Jacobs Reports Strong Fiscal Fourth Quarter and Fiscal Year 2024 Earnings
Successful Separation and Merger of CMS and C&I, Now Trading as
Backlog Grows by 23% y/y with TTM Book-to-
FY 2025 Guidance Highlights Favorable Growth and Margin Expectations
Q4 2024 Financial Highlights from Continuing Operations:
- Revenue of
$3.0 billion grew 4.4% y/y; adjusted net revenue1 up 4.3% y/y - Net income of
$309 million , up 333.1% y/y; Adjusted EBITDA1 of$289 million , up 12.5% y/y - EPS of
$2.38 , up 277.8% y/y; adjusted EPS1 of$1.37 , up 28.0% y/y - Recorded
$187 million in mark-to-market gains on our investment in AMTM, increasing Q4 GAAP net income - Backlog of
$21.8 billion , up 22.5% y/y; Q4 book-to-bill 1.67x (1.35x TTM)
Fiscal Year 2024 Highlights from Continuing Operations:
- Revenue of
$11.5 billion grew 6.0% y/y; adjusted net revenue1 up 5.1% y/y - Net income of
$613 million , up 61.6% y/y; Adjusted EBITDA1 of$1,059 million , up 8.9% y/y - EPS of
$4.79 , up 57.0% y/y; adjusted EPS1 of$5.28 , up 15.8% y/y - Cash conversion and reported free cash flow conversion1 exceeded 100%
Jacobs' Chair and CEO
Jacobs' CFO
Financial Outlook2
The Company's outlook for fiscal 2025 is for adjusted net revenue to grow mid-to-high single digits over fiscal 2024, adjusted EBITDA margin to range from 13.8-14.0%, adjusted EPS to range from
Update on Separation Transaction
On
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1See Non-GAAP Financial Measures and Operating Metrics, and GAAP Reconciliations at the end of the press release for additional detail. |
|
2Reconciliation of fiscal 2025 adjusted EBITDA, adjusted EPS and expectations for adjusted net revenue growth and reported FCF conversion 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 2025. |
Fourth Quarter Review (in thousands, except for per share and tax rate data)
|
|
Fiscal Q4 2024 |
Fiscal Q4 2023 |
Change |
|
Revenue |
|
|
|
|
Adjusted Net Revenue1 |
|
|
|
|
GAAP Net Earnings from Continuing Operations |
|
|
|
|
GAAP Earnings Per Diluted Share (EPS) from |
|
|
|
|
Adjusted Net Earnings from Continuing |
|
|
|
|
Adjusted EPS from Continuing Operations1,3 |
|
|
|
|
|
18.9 % |
35.5 % |
(16.6) % |
|
Adjusted effective tax rate from Continuing |
27.5 % |
29.1 % |
(1.6) % |
|
|
|
3Beginning with our fiscal first quarter in 2024, the Company has revised its presentation of adjusted net earnings from continuing operations and adjusted EPS from continuing operations to no longer apply an adjustment which previously resulted in the application of the expected annual effective tax rate to all quarterly periods. Prior comparable periods are also being presented on this basis. |
The Company's adjusted net earnings from continuing operations and adjusted EPS from continuing operations for the fourth quarter of fiscal 2024 and fiscal 2023 exclude certain adjustments that are further described in the section entitled "Non-GAAP Financial Measures" at the end of this release. For a reconciliation of Revenue to Adjusted Net Revenue, see "Segment Information" below.
Fiscal 2024 Review (in thousands, except for per share and tax rate data)
|
|
Fiscal 2024 |
Fiscal 2023 |
Change |
|
Revenue |
|
|
|
|
Adjusted Net Revenue1 |
|
|
|
|
GAAP Net Earnings from Continuing Operations |
|
|
|
|
GAAP Earnings Per Diluted Share (EPS) from |
|
|
|
|
Adjusted Net Earnings from Continuing |
|
|
|
|
Adjusted EPS from Continuing Operations1,3 |
|
|
|
|
|
16.9 % |
19.5 % |
(2.6) % |
|
Adjusted effective tax rate from Continuing |
19.6 % |
20.3 % |
(0.7) % |
The Company's adjusted net earnings from continuing operations and adjusted EPS from continuing operations for fiscal 2024 and fiscal 2023 exclude certain adjustments that are further described in the section entitled "Non-GAAP Financial Measures" at the end of this release. For a reconciliation of Revenue to Adjusted Net Revenue, see "Segment Information" below.
