Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 15, 2018

 

 

Jabil Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-14063   38-1886260

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

10560 Dr. Martin Luther King, Jr. Street North, St. Petersburg, Florida 33716

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (727) 577-9749

N/A

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On March 15, 2018, Jabil Inc. (the “Company”) issued a press release announcing its results of operations for the second fiscal quarter ended February 28, 2018. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

The information furnished herewith pursuant to Item 2.02 of this Current Report, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

The following exhibit is furnished herewith:

 

Exhibit
No.
  

Description

99.1    Press Release dated March 15, 2018.

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    JABIL INC.
    (Registrant)
March 15, 2018     By:  

/s/ FORBES I.J. ALEXANDER

      Forbes I.J. Alexander
      Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

Jabil Posts Second Quarter Results

Reiterates Positive Outlook

St. Petersburg, FL – March 15, 2018. Today Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its second quarter of fiscal year 2018, including second quarter net revenue of $5.3 billion. For the second quarter of fiscal year 2018, U.S. GAAP (as defined below) operating income was $129.5 million and U.S. GAAP diluted earnings per share was $0.21.

Second Quarter of Fiscal Year 2018 Highlights:

 

    Diversified Manufacturing Services (DMS) revenue growth: 38 percent

 

    Electronics Manufacturing Services (EMS) revenue growth: 7 percent

 

    Core operating income (Non-GAAP): $178.6 million

 

    Core diluted earnings per share (Non-GAAP): $0.66

“I’m pleased with the results of our second quarter, which was characterized by strong revenue growth, core operating income expansion and healthy cash flow generation,” said CEO Mark Mondello. “Additionally, we invested in several key new programs, returned approximately $150 million to shareholders via our capital return program and successfully renewed 10-year senior notes at a more favorable rate. These activities, both operational and strategic, position us well as we remain focused on diversifying our earnings and cash flows,” he added.

Third Quarter of Fiscal Year 2018 Guidance:

 

• Net revenue

  

$4.75 billion to $5.05 billion

• U.S. GAAP operating income

  

$85 million to $135 million

• U.S. GAAP diluted earnings per share

  

$0.12 to $0.38 per diluted share

• Core operating income (Non-GAAP)

  

$125 million to $165 million

• Core diluted earnings per share (Non-GAAP)

  

$0.35 to $0.55 per diluted share

• Diversified Manufacturing Services

  

Increase revenue 10 percent year-on-year

• Electronics Manufacturing Services

  

Increase revenue 8 percent year-on-year

• Total company

  

Increase revenue 9 percent year-on-year

“Looking ahead to the second half of fiscal 2018, we expect the broad-based growth across both of our segments to continue as we approach $21 billion in revenue for the year. At the same time, we remain committed to delivering $1 billion in operating cash flows and core earnings per share of approximately $2.60 for the year,” added Mondello.

(U.S. GAAP diluted earnings per share for the third quarter of fiscal year 2018 are currently estimated to include $0.06 per share for amortization of intangibles, $0.08 per share for stock-based compensation expense and related charges and $0.09 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: This news release contains forward-looking statements, including those regarding our anticipated financial results for our second quarter of fiscal year 2018; our guidance for future financial performance in our third 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 third quarter of fiscal year 2018) and full year 2018 (net revenue, operating cash flows and 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 second 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; our dependence on a limited number of large customers; and adverse changes in political conditions, in the U.S. and internationally, including, among others, adverse changes in tax laws and rates and our ability to estimate and manage their impact. 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 in the Supplemental Data at the end of this release.


Company Conference Call Information: Jabil will hold a conference call to discuss its second 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 through midnight ET on March 22, 2018. 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: 7399186. 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.

