Jabil Inc. (JBL) Earnings Call Transcript & Summary

Hello, everyone, and thank you so much for joining us here on day 2 of the Citigroup Investment Research TMT West; Technology, Media and Telecom West. We are doing this virtually, of course, due to the coronavirus pandemic. My name is Jim Suva, and I'm the IT hardware analyst at Citi Investment Research. I have a few housekeeping items. First of all, this is Jabil Circuits, stock ticker JBL, who will be doing this interactive fireside chat with us. This is meant to be very interactive. If you do have questions, please e-mail me, [email protected], and I will ask them on your behalf. We are not opening up all the lines due to the high number of our participants on this to ensure the quality of this meeting in the audio and video part of it. We do want to note a couple of other things. Media and press are not allowed on this call. So if you're media or press, please disconnect. And if you are a MiFID II investor, please ensure you have the MiFID II research agreement in place. I want to introduce -- we have 3 people from Jabil, who are with us on the call today. First of all, we have Mike Dastoor. He's the Chief Financial Officer of Jabil Circuits. Also, we have Kenny Wilson, he's the CEO of Green Point. And you recall that Jabil purchased Taiwan Green Point, I believe it was back in 2007, so it's been very much well integrated into Jabil and part of its company. And we also have Head of Investor Relations, Adam Berry, also joining us. So thank you so much for joining us here. I'm in San Francisco, Silicon Valley. We normally would be hosting this in Las Vegas, but we're doing this virtually this year. And thank you for connecting from your various locations in Florida.

Maybe to kick things off a little bit, maybe can you talk overall about the macro demand, the environment and the trends that you're seeing kind of near term, maybe 6 to 12 months, as we recover from the pandemic? And of course, you being in Florida, you have recovered a lot faster than us in California. As we talked about beforehand in our breakout meeting, I've been still cutting my own hair for the past 9 months, yet Florida seems to be opening up a lot faster than other parts. So gentlemen, if you could please talk about the macro environment and demand.

Sure. Thanks, Jim. Good morning, everyone. For the record, I cut my own hair as well here in Florida. I don't go out and get that done myself. So I guess, Jim, the best way to answer your question, there's no single answer for the macro environment trend that we're seeing today, different parts of the macro environment of behaving in different ways. As far as Jabil is concerned, I think one of the key benefits we're seeing is there's this whole convergence of technology that's taking place in our day-to-day lives. We always expected 5G to be a catalyst. I think COVID has expedited some of that convergence of technology. If you think of where we play, we're looking at it from a -- be it in digital health care, be it in smart packaging, be it in vehicle packaging, be it in devices related to work and learn from home, automotive, 5G infrastructure or shift to cloud, there's a number of areas where this convergence is taking place. And Jabil continues to benefit from that. I think this is a longer trend. It's not just a 6- to 12-month effect. I -- my personal belief is this continues well into years 3 and 4 as well.

And Mike, any comments on -- has the pandemic actually shaped or changed any of the underlying demand trends or the outlook or growth drivers? Has it changed anything or just created a pause?

I think there's a little bit of a pause in certain areas. But overall, as I mentioned, the convergence of technology has actually been expedited because of COVID. It was always coming, in our opinion, with the 5G rollout and the high speeds and the lack of latency in our day-to-day lives. But this -- I think, overall, there are certain pockets of the business, which have been down. Those will recover as we come out of COVID. I think trend in retail is a good example. I think we've talked about industrial, where some of the home buildings, industrial buildings have slowed down a little bit. But overall, the trend is a very positive one for us.

And in the competitive landscape, there are some meaningful changes that are about to occur. One of your competitors, Catcher, is selling their casing factory to Lens Tech. Do you think that, that changes anything or doesn't change anything? And maybe this is an opportunity for Kenny to chime in here, too, because some people think that all you do for your largest publicly disclosed company is in cases, which I believe is actually quite not the [ truth ]. You do much more for them. So if you could maybe talk about that a little bit.

