01—Abstract
Summary
Summary of the 10-K filed October 21, 2010. Cited figures are marked; the original filing is the authoritative source.
Jabil Circuit, Inc. (now Jabil Inc.) reported fiscal year 2010 (ended August 31, 2010) net revenue of $13.41 billiona, up from $11.68 billion in fiscal 2009, and net income attributable to Jabil Circuit, Inc. of $168.8 million, compared with a net loss of $1.17 billion in fiscal 2009 that included a $1.02 billion goodwill impairment charge.
Gross profit rose to $1.00 billionb (7.5% of net revenue) from $718.8 million (6.2%), and operating income was $327.6 million versus an operating loss of $910.2 million a year earlier. Core operating income, a non-GAAP measure excluding stock-based compensation, amortization, restructuring, and disposal losses, rose to $490.9 million. Diluted EPS was $0.78 versus a $5.63 loss per share in fiscal 2009.
The company's five largest customers accounted for approximately 45% of net revenue, and foreign source revenue was 84.7% of net revenue. Cash and cash equivalents were $744.3 millionc at year end, and operating cash flow was $427.4 million, with capital expenditures of $398.4 million. Inventories rose to $2.09 billion from $1.23 billion, and accounts payable rose to $2.74 billion.
The company disposed of its Automotive subsidiary in October 2009 and its Italian and French operations in July 2010, and it reorganized its segments into DMS, E&I and HVS effective September 1, 2010. The company also disclosed an IRS Revenue Agent's Report proposing approximately $70.2 milliond of additional tax for fiscal years 2003 through 2005, which it intends to contest.
02—Key points
Key Highlights
- Net revenue rose 14.8% to $13.41 billion in fiscal 2010 from $11.68 billion, driven by increases in most sectors, led by a 38% increase in instrumentation and medical products.
- Net income attributable to Jabil Circuit, Inc. was $168.8 million ($0.78 diluted EPS), compared with a net loss of $1.17 billion in fiscal 2009 that included a $1.02 billion goodwill impairment.
- Gross profit increased to $1.00 billion (7.5% of net revenue) from $718.8 million (6.2%), and core operating income rose 98.9% to $490.9 million (non-GAAP).
- Customer concentration remains high: five largest customers were about 45% of net revenue, with Cisco Systems and Research in Motion each at 15%.
- Working capital build: inventories increased $969.3 million and accounts receivable increased $247.1 million, while accounts payable and accrued expenses rose $1.17 billion; operating cash flow was $427.4 million.
- Backlog was approximately $3.9 billion at August 31, 2010, versus $2.2 billion a year earlier.
- The IRS proposed adjustments for fiscal 2003 to 2005 that would result in approximately $70.2 million of additional income tax before utilization of later tax attributes; the company disagrees and plans to contest it.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Jabil kept $0.01.
- Revenue$13.41B100.0%
- Cost of revenue−$12.41B92.5%
- Gross profit$1.00B7.5%
- Operating costs−$676.6M5.0%
- Operating income$327.6M2.4%
- Interest, other & tax−$158.7M1.2%
- Net income$168.8M1.3%
Where FY2010 revenue went
$13.41B- Cost of revenue: $12.41B, 93% of revenue
- Net income: $168.8M, 1.3% of revenue
- R&D: $28.1M, 0.2% of revenue
- SG&A: $589.7M, 4.4% of revenue
- Interest, other & tax: $158.7M, 1.2% of revenue
Kept 1.3% as net incomeNet income $168.8M · 1.3%R&D $28.1M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed October 21, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $13.41B$11.68B | +14.8% |
| Cost of Revenue | $12.41B$10.97B | +13.1% |
| Gross Profit | $1.00B$718.82M | +39.7% |
| R&D Expenses | $28.09M$27.32M | +2.8% |
| SG&A Expenses | $589.74M$495.94M | +18.9% |
| Operating Income | $327.57M-$910.20M | +136.0% |
| Interest Expense | $79.17M$82.25M | −3.7% |
| Net Income | $168.84M-$1.17B | +114.5% |
| EPS (Basic) | $0.79$-5.63 | +114.0% |
| EPS (Diluted) | $0.78$-5.63 | +113.9% |
| Shares Outstanding (Basic) | 214.33M207.00M | +3.5% |
| Shares Outstanding (Diluted) | 217.60M207.00M | +5.1% |
05—Questions
Frequently Asked Questions
How did Jabil perform financially in fiscal 2010 compared with fiscal 2009?
Net revenue grew 14.8% to $13.41 billion, and net income attributable to Jabil Circuit, Inc. was $168.8 million, versus a net loss of $1.17 billion in fiscal 2009. The prior-year loss was driven by a $1.02 billion goodwill impairment charge, and operating income swung from a $910.2 million loss to $327.6 million of income.
How concentrated is Jabil's customer base?
Concentration is significant. The five largest customers accounted for approximately 45% of fiscal 2010 net revenue, and 48 customers accounted for approximately 90%. Cisco Systems and Research in Motion each represented 15% of net revenue, and the company states it expects to continue depending on a relatively small number of customers.
What were the main portfolio and restructuring actions during the year?
Jabil sold its Jabil Circuit Automotive, SAS subsidiary in October 2009, recording a $15.7 million loss, and sold its Italian and French operations in July 2010, recording an $8.9 million loss and providing a $25.0 million working capital loan that could lead to up to $28.5 million of additional charges. Under the 2009 Restructuring Plan, it expects total charges of approximately $64.0 million and annualized savings of about $55.0 million.
What is the company's liquidity position and key financing risk?
At August 31, 2010, Jabil had $744.3 million of cash and cash equivalents, $800.0 million of available revolving credit capacity, and total debt of $1.2 billion. Its $270.0 million asset-backed securitization program and $100.0 million foreign securitization program expire in March 2011, and the company may be unable to renew them.
06—Continue