Fabrinet’s Q2 Fiscal Year 2019 Financial Results Exceed Guidance

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Fabrinet, a provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, announced its financial results for its second quarter ended December 28, 2018.

“We are pleased to have delivered record results in the fiscal second quarter, exceeding our prior guidance with particular strength from products to the telecom market. We are optimistic that Q3 will represent a record third quarter for us in terms of both revenue and profitability, and that our strong market position will enable us to extend our track record of success over the longer-term,” said Seamus Grady, chief executive officer of Fabrinet.

Second Quarter Fiscal Year 2019 Financial Highlights

As of the first quarter of fiscal 2019, Fabrinet is reporting results under the new revenue recognition standard Accounting Standards Codification Topic 606 (ASC 606), using the modified retrospective method. Financial results for reporting periods prior to fiscal year 2019 are presented as previously disclosed in conformity with the old revenue recognition standard Accounting Standards Codification Topic 605 (ASC 605). A reconciliation to ASC 605 is included at the end of this press release.

GAAP Results

Revenue for the second quarter of fiscal year 2019 was $403.1 million, compared to revenue of $337.1 million for the comparable period in fiscal year 2018.

GAAP net income for the second quarter of fiscal year 2019 was $31.5 million, compared to GAAP net income of $19.3 million for the second quarter of fiscal year 2018. GAAP net income for the second quarter of fiscal year 2019 included a foreign exchange loss of $0.4 million, or $(0.01) per diluted share, compared to a foreign exchange loss of $1.3 million, or $(0.04) per diluted share, for the second quarter of fiscal year 2018.

GAAP net income per diluted share for the second quarter of fiscal year 2019 was $0.84, compared to GAAP net income per diluted share of $0.51 for the second quarter of fiscal year 2018.

Non-GAAP Results

Non-GAAP net income for the second quarter of fiscal year 2019 was $36.5 million, compared to non-GAAP net income of $27.3 million for the second quarter of fiscal year 2018. Non-GAAP net income for the second quarter of fiscal year 2019 included a foreign exchange loss of $0.4 million, or $(0.01) per diluted share, compared to a foreign exchange loss of $1.3 million, or $(0.04) per diluted share, for the second quarter of fiscal year 2018.

Non-GAAP net income per diluted share for the second quarter of fiscal year 2019 was $0.97, compared to non-GAAP net income per diluted share of $0.72 for the same period in fiscal year 2018.

Share Repurchase Program Update

There was no share repurchase activity during the three months ended December 28, 2018. As of December 28, 2018, Fabrinet had a remaining authorization to purchase up to an additional $17.6 million worth of its ordinary shares.

Business Outlook

The guidance provided below for the third quarter of fiscal 2019 is based on ASC 605; however, we will report revenues for such quarter based on ASC 606. As of the first quarter of fiscal 2019, Fabrinet is reporting results under ASC 606, which it is adopting for fiscal year 2019 on a modified retrospective method. A reconciliation to ASC 605 is included at the end of this press release.

Based on information available as of February 4, 2019, Fabrinet is issuing guidance for its third fiscal quarter of 2019 ending March 29, 2019, as follows:

• Fabrinet expects third quarter revenue to be in the range of $384 million to $392 million.
• GAAP net income per diluted share is expected to be in the range of $0.71 to $0.75, based on approximately 37.6 million fully diluted shares outstanding.
• Non-GAAP net income per diluted share is expected to be in the range of $0.86 to $0.90, based on approximately 37.6 million fully diluted shares outstanding.

About Fabrinet

Fabrinet is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, automotive components, medical devices, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, advanced packaging, integration, final assembly and test. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the United States of America, the People’s Republic of China and the United Kingdom.