Jacobs Reports Earnings for the Third Quarter of Fiscal 2019
DALLAS, Aug. 5, 2019 /PRNewswire/ -- Jacobs Engineering Group Inc. (NYSE: JEC) today announced its financial results for the fiscal third quarter ended June 28, 2019.
Q3 2019 Highlights:
-- Gross revenue of $3.2 billion(1) grew 8.0% year-over-year; net revenue
grew organically by 11.1%(2)
-- EPS from continuing operations of $0.65, results impacted by higher
restructuring and transaction costs
-- Adjusted EPS from continuing operations of $1.40, up 13% year-over-year,
including a discrete tax benefit
-- Backlog increased $2.6 billion to $22.5 billion, up 8% on an organic
basis(2)
-- Increasing fiscal 2019 adjusted pro forma EPS outlook to $4.75 - $5.00
(excluding full year ECR)(3)
-- Completed $350 million of $1 billion share repurchase authorization
through August 2nd
Jacobs' Chair and CEO Steve Demetriou commented, "Our strong third quarter results and increased earnings outlook are yet another example of driving an innovative culture, strengthening our execution discipline and scaling our global network of expertise. As we execute against our strategy, we are profitably winning a greater level of business in our existing sectors, while diversifying into new high margin growth opportunities. We are creating a company like no other, putting our knowledge and imagination together to shape the next generation of innovative solutions. Our KeyW acquisition is already delivering with a growing pipeline of new and enhanced opportunities as we bring the two organizations together."
Jacobs' CFO Kevin Berryman added, "We delivered another quarter of solid results across both lines of business with accelerating growth in our sales pipelines, during the most transformative period in our company's history. The CH2M integration has exceeded our revenue and cost targets and is on track to be completed by the end of calendar 2019. Our divestiture of ECR is moving into the final stages of separation. We are raising our fiscal 2019 outlook and now expect adjusted EBITDA in the range of $965 million - $1 billion and adjusted pro forma EPS of $4.75 - $5.00.(3) From a long-term standpoint, we have created a transformed business with a stronger balance sheet."
Third Quarter Review
Fiscal 3Q 2019
Fiscal 3Q 2018
Change
---
Revenue
$3.2 billion
$2.9 billion
$0.3 billion
--- ---
Net Revenue
$2.6 billion
$2.4 billion
$0.2 billion
--- ---
GAAP Net
Earnings from
Continuing
Operations
$89 million
$113 million
-$24 million
--- ---
GAAP Earnings
Per Diluted
Share (EPS)
from Continuing
Operations $0.65 $0.79 -$0.14
---
Adjusted Net
Earnings from
Continuing
Operations
$193 million
$178 million
$15 million
--- ---
Adjusted EPS
from Continuing
Operations $1.40 $1.24 $0.16
---
The company's adjusted net earnings from continuing operations and adjusted EPS from continuing operations for the third 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 3Q 2019
Fiscal 3Q 2018
After-tax restructuring
and other charges
($93.2 million and
$30.1 million for the
fiscal 2019 and 2018
periods, respectively
before income taxes)
$70 million ($0.51 per share)
$22 million ($0.15 per share)
---
After-tax transaction
costs incurred in
connection with the
closing of the CH2M and
KeyW acquisitions
($13.3 million and $5.4
million for the fiscal
2019 and 2018 periods,
respectively before
income taxes)
$10 million ($0.07 per share)
$4 million ($0.03 per share)
---
Other adjustments
include:
$24 million ($0.17 per share)
$38 million ($0.27 per share)
(a) addback of
amortization of
intangible assets of
$18.4 million and $19.3
million in the 2019 and
2018 periods,
respectively,
(b) the allocation to
discontinued operations sale of the ECR
of estimated stranded business,
corporate costs of $2.0
million and $6.4
million in the 2019 and
2018 periods,
respectively, that will
be reimbursed or
otherwise eliminated in
connection with the
(c) the allocation to
discontinued operations million, respectively,
of 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 $5.8
million and $16.1
(d) the reclassification
of revenues under the million in remaining
Company's Transition unreimbursed costs
Services Agreement associated with the TSA
(TSA) with during the fiscal 2019
WorleyParsons of $14.1 third quarter,
million included in
other income for U.S.
