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Press Release

Jacobs Reports Fiscal First Quarter Earnings

  • Innovative Solutions and Disciplined Execution Drive Strong Consistent Results
  • Double-Digit Year-Over-Year Increase in EPS and Adjusted EPS
  • Maintains Fiscal Year 2020 Profit Outlook
  • Expects Improved Free Cash Flow for the Balance of Fiscal Year 2020

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 billion1 grew 9.0% year-over-year; net revenue grew 5% pro forma1
  • 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 basis1
  • Maintaining fiscal 2020 adjusted EBITDA outlook of $1.050 billion to $1.150 billion2
  • Maintaining fiscal 2020 adjusted pro forma EPS outlook of $5.30 - $5.802
  • 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 billion2.  Given our solid financial flexibility, we have increased our remaining share repurchase authorization to $1.4 billion."

1Reflects continuing operations as reported in accordance with GAAP.

2Reconciliation 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:

 (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 Company's Transition Services Agreement (TSA) with Worley 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 the TSA during the fiscal 2020 period,

 (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.

$(58) million ($(0.43) per share)

$43 million ($0.30 per share)

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,
2019

 

December 28,
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,
2019

 

December 28,
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,
2019

 

December 28,
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
Restructuring
and Other
Charges

 

Effects of
Transaction
Costs (1)

 

Other
Adjustments
(2)

 

Adjusted

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
Restructuring
and Other
Charges

 

Effects of
Transaction
Costs (1)

 

Other
Adjustments
(2)

 

Adjusted

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

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