What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-08-20 compared with 2023-08-22 · 36 added, 28 removed, 326 unchanged (16% of the section changed)

2 unchanged sentences

We focus primarily on low-volume production of a wide variety of high complexity products, which we refer to as “low-volume, high-mix.” We also have the capability to accommodate high-volume production.

Based on our extensive experience and the positive feedback we have received from our customers, we believe we are a global leader in providing these services to the optical communications, industrial lasers and automotive markets.

Our customers include companies in complex industries that require advanced precision manufacturing capabilities such as optical communications, industrial lasers, automotive and sensors.

Our customer base includes companies in complex industries that require advanced precision manufacturing capabilities such as optical communications, automotive, industrial lasers, medical, and sensors.

The products that we manufacture for our OEM customers include selective switching products;

tunable lasers, transponders and transceivers;

active optical cables;

solid state, diode-pumped, gas and fiber lasers;

Our customers in these industries support a growing number of end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing.

Our revenues for the year ended June 28, 2024 (“fiscal year 2024”) increased by $237.8 million, or 9.0%, from $2.65 billion for the year ended June 30, 2023 (“fiscal year 2023”) to $2.88 billion for fiscal year 2024.

Our percentage of revenues from lasers, sensors and other markets increased from 21.2% in fiscal year 2022 to 24.1% in fiscal year 2023, while our percentage of revenues from optical communications products decreased from 78.8% in fiscal year 2022 to 75.9% in fiscal year 2023.

In many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we produce for them.

Our percentage of revenues from optical communications products increased from 75.9% in fiscal year 2023 to 79.4% in fiscal year 2024, while our percentage of revenues from automotive, industrial lasers, and other markets decreased from 24.1% in fiscal year 2023 to 20.6% in fiscal year 2024.

In many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we manufacture for them.

The products that we manufacture for our OEM customers include:

8 unchanged sentences

We believe we offer differentiated manufacturing services through our optical and electro-mechanical process technologies and our strategic alignment with our customers.

Our dedicated process and design engineers, who have a deep knowledge in materials sciences and physics, are able to tailor our service offerings to accommodate our customers’ complex engineering assignments.

customers’ product development cycles, manufacturing cycle times, quality and reliability, manufacturing yields and end product costs.

Our dedicated process and design engineers, who have a deep knowledge in materials sciences and physics, are able to tailor our service offerings to accommodate our customers’ complex

engineering assignments.

Our range of capabilities, from the design of customized optics and glass through process engineering and testing of finished assemblies, provides us with a knowledge base that we believe often leads to improvements in our customers’ product development cycles, manufacturing cycle times, quality and reliability, manufacturing yields and end product costs.

We offer an efficient, technologically advanced and flexible manufacturing infrastructure designed to enable the scale production of low-volume, high-mix products, as well as high-volume products.

19 unchanged sentences

The bandwidth demands for data center access have been largely driven by social media applications and cloud services and continue to increase very rapidly.

Industrial Lasers, Sensors and Others

The optical and electro-mechanical process technologies used in the optical communications market also have applications in other similarly complex end-markets that require advanced precision manufacturing capabilities, such as automotive, industrial lasers, medical devices, and sensors.

Automotive, Industrial Lasers, and Others

These markets are substantially larger than the optical communications components and modules market.

We expect growth in the industrial lasers, medical, and sensors markets will be driven by demand for:

We expect growth in the automotive, industrial lasers, medical, and sensors markets will be driven by demand for:

• industrial laser applications across a growing number of end-markets, particularly in semiconductor processing, biotechnology, metrology and materials processing;

4 unchanged sentences

Our Competitive Strengths

We believe we have succeeded in providing differentiated services to the optical communications, industrial lasers, medical, and sensors industries due to our long-term focus on optical and electro-mechanical process technologies, strategic alignment with our customers and commitment to total customer satisfaction.

We believe we have succeeded in providing differentiated services to the optical communications, automotive, industrial lasers, medical, and sensors industries due to our long-term focus on optical and electro-mechanical process technologies, strategic alignment with our customers and commitment to total customer satisfaction.

More specifically, our key competitive strengths include:

30 unchanged sentences

Over the years, we have developed strong relationships with thousands of suppliers and implemented inventory management strategies with many of them, which enables us to obtain inventory on an as-needed basis and provide on-site stocking programs.

We believe our deep expertise, relationships and capabilities in supply chain and materials management often allows us to further reduce costs and cycle times for our customers.

We believe our deep expertise, relationships and capabilities

in supply chain and materials management often allows us to further reduce costs and cycle times for our customers.

Our Growth Strategy

132 unchanged sentences

Therefore, we expect a significant percentage of our revenues will continue to come from a small number of customers.

During fiscal years 2023 and 2022, we had four and three customers, respectively, that each contributed 10% or more of our revenues.

During fiscal years 2024 and 2023, we had two and four customers, respectively, that each contributed 10% or more of our revenues.

During fiscal year 2024, Nvidia Corporation and Cisco Systems Inc.

contributed 35.1%, and 13.4%, respectively, of our revenues.

During fiscal year 2023, Cisco Systems Inc., Lumentum Operations LLC, Nvidia Corporation, and Infinera Corporation contributed 15.6%, 15.4%, 12.5%, and 12.4%, respectively, of our revenues.