GAAP reporting purposes
to SG&A and the
exclusion of $3.2
(e) the add-back of
charges resulting from quarter and
the revaluation of
certain deferred tax
assets/liabilities in
connection with U.S.
tax reform of $5.3
million in the 2018
period and other income
tax adjustments of $1.5
million in the current
(f) associated income
tax expense adjustments
for the above pre-tax
adjustment items.
---
Adjusted EPS from
Continuing Operations
$193 million ($1.40 per share)
$178 million ($1.24 per share)
---
(note: earnings per share
amounts may not add due to
rounding)
Fiscal third quarter 2019 earnings per share from continuing operations reflect an adjusted effective tax rate of 22.6%, excluding discrete tax items of 16 cents per share. Fiscal third quarter 2018 included an 8 cent benefit from discrete tax items.
Jacobs is hosting a conference call at 11:00 A.M. ET on Monday August 5, 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 June 12, 2019, Jacobs completed the previously announced acquisition of The KeyW Holding Corporation.
About Jacobs
Jacobs leads the global professional services sector providing 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 www.jacobs.com, 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 quarters ended December 28, 2018 and 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.
(1)Reflects continuing operations as reported in accordance with GAAP.
(2)Excludes $23.9 million in revenue and $1.1 billion in backlog contribution from KeyW.
(3)Reconciliation of the adjusted pro forma EPS outlook 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, including with respect to the costs and charges relating to transaction expenses, restructuring and integration to be incurred in fiscal 2019.
Financial Highlights:
Results of Operations (in thousands, except per-share data):
---
For the Three Months Ended For the Nine Months Ended
Unaudited June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018
--- ---
Revenues $
3,169,622 $
2,933,623 $
9,345,005 $
7,587,916
Direct cost of contracts (2,543,488) (2,325,028) (7,533,511) (6,035,598)
Gross profit 626,134 608,595 1,811,494 1,552,318
Selling, general and
administrative expenses (536,180) (446,083) (1,505,731) (1,325,722)
Operating Profit 89,954 162,512 305,763 226,596
Other Income (Expense):
Interest income 3,398 1,277 7,172 6,896
Interest expense (18,978) (23,788) (73,727) (50,107)
Miscellaneous income
(expense), net 19,025 6,632 58,211 5,195
Total other (expense)
income, net 3,445 (15,879) (8,344) (38,016)
Earnings from Continuing
Operations Before Taxes 93,399 146,633 297,419 188,580
Income Tax Benefit (Expense)
for Continuing Operations 1,981 (31,174) (12,829) (110,230)
Net Earnings of the Group
from Continuing Operations 95,380 115,459 284,590 78,350
Net Earnings of the Group
from Discontinued
Operations 435,684 34,612 438,837 126,215
Net Earnings of the Group 531,064 150,071 723,427 204,565
Net Earnings Attributable to
Noncontrolling Interests
from Continuing Operations (6,015) (2,123) (15,578) (5,539)
Net Earnings Attributable to
Jacobs from Continuing
Operations 89,365 113,336 269,012 72,811
Net (Earnings) Losses
Attributable to
Noncontrolling Interests
from Discontinued
Operations (607) 2,274 (2,195) 1,946
Net Earnings Attributable to
Jacobs from Discontinued
Operations $
