ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Today Jabil Circuit, Inc. (NYSE: JBL), announced preliminary, unaudited financial results for its second quarter of fiscal year 2013. For the quarter, Jabil reported revenue of $4.4 billion, an increase of 4.3 percent over the second quarter of fiscal 2012. “We are pleased with these results for the quarter, despite the obviously challenging macro environment,” said Jabil’s Chief Executive Officer, Mark T. Mondello. “During the quarter we made great progress on the Nypro acquisition and believe the market opportunities of our combined capabilities are considerable,” said Mondello. “We look forward to a successful completion of this deal in our fourth fiscal quarter.”
Jabil’s three reporting segments delivered the following year over year revenue results:
- Diversified Manufacturing Services grew 11 percent.
- Enterprise & Infrastructure increased 12 percent.
- High Velocity declined 15 percent.
Generally accepted accounting principles (GAAP) operating income for the second quarter of fiscal year 2013 was $149 million and GAAP diluted earnings per share were $0.43 cents.
Core operating income results excluding amortization of intangibles and stock-based compensation was $170 million and core diluted earnings per share was $0.53 cents. Acquisition-related expenses were $5 million above the company’s second quarter forecast. This portion of the expenses was originally forecasted to be incurred during Jabil’s third fiscal quarter.
(Definitions used: "GAAP" means U.S. generally accepted accounting principles. Jabil defines core operating income as GAAP operating income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and impairment charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges and loss on disposal of subsidiaries. Jabil defines core earnings as GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and impairment charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges, loss on disposal of subsidiaries, certain other expenses, net of tax and certain deferred tax valuation allowance charges. Jabil defines core diluted earnings per share as core earnings divided by the weighted average number of outstanding diluted shares determined under GAAP. Jabil calculates core return on invested capital by annualizing its after-tax core operating income for its most recently-ended quarter and dividing that by a two quarter average net invested capital base. Jabil reports core operating income, core earnings, core diluted and basic earnings per share and core return on invested capital to provide investors an additional method for assessing operating income, earnings, diluted earnings per share and return on invested capital from what it believes are its core manufacturing operations. See the accompanying reconciliation of Jabil's core operating income to its GAAP operating income, its calculation of core earnings and core diluted earnings per share to its GAAP net income and GAAP earnings per share, its calculation of core return on invested capital and additional information in the supplemental information.)
|
Quarterly Results |
Q2 2013 |
Q2 2012 |
||
| Net revenue | $4.4 billion | $4.2 billion | ||
| GAAP operating income | $149.0 million | $150.2 million | ||
| GAAP net income | $88.5 million | $97.7 million | ||
| GAAP diluted earnings per share |
$0.43 |
$0.46 |
||
| GAAP return on invested capital | 16.9% | 20.5% | ||
| Core operating income | $170.2 million | $176.2 million | ||
| Core earnings | $109.3 million | $123.2 million | ||
| Core diluted earnings per share |
$0.53 |
$0.58 |
||
| Core return on invested capital | 19.9% | 24.6% |
|
Fiscal Q3 2013 Guidance |
||
| Net revenue | $4.3 billion to $4.5 billion | |
| Core operating income | $165 million to $185 million | |
| Core earnings per share | $0.50 to $0.58 per diluted share | |
| GAAP operating income | $144 million to $164 million | |
| GAAP earnings per share | $0.40 to $0.48 per diluted share |
(GAAP earnings per share for the third quarter of fiscal 2013 are currently estimated to include $0.02 per share for amortization of intangibles and $0.08 per share for stock-based compensation)
Segment Revenue Guidance:
- Diversified Manufacturing Services to remain consistent.
- Enterprise & Infrastructure to remain consistent.
- High Velocity to increase 13 percent.
