Backlog Grows by
18.9% Year-Over-Year with TTM Book-to-Bill Ratio of
1.3x
Repurchased $202
Million of our Shares During Q1
Board Authorizes $1.5 Billion for Company's Largest Ever Share
Repurchase Program
Increasing Dividend to $0.32/share, a 10% Increase
Year-Over-Year
Raising FY 2025 Adjusted EPS Guidance
Range
DALLAS, Feb. 4, 2025
/PRNewswire/ -- Jacobs Solutions Inc. (NYSE: J) today announced its
financial results for the fiscal first quarter ended December 27, 2024.
Q1 2025 Highlights1:
- Gross revenue of $2.9 billion
grew 4.4% y/y; adjusted net revenue2 up 5.1% y/y
- Infrastructure & Advanced Facilities gross revenue grew
4.9% y/y; adjusted net revenue2 up 6.0% y/y
- GAAP net loss of $17.1 million,
down 113.3% y/y; adjusted EBITDA2 of $282 million, up 23.6% y/y
- Recorded $145 million in
mark-to-market losses on our investment in AMTM, reducing Q1 2025
GAAP net income
- EPS of ($0.10), down 109.7% y/y;
adjusted EPS2 of $1.33,
down 8.3% y/y (tax benefit of $0.49/share in Q1 2024)
- Backlog of $21.8 billion, up
18.9% y/y; Q1 book-to-bill 1.0x (1.3x TTM)
Jacobs' Chair and CEO Bob Pragada
commented, "Our focus on the transformed portfolio is already
having a positive impact on results. We started FY25 with solid
performance across our business, led by strong Water and Life
Sciences revenue growth within Infrastructure & Advanced
Facilities. As we look ahead to the rest of the fiscal year, we
continue to see tailwinds from robust bookings over the last
several quarters as well as a healthy pipeline across our end
markets. We are pleased with our first quarter results and that
we've increased our adjusted EPS outlook early in our fiscal
year."
Jacobs' CFO Venk Nathamuni added, "We delivered strong first
quarter results with gross revenue growth of 4.4% and adjusted net
revenue growth of 5.1% year-over-year. While net income margin was
negative in Q1 as a result of losses related to the mark-to-market
of our ownership stake in Amentum, margin performance on an
adjusted EBITDA basis showed material year-over-year improvement.
During the quarter, we substantially increased capital returns to
our shareholders by repurchasing $202
million of our shares and ended Q1 in a strong financial
position. We have started the fiscal year positively and look
forward to updating investors and analysts on our long-term
strategy at our Investor Day on February
18th."
Financial Outlook3
The Company reiterates its fiscal 2025 outlook for adjusted net
revenue to grow mid-to-high single digits over fiscal 2024,
adjusted EBITDA margin to range from 13.8-14.0% and reported free
cash flow (FCF) conversion to exceed 100% of net income. We are
raising our adjusted EPS range for fiscal 2025 from $5.80-$6.20 to
$5.85-$6.20 to reflect our lower share count
expectation.
Investor Day 2025
Jacobs will host its Investor Day on February 18, 2025 at 3:00
p.m. EST in Miami,
Florida. To participate in the live webcast, please register
at the company's investor relations website at
invest.jacobs.com.
|
1All data
reflects continuing operations only.
|
|
2See
Non-GAAP Financial Measures and Operating Metrics, and
GAAP Reconciliations at the end of the press release for
additional detail.
|
|
3 Reconciliation of fiscal 2025
adjusted EBITDA margin, 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.