435,077 $
36,886 $
436,642 $
128,161
Net Earnings Attributable to
Jacobs $
524,442 $
150,222 $
705,654 $
200,972
Net Earnings Per Share:
Basic Net Earnings from
Continuing Operations Per
Share $
0.65 $
0.79 $
1.93 $
0.53
Basic Net Earnings from
Discontinued Operations Per
Share $
3.18 $
0.26 $
3.14 $
0.94
Basic Earnings Per Share $
3.83 $
1.05 $
5.07 $
1.47
Diluted Net Earnings from
Continuing Operations Per
Share $
0.65 $
0.79 $
1.92 $
0.53
Diluted Net Earnings from
Discontinued Operations Per
Share $
3.15 $
0.26 $
3.11 $
0.93
Diluted Earnings Per Share $
3.80 $
1.05 $
5.02 $
1.46
Segment Information (in thousands):
---
For the Three Months Ended For the Nine Months Ended
Unaudited June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018
--- ---
Revenues from External Customers:
Aerospace, Technology
and Nuclear $
1,156,488 $
1,021,523 $
3,251,024 $
2,656,303
Buildings,
Infrastructure and
Advanced Facilities 2,013,134 1,912,100 6,093,981 4,931,613
Pass Through Revenue (533,935) (583,423) (1,840,572) (1,603,930)
Buildings,
Infrastructure and
Advanced Facilities Net
Revenue $
1,479,199 $
1,328,677 $
4,253,409 $
3,327,683
Total Revenue $
3,169,622 $
2,933,623 $
9,345,005 $
7,587,916
Net Revenue $
2,635,687 $
2,350,200 $
7,504,433 $
5,983,986
For the Three Months Ended For the Nine Months Ended
June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018
---
Segment Operating Profit:
Aerospace, Technology
and Nuclear $
76,306 $
69,085 $
222,289 $
182,609
Buildings,
Infrastructure and
Advanced Facilities 183,318 163,193 515,465 374,809
Total Segment Operating
Profit 259,624 232,278 737,754 557,418
Other Corporate Expenses
(1) (64,525) (34,802) (185,674) (131,163)
Restructuring and Other
Charges (92,407) (30,544) (233,579) (122,744)
Transaction Costs (12,738) (4,420) (12,738) (76,915)
Total U.S. GAAP
Operating Profit 89,954 162,512 305,763 226,596
Total Other (Expense)
Income, net (2) 3,445 (15,879) (8,344) (38,016)
Earnings from Continuing
Operations Before Taxes $
93,399 $
146,633 $
297,419 $
188,580
(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 $2.0 million
and $6.4 million for the three-
month periods ended June 28, 2019
and June 29, 2018, respectively, and
$14.8 million and $19.2 million for
the nine-month periods ended June
28, 2019 and June 29, 2018,
respectively. Other corporate
expenses also include intangibles
amortization of $18.4 million and
$19.3 million for the three-month
periods ended June 28, 2019 and June
29, 2018, respectively, and $55.7
million and $49.1 million for the
nine-month periods ended June 28,
2019 and June 29, 2018,
respectively.
(2) Includes gain on the settlement
of the CH2M retiree medical plans of
$0.0 million and $34.6 million,
respectively, and the amortization
of deferred financing fees related
to the CH2M acquisition of $0.5
million and $1.5 million,
respectively, for the three- and
nine-month periods ended June 28,
2019, as well as amortization of
deferred financing fees related to
the CH2M acquisition of $0.5 million
and $1.2 million, respectively, for
the three- and nine-month periods
ended June 29, 2018. Also includes
revenues under the Company's TSA
with WorleyParsons of $14.1 million,
respectively, for the three- and
nine-month periods ended June 28,
2019, for which the related costs
are included in SG&A.
