JBL - Earnings call transcript Q2 2020

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Operator

Greetings, and welcome to the Jabil Second Quarter 2020 Financial Results Conference Call and Webcast. At this time all participants are in a listen-only mode, a question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Adam Berry, Vice President Investor Relations for Jabil. Please go ahead, sir.

Adam Berry

to Quarter welcome Earnings Fiscal and Call. morning, Jabil's of Second XXXX Good

today's Executive are and me call Joining on Chief Officer, Dastoor. Chief Mike Officer, Financial Mondello; Mark

on during is Please today's follow you along and be being will our discussion To prepared the the webcast and to Jabil's referencing note slides. remarks, will today's call, of At the be end call call website. logged live, view that in Relations the with the need will Investor to a presentation our be of webcast we available on and jabil.com. slides, replay both

call, and be for other our today's that outcomes actual uncertainties and on to forward-looking outlook things, statements These including, forecasts are based could materially. cause During among we results may business. current and the risks those differ involving regarding expectations, using assumptions

An in of obligation filings. report fiscal or identified any and XX, statements, and our our forward-looking events to revise uncertainties Form XXXX, result forward-looking year XX-K extensive are annual these a or intention or in information, the disclaims any future as new for August otherwise. on and list of update risks ended Jabil whether statements other

discuss for take I'd agenda begin, before minutes Now today's objective we a few and call. to like to the

As outbreak that guidance we announced we would on quarter a COVID-XX relative reminder, December to the had XXXX. February that negatively XX, second the XX, XXXX, on results impact our provided

caused costs fact, with by results all of quarter $XX in second below initial supply direct our were, by forewarned, impact and disruptive chain labor, expectations, associated as approximately COVID-XX. range our And million the in supplies inefficiencies, of driven

deceleration while a through the our customary, events sequence earnings of the detailing As also end material towards that quarter. intra-quarter resulted the will second quarter of walk results, in in Mike

manufacturing our determined. to our yet overall of the impact is continues each demand business be COVID-XX capacity and on improve day, strong, still remains Although to

ways. two quarterly our call format Consequently, distinct to standard from deviate going we're in

a in position each quarter or in markets XXXX outlooks not currently guidance XXXX to third fiscal usual. fiscal we're First, end for or as our provide of

comments, Q&A following questions. into directly prepared an Mike's to Second, address we effort move your efficiently will in

do, our normal in to future. call the to however, We cadence expect resume of

we our throughout global XX, on expressed pandemic of safety shareholders action February it's and has too. the can best believe thank when in everyone room energy. press this makes take our a of into Jabil release who people. all the of It first interest behalf priority on care typical speak in people, this been I our Mark As sense to jumped of those simply in of our I with

to work results The now hand team's to our Mike. in today. swift the response to quarter and a be With position that, report us over hard I'll allowed call second

Mike Dastoor

us for Adam. today. Thank morning, joining Thanks, everyone. you Good

outbreak. QX negatively our stated, Adam COVID-XX As the impacted results by were

Before I results, dynamics QX the to that a unfolded I'd walk cover through the take our like you moment during quarter. to

QX a began fiscal to the start We quarter. stronger-than-anticipated with

incurred was COVID-XX with approximately virus in February, into costs diminished ramped in we during the containment but demand outbreak. ability China. efforts moved $XX greatly demand associated we meet to As as the quarter, our held, million direct

I'd provide of to the costs. with now makeup like these you

labor QX. incurred in we costs First, additional

These decision costs made into to factors our During are employees the we compensate and restricted going to the quarter. strategically expected who February, we quarantined. than labor higher contributed

being Year restrictions. and impacted the in costs labor to further February Second, to Chinese disruptions the our to add XX factory utilization, February by were utilization in by later only capacity. the approximately at XX, days utilization depending to in We holiday To we and due Most our than XX XX% context to China February New travel began on was extended at come negatively lower with exited anticipated. in online location. XX% And operating sites XX% quarter began of China larger China. higher back

the our and protection items, keep upstream both base finally, which thermometers procure necessary footprint. masks, and during our supplies supply downstream unanticipated incurred in we such people And incurred to chain healthy, impacted Third, hand and we to disruptions, employee with keep as sanitizers, also worldwide safe our costs associated revenue an lost quarter, equipment. face effort to safe, personal

environment. I have would our would we circumstances, Under February adjusted highlight the like demand that our as anomaly. been to was costs diminished, lower would if have costs normal materially to an variable demand

