Fabrinet

Good afternoon. Welcome to Fabrinet's Financial Results Conference Call for the fourth quarter of fiscal year 2021. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions on how to participate will be provided at that time. As a reminder, today's call is being recorded. I would now like to turn the call over to your host, Gero Tsimajanian, Investor Relations.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss Fabrinet's financial and operating results for the fourth quarter of fiscal year 2021, which ended June 25, 2021. With me on the call today are Seamus Grady, Chief Executive Officer, and Chava Svera, Chief Financial Officer. This call is being webcast and a replay will be available on the investor section of our website located at investor.fabrinet.com. During this call, we will present both GAAP and non-GAAP financial measures. Please refer to the investor section of our website for important information, including our earnings press release and investor presentation, which include our GAAP to non-GAAP reconciliation. I would like to remind you that today's discussion will contain forward-looking statements about the future financial performance of the company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. These statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise them in light of new information or future events, except as required by law. For a description of the risk factors that may affect our results, please refer to our recent SEC filings, in particular the section captioned Risk Factors in our Form 10Q, filed on May 4, 2021. We will begin the call with remarks from Seamus and Chaba, followed by time for questions. I would now like to turn the call over to RapidX CEO Seamus Grady. SEAMUS GRADY Thank you, Gero.

Good afternoon, everyone, and thank you for joining us on today's conference call. We had an excellent fourth quarter to finish a strong fiscal year. With robust demand trends continuing across our business, combined with excellent execution by our team, we delivered a number of records in the quarter. Revenue was well above our guidance range and for the first time exceeded half a billion dollars at $509.6 million. In addition to record revenue, we also delivered record non-GAAP operating margins of 9.9%, resulting in an all-time high non-GAAP earnings per share of $1.31 in the fourth quarter. For the full fiscal year, we produced record revenue of $1.88 billion, representing industry-leading growth of 14% from the prior year. Non-GAAP net income was $4.67 per share. Total operating cash flow for the year was $118.7 million, and free cash flow was $76.1 million. Looking at some of the highlights of the fourth quarter, optical communications revenue reached another new record, driven by strong telecom demand. non-optical communications revenue also reached another record in Q4. Looking ahead, we remain encouraged by healthy demand trends across all lines of business as we continue to successfully navigate and manage component supplies. We estimate that the supply constraints we are experiencing impacted our fourth quarter revenue by approximately $25 to $30 million, and we expect to see a similar impact in Q1. Despite this headwind, we anticipate that revenue will continue to grow sequentially to a new record in Q1, as Chaba will outline in a moment. We are also optimistic from a profitability standpoint. That said, in Q1, we anticipate a small non-recurring headwind to net income. As you may have heard, Thailand, along with other countries in Southeast Asia, has recently seen a rapidly growing number of COVID-19 cases. In response, Lockdowns and other measures have been imposed, which primarily impact social gatherings. Our manufacturing facilities are fully operational, but we have implemented additional safeguards beyond what we have been doing for the past year and a half in order to protect our staff. This includes increased testing and sending people home with pay if they test positive for COVID-19. In addition, we have been granted permission by the Thai government to vaccinate our employees and have been carrying out this initiative for the past several weeks at our expense. We are very pleased that at this time, the vast majority of our employees have already received their second doses, such that by the end of this month, approximately 90% of our employees in Thailand will be considered fully vaccinated. We're proud to be able to carry out this effort that has both a very positive social impact while also being good for our business. And we believe it will further enhance our very favorable reputation as an excellent employer in Thailand. As we communicated earlier this year, we have broken ground on a new 1 million square foot building at our Chanbury campus. Construction is progressing and we expect the building to be complete in about one year. We also previously discussed our intention to add approximately 100,000 square feet of manufacturing space at our Pinehurst campus. Just after the end of the fourth quarter, we completed the acquisition of 15 acres of land that had become available adjacent to our Pinehurst facility. This site will enable us to relocate some non-manufacturing activities from the current campus, which will allow us to increase our manufacturing footprint within our existing buildings. As a result, we are confident that we will continue to have ample capacity to satisfy the growing customer demand we are experiencing. In summary, we had a very strong finish to a record year. We are optimistic about demand trends from all the markets we serve, and we are well positioned to continue to deliver excellent results over the longer term. Now I'd like to turn the call over to Chaba for additional financial details and our guidance for the first quarter of fiscal 2022. Chaba.