Other Operational Information (in thousands):
---
Unaudited For the Nine Months Ended
---
Continuing
Operations June 28, 2019 June 29, 2018
---
Depreciation (pre-
tax) $
67,553 $
69,663
Amortization of
Intangibles (pre-
tax) $
55,732 $
49,052
Pass-Through
Costs Included in
Revenues $
1,840,572 $
1,603,930
Capital
Expenditures $
97,466 $
48,975
Balance Sheet (in thousands):
---
Unaudited June 28, 2019 September 28, 2018
--- ---
ASSETS
Current Assets:
Cash and cash equivalents $
998,242 $
634,870
Receivables and contract assets 2,779,189 2,513,934
Prepaid expenses and other 695,810 171,096
Current assets held for sale 2,704 1,236,684
Total current assets 4,475,945 4,556,584
Property, Equipment and Improvements,
net 305,266 257,859
Other Noncurrent Assets:
Goodwill 5,370,741 4,795,856
Intangibles, net 694,117 572,952
Miscellaneous 768,102 760,854
Noncurrent assets held for sale 27,091 1,701,690
Total other noncurrent assets 6,860,051 7,831,352
$
11,641,262 $
12,645,795
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt $
222,687 $
3,172
Accounts payable 884,992 776,189
Accrued liabilities 1,673,272 1,167,002
Contract liabilities 506,394 442,760
Current liabilities held for sale 2,103 756,570
Total current liabilities 3,289,448 3,145,693
Long-term Debt 1,025,198 2,144,167
Other Deferred Liabilities 1,218,499 1,260,977
Noncurrent Liabilities Held for Sale - 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-135,848,893 shares and
142,217,933 shares as of June 28, 2019
and September 28, 2018, respectively 135,849 142,218
Additional paid-in capital 2,634,177 2,708,839
Retained earnings 4,053,626 3,809,991
Accumulated other comprehensive loss (763,589) (806,703)
Total Jacobs stockholders' equity 6,060,063 5,854,345
Noncontrolling interests 48,054 90,009
Total Group stockholders' equity 6,108,117 5,944,354
$
11,641,262 $
12,645,795
Statement of Cash Flow (in thousands):
---
For the Three Months Ended For the Nine Months Ended
Unaudited June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018
--- ---
Cash Flows from Operating Activities:
Net earnings attributable to the
Group $
531,064 $
150,071 $
723,427 $
204,565
Adjustments to reconcile net earnings to net cash
flows provided by operations:
Depreciation and amortization:
Property, equipment and
improvements 25,851 29,576 69,663 88,715
Intangible assets 18,383 22,447 56,346 58,495
(Gain) Loss on disposal of ECR
business (917,697) (917,697)
(Gain) Loss on disposal of other
businesses and investments 9,608 (444) 9,608 (444)
(Gain) Loss on investment in equity
securities (2,175) (2,175)
Stock based compensation 18,425 14,939 47,341 61,821
Equity in earnings of operating
ventures, net (2,307) (9,174) (7,632) (8,387)
(Gain) Losses on disposals of
assets, net (1,732) 6,138 1,998 10,055
Loss (Gain) on pension and retiree
medical plan changes - (34,621) 3,819
Deferred income taxes 83,600 (14,173) 52,592 (7,374)
Changes in assets and liabilities, excluding the
effects of businesses acquired:
Receivables and contract assets (149,885) (144,474) (402,616) (316,386)
Prepaid expenses and other current
assets (41,734) 7,981 5,999 5,620
Accounts payable 74,532 120,741 67,778 138,713
Accrued liabilities (103,416) 28,708 (161,179) 8,083
Contract liabilities 361,881 1,096 419,762 34,695
Other deferred liabilities (80,707) (3,587) (129,468) (21,007)
Other, net 11,228 4,901 (19,439) 7,967
Net cash (used for) provided by
operating activities (165,081) 214,746 (220,313) 268,950
Cash Flows from Investing Activities:
Additions to property and equipment (45,190) (18,563) (106,670) (63,408)
Disposals of property and equipment
and other assets 60 7,300 428
Distributions of capital from
(contributions to) equity
investees - 15,310 (3,904) 7,614
Acquisitions of businesses, net of
