Raises Outlook for Fiscal Year 2022
Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited
financial results for its third quarter of fiscal year 2022.
“The effectiveness of our business model was on display during
Q3, as the team delivered strong revenue and earnings results,”
said Chairman and CEO Mark Mondello. “Our diversified approach has
been designed to be flexible and resilient as we aim to deliver for
both our customers and stakeholders. During the quarter, I believe
the team did an outstanding job rising to the challenge,” he
added.
Third Quarter of Fiscal Year 2022 Highlights:
- Net revenue: $8.3 billion
- Diversified Manufacturing Services (DMS) year-on-year revenue
growth: 7 percent
- Electronics Manufacturing Services (EMS) year-on-year revenue
growth: 23 percent
- U.S. GAAP operating income: $321 million
- U.S. GAAP diluted earnings per share: $1.52
- Core operating income (Non-GAAP): $352 million
- Core diluted earnings per share (Non-GAAP): $1.72
Fourth Quarter of Fiscal Year 2022 Outlook:
•
Net revenue
$8.1 billion to $8.7 billion
•
U.S. GAAP operating income
$367 million to $427 million
•
U.S. GAAP diluted earnings per share
$1.78 to $2.18 per diluted share
•
Core operating income (Non-GAAP) (1)
$390 million to $450 million
•
Core diluted earnings per share (Non-GAAP)
(1)
$1.94 to $2.34 per diluted share
Fiscal Year 2022 Updated Outlook:
“As we look ahead, we see solid demand in key areas of our
business,” continued Mondello. “Given this ongoing momentum, we now
expect FY22 revenue to be in the neighborhood of $32.8 billion and
core EPS to be $7.45,” added Mondello.
_________________
(1)
Core operating income and core diluted
earnings per share exclude anticipated adjustments of $8 million
for amortization of intangibles (or $0.06 per diluted share) and
$15 million for stock-based compensation expense and related
charges (or $0.10 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 debt
extinguishment, loss (gain) 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 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 adjusted 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 our third quarter of fiscal year
2022 and our guidance for future financial performance in our
fourth quarter of fiscal year 2022 (including, net 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 and stock-based compensation
expense and related charges) and our full year 2022 (including net
revenue and core earnings per share (Non-GAAP)). 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 our third
quarter of fiscal year 2022 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, including geopolitical
uncertainties in Russia and Ukraine; 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, 2021 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 adjusted 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 third quarter of fiscal year 2022. 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 millions)
May 31, 2022
(unaudited)
August 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
1,070
$
1,567
Accounts receivable, net
3,193
3,141
Contract assets
1,276
998
Inventories, net
5,981
4,414
Prepaid expenses and other current
assets
952
757
Total current assets
12,472
10,877
Property, plant and equipment, net
3,894
4,075
Operating lease right-of-use asset
481
390
Goodwill and intangible assets, net
878
897
Deferred income taxes
174
176
Other assets
272
239
Total assets
$
18,171
$
16,654
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and
long-term debt
$
1
$
—
Accounts payable
7,082
6,841
Accrued expenses
4,744
3,734
Current operating lease liabilities
115
108
Total current liabilities
11,942
10,683
Notes payable and long-term debt, less
current installments
2,874
2,878
Other liabilities
289
334
Non-current operating lease
liabilities
405
333
Income tax liabilities
190
178
Deferred income taxes
114
111
Total liabilities
15,814
14,517
Commitments and contingencies
Equity:
Jabil Inc. stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
2,622
2,533
Retained earnings
3,333
2,688
Accumulated other comprehensive loss
(20
)
(25
)
Treasury stock, at cost
(3,579
)
(3,060
)
Total Jabil Inc. stockholders’ equity
2,356
2,136
Noncontrolling interests
1
1
Total equity
2,357
2,137
Total liabilities and equity
$
18,171
$
16,654
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except for per
share data)
(Unaudited)
Three months ended
Nine months ended
May 31, 2022
May 31, 2021
May 31, 2022
May 31, 2021
Net revenue
$
8,328
$
7,215
$
24,448
$
21,876
Cost of revenue
7,709
6,647
22,545
20,104
Gross profit
619
568
1,903
1,772
Operating expenses:
Selling, general and administrative
282
305
870
914
Research and development
8
10
25
27
Amortization of intangibles
8
12
24
35
Restructuring, severance and related
charges
—
1
—
6
Operating income
321
240
984
790
Loss on debt extinguishment
4
—
4
—
Gain on securities
—
(2
)
—
(2
)
Interest and other, net
39
29
101
85
Income before income tax
278
213
879
707
Income tax expense
60
43
198
184
Net income
218
170
681
523
Net income attributable to noncontrolling
interests, net of tax
—
1
—
2
Net income attributable to Jabil Inc.