Core to the interest now $X.XX. was $XX revenue million. operating the GAAP quarter $XXX per income the during for income diluted share expense our $X.X Turning loss Net billion. was second our during quarter million, GAAP was results. QX Net quarter operating $XX was financial and million. was

quarter XX.X%, was core the with rate for expectations. in-line Our tax

$X.XX. Core associated that worth share by costs noting impacted were earnings per the diluted earnings outbreak the negatively per our $X.XX. with It's approximately additional diluted share

GAAP to results. our moving Now

restructuring year. an incurred last of remain the As half to announced we with continues in a plan savings of cost expected, expected XXXX and charges September incremental $XX in restructuring This and associated of second in million the severance-related mainly QX, in on result million, to track benefit we FYXX. predominantly is as in reminder, plan $XX

the Also of in charge the segment. during networking a incurred impairment onetime the connection quarter, of an approximately we million with optical $XX sale in non-cash investment

good and results. From Revenue we was expected. cap saw $X.X semi end-market to EMS segment $X.X additional was came end-market largely in in for Revenue an the an end of in our strength mobility From segment billion. our the perspective, the second billion. business while we segment demand turning balance markets. the space, health as our for Now in demand experienced perspective, quarter DMS care

balance Turning to sheet. and flows cash our now

lower driven to total an by mainly came during of days, sales. by quarter, increase chain offset February XX end our by sequentially, days lower quarter at constraints days at inventory days mainly the sales XX of capacity the supply the of COVID-XX. QX, levels and inventory idle in During Higher slightly outstanding were driven of due

Jabil $XXX the credit quarter million the exited provided over facilities in these over Cash $XXX of operations with net XX% expenditures were totaled debt $X total end at We QX, of billion approximately has a level of cash balances capital core global EBITDA facilities, of revolver million. flows by $XX and to million. and were of and X.Xx available. QX,

shares priority employees. $XX in our During X.X repurchased our part closing, million million as announced as we two approximately In for well-being million No.X September. we and of QX, year, health always, $XXX Jabil's of is the authorization

to to business in We disruption our challenging best prevent responsibility We very and as are global take also the These teams possible spread significant on very measures seriously. minimize corporate providing environment. service focused to our this a COVID-XX customers. values take of motivate our citizen the

call Adam. the turn now I'll over to

Adam Berry

Thanks, Mike.

address begin customer remind your session, agreements, or appreciate participants that Operator, questions. We our we now per product-specific I'd Q&A As the customer will we're ready Q&A. like not our we cooperation. to for any call

Operator

is from Our Citigroup. coming first today from Instructions] question Jim Suva [Operator

is line live. now Your

Jim Suva

probably can maybe has much. since us or stand was And very the kind believe now? heard as a gave a If now? follow-up? the of you as then update and been you on quarter Because you, I'll you And have rates. exited Thank I couple some I you of say ended, quarter utilization you correctly, you it's weeks stand where XX% – did

Mark Mondello

quarantine factories go if between mid-February, to that to back in stepping with Chinese immediately various our and as probably to we're were protocols, after coming Year, New back China people running we – XX% Hey factories maybe our Jim, back XX%.

through indexed we And think to in said moved prepared closer XX%. we to mid-February, exited I XX% month, we remarks XX%. it As were Mike to as his the

where our that factories China I in some here sit near a to and chain X% perspective, factories mid-March, say, suboptimal suboptimal. we of are by only supply normal, due But issues. have we As the are Most is around would XX%. globe from actually to utilization pockets

sit of as some think least we odd is demand of again, to forward our global accommodate overall we parts. of we're in utilization, able China we of today, can But long get as In factory the way, all terms that's in as the as look front us concerns. I