Jacobs is hosting a conference call at
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," "target," "goal" and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make concerning our expectations as to our future growth, prospects, financial outlook and business strategy, including our expectations for our fiscal year 2025 adjusted EBITDA and adjusted EPS, and reported free cash flow conversion, as well as our expectations for our effective tax rates. Although such statements are based on management's current estimates and expectations, and/or 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:
- general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets and stock market volatility, instability in the banking industry, labor shortages, or the impact of a possible recession or economic downturn or changes to monetary or fiscal policies or priorities in the
U.S. and the other countries where we do business on our results, prospects and opportunities; - competition from existing and future competitors in our target markets, as well as the possible reduction in demand for certain of our product solutions and services, including delays in the timing of the award of projects or reduction in funding, or the abandonment of ongoing or anticipated projects due to the financial condition of our clients and suppliers or due to governmental budget constraints or changes to governmental budgetary priorities, or the inability of our clients to meet their payment obligations in a timely manner or at all;
- our ability to fully execute on our corporate strategy, including (i) uncertainties as to the impact of the separation of the Separated Business (as defined above) on our business, such as a possible impact on our credit profile or our ability to operate as a separate public-company without the benefit of the resources and capabilities divested as part of the Separated Business (as defined above), the possibility that the transaction will not result in the intended benefits to us or our shareholders, that we will not realize the value expected to be derived from the disposition of our retained stake in Amentum, or that we will incur unexpected costs, charges or expenses related to the provision of transition services in connection with the separation, (ii) the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from evolving business strategies, including on our ability to maintain our culture and retain key personnel, customers or suppliers, or our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, and (iii) our ability to invest in the tools needed to implement our strategy;
- financial market risks that may affect us, including by affecting our access to capital, the cost of such capital and/or our funding obligations under defined benefit pension and postretirement plans;
- legislative changes, including potential changes to the amounts provided for, under the
Infrastructure Investment and Jobs Act, as well as other legislation related to governmental spending, and changes inU.S. or foreign tax laws, statutes, rules, regulations or ordinances, including the impact of, and changes to tariffs or trade policies, that may adversely impact our future financial positions or results of operations; - increased geopolitical uncertainty and risks, including policy risks and potential civil unrest, relating to the outcome of elections across our key markets and elevated geopolitical tension and conflicts, including the
Russia -Ukraine and Israel-Hamas conflicts and the escalating tensions in theMiddle East , among others; and - the impact of any pandemic, 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, as well as the inability of governments in certain of the countries in which we operate to effectively mitigate the financial or other impacts of any future pandemics or infectious disease outbreaks 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 our Annual Report on Form 10-K for the year ended
Regulation FD
We use any of the following to comply with our disclosure obligations under Regulation FD: press releases,
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 approximately