$
218
$
169
$
681
$
521
Earnings per share attributable to the
stockholders of Jabil Inc.:
Basic
$
1.55
$
1.14
$
4.77
$
3.49
Diluted
$
1.52
$
1.12
$
4.67
$
3.41
Weighted average shares outstanding:
Basic
140.4
148.1
142.6
149.5
Diluted
143.3
152.0
145.8
152.8
JABIL INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Nine months ended
May 31, 2022
May 31, 2021
Cash flows provided by operating
activities:
Net income
$
681
$
523
Depreciation, amortization, and other,
net
768
730
Change in operating assets and
liabilities, exclusive of net assets acquired
(704
)
(582
)
Net cash provided by operating
activities
745
671
Cash flows used in investing
activities:
Acquisition of property, plant and
equipment
(1,068
)
(878
)
Proceeds and advances from sale of
property, plant and equipment
470
287
Cash paid for business and intangible
asset acquisitions, net of cash
(18
)
(50
)
Other, net
—
(3
)
Net cash used in investing activities
(616
)
(644
)
Cash flows used in financing
activities:
Borrowings under debt agreements
2,621
1,081
Payments toward debt agreements
(2,707
)
(908
)
Payments to acquire treasury stock
(475
)
(262
)
Dividends paid to stockholders
(37
)
(38
)
Net proceeds from exercise of stock
options and issuance of common stock under employee stock purchase
plan
26
20
Treasury stock minimum tax withholding
related to vesting of restricted stock
(44
)
(21
)
Other, net
(23
)
(49
)
Net cash used in financing activities
(639
)
(177
)
Effect of exchange rate changes on cash
and cash equivalents
13
(3
)
Net decrease in cash and cash
equivalents
(497
)
(153
)
Cash and cash equivalents at beginning of
period
1,567
1,394
Cash and cash equivalents at end of
period
$
1,070
$
1,241
JABIL INC. AND
SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF U.S. GAAP
FINANCIAL RESULTS TO NON-GAAP MEASURES
(in millions, except for per
share data)
(Unaudited)
Three months ended
Nine months ended
May 31, 2022
May 31, 2021
May 31, 2022
May 31, 2021
Operating income (U.S. GAAP)
$
321
$
240
$
984
$
790
Amortization of intangibles
8
12
24
35
Stock-based compensation expense and
related charges
16
19
67
76
Restructuring, severance and related
charges
—
1
—
6
Net periodic benefit cost (1)
7
5
21
17
Business interruption and impairment
charges, net
—
—
—
(1
)
Acquisition and integration charges
—
—
—
4
Adjustments to operating income
31
37
112
137
Core operating income
(Non-GAAP)
$
352
$
277
$
1,096
$
927
Net income attributable to Jabil Inc.
(U.S. GAAP)
$
218
$
169
$
681
$
521
Adjustments to operating income
31
37
112
137
Loss on debt extinguishment
4
—
4
—
Gain on securities
—
(2
)
—
(2
)
Net periodic benefit cost (1)
(7
)
(5
)
(21
)
(17
)
Adjustments for taxes
—
(1
)
—
(2
)
Core earnings (Non-GAAP)
$
246
$
198
$
776
$
637
Diluted earnings per share (U.S. GAAP)
$
1.52
$
1.12
$
4.67
$
3.41
Diluted core earnings per share
(Non-GAAP)
$
1.72
$
1.30
$
5.32
$
4.17
Diluted weighted average shares
outstanding (U.S. GAAP & Non-GAAP)
143.3
152.0
145.8
152.8
________________
(1)
In accordance with 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 millions)
(Unaudited)
Nine months ended
May 31, 2022
May 31, 2021
Net cash provided by operating
activities (U.S. GAAP)
$
745
$
671
Acquisition of property, plant and
equipment
(1,068
)
(878
)
Proceeds and advances from sale of
property, plant and equipment
470
287
Adjusted free cash flow
(Non-GAAP)
$
147
$
80
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version on businesswire.com: https://www.businesswire.com/news/home/20220616005187/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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