Jabil Posts Second Quarter Results
Company Raises Quarterly and Fiscal Year Guidance
22 March 2006
St. Petersburg, FL
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ST. PETERSBURG, FL March 22, 2006 Jabil Circuit, Inc. (NYSE: JBL), a global electronic product solutions company, today reported net revenue for the second quarter of fiscal 2006 ended February 28, increased 35 percent to $2.3 billion compared to $1.7 billion for the same period of fiscal 2005.
Under accounting principles generally accepted in the United States of America ("GAAP"), operating income for the second quarter of fiscal 2006 increased 44 percent to $83.3 million compared to $57.8 million for the same period of fiscal 2005. On a GAAP basis, net income for the second quarter of fiscal 2006 increased 50 percent to $69.0 million compared to $46.0 million for the same period in fiscal 2005. GAAP diluted earnings per share for the second quarter of fiscal 2006 increased 45 percent to $0.32 compared to $0.22 for the same period of fiscal 2005.
Jabil's second quarter of fiscal 2006 core operating income increased 41 percent to $96.2 million or 4.2 percent of net revenue compared to $68.1 million or 4.0 percent of net revenue for the second quarter of fiscal 2005. Core earnings increased 43 percent to $78.7 million compared to $54.9 million for the second quarter of fiscal 2005. Core earnings per share increased 37 percent to $0.37 per diluted share for the period compared to $0.27 for the second quarter of fiscal 2005. (Jabil defines core operating income as GAAP operating income before amortization of intangibles, stock-based compensation expense, acquisition-related charges and restructuring and impairment charges. Jabil defines core earnings as GAAP net income before amortization of intangibles, stock-based compensation expense, acquisition-related charges, restructuring and impairment charges and other income/loss, net of tax. Jabil defines core earnings per share as core earnings divided by the weighted average number of outstanding shares determined under GAAP. Jabil reports core operating income, core earnings and core earnings per share to provide its investors with an alternative method for assessing operating income, earnings and earnings per share from what it believes to be its core manufacturing operations. See the accompanying reconciliation of Jabil's core operating income to its GAAP operating income and Jabil's core earnings and core earnings per share to its GAAP net income and GAAP earnings per share and additional information in the supplemental information below.)
- Cash flow from operations was approximately $6 million for the second quarter of fiscal 2006.
- Sales cycle for the second quarter of fiscal 2006 was 19 days.
- Annualized inventory turns for the second quarter of fiscal 2006 were nine.
- Capital expenditures for the second quarter of fiscal 2006 were approximately $53 million.
- Depreciation for the second quarter of fiscal 2006 was approximately $44 million.
- Cash and cash equivalent balances were $919 million at the end of the second quarter of fiscal 2006.
- Return on Invested Capital (ROIC) was 19 percent for the second quarter of fiscal 2006.
"We are pleased with our second quarter results and the growing strength of the business in the second half of our fiscal year," said Jabil President and CEO Timothy L. Main. "Demand for Jabil's outsourcing services continues to be broad-based across numerous markets."
The company provided guidance for its third quarter of 2006. Jabil said it currently expects its third quarter revenue to be in a range of $2.5 to $2.6 billion and core earnings of $0.43 per diluted share, depending upon actual levels of production. GAAP earnings per share for the third fiscal quarter of 2006 are currently estimated to be $0.39 per diluted share. (Expected GAAP earnings per share for the third quarter of fiscal year 2006 are currently estimated to include $0.02 per share for amortization of intangibles and $0.02 per share for stock-based compensation required to be expensed in fiscal 2006 under new accounting guidelines, Statement of Financial Accounting Standard No.123R Share Based Payment ("SFAS 123R")).
The company updated and raised its full fiscal year 2006 guidance to 32 percent growth over fiscal 2005. Jabil said it currently expects fiscal year 2006 revenue of $9.9 billion, $600 million higher than guidance the company provided in December 2005. The company expects to grow full fiscal year core earnings per share 33 percent to $1.70 per diluted share. GAAP earnings per share for the full fiscal year are currently expected to be $1.50 per diluted share. (Expected GAAP earnings per share for the full fiscal year are currently estimated to include $0.08 per share for amortization of intangibles and $0.12 per share for stock-based compensation required to be expensed in fiscal 2006 under new accounting guidelines, SFAS 123R.)
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, acquisition-related charges, restructuring and impairment charges and other income) 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 earnings and core earnings per share to provide its investors with an alternative method for assessing operating income, earnings and earnings per share from what it believes to be its core manufacturing operations. Included in this release is a Condensed Consolidated Statement of Earnings as well as a reconciliation of the disclosed core financial measures to the most directly comparable GAAP financial measures.
Company Conference Call Information
Jabil Circuit will conduct a conference call to announce its second quarter fiscal year 2006 earnings today at 4:30 p.m. EST live on the Internet at http://jabil.com. This earnings conference call will be recorded and archived for playback on the web at http://www.jabil.com.
The news release and information about Jabil's earnings will also be available in the investor relations' section of the web site (jabil.com) by approximately 4:00 p.m., EST. A taped replay of the conference call will also be available March 22, 2006 at approximately 7:30 p.m. EST through midnight on March 24, 2006. To access the replay, call (800) 642-1687 from within the United States, or (706) 645-9291 outside the United States. The passcode is 6199124. 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 product management services to global electronics and technology companies. Jabil helps bring electronics products to the market faster and more cost effectively by providing complete product supply chain management around the world. With more than 50,000 employees and facilities in 20 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 the company's website: jabil.com.
Investor & Media Contact:
Jabil Circuit, Inc.
This news release contains forward-looking statements, including those regarding the anticipated outlook for our business, our currently estimated third quarter and full fiscal year 2006 net revenue and earnings results and our long-term outlook for our company, our industry and our business sectors. These statements 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: fluctuations in operating results; changes in technology; competition; anticipated growth for us and our industry that may not occur; managing rapid growth; managing any rapid declines in customer demand that may occur; our ability to successfully consummate acquisitions; managing the integration of businesses we acquire; risks associated with international sales and operations; retaining key personnel; our dependence on a limited number of 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, 2005, subsequent Reports on Form 10-Q and 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.