Jabil Posts Second Quarter Results

  Jabil Posts Second Quarter Results

                      Results Reflect Steady Performance

Business Wire

ST. PETERSBURG, Fla. -- March 20, 2013

Today Jabil Circuit, Inc. (NYSE: JBL), announced preliminary, unaudited
financial results for its second quarter of fiscal year 2013. For the quarter,
Jabil reported revenue of $4.4 billion, an increase of 4.3 percent over the
second quarter of fiscal 2012. “We are pleased with these results for the
quarter, despite the obviously challenging macro environment,” said Jabil’s
Chief Executive Officer, Mark T. Mondello. “During the quarter we made great
progress on the Nypro acquisition and believe the market opportunities of our
combined capabilities are considerable,” said Mondello. “We look forward to a
successful completion of this deal in our fourth fiscal quarter.”

Jabil’s three reporting segments delivered the following year over year
revenue results:

  *Diversified Manufacturing Services grew 11 percent.
  *Enterprise& Infrastructure increased 12 percent.
  *High Velocity declined 15 percent.

Generally accepted accounting principles (GAAP) operating income for the
second quarter of fiscal year 2013 was $149 million and GAAP diluted earnings
per share were $0.43 cents.

Core operating income results excluding amortization of intangibles and
stock-based compensation was $170 million and core diluted earnings per share
was $0.53 cents. Acquisition-related expenses were $5 million above the
company’s second quarter forecast. This portion of the expenses was originally
forecasted to be incurred during Jabil’s third fiscal quarter.

(Definitions used: "GAAP" means U.S. generally accepted accounting principles.
Jabil defines core operating income as GAAP operating income before
amortization of intangibles, stock-based compensation expense and related
charges, restructuring and impairment charges, goodwill impairment charges,
certain distressed customer charges, settlement of receivables and related
charges and loss on disposal of subsidiaries. Jabil defines core earnings as
GAAP net income before amortization of intangibles, stock-based compensation
expense and related charges, restructuring and impairment charges, goodwill
impairment charges, certain distressed customer charges, settlement of
receivables and related charges, loss on disposal of subsidiaries, 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
determined under GAAP. Jabil calculates core return on invested capital by
annualizing its after-tax core operating income for its most recently-ended
quarter and dividing that by a two quarter average net invested capital base.
Jabil reports core operating income, core earnings, core diluted and basic
earnings per share and core return on invested capital to provide investors an
additional method for assessing operating income, earnings, diluted earnings
per share and return on invested capital from what it believes are its core
manufacturing operations. See the accompanying reconciliation of Jabil's core
operating income to its GAAP operating income, its calculation of core
earnings and core diluted earnings per share to its GAAP net income and GAAP
earnings per share, its calculation of core return on invested capital and
additional information in the supplemental information.)

Quarterly Results                Q2 2013         Q2 2012
Net revenue                       $4.4 billion     $4.2 billion
GAAP operating income             $149.0 million   $150.2 million
GAAP net income                   $88.5 million    $97.7 million
GAAP diluted earnings per share   $0.43            $0.46
GAAP return on invested capital   16.9%            20.5%
Core operating income             $170.2 million   $176.2 million
Core earnings                     $109.3 million   $123.2 million
Core diluted earnings per share   $0.53            $0.58
Core return on invested capital   19.9%            24.6%

Fiscal Q3 2013 Guidance 
Net revenue               $4.3 billion to $4.5 billion
Core operating income     $165 million to $185 million
Core earnings per share   $0.50 to $0.58 per diluted share
GAAP operating income     $144 million to $164 million
GAAP earnings per share   $0.40 to $0.48 per diluted share

(GAAP earnings per share for the third quarter of fiscal 2013 are currently
estimated to include $0.02 per share for amortization of intangibles and $0.08
per share for stock-based compensation)

Segment Revenue Guidance:

  *Diversified Manufacturing Services to remain consistent.
  *Enterprise& Infrastructure to remain consistent.
  *High Velocity to increase 13 percent.

