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) June 14, 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 June 14, 2018, Jabil Inc. (the “Company”) issued a press release announcing its results of operations for the third fiscal quarter ended May 31, 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 June 14, 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)

June 14, 2018   By:  

/s/ FORBES I.J. ALEXANDER

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

Exhibit 99.1

 

LOGO

Jabil Posts Third Quarter Results

Reaffirms EPS Targets for FY18 and FY19; Extends Capital Return Framework

St. Petersburg, FL – June 14, 2018. Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its third quarter of fiscal year 2018.

Third Quarter of Fiscal Year 2018 Highlights:

 

    Net revenue: $5.4 billion

 

    Diversified Manufacturing Services (DMS) Year-on-year revenue growth: 36 percent

 

    Electronics Manufacturing Services (EMS) Year-on-year revenue growth: 12 percent

 

    U.S. GAAP operating income: $113.0 million

 

    U.S. GAAP diluted earnings per share: $0.25

 

    Core operating income (Non-GAAP): $150.1 million

 

    Core diluted earnings per share (Non-GAAP): $0.46

“Our team achieved a strong third quarter characterized by solid revenue growth and core margin expansion, year-on-year, while navigating a challenging components market,” said CEO Mark Mondello. “Our DMS segment grew by 36 percent, well-ahead of expectations, and posted meaningful income growth on a yearly basis. Similarly, our EMS segment grew both revenue and earnings by double-digits during the quarter. Most importantly, these results reflect one of our most diversified earnings performances in recent memory giving us confidence in both our enterprise-level strategy and outlook,” he added.

Fourth Quarter of Fiscal Year 2018 Guidance:

 

•  Net revenue

  

$5.2 billion to $5.6 billion

  

•  U.S. GAAP operating income

  

$144 million to $199 million

  

•  U.S. GAAP diluted earnings per share

  

$0.38 to $0.65 per diluted share

  

•  Core operating income (Non-GAAP) (1)

  

$175 million to $225 million

  

•  Core diluted earnings per share  (Non-GAAP) (1)

  

$0.56 to $0.80 per diluted share

  

•  Diversified Manufacturing Services

  

Consistent revenue year-on-year

  

•  Electronics Manufacturing Services

  

Increase revenue 13 percent  year-on-year

  

•  Total company

  

Increase revenue 8 percent year-on-year

  

(1) Fourth quarter core operating income and core diluted earnings per share exclude anticipated adjustments of $8.6 million for amortization of intangibles (or $0.05 per diluted share), $15.4 million for stock-based compensation expense and related charges (or $0.09 per diluted share) and $7.0 million to $2.0 million for restructuring and related charges (or $0.04 to $0.01 per diluted share).

“Based on our strong year-to-date results and the guidance we’re providing today for the fourth fiscal quarter, we now expect fiscal 2018 revenue and core earnings per share growth of 14 percent and 23 percent, respectively, as we deliver on our core earnings per share target of $2.60. Additionally, given the confidence we have in delivering $3.00 per share in fiscal 2019 and the value we see in our business, we’ve elected to increase and extend our capital return framework through fiscal 2019. This updated capital return framework now perfectly aligns with the final portion of our three-year strategic plan, and reflects management’s confidence to generate additional cash flows on top of our desired investments for the business,” added Mondello.


Jabil’s Board Authorizes $350 Million Share Repurchase:

Since the inception of the Capital Return Framework in 2016, Jabil has repurchased $716 million in Jabil common stock and distributed $118 million to shareholders via its quarterly dividend. At the end of the third fiscal quarter, $134 million in capacity remains outstanding on our current share repurchase authorization that expires on August 31, 2018.

Today, Jabil is announcing that its Board of Directors has authorized an additional share repurchase program for the purchase of up to $350 million in Jabil common stock. The share repurchase authorization expires on August 31, 2019. The shares will be repurchased from time-to-time through various methods, including open market repurchases, at the Company’s discretion and subject to market conditions and other factors.

(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 third quarter of fiscal year 2018; our guidance for future financial performance in our fourth 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 fourth quarter of fiscal year 2018) and full year 2018 (net revenue, operating cash flows and core earnings per share (Non-GAAP)); and our plans to repurchase stock. 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 third 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; 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 under the heading “Supplemental Data” at the end of this release.

