Jabil Inc 10-Q for FY2020 Q2

Jabil Inc (JBL)

10-Q 2020-04-01 For: 2020-02-29

Added on April 11, 2026

About this 10-Q

Jabil Inc filed this 10-Q on April 1, 2020, covering the quarter ended February 29, 2020 (FY2020 Q2).

Headline figures

Quarter ended February 29, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $6.13B; up 1.0% from $6.07B a year earlier
Net loss: $3.28M; compared with net income of $67.35M a year earlier
Diluted EPS: -$0.02; compared with $0.43 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →



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 29, 2020 and August 31, 2019	1
	Condensed Consolidated Statements of Operations for the three months and six months ended February 29, 2020 and February 28, 2019	3
	Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended February 29, 2020 and February 28, 2019	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended February 29, 2020 and February 28, 2019	5
	Condensed Consolidated Statements of Cash Flows for the six months ended February 29, 2020 and February 28, 2019	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39

Part II – Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
	Signatures	44



	February 29, 2020 (Unaudited)			August 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	696,745		$	1,163,343
Accounts receivable, net of allowance for doubtful accounts of $30,191 as of February 29, 2020 and $17,221 as of August 31, 2019	2,314,055			2,745,226
Contract assets	1,057,656			911,940
Inventories, net	3,339,890			3,023,003
Prepaid expenses and other current assets	569,493			501,573
Total current assets	7,977,839			8,345,085
Property, plant and equipment, net of accumulated depreciation of $4,344,338 as of February 29, 2020 and $4,110,496 as of August 31, 2019	3,462,038			3,333,750
Operating lease right-of-use asset	373,413			—
Goodwill	700,597			622,255
Intangible assets, net of accumulated amortization of $367,299 as of February 29, 2020 and $337,841 as of August 31, 2019	234,977			256,853
Deferred income taxes	194,468			198,827
Other assets	196,346			213,705
Total assets	$	13,139,678		$	12,970,475
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and long-term debt	$	637,841		$	375,181
Accounts payable	4,652,138			5,166,780
Accrued expenses	3,015,129			2,990,144
Current operating lease liabilities	100,033			—
Total current liabilities	8,405,141			8,532,105
Notes payable and long-term debt, less current installments	2,086,359			2,121,284
Other liabilities	315,875			163,821
Non-current operating lease liabilities	311,879			—
Income tax liabilities	143,161			136,689
Deferred income taxes	118,123			115,818
Total liabilities	11,380,538			11,069,717
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; 263,299,124 and 260,406,796 shares issued and 151,407,526 and 153,520,380 shares outstanding as of February 29, 2020 and August 31, 2019, respectively	263			260
Additional paid-in capital	2,363,839			2,304,552
Retained earnings	2,048,954			2,037,037
Accumulated other comprehensive loss	(102,943		)	(82,794		)
Treasury stock at cost, 111,891,598 and 106,886,416 shares as of February 29, 2020 and August 31, 2019, respectively	(2,563,282		)	(2,371,612		)
Total Jabil Inc. stockholders’ equity	1,746,831			1,887,443
Noncontrolling interests	12,309			13,315
Total equity	1,759,140			1,900,758
Total liabilities and equity	$	13,139,678		$	12,970,475



☒	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 29, 2020			February 28, 2019			February 29, 2020			February 28, 2019
Net revenue	$	6,125,083		$	6,066,990		$	13,630,781		$	12,573,265
Cost of revenue	5,694,958			5,612,116			12,646,817			11,598,741
Gross profit	430,125			454,874			983,964			974,524
Operating expenses:
Selling, general and administrative	285,024			282,142			613,923			560,268
Research and development	11,290			10,155			22,060			21,298
Amortization of intangibles	13,577			7,777			29,717			15,423
Restructuring and related charges	29,604			817			74,855			6,842
Operating income	90,630			153,983			243,409			370,693
Impairment on securities	12,205			—			12,205			—
Other expense	8,501			11,757			19,673			25,307
Interest income	(5,336		)	(4,760		)	(11,280		)	(9,139		)
Interest expense	46,183			46,160			91,094			88,812
Income before income tax	29,077			100,826			131,717			265,713
Income tax expense	31,658			33,219			93,584			74,032
Net (loss) income	(2,581		)	67,607			38,133			191,681
Net income attributable to noncontrolling interests, net of tax	702			253			994			727
Net (loss) income attributable to Jabil Inc.	$	(3,283	)	$	67,354		$	37,139		$	190,954
(Loss) earnings per share attributable to the stockholders of Jabil Inc.:
Basic	$	(0.02	)	$	0.44		$	0.24		$	1.21
Diluted	$	(0.02	)	$	0.43		$	0.24		$	1.19
Weighted average shares outstanding:
Basic	152,058			154,725			152,579			158,160
Diluted	152,058			156,737			156,171			160,413



