Attached files
| file | filename |
|---|---|
| 8-K - 8-K - JABIL INC | d704202d8k.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Sale of Aftermarket Services (“AMS”) Business
On April 1, 2014, Jabil Circuit, Inc. (“Jabil” or the “Company”) completed the sale of substantially all of its AMS business, except for the Malaysian operations due to certain regulatory approvals that are still pending in that jurisdiction, through a stock purchase agreement with iQor Holdings, Inc. (“iQor”) dated December 17, 2013. The sale was consummated for consideration of $725.0 million, which consists of $675.0 million in cash and an aggregate liquidation preference value of $50.0 million in Senior Non-Convertible Cumulative Preferred Stock of iQor that accretes dividends at an annual rate of 8 percent and is redeemable in nine years or upon a change in control. The amount of proceeds payable at closing was subject to a reduction of $90.5 million for cash, indebtedness, taxes, interest, certain working capital accounts and other items of the Company’s AMS business, which is subject to a future reconciliation and potential adjustment. Also, $20.0 million associated with the Malaysian operations was included in escrow until the closing of the Malaysian operations, which is anticipated to occur once such approvals are obtained.
Unaudited Pro Forma Consolidated Financial Information
The following unaudited pro forma consolidated financial statements were derived from the historical consolidated financial statements of the Company, which were prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
The unaudited pro forma consolidated balance sheet as of November 30, 2013 gives effect to the sale, as if it had occurred on that date. The unaudited pro forma consolidated statements of operations for the three months ended November 30, 2013 and 2012, and for the fiscal years ended August 31, 2013, 2012 and 2011, give effect to the sale, as if it had occurred on September 1, 2010, the first day of fiscal year 2011.
The unaudited pro forma consolidated financial statements include adjustments to reflect the following:
| • | the elimination of the AMS operations; and |
| • | the cash received from the sale of AMS and the investment in Senior Non-Convertible Cumulative Preferred Stock of iQor. |
The Company believes that the adjustments related to the sale of AMS presented in the unaudited pro forma consolidated financial information are consistent with the guidance for discontinued operations under U.S. GAAP. Specifically, income tax related adjustments represent our current estimates on a discontinued operations basis, which could materially change as the Company finalizes its discontinued operations accounting to be reported in the Annual Report on Form 10-K for the fiscal year ended August 31, 2014.
The assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma consolidated financial statements. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and the Company believes such assumptions are reasonable under the circumstances.
The following unaudited pro forma consolidated financial statements should be read in conjunction with the historical consolidated financial statements of the Company, the accompanying notes to those financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Jabil’s Annual Report on Form 10-K for the fiscal year ended August 31, 2013 and Quarterly Report on Form 10-Q for the first quarter of fiscal year 2014 ended November 30, 2013. The unaudited pro forma consolidated financial statements have been presented for informational purposes only. The unaudited pro forma consolidated financial statements are not necessarily indicative of what our results of operations or financial condition would have been had the transactions to which the pro forma adjustments relate actually occurred on the dates indicated, and they do not assert to project our results of operations or financial condition for any future period or as of any future date.
