Jabil Circuit Inc. (JBL, Financial) filed Quarterly Report for the period ended 2009-02-28.
Jabil Circuit Inc. is a worldwide independent provider of electronic manufacturing services. It designs and manufactures electronic circuit board assemblies and systems for major original equipment manufacturers in the communications computer peripherals personal computer automotive and consumer products industries. It serves its original equipment manufacturer customers with dedicated work cell business units that combine high volume highly automated continuous flow manufacturing with advanced electronic design and design for manufacturability technologies. Jabil Circuit Inc. has a market cap of $1.29 billion; its shares were traded at around $6.01 with a P/E ratio of 6.9 and P/S ratio of 100.5. The dividend yield of Jabil Circuit Inc. stocks is 4.6%. Jabil Circuit Inc. had an annual average earning growth of 8.1% over the past 10 years. GuruFocus rated Jabil Circuit Inc. the business predictability rank of 2-star.
During the second quarter of fiscal year 2009 and prior to finalizing the preliminary non-cash goodwill impairment charge recorded at November 30, 2009, related to the Consumer reporting unit, we concluded that additional indicators of potential impairment were present. Those indicators, based upon a combination of factors, included a continued deterioration in the macro-economic environment which resulted in further decline in customer demand and further sustained decline in our market capitalization below our carrying value. Furthermore, the average closing price of our common stock on the New York Stock Exchange (NYSE) in the second quarter of fiscal year 2009 was $6.16 compared to an average of $8.89 in the first quarter of fiscal year 2009, a decline of approximately 31%. At February 28, 2009, the closing price of our common stock was $4.14 compared to $6.58 at November 30, 2008, a decline of approximately 37%. Accordingly, we performed an interim first step of goodwill impairment test for each of our reporting units and determined that the carrying values of the Consumer and EMS reporting units exceeded their fair value, indicating potential goodwill impairment existed. Having determined that the goodwill of the Consumer and EMS reporting units were potentially impaired, we began performing the second step of the goodwill impairment analysis which involves calculating the implied fair value of the goodwill of the Consumer and EMS reporting units by allocating the fair value of the respective reporting units to all of our assets and liabilities other than goodwill (including both recognized and unrecognized intangible assets) and comparing the residual amount to the carrying value of goodwill. As of the date of the filing of our Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2009, we have determined that the goodwill related to the Consumer reporting unit is fully impaired and have recorded an additional non-cash goodwill impairment charge of approximately $82.7 million for the three months ended February 28, 2009. Further, we have also determined that the goodwill related to the EMS reporting unit is impaired and have recorded a preliminary non-cash goodwill impairment charge of approximately $622.4 million for the three months ended February 28, 2009. We have recorded this charge based on a preliminary assessment and will continue to
The income tax expense associated with the goodwill impairment was $111.8 million for the fiscal quarter ended February 28, 2009. This includes a tax benefit of $9.0 million for the write-off of tax deductible goodwill and income tax expense of $120.8 million resulting from the recognition of a valuation allowance against the deferred tax assets that we no longer believe are more likely than not to be realized. The recognition of the valuation allowance was primarily attributable to the same conditions that caused the goodwill impairment as referenced above.
The non-cash goodwill impairment charge of $ 705.1 million and $1.0 billion for the three months and six months ended February 28, 2009, respectively, did not impact our cash balance or debt covenant compliance.
Read the The complete ReportJBL is in the portfolios of David Dreman of Dreman Value Management, PRIMECAP Management, Kenneth Fisher of Fisher Asset Management, LLC.