FORWARD LOOKING STATEMENT:This news release contains forward-looking
statements, including those regarding our anticipated financial results for
our second quarter of fiscal year 2013; the anticipated closing date of the
Nypro acquisition; the market opportunities for our capabilities combined with
Nypro's; and our currently expected third quarter of fiscal year 2013 net
revenue, core operating income, GAAP operating income, core and GAAP earnings
per share results and the components thereof. The statements in this news
release are 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, but are not limited to: our
determination as we finalize our financial results for our second fiscal
quarter of fiscal year 2013 that our financial results and conditions differ
from our current preliminary unaudited numbers set forth herein; the Nypro
transaction failing to close or closing later than expected; our ability to
manage the integration of Nypro's business with ours; changes in our strategy;
our ability to successfully develop engineering and capability intensive
businesses; our ability to effectively compete in the global healthcare
provider, food and beverage, household, personal care and rigid plastic
packaging markets; our ability to retain the desired customers and personnel
of Nypro; the post-acquisition performance of Nypro; Nypro having potential
unanticipated liabilities; fluctuations in our stock’s market price;
fluctuations in operating results and cash flows; unexpected, adverse seasonal
impacts on demand; changes in macroeconomic conditions, both in the U.S. and
internationally; our financial performance during and after the current
economic conditions; our ability to maintain and improve costs, quality and
delivery for our customers; risks and costs inherent in litigation; whether
our realignment of our capacity will adversely affect our cost structure,
ability to service customers and labor relations; our ability to take
advantage of perceived benefits of offering customers vertically integrated
services; changes in technology; competition; anticipated growth for us and
our industry that may not occur; managing rapid growth; managing rapid
declines in customer demand and other related customer challenges that may
occur; our ability to successfully consummate acquisitions and divestitures;
managing the integration of businesses we acquire; risks associated with
international sales and operations; retaining key personnel; our dependence on
a limited number of large customers; business and competitive factors
generally affecting the electronic manufacturing services industry, our
customers and our business; other factors that we may not have currently
identified or quantified; and other risks, relevant factors and uncertainties
identified in our Annual Report on Form 10-K for the fiscal year ended
August31, 2012, subsequent Reports on Forms 10-Q and 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.

Supplemental Information: The financial results disclosed in this release
include certain measures calculated and presented in accordance with GAAP. In
addition to the GAAP financial measures, Jabil provides supplemental, non-GAAP
financial measures to facilitate evaluation of Jabil's core operating
performance. The non-GAAP financial measures disclosed in this release exclude
certain amounts that are included in the most directly comparable GAAP
measures. The non-GAAP or core financial measures disclosed in this release do
not have standard meanings and may vary from the non-GAAP financial measures
used by other companies. Management believes core financial measures (which
exclude the effects of the amortization of intangibles, stock-based
compensation expense and related charges, restructuring and impairment
charges, goodwill impairment charges, certain distressed customer charges,
settlement of receivables and related charges, loss on disposal of
subsidiaries, certain other expenses, net of tax and certain deferred tax
valuation allowance charges) are a useful measure that facilitates evaluating
the past and future performance of Jabil's ongoing operations on a comparable
basis. Jabil reports core operating income, core return on invested capital,
core earnings and core diluted and basic earnings per share to provide
investors an additional method for assessing operating income, earnings and
earnings per share from what it believes are its core manufacturing
operations. Included in this release are Condensed Consolidated Statements of
Operations as well as a reconciliation of the disclosed core financial
measures to the most directly comparable GAAP financial measures.

Company Conference Call Information: Jabil will hold a conference call to
discuss the second fiscal quarter 2013 earnings today at 4:30 p.m. ET live on
the Internet at http://www.jabil.com. The call will be recorded and archived
on the web at http://www.jabil.com. A taped replay of the conference call will
also be available March 20, 2013 at approximately 7:30 p.m. ET through
midnight on March 27, 2013. To access the replay, call (855) 859-2056 from
within the United States, or (404) 537-3406 outside the United States. The
pass code is: 20346794. An archived webcast of the conference call will be
available at http://www.jabil.com/investors/.

