(Mark one)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended August 31, 2005 | ||
or | ||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to |
Delaware
|
38-1886260 | |
(State or Other Jurisdiction of
Incorporation or Organization) |
(I.R.S. Employer
Identification No.) |
|
10560 Dr. Martin Luther King, Jr. Street North,
St. Petersburg, Florida (Address of principal executive offices) |
33716
(Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.001 par value per share | New York Stock Exchange | |
Series A Preferred Stock Purchase Rights | New York Stock Exchange |
1
Item 1. | Business |
| business conditions and growth in our customers industries, the electronic manufacturing services industry and the general economy; | |
| variability of operating results; | |
| our dependence on a limited number of major customers; | |
| the potential consolidation of our customer base; | |
| availability of components; | |
| dependence on certain industries; | |
| seasonality; | |
| variability of customer requirements; | |
| our ability to successfully negotiate definitive agreements and consummate acquisitions, and to integrate operations following consummation of acquisitions; | |
| our ability to take advantage of our past restructuring efforts to improve utilization and realize savings; | |
| other economic, business and competitive factors affecting our customers, our industry and our business generally; and | |
| other factors that we may not have currently identified or quantified. |
2
The Company |
| integrated design and engineering; | |
| component selection, sourcing and procurement; | |
| automated assembly; | |
| design and implementation of product testing; | |
| parallel global production; | |
| enclosure services; | |
| systems assembly, direct order fulfillment and configure to order; and | |
| repair and warranty. |
3
Industry Background |
| Reduced Product Cost. Industry providers are able to manufacture products at a reduced total cost to companies. These cost advantages result from higher utilization of capacity because of diversified product demand and, typically, a higher sensitivity to elements of cost. | |
| Accelerated Product Time-to-Market and Time-to-Volume. Industry providers are often able to deliver accelerated production start-ups and achieve high efficiencies in transferring new products into production. Providers are also able to more rapidly scale production for changing markets and to position themselves in global locations that serve the leading world markets. With increasingly shorter product life cycles, these key services allow new products to be sold in the marketplace in an accelerated time frame. | |
| Access to Advanced Design and Manufacturing Technologies. Customers may gain access to additional advanced technologies in manufacturing processes, as well as product and production design. Product and production design services may offer customers significant improvements in the performance, cost, time-to- market and manufacturability of their products. | |
| Improved Inventory Management and Purchasing Power. Industry providers are able to manage both procurement and inventory, and have demonstrated proficiency in purchasing components at improved pricing due to the scale of their operations and continuous interaction with the materials marketplace. | |
| Reduced Capital Investment in Manufacturing. Companies are increasingly seeking to lower their investment in inventory, facilities and equipment used in manufacturing in order to allocate capital to other activities such as sales and marketing, and research and development (R&D). This shift in capital deployment has placed a greater emphasis on outsourcing to external manufacturing specialists. |
Our Strategy |
| Establish and Maintain Long-Term Customer Relationships. Our core strategy is to establish and maintain long-term relationships with leading companies in expanding industries with the size and growth characteristics that can benefit from highly automated, continuous flow manufacturing on a global scale. Over the last three years, we have made concentrated efforts to diversify our industry sectors and customer base. As a result of these efforts, we have experienced business growth from existing customers and from new customers as a result of organic business wins. Additionally, our acquisitions have meaningfully contributed to our business growth. We focus on maintaining long-term relationships with our customers and seek to expand these relationships to include additional |
4
product lines and services. In addition, we have a focused effort to identify and develop relationships with new customers who meet our profile. | ||
| Utilize Business Units. Our business units are dedicated to one customer and operate with a high level of autonomy, utilizing dedicated production equipment, production workers, supervisors, buyers, planners, and engineers. We believe our customer centric business units promote increased responsiveness to our customers needs, particularly as a customer relationship grows to multiple production locations. | |
| Expand Parallel Global Production. Our ability to produce the same product on a global scale is a significant requirement of our customers. We believe that parallel global production is a key strategy to reduce obsolescence risk and secure the lowest landed costs while simultaneously supplying products of equivalent or comparable quality throughout the world. Consistent with this strategy, we have established or acquired operations in Austria, Belgium, Brazil, China, England, France, Hungary, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Scotland, Singapore, Taiwan, and Ukraine to increase our European, Asian and Latin American presence. | |
| Offer Systems Assembly, Direct Order Fulfillment and Configure to Order Services. Our systems assembly, direct order fulfillment and configure to order services allow our customers to reduce product cost and risk of product obsolescence by reducing total work-in-process and finished goods inventory. These services are available at all of our manufacturing locations. | |
| Pursue Selective Acquisition Opportunities. Companies have continued to divest internal manufacturing operations to manufacturing providers such as Jabil. In many of these situations, companies enter into a customer relationship with the manufacturing provider that acquires the operations. Our acquisition strategy is focused on obtaining manufacturing, repair and/or design operations that complement our geographic footprint and diversify our business into new industry sectors and customers, while providing opportunities for long-term outsourcing relationships. See Risk Factors We may not achieve expected profitability from our acquisitions. |
| Business Units. Our business units are dedicated to one customer and are empowered to formulate strategies tailored to individual customer needs. Each business unit has dedicated production lines consisting of equipment, production workers, supervisors, buyers, planners and engineers. Under certain circumstances, a production line may include more than one business unit in order to maximize resource utilization. Business units have direct responsibility for manufacturing results and time-to-volume production, promoting a sense of individual commitment and ownership. The business unit approach is modular and enables us to grow incrementally without disrupting the operations of other business units. | |
| Business Unit Management. Our Business Unit Managers coordinate all financial, manufacturing and engineering commitments for each of our customers at a particular manufacturing facility. Our Business Unit Directors oversee local Business Unit Managers and coordinate on a worldwide basis all financial, manufacturing and engineering commitments for each of our customers that have global production requirements. Jabils Business Unit Management has the authority, within high-level parameters set by executive management, to develop customer relationships, make design strategy decisions and production commitments, establish pricing, and implement production and electronic design changes. Business Unit Managers and Directors are also responsible for assisting customers with strategic planning for future products, including developing cost and technology goals. These Managers and Directors operate autonomously with responsibility for the development of customer relationships and direct profit and loss accountability for business unit performance. |
5
| Continuous Flow. We use a highly automated, continuous flow approach where different pieces of equipment are joined directly or by conveyor to create an in-line assembly process. This process is in contrast to a batch approach, where individual pieces of assembly equipment are operated as freestanding work-centers. The elimination of waiting time prior to sequential operations results in faster manufacturing, which improves production efficiencies and quality control, and reduces inventory work-in-process. Continuous flow manufacturing provides cost reductions and quality improvement when applied to volume manufacturing. | |
| Computer Integration. We support all aspects of our manufacturing activities with advanced computerized control and monitoring systems. Component inspection and vendor quality are monitored electronically in real-time. Materials planning, purchasing, stockroom and shop floor control systems are supported through a computerized Manufacturing Resource Planning system, providing customers with a continuous ability to monitor material availability and track work-in-process on a real-time basis. Manufacturing processes are supported by a real-time, computerized statistical process control system, whereby customers can remotely access our computer systems to monitor real-time yields, inventory positions, work-in-process status and vendor quality data. See Technology and Risk Factors Any delay in the implementation of our information systems could disrupt our operations and cause unanticipated increases in our cost. | |
| Supply Chain Management. We make available an electronic commerce system/electronic data interchange and web-based tools for our customers and suppliers to implement a variety of supply chain management programs. Most of our customers utilize these tools to share demand and product forecasts and deliver purchase orders. We use these tools with most of our suppliers for just-in-time delivery, supplier-managed inventory and consigned supplier-managed inventory. |
| Electronic Design. Our electronic design team provides electronic circuit design services, including application-specific integrated circuit design and firmware development. These services have been used to develop a variety of circuit designs for cellular telephone accessories, notebook and personal computers, servers, radio frequency products, video set-top boxes, optical communications products, personal digital assistants, communication broadband products, and automotive and consumer appliance controls. | |
| Industrial Design Services. Our industrial design team assists in designing the look and feel of the plastic and metal enclosures that house printed circuit board (PCB) assemblies and systems. | |
| Mechanical Design. Our mechanical engineering design team specializes in three-dimensional design and analysis of electronic and optical assemblies using state of the art modeling and analytical tools. The mechanical team has extended Jabils product offering capabilities to include all aspects of industrial design, advance mechanism development and tooling management. | |
| Computer Assisted Design. Our computer assisted design (CAD) team provides PCB design services using advanced CAD/computer assisted engineering tools, PCB design testing and verification services, and other consulting services, which include the generation of a bill of materials, approved vendor list and assembly equipment configuration for a particular PCB design. We believe that our CAD services result in PCB designs that are optimized for manufacturability and cost, and accelerate the time-to-market and time-to-volume production. | |
| Product Validation. Our product validation team provides complete product and process validation. This includes system test, product safety, regulatory compliance and reliability. |
6
| Product Solutions. The goal of our product solutions group is to find ways to expand our relationships by pairing with our customers and collaborating on new product designs. Product solutions is a launching pad for new technologies and concepts in specific growth areas. This team provides system-based solutions to engineering problems and challenges. |
7
Customers and Marketing |
Fiscal Year Ended August 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Royal Philips Electronics
|
14% | 18% | 15% | |||||||||
Nokia Corporation
|
13% | * | * | |||||||||
Hewlett-Packard Company
|
10% | * | 11% | |||||||||
Cisco Systems, Inc.
