Jabil Posts Fourth Quarter & Fiscal Year 2013 Results
Jabil Posts Fourth Quarter & Fiscal Year 2013 Results
Solid Revenue Growth and Strong Cash Flow Generation
"Delivering record revenues, generating more than a billion dollars of cash flow from operations, and achieving a core return on invested capital of 21 percent are clear highlights of our fiscal year," said Jabil's Chief Executive Officer Mark Mondello. "In addition, we are pleased to return nearly $200 million in capital to shareholders through dividends and share repurchases, while continuing to thoughtfully invest capital back into the business, both organically and acquisitively, with an eye on long-term earnings growth," said Mondello.
The company reported fourth quarter revenue of $4.8 billion and fiscal year revenue of $18.3 billion.
Jabil's three reporting segments delivered the following revenue results for the company's fourth fiscal quarter:
- Diversified Manufacturing: $2.1 billion.
- Enterprise & Infrastructure: $1.4 billion.
- High Velocity: $1.3 billion.
"I would like to acknowledge the continued dedication of our employees because it is their efforts and commitment that truly differentiate Jabil and enable us to achieve our goals," said Mondello.
Generally accepted accounting principles (GAAP) operating income for the fourth quarter was $88.4 million and $511.4 million for the full fiscal year, ended August 31, 2013. GAAP diluted earnings per share for the fourth quarter were $0.61 and $1.79 for the fiscal year. The company said that $89.5 million in restructuring activity during the year and a $25.6 million non-cash charge related to a note receivable and related charges in the third quarter impacted the fiscal year GAAP operating income and $61.1 million in restructuring activity impacted the fourth quarter GAAP operating income.
Core operating income results, excluding amortization of intangibles, stock-based compensation and related charges, restructuring and related charges, impairment of notes receivable and related charges and acquisition costs and purchase accounting adjustments, was $721.1 million and core diluted earnings per share was $2.26.
(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 related charges, impairment of notes receivable and related charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges, loss on disposal of subsidiaries and acquisition costs and purchase accounting adjustments. Jabil defines core earnings as GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, impairment of notes receivable and related charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges, loss on disposal of subsidiaries, acquisition costs and purchase accounting adjustments, 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.)
|Net revenue||$4.8 billion||$4.3 billion|
|GAAP operating income||$88.4 million||$144.3 million|
|GAAP net income||$127.0 million||$82.8 million|
|GAAP diluted earnings per share||$0.61||$0.39|
|GAAP return on invested capital||22%||17%|
|Core operating income||$181.4 million||$175.1 million|
|Core earnings||$117.2 million||$113.3 million|
|Core diluted earnings per share||$0.56||$0.54|
|Core return on invested capital||21%||22%|
Fiscal Year Results
|Net revenue||$18.3 billion||$17.2 billion|
|GAAP operating income||$511.4 million||$621.9 million|
|GAAP net income||$371.5 million||$394.7 million|
|GAAP diluted earnings per share||$1.79||$1.87|
|GAAP return on invested capital||17%||22%|
|Core operating income||$721.1 million||$736.2 million|
|Core earnings||$469.9 million||$507.1 million|
|Core diluted earnings per share||$2.26||$2.40|
|Core return on invested capital||21%||26%|
"We are fortunate to have a strong balance sheet, broad-based capabilities that deliver innovative solutions, outstanding employees and a roster of market-leading customers as we head into fiscal year 2014," said Jabil CEO, Mark Mondello. Jabil provided guidance for its first fiscal quarter of 2014, which began on September 1st.
Fiscal Q1 2014 Guidance:
|Net revenue||$4.35 billion to $4.65 billion|
|Core operating income||$165 million to $195 million|
|Core earnings per share||$0.50 to $0.60 per diluted share|
|GAAP operating income||$110 million to $140 million|
|GAAP earnings per share||$0.25 to $0.35 per diluted share|
(GAAP earnings per share for the first quarter of fiscal 2014 are currently estimated to include $0.03 per share for amortization of intangibles, $0.09 per share for stock-based compensation and $0.13 per share for restructuring and related charges.)
