8-K
JABIL INC false 0000898293 0000898293 2020-12-17 2020-12-17

 

 

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) December 17, 2020

 

 

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

(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))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.001 par value per share   JBL   New York Stock Exchange

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 December 17, 2020, Jabil Inc. (the “Company”) issued a press release announcing its results of operations for the first fiscal quarter ended November 30, 2020. 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 December 17, 2020.
104    Cover Page Interactive Data File - Embedded within the inline XBRL document


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)
December 17, 2020     By:  

/S/ MICHAEL DASTOOR

      Michael Dastoor
      Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

Jabil Posts Record First Quarter Results

Raises FY21 Financial Outlook

ST. PETERSBURG, Fla. – December 17, 2020 Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its first quarter of fiscal year 2021.

“I’m thrilled with the strong start to the fiscal year,” said CEO Mark Mondello. “Our unique positioning as a critical and trusted supplier for so many of the world’s leading brands is allowing us to benefit from powerful end-market trends. As a result, our team delivered record quarterly results for revenue, core operating income and core EPS. Importantly, these impressive results show that our multi-year strategy to create a more optimized commercial portfolio is working,” he added.

First Quarter of Fiscal Year 2021 Highlights:

 

   

Net revenue: $7.8 billion

 

   

Diversified Manufacturing Services (DMS) year-on-year revenue growth: 13 percent

 

   

Electronics Manufacturing Services (EMS) year-on-year revenue decrease: 4 percent

 

   

U.S. GAAP operating income: $314.0 million

 

   

U.S. GAAP diluted earnings per share: $1.31

 

   

Core operating income (Non-GAAP): $364.9 million

 

   

Core diluted earnings per share (Non-GAAP): $1.60

Second Quarter of Fiscal Year 2021 Outlook:

 

•  Net revenue

   $6.2 billion to $6.8 billion

•  U.S. GAAP operating income

   $173 million to $226 million

•  U.S. GAAP diluted earnings per share

   $0.60 to $0.82 per diluted share

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

   $210 million to $260 million

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

   $0.83 to $1.03 per diluted share

•  Total company revenue

   Increase 6 percent year-on-year

Fiscal Year 2021 Updated Outlook:

“Given our strong start to the year, combined with our improved forecast, we now expect FY21 revenue will be in the neighborhood of $27.5 billion, while core margin and core EPS will increase to 4.1% and $4.60, respectively,” added Mondello.

 

 

(1) Core operating income and core diluted earnings per share exclude anticipated adjustments of $11.0 million for amortization of intangibles (or $0.07 per diluted share), $18.0 million for stock-based compensation expense and related charges (or $0.11 per diluted share), $6.0 million to $3.0 million for restructuring, severance and related charges (or $0.04 to $0.02 per diluted share) and $2.0 million for acquisition and integration charges (or $0.01 per diluted share).

(Definitions: “U.S. GAAP” means U.S. generally accepted accounting principles. Jabil defines core operating income as U.S. GAAP operating income less amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges, distressed customer charges, acquisition and integration charges, 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 plus other components of net periodic benefit cost. Jabil defines core earnings as U.S. GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges, distressed customer charges, acquisition and integration charges, 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, loss 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 defines adjusted free cash flow as net cash provided by (used in) operating activities plus cash receipts on sold receivables less net capital expenditures (acquisition of property, plant and equipment less proceeds and advances from sale of property, plant and equipment). Jabil reports core operating income, core earnings, core diluted earnings per share and adjusted free cash flow to provide investors an additional method for assessing operating income, earnings, diluted earnings per share and free cash flow 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 release contains forward-looking statements, including those regarding our anticipated financial results for the first quarter of fiscal year 2021 and our guidance for future financial performance in our second quarter of fiscal year 2021 (including, net revenue, total company revenue, U.S. GAAP operating income, U.S. GAAP diluted earnings per share, core operating income (Non-GAAP), core diluted earnings per share (Non-GAAP) results and the components thereof, including but not limited to amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges and acquisition and integration charges) and in fiscal year 2021 (including revenue, core margin and core diluted earnings per share. The statements in this 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 the first quarter of fiscal year 2021 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; the scope and duration of the COVID-19 outbreak and its impact on our operations, sites, customers and supply chain; managing growth effectively; our dependence on a limited number of customers; competitive challenges affecting our customers; managing rapid declines or increases in customer demand and other related customer challenges that may occur; risks arising from relationships with emerging companies; changes in technology; our ability to introduce new business models or programs requiring implementation of new competencies; competition; transportation issues; our ability to maintain our engineering, technological and manufacturing expertise; retaining key personnel; our ability to purchase components efficiently and reliance on a limited number of suppliers for critical components; risks associated with international sales and operations; our ability to achieve expected profitability from acquisitions; risk arising from our restructuring activities; issues involving our information systems, including security issues; regulatory risks (including the expense of complying, or failing to comply, with applicable regulations; risk arising from design or manufacturing defects; and intellectual property risk); financial risks (including customers or suppliers who become financially troubled; turmoil in financial markets; tax risks; credit rating risks; risks of exposure to debt; currency fluctuations; energy prices; and asset impairment); changes in financial accounting standards or policies; and risk of natural disaster, climate change or other global events. 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, 2020 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, 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 U.S. GAAP financial measures is included under the heading “Supplemental Data” at the end of this release.

