Jabil Posts Fourth Quarter and Fiscal Year 2022 Results

Announces New $1 Billion Share Repurchase Authorization

ST. PETERSBURG, Fla. – September 27, 2022 Today, Jabil Inc. (NYSE: JBL), reported preliminary, unaudited financial results for its fourth quarter and fiscal year ended August 31, 2022.

“The team delivered yet another solid year in FY22,” said Chairman and CEO Mark Mondello. “I’d like to thank our reliable workforce and acknowledge the positive impact of our large-scale, well-diversified commercial portfolio,” he added.

Fourth Quarter of Fiscal Year 2022 Highlights: 

  • Net revenue: $9.0 billion
  • Diversified Manufacturing Services (DMS) year-on-year revenue growth: 13 percent
  • Electronics Manufacturing Services (EMS) year-on-year revenue growth: 32 percent
  • U.S. GAAP operating income: $409 million 
  • U.S. GAAP diluted earnings per share: $2.25
  • Core operating income (Non-GAAP): $447 million 
  • Core diluted earnings per share (Non-GAAP): $2.34

Fiscal Year 2022 Highlights: 

  • Net revenue: $33.5 billion
  • Diversified Manufacturing Services (DMS) year-on-year revenue growth: 9 percent
  • Electronics Manufacturing Services (EMS) year-on-year revenue growth: 20 percent
  • U.S. GAAP operating income: $1.4 billion
  • U.S. GAAP diluted earnings per share: $6.90
  • Core operating income (Non-GAAP): $1.5 billion
  • Core diluted earnings per share (Non-GAAP): $7.65

First Quarter of Fiscal Year 2023 Outlook: 

•    Net revenue

 

$9.0 billion to $9.6 billion

 

•    U.S. GAAP operating income

 

$367 million to $427 million

 

•    U.S. GAAP diluted earnings per share

 

$1.65 to $2.05 per diluted share

 

•    Core operating income (Non-GAAP) (1)

 

$415 million to $475 million

 

•    Core diluted earnings per share (Non-GAAP) (1)

 

$2.00 to $2.40 per diluted share

 

•    Total company revenue

 

Increase 9 percent year-on-year

 

 

(1) Core operating income and core diluted earnings per share exclude anticipated adjustments of $8 million for amortization of intangibles (or $0.06 per diluted share) and $40 million for stock-based compensation expense and related charges (or $0.29 per diluted share).

Capital Return Update:

Jabil’s Board of Directors has authorized a share repurchase program of up to $1 billion in common stock. The shares will be repurchased from time-to-time through fiscal year 2024 through various methods, including open market repurchases, at the Company's discretion and subject to market conditions and other factors.

“This is continued evidence of our ongoing commitment to return capital to shareholders,” said CFO Mike Dastoor. “This new authorization reflects our belief in Jabil’s ability to generate strong earnings and free cash flows,” he added.

(Definitions: “U.S. GAAP” means U.S. generally accepted accounting principles. Jabil defines core operating income as U.S. GAAP operating income less amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges, distressed customer charges, acquisition and integration charges, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges and business interruption and impairment charges, net plus other components of net periodic benefit cost.

Jabil defines core earnings as core operating income, less loss on debt extinguishment, loss (gain) on securities, other components of net periodic benefit cost, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations and certain other expenses, net of tax and certain deferred tax valuation allowance charges.

Jabil defines core diluted earnings per share as core earnings divided by the weighted average number of outstanding diluted shares as determined under U.S. GAAP.

Jabil defines adjusted free cash flow as net cash provided by (used in) operating activities less net capital expenditures (acquisition of property, plant and equipment less proceeds and advances from sale of property, plant and equipment).

Jabil reports core operating income, core earnings, core diluted earnings per share and adjusted free cash flow to provide investors an additional method for assessing operating income, earnings, diluted earnings per share and free cash flow from what it believes are its core manufacturing operations. See the accompanying reconciliation of Jabil’s core operating income to its U.S. GAAP operating income, its calculation of core earnings and core diluted earnings per share to its U.S. GAAP net income and U.S. GAAP earnings per share and additional information in the supplemental information.) 

