Here is the cut&paste of the earnings release...
This release contains certain forward-looking statements, which are subject to a number of risks and uncertainties. Some factors that could cause actual results to differ materially include: business conditions and growth in the contract manufacturing industry and the general economy; variability of operating results; dependence on a limited number of customers; limited availability of components; dependence on certain industries; variability of customer requirements; and other risk factors described in the company's most recently filed SEC documents such as the Form 10-K, filed 12/7/98.
JABIL CIRCUIT POSTS RECORD REVENUE
SEQUENTIAL OPERATING INCOME INCREASES 52 PERCENT
St. Petersburg, FL - December 15, 1998....Jabil Circuit, Inc. (NYSE: JBL), electronics contract manufacturer to the world market for circuit board assemblies, today reported record revenue for the first fiscal quarter of 1999, ended November 30, 1998. Revenue for the quarter increased 40 percent to $448 million compared to $320 million for the same period of fiscal 1998.
Jabil's first quarter of fiscal 1999 net income increased to $19.3 million or $0.50 per diluted share compared with $19.1 million or $0.49 per diluted share for the first quarter of fiscal 1998.
Gross profit for fiscal 1999 first quarter increased 22 percent to $50.6 million or 11.3 percent of revenue compared to $41.3 million or 12.9 percent of revenue for the corresponding quarter of fiscal 1998.
Operating income for the first fiscal quarter of 1999 increased six percent to $31.2 million or 7 percent of revenue compared to $29.4 million or 9.2 percent of revenue for the first fiscal quarter of 1998
Jabil Circuit President Thomas A. Sansone said, "The first quarter's record revenue and operating income levels are gratifying because in addition to integrating the Hewlett-Packard operations, we saw strong sequential growth in other sectors of our business. These results reflect an impressive 52 percent sequential increase in operating income."
Income Statement -- Sequential Trend Highlights
Revenue in the first fiscal quarter increased by 41 percent from the fourth quarter, reflecting the first full quarter of the Hewlett-Packard acquisition and an accelerated recovery of production levels in other business segments.
Gross margin was 11.3 percent of revenue for the quarter, reflecting dilution from the business mix relating to the Hewlett-Packard acquisition and start up costs in California.
SG&A was $18.3 million, or 4.1 percent of revenue, compared to 4.8 percent of revenue in the previous quarter.
R & D increased slightly in absolute dollars to $1.1 million, representing 0.2 percent of revenue.
Operating income increased sequentially by 52 percent to $31.2 million, or 7.0 percent of revenue. Operating income growth is our key financial objective.
Net interest expense increased to $1.5 million representing 0.3 percent of revenue, compared to 0.2 percent in the prior sequential quarter.
Income tax rates were 35 percent of pre-tax income.
Net income after tax was $19.3 million or 4.3 percent of revenue, as compared to 4.2 percent in the prior sequential quarter.
Earnings per share for first fiscal quarter of 1999 were $0.50 on an average 38.8 million shares during the period, fully diluted.
Balance Sheet -- Sequential Trend Highlights
Accounts receivable increased by $55 million to $181 million in the first quarter of fiscal 1999, as compared to $126 million in the fourth quarter of fiscal 1998.
Inventories increased by $23 million in the first quarter to $146 million as compared to $123 million as of the end of August. Calculated inventory turns improved to 11, ahead of our goal of 10 turns.
Fixed assets increased by $22 million to $246 million reflecting $34 million in capital expenditures, offset by $12 million in depreciation.
Jabil is utilizing $40 million of its revolving credit facility in order to support the increased asset base of the HP acquisition. The balance of the Company's credit facility ($185 million) will be used, as necessary, to fund the continued growth of the business.
Long-term debt remained at $90 million in the first quarter. The Company's long-term debt is represented by the $40 million credit facility and $50 million private placement debt funded in May of last fiscal year. Principal payments on this debt begin mid-1999.
The Company's debt-to-capitalization ratio is 25 percent. Total liabilities-to-equity ratio at the end of the quarter was 1.3 to 1.
For the quarter, the Company's average return on assets was 13.3 percent, with an average return on equity of 29.6 percent.
Business Notes
(NOTE: The following statements are forward looking; actual results may differ materially.)
New Plant Update.
Mexico. The plant was profitable in the first fiscal quarter of fiscal 1999. In addition, the Company has added a fourth business unit and expanded to 1,000 employees. Construction has begun on a 125,000 square foot addition, which should be available for production in May 1999.
Boise. Completed the first full quarter of production with rapid integration into Jabil operations. The Company has agreed to purchase a 50-acre campus location in Boise and plans to close within the next several weeks. Site plans are being finalized and construction is anticipated to begin in the spring.
Bergamo. Completed the first full quarter of production with little disruption to production. The Company is under active development of other business opportunities, including those that require process engineering and design for manufacturing excellence.
California. The site has begun initial production for several existing customers and a new customer --Network Appliance. The Company anticipates that the site will contribute to operating income in the third quarter of fiscal 1999.
Florida. The Company has broken ground on a new 60,000 square foot corporate headquarters building at its St. Petersburg location that should be completed by the fall of 1999.
Outlook
Sansone commented that the results for the first quarter were excellent and show continuing delivery of targeted growth rates in operating income. "We are encouraged about the growth prospects for our current customer base and look forward to participating in expanding opportunities for our industry as the adoption of outsourcing accelerates," said Sansone.
Jabil Circuit, Inc. is an electronic manufacturer of circuit board assemblies for international original equipment manufacturers in the communications, personal computer, peripheral, consumer and automotive markets. Jabil offers circuit design, board design from schematic, mechanical and production design, prototype assembly, volume board assembly and system assembly services from eight automated manufacturing facilities in North America, Europe and Asia.
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