Jabil Circuit Reports Second Quarter Results
Wednesday March 19, 4:01 pm ET
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--March 19, 2003--Jabil Circuit, Inc. (NYSE:JBL - News), an electronics manufacturing services provider, today reported results for the second quarter of fiscal 2003, ended February 28, 2003. Revenue for the quarter increased 39 percent to $1.15 billion compared to $0.82 billion for the same period of fiscal 2002.
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On a Generally Accepted Accounting Principles (GAAP) basis, net income for the second quarter of fiscal 2003 increased 173 percent to $10.1 million compared to $3.7 million for the same period of fiscal 2002. GAAP diluted earnings per share for the second quarter of fiscal 2003 increased 150 percent to $0.05 compared to $0.02 for the same period of fiscal 2002.
Jabil's second quarter of fiscal 2003 core earnings after taxes increased 113 percent to $32.6 million, compared to $15.3 million for the second quarter of fiscal 2002. (Jabil defines core earnings as GAAP net income before amortization of intangibles, acquisition related charges, restructuring and impairment charges and other income. See the accompanying reconciliation of Jabil's core earnings to its GAAP net income in the supplementary data below.) Core earnings per share increased 100 percent to $0.16 per diluted share for the period, compared to $0.08 for the second quarter of fiscal 2002.
Gross profit for the second quarter of fiscal 2003 increased 43 percent to $104.9 million or 9.2 percent of revenue compared to $73.5 million or 8.9 percent of revenue for the same period of fiscal 2002.
On a GAAP basis, operating income for the second quarter of fiscal 2003 increased 72 percent to $11.6 million compared to $6.7 million for the same period of fiscal 2002.
Core operating income for the second quarter of fiscal 2003 increased 92 percent to $42.1 million or 3.7 percent of revenue compared to $21.9 million or 2.7 percent of revenue for the second quarter of fiscal 2002. (Jabil defines core operating income as GAAP operating income before amortization of intangibles, acquisition related charges and restructuring and impairment charges. See the accompanying reconciliation of Jabil's core operating income to its GAAP operating income in the supplementary data below.)
"In a very tough environment, Jabil has just reported its fourth successive quarter of increasing revenue and operating profits, while maintaining solid balance sheet metrics. This quarter we completed the acquisition of the final three Philips Electronics manufacturing sites into Jabil, continued our restructuring of worldwide capacity and began numerous new manufacturing programs around the world," said Chris Lewis, Chief Financial Officer.
Income Statement Highlights
Second quarter revenue increased seven percent compared to the prior quarter.
GAAP operating income increased 305 percent to $11.6 million from the first quarter of fiscal 2003.
Core operating income increased eight percent to $42.1 million from the first quarter of fiscal 2003.
GAAP earnings were $10.1 million or 0.9 percent of revenue.
Core earnings were $32.6 million or 2.8 percent of revenue.
Fully diluted GAAP earnings per share for the quarter were $0.05 on 200,726,000 average shares.
Fully diluted core earnings per share for the quarter were $0.16 on 200,726,000 average shares.
Sequential Balance Sheet Highlights
Inventories increased by $83 million during the quarter to $527 million.
Only good if they are gearing up new programs
Calculated inventory turns were 8, compared to 9 the prior quarter.
This is not a good sign. They are not selling as much
as last Q. Given that X-mas Q is the strongest on the year,
this is no surprise. Neutral as an indicator.
Sales cycle increased by 6 days to 42.
Not bad enough to suggest credit problems
Return on invested capital remained consistent with the prior quarter at 10 percent.
Debt-to-capitalization ratio was 23 percent at the end of the quarter, compared to 25 percent at the end of the first quarter of fiscal 2003.
Cash flow from operations was approximately $50 million.
Still positive.
Business Outlook Guidance
The company provided guidance for its third fiscal quarter of 2003 indicating it expects revenue to increase sequentially 5 to 8 percent or range from $1.20 billion to $1.24 billion. Jabil said it expects core operating income to increase sequentially 7 to 12 percent resulting in core earnings per share of $0.17 to $0.19 per diluted share, depending upon exact levels of production. GAAP earnings per share are expected to be comparable with the second fiscal quarter of 2003. The Company also noted that its cost reduction activities are on track and reiterated previous estimates that it plans to record $60 to $80 million in restructuring charges over the course of fiscal year 2003.
"Over the past four quarters, we have produced over $4 billion in revenue and $151 million in core operating income," said Tim Main, Jabil's President and CEO. Main said Jabil would remain focused on diversifying and expanding customers and markets served, controlling operating costs and improving financial results. "Step by step, we will concentrate on the execution and expansion of our business to new customers, industry sectors, services and global locations," said Main.
