Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Jun. 30, 2017 | Aug. 11, 2017 | Dec. 30, 2016 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FN | ||
Entity Registrant Name | FABRINET | ||
Entity Central Index Key | 1,408,710 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 37,365,443 | ||
Entity Public Float | $ 1.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Current assets | ||
Cash and cash equivalents | $ 133,825 | $ 142,804 |
Marketable securities | 151,450 | 141,709 |
Trade accounts receivable, net | 264,349 | 196,145 |
Inventory, net | 238,665 | 181,499 |
Deferred tax assets | 1,358 | |
Prepaid expenses | 6,306 | 3,114 |
Other current assets | 4,159 | 6,662 |
Total current assets | 798,754 | 673,291 |
Non-current assets | ||
Restricted cash in connection with business acquisition | 3,312 | |
Property, plant and equipment, net | 216,881 | 178,410 |
Intangibles, net | 5,840 | 499 |
Goodwill | 3,806 | 0 |
Deferred tax assets | 2,905 | 1,806 |
Deferred debt issuance costs on revolving loan and other non-current assets | 1,577 | 1,851 |
Total non-current assets | 234,321 | 182,566 |
Total Assets | 1,033,075 | 855,857 |
Current liabilities | ||
Bank borrowings, net of unamortized debt issuance costs | 48,402 | 24,307 |
Trade accounts payable | 215,262 | 172,052 |
Fixed assets payable | 8,141 | 20,628 |
Capital lease liability, current portion | 344 | |
Income tax payable | 1,976 | 2,010 |
Accrued payroll, bonus and related expenses | 13,852 | 12,300 |
Accrued expenses | 9,227 | 8,072 |
Other payables | 14,068 | 16,356 |
Total current liabilities | 311,272 | 255,725 |
Non-current liabilities | ||
Long-term loan from bank, net of unamortized debt issuance costs | 22,701 | 36,100 |
Deferred tax liability | 1,981 | 854 |
Capital lease liability, non-current portion | 1,024 | |
Deferred liability in connection with business acquisition | 3,312 | |
Severance liabilities | 8,488 | 6,684 |
Other non-current liabilities | 2,723 | 2,075 |
Total non-current liabilities | 40,229 | 45,713 |
Total Liabilities | 351,501 | 301,438 |
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 30, 2017 and June 24, 2016) | ||
Ordinary shares (500,000,000 shares authorized, $0.01 par value; 37,340,496 shares and 36,156,446 shares issued and outstanding as of June 30, 2017 and June 24, 2016, respectively) | 373 | 362 |
Additional paid-in capital | 133,293 | 102,325 |
Accumulated other comprehensive (loss) income | (348) | 591 |
Retained earnings | 548,256 | 451,141 |
Total Shareholders' Equity | 681,574 | 554,419 |
Total Liabilities and Shareholders' Equity | $ 1,033,075 | $ 855,857 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Jun. 24, 2016 |
Preferred shares, shares authorized | 5,000,000 | 5,000,000 |
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 |
Ordinary shares, par value | $ 0.01 | $ 0.01 |
Ordinary shares, shares issued | 37,340,496 | 36,156,446 |
Ordinary shares, shares outstanding | 37,340,496 | 36,156,446 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Revenues | $ 1,420,490 | $ 976,747 | $ 773,587 |
Cost of revenues | (1,249,030) | (857,224) | (685,814) |
Gross profit | 171,460 | 119,523 | 87,773 |
Selling, general and administrative expenses | (65,626) | (49,753) | (39,460) |
Other income related to flooding, net | 36 | ||
Expenses related to reduction in workforce | (1,153) | ||
Operating income | 105,834 | 69,806 | 47,160 |
Interest income | 1,977 | 1,535 | 1,253 |
Interest expense | (3,321) | (1,569) | (616) |
Foreign exchange loss, net | (1,142) | (1,916) | (19) |
Other income (expense), net | 509 | 376 | (152) |
Income before income taxes | 103,857 | 68,232 | 47,626 |
Income tax expense | (6,742) | (6,335) | (3,984) |
Net income | 97,115 | 61,897 | 43,642 |
Other comprehensive (losses) gains, net of tax: | |||
Change in net unrealized (losses) gains on marketable securities | (471) | 443 | (44) |
Change in net unrealized (losses) gains on derivative instruments | (158) | 192 | |
Change in foreign currency translation adjustment | (310) | ||
Total other comprehensive (loss) income, net of tax | (939) | 635 | (44) |
Net comprehensive income | $ 96,176 | $ 62,532 | $ 43,598 |
Earnings per share | |||
Basic | $ 2.63 | $ 1.73 | $ 1.23 |
Diluted | $ 2.57 | $ 1.68 | $ 1.21 |
Weighted average number of ordinary shares outstanding (thousands of shares) | |||
Basic | 36,927 | 35,857 | 35,354 |
Diluted | 37,852 | 36,872 | 35,984 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning Balance (in shares) at Jun. 27, 2014 | 35,152,772 | ||||
Beginning Balance at Jun. 27, 2014 | $ 426,836 | $ 352 | $ 80,882 | $ 345,602 | |
Net income | 43,642 | 43,642 | |||
Other comprehensive income (loss) | (44) | $ (44) | |||
Share-based compensation expense | 8,027 | 8,027 | |||
Issuance of ordinary shares (in shares) | 284,882 | ||||
Issuance of ordinary shares | 835 | $ 2 | 833 | ||
Tax withholdings related to net share settlement of restricted share units | (352) | (352) | |||
Ending Balance (in shares) at Jun. 26, 2015 | 35,437,654 | ||||
Ending Balance at Jun. 26, 2015 | 478,944 | $ 354 | 89,390 | (44) | 389,244 |
Net income | 61,897 | 61,897 | |||
Other comprehensive income (loss) | 635 | 635 | |||
Share-based compensation expense | 9,927 | 9,927 | |||
Issuance of ordinary shares (in shares) | 718,792 | ||||
Issuance of ordinary shares | 5,479 | $ 8 | 5,471 | ||
Tax withholdings related to net share settlement of restricted share units | (2,463) | (2,463) | |||
Ending Balance (in shares) at Jun. 24, 2016 | 36,156,446 | ||||
Ending Balance at Jun. 24, 2016 | 554,419 | $ 362 | 102,325 | 591 | 451,141 |
Net income | 97,115 | 97,115 | |||
Other comprehensive income (loss) | (939) | (939) | |||
Share-based compensation expense | 26,507 | 26,507 | |||
Issuance of ordinary shares (in shares) | 1,184,050 | ||||
Issuance of ordinary shares | 5,897 | $ 11 | 5,886 | ||
Tax withholdings related to net share settlement of restricted share units | (1,425) | (1,425) | |||
Ending Balance (in shares) at Jun. 30, 2017 | 37,340,496 | ||||
Ending Balance at Jun. 30, 2017 | $ 681,574 | $ 373 | $ 133,293 | $ (348) | $ 548,256 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Cash flows from operating activities | |||
Net income for the year | $ 97,115 | $ 61,897 | $ 43,642 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation and amortization | 23,793 | 17,357 | 12,947 |
Gain on disposal of property, plant and equipment | (30) | (73) | (42) |
Loss from sales and maturities of marketable securities | 822 | 194 | 120 |
Amortization of investment (discount) premium | (193) | 798 | 985 |
Amortization of deferred debt issuance costs | 1,396 | 758 | 527 |
Income related to flooding | (828) | ||
Proceeds from insurers in settlement of claim related to flood damage | 272 | ||
(Reversal of) allowance for doubtful accounts | (1) | (17) | 13 |
Unrealized loss on exchange rate and fair value of derivative | 1,884 | 1,905 | 671 |
Share-based compensation | 26,507 | 9,927 | 8,027 |
Deferred income tax | 754 | 864 | (878) |
Other non-cash expenses | 2,173 | 1,744 | 1,722 |
Inventory obsolescence (reversal of) | 42 | (521) | 397 |
Loss from written-off inventory due to flood loss | 233 | ||
Changes in operating assets and liabilities | |||
Trade accounts receivable | (64,142) | (61,013) | (33,797) |
Inventory | (53,802) | (50,598) | (6,440) |
Other current assets and non-current assets | (2,231) | (5,901) | (283) |
Trade accounts payable | 38,293 | 56,308 | 20,466 |
Income tax payable | (67) | 573 | 446 |
Other current liabilities and non-current liabilities | (1,379) | 13,209 | 4,106 |
Net cash provided by operating activities | 70,934 | 47,088 | 52,629 |
Cash flows from investing activities | |||
Purchase of marketable securities | (122,778) | (108,341) | (203,407) |
Proceeds from sales of marketable securities | 39,578 | 41,836 | 29,036 |
Proceeds from maturities of marketable securities | 72,361 | 67,113 | 30,356 |
Payments in connection with business acquisition, net of cash acquired | (9,917) | ||
Purchase of property, plant and equipment | (68,262) | (40,616) | (51,398) |
Gain on cash settlement of hedged forward contracts | 34 | ||
Proceeds from disposal of property, plant and equipment | 230 | 194 | 48 |
Purchase of intangibles | (1,768) | (379) | (134) |
Proceeds from insurers in settlement of claims related to flood damage | 556 | ||
Net cash used in investing activities | (90,556) | (39,603) | (195,499) |
Cash flows from financing activities | |||
Payment of debt issuance costs | (654) | (1,946) | |
Proceeds of short-term loan from bank | 27,500 | 18,000 | 30,000 |
Repayment of short-term loan from bank | (157) | (41,500) | |
Proceeds of long-term loan from bank | 50,000 | ||
Repayment of long-term loan from bank | (18,100) | (6,000) | (6,000) |
Proceeds from issuance of ordinary shares under employee share option plan | 5,890 | 5,479 | 835 |
Repayment of capital lease liability | (276) | ||
Withholding tax related to net share settlement of restricted share units | (1,425) | (2,463) | (352) |
Net cash provided by financing activities | 13,432 | 22,862 | 22,537 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (6,190) | 30,347 | (120,333) |
Movement in cash, cash equivalents and restricted cash | |||
Cash, cash equivalents and restricted cash at beginning of period | 142,804 | 112,978 | 233,477 |
(Decrease) increase in cash, cash equivalents and restricted cash | (6,190) | 30,347 | (120,333) |
Effect of exchange rate on cash, cash equivalents and restricted cash | 523 | (521) | (166) |
Cash, cash equivalents and restricted cash at end of period | 137,137 | 142,804 | 112,978 |
Cash paid for | |||
Interest | 1,924 | 1,091 | 590 |
Taxes | 5,218 | 5,473 | 2,841 |
Cash received for interest | 1,753 | 1,049 | 749 |
Non-cash investing and financing activities | |||
Construction, software related and equipment related payables | $ 8,434 | $ 20,628 | $ 6,026 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | Jun. 27, 2014 |
Reconciliation of cash, cash equivalents and restricted cash | ||||
Cash and cash equivalents | $ 133,825 | $ 142,804 | $ 112,978 | |
Restricted cash in connection with business acquisition (non-current assets) | 3,312 | |||
Cash, cash equivalents and restricted cash | $ 137,137 | $ 142,804 | $ 112,978 | $ 233,477 |
Business and organization
Business and organization | 12 Months Ended |
Jun. 30, 2017 | |
Business and organization | 1. Business and organization Description of Business Fabrinet (“Fabrinet” or the “Parent Company”) was incorporated on August 12, 1999, and commenced operations on January 1, 2000. The Parent Company is an exempted company incorporated in the Cayman Islands, British West Indies. The “Company” refers to Fabrinet and its subsidiaries as a group. The Company provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (“OEMs”) of complex products, such as optical communication components, modules and sub-systems, industrial lasers, medical devices and sensors. The Company offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and test. The Company focuses primarily on the production of low-volume, high-mix products. The principal subsidiaries of Fabrinet include Fabrinet Co., Ltd. (“Fabrinet Thailand”), Casix, Inc. (“Casix”), Fabrinet West, Inc. (“Fabrinet West”) and Exception EMS Ltd. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Jun. 30, 2017 | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Principles of consolidation The Company utilizes a 52-53 week fiscal year ending on the Friday in June closest to June 30. Fiscal year 2017 ended on June 30, 2017 and consisted of 53 weeks. Fiscal year 2016 and fiscal year 2015 ended on June 24, 2016 and June 26, 2015, respectively, and each consisted of 52 weeks. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include Fabrinet and its subsidiaries. All inter-company accounts and transactions have been eliminated. Where necessary, comparative figures have been reclassified to conform to the current period accounting policies and presentation adopted. On September 14, 2016, the Company acquired Global CEM Solutions, Ltd. and all of its subsidiaries (collectively, “Exception EMS”), 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 Exception EMS commencing as of the acquisition date. See Note 9—Business acquisition for further details on the accounting for this transaction. Use of estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amount of total revenues and expenses during the year. The Company bases estimates on historical experience and various assumptions about the future that are believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under different conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies, which are discussed below. Significant assumptions are used in accounting for share-based compensation, allowance for doubtful accounts, income taxes, inventory obsolescence and valuation of intangible assets related to business acquisition, 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 differ from actual results, adjustments will be made in subsequent periods to reflect more current information. Foreign currency transactions and translation The consolidated financial statements are presented in United States dollars (“$” or “USD”). The functional currency of Fabrinet and most of its subsidiaries is the USD. With respect to subsidiaries that use USD as their functional currency, transactions denominated in a currency other than USD are translated into USD at the rates of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate prevailing at the consolidated balance sheet dates. Transaction gains and losses are included in other income (expense) or foreign exchange gain (loss) in the accompanying consolidated statements of operations and comprehensive income. Fabrinet translates the assets and liabilities of its subsidiaries that do not use USD as their functional currency into USD using exchange rates in effect at the end of each period. Revenue and expenses for such subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation adjustment included in accumulated other comprehensive income (loss) (“AOCI”). Cash and cash equivalents All highly liquid investments with original maturities of three months or less at the date of purchase are classified as cash equivalents. Cash and cash equivalents consist of cash deposited in checking accounts, time deposits with maturities of less than three months, money market accounts, and marketable securities with maturities of three months or less at the date of purchase. Marketable securities Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designations at each balance sheet date. The Company may sell certain of the Company’s marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management. The maturities of the Company’s marketable securities generally range from three months to three years. The Company’s marketable securities consist of investment in U.S. Treasury and fixed income securities and have been classified and accounted for as available-for-sale. The Company’s investments in marketable securities are classified as available-for-sale securities and reported at fair value. Unrealized gains and losses related to changes in the fair value of securities are recognized in accumulated other comprehensive income, net of tax, in the Company’s consolidated balance sheets. Changes in the fair value of available-for-sale securities impact the Company’s net income only when such securities are sold or other-than-temporary impairment is recognized. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. The Company reviews its marketable securities on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issue and the Company’s intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that an other-than-temporary decline exists in one of these securities, the Company will write down these investments to fair value. Trade accounts receivable Accounts receivable are carried at anticipated realizable value. The Company assesses the collectability of its accounts receivable based on specific customer circumstances, current economic trends, historical 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 written-off when identified. Unanticipated changes in the liquidity or financial position of the Company’s customers may require revision to the allowances for doubtful accounts. Inventory Inventory is stated at the lower of cost or market value. Cost is estimated using the standard costing method, computed on a first-in, first-out basis, with adjustments for variances to reflect actual costs not in excess of net realizable market value. Market value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The Company assesses the valuation of inventory on a quarterly basis and writes down the value for estimated excess and obsolete inventory based upon estimates of future demand. Leases Operating leases Payments made under operating leases are expensed on a straight-line basis over the lease term. Capital lease Certain machine and equipment held under capital leases are classified as property, plant and equipment and amortized using the straight-line method over the terms of the lease contracts. The related obligations from the capital lease are recorded as liabilities in the consolidated balance sheets. Property, plant and equipment Land is stated at historical cost. Other property, plant and equipment, except for construction in process and machinery under installation, are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method to write-off the cost of each asset to its residual value over its estimated useful life as follows: Land improvements 10 years Building and building improvements 7 - 30 years Leasehold improvements Shorter of useful life or lease term Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Motor vehicles 3 - 5 years Computer hardware 3 - 5 years Construction in process and machinery under installation is stated at historic cost and depreciation begins after it is constructed and fully installed and is ready for its intended use in the operations of the Company. Gains and losses on disposal are determined by comparing proceeds with carrying amounts and are included in operating income in the consolidated statements of operations and comprehensive income. The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of long-lived assets or asset groups is measured by comparing their carrying amount to the projected undiscounted cash flows that the long-lived assets or asset groups are expected to generate. If such assets are considered to be impaired, the impairment loss recognized, if any, is the amount by which the carrying amount of the property and equipment exceeds its fair value. Intangibles Intangibles are stated at historical cost less amortization. Amortization of customer relationships is calculated using the accelerated method as to reflect the pattern in which the economic benefits of the intangible assets are consumed. Amortization of other intangibles is calculated using the straight-line method. Business acquisition For the acquisition of Exception EMS, 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, $3.3 million of cash for deferred consideration, net of foreign currency translation adjustment, 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 Exception EMS, 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. The cash is presented as restricted cash in the consolidated balance sheets within non-current assets and the related liability is presented within non-current liabilities for the deferred consideration. Goodwill Goodwill arising from the acquisition is primarily attributable to the ability to expand future products and services and the assembled workforce. Goodwill is reviewed annually for impairment or more frequently whenever changes or circumstances indicate the carrying amount of goodwill may not be recoverable. Borrowing costs Borrowing costs are accounted for on an accrual basis and are charged to the consolidated statements of operations and comprehensive income in the year incurred, except for interest costs on general and specific borrowings attributable to finance certain qualifying assets. Such costs to finance qualifying assets are capitalized during the period of time that is required to complete and prepare the assets for their intended use, as part of the cost of the assets. All other borrowing costs are expensed as incurred. Where funds are not borrowed for a specific acquisition, construction or production of assets, the capitalization rate used to determine the amount of interest to be capitalized is the weighted average interest 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. Fair value of financial instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs for the valuation of an asset or liability as of the measurement date. The three levels of inputs that may be used to measure fair value are defined as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs for similar assets and liabilities in active markets other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 inputs that are significant to the fair value measurement and unobservable (i.e. supported by little or no market activity), which require the reporting entity to develop its own valuation techniques and assumptions. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The carrying amounts of certain financial instruments, which include cash and cash equivalents, trade accounts receivable, and trade accounts payable, approximate their fair values due to their short maturities. The carrying amounts of borrowings approximate their fair values as the applicable interest rate is based on market interest rates. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. Derivatives The derivatives assets and liabilities are recognized on the consolidated balance sheets as other current assets or accrued expenses and are measured at fair value. The Company applies hedge accounting to arrangements that qualify and are designated for cash flow or fair value hedge accounting treatment. Hedge accounting is discontinued prospectively if the hedging relationship ceases to be effective or the hedging or hedged items cease to exist as a result of maturity, sale, termination or cancellation. Derivatives designated and qualifying as hedges of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges which include forward currency contracts. In a cash flow hedging relationship, the effective portion of the change in the fair value of the hedging derivative is initially recorded in AOCI, while any ineffective portion is recognized directly in earnings, as a component of other income (expense). The portion of gain or loss on the derivative instrument remains in AOCI until the forecasted transaction is recognized in earnings. The Company also enters into derivative contracts that are intended to economically hedge certain of the Company’s risks. The changes in the fair value of the derivatives are recorded directly in earnings as a component of other income (expense). In accordance with the fair value measurement guidance, the Company’s accounting policy is to 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. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, marketable securities, derivatives and accounts receivable. Cash, cash equivalents and marketable securities are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties. The Company limits its investments in marketable securities to securities with a maturity not in excess of three years, and all marketable securities that the Company invests in are rated A1, P-1, F1, or better. The Company performs ongoing credit evaluations for credit worthiness of its customers and usually does not require collateral from its customers. Management has implemented a program to closely monitor near term cash collection and credit exposures to mitigate any material losses. Revenue recognition The Company derives total revenues primarily from the assembly of products under supply agreements with its customers and the fabrication of customized optics and glass. Revenues represent the invoiced value of products, net of trade discounts and allowances, and exclude goods and services tax. The Company recognizes revenues when realized or realizable and earned. The Company considers revenues realized or realizable and earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery does not occur until products have been shipped or services have been provided to the customer, risk of loss has transferred to the customer and customer acceptance has been obtained, customer acceptance provisions have lapsed, or the Company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. In situations where a formal acceptance is required but the acceptance only relates to whether the product meets its published specifications, revenues are generally recognized upon shipment provided all other revenue recognition criteria are met. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. The Company reduces revenues for rebates and other similar allowances. Revenues are recognized only if these estimates can be reasonably and reliably determined. The Company bases its estimates utilizing historical results taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenues. 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 $75.4 million, $31.7 million and $32.3 million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. Sales of goods Revenues from sales of goods are generally recognized when the product is shipped to the customer and when there are no unfulfilled obligations that affect the customer’s final acceptance of the arrangement. Any cost of warranties and remaining obligations that are inconsequential or perfunctory are accrued when the corresponding revenues are recognized. Certain customers may request the Company to store finished products purchased by them at the Company’s warehouse. In these instances, the Company receives a written request from the customer asking the Company to hold the inventory at the Company’s warehouse and the ordered goods are segregated in the Company’s warehouse from other inventory and cannot be used to fulfill other customer orders. In these situations, revenue is only recognized when persuasive evidence of the sales arrangement exists, the goods are completed and ready for shipment, pricing is fixed or determinable, collection is reasonably assured, and title and risk of loss have passed to the customer. Warranty provision Provisions for estimated expenses relating to product warranties are made at the time the products are sold using historical experience. Generally, this warranty is limited to workmanship and the Company’s liability is capped at the price of the product. The provisions will be adjusted when experience indicates an expected settlement will differ from initial estimates. Warranty cost allowances of $1.0 million, $0.1 million and $0.03 million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. Shipping and handling costs The Company records costs related to shipping and handling in cost of revenues for all periods presented. Share-based compensation Share-based compensation is recognized in the consolidated financial statements based on grant-date fair value. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The Company estimates the fair value of share option awards utilizing the Black-Scholes-Merton option-pricing model (“BSM”), net of estimated forfeitures. For restricted share units and performance share units, the fair values are based on the market value of our ordinary shares on the date of grant. Employee contribution plan The Company operates a defined contribution plan, known as a provident fund, in its subsidiaries in Thailand and the United Kingdom. The assets of these plans are in separate trustee-administered funds. The provident fund is funded by matching payments from employees and by the subsidiaries on a monthly basis. Current contributions to the provident fund are accrued and paid to the fund manager on a monthly basis. The Company sponsors the Fabrinet U.S. 401(k) Retirement Plan (the “401(k) Plan”), a Defined Contribution Plan under ERISA, at its subsidiaries in the United States, which provides retirement benefits for its eligible employees through tax deferred salary deductions. Severance liabilities Under labor protection laws applicable in Thailand and the Company’s subsidiary in Thailand’s employment policy, all employees of such subsidiary with more than 120 days of service are entitled to 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 months 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 Company accounts for these severance liabilities on an actuarial basis using the Projected Unit Credit Method, using the long-term Thai government bond yield as a discount rate. There are no separate plan assets held in respect of these liabilities. Annual leave Employee entitlements to annual leave are recognized when they accrue to the employee. On termination of employment, accrued employee entitlement to annual leave is paid in cash. Income taxes The Company uses the asset and liability method of accounting for income taxes, whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Fabrinet’s subsidiaries are subject to income tax audits by the respective tax authorities in all of the jurisdictions in which they operate. The determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations. The Company recognizes liabilities based on its estimate of whether, and the extent to which, additional tax liabilities are more-likely-than-not. If the Company ultimately determines that the payment of such a liability is not probable, then it reverses the liability and recognizes a tax benefit during the period in which the determination is made that the liability is no longer probable. The recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that the Company makes certain estimates and judgments. Changes to these estimates or a change in judgment may have a material impact on the Company’s tax provision in a future period. The authoritative guidance provides for recognition of deferred tax assets if the realization of such deferred tax assets is more likely than not to occur based on an evaluation of both positive and negative evidence and the relative weight of the evidence. The Company has determined that it is more likely than not that deferred tax asset attributable to a subsidiary in the United States will not be realized, primarily due to uncertainties related to its ability to utilize its net operating loss carryforward before they expire. Accordingly, the Company has established a valuation allowance for such deferred tax asset. If there is a change in the Company’s ability to realize its deferred tax assets for which a valuation allowance has been established, then its tax provision may decrease in the period in which it determines that realization is more likely than not. Likewise, if the Company determines that it is not more likely than not that its deferred tax assets will be realized, then a valuation allowance may be established for such deferred tax assets and the Company’s tax provision may increase in the period in which it makes the determination. The accounting standard clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. The Company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be sustained upon examination by 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. New Accounting Pronouncements—not yet adopted by the Company In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This amendment modified the concept of impairment assessment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. Public companies that are SEC filers should adopt the amendment for its annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-03, “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 Emerging Issues Task Force (“EITF”) Meetings.” The amendment provides guidance to the Company in relation to the disclosure of the impact that ASU 2014-09, ASU 2016-02 and ASU 2016-13 will have on the Company’s financial statements when adopted. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “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, 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 to its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “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 statement of cash flows in order to reduce diversity in existing practice. The amendments in ASU 2016-15 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 is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “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. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, for public companies. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, “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 a de-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 b |
Income taxes
Income taxes | 12 Months Ended |
Jun. 30, 2017 | |
Income taxes | 3. Income taxes Cayman Islands Fabrinet is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, Fabrinet is not subject to tax in the Cayman Islands on income or capital gains. Fabrinet has received this undertaking for a 20-year period ending August 24, 2019, and after the expiration date, Fabrinet can make a request for renewal with the office of the Clerk of the Cabinet for another 20 years. Income of the Company exempted from corporate income tax in the Cayman Islands amounted to $64.2 million, $41.0 million and $27.0 million in the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. Thailand Fabrinet Thailand is where the majority of the Company’s operations and production takes place. The Company was not subject to tax for the period from July 2010 through June 2015 on income generated from the manufacture of products at Pinehurst Building 5, and is not subject to tax from July 2012 through June 2020 on income generated from the manufacture of products at Pinehurst Building 6. Such preferential tax treatment is contingent on, among other things, the export of the Company’s customers’ products out of Thailand and the Company’s agreement not to move its manufacturing facilities out of its current province in Thailand for at least 15 years from the date on which preferential tax treatment was granted i.e., at least until June 2020. Additionally, in March 2016, the Thailand Revenue Department announced the permanent decrease of corporate income tax rates to 20% for tax periods beginning on or after January 1, 2016. As a result, corporate income tax rates for Fabrinet Thailand remain at 20% from fiscal year 2017 onwards. People’s Republic of China The corporate income tax rate for Casix is 25%. The Company’s income tax expense consisted of the following: Years Ended (amount in thousands) June 30, 2017 June 24, 2016 June 26, 2015 Current $ 6,299 $ 5,413 $ 4,191 Deferred 443 922 (207 ) Total income tax expense $ 6,742 $ 6,335 $ 3,984 The reconciliation between the Company’s taxes that would arise by applying the statutory tax rate of the country of the Company’s principal operations, Thailand, to the Company’s effective tax charge is shown below: Years Ended (amount in thousands) June 30, 2017 June 24, 2016 June 26, 2015 Income before income taxes (1) $ 103,857 $ 68,232 $ 47,626 Tax expense calculated at a statutory corporate income tax rate of 20% 20,771 13,646 9,525 Effect of income taxes from locations with tax rates different from Thailand 1,469 1,573 1,134 Income not subject to tax (2) (17,212 ) (10,493 ) (7,094 ) Income tax on unremitted earnings 1,058 741 1,263 Effect of different tax rate in relation to deferred tax utilization (3) — 894 (221 ) Effect of foreign exchange rate adjustment 667 375 (365 ) Tax rebate from research and development application (226 ) (145 ) (102 ) Others 215 (256 ) (156 ) Corporate income tax expense $ 6,742 $ 6,335 $ 3,984 (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 Building 5 and Building 6. Income not subject to tax per ordinary share on a diluted basis (in dollars) was $0.18, $0.06 and $0.20 for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. (3) The balances were effect of different tax rate in relation to the rate recognized deferred taxes during the fiscal year and the rate when deferred taxes will be utilized in the following fiscal years. The Company’s deferred tax assets and deferred tax liabilities, net of valuation allowance, at each balance sheet date are as follows: Years Ended (amount in thousands) June 30, June 24, Deferred tax assets: Depreciation $ 1,674 $ 1,679 Severance liability 1,127 955 Reserves and allowance 1,046 1,363 Loss carrying forward 496 — Others 10 — Total $ 4,353 $ 3,997 Years Ended (amount in thousands) June 30, June 24, Deferred tax liabilities: Temporary differences from intangibles and changes in the fair value of assets acquired $ (944 ) $ — Deferred tax from unremitted earnings (2,485 ) (1,687 ) Total (3,429 ) (1,687 ) Net $ 924 $ 2,310 As of June 30, 2017 and June 24, 2016, the Company recognized deferred tax assets of $6.4 million and $4.9 million, respectively, from tax on net operating loss carrying forward of Fabrinet West. Utilization of the tax net operating losses carrying forward may be subject to substantial limitations according to the subsidiary’s future operation, which may result in the reduced utilization of a portion of the Company’s net operating losses. Income tax liabilities have not been established for withholding tax and other taxes that would be payable on the unremitted earnings of Fabrinet Thailand. Such amounts of Fabrinet Thailand are permanently reinvested; unremitted earnings for Fabrinet Thailand totaled $97.3 million and $68.8 million as of June 30, 2017 and June 24, 2016, respectively. Unrecognized deferred tax liabilities for such unremitted earnings were $5.2 million and $4.2 million as of June 30, 2017 and June 24, 2016, respectively. Deferred tax liabilities of $0.8 million and $0.7 million have been established for withholding tax on the unremitted earnings of Casix for the year ended June 30, 2017, which are included in non-current deferred tax liability as of June 30, 2017 and June 24, 2016, respectively. Uncertain income tax positions Interest and penalties related to uncertain tax positions are recognized in income tax expense. The Company had approximately $0.6 million and $0.4 million of accrued interest and penalties related to uncertain tax positions on the consolidated balance sheets as of June 30, 2017 and June 24, 2016, respectively. The Company recorded interest and penalties of $0.3 million, $0.2 million and $0.1 million for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively, in the consolidated statements of operations and comprehensive income. With regard to the Thailand jurisdiction, tax years 2012 through 2016 remain open to examination by the local authorities. The following table indicates the changes to the Company’s uncertain income tax positions for the years ended June 30, 2017, June 24, 2016 and June 26, 2015 included in other non-current liabilities. (amount in thousands) As of June 30, 2017 As of June 24, 2016 As of June 26, 2015 Beginning balance $ 1,420 $ 1,420 $ 868 Additions during the year — — 552 Reductions for tax positions of prior years — — — Ending balance $ 1,420 $ 1,420 $ 1,420 |
Earnings per ordinary share
Earnings per ordinary share | 12 Months Ended |
Jun. 30, 2017 | |
Earnings per ordinary share | 4. Earnings per ordinary share Basic earnings per ordinary share is computed by dividing reported net income by the weighted average number of ordinary shares outstanding during each period. Diluted earnings per ordinary share is computed by calculating the effect of potential dilutive ordinary shares outstanding during the year using the treasury 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 30, June 24, June 26, 2015 Net income attributable to shareholders $ 97,115 $ 61,897 $ 43,642 Weighted-average number of ordinary shares outstanding (thousands of shares) 36,927 35,857 35,354 Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares) 925 1,015 630 Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares) 37,852 36,872 35,984 Basic earnings per ordinary share $ 2.63 $ 1.73 $ 1.23 Diluted earnings per ordinary share $ 2.57 $ 1.68 $ 1.21 Outstanding share options excluded in the computation of diluted earnings per ordinary share (1) — — 39,544 (1) These share options were not included in the computation of diluted earnings per ordinary share because the exercise price of the options was greater than the average market price of the underlying shares. |
Cash, cash equivalents and mark
Cash, cash equivalents and marketable securities | 12 Months Ended |
Jun. 30, 2017 | |
Cash, cash equivalents and marketable securities | 5. Cash, cash equivalents and marketable securities The Company’s cash, cash equivalents, and marketable securities can be analyzed as follows: Fair Value (amount in thousands) Carrying Cost Unrealized Cash and Marketable 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 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 Unrealized Cash and Marketable As of June 24, 2016 Cash $ 136,754 $ — $ 136,754 $ — Cash equivalents 6,050 — 6,050 — Corporate bonds and commercial papers 112,128 394 — 112,522 U.S. agency and U.S. treasury securities 28,028 2 — 28,030 Sovereign and municipal securities 1,154 3 — 1,157 Total $ 284,114 $ 399 $ 142,804 $ 141,709 The cash equivalents include short-term bank deposits, investments in money market funds, and marketable securities with maturities of three months or less at the date of purchase. The effective interest rate on short term bank deposits was 0.6% and 0.7% per annum for the years ended June 30, 2017 and June 24, 2016, respectively. As of June 30, 2017 and June 24, 2016, 66% of our cash and cash equivalents were held by the Parent Company. The following table summarizes the cost and estimated fair value of marketable securities classified as available-for-sale securities based on stated effective maturities as of June 30, 2017: (amount in thousands) Carrying Cost Fair Value Due within one year $ 14,369 $ 14,363 Due between one to three years 133,634 133,574 Due after three years 3,519 3,513 Total $ 151,522 $ 151,450 During the year ended June 30, 2017, the net realized loss from changes in fair value of marketable securities recognized by the Company was $0.8 million. As of June 30, 2017 and June 24, 2016, the Company considered the declines in market value of its marketable securities investment portfolio to be temporary in nature and did not consider any of its securities other-than-temporarily impaired. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. No impairment losses were recorded for the years ended June 30, 2017 and June 24, 2016. As of June 30, 2017 and June 24, 2016, cash, cash equivalents, and marketable securities included bank deposits of $40.0 million held in various financial institutions located in the United States in order to support the availability of the Facility Agreement and comply with covenants. Under the terms and conditions of the Facility Agreement, the Company shall maintain cash, cash equivalents and/or marketable securities in an aggregate amount not less than $40.0 million in unencumbered deposits, and/or securities in accounts located in the United States at all times during the term of the Facility Agreement. As discussed in Note 13, the Company must comply with this covenant from and after the effective date of the Facility Agreement. |
Fair Value
Fair Value | 12 Months Ended |
Jun. 30, 2017 | |
Fair Value | 6. Fair Value The following table provides details of the financial instruments measured at fair value on a recurring basis, including: Fair Value Measurements at Reporting Date (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 (1) — 15 Total $ — $ 154,050 $ — $ 154,050 Liabilities Derivative liabilities $ — $ — $ — $ — Total $ — $ — $ — $ — Fair Value Measurements at Reporting Date (amount in thousands) Level 1 Level 2 Level 3 Total As of June 24, 2016 Assets Cash equivalents $ — $ 6,050 $ — $ 6,050 Corporate bonds and commercial papers — 112,522 — 112,522 U.S. agency and U.S. treasury securities — 28,030 — 28,030 Sovereign and municipal securities — 1,157 — 1,157 Derivative assets — 158 (2) — 158 Total $ — $ 147,917 $ — $ 147,917 Liabilities Derivative liabilities $ — $ 1,754 (3) $ — $ 1,754 Total $ — $ 1,754 $ — $ 1,754 (1) Foreign currency forward contract with notional amount of $1.0 million and Canadian dollars 0.6 million. (2) Foreign currency forward contract with notional amount of $7.0 million. (3) Foreign currency forward contract with notional amount of $77.5 million and Canadian dollars 0.6 million. Derivative Financial Instruments As a result of foreign currency rate fluctuations, the U.S. dollar equivalent values of the Company’s foreign currency denominated assets and liabilities change. The Company uses foreign currency contracts to manage the foreign exchange risk associated with certain foreign currency denominated assets and liabilities and other foreign currency transactions. The Company minimizes the credit risk in derivative instruments by limiting its exposure to any single counterparty and by entering into derivative instruments only with counterparties that meet the Company’s minimum credit quality standard. As of June 30, 2017, the Company recognized the fair value of foreign currency forward contracts of $0.02 million as derivative assets in the consolidated balance sheets under other current assets. As of June 24, 2016, the Company recognized the fair value of foreign currency forward contracts of $0.2 million as derivative assets and $1.7 million as derivative liabilities in the consolidated balance sheets under other current assets and accrued expenses, respectively. As of 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 24, 2016, the Company hedged forecasted foreign currency transactions related to the construction costs of a new manufacturing building at the Company’s Chonburi Campus with certain forward contracts, designated as cash flow hedges. The Company had two outstanding forward contracts with notional amount of $7.0 million, which mature during August 2016 and September 2016. The Company included unrealized gain of $0.2 million from changes in fair value of these foreign currency forward contracts, designated as hedging instrument in AOCI in the consolidated balance sheets. As of June 24, 2016, gain of $0.01 million in AOCI is expected to be reclassified as earning within the next 12 months. During the year ended June 24, 2016, there was no ineffective portion or discontinued cash flow hedges recognized in the consolidated statements of operations and comprehensive income. As of June 30, 2017, the Company had 2 outstanding foreign currency forward contracts with notional amount of $1.0 million and Canadian dollars 0.6 million, with maturity dates from July through September 2017. These foreign currency forward 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. During the year ended June 30, 2017, the Company included unrealized gain of $0.02 million from changes in fair value of foreign currency contracts in the consolidated statements of operations and comprehensive income. As of June 24, 2016, the Company had 14 outstanding foreign currency forward contracts with notional amount of $77.5 million and Canadian dollars 0.6 million, which matured during July to December 2016. These foreign currency forward 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 dollar. During the year ended June 24, 2016, the Company included unrealized loss of $1.8 million from changes in fair value of foreign currency contracts in the consolidated statements of operations and comprehensive income. |
Trade accounts receivable, net
Trade accounts receivable, net | 12 Months Ended |
Jun. 30, 2017 | |
Trade accounts receivable, net | 7. Trade accounts receivable, net (amount in thousands) As of June 30, As of June 24, Trade accounts receivable $ 264,389 $ 196,178 Less: Allowance for doubtful account (40 ) (33 ) Trade accounts receivable, net $ 264,349 $ 196,145 As of June 30, 2017, trade accounts receivable of $3.0 million were secured to short-term loans from bank (see Note 13). |