FORWARD LOOKING STATEMENT: The unaudited pro forma consolidated financial statements and the accompanying notes to the financial statements contain forward-looking statements including statements that relate to the impact of, and transactions contemplated by, agreements entered into in connection with the sale and estimates regarding income tax adjustments. The statements in these unaudited pro forma consolidated financial statements and the accompanying notes to the financial statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: the Company’s ability to fully realize the expected benefits of the sale, global economic conditions, tax law changes and other risks, relevant factors and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2013, subsequent Reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
JABIL CIRCUIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of November 30, 2013
(in thousands)
| Pro Forma Adjustments | ||||||||||||||||
| As reported | Disposal of AMS | Note | Pro Forma | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: |
||||||||||||||||
| Cash and cash equivalents |
$ | 769,223 | $ | 564,594 | (a | ) | $ | 1,333,817 | ||||||||
| Accounts receivable, net |
1,430,997 | (101,521 | ) | 1,329,476 | ||||||||||||
| Inventories |
2,166,797 | (165,667 | ) | 2,001,130 | ||||||||||||
| Prepaid expenses and other current assets |
1,165,090 | (28,130 | ) | 1,136,960 | ||||||||||||
| Income taxes receivable |
26,280 | (822 | ) | (c | ) | 25,458 | ||||||||||
| Deferred income taxes |
50,308 | (213 | ) | (c | ) | 50,095 | ||||||||||
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|||||||||||
| Total current assets |
5,608,695 | 268,241 | 5,876,936 | |||||||||||||
| Property, plant and equipment, net |
2,474,466 | (84,041 | ) | 2,390,425 | ||||||||||||
| Goodwill |
457,972 | (87,703 | ) | 370,269 | ||||||||||||
| Intangible assets, net |
304,694 | (42,730 | ) | 261,964 | ||||||||||||
| Deferred income taxes |
87,170 | (2,467 | ) | (c | ) | 84,703 | ||||||||||
| Other assets |
96,405 | 30,436 | (b | ) | 126,841 | |||||||||||
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| Total assets |
$ | 9,029,402 | $ | 81,736 | $ | 9,111,138 | ||||||||||
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| LIABILITIES AND EQUITY | ||||||||||||||||
| Current liabilities: |
||||||||||||||||
| Current installments of notes payable, long-term debt and capital lease obligations |
$ | 117,230 | $ | — | $ | 117,230 | ||||||||||
| Accounts payable |
3,185,090 | (105,152 | ) | 3,079,938 | ||||||||||||
| Accrued expenses |
1,351,125 | (90,643 | ) | 1,260,482 | ||||||||||||
| Income taxes payable |
18,129 | (867 | ) | (c | ) | 17,262 | ||||||||||
| Deferred income taxes |
7,836 | (310 | ) | (c | ) | 7,526 | ||||||||||
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| Total current liabilities |
4,679,410 | (196,972 | ) | 4,482,438 | ||||||||||||
| Notes payable, long-term debt and capital lease obligations, less current installments |
1,677,824 | 9 | 1,677,833 | |||||||||||||
| Other liabilities |
85,242 | (12,520 | ) | 72,722 | ||||||||||||
| Income tax liabilities |
90,490 | (4,062 | ) | (c | ) | 86,428 | ||||||||||
| Deferred income taxes |
78,688 | (15,723 | ) | (c | ) | 62,965 | ||||||||||
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| Total liabilities |
6,611,654 | (229,268 | ) | 6,382,386 | ||||||||||||
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| Commitments and contingencies Equity: |
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| Jabil Circuit, Inc. stockholders’ equity: |
||||||||||||||||
| Preferred stock |
— | — | — | |||||||||||||
| Common stock |
242 | — | 242 | |||||||||||||
| Additional paid-in capital |
1,828,111 | — | 1,828,111 | |||||||||||||
| Retained earnings |
1,172,105 | 320,367 | (d | ) | 1,492,472 | |||||||||||
| Accumulated other comprehensive income |
93,914 | (9,363 | ) | 84,551 | ||||||||||||
| Treasury stock, at cost |
(703,500 | ) | — | (703,500 | ) | |||||||||||
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| Total Jabil Circuit, Inc. stockholders’ equity |
2,390,872 | 311,004 | 2,701,876 | |||||||||||||
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| Noncontrolling interests |
26,876 | — | 26,876 | |||||||||||||
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| Total equity |
2,417,748 | 311,004 | 2,728,752 | |||||||||||||
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| Total liabilities and equity |
$ | 9,029,402 | $ | 81,736 | $ | 9,111,138 | ||||||||||
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See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements.