Yes. As Jim mentioned, I'm the -- I run our Green point business. So yes, we are obviously very familiar. We've been dealing with -- we've been making casings since iPhone 4, so like 12, 13 years. So that's been a big part of our relationship there for a long time. So we're very familiar with Catcher. We're very familiar with the Catcher-Lens deal, and our opinion that there's certainly enough space for multiple suppliers in that side of the supply chain. So we are -- we know them. We're not concerned about it. We're very comfortable with where we are and the relationships that we have and the products that we're involved in. So certainly -- and all of that has obviously been baked into our guidance when we've looked at the quarter and the year. So we're in a pretty good space there. The other thing, I think, that you alluded to, Jim, which is that casings is just one part of the business that we manage with multiple customers and with Apple specifically here. We have -- I mean in '07, you're right, when we acquired Green Point. Green Point was effectively a tooling -- a high-precision tooling and molding company. So molding has been in our DNA, and it's been at the heart of what we do for a long time. So we're able to offer those services plus the electronic-type services that Jabil excels. And so we're able to combine all of them together. So we got a molding capability with an EMS capability and assembly capability, also a really best-in-class machining. So we feel that we've got compelling value proposition that we can use to offer our customers in this space.

And if I remember right, you gave some guidance about profitability or margins of the DMS business. And I think those profitability and margin outlooks are the highest in multiple years. Could you maybe walk us through a little bit about? Is my memory correct on that? And what's driving it? Is it mostly volumes? Is it efficiencies? Can you talk to us about profitability of the DMS business?

Yes. Well, the one thing that -- and Mike can help with this also. Obviously, the stuff that we do and the Green Point is only one part of our DMS business. So in there, there's also health care. You know about our JJMD relationship there. So I think what we're seeing generally is that we spend a lot of time trying to diversify. We've been very focused and focusing on the right products in the right areas. We have been getting our facilities utilized better also. So I think it's a combination of all of that. But certainly, we have enhanced -- if you look at our results, we've grown a lot outside of our Green Point business and the DMS space also, which has been very helpful.

If I can just chime in, Jim, I think from a Green Point perspective, Kenny has done an excellent job in terms of building a diversified portfolio, having some level loading throughout our fiscal year and huge amount of operational efficiencies, which he brought to the table as well. So that whole Green Point area is doing better in terms of margin. Then if you look at our regulated industries, Kenny talked about health care. Our JJMD relationship is going extremely well. Other parts of health care are doing really well as well. We've been talking about health care for a while. We're really excited about that part of the business, which is a higher-margin business. And then if you look at the next piece of the business in DMS is the automotive and transportation piece as well. We've been talking about Jabil's been in that whole automotive world for the last 50 years. We've been working on electrification of cars for the last 10, 12 years. That's a big head start versus our competitors. And we've been working with the largest electric vehicle company in the world for 10, 12 years. Our capabilities that we've built up in autonomous, connected and electrification, ACE, as we call it, those capabilities are all bearing fruit as well. So we're seeing some nice leverage in those capabilities that we've built up, some of the investments we've made in those areas, et cetera. And all of those, Jim, are actually leading us to a much better margin in DMS overall.

And Mike, you actually brought up your success in auto. Could you maybe just help investors understand, not necessarily by customer but maybe some examples of products that you make in autos? Is it like dashboard, entertainment and cabin LED lighting? Or are you guys actually looking at making a full car from tires to bumpers, to hood to trunk?

At this stage, we're not looking at that, Jim. That's a very capital-intensive area. So it's not a full car. But I think everything you mentioned, we work on. If you think of an electric car, we work on almost everything other than the battery itself. We're not actually making the battery. But we do help our customers with systems around the battery and chargers and the electronic modules and the infotainment. And it's a very different car than a normal transmission-driven car. So I think the capability is very specific. And like I said, we've got this head start in the last 10, 12 years with that largest electric vehicle company in the world.