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Financial Highlights: |
|||||||
|
|
|||||||
|
Results of Operations (in thousands, except per-share data): |
|||||||
|
|
|||||||
|
|
For the Three Months Ended |
|
For the Years Ended |
||||
|
Unaudited |
September |
|
September |
|
September |
|
September |
|
Revenues |
$ 2,960,150 |
|
$ 2,834,280 |
|
$ 11,500,941 |
|
$ 10,851,420 |
|
Direct cost of contracts |
(2,225,029) |
|
(2,128,933) |
|
(8,668,185) |
|
(8,140,560) |
|
Gross profit |
735,121 |
|
705,347 |
|
2,832,756 |
|
2,710,860 |
|
Selling, general and administrative expenses |
(538,916) |
|
(536,989) |
|
(2,140,320) |
|
(2,034,376) |
|
Operating Profit |
196,205 |
|
168,358 |
|
692,436 |
|
676,484 |
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
Interest income |
8,514 |
|
7,023 |
|
34,454 |
|
24,975 |
|
Interest expense |
(35,686) |
|
(43,640) |
|
(169,058) |
|
(168,085) |
|
Miscellaneous income (expense), net |
224,573 |
|
350 |
|
219,454 |
|
(12,399) |
|
Total other income (expense), net |
197,401 |
|
(36,267) |
|
84,850 |
|
(155,509) |
|
Earnings from Continuing Operations Before Taxes |
393,606 |
|
132,091 |
|
777,286 |
|
520,975 |
|
Income Tax Expense from Continuing Operations |
(74,467) |
|
(46,899) |
|
(131,493) |
|
(101,336) |
|
Net Earnings of the Group from Continuing Operations |
319,139 |
|
85,192 |
|
645,793 |
|
419,639 |
|
Net Earnings of the Group from Discontinued |
19,618 |
|
81,802 |
|
206,850 |
|
300,017 |
|
Net Earnings of the Group |
338,757 |
|
166,994 |
|
852,643 |
|
719,656 |
|
Net Earnings Attributable to Noncontrolling Interests |
(4,953) |
|
(5,397) |
|
(17,990) |
|
(18,900) |
|
Net Earnings Attributable to Redeemable |
(4,887) |
|
(8,388) |
|
(14,999) |
|
(21,614) |
|
Net Earnings Attributable to Jacobs from Continuing |
309,299 |
|
71,407 |
|
612,804 |
|
379,125 |
|
Net Earnings Attributable to Noncontrolling Interests |
(3,480) |
|
(3,830) |
|
(13,561) |
|
(13,365) |
|
Net Earnings Attributable to Jacobs from Discontinued |
16,138 |
|
77,972 |
|
193,289 |
|
286,652 |
|
Net Earnings Attributable to Jacobs |
$ 325,437 |
|
$ 149,379 |
|
$ 806,093 |
|
$ 665,777 |
|
Net Earnings Per Share: |
|
|
|
|
|
|
|
|
Basic Net Earnings from Continuing Operations Per |
$ 2.39 |
|
$ 0.63 |
|
$ 4.81 |
|
$ 3.06 |
|
Basic Net Loss from Discontinued Operations Per |
$ 0.13 |
|
$ 0.62 |
|
$ 1.54 |
|
$ 2.26 |
|
Basic Earnings Per Share |
$ 2.52 |
|
$ 1.25 |
|
$ 6.35 |
|
$ 5.32 |
|
|
|
|
|
|
|
|
|
|
Diluted Net Earnings from Continuing Operations Per |
$ 2.38 |
|
$ 0.63 |
|
$ 4.79 |
|
$ 3.05 |
|
Diluted Net Loss from Discontinued Operations Per |
$ 0.13 |
|
$ 0.61 |
|
$ 1.54 |
|
$ 2.25 |
|
Diluted Earnings Per Share |
$ 2.51 |
|
$ 1.24 |
|
$ 6.32 |
|
$ 5.30 |
|
Segment Information (in thousands): |
|||||||
|
|
|||||||
|
|
For the Three Months Ended |
|
For the Years Ended |
||||
|
Unaudited |
September |
|
September |
|
September |
|
September |
|
Revenues from External Customers: |
|
|
|
|
|
|
|
|
Infrastructure & Advanced Facilities |
$ 2,670,703 |
|
$ 2,546,040 |
|
$ 10,323,255 |
|
$ 9,693,276 |
|
Pass Through Revenue (1) |
(841,220) |
|
(801,988) |
|
(3,241,640) |
|
(2,989,553) |
|
Infrastructure & Advanced Facilities Adjusted Net |
$ 1,829,483 |
|
$ 1,744,052 |
|
$ 7,081,615 |
|
$ 6,703,723 |
|
|
289,447 |
|
288,240 |
|
1,177,686 |
|
1,158,144 |
|
Total Revenue |
$ 2,960,150 |
|
$ 2,834,280 |
|
$ 11,500,941 |
|
$ 10,851,420 |
|
Adjusted Net Revenue (1) |
$ 2,118,930 |
|
$ 2,032,292 |
|
$ 8,259,301 |
|
$ 7,861,867 |
|
|
|||||||
|
|
For the Three Months Ended |
|
For the Years Ended |
||||
|
|
September |
|
September |
|
September |
|
September |
|
Segment Operating Profit: |
|
|
|
|
|
|
|
|
Infrastructure & Advanced Facilities (2) |
$ 177,857 |
|
$ 162,063 |
|
$ 632,276 |
|
$ 585,392 |
|
|
61,737 |
|
59,482 |
|
239,250 |
|
237,003 |
|
Total Segment Operating Profit |
239,594 |
|
221,545 |
|
871,526 |
|
822,395 |
|
Restructuring, Transaction and Other Charges (3) |
(43,389) |
|
(53,187) |
|
(179,090) |
|
(145,911) |
|
Total |
196,205 |
|
168,358 |
|
692,436 |
|
676,484 |
|
Total Other Income (Expense), Net (4) |
197,400 |
|
(36,267) |
|
84,850 |
|
(155,509) |
|
Earnings Before Taxes from Continuing Operations |