Jim Suva

it's concern, is efforts to the is focused Perfect. is the question great that exactly the China that And follow-up then kind now of, eye an recovering keeping led on kind my efforts hey, of was, now sounds case be to, next on, and watching alluded locations other the and outside of, it kind you, your but guess, working I would you're thoughts that on that in any thing like yes, it on? spreads,

Mark Mondello

Yes, that’s fair.

this idle inefficiencies, but China in China. The If had constraints and you shortages, we've labor due big largely we our earnings now. what mostly to running. that was $XX is Mike but globally, labor again, – hit just footprint not of largely That's China quarantine again, million QX were infrastructure costs, think by factory out we chain inefficiencies picture, pockets behind had inefficiencies inefficiencies shortages. some got – of kind and said, us around labor, incremental factory so in much labor in core about broken Factory for onetime supply up largely, to costs,

notably our shared actionable is things So is our in interesting and competitors. pandemic this ready what And our relatively of at North significant worse presence playbook terms is in China. with really this, openly and in our in in and get experiences actions experience end short dealing And of Jim, of garnered approach, if with Europe. and very team we've because customers the in order, front else America COVID-XX our

Jim Suva

important. that to your the people first Thank for taking you foremost, I much much. most for are And you Thank so so concur and your details. actions care you're

Mark Mondello

Yes. Thanks, Jim.

Operator

you. Thank

Adam Our next from coming is Tindle from question James. Raymond

Your line live. now is

Adam Tindle

side it supply Okay, obviously, the sounds capacity morning. better. is thanks. and Good like, Mark, incrementally

I wanted to So demand. on touch just

that back so that, hoping be the done job was heart how about you cuts we potential for coming, just a there orders do think would you the think leverage, negative if in of I I question up. deleverage? good no update you've mentioned in release, to how investor But for potential getting change mitigate that had order with given product the have an February utilization fear was being on

Mark Mondello

and If on One Adam. cost talk about, of let me the take answer Adam. of, Thanks, could, I my might if side. sides I both kind liberty, equation, is the the Yes. expand

what February about, response the month. So not was $XX during for million again, and made million. Mike a my kind Jim up in to $XX full The talked of,

that were be February month. $XX run rate million, million if of, our the per kind core for extrapolate to, about So I continues $XX a on if to million against line $XX monthly

side, we cost better, remain has getting much With February. the Adam, work we relative in costs again, extent, on declined done and team a all to interruption what they and have China in see our think lesser experienced China, we business will the

Europe see we North and to think a is we for potential As get America North America the and bit Europe, worse.

of dislocation and all kind place see taking the whatnot. social You

side of, you will, blended it's weighted if of, landscape, done basis. is on kind So what a average, the but, opaque a we've cost kind foggy, really on average

million $XX And it'll disruption $XX about the on costs for across we million April, of interruption to same. our business For the March, much footprint. of month we're planning and think be

itself, Coming budgeting internally and to of think your in the of of for difficult. can specific I April. back how demand demand what we've demand I question, costs this But We're more gets going tell in about March. further for we're you if about haircut to in terms terms actions, talking and business and haircut

what April, related then And virus. dependent fear the control and and directly the to – say is I would is virus beyond really of containment then it's also the the on the

macro day, the are So this the changing as actions the everyone day backdrop, by has associated are landscape hourly. week, compounding then and seen

XX for the head business of, how about next inside days. So on our what's kind we're that's, to the XX thinking

Adam Tindle

And in to the expenses or just $X.XX million was Okay. $XX virus non-GAAP clarify, excluded EPS? of related of so that

Mike Dastoor

it’s would $X.XX. been it, Adam. EPS $X.XX, If hadn't our included included the in have No, we

Adam Tindle

have would been pretty quarter. nice It a Yes. Yes.

a in new it XXXX think change Mike, weighting? going of very around I maybe also allocation, and you follow-up, new cash million fiscal buybacks Does for sense on we're update million us price any Okay. And a that? year Do Do think then can flow $XXX still make in share you and to forecast? range? the $XXX previously the feel as obviously, you given, maybe in have given that to fiscal XXXX. just $XXX-plus you capital were do million

Mike Dastoor

We're I’ll So continuing second to and monitor question about the first. capital allocation thoughtful our answer policy. be

extremely the is price cash is While share right absurdly important, cheap now.