JABIL CIRCUIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended November 30, 2013
(in thousands, except for per share data)
| Pro Forma Adjustments | ||||||||||||
| As reported | Disposal of AMS | Pro Forma | ||||||||||
| Net revenue |
$ | 4,611,442 | $ | (268,731 | ) | $ | 4,342,711 | |||||
| Cost of revenue |
4,242,672 | (234,212 | ) | 4,008,460 | ||||||||
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| Gross profit |
368,770 | (34,519 | ) | 334,251 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative |
158,095 | (15,625 | ) | 142,470 | ||||||||
| Research and development |
9,054 | — | 9,054 | |||||||||
| Amortization of intangibles |
7,678 | (1,357 | ) | 6,321 | ||||||||
| Restructuring and related charges |
21,275 | (272 | ) | 21,003 | ||||||||
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| Operating income |
172,668 | (17,265 | ) | 155,403 | ||||||||
| Other expense |
1,255 | (78 | ) | 1,177 | ||||||||
| Interest income |
(747 | ) | 39 | (708 | ) | |||||||
| Interest expense |
33,314 | (9 | ) | 33,305 | ||||||||
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| Income before income tax |
138,846 | (17,217 | ) | 121,629 | ||||||||
| Income tax expense |
20,781 | (1,105 | ) | 19,676 | ||||||||
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| Net income |
118,065 | (16,112 | ) | 101,953 | ||||||||
| Net income attributable to noncontrolling interests, net of income tax expense |
143 | — | 143 | |||||||||
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| Net income attributable to Jabil Circuit, Inc. |
$ | 117,922 | $ | (16,112 | ) | $ | 101,810 | |||||
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| Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: |
||||||||||||
| Basic |
$ | 0.58 | $ | 0.50 | ||||||||
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| Diluted |
$ | 0.57 | $ | 0.49 | ||||||||
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| Weighted average shares outstanding: |
||||||||||||
| Basic |
204,762 | 204,762 | ||||||||||
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| Diluted |
206,813 | 206,813 | ||||||||||
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| Cash dividend declared per share |
$ | 0.08 | $ | 0.08 | ||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended November 30, 2012
(in thousands, except for per share data)
| Pro Forma Adjustments | ||||||||||||
| As reported | Disposal of AMS | Pro Forma | ||||||||||
| Net revenue |
$ | 4,637,018 | $ | (265,444 | ) | $ | 4,371,574 | |||||
| Cost of revenue |
4,286,423 | (226,439 | ) | 4,059,984 | ||||||||
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| Gross profit |
350,595 | (39,005 | ) | 311,590 | ||||||||
| Operating expenses: |
||||||||||||
| Selling, general and administrative |
169,600 | (20,705 | ) | 148,895 | ||||||||
| Research and development |
7,263 | (56 | ) | 7,207 | ||||||||
| Amortization of intangibles |
3,451 | (1,285 | ) | 2,166 | ||||||||
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| Operating income |
170,281 | (16,959 | ) | 153,322 | ||||||||
| Other expense |
1,569 | — | 1,569 | |||||||||
| Interest income |
(510 | ) | 21 | (489 | ) | |||||||
| Interest expense |
29,604 | (16 | ) | 29,588 | ||||||||
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| Income before income tax |
139,618 | (16,964 | ) | 122,654 | ||||||||
| Income tax expense |
34,034 | (2,353 | ) | 31,681 | ||||||||
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| Net income |
105,584 | (14,611 | ) | 90,973 | ||||||||
| Net loss attributable to noncontrolling interests, net of income tax expense |
(263 | ) | — | (263 | ) | |||||||
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| Net income attributable to Jabil Circuit, Inc. |
$ | 105,847 | $ | (14,611 | ) | $ | 91,236 | |||||
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| Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: |
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| Basic |
$ | 0.52 | $ | 0.45 | ||||||||
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| Diluted |
$ | 0.51 | $ | 0.44 | ||||||||
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| Weighted average shares outstanding: |
||||||||||||
| Basic |
204,318 | 204,318 | ||||||||||
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| Diluted |