|
* | 12% | 16% |
* | less than 10% of net revenue |
Fiscal Year Ended | ||||||||||||
August 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Consumer
|
29% | 25% | 20% | |||||||||
Instrumentation and medical
|
16% | 12% | 7% | |||||||||
Networking
|
15% | 20% | 23% | |||||||||
Computing and storage
|
12% | 13% | 15% | |||||||||
Telecommunications
|
9% | 11% | 14% | |||||||||
Peripherals
|
8% | 6% | 8% | |||||||||
Automotive
|
7% | 8% | 9% | |||||||||
Other
|
4% | 5% | 4% | |||||||||
100% | 100% | 100% | ||||||||||
8
International Operations |
Financial Information about Business Segments |
9
Competition |
Backlog |
Seasonality |
Components Procurement |
10
Proprietary Rights |
Employees |
Geographic Information |
Environmental |
11
Executive Officers of the Registrant |
12
13
Item 2. | Properties |
Approximate | Type of Interest | ||||||||||
Location | Square Footage | (Leased/Owned) | Description of Use | ||||||||
Auburn Hills, Michigan
|
207,000 | Owned | Manufacturing, Design | ||||||||
Auburn Hills, Michigan
|
12,000 | Leased | Support | ||||||||
Billerica, Massachusetts(1)
|
503,000 | Leased | Prototype Manufacturing | ||||||||
Boise, Idaho(2)
|
353,000 | Owned | Manufacturing | ||||||||
Louisville, Kentucky
|
138,000 | Leased | Repair | ||||||||
McAllen, Texas
|
100,000 | Leased | Repair | ||||||||
Memphis, Tennessee
|
1,101,000 | Leased | Manufacturing, Repair | ||||||||
Poway, California
|
112,000 | Leased | Manufacturing | ||||||||
San Jose, California(1)
|
281,000 | Leased | Prototype Manufacturing | ||||||||
St. Joe, Michigan
|
5,000 | Leased | Support | ||||||||
St. Petersburg, Florida
|
268,000 | Leased | Manufacturing, Support | ||||||||
St. Petersburg, Florida
|
299,000 | Owned | Manufacturing, Design, Repair, Support | ||||||||
Tempe, Arizona
|
191,000 | Owned | Manufacturing | ||||||||
Belo Horizonte, Brazil
|
143,000 | Leased | Manufacturing | ||||||||
Chihuahua, Mexico
|
1,025,000 | Owned | Manufacturing | ||||||||
Guadalajara, Mexico
|
363,000 | Owned | Manufacturing | ||||||||
Manaus, Brazil
|
330,000 | Leased | Manufacturing | ||||||||
Reynosa, Mexico
|
410,000 | Owned | Repair | ||||||||
Reynosa, Mexico
|
158,000 | Leased | Manufacturing | ||||||||
Sao Paulo, Brazil
|
35,000 | Leased | Repair | ||||||||
Tijuana, Mexico(3)
|
63,000 | Leased | Support | ||||||||
Total Americas
|
6,097,000 | ||||||||||
Gotemba, Japan
|
138,000 | Leased | Manufacturing | ||||||||
Hsinchu, Taiwan
|
21,000 | Leased | Design | ||||||||
Huangpu, China
|
1,890,000 | Owned | Manufacturing, Design, Support | ||||||||
Panyu, China
|
210,000 | Owned | Manufacturing | ||||||||
Penang, Malaysia
|
864,000 | Owned | Manufacturing, Design, Repair | ||||||||
Pune, India
|
8,000 | Leased | Support | ||||||||
Ranjangaon, India
|
175,000 | Owned | Manufacturing | ||||||||
Shanghai, China
|
352,000 | Owned | Manufacturing, Design, Repair | ||||||||
Shenzhen, China
|
762,000 | Leased | Manufacturing, Support | ||||||||
Sheung Shui, Hong Kong, China
|
1,000 | Leased | Support | ||||||||
Singapore City, Singapore
|
92,000 | Leased | Manufacturing | ||||||||
Tokyo, Japan
|
2,000 | Leased | Design, Support | ||||||||
Wuxi, China(4)
|
453,000 | Owned | Manufacturing | ||||||||
Total Asia
|
4,968,000 | ||||||||||
14
Approximate
Type of Interest
Location
Square Footage
(Leased/Owned)
Description of Use
90,000
Leased
Repair
430,000
Owned
Manufacturing
68,000
Leased
Manufacturing
389,000
Owned
Manufacturing
116,000
Leased
Manufacturing
57,000
Leased
Repair
39,000
Leased
Repair, Support
80,000
Leased
Repair
3,000
Leased
Support
4,000
Leased
Support
81,000
Leased
Prototype Manufacturing, Design
385,000
Owned
Manufacturing
130,000
Owned
Manufacturing
262,000
Leased
Manufacturing
111,000
Leased
Manufacturing
208,000
Leased
Manufacturing
127,000
Owned
Repair
409,000
Owned
Manufacturing
15,000
Leased
Manufacturing
99,000
Leased
Prototype Manufacturing, Design
3,103,000
14,168,000
(1) | A portion of this facility is no longer used in our business operations. |
(2) | This facility is no longer used in our business operations. |
(3) | This facility is no longer used in our business operations and has been subleased to an unrelated third party. |
(4) | This facility is currently under construction. Square footage indicated is expected total upon completion. |
Certifications |
| Aerospace Standard AS9100 Billerica, Massachusetts; Singapore City, Singapore; St. Petersburg, Florida; and Tempe, Arizona | |
| Automotive Standard TS16949 Auburn Hills, Michigan; Chihuahua, Mexico; Huangpu, China; Meung-sur-Loire, France; Tiszaujvaros, Hungary; and Vienna, Austria | |
| Medical Standard ISO-13485 Auburn Hills, Michigan; Guadalajara, Mexico; Livingston, Scotland; and Shanghai, China | |
| Occupational Health & Safety Management System Standard OHSAS 18001 Ayr, Scotland; Brest, France; Huangpu, China; Manaus, Brazil; Penang, Malaysia; Shenzhen, China; Singapore City, Singapore; St. Petersburg, Florida | |
| Telecommunications Standard TL 9000 Auburn Hills, Michigan; Chihuahua, Mexico; Penang, Malaysia; San Jose, California; Shanghai, China; and St. Petersburg, Florida |
15
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
High | Low | ||||||||
Year Ended August 31, 2005
|
|||||||||
First Quarter (September 1, 2004
November 30, 2004)
|
$ | 26.04 | $ | 20.33 | |||||
Second Quarter (December 1, 2004
February 28, 2005)
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$ | 27.08 | $ | 21.80 | |||||
Third Quarter (March 1, 2005 May 31, 2005)
|
$ | 29.73 | $ | 25.87 | |||||
Fourth Quarter (June 1, 2005 August 31,
2005)
|
$ | 32.88 | $ | 28.30 | |||||
Year Ended August 31, 2004
|
|||||||||
First Quarter (September 1, 2003
November 30, 2003)
|
$ | 31.65 | $ | 25.43 | |||||
Second Quarter (December 1, 2003
February 29, 2004)
|
$ | 32.40 | $ | 24.75 | |||||
Third Quarter (March 1, 2004 May 31, 2004)
|
$ | 31.49 | $ | 24.60 | |||||
Fourth Quarter (June 1, 2004 August 31,
2004)
|
$ | 29.10 | $ | 19.18 |
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Item 6. | Selected Financial Data |
Fiscal Year Ended August 31, | |||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||
(In thousands, except for per share data) | |||||||||||||||||||||
Consolidated Statement of Earnings Data:
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|||||||||||||||||||||
Net revenue
|
$ | 7,524,386 | $ | 6,252,897 | $ | 4,729,482 | $ | 3,545,466 | $ | 4,330,655 | |||||||||||
Cost of revenue
|
6,895,880 | 5,714,517 | 4,294,016 | 3,210,875 | 3,936,589 | ||||||||||||||||
Gross profit
|
628,506 | 538,380 | 435,466 | 334,591 | 394,066 | ||||||||||||||||
Selling, general and administrative
|
278,866 | 263,504 | 243,663 | 203,845 | 184,112 | ||||||||||||||||
Research and development
|
22,507 | 13,813 | 9,906 | 7,864 | 6,448 | ||||||||||||||||
Amortization of intangibles
|
39,762 | 43,709 | 36,870 | 15,113 | 5,820 | ||||||||||||||||
Acquisition-related charges
|
| 1,339 | (1) | 15,266 | (2) | 7,576 | (3) | 6,558 | (4) | ||||||||||||
Restructuring and impairment charges
|
| | 85,308 | (2) | 52,143 | (3) | 27,366 | (4) | |||||||||||||
Operating income
|
287,371 | 216,015 | 44,453 | 48,050 | 163,762 | ||||||||||||||||
Other loss (income)
|
| 6,370 | (1) | (2,600 | )(2) | | | ||||||||||||||
Interest income
|
(13,774 | ) | (7,237 | ) | (6,920 | ) | (9,761 | ) | (8,243 | ) | |||||||||||
Interest expense
|
24,773 | 19,369 | 17,019 | 13,055 | 5,857 | ||||||||||||||||
Income before income taxes
|
276,372 | 197,513 | 36,954 | 44,756 | 166,148 | ||||||||||||||||
Income tax expense (benefit)
|
44,525 | 30,613 | (6,053 | ) | 10,041 | 47,631 | |||||||||||||||
Net income
|
$ | 231,847 | $ | 166,900 | $ | 43,007 | $ | 34,715 | $ | 118,517 | |||||||||||
Earnings per share:
|
|||||||||||||||||||||
Basic
|
$ | 1.14 | $ | 0.83 | $ | 0.22 | $ | 0.18 | $ | 0.62 | |||||||||||
Diluted
|
$ | 1.12 | $ | 0.81 | $ | 0.21 | $ | 0.17 | $ | 0.59 | |||||||||||
Common shares used in the calculations of earnings per share:
|
|||||||||||||||||||||
Basic
|
202,501 | 200,430 | 198,495 | 197,396 | 191,862 | ||||||||||||||||
Diluted
|
207,526 | 205,849 | 202,103 | 200,782 | 202,223 | ||||||||||||||||
17
(1) | During 2004, we recorded acquisition-related charges of $1.3 million ($1.0 million after-tax) primarily in connection with the acquisitions of certain operations of Philips and NEC. We also recorded a loss of $6.4 million ($4.0 million after-tax) on the write-off of unamortized issuance costs associated with our convertible subordinated notes, which were retired in May 2004. |
(2) | During 2003, we recorded acquisition-related charges of $15.3 million ($9.8 million after-tax) in connection with the acquisitions of certain operations of Quantum, Alcatel Business Systems (Alcatel), Valeo, Lucent Technologies of Shanghai (Lucent), Seagate Technology Reynosa, S. de R.L. de C.V. (Seagate), Philips and NEC. We also recorded charges of $85.3 million ($60.7 million after-tax) related to the restructuring of our business during the fiscal year. We also recorded $2.6 million ($1.6 million after-tax) of other income related to proceeds received in connection with facility closure costs. |
(3) | During 2002, we recorded acquisition-related charges of $7.6 million ($4.8 million after-tax) in connection with the acquisition of certain operations of Marconi, Compaq Computer Corporation, Alcatel and Valeo. We also recorded charges of $52.1 million ($40.2 million after-tax) related to the restructuring of our business during the fiscal year. |
