Investors

Jabil Posts First Quarter Results

Jabil Posts First Quarter Results

12/14/2017

ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Dec. 14, 2017-- Today Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its first quarter of fiscal year 2018, including first quarter net revenue of $5.6 billion. For the first quarter of fiscal year 2018, U.S. GAAP (as defined below) operating income was $145.8 million and U.S. GAAP diluted earnings per share was $0.35.

First Quarter of Fiscal Year 2018 Highlights:

  • Diversified Manufacturing Services (DMS) revenue growth: 13 percent
  • Electronics Manufacturing Services (EMS) revenue growth: 6 percent
  • Core operating income (Non-GAAP): $227 million
  • Core diluted earnings per share (Non-GAAP): $0.80

“I’m extremely pleased with our first quarter results and a strong start to the year,” said CEO Mark Mondello. “As expected, we saw solid revenue growth across both our DMS and EMS segments, resulting in 15 percent growth, year-on-year, of core earnings per share. The quarter is a great illustration of the strength and diversification across the company,” he added.

Second Quarter of Fiscal Year 2018 Guidance:

   

• Net revenue

  $4.75 billion to $5.05 billion

• U.S. GAAP operating income

  $124 million to $169 million

• U.S. GAAP diluted earnings per share

  $0.31 to $0.57 per diluted share

• Core operating income (Non-GAAP)

  $160 million to $200 million

• Core diluted earnings per share (Non-GAAP)

  $0.50 to $0.74 per diluted share

• Diversified Manufacturing Services

  Increase revenue 25 percent year-on-year

• Electronics Manufacturing Services

  Increase revenue 1 percent year-on-year

• Total company

  Increase revenue 10 percent year-on-year

“Our second quarter guidance, which suggests ten percent revenue growth and nearly 25 percent core EPS growth year-on-year, is an absolute reflection of the momentum we have in our business today. Moreover, we anticipate the growth to continue in the second half of the fiscal year, resulting in core earnings per share of approximately $2.60 for 2018,” added Mondello.

(U.S. GAAP diluted earnings per share for the second quarter of fiscal year 2018 are currently estimated to include $0.05 per share for amortization of intangibles, $0.09 per share for stock-based compensation expense and related charges and $0.05 to $0.03 per share for restructuring and related charges.)

(Definitions: “U.S. GAAP” means U.S. generally accepted accounting principles. Jabil defines core operating income as U.S. GAAP operating income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges and business interruption and impairment charges, net. Jabil defines core earnings as U.S. GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, business interruption and impairment charges, net, impairment on securities, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations and 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 as determined under U.S. GAAP. Jabil reports core operating income, core earnings and core diluted and basic earnings per share to provide investors an additional method for assessing operating income, earnings and diluted earnings per share from what it believes are its core manufacturing operations. See the accompanying reconciliation of Jabil’s core operating income to its U.S. GAAP operating income, its calculation of core earnings and core diluted earnings per share to its U.S. GAAP net income and U.S. GAAP earnings per share and additional information in the supplemental information.)

Forward Looking Statements: Thisnews release contains forward-looking statements, including those regarding our anticipated financial results for our first quarter of fiscal year 2018; our guidance for future financial performance in our second quarter of fiscal year 2018 (including, net revenue, total company and segment revenue, U.S. GAAP operating income, U.S. GAAP diluted earnings per share, core operating income (Non-GAAP), and core diluted earnings per share (Non-GAAP) results and the components thereof, in each case for our second quarter of fiscal year 2018) and full year 2018 (core earnings per share (Non-GAAP)). The statements in this press release are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially from our current expectations. Such factors include, but are not limited to: our determination as we finalize our financial results for our first quarter of fiscal year 2018 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; unexpected, adverse seasonal impacts on demand; performance in the markets in which we operate; changes in macroeconomic conditions; the occurrence of, success and expected financial results from, product ramps; our ability to maintain and improve costs, quality and delivery for our customers; whether our restructuring activities and the realignment of our capacity will adversely affect our cost structure, ability to service customers and labor relations; reliance on a limited number of suppliers for critical components; 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; and our dependence on a limited number of large customers. Additional factors that could cause such differences can be found in our Annual Report on Form 10-K for the fiscal year ended August 31, 2017 and our other filings with the Securities and Exchange Commission. We assume no obligation to update these forward-looking statements.

