Jabil Inc 10-Q for FY2022 Q1

Jabil Inc (JBL)

10-Q 2022-01-07 For: 2021-11-30

Added on April 11, 2026

About this 10-Q

Jabil Inc filed this 10-Q on January 7, 2022, covering the quarter ended November 30, 2021 (FY2022 Q1).

Headline figures

Quarter ended November 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.57B; up 9.4% from $7.83B a year earlier
Net income: $241M; up 20.5% from net income of $200M a year earlier
Diluted EPS: $1.63; up 24.4% from $1.31 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 November 30, 2021 and August 31, 2021	1
	Condensed Consolidated Statements of Operations for the three months ended November 30, 2021 and 2020	2
	Condensed Consolidated Statements of Comprehensive Income for the three months ended November 30, 2021 and 2020	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended November 30, 2021 and 2020	4
	Condensed Consolidated Statements of Cash Flows for the three months ended November 30, 2021 and 2020	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25

Part II – Other Information
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	Signatures	29


	November 30, 2021 (Unaudited)		August 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,229	$	1,567
Accounts receivable, net of allowance for doubtful accounts	3,917		3,141
Contract assets	1,133		998
Inventories, net	4,681		4,414

Prepaid expenses and other current assets	852		757
Total current assets	11,812		10,877
Property, plant and equipment, net of accumulated depreciation of $5,189 as of November 30, 2021 and $5,033 as of August 31, 2021	3,976		4,075
Operating lease right-of-use asset	470		390
Goodwill	713		715
Intangible assets, net of accumulated amortization of $449 as of November 30, 2021 and $442 as of August 31, 2021	173		182
Deferred income taxes	176		176
Other assets	268		239
Total assets	$	17,588	$	16,654
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and long-term debt	$	500	$	—
Accounts payable	7,483		6,841

Accrued expenses	3,871		3,734
Current operating lease liabilities	111		108
Total current liabilities	11,965		10,683
Notes payable and long-term debt, less current installments	2,379		2,878
Other liabilities	332		334
Non-current operating lease liabilities	403		333
Income tax liabilities	189		178
Deferred income taxes	113		111
Total liabilities	15,381		14,517
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; 269,843,564 and 267,418,092 shares issued and 144,166,009 and 144,496,077 shares outstanding as of November 30, 2021 and August 31, 2021, respectively	—		—
Additional paid-in capital	2,567		2,533
Retained earnings	2,917		2,688
Accumulated other comprehensive loss	(48)		(25)
Treasury stock at cost, 125,677,555 and 122,922,015 shares as of November 30, 2021 and August 31, 2021, respectively	(3,230)		(3,060)
Total Jabil Inc. stockholders’ equity	2,206		2,136
Noncontrolling interests	1		1
Total equity	2,207		2,137
Total liabilities and equity	$	17,588	$	16,654


☒			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
		November 30, 2021		November 30, 2020
Net revenue		$	8,567	$	7,833
Cost of revenue		7,892		7,198
Gross profit		675		635
Operating expenses:
Selling, general and administrative		308		303
Research and development		9		8
Amortization of intangibles		8		11
Restructuring, severance and related charges		—		(1)

Operating income		350		314

Other expense (income)		1		(1)
Interest income		(1)		(2)
Interest expense		33		32
Income before income tax		317		285
Income tax expense		76		84
Net income		241		201
Net income attributable to noncontrolling interests, net of tax		—		1
Net income attributable to Jabil Inc.		$	241	$	200
Earnings per share attributable to the stockholders of Jabil Inc.:
Basic		$	1.68	$	1.33
Diluted		$	1.63	$	1.31
Weighted average shares outstanding:
Basic		144.1		150.2
Diluted		147.7		152.9


	November 30, 2021		August 31, 2021
Raw materials	$	3,709	$	3,142
Work in process	552		677
Finished goods	508		680
Reserve for excess and obsolete inventory	(88)		(85)
Inventories, net	$	4,681	$	4,414


	Payments due by period (in millions)
	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Operating lease obligations(1)	$	118	$	18	$	34	$	28	$	38
Finance lease obligations(1)	$	48	$	24	$	24	$	—	$	—