207,816 | 207,816 | ||||||||||
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| Cash dividend declared per share |
$ | 0.08 | $ | 0.08 | ||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended August 31, 2013
(in thousands, except for per share data)
| Pro Forma Adjustments | ||||||||||||
| As reported | Disposal of AMS | Pro Forma | ||||||||||
| Net revenue |
$ | 18,336,894 | $ | (1,087,401 | ) | $ | 17,249,493 | |||||
| Cost of revenue |
16,977,032 | (939,729 | ) | 16,037,303 | ||||||||
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| Gross profit |
1,359,862 | (147,672 | ) | 1,212,190 | ||||||||
| Operating expenses: |
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| Selling, general and administrative |
688,752 | (74,457 | ) | 614,295 | ||||||||
| Research and development |
28,468 | (56 | ) | 28,412 | ||||||||
| Amortization of intangibles |
16,154 | (5,200 | ) | 10,954 | ||||||||
| Restructuring and related charges |
89,453 | (8,940 | ) | 80,513 | ||||||||
| Impairment of receivables and related charges |
25,597 | — | 25,597 | |||||||||
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| Operating income |
511,438 | (59,019 | ) | 452,419 | ||||||||
| Other expense |
6,213 | (118 | ) | 6,095 | ||||||||
| Interest income |
(1,901 | ) | 88 | (1,813 | ) | |||||||
| Interest expense |
121,062 | (39 | ) | 121,023 | ||||||||
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| Income before income tax |
386,064 | (58,950 | ) | 327,114 | ||||||||
| Income tax expense |
15,973 | (8,342 | ) | 7,631 | ||||||||
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| Net income |
370,091 | (50,608 | ) | 319,483 | ||||||||
| Net loss attributable to noncontrolling interests, net of income tax expense |
(1,391 | ) | — | (1,391 | ) | |||||||
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| Net income attributable to Jabil Circuit, Inc. |
$ | 371,482 | $ | (50,608 | ) | $ | 320,874 | |||||
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| Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: |
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| Basic |
$ | 1.83 | $ | 1.58 | ||||||||
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| Diluted |
$ | 1.79 | $ | 1.54 | ||||||||
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| Weighted average shares outstanding: |
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| Basic |
203,096 | 203,096 | ||||||||||
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| Diluted |
207,815 | 207,815 | ||||||||||
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| Cash dividend declared per share |
$ | 0.32 | $ | 0.32 | ||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended August 31, 2012
(in thousands, except for per share data)
| Pro Forma Adjustments | ||||||||||||
| As reported | Disposal of AMS | Pro Forma | ||||||||||
| Net revenue |
$ | 17,151,941 | $ | (1,011,236 | ) | $ | 16,140,705 | |||||
| Cost of revenue |
15,842,896 | (863,142 | ) | 14,979,754 | ||||||||
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| Gross profit |
1,309,045 | (148,094 | ) | 1,160,951 | ||||||||
| Operating expenses: |
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| Selling, general and administrative |
644,452 | (71,807 | ) | 572,645 | ||||||||
| Research and development |
25,837 | — | 25,837 | |||||||||
| Amortization of intangibles |
16,825 | (3,926 | ) | 12,899 | ||||||||
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| Operating income |
621,931 | (72,361 | ) | 549,570 | ||||||||
| Other expense |
8,943 | (8 | ) | 8,935 | ||||||||
| Interest income |
(2,041 | ) | 39 | (2,002 | ) | |||||||
| Interest expense |
106,129 | (41 | ) | 106,088 | ||||||||
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| Income before income tax |
508,900 | (72,351 | ) | 436,549 | ||||||||
| Income tax expense |
112,811 | (9,945 | ) | 102,866 | ||||||||
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| Net income |
396,089 | (62,406 | ) | 333,683 | ||||||||
| Net income attributable to noncontrolling interests, net of income tax expense |
1,402 | — | 1,402 | |||||||||
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| Net income attributable to Jabil Circuit, Inc. |
$ | 394,687 | $ | (62,406 | ) | $ | 332,281 | |||||
