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St. Petersburg, FL - April 9, 2009... As announced on March 24, 2009 during the company's second fiscal quarter conference call, Jabil Circuit, Inc. (NYSE: JBL) has been undergoing an impairment analysis of its consolidated balance sheet goodwill. The macro-economic environment has resulted in customer demand declines and a sustained decline in the company's market capitalization below its carrying value at February 28, 2009.
As a result of this analysis, the company has determined that all goodwill was impaired except for approximately $23.3 million associated with the Aftermarket Services reporting unit.
Jabil determined that the goodwill related to the Consumer reporting unit is fully impaired and has recorded a non-cash goodwill impairment charge of approximately $82.7 million for the three months ended February 28, 2009. Further, the company has also determined that the goodwill related to the EMS reporting unit is impaired and has recorded a preliminary non-cash goodwill impairment charge of approximately $622.4 million for the three months ended February 28, 2009. The company's revenue and income guidance for its third fiscal quarter remains unchanged.
The income tax expense associated with the goodwill impairment was $111.8 million for the three months ended February 28, 2009. This includes a tax benefit of $9.0 million for the write-off of tax deductible goodwill and income tax expense of $120.8 million resulting from the recognition of a valuation allowance against the deferred tax assets that the company no longer believes are more likely than not to be realized. The recognition of the valuation allowance was primarily attributable to the same conditions that caused the goodwill impairment.
The determination of the non-cash goodwill impairment charge resulted in a reduction of reported GAAP net income and earnings per share for Jabil's fiscal 2009 second quarter. This non-cash charge does not impact the non-GAAP financial information presented in the March 24, 2009 press release.
The company has recorded the charge relating to the EMS reporting unit based on a preliminary assessment and will continue to evaluate the valuations of tangible and intangible assets and the allocation of fair value to all of the assets and liabilities other than goodwill. The company currently expects to finalize its goodwill impairment analysis relating to the EMS reporting unit during the third fiscal quarter, which ends on May 31, 2009. Any adjustments to the company's preliminary estimates as a result of completion of this evaluation are currently expected to be recorded in the company's consolidated financial statements for the third fiscal quarter ending May 31, 2009. For more detail regarding this non-cash goodwill impairment charge, please refer to the Quarterly Report on Form 10-Q that Jabil filed with the Securities and Exchange Commission yesterday.
About Jabil
Jabil is an electronic product solutions company providing comprehensive electronics design, manufacturing and product management services to global electronics and technology companies. Offering complete product supply chain management from facilities in 22 countries, Jabil provides comprehensive, individualized-focused solutions to customers in a broad range of industries. Jabil common stock is traded on the New York Stock Exchange under the symbol, "JBL". Further information is available on the company's website: jabil.com.
Investor & Media Contact:
Beth Walters
Vice President, Investor Relations & Communications
Jabil Circuit, Inc.
(727) 803-3511
beth_walters@jabil.com
This news release contains forward-looking statements, including those regarding our revenue and income guidance for the third fiscal quarter, the timely completion of our final assessment of our goodwill for impairment, the results of such final assessment and the likelihood that our deferred tax assets will be realized. The statements in this news release are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: the timing and results of our assessment of our goodwill for impairment; other factors that we may not have currently identified or quantified; and other risks, relevant factors and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2008, subsequent Reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.