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Exhibit 99.1
Jabil Posts Record First Quarter Results
Raises FY21 Financial Outlook
ST. PETERSBURG, Fla. – December 17, 2020 – Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its first quarter of fiscal year 2021.
“I’m thrilled with the strong start to the fiscal year,” said CEO Mark Mondello. “Our unique positioning as a critical and trusted supplier for so many of the world’s leading brands is allowing us to benefit from powerful end-market trends. As a result, our team delivered record quarterly results for revenue, core operating income and core EPS. Importantly, these impressive results show that our multi-year strategy to create a more optimized commercial portfolio is working,” he added.
First Quarter of Fiscal Year 2021 Highlights:
| • | Net revenue: $7.8 billion |
| • | Diversified Manufacturing Services (DMS) year-on-year revenue growth: 13 percent |
| • | Electronics Manufacturing Services (EMS) year-on-year revenue decrease: 4 percent |
| • | U.S. GAAP operating income: $314.0 million |
| • | U.S. GAAP diluted earnings per share: $1.31 |
| • | Core operating income (Non-GAAP): $364.9 million |
| • | Core diluted earnings per share (Non-GAAP): $1.60 |
Second Quarter of Fiscal Year 2021 Outlook:
| • Net revenue |
$6.2 billion to $6.8 billion | |
| • U.S. GAAP operating income |
$173 million to $226 million | |
| • U.S. GAAP diluted earnings per share |
$0.60 to $0.82 per diluted share | |
| • Core operating income (Non-GAAP) (1) |
$210 million to $260 million | |
| • Core diluted earnings per share (Non-GAAP) (1) |
$0.83 to $1.03 per diluted share | |
| • Total company revenue |
Increase 6 percent year-on-year | |
Fiscal Year 2021 Updated Outlook:
“Given our strong start to the year, combined with our improved forecast, we now expect FY21 revenue will be in the neighborhood of $27.5 billion, while core margin and core EPS will increase to 4.1% and $4.60, respectively,” added Mondello.
(1) Core operating income and core diluted earnings per share exclude anticipated adjustments of $11.0 million for amortization of intangibles (or $0.07 per diluted share), $18.0 million for stock-based compensation expense and related charges (or $0.11 per diluted share), $6.0 million to $3.0 million for restructuring, severance and related charges (or $0.04 to $0.02 per diluted share) and $2.0 million for acquisition and integration charges (or $0.01 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 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 the first quarter of fiscal year 2021 and our guidance for future financial performance in our second 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, restructuring, severance and related charges and acquisition and integration charges) and in fiscal year 2021 (including revenue, core margin and core diluted 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 the first 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 first 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)
| November 30, 2020 | ||||||||
| (unaudited) | August 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 1,107,573 | $ | 1,393,557 | ||||
| Accounts receivable, net |
3,651,869 | 2,847,743 | ||||||
| Contract assets |
1,088,059 | 1,104,700 | ||||||
| Inventories, net |
3,271,842 | 3,131,783 | ||||||
| Prepaid expenses and other current assets |
727,849 | 657,102 | ||||||
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| Total current assets |
9,847,192 | 9,134,885 | ||||||
| Property, plant and equipment, net |
3,792,091 | 3,665,312 | ||||||
| Operating lease right-of-use asset |
391,004 | 362,847 | ||||||
| Goodwill and intangible assets, net |
905,426 | 906,723 | ||||||
| Deferred income taxes |
165,264 | 165,407 | ||||||
| Other assets |
168,501 | 162,242 | ||||||
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| Total assets |
$ | 15,269,478 | $ | 14,397,416 | ||||
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| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: |
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| Current installments of notes payable and long-term debt |
$ | 50,195 | $ | 50,194 | ||||
| Accounts payable |
6,431,567 | 5,687,038 | ||||||
| Accrued expenses |
3,061,092 | 3,211,528 | ||||||
| Current operating lease liabilities |
119,150 | 110,723 | ||||||