Meeting and Replay Information: Jabil will hold a conference call today at 8:30 a.m. ET to discuss its earnings for the first quarter of fiscal year 2021. To access the live audio webcast and view the accompanying slide presentation, visit the Investor Relations section of Jabil’s website, located at https://investors.jabil.com. An archived replay of the webcast will also be available after completion of the call.

About Jabil: Jabil (NYSE: JBL) is a manufacturing solutions provider with over 260,000 employees across 100 locations in 30 countries. The world’s leading brands rely on Jabil’s unmatched breadth and depth of end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise. Driven by a common purpose, Jabil and its people are committed to making a positive impact on their local community and the environment. Visit www.jabil.com to learn more.

Investor Contact

Adam Berry

Vice President, Investor Relations

(727) 577-9749

Adam_Berry@jabil.com

Media Contact

Michelle Smith

Vice President, Corporate Communications

(727) 577-9749

Michelle_Smith@jabil.com


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     November 30, 2020        
     (unaudited)     August 31, 2020  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 1,107,573   $ 1,393,557

Accounts receivable, net

     3,651,869     2,847,743

Contract assets

     1,088,059     1,104,700

Inventories, net

     3,271,842     3,131,783

Prepaid expenses and other current assets

     727,849     657,102
  

 

 

   

 

 

 

Total current assets

     9,847,192     9,134,885

Property, plant and equipment, net

     3,792,091     3,665,312

Operating lease right-of-use asset

     391,004     362,847

Goodwill and intangible assets, net

     905,426     906,723

Deferred income taxes

     165,264     165,407

Other assets

     168,501     162,242
  

 

 

   

 

 

 

Total assets

   $ 15,269,478   $ 14,397,416
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities:

    

Current installments of notes payable and long-term debt

   $ 50,195   $ 50,194

Accounts payable

     6,431,567     5,687,038

Accrued expenses

     3,061,092     3,211,528

Current operating lease liabilities

     119,150     110,723
  

 

 

   

 

 

 

Total current liabilities

     9,662,004     9,059,483

Notes payable and long-term debt, less current installments

     2,679,005     2,678,288

Other liabilities

     331,093     268,925

Non-current operating lease liabilities

     324,379     302,035

Income tax liabilities

     163,459     148,629

Deferred income taxes

     115,587     114,657
  

 

 

   

 

 

 

Total liabilities

     13,275,527     12,572,017
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity:

    

Jabil Inc. stockholders’ equity:

    

Preferred stock

     —         —    

Common stock

     266     264

Additional paid-in capital

     2,445,582     2,413,616

Retained earnings

     2,228,729     2,040,922

Accumulated other comprehensive loss

     (14,346     (34,168

Treasury stock, at cost

     (2,680,860     (2,609,250
  

 

 

   

 

 

 

Total Jabil Inc. stockholders’ equity

     1,979,371     1,811,384

Noncontrolling interests

     14,580     14,015
  

 

 

   

 

 

 

Total equity

     1,993,951     1,825,399
  

 

 

   

 

 

 

Total liabilities and equity

   $ 15,269,478   $ 14,397,416
  

 

 

   

 

 

 


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data)

(Unaudited)

 

     Three months ended  
     November 30, 2020     November 30, 2019  

Net revenue

   $ 7,832,529   $ 7,505,698

Cost of revenue

     7,197,969     6,951,859
  

 

 

   

 

 

 

Gross profit

     634,560     553,839

Operating expenses:

    

Selling, general and administrative

     302,752     328,899

Research and development

     8,118     10,770

Amortization of intangibles

     11,455     16,140

Restructuring, severance and related charges

     (1,715     45,251
  

 

 

   

 

 

 

Operating income

     313,950     152,779

Interest and other, net

     28,543     50,139
  

 

 

   

 

 

 

Income before income tax

     285,407     102,640

Income tax expense

     84,400     61,926
  

 

 

   

 

 

 

Net income

     201,007     40,714

Net income attributable to noncontrolling interests, net of tax

     565     292
  

 

 

   

 

 

 

Net income attributable to Jabil Inc.