Company Conference Call Information: Jabil will hold a conference call to discuss its third 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 June 21, 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: 1466207. 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)

 

     May 31, 2018
(unaudited)
    August 31,
2017
 
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 677,492     $ 1,189,919  

Accounts receivable, net

     1,586,685       1,397,424  

Inventories, net

     3,343,782       2,942,083  

Prepaid expenses and other current assets

     1,124,028       1,097,257  
  

 

 

   

 

 

 

Total current assets

     6,731,987       6,626,683  

Property, plant and equipment, net

     3,127,083       3,228,678  

Goodwill and intangible assets, net

     919,824       892,780  

Deferred income taxes

     230,751       205,722  

Other assets

     165,865       142,132  
  

 

 

   

 

 

 

Total assets

   $ 11,175,510     $ 11,095,995  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities:

    

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

   $ 273,500     $ 445,498  

Accounts payable

     4,327,659       4,257,623  

Accrued expenses

     1,980,266       2,167,472  
  

 

 

   

 

 

 

Total current liabilities

     6,581,425       6,870,593  

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

     2,175,133       1,632,592  

Other liabilities

     66,690       74,237  

Income tax liabilities

     132,338       100,902  

Deferred income taxes

     34,366       49,327  
  

 

 

   

 

 

 

Total liabilities

     8,989,952       8,727,651  
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity:

    

Jabil Inc. stockholders’ equity:

    

Preferred stock

     —         —    

Common stock

     257       253  

Additional paid-in capital

     2,191,406       2,104,203  

Retained earnings

     1,830,921       1,730,893  

Accumulated other comprehensive income

     25,932       54,620  

Treasury stock, at cost

     (1,875,375     (1,536,455
  

 

 

   

 

 

 

Total Jabil Inc. stockholders’ equity

     2,173,141       2,353,514  

Noncontrolling interests

     12,417       14,830  
  

 

 

   

 

 

 

Total equity

     2,185,558       2,368,344  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 11,175,510     $ 11,095,995  
  

 

 

   

 

 

 


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data)

(Unaudited)

 

     Three months ended     Nine months ended  
     May 31, 2018      May 31, 2017     May 31, 2018      May 31, 2017  

Net revenue

   $ 5,436,952      $ 4,489,557     $ 16,323,585      $ 14,040,092  

Cost of revenue

     5,038,725        4,163,142       15,058,940        12,920,267  
  

 

 

    

 

 

   

 

 

    

 

 

 

Gross profit

     398,227        326,415       1,264,645        1,119,825  

Operating expenses:

          

Selling, general and administrative

     252,487        233,884       789,482        665,879  

Research and development

     10,082        7,274       27,535        21,982  

Amortization of intangibles

     10,040        9,174       29,909        26,262  

Restructuring and related charges

     12,647        32,700       29,462        113,529  
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating income

     112,971        43,383       388,257        292,173  

Interest and other, net

     41,818        47,601       123,403        117,552  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) before income tax

     71,153        (4,218     264,854        174,621  

Income tax expense

     28,451        21,481       120,705        93,495  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

     42,702        (25,699     144,149        81,126  

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

     161        (418     505        (2,285
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss) attributable to Jabil Inc.

   $ 42,541      $ (25,281   $ 143,644      $ 83,411  
  

 

 

    

 

 

   

 

 

    

 

 

 

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

          

Basic

   $ 0.25      $ (0.14   $ 0.83      $ 0.46  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.25      $ (0.14   $ 0.81      $ 0.45  
  

 

 

    

 

 

   

 

 

    

 

 

 

Weighted average shares outstanding:

          

Basic

     170,514        181,038       174,013        182,982  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

     173,279        181,038       176,997        186,621  
  

 

 

    

 

 

   

 

 

    

 

 

 


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Nine months ended  
     May 31, 2018     May 31, 2017  

Cash flows from operating activities:

    

Net income

   $ 144,149     $ 81,126  

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

    

