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8-K - FORM 8-K - JABIL CIRCUIT INCd440776d8k.htm

Exhibit 99.1

LOGO

Jabil Posts First Quarter Results

Impressive Strength in Specialized Services

St. Petersburg, FL – December 19, 2012.Today Jabil Circuit, Inc. (NYSE: JBL), announced its preliminary, unaudited financial results for the first quarter of fiscal year 2013. The company reported first quarter revenue of $4.6 billion. “Diversified Manufacturing Services increased to 47 percent of our overall business, paced by outstanding growth in Specialized Services,” said Timothy L. Main, President and CEO of Jabil.

Jabil’s Diversified Manufacturing Services business grew 20 percent in the first quarter of fiscal 2013 when compared to results of the first quarter of fiscal year 2012. The company’s Enterprise & Infrastructure business increased 17 percent from the first quarter of fiscal year 2012 while Jabil’s High Velocity business declined 20 percent during the first quarter of fiscal year 2013, as compared to fiscal 2012.

Generally accepted accounting principles (GAAP) operating income for the first quarter of fiscal year 2013 was $170 million. Excluding amortization of intangibles and stock-based compensation, core operating income was $193 million. GAAP diluted earnings per share was $0.51 cents and core diluted earnings per share was $0.61 cents.

“We are pleased to have generated cash flow from operations of $152 million during the quarter. As a result of this outstanding performance and the ongoing strength of our balance sheet, we were able to return $148 million in capital to shareholders during the first quarter of fiscal year 2013 through dividends and share repurchases,” said Chief Financial Officer Forbes Alexander. “We see this positive performance continuing and continue to estimate operating cash flow of $1 billion in fiscal 2013,” Alexander noted.

(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 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.)

Operational Highlights Fiscal Q1 2013 versus Fiscal Q1 2012

 

Diversified Manufacturing Services increased 20 percent.
  ¡ Specialized Services revenue expanded 51 percent.
  ¡ Healthcare & Instrumentation revenue declined 22 percent.
  ¡ Industrial & Clean Tech revenue declined 9 percent.
Enterprise & Infrastructure revenue increased 17 percent.
High Velocity revenue decreased 20 percent.
Cash flow from operations increased to $152 million.


Quarterly Results

   Q1 2013   Q1 2012

Net revenue

   $4.6 billion   $4.3 billion

GAAP operating income

   $170.3 million   $170.8 million

GAAP net income

   $105.8 million   $112.9 million

GAAP diluted earnings per share

   $0.51   $0.54

GAAP return on invested capital

   21%   26%

Core operating income

   $192.5 million   $194.6 million

Core earnings

   $127.8 million   $136.2 million

Core diluted earnings per share

   $0.61   $0.65

Core return on invested capital

   24%   30%

 

Repurchased $129 million worth of shares and returned $19 million to shareholders via dividends during the quarter.

Business Update

“Expectations for the second fiscal quarter of 2013 are consistent with seasonal patterns of demand,” said Jabil CEO Timothy Main. “End market demand remains muted in business sectors exposed to government and business spending. Although environmental conditions continue to be uncertain, we maintain our expectation that fiscal 2013 will be another record year for Jabil.”

Fiscal Q2 2013 Guidance Range

 

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 earnings per share

 

$0.40 to $0.48 per diluted share

 

 

(GAAP earnings per share for the second 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).

FORWARD LOOKING STATEMENT: This news release contains forward-looking statements, including those regarding our anticipated financial results for our first quarter of fiscal year 2013; our positive performance continuing, specifically our fiscal year 2013 operating cash flow and our strong balance sheet; our expectations for the second quarter of fiscal year 2013 being consistent with seasonal patterns of demand; end market demand remaining muted in business sectors exposed to government and business spending; our expectation that fiscal year 2013 will be another company record year for Jabil; and our currently expected second quarter of fiscal year 2013 net revenue, core 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 first fiscal quarter of fiscal year 2013 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; 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 Form 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 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 first 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 December 19, 2012 at approximately 7:30 p.m. ET through midnight on December 31, 2012. 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: 77599645. 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 29 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.

Investor & Media Contact:

Beth Walters

Senior Vice President, Investor Relations & Communications

Jabil Circuit, Inc.