we'll keep So of we're course. balance that, and mind, trying in cash to

think your standpoint, question, first cash For I a good. pretty we're from

a million in – and bank billion had lot of facility a we I converted bank January. debt. think debt I $XXX long-term think $X credit our We short-term had great transaction into we senior note, facilities, of we've a

that So the very outbreak It was is before as timing the well opportunistic. started. lucky it well COVID-XX happened

It's we're customers, the going $XXX flow, Right of Adam. probably range. now, about any cash point $XXX million just distancing good to going our to not be will about seeing We it free range? demand, and while extent it But Right And about think yes, the cash don't as million million forward. at at I flow. the feel impact change Mark talked stands, an time. is really our in all huge it $XXX in in that this know cuts from could have social magnitude time. that We the now,

Adam Tindle

you Thank very much. Understandable.

Operator

you. Thank

next coming is Paul from question from today Coster JPMorgan. Our

now Your line live. is

Paul Chung

guys. Hey, Coster. Chung our It’s taking Paul for question. for on Thanks

just these a customer Or those these, faster haircuts out? more out if pushed the of So kind kind being couple product canceled? kind are of, months demand of if Are products? being of cycle follow-up could you any and products And maybe baking on of confirm on in? you're are a

Mark Mondello

I for starting tell. I of a little the April. March, kind in just – haircut to early to really It's us think think bit, prudent it's business too

no it. business, tried there's exact fine type an science impossible. even So scalpel it's what if there's And of take out to not been some – sectors, and what to figure we

commentary we the heads say again, is – my absolutely to nothing or the leadership bring was demand to we my are So kind can murky. of really of team, commentary things in try around very can and around

again, planning actions bit. we're a We And for internal and soften are cost accordingly. to demand running

Paul Chung

you And avoiding you Got Europe margins any customer there to customers America's does longer of, discussions, kind sensitive so? kind you. for kind do And more now potential how to then that, of with tariffs? areas trends or then Are motivated new seeing preference intentions your of on more more are of or impact term? production seeing operating

Mark Mondello

capacity moving the call first either We holds. September bringing – million kind like of minimal has are of impact tell footprint. don't and all $XX of know, of finite margins, terms What of very impacts I and would global those around. up call, don't year, this Vietnam, in I $XX business you our this talked the the in places how to because much it I at terms of I of Mexico. long-term our is costs we in think million additional December experiencing, or terms think still Penang are an all we That half in

Europe, North based on in America customers want being really, Asia, be Southeast good served whether U.S. So and to then really in China, position Mexico, footprint. we're our

footprint our today, think well I optimized. is

Paul Chung

then my question. last And Great.

benefits business, the about the pricing So We some is environment. If of if focusing talk margin turning that floor that could more you of would, of for Flex scale, a be the could of Flex Thanks. of, besides how like kind know just one. kind kind about on kind and dynamics for lower business? on kind there new alternative the Is the Jabil away higher-margin What that, volume? creating guys? you margins of, you to talk

Mark Mondello

I If don’t industry. know. for is margin the – good

some of industry. that's And is they're raising on So for heard overall, margins, I focused I I their good this thing. week. If doing comments the think Flex their if think earlier

Paul Chung

guys. Thanks,

Operator

Thank you.

Our question Mark from from Delaney coming next Sachs. is Goldman

is Your live. now line

Mark Delaney

Yes. taking much very Good morning. the Thanks for questions.

component was I or on those versus The sure you on markets what relative past past most tariffs end of topic, you're wasn't disruptions, seeing it types first you're periods any topic. if with there component of what some that any are particular some concerned the examples? could And floods supply today of seeing similarities about? today you're or provide context that some be chain question just and tsunami? And or the to availability

Mark Mondello

hard I signals, January, around getting especially quite the some chain December, having labor chain were normal, We China Asian soft will think New that supply were they we supply spots you time real coming back strong across it's suppliers I some What hitting from tell fairly with and Chinese people Mark, as was a late Year. started started February. to Yes, board. specific is

been very and our team and the it, our activities if two weeks, our base has on scale, call is what's We amazing But divot, to could in, see elongated, between phones, relationships actions you and have of deployed me it America, a been news in overall will. completely this supply pretty good and to to in deep suppliers normal in the been our again, normal, bit. of finite back quick through it'll cycle a And I terms think is to when North that get with the back China is again, TBD. Europe terms getting we have still that's go

all few of global off running chain X% doing the job. is our supply utilization, But opening factories normal to are in Q&A, of near as being team a a I'd XX%. said what wonderful pockets our characterize But I