cash acquired (575,110) (3,729) (575,110) (1,488,546)
Disposals of investment in equity
securities 64,708 64,708
Proceeds (payments) related to
sales of businesses 2,796,734 2,796,734 3,403
Purchases of noncontrolling
interests - (1,113)
Net cash provided by (used for)
investing activities 2,241,202 (6,982) 2,181,945 (1,540,509)
Cash Flows from Financing Activities:
Net (payments) proceeds from
borrowings (1,895,959) (159,814) (1,200,388) 1,402,387
Debt issuance costs - (3,741)
Proceeds from issuances of common
stock 20,198 6,952 46,143 33,588
Common stock repurchases (36,183) (31) (524,618) (2,982)
Taxes paid on vested restricted
stock (5,870) (10,835) (26,187) (27,975)
Cash dividends, including to
noncontrolling interests (25,867) (20,999) (82,257) (65,232)
Net cash provided by (used for)
financing activities (1,943,681) (184,727) (1,791,048) 1,339,786
Effect of Exchange Rate Changes 15,164 (34,082) 34,300 (18,008)
Net Increase (decrease) in Cash and
Cash Equivalents 147,604 (11,045) 204,884 50,219
Cash and Cash Equivalents at the
Beginning of the Period 850,638 835,415 793,358 774,151
Cash and Cash Equivalents at the
End of the Period 998,242 824,370 998,242 824,370
Less Cash and Cash Equivalents
included in Assets held for Sale - (161,666) (161,666)
Cash and Cash Equivalents of
Continuing Operations at the End
of the Period $
998,242 $
662,704 $
998,242 $
662,704
Backlog (in millions):
---
June 28, 2019 June 29, 2018
---
Aerospace, Technology
and Nuclear $
8,456 $
7,147
Buildings,
Infrastructure and
Advanced Facilities 14,011 12,693
Total $
22,467 $
19,840
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 and adjusted EBITDA.
Adjusted net earnings from continuing operations and adjusted EPS from continuing operations 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, the ECR divestiture, the KeyW acquisition and other related cost reduction initiatives, which included involuntary terminations, costs associated with co-locating Jacobs and KeyW 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 KeyW and CH2M acquisitions 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; (ix) the reclassification of revenue under the Company's transition services agreement (TSA) included in other income for U.S. GAAP reporting purposes to SG&A and the exclusion of remaining unreimbursed costs associated with the TSA; (x) 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; and (xi) other income tax adjustments. Adjustments to derive adjusted net earnings from continuing operations and adjusted EPS from continuing operations are calculated on an after-tax basis. Adjusted EBITDA is calculated by adding depreciation expense to adjusted operating profit from continuing operations. 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 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 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 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 third quarter of fiscal 2019 and 2018
---
Three Months Ended
June 28, 2019
Unaudited U.S. GAAP Effects of Effects of Other Adjusted
Restructuring Transaction Adjustments
and Other Costs (1) (2)
Charges
--- ---
Revenues $
3,169,622
$
$
$ $
3,169,622
Pass through revenue - (533,935) (533,935)
Net revenue 3,169,622 (533,935) 2,635,687
Direct cost of
contracts (2,543,488) 2,481 533,935 (2,007,072)
Gross profit 626,134 2,481 628,615
Selling, general and
administrative
expenses (536,180) 89,926 12,738 37,714 (395,802)
Operating Profit 89,954 92,407 12,738 37,714 232,813
Total other (expense)
income, net 3,445 831 515 (8,362) (3,571)
Earnings from
Continuing
Operations Before
Taxes 93,399 93,238 13,253 29,352 229,242
Income Tax Benefit
(Expense) for
Continuing
Operations 1,981 (22,924) (3,259) (5,823) (30,025)
Net Earnings of the
Group from
Continuing
