DALLAS, Feb. 8, 2022 /PRNewswire/ -- Jacobs Engineering
Group Inc. (NYSE: J) today announced its financial results for the
fiscal first quarter ended December 31, 2021.
Q1 2022 Highlights:
- Revenue of $3.4 billion flat
year-over-year and net revenue increased 6.4% year-over-year
- Backlog increased $2.9 billion to
$28.0 billion, up 12%
year-over-year
- Cash flow from operations of $322
million; on track to achieve FY22 cash conversion
target
- EPS from continuing operations of $1.03, down 47% year-over-year, primarily
reflecting charge of $0.41 associated
with strategic reduction in real estate footprint
- Adjusted EPS from continuing operations of $1.56, up 11% year-over-year
- Reiterates fiscal 2022 adjusted EBITDA and adjusted EPS
outlook1
Jacobs' Chair and CEO Steve
Demetriou commented, "Our purpose to create a more
connected, sustainable world has never been more relevant
than now - as advances in data analytics and edge computing
power are unlocking our ability to deploy innovative technologies
related to climate change, infrastructure and national security."
Demetriou continued, "Effectively deploying capital is another key
component to driving value for our shareholders. PA Consulting had
another outstanding quarter with 21% year-over-year revenue growth
and we are now poised for transformative growth as a disruptive
space payload provider. Yesterday's announced acquisition of
StreetLight Data adds another data-rich software platform to our
portfolio, which we expect to provide highly profitable long-term
recurring revenue growth opportunities."
Jacobs' President and CFO Kevin
Berryman added, "We delivered strong performance during the
quarter with double-digit backlog growth across all businesses as
multiple global growth trends gain momentum. Our advanced
facilities revenue grew double-digits driven by supply chain
investments across semiconductors and life sciences manufacturing,
and we expect infrastructure modernization in the U.S. to further
materialize later in 2022. As a result, we expect our overall
net revenue growth to accelerate through the balance of the year.
Cash flow from operations was again robust as our Focus 2023
initiative to drive working capital efficiencies delivered above
our expectations."
Financial Outlook1
The company continues to expect fiscal 2022 adjusted EBITDA of
$1,370 million to $1,450 million and adjusted EPS of $6.85 to $7.45.
Jacobs continues to expect adjusted EPS of approximately
$10.00 in fiscal 2025, which
incorporates anticipated benefits to People and Places Solutions
from the recently passed Infrastructure Investment and Jobs Act,
executing against a robust Critical Mission Solutions sales
pipeline, continued growth in PA Consulting, and assumes a 23.5%
effective adjusted tax rate, modest capital deployment and net
leverage of <0.5x adjusted EBITDA.
The company plans to publish a comprehensive overview of its new
three-year strategy on Friday, March 4th,
2022 after market close. The materials, including a recorded
presentation, will be available at
https://invest.jacobs.com/investors.
1
Reconciliation of the adjusted EPS outlook and adjusted EBITDA
outlook for the full fiscal 2022 year and beyond 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 2022 and beyond.
|
First Quarter Review
|
Fiscal Q1
2022
|
Fiscal Q1
2021
|
Change
|
Revenue
|
$3.4
billion
|
$3.4
billion
|
$0.0
billion
|
Net
Revenue
|
$2.9
billion
|
$2.7
billion
|
$0.2
billion
|
GAAP Net Earnings
from Continuing Operations
|
$134
million
|
$257
million
|
($123
million)
|
GAAP Earnings Per
Diluted Share (EPS) from Continuing
Operations
|
$1.03
|
$1.96
|
($0.93)
|
Adjusted Net
Earnings from Continuing Operations
|
$203
million
|
$184
million
|
$19
million
|
Adjusted EPS from
Continuing Operations
|
$1.56
|
$1.41
|
$0.15
|
The company's adjusted net earnings from continuing operations
and adjusted EPS from continuing operations for the first quarter
of fiscal 2022 and fiscal 2021 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
2022
|
Fiscal Q1
2021
|
GAAP Net Earnings
from Continuing Operations and Diluted Earnings Per Share
(EPS)
|
$134 million ($1.03
per
share)
|
$257 million ($1.96
per
share)
|
An adjustment to add
back after-tax restructuring, transaction costs and other
charges ($75.0 million and $54.0 million for the
fiscal 2022 and 2021 periods,
respectively before income taxes).
