Jabil Delivers Strong Fourth Quarter Results
Positive Momentum Expected to Continue
“I’m thrilled with our ability to deliver such strong financial results to close out FY20,” said CEO
Fourth Quarter of Fiscal Year 2020 Highlights:
- Net revenue:
$7.3 billion - Diversified Manufacturing Services (DMS) year-on-year revenue growth: 17 percent
- Electronics Manufacturing Services (EMS) year-on-year revenue growth: 8 percent
U.S. GAAP operating income:$197.1 million U.S. GAAP diluted earnings per share:$0.44 - Core operating income (Non-GAAP):
$255.2 million - Core diluted earnings per share (Non-GAAP):
$0.98
Fiscal Year 2020 Highlights:
- Net revenue:
$27.3 billion - Diversified Manufacturing Services (DMS) year-on-year revenue growth: 8 percent
- Electronics Manufacturing Services (EMS) year-on-year revenue growth: 8 percent
U.S. GAAP operating income:$499.8 million U.S. GAAP diluted earnings per share:$0.35 - Core operating income (Non-GAAP):
$864.1 million - Core diluted earnings per share (Non-GAAP):
$2.90
“As we exit FY20 and look ahead, I am excited with the momentum underway in our business,” said CFO
First Quarter of Fiscal Year 2021 Outlook:
• Net revenue |
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• |
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• |
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• Core operating income (Non-GAAP) (1) |
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• Core diluted earnings per share (Non-GAAP) (1) |
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• Total company revenue |
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Decrease 7 percent year-on-year |
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(1) |
Core operating income and core diluted earnings per share exclude anticipated adjustments of |
(Definitions: “U.S. GAAP” means
Forward Looking Statements: This release contains forward-looking statements, including those regarding our anticipated financial results for the fourth quarter and fiscal year 2020 and our guidance for future financial performance in our first quarter of fiscal year 2021 (including, net revenue, total company revenue,
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
Jabil reports core operating income, core earnings, core diluted earnings per share and adjusted free cash flows to provide investors an additional method for assessing operating income, earnings, earnings per share and free cash flow 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 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
Meeting and Replay Information: Jabil will hold a conference call today at
About Jabil:
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,393,557 |
|
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$ |
1,163,343 |
|
Accounts receivable, net |
|
2,847,743 |
|
|
2,745,226 |
|
||
Contract assets |
|
1,104,700 |
|
|
911,940 |
|
||
Inventories, net |
|
3,131,783 |
|
|
3,023,003 |
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||
Prepaid expenses and other current assets |
|
657,102 |
|
|
501,573 |
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Total current assets |
|
9,134,885 |
|
|
8,345,085 |
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Property, plant and equipment, net |
|
3,665,312 |
|
|
3,333,750 |
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Operating lease right-of-use asset |
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362,847 |
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— |
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906,723 |
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|
879,108 |
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Deferred income taxes |
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165,407 |
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|
198,827 |
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Other assets |
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162,242 |
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213,705 |
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Total assets |
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$ |
14,397,416 |
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$ |
12,970,475 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Current installments of notes payable and long-term debt |
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$ |
50,194 |
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$ |
375,181 |
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Accounts payable |
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5,687,038 |
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5,166,780 |
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Accrued expenses |
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3,211,528 |
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2,990,144 |
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Current operating lease liabilities |
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110,723 |
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— |
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Total current liabilities |
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9,059,483 |
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8,532,105 |
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Notes payable and long-term debt, less current installments |
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2,678,288 |
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2,121,284 |
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Other liabilities |
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268,925 |
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163,821 |
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Non-current operating lease liabilities |
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302,035 |
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— |
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Income tax liabilities |
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148,629 |
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|
136,689 |
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Deferred income taxes |
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114,657 |
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|
115,818 |
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Total liabilities |
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12,572,017 |
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11,069,717 |
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Commitments and contingencies |
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Equity: |
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||||
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Preferred stock |
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— |
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— |
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Common stock |
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264 |
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260 |
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Additional paid-in capital |
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2,413,616 |
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|
2,304,552 |
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Retained earnings |
|
2,040,922 |
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2,037,037 |
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Accumulated other comprehensive loss |
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(34,168 |
) |
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(82,794 |
) |
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(2,609,250 |
) |