FORWARD LOOKING STATEMENT: This news release contains forward-looking statements, including those regarding our anticipated financial results for our second quarter of fiscal year 2013; the anticipated closing date of the Nypro acquisition; the market opportunities for our capabilities combined with Nypro's; and our currently expected third quarter of fiscal year 2013 net revenue, core operating income, GAAP operating income, core and GAAP earnings per share results and the components thereof. The statements in this news release are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: our determination as we finalize our financial results for our second fiscal quarter of fiscal year 2013 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; the Nypro transaction failing to close or closing later than expected; our ability to manage the integration of Nypro's business with ours; changes in our strategy; our ability to successfully develop engineering and capability intensive businesses; our ability to effectively compete in the global healthcare provider, food and beverage, household, personal care and rigid plastic packaging markets; our ability to retain the desired customers and personnel of Nypro; the post-acquisition performance of Nypro; Nypro having potential unanticipated liabilities; fluctuations in our stock’s market price; fluctuations in operating results and cash flows; unexpected, adverse seasonal impacts on demand; changes in macroeconomic conditions, both in the U.S. and internationally; our financial performance during and after the current economic conditions; our ability to maintain and improve costs, quality and delivery for our customers; risks and costs inherent in litigation; whether our realignment of our capacity will adversely affect our cost structure, ability to service customers and labor relations; our ability to take advantage of perceived benefits of offering customers vertically integrated services; changes in technology; competition; anticipated growth for us and our industry that may not occur; managing rapid growth; managing rapid declines in customer demand and other related customer challenges that may occur; our ability to successfully consummate acquisitions and divestitures; managing the integration of businesses we acquire; risks associated with international sales and operations; retaining key personnel; our dependence on a limited number of large customers; business and competitive factors generally affecting the electronic manufacturing services industry, our customers and our business; other factors that we may not have currently identified or quantified; and other risks, relevant factors and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2012, subsequent Reports on Forms 10-Q and 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Supplemental Information: The financial results disclosed in this release include certain measures calculated and presented in accordance with GAAP. In addition to the GAAP financial measures, Jabil provides supplemental, non-GAAP financial measures to facilitate evaluation of Jabil's core operating performance. The non-GAAP financial measures disclosed in this release exclude certain amounts that are included in the most directly comparable GAAP measures. The non-GAAP or core financial measures disclosed in this release do not have standard meanings and may vary from the non-GAAP financial measures used by other companies. Management believes core financial measures (which exclude the effects of the amortization of intangibles, stock-based compensation expense and related charges, restructuring and impairment charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges, loss on disposal of subsidiaries, certain other expenses, net of tax and certain deferred tax valuation allowance charges) are a useful measure that facilitates evaluating the past and future performance of Jabil's ongoing operations on a comparable basis. Jabil reports core operating income, core return on invested capital, core earnings and core diluted and basic earnings per share to provide investors an additional method for assessing operating income, earnings and earnings per share from what it believes are its core manufacturing operations. Included in this release are Condensed Consolidated Statements of Operations as well as a reconciliation of the disclosed core financial measures to the most directly comparable GAAP financial measures.
Company Conference Call Information: Jabil will hold a conference call to discuss the second fiscal quarter 2013 earnings today at 4:30 p.m. ET live on the Internet at http://www.jabil.com. The call will be recorded and archived on the web at http://www.jabil.com. A taped replay of the conference call will also be available March 20, 2013 at approximately 7:30 p.m. ET through midnight on March 27, 2013. To access the replay, call (855) 859-2056 from within the United States, or (404) 537-3406 outside the United States. The pass code is: 20346794. An archived webcast of the conference call will be available at http://www.jabil.com/investors/.
About Jabil
Jabil is an electronic product solutions company providing comprehensive electronics design, manufacturing and aftermarket product management services to global electronics and technology companies. Offering complete product supply chain management from facilities in 30 countries, Jabil provides comprehensive, individualized-focused solutions to customers in a broad range of industries. Jabil common stock is traded on the New York Stock Exchange under the symbol, “JBL”. Further information is available on Jabil’s website: jabil.com.