|
$59 million ($0.46
per
share)
|
$43 million
($0.33 per
share)
|
Other adjustments are
comprised mainly of:
(a) add-back of
amortization of intangible assets of $46.9 million and $23.2
million in the 2022 and 2021 periods, respectively,
(b) the removal
of $93.1 million in fair value adjustments related to our prior
investments in Worley stock and certain foreign currency
revaluations relating to
the ECR sale and in C3.ai, Inc. ("C3") of $82.6 million in the 2021
period,
(c) the
exclusion of impacts on the Company's effective tax rates
associated with
revised estimates on U.S. taxation of certain foreign earnings and
certain tax
return filing adjustments,
(d) associated
noncontrolling interest impacts for the above adjustment items
and
(e) income tax
expense adjustments for the above pre-tax adjustment
items.
|
$9 million
($0.07 per
share)
|
$(116) million
($(0.88)
per share)
|
Adjusted Net Earnings
from Continuing Operations and Adjusted EPS from
Continuing Operations
|
$203 million
($1.56 per
share)
|
$184 million
($1.41 per
share)
|
(note: earnings
per share amounts may not add due to rounding)
|
|
The Company's U.S. GAAP effective tax rate for continuing
operations is 9.4% for the fiscal first quarter 2022 and
fiscal first quarter 2022 adjusted earnings per share from
continuing operations reflects an estimated full year 21.7%
adjusted effective tax rate compared to previously communicated
adjusted effective tax rate estimate of 23%.
Jacobs is hosting a conference call at 10:00 A.M. ET on
Tuesday February 8, 2022, which it is
webcasting live at www.jacobs.com.
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 $14 billion in annual
revenue and a talent force of approximately 55,000, 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. Examples of
forward-looking statements include, but are not limited to,
statements regarding our expectations as to our future growth,
prospects, financial outlook and business strategy for fiscal 2022
or future fiscal years, including fiscal 2025 adjusted EPS
expectations, the anticipated benefits of the acquisitions of
BlackLynx and StreetLight, and statements regarding our
expectations from our strategic investment in PA Consulting.
Although such statements are based on management's current
estimates and/or 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. Such factors include our ability to execute our
tech-focused strategy, competition from existing and future
competitors in the markets in which we operate, our ability to
achieve the cost-savings and synergies contemplated by our recent
acquisitions within the expected time frames and to successfully
integrate acquired businesses while retaining key personnel, as
well as general economic conditions, the magnitude, timing,
duration and ultimate impact of the COVID-19 pandemic, including
the emergence and spread of variants of COVID-19, and any resulting
economic downturn on our results, prospects and opportunities,
measures or restrictions imposed by governments and health
officials in response to the pandemic, and the timing of the award
of projects and funding under the Infrastructure Investment and
Jobs Act signed into law by President Biden on November 15, 2021. The impact of such matters
includes, but is not limited to, the possible reduction in demand
for certain of our product solutions and services and the delay or
abandonment of ongoing or anticipated projects due to the financial
condition of our clients and suppliers or to governmental budget
constraints or changes to governmental budgetary priorities; the
inability of our clients to meet their payment obligations in a
timely manner or at all; potential issues and risks related to a
significant portion of our employees working remotely; illness,
travel restrictions and other workforce disruptions that have and
could continue to negatively affect our supply chain and our
ability to timely and satisfactorily complete our clients'
projects; difficulties associated with retaining key employees or
hiring additional employees; and the inability of governments in
certain of the countries in which we operate to effectively
mitigate the financial or other impacts of the COVID-19 pandemic on
their economies and workforces and our operations therein. The
foregoing factors and potential future developments are inherently
uncertain, unpredictable and, in many cases, beyond our control.