Supplemental Information Regarding Non-GAAP Financial Measures: Jabil provides supplemental, non-GAAP financial measures in this release to facilitate evaluation of Jabil’s core operating performance. These non-GAAP measures exclude certain amounts that are included in the most directly comparable U.S. GAAP measures, do not have standard meanings and may vary from the non-GAAP financial measures used by other companies. Management believes these “core” financial measures are useful measures that facilitate evaluation of the past and future performance of Jabil’s ongoing operations on a comparable basis.

Jabil reports core operating income, 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. Among other uses, management uses non-GAAP financial measures to make operating decisions, assess business performance and as a factor in determining certain employee performance when determining incentive compensation. The Company determines the tax effect of the items excluded from core earnings and core basic and diluted earnings per share based upon evaluation of the statutory tax treatment and the applicable tax rate of the jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain jurisdictions where the Company does not expect to realize a tax benefit (due to existing tax incentives or a history of operating losses or other factors resulting in a valuation allowance related to deferred tax assets), a reduced or 0% tax rate is applied. Detailed definitions of certain of the core financial measures are included above under “Definitions” and a reconciliation of the disclosed core financial measures to the most directly comparable U.S. GAAP financial measures is included under the heading “Supplemental Data” at the end of this release.

Company Conference Call Information: Jabil will hold a conference call to discuss its first quarter results today at 4:30 p.m. ET live on the Internet at www.jabil.com. The call will be recorded and archived on the web at www.jabil.com. A taped replay of the conference call will also be available December 14, 2017 at approximately 7:30 p.m. ET through midnight on December 21, 2017. 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: 2556719. An archived webcast of the conference call will be available at https://investors.jabil.com/.

About Jabil:Jabil (NYSE: JBL) is a product solutions company providing comprehensive design, manufacturing, supply chain and product management services. Operating from over 100 facilities in 29 countries, Jabil delivers innovative, integrated and tailored solutions to customers across a broad range of industries. For more information, visit jabil.com.

 

JABIL INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands)  
   
                 
    November 30,          
    2017     August 31,  
    (Unaudited)     2017  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 746,258     $ 1,189,919  
Accounts receivable, net     1,534,754       1,397,424  
Inventories, net     3,283,215       2,942,083  
Prepaid expenses and other current assets     1,357,901       1,097,257  
Total current assets     6,922,128       6,626,683  
Property, plant and equipment, net     3,289,754       3,228,678  
Goodwill and intangible assets, net     931,489       892,780  
Deferred income taxes     216,830       205,722  
Other assets     159,364       142,132  
Total assets   $ 11,519,565     $ 11,095,995  
LIABILITIES AND EQUITY                
Current liabilities:                
Current installments of notes payable, long-term debt and capital lease obligations   $ 427,019     $ 445,498  
Accounts payable     4,803,194       4,257,623  
Accrued expenses     2,019,511       2,167,472  
Total current liabilities     7,249,724       6,870,593  
Notes payable, long-term debt and capital lease obligations, less current installments     1,693,433       1,632,592  
Other liabilities     75,627       74,237  
Income tax liabilities     106,488       100,902  
Deferred income taxes     49,601       49,327  
Total liabilities     9,174,873       8,727,651  
Commitments and contingencies                
Equity:                
Jabil Inc. stockholders’ equity:                
Preferred stock            
Common stock     256       253  
Additional paid-in capital     2,149,173       2,104,203  
Retained earnings     1,779,335       1,730,893  
Accumulated other comprehensive income     51,484       54,620  
Treasury stock, at cost     (1,650,509 )     (1,536,455 )
Total Jabil Inc. stockholders’ equity     2,329,739       2,353,514  
Noncontrolling interests     14,953       14,830  
Total equity     2,344,692       2,368,344  
Total liabilities and equity   $ 11,519,565     $ 11,095,995  
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
             
    Three months ended
    November 30,   November 30,
    2017   2016  
Net revenue   $ 5,585,532   $ 5,104,898  
Cost of revenue     5,116,247     4,673,392  
Gross profit     469,285     431,506  
Operating expenses:            
Selling, general and administrative     293,055     214,052  
Research and development     9,109     7,623  
Amortization of intangibles     9,979     8,322  
Restructuring and related charges     11,388     35,902  
Operating income     145,754     165,607  
Interest and other, net     38,315     35,069  
Income before income tax     107,439     130,538  
Income tax expense     43,520     43,837  
Net income     63,919     86,701  
Net income (loss) attributable to noncontrolling interests, net of tax     124     (1,326 )
Net income attributable to Jabil Inc.   $ 63,795   $ 88,027  
Earnings per share attributable to the stockholders of Jabil Inc.:            
Basic   $ 0.36   $ 0.48  
Diluted   $ 0.35   $ 0.47  
             
