Jabil Inc.

Greetings and welcome to the JABL third quarter of fiscal year 2020 earnings conference. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Adam Berry, Investor Relations. Thank you. You may begin.

Good morning, and welcome to Jabil's third quarter of fiscal 2020 earnings call. Joining me on today's call are Chief Executive Officer Mark Mondello and Chief Financial Officer Mike Destor. Please note that today's call is being webcast live, and during our prepared remarks, we will be referencing slides. To follow along with the discussion and view the slides, you will need to be logged into our webcast on Jabil.com. At the end of today's call, both the presentation and a reply to the call will be available on Jabil's Investor Relations website. During today's call, we will be making forward-looking statements, including, among other things, those regarding our outlook for our business and expected fourth quarter and fiscal 20 net revenue and earnings. These statements are based on current expectations, forecasts, and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties are identified in our annual report on Form 10-K for the fiscal year ended August 31, 2019, and other filings. Table disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, it's my pleasure to turn the call over to Mark Mondella.

Thanks, Adam. Good morning. Good morning. I appreciate everyone taking time to join our call today. I'll begin by providing a brief business update before turning the call over to Mike, where he'll offer details on our Q3 performance and address our guidance for the balance of the year. So, before I get into the business at hand, I'd like to extend a warm thanks to our people here at Jabil for their hard work and commitment, especially during these trying times. I tend to think that successful and sustainable organizations are evaluated not only on their ability to deal with what they can control, but also on their ability to react and adapt to the environment, especially environments that shift suddenly and shift unexpectedly. For this, I give our team high marks. Their response to COVID-19 gives me confidence and demonstrates our resiliency. At Jabil, we help design, develop, and bring to life numerous products, products that the world depends on. In many ways, this pandemic has reinforced that Jabil itself is an essential business. If I may, I'll now take you back to our second fiscal quarter for proper context specific to COVID-19. As our teams in China attempted to return from Chinese New Year in mid-February, they were faced with travel lockdowns, quarantines, and the need for social distancing. Add to this the fact that our sites in China were operating at less than 50% capacity. Given the ambiguity that was fast unfolding, we rescinded our financial outlook for the fiscal year. As we moved into the third quarter, COVID quickly spread, impacting regions and countries that are home to our many factories. March quickly turned into April, and April to May. And while many of us were hunkered down following stay-at-home orders, transforming kitchens or bedrooms or garages into newfound workspaces, our factories, by and large, continued to build and ship product. Most importantly, throughout it all, the global incident rate of confirmed COVID cases across Jabil remained remarkably low. I want to offer a special thanks to all of our frontline workers. Those of you that work so hard in keeping our people safe, while taking amazing care of our customers directly from the factory floor. Your ability to execute and perform has been nothing short of spectacular. And on top of it all, together you created a COVID playbook that we use today across all sites. A playbook of protocols and best practices that we openly share with suppliers, customers, communities, and competitors. Moving on, to the critical business catalyst for the quarter. We saw strong demand in healthcare and packaging, cloud, edge devices, and mobility. In our healthcare sector, we joined the fight against COVID, as it was simply the right thing to do. Our teams quickly transformed manufacturing lines around the world, contributing to the production of critical products, such as ventilators, specialized manifolds, 3D printed components, face shields, protective masks, and test kits. In terms of our packaging business, which serves many of the world's top consumer brands, demand was strong in areas like cleaners and disinfectants, touchless dispensers, antibacterial products, and eat-at-home food products. At the same time, internet usage was exploding. prompted by remote learning and video conferencing. Teams from our cloud sector, along with the teams from our mobility and edge device sectors, were in full-blown customer care mode, as end users sought digital access to family, friends, business colleagues, and patients, a trend likely to be part of the world's new normal. During the quarter, these areas of strength were offset by weakness in our automotive and transport and print and retail sectors. Nonetheless, our well-diversified commercial portfolio allowed us to deliver $6.3 billion in revenue in line with our expectation. To me, this is quite meaningful. With each passing year, the blend of our revenues become better balanced and far less dependent on any single product or product family. Quite simply, greater diversification increases the reliability of our revenue. Having said this, and as we sit here today, the impact of COVID will cost us roughly $160 to $170 million for fiscal year 20. Therefore, We're taking aggressive actions to reshape the organization and ready ourselves for fiscal 21. We'll reduce our workforce and, in return, lower our cost structure by roughly $50 million. I'll now take a minute and express my appreciation for those impacted by this difficult decision, yet a decision that's corrupt for the business. In taking this decision, we've done our very best to ensure that everyone is treated with complete respect, care, and dignity. As we make our way through the summer months, there's considerable work ahead as we prepare to host a call with investors this coming September. For lack of a better description, we look at this call as having a conversation with investors. a conversation about how Jabil management is thinking about fiscal 21 during these uncertain times. It's important to note that throughout this macro uncertainty, we remain steadfast in prioritizing free cash flow and expanding core operating margins. In closing, you can be assured that we're navigating today's issues while being thoughtful about tomorrow's challenges. Looking ahead, I believe our business landscape and how we choose to conduct our business may look and feel a bit different. It'll possibly be more efficient. It'll possibly be more optimized. I think this could have real benefits as long as we don't lose a single ounce of our customer intimacy or customer care. Also, I believe key secular trends will remain and remain in our favor. Lastly, plenty of stuff will still need to be built, and building stuff is exactly what we do. Thank you. I'll now hand the call over to Mike.