$ 393,605 |
|
$ 132,091 |
|
$ 777,286 |
|
$ 520,975 |
|
|
|
|
(1) |
Pass-through revenues for the prior periods presented include certain minor adjustments to properly reflect amounts that had not been previously included and to conform with the fiscal 2023 amounts presented. |
|
(2) |
Operating profit for Infrastructure & Advanced Facilities includes intangibles amortization of |
|
(3) |
The three months and year ended |
|
(4) |
The three months and year ended |
|
Balance Sheet (in thousands): |
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|||
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|
|
|
|
|
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ 1,144,795 |
|
$ 770,853 |
|
Receivables and contract assets |
2,845,452 |
|
2,430,941 |
|
Prepaid expenses and other |
155,865 |
|
140,726 |
|
Investment in equity securities |
749,468 |
|
— |
|
Current assets held for spin |
— |
|
1,347,833 |
|
Total current assets |
4,895,580 |
|
4,690,353 |
|
Property, Equipment and Improvements, net |
315,630 |
|
279,749 |
|
Other Noncurrent Assets: |
|
|
|
|
|
4,788,181 |
|
4,644,087 |
|
Intangibles, net |
874,894 |
|
950,784 |
|
Deferred income tax assets |
195,406 |
|
52,956 |
|
Operating lease right-of-use assets |
303,856 |
|
324,857 |
|
Miscellaneous |
385,458 |
|
418,791 |
|
Noncurrent assets held for spin |
— |
|
3,255,532 |
|
Total other noncurrent assets |
6,547,795 |
|
9,647,007 |
|
|
$ 11,759,005 |
|
$ 14,617,109 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Short-term debt |
$ 875,760 |
|
$ 61,430 |
|
Accounts payable |
1,029,140 |
|
922,355 |
|
Accrued liabilities |
1,087,764 |
|
975,192 |
|
Operating lease liability |
119,988 |
|
126,247 |
|
Contract liabilities |
967,089 |
|
709,249 |
|
Current liabilities held for spin |
— |
|
628,088 |
|
Total current liabilities |
4,079,741 |
|
3,422,561 |
|
Long-term debt |
1,348,594 |
|
2,813,471 |
|
Liabilities relating to defined benefit pension and retirement plans |
298,221 |
|
247,277 |
|
Deferred income tax liabilities |
116,655 |
|
121,356 |
|
Long-term operating lease liability |
407,826 |
|
466,108 |
|
Other deferred liabilities |
120,483 |
|
116,828 |
|
Noncurrent liabilities held for spin |
— |
|
196,447 |
|
Redeemable Noncontrolling Interests |
820,182 |
|
632,979 |
|
Stockholders' Equity: |
|
|
|
|
Capital stock: |
|
|
|
|
Preferred stock, |
— |
|
— |
|
Common stock, |
124,084 |
|
125,977 |
|
Additional paid-in capital |
2,758,064 |
|
2,735,325 |
|
Retained earnings |
2,366,769 |
|
4,542,872 |
|
Accumulated other comprehensive loss |
(699,450) |
|
(857,954) |
|
Total Jacobs stockholders' equity |
4,549,467 |
|
6,546,220 |
|
Noncontrolling interests |
17,836 |
|
53,862 |
|
|
4,567,303 |
|
6,600,082 |
|
|
$ 11,759,005 |
|
$ 14,617,109 |
|
Cash Flows (in thousands) (Quarterly data unaudited) |
|||||||
|
|
|||||||
|
|
For the Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net earnings attributable to the Group |
$ 338,757 |
|
$ 166,996 |
|
$ 852,643 |
|
$ 719,656 |
|
Adjustments to reconcile net earnings to net cash flows provided by (used for) |
|
|
|
|
|
|
|
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
Property, equipment and improvements |
25,061 |
|
26,476 |
|
99,232 |
|
103,346 |
|
Intangible assets |
53,215 |
|
51,674 |
|
209,507 |
|
203,906 |
|
Gain on investment in equity securities |
(186,931) |
|
— |
|
(186,931) |
|
— |
|
Stock based compensation |
20,023 |
|
18,429 |
|
74,193 |
|
74,337 |
|
Equity in earnings of operating ventures, net of return on capital distributions |
(2,525) |
|
2,639 |
|
(16,079) |
|
(324) |
|
(Gain) loss on disposals of assets, net |
(4,233) |
|
7,100 |
|
(3,200) |
|
7,690 |
|
Impairment of equity method investment and other long-term assets |
3,000 |
|
10,032 |
|
3,000 |
|
48,163 |
|
Deferred income taxes |
(108,832) |
|
(81,759) |
|
(224,935) |
|
(76,815) |
|
Changes in assets and liabilities, excluding the effects of businesses acquired: |
|
|
|
|
|
|
|
|
Receivables and contract assets, net of contract liabilities |
36,147 |
|
(30,586) |
|
59,587 |
|
(8,395) |
|
Prepaid expenses and other current assets |
(43,295) |
|
(26,752) |
|
11,217 |
|
(33,996) |
|
