
Forfeited | (148,675 | ) | $ | 38.42 | ||||
Balance as of June 28, 2019 | 800,751 | $ | 42.48 | |||||
Granted | 367,088 | $ | 50.87 | |||||
Issued | (335,355 | ) | $ | 40.98 | ||||
Forfeited | (34,727 | ) | $ | 44.59 | ||||
Balance as of June 26, 2020 | 797,757 | $ | 46.88 | |||||
Expected to vest as of June 26, 2020 | 697,093 | $ | 46.81 | |||||
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
Balance as of June 24, 2016 | — | — | ||||||
Granted | 234,678 | $ | 40.48 | |||||
Issued | — | — | ||||||
Forfeited | (7,410 | ) | — | |||||
|
| |||||||
Balance as of June 30, 2017 | 227,268 | $ | 40.48 | |||||
Granted | 378,624 | $ | 37.16 | |||||
Issued | — | — | ||||||
Forfeited | — | — | ||||||
|
| |||||||
Balance as of June 29, 2018 | 605,892 | $ | 38.41 | |||||
|
| |||||||
Expected to vest as of June 29, 2018 | 285,280 | $ | 33.98 | |||||
|
|
Equity Incentive Plans:
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | |||||||
Balance as of June 30, 2017 | 227,268 | $ | 40.48 | |||||
Granted | 378,624 | $ | 37.16 | |||||
Issued | — | — | ||||||
Forfeited | — | — | ||||||
Balance as of June 29, 2018 | 605,892 | $ | 38.41 | |||||
Granted | 201,994 | $ | 48.02 | |||||
Issued | (227,268 | ) | $ | 40.48 | ||||
Forfeited | (32,118 | ) | $ | 40.47 | ||||
Balance as of June 28, 2019 | 548,500 | $ | 40.97 | |||||
Granted | 242,310 | $ | 48.65 | |||||
Issued | — | — | ||||||
Forfeited | (350,670 | ) | $ | 36.99 | ||||
Balance as of June 26, 2020 | 440,140 | $ | 48.37 | |||||
Expected to vest as of June 26, 2020 | 378,928 | $ | 48.37 | |||||
19. |
|
20. |
|
For the year ended June 30, 2017, Fabrinet issued 367,641 ordinary shares upon the exercise of options, for cash consideration at a weighted average exercise price of $16.02 per share, and 816,409 ordinary shares upon the vesting of restricted share units, net of shares withheld.
For the year ended June 24, 2016, Fabrinet issued 325,530 ordinary shares upon the exercise of options, for cash consideration at a weighted average exercise price of $16.83 per share, and 393,262 ordinary shares upon the vesting of restricted share units, net of shares withheld.
21. |
|
(amount in thousands) | Unrealized net (Losses)/Gains on Marketable Securities | Unrealized net (Losses)/Gains on Derivative Instruments | Foreign Currency Translation Adjustment | Total | ||||||||||||
Balance as of June 24, 2016 | $ | 399 | $ | 192 | $ | — | $ | 591 | ||||||||
Other comprehensive income before reclassification | 351 | — | (310 | ) | 41 | |||||||||||
Amounts reclassified from AOCI | (822 | ) | (158 | ) | — | (980 | ) | |||||||||
Tax effects | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Other comprehensive income | (471 | ) | (158 | ) | (310 | ) | (939 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Balance as of June 30, 2017 | (72 | ) | 34 | (310 | ) | (348 | ) | |||||||||
Other comprehensive income before reclassification | (655 | ) | — | 111 | (544 | ) | ||||||||||
Amounts reclassified from AOCI | (364 | ) | (1 | ) | — | (365 | ) | |||||||||
Tax effects | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Other comprehensive income | (1,019 | ) | (1 | ) | 111 | (909 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Balance as of June 29, 2018 | $ | (1,091 | ) | $ | 33 | $ | (199 | ) | $ | (1,257 | ) | |||||
|
|
|
|
|
|
|
|
(amount in thousands) | Unrealized Gains (Losses) on Available-for-sale Securities | Unrealized Gains (Losses) on Derivative Instruments | Retirement benefit plan - Prior service cost | Foreign Currency Translation Adjustment | Total | |||||||||||||||
