Jabil Inc 10-Q for FY2021 Q2

Jabil Inc (JBL)

10-Q 2021-04-02 For: 2021-02-28

Added on April 11, 2026

About this 10-Q

Jabil Inc filed this 10-Q on April 2, 2021, covering the quarter ended February 28, 2021 (FY2021 Q2).

Headline figures

Quarter ended February 28, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.83B; up 11.5% from $6.13B a year earlier
Net income: $151.65M; compared with a net loss of $3.28M a year earlier
Diluted EPS: $0.99; compared with -$0.02 a year earlier

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Delaware						38-1886260
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	JBL	New York Stock Exchange


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


Part I – Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of February 28, 2021 and August 31, 2020	1
	Condensed Consolidated Statements of Operations for the three months and six months ended February 28, 2021 and February 29, 2020	2
	Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended February 28, 2021 and February 29, 2020	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended February 28, 2021 and February 29, 2020	4
	Condensed Consolidated Statements of Cash Flows for the six months ended February 28, 2021 and February 29, 2020	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

Part II – Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
	Signatures	36


	February 28, 2021 (Unaudited)		August 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	838,099	$	1,393,557
Accounts receivable, net of allowance for doubtful accounts of $26,916 as of February 28, 2021 and $25,827 as of August 31, 2020	3,062,742		2,847,743
Contract assets	993,363		1,104,700
Inventories, net	3,558,970		3,131,783

Prepaid expenses and other current assets	690,479		657,102
Total current assets	9,143,653		9,134,885
Property, plant and equipment, net of accumulated depreciation of $4,762,227 as of February 28, 2021 and $4,525,758 as of August 31, 2020	3,696,373		3,665,312
Operating lease right-of-use asset	365,043		362,847
Goodwill	717,660		696,853
Intangible assets, net of accumulated amortization of $418,635 as of February 28, 2021 and $395,074 as of August 31, 2020	206,389		209,870
Deferred income taxes	154,706		165,407
Other assets	210,339		162,242
Total assets	$	14,494,163	$	14,397,416
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and long-term debt	$	50,197	$	50,194
Accounts payable	5,644,359		5,687,038

Accrued expenses	3,037,158		3,211,528
Current operating lease liabilities	110,663		110,723
Total current liabilities	8,842,377		9,059,483
Notes payable and long-term debt, less current installments	2,679,819		2,678,288
Other liabilities	305,410		268,925
Non-current operating lease liabilities	306,044		302,035
Income tax liabilities	161,416		148,629
Deferred income taxes	97,155		114,657
Total liabilities	12,392,221		12,572,017
Commitments and contingencies
Equity:
Jabil Inc. stockholders’ equity:
Preferred stock, $0.001 par value, authorized 10,000,000 shares; no shares issued and no shares outstanding	—		—
Common stock, $0.001 par value, authorized 500,000,000 shares; 266,842,954 and 263,830,270 shares issued and 149,366,501 and 150,330,358 shares outstanding as of February 28, 2021 and August 31, 2020, respectively	267		264
Additional paid-in capital	2,488,366		2,413,616
Retained earnings	2,368,012		2,040,922
Accumulated other comprehensive loss	(4,270)		(34,168)
Treasury stock at cost, 117,476,453 and 113,499,912 shares as of February 28, 2021 and August 31, 2020, respectively	(2,763,214)		(2,609,250)
Total Jabil Inc. stockholders’ equity	2,089,161		1,811,384
Noncontrolling interests	12,781		14,015
Total equity	2,101,942		1,825,399
Total liabilities and equity	$	14,494,163	$	14,397,416


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended				Six months ended
	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Net revenue	$	6,828,546	$	6,125,083	$	14,661,075	$	13,630,781
Cost of revenue	6,258,621		5,694,958		13,456,590		12,646,817
Gross profit	569,925		430,125		1,204,485		983,964
Operating expenses:
Selling, general and administrative	305,942		285,024		608,694		613,923
Research and development	9,368		11,290		17,486		22,060
Amortization of intangibles	11,639		13,577		23,094		29,717
Restructuring, severance and related charges	6,626		29,604		4,911		74,855