   $ 200,442   $ 40,422
  

 

 

   

 

 

 

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

    

Basic

   $ 1.33   $ 0.26
  

 

 

   

 

 

 

Diluted

   $ 1.31   $ 0.26
  

 

 

   

 

 

 

Weighted average shares outstanding:

    

Basic

     150,157     153,100
  

 

 

   

 

 

 

Diluted

     152,918     156,462
  

 

 

   

 

 

 


JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

     Three months ended  
     November 30, 2020     November 30, 2019  

Cash flows provided by operating activities:

    

Net income

   $ 201,007   $ 40,714

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

    

Depreciation and amortization

     205,766     202,859

Restructuring and related charges

     (1,556     18,347

Recognition of stock-based compensation expense and related charges

     33,541     30,223

Deferred income taxes

     (1,869     (6,645

Provision for allowance for doubtful accounts

     2,426     10,413

Other, net

     11,247     1,179

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

    

Accounts receivable

     (791,492     (863,210

Contract assets

     27,971     (68,322

Inventories

     (134,723     (286,775

Prepaid expenses and other current assets

     (54,243     (31,413

Other assets

     (8,142     (8,162

Accounts payable, accrued expenses and other liabilities

     575,527     981,736
  

 

 

   

 

 

 

Net cash provided by operating activities

     65,460     20,944
  

 

 

   

 

 

 

Cash flows used in investing activities:

    

Acquisition of property, plant and equipment

     (352,881     (230,393

Proceeds and advances from sale of property, plant and equipment

     110,792     23,209

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

     (18,417     (116,767

Other, net

     (3,367     (1,779
  

 

 

   

 

 

 

Net cash used in investing activities

     (263,873     (325,730
  

 

 

   

 

 

 

Cash flows used in financing activities:

    

Borrowings under debt agreements

     200,000     1,779,801

Payments toward debt agreements

     (201,969     (1,787,243

Payments to acquire treasury stock

     (50,029     (96,390

Dividends paid to stockholders

     (13,814     (13,731

Treasury stock minimum tax withholding related to vesting of restricted stock

     (21,581     (19,317
  

 

 

   

 

 

 

Net cash used in financing activities

     (87,393     (136,880
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (178     (1,835
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (285,984     (443,501

Cash and cash equivalents at beginning of period

     1,393,557     1,163,343
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,107,573   $ 719,842
  

 

 

   

 

 

 


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, 2020     November 30, 2019  

Operating income (U.S. GAAP)

   $ 313,950   $ 152,779
  

 

 

   

 

 

 

Amortization of intangibles

     11,455     16,140

Stock-based compensation expense and related charges

     33,541     30,223

Restructuring, severance and related charges

     (1,715     45,251

Distressed customer charge

     —         14,963

Net periodic benefit cost (1)

     5,593     1,825

Acquisition and integration charges

     2,113     16,134
  

 

 

   

 

 

 

Adjustments to operating income

     50,987     124,536
  

 

 

   

 

 

 

Core operating income (Non-GAAP)

   $ 364,937   $ 277,315
  

 

 

   

 

 

 

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

   $ 200,442   $ 40,422

Adjustments to operating income

     50,987     124,536

Net periodic benefit cost (1)

     (5,593     (1,825

Adjustments for taxes

     (595     497
  

 

 

   

 

 

 

Core earnings (Non-GAAP)

   $ 245,241   $ 163,630
  

 

 

   

 

 

 

Diluted earnings per share (U.S. GAAP)

   $ 1.31   $ 0.26
  

 

 

   

 

 

 

Diluted core earnings per share (Non-GAAP)

   $ 1.60   $ 1.05
  

 

 

   

 

 

 

Diluted weighted average shares outstanding (U.S. GAAP and Non-GAAP)

     152,918     156,462
  

 

 

   

 

 

 

 

(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.


JABIL INC. AND SUBSIDIARIES

SUPPLEMENTAL DATA

ADJUSTED FREE CASH FLOW

(in thousands)

(Unaudited)

 

     Three months ended  
     November 30, 2020     November 30, 2019  

Net cash provided by operating activities (U.S. GAAP)

   $ 65,460   $ 20,944

Acquisition of property, plant and equipment

     (352,881     (230,393

Proceeds and advances from sale of property, plant and equipment

     110,792     23,209
  

 

 

   

 

 

 

Adjusted free cash flow (Non-GAAP)

   $ (176,629   $ (186,240