Jabil Inc 10-Q for FY2023 Q2

Jabil Inc (JBL)

10-Q 2023-04-05 For: 2023-02-28

Added on April 11, 2026

About this 10-Q

Jabil Inc filed this 10-Q on April 5, 2023, covering the quarter ended February 28, 2023 (FY2023 Q2).

Headline figures

Quarter ended February 28, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.13B; up 7.7% from $7.55B a year earlier
Net income: $207M; down 6.8% from net income of $222M a year earlier
Diluted EPS: $1.52; up 0.7% from $1.51 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, 2023 and August 31, 2022	1
	Condensed Consolidated Statements of Operations for the three months and six months ended February 28, 2023 and 2022	2
	Condensed Consolidated Statements of Comprehensive Income for the three months and six months ended February 28, 2023 and 2022	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three months and six months ended February 28, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the six months ended February 28, 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27

Part II – Other Information
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	31


	February 28, 2023 (Unaudited)		August 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,200	$	1,478
Accounts receivable, net of allowance for credit losses	3,715		3,995
Contract assets	1,175		1,196
Inventories, net	6,519		6,128
Prepaid expenses and other current assets	1,172		1,111
Total current assets	13,781		13,908
Property, plant and equipment, net of accumulated depreciation of $5,963 as of February 28, 2023 and $5,624 as of August 31, 2022	3,903		3,954
Operating lease right-of-use asset	501		500
Goodwill	710		704
Intangible assets, net of accumulated amortization of $489 as of February 28, 2023 and $471 as of August 31, 2022	142		158
Deferred income taxes	217		199
Other assets	313		294
Total assets	$	19,567	$	19,717
LIABILITIES AND EQUITY
Current liabilities:
Current installments of notes payable and long-term debt	$	323	$	300
Accounts payable	6,965		8,006
Accrued expenses	5,866		5,272
Current operating lease liabilities	128		119
Total current liabilities	13,282		13,697
Notes payable and long-term debt, less current installments	2,577		2,575
Other liabilities	297		272
Non-current operating lease liabilities	405		417
Income tax liabilities	206		182
Deferred income taxes	126		122
Total liabilities	16,893		17,265
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; 273,531,447 and 270,891,715 shares issued and 133,238,368 and 135,493,980 shares outstanding as of February 28, 2023 and August 31, 2022, respectively	—		—
Additional paid-in capital	2,742		2,655
Retained earnings	4,046		3,638
Accumulated other comprehensive income (loss)	9		(42)
Treasury stock at cost, 140,293,079 and 135,397,735 shares as of February 28, 2023 and August 31, 2022, respectively	(4,124)		(3,800)
Total Jabil Inc. stockholders’ equity	2,673		2,451
Noncontrolling interests	1		1
Total equity	2,674		2,452
Total liabilities and equity	$	19,567	$	19,717


☒			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, 2023		February 28, 2022		February 28, 2023		February 28, 2022
Net revenue	$	8,134	$	7,553	$	17,769	$	16,120
Cost of revenue	7,473		6,944		16,365		14,836
Gross profit	661		609		1,404		1,284
Operating expenses:
Selling, general and administrative	285		280		604		588
Research and development	8		8		17		17
Amortization of intangibles	9		8		17		16
Restructuring, severance and related charges	—		—		45		—
Operating income	359		313		721		663


Other expense (income)	17		(4)		32		(3)
Interest income	(17)		—		(30)		(1)
Interest expense	72		33		133		66
Income before income tax	287		284		586		601
Income tax expense	80		62		156		138
Net income	207		222		430		463
Net income attributable to noncontrolling interests, net of tax	—		—		—		—
Net income attributable to Jabil Inc.	$	207	$	222	$	430	$	463
Earnings per share attributable to the stockholders of Jabil Inc.:
Basic	$	1.55	$	1.55	$	3.21	$	3.22
Diluted	$	1.52	$	1.51	$	3.14	$	3.15
Weighted average shares outstanding:
Basic	133.6		143.5		134.2		143.8
Diluted	136.3		146.4		137.1		147.0


	February 28, 2023		August 31, 2022
Raw materials	$	5,576	$	4,918
Work in process	499		687
Finished goods	522		605
Reserve for excess and obsolete inventory	(78)		(82)
Inventories, net	$	6,519	$	6,128