Inventory
Inventory | 12 Months Ended |
Jun. 30, 2017 | |
Inventory | 8. Inventory (amount in thousands) As of June 30, As of June 24, Raw materials $ 88,640 $ 58,199 Work in progress 105,732 94,762 Finished goods 33,998 21,593 Goods in transit 13,025 9,381 241,395 183,935 Less: Inventory obsolescence (2,730 ) (2,436 ) Inventory, net $ 238,665 $ 181,499 |
Business acquisition
Business acquisition | 12 Months Ended |
Jun. 30, 2017 | |
Business acquisition | 9. Business acquisition On September 14, 2016, the Company acquired 100% shareholding in Exception EMS for cash consideration of approximately $13.0 million, net of $0.5 million cash acquired. Exception EMS provides contract electronics manufacturing services to the global electronics industry with innovative solutions, adding value to the design, manufacture and testing of printed circuit board assemblies. Pursuant to the acquisition agreement, the Company has placed $3.3 million of cash, net of foreign currency translation adjustment, for deferred consideration in 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 Exception EMS, 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. 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 allocated to the assets acquired and the liabilities assumed based on their respective fair values on the acquisition date. The Company has made certain estimates and assumptions in determining the allocation of the acquisition consideration. The allocation of consideration to the individual net assets acquired was finalized in the fourth quarter of fiscal year 2017. As the functional currency of Exception EMS is pound sterling (“GBP”), for the year ended June 30, 2017, the Company recognized a $0.3 million loss from foreign currency translation adjustment in its consolidated statements of operations and comprehensive income. During the year ended June 30, 2017, the Company recorded a measurement period adjustment to recognized deferred tax liabilities of $1.2 million related to taxable temporary differences from intangibles and changes in the fair value of assets acquired. Therefore, goodwill which was previously reported at acquisition date of $2.7 million was changed to $3.9 million. The Company’s allocation of the total purchase price for the acquisition is summarized below: (amount in thousands) Purchase 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 Other non-current assets 516 Current liabilities (6,796 ) Deferred tax liabilities (1,148 ) Other non-current liabilities (1,563 ) Total fair value of assets acquired and liabilities assumed $ 13,517 Total purchase price, net of cash acquired $ 13,043 In connection with the Company’s acquisition of Exception EMS, the Company assumed lease agreements for certain machine and equipment, which are accounted for as capital leases. As of June 30, 2017, the Company included approximately $1.9 million of capital lease assets and $1.4 million of capital lease liability in the consolidated balance sheets associated with these acquired lease agreements. During the year ended June 30, 2017, the Company incurred approximately $1.5 million in transaction costs related to the acquisition, which primarily consisted of legal, accounting and valuation-related expenses. These expenses were recorded in selling, general and administrative expense in the accompanying consolidated statements of operations and comprehensive income. 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: Risk free rate: 30-year UK Government Bond adjusted by spot yield to reflect recent volatility Long-term revenue growth: 5.0% - 8.0% Churn rate: 10% Operating margin: 4.0% - 6.0% Customer relationships represent the fair value of future projected revenues derived from the estimated sale of products to existing customers of the acquired company. The fair value of $4.4 million will be amortized over an estimated useful life of ten years. Backlog represents the fair value of sales orders backlog as of the valuation date. The fair value of $0.1 million will be amortized over an estimated useful life of three years. Goodwill Goodwill arising from the acquisition is primarily attributable to the ability to expand future products and services and the assembled workforce. Goodwill is not deductible for tax purposes. |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Jun. 30, 2017 | |
Property, plant and equipment, net | 10. Property, plant and equipment, net The components of property, plant and equipment, net were as follows: (amount in thousands) Land and Building and Building Manufacturing Office Motor Computers Construction Total 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 ) Net book value $ 39,094 $ 106,697 $ 54,955 $ 3,525 $ 158 $ 6,394 $ 6,058 $ 216,881 As of June 24, 2016 Cost $ 39,048 $ 95,386 $ 96,041 $ 5,826 $ 443 $ 15,578 $ 23,248 $ 275,570 Less: Accumulated depreciation — (25,438 ) (56,564 ) (3,500 ) (366 ) (11,292 ) — (97,160 ) Net book value $ 39,048 $ 69,948 $ 39,477 $ 2,326 $ 77 $ 4,286 $ 23,248 $ 178,410 During the year ended June 30, 2017, property, plant and equipment, net included $5.0 million in assets acquired from the acquisition of Exception EMS, of which $1.9 million was capital leased assets. During the year ended June 24, 2016, the Company purchased a parcel of land in Chonburi, Thailand, with an aggregate purchase price of approximately $12.4 million, to support the expansion of its production capacity and capabilities in Thailand. Leased assets included above comprise certain machine and equipment from capital lease agreements assumed from the acquisition of Exception EMS. (amount in thousands) As of June 30, 2017 Cost—Capital leases $ 2,725 Less: Accumulated depreciation (856 ) Net book value $ 1,869 Depreciation expense amounted to $22.5 million, $17.3 million and $12.9 million for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively, and have been allocated between cost of revenues and selling, general and administrative expenses in the consolidated statements of operations and comprehensive income. The cost of fully depreciated property, plant and equipment written-off during the years ended June 30, 2017, June 24, 2016 and June 26, 2015 amounted to $5.4 million, $2.0 million and $1.1 million, respectively. During the years ended June 30, 2017 and June 24, 2016, the Company capitalized $0.5 million and $0.1 million of borrowing costs in construction in progress of its new manufacturing building at Chonburi Campus. The Company stopped capitalizing borrowing costs in the third quarter of fiscal year 2017 upon the completion of this campus. |
Intangibles
Intangibles | 12 Months Ended |
Jun. 30, 2017 | |
Intangibles | 11. Intangibles The following tables present details of the Company’s intangibles: (amount in thousands) Gross Accumulated Foreign 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 Total intangibles $ 10,436 $ (4,507 ) $ (89 ) $ 5,840 (amount in thousands) Gross Accumulated Foreign Net As of June 24, 2016 Software $ 3,786 $ (3,287 ) $ — $ 499 Customer relationships — — — — Backlog — — — — Total intangibles $ 3,786 $ (3,287 ) $ — $ 499 In connection with the acquisition of Exception EMS, the Company recorded $4.4 million of customer relationships and $0.1 million of backlog. As of June 30, 2017, the weighted-average remaining life of customer relationships and backlog was 6.9 years and 1.6 years, respectively. The Company recorded amortization expense relating to intangibles of $1.2 million, $0.1 million and $0.1 million for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. As of June 30, 2017, the estimated future amortization of intangible assets during each fiscal year was as follows: (amount in thousand) 2018 $ 1,482 2019 1,339 2020 934 2021 787 2022 527 Thereafter 771 Total $ 5,840 |
Goodwill
Goodwill | 12 Months Ended |
Jun. 30, 2017 | |
Goodwill | 12. Goodwill As of June 30, 2017, the Company recorded $3.8 million of goodwill, in connection with the acquisition of Exception EMS, in the consolidated balance sheets. The changes in the carrying amount of goodwill were as follows: (amount in thousands) Goodwill Balance as of June 24, 2016 $ — Addition in connection with business acquisition 3,883 Foreign currency translation adjustment (77 ) Balance as of June 30, 2017 $ 3,806 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. As of June 30, 2017, the Company performed the annual impairment test for goodwill, which indicated there was no goodwill impairment. |
Borrowings
Borrowings | 12 Months Ended |
Jun. 30, 2017 | |
Borrowings | 13. Borrowings The Company’s total borrowings, including revolving and long-term borrowings, consisted of the following (dollars in thousands): Rate (1) Conditions Maturity As of June 30, 2017 As of June 24, 2016 Short-term borrowing: Revolving borrowing: LIBOR + 1.75% per annum Repayable in 1 to 6 months July 2017 (2) $ 34,000 $ 6,500 Short-term loans from bank: Bank of England base rate +1.85% Repayable based on credit terms of secured 1,003 — Current portion of long-term borrowing 13,600 18,100 48,603 24,600 Less: Unamortized debt issuance costs (201 ) (293 ) $ 48,402 $ 24,307 Long-term borrowing: LIBOR + 2.80% per annum Repayable in quarterly installments March 2017 $ — $ 4,500 Term loan borrowing: LIBOR + 1.75% per annum Repayable in quarterly installments May 2019 36,400 $ 50,000 36,400 54,500 Less: (13,600 ) (18,100 ) Unamortized debt issuance costs (99 ) (300 ) Non-current portion $ 22,701 $ 36,100 (1) LIBOR is London Interbank Offered Rate. (2) In June 2017, the maturity date of this revolving borrowing was extended to mature in July 2017. The movements of long-term loans were as follows for the years ended June 30, 2017 and June 24, 2016: Years ended (amount in thousands) June 30, 2017 June 24, 2016 Opening net book amount $ 54,500 $ 10,500 Additional loan during the period — 50,000 Repayment during the period (18,100 ) (6,000 ) Closing net book amount $ 36,400 $ 54,500 As of June 30, 2017, the future maturities of long-term debt during each fiscal year were as follows: (amount in thousand) 2018 $ 13,600 2019 22,800 Total $ 36,400 Credit facilities: The Company entered into a syndicated senior credit facility agreement (the “Facility Agreement”) with a consortium of banks on May 22, 2014. The Facility Agreement, led by Bank of America, provides 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. The revolving loan facility contains an accordion feature permitting Fabrinet 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. The revolving loan facility terminates and all amounts outstanding are due and payable in full on May 22, 2019. 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 on May 22, 2019. 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 allows the Company, upon the satisfaction of certain conditions, to designate from time to time one or more of its subsidiaries as borrowers under the Facility Agreement. On July 31, 2015, the Company 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. 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, resulting in available credit facilities of $116.0 million. 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. Subsequent to the balance sheet date, the Company sent a notice to the bank to renew the maturity date of this revolving borrowing. The bank approved the notice and extended the maturity to July 2017. 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. As of June 30, 2017, the Company was in compliance with all covenants under the Facility Agreement. 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. Fabrinet intends to use the proceeds 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. Short-term borrowings from bank In connection with the acquisition of Exception EMS, the Company assumed a secured borrowing agreement that is secured by trade accounts receivable of Exception EMS. As of June 30, 2017, the carrying amount of trade accounts receivable secured to the loans was $3.0 million. The secured borrowing agreement contains certain covenants that Exception EMS is required to comply with: (1) the value of credit notes may not exceed 4% of the value of assigned debts measured on a monthly basis, and (2) rolling cash flow must be provided to the financial institution along with monthly management information. As of June 30, 2017, the subsidiary was in compliance with all covenants under the secured borrowing agreement. As of June 30, 2017, the Company drew down $1.0 million from this facility, which is recorded as short-term loans in the consolidated balance sheets. The agreement bears interest for discount charge at 1.85% per annum above Bank of England base rate. Undrawn available credit facilities classified by available period of future borrowing as of June 30, 2017 and June 24, 2016 were as follows: (amount in thousands) June 30, 2017 June 24, 2016 Short-term $ 1,965 $ 1,414 Long-term $ 116,000 $ 143,500 |
Severance liabilities
Severance liabilities | 12 Months Ended |
Jun. 30, 2017 | |
Severance liabilities | 14. Severance liabilities The following table provides the information of the severance liabilities: (amount in thousands) As of June 30, As of June 24, Balance, beginning of the fiscal year $ 6,684 $ 5,477 Charged to selling, general and administrative expenses in the consolidated statements of operations and comprehensive income 1,804 1,207 Balance, end of the fiscal year $ 8,488 $ 6,684 The amount recognized in the consolidated balance sheets under non-current liabilities was determined as follows: (amount in thousands) As of June 30, As of June 24, Present value of defined benefit obligation $ 8,488 $ 6,684 Total $ 8,488 $ 6,684 The amount recognized in the consolidated statements of operations and comprehensive income was as follows: Years Ended (amount in thousands) June 30, June 24, June 26, Current service cost $ 1,451 $ 842 $ 360 Interest cost 213 203 203 Benefit paid — (11 ) (10 ) Actuarial loss on obligation 140 173 471 Total $ 1,804 $ 1,207 $ 1,024 The principal actuarial assumptions used were as follows: Years Ended June 30, 2017 June 24, 2016 June 26, Discount rate 1.93% - 3.6% 2.0% - 3.2% 4.0% Future salary increases 3.5% - 10.0% 4.1% - 10.0% 4.2% |
Share-based compensation
Share-based compensation | 12 Months Ended |
Jun. 30, 2017 | |
Share-based compensation | 15. Share-based compensation Share-based compensation In determining the fair value of share option awards, the Company is required to make estimates of expected dividends to be issued, expected volatility of Fabrinet’s ordinary shares, expected forfeitures of the awards, risk free interest rates for the expected term of the awards and expected terms of the awards. Forfeitures are estimated at the time of grant and revised if necessary in subsequent periods if actual forfeitures differ from those estimates. The fair value of restricted share units is based on the market value of our ordinary shares on the date of grant. The effect of recording share-based compensation expense for the years ended June 30, 2017, June 24, 2016 and June 26, 2015 was as follows: Years Ended (amount in thousands) June 30, June 24, June 26, Share-based compensation expense by type of award: Share options $ — $ 16 $ 226 Restricted share units 22,412 9,911 7,801 Performance share units 4,095 — — Total share-based compensation expense 26,507 9,927 8,027 Tax effect on share-based compensation expense — — — Net effect on share-based compensation expense $ 26,507 $ 9,927 $ 8,027 Share-based compensation expense was recorded in the consolidated statements of operations and comprehensive income as follows: Years Ended (amount in thousands) June 30, 2017 June 24, 2016 June 26, 2015 Cost of revenue $ 5,318 $ 1,979 $ 1,450 Selling, general and administrative expense 21,189 7,948 6,577 Total share-based compensation expense $ 26,507 $ 9,927 $ 8,027 The Company did not capitalize any share-based compensation expense as part of any asset costs during the years ended June 30, 2017, June 24, 2016 and June 26, 2015. Share-based award activity Share options have been granted to directors and employees. As of June 30, 2017, there were no share options outstanding under Fabrinet’s Amended and Restated 1999 Share Option Plan (“1999 Plan”). Additional option grants may not be made under the 1999 Plan. As of June 30, 2017, there were an aggregate of 96,688 share options outstanding, 1,058,605 restricted share units outstanding and 227,268 performance share units outstanding under Fabrinet’s 2010 Performance Incentive Plan (“2010 Plan”). As of June 30, 2017, there were 1,111,573 ordinary shares available for future grant under Fabrinet’s 2010 Performance Incentive Plan (“2010 Plan”). The 1999 Plan and 2010 Plan are collectively referred to as the “Share Option Plans”. Share options Fabrinet’s board of directors has the authority to determine the type of option and the number of shares subject to an option. Options generally vest and become exercisable over four years and expire, if not exercised, within seven years of the grant date. In the case of a grantee’s first grant, 25 percent of the underlying shares subject to 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 a grantee, 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 share options activity: Number of Shares Number of Weighted- Weighted- Balance as of June 27, 2014 865,890 666,305 $ 16.27 Granted — — — Exercised (56,968 ) $ 14.67 Forfeited (8,347 ) $ 15.90 Expired (8,556 ) $ 21.44 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 Expected to vest as of June 30, 2017 96,688 $ 15.70 The fair value of each share option grant was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment and management estimate to determine. The total fair value of share options vested during the years ended June 30, 2017, June 24, 2016 and June 26, 2015 was nil, $0.2 million and $1.1 million, respectively. The total intrinsic value of options exercised during the years ended June 30, 2017 June 24, 2016 and June 26, 2015 was $8.9 million, $3.6 million and $0.2 million, respectively. In conjunction with these exercises, there was no tax benefit realized by the Company due to the fact that it is exempted from income tax. The amount of cash received from the exercise of share options was $5.9 million during the year ended June 30, 2017. Valuation Method Expected Dividend Expected Volatility Risk-Free Interest Rate Expected Term Vesting Period Fair Value The following table summarizes information for share options outstanding as of June 30, 2017 under the Share Option Plans: Number of Exercise Price Per Weighted Average Aggregate (amount in thousands) 25,238 $ 14.12 1.36 30,000 $ 15.05 0.35 6,100 $ 15.16 1.13 28,300 $ 16.83 0.29 5,550 $ 18.60 1.67 1,500 $ 25.50 0.54 Options outstanding 96,688 0.72 $ 2,607 Options exercisable 96,688 0.72 $ 2,607 Expected to vest as of June 30, 2017 96,688 0.72 $ 2,607 As of June 30, 2017, there was no unrecognized compensation cost under the Share Option Plans. Restricted share units and performance share units Restricted share units are one type of share-based award that may be granted under the 2010 Plan. Restricted share units granted to non-employee directors generally cliff vest 100% on the first of January, approximately one year from the grant date, provided the director continues to serve through such date. Restricted share units granted to employees generally vest in four equal installments over four years on each anniversary of the vesting commencement date. Performance share units granted to executives will vest at the end of a two-year performance period based on the Company’s achievement of pre-defined performance criteria, which consist of revenue and gross margin targets. The actual number of performance share units that may vest at the end of the performance period ranges from 0% to 100% of the award grant. The Company has entered into an employment agreement, as amended on August 12, 2016, with one executive of the Company that provided for accelerated vesting of equity awards under certain circumstances. Pursuant to such agreement, because the executive’s employment with the Company continued through February 20, 2017, (1) all outstanding equity awards granted to the executive prior to August 2016 became 100% vested on February 20, 2017 and (2) certain restricted share units granted to the executive in August 2016 became 100% vested on February 20, 2017. The following table summarizes restricted share unit activity under the 2010 Plan: Number of Weighted- Balance as of June 27, 2014 762,295 $ 14.23 Granted 666,582 $ 17.53 Issued (247,593 ) $ 14.44 Forfeited (40,357 ) $ 16.68 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 Expected to vest as of June 30, 2017 1,024,706 $ 31.56 The following summarizes performance share unit activity under the 2010 Plan: Number of Shares Weighted- 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 Expected to vest as of June 30, 2017 227,268 The fair value of restricted share units and performance share units are based on the market value of our ordinary shares on the date of grant. The total fair value of restricted share units and performance share unit vested during the year ended June 30, 2017, June 24, 2016 and June 26, 2015 was $18.1 million, $7.9 million and $3.6 million, respectively. The aggregate intrinsic value of restricted share units outstanding as of June 30, 2017 was $45.2 million. As of June 30, 2017, there was $16.1 million and $5.1 million of unrecognized share-based compensation expense related to restricted share units and performance share units, respectively, under the 2010 Plan that is expected to be recorded over a weighted-average period of 2.46 years and 1.13 years, respectively. For the years ended June 30, 2017 and June 24, 2016, the Company withheld an aggregate of 37,126 shares and 114,359 shares, respectively, upon the vesting of restricted share units, based upon the closing share price on the vesting date to settle the employees’ minimum statutory obligation for the applicable income and other employment taxes. For fiscal year 2017 and fiscal year 2016, the Company then remitted cash of $1.4 million and $2.5 million, respectively, to the appropriate taxing authorities, and presented it as a financing activity within the consolidated statements of cash flows. The payment had the effect on shares issued by the Company as it reduced the number of shares that would have been issued on the vesting date and was recorded as a reduction of additional paid-in capital. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Jun. 30, 2017 | |
Employee benefit plans | 16. Employee benefit plans Employee contribution plan The Company operates a defined contribution plan, known as a provident fund, in its subsidiaries in Thailand and the United Kingdom. The assets of these plans are in separate trustee-administered funds. The provident fund is funded by matching payments from employees and by the subsidiaries on a monthly basis. Current contributions to the provident fund are accrued and paid to the fund manager on a monthly basis. The Company’s contributions to the provident fund amounted to $3.6 million, $2.8 million and $2.3 million during the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. The Company sponsors the Fabrinet U.S. 401(k) Retirement Plan (“401(k) Plan”), a Defined Contribution Plan under ERISA, at its subsidiaries in the United States which provides retirement benefits for eligible employees through tax deferred salary deductions. The 401(k) Plan allows employees to contribute up to 80% of their annual compensation, subject to annual contributions limits established by the Internal Revenue Service. The Company provides for a 100% match of employees’ contributions to the 401(k) Plan up to the first 6% of annual compensation. All matching contributions are made in cash and vest immediately. The Company’s matching contributions to the 401(k) Plan were $0.6 million, $0.5 million and $0.3 million during the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. Executive incentive plan and employee performance bonuses For the year ended June 30, 2017, the Company maintained an executive incentive plan with quantitative objectives, based on achieving certain revenue and gross margin targets. For the years ended June 24, 2016 and June 26, 2015, the Company maintained an executive incentive plan with quantitative objectives, based on achieving certain revenue and non-GAAP earnings per share targets as well as qualitative objectives, based on achieving individual performance goals for the applicable fiscal year. During the years ended June 30, 2017, June 24, 2016 and June 26, 2015, discretionary merit-based bonus awards were also available to Fabrinet’s non-executive employees. Bonus distributions to employees were $7.6 million, $7.5 million and $6.0 million for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Jun. 30, 2017 | |
