EX-99.1 2 jec-ex991_6.htm EX-99.1 jec-ex991_6.htm

 

Exhibit 99.1

 

 

 

155 North Lake Avenue 91101

 

PO Box 7084

 

Pasadena, California 91109-7084

 

1.626.578.3500 Fax 1.626.578.7144

 

Press Release

 

FOR IMMEDIATE RELEASE

August 9, 2016

 

For additional information contact:

Kevin C. Berryman

Executive Vice President and Chief Financial Officer

626.578.3505

Jacobs Engineering Group Inc. Reports Earnings for the Third Quarter of Fiscal 2016

PASADENA, CALIF - Jacobs Engineering Group Inc. (NYSE:JEC) today announced its financial results for the third quarter of fiscal 2016 ended July 1, 2016.

Third Quarter Fiscal 2016 Highlights:

 

·

Revenues of $2.7B; Backlog of $18.3B, up sequentially from last quarter;

 

·

U.S. GAAP net earnings and EPS of $69M and $0.57, respectively;

 

·

Adjusted net earnings and EPS of $95M and $0.78, respectively;

 

·

Restructuring effort supporting an 11% reduction in G&A costs versus FY15Q3.

Jacobs reported adjusted net earnings of $95 million, or $0.78 per diluted share, on revenues of $2.7 billion for the third quarter of fiscal 2016 ended July 1, 2016 (U.S. GAAP net earnings and EPS were $69 million and $0.57, respectively).  This compares to adjusted net earnings of $121 million, or $0.97 per diluted share, on revenues of $2.9 billion for the third quarter of fiscal 2015 ended June 26, 2015 (U.S. GAAP net earnings and EPS were $91 million and $0.73, respectively).  The year-ago results include a $0.19 per share discrete tax benefit, related to the 2015 inter-company debt refinancing that was completed during the three months ended June 26, 2015.

The company's adjusted net earnings for the third quarter of fiscal 2016 exclude the after-tax costs related to certain restructuring activities that began during fiscal 2015 (the "2015 Restructuring") totaling $26 million, or $0.21 per diluted share.

Jacobs also announced a total backlog of $18.3 billion at July 1, 2016, including a technical professional services component of $11.9 billion. Total backlog and professional services backlog are both up sequentially by $0.1 billion and $0.6 billion, respectively, from the second quarter.

Commenting on the results for the third quarter of fiscal 2016, Jacobs Chairman and CEO Steve Demetriou stated, “While certain end-markets remain challenged, our drive to improve project delivery excellence and increase commercial discipline is gaining momentum, and I am pleased with our cost savings and margin improvement.  Our stable backlog is a clear sign of a more focused approach to sales within our new line of business structure, as our teams leverage our client diversity.”

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The Company’s cash flow from operations was $181 million in the third quarter due to significant improvement in working capital management.  Operational working capital was reduced to $515 million, calculated as current assets minus current liabilities, excluding cash and debt. During the quarter, Jacobs repurchased 0.6 million shares of common stock for $30 million.

Jacobs Chief Financial Officer, Kevin Berryman said, “We are seeing improvements in margin, cash flow and working capital, indicative of our ability to sharpen execution. Our year to date and third quarter performance increases our confidence to meet our adjusted full year earnings per share target.”

Jacobs is hosting a conference call at 10:00 a.m. Eastern Time on Tuesday, August 9, 2016, which it is webcasting live on the internet at www.jacobs.com.

Jacobs is one of the world's largest and most diverse providers of technical professional and construction services.

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 of the 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 period ended October 2, 2015, 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 , as well as the Company’s other filings with the Securities and Exchange Commission. We also caution the readers of this release that we do not undertake to update any forward-looking statements made herein.

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Financial Highlights:

Results of Operations (in thousands, except per-share data):

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

July 1, 2016

 

 

June 26, 2015

 

 

July 1, 2016

 

 

June 26, 2015

 

Revenues

 

$

2,693,873

 

 

$

2,907,541

 

 

$

8,323,570

 

 

$

8,997,878

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct cost of contracts

 

 

(2,242,424

)

 

 

(2,422,944

)

 

 

(6,987,431

)

 

 

(7,502,891

)

Selling, general and administrative expenses

 

 

(341,893

)

 

 

(384,163

)

 

 

(1,080,352

)

 

 

(1,103,286

)

Operating Profit

 

 

109,556

 

 

 

100,434

 

 

 

255,787

 

 

 

391,701

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

624

 

 

 

1,697

 

 

 

5,108

 

 

 

5,553

 

Interest expense

 

 

(4,572

)

 

 