Operations 95,380 70,314 9,994 23,529 199,217
Net Earnings
Attributable to
Noncontrolling
Interests from
Continuing
Operations (6,015) (6,015)
Net Earnings from
Continuing
Operations
attributable to
Jacobs 89,365 70,314 9,994 23,529 193,202
Net Earnings
Attributable to
Discontinued
Operations 435,077 2,058 2,447 (7,823) 431,759
Net earnings
attributable to
Jacobs $
524,442 $
72,372 $
12,441 $
15,706 $
624,961
Diluted Net Earnings
from Continuing
Operations Per Share $
0.65 $
0.51 $
0.07 $
0.17 $
1.40
Diluted Net Earnings
from Discontinued
Operations Per Share $
3.15 $
0.01 $
0.02 $
(0.06) $
3.13
Diluted Earnings Per
Share $
3.80 $
0.52 $
0.09 $
0.11 $
4.53
Operating profit
margin 2.84
% 8.83
%
===
(1) Includes after-tax CH2M
transaction costs and adjustments
of $0.4 million, after-tax
transaction costs associated with
the sale of our ECR line of
business of $2.4 million and after-
tax transaction costs associated
with the acquisition of KeyW of
$9.6 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 $533.9 million, (b) the
removal of amortization of
intangible assets of $18.4 million,
(c) the allocation to discontinued
operations of estimated stranded
corporate costs of $2.0 million for
the month of April prior to the
sale 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 month of April
prior to the sale related to long-
term debt that has been paid down
as a result of the ECR sale of $5.8
million, (e) 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 $2.6
million, (f) the reclassification
of revenues under the Company's TSA
of $14.1 million included in other
income for U.S. GAAP reporting
purposes to SG&A and the exclusion
of $3.2 million in remaining
unreimbursed costs associated with
this agreement, (g) other income
tax adjustments of $1.5 million and
(h) associated income tax expense
adjustments for all the above pre-
tax adjustment items.
Three Months Ended
June 29, 2018
Unaudited U.S. GAAP Effects of Effects of Other Adjusted
Restructuring CH2M Adjustments
and Other Transaction (1)
Charges Costs
---
Revenues $
2,933,623
$
$
$ $
2,933,623
Pass through revenue (583,423) (583,423)
Net revenue 2,933,623 (583,423) 2,350,200
Direct cost of
contracts (2,325,028) 2,576 583,423 (1,739,029)
Gross profit 608,595 2,576 611,171
Selling, general and
administrative
expenses (446,083) 27,967 4,422 25,699 (387,995)
Operating Profit 162,512 30,543 4,422 25,699 223,176
Total other (expense)
income, net (15,879) (466) 933 16,069 657
Earnings from
Continuing
Operations Before
Taxes 146,633 30,077 5,355 41,768 223,833
Income Tax Benefit
(Expense) for
Continuing
Operations (31,174) (7,433) (1,483) (3,478) (43,568)
Net Earnings of the
Group from
Continuing
Operations 115,459 22,644 3,872 38,290 180,265
Net Earnings
Attributable to
Noncontrolling
Interests from
Continuing
Operations (2,123) (577) (2,700)
Net Earnings from
Continuing
Operations
attributable to
Jacobs 113,336 22,067 3,872 38,290 177,565
Net Earnings
Attributable to
Discontinued
Operations 36,886 12,683 (14,800) 34,769
Net earnings
attributable to
Jacobs $
150,222 $
34,750 $
3,872 $
23,490 $
212,334
Diluted Net Earnings
from Continuing
Operations Per Share $
0.79 $
0.15 $
0.03 $
0.27 $
1.24
Diluted Net Earnings
from Discontinued
Operations Per Share $
0.26 $
0.09
$ $
(0.10) $
0.24
Diluted Earnings Per
Share $
1.05 $
0.24 $
0.03 $
0.16 $
1.48
Operating profit
margin 5.54
% 9.50
%
(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 $583.4 million, (b) the removal of
amortization of intangible assets of
$22.4 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 $19.2
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 $16.1
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 $5.3 million and (g)
associated income tax expense
adjustments for all the above pre-
tax adjustment items.