About Jabil

Jabil is an electronic product solutions company providing comprehensive
electronics design, manufacturing and aftermarket product management services
to global electronics and technology companies. Offering complete product
supply chain management from facilities in 30 countries, Jabil provides
comprehensive, individualized-focused solutions to customers in a broad range
of industries. Jabil common stock is traded on the New York Stock Exchange
under the symbol, “JBL”. Further information is available on Jabil’s  website:
jabil.com.

JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                              
                                                 February 28,
                                                 2013            August 31,

                                                 (Unaudited)     2012
ASSETS
Current assets:
Cash and cash equivalents                        $ 1,061,655     $ 1,217,256
Accounts receivable, net                           1,300,046       1,125,015
Inventories                                        2,496,618       2,268,949
Prepaid expenses and other current assets          997,647         989,326
Income taxes receivable                            11,312          10,949
Deferred income taxes                             29,995        27,833    
                                                                 
Total current assets                               5,897,273       5,639,328
                                                                 
Property, plant and equipment, net                 1,961,492       1,779,155
Goodwill and intangible assets, net                212,363         214,071
Deferred income taxes                              72,621          73,411
Other assets                                      103,892       97,176    
                                                                 
Total assets                                     $ 8,247,641    $ 7,803,141 
                                                                 
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and
long-term debt                                   $ 109,598       $ 18,031
Accounts payable                                   3,142,825       2,992,865
Accrued expenses                                   951,169         808,480
Income taxes payable                               20,130          35,665
Deferred income taxes                             4,866         3,955     
                                                                 
Total current liabilities                          4,228,588       3,858,996
                                                                 
Notes payable and long-term debt,
less current installments                          1,653,708       1,658,326
Other liabilities                                  86,042          85,714
Income tax liabilities                             75,968          68,525
Deferred income taxes                             25,345        24,245    
                                                                 
Total liabilities                                 6,069,651     5,695,806 
                                                                 
Commitments and contingencies

Equity:
Jabil Circuit, Inc. stockholders’ equity:
Preferred stock                                    —               —
Common stock                                       237             232
Additional paid-in capital                         1,800,595       1,752,847
Retained earnings                                  927,361         766,934
Accumulated other comprehensive income             118,624         106,275
Treasury stock, at cost                           (670,714  )    (521,231  )
                                                                 
Total Jabil Circuit, Inc. stockholders’ equity    2,176,103     2,105,057 
                                                                 
Noncontrolling interests                          1,887         2,278     
                                                                 
Total equity                                      2,177,990     2,107,335 
                                                                 
Total liabilities and equity                     $ 8,247,641    $ 7,803,141 

JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
                                                
                   Three months ended             Six months ended
                   February 28,   February 29,   February 28,   February 29,
                   2013           2012           2013           2012

Net revenue        $ 4,417,251     $  4,236,174   $ 9,054,269     $  8,562,943
Cost of revenue     4,092,724      3,914,010    8,379,147      7,900,769
                                                                  
Gross profit         324,527          322,164       675,122          662,174
                                                                  
Operating
expenses:
Selling, general     164,360          160,811       333,960          318,634
and administrative
Research and         7,655            6,264         14,918           12,535
development
Amortization of     3,471          4,871        6,922          9,945
intangibles
Operating income     149,041          150,218       319,322          321,060
                                                                  
Interest and        30,314         27,953       60,977         55,599
other, net
                                                                  
Income before        118,727          122,265       258,345          265,461
income tax
                                                                  
Income tax expense  30,638         24,020       64,672         53,435
                                                                  
Net income           88,089           98,245        193,673          212,026
                                                                  
Net (loss) income
attributable to
noncontrolling
interests, net of   (444      )     547          (707      )     1,456
income tax expense


                                                                  
Net income
attributable to    $ 88,533       $  97,698      $ 194,380      $  210,570
Jabil Circuit,
Inc.
                                                                  
Earnings per share
attributable to
the
stockholders of
Jabil Circuit,
Inc.:
Basic              $ 0.44         $  0.47        $ 0.96         $  1.02
Diluted            $ 0.43         $  0.46        $ 0.94         $  1.00
                                                                  
