Press Release Jul 28, 2014

Jacobs Engineering Group Inc. Reports Earnings for the Third Quarter of Fiscal 2014

PASADENA, Calif.--(BUSINESS WIRE)-- Jacobs Engineering Group Inc. (NYSE:JEC) announced today its financial results for the third quarter of fiscal 2014 ended June 27, 2014.

Third Quarter Fiscal 2014 Highlights:

  • Net earnings for the quarter of $64.8 million;
  • Diluted EPS for the quarter of $0.49; and
  • Backlog at June 27, 2014 of $18.5 billion.

Jacobs reported today net earnings of $64.8 million, or $0.49 per diluted share, on revenues of $3.2 billion for its third quarter of fiscal 2014 ended June 27, 2014. This compares to net earnings of $108.9 million, or $0.83 per diluted share, on revenues of $3.1 billion for the third quarter of fiscal 2013 ended June 28, 2013.

Included in the company’s results for the quarter ended June 27, 2014 is an aggregate after tax negative impact of $47.0 million or $0.35 per diluted share related to restructuring efforts.

Jacobs also announced total backlog of $18.5 billion at June 27, 2014, including a technical professional services component of $12.3 billion. This is up approximately 7.5% from total backlog and up approximately 11.2% from technical professional services backlog of $17.2 billion and $11.1 billion, respectively, at June 28, 2013.

Commenting on the results for the third quarter, Jacobs President and CEO Craig Martin stated, “Third quarter results reflect good underlying performance by the business. In spite of delays in investment decisions in a number of markets, we were able to continue to build backlog. Our control of SG&A costs was also good. Our customers' capital expenditure forecasts remain robust and our prospect list is good. Our outlook for the fourth quarter and for FY15 continues to be positive.”

Commenting on the Company’s earnings outlook for the remainder of fiscal 2014, Jacobs Chief Financial Officer John W. Prosser, Jr. stated, “We’re making good progress with the restructuring and expect it to be complete by the end of FY14. Excluding the unusual adjustments in the first half and the net impact of restructuring in the second, we expect our EPS for the year to be slightly below the midpoint of Q2 guidance which was $3.15 to $3.55 per share.”

Jacobs is hosting a conference call at 11:00 a.m. Eastern Time on Tuesday, July 29, 2014, which it is webcasting live on the Internet at www.jacobs.com.

Jacobs is one of the world's largest and most diverse providers of technical professional and construction services.

Statements made in this press release that are not based on historical fact are forward-looking statements. Although such statements are based on management's current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially. We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by our forward-looking statements. For a description of some of the 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 period ended September 27, 2013, and in particular the discussions contained under Item 1 - Business; Item 1A - Risk Factors; Item 3 - Legal Proceedings; and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as the Company’s other filings with the Securities and Exchange Commission. We also caution the readers of this release that we do not undertake to update any forward-looking statements made herein.

Financial Highlights:

Results of Operations (in thousands, except per-share data):

        Three Months Ended       Nine Months Ended
        June 27, 2014       June 28, 2013       June 27, 2014       June 28, 2013
Revenues       $ 3,231,791         $ 3,080,995         $ 9,476,715         $ 8,675,720  
Costs and Expenses:                                        
Direct costs of contracts       (2,670,052 )       (2,613,991 )       (7,944,731 )       (7,308,092 )
Selling, general, and administrative expenses       (437,802 )       (298,645 )       (1,140,565 )       (873,797 )
Operating Profit       123,937         168,359         391,419         493,831  
Other Income (Expense):                                        
Interest income       2,624         1,332         7,425         3,521  
Interest expense       (5,565 )       (2,786 )       (10,490 )       (9,515 )
Gain on sale of intellectual property, net                       12,147          
Miscellaneous expense, net       (2,950 )       1,518         (3,139 )       (1,195 )
Total other income (expense), net       (5,891 )       64         5,943         (7,189 )
Earnings Before Taxes       118,046         168,423         397,362         486,642  
Income Tax Expense       (46,737 )       (56,334 )       (136,304 )       (162,941 )
Net Earnings of the Group       71,309         112,089         261,058         323,701  

Net Earnings Attributable to Noncontrolling Interests

      (6,467 )       (3,218 )       (19,024 )       (11,419 )
Net Earnings Attributable to Jacobs       $ 64,842         $ 108,871         $ 242,034         $ 312,282  
Earnings Per Share (“EPS”):                                        
Basic       $ 0.50         $ 0.84         $ 1.86         $ 2.42  
Diluted       $ 0.49         $ 0.83         $ 1.83         $ 2.39  
                                         
Weighted Average Shares Used to Calculate EPS:                                        
Basic       130,738         129,536         130,417         129,094  
Diluted       132,611         131,295         132,460         130,590  
                                         
                                         

Other Operational Information (in thousands):

        Three Months Ended       Nine Months Ended
        June 27, 2014       June 28, 2013       June 27, 2014       June 28, 2013
Revenues by Major Component:                                        
Technical professional services       $ 1,893,095         $ 1,719,986         $ 5,437,593         $ 5,026,034  
Field services       1,338,696         1,361,009         4,039,122         3,649,686  
Total       $ 3,231,791         $ 3,080,995         $ 9,476,715         $ 8,675,720  
                                         
Depreciation (pre-tax)       $ 25,684         $ 17,737         $ 70,701         $ 49,828  
Amortization of Intangibles (pre-tax)       $ 13,641         $ 6,646         $ 35,329         $ 22,327  
Pass-Through Costs Included in Revenues       $ 700,294         $ 674,715         $ 2,152,875         $ 1,794,748  
                                         
Capital Expenditures       $ (25,081 )       $ (27,035 )       $ (92,033 )       $ (91,520 )
                                                 
                                                 

Selected Balance Sheet and Backlog Information (in thousands):

                  June 27, 2014             June 28, 2013
          Balance Sheet Information:                        
          Cash and cash equivalents       $ 772,613               $ 1,295,517
          Working capital       1,583,178               2,066,934
          Total debt       830,767               444,976
          Total Jacobs stockholders' equity       4,501,027               4,091,606
                                   
          Backlog Information:                        
          Technical professional services       $ 12,324,244               $ 11,087,100
          Field services       6,162,976               6,108,500
          Total       $ 18,487,220               $ 17,195,600
                                       
                                       

Non-U.S. GAAP Financial Measures:

The following table reconciles certain elements of the Company's results of operations excluding the 2014 Restructuring to its U.S. GAAP results of operations. Although such information is non-GAAP in nature, it is presented because management believes it provides a better view of the Company’s operating results to investors to assess the Company’s performance and operating trends.

                                           
                 

Without 2014

Restructuring

         

Effects of 2014

Restructuring

          U.S. GAAP
          Consolidated pre-tax earnings (loss)       $ 174,701             $ (56,654 )           $ 118,047  
          Tax (expense) benefit       (56,440 )           9,702             (46,738 )
          Net earnings of the Group       118,261             (46,952 )           71,309  
          Non-controlling interests       (6,467 )                       (6,467 )
          Net earnings of Jacobs       $ 111,794             $ (46,952 )           $ 64,842  
          Diluted earnings (loss) per share       $ 0.84             $ (0.35 )           $ 0.49  
                                                       

 

Source: Jacobs Engineering Group Inc.

Jacobs Engineering Group Inc.



John W. Prosser, Jr.



Executive Vice President, Finance and Administration



626.578.6803