[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Date: April 16, 2014 | PLEXUS CORP. | ||
(Registrant) | |||
By: | /s/ Ginger M. Jones | ||
Ginger M. Jones | |||
Chief Financial Officer |
• | Fiscal second quarter revenue of $558 million, diluted EPS of $0.53 |
• | Non-GAAP diluted EPS of $0.60, excluding $0.18 per share of restructuring and impairment charges and $0.11 per share of discrete tax benefit |
• | Initiates Q3 fiscal 2014 revenue guidance of $600 - $630 million |
Three Months Ended | |||||||||||
March 29, | December 28, | March 30, | |||||||||
2014 | 2013 | 2013 | |||||||||
(US$ in thousands, except EPS) | Q2 F14 | Q1 F14 | Q2 F13 | ||||||||
Revenue | $557,616 | $533,905 | $557,824 | ||||||||
Gross profit | $52,835 | $51,502 | $52,021 | ||||||||
Operating profit | $19,000 | $21,761 | $23,188 | ||||||||
Net income | $18,516 | $17,663 | $17,975 | ||||||||
Earnings per share (diluted) | $0.53 | $0.51 | $0.52 | ||||||||
Non-GAAP net income, before special items* | $20,831 | $21,268 | $17,975 | ||||||||
Non-GAAP earnings per share (diluted), before special items* | $0.60 | $0.61 | $0.52 | ||||||||
Gross margin | 9.5 | % | 9.6 | % | 9.3 | % | |||||
Operating margin | 3.4 | % | 4.1 | % | 4.2 | % | |||||
Return on invested capital (“ROIC”)** | 14.1 | % | 14.5 | % | 12.7 | % | |||||
*Special items for the fiscal second quarter of 2014 consisted of restructuring and impairment charges of $6.0 | |||||||||||
million and a discrete tax benefit of $3.7 million ($0.18 per share and $0.11 per share, respectively). | |||||||||||
Special items for the fiscal first quarter of 2014 consisted of restructuring charges of $3.6 million, $0.10 per share. | |||||||||||
**ROIC excludes special items, such as restructuring charges and discrete tax benefits. |
• | Revenue: $558 million, relative to our guidance of $535 to $565 million |
• | Diluted EPS: $0.53, including $0.10 per share of stock-based compensation expense |
• | Non-GAAP diluted EPS: $0.60 (including $0.10 per share of stock-based compensation expense and excluding $0.07 per share of net special items), relative to our guidance of $0.57 to $0.63 |
• | ROIC: 14.1% |
• | Revenue: $600 to $630 million |
• | Diluted EPS: $0.69 to $0.74, excluding any restructuring charges and including approximately $0.10 per share of stock-based compensation expense |
Market Sector ($ in millions) | Q2 F14 | Q1 F14 | Q2 F13 | ||||||||||||||
Networking/Communications | $162 | 29 | % | $163 | 31 | % | $213 | 38 | % | ||||||||
Healthcare/Life Sciences | $167 | 30 | % | $165 | 31 | % | $129 | 23 | % | ||||||||
Industrial/Commercial | $145 | 26 | % | $136 | 25 | % | $140 | 25 | % | ||||||||
Defense/Security/Aerospace | $84 | 15 | % | $70 | 13 | % | $76 | 14 | % | ||||||||
Total Revenue | $558 | $534 | $558 |
• | ROIC for the fiscal second quarter was 14.1%. The Company defines ROIC as tax-effected annualized operating income before special items divided by average invested capital over a rolling three-quarter period for the second quarter and a rolling two-quarter period for the first quarter. Invested capital is defined as equity plus debt, less cash and cash equivalents. The Company estimates weighted average cost of capital for fiscal 2014 to be 11%. |
• | Cash flow provided by operations was approximately $16.0 million for the quarter. Capital expenditures for the quarter were $8.8 million. Free cash flow for the quarter was approximately $7.2 million. The Company defines free cash flow as cash flow provided by (or used in) operations less capital expenditures. |
• | Top 10 customers comprised 54% of revenue during the quarter, up two percentage points from the previous quarter. |
• | Cash Conversion Cycle: |
Cash Conversion Cycle | Q2 F14 | Q1 F14 | Q2 F13 |
Days in Accounts Receivable | 49 | 51 | 55 |
Days in Inventory | 84 | 83 | 87 |
Days in Accounts Payable | (63) | (64) | (61) |
Days in Cash Deposits | (8) | (8) | (17) |
Annualized Cash Cycle | 62 | 62 | 64 |
What: | Plexus Corp.’s Fiscal Q2 Earnings Conference Call and Webcast |
When: | Thursday, April 17 at 8:30 a.m. Eastern Time |
Where: | We encourage participants to access the live webcast at the investor relations section of Plexus’ website, www.plexus.com or you can access it at: http://edge.media-server.com/m/p/ad4z7vxv/lan/en Those without internet access can listen to the call at 1-800-708-4540 with confirmation: 36644363. |