Great. Maybe switching over to components and the supply chain because you're so important around getting the components to assemble, to getting them to the end product. During the pandemic, in early days, there's a lot of production stoppages of components and a lot of component shortages. Are you still seeing component shortages if things reached to equilibrium? Or any outlook on the component shortages and your ability to procure the components to be able to meet the end demand?

Maybe I'll take that. Yes. I mean it's been a really interesting dynamic. Obviously, as the demand has switched from -- to areas like health care to essential type of industries, and so that's going to skew the demand to some degree with factories closing for periods of time that you just cannot predict. So it has been certainly, historically, been choppy. But what we have seen there is, if you look historically, we've managed through multiple different supply chain kind of constraints in the past. It's one of the reasons why we've talked a lot about our investments in digital supply chain. We've talked a lot about the single instance of SAP. So we do believe that being proactive in those areas is actually really, really helpful when you run into kind of supply chain constraints, allowing us to really focus on leveraging our relationships and focus in areas where we can help our suppliers. So for sure, we have been managing through some issues but nothing more than we've done historically and the growth we've seen over the last multiple years. So yes, we see issues. Yes, it's kind of normal, and we're working through them. And it's all kind of baked into our outlook, and we don't see anything that's different from what we expected.

Great. Maybe switching topics to, say, 5G. I'm sorry, let's start with cloud first. A lot of people don't really recognize cloud and demand for cloud products is being associated with Jabil, yet you have -- over the past few years, really seeing a lot of growth in your cloud initiative. Can you kind of walk us through that a little bit? And some investors have told me they have a concern because you went from high growth of cloud to kind of flattish, but I tried to explain it talking about the consignment model as that's catching on a little bit. Could you just focus on cloud a little bit?

Sure. So let me start by saying that the value proposition that we have for cloud absolutely still exists. Hyperscalers are more and more interested in the offering that Jabil is providing. I think you hit the nail on the head when you said we went from 0 cloud business to a very high dollar amount in just a relatively short period of time. So that value prop really is resonating with hyperscalers. And a lot of that demand is not just end market driven, so there's a little bit of a shift taking place to EMS as well because of the end-to-end solutions that we can provide beyond integration, into metal enclosures, into PCBAs, into colocation. We're in 30 countries, et cetera. So there's a very good value proposition there. So nothing has changed from that perspective. I think you highlighted consignment. That is a big change that we've made. I think the consignment change is advantageous to both the customer from the working capital charge standpoint to Jabil as well who benefits from lower margin -- better margin and lower working capital. So it's a win-win for both sides, that consignment piece. I think people do get a little bit confused. If you look at overall cloud business, the trajectory would be upward rather than negative or neutral. I think, in Q1 specifically, yes, we had a huge growth in cloud. Some of that we did call out as a little bit of a [ blue bird ] sort of a situation where it was specific for that Q1. But we're not seeing any change in that growth trend in the cloud business. We continue to be excited about that not just with existing customers but with new hyperscalers as well and beyond hyperscalers with the smaller white box and other customers as well. So I think cloud, this entire shift from on-premises to cloud, enterprise moving into the cloud, some of that has been expedited again by COVID. All of that is working out really well for us.

And your past growth trends in cloud has been very strong, but your outlook was relatively flattish. Any comments on that as I believe it's probably due to consignment, but may maybe there's other factors?

No, I think consignment is the right answer. I think consignment does play a big role in that. As we continue to convert more and more materials to a consignment model, that does have an impact. The value-add doesn't change. The value-add is actually on an upward trajectory. But you're right. It's mainly the consignment piece.

Okay. And I think you actually quantified that, and maybe Adam Berry knows the exact dollar amount of it. I think you actually quantified to help investors to be able to compare pre-consignment and post-consignment. Am I right, Mike and Adam?

Absolutely. Yes. So we talked about consignment at the beginning of this fiscal year being about $1 billion. That said, we did exceed our expectations quite significantly in Q1, and we didn't really give an updated outlook on that. But let's just say that ex consignment, the cloud business -- I should say the 5G wireless and cloud business will be growing year-over-year for certain.