For a description of these and additional factors that may occur
that could cause actual results to differ from our forward-looking
statements, see 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 in our most recently filed Annual Report
on Form 10-K, and 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, in our most recently filed
Quarterly Report on Form 10-Q, 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 31,
2021
|
|
January 1,
2021
|
Revenues
|
$
3,380,625
|
|
$
3,381,836
|
Direct cost of
contracts
|
(2,584,151)
|
|
(2,749,776)
|
Gross
profit
|
796,474
|
|
632,060
|
Selling, general and
administrative expenses
|
(619,141)
|
|
(418,120)
|
Operating
Profit
|
177,333
|
|
213,940
|
Other Income
(Expense):
|
|
|
|
Interest
income
|
1,501
|
|
1,124
|
Interest
expense
|
(19,426)
|
|
(17,313)
|
Miscellaneous income,
net
|
9,682
|
|
156,360
|
Total other (expense)
income, net
|
(8,243)
|
|
140,171
|
Earnings from
Continuing Operations Before Taxes
|
169,090
|
|
354,111
|
Income Tax Expense
from Continuing Operations
|
(15,889)
|
|
(87,023)
|
Net Earnings of the
Group from Continuing Operations
|
153,201
|
|
267,088
|
Net Earnings of the
Group from Discontinued Operations
|
(232)
|
|
(14)
|
Net Earnings of the
Group
|
152,969
|
|
267,074
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(9,252)
|
|
(10,026)
|
Net Earnings
Attributable to Redeemable Noncontrolling interests
|
(9,683)
|
|
—
|
Net Earnings
Attributable to Jacobs from Continuing Operations
|
134,266
|
|
257,062
|
Net Earnings
Attributable to Jacobs
|
$
134,034
|
|
$
257,048
|
Net Earnings Per
Share:
|
|
|
|
Basic Net Earnings
from Continuing Operations Per Share
|
$
1.04
|
|
$
1.98
|
Basic Net Earnings
from Discontinued Operations Per Share
|
$
—
|
|
$
—
|
Basic Earnings Per
Share
|
$
1.04
|
|
$
1.98
|
|
|
|
|
Diluted Net Earnings
from Continuing Operations Per Share
|
$
1.03
|
|
$
1.96
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
—
|
|
$
—
|
Diluted Earnings Per
Share
|
$
1.03
|
|
$
1.96
|
|
|
|
|
Segment
Information (in thousands):
|
|
|
Three Months
Ended
|
Unaudited
|
December 31,
2021
|
|
January 1,
2021
|
Revenues from
External Customers:
|
|
|
|
Critical Mission
Solutions
|
$
1,162,505
|
|
$
1,295,287
|
People & Places
Solutions
|
1,928,146
|
|
2,086,549
|
Pass Through
Revenue
|
(472,380)
|
|
(648,677)
|
People & Places
Solutions Net Revenue
|
$
1,455,766
|
|
$
1,437,872
|
PA
Consulting
|
289,974
|
|
—
|
Total
Revenue
|
$
3,380,625
|
|
$
3,381,836
|
Net Revenue
|
$
2,908,245
|
|
$
2,733,159
|
|
|
|
Three Months
Ended
|
|
December 31,
2021
|
|
January 1,
2021
|
Segment Operating
Profit:
|
|
|
|
Critical Mission
Solutions
|
$
111,496
|
|
$
110,072
|
People & Places
Solutions
|
191,692
|
|
196,300
|
PA
Consulting
|
63,071
|
|
—
|
Total Segment
Operating Profit
|
366,259
|
|
306,372
|
Other Corporate
Expenses (1)
|
(105,360)
|
|
(70,341)
|
Restructuring,
Transaction and Other Charges (2)
|
(83,566)
|
|
(22,091)
|
Total U.S. GAAP
Operating Profit
|
177,333
|
|
213,940
|
Total Other (Expense)
Income, net (3)
|
(8,243)
|
|
140,171
|
Earnings from
Continuing Operations Before Taxes
|
$
169,090
|
|
$
354,111
|
|
|
(1)
|
Other corporate
expenses also include intangibles amortization of $46.9 million and
$23.2 million for the three months ended December 31, 2021 and
January 1, 2021, respectively, with this increase mainly
attributable to the PA Consulting investment.
|
(2)
|
Included in the three
months ended December 31, 2021 is $72.3 million of real
estate impairment charges related to the Company's transformation
initiatives.
|
(3)
|
The three months
ended December 31, 2021 include $1.7 million in income associated
with final distributions from the exit of our AWE investment and a
gain of $6.9 million related to a lease termination. The three
months ended January 1, 2021 include $93.1 million in fair
value adjustments related to our investment in Worley stock (net of
Worley stock dividend) and certain foreign currency revaluations
relating to the ECR sale, $82.6 million in fair value adjustments
related to our investment in C3 stock and $(27.9) million related
to impairment charges on our AWE Management Ltd. investment. The
investments in Worley and C3 were sold in fiscal 2021 and therefore
there are no comparable amounts in the current quarter.
