ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Jabil Circuit, Inc. (NYSE: JBL) announced today that it has acquired three of its former operations in France and Italy, which were divested in July of 2010. Jabil will establish viable operations at the sites following multiple breaches by the purchaser of those facilities, including their diversion of funds that were specifically designated as working capital.
“We believe our actions today are in the best interests of the affected customers, former employees, Jabil shareholders, and the well being of the local communities where we operate,” said Tim Main, Jabil’s President & CEO. “Although the transgressions of the purchaser that led to this action were beyond our control, we could not stand-by and allow the circumstances to deteriorate further, risking more serious consequences to our stakeholders.”
Pursuant to the agreements, Jabil currently expects, based on existing information, to take a one-time charge of $25 million to $40 million to U.S. GAAP earnings in its second fiscal quarter of 2011. This charge is principally the write-off of working capital loans for the operations and other expenses associated with the transaction. (Operations in Meung-sur-Loire, France, which were separately and successfully divested on October 27, 2009, are not affected by these actions.)
Apart from the aforementioned charges associated with the transaction, the company re-affirmed its guidance for fiscal second quarter of 2011 provided during the quarterly earnings call on December 20, 2010.
About Jabil
Jabil is an electronic product solutions company providing comprehensive electronics design, manufacturing and product management services to global electronics and technology companies. Offering complete product supply chain management from facilities in 22 countries, Jabil provides comprehensive, individualized-focused solutions to customers in a broad range of industries. Jabil common stock is traded on the New York Stock Exchange under the symbol, “JBL”. Further information is available on Jabil’s website: jabil.com.
This news release contains forward-looking statements, including those regarding: our anticipated financial results for our second fiscal quarter; the re-establishment of viable operations at the sites as a result of our purchase of certain of our former French and Italian operations; the effect of our actions on our shareholders, affected customers, former employees and the local communities; the consequences to our stakeholders if we did not purchase these operations; and the transaction's financial impact on us. The statements in this news release are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: our determination as we finalize our financial results for our second fiscal quarter that our financial results and conditions differ from guidance for fiscal second quarter of 2011 provided during the quarterly earnings call on December 20, 2010; the success of these operations following our acquisition of them, various lawsuits, proceedings, claims, investigations or other matters threatened or pending against the entities acquired, the seller of these operations and certain of its affiliates and certain of our subsidiaries that we will have to address, as well as any potential additional lawsuits, proceedings, claims, investigations or other matters that may arise against or between such parties or their affiliates; in light of the lack of the acquired operations currently honoring their obligations to their customers (some of which we are also liable for) the satisfaction of the acquired operations obligations to its customers; the acquired entities having operational, financial and legal problems and liabilities that, due to our limited opportunity for due diligence, are currently unknown or unquantifiable; the apparent inadequate capitalization of the operations we are acquiring and, absent our anticipated, prompt actions, potential further liquidity problems, including pending or future insolvency type proceedings; their being sufficient amounts of work in the acquired operations to fully utilize their employees, as well as negotiations with those employees, who have engaged in various protest and other activities in light of the financial and operations problems of those operations, to address those grievances and, potentially, the size of such work forces going forward; our current expectations, forecasts and assumptions involved in our determination of the financial impact of this acquisition; and other risks, relevant factors and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2010, subsequent Reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.