Operating income	236,350		90,630		550,300		243,409
Impairment on securities	—		12,205		—		12,205
Other (income) expense	(1,559)		8,501		(3,481)		19,673
Interest income	(1,655)		(5,336)		(3,536)		(11,280)
Interest expense	31,026		46,183		63,372		91,094
Income before income tax	208,538		29,077		493,945		131,717
Income tax expense	56,184		31,658		140,584		93,584
Net income (loss)	152,354		(2,581)		353,361		38,133
Net income attributable to noncontrolling interests, net of tax	700		702		1,265		994
Net income (loss) attributable to Jabil Inc.	$	151,654	$	(3,283)	$	352,096	$	37,139
Earnings (loss) per share attributable to the stockholders of Jabil Inc.:
Basic	$	1.01	$	(0.02)	$	2.34	$	0.24
Diluted	$	0.99	$	(0.02)	$	2.30	$	0.24
Weighted average shares outstanding:
Basic	150,257		152,058		150,206		152,579
Diluted	152,975		152,058		153,051		156,171


	February 28, 2021		August 31, 2020
Raw materials	$	2,616,353	$	2,389,719
Work in process	539,446		450,781
Finished goods	484,035		376,542
Reserve for excess and obsolete inventory	(80,864)		(85,259)
Inventories, net	$	3,558,970	$	3,131,783


	Maturity Date	February 28, 2021		August 31, 2020
4.700% Senior Notes	Sep 15, 2022	$	498,983	$	498,659
4.900% Senior Notes	Jul 14, 2023	299,420		299,300
3.950% Senior Notes	Jan 12, 2028	495,745		495,440
3.600% Senior Notes	Jan 15, 2030	495,032		494,756
3.000% Senior Notes	Jan 15, 2031	590,708		590,162
Borrowings under credit facilities(1)	Apr 23, 2021, Jan 22, 2023 and Jan 22, 2025	—		—
Borrowings under loans	Jan 22, 2025	350,128		350,165

Total notes payable and long-term debt		2,730,016		2,728,482
Less current installments of notes payable and long-term debt		50,197		50,194
Notes payable and long-term debt, less current installments		$	2,679,819	$	2,678,288


	Maximum Amount of Net Cash Proceeds (in millions)(1)(2)		Expiration Date
North American	$	390.0	November 22, 2021
Foreign	$	400.0	September 30, 2021


	February 28, 2021		August 31, 2020
Contract liabilities(1)	$	524,053	$	496,219
Accrued compensation and employee benefits	666,808		703,250

Other accrued expenses	1,846,297		2,012,059
Accrued expenses	$	3,037,158	$	3,211,528


Derivatives Not Designated as Hedging Instruments Under ASC 815	Location of Gain on Derivatives Recognized in Net Income	Amount of Gain Recognized in Net Income on Derivatives
		Three months ended				Six months ended
		February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Forward foreign exchange contracts(1)	Cost of revenue	$	36,437	$	6,801	$	120,443	$	33,518


	Foreign Currency Translation Adjustment		Derivative Instruments		Actuarial Loss		Prior Service Cost		Total
Balance as of August 31, 2020	$	(36,595)	$	(30,996)	$	34,093	$	(670)	$	(34,168)
Other comprehensive income (loss) before reclassifications	11,004		56,235		(256)		—		66,983
Amounts reclassified from AOCI	—		(37,085)		—		—		(37,085)
Other comprehensive income (loss)(1)	11,004		19,150		(256)		—		29,898
Balance as of February 28, 2021	$	(25,591)	$	(11,846)	$	33,837	$	(670)	$	(4,270)