|
First Quarter Review (in thousands, except
per-share data)
|
Fiscal Q1
2025
|
Fiscal Q1
2024
|
Change
|
|
Revenue
|
$2,932,956
|
$2,810,227
|
$122,729
|
|
Adjusted Net
Revenue1
|
$2,082,497
|
$1,980,976
|
$101,521
|
|
GAAP Net (Loss)
Earnings from Continuing Operations
|
($17,129)
|
$128,346
|
($145,475)
|
|
GAAP (Loss) Earnings
Per Diluted Share (EPS) from Continuing Operations
|
($0.10)
|
$1.03
|
($1.13)
|
|
Adjusted Net
Earnings from Continuing Operations1
|
$165,828
|
$183,418
|
$(17,590)
|
|
Adjusted EPS from
Continuing Operations1
|
$1.33
|
$1.45
|
($0.12)
|
|
U.S. GAAP effective
tax rate from Continuing Operations
|
107.5 %
|
30.6 %
|
76.9 %
|
|
Adjusted effective
tax rate from Continuing Operations1
|
27.5 %
|
(6.9) %
|
34.4 %
|
|
|
1See
"Non-GAAP Financial Measures and Operating Metrics" and the GAAP
Reconciliation tables that follow for additional
detail.
|
The Company's adjusted net (loss) earnings from continuing
operations and adjusted EPS from continuing operations for the
first quarter of fiscal 2025 and fiscal 2024 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 10:00 A.M. ET on Tuesday, February 4, 2025,
which it is webcasting live at www.jacobs.com.
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 margin and adjusted EPS, adjusted net
revenue growth 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 completed
separation of the SpinCo Business (as defined below) 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 SpinCo
Business, 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 and executive orders related to
governmental spending, and changes in U.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 the Middle
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 the Company's filings with the U.S.
Securities and Exchange Commission, including in particular the
discussions contained in our fiscal 2024 Annual Report on Form 10-K
under Item 1 - Business, Item 1A - Risk Factors, Item 3 - Legal
Proceedings, and Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations; and in our most
recently filed Quarterly Report on Form 10-Q under Part I, Item 2 -
Management's Discussion and Analysis of Financial Condition and
Results of Operations, and Part II, Item 1 - Legal Proceedings and
Item 1A - Risk Factors. 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.
About Jacobs
At Jacobs, we're challenging today to reinvent tomorrow –
delivering outcomes and solutions for the world's most complex
challenges. With approximately $12 billion in annual revenue
and a team of almost 45,000, we provide end-to-end services in
advanced manufacturing, cities & places, energy, environmental,
life sciences, transportation and water. From advisory and
consulting, feasibility, planning, design, program and lifecycle
management, we're creating a more connected and sustainable world.
See how at jacobs.com and connect with us on LinkedIn, Instagram, X
and Facebook.
|
Financial
Highlights:
|
|
|
Results of
Operations (in thousands, except per-share
data):
|
|
For the Three Months
Ended
|
|
Unaudited
|
December 27,
2024
|
|
December 29,
2023
|
|
Revenues
|
$
2,932,956
|
|
$
2,810,227
|
|
Direct cost of
contracts
|
(2,211,689)
|
|
(2,145,497)
|
|
Gross profit
|
721,267
|
|
664,730
|
|
Selling, general and
administrative expenses
|
(512,849)
|
|
(522,730)
|
|
Operating
Profit
|
208,418
|
|
142,000
|
|
Other Income
(Expense):
|
|
|
|
|
Interest
income
|
9,656
|
|
7,519
|
|
Interest
expense
|
(34,820)
|
|
(43,350)
|
|
Miscellaneous
expense
|
(130,107)
