This is a summary of the second quarter fiscal 2009 earnings call as presented by Jabil Circuit, Inc. (JBL) on March 24, 2009.
Management
President and CEO: Tim Main
CFO: Forbes Alexander
VP, Communications & IR: Beth Walters
Key Investors Issues:
- A 7 cents dividend was paid on March 2, 2009.
- Cash flow from operations for the quarter was approximately $343 million.
- Net loss of 20 cents per diluted share was realized
Second Quarter Highlights
Jabil Circuit generated cash flow from operations of $343 million.
- The firm paid down $100 million of debt, reduced inventory levels to $200 million, and ended the period with $775 million in cash.
- It also successfully renewed its AR securitization facilities of $450 million.
The liquidity position has been enhanced by $224 million. A $65 million dollar rationalization program was announced in January.
- Cash charges associated with such plans are estimated to be $54 million.
- As a result of such activity, $55 million in annualized cost savings is expected.
- The firm realized charges of $32 million associated with these activities while cash payments associated with these plans were $1 million.
On revenues of $2.89 billion, the GAAP operating income was a loss of $500,000.
- This compares to 1.6 million GAAP operating income on revenues of 3.06 billion for the same period in the prior year.
- Core operating income excluding amortization of intangibles, stock-based compensation and restructuring charges was 51.2 million.
- This was 1.8% of revenue as compared to 67.8 million or 2.2 for the same period in the prior year.
Core earnings per diluted share were 13 cents as compared to 20 cents for the same period in the prior year.
- On a year-over-year basis for the period, revenue declined 6% while core operating profit declined 25%.
- On a sequential basis, revenues declined by 15% while core operating income declined 49%.
- This reflected the seasonal nature of the consumers sectors and a reduction in schedules as a result of the global economic recession.
The EMS division represented approximately 58% or $1.67 billion, a decline of 16% as compared with the first quarter of fiscal 2009.
- Core operating income for the division in the quarter was 1.3% of revenue.
Sector movements are as follows.
Production levels in the automotive sector: declined by 31% sequentially and represented 3% of revenues.
Computing and storage sectors: decreased by 6% in the first quarter and represented 12% of revenues.
Industrial instrumentation and medical sector: declined 10% from the prior quarter and represented 19% of revenues.
Networking: decreased by 20% from the previous quarter and represented 17% of revenues.