| JABIL CIRCUIT, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| February 28, | ||||||||
|
2013
(Unaudited) |
August 31,
2012 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,061,655 | $ | 1,217,256 | ||||
| Accounts receivable, net | 1,300,046 | 1,125,015 | ||||||
| Inventories | 2,496,618 | 2,268,949 | ||||||
| Prepaid expenses and other current assets | 997,647 | 989,326 | ||||||
| Income taxes receivable | 11,312 | 10,949 | ||||||
| Deferred income taxes | 29,995 | 27,833 | ||||||
| Total current assets | 5,897,273 | 5,639,328 | ||||||
| Property, plant and equipment, net | 1,961,492 | 1,779,155 | ||||||
| Goodwill and intangible assets, net | 212,363 | 214,071 | ||||||
| Deferred income taxes | 72,621 | 73,411 | ||||||
| Other assets | 103,892 | 97,176 | ||||||
| Total assets | $ | 8,247,641 | $ | 7,803,141 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current installments of notes payable and | ||||||||
| long-term debt | $ | 109,598 | $ | 18,031 | ||||
| Accounts payable | 3,142,825 | 2,992,865 | ||||||
| Accrued expenses | 951,169 | 808,480 | ||||||
| Income taxes payable | 20,130 | 35,665 | ||||||
| Deferred income taxes | 4,866 | 3,955 | ||||||
| Total current liabilities | 4,228,588 | 3,858,996 | ||||||
| Notes payable and long-term debt, | ||||||||
| less current installments | 1,653,708 | 1,658,326 | ||||||
| Other liabilities | 86,042 | 85,714 | ||||||
| Income tax liabilities | 75,968 | 68,525 | ||||||
| Deferred income taxes | 25,345 | 24,245 | ||||||
| Total liabilities | 6,069,651 | 5,695,806 | ||||||
|
Commitments and contingencies
Equity: |
||||||||
| Jabil Circuit, Inc. stockholders’ equity: | ||||||||
| Preferred stock | — | — | ||||||
| Common stock | 237 | 232 | ||||||
| Additional paid-in capital | 1,800,595 | 1,752,847 | ||||||
| Retained earnings | 927,361 | 766,934 | ||||||
| Accumulated other comprehensive income | 118,624 | 106,275 | ||||||
| Treasury stock, at cost | (670,714 | ) | (521,231 | ) | ||||
| Total Jabil Circuit, Inc. stockholders’ equity | 2,176,103 | 2,105,057 | ||||||
| Noncontrolling interests | 1,887 | 2,278 | ||||||
| Total equity | 2,177,990 | 2,107,335 | ||||||
| Total liabilities and equity | $ | 8,247,641 | $ | 7,803,141 | ||||
|
JABIL CIRCUIT, INC. AND SUBSIDIARIES |
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| Three months ended | Six months ended | ||||||||||||
| February 28, | February 29, | February 28, | February 29, | ||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
|
|
|||||||||||||
| Net revenue | $ | 4,417,251 | $ | 4,236,174 | $ | 9,054,269 | $ | 8,562,943 | |||||
| Cost of revenue | 4,092,724 | 3,914,010 | 8,379,147 | 7,900,769 | |||||||||
| Gross profit | 324,527 | 322,164 | 675,122 | 662,174 | |||||||||
| Operating expenses: | |||||||||||||
| Selling, general and administrative | 164,360 | 160,811 | 333,960 | 318,634 | |||||||||
| Research and development | 7,655 | 6,264 | 14,918 | 12,535 | |||||||||
| Amortization of intangibles | 3,471 | 4,871 | 6,922 | 9,945 | |||||||||
| Operating income | 149,041 | 150,218 | 319,322 | 321,060 | |||||||||
| Interest and other, net | 30,314 | 27,953 | 60,977 | 55,599 | |||||||||
| Income before income tax | 118,727 | 122,265 | 258,345 | 265,461 | |||||||||
| Income tax expense | 30,638 | 24,020 | 64,672 | 53,435 | |||||||||
| Net income | 88,089 | 98,245 | 193,673 | 212,026 | |||||||||
|
Net (loss) income attributable to noncontrolling
|
(444 | ) | 547 | (707 | ) | 1,456 | |||||||
| Net income attributable to Jabil Circuit, Inc. | $ | 88,533 | $ | 97,698 | $ | 194,380 | $ | 210,570 | |||||
|
Earnings per share attributable to the |
|||||||||||||
| Basic | $ | 0.44 | $ | 0.47 | $ | 0.96 | $ | 1.02 | |||||
| Diluted | $ | 0.43 | $ | 0.46 | $ | 0.94 | $ | 1.00 | |||||
| Weighted average shares outstanding: | |||||||||||||
| Basic | 202,458 | 207,287 | 203,393 | 206,337 | |||||||||
| Diluted | 206,804 | 212,148 | 207,474 | 211,410 | |||||||||
|
JABIL CIRCUIT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
||||||||
| Six months ended | ||||||||
|
February 28, 2013 |
February 29, 2012 |
|||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 193,673 | $ | 212,026 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 195,022 | 173,734 | ||||||
| Recognition of stock-based compensation expense | 36,513 | 39,734 | ||||||
| Other, net | 5,519 | (7,661 | ) | |||||
| Changes in operating assets and liabilities, exclusive of net assets acquired: | ||||||||