|
|
(2,964)
|
|
Total other expense,
net
|
(155,271)
|
|
(38,795)
|
|
Earnings from
Continuing Operations Before Taxes
|
53,147
|
|
103,205
|
|
Income Tax (Expense)
Benefit from Continuing Operations
|
(57,149)
|
|
31,610
|
|
Net (Loss) Earnings of
the Group from Continuing Operations
|
(4,002)
|
|
134,815
|
|
Net (Loss) Earnings of
the Group from Discontinued Operations, net of tax
|
(1,001)
|
|
46,639
|
|
Net (Loss) Earnings of
the Group
|
(5,003)
|
|
181,454
|
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(6,080)
|
|
(3,851)
|
|
Net Earnings
Attributable to Redeemable Noncontrolling interests
|
(7,047)
|
|
(2,618)
|
|
Net (Loss) Earnings
Attributable to Jacobs from Continuing Operations
|
(17,129)
|
|
128,346
|
|
Net Earnings
Attributable to Noncontrolling Interests from Discontinued
Operations
|
—
|
|
(3,375)
|
|
Net (Loss) Earnings
Attributable to Jacobs from Discontinued Operations
|
(1,001)
|
|
43,264
|
|
Net (Loss) Earnings
Attributable to Jacobs
|
$
(18,130)
|
|
$
171,610
|
|
Net Earnings Per
Share:
|
|
|
|
|
Basic Net (Loss)
Earnings from Continuing Operations Per Share
|
$
(0.10)
|
|
$
1.03
|
|
Basic Net (Loss)
Earnings from Discontinued Operations Per Share
|
$
(0.01)
|
|
$
0.34
|
|
Basic (Loss) Earnings
Per Share
|
$
(0.11)
|
|
$
1.37
|
|
|
|
|
|
Diluted Net (Loss)
Earnings from Continuing Operations Per Share
|
$
(0.10)
|
|
$
1.03
|
|
Diluted Net (Loss)
Earnings from Discontinued Operations Per Share
|
$
(0.01)
|
|
$
0.34
|
|
Diluted (Loss)
Earnings Per Share
|
$
(0.11)
|
|
$
1.37
|
|
Segment
Information (in thousands):
|
|
|
Three Months
Ended
|
|
Unaudited
|
December 27,
2024
|
|
December 29,
2023
|
|
Revenues from External
Customers:
|
|
|
|
|
Infrastructure &
Advanced Facilities
|
$
2,626,208
|
|
$
2,504,226
|
|
PA
Consulting
|
306,748
|
|
306,001
|
|
Total
Revenue
|
$
2,932,956
|
|
$
2,810,227
|
|
|
|
|
|
Infrastructure &
Advanced Facilities Pass Through Revenue
|
(850,459)
|
|
(829,251)
|
|
Infrastructure &
Advanced Facilities Adjusted Net Revenue
|
1,775,749
|
|
1,674,975
|
|
Total Adjusted Net
Revenue
|
$
2,082,497
|
|
$
1,980,976
|
|
|
Three Months
Ended
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Segment Operating
Profit:
|
|
|
|
|
Infrastructure &
Advanced Facilities (1)
|
$
157,776
|
|
$
128,892
|
|
PA
Consulting
|
66,738
|
|
54,455
|
|
Total Segment Operating
Profit
|
224,514
|
|
183,347
|
|
Restructuring,
Transaction and Other Charges (2)
|
(16,096)
|
|
(41,347)
|
|
Total U.S. GAAP
Operating Profit
|
208,418
|
|
142,000
|
|
Total Other (Expense)
Income, net (3)
|
(155,271)
|
|
(38,795)
|
|
Earnings Before Taxes
from Continuing Operations
|
$
53,147
|
|
$
103,205
|
|
|
|
(1)
|
Segment operating
profit for Infrastructure & Advanced Facilities includes
consolidated intangibles amortization of $38.7 million and $36.9
million and other corporate transaction related costs for the three
months ended December 27, 2024 and December 29, 2023,
respectively. Excluding these amounts, operating profit for the
segment was $210.3 million and $167.4 million,
respectively.
|
|
(2)
|
The three months ended
December 27, 2024 and December 29, 2023 included $15.0
million and $37.1 million, respectively, of restructuring and
other charges mainly relating to the Separation Transaction
(primarily professional services and employee separation
costs).
|
|
(3)
|
The three months ended
December 27, 2024 included $145.2 million in mark-to-market
losses associated with our investment in Amentum stock in
connection with the Separation Transaction.
