Jacobs Reports Fiscal First Quarter Earnings
DALLAS, Feb. 4, 2020 /PRNewswire/ -- Jacobs Engineering Group Inc. (NYSE: J) today announced its financial results for the fiscal first quarter ended December 27, 2019.
Q1 2020 Highlights:
-- Gross revenue of $3.4 billion(1) grew 9.0% year-over-year; net revenue grew 5% pro forma(1) -- EPS from continuing operations of $1.33, results include benefit from mark to market impact of Worley stock -- Adjusted EPS from continuing operations of $1.20, including $0.06 in discrete tax expenses -- Backlog increased $2.3 billion to $22.7 billion, up 11% year-over-year and up 6% on a pro forma basis(1) -- Maintaining fiscal 2020 adjusted EBITDA outlook of $1.050 billion to $1.150 billion(2) -- Maintaining fiscal 2020 adjusted pro forma EPS outlook of $5.30 - $5.80(2) -- Increased share repurchase authorization by $1 billion; total authorization now $1.4 billion
Jacobs' Chair and CEO Steve Demetriou commented, "Our transformed company continues to deliver consistent performance as we benefit from multiple secular growth trends; such as smart water solutions, environmental resiliency, urbanization, national security and the build out of 5G telecom infrastructure. We are excited about our new brand, which focuses employees to redefine what is possible by challenging traditional thinking and reimagining the future for our clients. The combination of our scale, expertise and innovation bolsters our sales pipeline, further supporting our multi-year financial targets of double-digit adjusted EBITDA growth across both lines of business."
Jacobs will be ringing the Opening Bell at the NYSE later today to celebrate its 30th year listing on the NYSE, proudly exemplifying its new brand and transformation to a global technology-forward solutions company.
Jacobs' President and CFO Kevin Berryman added, "Our strong first quarter profit performance was driven by the successful execution of our strategy to focus on higher growth, higher margin opportunities where our expertise and scale provide a competitive advantage. We are in the final stages of successful M&A restructuring and separation initiatives, which positions us to deliver improved free cash flow generation over the balance of fiscal 2020 and beyond. We are reaffirming our fiscal 2020 adjusted EBITDA outlook of $1.050 billion to $1.150 billion(2). Given our solid financial flexibility, we have increased our remaining share repurchase authorization to $1.4 billion."
(1)Reflects continuing operations as reported in accordance with GAAP. (2)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 2020.
First Quarter Review
Fiscal Q1 2020 Fiscal Q1 2019 Change Revenue $3.4 billion $3.1 billion $0.3 billion Net Revenue $2.7 billion $2.4 billion $0.3 billion GAAP Net Earnings from Continuing Operations $179 million $65 million $114 million GAAP Earnings Per Diluted Share (EPS) from Continuing Operations $1.33 $0.45 $0.88 Adjusted Net Earnings from Continuing Operations $162 million $144 million $18 million Adjusted EPS from Continuing Operations $1.20 $1.00 $0.20 ---
The company's adjusted net earnings from continuing operations and adjusted EPS from continuing operations for the first quarter of fiscal 2020 and fiscal 2019 exclude the adjustments 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, as well as a reconciliation of net revenue to revenue, refer to the section entitled "Non-GAAP Financial Measures" at the end of this release.