| Accounts receivable | (172,161 | ) | (1,024 | ) | ||||
| Inventories | (222,645 | ) | (119,816 | ) | ||||
| Prepaid expenses and other current assets | (6,349 | ) | (31,761 | ) | ||||
| Other assets | (2,799 | ) | (1,719 | ) | ||||
| Accounts payable and accrued expenses | 288,004 | (259,021 | ) | |||||
| Income taxes payable | (9,093 | ) | 736 | |||||
| Net cash provided by operating activities | 305,684 | 5,228 | ||||||
| Cash flows from investing activities: | ||||||||
| Cash paid for business and intangible asset acquisitions, net of cash acquired | (5,862 | ) | (128,462 | ) | ||||
| Acquisition of property, plant and equipment | (371,472 | ) | (180,506 | ) | ||||
| Proceeds from sale of property, plant and equipment | 9,504 | 9,666 | ||||||
| Investments in non-marketable equity securities | (2,942 | ) | — | |||||
| Cost of receivables acquired, net of cash collections | — | 497 | ||||||
| Net cash used in investing activities | (370,772 | ) | (298,805 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings under debt agreements | 2,178,021 | 4,633,328 | ||||||
| Payments towards debt agreements | (2,091,043 | ) | (4,425,749 | ) | ||||
| Dividends paid to stockholders | (34,748 | ) | (32,148 | ) | ||||
| Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan | 10,867 | 14,403 | ||||||
| Payments to acquire treasury stock | (129,262 | ) | (39,964 | ) | ||||
| Treasury stock minimum tax withholding related to vesting of restricted stock | (20,221 | ) | (31,056 | ) | ||||
| Excess tax benefit related to stock awards | 330 | 750 | ||||||
| Capital contribution to noncontrolling interest | 316 | — | ||||||
| Net cash (used in) provided by financing activities | (85,740 | ) | 119,564 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (4,773 | ) | (7,248 | ) | ||||
| Net decrease in cash and cash equivalents | (155,601 | ) | (181,261 | ) | ||||
| Cash and cash equivalents at beginning of period | 1,217,256 | 888,611 | ||||||
| Cash and cash equivalents at end of period | $ | 1,061,655 | $ | 707,350 | ||||
| JABIL CIRCUIT, INC. AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL DATA | ||||||||||||
| RECONCILIATION OF GAAP FINANCIAL RESULTS TO NON-GAAP MEASURES | ||||||||||||
| (in thousands, except for per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ended | Six months ended | |||||||||||
| February 28, | February 29, | February 28, | February 29, | |||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
|
|
||||||||||||
| Operating income (GAAP) | $ | 149,041 | $ | 150,218 | $ | 319,322 | $ | 321,060 | ||||
| Amortization of intangibles | 3,471 | 4,871 | 6,922 | 9,945 | ||||||||
| Stock-based compensation and related charges | 17,710 | 21,069 | 36,513 | 39,734 | ||||||||
| Core operating income (Non-GAAP) | $ | 170,222 | $ | 176,158 | $ | 362,757 | $ | 370,739 | ||||
| Net income attributable to Jabil Circuit, Inc. (GAAP) | $ | 88,533 | $ | 97,698 | $ | 194,380 | $ | 210,570 | ||||
| Amortization of intangibles, net of tax | 3,333 | 4,858 | 6,651 | 9,919 | ||||||||
| Stock-based compensation and related charges, net of tax | 17,479 | 20,595 | 36,071 | 38,864 | ||||||||
| Core earnings (Non-GAAP) | $ | 109,345 | $ | 123,151 | $ | 237,102 | $ | 259,353 | ||||
| Earnings per share: (GAAP) | ||||||||||||
| Basic | $ | 0.44 | $ | 0.47 | $ | 0.96 | $ | 1.02 | ||||
| Diluted | $ | 0.43 | $ | 0.46 | $ | 0.94 | $ | 1.00 | ||||
| Core earnings per share: (Non-GAAP) | ||||||||||||
| Basic | $ | 0.54 | $ | 0.59 | $ | 1.17 | $ | 1.26 | ||||
| Diluted | $ | 0.53 | $ | 0.58 | $ | 1.14 | $ | 1.23 | ||||
| Weighted average shares outstanding used in the calculations of earnings per share (GAAP and Non-GAAP): | ||||||||||||
| Basic | 202,458 | 207,287 | 203,393 | 206,337 | ||||||||
| Diluted | 206,804 | 212,148 | 207,474 | 211,410 | ||||||||
JABIL CIRCUIT, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION
OF GAAP FINANCIAL RESULTS TO NON-GAAP MEASURES
(in thousands)
(Unaudited)
CALCULATION OF RETURN ON INVESTED CAPITAL AND
CORE RETURN ON INVESTED CAPITAL
The Company calculates (1) "Return on Invested Capital" by annualizing its "after-tax GAAP operating income" for its most recently-ended quarter and dividing that by a two quarter average of its "net invested capital asset base" and (2) "Core Return on Invested Capital" by annualizing its "after-tax non-GAAP core operating income" for its most recently-ended quarter and dividing that by a two quarter average of its "net invested capital asset base."