|
|
Balance Sheets
(in thousands):
|
|
|
December 27,
2024
|
|
September 27,
2024
|
|
Unaudited
|
|
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,299,657
|
|
$
1,144,795
|
|
Receivables and
contract assets
|
2,912,513
|
|
2,845,452
|
|
Prepaid expenses and
other
|
136,855
|
|
155,865
|
|
Investment in equity
securities
|
597,939
|
|
749,468
|
|
Total current
assets
|
4,946,964
|
|
4,895,580
|
|
Property, Equipment and
Improvements, net
|
293,148
|
|
315,630
|
|
Other Noncurrent
Assets:
|
|
|
|
|
Goodwill
|
4,683,356
|
|
4,788,181
|
|
Intangibles,
net
|
795,285
|
|
874,894
|
|
Deferred income tax
assets
|
207,980
|
|
195,406
|
|
Operating lease
right-of-use assets
|
287,661
|
|
303,856
|
|
Miscellaneous
|
396,455
|
|
385,458
|
|
Total other noncurrent
assets
|
6,370,737
|
|
6,547,795
|
|
$
11,610,849
|
|
$
11,759,005
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Current maturities of
long-term debt
|
$
818,545
|
|
$
875,760
|
|
Accounts
payable
|
984,963
|
|
1,029,140
|
|
Accrued
liabilities
|
1,012,218
|
|
1,087,764
|
|
Operating lease
liability
|
114,293
|
|
119,988
|
|
Contract
liabilities
|
1,013,076
|
|
967,089
|
|
Total current
liabilities
|
3,943,095
|
|
4,079,741
|
|
Long-term
debt
|
1,717,270
|
|
1,348,594
|
|
Liabilities relating to
defined benefit pension and retirement plans
|
285,388
|
|
298,221
|
|
Deferred income tax
liabilities
|
142,971
|
|
116,655
|
|
Long-term operating
lease liability
|
383,966
|
|
407,826
|
|
Other deferred
liabilities
|
116,600
|
|
120,483
|
|
Total other noncurrent
liabilities
|
2,646,195
|
|
2,291,779
|
|
Commitments and
Contingencies
|
|
|
|
|
Redeemable
Noncontrolling interests
|
794,593
|
|
820,182
|
|
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
-
122,912,389 shares and 124,253,511 shares as of December 27,
2024 and September 27,
2024, respectively
|
122,912
|
|
124,084
|
|
Additional paid-in
capital
|
2,735,155
|
|
2,758,064
|
|
Retained
earnings
|
2,179,509
|
|
2,366,769
|
|
Accumulated other
comprehensive loss
|
(832,217)
|
|
(699,450)
|
|
Total Jacobs
stockholders' equity
|
4,205,359
|
|
4,549,467
|
|
Noncontrolling
interests
|
21,607
|
|
17,836
|
|
Total Group
stockholders' equity
|
4,226,966
|
|
4,567,303
|
|
$
11,610,849
|
|
$
11,759,005
|
|
Statements of
Cash Flows (in thousands):
|
|
|
For the Three Months
Ended
|
|
Unaudited
|
December 27,
2024
|
|
December 29,
2023
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net (loss) earnings
attributable to the Group
|
$
(5,003)
|
|
$
181,454
|
|
Adjustments to
reconcile net (loss) earnings to net cash flows provided by
operations:
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
Property, equipment
and improvements
|
20,922
|
|
25,169
|
|
Intangible
assets
|
38,661
|
|
51,119
|
|
Loss on investment in
equity securities
|
145,215
|
|
—
|
|
Stock based
compensation
|
13,059
|
|
19,310
|
|
Equity in earnings of
operating ventures, net of return on capital
distributions
|
(2,236)
|
|
1,870
|
|
(Gain) loss on
disposals of assets, net
|
(622)
|
|
608
|
|
Deferred income
taxes
|
20,253
|
|
(58,239)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables and
contract assets, net of contract liabilities
|
(57,753)
|
|
102,705
|
|
Prepaid expenses and
other current assets
|
9,617
|
|
50,216
|
|
Miscellaneous other
assets
|
17,243
|
|
28,385
|
|
Accounts
payable
|
(37,225)
|
|
(35,843)
|
|
Accrued
liabilities
|
(31,398)
|
|
37,584
|
|
Other deferred
liabilities
|
1,863
|
|
(1,665)
|
|
Other, net
|
(25,140)
|
|
15,688
|
|
Net cash provided by operating activities
|
107,456
|
|
418,361
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Additions to property
and equipment
|
(10,333)
|
|
(17,306)
|
|
Disposals of property
and equipment and other assets
|
1,481
|
|
43
|
|
Capital contributions
to equity investees, net of return of capital
distributions
|
932
|
|
1,266
|
|
Net cash used for investing activities
|
(7,920)
|
|
(15,997)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Net proceeds
(repayments) of borrowings
|
362,655
|
|
(33,613)
|
|
Debt issuance
costs