	Maturity Date	November 30, 2021		August 31, 2021
4.700% Senior Notes	Sep 15, 2022	$	500	$	499
4.900% Senior Notes	Jul 14, 2023	300		300
3.950% Senior Notes	Jan 12, 2028	496		496
3.600% Senior Notes	Jan 15, 2030	495		495
3.000% Senior Notes	Jan 15, 2031	591		591
1.700% Senior Notes	Apr 15, 2026	496		496
Borrowings under credit facilities(1)	Jan 22, 2024 and Jan 22, 2026	—		—
Borrowings under loans	Jul 31, 2026	1		1

Total notes payable and long-term debt		2,879		2,878
Less current installments of notes payable and long-term debt		500		—
Notes payable and long-term debt, less current installments		$	2,379	$	2,878


	Three months ended
		November 30, 2021		November 30, 2020(4)
Trade accounts receivable sold(1)		$	1,032	$	1,173
Cash proceeds received(2)		$	1,030	$	1,171

Pre-tax losses on sale of receivables(3)		$	2	$	2


	November 30, 2021		August 31, 2021
Contract liabilities(1)	$	667	$	559
Accrued compensation and employee benefits	778		827

Inventory deposits	850		711
Other accrued expenses	1,576		1,637
Accrued expenses	$	3,871	$	3,734


	Foreign Currency Translation Adjustment		Derivative Instruments		Actuarial Gain (Loss)		Prior Service (Cost) Credit		Total
Balance as of August 31, 2021	$	(20)	$	(36)	$	51	$	(20)	$	(25)
Other comprehensive (loss) income before reclassifications	(27)		6		—		—		(21)
Amounts reclassified from AOCI	—		2		(5)		1		(2)
Other comprehensive (loss) income(1)	(27)		8		(5)		1		(23)
Balance as of November 30, 2021	$	(47)	$	(28)	$	46	$	(19)	$	(48)


		Three months ended
Comprehensive Income Components	Financial Statement Line Item		November 30, 2021		November 30, 2020
Realized losses (gains) on derivative instruments:(1)
Foreign exchange contracts	Cost of revenue		1		(17)
Interest rate contracts	Interest expense		1		1

Actuarial gain	(2)		(5)		—
Prior service cost	(2)		1		—
Total amounts reclassified from AOCI(3)			$	(2)	$	(16)


	Three months ended
		November 30, 2021		November 30, 2020
Total stockholders' equity, beginning balances		$	2,137	$	1,825




Common stock:		—		—
Additional paid-in capital:
Beginning balances		2,533		2,414



Recognition of stock-based compensation		34		31
Ending balances		2,567		2,445
Retained earnings:
Beginning balances		2,688		2,041
Declared dividends		(12)		(12)

Net income attributable to Jabil Inc.		241		200
Ending balances		2,917		2,229
Accumulated other comprehensive loss:
Beginning balances		(25)		(34)
Other comprehensive income		(23)		20
Ending balances		(48)		(14)
Treasury stock:
Beginning balances		(3,060)		(2,610)
Purchases of treasury stock under employee stock plans		(43)		(21)
Treasury shares purchased		(127)		(50)
Ending balances		(3,230)		(2,681)
Noncontrolling interests:
Beginning balances		1		14
Net income attributable to noncontrolling interests		—		1





Ending balances		1		15



	November 30, 2021
Unrecognized stock-based compensation expense—restricted stock units	$	67
Remaining weighted-average period for restricted stock units expense	1.5 years


(in millions)	Fair Value Hierarchy		November 30, 2021		August 31, 2021
Assets:
Cash and cash equivalents:
Cash equivalents	Level 1	(1)	$	29	$	36
Prepaid expenses and other current assets:
Short-term investments	Level 1		18		18

Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 9)	Level 2	(2)	17		9
Derivatives not designated as hedging instruments (Note 9)	Level 2	(2)	50		20
Other assets:

Forward interest rate swap:
Derivatives designated as hedging instruments (Note 9)	Level 2	(3)	9		9
Liabilities:
Accrued expenses:
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 9)	Level 2	(2)	$	5	$	6
Derivatives not designated as hedging instruments (Note 9)	Level 2	(2)	10		9
Interest rate swaps:
Derivatives not designated as hedging instruments (Note 9)	Level 2	(3)	3		3