Fiscal Q1 2020 Fiscal Q1 2019 After-tax restructuring and other charges ($52.0 million and $45.1 million for the fiscal 2020 and 2019 periods, respectively before income taxes) $39 million ($0.29 per share) $35 million ($0.25 per share) After-tax transaction costs ($1.6 million and $0.5 million for the fiscal 2020 and 2019 periods, respectively before income taxes), $1.2 million ($0.01 per share) $0.4 million ($- per share) Other adjustments include: $(58) million ($(0.43) per share) $43 million ($0.30 per share) (a) addback of amortization of intangible assets of $21.8 million and $18.7 million in the 2020 and 2019 periods, respectively, (b) the allocation to discontinued operations of estimated stranded corporate costs of $6.4 million in the 2019 period that will be reimbursed or otherwise eliminated in connection with the sale of the ECR business, (c) the reclassification of revenues under the unreimbursed costs Company's Transition associated with the TSA Services Agreement during the fiscal 2020 (TSA) with Worley of period, $12.0 million, included in other income for U.S. GAAP reporting purposes to SG&A and the exclusion of $0.7 million in remaining (d) the removal of $(99.1) million in fair value adjustments related to our investment in Worley stock and certain foreign currency revaluations relating to the ECR sale in the 2020 period, (e) the allocation to discontinued operations of estimated interest expense amounts in 2019 related to long-term debt that was paid down in connection with the closing of the sale of the ECR business of $18.1 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 $11.0 million in the 2019 period, (g) the add-back of depreciation and amortization relating to the ECR business that was ceased as a result of the application of held for sale accounting in the 2019 period of $5.2 million and (h) associated income tax expense adjustments for the above pre-tax adjustment items. Adjusted EPS from Continuing Operations $162 million ($1.20 per share) $144 million ($1.00 per share) ---
(note: earnings per share amounts may not add due to rounding)
Fiscal first quarter 2020 adjusted earnings per share from continuing operations reflect an adjusted effective tax rate of 24.0%, excluding discrete tax expense items of $7.8 million, or $0.06 per share. Fiscal first quarter 2019 included $0.07 in a discrete tax benefit.
Jacobs is hosting a conference call at 11:00 A.M. ET on Tuesday February 4, 2020, which it is webcasting live at www.jacobs.com.
John Wood Group's Nuclear Business Acquisition
On August 20, 2019, Jacobs announced that it has entered into an agreement to acquire John Wood Group's Nuclear business for an enterprise value of £250 million (approximately $300 million) on a debt-free, cash-free basis. The transaction is expected to close in the fiscal 2020 second quarter.
About Jacobs
At Jacobs, we're challenging today to reinvent tomorrow by solving the world's most critical problems for thriving cities, resilient environments, mission-critical outcomes, operational advancement, scientific discovery and cutting-edge manufacturing, turning abstract ideas into realities that transform the world for good. With $13 billion in annual revenue and a talent force of approximately 52,000, Jacobs provides a full spectrum of professional services including consulting, technical, scientific and project delivery for the government and private sectors. Visit 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 27, 2019, 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 December 27, 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 Unaudited December 27, December 28, 2019 2018 --- Revenues $ 3,360,049 $ 3,083,788 Direct cost of contracts (2,715,478) (2,515,268) Gross profit 644,571 568,520 Selling, general and administrative expenses (493,226) (455,390) Operating Profit 151,345 113,130 Other Income (Expense): Interest income 946 2,104 Interest expense (14,817) (25,325) Miscellaneous income (expense), net 116,695 2,282 Total other income (expense), net 102,824 (20,939) Earnings from Continuing Operations Before Taxes 254,169 92,191 Income Tax Expense for Continuing Operations (68,489) (22,758) Net Earnings of the Group from Continuing Operations 185,680 69,433 Net Earnings of the Group from Discontinued Operations 77,587 60,158 Net Earnings of the Group 263,267 129,591 Net Earnings Attributable to Noncontrolling Interests from Continuing Operations (6,257) (4,539) Net Earnings Attributable to Jacobs from Continuing Operations 179,423 64,894 Net (Earnings) Losses Attributable to Noncontrolling Interests from Discontinued Operations - (756) Net Earnings Attributable to Jacobs from Discontinued Operations 77,587 59,402 Net Earnings Attributable to Jacobs $ 257,010 $ 124,296 Net Earnings Per Share: Basic Net Earnings from Continuing Operations Per Share $ 1.35 $ 0.45 Basic Net Earnings from Discontinued Operations Per Share $ 0.58 $ 0.42 Basic Earnings Per Share $ 1.93 $ 0.87 Diluted Net Earnings from Continuing Operations Per Share $ 1.33 $ 0.45 Diluted Net Earnings from Discontinued Operations Per Share $ 0.58 $ 0.41 Diluted Earnings Per Share $ 1.91 $ 0.86