Forward Looking Statements: This release contains forward-looking statements, including those regarding our anticipated financial results for our fourth quarter and full fiscal year 2022 and our guidance for future financial performance in our first quarter of fiscal year 2023 (including, net revenue, total company revenue, U.S. GAAP operating income, U.S. GAAP diluted earnings per share, core operating income (Non-GAAP), core diluted earnings per share (Non-GAAP) results and the components thereof, including but not limited to amortization of intangibles and stock-based compensation expense and related charges). The statements in this release are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially from our current expectations. Such factors include, but are not limited to: our determination as we finalize our financial results for our fourth quarter and full fiscal year 2022 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; the scope and duration of the COVID-19 outbreak and its impact on our operations, sites, customers and supply chain; managing growth effectively; our dependence on a limited number of customers; competitive challenges affecting our customers; managing rapid declines or increases in customer demand and other related customer challenges that may occur; risks arising from relationships with emerging companies; changes in technology; our ability to introduce new business models or programs requiring implementation of new competencies; competition; transportation issues; our ability to maintain our engineering, technological and manufacturing expertise; retaining key personnel; our ability to purchase components efficiently and reliance on a limited number of suppliers for critical components; risks associated with international sales and operations; including geopolitical uncertainties in Russia and Ukraine, our ability to achieve expected profitability from acquisitions; risk arising from our restructuring activities; issues involving our information systems, including security issues; regulatory risks (including the expense of complying, or failing to comply, with applicable regulations; risk arising from design or manufacturing defects; and intellectual property risk); financial risks (including customers or suppliers who become financially troubled; turmoil in financial markets; tax risks; credit rating risks; risks of exposure to debt; currency fluctuations; energy prices; and asset impairment); changes in financial accounting standards or policies; and risk of natural disaster, climate change or other global events. Additional factors that could cause such differences can be found in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021 and our other filings with the Securities and Exchange Commission. We assume no obligation to update these forward-looking statements.

Supplemental Information Regarding Non-GAAP Financial Measures: Jabil provides supplemental, non-GAAP financial measures in this release to facilitate evaluation of Jabil’s core operating performance. These non-GAAP measures exclude certain amounts that are included in the most directly comparable U.S. GAAP measures, do not have standard meanings and may vary from the non-GAAP financial measures used by other companies. Management believes these “core” financial measures are useful measures that facilitate evaluation of the past and future performance of Jabil’s ongoing operations on a comparable basis.

Jabil reports core operating income, core earnings, core diluted earnings per share and adjusted free cash flows to provide investors an additional method for assessing operating income, earnings, earnings per share and free cash flow from what it believes are its core manufacturing operations. Among other uses, management uses non-GAAP financial measures to make operating decisions, assess business performance and as a factor in determining certain employee performance when determining incentive compensation.

The Company determines the tax effect of the items excluded from core earnings and core diluted earnings per share based upon evaluation of the statutory tax treatment and the applicable tax rate of the jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain jurisdictions where the Company does not expect to realize a tax benefit (due to existing tax incentives or a history of operating losses or other factors resulting in a valuation allowance related to deferred tax assets), a reduced or 0% tax rate is applied. Detailed definitions of certain of the core financial measures are included above under “Definitions” and a reconciliation of the disclosed core financial measures to the most directly comparable U.S. GAAP financial measures is included under the heading “Supplemental Data” at the end of this release.

Meeting and Replay Information: Jabil will hold a conference call today at 8:30 a.m. ET to discuss its earnings for the fourth quarter and full fiscal year ended August 31, 2022 and to provide an investor briefing. To access the live audio webcast and view the accompanying slide presentation, visit the Investor Relations section of Jabil's website, located at https://investors.jabil.com. An archived replay of the webcast will also be available after completion of the call.

About Jabil:  Jabil (NYSE: JBL) is a manufacturing solutions provider with over 260,000 employees across 100 locations in 30 countries. The world’s leading brands rely on Jabil’s unmatched breadth and depth of end-market experience, technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise. Driven by a common purpose, Jabil and its people are committed to making a positive impact on their local community and the environment. Visit www.jabil.com to learn more.

Investor Contact

Adam Berry
Vice President, Investor Relations    
(727) 577-9749
Adam_Berry@jabil.com

 

 

 

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

 

 

August 31, 2022

 

 

 

(unaudited)

 

August 31, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$                     1,478

 

$                     1,567

Accounts receivable, net

                       3,995

 

                       3,141

Contract assets

                       1,196

 

                           998

Inventories, net

                       6,128

 

                       4,414

Prepaid expenses and other current assets

                       1,111 

 

                           757

Total current assets

                     13,908

 

                     10,877

Property, plant and equipment, net

                       3,954

 

                       4,075

Operating lease right-of-use asset

                           500

 

                           390

Goodwill and intangible assets, net

                           862

 

                           897

Deferred income taxes

                           199

 

                           176

Other assets

                           294

 

                           239

Total assets

$                   19,717

 