(5,509

)

 

 

(10,315

)

 

 

(15,374

)

Miscellaneous income (expense), net

 

 

(2,801

)

 

 

566

 

 

 

470

 

 

 

(1,034

)

Total other income (expense), net

 

 

(6,749

)

 

 

(3,246

)

 

 

(4,737

)

 

 

(10,855

)

Earnings Before Taxes

 

 

102,807

 

 

 

97,188

 

 

 

251,050

 

 

 

380,846

 

Income Tax Benefit (Expense)

 

 

(31,870

)

 

 

120

 

 

 

(66,418

)

 

 

(89,233

)

Net Earnings of the Group

 

 

70,937

 

 

 

97,308

 

 

 

184,632

 

 

 

291,613

 

Net Earnings Attributable to Noncontrolling Interests

 

 

(1,882

)

 

 

(6,246

)

 

 

(3,813

)

 

 

(18,505

)

Net Earnings Attributable to Jacobs

 

$

69,055

 

 

$

91,062

 

 

$

180,819

 

 

$

273,108

 

Net Earnings Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.58

 

 

$

0.74

 

 

$

1.50

 

 

$

2.17

 

Diluted

 

$

0.57

 

 

$

0.73

 

 

$

1.49

 

 

$

2.15

 

Segment Information (in thousands):

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

July 1, 2016

 

 

June 26, 2015

 

 

July 1, 2016

 

 

June 26, 2015

 

Revenues from External Customers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petroleum & Chemicals

$

766,546

 

 

$

983,887

 

 

$

2,575,474

 

 

$

3,191,106

 

Aerospace & Technology

 

667,785

 

 

 

699,118

 

 

 

2,007,440

 

 

 

2,134,460

 

Buildings & Infrastructure

 

553,546

 

 

 

593,834

 

 

 

1,696,004

 

 

 

1,820,626

 

Industrial

 

705,996

 

 

 

630,702

 

 

 

2,044,652

 

 

 

1,851,686

 

Total

$

2,693,873

 

 

$

2,907,541

 

 

$

8,323,570

 

 

$

8,997,878

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

July 1, 2016

 

 

June 26, 2015

 

 

July 1, 2016

 

 

June 26, 2015

 

Operating Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petroleum & Chemicals

$

29,646

 

 

$

42,011

 

 

$

92,194

 

 

$

105,765

 

Aerospace & Technology

 

53,741

 

 

 

46,467

 

 

 

156,861

 

 

 

149,500

 

Buildings & Infrastructure

 

50,168

 

 

 

41,625

 

 

 

133,083

 

 

 

122,017

 

Industrial

 

28,444

 

 

 

21,511

 

 

 

68,216

 

 

 

98,361

 

Total Segment Operating Profit

 

161,999

 

 

 

151,614

 

 

 

450,354

 

 

 

475,643

 

Other Corporate Expenses

 

(19,523

)

 

 

(7,558

)

 

 

(57,896

)

 

 

(26,282

)

Restructuring Charges

 

(32,920

)

 

 

(43,622

)

 

 

(136,671

)

 

 

(57,660

)

Total Other Expense

 

(6,749

)

 

 

(3,246

)

 

 

(4,737

)

 

 

(10,855

)

Earnings Before Taxes

$

102,807

 

 

$

97,188

 

 

$

251,050

 

 

$

380,846

 

 

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Other Operational Information (in thousands):

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

July 1, 2016

 

 

June 26, 2015

 

 

July 1, 2016

 

 

June 26, 2015

 

Depreciation (pre-tax)

 

$

20,221

 

 

$

24,563

 

 

$

63,447

 

 

$

75,718

 

Amortization of Intangibles (pre-tax)

 

$

12,048

 

 

$

12,555

 

 

$

35,499

 

 

$

38,090

 

Pass-Through Costs Included in Revenues

 

$

616,160

 

 

$

574,350

 

 

$

1,887,620

 

 

$

1,896,516

 

Capital Expenditures

 

$

17,094

 

 

$

10,120

 

 

$

46,403

 

 

$

69,297

 

 

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Balance Sheet (in thousands):

 

 

July 1,

2016

(Unaudited)

 

 

October 2,

2015

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

616,391

 

 

$

460,859

 

Receivables

 

 

2,234,178

 

 

 

2,548,743

 

Prepaid expenses and other

 

 

78,020

 

 

 

113,076

 

Total current assets

 

 

2,928,589

 

 

 

3,122,678

 

Property, Equipment and Improvements, Net

 

 

325,130

 

 

 

381,238

 

Other Noncurrent Assets:

 

 

 

 

