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Author: tchamp0 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 860  
Subject: Re: Conference Call Date: 6/21/2001 5:22 PM
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A lot of good comments about Jabil and it would be a great place for someone to BEGIN their career. This is late; but JBL stock is down again because there is not enough 'new' business to compensate for the reduction in business that has taken place. The Industry is still waiting for more business from it's customers and Avaya (Jabil customer) signed a large contract with a Jabil competitor, Celestica.

LTX new business is a feather in the cap for Jabil as LTX has a difficult and complex product with very exacting requirements. LTX sells to companies building Electronics requiring exact frequency etc. measurments.

The EMS business makes money on the turn over of inventory (components) and when that turn over reduces the margin of return drops very fast. E.G. 4% return times 10 turn overs equals (roughly) 40%. Drop the turn over to 5 and it equals 9%. Can you reduce the staff as fast as the turn over drops? Probably not.

Next major element to inquire about is Managements ability to reduce staff without losing their competitive profitability and quality. The difference beteween Solectron and Jabil maybe the difference on how Management 'manages' the cost reductions. My preference as a long-time investor would be to have the Company take short-term earning hits and prepare for the future by using the 'extra' (people you might lay-off) to solve any past or percieved issues / problems.
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