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JABIL INC.

(JBL)
  Report
Delayed Quote. Delayed Nyse - 07/28 04:10:00 pm
57.84 USD   +1.67%
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Jabil : Posts Third Quarter Results (Form 8-K)

06/17/2021 | 07:54am EDT

Jabil Posts Third Quarter Results

Momentum Leads to Solid Results and Strong Outlook

ST. PETERSBURG, Fla. - June 17, 2021- Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its third quarter of fiscal year 2021.

'Our third quarter performance was outstanding,' said CEO Mark Mondello. 'The combination of strong demand and excellent execution by the team allowed us to deliver $277 million in core operating income on revenue of $7.2 billion,' he added.

Third Quarter of Fiscal Year 2021 Highlights:

Net revenue: $7.2 billion

Diversified Manufacturing Services (DMS) year-on-year revenue growth: 21 percent

Electronics Manufacturing Services (EMS) year-on-year revenue growth: 8 percent

U.S. GAAP operating income: $239.8 million

U.S. GAAP diluted earnings per share: $1.12

Core operating income (Non-GAAP): $276.9 million

Core diluted earnings per share (Non-GAAP): $1.30

Fourth Quarter of Fiscal Year 2021 Outlook:

•   Net revenue

$7.3 billion to $7.9 billion

•   U.S. GAAP operating income

$242 million to $302 million

•   U.S. GAAP diluted earnings per share

$1.00 to $1.20 per diluted share

•   Core operating income (Non-GAAP)(1)

$280 million to $340 million

•   Core diluted earnings per share (Non-GAAP)(1)

$1.25 to $1.45 per diluted share

•   Total company revenue

Increase 4 percent year-on-year

Fiscal Year 2021 Updated Outlook:

'I'm confident in our plan. As a result, we are raising our financial outlook for the balance of the year. We now expect FY21 revenue to be in the neighborhood of $29.5 billion, with core EPS of approximately $5.50,' added Mondello.

(1)

Core operating income and core diluted earnings per share exclude anticipated adjustments of $12.0 million for amortization of intangibles (or $0.08 per diluted share), $22.0 million for stock-based compensation expense and related charges (or $0.14 per diluted share) and $4.0 million for restructuring, severance and related charges (or $0.03 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, (gain) impairment 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 our third quarter of fiscal year 2021 and our guidance for future financial performance in our fourth 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, and restructuring, severance and related charges) and in fiscal year 2021 (including revenue and core 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 our third 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 third 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.

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

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

May 31, 2021
(unaudited) August 31, 2020
ASSETS

Current assets:

Cash and cash equivalents

$ 1,240,729 $ 1,393,557

Accounts receivable, net

3,227,627 2,847,743

Contract assets

1,070,606 1,104,700

Inventories, net

3,979,329 3,131,783

Prepaid expenses and other current assets

741,223 657,102

Total current assets

10,259,514 9,134,885

Property, plant and equipment, net

3,812,159 3,665,312

Operating lease right-of-use asset

360,938 362,847

Goodwill and intangible assets, net

914,253 906,723

Deferred income taxes

165,612 165,407

Other assets

228,232 162,242

Total assets

$ 15,740,708 $ 14,397,416
LIABILITIES AND EQUITY

Current liabilities:

Current installments of notes payable and long-term debt

$ 50,168 $ 50,194

Accounts payable

6,193,198 5,687,038

Accrued expenses

3,490,480 3,211,528

Current operating lease liabilities

113,150 110,723

Total current liabilities

9,846,996 9,059,483

Notes payable and long-term debt, less current installments

2,876,599 2,678,288

Other liabilities

302,602 268,925

Non-current operating lease liabilities

303,703 302,035

Income tax liabilities

169,593 148,629

Deferred income taxes

102,255 114,657

Total liabilities

13,601,748 12,572,017

Commitments and contingencies

Equity:

Jabil Inc. stockholders' equity:

Preferred stock

- -

Common stock

267 264

Additional paid-in capital

2,490,892 2,413,616

Retained earnings

2,525,323 2,040,922

Accumulated other comprehensive income (loss)

14,722 (34,168 )

Treasury stock, at cost

(2,893,193 ) (2,609,250 )

Total Jabil Inc. stockholders' equity

2,138,011 1,811,384

Noncontrolling interests

949 14,015

Total equity

2,138,960 1,825,399

Total liabilities and equity

$ 15,740,708 $ 14,397,416

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per share data)

(Unaudited)

Three months ended Nine months ended
May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Net revenue

$ 7,214,645 $ 6,335,642 $ 21,875,721 $ 19,966,423

Cost of revenue

6,646,845 5,879,494 20,103,436 18,526,311

Gross profit

567,800 456,148 1,772,285 1,440,112

Operating expenses:

Selling, general and administrative

305,559 302,849 914,253 916,772

Research and development

9,657 11,587 27,143 33,647

Amortization of intangibles

12,066 13,178 35,160 42,895

Restructuring, severance and related charges

744 69,150 5,655 144,005

Operating income

239,774 59,384 790,074 302,793

(Gain) Impairment on securities

(2,409 ) - (2,409 ) 12,205

Interest and other, net

28,888 45,611 85,243 145,098

Income before income tax

213,295 13,773 707,240 145,490

Income tax expense

43,277 64,036 183,861 157,620

Net income (loss)

170,018 (50,263 ) 523,379 (12,130 )

Net income attributable to noncontrolling interests, net of tax

538 695 1,803 1,689

Net income (loss) attributable to Jabil Inc.