(727) 803-3511

beth_walters@jabil.com

 


JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

     November 30,     August 31,  
     2012 (Unaudited)     2012  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 1,030,034      $ 1,217,256   

Accounts receivable, net

     1,430,468        1,125,015   

Inventories

     2,465,801        2,268,949   

Prepaid expenses and other current assets

     980,494        989,326   

Income taxes receivable

     10,727        10,949   

Deferred income taxes

     28,552        27,833   
  

 

 

   

 

 

 

Total current assets

     5,946,076        5,639,328   

Property, plant and equipment, net

     1,859,166        1,779,155   

Goodwill and intangible assets, net

     211,569        214,071   

Deferred income taxes

     71,364        73,411   

Other assets

     97,325        97,176   
  

 

 

   

 

 

 

Total assets

   $ 8,185,500      $ 7,803,141   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Current installments of notes payable and long-term debt

   $ 9,650      $ 18,031   

Accounts payable

     3,374,927        2,992,865   

Accrued expenses

     852,199        808,480   

Income taxes payable

     28,416        35,665   

Deferred income taxes

     4,298        3,955   
  

 

 

   

 

 

 

Total current liabilities

     4,269,490        3,858,996   

Notes payable and long-term debt, less current installments

     1,656,058        1,658,326   

Other liabilities

     85,087        85,714   

Income tax liability

     76,152        68,525   

Deferred income taxes

     22,668        24,245   
  

 

 

   

 

 

 

Total liabilities

     6,109,455        5,695,806   
  

 

 

   

 

 

 

Commitments and contingencies

Equity:

    

Jabil Circuit, Inc. stockholders’ equity:

    

Preferred stock

     —          —     

Common stock

     237        232   

Additional paid-in capital

     1,775,168        1,752,847   

Retained earnings

     855,819        766,934   

Accumulated other comprehensive income

     112,890        106,275   

Treasury stock, at cost

     (670,401     (521,231
  

 

 

   

 

 

 

Total Jabil Circuit, Inc. stockholders’ equity

     2,073,713        2,105,057   
  

 

 

   

 

 

 

Noncontrolling interests

     2,332        2,278   
  

 

 

   

 

 

 

Total equity

     2,076,045        2,107,335   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 8,185,500      $ 7,803,141   
  

 

 

   

 

 

 


JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

(Unaudited)

 

 

     Three months ended  
     November 30,     November 30,  
     2012     2011  

Net revenue

   $ 4,637,018      $ 4,326,769   

Cost of revenue

     4,286,423        3,986,759   
  

 

 

   

 

 

 

Gross profit

     350,595        340,010   

Operating expenses:

    

Selling, general and administrative

     169,600        157,823   

Research and development

     7,263        6,271   

Amortization of intangibles

     3,451        5,074   
  

 

 

   

 

 

 

Operating income

     170,281        170,842   

Interest and other, net

     30,663        27,646   
  

 

 

   

 

 

 

Income before income tax

     139,618        143,196   

Income tax expense

     34,034        29,415   
  

 

 

   

 

 

 

Net income

     105,584        113,781   

Net (loss) income attributable to noncontrolling interests, net of income tax expense

     (263     909   
  

 

 

   

 

 

 

Net income attributable to Jabil Circuit, Inc.

   $ 105,847      $ 112,872   
  

 

 

   

 

 

 

Earnings per share attributable to the stockholders of

Jabil Circuit, Inc.:

    

Basic

   $ 0.52      $ 0.55   
  

 

 

   

 

 

 

Diluted

   $ 0.51      $ 0.54   
  

 

 

   

 

 

 

Weighted average shares outstanding:

    

Basic

     204,318        205,388   
  

 

 

   

 

 

 

Diluted

     207,816        209,937   
  

 

 

   

 

 

 


JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Three months ended  
     November 30,
2012
    November 30,
2011
 

Cash flows from operating activities:

    

Net income

   $ 105,584      $ 113,781   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     95,203        85,861   

Recognition of stock-based compensation expense

     18,803        18,665   

Other, net

     1,498        (561

Changes in operating assets and liabilities, exclusive of net assets acquired:

    

Accounts receivable

     (308,487     (29,659

Inventories

     (195,316     (173,336

Prepaid expenses and other current assets

     10,256        (49,009

Other assets

     233        6,319   

Accounts payable and accrued expenses

     424,119        147,107   

Income taxes payable

     21        (4,595
  

 