Miscellaneous other assets |
35,993 |
|
21,832 |
|
104,659 |
|
92,050 |
|
Accounts payable |
(35,751) |
|
57,052 |
|
81,469 |
|
166,194 |
|
Income taxes payable |
101,120 |
|
19,128 |
|
94,094 |
|
9,408 |
|
Accrued liabilities |
(37,808) |
|
(3,569) |
|
(138,491) |
|
(279,136) |
|
Other deferred liabilities |
(16,196) |
|
(5,537) |
|
6,047 |
|
(49,957) |
|
Other, net |
18,787 |
|
(13,792) |
|
28,661 |
|
(1,364) |
|
Net cash provided by operating activities |
196,532 |
|
219,363 |
|
1,054,673 |
|
974,763 |
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Additions to property and equipment |
(38,342) |
|
(39,246) |
|
(121,114) |
|
(137,486) |
|
Disposals of property and equipment and other assets |
6,029 |
|
7 |
|
6,187 |
|
1,544 |
|
Capital contributions to equity investees, net of return of capital distributions |
77 |
|
— |
|
1,737 |
|
7,964 |
|
Acquisitions of businesses, net of cash acquired |
— |
|
— |
|
(14,000) |
|
(17,685) |
|
Net cash used for investing activities |
(32,236) |
|
(39,239) |
|
(127,190) |
|
(145,663) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from long-term borrowings |
2,382,120 |
|
1,530,973 |
|
4,606,697 |
|
3,860,468 |
|
Repayments of long-term borrowings |
(1,175,932) |
|
(1,815,276) |
|
(3,370,355) |
|
(4,486,679) |
|
Proceeds from short-term borrowings |
4,239 |
|
9,658 |
|
5,345 |
|
13,011 |
|
Repayments of short-term borrowings |
(834,879) |
|
(3,353) |
|
(866,761) |
|
(3,353) |
|
Debt issuance costs |
(32,725) |
|
(5,281) |
|
(34,331) |
|
(17,177) |
|
Proceeds from issuances of common stock |
12,089 |
|
9,731 |
|
47,503 |
|
47,782 |
|
Common stock repurchases |
(56,286) |
|
(145) |
|
(402,668) |
|
(265,714) |
|
Taxes paid on vested restricted stock |
(8,331) |
|
(489) |
|
(41,720) |
|
(24,249) |
|
Cash dividends to shareholders |
(36,340) |
|
(32,748) |
|
(142,779) |
|
(128,420) |
|
Net dividends associated with noncontrolling interests |
(4,162) |
|
(5,869) |
|
(21,678) |
|
(23,156) |
|
Repurchase of redeemable noncontrolling interests |
(13,556) |
|
(2,514) |
|
(55,344) |
|
(92,939) |
|
Proceeds from issuances of redeemable noncontrolling interests |
— |
|
(755) |
|
19,761 |
|
34,016 |
|
Cash impact from distribution of SpinCo Business |
(495,307) |
|
— |
|
(495,307) |
|
— |
|
Net cash used for financing activities |
(259,070) |
|
(316,068) |
|
(751,637) |
|
(1,086,410) |
|
Effect of Exchange Rate Changes |
29,425 |
|
(28,761) |
|
41,640 |
|
32,548 |
|
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash |
(65,349) |
|
(164,705) |
|
217,486 |
|
(224,762) |
|
Cash and Cash Equivalents, including Restricted Cash, at the Beginning of the Period |
1,212,280 |
|
1,094,150 |
|
929,445 |
|
1,154,207 |
|
Cash and Cash Equivalents, including Restricted Cash, at the End of the Period |
$ 1,146,931 |
|
$ 929,445 |
|
$ 1,146,931 |
|
$ 929,445 |
|
Less Cash and Cash Equivalents included in Assets held for spin |
$ — |
|
$ (155,728) |
|
$ — |
|
$ (155,728) |
|
Cash and Cash Equivalents of Continuing Operations at the End of the Period |
$ 1,146,931 |
|
$ 773,717 |
|
$ 1,146,931 |
|
$ 773,717 |
|
Backlog (in millions): |
|||
|
|
|||
|
Unaudited |
|
|
|
|
Infrastructure & Advanced Facilities |
$ 21,472 |
|
$ 17,526 |
|
|
378 |
|
311 |
|
Total |
$ 21,850 |
|
$ 17,837 |
Non-GAAP Financial Measures and Operating Metrics:
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. These non-GAAP measures are described below.
As a result of the Separation Transaction, substantially all CMS and C&I related assets and liabilities were separated on
Adjusted net revenue is calculated by adjusting revenue from continuing operations to exclude amounts we bill to clients on projects where we are procuring subcontract labor or third-party materials and equipment on behalf of the client (referred to as "pass throughs"). These amounts are considered pass throughs because we receive no or only a minimal mark-up associated with the billed amounts. In 2023, we amended our name and convention for revenue, excluding pass-through costs from "net revenue" to "adjusted net revenue." This name change is intended to make the non-GAAP nature of this measure more prominent and does not impact measurement.