|
—
|
|
(1,606)
|
|
Proceeds from
issuances of common stock
|
7,984
|
|
11,355
|
|
Common stock
repurchases
|
(201,626)
|
|
(100,016)
|
|
Taxes paid on vested
restricted stock
|
(14,404)
|
|
(22,387)
|
|
Cash dividends to
shareholders
|
(36,481)
|
|
(33,366)
|
|
Net dividends
associated with noncontrolling interests
|
(2,245)
|
|
(4,708)
|
|
Repurchase of
redeemable noncontrolling interests
|
(3,729)
|
|
(24,360)
|
|
Net cash provided by (used for) financing activities
|
112,154
|
|
(208,701)
|
|
Effect of Exchange Rate
Changes
|
(58,180)
|
|
34,148
|
|
Net Increase in Cash
and Cash Equivalents and Restricted Cash
|
153,510
|
|
227,811
|
|
Cash and Cash
Equivalents, including Restricted Cash, at the Beginning of the
Period
|
1,146,931
|
|
929,445
|
|
Cash and Cash
Equivalents, including Restricted Cash, at the End of the
Period
|
$
1,300,441
|
|
$
1,157,256
|
|
Less Cash and Cash
Equivalents included in Assets held for spin
|
$
—
|
|
$
(215,622)
|
|
Cash and Cash
Equivalents, including Restricted Cash of Continuing Operations at
the End of the Period
|
$
1,300,441
|
|
$
941,634
|
|
Backlog (in
millions):
|
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Infrastructure &
Advanced Facilities
|
$
21,484
|
|
$
18,031
|
|
PA
Consulting
|
331
|
|
317
|
|
Total
|
$
21,815
|
|
$
18,348
|
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 spin-off of the SpinCo Business and merger of
the SpinCo Business with Amentum Parent Holdings LLC to form an
independent, publicly traded company, Amentum Holdings, Inc. (NYSE:
AMTM) (the "Separation Transaction"), substantially all CMS and
C&I (the "SpinCo Business") related assets and liabilities were
separated on September 27, 2024. As
such, the financial results of the SpinCo Business are reflected as
discontinued operations for all periods presented and therefore
excluded from the non-GAAP measures described below.
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. We sometimes refer to our GAAP revenue as "gross
revenue."
I&AF 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; involuntary terminations of management and
employees and related transition and legal costs (clauses (a) – (c)
collectively referred to as "Restructuring, integration, separation
and other charges").
|
|
|
|
|
|
2.
|
Excluding items
collectively referred to as "Other adjustments", which
include:
|
|
|
a.
|
intangible assets
amortization and impairment charges;
|
|
|
b.
|
impact of certain
subsidiary level contingent equity-based agreements in connection
with the transaction structure of our PA Consulting
investment;
|
|
|
c.
|
impacts related to tax
rate increases in the UK in a prior period;
|
|
|
d.
|
revenue under the
Company's transition services agreement (TSA) included in other
income for U.S. GAAP reporting purposes, and any SG&A costs
associated with the provision of such services;
|
|
|
e.
|
pretax mark-to-market
gains or losses associated with the Company's investment in Amentum
stock recorded in connection with the Separation Transaction;
and
|
|
|
f.
|
impacts resulting from
the EPS numerator adjustment relating to the redeemable
noncontrolling interests preference share repurchase and reissuance
activities.
|
|
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 (FCF) 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 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 Securities and Exchange Commission. Adjusted EBITDA margin
refers to a ratio of adjusted EBITDA to adjusted net revenue. Cash
conversion refers to a ratio of cash flow from operations to GAAP
net earnings from continuing operations. Reported FCF conversion
refers to a ratio of FCF to GAAP net earnings from continuing
operations. Book-to-bill ratio is an operational measure
representing the ratio of change in backlog since the prior
reporting period plus reported revenue for the reporting period to
the reported revenues for the same period. We regularly monitor
these operating metrics to evaluate our business, identify trends
affecting our business, and make strategic decisions.