The Company calculates: (1) its "after-tax GAAP operating income" by subtracting a certain tax effect (the calculation of which is explained below) from its GAAP operating income and (2) its "after-tax non-GAAP core operating income" by subtracting a certain tax effect (the calculation of which is explained below) from its non-GAAP core operating income. See elsewhere in this earnings release for a reconciliation of the Company's non-GAAP core operating income to its GAAP operating income.
The Company calculates "net invested capital asset base" as the sum of the averages (the calculations of which are explained below) of (1) its stockholders’ equity, (2) the non-current portion of its notes payable and long term debt and (3) the current portion of its notes payable and long term debt, less the average (the calculation of which is explained below) of its cash and cash equivalents.
The following table reconciles (1) "Return on Invested Capital," as calculated using "after-tax GAAP operating income" to (2) "Core Return on Invested Capital," as calculated using "after-tax non-GAAP core operating income":
| Three months ended | ||||||||||
|
February 28, |
February 29, | |||||||||
| 2013 | 2012 | |||||||||
| Numerator: | ||||||||||
| Operating income (GAAP) | $ | 149,041 | $ | 150,218 | ||||||
| Tax effect (1) | (30,930 | ) | (24,340 | ) | ||||||
| After-tax operating income | 118,111 | 125,878 | ||||||||
| x4 | x4 | |||||||||
| Annualized after-tax operating income | $ | 472,444 | $ | 503,512 | ||||||
| Core operating income (Non-GAAP) | $ | 170,222 | $ | 176,158 | ||||||
| Tax effect (2) | (31,258 | ) | (24,777 | ) | ||||||
| After-tax core operating income | 138,964 | 151,381 | ||||||||
| x4 | x4 | |||||||||
| Annualized after-tax core operating income | $ | 555,856 | $ | 605,524 | ||||||
| Denominator: | ||||||||||
| Average total Jabil Circuit, Inc. stockholders’ equity (3) | $ | 2,124,908 | $ | 1,949,666 | ||||||
| Average notes payable and long-term debt, less current installments (3) | 1,654,883 | 1,112,501 | ||||||||
| Average current installments of notes payable and long-term debt (3) | 59,624 | 182,731 | ||||||||
| Average cash and cash equivalents (3) | (1,045,845 | ) | (784,627 | ) | ||||||
| Net invested capital asset base | $ | 2,793,570 | $ | 2,460,271 | ||||||
| Return on Invested Capital (GAAP) | 16.9 | % | 20.5 | % | ||||||
| Adjustments noted above | 3.0 | % | 4.1 | % | ||||||
| Core Return on Invested Capital (Non-GAAP) | 19.9 | % | 24.6 | % | ||||||
|
(1) |
This amount is calculated by adding the amount of income taxes attributable to its operating income (GAAP) and its interest expense. |
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|
(2) |
This amount is calculated by adding the amount of income taxes attributable to its core operating income (Non-GAAP) and its interest expense. |
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|
(3) |
The average is based on the addition of the account balance at the end of the most recently-ended quarter to the account balance at the end of the prior quarter and dividing by two. |
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