IA&F and Jacobs adjusted operating profit, adjusted earnings from continuing operations before taxes, adjusted income tax expenses from continuing operations, adjusted net earnings from continuing operations and adjusted EPS from continuing operations are calculated by:
|
1. |
Excluding items collectively referred to as Restructuring, Transaction and Other Charges, which include: |
|
|
|
a. |
costs and other charges associated with our Focus 2023 transformation initiatives, including activities associated with the re-scaling and repurposing of physical office space, employee separations, contractual termination fees and related expenses, referred to as "Focus 2023 Transformation, mainly real estate rescaling efforts"; |
|
|
b. |
transaction costs and other charges incurred in connection with mergers, acquisitions, strategic investments and divestitures, including advisor fees, change in control payments, and the impact of the quarterly adjustment to the estimated performance based payout of contingent consideration to certain sellers in connection with certain acquisitions and similar transaction costs and expenses (collectively referred to as "Transaction Costs"); |
|
|
c. |
recoveries, costs and other charges associated with restructuring activities and other cost reduction initiatives implemented in connection with mergers, acquisitions, strategic investments and divestitures, including the separation of the CMS/C&I business, such as advisor fees, involuntary terminations and related costs, costs associated with co-locating offices of acquired companies, separating physical locations of continuing operations, professional services and other personnel costs; amounts relating to certain commitments and contingencies relating to discontinued operations of the |
|
|
|
|
|
2. |
Excluding items collectively referred to as "Other adjustments",1 which include: |
|
|
|
a. |
adding back intangible assets amortization and impairment charges; |
|
|
b. |
impact of certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our |
|
|
c. |
impacts related to tax rate increases in the |
|
|
d. |
Pretax mark-to-market gains associated with the Company's investment in Amentum stock recorded in connection with the Separation Transaction; and |
|
|
e. |
impacts resulting from the EPS numerator adjustment relating to the redeemable noncontrolling interests preference share repurchase and reissuance activities. |
|
|
|
|
|
|
|
1 Beginning with our first fiscal quarter in 2024, the Company has revised its presentation of adjusted net earnings from continuing operations and adjusted EPS to no longer reflect adjustments to align these non-GAAP measures to our annual effective tax rates. |
||||
We eliminate the impact of "Restructuring, integration, separation and other charges" because we do not consider these to be indicative of ongoing operating performance. Actions taken by the Company to enhance efficiencies are subject to significant fluctuations from period to period. The Company's management believes the exclusion of the amounts relating to the above-listed items improves the period-to-period comparability and analysis of the underlying financial performance of the business.
Adjustments to derive adjusted net earnings from continuing operations and adjusted EPS from continuing operations are calculated on an after-tax basis.
Free cash flow is calculated as net cash provided by operating activities from continuing operations as reported on the statement of cash flows less additions to property and equipment.
Adjusted EBITDA is calculated by adding income tax expense, depreciation expense and interest expense (in each case, to the extent attributable to continuing operations) to, and deducting interest income attributable to continuing operations from, adjusted net earnings from continuing operations.
I&AF Adjusted Operating Margin is a ratio of I&AF adjusted operating profit for the segment to the segment's adjusted net revenue. For a reconciliation of revenue to adjusted net revenue, see "Segment Information".
Jacobs Adjusted Operating Margin is a ratio of adjusted operating profit for the Company to the Company's adjusted net revenue. For a reconciliation of revenue to adjusted net revenue, see "Segment Information".
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.
This press release also contains certain financial and operating metrics which management believes are useful in evaluating the Company's performance. Backlog represents the revenue or gross profit, as applicable, we expect to realize for work to be completed by our consolidated subsidiaries and our proportionate share of work to be performed by unconsolidated joint ventures. Gross margin in backlog refers to the ratio of gross profit in backlog to gross revenue in backlog. For more information on how we determine our backlog, see our Backlog Information in our most recent annual report filed with the