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 earnings from continuing operations before taxes, income taxes
from continuing operations, net earnings attributable to Jacobs
from continuing operations, Diluted Net Earnings from Continuing
Operations Per Share (which we refer to as EPS from continuing
operations), to the corresponding "adjusted" amount, net cash
provided by operating activities to reported free cash flow and
revenue to adjusted net revenue. For the comparable period
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 total due to rounding).
|
Reconciliation of
Earnings from Continuing Operations Before Taxes to Adjusted
Earnings from Continuing Operations Before Taxes
(in thousands)
|
|
|
Three Months
Ended
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Earnings from
Continuing Operations Before Taxes
|
$
53,147
|
|
$
103,205
|
|
Restructuring,
Transaction and Other Charges (1):
|
|
|
|
|
Focus 2023
Transformation, mainly real estate rescaling efforts
|
—
|
|
49
|
|
Transaction
costs
|
1,355
|
|
2,995
|
|
Restructuring,
integration, separation and other charges
|
14,740
|
|
38,305
|
|
Other Adjustments
(2):
|
|
|
|
|
Transition Services
Agreement, net
|
(3,571)
|
|
—
|
|
Amortization of
intangibles
|
38,661
|
|
36,931
|
|
Mark-to-market losses
on investment in Amentum stock
|
145,215
|
|
—
|
|
Other
|
5,981
|
|
1,565
|
|
Adjusted Earnings
from Continuing Operations Before Taxes
|
$
255,528
|
|
$
183,050
|
|
|
(1) Includes pre-tax
charges primarily relating to the Separation Transaction for the
three months ended December 27, 2024. Includes real estate
impairments charges associated with the Company's Focus 2023
Transformation program for the three months ended December 29,
2023, as well as charges associated with various transaction
costs and activity associated with Company restructuring and
integration programs for the three months ended December 27, 2024
and December 29, 2023.
|
|
(2) Includes pre-tax
charges for the removal of amortization of intangible assets,
pretax mark-to-market losses associated with the Company's
investment in Amentum stock recorded in connection with the
Separation Transaction, the impact of certain subsidiary level
contingent equity-based agreements in connection with the
transaction structure of our PA Consulting investment and the
removal of revenues under the Company's TSA with Amentum for the
three months ended December 27, 2024 and December 29,
2023.
|
|
Reconciliation of
Income Tax Expense from Continuing Operations to Adjusted Income
Tax Expense from Continuing Operations
(in thousands)
|
|
|
Three Months
Ended
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Income Tax (Expense)
Benefit from Continuing Operations
|
$
(57,149)
|
|
$
31,610
|
|
Tax Effects of
Restructuring, Transaction and Other Charges (1):
|
|
|
|
|
Focus 2023
Transformation, mainly real estate rescaling efforts
|
—
|
|
(12)
|
|
Transaction
costs
|
(248)
|
|
(446)
|
|
Restructuring,
integration, separation and other charges
|
(3,805)
|
|
(9,156)
|
|
Tax Effects of Other
Adjustments (2):
|
|
|
|
|
Transition Services
Agreement, net
|
909
|
|
—
|
|
Amortization of
intangibles
|
(9,892)
|
|
(9,328)
|
|
Other
|
(15)
|
|
1
|
|
Adjusted Income Tax
(Expense) Benefit from Continuing Operations
|
$
(70,200)
|
|
$
12,669
|
|
Adjusted effective
tax rate from Continuing Operations
|
27.5 %
|
|
(6.9) %
|
|
|
(1) Includes income tax
impacts on restructuring activities primarily relating to the
Separation Transaction for the three months ended December 27,
2024 and December 27, 2024, along with impacts on real estate
impairments associated with the Company's Focus 2023 Transformation
program for the three months ended December 29,
2023.