Company Contacts:

Beth Walters

Senior Vice President, Investor Relations & Communications

(727) 803-3511

beth_walters@jabil.com

Adam Berry

Senior Director, Investor Relations

(727) 803-5772

adam_berry@jabil.com


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     February 28, 2018
(unaudited)
    August 31, 2017  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 940,796     $ 1,189,919  

Accounts receivable, net

     1,549,899       1,397,424  

Inventories, net

     3,387,995       2,942,083  

Prepaid expenses and other current assets

     1,157,485       1,097,257  
  

 

 

   

 

 

 

Total current assets

     7,036,175       6,626,683  

Property, plant and equipment, net

     3,141,952       3,228,678  

Goodwill and intangible assets, net

     927,599       892,780  

Deferred income taxes

     216,281       205,722  

Other assets

     166,250       142,132  
  

 

 

   

 

 

 

Total assets

   $ 11,488,257     $ 11,095,995  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities:

    

Current installments of notes payable, long-term debt and capital lease obligations

   $ 27,158     $ 445,498  

Accounts payable

     4,642,860       4,257,623  

Accrued expenses

     2,095,042       2,167,472  
  

 

 

   

 

 

 

Total current liabilities

     6,765,060       6,870,593  

Notes payable, long-term debt and capital lease obligations, less current installments

     2,181,478       1,632,592  

Other liabilities

     73,197       74,237  

Income tax liabilities

     136,310       100,902  

Deferred income taxes

     37,866       49,327  
  

 

 

   

 

 

 

Total liabilities

     9,193,911       8,727,651  
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity:

    

Jabil Inc. stockholders’ equity:

    

Preferred stock

     —         —    

Common stock

     257       253  

Additional paid-in capital

     2,176,764       2,104,203  

Retained earnings

     1,802,372       1,730,893  

Accumulated other comprehensive income

     86,608       54,620  

Treasury stock, at cost

     (1,783,906     (1,536,455
  

 

 

   

 

 

 

Total Jabil Inc. stockholders’ equity

     2,282,095       2,353,514  

Noncontrolling interests

     12,251       14,830  
  

 

 

   

 

 

 

Total equity

     2,294,346       2,368,344  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 11,488,257     $ 11,095,995  
  

 

 

   

 

 

 


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data)

(Unaudited)

 

     Three months ended     Six months ended  
     February 28, 2018      February 28, 2017     February 28, 2018      February 28, 2017  

Net revenue

   $ 5,301,101      $ 4,445,637     $ 10,886,633      $ 9,550,535  

Cost of revenue

     4,903,968        4,083,733       10,020,215        8,757,125  
  

 

 

    

 

 

   

 

 

    

 

 

 

Gross profit

     397,133        361,904       866,418        793,410  

Operating expenses:

          

Selling, general and administrative

     243,940        217,943       536,995        431,995  

Research and development

     8,344        7,085       17,453        14,708  

Amortization of intangibles

     9,890        8,766       19,869        17,088  

Restructuring and related charges

     5,427        44,927       16,815        80,829  
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating income

     129,532        83,183       275,286        248,790  

Interest and other, net

     43,270        34,882       81,585        69,951  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income before income tax

     86,262        48,301       193,701        178,839  

Income tax expense

     48,734        28,177       92,254        72,014  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income

     37,528        20,124       101,447        106,825  

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

     220        (541     344        (1,867
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income attributable to Jabil Inc.

   $ 37,308      $ 20,665     $ 101,103      $ 108,692  
  

 

 

    

 

 

   

 

 

    

 

 

 

Earnings per share attributable to the stockholders of Jabil Inc.:

          

Basic

   $ 0.21      $ 0.11     $ 0.58      $ 0.59  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.21      $ 0.11     $ 0.57      $ 0.58  
  

 

 

    

 

 

   

 

 

    

 

 

 

Weighted average shares outstanding:

          

Basic

     174,635        182,632       175,792        183,970  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

     176,953        185,010       178,578        186,463  
  

 

 

    

 

 

   

 

 

    

 

 

 


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Six months ended  
     February 28, 2018     February 28, 2017  

Cash flows from operating activities:

    

Net income

   $ 101,447     $ 106,825  

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

    