The Company provides non-GAAP measures to supplement
The following tables reconcile the components and values of
|
Reconciliation of Earnings from Continuing Operations Before Taxes to Adjusted Earnings from Continuing Operations Before Taxes (in thousands): |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Earnings from Continuing Operations Before |
$ 393,606 |
|
$ 132,091 |
|
$ 777,286 |
|
$ 520,975 |
|
Restructuring, Transaction and Other |
|
|
|
|
|
|
|
|
Focus 2023 Transformation, mainly real estate |
(10) |
|
6,872 |
|
49 |
|
45,495 |
|
Transaction costs |
1,232 |
|
372 |
|
9,246 |
|
16,315 |
|
Restructuring, integration and separation |
7,234 |
|
43,500 |
|
134,862 |
|
80,724 |
|
Other Adjustments (2): |
|
|
|
|
|
|
|
|
Amortization of intangibles |
38,948 |
|
37,449 |
|
152,666 |
|
147,230 |
|
Other |
(185,021) |
|
(4,162) |
|
(173,498) |
|
980 |
|
Adjusted Earnings from Continuing |
$ 255,989 |
|
$ 216,122 |
|
$ 900,611 |
|
$ 811,719 |
|
|
|
(1) Includes pre-tax charges primarily relating to the Separation Transaction for the three months and years ended |
|
(2) Includes pre-tax charges for the removal of amortization of intangible assets for the three months and years ended |
|
Reconciliation of Income Tax Expense from Continuing Operations to Adjusted Income Tax Expense from Continuing Operations (in thousands): |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Income Tax Expense from Continuing |
$ (74,467) |
|
$ (46,899) |
|
$ (131,493) |
|
$ (101,336) |
|
Tax Effects of Restructuring, Transaction |
|
|
|
|
|
|
|
|
Focus 2023 Transformation, mainly real estate |
2 |
|
(1,815) |
|
(12) |
|
(11,519) |
|
Transaction costs |
(174) |
|
136 |
|
(1,428) |
|
(2,855) |
|
Restructuring, integration and separation |
14,565 |
|
(5,409) |
|
(4,779) |
|
(12,848) |
|
Tax Effects of Other Adjustments (2) |
|
|
|
|
|
|
|
|
Amortization of intangibles |
(10,362) |
|
(8,842) |
|
(39,073) |
|
(34,737) |
|
Other |
(20) |
|
(30) |
|
(36) |
|
(1,038) |
|
Adjusted Income Tax Expense from |
$ (70,456) |
|
$ (62,859) |
|
$ (176,821) |
|
$ (164,333) |
|
|
|
(1) Includes income tax impacts on restructuring activities primarily relating to the Separation Transaction for the three months and years ended |
|
(2) Includes income tax impacts on amortization of intangible assets and on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our |
|
Reconciliation of Net Earnings Attributable to Jacobs from Continuing Operations to Adjusted Net Earnings Attributable to Jacobs from Continuing Operations (in thousands): |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Net Earnings Attributable to Jacobs from |
$ 309,299 |
|
$ 71,407 |
|
$ 612,804 |
|
$ 379,125 |
|
After-tax effects of Restructuring, |
|
|
|
|
|
|
|
|
Focus 2023 Transformation, mainly real estate |
(8) |
|
4,958 |
|
36 |
|
33,876 |
|
Transaction costs |
845 |
|
113 |
|
6,606 |
|
11,309 |
|
Restructuring, integration and separation |
22,077 |
|
38,602 |
|
128,155 |
|
63,774 |
|
After-tax effects of Other Adjustments (2): |
|
|
|
|
|
|
|
|
Amortization of intangibles |
23,859 |
|
23,599 |
|
95,020 |
|
92,612 |
|
Other |
(185,592) |
|
(2,924) |
|
(177,545) |
|
(152) |
|
Adjusted Net Earnings Attributable to |
$ 170,480 |
|
$ 135,755 |
|
$ 665,076 |
|
$ 580,544 |
|
|
|
(1) Includes after-tax charges primarily relating to the Separation Transaction for the three months and years ended |
|
(2) Includes after-tax and noncontrolling interest impacts from the amortization of intangible assets and estimated tax impacts on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our |
|
Reconciliation of Diluted Net Earnings from Continuing Operations Per Share to Adjusted Diluted Net Earnings from Continuing Operations Per Share: |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Diluted Net Earnings from Continuing |
$ 2.38 |
|
$ 0.63 |
|
$ 4.79 |
|
$ 3.05 |
|
After-tax effects of Restructuring, |
|
|
|
|
|
|
|
|
Focus 2023 Transformation, mainly real estate |
— |
|
0.04 |
|
— |
|
0.27 |
|
Transaction costs |
0.01 |
|
— |
|
0.05 |
|
0.09 |
|
Restructuring, integration and separation |
0.18 |
|
0.30 |
|
1.02 |
|
0.50 |
|
After-tax effects of Other Adjustments (2): |
|
|
|
|
|
|
|
|
Amortization of intangibles |
0.19 |
|
0.19 |
|
0.75 |
|
0.73 |
|
Other |
(1.39) |
|
(0.09) |
|
(1.33) |
|
(0.07) |
|
Adjusted Diluted Net Earnings from |
$ 1.37 |
|
$ 1.07 |
|
$ 5.28 |
|
$ 4.56 |
