01—Abstract
Summary
Summary of the 10-K filed October 27, 2011. Cited figures are marked; the original filing is the authoritative source.
Jabil Circuit, Inc. (now Jabil Inc.) reported fiscal year 2011 (ended August 31, 2011) net revenue of $16.52 billiona, up 23.2% from $13.41 billion in fiscal 2010, with net income attributable to Jabil Circuit, Inc. of $381.1 million, or $1.73 per diluted share, compared with $168.8 million, or $0.78 per diluted share, a year earlier.
Gross profit rose to $1.25 billionb (7.6% of net revenue) from $1.00 billion (7.5%), and operating income increased to $578.7 million from $327.6 million. The company attributes the growth mainly to increased revenue from existing customers, including new program wins, and to its DMS segment, which typically carries higher margins than E&I and HVS. Core earnings, a non-U.S. GAAP measure, were $516.3 million, up 56.3%.
Cash flow and balance sheet activity were significant during the year. Net cash provided by operating activities was $828.0 millionc, and capital expenditures were $459.0 million. Cash and cash equivalents stood at $888.6 million at year end, and notes payable and long-term debt totaled $1.19 billion.
In fiscal 2011 the company issued $400.0 milliond of 5.625% Senior Notes due 2020, entered a $1.0 billion Amended and Restated Credit Facility, repurchased 11,520,137 shares for $200.2 million under a $200.0 million authorization, and paid $60.4 million in dividends. Customer concentration remains high: the five largest customers accounted for approximately 47% of net revenue. The filing also discloses a proposed IRS adjustment that could add approximately $69.3 million in tax for fiscal years 2003 through 2005, which the company is contesting and believes will not have a material effect on its financial position or liquidity.
The filing describes a company with a substantial international footprint, with 86.0% of fiscal 2011 net revenue from international operations. It also reports the acquisition of the Competence Sites in France and Italy, previously divested, and a pending agreement to acquire Telmar Network Technology, Inc., expected to close in the first half of fiscal 2012.
02—Key points
Key Highlights
- Net revenue rose 23.2% to $16.52 billion in fiscal 2011, from $13.41 billion in fiscal 2010.
- Net income attributable to Jabil Circuit, Inc. was $381.1 million, or $1.73 per diluted share, versus $168.8 million, or $0.78 per diluted share, in fiscal 2010.
- Gross profit increased to $1.25 billion (7.6% of net revenue) from $1.00 billion (7.5%), and operating income rose to $578.7 million from $327.6 million.
- Net cash from operating activities was $828.0 million, and capital expenditures were $459.0 million.
- Cash and cash equivalents were $888.6 million at August 31, 2011, against total notes payable and long-term debt of $1.19 billion.
- The five largest customers accounted for approximately 47% of net revenue, and 86.0% of net revenue came from international operations.
- The company issued $400.0 million of 5.625% Senior Notes due 2020, repurchased 11,520,137 shares for $200.2 million, and paid $60.4 million in dividends.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Jabil kept $0.02.
- Revenue$16.52B100.0%
- Cost of revenue−$15.26B92.4%
- Gross profit$1.25B7.6%
- Operating costs−$675.8M4.1%
- Operating income$578.7M3.5%
- Interest, other & tax−$197.7M1.2%
- Net income$381.1M2.3%
Where FY2011 revenue went
$16.52B- Cost of revenue: $15.26B, 92% of revenue
- Net income: $381.1M, 2.3% of revenue
- R&D: $25.0M, 0.2% of revenue
- SG&A: $590.6M, 3.6% of revenue
- Interest, other & tax: $197.7M, 1.2% of revenue
Kept 2.3% as net incomeNet income $381.1M · 2.3%R&D $25.0M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed October 27, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $16.52B$13.41B | +23.2% |
| Cost of Revenue | $15.26B$12.41B | +23.0% |
| Gross Profit | $1.25B$1.00B | +24.9% |
| R&D Expenses | $25.03M$28.09M | −10.9% |
| SG&A Expenses | $590.57M$589.74M | +0.1% |
| Operating Income | $578.73M$327.57M | +76.7% |
| Interest Expense | $97.69M$79.17M | +23.4% |
| Net Income | $381.06M$168.84M | +125.7% |
| EPS (Basic) | $1.78$0.79 | +125.3% |
| EPS (Diluted) | $1.73$0.78 | +121.8% |
| Shares Outstanding (Basic) | 214.50M214.33M | +0.1% |
| Shares Outstanding (Diluted) | 220.72M217.60M | +1.4% |
05—Questions
Frequently Asked Questions
How did Jabil perform financially in fiscal 2011?
Net revenue grew 23.2% to $16.52 billion, and net income attributable to Jabil Circuit, Inc. was $381.1 million, or $1.73 per diluted share, compared with $168.8 million, or $0.78 per diluted share, in fiscal 2010. The filing attributes the increase mainly to higher revenue from existing customers, including new program wins.
How concentrated is Jabil's customer base?
The filing states that the five largest customers accounted for approximately 47% of fiscal 2011 net revenue and that 52 customers accounted for approximately 90%. Cisco Systems, Inc. (13%) and Research in Motion Limited (15%) each represented 10% or more of net revenue. The filing notes that a significant reduction in sales to any of these customers could have a material adverse effect on results.
What were the company's main capital allocation actions in fiscal 2011?
Jabil repurchased 11,520,137 shares for $200.2 million under a $200.0 million authorization approved in June 2011, paid $60.4 million in dividends, and made capital expenditures of $459.0 million. It also issued $400.0 million of 5.625% Senior Notes due 2020 and entered a $1.0 billion Amended and Restated Credit Facility.
What tax matter does the filing disclose?
The IRS issued a Revenue Agent's Report on April 30, 2010 proposing adjustments for fiscal years 2003 through 2005. If the IRS prevails, the company's income tax payment would be approximately an additional $69.3 million before utilization of tax attributes, plus interest and penalties. Jabil disagrees with the proposed adjustments, is contesting them, and believes the resolution will not have a material effect on its financial position or liquidity.
What acquisitions and divestitures are described?
Jabil reacquired the Competence Sites in France and Italy in the second quarter of fiscal 2011, after selling them in fiscal 2010. The filing also reports a pending agreement to acquire Telmar Network Technology, Inc., a provider of reverse logistics, repair and spare parts management services, with completion expected in the first half of fiscal 2012 subject to regulatory clearance.
06—Continue