Depreciation and amortization

     583,646       570,557  

Restructuring and related charges

     14,838       58,613  

Recognition of stock-based compensation expense and related charges

     74,977       33,377  

Deferred income taxes

     (39,762     (44,916

Provision for allowance for doubtful accounts

     20,577       8,524  

Other, net

     (4,059     17,766  

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

    

Accounts receivable

     (186,231     (85,761

Inventories

     (379,658     (216,149

Prepaid expenses and other current assets

     (32,981     100,397  

Other assets

     (21,542     (28,852

Accounts payable, accrued expenses and other liabilities

     20,897       38,341  
  

 

 

   

 

 

 

Net cash provided by operating activities

     194,851       533,023  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisition of property, plant and equipment

     (819,167     (482,739

Proceeds and advances from sale of property, plant and equipment

     246,370       43,437  

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

     (109,664     (36,620

Other, net

     (2,360     (1,360
  

 

 

   

 

 

 

Net cash used in investing activities

     (684,821     (477,282
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Borrowings under debt agreements

     6,847,756       5,432,503  

Payments toward debt agreements

     (6,472,728     (5,370,936

Payments to acquire treasury stock

     (316,394     (237,135

Dividends paid to stockholders

     (44,274     (45,550

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

     12,844       11,246  

Treasury stock minimum tax withholding related to vesting of restricted stock

     (22,526     (11,558

Other, net

     (11,876     (1,496
  

 

 

   

 

 

 

Net cash used in financing activities

     (7,198     (222,926
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (15,259     (943
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (512,427     (168,128

Cash and cash equivalents at beginning of period

     1,189,919       912,059  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 677,492     $ 743,931  
  

 

 

   

 

 

 


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     Nine months ended  
     May 31, 2018     May 31, 2017     May 31, 2018      May 31, 2017  

Operating income (U.S. GAAP)

   $ 112,971     $ 43,383     $ 388,257      $ 292,173  
  

 

 

   

 

 

   

 

 

    

 

 

 

Amortization of intangibles

     10,040       9,174       29,909        26,262  

Stock-based compensation expense and related charges

     15,038       18,350       82,822        33,377  

Restructuring and related charges

     12,647       32,700       29,462        113,529  

Distressed customer charge

     —         10,198       14,706        10,198  

Business interruption and impairment charges, net

     (634     —         10,722        —    
  

 

 

   

 

 

   

 

 

    

 

 

 

Adjustments to operating income

     37,091       70,422       167,621        183,366  
  

 

 

   

 

 

   

 

 

    

 

 

 

Core operating income (Non-GAAP)

   $ 150,062     $ 113,805     $ 555,878      $ 475,539  
  

 

 

   

 

 

   

 

 

    

 

 

 

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

   $ 42,541     $ (25,281   $ 143,644      $ 83,411  

Adjustments to operating income

     37,091       70,422       167,621        183,366  

Impairment on securities

     —         11,539       —          11,539  

Adjustments for taxes(1)

     (16     431       29,037        (2,793
  

 

 

   

 

 

   

 

 

    

 

 

 

Core earnings (Non-GAAP)

   $ 79,616     $ 57,111     $ 340,302      $ 275,523  
  

 

 

   

 

 

   

 

 

    

 

 

 

Earnings (loss) per share (U.S. GAAP):

         

Basic

   $ 0.25     $ (0.14   $ 0.83      $ 0.46  
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.25     $ (0.14   $ 0.81      $ 0.45  
  

 

 

   

 

 

   

 

 

    

 

 

 

Core earnings per share (Non-GAAP):

         

Basic

   $ 0.47     $ 0.32     $ 1.96      $ 1.51  
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.46     $ 0.31     $ 1.92      $ 1.48  
  

 

 

   

 

 

   

 

 

    

 

 

 

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

         

Basic

     170,514       181,038       174,013        182,982  
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted

     173,279       181,038       176,997        186,621  
  

 

 

   

 

 

   

 

 

    

 

 

 

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

         
  

 

 

   

 

 

   

 

 

    

 

 

 

Basic

     170,514       181,038       174,013        182,982  
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted

     173,279       184,940       176,997        186,621  
  

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)  Includes a $30.9 million provisional estimate to account for the effects of the Tax Cuts and Jobs Act for the nine months ended May 31, 2018.