Jabil Circuit Reports Fiscal Year 1999 Third Quarter Results

Operating Income Increases 45 Percent

15 June 1999
St. Petersburg, Florida

Jabil Circuit, Inc. (NYSE: JBL), electronics contract manufacturer to the world market for circuit board assemblies, today reported earnings for the third fiscal quarter of 1999 ended May 31, 1999. Revenue for the quarter increased 69 percent to $522.5 million compared to $309.6 million for the same period of fiscal 1998.

Jabil's third quarter of fiscal 1999 net income increased 41 percent to $24.4 million or $.29 per diluted share compared with $17.3 million or $.23 per diluted share for the third quarter of fiscal 1998.

Gross profit for Jabil's third quarter increased 49 percent to $59.4 million or 11.4 percent of revenue compared to $39.8 million or 12.8 percent of revenue for the corresponding quarter of fiscal 1998.

Operating income for the third fiscal quarter of 1999 increased 45 percent to $37.2 million or 7.1 percent of revenue compared to $25.8 million or 8.3 percent of revenue for the third fiscal quarter of 1998.

"We are pleased with the results for our third fiscal quarter which reflect continued organic growth in all major sectors of the business," said Jabil Circuit Vice Chair Thomas A. Sansone. "We were also very satisfied to see profitability and operating goals met in our new San Jose plant and in our recently expanded Mexico facility." The Company said its Mexico facility expanded during the quarter to 1300 employees and two additional business unit manufacturing lines.

Income Statement -- Sequential Trend Highlights

Revenue in the third fiscal quarter increased by $29.1 million, a six percent increase from the second quarter, reflecting an increase in production levels.
Gross margin increased to 11.4 percent of revenue, reflecting a consistent business mix and high utilization rates in our domestic plants.
SG&A increased to $21.2 million, or 4.1 percent of revenue.
R & D remained constant at 0.2 percent of revenue, or $952 thousand.
Operating income increased sequentially 7% to $37.2 million, or 7.1 percent of revenue. Operating income growth is Jabil Circuit's key financial objective.
Net interest income for the quarter was $301 thousand, largely as a result of net proceeds from the March 1999 secondary stock offering.
Income tax rates were 35 percent of income.
Net income after tax was $24.4 million or 4.7 percent of revenue, as compared to 4.4 percent in the prior sequential quarter. Earnings per share for the quarter were $.29 on an average 85,601,880 shares during the period, fully diluted.

Balance Sheet -- Sequential Trend Highlights

Accounts receivable decreased by $818 thousand to $208.3 million in the third quarter of fiscal 1999. This compares to $209.1 million in the second quarter of fiscal 1999. Calculated days sales outstanding were 36.
Inventories decreased by $18.7 million in the third quarter to $137.8 million as compared to $156.5 million as of the end of May. Calculated inventory turns improved to 13, up from 11 in the second quarter of fiscal 1999.
Cash balances were $158.5 million at the end of the third fiscal quarter, as compared to $18.1 million at the end of the second quarter of fiscal 1999. The $140 million increase over the second quarter reflects the proceeds from the March 1999 secondary stock offering.
Fixed assets increased by $16 million to $300 million reflecting $31 million in capital expenditures, offset by $15 million in depreciation.
The Company is not currently utilizing the $225 million credit facility.
Long-term debt and current installments of long-term debt decreased $80 million in the third quarter to $50 million. The company has utilized a portion of the proceeds from the March 1999 secondary stock offering to pay off debt associated with the revolving credit facility.
The Company's debt-to-capitalization ratio as of the end of May is nine percent.
For the quarter, average return on assets was 12.7 percent, with an average return on equity of 24.1 percent.

Business Notes

Outlook

The Company said that growth rates for the fourth fiscal quarter may be less than previously anticipated due to last minute design delays on new products from two customers. The impact of these potential deferments could reduce expected fiscal fourth quarter revenue and earnings per share by as much as ten percent from prior expectations. It is anticipated that any growth delays on these new products would be recovered in the fall. According to guidance from the Company, growth rates for fiscal 2000 are positioned to exceed long-term growth objectives of 30 percent per year, based on currently booked business levels.

"We are pleased to announce four new customer relationships added during the quarter and a new greenfield plant in Massachusetts to meet our Northeast production demands. With these announcements and the continued overall level of new business opportunity, we believe the outlook for the Company in fiscal 2000 is very favorable," Sansone said.

About Jabil

Jabil Circuit, Inc. is an electronic manufacturer of circuit board assemblies for international original equipment manufacturers in the communications, personal computer, computer peripheral, automotive and consumer markets. Jabil offers circuit design, board design from schematic, prototype assembly, volume board assembly and system assembly services from automated manufacturing facilities in Florida, Michigan, California, Idaho, Italy, Scotland, Malaysia and Mexico.

This release contains certain forward-looking statements, which are subject to a number of risks and uncertainties. Some factors that could cause actual results to differ materially include: business conditions and growth in the contract manufacturing industry and the general economy; variability of operating results; dependence on a limited number of customers; limited availability of components; dependence on certain industries; variability of customer requirements; and other risk factors described in the company's most recently filed SEC documents such as the Form 10-K, filed 12/7/98.