Segment Information (in thousands): --- For the Three Months Ended Unaudited December 27, December 28, 2019 2018 --- Revenues from External Customers: Critical Mission Solutions $ 1,182,457 $ 1,035,028 People & Places Solutions $ 2,177,592 $ 2,048,760 Pass Through Revenue (701,754) (674,278) People & Places Solutions Net Revenue $ 1,475,838 $ 1,374,482 Total Revenue $ 3,360,049 $ 3,083,788 Net Revenue $ 2,658,295 $ 2,409,510 For the Three Months Ended December 27, December 28, 2019 2018 Segment Operating Profit: Critical Mission Solutions $ 90,422 $ 72,152 People & Places Solutions 178,328 159,459 Total Segment Operating Profit 268,750 231,611 Other Corporate Expenses (1) (66,719) (71,247) Restructuring and Other Charges (49,663) (47,234) Transaction Costs (1,023) Total U.S. GAAP Operating Profit 151,345 113,130 Total Other (Expense) Income, net (2) 102,824 (20,939) Earnings from Continuing Operations Before Taxes $ 254,169 $ 92,191
(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 amount of $6.4 million for the three-month period ended December 28, 2018. Other corporate expenses also include intangibles amortization of $21.8 million and $18.7 million for the three-month periods ended December 27, 2019 and December 28, 2018, respectively. (2) Includes revenues under the Company's TSA with Worley of $12.0 million, $99.1 million of fair value adjustments (unrealized gains) related to our investment in Worley stock and certain foreign currency revaluations relating to the ECR sale and the amortization of deferred financing fees related to the CH2M acquisition of $0.6 million for the three months ended December 27, 2019. For the three months ended December 28, 2018, primarily includes interest expense of $25.3 million and the amortization of deferred financing fees related to the CH2M acquisition of $0.5 million. Also, includes items related to restructuring and other charges for the three months ended December 27, 2019 and December 28, 2018, which are the loss on settlement of the CH2M portion of the U.S. pension plan of $2.4 million and the gain on the settlement of the CH2M retiree medical plans of $2.2 million, respectively.
Other Operational Information (in thousands): --- Unaudited For the Three Months Ended --- Continuing Operations December 27, 2019 December 28, 2018 Depreciation (pre-tax) $ 22,152 $ 18,211 Amortization of Intangibles (pre-tax) $ 21,845 $ 18,671 Capital Expenditures $ 22,260 $ 19,467
Balance Sheet (in thousands): --- Unaudited December 27, 2019 September 27, 2019 --- ASSETS Current Assets: Cash and cash equivalents $ 619,212 $ 631,068 Receivables and contract assets 3,056,115 2,840,209 Prepaid expenses and other 699,237 639,539 Current assets held for sale 4,022 952 Total current assets 4,378,586 4,111,768 Property, Equipment and Improvements, net 308,672 308,143 Other Noncurrent Assets: Goodwill 5,437,422 5,432,544 Intangibles, net 645,468 665,076 Miscellaneous 1,403,881 918,202 Noncurrent assets held for sale 26,530 26,978 Total other noncurrent assets 7,513,301 7,042,800 $ 12,200,559 $ 11,462,711 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-term debt $ 199,936 $ 199,901 Accounts payable 1,032,820 1,072,645 Accrued liabilities 1,162,872 1,384,379 Contract liabilities 435,211 414,208 Current liabilities held for sale 797 2,573 Total current liabilities 2,831,636 3,073,706 Long-term Debt 1,414,903 1,201,245 Other Deferred Liabilities 1,891,797 1,419,005 Noncurrent Liabilities Held for Sale 52 97 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 - 133,001,493 shares and 132,879,395 shares as of December 27, 2019 and September 27, 2019, respectively 133,001 132,879 Additional paid-in capital 2,605,765 2,559,450 Retained earnings 4,145,825 3,939,174 Accumulated other comprehensive loss (880,166) (916,812) Total Jacobs stockholders' equity 6,004,425 5,714,691 Noncontrolling interests 57,746 53,967 Total Group stockholders' equity 6,062,171 5,768,658 $ 12,200,559 $ 11,462,711