$ 169,480 $ (50,958 ) $ 521,576 $ (13,819 )

Earnings (loss) per share attributable to the stockholders of Jabil Inc.:

Basic

$ 1.14 $ (0.34 ) $ 3.49 $ (0.09 )

Diluted

$ 1.12 $ (0.34 ) $ 3.41 $ (0.09 )

Weighted average shares outstanding:

Basic

148,110 150,723 149,500 151,956

Diluted

151,976 150,723 152,838 151,956

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Nine months ended
May 31, 2021 May 31, 2020

Cash flows provided by operating activities:

Net income (loss)

$ 523,379 $ (12,130 )

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

644,743 600,692

Restructuring and related charges

3,043 39,292

Recognition of stock-based compensation expense and related charges

76,119 62,214

Deferred income taxes

(15,933 ) 18,279

Provision for allowance for doubtful accounts

5,395 14,636

Other, net

16,217 20,979

Change in operating assets and liabilities, exclusive of net assets acquired:

Accounts receivable

(365,061 ) 142,470

Contract assets

47,135 (92,574 )

Inventories

(839,570 ) (229,398 )

Prepaid expenses and other current assets

(73,024 ) (44,331 )

Other assets

(32,220 ) (9,089 )

Accounts payable, accrued expenses and other liabilities

680,637 59,686

Net cash provided by operating activities

670,860 570,726

Cash flows used in investing activities:

Acquisition of property, plant and equipment

(878,020 ) (648,945 )

Proceeds and advances from sale of property, plant and equipment

286,702 93,679

Cash paid for business and intangible asset acquisitions, net of cash

(49,833 ) (145,595 )

Other, net

(3,081 ) 21,398

Net cash used in investing activities

(644,232 ) (679,463 )

Cash flows used in financing activities:

Borrowings under debt agreements

1,081,486 9,521,853

Payments toward debt agreements

(908,265 ) (9,533,522 )

Payments to acquire treasury stock

(261,788 ) (189,500 )

Dividends paid to stockholders

(37,872 ) (38,411 )

Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

20,354 16,179

Treasury stock minimum tax withholding related to vesting of restricted stock

(22,155 ) (23,085 )

Other, net

(48,901 ) (13,106 )

Net cash used in financing activities

(177,141 ) (259,592 )

Effect of exchange rate changes on cash and cash equivalents

(2,315 ) (31,677 )

Net decrease in cash and cash equivalents

(152,828 ) (400,006 )

Cash and cash equivalents at beginning of period

1,393,557 1,163,343

Cash and cash equivalents at end of period

$ 1,240,729 $ 763,337

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 Nine months ended
May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020

Operating income (U.S. GAAP)

$ 239,774 $ 59,384 $ 790,074 $ 302,793

Amortization of intangibles

12,066 13,178 35,160 42,895

Stock-based compensation expense and related charges

18,765 16,882 76,119 62,214

Restructuring, severance and related charges

744 69,150 5,655 144,005

Distressed customer charge

- - - 14,963

Net periodic benefit cost (1)

5,534 2,797 16,850 7,398

Business interruption and impairment charges, net

- 4,574 (806 ) 4,574

Acquisition and integration charges

- 6,119 3,374 30,005

Adjustments to operating income

37,109 112,700 136,352 306,054

Core operating income (Non-GAAP)

$ 276,883 $ 172,084 $ 926,426 $ 608,847

Net income (loss) attributable to Jabil Inc. (U.S. GAAP)

$ 169,480 $ (50,958 ) $ 521,576 $ (13,819 )

Adjustments to operating income

37,109 112,700 136,352 306,054

(Gain) Impairment on securities

(2,409 ) - (2,409 ) 12,205

Net periodic benefit cost (1)

(5,534 ) (2,797 ) (16,850 ) (7,398 )

Adjustments for taxes

(584 ) (2,422 ) (1,732 ) 1,166

Core earnings (Non-GAAP)

$ 198,062 $ 56,523 $ 636,937 $ 298,208

Diluted earnings (loss) per share (U.S. GAAP)

$ 1.12 $ (0.34 ) $ 3.41 $ (0.09 )

Diluted core earnings per share (Non-GAAP)

$ 1.30 $ 0.37 $ 4.17 $ 1.93

Diluted weighted average shares outstanding (U.S. GAAP)

151,976 150,723 152,838 151,956

Diluted weighted average shares outstanding (Non-GAAP)

151,976 152,693 152,838 154,412
(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)

Nine months ended
May 31, 2021 May 31, 2020

Net cash provided by operating activities (U.S. GAAP)

$ 670,860 $ 570,726

Acquisition of property, plant and equipment

(878,020 ) (648,945 )

Proceeds and advances from sale of property, plant and equipment

286,702 93,679

Adjusted free cash flow (Non-GAAP)

$ 79,542 $ 15,460

Disclaimer

Jabil Inc. published this content on 17 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 June 2021 11:53:01 UTC.


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Financials (USD)
Sales 2021 29 548 M - -
Net income 2021 697 M - -
Net Debt 2021 1 227 M - -
P/E ratio 2021 12,7x
Yield 2021 0,57%
Capitalization 8 435 M 8 435 M -
EV / Sales 2021 0,33x
EV / Sales 2022 0,30x
Nbr of Employees 240 000
Free-Float 51,4%
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 8
Last Close Price 57,84 $
Average target price 67,57 $
Spread / Average Target 16,8%
EPS Revisions
Managers and Directors
Mark T. Mondello Chief Executive Officer & Director
Meheryar K. Dastoor Chief Financial Officer & Executive Vice President
Timothy L. Main Non-Executive Chairman
May Yap Chief Information Officer & Senior Vice President
Steven A. Raymund Independent Director
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