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(2,371,612 |
) |
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1,811,384 |
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1,887,443 |
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Noncontrolling interests |
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14,015 |
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13,315 |
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Total equity |
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1,825,399 |
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1,900,758 |
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Total liabilities and equity |
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$ |
14,397,416 |
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$ |
12,970,475 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) (Unaudited) |
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Three Months Ended |
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Fiscal Year Ended |
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Net revenue |
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$ |
7,300,015 |
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$ |
6,573,453 |
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$ |
27,266,438 |
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$ |
25,282,320 |
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Cost of revenue |
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6,809,314 |
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6,078,375 |
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25,335,625 |
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23,368,919 |
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Gross profit |
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490,701 |
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|
495,078 |
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1,930,813 |
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|
1,913,401 |
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Operating expenses: |
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Selling, general and administrative |
|
257,922 |
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276,597 |
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1,174,694 |
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1,111,347 |
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Research and development |
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10,496 |
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10,114 |
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44,143 |
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|
42,861 |
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Amortization of intangibles |
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12,649 |
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8,890 |
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55,544 |
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31,923 |
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Restructuring, severance and related charges |
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12,581 |
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9,732 |
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156,586 |
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25,914 |
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Operating income |
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197,053 |
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|
189,745 |
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499,846 |
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|
701,356 |
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Loss on securities |
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36,420 |
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29,632 |
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|
48,625 |
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|
29,632 |
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Interest and other, net |
|
45,385 |
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|
58,200 |
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|
190,483 |
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|
221,020 |
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Income before income tax |
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115,248 |
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|
101,913 |
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|
260,738 |
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|
450,704 |
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Income tax expense |
|
46,339 |
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|
48,152 |
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|
203,959 |
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|
161,230 |
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Net income |
|
68,909 |
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|
53,761 |
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|
56,779 |
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|
289,474 |
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Net income attributable to noncontrolling interests, net of tax |
|
1,178 |
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|
1,086 |
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|
2,867 |
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|
2,363 |
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Net income attributable to |
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$ |
67,731 |
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$ |
52,675 |
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$ |
53,912 |
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$ |
287,111 |
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Earnings per share attributable to the stockholders of |
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Basic |
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$ |
0.45 |
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$ |
0.34 |
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$ |
0.36 |
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$ |
1.85 |
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Diluted |
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$ |
0.44 |
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$ |
0.34 |
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$ |
0.35 |
|
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$ |
1.81 |
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Weighted average shares outstanding: |
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Basic |
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150,590 |
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|
153,327 |
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151,613 |
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|
155,613 |
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Diluted |
|
154,453 |
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|
156,981 |
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|
155,274 |
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|
158,647 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) |
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Fiscal Year Ended |
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Cash flows provided by operating activities: |
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Net income |
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$ |
56,779 |
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$ |
289,474 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
|
794,581 |
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|