Shareholders' equity | 17. Shareholders’ equity Fabrinet’s authorized share capital is 500,000,000 ordinary shares, par value of $0.01 per ordinary share, and 5,000,000 preferred shares, par value of $0.01 per preferred share. 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. For the year ended June 26, 2015, Fabrinet issued 56,968 ordinary shares upon the exercise of options, for cash consideration at a weighted average exercise price of $14.67 per share, and 227,914 ordinary shares upon the vesting of restricted share units, net of shares withheld. All such issued shares are fully paid. |
Accumulated other comprehensive
Accumulated other comprehensive income (loss) | 12 Months Ended |
Jun. 30, 2017 | |
Accumulated other comprehensive income (loss) | 18. Accumulated other comprehensive income (loss) The changes in AOCI by component for the years ended June 30, 2017 and June 24, 2016 were as follows: (amount in thousands) Unrealized net (Losses)/Gains on Marketable Securities Unrealized net (Losses)/Gains Instruments Foreign Total Balance as of June 26, 2015 $ (44 ) $ — $ — $ (44 ) Other comprehensive income before reclassification 637 (298 ) — 339 Amounts reclassified from AOCI (194 ) 490 — 296 Tax effects — — — — Other comprehensive income 399 192 — 591 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 ) The following table presents the pre-tax amounts reclassified from AOCI into the consolidated statements of operations and comprehensive income for the years ended June 30, 2017 and June 24, 2016, respectively (amounts in thousands). Years ended AOCI components Financial statements line item June 30, June 24, Unrealized losses on marketable securities Interest income $ (822 ) $ (194 ) Unrealized gains on derivative instruments Cost of revenues — 471 Selling, general and administrative expenses (158 ) 19 Total amounts reclassified from AOCI $ (980 ) $ 296 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Jun. 30, 2017 | |
Commitments and contingencies | 19. Commitments and contingencies Bank guarantees As of June 30, 2017 and June 24, 2016, there were outstanding bank guarantees given by a bank on behalf of our subsidiary in Thailand for electricity usage and other normal business amounting to $1.5 and $0.8 million, respectively. Operating lease commitments The Company leases a portion of its capital equipment, vehicle, and certain land and buildings for its facilities 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 amounted to $1.7 million, $1.2 million and $1.1 million for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. As of June 30, 2017, the future minimum lease payments due under non-cancelable operating leases during each fiscal year were as follows: (amount in thousands) 2018 $ 1,744 2019 1,162 2020 946 2021 540 2022 416 Thereafter 520 Total future minimum operating lease payments $ 5,328 Capital lease commitments In connection with the acquisition of Exception EMS, 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 30, 2017, the future minimum lease payments under non-cancelable capital leases during each fiscal year were as follows: (amount in thousands) 2018 $ 466 2019 479 2020 422 2021 105 Total 1,472 Less: Future finance charge on capital leases (104 ) Present value of capital lease $ 1,368 Representing capital lease liabilities Current $ 344 Non-current 1,024 Total capital lease liabilities $ 1,368 As of June 30, 2017, the present value of capital lease during each fiscal year were as follows: (amount in thousands) 2018 $ 344 2019 510 2020 409 2021 105 Total future minimum capital lease payments $ 1,368 Purchase obligations Purchase obligations represent legally-binding commitments to purchase inventory and other commitments made in the normal course of business to meet operational requirements. Although open purchase orders are considered enforceable and legally binding, their terms generally give the Company the option to cancel, reschedule and/or adjust its requirements based on its business needs prior to the delivery of goods or performance of services. Obligations to purchase inventory and other commitments are generally expected to be fulfilled within one year. 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 is approximately $5.6 million, of which the first installment of $1.1 million was paid by the Company on January 10, 2017. The Company expects to pay the remaining balance of the purchase price on or before December 25, 2017. As of June 30, 2017, the Company had an outstanding commitment to third parties of $10.6 million, of which $4.5 million was from the commitment to purchase land in Chonburi, Thailand. Indemnification of directors and officers Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Fabrinet’s amended and restated memorandum and articles of association provide for indemnification of directors and officers for actions, costs, charges, losses, damages and expenses incurred in their capacities as such, except that such indemnification does not extend to any matter in respect of any fraud or dishonesty that may attach to any of them. In accordance with Fabrinet’s form of indemnification agreement for its directors and officers, Fabrinet has agreed to indemnify its directors and officers against certain liabilities and expenses incurred by such persons in connection with claims by reason of their being such a director or officer. Fabrinet maintains a director and officer liability insurance policy that may enable it to recover a portion of any future amounts paid under the indemnification agreements. |
Business segments and geographi
Business segments and geographic information | 12 Months Ended |
Jun. 30, 2017 | |
Business segments and geographic information | 20. Business segments and geographic information Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is Fabrinet’s chief executive officer. As of June 30, 2017, June 24, 2016 and June 26, 2015, the Company operated and internally managed a single operating segment. Accordingly, the Company does not accumulate discrete information with respect to separate product lines and does not have separate reportable segments. Total revenues are attributed to a particular geographic area based on the bill-to-location of the customer. The Company operates primarily in three geographic regions: North America, Asia-Pacific and Europe. The following table presents total revenues by geographic regions: Years Ended (amount in thousands) June 30, June 24, June 26, North America $ 661,267 $ 525,161 $ 370,836 Asia-Pacific 539,317 351,033 309,941 Europe 219,906 100,553 92,810 Total $ 1,420,490 $ 976,747 $ 773,587 As of June 30, 2017 and June 24, 2016, the Company had approximately $34.9 million and $34.7 million, respectively, of long-lived assets based in North America, with the substantial remainder of assets based in Asia-Pacific. The following table presents revenues by end market: Years Ended (amount in thousands) June 30, June 24, June 26, Optical communications $ 1,108,637 $ 727,580 $ 553,245 Lasers, sensors, and other 311,853 249,167 220,342 Total $ 1,420,490 $ 976,747 $ 773,587 Significant customers Total revenues, by percentage, from individual customers representing 10% or more of total revenues in the respective periods were as follows: Years Ended June 30, June 24, June 26, Lumentum Operations LLC 17 % 20 % 20 % Oclaro, Inc. * (1) * (1) 10 % (1) Less than 10% of total revenue. Accounts receivable from individual customers representing 10% or more of accounts receivable as of June 30, 2017 and June 24, 2016, respectively, were as follows: As of June 30, 2017 As of June 24, 2016 Lumentum Operations LLC 15 % 18 % NeoPhotonics Corporation 12 % * (1) Acacia Communications Inc. 10 % * (1) Valeo * (1) 11 % (1) Less than 10% of total accounts receivable. |
Financial instruments
Financial instruments | 12 Months Ended |
Jun. 30, 2017 | |
Financial instruments | 21. Financial instruments Objectives and significant terms and conditions The principal financial risks faced by the Company are foreign currency risk and interest rate risk. The Company borrows at floating rates of interest to finance its operations. A minority of sales and purchases and a majority of labor and overhead costs are entered into in foreign currencies. In order to manage the risks arising from fluctuations in currency exchange rates, the Company uses derivative instruments. Trading for speculative purposes is prohibited under Company policies. The Company enters into short-term foreign currency forward and option contracts to manage foreign currency exposures associated with certain assets, liabilities and other forecasted foreign currency transactions and may designate these instruments as hedging instruments. The foreign currency forward and option contracts generally have maturity of up to six months. All foreign currency exchange contracts are recognized on the consolidated balance sheets at fair value. Gain or loss on the Company’s derivative instruments generally offset the assets, liabilities and transactions economically hedged. Foreign currency risk The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Thai baht, Chinese Renminbi (“RMB”) GBP. As of June 30, 2017 and June 24, 2016, the Company had outstanding foreign currency assets and liabilities as follows: As of June 30, 2017 As of June 24, 2016 (amount in thousands) Currency $ Currency $ Assets Thai baht 395,123 $ 11,628 834,536 $ 23,594 RMB 26,965 3,980 14,835 2,255 GBP 6,896 8,982 — — Total $ 24,590 $ 25,849 Liabilities Thai baht 1,875,338 $ 55,189 1,517,782 $ 42,912 RMB 28,451 4,200 24,654 3,748 GBP 5,625 7,326 — — Total $ 66,715 $ 46,660 The Thai baht assets represent cash and cash equivalents, trade accounts receivable, deposits and other current assets. The Thai baht liabilities represent trade accounts payable, accrued expenses, income tax payable and other payables. The Company manages its exposure to fluctuations in foreign exchange rates by the use of foreign currency contracts and offsetting assets and liabilities denominated in the same currency in accordance with management’s policy. As of June 30, 2017 and June 24, 2016, there was $1.0 million and $84.5 million in foreign currency forward contracts, respectively, outstanding on the Thai baht payables. The RMB assets represent cash and cash equivalents, trade accounts receivable and other current assets. The RMB liabilities represent trade accounts payable, accrued expenses, income tax payable and other payables. As of June 30, 2017 and June 24, 2016, there were no derivative contracts denominated in RMB. The GBP assets primarily represent cash, trade accounts receivable and property, plant and equipment, net. The GBP liabilities primarily represent short-term loans, trade accounts payable and other payables. As of June 30, 2017, there were no derivative contracts denominated in GBP. For fiscal year 2017 and fiscal year 2016, the Company recorded unrealized loss of $0.02 million and $1.8 million, respectively, related to derivatives that are not designated as hedging instruments in its consolidated statements of operations and comprehensive income. Interest Rate Risk The Company’s principal interest bearing assets are time deposits and short-term investments with maturities of three months or less held with high quality financial institutions. The Company’s principal interest bearing liabilities are bank loans which bear interest at floating rates. |
Income related to flooding
Income related to flooding | 12 Months Ended |
Jun. 30, 2017 | |
Income related to flooding | 22. Income related to flooding During the week of August 10, 2015, the Company’s subsidiary in China temporarily suspended production in its manufacturing facility due to flooding caused by Typhoon Soudelor and resumed operations on August 15, 2015. During the year ended June 24, 2016, the Company recognized income related to flooding of $0.04 million, which consisted of a $0.9 million final payment from an insurer against the Company’s claim for flood damage, offset by expenses in relation to flood of $0.86 million, which mainly consisted of $0.6 million of repaired cost of equipment and $0.2 million of inventory losses. |
Subsequent event
Subsequent event | 12 Months Ended |
Jun. 30, 2017 | |
Subsequent event | 23. Subsequent event In August 2017, the Company’s Board of Directors approved a share repurchase program to permit the Company to repurchase up to $30.0 million worth of its issued and outstanding ordinary shares in the open market in accordance with applicable rules and regulations, at such time and such prices as management may decide. The repurchased shares will be held as treasury stock. |
UNAUDITED QUARTERLY FINANCIAL I
UNAUDITED QUARTERLY FINANCIAL INFORMATION | 12 Months Ended |
Jun. 30, 2017 | |
UNAUDITED QUARTERLY FINANCIAL INFORMATION | UNAUDITED QUARTERLY FINANCIAL INFORMATION The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal years ended June 30, 2017 and June 24, 2016: Three Months Ended (in thousands, except per share data) Jun 30, Mar 31, Dec 30, Sep 30, Jun 24, Mar 25, Dec 25, Sep 25, Total revenues $ 370,454 $ 366,837 $ 351,156 $ 332,043 $ 276,388 $ 250,888 $ 233,038 $ 216,433 Gross profit $ 44,760 $ 44,046 $ 43,046 $ 39,608 $ 33,842 $ 31,177 $ 28,493 $ 26,011 Net income $ 27,401 $ 21,656 $ 25,292 $ 22,766 $ 19,669 $ 20,822 $ 19,803 $ 1,603 Basic net income per share: Net income $ 0.73 $ 0.58 $ 0.69 $ 0.63 $ 0.55 $ 0.58 $ 0.55 $ 0.05 Weighted-average shares used in basic net income per share calculations 37,334 37,116 36,848 36,404 36,075 35,964 35,812 35,579 Diluted net income per share: Net income $ 0.72 $ 0.57 $ 0.67 $ 0.61 $ 0.53 $ 0.56 $ 0.54 $ 0.04 Weighted-average shares used in diluted net income per share calculations 38,118 37,872 37,805 37,330 37,258 37,089 36,826 36,315 |
Summary of significant accoun32
Summary of significant accounting policies (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
Principles of consolidation | Principles of consolidation The Company utilizes a 52-53 week fiscal year ending on the Friday in June closest to June 30. Fiscal year 2017 ended on June 30, 2017 and consisted of 53 weeks. Fiscal year 2016 and fiscal year 2015 ended on June 24, 2016 and June 26, 2015, respectively, and each consisted of 52 weeks. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and include Fabrinet and its subsidiaries. All inter-company accounts and transactions have been eliminated. Where necessary, comparative figures have been reclassified to conform to the current period accounting policies and presentation adopted. On September 14, 2016, the Company acquired Global CEM Solutions, Ltd. and all of its subsidiaries (collectively, “Exception EMS”), 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 Exception EMS commencing as of the acquisition date. See Note 9—Business acquisition for further details on the accounting for this transaction. |
Use of estimates | Use of estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amount of total revenues and expenses during the year. The Company bases estimates on historical experience and various assumptions about the future that are believed to be reasonable based on available information. The Company’s reported financial position or results of operations may be materially different under different conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies, which are discussed below. Significant assumptions are used in accounting for share-based compensation, allowance for doubtful accounts, income taxes, inventory obsolescence and valuation of intangible assets related to business acquisition, 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 differ from actual results, adjustments will be made in subsequent periods to reflect more current information. |
Foreign currency transactions and translation | Foreign currency transactions and translation The consolidated financial statements are presented in United States dollars (“$” or “USD”). The functional currency of Fabrinet and most of its subsidiaries is the USD. With respect to subsidiaries that use USD as their functional currency, transactions denominated in a currency other than USD are translated into USD at the rates of exchange in effect at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate prevailing at the consolidated balance sheet dates. Transaction gains and losses are included in other income (expense) or foreign exchange gain (loss) in the accompanying consolidated statements of operations and comprehensive income. Fabrinet translates the assets and liabilities of its subsidiaries that do not use USD as their functional currency into USD using exchange rates in effect at the end of each period. Revenue and expenses for such subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in foreign currency translation adjustment included in accumulated other comprehensive income (loss) (“AOCI”). |
Cash and cash equivalents | Cash and cash equivalents All highly liquid investments with original maturities of three months or less at the date of purchase are classified as cash equivalents. Cash and cash equivalents consist of cash deposited in checking accounts, time deposits with maturities of less than three months, money market accounts, and marketable securities with maturities of three months or less at the date of purchase. |
Marketable securities | Marketable securities Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designations at each balance sheet date. The Company may sell certain of the Company’s marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and duration management. The maturities of the Company’s marketable securities generally range from three months to three years. The Company’s marketable securities consist of investment in U.S. Treasury and fixed income securities and have been classified and accounted for as available-for-sale. The Company’s investments in marketable securities are classified as available-for-sale securities and reported at fair value. Unrealized gains and losses related to changes in the fair value of securities are recognized in accumulated other comprehensive income, net of tax, in the Company’s consolidated balance sheets. Changes in the fair value of available-for-sale securities impact the Company’s net income only when such securities are sold or other-than-temporary impairment is recognized. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. The Company reviews its marketable securities on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issue and the Company’s intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that an other-than-temporary decline exists in one of these securities, the Company will write down these investments to fair value. |
Trade accounts receivable | Trade accounts receivable Accounts receivable are carried at anticipated realizable value. The Company assesses the collectability of its accounts receivable based on specific customer circumstances, current economic trends, historical 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 written-off when identified. Unanticipated changes in the liquidity or financial position of the Company’s customers may require revision to the allowances for doubtful accounts. |
Inventory | Inventory Inventory is stated at the lower of cost or market value. Cost is estimated using the standard costing method, computed on a first-in, first-out basis, with adjustments for variances to reflect actual costs not in excess of net realizable market value. Market value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The Company assesses the valuation of inventory on a quarterly basis and writes down the value for estimated excess and obsolete inventory based upon estimates of future demand. |
Leases | Leases Operating leases Payments made under operating leases are expensed on a straight-line basis over the lease term. Capital lease Certain machine and equipment held under capital leases are classified as property, plant and equipment and amortized using the straight-line method over the terms of the lease contracts. The related obligations from the capital lease are recorded as liabilities in the consolidated balance sheets. |
Property, plant and equipment | Property, plant and equipment Land is stated at historical cost. Other property, plant and equipment, except for construction in process and machinery under installation, are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method to write-off the cost of each asset to its residual value over its estimated useful life as follows: Land improvements 10 years Building and building improvements 7 - 30 years Leasehold improvements Shorter of useful life or lease term Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Motor vehicles 3 - 5 years Computer hardware 3 - 5 years Construction in process and machinery under installation is stated at historic cost and depreciation begins after it is constructed and fully installed and is ready for its intended use in the operations of the Company. Gains and losses on disposal are determined by comparing proceeds with carrying amounts and are included in operating income in the consolidated statements of operations and comprehensive income. The Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of long-lived assets or asset groups is measured by comparing their carrying amount to the projected undiscounted cash flows that the long-lived assets or asset groups are expected to generate. If such assets are considered to be impaired, the impairment loss recognized, if any, is the amount by which the carrying amount of the property and equipment exceeds its fair value. |
Intangibles | Intangibles Intangibles are stated at historical cost less amortization. Amortization of customer relationships is calculated using the accelerated method as to reflect the pattern in which the economic benefits of the intangible assets are consumed. Amortization of other intangibles is calculated using the straight-line method. |
Business acquisition | Business acquisition For the acquisition of Exception EMS, 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, $3.3 million of cash for deferred consideration, net of foreign currency translation adjustment, 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 Exception EMS, 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. The cash is presented as restricted cash in the consolidated balance sheets within non-current assets and the related liability is presented within non-current liabilities for the deferred consideration. |
Goodwill | Goodwill Goodwill arising from the acquisition is primarily attributable to the ability to expand future products and services and the assembled workforce. Goodwill is reviewed annually for impairment or more frequently whenever changes or circumstances indicate the carrying amount of goodwill may not be recoverable. |
