Jabil Posts Fourth Quarter & Fiscal Year 2012 Results

FORWARD-LOOKING STATEMENT: This news release contains forward-looking statements, including those regarding our anticipated financial results for our fourth quarter of fiscal year 2012; our estimated operating cash flows in fiscal year 2013; potential repurchases of our common stock; our balance sheet, operations, employees and roster of customers heading into fiscal year 2013; the macroeconomic climate; our long-term goals and competitive position; our fiscal year 2013 earnings and our currently expected first quarter of fiscal year 2013 net revenue, core 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 fourth fiscal quarter of fiscal year 2012 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; 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 (including, with respect to the acquisition of the Italian and French sites, potential unknown liabilities and the costs associated with addressing potential reduced business activity at these sites); 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 August 31, 2011, subsequent Reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 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 fourth fiscal quarter 2012 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 September 25, 2012 at approximately 7:30 p.m. ET through midnight on October 2, 2012. To access the replay, call [phone] from within the United States, or [phone] outside the United States. The pass code is: 29777922. 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 29 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)
		August 31,				August 31,
		2012 (Unaudited)					2011
ASSETS
Current assets:
Cash and cash equivalents		$	1,217,256			$	888,611
Accounts receivable, net			1,125,015				1,100,926
Inventories			2,268,949				2,227,339
Prepaid expenses and other current assets			989,326				868,892
Income taxes receivable			10,949				33,855
Deferred income taxes			27,833				15,737
Total current assets			5,639,328				5,135,360
Property, plant and equipment, net			1,779,155				1,641,335
Goodwill and intangible assets, net			214,071				125,305
Deferred income taxes			73,411				74,989
Income taxes receivable			15,651				-
Other assets			81,525				80,951
Total assets		$	7,803,141			$	7,057,940
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and
long-term debt		$	18,031			$	74,160
Accounts payable			2,992,865				2,885,168
Accrued expenses			808,480				892,391
Income taxes payable			35,665				32,987
Deferred income taxes			3,955				5,182
Total current liabilities			3,858,996				3,889,888
Notes payable and long-term debt,
less current installments			1,658,326				1,112,594
Other liabilities			85,714				67,423
Income tax liability			68,525				88,451
Deferred income taxes			24,245				15,761
Total liabilities			5,695,806				5,174,117
Commitments and contingencies Equity:
Jabil Circuit, Inc. stockholders’ equity Common stock			232				225
Additional paid-in capital			1,752,847				1,649,431
Retained earnings			766,934				441,793
Accumulated other comprehensive income			106,275				194,706
Treasury stock, at cost			(521,231	)			(419,035	)
Total Jabil Circuit, Inc. stockholders’ equity			2,105,057				1,867,120
Noncontrolling interests			2,278				16,703
Total equity			2,107,335				1,883,823
Total liabilities and equity		$	7,803,141			$	7,057,940

JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
(Unaudited)
		Three months ended							Twelve months ended
		August 31,				August 31,			August 31,			August 31,
			2012				2011			2012			2011
Net revenue		$	4,338,080			$	4,280,295		$	17,151,941		$	16,518,827
Cost of revenue			4,020,532				3,951,092			15,842,896			15,264,257
Gross profit			317,548				329,203			1,309,045			1,254,570
Operating expenses:
Selling, general and administrative			163,070				152,204			644,452			590,572
Research and development			6,784				6,209			25,837			25,034
Amortization of intangibles			3,426				5,230			16,825			22,051
Restructuring and impairment charges			-				-			-			628
Settlement of receivables and related charges			-				-			-			13,607
Loss on disposal of subsidiaries			-				-			-			23,944
Operating income			144,268				165,560			621,931			578,734
Interest and other, net			29,804				24,527			113,031			97,547
Income before income tax			114,464				141,033			508,900			481,187
Income tax expense			31,999				25,492			112,811			98,229
Net income			82,465				115,541			396,089			382,958
Net income (loss) attributable to noncontrolling interests, net of income tax expense			(332	)			1,253			1,402			1,895
Net income attributable to Jabil Circuit, Inc.		$	82,797			$	114,288		$	394,687		$	381,063
Earnings per share attributable to the stockholders of Jabil Circuit, Inc.:
Basic		$	0.40			$	0.54		$	1.91		$	1.78
Diluted		$	0.39			$	0.52		$	1.87		$	1.73
Weighted average shares outstanding:
Basic			205,666				212,753			206,160			214,502
Diluted			210,847				219,494			211,181			220,719

