Jabil 3Q revs up 66%; net jumps

Electronic News, July 15, 1996

St. Petersburg, Fla.--Jabil Circuit Inc. reported 3Q96 revenue rose 66 percent to $219.7 million from $132.4 million in 3Q95. Net income for the quarter ended May 31, 1996 surged to $6.2 million, or 33 cents per share, from $1.2 million, or 8 cents per share.

Quarterly gross profit rose 137 percent to $18.6 million, or 8.4 percent of revenue, from $7.8 million, or 5.9 percent. Operating income surged 280 percent for the quarter to $11.4 million, or 5.2 percent of revenue, from $3.0 million, or 2.2 percent, in 3Q95, the company said.

Cited were increasing volumes of higher margin products and improved operational efficiencies.

Sequential revenue decreased slightly due to the end of hard drive production for Quantum Corp. (EN, March 25). Gross margin increased sequentially from 7.8 percent of revenue to 8.4 percent, reflecting improved production efficiencies and increasing volumes of higher value-added products, Jabil said.

Selling, general and administrative expenses increased 3.0 percent of revenue from 2.6 percent in 2Q96, primarily due to the writing off of loan origination costs on a prior financing paid off during the quarter. Total expense rose to $6.6 million. R&D increased slightly to .3 percent from .2 percent.

Meanwhile, operating income increased sequentially to 5.2 percent of comparable revenue, from 5.0 percent in 2Q96.

"Prospects for future business levels continue to improve, particularly in targeted markets and for multi-national production," said CEO Thomas A. Sansone. He predicted near-term production levels would shift significantly to higher mix, higher value-added products. "Although we still expect earnings to soften somewhat during the summer quarter (4Q96), we anticipate they will rebound in 1Q97 to near levels achieved this quarter."

Long-term debt increased to $65 million from $38 million due to the funding of $50 million private placement of debt offset by retirement of $24 million in bank term debt.