(4) | During 2001, we recorded charges of $6.6 million ($4.1 million after-tax) related to the acquisition of certain manufacturing facilities of Marconi. We also recorded charges of $27.4 million ($21.6 million after-tax) related to restructuring of our business and other non-recurring charges during our fiscal year. |
18
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
| business conditions and growth in our customers industries, the electronic manufacturing services industry and the general economy; | |
| variability of operating results; | |
| our dependence on a limited number of major customers; | |
| the potential consolidation of our customer base; | |
| availability of components; | |
| dependence on certain industries; | |
| seasonality; | |
| variability of customer requirements; | |
| our ability to successfully negotiate definitive agreements and consummate acquisitions, and to integrate operations following consummation of acquisitions; | |
| our ability to take advantage of our past restructuring efforts to improve utilization and realize savings; | |
| other economic, business and competitive factors affecting our customers, our industry and business generally; and | |
| other factors that we may not have currently identified or quantified. |
19
20
Summary of Results |
Fiscal Year Ended August 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Net revenue
|
$ | 7,524,386 | $ | 6,252,897 | $ | 4,729,482 | ||||||
Gross profit
|
$ | 628,506 | $ | 538,380 | $ | 435,466 | ||||||
Operating income
|
$ | 287,371 | $ | 216,015 | $ | 44,453 | ||||||
Net income
|
$ | 231,847 | $ | 166,900 | $ | 43,007 | ||||||
Basic earnings per share
|
$ | 1.14 | $ | 0.83 | $ | 0.22 | ||||||
Diluted earnings per share
|
$ | 1.12 | $ | 0.81 | $ | 0.21 |
21
Key Performance Indicators |
Three Months Ended | ||||||||||||||||
August 31, | May 31, | February 28, | November 30, | |||||||||||||
2005 | 2005 | 2005 | 2004 | |||||||||||||
Sales cycle
|
17 days | 20 days | 23 days | 28 days | ||||||||||||
Inventory turns
|
9 turns | 10 turns | 9 turns | 9 turns | ||||||||||||
Days in accounts receivable
|
42 days | 42 days | 42 days | 52 days | ||||||||||||
Days in inventory
|
39 days | 37 days | 39 days | 40 days | ||||||||||||
Days in accounts payable
|
64 days | 59 days | 58 days | 64 days |
Three Months Ended | ||||||||||||||||
August 31, | May 31, | February 29, | November 30, | |||||||||||||
2004 | 2004 | 2004 | 2003 | |||||||||||||
Sales cycle
|
26 days | 26 days | 26 days | 33 days | ||||||||||||
Inventory turns
|
9 turns | 9 turns | 8 turns | 9 turns | ||||||||||||
Days in accounts receivable
|
43 days | 40 days | 42 days | 52 days | ||||||||||||
Days in inventory
|
40 days | 40 days | 45 days | 39 days | ||||||||||||
Days in accounts payable
|
57 days | 54 days | 61 days | 58 days |
22
Revenue Recognition |
Allowance for Doubtful Accounts |
Inventory Valuation |
Long-Lived Assets |
23
Restructuring and Impairment Charges |
Pension and Postretirement Benefits |
Income Taxes |
24
Fiscal Year Ended | ||||||||||||
August 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Net revenue
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of revenue
|
91.7 | 91.4 | 90.8 | |||||||||
Gross profit
|
8.3 | 8.6 | 9.2 | |||||||||
Selling, general and administrative
|
3.7 | 4.2 | 5.2 | |||||||||
Research and development
|
0.3 | 0.2 | 0.2 | |||||||||
Amortization of intangibles
|
0.5 | 0.7 | 0.8 | |||||||||
Acquisition-related charges
|
| | 0.3 | |||||||||
Restructuring and impairment charges
|
| | 1.8 | |||||||||
Operating income
|
3.8 | 3.5 | 0.9 | |||||||||
Other loss (income)
|
| 0.1 | (0.1 | ) | ||||||||
Interest income
|
(0.2 | ) | (0.1 | ) | (0.1 | ) | ||||||
Interest expense
|
0.3 | 0.3 | 0.3 | |||||||||
Income before income taxes
|
3.7 | 3.2 | 0.8 | |||||||||
Income tax expense (benefit)
|
0.6 | 0.5 | (0.1 | ) | ||||||||
Net income
|
3.1 | % | 2.7 | % | 0.9 | % | ||||||
25
Fiscal Year Ended
August 31,
2005
2004
2003
7%
8%
9%
12%
13%
15%
29%
25%
20%
16%
12%
7%
15%
20%
23%
8%
6%
8%
9%
11%
14%
4%
5%
4%
100%
100%
100%
26
27
28
29
Fiscal Year 2005 | Fiscal Year 2004 | ||||||||||||||||||||||||||||||||
Aug. 31, | May 31, | Feb. 28, | Nov. 30, | Aug. 31, | May 31, | Feb. 29, | Nov. 30, | ||||||||||||||||||||||||||
2005 | 2005 | 2005 | 2004 | 2004 | 2004 | 2004 | 2003 | ||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||
Net revenue
|
$ | 2,036,590 | $ | 1,938,415 | $ | 1,716,006 | $ | 1,833,375 | $ | 1,626,177 | $ | 1,625,850 | $ | 1,491,876 | $ | 1,508,994 | |||||||||||||||||
Cost of revenue
|
1,865,476 | 1,776,333 | 1,575,555 | 1,678,517 | 1,488,488 | 1,489,935 | 1,360,549 | 1,375,545 | |||||||||||||||||||||||||
Gross profit
|
171,114 | 162,082 | 140,451 | 154,858 | 137,689 | 135,915 | 131,327 | 133,449 | |||||||||||||||||||||||||
Selling, general and administrative
|
72,952 | 71,688 | 66,137 | 68,089 | 65,596 | 65,913 | 65,986 | 66,009 | |||||||||||||||||||||||||
Research and development
|
4,746 | 5,667 | 6,175 | 5,919 | 4,405 | 3,318 | 3,184 | 2,906 | |||||||||||||||||||||||||
Amortization of intangibles
|
7,360 | 11,491 | 10,365 | 10,545 | 10,806 | 10,792 | 11,952 | 10,159 | |||||||||||||||||||||||||
Acquisition-related charges
|
| | | | | | | 1,339 | |||||||||||||||||||||||||
Restructuring and impairment charges
|
| | | | | | | | |||||||||||||||||||||||||
Operating income
|
86,056 | 73,236 | 57,774 | 70,305 | 56,882 | 55,892 | 50,205 | 53,036 | |||||||||||||||||||||||||
Other loss
|
| | | | | 6,370 | | | |||||||||||||||||||||||||
Interest income
|
(4,767 | ) | (4,214 | ) | (2,928 | ) | (1,865 | ) | (1,679 | ) | (2,087 | ) | (1,815 | ) | (1,656 | ) | |||||||||||||||||
Interest expense
|
6,733 | 6,972 | 5,682 | 5,386 | 4,249 | 5,584 | 4,776 | 4,760 | |||||||||||||||||||||||||
Income before income taxes
|
84,090 | 70,478 | 55,020 | 66,784 | 54,312 | 46,025 | 47,244 | 49,932 | |||||||||||||||||||||||||
Income tax expense
|
13,558 | 11,125 | 8,973 | 10,869 | 10,054 | 5,894 | 7,229 | 7,436 | |||||||||||||||||||||||||
Net income
|
$ | 70,532 | $ | 59,353 | $ | 46,047 | $ | 55,915 | $ | 44,258 | $ | 40,131 | $ | 40,015 | $ | 42,496 | |||||||||||||||||
Earnings per share:
|
|||||||||||||||||||||||||||||||||
Basic
|
$ | 0.35 | $ | 0.29 | $ | 0.23 | $ | 0.28 | $ | 0.22 | $ | 0.20 | $ | 0.20 | $ | 0.21 | |||||||||||||||||
Diluted
|
$ | 0.34 | $ | 0.29 | $ | 0.22 | $ | 0.27 | $ | 0.22 | $ | 0.19 | $ | 0.19 | $ | 0.20 | |||||||||||||||||
Common shares used in the calculations of earnings per share:
|
|||||||||||||||||||||||||||||||||
Basic
|
203,941 | 202,666 | 201,930 | 201,467 | 201,110 | 200,716 | 200,267 | 199,626 | |||||||||||||||||||||||||
Diluted
|
209,813 | 207,736 | 206,459 | 205,843 | 205,165 | 206,371 | 214,738 | 213,940 | |||||||||||||||||||||||||
30
Fiscal Year 2005 | Fiscal Year 2004 | ||||||||||||||||||||||||||||||||
Aug. 31, | May 31, | Feb. 28, | Nov. 30, | Aug. 31, | May 31, | Feb. 29, | Nov. 30, | ||||||||||||||||||||||||||
2005 | 2005 | 2005 | 2004 | 2004 | 2004 | 2004 | 2003 | ||||||||||||||||||||||||||
Net revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||
Cost of revenue
|
91.6 | 91.6 | 91.8 | 91.6 | 91.5 | 91.6 | 91.2 | 91.2 | |||||||||||||||||||||||||
Gross profit
|
8.4 | 8.4 | 8.2 | 8.4 | 8.5 | 8.4 | 8.8 | 8.8 | |||||||||||||||||||||||||
Selling, general and administrative
|
3.6 | 3.7 | 3.9 | 3.7 | 4.0 | 4.1 | 4.4 | 4.4 | |||||||||||||||||||||||||
Research and development
|
0.2 | 0.3 | 0.4 | 0.3 | 0.3 | 0.2 | 0.2 | 0.2 | |||||||||||||||||||||||||
Amortization of intangibles
|
0.4 | 0.6 | 0.6 | 0.6 | 0.7 | 0.7 | 0.8 | 0.6 | |||||||||||||||||||||||||
Acquisition-related charges
|
| | | | | | | 0.1 | |||||||||||||||||||||||||
Restructuring and impairment charges
|
| | | | | | | | |||||||||||||||||||||||||
Operating income
|
4.2 | 3.8 | 3.3 | 3.8 | 3.5 | 3.4 | 3.4 | 3.5 | |||||||||||||||||||||||||
Other loss
|
| | | | | 0.4 | | | |||||||||||||||||||||||||
Interest income
|
(0.2 | ) | (0.2 | ) | (0.2 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||||||||||||||
Interest expense
|
0.3 | 0.4 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | |||||||||||||||||||||||||
Income before income taxes
|
4.1 | 3.6 | 3.2 | 3.6 | 3.3 | 2.8 | 3.2 | 3.3 | |||||||||||||||||||||||||
Income tax expense
|
0.7 | 0.6 | 0.5 | 0.6 | 0.6 | 0.3 | 0.5 | 0.5 | |||||||||||||||||||||||||
Net income
|
3.4 | % | 3.0 | % | 2.7 | % | 3.0 | % | 2.7 | % | 2.5 | % | 2.7 | % | 2.8 | % | |||||||||||||||||
31
Fiscal Year Ended August 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Net cash provided by operating activities
|
$ | 590,001 | $ | 451,241 | $ | 263,493 | ||||||
Net cash used in investing activities
|
(488,694 | ) | (205,593 | ) | (517,493 | ) | ||||||
Net cash provided by (used in) financing activities
|
60,940 | (318,440 | ) | 312,420 | ||||||||
Effect of exchange rate changes on cash
|
12,502 | (5,634 | ) | 593 | ||||||||
Net increase (decrease) in cash and cash equivalents
|
$ | 174,749 | $ | (78,426 | ) | $ | 59,013 | |||||
32
33
34
35
Payments Due by Period (In thousands) | ||||||||||||||||||||
Less than | 1-3 | 4-5 | After | |||||||||||||||||
Contractual Obligations | Total | 1 Year | Years | Years | 5 Years | |||||||||||||||
Notes payable, long-term debt and long-term lease obligations
|