Statement of Cash Flow (in thousands): --- For the Three Months Ended Unaudited December 27, 2019 December 28, 2018 --- Cash Flows from Operating Activities: Net earnings attributable to the Group $ 263,267 $ 129,591 Adjustments to reconcile net earnings to net cash flows (used for) provided by operations: Depreciation and amortization: Property, equipment and improvements 22,152 20,321 Intangible assets 21,845 19,285 Gain on sale of ECR business (61,943) (Gain) Loss on investment in equity securities (105,319) Stock based compensation 14,279 15,594 Equity in earnings of operating ventures, net (715) (3,141) (Gain) Loss on disposals of assets, net 36 511 Loss (Gain) on pension and retiree medical plan changes 2,651 (2,172) Deferred income taxes 102,487 (26,080) Changes in assets and liabilities, excluding the effects of businesses acquired: Receivables and contract assets (121,532) (299,061) Prepaid expenses and other current assets (4,152) 39,198 Accounts payable (35,380) 18,891 Accrued liabilities (236,090) (169,948) Contract liabilities 25,457 119,641 Other deferred liabilities (60,562) (80,439) Other, net 36,333 (6,892) Net cash (used for) provided by operating activities (137,186) (224,701) Cash Flows from Investing Activities: Additions to property and equipment (22,260) (20,721) Disposals of property and equipment and other assets - 205 Distributions of capital from (contributions to) equity investees (12,000) (966) Purchases of noncontrolling interests - (1,113) Net cash provided by (used for) investing activities (34,260) (22,595) Cash Flows from Financing Activities: Net (payments) proceeds from borrowings 210,616 527,057 Proceeds from issuances of common stock 6,201 7,582 Common stock repurchases - (141,799) Taxes paid on vested restricted stock (24,334) (18,512) Cash dividends, including to noncontrolling interests (25,618) (28,603) Net cash provided by (used for) financing activities 166,865 345,725 Effect of Exchange Rate Changes (7,275) 22,115 Net Increase (decrease) in Cash and Cash Equivalents (11,856) 120,544 Cash and Cash Equivalents at the Beginning of the Period 631,068 793,358 Cash and Cash Equivalents at the End of the Period 619,212 913,902 Less Cash and Cash Equivalents included in Assets held for Sale - (27,195) Cash and Cash Equivalents of Continuing Operations at the End of the Period $ 619,212 $ 886,707
Backlog (in millions): --- December 27, 2019 December 28, 2018 Critical Mission Solutions $ 8,473 $ 7,158 People & Places Solutions 14,197 13,177 Total $ 22,670 $ 20,335
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 and adjusted EBITDA.
Net revenue is calculated excluding pass-through revenue of the Company's People & Places Solutions segment from the Company's revenue from continuing operations. Adjusted net earnings from continuing operations, adjusted EPS from continuing operations and adjusted operating profit 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 KeyW and CH2M acquisitions, the sale of the ECR business and other related cost reduction initiatives, which included involuntary terminations, costs associated with co-locating Jacobs, 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, charges associated with certain operations in India, which included write-offs on contract accounts receivable and other accruals, 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, the pending acquisition of Wood Group's nuclear business, and sale of the ECR business (to the extent incurred prior to the closing), 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) adding back amortization of intangible assets; (v) allocating to discontinued operations estimated stranded corporate costs that will be reimbursed or otherwise eliminated in connection with the sale of the ECR business; (vi) 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; (vii) allocating to discontinued operations estimated interest expense relating to long-term debt that was paid down with the proceeds of the ECR sale; (viii) the removal of fair value adjustments and dividend income related to the Company's investment in Worley stock and certain foreign currency revaluations relating to ECR sale proceeds; (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; (x) excluding charges resulting from the revaluation of certain deferred tax assets/liabilities in connection with U.S. tax reform; (xi) 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; and (xii) other income tax adjustments. Adjustments to derive adjusted net earnings from continuing operations, adjusted EPS from continuing operations and adjusted operating profit are calculated on an after-tax basis. We believe that net revenue, adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted operating profit 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 such measures 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.