|
|
(2) Includes income tax
impacts on amortization of intangible assets, on certain subsidiary
level contingent equity-based agreements in connection with the
transaction structure of our PA Consulting investment and the
removal of revenues under the Company's TSA with Amentum for the
three months ended December 27, 2024 and December 29,
2023.
|
|
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
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Net (Loss) Earnings
Attributable to Jacobs from Continuing Operations
|
$
(17,129)
|
|
$
128,346
|
|
After-tax effects of
Restructuring, Transaction and Other Charges (1):
|
|
|
|
|
Focus 2023
Transformation, mainly real estate rescaling efforts
|
—
|
|
37
|
|
Transaction
costs
|
1,520
|
|
2,190
|
|
Restructuring,
integration, separation and other charges
|
11,005
|
|
28,793
|
|
After-tax effects of
Other Adjustments (2):
|
|
|
|
|
Transition Services
Agreement, net
|
(2,662)
|
|
—
|
|
Amortization of
intangibles
|
23,664
|
|
22,962
|
|
Mark-to-market losses
on investment in Amentum stock
|
145,215
|
|
—
|
|
Other
|
4,215
|
|
1,090
|
|
Adjusted Net
Earnings Attributable to Jacobs from Continuing
Operations
|
$
165,828
|
|
$
183,418
|
|
|
(1) Includes after-tax
charges primarily relating to the Separation Transaction for the
three months ended December 27, 2024 and December 29,
2023. Includes non-cash real estate impairment charges associated
with the Company's Focus 2023 program and charges associated with
various transaction costs and activity associated with Company
restructuring and integration programs for the three months ended
December 29, 2023.
|
|
(2) Includes after-tax
and noncontrolling interest charges from amortization of intangible
assets, mark-to-market losses associated with the Company's
investment in Amentum stock recorded in connection with the
Separation Transaction, estimated tax impacts on certain subsidiary
level contingent equity-based agreements in connection with the
transaction structure of our PA Consulting investment and the
removal of after-tax revenues under the Company's TSA with Amentum
for the three months ended December 27, 2024 and
December 29, 2023.
|
|
Reconciliation of
Diluted Net Earnings from Continuing Operations Per Share to
Adjusted Diluted Net Earnings from Continuing
Operations Per Share (in thousands)
|
|
Three Months
Ended
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Diluted Net (Loss)
Earnings from Continuing Operations Per Share
|
$
(0.10)
|
|
$
1.03
|
|
After-tax effects of
Restructuring, Transaction and Other Charges (1):
|
|
|
|
|
Focus 2023
Transformation, mainly real estate rescaling efforts
|
—
|
|
—
|
|
Transaction
costs
|
0.01
|
|
0.02
|
|
Restructuring,
integration, separation and other charges
|
0.09
|
|
0.23
|
|
After-tax effects of
Other Adjustments (2):
|
|
|
|
|
Transition Services
Agreement, net
|
(0.02)
|
|
—
|
|
Amortization of
intangibles
|
0.19
|
|
0.18
|
|
Mark-to-market losses
on investment in Amentum stock
|
1.16
|
|
—
|
|
Other
|
—
|
|
(0.01)
|
|
Adjusted Diluted Net
Earnings from Continuing Operations Per Share
|
$
1.33
|
|
$
1.45
|
|
|
(1) Includes per-share
impact charges primarily relating to the Separation Transaction for
the three months ended December 27, 2024 and December 29,
2023, along with charges associated with various transaction costs
and activity associated with Company restructuring and integration
programs for the three months ended December 27, 2024 and
December 29, 2023.