|
|
|
(1) Includes per-share impact charges primarily relating to the Separation Transaction for the three months and years ended |
|
(2) Includes per-share impacts from the amortization of intangible assets and estimated tax impacts on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our |
|
Reconciliation of Interest Expense from Continuing Operations to Adjusted Interest Expense from Continuing Operations (in thousands): |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Interest Expense from Continuing |
$ (35,686) |
|
$ (43,640) |
|
$ (169,058) |
|
$ (168,085) |
|
Restructuring, Transaction and Other |
|
|
|
|
|
|
|
|
Restructuring, integration and separation |
219 |
|
— |
|
219 |
|
— |
|
Adjusted Interest Expense from |
$ (35,467) |
|
$ (43,640) |
|
$ (168,839) |
|
$ (168,085) |
|
|
|
(1) Includes pre-tax charges related to the Separation Transaction for the three months and year ended |
|
Reconciliation of Net Earnings Attributable to Jacobs from Continuing Operations to Adjusted EBITDA (in thousands): |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
September |
|
September |
|
September |
|
September |
|
Net Earnings Attributable to Jacobs from Continuing Operations |
$ 309,299 |
|
$ 71,407 |
|
$ 612,804 |
|
$ 379,125 |
|
After-tax effects of Restructuring, Transaction and Other |
22,914 |
|
43,673 |
|
134,797 |
|
108,959 |
|
After-tax effects of Other Adjustments |
(161,733) |
|
20,675 |
|
(82,525) |
|
92,460 |
|
Adj. Net earnings from Continuing Operations |
170,480 |
|
135,755 |
|
665,076 |
|
580,544 |
|
Adj. Income Tax Expense from Continuing Operations |
70,456 |
|
62,859 |
|
176,821 |
|
164,333 |
|
Adj. Net earnings from Continuing Operations attributable to |
240,936 |
|
198,614 |
|
841,897 |
|
744,877 |
|
Depreciation expense |
21,053 |
|
21,657 |
|
82,987 |
|
84,271 |
|
Interest income |
(8,514) |
|
(7,023) |
|
(34,454) |
|
(24,975) |
|
Adjusted Interest expense |
35,467 |
|
43,640 |
|
168,839 |
|
168,085 |
|
Adjusted EBITDA |
$ 288,942 |
|
$ 256,888 |
|
$ 1,059,269 |
|
$ 972,258 |
|
Reconciliation of Free Cash Flow (in thousands): |
|||||||
|
|
|||||||
|
|
Three Months Ended |
|
For the Years Ended |
||||
|
|
September |
|
September |
|
September |
|
September |
|
Net cash provided by operating activities |
$ 196,532 |
|
$ 219,363 |
|
$ 1,054,673 |
|
$ 974,763 |
|
Additions to property and equipment |
(38,342) |
|
(39,246) |
|
(121,114) |
|
(137,486) |
|
Free cash flow |
$ 158,190 |
|
$ 180,117 |
|
$ 933,559 |
|
$ 837,277 |
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities |
$ (32,236) |
|
$ (39,239) |
|
$ (127,190) |
|
$ (145,663) |
|
Net cash used for financing activities |
$ (259,070) |
|
$ (316,068) |
|
$ (751,637) |
|
$ (1,086,410) |
|
Earnings Per Share (in thousands): |
|||||||
|
|
|||||||
|
|
For the Three Months Ended |
|
For the Years Ended |
||||
|
|
|
|
|
|
|
|
|
|
Numerator for Basic and Diluted EPS: |
|
|
|
|
|
|
|
|
Net earnings attributable to Jacobs from continuing |
$ 309,299 |
|
$ 71,407 |
|
$ 612,804 |
|
$ 379,125 |
|
Preferred Redeemable Noncontrolling interests |
(12,020) |
|
8,340 |
|
(10,274) |
|
8,340 |
|
Net earnings from continuing operations |
$ 297,279 |
|
$ 79,747 |
|
$ 602,530 |
|
$ 387,465 |
|
|
|
|
|
|
|
|
|
|
Net earnings from discontinued operations |
$ 16,138 |
|
$ 77,972 |
|
$ 193,289 |
|
$ 286,652 |
|
|
|
|
|
|
|
|
|
|
Net earnings allocated to common stock for EPS |
$ 313,417 |
|
$ 157,719 |
|
$ 795,819 |
|
$ 674,117 |
|
|
|
|
|
|
|
|
|
|
Denominator for Basic and Diluted EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used for calculating basic EPS attributable |
124,315 |
|
126,074 |
|
125,324 |
|
126,607 |
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
Stock compensation plans |
569 |
|
791 |
|
557 |
|
607 |
|
Shares used for calculating diluted EPS |
124,884 |
|
126,865 |
|
125,881 |
|
127,214 |
|
|
|
|
|
|
|
|
|
|
Net Earnings Per Share: |
|
|
|
|
|
|
|
|
Basic Net Earnings from Continuing Operations |
$ 2.39 |
|
$ 0.63 |
|
$ 4.81 |
|
$ 3.06 |
|
Basic Net Loss from Discontinued Operations |
$ 0.13 |
|
$ 0.62 |
|
$ 1.54 |
|
$ 2.26 |
|
Basic Earnings Per Share: |
$ 2.52 |
|
$ 1.25 |
|
$ 6.35 |
|
$ 5.32 |
|
Diluted Net Earnings from Continuing Operations |
$ 2.38 |
|
$ 0.63 |
|
$ 4.79 |
|
$ 3.05 |
|
Diluted Net Loss from Discontinued Operations |
$ 0.13 |
|
$ 0.61 |
|
$ 1.54 |
|
$ 2.25 |
|
Diluted Earnings Per Share: |
$ 2.51 |
|
$ 1.24 |
|
$ 6.32 |
|
$ 5.30 |
|
|
|
Note: Earnings per share amounts may not add due to rounding |
For additional information contact:
Investors:
JacobsIR@jacobs.com
Media:
louise.white@jacobs.com
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SOURCE Jacobs