Adjusted EBITDA for prior periods is calculated by adding depreciation expense to adjusted operating profit from continuing operations. For fiscal 2020 outlook, the Company calculated adjusted EBITDA by adding income tax expense, depreciation expense and interest expense, and deducting interest income from adjusted net earnings from continuing operations.
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, operating profit and revenue 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 (note: earnings per share amounts may not add across due to rounding).
U.S. GAAP Reconciliation for the first quarter of fiscal 2020 and 2019 --- Three Months Ended December 27, 2019 Unaudited U.S. GAAP Effects of Effects of Other Adjusted Restructuring Transaction Adjustments and Other Costs (1) (2) Charges --- Revenues $ 3,360,049 $ $ $ $ 3,360,049 Pass through revenue - (701,754) (701,754) Net revenue 3,360,049 (701,754) 2,658,295 Direct cost of contracts (2,715,478) 701,754 (2,013,724) Gross profit 644,571 644,571 Selling, general and administrative expenses (493,226) 49,663 1,023 34,520 (408,020) Operating Profit 151,345 49,663 1,023 34,520 236,551 Total other income (expense), net 102,824 2,378 620 (111,107) (5,285) Earnings from Continuing Operations Before Taxes 254,169 52,041 1,643 (76,587) 231,266 Income Tax Expense for Continuing Operations (68,489) (13,032) (400) 18,640 (63,281) Net Earnings of the Group from Continuing Operations 185,680 39,009 1,243 (57,947) 167,985 Net Earnings Attributable to Noncontrolling Interests from Continuing Operations (6,257) (6,257) Net Earnings from Continuing Operations attributable to Jacobs 179,423 39,009 1,243 (57,947) 161,728 Net Earnings Attributable to Discontinued Operations 77,587 77,587 Net earnings attributable to Jacobs $ 257,010 $ 39,009 $ 1,243 $ (57,947) $ 239,315 Diluted Net Earnings from Continuing Operations Per Share $ 1.33 $ 0.29 $ 0.01 $ (0.43) $ 1.20 Diluted Net Earnings from Discontinued Operations Per Share $ 0.58 $ $ $ $ 0.58 Diluted Earnings Per Share $ 1.91 $ 0.29 $ 0.01 $ (0.43) $ 1.78 Operating profit margin 4.5 % 8.9 % ===
(1) Includes after-tax transaction costs associated mainly with the acquisition of John Wood Group's Nuclear Business. (2) Includes (a) the removal of pass through revenues and costs for the People & Places Solutions line of business for the calculation of operating profit margin as a percentage of net revenue of $701.8 million, (b) the removal of amortization of intangible assets of $21.8 million, (c) the reclassification of revenues under the Company's TSA of $12.0 million included in other income for U.S. GAAP reporting purposes to SG&A and the exclusion of $0.7 million in remaining unreimbursed costs associated with this agreement, (d) the removal of $99.1 million in fair value adjustments related to our investment in Worley stock and certain foreign currency revaluations relating to the ECR sale and (e) associated income tax expense adjustments for the above pre-tax adjustment items.