$                   16,654

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Current installments of notes payable and long-term debt

$                        300

 

$                           —

Accounts payable

                       8,006

 

                       6,841

Accrued expenses

                       5,272

 

                       3,734

Current operating lease liabilities

                           119

 

                           108

Total current liabilities

                     13,697

 

                     10,683

Notes payable and long-term debt, less current installments

                       2,575

 

                       2,878

Other liabilities

                           272

 

                           334

Non-current operating lease liabilities

                           417

 

                           333

Income tax liabilities

                           182

 

                           178

Deferred income taxes

                           122

 

                           111 

Total liabilities

                     17,265

 

                     14,517

Commitments and contingencies

 

 

 

Equity:

 

 

 

Jabil Inc. stockholders’ equity:

 

 

 

Preferred stock

                             —

 

                             —

Common stock

                             —

 

                             —

Additional paid-in capital

                       2,655

 

                       2,533

Retained earnings

                       3,638

 

                       2,688

Accumulated other comprehensive loss

                           (42)

 

                           (25)

Treasury stock, at cost

                     (3,800)

 

                     (3,060)

Total Jabil Inc. stockholders’ equity

                       2,451

 

                       2,136

Noncontrolling interests

                               1

 

                               1

Total equity

                       2,452

 

                       2,137

Total liabilities and equity

$                   19,717

 

$                   16,654

               

 

 

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except for per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Net revenue

 

$               9,030

 

$               7,409

 

$             33,478

 

$             29,285

Cost of revenue

 

                  8,301

 

                  6,822

 

               30,846

 

               26,926

Gross profit

 

                     729

 

                     587

 

                  2,632

 

                  2,359

Operating expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

                     284

 

                     299

 

                  1,154

 

                  1,213

Research and development

 

                         8

 

                         7

 

                       33

 

                       34

Amortization of intangibles

 

                       10

 

                       12

 

                       34

 

                       47

Restructuring, severance and related charges

 

                       18

 

                         4

 

                       18

 

                       10

Operating income

 

                     409

 

                     265

 

                  1,393

 

                  1,055

Loss on debt extinguishment

 

                       —

 

                       —

 

                         4

 

                       —

Gain on securities

 

                       —

 

                       —

 

                       —

 

                        (2)

Interest and other, net

 

                       57

 

                       28

 

                     158

 

                     113

Income before income tax

 

                     352

 

                     237

 

                  1,231

 

                     944

Income tax expense

 

                       37

 

                       62

 

                     235

 

                     246

Net income

 

                     315

 

                     175

 

                     996

 

                     698

Net income attributable to noncontrolling interests, net of tax

 

                       —

 

                       —

 

                       —

 

                         2

Net income attributable to Jabil Inc.

 

$                   315

 

$                   175

 

$                   996

 

$                   696

Earnings per share attributable to the stockholders of Jabil Inc.:

 

 

 

 

 

 

 

 

Basic

 

$                  2.30

 

$                  1.20

 

$                  7.06

 

$                  4.69

Diluted

 

$                  2.25

 

$                  1.16

 

$                  6.90

 

$                  4.58

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

                  137.0

 

                  145.7

 

                  141.2

 

                  148.5

Diluted

 

                  140.3

 

                  150.1

 

                  144.4

 

                  152.1

 

 

JABIL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)

 

Fiscal Year Ended

 

August 31, 2022

 

August 31, 2021

Cash flows provided by operating activities:

 

 

 

Net income

$                        996

 

$                        698

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

                           925

 

                           876

Restructuring and related charges

                             (1)

 

                               5

Recognition of stock-based compensation expense and related charges

                             81

 

                           102

Deferred income taxes

                           (13)

 

                           (13)

Loss on sale of property, plant and equipment

                             —

 

                             14

Provision for allowance for doubtful accounts

                             —

 

                               6

Gain on securities

                             —

 

                             (2)

Other, net

                             10

 

                             13

Change in operating assets and liabilities, exclusive of net assets acquired:

 

 

 

Accounts receivable

                         (878)

 

                         (283)

Contract assets

                         (214)

 

                           116

Inventories

                     (1,725)

 

                     (1,276)

Prepaid expenses and other current assets

                         (367)

 

                           (90)

Other assets

                           (29)

 

                           (43)

Accounts payable, accrued expenses and other liabilities

                       2,866

 

                       1,310

Net cash provided by operating activities

                       1,651

 

                       1,433

Cash flows used in investing activities:

 

 

 

Acquisition of property, plant and equipment

                     (1,385)

 

                     (1,159)