Borrowing costs | Borrowing costs Borrowing costs are accounted for on an accrual basis and are charged to the consolidated statements of operations and comprehensive income in the year incurred, except for interest costs on general and specific borrowings attributable to finance certain qualifying assets. Such costs to finance qualifying assets are capitalized during the period of time that is required to complete and prepare the assets for their intended use, as part of the cost of the assets. All other borrowing costs are expensed as incurred. Where funds are not borrowed for a specific acquisition, construction or production of assets, the capitalization rate used to determine the amount of interest to be capitalized is the weighted average interest 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. |
Fair value of financial instruments | Fair value of financial instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs for the valuation of an asset or liability as of the measurement date. The three levels of inputs that may be used to measure fair value are defined as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs for similar assets and liabilities in active markets other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 inputs that are significant to the fair value measurement and unobservable (i.e. supported by little or no market activity), which require the reporting entity to develop its own valuation techniques and assumptions. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The carrying amounts of certain financial instruments, which include cash and cash equivalents, trade accounts receivable, and trade accounts payable, approximate their fair values due to their short maturities. The carrying amounts of borrowings approximate their fair values as the applicable interest rate is based on market interest rates. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. |
Derivatives | Derivatives The derivatives assets and liabilities are recognized on the consolidated balance sheets as other current assets or accrued expenses and are measured at fair value. The Company applies hedge accounting to arrangements that qualify and are designated for cash flow or fair value hedge accounting treatment. Hedge accounting is discontinued prospectively if the hedging relationship ceases to be effective or the hedging or hedged items cease to exist as a result of maturity, sale, termination or cancellation. Derivatives designated and qualifying as hedges of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges which include forward currency contracts. In a cash flow hedging relationship, the effective portion of the change in the fair value of the hedging derivative is initially recorded in AOCI, while any ineffective portion is recognized directly in earnings, as a component of other income (expense). The portion of gain or loss on the derivative instrument remains in AOCI until the forecasted transaction is recognized in earnings. The Company also enters into derivative contracts that are intended to economically hedge certain of the Company’s risks. The changes in the fair value of the derivatives are recorded directly in earnings as a component of other income (expense). In accordance with the fair value measurement guidance, the Company’s accounting policy is to 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. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, marketable securities, derivatives and accounts receivable. Cash, cash equivalents and marketable securities are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties. The Company limits its investments in marketable securities to securities with a maturity not in excess of three years, and all marketable securities that the Company invests in are rated A1, P-1, F1, or better. The Company performs ongoing credit evaluations for credit worthiness of its customers and usually does not require collateral from its customers. Management has implemented a program to closely monitor near term cash collection and credit exposures to mitigate any material losses. |
Revenue recognition | Revenue recognition The Company derives total revenues primarily from the assembly of products under supply agreements with its customers and the fabrication of customized optics and glass. Revenues represent the invoiced value of products, net of trade discounts and allowances, and exclude goods and services tax. The Company recognizes revenues when realized or realizable and earned. The Company considers revenues realized or realizable and earned when there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery does not occur until products have been shipped or services have been provided to the customer, risk of loss has transferred to the customer and customer acceptance has been obtained, customer acceptance provisions have lapsed, or the Company has objective evidence that the criteria specified in the customer acceptance provisions have been satisfied. In situations where a formal acceptance is required but the acceptance only relates to whether the product meets its published specifications, revenues are generally recognized upon shipment provided all other revenue recognition criteria are met. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. The Company reduces revenues for rebates and other similar allowances. Revenues are recognized only if these estimates can be reasonably and reliably determined. The Company bases its estimates utilizing historical results taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. In addition to the aforementioned general policies, the following are the specific revenue recognition policies for each major category of revenues. 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 $75.4 million, $31.7 million and $32.3 million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. Sales of goods Revenues from sales of goods are generally recognized when the product is shipped to the customer and when there are no unfulfilled obligations that affect the customer’s final acceptance of the arrangement. Any cost of warranties and remaining obligations that are inconsequential or perfunctory are accrued when the corresponding revenues are recognized. Certain customers may request the Company to store finished products purchased by them at the Company’s warehouse. In these instances, the Company receives a written request from the customer asking the Company to hold the inventory at the Company’s warehouse and the ordered goods are segregated in the Company’s warehouse from other inventory and cannot be used to fulfill other customer orders. In these situations, revenue is only recognized when persuasive evidence of the sales arrangement exists, the goods are completed and ready for shipment, pricing is fixed or determinable, collection is reasonably assured, and title and risk of loss have passed to the customer. |
Warranty provision | Warranty provision Provisions for estimated expenses relating to product warranties are made at the time the products are sold using historical experience. Generally, this warranty is limited to workmanship and the Company’s liability is capped at the price of the product. The provisions will be adjusted when experience indicates an expected settlement will differ from initial estimates. Warranty cost allowances of $1.0 million, $0.1 million and $0.03 million were recognized in the consolidated statements of operations and comprehensive income for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively |
Shipping and handling costs | Shipping and handling costs The Company records costs related to shipping and handling in cost of revenues for all periods presented. |
Share-based compensation | Share-based compensation Share-based compensation is recognized in the consolidated financial statements based on grant-date fair value. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The Company estimates the fair value of share option awards utilizing the Black-Scholes-Merton option-pricing model (“BSM”), net of estimated forfeitures. For restricted share units and performance share units, the fair values are based on the market value of our ordinary shares on the date of grant. |
Employee contribution plan | Employee contribution plan The Company operates a defined contribution plan, known as a provident fund, in its subsidiaries in Thailand and the United Kingdom. The assets of these plans are in separate trustee-administered funds. The provident fund is funded by matching payments from employees and by the subsidiaries on a monthly basis. Current contributions to the provident fund are accrued and paid to the fund manager on a monthly basis. The Company sponsors the Fabrinet U.S. 401(k) Retirement Plan (the “401(k) Plan”), a Defined Contribution Plan under ERISA, at its subsidiaries in the United States, which provides retirement benefits for its eligible employees through tax deferred salary deductions. |
Severance liabilities | Severance liabilities Under labor protection laws applicable in Thailand and the Company’s subsidiary in Thailand’s employment policy, all employees of such subsidiary with more than 120 days of service are entitled to 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 months 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 Company accounts for these severance liabilities on an actuarial basis using the Projected Unit Credit Method, using the long-term Thai government bond yield as a discount rate. There are no separate plan assets held in respect of these liabilities. |
Annual leave | Annual leave Employee entitlements to annual leave are recognized when they accrue to the employee. On termination of employment, accrued employee entitlement to annual leave is paid in cash. |
Income taxes | Income taxes The Company uses the asset and liability method of accounting for income taxes, whereby deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Fabrinet’s subsidiaries are subject to income tax audits by the respective tax authorities in all of the jurisdictions in which they operate. The determination of tax liabilities in each of these jurisdictions requires the interpretation and application of complex and sometimes uncertain tax laws and regulations. The Company recognizes liabilities based on its estimate of whether, and the extent to which, additional tax liabilities are more-likely-than-not. If the Company ultimately determines that the payment of such a liability is not probable, then it reverses the liability and recognizes a tax benefit during the period in which the determination is made that the liability is no longer probable. The recognition and measurement of current taxes payable or refundable and deferred tax assets and liabilities requires that the Company makes certain estimates and judgments. Changes to these estimates or a change in judgment may have a material impact on the Company’s tax provision in a future period. The authoritative guidance provides for recognition of deferred tax assets if the realization of such deferred tax assets is more likely than not to occur based on an evaluation of both positive and negative evidence and the relative weight of the evidence. The Company has determined that it is more likely than not that deferred tax asset attributable to a subsidiary in the United States will not be realized, primarily due to uncertainties related to its ability to utilize its net operating loss carryforward before they expire. Accordingly, the Company has established a valuation allowance for such deferred tax asset. If there is a change in the Company’s ability to realize its deferred tax assets for which a valuation allowance has been established, then its tax provision may decrease in the period in which it determines that realization is more likely than not. Likewise, if the Company determines that it is not more likely than not that its deferred tax assets will be realized, then a valuation allowance may be established for such deferred tax assets and the Company’s tax provision may increase in the period in which it makes the determination. The accounting standard clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. The Company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be sustained upon examination by 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. |
New Accounting Pronouncements - not yet adopted by the Company | New Accounting Pronouncements—not yet adopted by the Company In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This amendment modified the concept of impairment assessment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. Public companies that are SEC filers should adopt the amendment for its annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-03, “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 Emerging Issues Task Force (“EITF”) Meetings.” The amendment provides guidance to the Company in relation to the disclosure of the impact that ASU 2014-09, ASU 2016-02 and ASU 2016-13 will have on the Company’s financial statements when adopted. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “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, 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 to its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “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 statement of cash flows in order to reduce diversity in existing practice. The amendments in ASU 2016-15 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 is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “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. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, for public companies. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, “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 a de-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. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “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 ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): 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. The Company is currently evaluating the impact of the adoption of this update on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606), issued as a new Topic, Accounting Standards Codification.” The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update is effective for public companies, as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application of this guidance is permitted, but not before the original date of December 15, 2016, which can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. Subsequently, in March 2016 and April 2016, the FASB issued ASU 2016-08 and ASU 2016-10, respectively, to clarify the implementation guidance on principle versus agent considerations and address the potential diversity in practice at initial application and cost; and the complexity of applying Topic 606, both at transition and on an ongoing basis related to identification of performance obligations and licensing arrangements; and ASU 2016-12 and ASU 2016-20, in May 2016 and December 2016, respectively, to improve in certain aspects of Topic 606, with the same effective date as ASU 2015-14. The Company is continuing to assess the impact of adopting this new guidance on its consolidated financial statements, including whether the effect will be material. The Company has not decided on the method of adoption. Additionally, as the Company continues to assess the new standard along with industry trends and additional interpretive guidance, the Company may adjust its implementation plan accordingly. The process is still ongoing and the Company expects to make significant progress in the coming quarters. |
New Accounting Pronouncements-adopted by the Company | New Accounting Pronouncements—adopted by the Company In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents and restricted cash or restricted cash equivalents. The Company has early adopted this update in the second quarter of fiscal year 2017 on a retrospective basis but there was no impact to the presentation of the comparative period in the consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes,” which will require entities to present deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) as non-current in a classified balance sheet. The ASU simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and non-current in a classified balance sheet. The Company has early adopted this update in the first quarter of fiscal year 2017. The Company adopted this update on a prospective basis and did not change the presentation of the comparative period. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” which require an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The Company adopted this update in the first quarter of fiscal year 2017 and applied it on a prospective basis. See Footnote 9—Business acquisition, for further disclosure on measurement period adjustments recorded in the year ended June 30, 2017. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The update provides the guidance that an entity, that measured inventory by using first-in, first-out or average cost, should measure inventory at the lower of cost and net realizable value. Subsequent measurement is unchanged for inventory measured using last-in, first-out or the retail inventory method. The Company adopted this update in the first quarter of fiscal year 2017 with no impact to the consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. Additionally, in August 2015, the FASB issued ASU 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” to amend ASU 2015-03. The Company adopted this amendment retrospectively in the first quarter of fiscal year 2017. As of June 30, 2017 and June 24, 2016, debt issuance costs of $0.3 million and $0.6 million, respectively, related to a recognized debt liability are presented in the balance sheet as a direct reduction of the carrying amount of the related debts. In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” ASU No. 2015-02 amended the process that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. In the first quarter of fiscal year 2017, the Company adopted this update with no impact to the consolidated financial statements. In January 2015, the FASB issued ASU 2015-01, “Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” The objective of this amendment is to reduce the complexity in accounting standards by eliminating the concept of extraordinary items from U.S. GAAP. To meet for extraordinary classification the underlying event or transaction should (a) possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity and (b) not reasonably be expected to recur in the foreseeable future. In the first quarter of fiscal year 2017, the Company adopted this update with no impact to the consolidated financial statements. |
Summary of significant accoun33
Summary of significant accounting policies (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Property Plant and Equipment Estimated Useful Life | Depreciation is calculated using the straight-line method to write-off the cost of each asset to its residual value over its estimated useful life as follows: Land improvements 10 years Building and building improvements 7 - 30 years Leasehold improvements Shorter of useful life or lease term Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Motor vehicles 3 - 5 years Computer hardware 3 - 5 years |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Expense | The Company’s income tax expense consisted of the following: Years Ended (amount in thousands) June 30, 2017 June 24, 2016 June 26, 2015 Current $ 6,299 $ 5,413 $ 4,191 Deferred 443 922 (207 ) Total income tax expense $ 6,742 $ 6,335 $ 3,984 |
Reconciliation between Taxes that Would Arise by Applying Statutory Tax Rate of Country of Principal Operations to Effective Tax Charge | The reconciliation between the Company’s taxes that would arise by applying the statutory tax rate of the country of the Company’s principal operations, Thailand, to the Company’s effective tax charge is shown below: Years Ended (amount in thousands) June 30, 2017 June 24, 2016 June 26, 2015 Income before income taxes (1) $ 103,857 $ 68,232 $ 47,626 Tax expense calculated at a statutory corporate income tax rate of 20% 20,771 13,646 9,525 Effect of income taxes from locations with tax rates different from Thailand 1,469 1,573 1,134 Income not subject to tax (2) (17,212 ) (10,493 ) (7,094 ) Income tax on unremitted earnings 1,058 741 1,263 Effect of different tax rate in relation to deferred tax utilization (3) — 894 (221 ) Effect of foreign exchange rate adjustment 667 375 (365 ) Tax rebate from research and development application (226 ) (145 ) (102 ) Others 215 (256 ) (156 ) Corporate income tax expense $ 6,742 $ 6,335 $ 3,984 (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 Building 5 and Building 6. Income not subject to tax per ordinary share on a diluted basis (in dollars) was $0.18, $0.06 and $0.20 for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. (3) The balances were effect of different tax rate in relation to the rate recognized deferred taxes during the fiscal year and the rate when deferred taxes will be utilized in the following fiscal years. |
Deferred Tax Assets and Deferred Tax Liabilities, Net of Valuation Allowance | The Company’s deferred tax assets and deferred tax liabilities, net of valuation allowance, at each balance sheet date are as follows: Years Ended (amount in thousands) June 30, June 24, Deferred tax assets: Depreciation $ 1,674 $ 1,679 Severance liability 1,127 955 Reserves and allowance 1,046 1,363 Loss carrying forward 496 — Others 10 — Total $ 4,353 $ 3,997 Years Ended (amount in thousands) June 30, June 24, Deferred tax liabilities: Temporary differences from intangibles and changes in the fair value of assets acquired $ (944 ) $ — Deferred tax from unremitted earnings (2,485 ) (1,687 ) Total (3,429 ) (1,687 ) Net $ 924 $ 2,310 |
Changes to Unrecognized Tax Benefits | The following table indicates the changes to the Company’s uncertain income tax positions for the years ended June 30, 2017, June 24, 2016 and June 26, 2015 included in other non-current liabilities. (amount in thousands) As of June 30, 2017 As of June 24, 2016 As of June 26, 2015 Beginning balance $ 1,420 $ 1,420 $ 868 Additions during the year — — 552 Reductions for tax positions of prior years — — — Ending balance $ 1,420 $ 1,420 $ 1,420 |
Earnings per ordinary share (Ta
Earnings per ordinary share (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Earnings Per Ordinary Share | The earnings per ordinary share was calculated as follows: Years Ended (amount in thousands except per share amounts) June 30, June 24, June 26, 2015 Net income attributable to shareholders $ 97,115 $ 61,897 $ 43,642 Weighted-average number of ordinary shares outstanding (thousands of shares) 36,927 35,857 35,354 Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares) 925 1,015 630 Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares) 37,852 36,872 35,984 Basic earnings per ordinary share $ 2.63 $ 1.73 $ 1.23 Diluted earnings per ordinary share $ 2.57 $ 1.68 $ 1.21 Outstanding share options excluded in the computation of diluted earnings per ordinary share (1) — — 39,544 (1) These share options were not included in the computation of diluted earnings per ordinary share because the exercise price of the options was greater than the average market price of the underlying shares. |
Cash, cash equivalents and ma36
Cash, cash equivalents and marketable securities (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Cash, Cash Equivalents, and Marketable Securities | The Company’s cash, cash equivalents, and marketable securities can be analyzed as follows: Fair Value (amount in thousands) Carrying Cost Unrealized Cash and Marketable 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 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 Unrealized Cash and Marketable As of June 24, 2016 Cash $ 136,754 $ — $ 136,754 $ — Cash equivalents 6,050 — 6,050 — Corporate bonds and commercial papers 112,128 394 — 112,522 U.S. agency and U.S. treasury securities 28,028 2 — 28,030 Sovereign and municipal securities 1,154 3 — 1,157 Total $ 284,114 $ 399 $ 142,804 $ 141,709 |
