JBL
#Sure, <UNK>.
Just to clarify, right.
And maybe you understood it correctly, but just I want to be sure.
I wasn't saying ---+ so in the June call, what I said was, is that our EMS business, first half of 2016 to first half of 2017, we thought that business would grow at a core operating line 3% to 4%.
What I'm saying now and on this call is, is that we think EMS year-on-year, so all of 2016 compared to all of 2017, will probably grow more like 5% to 6% in terms of core operating income.
So if you ---+ last year, we did around $370 million I think in EMS.
If you just struck a midpoint to that and said, okay, what <UNK>'s saying is, is they did $370 million or so in 2016, multiply that by [1.055], and that would be a good barometer for FY17 in terms of EMS.
And then just roughly, if you layered in the four quarters revenue-wise to be similar to FY16, I think that would be a reasonably good model.
And then, what I said on top of that was, is for the entire FY17, I thought that the core operating margins for EMS would be 3.4% to 3.5%.
No.
If you did a scattergram on that, <UNK>, it's really all over.
And it really wasn't tied to, if you will, any specific businesses.
I pulled my whole staff together for six months of meetings.
We talked a lot about our three year strategy.
And then, we had a lot of discussion from a geographic standpoint, from a cost standpoint, from where business was headed.
And so, I wouldn't characterize it as one segment or another, or one business or another.
It's across the whole Company.
Yes.
It did come down pretty dramatically this quarter.
Based on our performance, we're not going to see vesting.
So US GAAP forces one to write back that expense.
So really as we're moving forward, I think I'd model somewhere in the region of $60 million for FY17.
Think of that roughly $15 million a quarter, something like that.
Thanks, <UNK>.
(Laughter).
Right now, we're just not going to talk about the back half, <UNK>.
And I appreciate, and so understand your question.
Could it be.
Yes.
Could it not be.
But we're just ---+ I think as we get to the December call, there's a lot of moving parts.
I know you're really close to the mobility space.
You can appreciate it.
We'll have a better sense as we get to the December call, on how the back half looks.
Yes, absolutely.
As I talked about $500 million to $600 million in CapEx, our D&A is running what, closer to $700 million, something of that nature.
So, yes, a nice delta there, and we think about that through 2018 also.
So as I said, feel very comfortable with the free cash flow number that <UNK> discussed, and cash flow from operations north of $1 billion.
There will be ---+ I think the majority of it will be through the SG&A line.
There will be some through the gross margin, clearly with some of the capacity realignment.
So sort of think of it, maybe 80/20, 70/30, something like that, SG&A to gross margin.
You're welcome.
Thanks, <UNK>.
Appreciate that.
We feel good about 50 years as well.
Feels like 350 years sometimes, but anyway (laughter).
<UNK>, I don't think I gave any commentary around overall sales for FY17, and neither did <UNK>, I don't believe.
What I think we did say is, is that you can get to it, you can kind of get to an overall EMS number.
If you think about the fact that I talked about core operating income for the year being up around 5%, 6% ---+ you want to be conservative in your models, use 5%, 5.5%.
And I said the margins would be 3.4%, 3.5%.
So take the core operating income, divide by the margin, and you can get yourself a pretty accurate, I think, revenue number for EMS as we sit today, and the way we see the outlook.
In terms of DMS, though, we didn't give any guidance at all for the year, nor will we, and we might, as we get to the December call, but we'll see how things look.
In terms of Q1, <UNK>, we didn't talk much about overall sales detail, other than to give you a number, which would suggest that our DMS revenues are down quarter to quarter, Q1 2016 to 2017, and our EMS top line is about flat.
So ---+ and again, even with that, Q1 2016 was what I would kind of characterize a bit of a blow-out quarter.
And I feel really good about the guidance we're offering today on Q1 of 2017.
In terms of the segments, <UNK>, yes, we'll cover that next week, as <UNK> said, there was a reference, we're having some of our leads of business present.
And we'll certainly give you an overview of that.
As we move into Q1, the guidance would suggest it's at the lower end of the range, that long-term range that we've had out there in the low 5%s.
But as I say, we'll give you a little bit more color on that next Tuesday.
Steve, on your first question, I think our Q4 came in largely as we expected.
So as far as a drag on gross margins, I just don't see it that way.
Q4 largely was just like we expected it to be.
We knew it would be, again, an investment quarter, and a ramp quarter.
In terms of does DMS ever get back to, quote, normalized margins, let's see what happens this quarter, and then again as we move through the year, we'll look at that, and we'll talk a bit about that in discussions on Tuesday.
In terms of the CNC [gear], not going to give you a breakdown of all that, other than to say that there's no volume CNC gear that is anticipated at all in the restructuring.
And so, by kind of the sheer nature of that comment, I think it's a pretty fair assumption to think that over the next couple years, we'll continue to have all that equipment well consumed.
Yes, thank you.
Thanks, <UNK>.
I don't know if I'd consider it step function, but, yes, pretty bullish.
I think in my prepared comments, I talked about healthcare and packaging year-on-year being up 15% on a core earnings line.
That's pretty substantial in this environment.
So I would read into that bullishness for sure, and we've really never broken that out.
Maybe as we get to the December call, we'll ---+ I can tell you it's starting to become material.
And we're really happy with what we've built over the last two or three years and where that's headed.
We'll talk in depth about the strategy around packaging and healthcare on Tuesday.
And then maybe as we move through the year, either the December call or March call, we'll at least start giving you a little bit more color on top line in those areas.
But yes, I think your read on that is, yes, not step function but good bullishness around healthcare and packaging.
<UNK>, I give you credit.
I'm thinking to myself, how many different ways could they ask about us providing guidance for the year.
(laughter) That was pretty clever.
And the answer is, is you've got a lot of information around our healthcare and packaging business.
You've got a lot of information around our EMS business, and we'll give you better color around the year hopefully in December.
Yes, that was a good attempt, applause.
Operator, we have time ---+
We saved the best for last, <UNK>, you're up.
(Laughter).
Thanks, <UNK>.
On the program wins, let's wait until Tuesday, and I think you'll get a sense of the energy and what's going on.
In terms of providing any more detail and color around, again the healthcare and packaging side, I'll just ---+ I'll again say, that it's an area of focus for us.
And as we sit today, we're pretty encouraged by that.
So I guess, I'll just ---+ I'll leave it at that.
And again, as we get further through the year, I think it's a fair expectation that we'll provide a bit more color around those two aspects of the business, because they'll start to become more and more material.
Yes, you're welcome.
Very good.
Thank you everyone for joining us on the call today.
We will look forward to seeing many of you next week at our Analyst meeting here in St.
Petersburg, Florida.
But I'll also remind you that we'll be here the rest of the week, and happy to do any follow-up calls that you might find necessary.
So thanks again for joining us.