Mark Delaney

Thanks I your trying why forecast. the on and follow-up to you're so you're these wanted of of to how about are about so guys haircutting quantification through for destruction? demand any or what that's demand is managing haircutting sort and potential some you also Do haircutting forecasts? weakness? So just rough the percent comment you to you're think that? orders details there getting more there, just proactively And Mark. think about potential the trying double of And think Thanks. you're

Mark Mondello

months, consumers, actions that's I demand, think I'll about don't six I four, any know that appropriately it current actions of just next because the be. associated virus, over to terms conditions, We're stay fears, I both the about from I we they think be the think going make Mark, – about by the and away about – know three, in Yes. the then maybe don't sense. just percentages what may corporations and possible say, in the five, even

just that directly extrapolate any take reasonably So think with and today no signals, demand again, which our holding makes I haircut, that just don't well to sense. are

in what's of if to to back events or et business, U.S. in week this have terms to alone, and impact sports, have concerts, on whatnot, professional cetera. just shape And that's you look – happened some way, I'll group the form, going go at small an

think the thing again, definition to XX just of hope XX that the will last It's this finite, of is three finite prudent And matter just be months temporary. does does think it's months. I let's it it and and last or So I to do. temporary, this a

around do resilient, us I experienced the team's Those The this But what been team we the is of knows in do most have that have probably know time, in costs manage before, customer to times. our here business. one how the company in is the We've place variable proven. XXX. rec, through is a and thing long and been around tech for care tough

Mark Delaney

you. Thank

Mark Mondello

Yes.

Operator

Thank you.

Our next Steven question Fox coming from is Fox Advisors. from

Your line is now live.

Steven Fox

a Thanks. taking my it could you wondering you precautions whether the quick talk could about if ramping to Good for could travel follow-up. basis? share was morning. Mark, programs? going your inside plants then And with And us on affect policy question. a had I And you're global your infection prevent secondly, then Thanks I forward? taking new

Mark Mondello

is this, but great our don't many Sure. the ways, stuff Those – form in just lot less when business, clarity. bit said, about structure, are of I times in unique, in and a in I saying think have I'd I of don't content, questions. terms like saying to talk as good more. believe is love saying call Adam Especially, we and a today

we just – our care we safety, had priority, our everybody – all acknowledge is out got and to good near-perfect past between Mike special our of results, $XX talk one even how incredible don’t care health well-being question disruptions, to we’d people. We team. of number that and it, purpose execution while folks. and of quarter great of one with And split our was calls I people, customers, reacting know, I the clipped hit I our a say our this on these speed million But this, and amazing. about to Adam on taking is thanking core lead – and our both – is had in. our though is your thanks a really And always

sites, folks our line up about space European think really, no through characterize immediately that local team partnering sites. We of items, We really speed hospitals. we back certain one rate. quarantine our quarantine as, disinfection what in out our if first testing centers when about would it, where, purpose, with set and from U.S. went Asian in I Chinese in were extreme when that Year, doing and is, we’re coming and China streamlined sanitization I New and now was and and talk protocols, And

set HR combined education Our employees. and business comprehensive partners and with our for awareness have team, our up our a folks of all technical

our very in conducting thoughtful very restrictions business Our been, and in safe our balance We’ve terms as keeping factories. our And I own to a Jabil folks travel been characterize in world, if place between put and have throughout visits then what way. think, masks fine needed. would I producing had we’ve of again, a the reducing policies Asia people our in ingenuity, surgical for very,

And question, things worse Q&A in and again, the things that ready written America think well I’ll of it some as If outcome. concerns. already And an today, it’s if get North worse least to Steve, China get say Europe, we’ve here way, our is mention, in sit again, us we earlier Europe, And positions don’t the I odd in go. playbook. America that’s fantastic really a in and do I made the North

what kind been that’s of So we’ve up to.