	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Operating lease obligations(1)	$	70	$	19	$	29	$	17	$	5
Finance lease obligations(1)	$	75	$	45	$	30	$	—	$	—


	Maturity Date	February 28, 2023		August 31, 2022
4.900% Senior Notes	Jul 14, 2023	$	300	$	300
3.950% Senior Notes	Jan 12, 2028	497		497
3.600% Senior Notes	Jan 15, 2030	496		496
3.000% Senior Notes	Jan 15, 2031	593		592
1.700% Senior Notes	Apr 15, 2026	497		497
4.250% Senior Notes	May 15, 2027	494		493
Borrowings under credit facilities(1)(2)	Jan 22, 2025 and Jan 22, 2027	23		—
Borrowings under loans	Jul 31, 2026	—		—
Total notes payable and long-term debt		2,900		2,875
Less current installments of notes payable and long-term debt		323		300
Notes payable and long-term debt, less current installments		$	2,577	$	2,575


	February 28, 2023		August 31, 2022
Inventory deposits	$	1,975	$	1,586
Contract liabilities(1)	1,128		796
Accrued compensation and employee benefits	653		806
Other accrued expenses	2,110		2,084
Accrued expenses	$	5,866	$	5,272


Derivatives Not Designated as Hedging Instruments Under ASC 815	Location of Gain (Loss) on Derivatives Recognized in Net Income	Amount of Gain (Loss) Recognized in Net Income on Derivatives
		Three months ended				Six months ended
		February 28, 2023		February 28, 2022		February 28, 2023		February 28, 2022
Forward foreign exchange contracts(1)	Cost of revenue	$	30	$	22	$	(16)	$	60


	Foreign Currency Translation Adjustment		Derivative Instruments		Actuarial Gain (Loss)		Prior Service (Cost) Credit		Total
Balance as of August 31, 2022	$	(88)	$	(3)	$	65	$	(16)	$	(42)
Other comprehensive income (loss) before reclassifications	18		(7)		2		(1)		12
Amounts reclassified from AOCI	—		44		(7)		2		39
Other comprehensive income (loss)(1)	18		37		(5)		1		51
Balance as of February 28, 2023	$	(70)	$	34	$	60	$	(15)	$	9


		Three months ended				Six months ended
Comprehensive Income Components	Financial Statement Line Item	February 28, 2023		February 28, 2022		February 28, 2023		February 28, 2022
Realized losses (gains) on derivative instruments:(1)
Foreign exchange contracts	Cost of revenue	$	1	$	(6)	$	44	$	(5)
Interest rate contracts	Interest expense	—		1		—		2
Actuarial gain	(2)	(4)		(5)		(7)		(10)
Prior service cost	(2)	1		1		2		2
Total amounts reclassified from AOCI(3)		$	(2)	$	(9)	$	39	$	(11)


	February 28, 2023
Unrecognized stock-based compensation expense—restricted stock units	$	64
Remaining weighted-average period for restricted stock units expense	1.5 years


	Three months ended				Six months ended
	February 28, 2023(1)		February 28, 2022		February 28, 2023(1)		February 28, 2022
Employee severance and benefit costs	$	(4)	$	—	$	36	$	1
Lease costs	—		—		—		(1)
Asset write-off costs	4		—		5		—
Other costs	—		—		4		—
Total restructuring, severance and related charges(2)	$	—	$	—	$	45	$	—


	Dividend Declaration Date	Dividend per Share		Total of Cash Dividends Declared		Date of Record for Dividend Payment	Dividend Cash Payment Date
Fiscal Year 2023:	October 20, 2022	$	0.08	$	12	November 15, 2022	December 2, 2022
	January 26, 2023	$	0.08	$	10	February 15, 2023	March 2, 2023


Fiscal Year 2022:	October 21, 2021	$	0.08	$	12	November 15, 2021	December 1, 2021
	January 20, 2022	$	0.08	$	12	February 15, 2022	March 2, 2022


	Fair Value Hierarchy		February 28, 2023		August 31, 2022
Assets:
Cash and cash equivalents:
Cash equivalents	Level 1	(1)	$	5	$	14
Prepaid expenses and other current assets:
Short-term investments	Level 1		22		16
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 9)	Level 2	(2)	11		3
Derivatives not designated as hedging instruments (Note 9)	Level 2	(2)	42		13


