| | | From the FN conference call earlier this week:
"While we don't generally disclose specific transactions, during the third quarter, we entered into an agreement with an existing customer that could have a meaningful impact on our results in the coming quarters, and hence, warrants further discussion. We typically engage with our customers during the design phase and early in the manufacturing process to help them transition from new product introduction into volume manufacturing. During the third quarter, we signed an agreement with Infinera, an existing customer, to assume manufacturing responsibilities for the products currently being manufactured at their Coriant division in Berlin. We already have staff in Berlin to support this program and anticipate migrating the products currently being manufactured at this location to our facility in Thailand in the coming quarters.
While we expect the revenue impact from this program to be small in fiscal 2019, we believe that it could lead to Infinera becoming a greater-than-10% customer in fiscal 2020 in what we believe is a win-win relationship. With this transaction, as well as other new business wins, we expect our first building in Chon buri (Thailand) to reach a level of 70% that is either occupied or spoken for in the coming months. In summary, we are pleased to have exceeded our expectations for the third quarter with revenue above the high end of our guidance and to have delivered earnings per share that were also above the high end of expectations. We are pleased to see gross margins return to our target range and are optimistic that our new program with Infinera will further support the momentum we see across our business."
There is more detail about this in the Q&A. Infinera has been a customer of Fabrinet (FN) for quite some time. |
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