Great. Which brings us to the exact next topic and that's 5G. Maybe can you talk a little bit about the 5G segment? Because there's been the political trade wars of the U.S. placing some companies like Huawei on entity list of who can and cannot ship to them. And then we're seeing some -- while not in the U.S., Huawei isn't prevalent -- in Europe, Huawei is really prevalent, and we're seeing a lot of news about customers potentially -- service providers not using Huawei quite as much. Are you seeing any of those trends? Are you able to ship to Huawei or not? How should we think about 5G and Huawei and entity list that the U.S. has put down?

Sure, Jim. So I think we're well positioned with 2 out of the 4 suppliers. I think you mentioned Huawei and then there's a Korean supplier as well. But we're well positioned with the 2 European suppliers that you referred to. I think we're seeing -- definitely seeing upsides. The Huawei relationship is helping these European suppliers. The 5G rollout is still in a relatively immature stage where rollouts continue. They're nowhere near 100% rolled out. They've been rolled out right now in the developed countries that will shift at some point in time, developing countries and underdeveloped countries as well. So there's a very long tail to this business. If you look at some of the providers, the AT&Ts, the Verizons, the T-Mobiles of the world, they are rolling out their 5G infrastructure, and that's where we play. It's a 5G infrastructure that we're helping them with it. And as that gathers steam, like I said, they'll be shipped from developed countries to developing and underdeveloped countries as well. And I think we're really well positioned in the whole 5G area as well.

So, so far, everything we talked about seems is glamorous, but then I like to also be well balanced. So maybe can we look over, say, at the storage or the networking segment and walk us through that? Because if my memory is right, I think we're expecting a decline in that. Or am I off on that?

No, I think you're absolutely right. I talked about how the cloud businesses -- the shift that's taking place from on-premises to the cloud, that continues. As a result of it, some of the enterprise and networking sort of business does have a negative impact there. We're looking at some of our business sort of terms, making sure that the financial metrics that we have with some of these customers make sense for both parties. So there's definitely some level of selection or some level of renegotiation going on, on that front. And then this whole COVID thing has had a little bit of an impact on enterprise. We've talked about that in the past. I think as COVID dissipates and vaccines come in, some of that will come back. But overall, networking and storage, I wouldn't think of -- I wouldn't consider that a high-growth area for us. I would think of that as a nice part of the business to have, which sort of renegotiated, reengagement, reestablishment of some of the terms.

And Jim, I'd just add that, relatively speaking, that business is lower margin for us. So in our efforts to grow margins over long periods of time, that business declining doesn't affect us in our journey to grow margins.

Okay. Mike, as Chief Financial Officer, all your business segment leaders are coming to you asking for capital expenditures, writing checks for expansion, some leaders may want to go into some new areas. How should we think about your capital deployment? And if I remember right, I think you're the only EMS company that actually pays a dividend. So can you walk us through uses of cash and capital deployment as you see it?

Sure. So if you think of CapEx at around that 3% level, we've been 2.8%, 2.9% in the past. We've been 3.1%, but that 3% of revenue sounds like a reasonable amount. So if you think of CapEx right now, I think the guidance we provided is in that $800 million range. Beyond that, we do have a $600 million authorization to do share buybacks. You mentioned dividends. We're continuing with the whole dividend piece. And the buybacks, up to now, out of the $600 million, I think we've done about half of that. We will continue to be opportunistic and get a better value for -- because we do think that the company is undervalued today. So the buybacks will continue until we go to authorization.

And I got a couple of investor questions. One is that -- somebody wanted to ask, with the pandemic, are there any regional shifts that are materially going on? They said, specifically with the pandemic breakout of COVID, are customers looking at going a lot more local now and Jabil's global footprint really, really helps with that? Or is it more discussions or contingency planning? Or is there actually substantive discussions and changes going on as we've gone through this pandemic?

