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Jabil Circuit Reports Forth Quarter and Fiscal Year 1999 Results

Quarterly Earnings Increase 75 Percent

15 September 1999
St. Petersburg, Florida

Forward - Looking Statement

Jabil Circuit, Inc. (NYSE: JBL), electronics manufacturer for circuit board assemblies, today reported record earnings for the fourth fiscal quarter and 1999 fiscal year ended August 31, 1999. Revenue for the fourth quarter of fiscal 1999 increased 69 percent and revenue for the fiscal year increased 57 percent compared to the same periods of fiscal 1998.

Fiscal Fourth Quarter 1999

Revenue for the fourth fiscal quarter of 1999 increased 69 percent to $536.5 million compared to $317.6 million for the same period of fiscal 1998. Net income increased 96 percent to $26.2 million, compared to $13.4 million for the same period of fiscal 1998. Earnings per share increased 75 percent to $.30, compared to fiscal 1998 fourth quarter of $.17. (All fiscal fourth quarter data excludes a one-time acquisition-related charge.)

Fiscal Year 1999

Fiscal year revenues increased 57 percent to $2.0 billion, compared to $1.3 billion in fiscal 1998. Operating income for fiscal year 1999 increased 33 percent to $141.2 million, compared to $105.9 million for fiscal year 1998. Net income increased 31 percent to $91.5 million, compared with net income of $69.8 million. Fiscal year earnings per share increased 23 percent to $1.12 per share compared to $.91 per share for fiscal 1998. (All fiscal 1998 data excludes a one-time acquisition-related charge.)

All earnings per share amounts represent diluted earnings per share.

Jabil Circuit President Tim Main said, "We are pleased to report record fiscal 1999 results that were above our long-term operating goals. This year's performance was possible thanks to the continued dedication of our employees who have continued to run world-class operations in an aggressive growth environment."

Income Statement -- Sequential Trend Highlights

  • Fourth quarter revenue grew by 3 percent over the prior quarter.
  • Gross margin remained constant at 11.4 percent of revenue, reflecting increasing material related revenue offset by improved utilization rates in some international operations.
  • SG&A remained constant as a percentage of sales at 4.1 percent as compared to the previous quarter. In absolute dollars SG&A increased $663,000 to $21,900,000.
  • R & D increased slightly to $1,107,000 or .2 percent of revenue.
  • Goodwill amortization for the quarter was $287,000, reflecting the amortization related to the Hewlett Packard acquisition completed last August. We have added this line item in our financial statements to identify non-cash related amortization charges. For the year, this amortization expense was $1.2 million and was previously recorded in costs of revenue.
  • Operating income increased from $37.2 million, to $37.9 million or 7.1 percent of revenue.
  • Interest income for the quarter increased by $900,000 to $1.2M due to higher cash balances than the previous quarter.
  • Income taxes were 33.0 percent of income, on higher levels of income at lower taxed international operations.
  • Net income after taxes was $26,168,000 or 4.9 percent of revenue, as compared to 4.7 percent in the prior sequential quarter.
  • EPS of $.30 on an average 85,954,000 shares during the period, fully diluted.

Balance Sheet -- Sequential Trend Highlights

  • Accounts receivables increased by $20 million to $229 million in the 4th quarter as compared to $208 million in the 3rd quarter. Calculated DSO and collection experience was 38 days, slightly higher than the third quarter of 36 days sales outstanding.
  • Inventories increased by $54 million in the 4th quarter to $191 million as compared to $138 million as of the end of May. Calculated inventory turns were 10, as compared to 13 turns in the previous quarter. Overall inventory balances are somewhat higher to prepare for significant growth in several segment areas in the first fiscal quarter.
  • Fixed assets increased by $14 million to $314 million reflecting $29 million in capital expenditures offset by $15 million in depreciation. Total capital expenditures for the year were $149 million, with depreciation of $58 million. Capital expenditures estimated for FY 00 are presently $175 million, with $85 million in depreciation. These estimates include the impact of recent acquisitions.
  • Cash balances were $141 million compared to $158 million as the end of May.
  • Currently not utilizing a $225 million credit facility.
  • Long-term debt and current installments of long-term debt decreased $8 million to $42 million reflecting scheduled principal payments on our private placement debt.
  • Debt to capitalization ratio was 7 percent.
  • Average return on assets was 11.9 percent.
  • Average return on equity of 19.7 percent.

Business Outlook

Fiscal 1999

The Company's current production outlook positions fiscal 2000 for 60 percent revenue growth and 48 percent operating income growth. This outlook is significantly above the Company's historical goals, reflecting new business and increased production schedules in several business sectors. "The business fundamentals are strong and we look forward to producing outstanding results for our customers and shareholders in Fiscal 2000," Main said.

Factory Site Updates.

Guadalajara. The plant continues to be solidly profitable while experiencing continued growth. The Company continues to expand this operation, which will allow for continued growth at this site for most of FY 00. This site has matured very quickly and is now the Company's second largest operation with over 2000 employees.

California. This site has continued to progress consistent with previous expectations, results near break even.

Massachusetts. The leased facility in Billerica, Massachusetts will manufacture for current customer requirements in the Boston area, while serving as a mid- volume turnkey site for numerous other opportunities. Building site modifications are expected to be completed by October with modest initial production in November. The Company incurred modest start-up costs in Q4 and estimates start-up costs of approximately $.01 per share in both Q1 and Q2 in fiscal 2000.

About Jabil

Jabil Circuit, Inc. is an electronic manufacturer of circuit board assemblies and systems for communications, personal computers, peripherals, automotive and consumer products. Jabil offers circuit design, board design from schematic, prototype assembly, volume board assembly, system assembly, repair and warranty services from facilities in the U.S., Mexico, Europe and Asia. Further information about Jabil can be found on the World Wide Web athttp://www.jabil.com.

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.