Balance as of June 29, 2018 | $ | (1,091 | ) | $ | 33 | $ | — | $ | (199 | ) | $ | (1,257 | ) | |||||||
Other comprehensive income before reclassification | 1,845 | — | (2,537 | ) | (634 | ) | (1,326 | ) | ||||||||||||
Amounts reclassified from AOCI | 198 | (1 | ) | — | — | 197 | ||||||||||||||
Tax effects | — | — | — | — | — | |||||||||||||||
Other comprehensive income | 2,043 | (1 | ) | (2,537 | ) | (634 | ) | (1,129 | ) | |||||||||||
Balance as of June 28, 2019 | 952 | 32 | (2,537 | ) | (833 | ) | (2,386 | ) | ||||||||||||
Other comprehensive income before reclassification | 634 | 171 | — | (397 | ) | 408 | ||||||||||||||
Amounts reclassified from AOCI | (96 | ) | 399 | 528 | — | 831 | ||||||||||||||
Tax effects | — | — | — | — | — | |||||||||||||||
Other comprehensive income | 538 | 570 | 528 | (397 | ) | 1,239 | ||||||||||||||
Balance as of June 26, 2020 | $ | 1,490 | $ | 602 | $ | (2,009 | ) | $ | (1,230 | ) | $ | (1,147 | ) | |||||||
Years ended | ||||||||||
AOCI components | Financial statements line item | June 29, 2018 | June 30, 2017 | |||||||
Unrealized losses on marketable securities | Interest income | $ | (364 | ) | $ | (822 | ) | |||
Unrealized gains on derivative instruments | Selling, general and administrative expenses | (1 | ) | (158 | ) | |||||
|
|
|
| |||||||
Total amounts reclassified from AOCI | $ | (365 | ) | $ | (980 | ) | ||||
|
|
|
|
(amount in thousands) | Years ended | |||||||||
AOCI components | Financial statements line item | June 26, 2020 | June 28, 2019 | |||||||
Unrealized gains (losses) on available-for-sale | Interest income | $ | (96 | ) | $ | 198 | ||||
Unrealized gains (losses) on derivative instruments | Cost of revenues | 2,512 | — | |||||||
Unrealized gains (losses) on derivative instruments | Selling, general and administrative expenses | 105 | (1 | ) | ||||||
Unrealized gains (losses) on derivative instruments | Foreign exchange loss, net | (998 | ) | — | ||||||
Unrealized gains (losses) on derivative instruments | Interest expense | (1,220 | ) | — | ||||||
Retirement benefit plan – Prior service cost | Selling, general and administrative expenses | 528 | — | |||||||
Total amounts reclassified from AOCI | $ | 831 | $ | 197 | ||||||
22. |
|
2019 2020 2021 2022 Thereafter Total future minimum operating lease payments 2019 2020 2021 Total minimum capital lease payments Less: Future finance charge on capital leases Present value of capital lease Current Non-current Total capital lease liabilities 2019 2020 2021 Total future minimum capital lease payments Bank29, 201826, 2020 and June 30, 2017,28, 2019, the Company had one outstanding standby letter of credit of 6.0 million Euros, related to the Company’s support of a customer’s transfer of certain manufacturing operations from Berlin, Germany to the Company’s facilities in Thailand. As of June 26, 2020 and June 28, 2019, the standby letter of credit was backed by cash collateral of $7.4 million.amounting to $1.5 million.Operating lease commitmentsThe Company leasesexpenses totaling $1.6 million portionbank on behalf of its capital equipment, vehicle, and certain land and buildings for its facilitiesour subsidiaries in Thailand, Cayman Islands, China the United States and the United Kingdom under operating lease arrangements that expire in various years through 2023. Rental expense under these operating leases amountedU.K. to $1.8 million, $1.7support their operations of$1.2 million for the years ended June 29, 2018, June 30, 2017 and June 24, 2016,$25 thousand, respectively.As of June 29, 2018, the future minimum lease payments due undernon-cancelable