$ | 327,254 | $ | 674 | $ | 11,186 | $ | 315,394 | $ | | ||||||||||
Operating lease obligations
|
145,347 | 34,448 | 51,886 | 34,160 | 24,853 | |||||||||||||||
Total
|
$ | 472,601 | $ | 35,122 | $ | 63,072 | $ | 349,554 | $ | 24,853 | ||||||||||
36
| adverse changes in general economic conditions; | |
| the level and timing of customer orders; | |
| the level of capacity utilization of our manufacturing facilities and associated fixed costs; | |
| the composition of the costs of revenue between materials, labor and manufacturing overhead; | |
| price competition; | |
| our level of experience in manufacturing a particular product; | |
| the degree of automation used in our assembly process; | |
| the efficiencies achieved in managing inventories and fixed assets; | |
| fluctuations in materials costs and availability of materials; | |
| seasonality in customers product requirements; and | |
| the timing of expenditures in anticipation of increased sales, customer product delivery requirements and shortages of components or labor. |
37
| The inability of our customers to adapt to rapidly changing technology and evolving industry standards, which result in short product life cycles. | |
| The inability of our customers to develop and market their products, some of which are new and untested, the potential that our customers products may become obsolete or the failure of our customers products to gain widespread commercial acceptance. | |
| Recessionary periods in our customers markets. |
38
| variation in demand for our customers products; | |
| our customers attempts to manage their inventory; | |
| electronic design changes; | |
| changes in our customers manufacturing strategy; and | |
| acquisitions of or consolidations among customers. |
39
| respond more quickly to new or emerging technologies; | |
| have greater name recognition, critical mass and geographic market presence; | |
| be better able to take advantage of acquisition opportunities; | |
| adapt more quickly to changes in customer requirements; | |
| devote greater resources to the development, promotion and sale of their services; and | |
| be better positioned to compete on price for their services. |
40
| difficulties in staffing and managing foreign operations; | |
| political and economic instability; | |
| unexpected changes in regulatory requirements and laws; | |
| longer customer payment cycles and difficulty collecting accounts receivable export duties, import controls and trade barriers (including quotas); | |
| governmental restrictions on the transfer of funds to us from our operations outside the United States; | |
| burdens of complying with a wide variety of foreign laws and labor practices; | |
| fluctuations in currency exchange rates, which could affect local payroll, utility and other expenses; and | |
| inability to utilize net operating losses incurred by our foreign operations against future income in the same jurisdiction. |
| Financial risks, such as (1) potential liabilities of the acquired businesses; (2) costs associated with integrating acquired operations and businesses; (3) the dilutive effect of the issuance of additional equity securities; (4) the incurrence of additional debt; (5) the financial impact of valuing goodwill and other intangible assets involved in any acquisitions, potential future impairment write-downs of goodwill and the amortization of other intangible assets; (6) possible adverse tax and accounting effects; and (7) the risk that we spend substantial amounts purchasing these manufacturing facilities and assume significant contractual and other obligations with no guaranteed levels of revenue or that we may have to close facilities at our cost. |
41
| Operating risks, such as (1) the diversion of managements attention to the assimilation of the businesses to be acquired; (2) the risk that the acquired businesses will fail to maintain the quality of services that we have historically provided; (3) the need to implement financial and other systems and add management resources; (4) the risk that key employees of the acquired businesses will leave after the acquisition; (5) unforeseen difficulties in the acquired operations; and (6) the impact on us of any unionized work force we may acquire or any labor disruptions that might occur. |
| The integration into our business of the acquired assets and facilities may be time-consuming and costly. | |
| We, rather than the divesting company, may bear the risk of excess capacity. | |
| We may not achieve anticipated cost reductions and efficiencies. | |
| We may be unable to meet the expectations of the divesting company as to volume, product quality, timeliness and cost reductions. | |
| If demand for the divesting companys products declines, it may reduce the volume of purchases and we may not be able to sufficiently reduce the expenses of operating the facility or use the facility to provide services to other customers. |
42
| hire, retain and expand our qualified engineering and technical personnel; | |
| maintain technological leadership; | |
| develop and market manufacturing services that meet changing customer needs; and | |
| successfully anticipate or respond to technological changes in manufacturing processes on a cost-effective and timely basis. |
43
44
45
46
| make it difficult for us to obtain any necessary financing in the future for other acquisitions, working capital, capital expenditures, debt service requirements or other purposes; | |
| limit our flexibility in planning for, or reacting to changes in, our business; and | |
| make us more vulnerable in the event of a downturn in our business. |
47
| a poison pill shareholder rights plan; | |
| a statutory restriction on the ability of shareholders to take action by less than unanimous written consent; and | |
| a statutory restriction on business combinations with some types of interested shareholders. |
48
49
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
50
Item 8. | Financial Statements and Supplementary Data |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
51
Item 9B. | Other Information |
52
Item 10. | Directors and Executive Officers of the Registrant |
Jabil Circuit, Inc. | |
Attention: Investor Relations | |
10560 Dr. Martin Luther King, Jr. Street North | |
St. Petersburg, Florida 33716 | |
Telephone: (727) 577-9749 |
53
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Number of Securities | ||||||||||||
Number of Securities to | Weighted-Average | Remaining Available | ||||||||||
Be Issued upon Exercise | Exercise Price of | for Future Issuance | ||||||||||
of Outstanding Options, | Outstanding Options, | Under Equity | ||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | Compensation Plans | |||||||||
Equity compensation plans approved by security holders:
|
||||||||||||
1992 Stock Option Plan
|
7,615,381 | 18.29 | | |||||||||
1992 Employee Stock Purchase Plan
|
NA | NA | | |||||||||
2002 Stock Option Plan
|
10,797,058 | 22.05 | 6,193,324 | |||||||||
2002 CSOP Plan
|
204,536 | 16.42 | 384,063 | |||||||||
2002 FSOP Plan
|
315,130 | 24.12 | 84,030 | |||||||||
2002 Employee Stock Purchase Plan
|
NA | NA | 517,528 | |||||||||
Restricted Stock Awards
|
435,000 | 24.21 | NA | |||||||||
Equity compensation plans not approved by security holders:
|
||||||||||||
2001 Stock Award Plan
|
NA | NA | 88,350 | |||||||||
Total
|
19,367,105 | 7,267,295 | ||||||||||
54
Item 13. | Certain Relationships and Related Transactions |
Item 14. | Principal Accounting Fees and Services |
Item 15. | Exhibits, Financial Statement Schedules |
1. Financial Statements. Our consolidated financial statements, and related notes thereto, with the independent registered public accounting firm report thereon are included in Part IV of this report on the pages indicated by the Index to Consolidated Financial Statements and Schedule as presented on page 56 of this report. | |
2. Financial Statement Schedule. Our financial statement schedule is included in Part IV of this report on the page indicated by the Index to Consolidated Financial Statements and Schedule as presented on page 56 of this report. This financial statement schedule should be read in conjunction with our consolidated financial statements, and related notes thereto. | |
Schedules not listed in the Index to Consolidated Financial Statements and Schedule have been omitted because they are not applicable, not required, or the information required to be set forth therein is included in the consolidated financial statements or notes thereto. | |
3. Exhibits. See Item 15(b) below. |
55
57 | |||
58 | |||
60 | |||
Consolidated Financial Statements:
|
|||
61 | |||
62 | |||
63 | |||
64 | |||
65 | |||
66 | |||
Financial Statement Schedule:
|
|||
101 |
56
57
58
/s/ KPMG LLP |
59
/s/ KPMG LLP |
60
61
Fiscal Year Ended August 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
Net revenue (note 9)
|
$ | 7,524,386 | $ | 6,252,897 | $ | 4,729,482 | |||||||
Cost of revenue
|
6,895,880 | 5,714,517 | 4,294,016 | ||||||||||
Gross profit
|
628,506 | 538,380 | 435,466 | ||||||||||
Operating expenses:
|
|||||||||||||
Selling, general and administrative
|
278,866 | 263,504 | 243,663 | ||||||||||
Research and development
|
22,507 | 13,813 | 9,906 | ||||||||||
Amortization of intangibles (note 4)
|
39,762 | 43,709 | 36,870 | ||||||||||
Acquisition-related charges (note 12)
|
| 1,339 | 15,266 | ||||||||||