Steven Fox

talk helpful. you your you the in that Thanks there’d current you plans line tapped on credit follow-up. cash about any that. the that’s whether just you really a to it just if then And for quick sort have Mike, as restrictions of And needed and mentioned available That’s could be to? quarter? accessing

Mike Dastoor

any restrictions. out in We aware required. So funds tap around we’re we as Obviously, tap globally. not move internationally, of

We’re in XX countries.

do around we funds efficiently. So move pretty

Steve. all, at there issues no So

Steven Fox

forward. luck Good you. going Thank

Operator

you. Thank

coming Our America. of from Bhattacharya Ruplu next Bank question from is

now is live. line Your

Ruplu Bhattacharya

morning, Hi. everyone. Good

come give thoughts in of growth inorganically? you the for look on what your are M&A? some As maybe us Your valuations can in, have things on targets? And you thoughts

Mark Mondello

Hi, Ruplu.

led market headed always think by by I our Courtney. shopping. we That’s we’re strategic the start team – in with up

the in got constantly at toes So M&A. our water we’re – we’ve looking

strategy. price on smaller preferences terms our felt therefore, us in some everything aligned almost strong, our of And that at that the M&A paired small months deals help activity. and of capability for with – is back looked ridiculous. last Our were tags XX we’ve We strong we

the and really never on whatnot, it’s COVID-XX it based down look want because would something individuals impact prices has I does and it to like on a like if of COVID-XX the I weeks, – the But to I was think the aside, happened independent of just it to couple like last virus. begin think felt us with families market come and what’s overbought of pandemic.

can normal, So not shopping back do the prices see in our pick is some activity increasing capabilities. will if – we I get world billion terms but to M&A for I $X we’d in things out like big think to of up. deals, we’re there a

will you virus, other get assuming is that to exceptional. we I side needs mentioned stuff earlier, of I our still to get factory this optimization tell built. the

about Ruplu, care, remember M&A, Let’s I think that’s in health organic that network handsets, wrapped trends disruption very both blah. then blah, in XG, all And are when markets and unique. machine wonderful XD and secular advanced additive IT our retail learning like transport, factories a in electric

might secular bit be haven’t demand time, a softer Although those trends of changed.

they really us. for good and think will be intact, I that remain

Ruplu Bhattacharya

rationalizing control? that are costs sense. some we Maybe us cost Okay. what that you Thanks. on mobility on think these guess how us And a Can makes of your under Thanks that, to of as costs? sales SG&A I of you about update just for and footprint. status the should the control about side, remind related talked the that. Mark, as forward of can And going percent your are try that? some you’ve you

Mark Mondello

through That just was a me Okay. think little way – my bit let that.

with SG&A me let your So question. start

a we but SG&A, for like bit. little time in see I think, a On I the tremendous cost I’ll When and this is, down that basis, you I’d all fabulous. of run which at tend go around to of little a fluffy decade XXX% terms when us. still company relative get most through you of come bit overhead. specifically X% think companies, growth, I speak – a think to

are we costs. So watching always

When The COVID-XX was September you like before of to it that year nice sharpen I is, and our pencil. was think the think it about, on talked well catalyst restructuring us have for this, kind is factory network. has Mike a occurred. some continue thing shape this to I about call I optimize and our

So costs of this a to take of, in infrastructure ability in positioned, some feel about in that a way. of We’ll I very, to opportunity front further our we’re good at headcount. agile, a little terms OpEx, and certainly really about react feel act bit and I company’s out already. But how odd look in way, we’re really, kind use good swift

So overall, today. I how feel good about we sit

Ruplu Bhattacharya

Okay. just areas highlight? rationalization that. on And any less to of or Thanks that spend is the And mobility then for more this of maybe want next CapEx done? footprint, you your year and year that

Mark Mondello

that, that remarks. evaluating get addressed I CapEx of and in his Mike the at prepared we’re some don’t really into want moment, to

September of to plan. good think have place going question, – still pretty we would out that’s a restructuring I if the In I detail is may, instead the I that laid the in Mike call about terms footprint, your way of mobility address on

In through. we’ll continue fact, plan, of and to we’re bit see that ahead a

Ruplu Bhattacharya

I Okay. questions. the for for all Thanks appreciate taking thanks it. details my and

Mark Mondello

Thanks, Ruplu.