Weighted average
shares
outstanding:
Basic               202,458        207,287      203,393        206,337
Diluted             206,804        212,148      207,474        211,410

JABIL CIRCUIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
                                             
                                               Six months ended
                                               February 28,    February 29,
                                               2013             2012
Cash flows from operating activities:
Net income                                     $ 193,673        $ 212,026
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                    195,022          173,734
Recognition of stock-based compensation          36,513           39,734
expense
Other, net                                       5,519            (7,661     )
Changes in operating assets and liabilities,
exclusive of net assets acquired:
Accounts receivable                              (172,161   )     (1,024     )
Inventories                                      (222,645   )     (119,816   )
Prepaid expenses and other current assets        (6,349     )     (31,761    )
Other assets                                     (2,799     )     (1,719     )
Accounts payable and accrued expenses            288,004          (259,021   )
Income taxes payable                            (9,093     )    736        
                                                                
Net cash provided by operating activities       305,684        5,228      
                                                                
Cash flows from investing activities:
Cash paid for business and intangible asset      (5,862     )     (128,462   )
acquisitions, net of cash acquired
Acquisition of property, plant and equipment     (371,472   )     (180,506   )
Proceeds from sale of property, plant and        9,504            9,666
equipment
Investments in non-marketable equity             (2,942     )     —
securities
Cost of receivables acquired, net of cash       —              497        
collections
                                                                
Net cash used in investing activities           (370,772   )    (298,805   )
                                                                
Cash flows from financing activities:
Borrowings under debt agreements                 2,178,021        4,633,328
Payments towards debt agreements                 (2,091,043 )     (4,425,749 )
Dividends paid to stockholders                   (34,748    )     (32,148    )
Net proceeds from exercise of stock options
and issuance of common stock under employee      10,867           14,403
stock purchase plan
Payments to acquire treasury stock               (129,262   )     (39,964    )
Treasury stock minimum tax withholding           (20,221    )     (31,056    )
related to vesting of restricted stock
Excess tax benefit related to stock awards       330              750
Capital contribution to noncontrolling          316            —          
interest
                                                                
Net cash (used in) provided by financing        (85,740    )    119,564    
activities
                                                                
Effect of exchange rate changes on cash and     (4,773     )    (7,248     )
cash equivalents
                                                                
Net decrease in cash and cash equivalents        (155,601   )     (181,261   )
Cash and cash equivalents at beginning of       1,217,256      888,611    
period
                                                                
Cash and cash equivalents at end of period     $ 1,061,655     $ 707,350    

JABIL CIRCUIT, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
RECONCILIATION OF GAAP FINANCIAL RESULTS TO NON-GAAP MEASURES

(in thousands, except for per share data)
(Unaudited)
                                                
                     Three months ended            Six months ended
                     February 28,  February 29,   February 28,  February 29,
                     2013           2012           2013           2012

Operating income     $   149,041    $   150,218    $   319,322    $   321,060
(GAAP)
Amortization of          3,471          4,871          6,922          9,945
intangibles
Stock-based
compensation and        17,710        21,069        36,513        39,734
related charges
Core operating       $   170,222    $   176,158    $   362,757    $   370,739
income (Non-GAAP)
                                                                  
Net income
attributable to      $   88,533     $   97,698     $   194,380    $   210,570
Jabil Circuit,
Inc. (GAAP)
Amortization of
intangibles, net         3,333          4,858          6,651          9,919
of tax
Stock-based
compensation and        17,479        20,595        36,071        38,864
related charges,
net of tax
Core earnings        $   109,345    $   123,151    $   237,102    $   259,353
(Non-GAAP)
                                                                  
Earnings per
share: (GAAP)
Basic                $   0.44       $   0.47       $   0.96       $   1.02
Diluted              $   0.43       $   0.46       $   0.94       $   1.00
                                                                  
Core earnings per
share: (Non-GAAP)
Basic                $   0.54       $   0.59       $   1.17       $   1.26
Diluted              $   0.53       $   0.58       $   1.14       $   1.23
                                                                  