Jabil Circuit, Inc. is one of the world's largest electronic manufacturing services providers. Jabil manufactures for international electronics companies in the automotive, computing and storage, consumer, instrumentation and medical, networking, peripheral and telecommunications markets. Jabil offers circuit design, board design from schematic, prototype assembly, volume board assembly, system assembly, repair and warranty services from facilities in the Americas, Europe and Asia. Further information about Jabil can be found at jabil.com.
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
February 28, August 31,
2003 2002
----------- -----------
ASSETS
Current assets
Cash and cash equivalents $497,351 $640,735
Accounts receivable, net 676,463 446,879
Inventories 527,190 395,918
Income tax receivable 17,981 49,411
Prepaid expenses and other current assets 44,092 34,128
Deferred income taxes 29,953 21,273
----------- -----------
Total current assets 1,793,030 1,588,344
Property, plant and equipment, net 801,515 740,868
Goodwill and intangible assets, net 336,843 194,447
Other assets 23,102 24,247
----------- -----------
$2,954,490 $2,547,906
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current installments of long term debt and
capital lease obligations $8,764 $8,692
Accounts payable 660,739 431,588
Accrued expenses 192,946 153,102
----------- -----------
Total current liabilities 862,449 593,382
Long term debt and capital lease obligations,
less current installments 454,544 354,668
Deferred income taxes 41,381 41,323
Other liabilities 42,992 51,567
----------- -----------
Total liabilities 1,401,366 1,040,940
----------- -----------
Stockholders' equity
Common stock 198 198
Additional paid in capital 933,463 926,345
Retained earnings 598,515 580,046
Accumulated other comprehensive income 20,948 377
----------- -----------
Total stockholders' equity 1,553,124 1,506,966
----------- -----------
$2,954,490 $2,547,906
=========== ===========
JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share data)
(Unaudited)
Three months ended Six months ended
--------------------- -----------------------
February February February February
28, 28, 28, 28,
2003 2002 2003 2002
----------- --------- ----------- -----------
Net revenue $1,145,917 $822,074 $2,214,163 $1,706,641
Cost of revenue 1,041,030 748,582 2,011,732 1,551,541
----------- --------- ----------- -----------
Gross profit 104,887 73,492 202,431 155,100
Operating expenses:
Selling, general and
administrative 60,310 49,732 116,150 99,335
Research and
development 2,431 1,859 5,047 3,737
Amortization of
intangibles 9,716 4,180 15,867 7,022
Acquisition related
charges (1) 3,697 546 7,412 2,557
Restructuring and
impairment charges (2) 17,128 10,446 43,487 24,588
----------- --------- ----------- -----------
Operating income 11,605 6,729 14,468 17,861
Other Income - - (2,600) -
Interest income (1,847) (2,008) (3,771) (4,179)
Interest expense 4,182 3,465 7,911 6,248
----------- --------- ----------- -----------
Income before income
taxes 9,270 5,272 12,928 15,792
Income tax (benefit)
expense (842) 1,570 (5,541) 3,715
----------- --------- ----------- -----------
Net income $10,112 $3,702 $18,469 $12,077
=========== ========= =========== ===========
Earnings per share:
Basic $0.05 $0.02 $0.09 $0.06
=========== ========= =========== ===========
Diluted $0.05 $0.02 $0.09 $0.06
=========== ========= =========== ===========
Common shares used in the
calculation of
earnings per share:
Basic 198,351 197,305 198,162 197,158
=========== ========= =========== ===========
Diluted 200,726 201,348 200,419 200,856
=========== ========= =========== ===========
(1) During the quarter ended February 28, 2003, we recorded
acquisition related charges of $3.7 million ($2.3 million after-tax)
in connection with the acquisitions of certain operations of Quantum
Corporation, Alcatel Business Systems, Valeo, Lucent Technologies of
Shanghai, Seagate Technology - Reynosa, S. de R.L. de C.V. and Royal
Philips Electronics. During the quarter ended February 28, 2002, we
recorded acquisition related charges of $0.5 million ($0.3 million
after-tax) in connection with the acquisition of certain operations of
Marconi Communications. During the six months ended February 28, 2003,
we recorded acquisition related charges of $7.4 million ($4.7 million
after-tax) in connection with the acquisitions of certain operations
of Quantum Corporation, Alcatel Business Systems, Valeo, Lucent
Technologies of Shanghai, Seagate Technology - Reynosa, S. de R.L. de
C.V. and Royal Philips Electronics. During the six months ended
February 28, 2002, we recorded acquisition related charges of $2.6
million ($1.6 million after-tax) in connection with the acquisition of
certain operations of Marconi Communications.