Proceeds and advances from sale of property, plant and equipment

                           544

 

                           366

Cash paid for business and intangible asset acquisitions, net of cash

                           (18)

 

                           (50)

Repurchase of sold receivables

                             —

 

                           (99)

Cash receipts on repurchased receivables

                               4

 

                             95

Other, net

                              (3)

 

                              (4)

Net cash used in investing activities

                         (858)

 

                         (851)

Cash flows used in financing activities:

 

 

 

Borrowings under debt agreements

                       3,767

 

                       1,724

Payments toward debt agreements

                      (3,890)

 

                      (1,613)

Payments to acquire treasury stock

                         (696)

 

                         (428)

Dividends paid to stockholders

                           (48)

 

                           (50)

Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

                            45

 

                            39

Treasury stock minimum tax withholding related to vesting of restricted stock

                           (44)

 

                           (22)

Other, net

                           (22)

 

                           (63)

Net cash used in financing activities

                         (888)

 

                         (413)

Effect of exchange rate changes on cash and cash equivalents

                               6

 

                               4

Net (decrease) increase in cash and cash equivalents

                           (89)

 

                           173

Cash and cash equivalents at beginning of period

                       1,567

 

                       1,394

Cash and cash equivalents at end of period

$                     1,478

 

$                     1,567

 

 

JABIL INC. AND SUBSIDIARIES

SUPPLEMENTAL DATA

RECONCILIATION OF U.S. GAAP FINANCIAL RESULTS TO NON-GAAP MEASURES

(in millions, except for per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

August 31, 2022

 

August 31, 2021

 

August 31, 2022

 

August 31, 2021

Operating income (U.S. GAAP)

 

$                409

 

$                265

 

$            1,393

 

$            1,055

Amortization of intangibles

 

                    10

 

                    12

 

                    34

 

                    47

Stock-based compensation expense and related charges

 

                    14

 

                    26

 

                    81

 

                  102

Restructuring, severance and related charges

 

                    18

 

                      4

 

                    18

 

                    10

Net periodic benefit cost(1)

 

                     (4)

 

                      7

 

                    17

 

                    24

Business interruption and impairment charges, net

 

                    — 

 

                    —

 

                    —

 

                     (1)

Acquisition and integration charges

 

                    —

 

                    —

 

                    —

 

                      4

Adjustments to operating income

 

                    38

 

                    49

 

                  150

 

                  186

Core operating income (Non-GAAP)

 

$                447

 

$                314

 

$            1,543

 

$            1,241

Net income attributable to Jabil Inc. (U.S. GAAP)

 

$                315

 

$                175

 

$                996

 

$                696

Adjustments to operating income

 

                    38

 

                    49

 

                  150

 

                  186

Loss on debt extinguishment

 

                    — 

 

                    —

 

                      4

 

                    —

Gain on securities

 

                    —

 

                    —

 

                    —

 

                     (2)

Net periodic benefit cost(1)

 

                      4

 

                     (7)

 

                   (17)

 

                   (24)

Adjustments for taxes

 

                   (28)

 

                     (1)

 

                   (28)

 

                     (3)

Core earnings (Non-GAAP)

 

$                329

 

$                216

 

$            1,105

 

$                853

Diluted earnings per share (U.S. GAAP)

 

$               2.25

 

$               1.16

 

$               6.90

 

$               4.58

Diluted core earnings per share (Non-GAAP)

 

$               2.34

 

$               1.44

 

$               7.65

 

$               5.61

Diluted weighted average shares outstanding (U.S. GAAP and Non-GAAP)

 

               140.3

 

               150.1

 

               144.4

 

               152.1

 

 

(1)    Pension service cost is recognized in cost of revenue and all other components of net periodic benefit cost, including return on plan assets, are presented in other expense. We are reclassifying the pension components in other expense to core operating income as we assess operating performance, inclusive of all components of net periodic benefit cost, with the related revenue. There is no impact to core earnings or diluted core earnings per share for this adjustment.

 

 

JABIL INC. AND SUBSIDIARIES

SUPPLEMENTAL DATA

ADJUSTED FREE CASH FLOW

(in millions)

(Unaudited)

 

Fiscal Year Ended

 

August 31, 2022

 

August 31, 2021

Net cash provided by operating activities (U.S. GAAP)

$                  1,651

 

$                  1,433

Acquisition of property, plant and equipment

                   (1,385)

 

                   (1,159)

Proceeds and advances from sale of property, plant and equipment

                       544

 

                       366

Adjusted free cash flow (Non-GAAP)

$                     810

 

$                     640