Jim, I think the best way to answer that is there's no major significant changes. We always have discussions. We always have consultations. There's always some part -- some country that is a little bit more preferable sometimes for our customers because of their local presence, et cetera. And we're always considering that. So there's nothing majorly new just because of COVID. I think this -- one good thing is we're in 30 countries. I think Kenny talked about single instance of SAP, very critical when you're in so many countries, and we have a centralized procurement system as well. Kenny, I don't know if you have any further thoughts on that as well?

Yes. I think you cut well, Mike. The one thing I would say is that what it has done -- I think any -- the discussions continue, but what it has done is [ clean ] up the pause on plans that were in place to move some business around to some degree because just people aren't traveling. People can't cross borders. So it's probably held a little bit some of the plans maybe to regionalize to some degree, but it hasn't changed the trajectory of just looking to rebalance some of our business more locally as opposed to consolidating in one area.

Great. Somebody asked, they haven't spoken much about Nypro recently. And I truly believe maybe it's simply because it's been integrated into Jabil as a packaging supplier. But can you talk about Nypro a little bit, kind of what you're doing there? Any success or things you should think about, about why it hasn't been, say, as visible in the public eye?

Sure. So Nypro, you're absolutely right, is integrated into our health care business. There was a little bit of packaging that came with that as well. And all of that is integrated with that health care business, mainly the health care. We've talked about how excited we are. The Nypro brand name has helped us gain more business. We feel that the Jabil brand name now, especially with newer customers, such as JJMD, et cetera, is a little bit more meaningful. And hence, we've sort of stayed away from the Nypro name a little bit. But overall, it's very much part of our health care business.

Somebody asked, thank you for having Kenny from Green Point on. And someone said that they had thought the majority of your top customer, and I know we don't want to focus on Apple, but you publicly disclosed Apple as your top customer, that they do almost all focused on casing. But it sounds like from Kenny's comments, it's a lot more diversified beyond casing for that top customer. And if I remember correctly, casing isn't even 50% of it that you're actually in almost literally all their products. Could you help us understand the diversification within that customer? Because some people are very sensitive to risk of a concentration, but it seems like it's actually a lot more diversified.

Yes. There's a couple of things there. Let me talk casing for a second. What we've been working on there, we can be diversified in that space. So you can be on multiple programs, which offset some of the risk of a home run for one product and an issue with another. So we've been focused on that. But you're right. And we've said previously that -- and we don't think we're different from most of the people we compete with in that space, is that I think almost every product that ships out of an Apple store has a Jabil component or assembly in it. So whether it's product for the home, whether it's your AirPods, whether it's the new over-ear device or power adapters or parts for the iPads, parts for Macbooks, we do assemblies and we do components for all of that. Remember that -- and if I can leave you with the messages that when we acquired Green Point in '07, Green Point was really, really good at high-precision tooling and injection molding. So we've actually added the machining portion to that piece of business, and also we've added the Jabil heritage of just best-in-class electronic manufacturing. So we get a whole suite of capabilities that we can then use to service products, whether it's from watch to -- I mean, basically, almost everything that ships out of the Apple Store, to some degree, has a Jabil device component or assembly in it.

So it sounds a lot more diversified maybe than what people would have thought about back when you made the acquisition about 13 years ago.

For sure. Yes, for sure.

And just to provide some color, Jim, if you look at -- from a percentage standpoint for our overall revenue, we call out our mobility piece, I think the guidance we provided in our slides during our December call was about $3.9 billion [ probability ]. Less than half of that is casings. So if you take that as a percentage of our total revenue, which is $27-odd billion, you're talking in the mid- to slightly high single digits in terms of concentration on casing.

Yes. So casing is important, but it's not the bulk of it and it's not 100% relied on, which I think there's a misperception that people think it's only casing you do.

Absolutely.

