Jabil Circuit Inc. (JBL, Financial) filed Quarterly Report for the period ended 2009-05-31.
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 $1.53 billion; its shares were traded at around $7.22 with a P/E ratio of 11.37 and P/S ratio of 119.76. The dividend yield of Jabil Circuit Inc. stocks is 3.91%. 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, our Board of Directors approved a restructuring plan to better align our manufacturing capacity in certain geographies and to reduce our worldwide workforce by approximately 3,000 employees in order to reduce operating expenses (the 2009 Restructuring Plan). These restructuring activities are intended to address the current market conditions and properly size our manufacturing facilities to increase the efficiencies of our operations. Based on the analysis completed to date, we currently expect to recognize approximately $64.0 million in pre-tax restructuring and impairment costs and reduce our worldwide headcount by approximately 2,500 employees over the course of fiscal years 2009 and 2010. In addition, we have recorded a valuation allowance of $13.5 million on certain deferred tax assets during the second quarter of fiscal year 2009. The restructuring charges include pre-tax employee severance and termination benefit costs, contract termination costs and other related restructuring costs. The impairment charges include pre-tax fixed asset impairment costs, as well as valuation allowances against net deferred tax assets. This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the particular legal jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors. Based on the ongoing assessment of market conditions, it is possible that we may perform additional restructuring activities in the future. For further discussion of this restructuring program and the restructuring and impairment costs recognized, refer to Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Restructuring and Impairment Charges and Note 7 Restructuring and Impairment Charges to the Condensed Consolidated Financial Statements. See also Risk Factors We face risks arising from the restructuring of our operations.
During the first quarter of fiscal year 2009, 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 the deferred tax assets, 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, 2008, related to the Consumer reporting unit, we concluded that additional impairment indicators were present. As a result of that analysis, we determined that the goodwill related to the Consumer reporting unit was fully impaired and recorded an additional non-cash goodwill impairment charge of approximately $82.7 million. Further, we also determined that the goodwill related to the EMS reporting unit was impaired and recorded a preliminary non-cash goodwill impairment charge of approximately $622.4 million. The income tax expense associated with the goodwill impairment was $111.8 million for the fiscal quarter ended February 28, 2009. This included 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.
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 $1.53 billion; its shares were traded at around $7.22 with a P/E ratio of 11.37 and P/S ratio of 119.76. The dividend yield of Jabil Circuit Inc. stocks is 3.91%. 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:
Net revenues for the third quarter of fiscal year 2009 decreased approximately 15.3% to $2.6 billion compared to $3.1 billion for the same period of fiscal year 2008 due to decreases in all of our sectors, except for the peripheral sector and the AMS division. These decreases were largely due to the reductions in customer demand resulting from the downturn in the global macro-economic environment in which we operate.During the second quarter of fiscal year 2009, our Board of Directors approved a restructuring plan to better align our manufacturing capacity in certain geographies and to reduce our worldwide workforce by approximately 3,000 employees in order to reduce operating expenses (the 2009 Restructuring Plan). These restructuring activities are intended to address the current market conditions and properly size our manufacturing facilities to increase the efficiencies of our operations. Based on the analysis completed to date, we currently expect to recognize approximately $64.0 million in pre-tax restructuring and impairment costs and reduce our worldwide headcount by approximately 2,500 employees over the course of fiscal years 2009 and 2010. In addition, we have recorded a valuation allowance of $13.5 million on certain deferred tax assets during the second quarter of fiscal year 2009. The restructuring charges include pre-tax employee severance and termination benefit costs, contract termination costs and other related restructuring costs. The impairment charges include pre-tax fixed asset impairment costs, as well as valuation allowances against net deferred tax assets. This information will be subject to the finalization of timetables for the transition of functions, consultation with employees and their representatives as well as the statutory severance requirements of the particular legal jurisdictions impacted, and the amount and timing of the actual charges may vary due to a variety of factors. Based on the ongoing assessment of market conditions, it is possible that we may perform additional restructuring activities in the future. For further discussion of this restructuring program and the restructuring and impairment costs recognized, refer to Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Restructuring and Impairment Charges and Note 7 Restructuring and Impairment Charges to the Condensed Consolidated Financial Statements. See also Risk Factors We face risks arising from the restructuring of our operations.
During the first quarter of fiscal year 2009, 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 the deferred tax assets, 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, 2008, related to the Consumer reporting unit, we concluded that additional impairment indicators were present. As a result of that analysis, we determined that the goodwill related to the Consumer reporting unit was fully impaired and recorded an additional non-cash goodwill impairment charge of approximately $82.7 million. Further, we also determined that the goodwill related to the EMS reporting unit was impaired and recorded a preliminary non-cash goodwill impairment charge of approximately $622.4 million. The income tax expense associated with the goodwill impairment was $111.8 million for the fiscal quarter ended February 28, 2009. This included 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.
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.