Weighted average shares outstanding:            
Basic     176,936     185,292  
Diluted     180,203     187,856  
JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
                       
          Three months ended  
          November 30,     November 30,  
          2017       2016  
Cash flows from operating activities:                
  Net income   $ 63,919       $ 86,701  
  Adjustments to reconcile net income to net cash provided by operating activities:                
      Depreciation and amortization     194,633         188,901  
      Restructuring and related charges     6,812         12,640  
      Recognition of stock-based compensation expense and related charges     44,974         (291 )
      Deferred income taxes     (11,507 )       (16,495 )
      Other, net     3,812         4,421  
  Change in operating assets and liabilities, exclusive of net assets acquired:                
      Accounts receivable     (125,627 )       (170,932 )
      Inventories     (320,814 )       (32,520 )
      Prepaid expenses and other current assets     (250,857 )       (218,379 )
      Other assets     (13,549 )       (34,987 )
      Accounts payable, accrued expenses and other liabilities     354,617         332,881  
  Net cash (used in) provided by operating activities     (53,587 )       151,940  
Cash flows from investing activities:                
  Acquisition of property, plant and equipment     (218,617 )       (163,866 )
  Proceeds and advances from sale of property, plant and equipment     20,330         1,472  
  Cash paid for business and intangible asset acquisitions, net of cash     (95,858 )        
  Other, net     (1,067 )       (2,033 )
  Net cash used in investing activities     (295,212 )       (164,427 )
Cash flows from financing activities:                
  Borrowings under debt agreements     1,792,000         1,676,000  
  Payments toward debt agreements     (1,748,599 )       (1,685,151 )
  Payments to acquire treasury stock     (93,309 )       (114,165 )
  Dividends paid to stockholders     (16,231 )       (16,059 )
  Treasury stock minimum tax withholding related to vesting of restricted stock     (20,745 )       (9,119 )
  Other, net     (3,912 )        
  Net cash used in financing activities     (90,796 )       (148,494 )
Effect of exchange rate changes on cash and cash equivalents     (4,066 )       (3,663 )
Net decrease in cash and cash equivalents     (443,661 )       (164,644 )
Cash and cash equivalents at beginning of period     1,189,919         912,059  
Cash and cash equivalents at end of period   $ 746,258       $ 747,415  
JABIL INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF U.S. GAAP FINANCIAL RESULTS TO NON-GAAP MEASURES
(in thousands, except for per share data)
(Unaudited)
               
    Three months ended
    November 30,     November 30,
    2017     2016
Operating income (U.S. GAAP)   $ 145,754     $ 165,607
Amortization of intangibles     9,979       8,322
Stock-based compensation expense and related charges     52,745       (291)
Restructuring and related charges     11,388       35,902
Business interruption and impairment charges, net     7,354      
Adjustments to operating income     81,466       43,933
Core operating income (Non-GAAP)   $ 227,220     $ 209,540
               
Net income attributable to Jabil Inc. (U.S. GAAP)   $ 63,795     $ 88,027
Adjustments to operating income     81,466       43,933
Adjustments for taxes     (717)       (2,325)
Core earnings (Non-GAAP)   $ 144,544     $ 129,635
               
Earnings per share (U.S. GAAP):              
Basic   $ 0.36     $ 0.48
Diluted   $ 0.35     $ 0.47
               
Core earnings per share (Non-GAAP):              
Basic   $ 0.82     $ 0.70
Diluted   $ 0.80     $ 0.69
               
Weighted average shares outstanding used in the calculations of              
earnings per share (U.S. GAAP and Non-GAAP):              
Basic     176,936       185,292
Diluted     180,203       187,856

 

Source: Jabil Circuit, Inc.

Jabil Inc.
Beth Walters, 727-803-3511
Senior Vice President, Investor Relations & Communications
beth_walters@jabil.com
or
Adam Berry, 727-803-5772
Senior Director, Investor Relations
adam_berry@jabil.com

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