		Three months ended				Six months ended
Comprehensive Income Components	Financial Statement Line Item	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Realized (gains) losses on derivative instruments:(1)
Foreign exchange contracts	Cost of revenue	$	(22,344)	$	(3,117)	$	(38,712)	$	4,197
Interest rate contracts	Interest expense	810		(431)		1,627		(862)

Total amounts reclassified from AOCI(2)		$	(21,534)	$	(3,548)	$	(37,085)	$	3,335


	Three months ended				Six months ended
	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Total stockholders' equity, beginning balances	$	1,993,951	$	1,849,293	$	1,825,399	$	1,900,758
Common stock:
Beginning balances	266		262		264		260
Shares issued under employee stock purchase plan	1		1		1		1
Vesting of restricted stock	—		—		2		2
Ending balances	267		263		267		263
Additional paid-in capital:
Beginning balances	2,445,582		2,332,307		2,413,616		2,304,552
Shares issued under employee stock purchase plan	20,354		16,179		20,354		16,179
Vesting of restricted stock	—		—		(2)		(2)
Recognition of stock-based compensation	22,430		15,353		54,398		43,110
Ending balances	2,488,366		2,363,839		2,488,366		2,363,839
Retained earnings:
Beginning balances	2,228,729		2,064,758		2,040,922		2,037,037
Declared dividends	(12,371)		(12,521)		(25,006)		(25,222)

Net income (loss) attributable to Jabil Inc.	151,654		(3,283)		352,096		37,139
Ending balances	2,368,012		2,048,954		2,368,012		2,048,954
Accumulated other comprehensive loss:
Beginning balances	(14,346)		(74,322)		(34,168)		(82,794)
Other comprehensive income (loss)	10,076		(28,621)		29,898		(20,149)
Ending balances	(4,270)		(102,943)		(4,270)		(102,943)
Treasury stock:
Beginning balances	(2,680,860)		(2,487,319)		(2,609,250)		(2,371,612)
Purchases of treasury stock under employee stock plans	(388)		(3,693)		(21,969)		(23,010)
Treasury shares purchased	(81,966)		(72,270)		(131,995)		(168,660)
Ending balances	(2,763,214)		(2,563,282)		(2,763,214)		(2,563,282)
Noncontrolling interests:
Beginning balances	14,580		13,607		14,015		13,315
Net income attributable to noncontrolling interests	700		702		1,265		994


Declared dividends to noncontrolling interests	(2,499)		(2,000)		(2,499)		(2,000)

Ending balances	12,781		12,309		12,781		12,309
Total stockholders' equity, ending balances	$	2,101,942	$	1,759,140	$	2,101,942	$	1,759,140


	Six months ended
	February 28, 2021		February 29, 2020
Cash flows provided by operating activities:
Net income	$	353,361	$	38,133
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	420,416		402,347
Restructuring and related charges	3,036		33,061
Recognition of stock-based compensation expense and related charges	57,354		45,332
Deferred income taxes	(8,330)		3,087
Provision for allowance for doubtful accounts	5,313		10,185

Other, net	15,489		13,838
Change in operating assets and liabilities, exclusive of net assets acquired:
Accounts receivable	(200,130)		424,971
Contract assets	123,258		(63,302)
Inventories	(421,255)		(279,664)
Prepaid expenses and other current assets	(31,279)		(62,881)
Other assets	(20,688)		(8,438)
Accounts payable, accrued expenses and other liabilities	(210,600)		(472,503)
Net cash provided by operating activities	85,945		84,166
Cash flows used in investing activities:
Acquisition of property, plant and equipment	(661,153)		(448,765)
Proceeds and advances from sale of property, plant and equipment	266,725		36,624
Cash paid for business and intangible asset acquisitions, net of cash	(49,394)		(141,195)