 

 

 

 

Goodwill

 

 

3,079,821

 

 

 

3,048,778

 

Intangibles

 

 

333,608

 

 

 

353,419

 

Deferred income taxes

 

 

356,444

 

 

 

374,064

 

Miscellaneous

 

 

397,200

 

 

 

505,749

 

Total other non-current assets

 

 

4,167,073

 

 

 

4,282,010

 

 

 

$

7,420,792

 

 

$

7,785,926

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Notes payable

 

$

8,941

 

 

$

13,364

 

Accounts payable

 

 

479,217

 

 

 

566,866

 

Accrued liabilities

 

 

1,020,762

 

 

 

1,090,985

 

Billings in excess of costs

 

 

297,520

 

 

 

309,951

 

Total current liabilities

 

 

1,806,440

 

 

 

1,981,166

 

Long-term Debt

 

 

479,000

 

 

 

584,434

 

Other Deferred Liabilities

 

 

646,070

 

 

 

863,868

 

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—121,703,665 shares and 123,152,966

   shares as of July 1, 2016 and October 2, 2015, respectively

 

 

121,704

 

 

 

123,153

 

Additional paid-in capital

 

 

1,156,064

 

 

 

1,137,144

 

Retained earnings

 

 

3,600,121

 

 

 

3,496,212

 

Accumulated other comprehensive loss

 

 

(453,263

)

 

 

(464,764

)

Total Jacobs stockholders’ equity

 

 

4,424,626

 

 

 

4,291,745

 

Noncontrolling interests

 

 

64,656

 

 

 

64,713

 

Total Group stockholders’ equity

 

 

4,489,282

 

 

 

4,356,458

 

 

 

$

7,420,792

 

 

$

7,785,926

 

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Backlog (in millions):

 

 

July 1, 2016

 

 

June 26, 2015

 

Backlog:

 

 

 

 

 

 

 

 

Petroleum & Chemicals

 

$

5,149.1

 

 

$

6,093.3

 

Aerospace & Technology

 

 

5,126.7

 

 

 

5,230.0

 

Buildings & Infrastructure

 

 

4,843.0

 

 

 

4,809.9

 

Industrial

 

 

3,203.9

 

 

 

2,680.1

 

Total

 

$

18,322.6

 

 

$

18,813.2

 

 

Non-U.S. GAAP Financial Measures:

The following tables reconcile the U.S. GAAP values of certain elements of the Company's results of operations to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in connection with the 2015 Restructuring. Although such adjusted amounts are non-GAAP in nature, they are presented because management believes it provides a better view of the Company’s operating results to investors to assess the Company’s performance and operating trends. Amounts are shown in thousands, except for per-share data:

U.S. GAAP Reconciliation for the third quarter fiscal 2016 and 2015:

 

 

 

Three Months Ended

 

 

 

July 1, 2016

 

 

 

U.S. GAAP

 

 

Effects of 2015

Restructuring

 

 

Without 2015

Restructuring

 

Selling, general and administrative expenses

 

$

341,893

 

 

$

(32,828

)

 

$

309,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated pre-tax earnings

 

$

102,807

 

 

$

(32,920

)

 

$

135,727

 

Tax expense

 

 

(31,870

)

 

 

7,148

 

 

 

(39,018

)

Net earnings of the Group

 

 

70,937

 

 

 

(25,772

)

 

 

96,709

 

Non-controlling interests

 

 

(1,882

)

 

 

—

 

 

 

(1,882

)

Net earnings of Jacobs

 

$

69,055

 

 

$

(25,772

)

 

$

94,827

 

Diluted earnings per share

 

$

0.57

 

 

$

(0.21

)

 

$

0.78

 

 

 

 

Three Months Ended

 

 

 

June 26, 2015

 

 

 

U.S. GAAP

 

 

Effects of 2015

Restructuring

 

 

Without 2015

Restructuring

 

Selling, general and administrative expenses

 

$

384,163

 

 

$

(43,622

)

 

$

340,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated pre-tax earnings

 

$

97,188

 

 

$

(43,622

)

 

$

140,810

 

Tax expense

 

 

120

 

 

 

13,521

 

 

 

(13,401

)

Net earnings of the Group

 

 

97,308

 

 

 

(30,101

)

 

 

127,409

 

Non-controlling interests

 

 

(6,246

)

 

 

—

 

 

 

(6,246

)

Net earnings of Jacobs

 

$

91,062

 

 

$

(30,101

)

 

$

121,163

 

Diluted earnings per share

 

$

0.73

 

 

$

(0.24

)

 

$

0.97

 

 

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