Program	Maximum Amount (in millions)⁽¹⁾			Type of Facility	Expiration Date
A	$	500.0		Uncommitted	December 5, 2020⁽²⁾
B	$	150.0		Uncommitted	November 30, 2020⁽³⁾
C	800.0		CNY	Uncommitted	June 30, 2020
D	$	150.0		Uncommitted	May 4, 2023⁽⁴⁾
E	$	50.0		Uncommitted	August 25, 2020
F	$	150.0		Uncommitted	January 25, 2021⁽⁵⁾
G	$	50.0		Uncommitted	February 23, 2023⁽⁶⁾
H	$	100.0		Uncommitted	August 10, 2020⁽⁷⁾
I	$	100.0		Uncommitted	July 21, 2020⁽⁸⁾
J	$	650.0		Uncommitted	December 4, 2020⁽⁹⁾
K	$	110.0		Uncommitted	April 11, 2020⁽¹⁰⁾
L	100.0		CHF	Uncommitted	December 5, 2020⁽²⁾


⁽²⁾	The program will be automatically extended each year through December 5, 2025 unless either party provides 30 days notice of termination.


⁽³⁾	The program will automatically extend for one year at each expiration date unless either party provides 10 days notice of termination.


⁽⁴⁾	Any party may elect to terminate the agreement upon 30 days prior notice.


⁽⁵⁾	The program will be automatically extended through January 25, 2023 unless either party provides 30 days notice of termination.


⁽⁶⁾	Any party may elect to terminate the agreement upon 15 days prior notice.


⁽⁷⁾	The program will be automatically extended through August 10, 2023 unless either party provides 30 days notice of termination.



	Three months ended						Six months ended
	February 29, 2020			February 28, 2019			February 29, 2020			February 28, 2019
Total stockholders' equity, beginning balances	$	1,849,293		$	1,905,513		$	1,900,758		$	1,963,380
Common stock:
Beginning balances	262			259			260			257
Shares issued under employee stock purchase plan	1			1			1			1
Vesting of restricted stock	—			—			2			2
Ending balances	263			260			263			260
Additional paid-in capital:
Beginning balances	2,332,307			2,235,827			2,304,552			2,218,673
Shares issued under employee stock purchase plan	16,179			14,579			16,179			14,587
Vesting of restricted stock	—			—			(2		)	(2		)
Recognition of stock-based compensation	15,353			14,560			43,110			31,708
Ending balances	2,363,839			2,264,966			2,363,839			2,264,966
Retained earnings:
Beginning balances	2,064,758			1,911,451			2,037,037			1,760,097
Declared dividends	(12,521		)	(12,705		)	(25,222		)	(25,806		)
Cumulative effect adjustment for adoption of new accounting standards	—			—			—			40,855
Net (loss) income attributable to Jabil Inc.	(3,283		)	67,354			37,139			190,954
Ending balances	2,048,954			1,966,100			2,048,954			1,966,100
Accumulated other comprehensive loss:
Beginning balances	(74,322		)	(31,948		)	(82,794		)	(19,399		)
Other comprehensive (loss) income	(28,621		)	18,695			(20,149		)	6,146
Ending balances	(102,943		)	(13,253		)	(102,943		)	(13,253		)
Treasury stock:
Beginning balances	(2,487,319		)	(2,223,673		)	(2,371,612		)	(2,009,371		)
Purchases of treasury stock under employee stock plans	(3,693		)	(1,489		)	(23,010		)	(11,204		)
Treasury shares purchased	(72,270		)	(145,736		)	(168,660		)	(350,323		)
Ending balances	(2,563,282		)	(2,370,898		)	(2,563,282		)	(2,370,898		)
Noncontrolling interests:
Beginning balances	13,607			13,597			13,315			13,123
Net income attributable to noncontrolling interests	702			253			994			727
Acquisition of noncontrolling interests	—			1,112			—			1,112
Disposition of noncontrolling interests	—			(1,785		)	—			(1,785		)
Declared dividends to noncontrolling interests	(2,000		)	(1,500		)	(2,000		)	(1,500		)
Ending balances	12,309			11,677			12,309			11,677
Total stockholders' equity, ending balances	$	1,759,140		$	1,858,852		$	1,759,140		$	1,858,852