Restructuring and impairment charges (note 13)
|
| | 85,308 | ||||||||||
Operating income
|
287,371 | 216,015 | 44,453 | ||||||||||
Other loss (income)
|
| 6,370 | (2,600 | ) | |||||||||
Interest income
|
(13,774 | ) | (7,237 | ) | (6,920 | ) | |||||||
Interest expense
|
24,773 | 19,369 | 17,019 | ||||||||||
Income before income taxes
|
276,372 | 197,513 | 36,954 | ||||||||||
Income tax expense (benefit) (note 6)
|
44,525 | 30,613 | (6,053 | ) | |||||||||
Net income
|
$ | 231,847 | $ | 166,900 | $ | 43,007 | |||||||
Earnings per share:
|
|||||||||||||
Basic
|
$ | 1.14 | $ | 0.83 | $ | 0.22 | |||||||
Diluted
|
$ | 1.12 | $ | 0.81 | $ | 0.21 | |||||||
Common shares used in the calculations of earnings per share:
|
|||||||||||||
Basic
|
202,501 | 200,430 | 198,495 | ||||||||||
Diluted
|
207,526 | 205,849 | 202,103 | ||||||||||
62
Fiscal Year Ended August 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Net income
|
$ | 231,847 | $ | 166,900 | $ | 43,007 | ||||||
Other comprehensive income (loss):
|
||||||||||||
Foreign currency translation adjustment
|
37,377 | 25,586 | 26,861 | |||||||||
Change in fair market value of derivative instruments, net of tax
|
(274 | ) | 1,139 | (865 | ) | |||||||
Minimum pension liability, net of tax (note 7)
|
(10,057 | ) | 5,253 | (5,294 | ) | |||||||
Comprehensive income
|
$ | 258,893 | $ | 198,878 | $ | 63,709 | ||||||
63
Common Stock | Accumulated | |||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||
Shares | Par | Paid-In | Retained | Unearned | Comprehensive | Stockholders | ||||||||||||||||||||||
Outstanding | Value | Capital | Earnings | Compensation | Income (Loss) | Equity | ||||||||||||||||||||||
Balance at August 31, 2002
|
197,950,937 | $ | 198 | $ | 926,345 | $ | 580,046 | $ | | $ | 377 | $ | 1,506,966 | |||||||||||||||
Shares issued to non-employees under stock option plans
|
| | 86 | | | | 86 | |||||||||||||||||||||
Shares issued upon exercise of stock options
|
825,394 | 1 | 8,147 | | | | 8,148 | |||||||||||||||||||||
Shares issued under employee stock purchase plan
|
569,627 | | 8,877 | | | | 8,877 | |||||||||||||||||||||
Tax benefit of options exercised
|
| | 690 | | | | 690 | |||||||||||||||||||||
Comprehensive income
|
| | | 43,007 | | 20,702 | 63,709 | |||||||||||||||||||||
Balance at August 31, 2003
|
199,345,958 | 199 | 944,145 | 623,053 | | 21,079 | 1,588,476 | |||||||||||||||||||||
Shares issued upon exercise of stock options
|
1,506,579 | 2 | 19,922 | | | | 19,924 | |||||||||||||||||||||
Shares issued under employee stock purchase plan
|
446,293 | | 8,967 | | | | 8,967 | |||||||||||||||||||||
Tax benefit of options exercised
|
| | 3,095 | | | | 3,095 | |||||||||||||||||||||
Comprehensive income
|
| | | 166,900 | | 31,978 | 198,878 | |||||||||||||||||||||
Balance at August 31, 2004
|
201,298,830 | 201 | 976,129 | 789,953 | | 53,057 | 1,819,340 | |||||||||||||||||||||
Shares issued upon exercise of stock options
|
2,727,004 | 3 | 40,661 | | | | 40,664 | |||||||||||||||||||||
Shares issued under employee stock purchase plan
|
466,297 | | 9,723 | | | | 9,723 | |||||||||||||||||||||
Issuance of restricted stock awards
|
| | 10,529 | | (10,529 | ) | | | ||||||||||||||||||||
Recognition of unearned compensation
|
| | | 1,755 | | 1,755 | ||||||||||||||||||||||
Tax benefit of options exercised
|
| | 4,842 | | | | 4,842 | |||||||||||||||||||||
Comprehensive income
|
| | | 231,847 | | 27,046 | 258,893 | |||||||||||||||||||||
Balance at August 31, 2005
|
204,492,131 | $ | 204 | $ | 1,041,884 | $ | 1,021,800 | $ | (8,774 | ) | $ | 80,103 | $ | 2,135,217 | ||||||||||||||
64
Fiscal Year Ended August 31, | ||||||||||||||
2005 | 2004 | 2003 | ||||||||||||
Cash flows from operating activities:
|
||||||||||||||
Net income
|
$ | 231,847 | $ | 166,900 | $ | 43,007 | ||||||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||||||||
Depreciation and amortization
|
220,123 | 221,668 | 224,439 | |||||||||||
Recognition of deferred grant proceeds
|
(1,199 | ) | (1,649 | ) | (1,809 | ) | ||||||||
Amortization of discount on note receivable
|
(1,002 | ) | | | ||||||||||
Recognition of stock-based compensation
|
1,880 | | | |||||||||||
Deferred income taxes
|
4,609 | (43,142 | ) | (28,958 | ) | |||||||||
Write-off of unamortized debt issuance costs
|
| 6,370 | | |||||||||||
Accrued interest on deferred acquisition payments
|
| | 760 | |||||||||||
Imputed interest on acquisition payments
|
| | 395 | |||||||||||
Non-cash restructuring charges
|
| | 56,444 | |||||||||||
(Recovery) provision for doubtful accounts
|
(936 | ) | 1,039 | 3,227 | ||||||||||
Tax benefit of options exercised
|
4,842 | 3,095 | 690 | |||||||||||
Loss (Gain) on sale of property
|
2,731 | 2,306 | (202 | ) | ||||||||||
Change in operating assets and liabilities, exclusive of net
assets acquired:
|
||||||||||||||
Accounts receivable
|
(31,070 | ) | 1,489 | (286,644 | ) | |||||||||
Inventories
|
(106,291 | ) | (133,907 | ) | 68,640 | |||||||||
Prepaid expenses and other current assets
|
21,203 | (5,396 | ) | (26,189 | ) | |||||||||
Other assets
|
1,689 | 3,585 | (3,838 | ) | ||||||||||
Accounts payable and accrued expenses
|
244,083 | 197,963 | 194,702 | |||||||||||
Income taxes payable
|
(2,508 | ) | 30,920 | 18,829 | ||||||||||
Net cash provided by operating activities
|
590,001 | 451,241 | 263,493 | |||||||||||
Cash flows from investing activities:
|
||||||||||||||
Net cash paid for business and intangible asset acquisitions
|
(216,060 | ) | (1,492 | ) | (415,166 | ) | ||||||||
Cash disbursements for notes receivable
|
(26,356 | ) | | | ||||||||||
Cash disbursement for purchase option
|
(3,809 | ) | | | ||||||||||
Acquisition of property, plant and equipment
|
(256,849 | ) | (217,741 | ) | (117,215 | ) | ||||||||
Proceeds from sale of property, plant and equipment
|
14,380 | 13,640 | 14,888 | |||||||||||
Net cash used in investing activities
|
(488,694 | ) | (205,593 | ) | (517,493 | ) | ||||||||
Cash flows from financing activities:
|
||||||||||||||
Borrowings under debt agreements
|
117,708 | 81 | 165,186 | |||||||||||
Payments toward debt agreements and capital lease obligations
|
(102,466 | ) | (347,412 | ) | (167,086 | ) | ||||||||
Payment related to termination of interest rate swap agreement
|
(4,564 | ) | | | ||||||||||
Net proceeds from issuance of long-term debt
|
| | 297,209 | |||||||||||
Net proceeds from issuance of common stock under option and
employee purchase plans
|
50,262 | 28,891 | 17,111 | |||||||||||
Net cash provided by (used in) financing activities
|
60,940 | (318,440 | ) | 312,420 | ||||||||||
Effect of exchange rate changes on cash
|
12,502 | (5,634 | ) | 593 | ||||||||||
Net increase (decrease) in cash and cash equivalents
|
174,749 | (78,426 | ) | 59,013 | ||||||||||
Cash and cash equivalents at beginning of period
|
621,322 | 699,748 | 640,735 | |||||||||||
Cash and cash equivalents at end of period
|
$ | 796,071 | $ | 621,322 | $ | 699,748 | ||||||||
Supplemental disclosure information:
|
||||||||||||||
Interest paid
|
$ | 21,987 | $ | 19,232 | $ | 14,367 | ||||||||
Income taxes paid, net of refunds received
|
$ | 45,455 | $ | 33,848 | $ | 6,937 | ||||||||
65
1. | Description of Business and Summary of Significant Accounting Policies |
a. Principles of Consolidation and Basis of Presentation |
b. Use of Accounting Estimates |
c. Cash and Cash Equivalents |
d. Inventories |
66
e. Property, Plant and Equipment, net
Asset Class
Estimated Useful Life
35 years
Shorter of lease term or useful life of the improvement
5 to 7 years
5 years
3 to 7 years
3 years
f. Goodwill and Other Intangible Assets |
g. Impairment of Long-lived Assets |
h. Revenue Recognition |
67
i. Income Taxes |
j. Earnings Per Share |
Fiscal Year Ended August 31, | |||||||||||||
2005 | 2004 | 2003 | |||||||||||
Numerator:
|
|||||||||||||
Net income
|
$ | 231,847 | $ | 166,900 | $ | 43,007 | |||||||
Denominator:
|
|||||||||||||
Weighted-average common shares outstanding basic
|
202,501 | 200,430 | 198,495 | ||||||||||
Dilutive common shares issuable upon exercise of stock options
|
4,590 | 5,419 | 3,608 | ||||||||||
Dilutive unvested common shares associated with restricted stock
awards
|
435 | | | ||||||||||
Weighted average shares outstanding diluted
|
207,526 | 205,849 | 202,103 | ||||||||||
Earnings per common share:
|
|||||||||||||
Basic
|
$ | 1.14 | $ | 0.83 | $ | 0.22 | |||||||
Diluted
|
$ | 1.12 | $ | 0.81 | $ | 0.21 | |||||||
68
k. Foreign Currency Transactions |
l. Profit Sharing, 401(k) Plan and Defined Contribution Plans |
m. Stock-Based Compensation |
69
70
Fiscal Year Ended August 31,
2005
2004
2003
$
231,847
$
166,900
$
43,007
1,354
(99,936
)
(45,531
)
(34,181
)
$
133,265
$
121,369
$
8,826
$
1.14
$
0.83
$
0.22
$
0.66
$
0.61
$
0.04
$
1.12
$
0.81
$
0.21
$
0.64
$
0.59
$
0.04
n. Comprehensive Income |
August 31, | ||||||||
2005 | 2004 | |||||||
Foreign currency translation adjustment
|
$ | 90,201 | $ | 52,824 | ||||
Accumulated derivative net losses, net of tax
|
| 274 | ||||||
Minimum pension liability, net of tax
|
(10,098 | ) | (41 | ) | ||||
$ | 80,103 | $ | 53,057 | |||||
71
o. Warranty Provision |
p. Derivative Instruments |
q. Intellectual Property Guarantees |
2. | Inventories |
August 31, | ||||||||
2005 | 2004 | |||||||
Raw materials
|
$ | 573,756 | $ | 441,968 | ||||
Work in process
|
148,455 | 133,005 | ||||||
Finished goods
|
96,224 | 81,708 | ||||||
$ | 818,435 | $ | 656,681 | |||||
72
3.
