CORRECTING and REPLACING Jabil Posts Third Quarter Results Strong Cash Flow from Operations CORRECTION...by Jabil Circuit, Inc. Business Wire ST. PETERSBURG, Fla. -- June 19, 2013 In the chart labeled "Fiscal Q4 2013 Guidance, including Nypro acquisition:" Net revenue should read: $4.45 billion to $4.65 billion (sted $4.55 billion to $4.65 billion). The corrected release reads: JABIL POSTS THIRD QUARTER RESULTS Today Jabil Circuit, Inc. (NYSE: JBL), announced preliminary, unaudited financial results for its third quarter of fiscal year 2013. For the quarter, Jabil’s revenue increased 5.1 percent to $4.5 billion, over the third quarter of fiscal year 2012. Jabil’s three reporting segments delivered the following revenue results for the company’s third fiscal quarter: *Diversified Manufacturing: $1.8 billion. *Enterprise& Infrastructure: $1.4 billion. *High Velocity: $1.3 billion. “We are pleased with our progress on the diversification of our business and the positive benefits it affords the company,” said Jabil’s Chief Executive Officer, Mark T. Mondello. “We expect this diversification to continue during our fourth fiscal quarter as we finalize our acquisition of Nypro, which is expected to close on the 1^st of July,” he said. Other highlights from the quarter included producing $504 million cash flow from operations. “Thanks to the dedication of our global workforce, we have generated $810 million cash flow from operations year to date and are on track to deliver $1 billion for our full fiscal year,” said Mondello. Generally accepted accounting principles (GAAP) operating income for the third quarter of fiscal year 2013 was $103.7 million and GAAP diluted earnings per share were 24 cents. The company said that $28 million in restructuring activity and a $26 million non-cash charge related to a note receivable and related charges impacted GAAP operating income. Core operating income results excluding amortization of intangibles, stock-based compensation, restructuring and related charges and impairment of notes receivable and related charges was $176.9 million and core diluted earnings per share was 56 cents. (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 related charges, impairment of notes receivable and related 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 related charges, impairment of notes receivable and related 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 Q3 2013 Q3 2012 Net revenue $4.5 billion $4.3 billion GAAP operating income $103.7 million $156.6 million GAAP net income $49.6 million $101.6 million GAAP diluted earnings per share $0.24 $0.48 GAAP return on invested capital 12.0% 19.1% Core operating income $176.9 million $190.3 million Core earnings $115.6 million $134.4 million Core diluted earnings per share $0.56 $0.64 Core return on invested capital 21.8% 24.0% Fiscal Q4 2013 Guidance, including Nypro acquisition: Net revenue $4.45 billion to $4.65 billion Core operating income $165 million to $185 million Core earnings per share $0.50 to $0.58 per diluted share GAAP operating income $63 million to $83 million GAAP earnings per share $0.04 to $0.12 per diluted share Jabil indicated it expects to incur Nypro-related acquisition costs and purchase accounting adjustments of $10 million during its fourth fiscal quarter. This sum is excluded from the above core operating guidance. (GAAP earnings per share for the fourth quarter of fiscal 2013 are currently estimated to include $0.02 per share for amortization of intangibles, $0.08 per share for stock-based compensation, $0.32 per share for restructuring and related charges and $.04 for acquisition related charges and adjustments.) Year over Year Segment Revenue Guidance: *Diversified Manufacturing Services to remain consistent. *Enterprise& Infrastructure to remain consistent. *High Velocity to increase fifteen percent. In addition to the segment guidance, Jabil announced its intention to realign its global operations to more appropriately reflect current market conditions and customer needs. The company indicated that they began consultation with employees during the third fiscal quarter. Jabil management did not provide specific locations under consideration out of respect for employees, their families and their representatives, and statutory and consultation periods required. The company currently estimates that the realignment could result in approximately $188 million of charges, including the $28 million of charges incurred during the company’s third quarter. It is currently estimated that $60 to $70 million will be recorded in Jabil’s fourth fiscal quarter of 2013 and the balance during its fiscal years 2014 and 2015. Jabil estimates that the majority of the $140 million cash