operating leases during each fiscal year were as follows:(amount in thousands) $ 1,263 943 542 427 456 $ 3,631 Capital lease commitmentsIn connection with the acquisition of Fabrinet UK, the Company assumed the capital lease commitments of several machines and equipment, with various expiration dates until September 2020. The equipment can be purchased at the determined prices upon expiration of such contracts.As of June 29, 2018, the future minimum lease payments undernon-cancelable capital leases during each fiscal year were as follows:(amount in thousands) $ 481 424 106 1,011 (44 ) $ 967 Representing capital lease liabilities $ 451 516 $ 967 As of June 29, 2018, the present value of capital lease during each fiscal year were as follows:(amount in thousands) $ 451 411 105 $ 967 On December 23, 2016, the Company entered into an agreement to purchase a parcel of land in Chonburi, Thailand, to support the expansion of the Company’s production in Thailand. The aggregate purchase price was approximately $5.6 million, of which the first installment of $1.1 million was paid by the Company on January 10, 2017 and the remainder was fully paid on December 25, 2017.29, 2018,26, 2020, the Company had an outstanding commitment to third parties of $2.4$11.1 million.
23. |
|
Total revenues are attributed to a particular geographic area based on the primarily in three geographic regions: North America, Asia-Pacific and Europe.
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
North America | $ | 643,236 | $ | 661,267 | $ | 525,161 | ||||||
Asia-Pacific | 519,203 | 539,317 | 351,033 | |||||||||
Europe | 209,486 | 219,906 | 100,553 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,371,925 | $ | 1,420,490 | $ | 976,747 | ||||||
|
|
|
|
|
|
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
North America | $ | 830,888 | $ | 756,278 | $ | 643,236 | ||||||
Asia-Pacific | 552,923 | 608,386 | 519,203 | |||||||||
Europe | 258,025 | 219,671 | 209,486 | |||||||||
Total | $ | 1,641,836 | $ | 1,584,335 | $ | 1,371,925 | ||||||
Asia-Pacific and Europe.
Years Ended | ||||||||||||
(amount in thousands) | June 29, 2018 | June 30, 2017 | June 24, 2016 | |||||||||
Optical communications | $ | 1,000,256 | $ | 1,108,637 | $ | 727,580 | ||||||
Lasers, sensors, and other | 371,669 | 311,853 | 249,167 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 1,371,925 | $ | 1,420,490 | $ | 976,747 | ||||||
|
|
|
|
|
|
Years Ended | ||||||||||||
(amount in thousands) | June 26, 2020 | June 28, 2019 | June 29, 2018 | |||||||||
Optical communications | $ | 1,248,174 | $ | 1,184,936 | $ | 1,000,256 | ||||||
Lasers, sensors, and other | 393,662 | 399,399 | 371,669 | |||||||||
Total | $ | 1,641,836 | $ | 1,584,335 | $ | 1,371,925 | ||||||
Years Ended | ||||||||||||
June 29, 2018 | June 30, 2017 | June 24, 2016 | ||||||||||
Lumentum Operations LLC | 16 | % | 17 | % | 20 | % |
Years Ended | ||||||||||||
June 26, 2020 | June 28, 2019 | June 29, 2018 | ||||||||||
Lumentum Operations LLC | 19 | % | 20 | % | 16 | % | ||||||
Acacia Communications Inc. | 10 | % | * | * | ||||||||
Infinera Corporation | 10 | % | * | * |
* | Represents less than 10% of total revenues. |
As of June 29, 2018 | As of June 30, 2017 | |||||||
Lumentum Operations LLC | 18 | % | 15 | % | ||||
NeoPhotonics Corporation | 11 | % | 12 | % | ||||
Acacia Communications Inc. | * | 10 | % |
As of June 26, 2020 | As of June 28, 2019 | |||||||
Lumentum Operations LLC | 20 | % | 23 | % | ||||
Acacia Communications Inc. | 13 | % | 12 | % |
24. |
Financial instruments |
|
Pound sterling (“GBP”).
