01—Abstract
Summary
Summary of the 10-K filed October 25, 2012. Cited figures are marked; the original filing is the authoritative source.
Jabil Circuit, Inc. reported net revenue of $17.15 billiona for fiscal year ended August 31, 2012, up from $16.52 billion in fiscal 2011, driven mainly by increased revenue from existing customers and new program wins.
Gross profit was $1.31 billionb (7.6% of net revenue, flat versus fiscal 2011), and operating income rose to $621.9 million from $578.7 million. Net income attributable to Jabil Circuit, Inc. was $394.7 million, or $1.87 diluted EPS, compared with $381.1 million, or $1.73 diluted, in fiscal 2011. Core earnings, a non-U.S. GAAP measure, decreased to $507.1 million from $516.3 million.
The company operates through three segments: Diversified Manufacturing Services (DMS, 44%c of net revenue in fiscal 2012), Enterprise & Infrastructure (E&I, 29%), and High Velocity Systems (HVS, 27%). Customer concentration remains significant: the five largest customers accounted for approximately 48% of net revenue, and 54 customers accounted for approximately 90%. International operations generated 85.6% of net revenue.
Year-end backlog was approximately $5.1 billiond, compared with $4.3 billion a year earlier. On the balance sheet, cash and cash equivalents were $1.2 billion and total notes payable and long-term debt was $1.7 billion, up from $1.2 billion, reflecting a $500.0 million 4.700% Senior Notes issuance in the fourth quarter. Operating cash flow was $634.2 million and capital expenditures were $497.7 million.
The company repurchased $71.0 million of shares during the year, paid $65.2 million in dividends, and authorized a further $100.0 million buyback in September 2012. The filing also discloses an ongoing IRS dispute over fiscal 2003 to 2008 tax years, with a proposed additional payment of approximately $69.3 million for fiscal 2003 to 2005, which management believes will not have a material effect.
02—Key points
Key Highlights
- Net revenue rose 3.8% to $17.15 billion in fiscal 2012, and net income attributable to Jabil Circuit, Inc. increased to $394.7 million ($1.87 diluted EPS) from $381.1 million.
- Gross profit was flat at $1.31 billion (7.6% of net revenue), while operating income increased to $621.9 million from $578.7 million.
- DMS segment grew to 44% of net revenue from 36% in fiscal 2011, while HVS declined to 27% from 32%.
- Customer concentration is high: the five largest customers accounted for approximately 48% of net revenue, and Apple Inc. became a 13% customer.
- Backlog stood at approximately $5.1 billion at August 31, 2012, up from approximately $4.3 billion a year earlier.
- Total notes payable and long-term debt rose to $1.7 billion after issuing $500.0 million of 4.700% Senior Notes due 2022; cash and cash equivalents were $1.2 billion.
- Operating cash flow was $634.2 million, against capital expenditures of $497.7 million; the Board authorized an additional $100.0 million share repurchase in September 2012.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Jabil kept $0.02.
- Revenue$16.14B100.0%
- Cost of revenue−$14.98B92.8%
- Gross profit$1.16B7.2%
- Operating costs−$611.4M3.8%
- Operating income$549.6M3.4%
- Interest, other & tax−$154.9M1.0%
- Net income$394.7M2.4%
Where FY2012 revenue went
$16.14B- Cost of revenue: $14.98B, 93% of revenue
- Net income: $394.7M, 2.4% of revenue
- R&D: $25.8M, 0.2% of revenue
- SG&A: $572.6M, 3.5% of revenue
- Interest, other & tax: $154.9M, 1.0% of revenue
Kept 2.4% as net incomeNet income $394.7M · 2.4%R&D $25.8M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed October 25, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $16.14B$16.52B | −2.3% |
| Cost of Revenue | $14.98B$15.26B | −1.9% |
| Gross Profit | $1.16B$1.25B | −7.5% |
| R&D Expenses | $25.84M$25.03M | +3.2% |
| SG&A Expenses | $572.64M$590.57M | −3.0% |
| Operating Income | $549.57M$578.73M | −5.0% |
| Interest Expense | $106.09M$97.69M | +8.6% |
| Net Income | $394.69M$381.06M | +3.6% |
| EPS (Basic) | $1.91$1.78 | +7.3% |
| EPS (Diluted) | $1.87$1.73 | +8.1% |
| Shares Outstanding (Basic) | 206.16M214.50M | −3.9% |
| Shares Outstanding (Diluted) | 211.18M220.72M | −4.3% |
05—Questions
Frequently Asked Questions
How did Jabil perform financially in fiscal 2012?
Net revenue increased 3.8% to $17.15 billion, operating income rose to $621.9 million from $578.7 million, and net income attributable to Jabil Circuit, Inc. was $394.7 million, or $1.87 per diluted share, compared with $1.73 in fiscal 2011. Gross margin was flat at 7.6% of net revenue.
How concentrated is Jabil's customer base?
The company depends on a relatively small number of customers. The five largest customers accounted for approximately 48% of fiscal 2012 net revenue, and 54 customers accounted for approximately 90%. Apple Inc. represented 13% of net revenue, Cisco Systems 10%, and Research in Motion 10%.
What is the company's debt and liquidity position?
At August 31, 2012, total notes payable and long-term debt was $1.7 billion, and cash and cash equivalents were $1.2 billion. The company had $1.3 billion in available liquidity under its revolving credit facilities, plus up to $184.3 million under its receivables securitization and uncommitted sale programs. The company issued $500.0 million of 4.700% Senior Notes due 2022 in the fourth quarter.
What are the main unresolved tax matters?
The IRS proposed adjustments for fiscal years 2003 through 2005 that, if the IRS prevails, would require an additional tax payment of approximately $69.3 million before utilization of tax attributes, plus interest and penalties. The IRS also issued a Revenue Agent's Report for fiscal 2006 through 2008 with no proposed additional tax payment. Management is contesting the matter and believes the resolution will not have a material effect on its financial position, results of operations or cash flows.
What returns did Jabil provide to shareholders?
The company declared quarterly dividends of $0.08 per share in fiscal 2012, totaling $0.32 per share, and paid $65.2 million in dividends. It repurchased 3,212,418 shares for approximately $71.0 million during fiscal 2012 and, on September 25, 2012, authorized up to an additional $100.0 million in repurchases.
06—Continue