01—Abstract
Summary
Summary of the 10-K filed October 28, 2013. Cited figures are marked; the original filing is the authoritative source.
Jabil Circuit, Inc. reported fiscal 2013 (year ended August 31, 2013) net revenue of $18.3 billiona, up from $17.2 billion in fiscal 2012, with net income attributable to Jabil Circuit, Inc. of $371.5 million, compared with $394.7 million the prior year.
Gross profit was $1.36 billionb (7.4% of net revenue), versus $1.31 billion (7.6%) in fiscal 2012. Operating income fell to $511.4 million from $621.9 million, reflecting $89.5 million of restructuring charges under the 2013 Restructuring Plan, a $25.6 million impairment of notes receivable, and $10.0 million of acquisition costs and purchase accounting adjustments. Diluted EPS was $1.79, versus $1.87 a year earlier.
The company stated that its effective tax rate fell to 4.1% largely because of a $104.0 millionc partial release of a U.S. valuation allowance tied to the Nypro acquisition. The company's revenue is concentrated: its five largest customers accounted for approximately 53% of net revenue in fiscal 2013, and Apple, Inc. (19%) and BlackBerry Limited (12%) were the two customers above 10%. The filing states that Jabil is currently in ongoing discussions with BlackBerry regarding the termination or substantial winding down of that relationship, and that any restructuring costs from this could have a material adverse effect.
Approximately 86.0% of net revenue came from international operations. Jabil completed its acquisition of Nypro Inc. on July 1, 2013 for net consideration of $679.5 milliond, funded from available cash. Liquidity was supported by $1.0 billion of cash and cash equivalents and $1.9 billion of total notes payable, long-term debt and capital lease obligations at August 31, 2013.
Net cash from operating activities was $1.21 billion, while capital expenditures were $736.9 million. The company expects capital expenditures of $250.0 million to $350.0 million over the next 12 months and declared quarterly dividends of $0.08 per share throughout fiscal 2013.
02—Key points
Key Highlights
- Net revenue rose to $18.3 billion in fiscal 2013 from $17.2 billion, driven mainly by existing customers and new program wins.
- Net income attributable to Jabil Circuit, Inc. was $371.5 million, or $1.79 diluted EPS, down from $394.7 million and $1.87 in fiscal 2012.
- Operating income declined to $511.4 million from $621.9 million, including $89.5 million of restructuring and related charges under the 2013 Restructuring Plan.
- Customer concentration is high: the five largest customers were approximately 53% of net revenue, with Apple at 19% and BlackBerry at 12%.
- The company is in ongoing discussions with BlackBerry Limited about terminating or substantially winding down the relationship, which could have a material adverse effect.
- The Nypro Inc. acquisition, completed July 1, 2013 for $679.5 million net consideration, added to goodwill of $436.2 million and total assets of $9.15 billion.
- The effective tax rate was 4.1%, reflecting a $104.0 million partial release of the U.S. valuation allowance linked to the Nypro acquisition.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Jabil kept $0.02.
- Revenue$17.25B100.0%
- Cost of revenue−$16.04B93.0%
- Gross profit$1.21B7.0%
- Operating costs−$759.8M4.4%
- Operating income$452.4M2.6%
- Interest, other & tax−$80.9M0.5%
- Net income$371.5M2.2%
Where FY2013 revenue went
$17.25B- Cost of revenue: $16.04B, 93% of revenue
- Net income: $371.5M, 2.2% of revenue
- R&D: $28.4M, 0.2% of revenue
- SG&A: $614.3M, 3.6% of revenue
- Other operating costs: $117.1M, 0.7% of revenue
Kept 2.2% as net incomeNet income $371.5M · 2.2%R&D $28.4M · 0.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed October 28, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $17.25B$16.14B | +6.9% |
| Cost of Revenue | $16.04B$14.98B | +7.1% |
| Gross Profit | $1.21B$1.16B | +4.4% |
| R&D Expenses | $28.41M$25.84M | +10.0% |
| SG&A Expenses | $614.29M$572.64M | +7.3% |
| Operating Income | $452.42M$549.57M | −17.7% |
| Interest Expense | $121.02M$106.09M | +14.1% |
| Net Income | $371.48M$394.69M | −5.9% |
| EPS (Basic) | $1.83$1.91 | −4.2% |
| EPS (Diluted) | $1.79$1.87 | −4.3% |
| Shares Outstanding (Basic) | 203.10M206.16M | −1.5% |
| Shares Outstanding (Diluted) | 207.81M211.18M | −1.6% |
05—Questions
Frequently Asked Questions
Why did operating income decline in fiscal 2013 despite higher revenue?
Operating income fell to $511.4 million from $621.9 million even though net revenue grew. The filing attributes the decline mainly to $89.5 million of restructuring and related charges under the 2013 Restructuring Plan, a $25.6 million impairment of notes receivable and related charges, and $10.0 million of acquisition costs and purchase accounting adjustments. Selling, general and administrative expense also rose to $688.8 million from $644.5 million.
How concentrated is Jabil's customer base?
The filing states that the five largest customers accounted for approximately 53% of net revenue in fiscal 2013, and 58 customers accounted for approximately 90%. Apple, Inc. represented 19% and BlackBerry Limited 12% of net revenue. The company says it expects to continue depending on a relatively small number of customers.
What is the status of the BlackBerry relationship?
The filing says Jabil is currently in ongoing discussions with BlackBerry Limited regarding the termination or substantial winding down of the business relationship. No reserve has been established because a loss is not considered probable. The filing notes that the reduction in business could include restructuring and related expenses, which are still being determined and could have a material adverse effect on results of operations.
What liquidity and capital resources did Jabil report at fiscal year-end?
At August 31, 2013, Jabil had cash and cash equivalents of $1.0 billion, total notes payable, long-term debt and capital lease obligations of $1.9 billion, and $1.1 billion of available liquidity under its revolving credit facilities. Net cash provided by operating activities was $1.21 billion. The company expects capital expenditures of $250.0 million to $350.0 million over the next 12 months.
What is the 2013 Restructuring Plan expected to deliver?
The company expects to recognize approximately $188.0 million in pre-tax restructuring and other related costs over fiscal 2013 through 2015. It expects annualized cost savings of approximately $70.9 million upon completion, which after partial offsets is expected to be about $65.0 million a year. The company began realizing part of these savings in the fourth quarter of fiscal 2013.
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