Other assets:

Forward interest rate swap:
Derivatives designated as hedging instruments (Note 9)	Level 2	(3)	23		13
Liabilities:
Accrued expenses:
Forward foreign exchange contracts:
Derivatives designated as hedging instruments (Note 9)	Level 2	(2)	$	14	$	32
Derivatives not designated as hedging instruments (Note 9)	Level 2	(2)	27		76


	Three months ended						Six months ended
(dollars in millions)	February 28, 2023		February 28, 2022		Change		February 28, 2023		February 28, 2022		Change
Net revenue	$	8,134	$	7,553	7.7	%	$	17,769	$	16,120	10.2	%


	Three months ended				Six months ended
(in millions, except for per share data)	February 28, 2023		February 28, 2022		February 28, 2023		February 28, 2022
Operating income (U.S. GAAP)	$	359	$	313	$	721	$	663
Amortization of intangibles	9		8		17		16
Stock-based compensation expense and related charges	20		16		62		51
Restructuring, severance and related charges(1)	—		—		45		—

Net periodic benefit cost(2)	3		7		7		14



Adjustments to operating income	32		31		131		81
Core operating income (Non-GAAP)	$	391	$	344	$	852	$	744
Net income attributable to Jabil Inc. (U.S. GAAP)	$	207	$	222	$	430	$	463
Adjustments to operating income	32		31		131		81


Net periodic benefit cost(2)	(3)		(7)		(7)		(14)
Adjustments for taxes	20		—		21		—
Core earnings (Non-GAAP)	$	256	$	246	$	575	$	530


Diluted earnings per share (U.S. GAAP)	$	1.52	$	1.51	$	3.14	$	3.15


Diluted core earnings per share (Non-GAAP)	$	1.88	$	1.68	$	4.19	$	3.60


Diluted weighted average shares outstanding (U.S. GAAP and Non-GAAP)	136.3		146.4		137.1		147.0


	Six months ended
(in millions)	February 28, 2023		February 28, 2022
Net cash provided by operating activities (U.S. GAAP)	$	580	$	200
Acquisition of property, plant and equipment (“PP&E”)(1)	(637)		(704)
Proceeds and advances from sale of PP&E(1)	169		430
Adjusted free cash flow (Non-GAAP)	$	112	$	(74)


(in millions)	4.900% Senior Notes		3.950% Senior Notes		3.600% Senior Notes		3.000% Senior Notes		1.700% Senior Notes		4.250% Senior Notes		Borrowings under revolving credit facilities(1)(2)		Borrowings under loans		Total notes payable and credit facilities
Balance as of August 31, 2022	$	300	$	497	$	496	$	592	$	497	$	493	$	—	$	—	$	2,875
Borrowings	—		—		—		—		—		—		2,021		—		2,021
Payments	—		—		—		—		—		—		(1,998)		—		(1,998)
Other	—		—		—		1		—		1		—		—		2
Balance as of February 28, 2023	$	300	$	497	$	496	$	593	$	497	$	494	$	23	$	—	$	2,900
Maturity Date	Jul 14, 2023		Jan 12, 2028		Jan 15, 2030		Jan 15, 2031		Apr 15, 2026		May 15, 2027		Jan 22, 2025 and Jan 22, 2027		Jul 31, 2026
Original Facility/ Maximum Capacity(2)	$300 million		$500 million		$500 million		$600 million		$500 million		$500 million		$3.8 billion(2)		$1 million


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs(2)(3)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (in millions)(2)(3)
December 1, 2022 - December 31, 2022	957,704	$	70.30	957,593	$	1,035
January 1, 2023 - January 31, 2023	407,990	$	71.90	360,859	$	1,009
February 1, 2023 - February 28, 2023	405,292	$	82.33	405,292	$	975
Total	1,770,986	$	73.42	1,723,744


	JABIL INC. Registrant

Date: April 5, 2023	By:	/s/ MARK T. MONDELLO
		Mark T. Mondello Chief Executive Officer

Date: April 5, 2023	By:	/s/ MICHAEL DASTOOR
		Michael Dastoor Chief Financial Officer


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


			b)			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.