Nine Months Ended
June 28, 2019
Unaudited U.S. GAAP Effects of Effects of Other Adjusted
Restructuring Transaction Adjustments
and Other Costs (1) (2)
Charges
---
Revenues $
9,345,005
$
$
$ $
9,345,005
Pass through revenue (1,840,572) (1,840,572)
Net revenue 9,345,005 (1,840,572) 7,504,433
Direct cost of
contracts (7,533,511) 1,969 1,840,572 (5,690,970)
Gross profit 1,811,494 1,969 1,813,463
Selling, general and
administrative
expenses (1,505,731) 231,610 12,738 87,863 (1,173,520)
Operating Profit 305,763 233,579 12,738 87,863 639,943
Total other (expense)
income, net (8,344) (28,460) 1,544 28,109 (7,151)
Earnings from
Continuing
Operations Before
Taxes 297,419 205,119 14,282 115,972 632,792
Income Tax Expense
for Continuing
Operations (12,829) (44,443) (3,509) (53,782) (114,563)
Net Earnings of the
Group from
Continuing
Operations 284,590 160,676 10,773 62,190 518,229
Net (Earnings) Loss
Attributable to
Noncontrolling
Interests from
Continuing
Operations (15,578) (15,578)
Net Earnings from
Continuing
Operations
attributable to
Jacobs 269,012 160,676 10,773 62,190 502,651
Net Earnings
Attributable to
Discontinued
Operations 436,642 (587) 8,948 (55,622) 389,381
Net earnings
attributable to
Jacobs $
705,654 $
160,089 $
19,721 $
6,568 $
892,032
Diluted Net Earnings
from Continuing
Operations Per Share $
1.92 $
1.14 $
0.08 $
0.44 $
3.58
Diluted Net Earnings
from Discontinued
Operations Per Share $
3.11
$ $
0.06 $
(0.40) $
2.77
Diluted Earnings Per
Share $
5.02 $
1.14 $
0.14 $
0.05 $
6.35
Operating profit
margin 3.27
% 8.53
%
(1) Includes after-tax CH2M
transaction costs and adjustments of
$1.2 million, after-tax transaction
costs associated with the sale of our
ECR line of business of $8.9 million
and after-tax transaction costs
associated with the acquisition of
KeyW of $9.6 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 $1.84 billion, (b) the removal of
amortization of intangible assets of
$55.7 million, (c) the allocation to
discontinued operations of estimated
stranded corporate costs of $14.8
million for the month of April prior
to the sale 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
month of April prior to the sale
related to long-term debt that has
been paid down as a result of the ECR
sale of $42.3 million, (e) the
exclusion of approximately $37.0
million in one-time favorable income
tax adjustment from the second
quarter 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 other
adjustments of $1.5 million, (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 $17.3
million, (h) the reclassification of
revenues under the Company's TSA of
$14.1 million included in other
income for U.S. GAAP reporting
purposes to SG&A and the exclusion of
$3.2 million in remaining
unreimbursed costs associated with
this agreement and (i) associated
income tax expense adjustments for
all the above pre-tax adjustment
items.