Available-for-Sale Securities Based on Stated Effective Maturities | The following table summarizes the cost and estimated fair value of marketable securities classified as available-for-sale securities based on stated effective maturities as of June 30, 2017: (amount in thousands) Carrying Cost Fair Value Due within one year $ 14,369 $ 14,363 Due between one to three years 133,634 133,574 Due after three years 3,519 3,513 Total $ 151,522 $ 151,450 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Financial Instruments Measured at Fair Value on Recurring Basis | The following table provides details of the financial instruments measured at fair value on a recurring basis, including: Fair Value Measurements at Reporting Date (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 (1) — 15 Total $ — $ 154,050 $ — $ 154,050 Liabilities Derivative liabilities $ — $ — $ — $ — Total $ — $ — $ — $ — Fair Value Measurements at Reporting Date (amount in thousands) Level 1 Level 2 Level 3 Total As of June 24, 2016 Assets Cash equivalents $ — $ 6,050 $ — $ 6,050 Corporate bonds and commercial papers — 112,522 — 112,522 U.S. agency and U.S. treasury securities — 28,030 — 28,030 Sovereign and municipal securities — 1,157 — 1,157 Derivative assets — 158 (2) — 158 Total $ — $ 147,917 $ — $ 147,917 Liabilities Derivative liabilities $ — $ 1,754 (3) $ — $ 1,754 Total $ — $ 1,754 $ — $ 1,754 (1) Foreign currency forward contract with notional amount of $1.0 million and Canadian dollars 0.6 million. (2) Foreign currency forward contract with notional amount of $7.0 million. (3) Foreign currency forward contract with notional amount of $77.5 million and Canadian dollars 0.6 million. |
Trade accounts receivable, net
Trade accounts receivable, net (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Trade Accounts Receivable, Net | (amount in thousands) As of June 30, As of June 24, Trade accounts receivable $ 264,389 $ 196,178 Less: Allowance for doubtful account (40 ) (33 ) Trade accounts receivable, net $ 264,349 $ 196,145 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Inventories | (amount in thousands) As of June 30, As of June 24, Raw materials $ 88,640 $ 58,199 Work in progress 105,732 94,762 Finished goods 33,998 21,593 Goods in transit 13,025 9,381 241,395 183,935 Less: Inventory obsolescence (2,730 ) (2,436 ) Inventory, net $ 238,665 $ 181,499 |
Business acquisition (Tables)
Business acquisition (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Allocation of Total Purchase Price | The Company’s allocation of the total purchase price for the acquisition is summarized below: (amount in thousands) Purchase 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 Other non-current assets 516 Current liabilities (6,796 ) Deferred tax liabilities (1,148 ) Other non-current liabilities (1,563 ) Total fair value of assets acquired and liabilities assumed $ 13,517 Total purchase price, net of cash acquired $ 13,043 |
Fair Value of Identified Intangible Assets | The fair value of the identified intangible assets was determined based on the multi-period excess earnings method, which applied the following key assumptions: Risk free rate: 30-year UK Government Bond adjusted by spot yield to reflect recent volatility Long-term revenue growth: 5.0% - 8.0% Churn rate: 10% Operating margin: 4.0% - 6.0% |
Property, plant and equipment41
Property, plant and equipment, net (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment Net | The components of property, plant and equipment, net were as follows: (amount in thousands) Land and Building and Building Manufacturing Office Motor Computers Construction Total 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 ) Net book value $ 39,094 $ 106,697 $ 54,955 $ 3,525 $ 158 $ 6,394 $ 6,058 $ 216,881 As of June 24, 2016 Cost $ 39,048 $ 95,386 $ 96,041 $ 5,826 $ 443 $ 15,578 $ 23,248 $ 275,570 Less: Accumulated depreciation — (25,438 ) (56,564 ) (3,500 ) (366 ) (11,292 ) — (97,160 ) Net book value $ 39,048 $ 69,948 $ 39,477 $ 2,326 $ 77 $ 4,286 $ 23,248 $ 178,410 |
Leased Assets Under Capital Lease Agreements | Leased assets included above comprise certain machine and equipment from capital lease agreements assumed from the acquisition of Exception EMS. (amount in thousands) As of June 30, 2017 Cost—Capital leases $ 2,725 Less: Accumulated depreciation (856 ) Net book value $ 1,869 |
Intangibles (Tables)
Intangibles (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Intangibles | The following tables present details of the Company’s intangibles: (amount in thousands) Gross Accumulated Foreign 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 Total intangibles $ 10,436 $ (4,507 ) $ (89 ) $ 5,840 (amount in thousands) Gross Accumulated Foreign Net As of June 24, 2016 Software $ 3,786 $ (3,287 ) $ — $ 499 Customer relationships — — — — Backlog — — — — Total intangibles $ 3,786 $ (3,287 ) $ — $ 499 |
Estimated Future Amortization of intangibles | As of June 30, 2017, the estimated future amortization of intangible assets during each fiscal year was as follows: (amount in thousand) 2018 $ 1,482 2019 1,339 2020 934 2021 787 2022 527 Thereafter 771 Total $ 5,840 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill were as follows: (amount in thousands) Goodwill Balance as of June 24, 2016 $ — Addition in connection with business acquisition 3,883 Foreign currency translation adjustment (77 ) Balance as of June 30, 2017 $ 3,806 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Total Borrowings, Including Revolving and Long-Term Borrowings | The Company’s total borrowings, including revolving and long-term borrowings, consisted of the following (dollars in thousands): Rate (1) Conditions Maturity As of June 30, 2017 As of June 24, 2016 Short-term borrowing: Revolving borrowing: LIBOR + 1.75% per annum Repayable in 1 to 6 months July 2017 (2) $ 34,000 $ 6,500 Short-term loans from bank: Bank of England base rate +1.85% Repayable based on credit terms of secured 1,003 — Current portion of long-term borrowing 13,600 18,100 48,603 24,600 Less: Unamortized debt issuance costs (201 ) (293 ) $ 48,402 $ 24,307 Long-term borrowing: LIBOR + 2.80% per annum Repayable in quarterly installments March 2017 $ — $ 4,500 Term loan borrowing: LIBOR + 1.75% per annum Repayable in quarterly installments May 2019 36,400 $ 50,000 36,400 54,500 Less: (13,600 ) (18,100 ) Unamortized debt issuance costs (99 ) (300 ) Non-current portion $ 22,701 $ 36,100 (1) LIBOR is London Interbank Offered Rate. (2) In June 2017, the maturity date of this revolving borrowing was extended to mature in July 2017. |
Movements of Long-Term Loans | The movements of long-term loans were as follows for the years ended June 30, 2017 and June 24, 2016: Years ended (amount in thousands) June 30, 2017 June 24, 2016 Opening net book amount $ 54,500 $ 10,500 Additional loan during the period — 50,000 Repayment during the period (18,100 ) (6,000 ) Closing net book amount $ 36,400 $ 54,500 |
Future Maturities of Long-Term Debt | As of June 30, 2017, the future maturities of long-term debt during each fiscal year were as follows: (amount in thousand) 2018 $ 13,600 2019 22,800 Total $ 36,400 |
Undrawn Available Credit Facilities Classified by Available Period of Future Borrowing | Undrawn available credit facilities classified by available period of future borrowing as of June 30, 2017 and June 24, 2016 were as follows: (amount in thousands) June 30, 2017 June 24, 2016 Short-term $ 1,965 $ 1,414 Long-term $ 116,000 $ 143,500 |
Severance liabilities (Tables)
Severance liabilities (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Severance Liabilities | The following table provides the information of the severance liabilities: (amount in thousands) As of June 30, As of June 24, Balance, beginning of the fiscal year $ 6,684 $ 5,477 Charged to selling, general and administrative expenses in the consolidated statements of operations and comprehensive income 1,804 1,207 Balance, end of the fiscal year $ 8,488 $ 6,684 |
Severance Liabilities Recognized in Balance Sheet | The amount recognized in the consolidated balance sheets under non-current liabilities was determined as follows: (amount in thousands) As of June 30, As of June 24, Present value of defined benefit obligation $ 8,488 $ 6,684 Total $ 8,488 $ 6,684 |
Severance Liabilities Recognized in Statements of Operations and Comprehensive Income | The amount recognized in the consolidated statements of operations and comprehensive income was as follows: Years Ended (amount in thousands) June 30, June 24, June 26, Current service cost $ 1,451 $ 842 $ 360 Interest cost 213 203 203 Benefit paid — (11 ) (10 ) Actuarial loss on obligation 140 173 471 Total $ 1,804 $ 1,207 $ 1,024 |
Principal Actuarial Assumptions Used | The principal actuarial assumptions used were as follows: Years Ended June 30, 2017 June 24, 2016 June 26, Discount rate 1.93% - 3.6% 2.0% - 3.2% 4.0% Future salary increases 3.5% - 10.0% 4.1% - 10.0% 4.2% |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Effect of Recording Share-Based Compensation Expense | The effect of recording share-based compensation expense for the years ended June 30, 2017, June 24, 2016 and June 26, 2015 was as follows: Years Ended (amount in thousands) June 30, June 24, June 26, Share-based compensation expense by type of award: Share options $ — $ 16 $ 226 Restricted share units 22,412 9,911 7,801 Performance share units 4,095 — — Total share-based compensation expense 26,507 9,927 8,027 Tax effect on share-based compensation expense — — — Net effect on share-based compensation expense $ 26,507 $ 9,927 $ 8,027 |
Share-Based Compensation Expense Recorded in Consolidated Statements of Operations and Comprehensive Income | Share-based compensation expense was recorded in the consolidated statements of operations and comprehensive income as follows: Years Ended (amount in thousands) June 30, 2017 June 24, 2016 June 26, 2015 Cost of revenue $ 5,318 $ 1,979 $ 1,450 Selling, general and administrative expense 21,189 7,948 6,577 Total share-based compensation expense $ 26,507 $ 9,927 $ 8,027 |
Share Option Activity | The following table summarizes share options activity: Number of Shares Number of Weighted- Weighted- Balance as of June 27, 2014 865,890 666,305 $ 16.27 Granted — — — Exercised (56,968 ) $ 14.67 Forfeited (8,347 ) $ 15.90 Expired (8,556 ) $ 21.44 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 Expected to vest as of June 30, 2017 96,688 $ 15.70 |
Information for Share Options Outstanding | The following table summarizes information for share options outstanding as of June 30, 2017 under the Share Option Plans: Number of Exercise Price Per Weighted Average Aggregate (amount in thousands) 25,238 $ 14.12 1.36 30,000 $ 15.05 0.35 6,100 $ 15.16 1.13 28,300 $ 16.83 0.29 5,550 $ 18.60 1.67 1,500 $ 25.50 0.54 Options outstanding 96,688 0.72 $ 2,607 Options exercisable 96,688 0.72 $ 2,607 Expected to vest as of June 30, 2017 96,688 0.72 $ 2,607 |
Restricted Share Unit Activity | The following table summarizes restricted share unit activity under the 2010 Plan: Number of Weighted- Balance as of June 27, 2014 762,295 $ 14.23 Granted 666,582 $ 17.53 Issued (247,593 ) $ 14.44 Forfeited (40,357 ) $ 16.68 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 Expected to vest as of June 30, 2017 1,024,706 $ 31.56 |
Performance Share Unit Activity | The following summarizes performance share unit activity under the 2010 Plan: Number of Shares Weighted- 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 Expected to vest as of June 30, 2017 227,268 |
Accumulated other comprehensi47
Accumulated other comprehensive income (loss) (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Changes in AOCI, Net of Tax | The changes in AOCI by component for the years ended June 30, 2017 and June 24, 2016 were as follows: (amount in thousands) Unrealized net (Losses)/Gains on Marketable Securities Unrealized net (Losses)/Gains Instruments Foreign Total Balance as of June 26, 2015 $ (44 ) $ — $ — $ (44 ) Other comprehensive income before reclassification 637 (298 ) — 339 Amounts reclassified from AOCI (194 ) 490 — 296 Tax effects — — — — Other comprehensive income 399 192 — 591 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 ) |
Pre-tax Amounts Reclassified from AOCI into Condensed Consolidated Statements of Operations and Comprehensive Income | The following table presents the pre-tax amounts reclassified from AOCI into the consolidated statements of operations and comprehensive income for the years ended June 30, 2017 and June 24, 2016, respectively (amounts in thousands). Years ended AOCI components Financial statements line item June 30, June 24, Unrealized losses on marketable securities Interest income $ (822 ) $ (194 ) Unrealized gains on derivative instruments Cost of revenues — 471 Selling, general and administrative expenses (158 ) 19 Total amounts reclassified from AOCI $ (980 ) $ 296 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Future Minimum Lease Payments Due Under Non-Cancelable Operating Leases | As of June 30, 2017, the future minimum lease payments due under non-cancelable operating leases during each fiscal year were as follows: (amount in thousands) 2018 $ 1,744 2019 1,162 2020 946 2021 540 2022 416 Thereafter 520 Total future minimum operating lease payments $ 5,328 |
Future Minimum Lease Payments Under Non-Cancelable Capital Leases | As of June 30, 2017, the future minimum lease payments under non-cancelable capital leases during each fiscal year were as follows: (amount in thousands) 2018 $ 466 2019 479 2020 422 2021 105 Total 1,472 Less: Future finance charge on capital leases (104 ) Present value of capital lease $ 1,368 As of June 30, 2017, the present value of capital lease during each fiscal year were as follows: (amount in thousands) 2018 $ 344 2019 510 2020 409 2021 105 Total future minimum capital lease payments $ 1,368 |
Capital Lease Liabilities | Representing capital lease liabilities Current $ 344 Non-current 1,024 Total capital lease liabilities $ 1,368 |
Business segments and geograp49
Business segments and geographic information (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Total Revenues by Geographic Regions | The following table presents total revenues by geographic regions: Years Ended (amount in thousands) June 30, June 24, June 26, North America $ 661,267 $ 525,161 $ 370,836 Asia-Pacific 539,317 351,033 309,941 Europe 219,906 100,553 92,810 Total $ 1,420,490 $ 976,747 $ 773,587 |
Revenues by End Market | The following table presents revenues by end market: Years Ended (amount in thousands) June 30, June 24, June 26, Optical communications $ 1,108,637 $ 727,580 $ 553,245 Lasers, sensors, and other 311,853 249,167 220,342 Total $ 1,420,490 $ 976,747 $ 773,587 |
Total Revenues by Percentage from Individual Customers Representing Ten Percent or More of Total Revenues | Total revenues, by percentage, from individual customers representing 10% or more of total revenues in the respective periods were as follows: Years Ended June 30, June 24, June 26, Lumentum Operations LLC 17 % 20 % 20 % Oclaro, Inc. * (1) * (1) 10 % (1) Less than 10% of total revenue. |
Accounts Receivable from Individual Customers Representing Ten Percent or More of Accounts Receivable | Accounts receivable from individual customers representing 10% or more of accounts receivable as of June 30, 2017 and June 24, 2016, respectively, were as follows: As of June 30, 2017 As of June 24, 2016 Lumentum Operations LLC 15 % 18 % NeoPhotonics Corporation 12 % * (1) Acacia Communications Inc. 10 % * (1) Valeo * (1) 11 % (1) Less than 10% of total accounts receivable. |
Financial instruments (Tables)
Financial instruments (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Outstanding Foreign Currency Assets and Liabilities | As of June 30, 2017 and June 24, 2016, the Company had outstanding foreign currency assets and liabilities as follows: As of June 30, 2017 As of June 24, 2016 (amount in thousands) Currency $ Currency $ Assets Thai baht 395,123 $ 11,628 834,536 $ 23,594 RMB 26,965 3,980 14,835 2,255 GBP 6,896 8,982 — — Total $ 24,590 $ 25,849 Liabilities Thai baht 1,875,338 $ 55,189 1,517,782 $ 42,912 RMB 28,451 4,200 24,654 3,748 GBP 5,625 7,326 — — Total $ 66,715 $ 46,660 |
UNAUDITED QUARTERLY FINANCIAL51
UNAUDITED QUARTERLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Quarterly Financial Information | The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal years ended June 30, 2017 and June 24, 2016: Three Months Ended (in thousands, except per share data) Jun 30, Mar 31, Dec 30, Sep 30, Jun 24, Mar 25, Dec 25, Sep 25, Total revenues $ 370,454 $ 366,837 $ 351,156 $ 332,043 $ 276,388 $ 250,888 $ 233,038 $ 216,433 Gross profit $ 44,760 $ 44,046 $ 43,046 $ 39,608 $ 33,842 $ 31,177 $ 28,493 $ 26,011 Net income $ 27,401 $ 21,656 $ 25,292 $ 22,766 $ 19,669 $ 20,822 $ 19,803 $ 1,603 Basic net income per share: Net income $ 0.73 $ 0.58 $ 0.69 $ 0.63 $ 0.55 $ 0.58 $ 0.55 $ 0.05 Weighted-average shares used in basic net income per share calculations 37,334 37,116 36,848 36,404 36,075 35,964 35,812 35,579 Diluted net income per share: Net income $ 0.72 $ 0.57 $ 0.67 $ 0.61 $ 0.53 $ 0.56 $ 0.54 $ 0.04 Weighted-average shares used in diluted net income per share calculations 38,118 37,872 37,805 37,330 37,258 37,089 36,826 36,315 |
Property Plant and Equipment Es
Property Plant and Equipment Estimated Useful Life (Detail) | 12 Months Ended |
Jun. 30, 2017 | |
Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 10 years |
Building and Building Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 7 years |
Building and Building Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 30 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Leasehold improvements | Shorter of useful life or lease term |
Manufacturing Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 3 years |
Manufacturing Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 7 years |
Office Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 3 years |
Office Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 7 years |
Motor Vehicles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 3 years |
Motor Vehicles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 5 years |
Computers | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 3 years |
Computers | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful life | 5 years |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | Sep. 14, 2016 | |
Accounting Policies [Line Items] | ||||
Restricted cash in connection with business acquisition | $ 3,312 | |||
Services revenue recognized | 75,400 | $ 31,700 | $ 32,300 | |
Warranty cost allowances | 1,000 | 100 | $ 30 | |
ASU 2015-15 | ||||
Accounting Policies [Line Items] | ||||
Debt issuance costs | $ 300 | $ 600 | ||
Global CEM Solutions, Ltd. | ||||
Accounting Policies [Line Items] | ||||
Restricted cash in connection with business acquisition | $ 3,300 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | ||
Income Taxes [Line Items] | ||||
Exempted income from corporate income tax | [1] | $ 17,212 | $ 10,493 | $ 7,094 |
Corporate income tax rate | 20.00% | 20.00% | 20.00% | |
Deferred Tax Assets, Net operating Loss carry forwards | $ 496 | |||
Deferred tax liabilities | 2,485 | $ 1,687 | ||
Accrued interest and penalties related to uncertain tax positions | 600 | 400 | ||
Recorded (reversed) interest and penalties | 300 | 200 | $ 100 | |
Fabrinet West Inc | ||||
Income Taxes [Line Items] | ||||
Deferred Tax Assets, Net operating Loss carry forwards | $ 6,400 | 4,900 | ||
Cayman Islands | ||||
Income Taxes [Line Items] | ||||
Tax exemption period | 20 years | |||
Tax exemption renewal period | 20 years | |||
Exempted income from corporate income tax | $ 64,200 | $ 41,000 | $ 27,000 | |
Thailand | ||||
Income Taxes [Line Items] | ||||
Reduced corporate Income Tax rate | 20.00% | |||
Period income earned from operation of Building 6 is not subject to tax | 8 years | |||
Unremitted earnings | 97,300 | $ 68,800 | ||
Unrecognized deferred tax liabilities | 5,200 | 4,200 | ||
Deferred tax liabilities | $ 800 | $ 700 | ||
Thailand | From fiscal year 2017 onwards | ||||
Income Taxes [Line Items] | ||||
Corporate income tax rate | 20.00% | |||
China | ||||
Income Taxes [Line Items] | ||||
Corporate income tax rate | 25.00% | |||
[1] | Income not subject to tax relates to income earned in the Cayman Islands and income subject to an investment promotion privilege for Building 5 and Building 6. Income not subject to tax per ordinary share on a diluted basis (in dollars) was $0.18, $0.06 and $0.20 for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. |
Income Tax Expense (Detail)
Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Income Taxes [Line Items] | |||
Current | $ 6,299 | $ 5,413 | $ 4,191 |
Deferred | 443 | 922 | (207) |
Corporate income tax expense | $ 6,742 | $ 6,335 | $ 3,984 |
Reconciliation between Taxes th
Reconciliation between Taxes that Would Arise by Applying Statutory Tax Rate of Country of Principal Operations to Effective Tax Charge (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | ||
Reconciliation of Effective Income Tax Rate [Line Items] | ||||
Income before income taxes | [1] | $ 103,857 | $ 68,232 | $ 47,626 |
Tax expense calculated at a statutory corporate income tax rate of 20% | 20,771 | 13,646 | 9,525 | |
Effect of income taxes from locations with tax rates different from Thailand | 1,469 | 1,573 | 1,134 | |
Income not subject to tax | [2] | (17,212) | (10,493) | (7,094) |
Income tax on unremitted earnings | 1,058 | 741 | 1,263 | |
Effect of different tax rate in relation to deferred tax utilization | [3] | 894 | (221) | |
Effect of foreign exchange rate adjustment | 667 | 375 | (365) | |
Tax rebate from research and development application | (226) | (145) | (102) | |
Others | 215 | (256) | (156) | |
Corporate income tax expense | $ 6,742 | $ 6,335 | $ 3,984 | |
[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 Building 5 and Building 6. Income not subject to tax per ordinary share on a diluted basis (in dollars) was $0.18, $0.06 and $0.20 for the years ended June 30, 2017, June 24, 2016 and June 26, 2015, respectively. | |||
[3] | The balances were effect of different tax rate in relation to the rate recognized deferred taxes during the fiscal year and the rate when deferred taxes will be utilized in the following fiscal years |
Reconciliation between Taxes 57
Reconciliation between Taxes that Would Arise by Applying Statutory Tax Rate of Country of Principal Operations to Effective Tax Charge (Parenthetical) (Detail) - $ / shares | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Reconciliation of Effective Income Tax Rate [Line Items] | |||
Tax calculated at a corporate income tax rate, rate | 20.00% | 20.00% | 20.00% |
Income (loss) not subject to tax per ordinary share on a diluted basis | $ 0.18 | $ 0.06 | $ 0.20 |
Deferred Tax Assets and Deferre
Deferred Tax Assets and Deferred Tax Liabilities, Net of Valuation Allowance (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Deferred tax assets: | ||
Depreciation | $ 1,674 | $ 1,679 |
Severance liability | 1,127 | 955 |
Reserves and allowance | 1,046 | 1,363 |
Loss carrying forward | 496 | |
Others | 10 | |
Total | 4,353 | 3,997 |
Deferred tax liabilities: | ||
Temporary differences from intangibles and changes in the fair value of assets acquired | (944) | |
Deferred tax from unremitted earnings | (2,485) | (1,687) |
Total | (3,429) | (1,687) |
Net deferred income tax assets | $ 924 | $ 2,310 |
Changes to Unrecognized Tax Ben
Changes to Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Income Tax Contingency [Line Items] | |||
Beginning balance | $ 1,420 | $ 1,420 | $ 868 |
Additions during the year | 552 | ||
Reductions for tax positions of prior years | 0 | 0 | 0 |
Ending balance | $ 1,420 | $ 1,420 | $ 1,420 |
Earnings Per Ordinary Share (De
Earnings Per Ordinary Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 30, 2016 | Sep. 30, 2016 | Jun. 24, 2016 | Mar. 25, 2016 | Dec. 25, 2015 | Sep. 25, 2015 | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||||||||||
Net income attributable to shareholders | $ 27,401 | $ 21,656 | $ 25,292 | $ 22,766 | $ 19,669 | $ 20,822 | $ 19,803 | $ 1,603 | $ 97,115 | $ 61,897 | $ 43,642 | |