(2) We recorded charges of $17.1 million and $10.4 million ($12.0
million after-tax and $7.7 million after-tax, respectively) related to
the restructuring of our business during the quarters ended February
28, 2003 and February 28, 2002, respectively. We recorded charges of
$43.5 million and $24.6 million ($28.5 million after-tax and $17.9
million after-tax, respectively) related to the restructuring of our
business during the six months ended February 28, 2003 and February
28, 2002, respectively.
JABIL CIRCUIT, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
(In thousands, except for per share data)
(Unaudited)
Three months ended Six months ended
------------------ -----------------
February February February February
28, 28, 28, 28,
2003 2002 2003 2002
-------- -------- -------- --------
Net Income $10,112 $3,702 $18,469 $12,077
Amortization of intangibles, net of
tax 8,230 3,559 13,217 5,911
Acquisition related charges, net of
tax (1) 2,328 344 4,652 1,606
Restructuring and impairment
charges, net of tax (2) 11,976 7,728 28,481 17,874
Other income, net of tax - - (1,622) -
-------- -------- -------- --------
Core earnings $32,646 $15,333 $63,197 $37,468
======== ======== ======== ========
Core Earnings per share:
Basic $0.16 $0.08 $0.32 $0.19
======== ======== ======== ========
Diluted $0.16 $0.08 $0.32 $0.19
======== ======== ======== ========
Common shares used in the
calculation of core
earnings:
Basic 198,351 197,305 198,162 197,158
======== ======== ======== ========
Diluted 200,726 201,348 200,419 200,856
======== ======== ======== ========
Operating income $11,605 $6,729 $14,468 $17,861
Amortization of intangibles 9,716 4,180 15,867 7,022
Acquisition related charges (1) 3,697 546 7,412 2,557
Restructuring and impairment
charges (2) 17,128 10,446 43,487 24,588
-------- -------- -------- --------
Core operating income $42,146 $21,901 $81,234 $52,028
======== ======== ======== ========
(1) During the quarter ended February 28, 2003, we recorded
acquisition related charges of $3.7 million ($2.3 million after-tax)
in connection with the acquisitions of certain operations of Quantum
Corporation, Alcatel Business Systems, Valeo, Lucent Technologies of
Shanghai, Seagate Technology - Reynosa, S. de R.L. de C.V. and Royal
Philips Electronics. During the quarter ended February 28, 2002, we
recorded acquisition related charges of $0.5 million ($0.3 million
after-tax) in connection with the acquisition of certain operations of
Marconi Communications. During the six months ended February 28, 2003,
we recorded acquisition related charges of $7.4 million ($4.7 million
after-tax) in connection with the acquisitions of certain operations
of Quantum Corporation, Alcatel Business Systems, Valeo, Lucent
Technologies of Shanghai, Seagate Technology - Reynosa, S. de R.L. de
C.V. and Royal Philips Electronics. During the six months ended
February 28, 2002, we recorded acquisition related charges of $2.6
million ($1.6 million after-tax) in connection with the acquisition of
certain operations of Marconi Communications.
(2) We recorded charges of $17.1 million and $10.4 million ($12.0
million after-tax and $7.7 million after-tax, respectively) related to
the restructuring of our business during the quarters ended February
28, 2003 and February 28, 2002, respectively. We recorded charges of
$43.5 million and $24.6 million ($28.5 million after-tax and $17.9
million after-tax, respectively) related to the restructuring of our
business during the six months ended February 28, 2003 and February
28, 2002, respectively.
This news release contains forward-looking statements, including those regarding the anticipated outlook for our business, our expected third quarter fiscal 2003 earnings results and our long-term outlook for the company, our industry and our customers based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, buüt limited to: the length and severity of the current economic downturn and our ability to manage customer demand through the downturn; fluctuations in operating results; changes in technology; competition; managing rapid growth; managing rapid declines in customer demand; our ability to successfully consummate our acquisitions; managing the integration of businesses we acquire; risks associated with international sales and operations; retaining key personnel; our dependence on a limited number of customers; the consolidation of our customer base; business and competitive factors generally affecting the electronic manufacturing services industry, our customers and our business or other factors that we may not have currently identified or quantified; and other risks, relevant factors and uncertainties are identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2002, any subsequent Reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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Contact:
Jabil Circuit, Inc., St. Petersburg
Investors:
Beth Walters, 727/803-3349
investor_relations@jabil.com
Media:
Lisa Allison, 727/803-3314
lisa_allison@jabil.com |