	Six months ended
	February 29, 2020			February 28, 2019
Cash flows provided by operating activities:
Net income	$	38,133		$	191,681
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	402,347			381,510
Restructuring and related charges	33,061			(3,212		)
Recognition of stock-based compensation expense and related charges	45,332			32,946
Deferred income taxes	3,087			23,921
Provision for allowance for doubtful accounts	10,185			5,598
Other, net	13,838			38,559
Change in operating assets and liabilities, exclusive of net assets acquired:
Accounts receivable	424,971			(365,192		)
Contract assets	(63,302		)	(815,144		)
Inventories	(279,664		)	225,036
Prepaid expenses and other current assets	(62,881		)	(4,895		)
Other assets	(8,438		)	(10,170		)
Accounts payable, accrued expenses and other liabilities	(472,503		)	407,127
Net cash provided by operating activities	84,166			107,765
Cash flows used in investing activities:
Acquisition of property, plant and equipment	(448,765		)	(537,140		)
Proceeds and advances from sale of property, plant and equipment	36,624			144,968
Cash paid for business and intangible asset acquisitions, net of cash	(141,195		)	(80,778		)
Cash receipts on sold receivables	—			96,846
Other, net	(2,013		)	(13,504		)
Net cash used in investing activities	(555,349		)	(389,608		)
Cash flows provided by (used in) financing activities:
Borrowings under debt agreements	5,063,358			6,182,931
Payments toward debt agreements	(4,835,697		)	(6,046,181		)
Payments to acquire treasury stock	(168,660		)	(350,323		)
Dividends paid to stockholders	(26,280		)	(27,422		)
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan	16,179			14,587
Treasury stock minimum tax withholding related to vesting of restricted stock	(23,010		)	(11,204		)
Other, net	(11,617		)	(1,500		)
Net cash provided by (used in) financing activities	14,273			(239,112		)
Effect of exchange rate changes on cash and cash equivalents	(9,688		)	12,063
Net decrease in cash and cash equivalents	(466,598		)	(508,892		)
Cash and cash equivalents at beginning of period	1,163,343			1,257,949


⁽¹⁾	Maximum amount available at any one time.


⁽¹⁾	Recorded to other expense within the Condensed Consolidated Statement of Operations.


⁽⁸⁾	The program will be automatically extended through August 21, 2023 unless either party provides 30 days notice of termination.


⁽⁹⁾	The program will be automatically extended each year through December 5, 2024 unless either party provides 30 days notice of termination.


⁽¹⁰⁾	The program will be automatically extended each year through April 11, 2025 unless either party provides 30 days notice of termination.



	Three months ended				Six months ended
	February 29, 2020		February 28, 2019		February 29, 2020		February 28, 2019
Trade accounts receivable sold	$	2,201	$	1,719	$	4,163	$	3,553
Cash proceeds received	$	2,196	$	1,712	$	4,153	$	3,538
Pre-tax losses on sale of receivables⁽¹⁾	$	5	$	7	$	10	$	15



	February 29, 2020			August 31, 2019
Raw materials	$	2,482,072		$	2,310,081
Work in process	462,549			468,217
Finished goods	455,295			314,258
Reserve for excess and obsolete inventory	(60,026		)	(69,553		)
Inventories, net	$	3,339,890		$	3,023,003



	Financial Statement Line Item	February 29, 2020
Assets
Operating lease assets ⁽¹⁾	Operating lease right-of-use assets	$	373,413
Finance lease assets ⁽²⁾	Property, plant and equipment, net	151,401
Total lease assets		$	524,814
Liabilities
Current
Operating lease liabilities	Current operating lease liabilities	$	100,033
Finance lease liabilities	Accrued expenses	6,906
Non-current
Operating lease liabilities	Non-current operating lease liabilities	311,879
Finance lease liabilities	Other liabilities	156,798
Total lease liabilities		$	575,616


⁽¹⁾	Lease costs are primarily recognized in cost of revenue.



