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Jabil Annual Report, Year Ended Aug 31, 2005

Filing Date
Filed October 28, 2005
Period End
August 31, 2005
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 October 28, 2005. Cited figures are marked; the original filing is the authoritative source.

Jabil Circuit, Inc. reported fiscal year 2005 (ended August 31, 2005) net revenue of $7.52 billiona, up 20.3% from $6.25 billion in fiscal 2004, with net income of $231.8 million, or $1.12 per diluted share, compared with $166.9 million, or $0.81 per diluted share, a year earlier.

Gross profit was $628.5 millionb (8.3% of net revenue, down from 8.6%), and operating income rose to $287.4 million from $216.0 million. The filing attributes the revenue growth to stronger demand from existing programs and organic growth from new and existing customers, with the consumer and instrumentation and medical sectors growing fastest. Backlog was approximately $2.3 billion at August 31, 2005, up from $1.8 billion a year earlier.

The balance sheet strengthened, with cash and cash equivalents of $796.1 millionc, total assets of $4.08 billion, and stockholders' equity of $2.14 billion at year-end. Operating cash flow was $590.0 million, while capital expenditures were $256.8 million and the company spent $216.1 million net on acquisitions, principally the Philips Kwidzyn operations and Varian Electronics Manufacturing (VEM). Total notes payable and long-term debt were $327.3 million, largely the $300.0 million 5.875% Senior Notes due 2010.

The company also established a $500.0 milliond unsecured revolving credit facility in May 2005 and expects capital expenditures of $250.0 million to $350.0 million over the next twelve months. The filing highlights concentration risk: five largest customers accounted for approximately 50% of net revenue, and Philips, Nokia and HP represented about 14%, 13% and 10%, respectively.

Foreign-source revenue was 83.8% of net revenue. Management also flagged that adoption of SFAS 123R beginning in fiscal 2006 will materially affect results, and that the company is evaluating a potential acquisition of an electronics manufacturing services provider in Southern Asia.

02—Key points

Key Highlights

  1. Net revenue of $7.52 billion in fiscal 2005, up 20.3% from $6.25 billion in fiscal 2004
  2. Net income of $231.8 million, or $1.12 per diluted share, versus $166.9 million, or $0.81 per diluted share, in fiscal 2004
  3. Gross margin narrowed to 8.3% of net revenue from 8.6%, while operating income rose to $287.4 million from $216.0 million
  4. Backlog of approximately $2.3 billion at August 31, 2005, compared with $1.8 billion at August 31, 2004
  5. Cash and cash equivalents of $796.1 million; operating cash flow of $590.0 million; $500.0 million unsecured revolver undrawn at year-end
  6. Customer concentration: five largest customers about 50% of net revenue; Philips 14%, Nokia 13%, HP 10%
  7. Stock-based compensation accounting changes under SFAS 123R take effect in fiscal 2006 and are expected to materially affect results; options vesting was accelerated in January 2005 to avoid roughly $96.0 million of future expense

03—Questions

Frequently Asked Questions

  1. How did Jabil perform financially in fiscal 2005?

    Net revenue rose 20.3% to $7.52 billion, and net income increased to $231.8 million, or $1.12 per diluted share, from $166.9 million, or $0.81 per diluted share, in fiscal 2004. Operating income grew to $287.4 million from $216.0 million, although gross margin slipped to 8.3% from 8.6%.

  2. How dependent is Jabil on its largest customers?

    The filing states that five largest customers accounted for approximately 50% of net revenue in fiscal 2005, and 40 customers accounted for about 90%. Philips, Nokia and HP accounted for approximately 14%, 13% and 10%, respectively. The company warns that a significant reduction in sales to any major customer would have a material adverse effect on results.

  3. What acquisitions and investments did Jabil make in fiscal 2005?

    Jabil acquired certain television assembly operations of Philips in Kwidzyn, Poland, for about $20.1 million, and the electronics manufacturing business of Varian, Inc. (VEM) for about $202.1 million in cash on March 11, 2005. It also entered into a loan agreement with an unrelated EMS provider, and in a subsequent event disclosed that it may exercise a purchase option for that provider as negotiations continue.

  4. What is Jabil's financial position and debt profile?

    At August 31, 2005, Jabil had cash and cash equivalents of $796.1 million, total notes payable and long-term debt of $327.3 million, and stockholders' equity of $2.14 billion. Its main debt is $300.0 million of 5.875% Senior Notes due July 2010, and the $500.0 million Unsecured Revolver had no borrowings outstanding.

  5. What are the key risks and upcoming changes investors should watch?

    The filing highlights reliance on a small number of customers, exposure to foreign operations (83.8% of revenue from foreign sources), currency fluctuations, and component supply shortages. It also notes that SFAS 123R will materially affect results beginning in the first quarter of fiscal 2006, and that the company expects capital expenditures of $250.0 million to $350.0 million over the next twelve months.

04—Continue

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