That was a great question, Jim, and I'm glad you spent some time here because over time, Jabil has made a very deliberate and purposeful -- has acted on a very deliberate strategy to diversify the business, right? So not only does that pertain to Kenny's business and just the space where he plays, but it's also in end markets like automotive. It's also in end markets like cloud, all the things that we've discussed. And then as part of that strategy, we've tried to associate ourselves with not only the best-in-class customers but the areas within that business in those end markets that seem to be really growing. And I think today, if you looked at us and you compared us to maybe 2016 or whenever, we are as diversified as a company as we have ever been. And the reason why that's so important is because we believe it gives us real sustainability going forward in terms of growing margins, growing cash flows and just delivering on the results that we've put out there. And I think it's a really interesting time for us because I'm really pleased with the results of those efforts, and these 2 gentlemen have certainly led that. And I think if you go back and if anyone missed it, our Q1 results were pretty strong. And we beat our own internal results, and we gave a -- and we guided up the year. So it looks like the strategy is coming together, and it's a really exciting time for Jabil.

There was a question here asking about personal fitness, whether it be clothing we wear, shoes we wear, and they mentioned that Flex or Flextronics previously was trying to do -- build a custom ship-to-your-home shoes and spent a lot of money and that unraveled in a negative way. And I believe you guys had mentioned that you were talking with Adidas and some of the others to do something similar. How has that played out? And has that model turned into, "Hey, let's just do more logo stuff?" Or are you actually doing custom-built ship-to-home? Or the person asked is, is there a risk of that unraveling like it did at Flex?

So as of today, Jim, we don't have much of that business. If any, it's literally completely insignificant. But of the business, we've been very careful, very diligent in terms of what we do, what we can take, what our capability is. And rather than jump into something where the capability doesn't stand up to the demands of the customers, we've been extremely cautious, Jim. So there's literally no risk. There might be an opportunity. But like I said, we're actually being extremely diligent on that front. So I wouldn't even think of footwear as a segment in our business right now.

Got you. Someone asked me to ask, Mike, are you having to have any major expansions of actually physical footprints around the world? Or is your CapEx mostly on like new tooling and machining?

It's a combination. So we're in 30 countries, Jim. We have 100 locations. Just maintenance CapEx -- CapEx -- if you have equipment, that's all. The yields drop. So we're always sort of comparing maintenance costs versus putting in new equipment. That particular rotation will always be there. So there's a lot of maintenance CapEx. And then the piece that we're investing in, Jim, is the factory of the future, of automation, some of the robotics. Those are all things of forward-looking nature, which, again, help with the yields, which, again, help with some of the operational efficiencies that Kenny was talking about. So I think the CapEx is spread out. If I was to bucket them, it'd be maintenance. It'd be some of this factory of the future, and then there'll be some growth, obviously, as well.

But it doesn't sound like you need to put up a brand-new footprint to start from bumper to bumper, 4-wheel tires to make a car. It's more expansion of -- I'm just making up automotive, of more capabilities and not a huge change in strategy?

That's fair, Jim.

Okay. I just think there's been so much news about will Apple build a car or not. They're kind of looking to see if Jabil would do that, but I look at your profitability. And it seems like you've been very focused on where you want to compete, what products you want to do, and is there value in associating it from that point to the next point.

Absolutely, Jim, and that's throughout. If you look at our blue and green slide that we put up during our earnings calls, each and every line is very thoughtfully thought of. It's carefully considered: financial metrics, margin, value proposition, what capabilities we have, the value proposition that we bring to the customer. And I think the key here is that SMT provider of the past, that's history. Right now, we work with the customer on designs. The customer comes to us with a concept. We actually help them design, and we help them manufacture it. We help them do logistics of it. We help them with materials. We help them with an end-to-end solution that gets them to market in a relatively quick way, much faster than they would ever have been able to do themselves in 30 countries, by the way, which is a major benefit as well for a provider such as Jabil.