Nine Months Ended
June 29, 2018
Unaudited U.S. GAAP Effects of Effects of Other Adjusted
Restructuring CH2M Adjustments
and Other Transaction (1)
Charges Costs
---
Revenues $
7,587,916
$
$
$ $
7,587,916
Pass through revenue (1,603,930) (1,603,930)
Net revenue 7,587,916 (1,603,930) 5,983,986
Direct cost of
contracts (6,035,598) 2,576 1,603,930 (4,429,092)
Gross profit 1,552,318 2,576 1,554,894
Selling, general and
administrative
expenses (1,325,722) 120,168 76,915 68,252 (1,060,387)
Operating Profit 226,596 122,744 76,915 68,252 494,507
Total other (expense)
income, net (38,016) 1,189 33,205 (3,622)
Earnings from
Continuing
Operations Before
Taxes 188,580 122,744 78,104 101,457 490,885
Income Tax Expense
for Continuing
Operations (110,230) (31,352) (19,363) 51,210 (109,735)
Net Earnings of the
Group from
Continuing
Operations 78,350 91,392 58,741 152,667 381,150
Net (Earnings) Loss
Attributable to
Noncontrolling
Interests from
Continuing
Operations (5,539) (577) (6,116)
Net Earnings from
Continuing
Operations
attributable to
Jacobs 72,811 90,815 58,741 152,667 375,034
Net Earnings
Attributable to
Discontinued
Operations 128,161 9,794 (32,607) 105,348
Net earnings
attributable to
Jacobs $
200,972 $
100,609 $
58,741 $
120,060 $
480,382
Diluted Net Earnings
from Continuing
Operations Per Share $
0.53 $
0.66 $
0.43 $
1.11 $
2.72
Diluted Net Earnings
from Discontinued
Operations Per Share $
0.93 $
0.07
$ $
(0.24) $
0.76
Diluted Earnings Per
Share $
1.46 $
0.73 $
0.43 $
0.87 $
3.49
Operating profit
margin 2.99
% 8.26
%
(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 $1.60 billion; (b) the removal of
amortization of intangible assets of
$58.5 million, (c) the allocation to
discontinued operations of estimated
stranded corporate costs of $19.2
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 $51.2
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 $33.2
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 $74.7 million and (g)
associated income tax expense
adjustments for all the above pre-
tax adjustment items.
Earnings Per Share:
---
Three Months Ended Nine Months Ended
Unaudited June 28, 2019 June 29, 2018 June 28, 2019 June 29, 2018
--- ---
Numerator for Basic and Diluted EPS:
Net earnings (loss)
attributable to Jacobs
from continuing
operations $
89,365 $
113,336 $
269,012 $
72,811
Net earnings (loss) from
continuing operations
allocated to
participating securities (105) (475) (444) (325)
Net earnings (loss) from
continuing operations
allocated to common stock
for EPS calculation $
89,260 $
112,861 $
268,568 $
72,486
Net earnings (loss)
attributable to Jacobs
from discontinued
operations $
435,077 $
36,886 436,642 128,161
Net earnings (loss) from
discontinued operations
allocated to
participating securities (513) (155) (720) (573)
Net earnings (loss) from
discontinued operations
allocated to common stock
for EPS calculation $
434,564 $
36,731 $
435,922 $
127,588
Net earnings allocated to
common stock for EPS
calculation $
523,824 $
149,592 $
704,490 $
200,074
Denominator for Basic and Diluted EPS:
Weighted average basic
shares 136,772 142,612 139,263 136,717
Shares allocated to
participating securities (161) (597) (230) (743)
Shares used for
calculating basic EPS
attributable to common
stock 136,611 142,015 139,033 135,974
Effect of dilutive securities:
Stock compensation plans 1,212 1,014 1,206 1,028
Shares used for
calculating diluted EPS
attributable to common
stock 137,823 143,029 140,239 137,002
Net Earnings Per Share:
Basic Net Earnings from
Continuing Operations Per
Share $
0.65 $
0.79 $
1.93 $
0.53
Basic Net Earnings from
Discontinued Operations
Per Share $
3.18 $
0.26 $
3.14 $
0.94
Basic EPS $
3.83 $
1.05 $
5.07 $
1.47
Diluted Net Earnings from
Continuing Operations Per
Share $
0.65 $
0.79 $
1.92 $
0.53
Diluted Net Earnings from
Discontinued Operations
Per Share $
3.15 $
0.26 $
3.11 $
0.93
Diluted EPS $
3.80 $
1.05 $
5.02 $
1.46
For additional information contact:
Investors:
Jonathan Doros, 214-583-8596
jonathan.doros@jacobs.com
Media:
Marietta Hannigan, 214-920-8035
marietta.hannigan@jacobs.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/jacobs-reports-earnings-for-the-third-quarter-of-fiscal-2019-300896088.html
SOURCE Jacobs