Weighted average
shares outstanding
used in the
calculations of
earnings per share
(GAAP and
Non-GAAP):
Basic                   202,458       207,287       203,393       206,337
Diluted                 206,804       212,148       207,474       211,410

                     JABIL CIRCUIT, INC. AND SUBSIDIARIES
                              SUPPLEMENTAL DATA
        RECONCILIATION OF GAAP FINANCIAL RESULTS TO NON-GAAP MEASURES
                                (in thousands)
                                 (Unaudited)

                CALCULATION OF RETURN ON INVESTED CAPITAL AND

                       CORE RETURN ON INVESTED CAPITAL

The Company calculates (1) "Return on Invested Capital" by annualizing its
"after-tax GAAP operating income" for its most recently-ended quarter and
dividing that by a two quarter average of its "net invested capital asset
base" and (2) "Core Return on Invested Capital" by annualizing its "after-tax
non-GAAP core operating income" for its most recently-ended quarter and
dividing that by a two quarter average of its "net invested capital asset
base."

The Company calculates: (1) its "after-tax GAAP operating income" by
subtracting a certain tax effect (the calculation of which is explained below)
from its GAAP operating income and (2) its "after-tax non-GAAP core operating
income" by subtracting a certain tax effect (the calculation of which is
explained below) from its non-GAAP core operating income. See elsewhere in
this earnings release for a reconciliation of the Company's non-GAAP core
operating income to its GAAP operating income.

The Company calculates "net invested capital asset base" as the sum of the
averages (the calculations of which are explained below) of (1) its
stockholders’ equity, (2) the non-current portion of its notes payable and
long term debt and (3) the current portion of its notes payable and long term
debt, less the average (the calculation of which is explained below) of its
cash and cash equivalents.

The following table reconciles (1) "Return on Invested Capital," as calculated
using "after-tax GAAP operating income" to (2) "Core Return on Invested
Capital," as calculated using "after-tax non-GAAP core operating income":

                                 Three months ended
                                   February 28,            February 29,
                                   2013                    2012            
      Numerator:
      Operating income (GAAP)      $   149,041              $   150,218
      Tax effect (1)                  (30,930      )          (24,340     )
      After-tax operating              118,111                  125,878
      income
                                   x4                       x4
      Annualized after-tax         $   472,444             $   503,512     
      operating income
                                                            
      Core operating income        $   170,222              $   176,158
      (Non-GAAP)
      Tax effect (2)                  (31,258      )          (24,777     )
      After-tax core                   138,964                  151,381
      operating income
                                   x4                       x4
      Annualized after-tax         $   555,856             $   605,524     
      core operating income
                                                            
      Denominator:
      Average total Jabil
      Circuit, Inc.                $   2,124,908            $   1,949,666
      stockholders’ equity
      (3)
      Average notes payable
      and long-term debt,              1,654,883                1,112,501
      less current
      installments (3)
      Average current
      installments of notes            59,624                   182,731
      payable and long-term
      debt (3)
      Average cash and cash           (1,045,845   )          (784,627    )
      equivalents (3)
      Net invested capital         $   2,793,570           $   2,460,271   
      asset base
                                                            
      Return on Invested               16.9         %           20.5        %
      Capital (GAAP)
      Adjustments noted above          3.0          %           4.1         %
      Core Return on Invested          19.9         %           24.6        %
      Capital (Non-GAAP)
                                                                            
(1)   This amount is calculated by adding the amount of income taxes
      attributable to its operating income (GAAP) and its interest expense.
      This amount is calculated by adding the amount of income taxes
(2)   attributable to its core operating income (Non-GAAP) and its interest
      expense.
      The average is based on the addition of the account balance at the end
(3)   of the most recently-ended quarter to the account balance at the end of
      the prior quarter and dividing by two.

Contact:

Jabil Circuit, Inc.
Investor & Media Contact:
Beth Walters, 727-803-3511
Senior Vice President, Investor Relations & Communications
beth_walters@jabil.com