 

   

 

 

 

Net cash provided by operating activities

     151,914        114,573   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisition of property, plant and equipment

     (166,485     (103,234

Proceeds from sale of property, plant and equipment

     1,981        8,148   

Cost of receivables acquired, net of cash collections

     —          510   
  

 

 

   

 

 

 

Net cash used in investing activities

     (164,504     (94,576
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Borrowings under debt agreements

     776,517        2,380,710   

Payments toward debt agreements

     (787,196     (2,370,864

Payments to acquire treasury stock

     (129,262     —     

Dividends paid to stockholders

     (18,551     (15,528

Capital contributions made to noncontrolling interest

     317        —     

Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

     3,201        3,183   

Treasury stock minimum tax withholding related to vesting of restricted stock

     (19,908     (30,868

Excess tax benefit related to stock awards

     330        888   
  

 

 

   

 

 

 

Net cash used in financing activities

     (174,552     (32,479
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (80     (14,225
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (187,222     (26,707

Cash and cash equivalents at beginning of period

     1,217,256        888,611   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,030,034      $ 861,904   
  

 

 

   

 

 

 


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  
     November 30,      November 30,  
     2012      2011  

Operating income (GAAP)

   $ 170,281       $ 170,842   

Amortization of intangibles

     3,451         5,074   

Stock-based compensation and related charges

     18,803         18,665   
  

 

 

    

 

 

 

Core operating income (Non-GAAP)

   $ 192,535       $ 194,581   

Net income attributable to Jabil Circuit, Inc. (GAAP)

   $ 105,847       $ 112,872   

Amortization of intangibles, net of tax

     3,318         5,061   

Stock-based compensation and related charges, net of tax

     18,593         18,269   
  

 

 

    

 

 

 

Core earnings (Non-GAAP)

   $ 127,758       $ 136,202   

Earnings per share: (GAAP)

     

Basic

   $ 0.52       $ 0.55   
  

 

 

    

 

 

 

Diluted

   $ 0.51       $ 0.54   
  

 

 

    

 

 

 

Core earnings per share: (Non-GAAP)

     

Basic

   $ 0.63       $ 0.66   
  

 

 

    

 

 

 

Diluted

   $ 0.61       $ 0.65   
  

 

 

    

 

 

 

Weighted average shares outstanding used in the calculations of

earnings per share (GAAP and Non-GAAP):

     

Basic

     204,318         205,388   
  

 

 

    

 

 

 

Diluted

     207,816         209,937   
  

 

 

    

 

 

 

 


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 calculation 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
    Three months
ended
 
     November 30,     November 30,  
     2012     2011  

Numerator:

    

Operating income (GAAP)

   $ 170,281      $ 170,842   

Tax effect (1)

     (34,292     (29,852
  

 

 

   

 

 

 

After-tax operating income

     135,989        140,990   
     x4        x4   
  

 

 

   

 

 

 

Annualized after-tax operating income

   $ 543,956      $ 563,960   
  

 

 

   

 

 

 

Core Operating Income (Non-GAAP)

   $ 192,535      $ 194,581   

Tax effect (2)

     (34,602     (30,204
  

 

 

   

 

 

 

After-tax core operating income

     157,933        164,377   
     x4        x4   
  

 

 

   

 

 

 

Annualized after-tax core operating income

   $ 631,732      $ 657,508   
  

 

 

   

 

 

 

Denominator:

    

Average total Jabil Circuit, Inc. stockholders’ equity (3)

   $ 2,089,385      $ 1,882,810   

Average notes payable and long-term debt, less current installments (3)

     1,657,192        1,112,560   

Average current installments of notes payable and long-term debt (3)

     13,841        79,010   

Average cash and cash equivalents (3)

     (1,123,645     (875,258
  

 

 

   

 

 

 

Net invested capital asset base

   $ 2,636,773      $ 2,199,122   
  

 

 

   

 

 

 

Return on Invested Capital (GAAP)

     20.6     25.6

Adjustments noted above

     3.4     4.3

Core Return on Invested Capital (Non-GAAP)

     24.0     29.9
(1) This amount is calculated by adding the amount of income taxes attributable to its operating income (GAAP) and its interest expense.
(2) This amount is calculated by adding the amount of income taxes attributable to its core operating income (Non-GAAP) and its interest expense.
(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.