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Jabil Annual Report, Year Ended Aug 31, 2003

Filing Date
Filed November 12, 2003
Period End
August 31, 2003
Security
JBL
In the record · 2016–202610-K1110-Q338-K104

JBL filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 104 current reports (8-K) between 2016 and 2026.

  1. Restructuring8-K · Mar ’17Mar ’17
  2. FY2018 annual report10-K · Oct ’18Oct ’18
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed November 12, 2003. Cited figures are marked; the original filing is the authoritative source.

Jabil Circuit, Inc. reported fiscal 2003 (year ended August 31, 2003) net revenue of $4.73 billiona, up from $3.55 billion in fiscal 2002, and net income of $43.0 million, compared with $34.7 million a year earlier.

Gross profit was $435.5 millionb, or 9.2% of net revenue. Results were weighed down by $85.3 million of restructuring and impairment charges, $36.9 million of intangible amortization, and $15.3 million of acquisition-related charges. The company recorded an income tax benefit of $6.1 million, an effective rate of (16.4)%, which it attributes to restructuring charges booked in lower-tax jurisdictions and to tax holidays in Malaysia, China and Hungary.

Growth came largely from acquisitions, most notably the purchase of certain Philips operations for approximately $198.3 millionc, along with sites bought from Lucent, Quantum, NEC, Seagate and others. Foreign source revenue rose to 80.7% of net revenue from 60.6% a year earlier. Customer concentration remains high: Cisco, Philips and HP accounted for approximately 16%, 15% and 11% of net revenue, and five customers represented about 53%.

Order backlog at August 31, 2003 was approximately $1.3 billiond, compared with $699.8 million a year earlier. The balance sheet strengthened in liquidity terms. Cash and cash equivalents were $699.7 million and total debt was $644.3 million, including a $300.0 million 5.875% senior note issued in July 2003 and $345.0 million of 1.75% convertible notes that are classified as current because holders may require repurchase in May 2004.

Net cash from operations was $263.5 million, capital expenditures were $117.2 million, and the company expects capital expenditures of about $80 million over the next twelve months. Management stated that Jabil has never paid cash dividends.

02—Key points

Key Highlights

  1. Net revenue rose to $4.73 billion in fiscal 2003 from $3.55 billion in fiscal 2002, driven by acquisitions and new customers.
  2. Net income was $43.0 million, or $0.21 diluted EPS, versus $34.7 million, or $0.17 diluted EPS, in fiscal 2002.
  3. Restructuring and impairment charges totaled $85.3 million, and the company eliminated approximately 2,300 employees under the program.
  4. Foreign source revenue reached 80.7% of net revenue, up from 60.6% in fiscal 2002.
  5. Cash and cash equivalents were $699.7 million at year end, against total notes payable and long-term debt of $644.3 million.
  6. Cisco (16%), Philips (15%) and HP (11%) accounted for a large share of net revenue, and five customers represented about 53%.
  7. Backlog was approximately $1.3 billion at August 31, 2003, up from $699.8 million a year earlier.

03—Questions

Frequently Asked Questions

  1. Why was the income tax result a benefit in fiscal 2003?

    The company recorded an income tax benefit of $6.1 million, an effective rate of (16.4)%. The filing attributes this to the mix of tax rates in the jurisdictions where restructuring charges were incurred, and to a mix of domestic and international income. Tax holidays for sites in Malaysia, China and Hungary, which expire at various dates through 2010, also lower the effective rate.

  2. How much debt is coming due, and how is it financed?

    Notes payable and long-term debt total $644.3 million, of which $347.2 million is classified as current. That includes $345.0 million of 1.75% convertible notes, which holders may require the company to repurchase on May 15, 2004, at par plus accrued interest. The company may pay in cash or common stock valued at 95% of market price. The company also has an undrawn $400.0 million Amended Revolver that expires July 14, 2006.

  3. What drove the growth in net revenue?

    The filing attributes the increase mainly to a 218% increase in consumer products production, largely from the Philips acquisition, along with 80% growth in instrumentation and medical products, 72% growth in automotive and 54% growth in computing and storage products. Telecommunications production declined 18%. The company also cites new customers, acquisitions and organic growth.

  4. How concentrated is the customer base?

    The company depends on a small number of customers. In fiscal 2003, five customers accounted for approximately 53% of net revenue and 32 customers accounted for over 95%. Cisco, Philips and HP accounted for approximately 16%, 15% and 11%. The filing warns that a significant reduction in sales to any major customer would have a material adverse effect on results.

04—Continue

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