associated with these actions will be used in fiscal 2014. FORWARD LOOKING STATEMENT:This news release contains forward-looking statements, including those regarding our anticipated financial results for our third quarter of fiscal year 2013; the anticipated closing date of the Nypro acquisition; the continuation of diversification during the fourth fiscal quarter as the Nypro acquisition is finalized; and our currently expected fourth quarter of fiscal year 2013 net revenue (including that of our segments), 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 third 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 diversify our business during the fourth fiscal quarter; 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 related charges, impairment of notes receivable and related 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 third 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 June 19, 2013 at approximately 7:30 p.m. ET through midnight on June 26, 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: 91127885. 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) May 31, 2013 August 31, (Unaudited) 2012 ASSETS Current assets: Cash and cash equivalents $ 1,351,726 $ 1,217,256 Accounts receivable, net 1,008,106 1,125,015 Inventories 2,356,304 2,268,949 Prepaid expenses and other current assets 1,044,557 989,326 Income taxes receivable 11,988 10,949 Deferred income taxes 35,508 27,833 Total current assets 5,808,189 5,639,328 Property, plant and equipment, net 1,939,848 1,779,155 Goodwill and intangible assets, net 214,382 214,071 Deferred income taxes 95,734 73,411 Other assets 75,331 97,176 Total assets $ 8,133,484 $ 7,803,141 LIABILITIES AND EQUITY Current liabilities: Current installments of notes payable and $ 9,459 $ 18,031 long-term debt Accounts payable 3,085,848 2,992,865 Accrued expenses 954,488 808,480 Income taxes payable 33,178 35,665 Deferred income taxes 6,600 3,955 Total current liabilities 4,089,573 3,858,996 Notes payable and long-term debt, less current 1,651,359 1,658,326 installments Other liabilities 78,265 85,714 Income tax liabilities 81,558 68,525 Deferred income taxes 25,710 24,245 Total liabilities 5,926,465 5,695,806 Commitments and contingencies Equity: Jabil Circuit, Inc. stockholders’ equity: Preferred stock — — Common stock 237 232 Additional paid-in capital 1,816,335 1,752,847 Retained earnings 961,160 766,934 Accumulated other comprehensive income 98,616 106,275 Treasury stock, at cost (670,761 ) (521,231 ) Total Jabil Circuit, Inc. stockholders’ equity 2,205,587 2,105,057 Noncontrolling interests 1,432 2,278 Total equity 2,207,019 2,107,335 Total liabilities and equity $ 8,133,484 $ 7,803,141 JABIL CIRCUIT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) (Unaudited) Three months ended Nine months ended May 31, May 31, May 31, May 31, 2013 2012 2013 2012 Net revenue $ 4,467,767 $ 4,250,918 $ 13,522,036 $ 12,813,861 Cost of revenue 4,135,272 3,921,595 12,514,419 11,822,364 Gross profit 332,495 329,323 1,007,617 991,497 Operating expenses: Selling, general and 164,813 162,748 498,773 481,382 administrative Research and 6,475 6,518 21,393 19,053 development Amortization of 3,472 3,454 10,394 13,399 intangibles Restructuring and related 28,392 — 28,392 — charges Impairment of notes receivable 25,597 — 25,597 — and related charges Operating income 103,746 156,603 423,068 477,663 Interest and 31,850 27,628 92,827 83,227 other, net Income before 71,896 128,975 330,241 394,436 income tax Income tax 22,268 27,377 86,940 80,812 expense Net income 49,628 101,598 243,301 313,624 Net (loss) income attributable to noncontrolling (455 ) 278 (1,162 ) 1,734 interests, net of income tax expense Net income attributable to $ 50,083 $ 101,320 $ 244,463 $ 311,890 Jabil Circuit, Inc. Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: Basic $ 0.25 $ 0.49 $ 1.20 $ 1.51 Diluted $ 0.24 $ 0.48 $ 1.18 $ 1.47 Weighted average shares outstanding: Basic 202,648 206,298 203,142 206,326 Diluted 207,569 211,541 207,540 211,749 JABIL CIRCUIT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine months ended May 31, May 31, 2013 2012 Cash flows from operating activities: Net income $ 243,301 $ 313,624 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 295,710 262,186 Recognition of stock-based compensation 52,201 59,857 expense Deferred income taxes (28,635 ) (10,573 ) Impairment of notes receivable and related 25,597 — charges Other, net 6,708 17,532 Changes in operating assets and liabilities, exclusive of net assets acquired: Accounts receivable 113,134 (22,634 ) Inventories (85,855 ) (162,076 ) Prepaid expenses and other current assets (59,259 ) (201,715 ) Other assets (1,497 ) (3,302 ) Accounts payable and accrued expenses 239,209 (52,439 ) Income taxes payable 9,067 (8,933 ) Net cash provided by operating activities 809,681 191,527 Cash flows from investing activities: Acquisition of property, plant and equipment (452,993 ) (291,792 ) Proceeds from sale of property, plant and 11,274 12,555 equipment Cash paid for business and intangible asset (9,662 ) (125,098 ) acquisitions, net of cash acquired Cost of receivables acquired, net of cash — 517 collections Investments in non-marketable equity (2,942 ) — securities Net cash used in investing activities (454,323 ) (403,818 ) Cash flows from financing activities: Borrowings under debt agreements 3,169,401 7,033,854 Payments towards debt agreements (3,184,810 ) (6,783,726 ) Payments to acquire treasury stock (129,262 ) (70,991 ) Dividends paid to stockholders (51,743 ) (48,716 ) Dividends paid to noncontrolling interest — (333 ) Net proceeds from exercise of stock options and issuance of common stock under employee 10,899 18,576 stock purchase plan Treasury stock minimum tax withholding (20,268 ) (31,181 ) related to vesting of restricted stock Debt issuance costs — (5,014 ) Excess tax benefit related to stock awards 330 750 Capital contribution to noncontrolling 316 — interest Cash paid to purchase noncontrolling — (20,501 ) interest Net cash (used in) provided by financing (205,137 ) 92,718 activities Effect of exchange rate changes on cash and (15,751 ) (26,909 ) cash equivalents Net increase (decrease) in cash and cash 134,470 (146,482 ) equivalents Cash and cash equivalents at beginning of 1,217,256 888,611 period Cash and cash equivalents at end of period $ 1,351,726 $ 742,129 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 Nine months ended May 31, May 31, May 31, May 31, 2013 2012 2013 2012 Operating income (GAAP) $ 103,746 $ 156,603 $ 423,068 $ 477,663 Amortization of intangibles 3,472 3,454 10,394 13,399 Distressed customer charge — 10,149 — 10,149 Stock-based compensation and 15,688 20,123 52,201 59,857 related charges Restructuring and related 28,392 — 28,392 — charges Impairment of notes receivable and related 25,597 — 25,597 — charges Core operating income $ 176,895 $ 190,329 $ 539,652 $ 561,068 (Non-GAAP) Net income attributable to $ 50,083 $ 101,320 $ 244,463 $ 311,890 Jabil Circuit, Inc. (GAAP) Amortization of intangibles, 3,186 3,180 9,837 13,099 net of tax Distressed customer charge — 10,149 — 10,149 Stock-based compensation and 16,042 19,792 52,115 58,656 related charges, net of tax Restructuring and related 26,574 — 26,574 — charges, net of tax Impairment of notes receivable and related 19,747 — 19,747 — charges, net of tax Core earnings (Non-GAAP) $ 115,632 $ 134,441 $ 352,736 $ 393,794 Earnings per share: (GAAP) Basic $ 0.25 $ 0.49 $ 1.20 $ 1.51 Diluted $ 0.24 $ 0.48 $ 1.18 $ 1.47 Core earnings per share: (Non-GAAP) Basic $ 0.57 $ 0.65 $ 1.74 $ 1.91 Diluted $ 0.56 $ 0.64 $ 1.70 $ 1.86 Weighted average shares outstanding used in the calculations of earnings per share (GAAP and Non-GAAP): Basic 202,648 206,298 203,142 206,326 Diluted 207,569 211,541 207,540 211,749 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) its "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) its "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 May 31, May 31, 2013 2012 Numerator: Operating income (GAAP) $ 103,746 $ 156,603 Tax effect (1) (22,620 ) (27,625 ) After-tax operating income 81,126 128,978 x4 x4 Annualized after-tax operating income $ 324,504 $ 515,912 Core operating income (Non-GAAP) $ 176,895 $ 190,329 Tax effect (2) (30,101 ) (28,183 ) After-tax core operating income 146,794 162,146 x4 x4 Annualized after-tax core operating income $ 587,176 $ 648,584 Denominator: Average total Jabil Circuit, Inc. $ 2,190,845 $ 2,007,199 stockholders’ equity (3) Average notes payable and long-term debt, 1,652,534 1,126,315 less current installments (3) Average current installments of notes payable 59,529 289,010 and long-term debt (3) Average cash and cash equivalents (3) (1,206,691 ) (724,740 ) Net invested capital asset base $ 2,696,217 $ 2,697,784 Return on Invested Capital (GAAP) 12.0 % 19.1 % Adjustments noted above 9.8 % 4.9 % Core Return on Invested Capital (Non-GAAP) 21.8 % 24.0 % (1) This amount is calculated by adding the amount of income taxes attributable to its operating income (GAAP) and its interest expense. (2) This amount is calculated by adding the amount of income taxes attributable to its core operating income (Non-GAAP) and its interest expense. (3) The average is based on the addition of the account balance at the end 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 firstname.lastname@example.org
CORRECTING and REPLACING Jabil Posts Third Quarter Results
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