771,833 |
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Restructuring and related charges |
|
41,356 |
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(3,566 |
) |
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Recognition of stock-based compensation expense and related charges |
|
83,084 |
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|
61,346 |
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Deferred income taxes |
|
29,209 |
|
|
20,998 |
|
||
Loss (gain) on sale of property, plant and equipment |
|
29,393 |
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|
(2,522 |
) |
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Provision for allowance for doubtful accounts |
|
32,066 |
|
|
15,867 |
|
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Loss on securities |
|
36,420 |
|
|
29,632 |
|
||
Other, net |
|
34,130 |
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|
39,539 |
|
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Change in operating assets and liabilities, exclusive of net assets acquired: |
|
|
|
|
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Accounts receivable |
|
(135,973 |
) |
|
(586,511 |
) |
||
Contract assets |
|
(104,601 |
) |
|
(878,469 |
) |
||
Inventories |
|
(77,320 |
) |
|
483,074 |
|
||
Prepaid expenses and other current assets |
|
(144,152 |
) |
|
28,897 |
|
||
Other assets |
|
(10,669 |
) |
|
(38,188 |
) |
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Accounts payable, accrued expenses and other liabilities |
|
592,972 |
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|
961,662 |
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Net cash provided by operating activities |
|
1,257,275 |
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|
1,193,066 |
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Cash flows used in investing activities: |
|
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Acquisition of property, plant and equipment |
|
(983,035 |
) |
|
(1,005,480 |
) |
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Proceeds and advances from sale of property, plant and equipment |
|
186,655 |
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|
218,708 |
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||
Cash paid for business and intangible asset acquisitions, net of cash |
|
(146,909 |
) |
|
(153,239 |
) |
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Cash receipts on sold receivables |
|
— |
|
|
96,846 |
|
||
Other, net |
|
22,176 |
|
|
(29,289 |
) |
||
Net cash used in investing activities |
|
(921,113 |
) |
|
(872,454 |
) |
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Cash flows used in financing activities: |
|
|
|
|
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Borrowings under debt agreements |
|
12,777,055 |
|
|
11,985,978 |
|
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Payments toward debt agreements |
|
(12,544,456 |
) |
|
(12,013,004 |
) |
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Payments to acquire treasury stock |
|
(214,510 |
) |
|
(350,323 |
) |
||
Dividends paid to stockholders |
|
(50,462 |
) |
|
(52,004 |
) |
||
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan |
|
30,117 |
|
|
26,999 |
|
||
|
|
(23,128 |
) |
|
(11,918 |
) |
||
Other, net |
|
(39,739 |
) |
|
(1,500 |
) |
||
Net cash used in financing activities |
|
(65,123 |
) |
|
(415,772 |
) |
||
Effect of exchange rate changes on cash and cash equivalents |
|
(40,825 |
) |
|
554 |
|
||
Net increase (decrease) in cash and cash equivalents |
|
230,214 |
|
|
(94,606 |
) |
||
Cash and cash equivalents at beginning of period |
|
1,163,343 |
|
|
1,257,949 |
|
||
Cash and cash equivalents at end of period |
|
$ |
1,393,557 |
|
|
$ |
1,163,343 |
|
SUPPLEMENTAL DATA RECONCILIATION OF (in thousands, except for per share data) (Unaudited) |
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|
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Three Months Ended |
|
Fiscal Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income ( |
|
$ |
197,053 |
|
|
$ |
189,745 |
|
|
$ |
499,846 |
|
|
$ |
701,356 |
|
Amortization of intangibles |
|
12,649 |
|
|
8,890 |
|
|
55,544 |
|
|
31,923 |
|
||||
Stock-based compensation expense and related charges |
|
20,870 |
|
|
13,894 |
|
|
83,084 |
|
|
61,346 |
|
||||
Restructuring, severance and related charges |
|
12,581 |
|
|
9,732 |
|
|
156,586 |
|
|
25,914 |
|
||||
Distressed customer charge |
|
— |
|
|
6,235 |
|
|
14,963 |
|
|
6,235 |
|
||||
Net periodic benefit cost(1) |
|
8,680 |
|
|
— |
|
|
16,078 |
|
|
— |
|
||||
Business interruption and impairment charges, net |
|
1,211 |
|
|
— |
|
|
5,785 |
|
|
(2,860 |
) |
||||
Acquisition and integration charges |
|
2,162 |
|
|
17,631 |
|
|
32,167 |
|
|
52,697 |
|
||||
Adjustments to operating income |
|
58,153 |
|
|
56,382 |
|
|
364,207 |
|
|
175,255 |
|
||||
Core operating income (Non-GAAP) |
|
$ |
255,206 |
|
|
$ |
246,127 |
|
|
$ |
864,053 |
|
|
$ |
876,611 |
|
Net income attributable to |
|
$ |
67,731 |
|
|
$ |
52,675 |
|
|
$ |
53,912 |
|
|
$ |
287,111 |
|
Adjustments to operating income |
|
58,153 |
|
|
56,382 |
|
|
364,207 |
|
|
175,255 |
|
||||
Loss on securities |
|
36,420 |
|
|
29,632 |
|
|
48,625 |
|
|
29,632 |
|
||||
Net periodic benefit cost(1) |
|
(8,680 |
) |
|
— |
|
|
(16,078 |
) |
|
— |
|
||||
Adjustments for taxes(2) |
|
(2,259 |
) |
|
(796 |
) |
|
(1,093 |
) |
|
(18,633 |
) |
||||
Core earnings (Non-GAAP) |
|
$ |
151,365 |
|
|
$ |
137,893 |
|
|
$ |
449,573 |
|
|
$ |
473,365 |
|
Diluted earnings per share ( |
|
$ |
0.44 |
|
|
$ |
0.34 |
|
|
$ |
0.35 |
|
|
$ |
1.81 |
|
Diluted core earnings per share (Non-GAAP) |
|
$ |
0.98 |
|
|
$ |
0.88 |
|
|
$ |
2.90 |
|
|
$ |
2.98 |
|
Diluted weighted average shares outstanding ( |
|
154,453 |
|
|
156,981 |
|
|
155,274 |
|
|
158,647 |
|
|
|
|
||
(1) |
Following the adoption of Accounting Standards Update 2017-07, Compensation - Retirement Benefits (Topic 715) (“ASU 2017-07”), pension service cost is recognized in cost of revenue and all other components of net periodic benefit cost, including return on plan assets, are presented in other expense. We are reclassifying the pension components in other expense to core operating income as we assess operating performance, inclusive of all components of net periodic benefit cost, with the related revenue. There is no impact to core earnings or diluted core earnings per share for this adjustment. |
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(2) |
The fiscal year ended |
SUPPLEMENTAL DATA ADJUSTED FREE CASH FLOW (in thousands) (Unaudited) |
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|
Fiscal Year Ended |
||||||
|
|
|
|
||||
Net cash provided by operating activities ( |
$ |
1,257,275 |
|
|
$ |
1,193,066 |
|
Cash receipts on sold receivables |
— |
|
|
96,846 |
|
||
Acquisition of property, plant and equipment |
(983,035 |
) |
|
(1,005,480 |
) |
||
Proceeds and advances from sale of property, plant and equipment |
186,655 |
|
|
218,708 |
|
||
Adjusted free cash flow (Non-GAAP) |
$ |
460,895 |
|
|
$ |
503,140 |
|
(1) |
In fiscal year 2019, the adoption of Accounting Standards Update ("ASU") 2016-15, "Classification of Certain Cash Receipts and Cash Payments" resulted in a reclassification of cash flows from operating activities to investing activities for cash receipts for the deferred purchase price receivable on asset-backed securitization transactions. The adoption of this standard does not reflect a change in the underlying business or activities. The effects of this change are applied retrospectively to all prior periods. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200924005168/en/
Investor Contact
Vice President, Investor Relations
(727) 577-9749
Adam_Berry@jabil.com
Media Contact
Vice President, Corporate Communications
(727) 577-9749
Michelle_Smith@jabil.com
Source: