Jacobs Reports Earnings for the Second Quarter of Fiscal 2019
DALLAS, May 7, 2019 /PRNewswire/ -- Jacobs Engineering Group Inc. (NYSE: JEC) today announced its financial results for the fiscal second quarter ended March 29, 2019.
Q2 2019 Highlights:
-- Revenue of $3.1 billion(1) grew 7.7% year-over-year and 8.7% on net
revenue basis
-- Operating profit up double-digit year-over-year; OP margin up more than
120 bps
-- EPS from continuing operations of $0.82, affected by CH2M related
restructuring and ECR divestiture costs
-- Adjusted EPS from continuing operations of $1.19, up 37% year-over-year
-- Backlog increased $1.5 billion, or 8% year-over-year to $20.7 billion
-- Increasing fiscal 2019 adjusted pro forma EPS outlook to $4.45 - $4.85
(excluding full year ECR)(2)
Jacobs' Chair and CEO Steve Demetriou commented, "Our strong second quarter results include significant net revenue and operating profit growth versus the year-ago quarter, resulting in our adjusted operating profit margin increasing to 9% for the quarter. These results provide momentum to achieve our fiscal 2019 outlook. We view an ambitious strategic vision, consistent execution and disciplined capital allocation as paramount to driving continued shareholder value. We are creating a company like no other that is rooted in a culture of innovation focused on solving the world's most complex challenges."
Jacobs' CFO Kevin Berryman added, "Our second quarter results were solid across both lines of business resulting in strong overall revenue and profit growth. The CH2M integration is near complete and revenue synergies are accelerating in backlog, which is up 8% year-over-year. Our transformed portfolio is well aligned to long-term secular growth trends with an efficient cost structure that will drive enhanced operating leverage. We continue to expect $920 million to $1 billion in adjusted EBITDA(3) for fiscal 2019 and we are raising our fiscal 2019 adjusted pro forma EPS outlook to $4.45 - $4.85."
The company announced the pending acquisition of The KeyW Holding Corporation on April 22, 2019 and closed the sale of its Energy, Chemicals and Resources (ECR) business on April 26, 2019.
(1)Reflects continuing operations as reported in accordance with GAAP.
(2)Reconciliation of the adjusted EPS outlook for the full fiscal year to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict with sufficient certainty all the components required to provide such reconciliation, including with respect to the costs and charges relating to transaction expenses, restructuring and integration to be incurred in fiscal 2019.
(3)Reconciliation of the adjusted EBITDA outlook for the full fiscal year to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict with sufficient certainty all the components required to provide such reconciliation, including with respect to the costs and charges relating to transaction expenses, restructuring and integration to be incurred in fiscal 2019.
Second Quarter Review
Fiscal 2Q 2019
Fiscal 2Q 2018
Change
---
Revenue
$3.1 billion
$2.9 billion
$0.2 billion
--- ---
Net Revenue
$2.5 billion
$2.3 billion
$0.2 billion
--- ---
GAAP Net
Earnings from
Continuing
Operations
$115 million
-$6 million
$121 million
--- ---
GAAP Earnings
Per Diluted
Share (EPS)
from Continuing
Operations $0.82 -$0.04 $0.86
---
Adjusted Net
Earnings from
Continuing
Operations
$166 million
$124 million
$42 million
--- ---
Adjusted EPS
from Continuing
Operations $1.19 $0.87 $0.32
---
The company's adjusted net earnings from continuing operations and adjusted EPS from continuing operations for the second quarter of fiscal 2019 and fiscal 2018 exclude the charges and costs set forth in the table below. For additional information regarding these adjustments and a reconciliation of adjusted net earnings and adjusted EPS to net earnings and EPS, respectively, refer to the section entitled "Non-GAAP Financial Measures" at the end of this release.
Fiscal 2Q 2019
Fiscal 2Q 2018
After-tax
restructuring and
other charges
$55 million ($0.39 per share)
$57 million ($0.40 per share)
---
After-tax transaction
costs incurred in
connection with the
closing of the CH2M
acquisition and the
sale of the ECR
business
$0.4 million ($0.00 per share)
$4 million ($0.02 per share)
---
Other adjustments
include: -$5 million (-$0.03 per share)
$70 million ($0.49 per share)
(a) addback of
amortization of
intangible assets of
$18.7 million and
$18.2 million in the
2019 and 2018 periods,
respectively,
(b) the allocation to
discontinued sale of the ECR
operations of business,
estimated stranded
corporate costs of
$6.4 million in the
2019 and 2018 periods
that will be
reimbursed or
otherwise eliminated
in connection with the
(c) the allocation to
discontinued million and $14.4
operations of million, respectively,
estimated interest
expense amounts in
2019 and 2018 related
to long-term debt
that has been paid
down in connection
with the sale of the
ECR business of $18.4
(d) the exclusion of a
$37 million one-time sale of the ECR
favorable adjustment business,
in the 2019 period
associated with
reduction of deferred
income taxes for
permanently reinvested
earnings from non-
U.S. subsidiaries in
connection with the
(e) the add-back of
charges resulting from
the revaluation of
certain deferred tax
assets/liabilities in
connection with U.S.
tax reform of $40.6
million in the 2018
period and
(f) associated income
tax expense
adjustments for the
above pre-tax
adjustment items.
---
Adjusted EPS from
Continuing Operations
$166 million ($1.19 per share)
$124 million ($0.87 per share)
---
(note: earnings per share
amounts may not add due to
rounding)
Fiscal second quarter 2019 earnings from continuing operations include an adjusted effective tax rate of 23% excluding the ECR sale related tax adjustment mentioned above. Additionally, fiscal second quarter 2019 earnings include pre-tax charges for the award and recovery of costs, estimated related interest and attorneys' fees in the amount of $147.0 million for a legal matter. Such charges relate to discontinued operations and therefore are not included in earnings from continuing operations.
Jacobs is hosting a conference call at 10:00 A.M. ET on Tuesday May 7, 2019, which it is webcasting live at www.jacobs.com.
Energy, Chemicals and Resources (ECR) Sale to WorleyParsons
On April 26, 2019, Jacobs completed the previously announced sale of the Jacobs' ECR business to WorleyParsons Limited.
KeyW Acquisition
On April 21, 2019, Jacobs entered into an Agreement and Plan of Merger (the "Merger Agreement") with The KeyW Holding Corporation, a Maryland corporation ("KeyW"), and Atom Acquisition Sub, Inc., a Maryland corporation and a wholly owned indirect subsidiary of Jacobs ("Merger Sub"). Pursuant to and subject to the terms and conditions of the Merger Agreement, Merger Sub will commence an all-cash tender offer within fifteen business days after the date of the Merger Agreement to acquire all of KeyW's issued and outstanding shares of common stock at a price per share of $11.25, payable net to the seller in cash, without interest, and subject to any required withholding taxes. Jacobs expects to finance the transaction through a combination of cash on hand and its existing credit facility. The acquisition is subject to the satisfaction of customary closing conditions, including regulatory approvals and is expected to be completed by August 31, 2019.
About Jacobs
Jacobs leads the global professional services sector delivering solutions for a more connected, sustainable world. With approximately $12 billion in revenue and a talent force of more than 50,000, Jacobs provides a full spectrum of services including scientific, technical, professional and construction- and program-management for business, industrial, commercial, government and infrastructure sectors. For more information, visit www.jacobs.com, and connect with Jacobs on LinkedIn, Twitter, Facebook and Instagram.
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Statements made in this press release that are not based on historical fact are forward-looking statements. Although such statements are based on management's current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially. We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by our forward-looking statements. For a description of some additional factors that may occur that could cause actual results to differ from our forward-looking statements see our Annual Report on Form 10-K for the year ended September 28, 2018, and in particular the discussions contained under Item 1 - Business; Item 1A - Risk Factors; Item 3 - Legal Proceedings; and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, and our Quarterly Report on Form 10-Q for the quarter ended March 29, 2019, and in particular the discussions contained under Part I, Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations; Part II, Item 1 - Legal Proceedings; and Part II, Item 1A - Risk Factors, as well as the Company's other filings with the Securities and Exchange Commission. The Company is not under any duty to update any of the forward-looking statements after the date of this press release to conform to actual results, except as required by applicable law.
Financial Highlights:
Results of Operations (in thousands, except per-share data):
---
For the Three Months Ended For the Six Months Ended
March 29, 2019 March 30, 2018 March 29, 2019 March 30, 2018
---
Revenues $
3,091,596 $
2,870,295 $
6,175,384 $
4,654,294
Direct cost of contracts (2,474,755) (2,268,667) (4,990,023) (3,710,572)
Gross profit 616,841 601,628 1,185,361 943,722
Selling, general and
administrative expenses (514,160) (532,873) (969,551) (879,637)
Operating Profit 102,681 68,755 215,810 64,085
Other Income (Expense):
Interest income 1,670 1,785 3,774 5,619
Interest expense (29,423) (19,228) (54,749) (26,320)
Miscellaneous income
(expense), net 36,904 (2,661) 39,186 (1,436)
Total other (expense)
income, net 9,151 (20,104) (11,789) (22,137)
Earnings from Continuing
Operations Before Taxes 111,832 48,651 204,021 41,948
Income Tax Benefit (Expense)
for Continuing Operations 7,947 (51,856) (14,811) (79,056)
Net Earnings (Loss) of the
Group from Continuing
Operations 119,779 (3,205) 189,210 (37,108)
Net Earnings (Loss) of the
Group from Discontinued
Operations (57,006) 55,137 3,153 91,601
Net Earnings of the Group 62,773 51,932 192,363 54,493
Net Earnings Attributable to
Noncontrolling Interests
from Continuing Operations (5,024) (3,085) (9,562) (3,416)
Net Earnings (Loss)
Attributable to Jacobs from
Continuing Operations 114,755 (6,290) 179,648 (40,524)
Net Earnings Attributable to
Noncontrolling Interests
from Discontinued
Operations (832) (260) (1,588) (327)
Net Earnings (Loss)
Attributable to Jacobs from
Discontinued Operations $
(57,838) $
54,877 $
1,565 $
91,274
Net Earnings Attributable to
Jacobs $
56,917 $
48,587 $
181,213 $
50,750
Net Earnings Per Share:
Basic Net Earnings from
Continuing Operations Per
Share $
0.83 $
(0.04) $
1.28 $
(0.30)
Basic Net Earnings from
Discontinued Operations Per
Share $
(0.42) $
0.39 $
0.01 $
0.68
Basic Earnings Per Share $
0.41 $
0.34 $
1.29 $
0.38
Diluted Net Earnings from
Continuing Operations Per
Share $
0.82 $
(0.04) $
1.27 $
(0.30)
Diluted Net Earnings from
Discontinued Operations Per
Share $
(0.41) $
0.39 $
0.01 $
0.68
Diluted Earnings Per Share $
0.41 $
0.34 $
1.28 $
0.38
Segment Information (in thousands):
---
For the Three Months Ended For the Six Months Ended
March 29, 2019 March 30, 2018 March 29, 2019 March 30, 2018
---
Revenues from External Customers:
Aerospace, Technology
and Nuclear $
1,059,508 $
923,905 $
2,094,537 $
1,634,780
Buildings,
Infrastructure and
Advanced Facilities 2,032,088 1,946,390 4,080,847 3,019,514
Pass Through Revenue (632,359) (608,720) (1,306,637) (1,020,507)
Buildings,
Infrastructure and
Advanced Facilities Net
Revenue $
1,399,729 $
1,337,670 $
2,774,210 $
1,999,007
Total Revenue $
3,091,596 $
2,870,295 $
6,175,384 $
4,654,294
Net Revenue $
2,459,237 $
2,261,575 $
4,868,747 $
3,633,787
For the Three Months Ended For the Six Months Ended
March 29, 2019 March 30, 2018 March 29, 2019 March 30, 2018
---
Segment Operating Profit:
Aerospace, Technology
and Nuclear $
73,831 $
52,458 $
145,982 $
113,524
Buildings,
Infrastructure and
Advanced Facilities 172,689 144,755 332,148 211,615
Total Segment Operating
Profit 246,520 197,213 478,130 325,139
Other Corporate Expenses
(1) (49,901) (47,133) (121,149) (96,361)
Restructuring and Other
Charges (93,938) (76,473) (141,171) (92,200)
Transaction Costs - (4,852) (72,493)
Total U.S. GAAP
Operating Profit 102,681 68,755 215,810 64,085
Total Other (Expense)
Income, net (2) 9,151 (20,104) (11,789) (22,137)
Earnings from Continuing
Operations Before Taxes $
111,832 $
48,651 $
204,021 $
41,948
(1) Other corporate expenses include
costs that were previously
allocated to the ECR segment
prior to discontinued
operations presentation in
connection with the ECR sale in
the approximate amounts of $6.4
million for the three-month
periods ended March 29, 2019
and March 30, 2018,
respectively, and $12.8 million
for the six-month periods
ended March 29, 2019 and March
30, 2018, respectively. Other
corporate expenses also include
intangibles amortization of
$18.7 million and $18.2 million
for the three-month periods
ended March 29, 2019 and March
30, 2018, respectively and
$37.3 million and $29.8 million
for the six-month periods
ended March 29, 2019 and March
30, 2018, respectively.
(2) Includes gain on the settlement
of the CH2M retiree medical
plans of $32.4 million and
$34.6 million and the
amortization of deferred
financing fees related to the
CH2M acquisition of $0.5
million and $1.0 million for
the three- and six-month
periods ended March 29, 2019 as
well as amortization of
deferred financing fees related
to the CH2M acquisition of $0.5
million and $0.7 million for
the three- and six-month
periods ended March 30, 2018.
Other Operational Information (in thousands):
---
For the Six Months Ended
Continuing
Operations March 29, 2019 March 30, 2018
---
Depreciation (pre-
tax) $
41,702 $
45,240
===
Amortization of
Intangibles (pre-
tax) $
37,349 $
29,752
Pass-Through
Costs Included in
Revenues $
1,306,637 $
1,020,507
===
Capital
Expenditures $
58,909 $
33,499
===
Balance Sheet (in thousands):
---
Unaudited March 29, 2019 September 28, 2018
---
ASSETS
Current Assets:
Cash and cash equivalents $
674,548 $
634,870
Receivables and contract assets 2,747,172 2,513,934
Prepaid expenses and other 127,320 171,096
Current assets held for sale 1,297,430 1,236,684
Total current assets 4,846,470 4,556,584
Property, Equipment and Improvements,
net 268,800 257,859
Other Noncurrent Assets:
Goodwill 4,774,849 4,795,856
Intangibles, net 533,638 572,952
Miscellaneous 847,076 760,854
Noncurrent assets held for sale 1,675,012 1,701,690
Total other noncurrent assets 7,830,575 7,831,352
$
12,945,845 $
12,645,795
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $
24 $
3,172
Accounts payable 828,522 776,189
Accrued liabilities 1,177,632 1,167,002
Contract liabilities 450,864 442,760
Current liabilities held for sale 731,158 756,570
Total current liabilities 3,188,200 3,145,693
Long-term Debt 2,841,536 2,144,167
Other Deferred Liabilities 1,237,535 1,260,977
Noncurrent liabilities held for sale 122,993 150,604
Commitments and Contingencies
Stockholders' Equity:
Capital stock:
Preferred stock, $1 par value,
authorized -1,000,000 shares; issued
and outstanding -none -
Common stock, $1 par value, authorized -
240,000,000 shares; issued and
outstanding-136,432,304 shares and
142,217,933 shares as of March 29, 2019
and September 28, 2018, respectively 136,432 142,218
Additional paid-in capital 2,568,809 2,708,839
Retained earnings 3,620,873 3,809,991
Accumulated other comprehensive loss (860,260) (806,703)
Total Jacobs stockholders' equity 5,465,854 5,854,345
Noncontrolling interests 89,727 90,009
Total Group stockholders' equity 5,555,581 5,944,354
$
12,945,845 $
12,645,795
Statement of Cash Flow (in thousands):
---
For the Six Months Ended
March 29, 2019 March 30, 2018
---
Cash Flows from Operating Activities:
Net earnings attributable to the
Group $
192,363 $
54,493
Adjustments to reconcile net earnings to net cash
flows provided by operations:
Depreciation and amortization:
Property, equipment and
improvements 43,812 59,139
Intangible assets 37,963 36,048
(Gain) Loss on disposal of
businesses and investments - (444)
Stock based compensation 28,916 47,189
Equity in earnings of operating
ventures, net (5,325) 787
(Gain) Losses on disposals of
assets, net 3,730 3,917
Loss (Gain) on pension and retiree
medical plan changes (34,621) 3,819
Deferred income taxes (31,008) 6,799
Changes in assets and liabilities, excluding the
effects of businesses acquired:
Receivables and contract assets (252,731) (171,912)
Prepaid expenses and other current
assets 47,733 (2,361)
Accounts payable (6,754) 17,972
Accrued liabilities (57,763) (20,625)
Contract liabilities 57,881 33,599
Other deferred liabilities (48,761) (17,420)
Other, net (30,667) 3,204
Net cash (used for) provided by
operating activities (55,232) 54,204
Cash Flows Used for Investing Activities:
Additions to property and equipment (61,480) (44,845)
Disposals of property and equipment
and other assets 7,240 428
Distributions of capital from
(contributions to) equity
investees (3,904) (7,696)
Acquisitions of businesses, net of
cash acquired - (1,484,817)
Proceeds (payments) related to
sales of businesses - 3,403
Purchases of noncontrolling
interests (1,113)
Net cash used for investing
activities (59,257) (1,533,527)
Cash Flows Provided by Financing Activities:
Net proceeds from borrowings 695,571 1,562,201
Debt issuance costs (3,741)
Proceeds from issuances of common
stock 25,945 26,636
Common stock repurchases (488,435) (2,951)
Taxes paid on vested restricted
stock (20,317) (17,140)
Cash dividends, including to
noncontrolling interests (56,390) (44,233)
Net cash provided by (used for)
financing activities 152,633 1,524,513
Effect of Exchange Rate Changes 19,136 16,074
Net Increase in Cash and Cash
Equivalents 57,280 61,264
Cash and Cash Equivalents at the
Beginning of the Period 793,358 774,151
Cash and Cash Equivalents at the
End of the Period 850,638 835,415
Less Cash and Cash Equivalents
included in Assets held for Sale (176,090) (164,612)
Cash and Cash Equivalents of
Continuing Operations at the End
of the Period $
674,548 $
670,803
Backlog (in millions):
---
March 29, 2019 March 30, 2018
---
Aerospace, Technology
and Nuclear $
7,285 $
7,174
Buildings,
Infrastructure and
Advanced Facilities 13,428 12,088
Total $
20,713 $
19,262
Non-GAAP Financial Measures:
In this press release, the Company has included certain non-GAAP financial measures as defined in Regulation G promulgated under the Securities Exchange Act of 1934, as amended. The non-GAAP financial measures included in this press release are net revenue, adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted operating profit margin and adjusted EBITDA.
Adjusted net earnings from continuing operations, adjusted EPS from continuing operations, and adjusted operating profit margin are non-GAAP financial measures that are calculated by (i) excluding the costs related to the 2015 restructuring activities, which included involuntary terminations, the abandonment of certain leased offices, combining operational organizations and the co-location of employees into other existing offices; and charges associated with our Europe, U.K. and Middle East region, which included write-offs on contract accounts receivable and charges for statutory redundancy and severance costs (collectively, the "2015 Restructuring and other items"); (ii) excluding costs and other charges associated with restructuring activities implemented in connection with the CH2M acquisition and the ECR divestiture, which included involuntary terminations, costs associated with co-locating Jacobs and CH2M offices, separating physical locations of ECR and continuing operations, costs and expenses of the Integration Management Office and Separation Management Office, including professional services and personnel costs, costs and charges associated with the divestiture of joint venture interests to resolve potential conflicts arising from the CH2M acquisition, expenses relating to certain commitments and contingencies relating to discontinued operations of the CH2M business, and similar costs and expenses (collectively referred to as the "Restructuring and other charges"); (iii) excluding transaction costs and other charges incurred in connection with closing of the CH2M acquisition and sale of the ECR business, including advisor fees, change in control payments, costs and expenses relating to the registration and listing of Jacobs stock issued in connection with the CH2M acquisition, and similar transaction costs and expenses (collectively referred to as "transaction costs"); (iv) excluding charges resulting from the revaluation of certain deferred tax assets/liabilities in connection with U.S. tax reform; (v) adding back depreciation and amortization relating to the ECR business of the Company that was ceased as a result of the application of held-for-sale accounting; (vi) adding back amortization of intangible assets; (vii) allocating to discontinued operations estimated stranded corporate costs that will be reimbursed or otherwise eliminated in connection with the sale of the ECR business; (viii) allocating to discontinued operations estimated interest expense relating to long-term debt that was paid down with the proceeds of the ECR sale; and (ix) the exclusion of a one-time favorable adjustment in the fiscal 2019 period associated with a reduction of deferred income taxes for permanently reinvested earnings from non-U.S. subsidiaries in connection with the sale of the ECR business. Adjustments to derive adjusted net earnings from continuing operations, adjusted EPS from continuing operations are calculated on an after-tax basis. Net revenue is calculated by excluding pass-through revenues of the BIAF line of business. We believe that net revenue, adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted operating profit margin and adjusted EBITDA are useful to management, investors and other users of our financial information in evaluating the Company's operating results and understanding the Company's operating trends by excluding or adding back the effects of the items described above, the inclusion or exclusion of which can obscure underlying trends. Additionally, management uses net revenue, adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted operating profit margin and adjusted EBITDA in its own evaluation of the Company's performance, particularly when comparing performance to past periods, and believes these measures are useful for investors because they facilitate a comparison of our financial results from period to period.
The Company provides non-GAAP measures to supplement U.S. GAAP measures, as they provide additional insight into the Company's financial results. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not in accordance with, or a substitute for, U.S. GAAP measures. In addition, other companies may define non-GAAP measures differently, which limits the ability of investors to compare non-GAAP measures of the Company to those used by our peer companies.
The following tables reconcile the components and values of U.S. GAAP revenue, net earnings from continuing operations, EPS from continuing operations, EPS and operating profit margin to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in connection with the items described above. Amounts are shown in thousands, except for per-share data (note: earnings per share amounts may not add across due to rounding). Reconciliation of the adjusted EPS and adjusted EBITDA outlook for the full fiscal year to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict with sufficient certainty all the components required to provide such reconciliation.
U.S. GAAP Reconciliation for the second quarter of fiscal 2019 and 2018
---
Three Months Ended
March 29, 2019
U.S. GAAP Effects of Effects of Other Adjusted
Restructuring Transaction Adjustments
and Other Costs (1) (2)
Charges
---
Revenues $
3,091,596
$
$
$ $
3,091,596
Pass through revenue - (632,359) $
(632,359)
Net revenue 3,091,596 (632,359) 2,459,237
Direct cost of
contracts (2,474,755) (3,383) 632,359 (1,845,779)
Gross profit 616,841 (3,383) 613,458
Selling, general and
administrative
expenses (514,160) $
97,321
$ $
25,078 $
(391,761)
Operating Profit 102,681 93,938 25,078 221,697
Total other (expense)
income, net 9,151 (27,117) 515 18,403 952
Earnings from
Continuing
Operations Before
Taxes 111,832 66,821 515 43,481 222,649
Income Tax Benefit
(Expense) for
Continuing
Operations 7,947 (11,824) (125) (48,097) (52,099)
Net Earnings (Loss)
of the Group from
Continuing
Operations 119,779 54,997 390 (4,616) 170,550
Net Earnings
Attributable to
Noncontrolling
Interests from
Continuing
Operations (5,024) (5,024)
Net Earnings from
Continuing
Operations
attributable to
Jacobs 114,755 54,997 390 (4,616) 165,526
Net Earnings
Attributable to
Discontinued
Operations (57,838) 2,078 1,705 (24,489) (78,544)
Net earnings
attributable to
Jacobs $
56,917 $
57,075 $
2,095 $
(29,105) $
86,982
Diluted Net Earnings
from Continuing
Operations Per Share $
0.82 $
0.39
$ $
(0.03) $
1.19
Diluted Net Earnings
from Discontinued
Operations Per Share $
(0.41) $
0.01 $
0.01 $
(0.18) $
(0.56)
Diluted Earnings Per
Share $
0.41 $
0.41 $
0.02 $
(0.21) $
0.62
Operating profit
margin 3.32
% 9.01
%
===
(1) Includes after-tax CH2M
transaction costs and adjustments
of $0.4 million as well as after-
tax transaction costs associated
with the sale of our ECR line of
business of $1.7 million.
(2) Includes (a) the removal of pass
through revenues and costs for the
BIAF line of business for the
calculation of operating profit
margin as a percentage of net
revenue of $632.4 million, (b) the
removal of amortization of
intangible assets of $18.7
million, (c) the allocation to
discontinued operations of
estimated stranded corporate costs
of $6.4 million that will be
reimbursed under the ECR
transition services agreement
(TSA) with Worley Parsons or
otherwise eliminated from the
ongoing operations in connection
with the sale of the ECR business,
(d) the allocation to discontinued
operations of estimated interest
expense for the full period
related to long-term debt that
has been paid down as a result of
the ECR sale of $18.4 million, (e)
the exclusion of approximately
$37.0 million in one-time
favorable income tax adjustment
associated with reduction of
deferred income taxes for
permanently reinvested earnings
from non-U.S. subsidiaries in
connection with the sale of the
ECR business, (f) the add-back of
depreciation relating to the ECR
business that was ceased as a
result of the application of held-
for-sale accounting of $(5.8)
million and (g) associated income
tax expense adjustments for all
the above pre-tax adjustment
items.
Three Months Ended
March 30, 2018
U.S. GAAP Effects of Effects of Other Adjusted
Restructuring CH2M Adjustments
and Other Transaction (1)
Charges Costs
Revenues $
2,870,295
$
$
$ $
2,870,295
Pass through revenue (608,720) (608,720)
Net revenue 2,870,295 (608,720) 2,261,575
Direct cost of
contracts (2,268,667) 608,720 (1,659,947)
Gross profit 601,628 601,628
Selling, general and
administrative
expenses (532,873) 76,473 4,852 24,605 (426,943)
Operating Profit 68,755 76,473 4,852 24,605 174,685
Total other (expense)
income, net (20,104) 466 14,384 (5,254)
Earnings from
Continuing
Operations Before
Taxes 48,651 76,939 4,852 38,989 169,431
Income Tax Benefit
(Expense) for
Continuing
Operations (51,856) (20,104) (1,344) 30,931 (42,373)
Net Earnings (Loss)
of the Group from
Continuing
Operations (3,205) 56,835 3,508 69,920 127,058
Net Earnings
Attributable to
Noncontrolling
Interests from
Continuing
Operations (3,085) (3,085)
Net Earnings from
Continuing
Operations
attributable to
Jacobs (6,290) 56,835 3,508 69,920 123,973
Net Earnings
Attributable to
Discontinued
Operations 54,877 (5,633) (13,247) 35,997
Net earnings
attributable to
Jacobs $
48,587 $
51,202 $
3,508 $
56,673 $
159,970
Diluted Net Earnings
from Continuing
Operations Per Share $
(0.04) $
0.40 $
0.02 $
0.49 $
0.87
Diluted Net Earnings
from Discontinued
Operations Per Share $
0.39 $
(0.04)
$ $
(0.09) $
0.25
Diluted Earnings Per
Share $
0.34 $
0.36 $
0.02 $
0.40 $
1.12
Operating profit
margin 2.40
% 7.72
%
(1) Includes (a) the removal of pass
through revenues and costs for the
BIAF line of business for the
calculation of operating profit
margin as a percentage of net revenue
of $608.7 million, (b) the removal of
amortization of intangible assets of
$18.2 million, (c) the allocation to
discontinued operations of estimated
stranded corporate costs of $6.4
million that would have been
reimbursed under the ECR transition
services agreement (TSA) with Worley
Parsons or otherwise eliminated from
the ongoing operations in connection
with the sale of the ECR business,
(d) estimated 2018 impacts of $21.0
million from overhead allocation
realignments in connection with the
Company's CH2M business in the first
quarter of fiscal 2019 had those
changes been put into effect in first
quarter of fiscal 2018 (the net
impact of which was zero for
consolidated selling, general and
administrative expenses), (e) the
allocation to discontinued operations
of estimated interest expense for the
full period related to long-term
debt that has been paid down as a
result of the ECR sale of $14.4
million, (f) the add-back of charges
resulting from the revaluation of
certain deferred tax assets/
liabilities in connection with U.S.
tax reform of $40.6 million and (g)
associated income tax expense
adjustments for all the above pre-
tax adjustment items.
Six Months Ended
March 29, 2019
U.S. GAAP Effects of Effects of Other Adjusted
Restructuring Transaction Adjustments
and Other Costs (1) (2)
Charges
Revenues $
6,175,384
$
$
$ $
6,175,384
Pass through revenue (1,306,637) (1,306,637)
Net revenue 6,175,384 (1,306,637) 4,868,747
Direct cost of
contracts (4,990,023) (512) 1,306,637 (3,683,898)
Gross profit 1,185,361 (512) 1,184,849
Selling, general and
administrative
expenses (969,551) 141,683 50,149 (777,719)
Operating Profit 215,810 141,171 50,149 407,130
Total other (expense)
income, net (11,789) (29,291) 1,029 36,470 (3,581)
Earnings from
Continuing
Operations Before
Taxes 204,021 111,880 1,029 86,619 403,549
Income Tax Expense
for Continuing
Operations (14,811) (21,519) (250) (47,959) (84,539)
Net Earnings of the
Group from
Continuing
Operations 189,210 90,361 779 38,660 319,010
Net (Earnings) Loss
Attributable to
Noncontrolling
Interests from
Continuing
Operations (9,562) (9,562)
Net Earnings from
Continuing
Operations
attributable to
Jacobs 179,648 90,361 779 38,660 309,448
Net Earnings
Attributable to
Discontinued
Operations 1,565 (2,645) 6,500 (47,799) (42,379)
Net earnings
attributable to
Jacobs $
181,213 $
87,716 $
7,279 $
(9,139) $
267,069
Diluted Net Earnings
from Continuing
Operations Per Share $
1.27 $
0.64 $
0.01 $
0.27 $
2.18
Diluted Net Earnings
from Discontinued
Operations Per Share $
0.01 $
(0.02) $
0.05 $
(0.34) $
(0.30)
Diluted Earnings Per
Share $
1.28 $
0.62 $
0.05 $
(0.06) $
1.88
Operating profit
margin 3.49
% 8.36
%
(1) Includes after-tax CH2M
transaction costs and adjustments of
$1.0 million as well as after-tax
transaction costs associated with the
sale of our ECR line of business of
$6.5 million.
(2) Includes (a) the removal of pass
through revenues and costs for the
BIAF line of business for the
calculation of operating profit
margin as a percentage of net revenue
of $1.31 billion, (b) the removal of
amortization of intangible assets of
$37.3 million, (c) the allocation to
discontinued operations of estimated
stranded corporate costs of $12.8
million that will be reimbursed under
the ECR transition services
agreement (TSA) with Worley Parsons
or otherwise eliminated from the
ongoing operations in connection with
the sale of the ECR business, (d) the
allocation to discontinued operations
of estimated interest expense for the
full period related to long-term
debt that has been paid down as a
result of the ECR sale of $36.5
million, (e) the exclusion of
approximately $37.0 million in one-
time favorable income tax adjustment
associated with reduction of deferred
income taxes for permanently
reinvested earnings from non-U.S.
subsidiaries in connection with the
sale of the ECR business, (f) the
add-back of charges resulting from
the revaluation of certain deferred
tax assets/liabilities in connection
with U.S. tax reform from the first
quarter of $11.0 million and (g) the
add-back of depreciation relating to
the ECR business that was ceased as a
result of the application of held-
for-sale accounting of $(11.0)
million and (h) associated income tax
expense adjustments for all the above
pre-tax adjustment items.
Six Months Ended
March 30, 2018
U.S. GAAP Effects of Effects of Other Adjusted
Restructuring CH2M Adjustments
and Other Transaction (1)
Charges Costs
Revenues $
4,654,294
$
$
$ $
4,654,294
Pass through revenue (1,020,507) (1,020,507)
Net revenue 4,654,294 (1,020,507) 3,633,787
Direct cost of
contracts (3,710,572) 1,020,507 (2,690,065)
Gross profit 943,722 943,722
Selling, general and
administrative
expenses (879,637) 92,200 72,493 42,552 (672,392)
Operating Profit 64,085 92,200 72,493 42,552 271,330
Total other (expense)
income, net (22,137) 466 256 17,137 (4,278)
Earnings from
Continuing
Operations Before
Taxes 41,948 92,666 72,749 59,689 267,052
Income Tax Expense
for Continuing
Operations (79,056) (23,919) (17,880) 54,689 (66,166)
Net Earnings of the
Group from
Continuing
Operations (37,108) 68,747 54,869 114,378 200,886
Net (Earnings) Loss
Attributable to
Noncontrolling
Interests from
Continuing
Operations (3,416) (3,416)
Net Earnings from
Continuing
Operations
attributable to
Jacobs (40,524) 68,747 54,869 114,378 197,470
Net Earnings
Attributable to
Discontinued
Operations 91,274 (2,889) (17,807) 70,578
Net earnings
attributable to
Jacobs $
50,750 $
65,858 $
54,869 $
96,571 $
268,048
Diluted Net Earnings
from Continuing
Operations Per Share $
(0.30) $
0.51 $
0.41 $
0.86 $
1.48
Diluted Net Earnings
from Discontinued
Operations Per Share $
0.68 $
(0.02)
$ $
(0.13) $
0.53
Diluted Earnings Per
Share $
0.38 $
0.49 $
0.41 $
0.72 $
2.00
Operating profit
margin 1.38
% 7.47
%
(1) Includes (a) the removal of pass
through revenues and costs for the
BIAF line of business for the
calculation of operating profit
margin as a percentage of net revenue
of $1.02 billion; (b) the removal of
amortization of intangible assets of
$29.8 million, (c) the allocation to
discontinued operations of estimated
stranded corporate costs of $12.8
million that would have been
reimbursed under the ECR transition
services agreement (TSA) with Worley
Parsons or otherwise eliminated from
the ongoing operations in connection
with the sale of the ECR business,
(d) estimated 2018 impacts of $32.0
million from overhead allocation
realignments in connection with the
Company's CH2M business in the first
quarter of fiscal 2019 had those
changes been put into effect in first
quarter of fiscal 2018 (the net
impact of which was zero for
consolidated selling, general and
administrative expenses), (e) the
allocation to discontinued operations
of estimated interest expense for the
full period related to long-term
debt that has been paid down as a
result of the ECR sale of $17.1
million, (f) the add-back of charges
resulting from the revaluation of
certain deferred tax assets/
liabilities in connection with U.S.
tax reform of $69.4 million and (g)
associated income tax expense
adjustments for all the above pre-
tax adjustment items.
Earnings Per Share:
---
Three Months Ended Six Months Ended
March 29, 2019 March 30, 2018 March 29, 2019 March 30, 2018
---
Numerator for Basic and Diluted EPS:
Net earnings (loss)
attributable to Jacobs
from continuing
operations $
114,755 $
(6,290) $
179,648 $
(40,524)
Net earnings (loss) from
continuing operations
allocated to
participating securities (191) 33 (338) 247
Net earnings (loss) from
continuing operations
allocated to common
stock for EPS
calculation $
114,564 $
(6,257) $
179,310 $
(40,277)
Net earnings (loss)
attributable to Jacobs
from discontinued
operations $
(57,838) $
54,877 1,565 91,274
Net earnings (loss) from
discontinued operations
allocated to
participating securities 96 (287) (3) (557)
Net earnings (loss) from
discontinued operations
allocated to common
stock for EPS
calculation $
(57,742) $
54,590 $
1,562 $
90,717
Net earnings allocated to
common stock for EPS
calculation $
56,822 $
48,333 $
180,872 $
50,440
Denominator for Basic and Diluted EPS:
Weighted average basic
shares 138,566 142,531 140,509 133,770
Shares allocated to
participating securities (231) (746) (264) (816)
Shares used for
calculating basic EPS
attributable to common
stock 138,335 141,785 140,245 132,954
Effect of dilutive securities:
Stock compensation plans 981 1,202
Shares used for
calculating diluted EPS
attributable to common
stock 139,316 141,785 141,447 132,954
Net Earnings Per Share:
Basic Net Earnings from
Continuing Operations
Per Share $
0.83 $
(0.04) $
1.28 $
(0.30)
Basic Net Earnings from
Discontinued Operations
Per Share $
(0.42) $
0.39 $
0.01 $
0.68
Basic EPS $
0.41 $
0.34 $
1.29 $
0.38
Diluted Net Earnings from
Continuing Operations
Per Share $
0.82 $
(0.04) $
1.27 $
(0.30)
Diluted Net Earnings from
Discontinued Operations
Per Share $
(0.41) $
0.39 $
0.01 $
0.68
Diluted EPS $
0.41 $
0.34 $
1.28 $
0.38
For additional information contact:
Investors:
Jonathan Doros, 214-583-8596
jonathan.doros@jacobs.com
Media:
Marietta Hannigan, 214-920-8035
marietta.hannigan@jacobs.com
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SOURCE Jacobs