Property, Plant and Equipment
August 31,
2005
2004
$
74,296
$
70,769
372,536
361,513
43,792
40,165
770,840
645,631
45,857
43,976
208,762
178,438
6,160
5,224
72,642
1,722
1,594,885
1,347,438
714,149
571,085
$
880,736
$
776,353
4. | Goodwill and Other Intangible Assets |
73
Gross Carrying
Accumulated
Net Carrying
August 31, 2005
Amount
Amortization
Amount
$
202,629
$
(133,800
)
$
68,829
800
(567
)
233
$
203,429
$
(134,367
)
$
69,062
Gross Carrying
Accumulated
Net Carrying
August 31, 2004
Amount
Amortization
Amount
$
151,660
$
(94,113
)
$
57,547
800
(487
)
313
$
152,460
$
(94,600
)
$
57,860
Fiscal Year Ending August 31, | Amount | ||||
2006
|
$ | 21,922 | |||
2007
|
12,237 | ||||
2008
|
7,629 | ||||
2009
|
4,211 | ||||
2010
|
4,209 | ||||
Thereafter
|
18,854 | ||||
Total
|
$ | 69,062 | |||
Acquisitions and | |||||||||||||||||
Balance at | Purchase Accounting | Foreign Currency | Balance at | ||||||||||||||
Reportable Segment | August 31, 2004 | Adjustments | Impact | August 31, 2005 | |||||||||||||
Americas
|
$ | 34,770 | $ | 81,162 | $ | 3,385 | $ | 119,317 | |||||||||
Europe
|
171,932 | 47 | 3,316 | 175,295 | |||||||||||||
Asia
|
65,239 | | (139 | ) | 65,100 | ||||||||||||
Other non-reportable segment
|
22,625 | 1,928 | (26 | ) | 24,527 | ||||||||||||
Total
|
$ | 294,566 | $ | 83,137 | $ | 6,536 | $ | 384,239 | |||||||||
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
August 31,
2005
2004
$
$
97
81
710
1,113
14,551
9,093
22,106
295,248
293,861
327,254
309,606
674
4,412
$
326,580
$
305,194
(a)
In July 2003, the Company amended and revised its then existing
credit facility and established a three-year,
$400.0 million unsecured revolving credit facility with a
syndicate of banks (Amended Revolver). Under the
terms of the Amended Revolver, borrowings could be made under
either floating rate loans or Eurodollar rate loans. Interest
accrued on outstanding floating rate loans at the greater of the
agents prime rate or 0.50% plus the federal funds rate.
Interest accrued on outstanding Eurodollar loans at the London
Interbank Offered Rate (LIBOR) in effect at the loan
inception plus a spread of 0.65% to 1.35%. A facility fee based
on the committed amount of the Amended Revolver was payable at a
rate equal to 0.225% to 0.40%. A usage fee was also payable if
the borrowings on the Amended Revolver exceeded
33
1
/
3
%
of the aggregate commitment. The usage fee rate ranged from
0.125% to 0.25%. The interest spread, facility fee and usage fee
were determined based on the Companys general corporate
rating or rating of its senior unsecured long-term indebtedness
as determined by Standard & Poors Rating Service
(S&P) and Moodys Investor Service
(Moodys). The Amended Revolver had an
expiration date of July 14, 2006 when outstanding
borrowings would then be due and payable. The Amended Revolver
required compliance with several financial covenants including a
fixed charge coverage ratio, consolidated net worth threshold
and indebtedness to EBITDA ratio, as defined in the Amended
Revolver. The Amended Revolver required compliance with certain
operating covenants, which limited, among other things, the
Companys incurrence of additional indebtedness. On
March 10, 2005, the Company borrowed $80.0 million
under the Amended Revolver to partially fund the acquisition of
Varian Electronics Manufacturing (VEM), which was
consummated on March 11, 2005. This borrowing was repaid in
full during the third quarter of fiscal year 2005 from cash
provided by operations.
On May 11, 2005, the Company replaced the Amended Revolver
and established a five-year, $500.0 million unsecured
revolving credit facility with a syndicate of banks (the
Unsecured Revolver). The Unsecured Revolver, which
expires on May 11, 2010, may be increased to a
Table of Contents
maximum of $750.0 million at the request of the Company if
approved by the lenders. Such requests must be for an increase
of at least $50.0 million or an integral multiple thereof,
and may only be made once per calendar year. Interest and fees
on Unsecured Revolver advances are based on the Companys
senior unsecured long-term indebtedness rating as determined by
S&P and Moodys. Interest is charged at either the base
rate or a rate equal to 0.50% to 0.950% above the Eurocurrency
rate, where the base rate, available for U.S. dollar
advances only, represents the greater of the agents prime
rate or 0.50% plus the federal funds rate, and the Eurocurrency
rate represents the applicable LIBOR, each as more fully defined
in the Unsecured Revolver. Fees include a facility fee based on
the total commitments of the lenders, a letter of credit fee
based on the amount of outstanding letters of credit, and a
utilization fee to be added to the interest rate and the letter
of credit fee during any period when the aggregate amount of
outstanding advances and letters of credit exceeds 50% of the
total commitments of the lenders. Based on the Companys
current senior unsecured long-term indebtedness rating as
determined by S&P and Moodys, the current rate of
interest plus the applicable facility and utilization fee on a
full Eurocurrency rate draw would be 1.00% above the
Eurocurrency rate as defined above. Among other things, the
Unsecured Revolver contains financial covenants establishing a
debt to EBITDA ratio and interest coverage ratio; and contains
operating covenants, which limit, among other things, the
Companys incurrence of indebtedness at the subsidiary
level, and the incurrence of liens at all levels. The various
covenants, limitations and events of default included in the
Unsecured Revolver are currently customary for similar
facilities for similarly rated borrowers. The Company was in
compliance with the respective covenants as of August 31,
2005. At August 31, 2005, there were no borrowings
outstanding on the Unsecured Revolver.
(b)
In May 2003, the Company negotiated a six-month,
0.6 billion Japanese yen (JPY) credit facility
(approximately $5.4 million based on currency exchange
rates at August 31, 2005) for a Japanese subsidiary with a
Japanese bank. During the first quarter of fiscal year 2004 the
Company renewed this existing facility. Under the terms of the
facility, the Company pays interest on outstanding borrowings
based on the Tokyo Interbank Offered Rate plus a spread of
1.75%. The credit facility expires on December 2, 2005 and
any outstanding borrowings are then due and payable. At
August 31, 2005, there were no borrowings outstanding under
this facility.
(c)
In June 2004, the Company negotiated a two-year, $100.0 thousand
credit facility for a Ukrainian subsidiary with a Ukrainian
bank. During the third quarter of fiscal year 2005, this credit
facility was increased to $600.0 thousand. However, $500.0
thousand of the availability under the facility has been
restricted for specific purposes. Under the terms of the
facility, the Company pays interest on outstanding borrowings
based on LIBOR plus a spread of 1.5%. The Company also pays a
commitment fee of 2.0% per annum for any capacity that is
restricted but not outstanding under the facility. The credit
facility expires on June 9, 2006 and any outstanding
borrowings are then due and payable. At August 31, 2005,
there were $97.0 thousand of borrowings outstanding under this
facility.
(d)
The Company assumed a capital lease obligation as part of its
purchase of certain operations of Valeo S.A. during the fourth
quarter of fiscal year 2002. This lease covers the land and
building in Meung-sur-Loire, France and payments are due
quarterly through fiscal year 2007. Additionally, in the second
quarter of fiscal year 2005, the Company entered into a capital
lease covering specific equipment in Brest, France. Payments on
the Brest capital lease are due quarterly through the third
quarter of fiscal year 2006.
(e)
In August 2003, the Company negotiated a five-year,
1.8 billion JPY term loan with a Japanese bank (Japan
Term Loan). The Company paid interest quarterly at a fixed
annual rate of 2.97%. The Japan Term Loan required quarterly
repayments of principal of 105 million JPY. The final
principal payment was to be due May 31, 2008. During the
second quarter of fiscal year 2005, the Company
Table of Contents
extinguished the outstanding balance of the Japan Term Loan. The
Japan Term Loan required compliance with financial and operating
covenants including maintaining a minimum equity balance at the
respective subsidiary level. The Company was in compliance with
these covenants through the date of extinguishment. The Japan
Term Loan replaced a six-month, 1.8 billion JPY credit
facility that was negotiated in May 2003.
(f)
In April 2005, we negotiated a five-year, 400.0 million
Indian rupee (approximately $9.1 million based on currency
exchange rates at August 31, 2005) construction loan for an
Indian subsidiary with an Indian bank. Under the terms of the
loan facility, we pay interest on outstanding borrowings based
on a fixed rate of 7.45%. The construction loan expires on
April 15, 2010 and all outstanding borrowings are then due
and payable.
(g)
In April 2005, we negotiated a five-year, 25.0 million Euro
construction loan for a Hungarian subsidiary with a Hungarian
bank. Under the terms of the loan facility, we pay interest on
outstanding borrowings based on the Euro Interbank Offered Rate
plus a spread of 0.925%. Quarterly principal repayments begin in
September 2006 to repay the amount of proceeds drawn under the
construction loan. The construction loan expires on
April 13, 2010. At August 31, 2005, proceeds of
17.9 million Euros (approximately $22.1 million based
on currency exchange rates at August 31, 2005) had been
drawn under the construction loan.
(h)
In July 2003, the Company issued a total of $300.0 million,
seven-year, 5.875% senior notes (5.875% Senior
Notes) at 99.803% of par, resulting in net proceeds of
approximately $297.2 million. The 5.875% Senior Notes
mature on July 15, 2010 and pay interest semiannually on
January 15 and July 15.
Fiscal Year Ending August 31,
Amount
$
674
5,659
5,527
5,527
309,867
$
327,254
Table of Contents
6.
Income Taxes
Fiscal Year Ended August 31,
2005
2004
2003
$
96,730
$
69,130
$
12,934
(174
)
328
307
(54,254
)
(35,448
)
(21,617
)
6,943
4,895
1,671
(3,540
)
(4,394
)
(2,177
)
119
(2,662
)
(358
)
652
$
44,525
$
30,613
$
(6,053
)
16.1
%
15.5
%
(16.4
)%
Fiscal Year Ended August 31,
2005
2004
2003
$
6,344
$
(20,418
)
$
(63,254
)
270,028
217,931
100,208
$
276,372
$
197,513
$
36,954
Table of Contents
Fiscal Year Ended August 31,
Current
Deferred
Total
U.S. Federal
$
4,466
$
784
$
5,250
U.S. State
1,429
(1,697
)
(268
)
Foreign
27,001
12,542
39,543
$
32,896
$
11,629
$
44,525
U.S. Federal
$
6,558
$
(11,145
)
$
(4,587
)
U.S. State
1,080
(575
)
505
Foreign
44,407
(9,712
)
34,695
$
52,045
$
(21,432
)
$
30,613
U.S. Federal
$
(3,414
)
$
(21,200
)
$
(24,614
)
U.S. State
1,616
(1,144
)
472
Foreign
24,982
(6,893
)
18,089
$
23,184
$
(29,237
)
$
(6,053
)
Table of Contents
Fiscal Year Ended
August 31,
2005
2004
$
22,739
$
21,096
1,238
2,580
238
598
9,517
10,593
3,725
2,949
33,578
34,673
540
4,221
1,345
1,833
3,786
1,187
5,860
6,331
82,566
86,061
(4,575
)
(4,386
)
$
77,991
$
81,675
$
7,933
$
14,511
4,590
4,069
$
12,523
$
18,580
7.
Pension and Other Postretirement Benefits
Table of Contents
a. Benefit Obligations
Pension Benefits
Other Benefits
2005
2004
2005
2004
$
95,260
$
87,874
$
425
$
198
1,632
1,665
142
53
4,806
4,266
58
31
15,028
(1,572
)
(155
)
144
(653
)
(778
)
(5,496
)
(7,566
)
242
908
46
(336
)
10,463
106
(1
)
$
110,529
$
95,260
$
576
$
425
Pension Benefits
Other Benefits
2005
2004
2005
2004
4.3%
5.0%
13.3%
12.2%
3.6%
3.7%
9.5%
8.5%
Table of Contents
b. Plan Assets
Pension Benefits
Other Benefits
2005
2004
2005
2004
$
64,208
$
54,861
$
$
8,386
5,997
811
1,408
(4,300
)
(6,774
)
242
908
(42
)
7,808
$
69,305
$
64,208
$
$
Pension Plan Assets
2005
2004
Equity securities
35%
40%
Debt securities
65%
60%
Total
100%
100%
Table of Contents
c. Funded Status
Pension Benefits
Other Benefits
2005
2004
2005
2004
$
69,305
$
64,208
$
$
(110,529
)
(95,260
)
(576
)
(425
)
(41,224
)
(31,052
)
(576
)
(425
)
18,398
8,306
(126
)
36
$
(22,826
)
$
(22,746
)
$
(702
)
$
(389
)
$
$
5,198
$
$
(37,256
)
(28,008
)
(702
)
(389
)
14,430
64
$
(22,826
)
$
(22,746
)
$
(702
)
$
(389
)
August 31,
2005
2004
$
110,529
$
29,218
103,629
23,852
69,305
424
Pension Benefits
Other Benefits
2005
2004
2005
2004
$
14,366
$
(7,498
)
$
$
Table of Contents
d. Net Periodic Benefit Cost
Pension Benefits
Other Benefits
2005
2004
2003
2005
2004
2003
$
1,632
$
1,665
$
2,363
$
142
$
53
$
28
4,806
4,266
3,746
58
31
15
(4,455
)
(4,136
)
(4,110
)
84
450
(211
)
$
2,067
$
2,245
$
1,788
$
200
$
84
$
43
Pension Benefits
Other Benefits
2005
2004
2003
2005
2004
2003
4.3%
5.0%
4.6%
13.3%
12.2%
14.7%
5.8%
6.8%
7.0%
3.6%
3.7%
3.3%
9.5%
8.5%
8.0%
e. Health Care Cost Trend Rates
Measurement
Year Ended
2005
2004
8.0
%
9.3
%
8.0
%
9.3
%
2006
2004
f. Cash Flows
Table of Contents
Fiscal Year Ending August 31,
Pension Benefits
Other Benefits
$
3,704
$
62
4,242
1
5,418
68
5,974
70
7,063
14
40,287
630
8.
Stockholders Equity
a. Stock Option Plans
Table of Contents
Options
Weighted-
Available
Outstanding
Average
for Grant
Options
Exercise Price
9,481,312
13,004,555
16.84
(850,951
)
(4,247,200
)
4,247,200
13.11
1,125,723
(1,125,723
)
19.47
(825,394
)
10.18
5,508,884
15,300,638
15.95
10,000,000
(161,377
)
(4,787,280
)
4,787,280
26.18
436,566
(436,566
)
19.90
(1,506,579
)
5.86
10,996,793
18,144,773
18.76
(385,696
)
(4,561,990
)
4,561,990
24.09
1,135,660
(1,047,654
)
20.14
(435,000
)
(2,727,004
)
14.83
6,749,767
18,932,105
20.51
Weighted-
Average
Remaining
Weighted-
Contractual
Average
Range of Exercise Prices
Shares
Life
Exercise Price
797,886
2.54
$
5.14
6,473,740
6.01
13.63
11,076,219
7.66
24.48
584,260
5.11
42.48
18,932,105
6.80
$
20.51
Table of Contents
Weighted-
Shares
Average
Range of Exercise Prices
Exercisable
Exercise Price
797,886
$
5.14
5,129,832
13.68
10,288,409
24.34
584,260
42.48
16,800,387
$
20.80
Fiscal Year Ended August 31,
2005
2004
2003
0%
0%
0%
3.5%
3.4%
3.0%
71.6%
73.6%
88.4%
5 years
5 years
5 years
b. Stock Purchase and Award Plans
Table of Contents
Fiscal Year Ended August 31,
2005
2004
2003
0%
0%
0%
2.6%
1.7%
1.8%
33.0%
39.1%
66.2%
0.5 years
0.5 years
0.5 years
c. Restricted Stock Awards
9.
Concentration of Risk and Segment Data
a. Concentration of Risk
Table of Contents
Percentage of
Percentage of
Net Revenue
Accounts
Fiscal Year Ended
Receivable
August 31,
August 31,
2005
2004
2003
2005
2004
14%
18%
15%
20%
27%
13%
*
*
20%
*
10%
*
11%
11%
11%
*
12%
16%
*
*
*
Amount was less than 10% of total
b. Segment Data
Table of Contents
Fiscal Year Ended August 31,
Net Revenue
2005
2004
2003
$
2,550,685
$
1,977,953
$
1,747,718
2,608,467
2,261,355
1,592,389
2,042,497
1,767,816
1,240,543
322,737
245,773
148,832
$
7,524,386
$
6,252,897
$
4,729,482
Depreciation Expense
2005
2004
2003
$
61,554
$
61,770
$
82,248
55,646
57,824
53,618
40,318
38,835
34,612
22,844
19,530
17,091
$
180,362
$
177,959
$
187,569
Segment Income and Reconciliation of Income Before
Income Taxes
2005
2004
2003
$
163,494
$
108,466
$
83,591
172,129
161,936
104,557
144,783
114,800
101,148
16,667
9,949
11,031
497,073
395,151
300,327
(39,762
)
(43,709
)
(36,870
)
(1,339
)
(15,266
)
(85,308
)
(10,999
)
(12,132
)
(10,099
)
(169,940
)
(140,458
)
(115,830
)
$
276,372
$
197,513
$
36,954
Property, Plant and Equipment
2005
2004
2003
$
294,456
$
266,484
$
276,901
192,060
196,847
180,680
246,978
202,069
190,983
147,242
110,953
97,640
$
880,736
$
776,353
$
746,204
Table of Contents
Fiscal Year Ended August 31,
Total Assets
2005
2004
2003
$
1,272,155
$
763,517
$
707,400
1,315,079
1,294,180
1,182,487
1,116,186
893,032
833,166
373,842
378,627
521,692
$
4,077,262
$
3,329,356
$
3,244,745
Capital Expenditures
2005
2004
2003
$
64,873
$
61,247
$
20,089
48,160
71,857
35,530
83,778
49,554
47,027
60,038
35,083
14,569
$
256,849
$
217,741
$
117,215
Fiscal Year Ended August 31,
External Net Revenue:
2005
2004
2003
$
1,222,127
$
967,692
$
916,868
1,123,870
973,696
949,327
947,883
580,171
168,202
897,198
675,690
506,875
878,446
877,227
569,448
446,211
218,474
82,543
432,023
395,120
399,019
1,576,628
1,564,827
1,137,200
$
7,524,386
$
6,252,897
$
4,729,482
Table of Contents
August 31,
Long-Lived Assets:
2005
2004
2003
$
340,611
$
209,536
$
216,257
210,508
167,900
138,226
173,441
169,553
189,078
157,959
134,662
91,897
79,623
79,561
84,549
71,261
58,286
13,089
300,634
309,281
394,427
$
1,334,037
$
1,128,779
$
1,127,523
10.
Derivative Instruments and Hedging Activities
a. Foreign Currency Risk
b.
Interest Rate Risk
Table of Contents
11.
Commitments and Contingencies
a.
Lease Agreements
Fiscal Year Ending August 31,
Amount
$
34,448
30,673
21,213
18,598
15,562
24,853
$
145,347
b.
Litigation
12.
Business Acquisitions and Other Transactions
a.
Business Acquisitions
Table of Contents
b.
Other Transactions
Table of Contents
13.
Restructuring and Impairment Charges
Asset
Balance at
Restructuring
Impairment
Balance at
August 31,
Related
Charge
Cash
August 31,
2002
Charges
(Non-Cash)
Payments
2003
$
12,918
$
29,897
$
$
(36,326
)
$
6,489
7,535
14,877
(7,366
)
15,046
37,661
(37,661
)
925
2,873
(3,638
)
160
$
21,378
$
85,308
$
(37,661
)
$
(47,330
)
$
21,695
Table of Contents
Asset
Balance at
Restructuring
Impairment
Balance at
August 31,
Related
Charge
Cash
August 31,
2003
Charges
(Non-Cash)
Payments
2004
$
6,489
$
(14
)
$
$
(5,464
)
$
1,011
15,046
(5,407
)
9,639
160
14
(130
)
44
$
21,695
$
$
$
(11,001
)
$
10,694
Asset
Balance at
Restructuring
Impairment
Balance at
August 31,
Related
Charge
Cash
August 31,
2003
Charges
(Non-Cash)
Payments
2004
$
1,011
$
$
$
(1,011
)
$
9,639
(4,715
)
4,924
44
(44
)
$
10,694
$
$
$
(5,770
)
$
4,924
Note 14.
Accounts Receivable Securitization
Table of Contents
Fiscal year ending August 31,
Amount
$
12,213
5,083
2,369
2,100
1,943
657
$
24,365
Table of Contents
Table of Contents
Jabil Circuit, Inc. |
By: | /s/ Timothy L. Main |
|
|
Timothy L. Main | |
President and Chief Executive Officer |
99
Signature | Title | Date | ||||
By: |
/s/
William D. Morean
|
Chairman of the Board of Directors | October 27, 2005 | |||
By: |
/s/
Thomas A. Sansone
|
Vice Chairman of the Board of Directors | October 27, 2005 | |||
By: |
/s/
Timothy L. Main
|
President, Chief Executive Officer and Director
(Principal Executive Officer) |
October 27, 2005 | |||
By: |
/s/
Forbes I.J.
Alexander
|
Chief Financial Officer (Principal Financial and Accounting Officer) | October 27, 2005 | |||
By: |
/s/
Laurence S.
