It's not that bad, Jabil CEO says
Compared to its competitors, Tim Main says, the St. Petersburg company is in good shape.
By JEFF HARRINGTON, Times Staff Writer
© St. Petersburg Times, published January 25, 2002
ST. PETERSBURG -- Chief executive Tim Main's message at Jabil Circuit's annual meeting Thursday could be summed up in one phrase: consider the context.
Sure, the St. Petersburg maker of electronic components is plodding through a drought in orders. Several thousand jobs have been cut, including about a third of its hometown work force, and profits have dwindled.
Shares are off more than 60 percent from their high in the fall of 2000. And there is no sign yet that business is bouncing back.
But, Main told shareholders, compare Jabil to the rest of its industry and it looks downright positive.
Jabil has the highest five-year return to shareholders among its peers. Its price-to-earnings ratio is 30 percent higher than the industry average. And Jabil has managed to increase its overall market share among the big five contract manufacturers of electronics components as companies pare down their vendor lists.
"At least we're still making money," Main said. "We're the only guys in the industry making real operating increases."
Jabil's arch-competitors Flextronics International and Solectron Corp. have taken charges of just under $1-billion and $884-million, respectively, over the past 12 months. Each has laid off tens of thousands of employees.
Jabil, by contrast, has taken only $55-million in restructuring charges and closed one plant in Tijuana, Mexico. Its global work force was cut from 19,115 to 17,097 as of the Aug. 31 close of its fiscal year (Jabil would not give an updated number that includes the latest cuts).
In St. Petersburg, it has quietly gone about slashing its work force from 3,000 a year ago to about 2,000 today.
Main offered no predictions about the depth or end of the recession, except to suggest, "This one is probably closer to the end than to the beginning."
He forecast earnings of 50 cents to 60 cents a share on sales of $3.5-billion to $4-billion for the current fiscal year. That's off from 59 cents a share on $4.3-billion in sales in the year ended Aug. 31.
Shares in Jabil closed Thursday at $22.63 apiece, down 18 cents, or 1 percent. That's off 45 percent from its 52-week high of $40.99 last February.
"I realize it's been kind of a rough year, hasn't it?" Main told about 150 shareholders gathered at the Vinoy Golf Club on Snell Isle Boulevard. "We've seen this recession get nastier and nastier."
Shareholders in attendance were largely sedate and receptive to Jabil's management team. A few quizzed Main about employee training and successes in Malaysia. One shareholder asked whether manufacturing employees in poorer countries in Asia were being paid fair wages. ("We're not taking advantage. We're not a Nike," Main responded. "We generally pay above the minimum wage in that country.")
Jabil, whose customer base includes such heavyweights as Cisco, Dell and Hewlett-Packard, began the bloodletting early last year. The company's cash flow, however, has remained strong throughout the recession. It currently has about $1.3-billion in cash and credit available for acquisitions. |
