Jabil Circuit Inc. Reports Operating Results (10-Q)
Jabil Circuit Inc. has a market cap of $4.67 billion; its shares were traded at around $21.45 with a P/E ratio of 16.1 and P/S ratio of 0.3. The dividend yield of Jabil Circuit Inc. stocks is 1.3%. Jabil Circuit Inc. had an annual average earning growth of 4.7% over the past 10 years.JBL is in the portfolios of David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Paul Tudor Jones of The Tudor Group, PRIMECAP Management, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: Selling, General and Administrative. Selling, general and administrative expenses increased to $142.4 million (3.6% of net revenue) for the three months ended November 30, 2010 from $131.6 million (4.3% of net revenue) for the three months ended November 30, 2009. This increase is largely due to $5.5 million in incremental stock-based compensation expense primarily resulting from retirement eligibility provisions that accelerate the requisite service period of certain restricted stock awards and an increase in the number of performance-based restricted stock awards expected to vest and $2.6 million in additional salary expense associated with increased headcount.
Amortization of Intangibles. We recorded $6.0 million of amortization of intangible assets for the three months ended November 30, 2010 as compared to $7.1 million for the three months ended November 30, 2009. The decrease is primarily attributable to certain intangible assets that became fully amortized since November 30, 2009. For additional information regarding purchased intangibles, see Note 7 Goodwill and Other Intangible Assets to the Condensed Consolidated Financial Statements.
During the three months ended November 30, 2010, we recorded $0.1 million of restructuring and impairment costs compared to charges of $3.5 million of restructuring and impairment costs during the three months ended November 30, 2009. The charges related to the 2009 Restructuring Plan incurred during the three months ended November 30, 2010 are primarily related to lease commitment costs.
The 2009 Restructuring Plan is expected to yield annualized cost savings of approximately $55.0 million. The majority of these annual cost savings are expected to be reflected as a reduction in cost of revenue, with a small portion being reflected as a reduction of selling, general and administrative expense. These expected annualized cost savings reflect a reduction in employee expense of approximately $41.8 million, a reduction in depreciation expense of approximately $5.9 million, a reduction in lease commitment costs of approximately $0.1 million, a reduction of other manufacturing costs of approximately $3.8 million and a reduction of selling, general and administrative expenses of approximately $3.4 million. Of the $55.0 million of expected annualized cost savings, we have realized a cumulative annualized cost savings of approximately $50.0 million by the end of the first quarter of fiscal year 2011.
During the three months ended November 30, 2010, we recorded approximately $0.3 million of restructuring and impairment charges compared to a reversal of $0.1 million of restructuring and impairment charges recognized for the three months ended November 30, 2009. The restructuring and impairment costs for the three months ended November 30, 2010 are primarily related to lease commitment costs.
At November 30, 2010, liabilities of approximately $0.6 million related to the 2006 Restructuring Plan are expected to be paid out over the next twelve months. The remaining liability of $2.1 million relates primarily to the charge for employee severance and termination benefits payments.
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