Three Months Ended December 28, 2018 Unaudited U.S. GAAP Effects of Effects of Other Adjusted Restructuring Transaction Adjustments and Other Costs (1) (2) Charges --- Revenues $ 3,083,788 $ $ $ $ 3,083,788 Pass through revenue (674,278) (674,278) Net revenue 3,083,788 (674,278) 2,409,510 Direct cost of contracts (2,515,268) 2,870 674,278 (1,838,120) Gross profit 568,520 2,870 571,390 Selling, general and administrative expenses (455,390) 44,364 25,071 (385,955) Operating Profit 113,130 47,234 25,071 185,435 Total other income (expense), net (20,939) (2,175) 515 18,067 (4,532) Earnings from Continuing Operations Before Taxes 92,191 45,059 515 43,138 180,903 Income Tax Expense for Continuing Operations (22,758) (9,695) (125) 138 (32,440) Net Earnings of the Group from Continuing Operations 69,433 35,364 390 43,276 148,463 Net Earnings Attributable to Noncontrolling Interests from Continuing Operations (4,539) (4,539) Net Earnings from Continuing Operations attributable to Jacobs 64,894 35,364 390 43,276 143,924 Net Earnings Attributable to Discontinued Operations 59,402 (4,723) 4,795 (23,310) 36,164 Net earnings attributable to Jacobs $ 124,296 $ 30,641 $ 5,185 $ 19,966 $ 180,088 Diluted Net Earnings from Continuing Operations Per Share $ 0.45 $ 0.25 $ $ 0.30 $ 1.00 Diluted Net Earnings from Discontinued Operations Per Share $ 0.41 $ (0.03) $ 0.03 $ (0.16) $ 0.25 Diluted Earnings Per Share $ 0.86 $ 0.22 $ 0.03 $ 0.14 $ 1.25 Operating profit margin 3.7 % 7.7 %
(1) Includes after-tax transaction costs associated mainly with the sale of our former ECR business. (2) Includes (a) the removal of pass through revenues and costs for the People & Places Solutions line of business for the calculation of operating profit margin as a percentage of net revenue of $674.3 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 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) the allocation to discontinued operations of estimated interest expense for the full period related to long-term debt that was paid down as a result of the closing of the sale of the ECR business of $18.1 million, (e) the add-back of depreciation and amortization relating to the ECR business that was ceased as a result of application of held for sale accounting of $5.2 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 $11.0 million and (g) associated income tax expense adjustments for all the above pre- tax adjustment items.
Earnings Per Share: --- Three Months Ended Unaudited December 27, 2019 December 28, 2018 --- Numerator for Basic and Diluted EPS: Net earnings (loss) attributable to Jacobs from continuing operations $ 179,423 $ 64,894 Net earnings (loss) from continuing operations allocated to participating securities (92) (135) Net earnings (loss) from continuing operations allocated to common stock for EPS calculation $ 179,331 $ 64,759 Net earnings (loss) attributable to Jacobs from discontinued operations $ 77,587 $ 59,402 Net earnings (loss) from discontinued operations allocated to participating securities (40) (124) Net earnings (loss) from discontinued operations allocated to common stock for EPS calculation $ 77,547 $ 59,278 Net earnings allocated to common stock for EPS calculation $ 256,878 $ 124,037 Denominator for Basic and Diluted EPS: Weighted average basic shares 133,202 142,451 Shares allocated to participating securities (68) (297) Shares used for calculating basic EPS attributable to common stock 133,134 142,154 Effect of dilutive securities: Stock compensation plans 1,484 1,424 Shares used for calculating diluted EPS attributable to common stock 134,618 143,578 Net Earnings Per Share: Basic Net Earnings from Continuing Operations Per Share $ 1.35 $ 0.45 Basic Net Earnings from Discontinued Operations Per Share $ 0.58 $ 0.42 Basic EPS $ 1.93 $ 0.87 Diluted Net Earnings from Continuing Operations Per Share $ 1.33 $ 0.45 Diluted Net Earnings from Discontinued Operations Per Share $ 0.58 $ 0.41 Diluted EPS $ 1.91 $ 0.86
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-fiscal-first-quarter-earnings-300998137.html
SOURCE Jacobs