01—Abstract
Summary
Summary of the 10-K filed November 28, 2000. Cited figures are marked; the original filing is the authoritative source.
Jabil Circuit, Inc. reported its annual results for the fiscal year ended August 31, 2000, in this Form 10-K.
The company is a provider of electronic manufacturing services (EMS) to original equipment manufacturers (OEMs) in the communications, computer peripherals, personal computer, automotive and consumer products industries. Net revenue for fiscal 2000 was $3.56 billiona, up from $2.24 billion in fiscal 1999, and net income was $145.6 million, up from $84.8 million. Diluted earnings per share were $0.78, compared with $0.49 a year earlier.
Gross margin narrowed to 10.1% from 11.0%, which the filing attributes to a higher content of material-based revenue and under-utilization of assets in certain international factories. Customer concentration remains significant: Cisco Systems accounted for 20% of net revenue, Dell Computer for 16%, Hewlett-Packard for 14% and Lucent Technologies for 10%. The company reported a backlog of approximately $1.2 billionb at August 31, 2000, compared with $688 million a year earlier.
Operating cash flow was $35.4 millionc, well below net income, as the filing attributes the gap to increases in accounts receivable ($257.8 million) and inventories ($255.6 million) that accompanied higher business volume. Capital expenditures were $333.1 million, and the company expects fiscal 2001 capital expenditures to exceed $400 million. Balance sheet strength improved substantially.
Stockholders' equity rose to $1.27 billiond from $577.8 million, largely due to a June 2000 offering of 13.0 million shares that generated net proceeds of about $525.8 million. Cash and cash equivalents were $337.6 million, and the company had no borrowings under its $500 million revolving credit facility at year end. The filing also notes that the company has never paid cash dividends, and that executive officers, directors and principal stockholders collectively own 22.4% of outstanding common stock.
02—Key points
Key Highlights
- Net revenue of $3.56 billion for fiscal 2000, up from $2.24 billion in fiscal 1999; net income of $145.6 million versus $84.8 million.
- Diluted EPS of $0.78 versus $0.49 in fiscal 1999; gross margin declined to 10.1% from 11.0%.
- Customer concentration: Cisco Systems (20%), Dell Computer (16%), Hewlett-Packard (14%) and Lucent Technologies (10%) of fiscal 2000 net revenue.
- Backlog of approximately $1.2 billion at August 31, 2000, compared with $688 million at August 31, 1999.
- Operating cash flow of $35.4 million, reflecting increases in accounts receivable and inventories tied to higher business levels.
- Capital expenditures of $333.1 million in fiscal 2000, with fiscal 2001 capital expenditures expected to exceed $400 million.
- Stockholders' equity of $1.27 billion, supported by a June 2000 offering of 13.0 million shares with net proceeds of about $525.8 million; no revolver borrowings outstanding at year end.
03—Questions
Frequently Asked Questions
What drove the revenue growth in fiscal 2000?
The filing says the increase in net revenue of 59.0% to $3.6 billion was primarily due to increased production of communications products. Foreign source revenue represented 43.5% of net revenue in fiscal 2000, up from 40.5% in fiscal 1999, attributed to increased production at international locations.
Why did gross margin decline?
Gross margin decreased to 10.1% in fiscal 2000 from 11.0% in fiscal 1999. The filing attributes this to a higher content of material-based revenue and under-utilization of assets in certain international factories.
How concentrated is the customer base?
The filing states that four largest customers accounted for approximately 60% of net revenue in fiscal 2000, and about 30 customers accounted for over 95%. The company says it expects to continue depending on a relatively small number of customers and that significant reductions in sales to any large customer would have a material adverse effect on results.
Why was operating cash flow much lower than net income?
Net cash provided by operating activities was $35.4 million against net income of $145.6 million. The filing attributes this to $257.8 million of increases in accounts receivable and $255.6 million of increases in inventories, partly offset by $307.3 million of increases in accounts payable and accrued expenses, all tied to higher business volume.
How is the company funding its expansion?
The company completed a June 2000 offering of 13.0 million shares, with net proceeds of about $525.4 million per the MD&A (about $525.8 million per the notes). At August 31, 2000, it had cash and short-term investments of $337.6 million and $500 million of unused revolving credit availability. It also established a $225 million receivables securitization program in August 2000, which had not been used as of year end.
04—Continue