Year over Year Segment Revenue Guidance:
- Diversified Manufacturing Services to increase 7 percent.
- Enterprise & Infrastructure to remain consistent.
- High Velocity to decline 25 percent.
In addition to the segment guidance, Jabil said its previously announced restructuring of global operations continued through the quarter. It is currently estimated that the balance of $99 million will be recorded in fiscal years 2014 and 2015.
The company also announced it expects approximately $35 to $85 million of charges in fiscal year 2014 related to ongoing discussions with Blackberry, Jabil's second largest customer in fiscal 2013.
FORWARD LOOKING STATEMENT: This news release contains forward-looking statements, including those regarding our anticipated financial results for our fourth quarter of fiscal year 2013 and our full fiscal year 2013; our thoughtful investment of capital back into the business, both organically and acquisitively, with an eye on long term earnings growth; our balance sheet, capabilities, employees and customers as we head into fiscal year 2014; and our currently expected first quarter of fiscal year 2014 net revenue (including that of our segments), 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 fourth quarter of fiscal year 2013 and our full fiscal year 2013 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; changes to our capital investment strategy over time; our ability to generate long term earnings growth from our capital investments; 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 and8-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 related charges, impairment of notes receivable and related charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges, loss on disposal of subsidiaries, acquisition costs and purchase accounting adjustments, 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 fourth 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 September 25, 2013 at approximately 7:30 p.m. ET through midnight on October 2, 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: 55279234. An archived webcast of the conference call will be available at http://www.jabil.com/investors/.
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 31 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'swebsite: jabil.com.
|JABIL CIRCUIT, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|Cash and cash equivalents||$||1,011,373||$||1,217,256|
|Accounts receivable, net||1,281,425||1,125,015|
|Prepaid expenses and other current assets||1,165,984||989,326|
|Income taxes receivable||13,048||10,949|
|Deferred income taxes||46,260||27,833|
|Total current assets||5,820,245||5,639,328|
|Property, plant and equipment, net||2,395,598||1,779,155|
|Goodwill and intangible assets, net||740,435||214,071|
|Deferred income taxes||94,069||73,411|
|LIABILITIES AND EQUITY|
|Current installments of notes payable, long-term debt and capital lease obligations||$||215,536||$||18,031|
|Income taxes payable||40,332||35,665|
|Deferred income taxes||6,253||3,955|
|Total current liabilities||4,864,434||3,858,996|
|Notes payable, long-term debt and capital lease obligations, less current installments||1,690,426||1,658,326|
|Income tax liabilities||80,368||68,525|
|Deferred income taxes||73,173||24,245|
|Commitments and contingencies
|Jabil Circuit, Inc. stockholders' equity:|
|Additional paid-in capital||1,853,409||1,752,847|
|Accumulated other comprehensive income||81,248||106,275|
|Treasury stock, at cost||(670,783||)||(521,231||)|
|Total Jabil Circuit, Inc. stockholders' equity||2,335,287||2,105,057|
|Total liabilities and equity||$||9,153,781||$||7,803,141|
JABIL CIRCUIT, INC. AND SUBSIDIARIES
|Three months ended||Twelve months ended|
|August 31,||August 31,||August 31,||August 31,|
|Cost of revenue||4,462,613||4,020,532||16,977,032||15,842,896|
|Selling, general and administrative||189,979||163,070||688,752||644,452|
|Research and development||7,075||6,784||28,468||25,837|
|Amortization of intangibles||5,760||3,426||16,154||16,825|
|Restructuring and related charges||61,061||—||89,453||—|
|Impairment of notes receivable and related charges||—||—||25,597||—|
|Interest and other, net||32,547||29,804||125,374||113,031|
|Income before income tax||55,823||114,464||386,064||508,900|
|Income tax (benefit) expense||(70,967||)||31,999||15,973||112,811|
|Net (loss) income attributable to noncontrolling interests, net of income tax expense||(229||)||(332||)||(1,391||)||1,402|
|Net income attributable to Jabil Circuit, Inc.||$||127,019||$||82,797||$||371,482||$||394,687|
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