	February 29, 2020
	Weighted-average remaining lease term	Weighted-average discount rate
Operating leases	5.5 years	3.22	%
Finance leases	6.3 years	4.31	%



	Six months ended
	February 29, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases⁽¹⁾	$	55,592
Operating cash flows for finance leases⁽¹⁾	2,443
Financing activities for finance leases⁽²⁾	2,808
Non-cash right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	34,213
Finance leases	111,591


⁽¹⁾	Included in accounts payable, accrued expenses and other liabilities in Operating Activities of the Company's Condensed Consolidated Statements of Cash Flows.


⁽²⁾	Included in payments toward debt agreements in Financing Activities of the Company's Condensed Consolidated Statements of Cash Flows.



Twelve months ended February 29,	Operating Leases⁽¹⁾			Finance Leases			Total
2020	$	110,692		$	11,849		$	122,541
2021	89,479			12,375			101,854
2022	69,928			11,744			81,672
2023	53,400			11,879			65,279
2024	41,472			15,644			57,116
Thereafter	92,529			128,763			221,292
Total minimum lease payments	$	457,500		$	192,254		$	649,754
Less: Interest	(45,588		)	(28,550		)	(74,138		)
Present value of lease liabilities	$	411,912		$	163,704		$	575,616


⁽¹⁾	Excludes $28.2 million of payments related to leases signed but not yet commenced. Additionally, certain leases signed but not yet commenced contain residual value guarantees and purchase options not deemed probable.



Fiscal Year Ending August 31,	Amount
2020	$	118,312
2021	102,915
2022	84,729
2023	63,206
2024	51,091
Thereafter	182,932
Total minimum lease payments	$	603,185



	Maturity Date	February 29, 2020		August 31, 2019
5.625% Senior Notes	Dec 15, 2020	$	399,332	$	398,886
4.700% Senior Notes	Sep 15, 2022	498,332		498,004
4.900% Senior Notes	Jul 14, 2023	299,178		299,057
3.950% Senior Notes	Jan 12, 2028	495,132		494,825
3.600% Senior Notes⁽¹⁾	Jan 15, 2030	494,470		—
Borrowings under credit facilities⁽²⁾⁽³⁾	Jan 22, 2023 and Jan 22, 2025	—		—
Borrowings under commercial paper program⁽⁴⁾	⁽⁴⁾	237,661		—
Borrowings under loans⁽²⁾	Jan 22, 2025	300,095		805,693
Total notes payable and long-term debt		2,724,200		2,496,465
Less current installments of notes payable and long-term debt		637,841		375,181
Notes payable and long-term debt, less current installments		$	2,086,359	$	2,121,284


⁽¹⁾	On January 15, 2020, the Company issued $500.0 million of publicly registered 3.600% Senior Notes due 2030 (the “3.600% Senior Notes”). The net proceeds from the offering were used for the repayment of term loan indebtedness.


⁽³⁾	As of February 29, 2020, the Company has $3.1 billion in available unused borrowing capacity under its revolving credit facilities, net of outstanding commercial paper borrowings.


⁽⁴⁾	The Company has a borrowing capacity of up to $1.8 billion under its commercial paper program. The revolving credit facility supports commercial paper outstanding, if any. As of February 29, 2020, the outstanding commercial paper has maturities of 90 days or less. During the three months ended February 29, 2020, the interest rates on the commercial paper program ranged from 2.0% to 2.6%.



	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


⁽²⁾	As of February 29, 2020, the Company had up to $76.3 million in available liquidity under its asset-backed securitization programs.