Depreciation and amortization

     382,322       380,317  

Restructuring and related charges

     9,263       46,775  

Recognition of stock-based compensation expense and related charges

     59,938       15,027  

Deferred income taxes

     (24,535     (31,680

Provision for allowance for doubtful accounts

     17,271       4,705  

Other, net

     (792     4,978  

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

    

Accounts receivable

     (131,947     (77,649

Inventories

     (418,307     (19,521

Prepaid expenses and other current assets

     (46,549     145,527  

Other assets

     (19,272     (41,971

Accounts payable, accrued expenses and other liabilities

     369,346       (187,130
  

 

 

   

 

 

 

Net cash provided by operating activities

     298,185       346,203  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisition of property, plant and equipment

     (544,401     (320,674

Proceeds and advances from sale of property, plant and equipment

     236,316       18,963  

Cash paid for business and intangible asset acquisitions, net of cash

     (95,858     (5,256

Other, net

     (2,360     (1,360
  

 

 

   

 

 

 

Net cash used in investing activities

     (406,303     (308,327
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Borrowings under debt agreements

     4,690,570       3,453,390  

Payments toward debt agreements

     (4,555,233     (3,471,329

Payments to acquire treasury stock

     (225,108     (151,488

Dividends paid to stockholders

     (30,431     (30,940

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

     12,838       11,250  

Treasury stock minimum tax withholding related to vesting of restricted stock

     (22,343     (10,796

Other, net

     (11,237     (1,499
  

 

 

   

 

 

 

Net cash used in financing activities

     (140,944     (201,412
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (61     6,575  
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (249,123     (156,961

Cash and cash equivalents at beginning of period

     1,189,919       912,059  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 940,796     $ 755,098  
  

 

 

   

 

 

 


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     Six months ended  
     February 28,
2018
     February 28,
2017
    February 28,
2018
     February 28,
2017
 

Operating income (U.S. GAAP)

   $ 129,532      $ 83,183     $ 275,286      $ 248,790  
  

 

 

    

 

 

   

 

 

    

 

 

 

Amortization of intangibles

     9,890        8,766       19,869        17,088  

Distressed customer charge

     14,706        —         14,706        —    

Stock-based compensation expense and related charges

     15,039        15,318       67,784        15,027  

Restructuring and related charges

     5,427        44,927       16,815        80,829  

Business interruption and impairment charges, net

     4,002        —         11,356        —    
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjustments to operating income

     49,064        69,011       130,530        112,944  
  

 

 

    

 

 

   

 

 

    

 

 

 

Core operating income (Non-GAAP)

   $ 178,596      $ 152,194     $ 405,816      $ 361,734  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income attributable to Jabil Inc. (U.S. GAAP)

   $ 37,308      $ 20,665     $ 101,103      $ 108,692  

Adjustments to operating income

     49,064        69,011       130,530        112,944  

Adjustments for taxes(1)

     29,771        (899     29,054        (3,224
  

 

 

    

 

 

   

 

 

    

 

 

 

Core earnings (Non-GAAP)

   $ 116,143      $ 88,777     $ 260,687      $ 218,412  
  

 

 

    

 

 

   

 

 

    

 

 

 

Earnings per share (U.S. GAAP):

          

Basic

   $ 0.21      $ 0.11     $ 0.58      $ 0.59  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.21      $ 0.11     $ 0.57      $ 0.58  
  

 

 

    

 

 

   

 

 

    

 

 

 

Core earnings per share (Non-GAAP):

          

Basic

   $ 0.67      $ 0.49     $ 1.48      $ 1.19  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.66      $ 0.48     $ 1.46      $ 1.17  
  

 

 

    

 

 

   

 

 

    

 

 

 

Weighted average shares outstanding used in the calculations of earnings per share (U.S. GAAP and Non-GAAP):

          

Basic

     174,635        182,632       175,792        183,970  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

     176,953        185,010       178,578        186,463  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)  Includes a $30.9 million provisional estimate to account for the effects of the Tax Cuts and Jobs Act for the three months and six months ended February 28, 2018.