|
Balance Sheet
(in thousands):
|
|
|
December 31,
2021
|
|
October 1,
2021
|
|
Unaudited
|
|
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,245,024
|
|
$
1,014,249
|
Receivables and
contract assets
|
2,992,814
|
|
3,101,418
|
Prepaid expenses and
other
|
134,165
|
|
176,228
|
Total current
assets
|
4,372,003
|
|
4,291,895
|
Property, Equipment
and Improvements, net
|
328,631
|
|
353,117
|
Other Noncurrent
Assets:
|
|
|
|
Goodwill
|
7,350,494
|
|
7,197,000
|
Intangibles,
net
|
1,618,913
|
|
1,565,758
|
Deferred income tax
assets
|
102,416
|
|
103,193
|
Operating lease
right-of-use assets
|
563,124
|
|
650,097
|
Miscellaneous
|
468,513
|
|
471,549
|
Total other noncurrent
assets
|
10,103,460
|
|
9,987,597
|
|
$
14,804,094
|
|
$
14,632,609
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Short-term
debt
|
$
53,400
|
|
$
53,456
|
Accounts
payable
|
816,815
|
|
908,441
|
Accrued
liabilities
|
1,486,618
|
|
1,533,559
|
Operating lease
liability
|
162,949
|
|
172,414
|
Contract
liabilities
|
605,801
|
|
542,054
|
Total current
liabilities
|
3,125,583
|
|
3,209,924
|
Long-term
Debt
|
3,073,067
|
|
2,839,933
|
Liabilities relating
to defined benefit pension and retirement plans
|
404,421
|
|
418,080
|
Deferred income tax
liabilities
|
211,900
|
|
214,380
|
Long-term operating
lease liability
|
706,288
|
|
758,358
|
Other deferred
liabilities
|
545,226
|
|
559,375
|
Commitments and
Contingencies
|
|
|
|
Redeemable
Noncontrolling interests
|
637,664
|
|
657,722
|
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
-
129,153,184 shares and 128,892,540 shares as of December 31,
2021 and October 1,
2021, respectively
|
129,153
|
|
128,893
|
Additional paid-in
capital
|
2,641,059
|
|
2,590,012
|
Retained
earnings
|
4,087,390
|
|
4,015,578
|
Accumulated other
comprehensive loss
|
(787,656)
|
|
(794,442)
|
Total Jacobs
stockholders' equity
|
6,069,946
|
|
5,940,041
|
Noncontrolling
interests
|
29,999
|
|
34,796
|
Total Group
stockholders' equity
|
6,099,945
|
|
5,974,837
|
|
$
14,804,094
|
|
$
14,632,609
|
Statement of
Cash Flow (in thousands):
|
|
|
For the Three
Months Ended
|
Unaudited
|
December 31,
2021
|
|
January 1,
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
Net earnings
attributable to the Group
|
$
152,969
|
|
$
267,074
|
Adjustments to
reconcile net earnings to net cash flows provided by
operations:
|
|
|
|
Depreciation and
amortization:
|
|
|
|
Property, equipment
and improvements
|
26,237
|
|
22,989
|
Intangible
assets
|
46,907
|
|
23,155
|
Gain on investment in
equity securities
|
—
|
|
(190,368)
|
Stock based
compensation
|
7,014
|
|
11,841
|
Equity in earnings of
operating ventures, net of return on capital
distributions
|
12,749
|
|
1,159
|
Loss (gain) on
disposals of assets, net
|
151
|
|
(134)
|
Impairment of
long-lived assets and equity method investment
|
72,266
|
|
27,902
|
Deferred income
taxes
|
(17,659)
|
|
53,008
|
Changes in assets and
liabilities, excluding the effects of businesses
acquired:
|
|
|
|
Receivables and
contract assets, net of contract liabilities
|
163,535
|
|
33,250
|
Prepaid expenses and
other current assets
|
32,286
|
|
25,144
|
Miscellaneous other
assets
|
24,618
|
|
16,564
|
Accounts
payable
|
(88,470)
|
|
(63,985)
|
Accrued
liabilities
|
(91,263)
|
|
(131,576)
|
Other deferred
liabilities
|
(18,407)
|
|
16,491
|
Other, net
|
(1,288)
|
|
104
|
Net cash provided by operating activities
|
321,645
|
|
112,618
|
Cash Flows from
Investing Activities:
|
|
|
|
Additions to property
and equipment
|
(19,318)
|
|
(16,766)
|
Disposals of property
and equipment and other assets
|
43
|
|
—
|
Capital contributions
to equity investees, net of return of capital
distributions
|
(480)
|
|
(3,430)
|
Acquisitions of
businesses, net of cash acquired
|
(229,813)
|
|
(173,012)
|
Net cash used for investing activities
|
(249,568)
|
|
(193,208)
|
Cash Flows from
Financing Activities:
|
|
|
|
Net proceeds from
borrowings
|
231,387
|
|
94,998
|
Proceeds from
issuances of common stock
|
17,862
|
|
9,541
|
Common stock
repurchases
|
—
|
|
(24,801)
|
Taxes paid on vested
restricted stock
|
(28,226)
|
|
(25,335)
|
Cash dividends,