As of June 29, 2018 | As of June 30, 2017 | |||||||||||||||
(amount in thousands) | Currency | $ | Currency | $ | ||||||||||||
Assets | ||||||||||||||||
Thai baht | 980,778 | $ | 29,568 | 395,123 | $ | 11,628 | ||||||||||
RMB | 18,455 | 2,789 | 26,965 | 3,980 | ||||||||||||
GBP | 12,514 | 16,392 | 6,896 | 8,982 | ||||||||||||
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| |||||||||||||
Total | $ | 48,749 | $ | 24,590 | ||||||||||||
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| |||||||||||||
Liabilities | ||||||||||||||||
Thai baht | 1,401,473 | $ | 42,251 | 1,875,338 | $ | 55,189 | ||||||||||
RMB | 19,893 | 3,007 | 28,451 | 4,200 | ||||||||||||
GBP | 3,615 | 4,735 | 5,625 | 7,326 | ||||||||||||
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|
| |||||||||||||
Total | $ | 49,993 | $ | 66,715 | ||||||||||||
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|
|
|
As of June 26, 2020 | As of June 28, 2019 | |||||||||||||||
(amount in thousands) | Currency | $ | Currency | $ | ||||||||||||
Assets | ||||||||||||||||
Thai baht | 667,955 | $ | 21,617 | 664,860 | $ | 21,628 | ||||||||||
RMB | 158,060 | 22,402 | 53,393 | 7,767 | ||||||||||||
GBP | 6,220 | 7,726 | 5,270 | 6,682 | ||||||||||||
Total | $ | 51,745 | $ | 36,077 | ||||||||||||
Liabilities | ||||||||||||||||
Thai baht | 2,102,392 | $ | 68,039 | 1,961,972 | $ | 63,825 | ||||||||||
RMB | 42,586 | 6,036 | 26,373 | 3,836 | ||||||||||||
GBP | 1,545 | 1,919 | 2,598 | 3,294 | ||||||||||||
Total | $ | 75,994 | $ | 70,955 | ||||||||||||
|
On August 1, 2018, a new subsidiary in Singapore, Casix Pte Ltd. was set up.
25. | Subsequent Event |
Three Months Ended | ||||||||||||||||||||||||||||||||
(in thousands, except per share data) | Jun 29, 2018 | Mar 30, 2018 | Dec 29, 2017 | Sep 29, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 30, 2016 | Sep 30, 2016 | ||||||||||||||||||||||||
Total revenues | $ | 345,327 | $ | 332,313 | $ | 337,072 | $ | 357,313 | $ | 370,454 | $ | 366,837 | $ | 351,156 | $ | 332,043 | ||||||||||||||||
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Gross profit | $ | 38,981 | $ | 36,933 | $ | 37,166 | $ | 40,332 | $ | 44,760 | $ | 44,046 | $ | 43,046 | $ | 39,608 | ||||||||||||||||
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Net income | $ | 22,768 | $ | 21,053 | $ | 19,313 | $ | 21,033 | $ | 27,401 | $ | 21,656 | $ | 25,292 | $ | 22,766 | ||||||||||||||||
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Basic net income per share: | ||||||||||||||||||||||||||||||||