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| Total current liabilities |
9,662,004 | 9,059,483 | ||||||
| Notes payable and long-term debt, less current installments |
2,679,005 | 2,678,288 | ||||||
| Other liabilities |
331,093 | 268,925 | ||||||
| Non-current operating lease liabilities |
324,379 | 302,035 | ||||||
| Income tax liabilities |
163,459 | 148,629 | ||||||
| Deferred income taxes |
115,587 | 114,657 | ||||||
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| Total liabilities |
13,275,527 | 12,572,017 | ||||||
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| Commitments and contingencies |
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| Equity: |
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| Jabil Inc. stockholders’ equity: |
||||||||
| Preferred stock |
— | — | ||||||
| Common stock |
266 | 264 | ||||||
| Additional paid-in capital |
2,445,582 | 2,413,616 | ||||||
| Retained earnings |
2,228,729 | 2,040,922 | ||||||
| Accumulated other comprehensive loss |
(14,346 | ) | (34,168 | ) | ||||
| Treasury stock, at cost |
(2,680,860 | ) | (2,609,250 | ) | ||||
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| Total Jabil Inc. stockholders’ equity |
1,979,371 | 1,811,384 | ||||||
| Noncontrolling interests |
14,580 | 14,015 | ||||||
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| Total equity |
1,993,951 | 1,825,399 | ||||||
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| Total liabilities and equity |
$ | 15,269,478 | $ | 14,397,416 | ||||
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JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
| Three months ended | ||||||||
| November 30, 2020 | November 30, 2019 | |||||||
| Net revenue |
$ | 7,832,529 | $ | 7,505,698 | ||||
| Cost of revenue |
7,197,969 | 6,951,859 | ||||||
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| Gross profit |
634,560 | 553,839 | ||||||
| Operating expenses: |
||||||||
| Selling, general and administrative |
302,752 | 328,899 | ||||||
| Research and development |
8,118 | 10,770 | ||||||
| Amortization of intangibles |
11,455 | 16,140 | ||||||
| Restructuring, severance and related charges |
(1,715 | ) | 45,251 | |||||
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| Operating income |
313,950 | 152,779 | ||||||
| Interest and other, net |
28,543 | 50,139 | ||||||
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| Income before income tax |
285,407 | 102,640 | ||||||
| Income tax expense |
84,400 | 61,926 | ||||||
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| Net income |
201,007 | 40,714 | ||||||
| Net income attributable to noncontrolling interests, net of tax |
565 | 292 | ||||||
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| Net income attributable to Jabil Inc. |
$ | 200,442 | $ | 40,422 | ||||
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| Earnings per share attributable to the stockholders of Jabil Inc.: |
||||||||
| Basic |
$ | 1.33 | $ | 0.26 | ||||
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| Diluted |
$ | 1.31 | $ | 0.26 | ||||
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| Weighted average shares outstanding: |
||||||||
| Basic |
150,157 | 153,100 | ||||||
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| Diluted |
152,918 | 156,462 | ||||||
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JABIL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Three months ended | ||||||||
| November 30, 2020 | November 30, 2019 | |||||||
| Cash flows provided by operating activities: |
||||||||
| Net income |
$ | 201,007 | $ | 40,714 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
205,766 | 202,859 | ||||||
| Restructuring and related charges |
(1,556 | ) | 18,347 | |||||
| Recognition of stock-based compensation expense and related charges |
33,541 | 30,223 | ||||||
| Deferred income taxes |
(1,869 | ) | (6,645 | ) | ||||
| Provision for allowance for doubtful accounts |
2,426 | 10,413 | ||||||
| Other, net |
11,247 | 1,179 | ||||||
| Change in operating assets and liabilities, exclusive of net assets acquired: |
||||||||
| Accounts receivable |
(791,492 | ) | (863,210 | ) | ||||
| Contract assets |
27,971 | (68,322 | ) | |||||
| Inventories |
(134,723 | ) | (286,775 | ) | ||||
| Prepaid expenses and other current assets |
(54,243 | ) | (31,413 | ) | ||||
| Other assets |
(8,142 | ) | (8,162 | ) | ||||