Other, net	(3,367)		(2,013)
Net cash used in investing activities	(447,189)		(555,349)
Cash flows (used in) provided by financing activities:
Borrowings under debt agreements	379,111		5,063,358
Payments toward debt agreements	(392,878)		(4,835,697)
Payments to acquire treasury stock	(131,995)		(168,660)
Dividends paid to stockholders	(25,879)		(26,280)
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan	20,354		16,179
Treasury stock minimum tax withholding related to vesting of restricted stock	(21,969)		(23,010)
Other, net	(15,999)		(11,617)
Net cash (used in) provided by financing activities	(189,255)		14,273
Effect of exchange rate changes on cash and cash equivalents	(4,959)		(9,688)
Net decrease in cash and cash equivalents	(555,458)		(466,598)
Cash and cash equivalents at beginning of period	1,393,557		1,163,343


	Three months ended				Six months ended
	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Service cost (1)	$	6,453	$	6,638	$	12,531	$	11,101
Interest cost (2)	1,176		809		2,297		1,572
Expected long-term return on plan assets (2)	(3,979)		(3,789)		(7,849)		(6,575)
Recognized actuarial (gain) loss (2)	(1,270)		226		(2,513)		449
Amortization of actuarial gain (2)	(1,766)		—		(3,490)		—
Amortization of prior service credit (2)	(13)		(11)		(26)		(22)
Net periodic benefit cost	$	601	$	3,873	$	950	$	6,525



	February 28, 2021
Unrecognized stock-based compensation expense—restricted stock units	$	58,206
Remaining weighted-average period for restricted stock units expense	1.5 years


	Employee Severance and Benefit Costs		Lease Costs		Asset Write-off Costs		Other Related Costs		Total
Balance as of August 31, 2020	$	8,143	$	2,316	$	—	$	426	$	10,885
Restructuring related charges	2,322		(2,873)		4,344		599		4,392
Asset write-off charge and other non-cash activity	(9)		1,554		(4,344)		2		(2,797)
Cash payments	(6,395)		(113)		—		(629)		(7,137)
Balance as of February 28, 2021	$	4,061	$	884	$	—	$	398	$	5,343


	Dividend Declaration Date	Dividend per Share		Total of Cash Dividends Declared		Date of Record for Dividend Payment	Dividend Cash Payment Date
Fiscal Year 2021:	October 15, 2020	$	0.08	$	12,417	November 16, 2020	December 2, 2020
	January 21, 2021	$	0.08	$	12,371	February 15, 2021	March 2, 2021

Fiscal Year 2020:	October 17, 2019	$	0.08	$	12,647	November 15, 2019	December 2, 2019
	January 23, 2020	$	0.08	$	12,517	February 14, 2020	March 4, 2020


(in thousands)	Fair Value Hierarchy		February 28, 2021		August 31, 2020
Assets:
Cash and cash equivalents:
Cash equivalents	Level 1	(1)	$	46,900	$	33,869
Prepaid expenses and other current assets:
Short-term investments	Level 1		16,878		16,556

Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 8)	Level 2	(2)	15,506		11,201
Derivatives not designated as hedging instruments (Note 8)	Level 2	(2)	73,371		58,893
Other assets:

Forward interest rate swap:
Derivatives designated as hedging instruments (Note 8)	Level 2	(3)	17,547		—
Liabilities:
Accrued expenses:
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 8)	Level 2	(2)	$	3,149	$	1,522
Derivatives not designated as hedging instruments (Note 8)	Level 2	(2)	6,922		9,100
Interest rate swaps:
Derivatives not designated as hedging instruments (Note 8)	Level 2	(3)	7,890		540



Extended interest rate swap not designated as a hedging instrument (Note 8)	Level 2	(4)	18,190		26,492
Other liabilities:
Interest rate swaps:
Derivatives not designated as hedging instruments (Note 8)	Level 2	(3)	—		329
Extended interest rate swap not designated as a hedging instrument (Note 8)	Level 2	(4)	—		13,111