And as we start to round out our time here, and boy, time has flown so well when you're doing well as a company and have a lot of positive things to talk about. I'd like to ask each of you a question, and I'll let you all think about them here for a second. First, Adam Berry, about maybe any clarification items or items he gets asked the most as Investor Relations that maybe he can take this opportunity to clarify out there. And then for Kenny, in charge of -- the CEO of Green Point, what's something, Kenny, that you're so excited about and maybe you think investors are not fully embracing and understanding about Green Point? And then, Mike, to wrap it up as Chief Financial Officer, you've been at Jabil now for a while. What gets you so excited about, why you want to wake up every day and continue to work for the company of Jabil, and why investors should own the stock? And I have been asked to remind people to please look at the Jabil website for the fair disclosure and safe harbor statements as well as the Citigroup Investment Research disclosures. But maybe, Adam, if you can start off with a couple of comments about any misperceptions or the questions you get asked about that we can clarify with investors.

Over the last couple of years, I think we've done an incredible job kind of peeling back the covers in terms of the end markets we play, what customers we play with, why we're there and what we're doing. And consistently throughout that message, we've been talking about growing margins and cash flows. So a lot of my conversations today are around those areas, right? So that's -- those are most of my conversations. The one thing I'd like to say about Jabil, and it's a bit outside the box, but if I were able to take investors, if I were able to take you, Jim, which maybe someday we can, right, through any of our facilities, I think you would be incredibly loud by what we do in the EV space, by what we do in the health care space, by what we do in mobility, what we do in -- for semi cap, what we do for all these areas. And I think it would give people comfortability to say, "I think Jabil needs to be re-rated in terms of its multiples, in terms of its valuation humbly." So I just want to give a little credit to the guys around the world here at Jabil and what they do each and every day and make sure that people are taking notice of that.

Great. Thanks so much, Adam. Kenny, any comments about Green Point that you want to leave investors with?

Yes. Yes. So I think we touched on it a little bit earlier, Jim, which is we don't just machine casings. We've been really thoughtful from '07 of taking a molding capability, with the machining capability, with an optics capability, with an electronics and assembly capability, and there's very, very few companies can take all of those capabilities and deploy them vertically at scale for the best-in-class products everyone wants to buy. So I think when people realize just the breadth of what we do and how good we are at it, that -- we are a real opportunity. I think [Audio Gap] the best companies in the world because we're really good at what we do. And I would just leave you with the message that just remember how competent and capable we are.

And Mike, if you want to round it out as Chief Financial Officer, what gets you so excited as CFO? And why people should be owning Jabil stock?

Sure. I talked about the convergence of technology, Jim. I think that is very important. I think we're seeing more and more of that in our day-to-day lives. I talked about a few areas such as digital health care, such as smart packaging, such as electrification in cars, such as connected devices, such as 5G, such as cloud, et cetera. So they're all -- there's a lot of positives coming out from a technology standpoint. One other thing we're seeing, and I think people are just beginning to realize this a little bit, the discipline in our industry is getting much, much better. I think a lot of our competitors are talking the same language. They're talking about margins. They're talking about cash flows. So the pricing -- let's call it the pricing wars of the past, et cetera, their history. Everyone's focused on margins. Everyone's focused on cash flows. So it's a very, very positive trend for the industry. And then if you take that down to the Jabil level, if you look at some of the capabilities that we built up, some of the stuff that we do, which is like, again, some of the other competitors, it's a little bit more than that. Precision mechanics, for instance, CNC injection molding, the optics capability that we have, 3D automation, factory of the future, et cetera, they're all sort of -- they're all in the right areas, and we do feel that the investments we made, the capabilities that we've invested in over the last few years almost are perfectly aligned to this convergence of technology, aligned to the future right now. And I think Jabil is in a really good position. And that's what gets me excited, Jim. I get there and our macro is great. Industry is great and Jabil is great. So it's sort of almost a triple positive value there is what gets me super excited.

Well, I personally want to thank Jabil for sending their management team virtually to our conference. And we do hope that in 2021, we can meet together in person again and do this over coffee, tea, lunch or a meal or something like that. Thank you so much, Jabil. And ladies and gentlemen, this will conclude this session. And we'll reconnect with you on the next session. Thank you and happy new year to everybody.

Thank you.

Thank you.