Jabil Circuit Inc. is a worldwide independent provider of electronic manufacturing services. It designs and manufactures electronic circuit board assemblies and systems for major original equipment manufacturers in the communications computer peripherals personal computer automotive and consumer products industries. It serves its original equipment manufacturer customers with dedicated work cell business units that combine high volume highly automated continuous flow manufacturing with advanced electronic design and design for manufacturability technologies. Jabil Circuit Inc. has a market cap of $1.29 billion; its shares were traded at around $6.01 with a P/E ratio of 6.9 and P/S ratio of 100.5. The dividend yield of Jabil Circuit Inc. stocks is 4.6%. Jabil Circuit Inc. had an annual average earning growth of 8.1% over the past 10 years. GuruFocus rated Jabil Circuit Inc. the business predictability rank of 2-star.
Highlight of Business Operations:
During the first quarter of fiscal year 2009, based upon a combination of factors, including a significant and sustained decline in our market capitalization below our carrying value, the deteriorating macro-economic environment and illiquidity in the overall credit markets, we concluded that sufficient indicators existed to require us to perform an interim goodwill impairment analysis at November 30, 2008. Accordingly, at November 30, 2008, we determined that the goodwill related to the Consumer reporting unit was impaired and recorded a preliminary non-cash goodwill impairment charge of approximately $317.7 million. The income tax expense associated with the preliminary goodwill impairment charge was $4.4 million. This included a tax benefit of $30.6 million for the write-off of tax deductible goodwill and tax expense of $35.0 million resulting from the recognition of a valuation allowance against a deferred tax asset, which related primarily to net operating losses, that we now believe will not be realized.During the second quarter of fiscal year 2009 and prior to finalizing the preliminary non-cash goodwill impairment charge recorded at November 30, 2009, related to the Consumer reporting unit, we concluded that additional indicators of potential impairment were present. Those indicators, based upon a combination of factors, included a continued deterioration in the macro-economic environment which resulted in further decline in customer demand and further sustained decline in our market capitalization below our carrying value. Furthermore, the average closing price of our common stock on the New York Stock Exchange (NYSE) in the second quarter of fiscal year 2009 was $6.16 compared to an average of $8.89 in the first quarter of fiscal year 2009, a decline of approximately 31%. At February 28, 2009, the closing price of our common stock was $4.14 compared to $6.58 at November 30, 2008, a decline of approximately 37%. Accordingly, we performed an interim first step of goodwill impairment test for each of our reporting units and determined that the carrying values of the Consumer and EMS reporting units exceeded their fair value, indicating potential goodwill impairment existed. Having determined that the goodwill of the Consumer and EMS reporting units were potentially impaired, we began performing the second step of the goodwill impairment analysis which involves calculating the implied fair value of the goodwill of the Consumer and EMS reporting units by allocating the fair value of the respective reporting units to all of our assets and liabilities other than goodwill (including both recognized and unrecognized intangible assets) and comparing the residual amount to the carrying value of goodwill. As of the date of the filing of our Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2009, we have determined that the goodwill related to the Consumer reporting unit is fully impaired and have recorded an additional non-cash goodwill impairment charge of approximately $82.7 million for the three months ended February 28, 2009. Further, we have also determined that the goodwill related to the EMS reporting unit is impaired and have recorded a preliminary non-cash goodwill impairment charge of approximately $622.4 million for the three months ended February 28, 2009. We have recorded this charge based on a preliminary assessment and will continue to
The income tax expense associated with the goodwill impairment was $111.8 million for the fiscal quarter ended February 28, 2009. This includes a tax benefit of $9.0 million for the write-off of tax deductible goodwill and income tax expense of $120.8 million resulting from the recognition of a valuation allowance against the deferred tax assets that we no longer believe are more likely than not to be realized. The recognition of the valuation allowance was primarily attributable to the same conditions that caused the goodwill impairment as referenced above.
The non-cash goodwill impairment charge of $ 705.1 million and $1.0 billion for the three months and six months ended February 28, 2009, respectively, did not impact our cash balance or debt covenant compliance.
Read the The complete ReportJBL is in the portfolios of David Dreman of Dreman Value Management, PRIMECAP Management, Kenneth Fisher of Fisher Asset Management, LLC.