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| Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: |
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| Basic |
$ | 1.91 | $ | 1.61 | ||||||||
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| Diluted |
$ | 1.87 | $ | 1.57 | ||||||||
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| Weighted average shares outstanding: |
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| Basic |
206,160 | 206,160 | ||||||||||
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| Diluted |
211,181 | 211,181 | ||||||||||
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| Cash dividend declared per share |
$ | 0.32 | $ | 0.32 | ||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Fiscal Year Ended August 31, 2011
(in thousands, except for per share data)
| Pro Forma Adjustments | ||||||||||||
| As reported | Disposal of AMS | Pro Forma | ||||||||||
| Net revenue |
$ | 16,518,827 | $ | (898,569 | ) | $ | 15,620,258 | |||||
| Cost of revenue |
15,264,257 | (757,679 | ) | 14,506,578 | ||||||||
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| Gross profit |
1,254,570 | (140,890 | ) | 1,113,680 | ||||||||
| Operating expenses: |
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| Selling, general and administrative |
590,572 | (50,980 | ) | 539,592 | ||||||||
| Research and development |
25,034 | (32 | ) | 25,002 | ||||||||
| Amortization of intangibles |
22,051 | (287 | ) | 21,764 | ||||||||
| Restructuring and related charges |
628 | 48 | 676 | |||||||||
| Settlement of receivables and related charges |
13,607 | — | 13,607 | |||||||||
| Loss on disposal of subsidiaries |
23,944 | — | 23,944 | |||||||||
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| Operating income |
578,734 | (89,639 | ) | 489,095 | ||||||||
| Other expense |
2,986 | (237 | ) | 2,749 | ||||||||
| Interest income |
(3,132 | ) | 17 | (3,115 | ) | |||||||
| Interest expense |
97,693 | (22 | ) | 97,671 | ||||||||
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| Income before income tax |
481,187 | (89,397 | ) | 391,790 | ||||||||
| Income tax expense |
98,229 | (3,132 | ) | 95,097 | ||||||||
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| Net income |
382,958 | (86,265 | ) | 296,693 | ||||||||
| Net income attributable to noncontrolling interests, net of income tax expense |
1,895 | — | 1,895 | |||||||||
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| Net income attributable to Jabil Circuit, Inc. |
$ | 381,063 | $ | (86,265 | ) | $ | 294,798 | |||||
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| Earnings per share attributable to the stockholders of Jabil Circuit, Inc.: |
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| Basic |
$ | 1.78 | $ | 1.37 | ||||||||
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| Diluted |
$ | 1.73 | $ | 1.34 | ||||||||
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| Weighted average shares outstanding: |
||||||||||||
| Basic |
214,502 | 214,502 | ||||||||||
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| Diluted |
220,719 | 220,719 | ||||||||||
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| Cash dividend declared per share |
$ | 0.28 | $ | 0.28 | ||||||||
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JABIL CIRCUIT, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| (a) | Represents the net aggregate consideration received in cash upon the sale of the AMS business. |
| (b) | Includes the estimated fair value of the 50,000 shares of Senior Non-Convertible Cumulative Preferred Stock of iQor having an aggregate liquidation preference value of $50.0 million that accretes dividends at an annual rate of 8 percent and is redeemable in nine years or upon a change in control. |
| (c) | The tax impacts related to the cash consideration received upon the sale of the AMS business have not been included in the Unaudited Pro Forma Consolidated Balance Sheet since certain significant facts are unknown at this time. Therefore, income tax related adjustments could materially change as we finalize our discontinued operations accounting to be reported in the Annual Report on Form 10-K for the fiscal year ended August 31, 2014. |
| (d) | The adjustment to retained earnings is the result of the proceeds from the sale of the AMS business less the removal of the AMS net assets. |