CEO Tim Main on Jabil Circuit Inc. in 2010: Leaner, meaner, greener
Wake up and good morning. Well, the Jabil Circuit gang was in a good mood late yesterday with a strong quarterly earnings report (and slide presentation), a clear confidence about 2010 (even if the recovery will be slow), and the St. Petersburg-based electronics manufacturer pushing deeper into new businesses.
In a conference call with analysts, Jabil CEO Tim Main started off remarks with "What a difference a year makes" and offered up a couple of points of particular interest to me. Here is the full conference call transcript. And here are my takeaways from it:
1. Leaner is meaner. Jabil squeezed more profits out of smaller revenues and Main sees no reason not to continue corporate efforts to streamline and pursue even greater productivity. The bottom line? Jabil will hire sparingly at best, in keeping with recovery forecasts that companies will not offer up jobs in large dollops as the economy gains strength.
2. New business lines look promising. Jabil's long been big in manufacturing the guts of things like networking devices, cell phones and monitors. Now it's talking more about medical-related products (and healthcare is a relative bright spot in the economy) and "clean tech" which means things like smart grid electric meters, smarter appliances and solar power systems. These are not big buck contributors to Jabil. But they are indicators of Jabil's flexibility in pursuing the next hot market and something to watch for the future.
3. Slow recovery but no dip later in 2010. There's growing concern that the recent signs of economic improvement will fizzle later in 2010, especially as the federal stimulus package runs out of money. Jabil does not see its output suffering that way.
4. Darwinian competition is okay with Jabil. I'll let CEO Main sum up this notion with a colorful remark offered up to analysts yesterday:
"I’d say that the competitive environment – my color would be is it’s not any more hyper competitive this quarter than it’s been for the last 10 or 15 years but it’s still very competitive out there. The food supply has gone down so only the most efficient people can compete and provide the type of pricing that the market requires and still make a buck. Yes, we’ve had lean for a long, long time. This is not a flippant comment but we are getting better at it and we are seeing better results today than we have in the past."
Main, by the way, received total compensation in 2009 of more than $4.1 million. That's up from almost $3.5 million in 2008, according to Jabil's new proxy statement. So, to echo Main's own words, what a difference a year makes? About $600,000 more in the pocket.
-- Robert Trigaux, Times Business Columnist