JABIL CIRCUIT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
		Twelve months ended
		August 31, 2012				August 31, 2011
Cash flows from operating activities:
Net income		$	396,089			$	382,958
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			353,492				319,179
Recognition of stock-based compensation expense			81,405				76,230
Settlement of receivables and related charges			—				12,673
Loss on disposal of subsidiaries			—				23,944
Other, net			15,477				12,804
Change in operating assets and liabilities, exclusive of net assets acquired:
Accounts receivable			(22,626	)			48,232
Inventories			(53,268	)			(158,545	)
Prepaid expenses and other current assets			(141,526	)			(212,265	)
Other assets			(2,745	)			3,205
Accounts payable and accrued expenses			21,955				305,814
Income taxes payable			(14,027	)			13,780
Net cash provided by operating activities			634,226				828,009
Cash flows from investing activities:
Cash paid for business and intangible asset acquisitions, net of cash acquired			(125,098	)			3,985
Acquisition of property, plant and equipment			(497,697	)			(458,989	)
Proceeds from sale of property, plant and equipment			16,408				23,483
Proceeds from disposal of available for sale investments			—				5,800
Cost of receivables acquired, net of cash collections			517				(557	)
Net cash used in investing activities			(605,870	)			(426,278	)
Cash flows from financing activities:
Payments toward debt agreements			(8,748,420	)			(7,586,754	)
Borrowings under debt agreements			9,233,414				7,572,157
Dividends paid to stockholders			(65,240	)			(60,411	)
Dividends paid to noncontrolling interest			(333	)			—
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan			26,003				31,644
Payments to acquire treasury stock			(70,991	)			(200,226	)
Treasury stock minimum tax withholding related to vesting of restricted stock			(31,205	)			(9,763	)
Debt issuance costs			(6,254	)			(14,549	)
Excess tax benefit related to stock awards			885				180
Cash paid to purchase noncontrolling interest			(20,501	)			—
Net cash provided by (used in) financing activities			317,358				(267,722	)
Effect of exchange rate changes on cash and cash equivalents			(17,069	)			10,273
Net increase in cash and cash equivalents			328,645				144,282
Cash and cash equivalents at beginning of fiscal year			888,611				744,329
Cash and cash equivalents at end of fiscal year			1,217,256				888,611

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						Twelve months ended
		August 31,			August 31,			August 31,			August 31,
		2012			2011			2012			2011
Operating income (GAAP)		$	144,268		$	165,560		$	621,931		$	578,734
Amortization of intangibles			3,426			5,230			16,825			22,051
Distressed customer charge			5,865			-			16,014			-
Stock-based compensation and related charges			21,552			16,376			81,409			76,230
Restructuring and impairment charges			-			-			-			628
Loss on disposal of subsidiaries			-			-			-			23,944
Settlement of receivables and related charges			-			-			-			13,607
Core operating income (Non-GAAP)		$	175,111		$	187,166		$	736,179		$	715,194
Net income attributable to Jabil Circuit, Inc. (GAAP)		$	82,797		$	114,288		$	394,687		$	381,063
Amortization of intangibles, net of tax			3,327			5,213			16,425			21,998
Distressed customer charge, net of tax			5,865			-			16,014			-
Stock-based compensation and related charges, net of tax			21,329			16,790			79,985			75,068
Restructuring and impairment charges, net of tax			-			-			-			628
Loss on disposal of subsidiaries, net of tax			-			-			-			23,944
Settlement of receivables and related charges, net of tax			-			-			-			13,607
Core earnings (Non-GAAP)		$	113,318		$	136,291		$	507,111		$	516,308
Earnings per share: (GAAP)
Basic		$	0.40		$	0.54		$	1.91		$	1.78
Diluted		$	0.39		$	0.52		$	1.87		$	1.73
Core earnings per share: (Non-GAAP)
Basic		$	0.55		$	0.64		$	2.46		$	2.41
Diluted		$	0.54		$	0.62		$	2.40		$	2.34
Weighted average shares outstanding used in the calculations of earnings per share (GAAP and Non-GAAP):
Basic			205,666			212,753			206,160			214,502
Diluted			210,847			219,494			211,181			220,719

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."

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