including to noncontrolling interests
|
(41,565)
|
|
(35,718)
|
Repurchase of
redeemable noncontrolling interests
|
(35,095)
|
|
—
|
Net cash provided by financing activities
|
144,363
|
|
18,685
|
Effect of Exchange Rate
Changes
|
2,722
|
|
36,493
|
Net Increase (Decrease)
in Cash and Cash Equivalents and Restricted Cash
|
219,162
|
|
(25,412)
|
Cash and Cash
Equivalents, including Restricted Cash, at the Beginning of the
Period
|
1,026,575
|
|
862,424
|
Cash and Cash
Equivalents, including Restricted Cash, at the End of the
Period
|
$
1,245,737
|
|
$
837,012
|
Backlog (in
millions):
|
|
|
December 31,
2021
|
|
January 1,
2021
|
Critical Mission
Solutions
|
$
10,798
|
|
$
9,683
|
People & Places
Solutions
|
16,932
|
|
15,422
|
PA
Consulting
|
276
|
|
—
|
Total
|
$
28,006
|
|
$
25,105
|
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, adjusted EPS from continuing operations, adjusted
EBITDA outlook, adjusted EPS outlook and adjusted effective tax
rate.
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 and adjusted EPS from continuing operations
are calculated by (i) excluding costs and other charges associated
with restructuring activities implemented in connection with the
acquisitions of CH2M, John Wood Group nuclear business, BlackLynx,
Buffalo Group and StreetLight Data, the strategic investment in PA
Consulting, the sale of the ECR business and other related cost
reduction initiatives, which included involuntary terminations,
costs associated with co-locating offices of acquired companies,
separating physical locations of ECR and continuing operations,
professional services and personnel costs, expenses relating to
certain commitments and contingencies relating to discontinued
operations of the CH2M business; (ii) excluding the costs and other
charges associated with our Focus 2023 transformation initiatives,
which included costs and charges associated with the re-scaling and
repurposing of physical office space, voluntary employee
separations, contractual termination fees and related expenses (the
amounts referred in (i) and (ii) are collectively referred to as
the "Restructuring and other charges"); (iii) excluding transaction
costs and other charges incurred in connection with closing of
Buffalo Group, BlackLynx and StreetLight Data acquisitions and the
strategic investment in PA Consulting, including advisor fees,
change in control payments, certain consideration amounts for PA
Consulting that were required to be treated as post-completion
compensation expense given retention related requirements
applicable to the distribution of such funds to PA Consulting
employees, and impacts resulting from the non-cash purchase
accounting adjustment related to the investment in PA Consulting to
reflect a change in the preliminary purchase price allocation for
the redeemable non-controlling interests, the impact of the
quarterly adjustment to the estimated future payout of contingent
consideration to the sellers in connection with acquisitions, and
similar transaction costs and expenses (collectively referred to as
"transaction costs"); (iv) adding back amortization of intangible
assets; (v) the removal of fair value adjustments and dividend
income related to the Company's investments in Worley and C3 stock
and certain foreign currency revaluations relating to ECR sale
proceeds; (vi) excluding charges resulting from the revaluation of
certain deferred tax assets/liabilities in connection tax rate
increases in the United Kingdom
during fiscal 2021; (vii) charges associated with the impairment of
our investment in AWE; (viii) charges to interest expense
associated with one-time deal related bank fees; (ix) certain
non-routine income tax adjustments for the purposes of calculating
the Company's annual non-GAAP effective tax rate to facilitate a
more meaningful evaluation of the Company's current operating
performance and comparisons to the Company's operating performance
in other periods and (x) other income tax adjustments associated
with the pre-tax income adjustments above. Adjustments to derive
adjusted EPS from continuing operations are calculated on an
after-tax basis.