	Three months ended						Six months ended
(dollars in millions)	February 28, 2021		February 29, 2020		Change		February 28, 2021		February 29, 2020		Change



Net revenue	$	6,828.5	$	6,125.1	11.5	%	$	14,661.1	$	13,630.8	7.6	%


	Three months ended				Six months ended
(in thousands, except for per share data)	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Operating income (U.S. GAAP)	$	236,350	$	90,630	$	550,300	$	243,409
Amortization of intangibles	11,639		13,577		23,094		29,717
Stock-based compensation expense and related charges	23,813		15,109		57,354		45,332
Restructuring, severance and related charges	6,626		29,604		4,911		74,855
Distressed customer charge (1)	—		—		—		14,963
Net periodic benefit cost (2)	5,723		2,776		11,316		4,601
Business interruption and impairment charges, net	(806)		—		(806)		—

Acquisition and integration charges (3)	1,261		7,752		3,374		23,886
Adjustments to operating income	48,256		68,818		99,243		193,354
Core operating income (Non-GAAP)	$	284,606	$	159,448	$	649,543	$	436,763
Net income (loss) attributable to Jabil Inc. (U.S. GAAP)	$	151,654	$	(3,283)	$	352,096	$	37,139
Adjustments to operating income	48,256		68,818		99,243		193,354
Impairment on securities	—		12,205		—		12,205
Net periodic benefit cost (2)	(5,723)		(2,776)		(11,316)		(4,601)
Adjustments for taxes	(553)		3,091		(1,148)		3,588
Core earnings (Non-GAAP)	$	193,634	$	78,055	$	438,875	$	241,685


Diluted earnings (loss) per share (U.S. GAAP)	$	0.99	$	(0.02)	$	2.30	$	0.24


Diluted core earnings per share (Non-GAAP)	$	1.27	$	0.50	$	2.87	$	1.55


Diluted weighted average shares outstanding (U.S. GAAP)	152,975		152,058		153,051		156,171


Diluted weighted average shares outstanding (Non-GAAP)	152,975		155,714		153,051		156,171


(in thousands)	4.700% Senior Notes		4.900% Senior Notes		3.950% Senior Notes		3.600% Senior Notes		3.000% Senior Notes		Borrowings under revolving credit facilities(1)		Borrowings under loans		Total notes payable and credit facilities
Balance as of August 31, 2020	$	498,659	$	299,300	$	495,440	$	494,756	$	590,162	$	—	$	350,165	$	2,728,482
Borrowings	—		—		—		—		—		379,111		—		379,111
Payments	—		—		—		—		—		(379,111)		(109)		(379,220)
Other	324		120		305		276		546		—		72		1,643
Balance as of February 28, 2021	$	498,983	$	299,420	$	495,745	$	495,032	$	590,708	$	—	$	350,128	$	2,730,016
Maturity Date	Sep 15, 2022		Jul 14, 2023		Jan 12, 2028		Jan 15, 2030		Jan 15, 2031		Apr 23, 2021, Jan 22, 2023 and Jan 22, 2025		Jan 22, 2025
Original Facility/ Maximum Capacity	$500.0 million		$300.0 million		$500.0 million		$500.0 million		$600.0 million		$3.8 billion(1)		$351.9 million


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program(2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands)
December 1, 2020 - December 31, 2020	304,316	$	42.09	301,250	$	323,392
January 1, 2021 - January 31, 2021	587,575	$	44.03	581,858	$	297,777
February 1, 2021 - February 28, 2021	1,008,780	$	43.28	1,008,690	$	254,126
Total	1,900,671	$	43.32	1,891,798


	JABIL INC. Registrant

Date: April 2, 2021	By:	/s/ MARK T. MONDELLO
		Mark T. Mondello Chief Executive Officer

Date: April 2, 2021	By:	/s/ MICHAEL DASTOOR
		Michael Dastoor Chief Financial Officer