Extended interest rate swap not designated as a hedging instrument (Note 9)	Level 2	(4)	9		10
Other liabilities:



Forward interest rate swap:
Derivatives designated as hedging instruments (Note 9)	Level 2	(3)	6		7


	Three months ended
(dollars in millions)		November 30, 2021		November 30, 2020		Change



Net revenue		$	8,567	$	7,833	9.4	%


	Three months ended
(in millions, except for per share data)		November 30, 2021		November 30, 2020
Operating income (U.S. GAAP)		$	350	$	314
Amortization of intangibles		8		11
Stock-based compensation expense and related charges		35		34
Restructuring, severance and related charges		—		(1)

Net periodic benefit cost (1)		7		5


Acquisition and integration charges (2)		—		2
Adjustments to operating income		50		51
Core operating income (Non-GAAP)		$	400	$	365
Net income attributable to Jabil Inc. (U.S. GAAP)		$	241	$	200
Adjustments to operating income		50		51

Net periodic benefit cost (1)		(7)		(5)
Adjustments for taxes		—		(1)
Core earnings (Non-GAAP)		$	284	$	245


Diluted earnings per share (U.S. GAAP)		$	1.63	$	1.31


Diluted core earnings per share (Non-GAAP)		$	1.92	$	1.60


Diluted weighted average shares outstanding (U.S. GAAP and Non-GAAP)		147.7		152.9


(in millions)	4.700% Senior Notes		4.900% Senior Notes		3.950% Senior Notes		3.600% Senior Notes		3.000% Senior Notes		1.700% Senior Notes		Borrowings under revolving credit facilities (1)		Borrowings under loans		Total notes payable and credit facilities
Balance as of August 31, 2021	$	499	$	300	$	496	$	495	$	591	$	496	$	—	$	1	$	2,878
Borrowings	—		—		—		—		—		—		550		—		550
Payments	—		—		—		—		—		—		(550)		—		(550)
Other	1		—		—		—		—		—		—		—		1
Balance as of November 30, 2021	$	500	$	300	$	496	$	495	$	591	$	496	$	—	$	1	$	2,879
Maturity Date	Sep 15, 2022		Jul 14, 2023		Jan 12, 2028		Jan 15, 2030		Jan 15, 2031		Apr 15, 2026		Jan 22, 2024 and Jan 22, 2026		Jul 31, 2026
Original Facility/ Maximum Capacity	$500 million		$300 million		$500 million		$500 million		$600 million		$500 million		$3.8 billion(1)		$2 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 millions)(2)
September 1, 2021 - September 30, 2021	872,673	$	61.45	872,673	$	905
October 1, 2021 - October 31, 2021	1,487,379	$	61.58	816,980	$	854
November 1, 2021 - November 30, 2021	395,488	$	62.30	375,332	$	831
Total	2,755,540	$	61.64	2,064,985


	JABIL INC. Registrant

Date: January 7, 2022	By:	/s/ MARK T. MONDELLO
		Mark T. Mondello Chief Executive Officer

Date: January 7, 2022	By:	/s/ MICHAEL DASTOOR
		Michael Dastoor Chief Financial Officer


Cumulative EPS for Three Fiscal Years Beginning September 1, 2021 and Ending August 31, 2024	Percentage of Shares Vested
Below [**Redacted]		0	%
[**Redacted]		20	%
[**Redacted]		100	%
[**Redacted]		150	%


Full Years of Continuous Service
20 Years	25 Years		30 or More Years
2 years		3 years		Full vesting period


Age	Full Years of Continuous Service
Age	5 Years	10 Years	15 Years	20 or More Years
50 – 54	None	None	1 year	2 years
55 – 57	None	None	2 years	Full vesting period
58 – 61	None	2 years	3 years	Full vesting period
62 or Older	Full vesting period	Full vesting period	Full vesting period	Full vesting period


Company TSR relative to the TSR of the companies in the Index		Percentage of Units/Shares Vested
25th percentile or below		[**Redacted]
Median		[**Redacted]
75th percentile and above		[**Redacted]


1.			I have reviewed this quarterly report on Form 10-Q of Jabil Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15 (e) and 15d – 15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:


			a)			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b)			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			c)			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d)			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


			a)			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and