Raises FY21 Financial Outlook
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
- U.S. GAAP operating income
- U.S. GAAP diluted earnings per share
- Core operating income (Non-GAAP) (1)
- Core diluted earnings per share (Non-GAAP) (1)
- Total company revenue
$6.2 billion to $6.8 billion
$173 million to $226 million
$0.60 to $0.82 per diluted share
$210 million to $260 million
$0.83 to $1.03 per diluted share
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.
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
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201217005157/en/
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
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