| Accounts payable, accrued expenses and other liabilities |
575,527 | 981,736 | ||||||
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| Net cash provided by operating activities |
65,460 | 20,944 | ||||||
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| Cash flows used in investing activities: |
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| Acquisition of property, plant and equipment |
(352,881 | ) | (230,393 | ) | ||||
| Proceeds and advances from sale of property, plant and equipment |
110,792 | 23,209 | ||||||
| Cash paid for business and intangible asset acquisitions, net of cash |
(18,417 | ) | (116,767 | ) | ||||
| Other, net |
(3,367 | ) | (1,779 | ) | ||||
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| Net cash used in investing activities |
(263,873 | ) | (325,730 | ) | ||||
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| Cash flows used in financing activities: |
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| Borrowings under debt agreements |
200,000 | 1,779,801 | ||||||
| Payments toward debt agreements |
(201,969 | ) | (1,787,243 | ) | ||||
| Payments to acquire treasury stock |
(50,029 | ) | (96,390 | ) | ||||
| Dividends paid to stockholders |
(13,814 | ) | (13,731 | ) | ||||
| Treasury stock minimum tax withholding related to vesting of restricted stock |
(21,581 | ) | (19,317 | ) | ||||
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| Net cash used in financing activities |
(87,393 | ) | (136,880 | ) | ||||
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| Effect of exchange rate changes on cash and cash equivalents |
(178 | ) | (1,835 | ) | ||||
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| Net decrease in cash and cash equivalents |
(285,984 | ) | (443,501 | ) | ||||
| Cash and cash equivalents at beginning of period |
1,393,557 | 1,163,343 | ||||||
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| Cash and cash equivalents at end of period |
$ | 1,107,573 | $ | 719,842 | ||||
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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 | ||||||||
| November 30, 2020 | November 30, 2019 | |||||||
| Operating income (U.S. GAAP) |
$ | 313,950 | $ | 152,779 | ||||
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| Amortization of intangibles |
11,455 | 16,140 | ||||||
| Stock-based compensation expense and related charges |
33,541 | 30,223 | ||||||
| Restructuring, severance and related charges |
(1,715 | ) | 45,251 | |||||
| Distressed customer charge |
— | 14,963 | ||||||
| Net periodic benefit cost (1) |
5,593 | 1,825 | ||||||
| Acquisition and integration charges |
2,113 | 16,134 | ||||||
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| Adjustments to operating income |
50,987 | 124,536 | ||||||
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| Core operating income (Non-GAAP) |
$ | 364,937 | $ | 277,315 | ||||
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| Net income attributable to Jabil Inc. (U.S. GAAP) |
$ | 200,442 | $ | 40,422 | ||||
| Adjustments to operating income |
50,987 | 124,536 | ||||||
| Net periodic benefit cost (1) |
(5,593 | ) | (1,825 | ) | ||||
| Adjustments for taxes |
(595 | ) | 497 | |||||
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| Core earnings (Non-GAAP) |
$ | 245,241 | $ | 163,630 | ||||
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| Diluted earnings per share (U.S. GAAP) |
$ | 1.31 | $ | 0.26 | ||||
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| Diluted core earnings per share (Non-GAAP) |
$ | 1.60 | $ | 1.05 | ||||
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| Diluted weighted average shares outstanding (U.S. GAAP and Non-GAAP) |
152,918 | 156,462 | ||||||
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| (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)
| Three months ended | ||||||||
| November 30, 2020 | November 30, 2019 | |||||||
| Net cash provided by operating activities (U.S. GAAP) |
$ | 65,460 | $ | 20,944 | ||||
| Acquisition of property, plant and equipment |
(352,881 | ) | (230,393 | ) | ||||
| Proceeds and advances from sale of property, plant and equipment |
110,792 | 23,209 | ||||||
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| Adjusted free cash flow (Non-GAAP) |
$ | (176,629 | ) | $ | (186,240 | ) | ||
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