Net income | $ | 0.62 | $ | 0.56 | $ | 0.52 | $ | 0.56 | $ | 0.73 | $ | 0.58 | $ | 0.69 | $ | 0.63 | ||||||||||||||||
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Weighted-average shares used in basic net income per share calculations | 36,828 | 37,275 | 37,477 | 37,447 | 37,334 | 37,116 | 36,848 | 36,404 | ||||||||||||||||||||||||
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Diluted net income per share: | ||||||||||||||||||||||||||||||||
Net income | $ | 0.60 | $ | 0.55 | $ | 0.51 | $ | 0.55 | $ | 0.72 | $ | 0.57 | $ | 0.67 | $ | 0.61 | ||||||||||||||||
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Weighted-average shares used in diluted net income per share calculations | 37,766 | 38,055 | 38,156 | 38,163 | 38,118 | 37,872 | 37,805 | 37,330 | ||||||||||||||||||||||||
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Three Months Ended | ||||||||||||||||||||||||||||||||
(in thousands, except per share data) | Jun 26, 2020 | Mar 27, 2020 | Dec 27, 2019 | Sep 27, 2019 | Jun 28, 2019 | Mar 29, 2019 | Dec 28, 2018 | Sep 28, 2018 | ||||||||||||||||||||||||
Total revenues | $ | 405,113 | $ | 411,210 | $ | 426,217 | $ | 399,296 | $ | 405,127 | $ | 398,951 | $ | 403,080 | $ | 377,177 | ||||||||||||||||
Gross profit | $ | 46,624 | $ | 44,336 | $ | 49,158 | $ | 45,987 | $ | 46,626 | $ | 46,758 | $ | 45,564 | $ | 40,276 | ||||||||||||||||
Net income | $ | 28,024 | $ | 28,267 | $ | 31,231 | $ | 25,957 | $ | 32,957 | $ | 28,635 | $ | 31,513 | $ | 27,850 | ||||||||||||||||
Basic net income per share: | ||||||||||||||||||||||||||||||||
Net income | $ | 0.76 | $ | 0.76 | $ | 0.84 | $ | 0.70 | $ | 0.89 | $ | 0.78 | $ | 0.86 | $ | 0.76 | ||||||||||||||||
Weighted-average shares used in basic net income per share calculations | 36,723 | 36,987 | 37,011 | 36,913 | 36,836 | 36,891 | 36,841 | 36,625 | ||||||||||||||||||||||||
Diluted net income per share: | ||||||||||||||||||||||||||||||||
Net income | $ | 0.75 | $ | 0.75 | $ | 0.83 | $ | 0.69 | $ | 0.88 | $ | 0.76 | $ | 0.84 | $ | 0.75 | ||||||||||||||||
Weighted-average shares used in diluted net income per share calculations | 37,571 | 37,797 | 37,763 | 37,529 | 37,511 | 37,539 | 37,471 | 37,140 | ||||||||||||||||||||||||
ITEM 9. |
|
ITEM 9A. |
|
that occurred during the quarterthree months ended June 29, 201826, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. |
|
ITEM 10. |
|
20182020 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form (the “201820182020 Proxy Statement.20182020 Proxy Statement.20182020 Proxy Statement.ACCOUNTINGACCOUNTANT FEES AND SERVICES.20182020 Proxy Statement.