During fiscal year 2022, Cisco Systems Inc., Infinera Corporation and Lumentum Operations LLC contributed 25.4%, 12.5% and 10.3%, respectively, of our revenues.

The production of optical devices is characterized by a lengthy qualification process.

14 unchanged sentences

While we continually undertake programs to strengthen our supply chain, we are experiencing, and expect to experience for the foreseeable future, strain on our supply chain, as well as periodic supplier problems.

These supply chain disruptions were exacerbated by recent global events, such as (1) COVID-related lockdowns in China, which caused freight and logistics issues and unforeseen delays during the first half of fiscal year 2023, and (2) the armed conflict between Russia and Ukraine.

While we have no significant direct business in Ukraine or Russia, the conflict has negatively impacted demand from some of our automotive customers that have other suppliers in the region.

Furthermore, in some cases, our efforts to identify and secure alternative supply chain sources has resulted in our customers or their end customers requiring requalification and validation of components, a process that can often be lengthy and has negatively impacted the timing of our revenue.

13 unchanged sentences

ISO 45001 for Occupational Health and Safety Management Systems;

ISO/IEC 17025 for Testing and Calibration Laboratories Certification;

and ISO 22301 for Business Continuity Management Systems.

22 unchanged sentences

and Venture Corporation Limited, as well as the internal manufacturing capabilities of our customers.

Our customized optics and glass operations face competition from companies such as Browave Corporation, Fujian Castech Crystals, Inc., Photop Technologies, Inc.

Our customized optics and glass operations face competition from companies such as Fujian Castech Crystals, Inc., Photop Technologies, Inc.

and Research Electro-Optic, Inc.

20 unchanged sentences

We do not anticipate any material capital expenditures for environmental control facilities for the foreseeable future.

While to date we

are not aware of any material exposures, there can be no assurance that environmental matters will not arise in the future or that costs will not be incurred with respect to sites as to which no problem is currently known.

While to date we are not aware of any material exposures, there can be no assurance that environmental matters will not arise in the future or that costs will not be incurred with respect to sites as to which no problem is currently known.

As part of the International Organization for Standardization (“ISO”) 14001 environmental management systems framework, we have established and continue to enforce at our facilities a global environmental policy that includes evaluation and control, compliance obligations, commitment, training, communication, control of documented information, operational control, emergency preparedness and response, and management review.

While environmental regulations have not thus far resulted in a material adverse effect on our operations, changes in regulations could necessitate additional capital expenditures, modification of our operations, or other compliance actions.

While environmental regulations have not thus far

resulted in a material adverse effect on our operations, changes in regulations could necessitate additional capital expenditures, modification of our operations, or other compliance actions.

Trade Regulations

8 unchanged sentences

There have been a number of proposed changes in the tax laws that could increase our tax liability.

Several governments are considering tax reform proposals that, if enacted, could increase our tax expense.

The Organization for Economic Co-operation and Development (OECD) announced that it has reached agreement among its member countries to implement Pillar Two rules, a global minimum tax at 15% for certain multinational enterprises.

Many countries are expected to issue laws and regulations to conform to this regime.

The OECD has issued Pillar Two model rules and continues to release guidance on these rules.

Many jurisdictions have enacted tax laws that will take effect in 2024 and 2025 to implement Pillar Two rules.

Other countries have announced plans to adopt tax laws to implement similar legislation with varying effective dates in the future.

Certain jurisdictions in which we operate have not adopted corresponding legislation to date.

These changes could increase tax uncertainty and may adversely affect our provision for income taxes and operating results.

We will continue to monitor legislative and regulatory developments to assess the impact on our business, financial condition and operating results.

7 unchanged sentences

Fabrinet was incorporated under the laws of the Cayman Islands in August 1999 and commenced business operations in January 2000.

We have fourteen direct and indirect subsidiaries, all of which are wholly-owned.

We have thirteen direct and indirect subsidiaries, all of which are wholly-owned.

As the parent company, we enter into contracts directly with our customers while some of our subsidiaries in the PRC and the U.S.

4 unchanged sentences

Human Capital Resources

Our workforce is distributed globally over seven countries.

As of June 30, 2023, we employed approximately 14,663 full-time employees worldwide, with approximately 14,451 employees located in the Asia-Pacific region, 210 employees located in North America, and 2 employees located in Europe or the Middle East.

Of our total workforce, approximately 14,217 employees were involved in manufacturing operations and 446 employees were involved in business development and general

and administrative functions.

Our workforce is distributed globally over six countries.

As of June 28, 2024, we employed approximately 14,213 full-time employees worldwide, with approximately 13,973 employees located in the Asia-Pacific region, and 240 employees located in North America.

Of our total workforce, approximately 13,761 employees were involved in manufacturing operations and 452 employees were involved in business development and general and administrative functions.

None of our employees are represented by a labor union.

3 unchanged sentences

We advertise job openings and source candidates broadly to attract a diverse candidate pool.

We also monitor hiring, termination and pay practices to ensure compliance with established regulations across the world, and we track and report internally on key talent metrics including talent pipeline, employee promotions, employee turnover, and engagement of our employees.

We also monitor hiring, termination and pay

practices to ensure compliance with established regulations across the world, and we track and report internally on key talent metrics including talent pipeline, employee promotions, employee turnover, and engagement of our employees.

We provide employee career guidance and counseling through established employee development and training opportunities.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business