Weighted-average number of ordinary shares outstanding (thousands of shares) | 37,334 | 37,116 | 36,848 | 36,404 | 36,075 | 35,964 | 35,812 | 35,579 | 36,927 | 35,857 | 35,354 | |
Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units (thousands of shares) | 925 | 1,015 | 630 | |||||||||
Weighted-average number of ordinary shares for diluted earnings per ordinary share (thousands of shares) | 38,118 | 37,872 | 37,805 | 37,330 | 37,258 | 37,089 | 36,826 | 36,315 | 37,852 | 36,872 | 35,984 | |
Basic earnings per ordinary share | $ 0.73 | $ 0.58 | $ 0.69 | $ 0.63 | $ 0.55 | $ 0.58 | $ 0.55 | $ 0.05 | $ 2.63 | $ 1.73 | $ 1.23 | |
Diluted earnings per ordinary share | $ 0.72 | $ 0.57 | $ 0.67 | $ 0.61 | $ 0.53 | $ 0.56 | $ 0.54 | $ 0.04 | $ 2.57 | $ 1.68 | $ 1.21 | |
Outstanding share options excluded in the computation of diluted earnings per ordinary share | [1] | 39,544 | ||||||||||
[1] | These share options were not included in the computation of diluted earnings per ordinary share because the exercise price of the options was greater than the average market price of the underlying shares. |
Cash, Cash Equivalents, and Mar
Cash, Cash Equivalents, and Marketable Securities (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 |
Cash, cash equivalents and marketable securities [Line Items] | |||
Cash and cash equivalents and Marketable securities, Carrying Cost | $ 285,347 | $ 284,114 | |
Marketable securities, Unrealized (Loss)/ Gain | (72) | 399 | |
Cash and cash equivalents | 133,825 | 142,804 | $ 112,978 |
Marketable securities | 151,450 | 141,709 | |
Cash | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Carrying Cost | 131,240 | 136,754 | |
Cash and cash equivalents | 131,240 | 136,754 | |
Cash Equivalents | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Carrying Cost | 2,585 | 6,050 | |
Cash and cash equivalents | 2,585 | 6,050 | |
Corporate bonds and commercial papers | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Marketable securities, Carrying cost | 98,247 | 112,128 | |
Marketable securities, Unrealized (Loss)/ Gain | 27 | 394 | |
Marketable securities | 98,274 | 112,522 | |
U.S. agency and U.S. treasury securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Marketable securities, Carrying cost | 50,768 | 28,028 | |
Marketable securities, Unrealized (Loss)/ Gain | (102) | 2 | |
Marketable securities | 50,666 | 28,030 | |
Sovereign And Municipal Securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Marketable securities, Carrying cost | 2,507 | 1,154 | |
Marketable securities, Unrealized (Loss)/ Gain | 3 | 3 | |
Marketable securities | $ 2,510 | $ 1,157 |
Cash, Cash Equivalents and Ma62
Cash, Cash Equivalents and Marketable Securities - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 24, 2016 | |
Cash, cash equivalents and marketable securities [Line Items] | ||
Effective interest rate on short term bank deposits | 0.60% | 0.70% |
Percentage of cash and cash equivalents held by parent company | 66.00% | 66.00% |
Net realized loss from changes in fair value of marketable securities | $ 800,000 | |
Impairment losses | 0 | $ 0 |
Cash, cash equivalents and marketable securities at financial institutions located in the United States | $ 40,000,000 | $ 40,000,000 |
Available-for-Sale Securities B
Available-for-Sale Securities Based on Stated Effective Maturities (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Carrying cost | ||
Due within one year | $ 14,369 | |
Due between one to three years | 133,634 | |
Due after three years | 3,519 | |
Total | 151,522 | |
Fair value | ||
Due within one year | 14,363 | |
Due between one to three years | 133,574 | |
Due after three years | 3,513 | |
Total | $ 151,450 | $ 141,709 |
Financial Instruments Measured
Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 | |||
Assets | |||||
Derivative assets | $ 15 | $ 158 | |||
Total | 154,050 | 147,917 | |||
Liabilities | |||||
Derivative liabilities | 1,754 | ||||
Total | 1,754 | ||||
Cash Equivalents | |||||
Assets | |||||
Marketable securities | 2,585 | 6,050 | |||
Corporate bonds and commercial papers | |||||
Assets | |||||
Marketable securities | 98,274 | 112,522 | |||
U.S. agency and U.S. treasury securities | |||||
Assets | |||||
Marketable securities | 50,666 | 28,030 | |||
Sovereign And Municipal Securities | |||||
Assets | |||||
Marketable securities | 2,510 | 1,157 | |||
Significant Other Observable Inputs (Level 2) | |||||
Assets | |||||
Derivative assets | 15 | [1] | 158 | [2] | |
Total | 154,050 | 147,917 | |||
Liabilities | |||||
Derivative liabilities | [3] | 1,754 | |||
Total | 1,754 | ||||
Significant Other Observable Inputs (Level 2) | Cash Equivalents | |||||
Assets | |||||
Marketable securities | 2,585 | 6,050 | |||
Significant Other Observable Inputs (Level 2) | Corporate bonds and commercial papers | |||||
Assets | |||||
Marketable securities | 98,274 | 112,522 | |||
Significant Other Observable Inputs (Level 2) | U.S. agency and U.S. treasury securities | |||||
Assets | |||||
Marketable securities | 50,666 | 28,030 | |||
Significant Other Observable Inputs (Level 2) | Sovereign And Municipal Securities | |||||
Assets | |||||
Marketable securities | $ 2,510 | $ 1,157 | |||
[1] | Foreign currency forward contract with notional amount of $1.0 million and Canadian dollars 0.6 million. | ||||
[2] | Foreign currency forward contract with notional amount of $7.0 million. | ||||
[3] | Foreign currency forward contract with notional amount of $77.5 million and Canadian dollars 0.6 million. |
Financial Instruments Measure65
Financial Instruments Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - Foreign currency forward contracts - Fair Value, Measurements, Recurring CAD in Millions, $ in Millions | Jun. 30, 2017USD ($) | Jun. 30, 2017CAD | Jun. 24, 2016USD ($) | Jun. 24, 2016CAD |
Fair Value Measurements at Reporting Date Using | ||||
Derivative assets, notional amount | $ 1 | CAD 0.6 | $ 7 | |
Derivative liabilities, notional amount | $ 77.5 | CAD 0.6 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) | 12 Months Ended | ||||
Jun. 30, 2017USD ($)Contract | Jun. 24, 2016USD ($)Contract | Jun. 26, 2015USD ($) | Jun. 30, 2017CADContract | Jun. 24, 2016CADContract | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Unrealized gain (loss) on derivatives | $ (1,884,000) | $ (1,905,000) | $ (671,000) | ||
Foreign currency forward contracts | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Derivative assets | $ 20,000 | 200,000 | |||
Derivative liabilities | $ 1,700,000 | ||||
Foreign currency forward contracts | Non designated | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Number of forward contracts outstanding | Contract | 2 | 14 | 2 | 14 | |
Derivative notional amount | $ 1,000,000 | $ 77,500,000 | CAD 600,000 | CAD 600,000 | |
Unrealized gain (loss) on derivatives | $ 20,000 | $ (1,800,000) | |||
Foreign currency forward contracts | Non designated | Minimum | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Derivative maturity period | 2017-07 | 2016-07 | |||
Foreign currency forward contracts | Non designated | Maximum | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Derivative maturity period | 2017-09 | 2016-12 | |||
Foreign currency forward contracts | Cash Flow Hedging | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Gain recognized from discontinued cash flow hedges | $ 300,000 | ||||
Number of forward contracts outstanding | Contract | 0 | 2 | 0 | 2 | |
Derivative assets, notional amount | $ 7,000,000 | ||||
Unrealized gain (loss) on derivatives | 200,000 | ||||
Derivative ineffective portion | 0 | ||||
Foreign currency cash flow hedge gain to be reclassified during next 12 months | 10,000 | ||||
Discontinued of cash flow hedges recognized | $ 0 | ||||
Foreign currency forward contracts | Cash Flow Hedging | Minimum | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Derivative maturity period | 2016-08 | ||||
Foreign currency forward contracts | Cash Flow Hedging | Maximum | |||||
Foreign Currency Fair Value Hedge Derivative [Line Items] | |||||
Derivative maturity period | 2016-09 |
Trade Accounts Receivable, Ne67
Trade Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade accounts receivable | $ 264,389 | $ 196,178 |
Less: Allowance for doubtful account | (40) | (33) |
Trade accounts receivable, net | $ 264,349 | $ 196,145 |
Trade Accounts Receivable, Ne68
Trade Accounts Receivable, Net - Additional Information (Detail) $ in Millions | Jun. 30, 2017USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Trade accounts receivable secured to short-term loans from bank | $ 3 |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 88,640 | $ 58,199 |
Work in progress | 105,732 | 94,762 |
Finished goods | 33,998 | 21,593 |
Goods in transit | 13,025 | 9,381 |
Inventory, Gross, Total | 241,395 | 183,935 |
Less: Inventory obsolescence | (2,730) | (2,436) |
Inventory, net | $ 238,665 | $ 181,499 |
Business Acquisition - Addition
Business Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 14, 2016 | Jun. 30, 2017 | Jun. 24, 2016 |
Business Acquisition [Line Items] | |||
Total cash consideration, net of cash acquired | $ 9,917 | ||
Restricted cash in connection with business acquisition | 3,312 | ||
Foreign currency translation adjustment | (310) | ||
Goodwill | 3,806 | $ 0 | |
Capital lease assets | 1,869 | ||
Capital lease liability | 1,368 | ||
Global CEM Solutions, Ltd. | |||
Business Acquisition [Line Items] | |||
Total cash consideration, net of cash acquired | $ 13,043 | ||
Business acquisition, cash acquired | $ 500 | ||
Percentage of ownership acquired | 100.00% | ||
Restricted cash in connection with business acquisition | $ 3,300 | ||
Foreign currency translation adjustment | (300) | ||
Goodwill | 3,883 | 3,800 | |
Deferred tax liabilities | 1,148 | 1,200 | |
Capital lease assets | 1,900 | ||
Capital lease liability | 1,400 | ||
Global CEM Solutions, Ltd. | Scenario, Previously Reported | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 2,700 | 3,900 | |
Global CEM Solutions, Ltd. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 4,400 | ||
Estimated useful life | 10 years | ||
Global CEM Solutions, Ltd. | Backlog | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 100 | ||
Estimated useful life | 3 years | ||
Global CEM Solutions, Ltd. | Selling, General and Administrative Expenses | |||
Business Acquisition [Line Items] | |||
Transaction costs related to acquisition | $ 1,500 |
Allocation of Total Purchase Pr
Allocation of Total Purchase Price (Detail) - USD ($) $ in Thousands | Sep. 14, 2016 | Jun. 30, 2017 | Jun. 24, 2016 |
Business Acquisition [Line Items] | |||
Property, plant and equipment | $ 5,000 | ||
Goodwill | 3,806 | $ 0 | |
Total purchase price, net of cash acquired | 9,917 | ||
Global CEM Solutions, Ltd. | |||
Business Acquisition [Line Items] | |||
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 | 3,800 | |
Other non-current assets | 516 | ||
Current liabilities | (6,796) | ||
Deferred tax liabilities | (1,148) | $ (1,200) | |
Other non-current liabilities | (1,563) | ||
Total fair value of assets acquired and liabilities assumed | 13,517 | ||
Total purchase price, net of cash acquired | $ 13,043 |
Fair Value of Identified Intang
Fair Value of Identified Intangible Assets (Detail) - Identified Intangible Assets | 12 Months Ended |
Jun. 30, 2017 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Risk free rate: | 30-year UK Government Bond adjusted by spot yield to reflect recent volatility |
Risk free rate: | 30 years |
Churn rate: | 10.00% |
Minimum | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Long-term revenue growth: | 5.00% |
Operating margin: | 4.00% |
Maximum | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Long-term revenue growth: | 8.00% |
Operating margin: | 6.00% |
Property Plant and Equipment Ne
Property Plant and Equipment Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 338,681 | $ 275,570 |
Less: Accumulated depreciation | (121,800) | (97,160) |
Net book value | 216,881 | 178,410 |
Land and Land Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 39,096 | 39,048 |
Less: Accumulated depreciation | (2) | |
Net book value | 39,094 | 39,048 |
Building and Building Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 138,578 | 95,386 |
Less: Accumulated depreciation | (31,881) | (25,438) |
Net book value | 106,697 | 69,948 |
Manufacturing Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 127,085 | 96,041 |
Less: Accumulated depreciation | (72,130) | (56,564) |
Net book value | 54,955 | 39,477 |
Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 7,688 | 5,826 |
Less: Accumulated depreciation | (4,163) | (3,500) |
Net book value | 3,525 | 2,326 |
Motor Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 534 | 443 |
Less: Accumulated depreciation | (376) | (366) |
Net book value | 158 | 77 |
Computers | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 19,642 | 15,578 |
Less: Accumulated depreciation | (13,248) | (11,292) |
Net book value | 6,394 | 4,286 |
Construction and Machinery Under Installation | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 6,058 | 23,248 |
Net book value | $ 6,058 | $ 23,248 |
Property Plant and Equipment, N
Property Plant and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Aggregate Purchase price of land | $ 12,400 | ||
Property, plant and equipment, assets acquired from acquisition | $ 5,000 | ||
Capital leased asset | 1,869 | ||
Depreciation expense | 22,500 | 17,300 | $ 12,900 |
Property, plant and equipment written-off, fully depreciated cost | 5,400 | 2,000 | $ 1,100 |
Capitalized interest expense related to long-term loan | $ 500 | $ 100 |
Leased Assets Under Capital Lea
Leased Assets Under Capital Lease Agreements (Detail) $ in Thousands | Jun. 30, 2017USD ($) |
Property, Plant and Equipment [Line Items] | |
Cost-Capital leases | $ 2,725 |
Less: Accumulated depreciation | (856) |
Net book value | $ 1,869 |
Intangibles (Detail)
Intangibles (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2017 | Jun. 24, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 10,436 | $ 3,786 |
Accumulated Amortization | (4,507) | (3,287) |
Foreign Currency Translation Adjustment | (89) | |
Net | 5,840 | 499 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,944 | 3,786 |
Accumulated Amortization | (3,850) | (3,287) |
Net | 2,094 | $ 499 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,373 | |
Accumulated Amortization | (606) | |
Foreign Currency Translation Adjustment | (88) | |
Net | 3,679 | |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 119 | |
Accumulated Amortization | (51) | |
Foreign Currency Translation Adjustment | (1) | |
Net | $ 67 |
Intangibles - Additional Inform
Intangibles - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense related to intangibles | $ 1.2 | $ 0.1 | $ 0.1 |
Global CEM Solutions, Ltd. | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 4.4 | ||
Weighted average remaining life of acquired intangible assets | 6 years 10 months 25 days | ||
Global CEM Solutions, Ltd. | Backlog | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $ 0.1 | ||
Weighted average remaining life of acquired intangible assets | 1 year 7 months 6 days |
Estimated Future Amortization o
Estimated Future Amortization of Intangibles (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
2,018 | $ 1,482 | |
2,019 | 1,339 | |
2,020 | 934 | |
2,021 | 787 | |
2,022 | 527 | |
Thereafter | 771 | |
Total | $ 5,840 | $ 499 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) | Jun. 30, 2017 | Sep. 14, 2016 | Jun. 24, 2016 |
Goodwill [Line Items] | |||
Goodwill | $ 3,806,000 | $ 0 | |
Goodwill impairment charges | 0 | ||
Global CEM Solutions, Ltd. | |||
Goodwill [Line Items] | |||
Goodwill | $ 3,800,000 | $ 3,883,000 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 12 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Balance as of June 24, 2016 | $ 0 |
Addition in connection with business acquisition | 3,883 |
Foreign currency translation adjustment | (77) |
Balance as of June 30, 2017 | $ 3,806 |
Total Borrowings, Including Rev
Total Borrowings, Including Revolving and Long-Term Borrowings (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | ||
Debt Instrument [Line Items] | ||||
Revolving borrowing | $ 34,000 | $ 6,500 | ||
Short-term loans from bank | 1,003 | |||
Current portion of long-term borrowing | 13,600 | 18,100 | ||
Bank borrowings, gross | 48,603 | 24,600 | ||
Less: Unamortized debt issuance costs | (201) | (293) | ||
Bank borrowings, net of unamortized debt issuance costs | 48,402 | 24,307 | ||
Long-term borrowing | 36,400 | 54,500 | $ 10,500 | |
Unamortized debt issuance costs | (99) | (300) | ||
Non-current portion | $ 22,701 | 36,100 | ||
Short-term loans from bank | ||||
Debt Instrument [Line Items] | ||||
Rate | [1] | Bank of England base rate +1.85% | ||
Conditions | Repayable based on credit terms of secured accounts receivable | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Rate | [1] | LIBOR + 1.75% per annum | ||
Conditions | Repayable in 1 to 6 months | |||
Term | [2] | 2017-07 | ||
Revolving borrowing | $ 34,000 | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Repayment duration | 1 month | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Repayment duration | 6 months | |||
LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 1.75% | |||
LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 2.50% | |||
LIBOR | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 1.75% | |||
Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 0.75% | |||
Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 1.50% | |||
Base Rate | Short-term loans from bank | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 1.85% | |||
Loans Payable Due March 2017 | ||||
Debt Instrument [Line Items] | ||||
Rate | [1] | LIBOR + 2.80% per annum | ||
Conditions | Repayable in quarterly installments | |||
Term | 2017-03 | |||
Long-term borrowing | 4,500 | |||
Loans Payable Due March 2017 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 2.80% | |||
Loans Payable Due May 2019 | ||||
Debt Instrument [Line Items] | ||||
Rate | [1] | LIBOR + 1.75% per annum | ||
Conditions | Repayable in quarterly installments | |||
Term | 2019-05 | |||
Long-term borrowing | $ 36,400 | $ 50,000 | ||
Loans Payable Due May 2019 | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Margin above rate | 1.75% | |||
[1] | LIBOR is London Interbank Offered Rate. | |||
[2] | In June 2017, the maturity date of this revolving borrowing was extended to mature in July 2017. |
Total Borrowings, Including R82
Total Borrowings, Including Revolving and Long-Term Borrowings (Parenthetical) (Detail) | 1 Months Ended |
Jun. 30, 2017 | |
Debt Instrument [Line Items] | |
Extended maturity date | 2017-07 |
Movements of Long-Term Loans (D
Movements of Long-Term Loans (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Debt Instrument [Line Items] | |||
Opening net book amount | $ 54,500 | $ 10,500 | |
Additional loan during the period | 50,000 | ||
Repayment during the period | (18,100) | (6,000) | $ (6,000) |
Closing net book amount | $ 36,400 | $ 54,500 | $ 10,500 |
Future Maturities of Long-Term
Future Maturities of Long-Term Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 |
Debt Instrument [Line Items] | |||
2,018 | $ 13,600 | ||
2,019 | 22,800 | ||
Total | $ 36,400 | $ 54,500 | $ 10,500 |
Borrowings - Additional Informa
Borrowings - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 24, 2016 | |
Line of Credit Facility [Line Items] | |||
Line of credit facility borrowing capacity | $ 200,000,000 | $ 200,000,000 | |
Line of credit facility amounts outstanding | 34,000,000 | 34,000,000 | $ 6,500,000 |
Proceeds of long-term loan from bank | 50,000,000 | ||
Undrawn available credit facilities for long-term borrowing | $ 116,000,000 | 116,000,000 | |
Extended maturity date | 2017-07 | ||
Cash, cash equivalents and marketable securities at financial institutions located in the United States | $ 40,000,000 | 40,000,000 | 40,000,000 |
Deposits or securities | 10,000,000 | 10,000,000 | |
Minimum net worth required for credit agreement | 200,000,000 | $ 200,000,000 | |
Percentage of quarterly net income required for credit agreement | 50.00% | ||
Minimum debt service coverage ratio | 150.00% | ||
Maximum senior leverage ratio | 250.00% | ||
Minimum quick ratio required for credit agreement | 110.00% | ||
Trade accounts receivable, net | 264,349,000 | $ 264,349,000 | 196,145,000 |
Short-term loans from bank | 1,003,000 | 1,003,000 | |
Short-term loans from bank | |||
Line of Credit Facility [Line Items] | |||
Trade accounts receivable, net | $ 3,000,000 | $ 3,000,000 | |
Credit facility maximum borrowing capacity, percentage | 4.00% | 4.00% | |
Interest rate on short term loans | 1.85% | 1.85% | |
LIBOR | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate | LIBOR rate plus a spread of 1.75% to 2.50% | ||
LIBOR | Minimum | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate, percentage | 1.75% | ||
LIBOR | Maximum | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate, percentage | 2.50% | ||
Base Rate | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate | Base rate, determined in accordance with the Facility Agreement, plus a spread of 0.75% to 1.50% | ||
Base Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate, percentage | 0.75% | ||
Base Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate, percentage | 1.50% | ||
Base Rate | Short-term loans from bank | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate, percentage | 1.85% | ||
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility borrowing capacity | $ 150,000,000 | $ 150,000,000 | |
Line of credit facility increase in borrowing capacity | 100,000,000 | $ 100,000,000 | |
Line of credit expiration date | May 22, 2019 | ||
Line of credit facility amounts outstanding | $ 34,000,000 | $ 34,000,000 | |
Extended maturity date | 2017-07 | ||
Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Repayment duration | 1 month | ||
Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Repayment duration | 6 months | ||
Revolving Credit Facility | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Credit line interest rate, percentage | 1.75% | ||
Term Loan Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility borrowing capacity | $ 50,000,000 | $ 50,000,000 | |
Line of credit expiration date | May 22, 2019 | ||
Line of credit facility amounts outstanding | $ 36,400,000 | $ 36,400,000 | |
Proceeds of long-term loan from bank | $ 50,000,000 |
Undrawn Available Credit Facili
Undrawn Available Credit Facilities Classified by Available Period of Future Borrowing (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 |
Line of Credit Facility [Line Items] | ||
Undrawn available credit facilities | $ 116,000 | |
Short-term loans | ||
Line of Credit Facility [Line Items] | ||
Undrawn available credit facilities | 1,965 | $ 1,414 |
Long-term loans | ||
Line of Credit Facility [Line Items] | ||
Undrawn available credit facilities | $ 116,000 | $ 143,500 |
Severance Liabilities (Detail)
Severance Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Balance, beginning of the fiscal year | $ 6,684 | $ 5,477 | |
Charged to selling, general and administrative expenses in the consolidated statements of operations and comprehensive income | 1,804 | 1,207 | $ 1,024 |
Balance, end of the fiscal year | $ 8,488 | $ 6,684 | $ 5,477 |
Severance Liabilities Recognize
Severance Liabilities Recognized in Balance Sheet (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 |
Defined Benefit Plan Disclosure [Line Items] | |||
Present value of defined benefit obligation | $ 8,488 | $ 6,684 | |
Total | $ 8,488 | $ 6,684 | $ 5,477 |
Severance Costs Recognized in S
Severance Costs Recognized in Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Current service cost | $ 1,451 | $ 842 | $ 360 |
Interest cost | 213 | 203 | 203 |
Benefit paid | (11) | (10) | |
Actuarial loss on obligation | 140 | 173 | 471 |
Total | $ 1,804 | $ 1,207 | $ 1,024 |
Principal Actuarial Assumptions