ITEM 15. |
|
(b)
Exhibit Number | Description | Incorporated by reference herein | ||||||||
Form | Exhibit No. | Filing Date | File No. | |||||||
3.1 | S-1/A | 3.1 | May 3, 2010 | 333-163258 | ||||||
4.1 | S-1/A | 4.1 | June 14, 2010 | 333-163258 | ||||||
4.2 | 10-K | 4.2 | August 20, 2019 | 001-34775 | ||||||
10.1.1+ | 8-K | 10.1 | December 15, 2017 | 001-34775 | ||||||
10.1.2+ | 10-Q | 10.2 | February 5, 2013 | 001-34775 | ||||||
10.1.3+ | 10-Q | 10.3 | February 5, 2013 | 001-34775 | ||||||
10.1.4+ | 10-Q | 10.4 | February 5, 2013 | 001-34775 | ||||||
10.1.5+ | 10-Q | 10.5 | November 9, 2016 | 001-34775 | ||||||
10.2.1+ | S-8 | 99.1.1 | November 8, 2017 | 333-221423 | ||||||
10.2.2+ | S-8 | 99.1.2 | November 8, 2017 | 333-221423 | ||||||
10.2.3+ | S-8 | 99.1.3 | November 8, 2017 | 333-221423 | ||||||
10.3.1+ | S-8 | 99.1 | December 12, 2020 | 333-235462 | ||||||
10.3.2+ | S-8 | 99.2 | December 12, 2020 | 333-235462 | ||||||
10.3.3+ | S-8 | 99.3 | December 12, 2020 | 333-235462 | ||||||
10.4+ | 8-K | 10.1 | August 20, 2019 | 001-34755 | ||||||
10.5+ | 8-K | 10.1 | September 25, 2017 | 001-34755 |
Exhibit Number | Description | Incorporated by reference herein | ||||||||
Form | Exhibit No. | Filing Date | File No. | |||||||
10.6+ | 8-K | 10.1 | February 28, 2019 | 001-34755 | ||||||
10.7+ | 8-K | 10.1 | May 8, 2018 | 001-34755 | ||||||
10.8+ | S-1 | 10.5 | November 7, 2007 | 333-147191 | ||||||
10.9+ | 8-K | 10.1 | February 3, 2020 | 001-34755 | ||||||
10.10+ | 10-Q | 10.2 | May 5, 2020 | 001-34755 | ||||||
10.11+ | 8-K, Item 5.02 | N/A | August 20, 2019 | 001-34755 | ||||||
10.12+ | 8-K, Item 5.02 | N/A | August 17, 2020 | 001-34755 | ||||||
10.13+ | S-1/A | 10.10 | January 28, 2010 | 333-163258 | ||||||
10.14 | S-1 | 10.10 | November 7, 2007 | 333-147191 | ||||||
10.15 | S-1 | 10.11 | November 7, 2007 | 333-147191 | ||||||
10.16 | S-1 | 10.12 | November 7, 2007 | 333-147191 | ||||||
10.17 | S-1 | 10.14 | November 20, 2009 | 333-163258 |
Exhibit Number | Description | Incorporated by reference herein | ||||||||
Form | Exhibit No. | Filing Date | File No. | |||||||
10.18 | 8-K | 10.1 | September 12, 2019 | 001-34775 | ||||||
10.19 | 8-K | 10.2 | September 12, 2019 | 001-34775 | ||||||
10.20† | S-1/A | 10.27 | January 19, 2010 | 333-163258 | ||||||
21.1 | 10-K | 21.1 | August 20, 2019 | 001-34755 | ||||||
23.1 | ||||||||||
24.1 | ||||||||||
31.1 | ||||||||||
31.2 | ||||||||||
32.1 | ||||||||||
101.INS | Inline XBRL Instance | |||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
|
|
| ||||||||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
Form |
| Exhibit No. | Filing Date | File No. | ||||||||||||||
| ||||||||||||||||||
Inline XBRL | ||||||||||||||||||
Inline XBRL Taxonomy Extension | ||||||||||||||||||
Cover Page Interactive Data File (formatted as inline XBRL | ||||||||||||||||||
+ | Indicates management contract or compensatory plan. |
† | Confidential treatment has been |
(c) | Financial Statement Schedules: See Item 15(a)(2), above. |
ITEM 16. | FORM 10-K SUMMARY. |
FABRINET | ||
By: |
| |
Name: | Csaba Sverha | |
Title: | Executive Vice President and Chief Financial Officer |
|
|
| ||
| Chief Executive Officer
| August | ||
| Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | August | ||
| Chairman of the Board of Directors | August | ||
| Director | August | ||
| Director | August 18, 2020 | ||
/S/ THOMAS F. KELLY Thomas F. Kelly | Director | August | ||
| Director | August | ||
| Director | August |
113