Operator

you. Thank

Our next Cross question is Research. Shannon from today coming from Cross

Your line is now live.

Shannon Cross

you question. changed then have curious about I a come quarter? you very follow-up. bit about saw the continuity And realized lot of the a of for you talk the the beginning Thank a Can then, in much since taking strength my second? quarter first you of Thank I from I’m business. some in your And strength through but saw you. if cloud has

Mark Mondello

Thanks, Yes. Shannon.

just really remember, was board. is I think don’t part we that the know, put release. off I and start. I nice I the December think We of January, kind the got really the across thing this press it. a it to you alluded interesting to as And crazy know is, in of Mike

demand. business operating liberty say characterize take our quite cloud when our I strong. demand – Jabil’s So the quite that is business, I slightly above strong. mobility is to our And plan, demand as is would side the of the

think two components there’s I that. And of

that EMS And driving pick I I when different holding our think the kind market pretty which or look continue that amazing across area, team our business, But quarter eight share, of six we the then buttered the in side in was demand work our to sectors. in well done has strength is some peanut of to of at demand. also is overall market. the the start up

Shannon Cross

Great. had And you. I a then Thank Mike, question.

X.Xx the levering to a any at? recent opportunity? if you little I price curious maybe then tend just somewhat dislocation provides bit guys is I stock up back I but acquisition, leverage, pretty an I’m think, of Your, be you. to the curious, given Thank a But thoughts conservative. of where bit, guess, the know little

Mike Dastoor

Yes, I that capital go in opportunities that And about laid as we’ll definitely and we and methodology out, be will policy that. of to earlier, we’ll an to allocation stick have we monitor and a talked do continue look. have come allocation thoughtful up,

Shannon Cross

Thank you.

Operator

Thank you.

Sheerin next Stifel. question coming Our Matt from from is

line now is Your live.

Matt Sheerin

conservative been terms Thanks fairly component may and recent question in issues and relative commentary in tend that’s But inventory under and a fairly working progress the saw quarters good just some capital. want remain to to here sounds morning. should control more Yes, seeing. to regarding hand? that and your to levels inventory of high the keep about be It on you’ve you because customers you the your expect inventory like we

Mike Dastoor

Yes.

the the see of is continue, as a running perfect was chain storm supply in think at bit spike little other highly this a of February the will stage. and in bit a of well. world we the capacity, unlikely were rest that I spreads XX% XX%, inventory. world of parts as a in at We constraints COVID-XX

change. could that Now

not a So a but of much spike, little as as be bit February. will there

Matt Sheerin

And flow? fairly – I at pretty for the your on in you’ve And that’s sort rest free know of of your the flow I this some the terms had targets free year. impact point? along Okay. cash of robust with cash off guidance, table guess,

Mike Dastoor

the off it’s say table. wouldn’t I

goes We’re our when dollar still number. that and down, a standpoint actually demands targeting falls working Remember, from revenue improves. capital

business, gives So of of a there’s type paradox EMS which protection. on our that a goes little with little natural bit nice

Matt Sheerin

things this relative of pilot and customers about and the as on thing the and mobility end has that later next-generation of strength year, in sort terms doing and with cycles as forward you – R&D for then front of cycles Mark, change of And in prepare Okay, look any and terms everybody year? the great. programs you’re talked the to product been looking you you

Mark Mondello

No, I’d that usual. business say is

Matt Sheerin

and much the details. very Thanks Okay. thanks for all

Mark Mondello

Thanks Matt.

Operator

We floor back you. the over comments. of question-and-answer Thank reached turn end for session. to further like closing I’d any management to our

Adam Berry

joining you call. now Thank concludes for This our us.

Operator

today’s teleconference That you. conclude Thank webcast. and does

participation this have a today. day. You line may for thank We you and disconnect time, your your at wonderful

Jabil (JBL) 13 Mar 202020 Q2 Earnings call transcript