Adjusted EBITDA is calculated by adding income tax expense,
depreciation expense and adjusted interest expense, and deducting
interest income from adjusted net earnings from continuing
operations.
We believe that the measures listed above 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 and below, 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.
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 net earnings and EPS from continuing operations to the
corresponding "adjusted" amount, revenue from continuing operations
to net revenue. 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 fiscal 2022 and beyond and fiscal 2022 net
revenue growth 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. See footnote 1 on page 3 for
additional information.
U.S. GAAP
Reconciliation for the first quarter of fiscal 2022 and
2021
|
|
|
Three Months
Ended
|
|
December 31,
2021
|
Unaudited
|
U.S.
GAAP
|
|
Effects of
Restructuring,
Transaction
and Other
Charges (1)
|
|
Other
Adjustments
(2)
|
|
Adjusted
|
Revenues
|
$
3,380,625
|
|
$
—
|
|
$
—
|
|
$
3,380,625
|
Pass through
revenue
|
—
|
|
—
|
|
(472,380)
|
|
(472,380)
|
Net
revenue
|
3,380,625
|
|
—
|
|
(472,380)
|
|
2,908,245
|
Direct cost of
contracts
|
(2,584,151)
|
|
3
|
|
472,380
|
|
(2,111,768)
|
Gross
profit
|
796,474
|
|
3
|
|
—
|
|
796,477
|
Selling, general and
administrative expenses
|
(619,141)
|
|
83,563
|
|
46,907
|
|
(488,671)
|
Operating
Profit
|
177,333
|
|
83,566
|
|
46,907
|
|
307,806
|
Total other (expense)
income, net
|
(8,243)
|
|
(8,544)
|
|
5
|
|
(16,782)
|
Earnings from
Continuing Operations Before Taxes
|
169,090
|
|
75,022
|
|
46,912
|
|
291,024
|
Income Tax Expense
from Continuing Operations
|
(15,889)
|
|
(15,676)
|
|
(31,587)
|
|
(63,152)
|
Net Earnings of the
Group from Continuing Operations
|
153,201
|
|
59,346
|
|
15,325
|
|
227,872
|
Net Earnings
Attributable to Noncontrolling Interests from
Continuing Operations
|
(9,252)
|
|
—
|
|
—
|
|
(9,252)
|
Net Earnings
Attributable to Redeemable Noncontrolling
interests
|
(9,683)
|
|
8
|
|
(5,890)
|
|
(15,565)
|
Net Earnings
Attributable to Jacobs from Continuing
Operations
|
134,266
|
|
59,354
|
|
9,435
|
|
203,055
|
Net Earnings
Attributable to Discontinued Operations
|
(232)
|
|
—
|
|
—
|
|
(232)
|
Net Earnings
attributable to Jacobs
|
$
134,034
|
|
$
59,354
|
|
$
9,435
|
|
$
202,823
|
Net earnings from
continuing operations
allocated to common stock for EPS calculation
|
$
134,266
|
|
$
59,354
|
|
$
9,435
|
|
$
203,055
|
Diluted Net Earnings
from Continuing Operations Per Share
|
$
1.03
|
|
$
0.46
|
|
$
0.07
|
|
$
1.56
|
Diluted Net Earnings
from Discontinued Operations Per
Share
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
Diluted Earnings Per
Share
|
$
1.03
|
|
$
0.46
|
|
$
0.07
|
|
$
1.56
|
Operating profit
margin
|
5.2 %
|
|
|
|
|
|
10.6
%
|
|
(1) Includes charges
associated with various restructuring, transaction and other
related activity costs associated with Company transformation and
acquisition related programs, including pre-tax charges for the
Company's real estate impairment of$72.3 million.
|
(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 $472.4 million, (b)
the removal of amortization of intangible assets of $46.9 million,
(c) the exclusion of impacts on the Company's effective tax rates
associated with revised estimates on US taxation of certain foreign
earning and, certain tax return filing adjustments, (d) associated
noncontrolling interest impacts for the above adjustment items and
(e) income tax expense adjustments for the above pre-tax adjustment
items.
|
|
Three Months
Ended
|
|
January 1,
2021
|
Unaudited
|
U.S.