Principal Actuarial Assumptions Used (Detail) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.00% | ||
Future salary increases | 4.20% | ||
Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 1.93% | 2.00% | |
Future salary increases | 3.50% | 4.10% | |
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.60% | 3.20% | |
Future salary increases | 10.00% | 10.00% |
Effect of Recording Share-Based
Effect of Recording Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Share-based compensation expense by type of award: | |||
Share options | $ 16 | $ 226 | |
Restricted share units | $ 22,412 | 9,911 | 7,801 |
Performance share units | 4,095 | ||
Total share-based compensation expense | 26,507 | 9,927 | 8,027 |
Tax effect on share-based compensation expense | 0 | 0 | 0 |
Net effect on share-based compensation expense | $ 26,507 | $ 9,927 | $ 8,027 |
Share-Based Compensation Expens
Share-Based Compensation Expense Recorded in Condensed Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 26,507 | $ 9,927 | $ 8,027 |
Cost of Revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 5,318 | 1,979 | 1,450 |
Selling, General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 21,189 | $ 7,948 | $ 6,577 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) | 12 Months Ended | |||
Jun. 30, 2017USD ($)Installmentshares | Jun. 24, 2016USD ($)shares | Jun. 26, 2015USD ($)shares | Jun. 27, 2014shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation costs capitalized | $ 0 | $ 0 | $ 0 | |
Total fair value of shares vested | 200,000 | 1,100,000 | ||
Total intrinsic value of options exercised | 8,900,000 | $ 3,600,000 | 200,000 | |
Cash received from the exercise of share options | 5,900,000 | |||
Tax benefit realized | $ 0 | |||
Annualized dividend yield | 0.00% | |||
Shares withheld to settle employee minimum statutory obligation for applicable income and other employment taxes | shares | 37,126 | 114,359 | ||
Tax withholdings related to net share settlement of restricted share units | $ 1,425,000 | $ 2,463,000 | $ 352,000 | |
Stock Plan 1999 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share options outstanding | shares | 0 | |||
Stock Plan 2010 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share options outstanding | shares | 96,688 | |||
Ordinary shares available for future grant | shares | 1,111,573 | |||
Performance Share Units | Stock Plan 2010 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share units outstanding | shares | 227,268 | 0 | ||
Performance Share Units | Executive of the Company | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award granted vesting period, year | 2 years | |||
Performance Share Units | Executive of the Company | Vest at the end of the performance period | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 0.00% | |||
Performance Share Units | Executive of the Company | Vest at the end of the performance period | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 100.00% | |||
Restricted Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award granted vesting period, year | 4 years | |||
Award granted, equal installments | Installment | 4 | |||
Aggregate intrinsic value of restricted share units outstanding | $ 45,200,000 | |||
Restricted Share Units | Stock Plan 2010 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share units outstanding | shares | 1,058,605 | 1,181,402 | 1,140,927 | 762,295 |
Unrecognized share-based compensation expense | $ 16,100,000 | |||
Unrecognized compensation expense, weighted-average period for recognition | 2 years 5 months 16 days | |||
Restricted Share Units | Executive of the Company | Granted to the executive prior to August 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 100.00% | |||
Restricted Share Units | Executive of the Company | Granted to the executive in August 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 100.00% | |||
Restricted Share Units | Non Employee Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award granted vesting period, year | 1 year | |||
Restricted Share Units | Non Employee Director | Vest on the first of January | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 100.00% | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award granted vesting period, year | 4 years | |||
Options expiration period, year | 7 years | |||
Employee Stock Option | Stock Plan 2010 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense | $ 0 | |||
Employee Stock Option | Vest 12 months after the vesting commencement date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 25.00% | |||
Employee Stock Option | Vest monthly over each of the subsequent 36 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 2.083% | |||
Employee Stock Option | Vest monthly over four years, commencing one month after the vesting commencement date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting percentage | 2.083% | |||
Restricted Share Units and Performance Share Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total fair value of restricted share units vested | $ 18,100,000 | $ 7,900,000 | $ 3,600,000 | |
Performance Stock Units PSU | Stock Plan 2010 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized share-based compensation expense | $ 5,100,000 | |||
Unrecognized compensation expense, weighted-average period for recognition | 1 year 1 month 16 days |
Share Option Activity (Detail)
Share Option Activity (Detail) - Stock Plan Nineteen Ninety Nine and Twenty Ten - $ / shares | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | Jun. 27, 2014 | |
Number of shares | ||||
Beginning balance | 464,334 | 792,019 | 865,890 | |
Granted | 0 | 0 | 0 | |
Exercised | (367,641) | (325,530) | (56,968) | |
Forfeited | (755) | (8,347) | ||
Expired | (5) | (1,400) | (8,556) | |
Ending balance | 96,688 | 464,334 | 792,019 | |
Expected to vest as of June 30, 2017 | 96,688 | |||
Weighted-Average Exercise Price per share | ||||
Beginning balance | $ 15.95 | $ 16.33 | $ 16.27 | |
Granted | 0 | 0 | 0 | |
Exercised | 16.02 | 16.83 | 14.67 | |
Forfeited | 17.10 | 15.90 | ||
Expired | 5.75 | 23.62 | 21.44 | |
Ending balance | $ 15.70 | $ 15.95 | $ 16.33 | |
Number of Exercisable Options | ||||
Number of Exercisable Options | 96,688 | 464,334 | 758,451 | 666,305 |
Weighted-Average Grant Date Fair Value | ||||
Granted | $ 0 | $ 0 | $ 0 | |
Expected to vest as of June 30, 2017 | $ 15.70 |
Information for Share Options O
Information for Share Options Outstanding (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 96,688 |
Options outstanding, weighted average remaining contractual life (years) | 8 months 19 days |
Options outstanding, aggregate intrinsic value | $ | $ 2,607 |
Range of Exercise Price 1 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 25,238 |
Exercise Price Per Share | $ / shares | $ 14.12 |
Options outstanding, weighted average remaining contractual life (years) | 1 year 4 months 9 days |
Range of Exercise Price 2 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 30,000 |
Exercise Price Per Share | $ / shares | $ 15.05 |
Options outstanding, weighted average remaining contractual life (years) | 4 months 6 days |
Range of Exercise Price 3 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 6,100 |
Exercise Price Per Share | $ / shares | $ 15.16 |
Options outstanding, weighted average remaining contractual life (years) | 1 year 1 month 16 days |
Range of Exercise Price 4 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 28,300 |
Exercise Price Per Share | $ / shares | $ 16.83 |
Options outstanding, weighted average remaining contractual life (years) | 3 months 15 days |
Range of Exercise Price 5 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 5,550 |
Exercise Price Per Share | $ / shares | $ 18.60 |
Options outstanding, weighted average remaining contractual life (years) | 1 year 8 months 2 days |
Range of Exercise Price 6 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, outstanding | 1,500 |
Exercise Price Per Share | $ / shares | $ 25.50 |
Options outstanding, weighted average remaining contractual life (years) | 6 months 14 days |
Stock Plan Nineteen Ninety Nine and Twenty Ten | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Shares Underlying Options, exercisable | 96,688 |
Options exercisable, weighted average remaining contractual life (years) | 8 months 19 days |
Options exercisable, aggregate intrinsic value | $ | $ 2,607 |
Number of Shares Underlying Options, Expected to vest | 96,688 |
Options Expected to vest, weighted average remaining contractual life (years) | 8 months 19 days |
Options Expected to vest, aggregate intrinsic value | $ | $ 2,607 |
Restricted Share Unit Activity
Restricted Share Unit Activity (Detail) - Stock Plan 2010 - Restricted Share Units - $ / shares | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Number of restricted share units | |||
Number of share units, beginning balance | 1,181,402 | 1,140,927 | 762,295 |
Number of share units, Granted | 861,356 | 654,589 | 666,582 |
Number of share units, Issued | (853,535) | (507,621) | (247,593) |
Number of share units, Forfeited | (130,618) | (106,493) | (40,357) |
Number of restricted share units, ending balance | 1,058,605 | 1,181,402 | 1,140,927 |
Number of restricted share units, Expected to vest | 1,024,706 | ||
Weighted Average Grant Date Fair Value Per Share | |||
Weighted-average grant date fair value per share, Beginning Balance | $ 18.34 | $ 16.03 | $ 14.23 |
Weighted-average grant date fair value per share, Granted | 38.95 | 21.15 | 17.53 |
Weighted-average grant date fair value per share, Issued | 21.16 | 15.60 | 14.44 |
Weighted-average grant date fair value per share, Forfeited | 29.31 | 18.34 | 16.68 |
Weighted-average grant date fair value per share, Ending Balance | 31.59 | $ 18.34 | $ 16.03 |
Weighted-average grant date fair value per share, Expected to vest | $ 31.56 |
Performance Share Unit Activity
Performance Share Unit Activity (Detail) - Stock Plan 2010 - Performance Share Units | 12 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Number of performance share units | |
Number of share units, beginning balance | 0 |
Number of share units, Granted | 234,678 |
Number of share units, Issued | 0 |
Number of share units, Forfeited | (7,410) |
Number of restricted share units, ending balance | 227,268 |
Expected to vest as of June 30, 2017 | 227,268 |
Weighted Average Grant Date Fair Value Per Share | |
Weighted-average grant date fair value per share, Granted | $ / shares | $ 40.48 |
Weighted-average grant date fair value per share, Issued | $ / shares | 0 |
Weighted-average grant date fair value per share, Forfeited | $ / shares | 0 |
Weighted-average grant date fair value per share, Ending Balance | $ / shares | $ 40.48 |
Employee Benefit Plans -Additio
Employee Benefit Plans -Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Defined Contribution and Defined Benefit Plans [Line Items] | |||
Bonus distributions to employees | $ 7.6 | $ 7.5 | $ 6 |
Provident Fund | |||
Defined Contribution and Defined Benefit Plans [Line Items] | |||
Defined contribution plan, employer annual contribution | 3.6 | 2.8 | 2.3 |
Defined Contribution Plan 401k | |||
Defined Contribution and Defined Benefit Plans [Line Items] | |||
Defined contribution plan, employer annual contribution | $ 0.6 | $ 0.5 | $ 0.3 |
Employees maximum contribution to 401 (K) Plan | 80.00% | ||
Percentage of employees' contribution, eligible for employer match | 100.00% | ||
Percentage of employees' annual contribution, eligible for employers match | 6.00% |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - $ / shares | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Shareholders Equity [Line Items] | |||
Ordinary shares, authorized share capital | 500,000,000 | 500,000,000 | |
Ordinary shares, par value | $ 0.01 | $ 0.01 | |
Preferred shares, shares authorized | 5,000,000 | 5,000,000 | |
Preferred shares, par value | $ 0.01 | $ 0.01 | |
Stock Plan Nineteen Ninety Nine and Twenty Ten | |||
Shareholders Equity [Line Items] | |||
Ordinary shares issued upon exercise of options | 367,641 | 325,530 | 56,968 |
Ordinary shares issued upon exercise of options, weight average exercise price | $ 16.02 | $ 16.83 | $ 14.67 |
Ordinary shares issued upon vesting of restricted shares | 816,409 | 393,262 | 227,914 |
Changes in AOCI, Net of Tax (De
Changes in AOCI, Net of Tax (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 554,419 | $ 478,944 | $ 426,836 |
Other comprehensive income before reclassification | 41 | 339 | |
Amounts reclassified from AOCI | (980) | 296 | |
Tax effects | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | (939) | 635 | (44) |
Ending Balance | 681,574 | 554,419 | 478,944 |
Unrealized Net (Losses)/Gains on Marketable Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 399 | (44) | |
Other comprehensive income before reclassification | 351 | 637 | |
Amounts reclassified from AOCI | (822) | (194) | |
Tax effects | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | (471) | 399 | |
Ending Balance | (72) | 399 | (44) |
Unrealized Net (Losses)/Gains on Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 192 | ||
Other comprehensive income before reclassification | 0 | (298) | |
Amounts reclassified from AOCI | (158) | 490 | |
Tax effects | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | (158) | 192 | |
Ending Balance | 34 | 192 | |
Foreign Currency Translation Adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 0 | ||
Other comprehensive income before reclassification | (310) | ||
Amounts reclassified from AOCI | 0 | ||
Tax effects | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | (310) | ||
Ending Balance | (310) | 0 | |
AOCI Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 591 | (44) | |
Tax effects | 0 | 0 | |
Total other comprehensive (loss) income, net of tax | (939) | 635 | (44) |
Ending Balance | $ (348) | $ 591 | $ (44) |
Pre-tax Amounts Reclassified fr
Pre-tax Amounts Reclassified from AOCI into Condensed Consolidated Statements of Operations and Comprehensive Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest income | $ (1,977) | $ (1,535) | $ (1,253) |
Cost of revenues | 1,249,030 | 857,224 | 685,814 |
Selling, general and administrative expenses | 65,626 | 49,753 | $ 39,460 |
Total amounts reclassified from AOCI | (980) | 296 | |
Unrealized Net (Losses)/Gains on Marketable Securities | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total amounts reclassified from AOCI | (822) | (194) | |
Unrealized Net (Losses)/Gains on Derivative Instruments | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total amounts reclassified from AOCI | (158) | 490 | |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Net (Losses)/Gains on Marketable Securities | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest income | (822) | (194) | |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Net (Losses)/Gains on Derivative Instruments | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of revenues | 471 | ||
Selling, general and administrative expenses | $ (158) | $ 19 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Jan. 10, 2017 | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | Dec. 23, 2016 |
Commitments and Contingencies Disclosure [Line Items] | |||||
Outstanding bank guarantees given by banks on behalf of subsidiary | $ 1.5 | $ 0.8 | |||
Rental expense under operating leases | 1.7 | 1.2 | $ 1.1 | ||
Payment to purchase of land | $ 12.4 | ||||
Thailand | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Purchase of land | $ 5.6 | ||||
Payment to purchase of land | $ 1.1 | ||||
Outstanding commitment to third parties | 10.6 | ||||
Thailand | Land | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Outstanding commitment to third parties | $ 4.5 | ||||
Maximum | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Operating lease expiration year | 2,023 |
Future Minimum Lease Payments D
Future Minimum Lease Payments Due Under Non-Cancelable Operating Leases (Detail) $ in Thousands | Jun. 30, 2017USD ($) |
Operating Leased Assets [Line Items] | |
2,018 | $ 1,744 |
2,019 | 1,162 |
2,020 | 946 |
2,021 | 540 |
2,022 | 416 |
Thereafter | 520 |
Total future minimum operating lease payments | $ 5,328 |
Future Minimum Lease Payments U
Future Minimum Lease Payments Under Non-Cancelable Capital Leases (Detail) $ in Thousands | Jun. 30, 2017USD ($) |
Capital Leased Assets [Line Items] | |
2,018 | $ 466 |
2,019 | 479 |
2,020 | 422 |
2,021 | 105 |
Total | 1,472 |
Less: Future finance charge on capital leases | (104) |
Present value of capital lease | $ 1,368 |
Capital Lease Liabilities (Deta
Capital Lease Liabilities (Detail) $ in Thousands | Jun. 30, 2017USD ($) |
Capital Leased Assets [Line Items] | |
Current | $ 344 |
Non-current | 1,024 |
Present value of capital lease | $ 1,368 |
Present Value of Capital Lease
Present Value of Capital Lease (Detail) $ in Thousands | Jun. 30, 2017USD ($) |
Capital Leased Assets [Line Items] | |
2,018 | $ 344 |
2,019 | 510 |
2,020 | 409 |
2,021 | 105 |
Present value of capital lease | $ 1,368 |
Business Segments and Geogra107
Business Segments and Geographic Information - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Jun. 30, 2017USD ($)Segment | Jun. 24, 2016USD ($)Segment | Jun. 26, 2015Segment | |
Segment Reporting Information [Line Items] | |||
Number of operating segment | Segment | 1 | 1 | 1 |
North America | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ | $ 34.9 | $ 34.7 |
Total Revenues by Geographic Re
Total Revenues by Geographic Regions (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 30, 2016 | Sep. 30, 2016 | Jun. 24, 2016 | Mar. 25, 2016 | Dec. 25, 2015 | Sep. 25, 2015 | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items] | |||||||||||
Revenues | $ 370,454 | $ 366,837 | $ 351,156 | $ 332,043 | $ 276,388 | $ 250,888 | $ 233,038 | $ 216,433 | $ 1,420,490 | $ 976,747 | $ 773,587 |
North America | |||||||||||
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items] | |||||||||||
Revenues | 661,267 | 525,161 | 370,836 | ||||||||
Asia-Pacific | |||||||||||
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items] | |||||||||||
Revenues | 539,317 | 351,033 | 309,941 | ||||||||
Europe | |||||||||||
Entity Wide Disclosure On Geographic Areas Revenue From External Customers Attributed To Individual Foreign And Domestic Countries [Line Items] | |||||||||||
Revenues | $ 219,906 | $ 100,553 | $ 92,810 |
Revenues by End Market (Detail)
Revenues by End Market (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 30, 2016 | Sep. 30, 2016 | Jun. 24, 2016 | Mar. 25, 2016 | Dec. 25, 2015 | Sep. 25, 2015 | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenues | $ 370,454 | $ 366,837 | $ 351,156 | $ 332,043 | $ 276,388 | $ 250,888 | $ 233,038 | $ 216,433 | $ 1,420,490 | $ 976,747 | $ 773,587 |
Optical communications | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenues | 1,108,637 | 727,580 | 553,245 | ||||||||
Lasers, sensors, and other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenues | $ 311,853 | $ 249,167 | $ 220,342 |
Total Revenues by Percentage fr
Total Revenues by Percentage from Individual Customers Representing Ten Percent or More of Total Revenues (Detail) - Revenue - Customer Concentration Risk | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Lumentum Operations LLC | |||
Revenue, Major Customer [Line Items] | |||
Concentration of risk percentage | 17.00% | 20.00% | 20.00% |
Oclaro, Inc. | |||
Revenue, Major Customer [Line Items] | |||
Concentration of risk percentage | 10.00% |
Accounts Receivable from Indivi
Accounts Receivable from Individual Customers Representing Ten Percent or More of Accounts Receivable (Detail) - Accounts Receivable - Customer Concentration Risk | 12 Months Ended | |
Jun. 30, 2017 | Jun. 24, 2016 | |
Lumentum Operations LLC | ||
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items] | ||
Concentration of risk percentage | 15.00% | 18.00% |
NeoPhotonics Corporation | ||
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items] | ||
Concentration of risk percentage | 12.00% | |
Acacia Communications Inc | ||
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items] | ||
Concentration of risk percentage | 10.00% | |
Valeo | ||
Schedule Of Entity Wide Accounts Receivable By Major Customers By Reporting Segments [Line Items] | ||
Concentration of risk percentage | 11.00% |
Financial instruments - Additio
Financial instruments - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Jun. 30, 2017 | Jun. 24, 2016 | |
Financial Instrument [Line Items] | ||
Amount of unrealized loss recognized in net income on derivatives | $ 20,000 | $ 1,800,000 |
Forward Foreign Currency and Option Contracts | Maximum | ||
Financial Instrument [Line Items] | ||
Derivative term of contract | 6 months | |
China, Yuan Renminbi | ||
Financial Instrument [Line Items] | ||
Derivative contracts | $ 0 | 0 |
United Kingdom, Pounds | ||
Financial Instrument [Line Items] | ||
Derivative contracts denominated in GBP | 0 | |
Foreign currency forward contracts | Thailand, baht | ||
Financial Instrument [Line Items] | ||
Derivative contracts | $ 1,000,000 | $ 84,500,000 |
Outstanding Foreign Currency As
Outstanding Foreign Currency Assets and Liabilities (Detail) ¥ in Thousands, £ in Thousands, THB in Thousands, $ in Thousands | Jun. 30, 2017USD ($) | Jun. 30, 2017THB | Jun. 30, 2017CNY (¥) | Jun. 30, 2017GBP (£) | Jun. 24, 2016USD ($) | Jun. 24, 2016THB | Jun. 24, 2016CNY (¥) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Foreign currency assets | $ 24,590 | $ 25,849 | |||||
Foreign currency liabilities | 66,715 | 46,660 | |||||
Thailand, baht | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Foreign currency assets | 11,628 | THB 395,123 | 23,594 | THB 834,536 | |||
Foreign currency liabilities | 55,189 | THB 1,875,338 | 42,912 | THB 1,517,782 | |||
China, Yuan Renminbi | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Foreign currency assets | 3,980 | ¥ 26,965 | 2,255 | ¥ 14,835 | |||
Foreign currency liabilities | 4,200 | ¥ 28,451 | $ 3,748 | ¥ 24,654 | |||
United Kingdom, Pounds | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Foreign currency assets | 8,982 | £ 6,896 | |||||
Foreign currency liabilities | $ 7,326 | £ 5,625 |
Income Related to Flooding - Ad
Income Related to Flooding - Additional Information (Detail) $ in Thousands | 12 Months Ended |
Jun. 24, 2016USD ($) | |
Unusual or Infrequent Item [Line Items] | |
Income related to flooding | $ 36 |
Final payment from insurer | 900 |
Expense related to flooding | 860 |
Repair cost of equipment | 600 |
Inventory losses | $ 200 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) $ in Millions | Aug. 31, 2017USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Amount of repurchased ordinary shares | $ 30 |
Unaudited Quarterly Financia116
Unaudited Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 30, 2016 | Sep. 30, 2016 | Jun. 24, 2016 | Mar. 25, 2016 | Dec. 25, 2015 | Sep. 25, 2015 | Jun. 30, 2017 | Jun. 24, 2016 | Jun. 26, 2015 | |
Quarterly Financial Information [Line Items] | |||||||||||
Total revenues | $ 370,454 | $ 366,837 | $ 351,156 | $ 332,043 | $ 276,388 | $ 250,888 | $ 233,038 | $ 216,433 | $ 1,420,490 | $ 976,747 | $ 773,587 |
Gross profit | 44,760 | 44,046 | 43,046 | 39,608 | 33,842 | 31,177 | 28,493 | 26,011 | 171,460 | 119,523 | 87,773 |
Net income | $ 27,401 | $ 21,656 | $ 25,292 | $ 22,766 | $ 19,669 | $ 20,822 | $ 19,803 | $ 1,603 | $ 97,115 | $ 61,897 | $ 43,642 |
Basic net income per share: | |||||||||||
Net income | $ 0.73 | $ 0.58 | $ 0.69 | $ 0.63 | $ 0.55 | $ 0.58 | $ 0.55 | $ 0.05 | $ 2.63 | $ 1.73 | $ 1.23 |
Weighted-average shares used in basic net income per share calculations | 37,334 | 37,116 | 36,848 | 36,404 | 36,075 | 35,964 | 35,812 | 35,579 | 36,927 | 35,857 | 35,354 |
Diluted net income per share: | |||||||||||
Net income | $ 0.72 | $ 0.57 | $ 0.67 | $ 0.61 | $ 0.53 | $ 0.56 | $ 0.54 | $ 0.04 | $ 2.57 | $ 1.68 | $ 1.21 |
Weighted-average shares used in diluted net income per share calculations | 38,118 | 37,872 | 37,805 | 37,330 | 37,258 | 37,089 | 36,826 | 36,315 | 37,852 | 36,872 | 35,984 |