Grafstein
|
Director | October 27, 2005 | |||
By: |
/s/
Mel S. Lavitt
|
Director | October 27, 2005 | |||
By: |
/s/
Lawrence J. Murphy
|
Director | October 27, 2005 | |||
By: |
/s/
Frank A. Newman
|
Director | October 27, 2005 | |||
By: |
/s/
Steven A. Raymund
|
Director | October 27, 2005 | |||
By: |
/s/
Kathleen A. Walters
|
Director | October 27, 2005 |
100
Additions
Balance at
Charged to
Beginning
Costs and
Balance at
of Period
Expenses
Write-offs
End of Period
$
6,147
$
(936
)
$
1,244
$
3,967
$
6,299
$
1,039
$
1,191
$
6,147
$
4,689
$
3,227
$
1,617
$
6,299
Additions
Additions
Balance at
Charged to
Charged to
Beginning
Costs and
Other
Balance at
of Period
Expenses
Accounts
Deductions
End of Period
$
4,386
$
189
$
$
$
4,575
$
2,394
$
$
1,992
$
$
4,386
$
2,056
$
338
$
$
$
2,394
101
102
103
104
Exhibit No.
Description
3.1(4)
Registrants Certificate of Incorporation, as amended
3.2(4)
Registrants Bylaws, as amended
4.1(2)
Form of Certificate for Shares of Registrants Common Stock
4.2(6)
Rights Agreement, dated as of October 19, 2001, between the
Registrant and EquiServe Trust Company, N.A., which includes the
form of the Certificate of Designation as Exhibit A, form
of the Rights Certificate as Exhibit B, and the Summary of
Rights as Exhibit C
4.3(10)
Senior Debt Indenture, dated as of July 21, 2003, with
respect to the Senior Debt of the Registrant, between the
Registrant and the Bank of New York, as trustee
4.4(10)
First Supplemental Indenture, dated as of July 21, 2003,
with respect to the 5.875% Senior Notes, due 2010, of the
Registrant, between the Registrant and The Bank of New York, as
trustee
10.1(3)(5)
1992 Stock Option Plan and forms of agreement used thereunder,
as amended
10.2(3)(5)
1992 Employee Stock Purchase Plan and forms of agreement used
thereunder, as amended
10.3(1)(3)
Restated cash or deferred profit sharing plan under
section 401(k)
10.4(1)(3)
Form of Indemnification Agreement between Registrant and its
officers and Directors
10.5 (3)(7)
Jabil 2002 Employment Stock Purchase Plan
10.6 (3)(16)
Jabil 2002 Stock Incentive Plan
10.6.1(20)
Form of Jabil Circuit, Inc. 2002 Stock Incentive Plan Stock
Option Agreement
10.6.2(20)
Form of Jabil Circuit, Inc. 2002 Stock Incentive Plan-French
Subplan Stock Option Agreement
10.6.3(20)
Form of Jabil Circuit, Inc. 2002 Stock Incentive Plan-UK Subplan
CSOP Option Certificate
10.6.4(20)
Form of Jabil Circuit, Inc. 2002 Stock Incentive Plan-UK Subplan
Stock Option Agreement
10.6.5
Form of Jabil Circuit, Inc. Restricted Stock Award Agreement
10.6.6
Form of Stock Appreciation Right Agreement
10.7(3)(9)
Stock Award Plan
10.8(3)(11)
Employment Contract between the Registrant and European Chief
Operating Officer dated December 1, 2002
10.9(11)
364-Day Loan Agreement dated as of November 29, 2002
between Registrant and certain banks and Bank One, NA, SunTrust
Bank and The Royal Bank of Scotland as agents for the bank
10.10(11)
Three-Year Loan Agreement dated as of November 29, 2002
between Registrant and certain banks and Bank One, NA, SunTrust
Bank and The Royal Bank of Scotland as agents for the bank
10.11(12)
Addendum to the Terms and Conditions of the Jabil Circuit, Inc.
2002 Stock Incentive Plan for Grantees Resident in France
10.12(15)
Amended and Restated Three-year Loan Agreement dated as of
July 14, 2003 between Registrant and certain banks and Bank
One, NA, SunTrust Bank and The Royal Bank of Scotland as agents
for the bank
10.13(3)(8)
Schedule to the Jabil Circuit, Inc. 2002 Stock Incentive Plan
for Grantees Resident in the United Kingdom
10.14(13)
Amendment No. 1 to Amended and Restated Three-year Loan
Agreement dated as of February 4, 2004 between the
Registrant and certain banks and Bank One, NA, as administrative
agent for the banks
Table of Contents
Exhibit No.
Description
10.15(13)
Receivables Sale Agreement dated as of February 25, 2004
among Jabil Circuit, Inc, Jabil Circuit of Texas, L.P. and Jabil
Global Services, Inc. as originators and Jabil Circuit
Financial II, Inc. as buyer
10.16(13)
Receivables Purchase Agreement dated as of February 25,
2004 among Jabil Circuit Financial II, Inc. as seller,
Jabil Circuit, Inc. as servicer and Jupiter Securitization
Corporation, the Financial Institutions and Bank One as agent
for Jupiter and the Financial Institutions
10.17(14)
Amendment No. 1 to Receivables Purchase Agreement dated as
of April 22, 2004 among Jabil Circuit Financial II,
Inc. as seller, Jabil Circuit, Inc. as servicer and Jupiter
Securitization Corporation, the Financial Institutions and Bank
One as agent for Jupiter and the Financial Institutions
10.18(17)
Amendment No. 2 to Receivables Purchase Agreement dated as
of February 23, 2005 among Jabil Circuit Financial II,
Inc. as seller, Jabil Circuit, Inc., as servicer and Jupiter
Securitization Corporation, the Financial Institutions and JP
Morgan Chase Bank, N.A. (successor by merger to Bank One, N.A.)
as agent for Jupiter and the Financial Institutions
10.19(18)
Five-Year Unsecured Revolving Credit Agreement dated as of
May 11, 2005 between Registrant; initial lenders named
therein; Citicorp USA, Inc. as administrative agent; JPMorgan
Chase Bank, N.A. as syndication agent; and The Royal Bank of
Scotland PLC, SunTrust Bank, and ABN Amro Bank N.V. as
co-documentation agents
10.20(19)
Amendment No. 3 to Receivables Purchase Agreement dated as
of May 13, 2005 among Jabil Circuit Financial II, Inc.
as seller, Jabil Circuit, Inc., as servicer and Jupiter
Securitization Corporation, the Financial Institutions and JP
Morgan Chase Bank, N.A. (successor by merger to Bank One, N.A.)
as agent for Jupiter and the Financial Institutions
21.1
List of Subsidiaries
23.1
Consent of Independent Registered Public Accounting Firm
24.1
Power of Attorney (See Signature page)
31.1
Rule 13a-14(a)/15d-14(a) Certification by the President and
Chief Executive Officer of Jabil Circuit, Inc.
31.2
Rule 13a-14(a)/15d-14(a) Certification by the Chief
Financial Officer of Jabil Circuit, Inc.
32.1
Section 1350 Certification by the President and Chief
Executive Officer of Jabil Circuit, Inc.
32.2
Section 1350 Certification by the Chief Financial Officer
of Jabil Circuit, Inc.
(1)
Incorporated by reference to the Registration Statement on
Form S-1 filed by the Registrant on March 3, 1993
(File No. 33-58974).
(2)
Incorporated by reference to exhibit Amendment No. 1
to the Registration Statement on Form S-1 filed by the
Registrant on March 17, 1993 (File No. 33-58974).
(3)
Indicates management compensatory plan, contractor arrangement.
(4)
Incorporated by reference to exhibit to the Registrants
Quarterly Report on Form 10-Q for the quarter ended
February 29, 2000.
(5)
Incorporated by reference to the Registration Statement on
Form S-8 (File No. 333-37701) filed by the Registrant
on October 10, 1997.
(6)
Incorporated by reference to the Registrants Form 8-A
(File No. 001-14063) filed October 19, 2001.
(7)
Incorporated by reference to the Registrants Form S-8
(File No. 333-98291) filed by the Registrant on
August 16, 2002.
Table of Contents
(8)
Incorporated by reference to the Registrants Form S-8
(File No. 333-98299) filed by the Registrant on
August 16, 2002.
(9)
Incorporated by reference to the Registrants Form S-8
(File No. 333-54946) filed by the Registrant on
February 5, 2001.
(10)
Incorporated by reference to the Registrants Current
Report on Form 8-K filed by the Registrant on July 21,
2003.
(11)
Incorporated by reference to the Registrants
Form 10-Q for the quarter ended November 30, 2002.
(12)
Incorporated by reference to the Registrants Form S-8
(File No. 106123) filed by the Registrant on June 13,
2003.
(13)
Incorporated by reference to the Registrants
Form 10-Q for the quarter ended February 29, 2004.
(14)
Incorporated by reference to the Registrants
Form 10-Q for the quarter ended May 31, 2004.
(15)
Incorporated by reference to the Registrants Annual Report
on Form 10-K for the fiscal year ended August 31, 2003.
(16)
Incorporated by reference to the Registrants Form S-8
(File No. 333-112264) filed by the Registrant on
January 27, 2004.
(17)
Incorporated by reference to the Registrants
Form 10-Q for the quarter ended February 28, 2005.
(18)
Incorporated by reference to the Registrants Current
Report on Form 8-K filed by the Registrant on May 13,
2005.
(19)
Incorporated by reference to the Registrants
Form 10-Q for the quarter ended May 31, 2005.
(20)
Incorporated by reference to the Registrants Annual Report
on Form 10-K for the fiscal year ended August 31, 2004.
1
2
3
4
JABIL CIRCUIT, INC.
|
||||
By: | ||||
GRANTEE:
|
||||
5
JABIL CIRCUIT, INC.
|
||||
By: | ||||
GRANTEE:
|
||||
* | Jabil Circuit, Inc. subsidiaries list as of August 31, 2005, not including certain immaterial subsidiaries dissolved prior to August 31, 2005. |
/s/ KPMG LLP |
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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ Timothy L. Main | |
|
|
Timothy L. Main | |
President and Chief Executive Officer |
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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants 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 registrants 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 registrants internal control over financial reporting. |
/s/ FORBES I.J. ALEXANDER | |
|
|
Forbes I.J. Alexander | |
Chief Financial Officer |
(1) The Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and | |
(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ TIMOTHY L. MAIN | |
|
|
Timothy L. Main | |
President and Chief Executive Officer |
(1) The Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and | |
(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ FORBES I.J. ALEXANDER | |
|
|
Forbes I.J. Alexander | |
Chief Financial Officer |