GAAP
|
|
Effects of
Restructuring,
Transaction
and Other
Charges (1)
|
|
Other
Adjustments (2)
|
|
Adjusted
|
Revenues
|
$
3,381,836
|
|
$
—
|
|
$
—
|
|
$
3,381,836
|
Pass through
revenue
|
—
|
|
—
|
|
(648,677)
|
|
(648,677)
|
Net
revenue
|
3,381,836
|
|
—
|
|
(648,677)
|
|
2,733,159
|
Direct cost of
contracts
|
(2,749,776)
|
|
92
|
|
648,677
|
|
(2,101,007)
|
Gross
profit
|
632,060
|
|
92
|
|
—
|
|
632,152
|
Selling, general and
administrative expenses
|
(418,120)
|
|
21,999
|
|
23,129
|
|
(372,992)
|
Operating
Profit
|
213,940
|
|
22,091
|
|
23,129
|
|
259,160
|
Total other income
(expense), net
|
140,171
|
|
31,902
|
|
(176,017)
|
|
(3,944)
|
Earnings from
Continuing Operations Before Taxes
|
354,111
|
|
53,993
|
|
(152,888)
|
|
255,216
|
Income Tax Expense
from Continuing Operations
|
(87,023)
|
|
(11,095)
|
|
37,377
|
|
(60,741)
|
Net Earnings of the
Group from Continuing Operations
|
267,088
|
|
42,898
|
|
(115,511)
|
|
194,475
|
Net Earnings
Attributable to Noncontrolling Interests from
Continuing Operations
|
(10,026)
|
|
—
|
|
—
|
|
(10,026)
|
Net Earnings from
Continuing Operations attributable to
Jacobs
|
257,062
|
|
42,898
|
|
(115,511)
|
|
184,449
|
Net Earnings
Attributable to Discontinued Operations
|
(14)
|
|
—
|
|
—
|
|
(14)
|
Net Earnings
attributable to Jacobs
|
$
257,048
|
|
$
42,898
|
|
$
(115,511)
|
|
$
184,435
|
Diluted Net Earnings
from Continuing Operations Per Share
|
$
1.96
|
|
$
0.33
|
|
$
(0.88)
|
|
$
1.41
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
Diluted Earnings Per
Share
|
$
1.96
|
|
$
0.33
|
|
$
(0.88)
|
|
$
1.41
|
Operating profit
margin
|
6.3 %
|
|
|
|
|
|
9.5 %
|
|
(1) Includes charges
associated with various restructuring, transaction and other
related activity costs associated with Company transformation and
acquisition related programs. Also includes $27.9 million in
charges associated with the impairment of our investment in
AWE.
|
(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 $648.7 million, (b)
the removal of amortization of intangible assets of $23.2 million,
(c) the removal of $93.1 million in fair value adjustments related
to our investment in Worley stock and certain foreign currency
revaluations relating to the ECR sale, (d) the removal of the fair
value adjustment of the Company's investment in C3 of $82.6 million
and (e) income tax expense adjustments for the above pre-tax
adjustment items.
|
Earnings Per
Share:
|
|
|
Three Months
Ended
|
Unaudited
|
December
31, 2021
|
|
January 1,
2021
|
Numerator for
Basic and Diluted EPS:
|
|
|
|
|
|
|
|
Net earnings from
continuing operations allocated to common stock for EPS
calculation
|
$
134,266
|
|
$
257,062
|
|
|
|
|
Net earnings from
discontinued operations allocated to common stock for EPS
calculation
|
$
(232)
|
|
$
(14)
|
|
|
|
|
Net earnings
allocated to common stock for EPS calculation
|
$
134,034
|
|
$
257,048
|
|
|
|
|
Denominator for
Basic and Diluted EPS:
|
|
|
|
|
|
|
|
Shares used for
calculating basic EPS attributable to common stock
|
129,342
|
|
129,968
|
|
|
|
|
Effect of dilutive
securities:
|
|
|
|
Stock compensation
plans
|
952
|
|
1,182
|
Shares used for
calculating diluted EPS attributable to common stock
|
130,294
|
|
131,150
|
|
|
|
|
Net Earnings Per
Share:
|
|
|
|
Basic Net Earnings
from Continuing Operations Per Share
|
$
1.04
|
|
$
1.98
|
Basic Net Earnings
from Discontinued Operations Per Share
|
$
—
|
|
$
—
|
Basic Earnings Per
Share
|
$
1.04
|
|
$
1.98
|
Diluted Net Earnings
from Continuing Operations Per Share
|
$
1.03
|
|
$
1.96
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
—
|
|
$
—
|
Diluted Earnings
Per Share
|
$
1.03
|
|
$
1.96
|
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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SOURCE Jacobs