|
|
(2) Includes per-share
impacts from the amortization of intangible assets, mark-to-market
losses associated with the Company's investment in Amentum stock
recorded in connection with the Separation Transaction, certain
subsidiary level contingent equity-based agreements in connection
with the transaction structure of our PA Consulting investment and
the removal of revenues under the Company's TSA with Amentum for
the three months ended December 27, 2024 and December 29,
2023.
|
|
Reconciliation of
Net Earnings Attributable to Jacobs from Continuing Operations to
Adjusted EBITDA (in thousands):
|
|
Three Months
Ended
|
|
December 27,
2024
|
|
December 29,
2023
|
|
Net (Loss) Earnings
Attributable to Jacobs from Continuing Operations
|
$
(17,129)
|
|
$
128,346
|
|
After-tax effects of
Restructuring, Transaction and Other Charges
|
12,525
|
|
31,020
|
|
After-tax effects of
Other Adjustments
|
170,432
|
|
24,052
|
|
Adj. Net earnings from
Continuing Operations
|
165,828
|
|
183,418
|
|
Adj. Income Tax Expense
(Benefit) from Continuing Operations
|
70,200
|
|
(12,669)
|
|
Adj. Net earnings from
Continuing Operations attributable to Jacobs before Income Taxes
|
236,028
|
|
170,749
|
|
Depreciation expense
|
20,922
|
|
21,694
|
|
Interest income
|
(9,656)
|
|
(7,519)
|
|
Adjusted Interest expense
|
34,820
|
|
43,350
|
|
Adjusted
EBITDA
|
$
282,114
|
|
$
228,274
|
|
Earnings Per
Share:
|
|
Three Months
Ended
|
|
Unaudited
|
December 27,
2024
|
|
December 29,
2023
|
|
Numerator for Basic
and Diluted EPS:
|
|
|
|
|
Net (loss) earnings
attributable to Jacobs from continuing operations
|
$
(17,129)
|
|
$
128,346
|
|
Preferred Redeemable
Noncontrolling interests redemption value adjustment
|
4,568
|
|
1,766
|
|
Net (loss) earnings
from continuing operations allocated to common stock
for EPS calculation
|
$
(12,561)
|
|
$
130,112
|
|
|
|
|
|
Net (loss) earnings
from discontinued operations allocated to common stock
for EPS calculation
|
$
(1,001)
|
|
$
43,264
|
|
|
|
|
|
Net (loss) earnings
allocated to common stock for EPS calculation
|
$
(13,562)
|
|
$
173,376
|
|
|
|
|
|
Denominator for
Basic and Diluted EPS:
|
|
|
|
|
|
|
|
|
Shares used for
calculating basic EPS attributable to common stock
|
124,055
|
|
126,105
|
|
|
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
Stock compensation
plans (1)
|
—
|
|
708
|
|
Shares used for
calculating diluted EPS attributable to common stock
|
124,055
|
|
126,813
|
|
|
|
|
|
Net Earnings Per
Share:
|
|
|
|
|
Basic Net (Loss)
Earnings from Continuing Operations Per Share
|
$
(0.10)
|
|
$
1.03
|
|
Basic Net (Loss)
Earnings from Discontinued Operations Per Share
|
$
(0.01)
|
|
$
0.34
|
|
Basic (Loss)
Earnings Per Share
|
$
(0.11)
|
|
$
1.37
|
|
Diluted Net (Loss)
Earnings from Continuing Operations Per Share
|
$
(0.10)
|
|
$
1.03
|
|
Diluted Net (Loss)
Earnings from Discontinued Operations Per Share
|
$
(0.01)
|
|
$
0.34
|
|
Diluted (Loss)
Earnings Per Share
|
$
(0.11)
|
|
$
1.37
|
|
|
|
|
|
Note: Per share amounts may not add due to
rounding.
|
|
|
|
(1) For the three months ended
December 27, 2024, because net (loss) earnings from continuing
operations was a loss, the effect of antidilutive securities of 576
was excluded from the denominator in calculating diluted
EPS.
For additional information contact:
Investors:
Bert Subin
JacobsIR@jacobs.com
Media:
Louise White
louise.white@jacobs.com
469-724-0810
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SOURCE Jacobs