Replay: | The webcast will be archived at the Company’s website or via telephone replay at 1-888-843-7419 or (630) 652-3042 with Passcode: 3664 4363# |
Contact: | Kristie Johnson, 920-725-7224, kristie.johnson@plexus.com |
PLEXUS CORP. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
March 29, | March 30, | March 29, | March 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net sales | $557,616 | $557,824 | $1,091,521 | $1,088,356 | |||||||||||
Cost of sales | 504,781 | 505,803 | 987,184 | 985,173 | |||||||||||
Gross profit | 52,835 | 52,021 | 104,337 | 103,183 | |||||||||||
Operating expenses: | |||||||||||||||
Selling and administrative expenses | 27,790 | 28,833 | 53,926 | 58,511 | |||||||||||
Restructuring and impairment charges | 6,045 | - | 9,650 | - | |||||||||||
Operating income | 19,000 | 23,188 | 40,761 | 44,672 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (3,082) | (3,640) | (5,896) | (7,360) | |||||||||||
Interest income | 683 | 383 | 1,322 | 780 | |||||||||||
Miscellaneous | 671 | - | 911 | (475) | |||||||||||
Income before income taxes | 17,272 | 19,931 | 37,098 | 37,617 | |||||||||||
Income tax expense | (1,244) | 1,956 | 919 | 3,026 | |||||||||||
Net income | $18,516 | $17,975 | $36,179 | $34,591 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $0.55 | $0.52 | $1.07 | $1.01 | |||||||||||
Diluted | $0.53 | $0.52 | $1.04 | $1.00 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 33,868 | 34,286 | 33,799 | 34,253 | |||||||||||
Diluted | 34,703 | 34,694 | 34,698 | 34,673 |
PLEXUS CORP. | |||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 29, | December 28, | March 30, | |||||||||
2014 | 2013 | 2013 | |||||||||
Operating profit, as reported | $19,000 | $21,761 | $23,188 | ||||||||
Operating margin, as reported | 3.4 | % | 4.1 | % | 4.2 | % | |||||
Non-GAAP adjustments: | |||||||||||
Restructuring and impairment charges* | 6,045 | 3,605 | - | ||||||||
Operating profit, as adjusted | $25,045 | $25,366 | $23,188 | ||||||||
Operating margin, as adjusted | 4.5 | % | 4.8 | % | 4.2 | % | |||||
Net income, as reported | $18,516 | $17,663 | $17,975 | ||||||||
Non-GAAP adjustments: | |||||||||||
Restructuring and impairment charges* | 6,045 | 3,605 | - | ||||||||
Discrete tax benefit, net | (3,730) | - | - | ||||||||
Net income, as adjusted | $20,831 | $21,268 | $17,975 | ||||||||
Diluted earnings per share, as reported | $0.53 | $0.51 | $0.52 | ||||||||
Non-GAAP adjustments: | |||||||||||
Restructuring and impairment charges | 0.18 | 0.10 | - | ||||||||
Discrete tax benefit, net | (0.110) | - | - | ||||||||
Diluted earnings per share, as adjusted | $0.60 | $0.61 | $0.52 | ||||||||
*Summary of Restructuring and Impairment Charges | |||||||||||
Severance Costs | $2,245 | $401 | $0 | ||||||||
Fixed Asset Impairment | 3,160 | - | - | ||||||||
Other Exit Costs | 640 | 3,204 | - | ||||||||
Total Restructuring and Impairment Charges | $6,045 | $3,605 | $0 |
PLEXUS CORP. | ||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION | ||||||||||||||
(in thousands, except per share data) | ||||||||||||||
(unaudited) | ||||||||||||||
ROIC Calculation | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||
March 29, | December 28, | March 30, | ||||||||||||
2014 | 2013 | 2013 | ||||||||||||
Operating income | $40,761 | $21,761 | $44,672 | |||||||||||
Restructuring and impairment charges | $9,650 | 3,605 | - | |||||||||||
Adjusted operating income | $50,411 | $25,366 | $44,672 | |||||||||||
x | 2 | x | 4 | x | 2 | |||||||||
Annualized operating income | 100,822 | 101,464 | 89,344 | |||||||||||
Tax rate | x | 9 | % | x | 9 | % | x | 8 | % | |||||
Tax impact | 9,074 | 9,132 | 7,148 | |||||||||||
Operating income (tax effected) | $91,748 | $92,332 | $82,196 | |||||||||||
Average invested capital | $650,061 | $638,697 | $645,402 | |||||||||||
ROIC | 14.1 | % | 14.5 | % | 12.7 | % |
March 29, 2014 | December 28, 2013 | September 28, 2013 | ||||||||||
Equity | $736,493 | $722,021 | $699,301 | |||||||||
Plus: | ||||||||||||
Debt - current | 3,901 | 3,796 | 3,574 | |||||||||
Debt - non-current | 256,090 | 256,949 | 257,773 | |||||||||
Less: | ||||||||||||
Cash and cash equivalents | (323,695) | (324,156) | (341,865) | |||||||||
$672,789 | $658,610 | $618,783 | ||||||||||
Fiscal 2014 second quarter average invested capital (March 29, 2014, December 28, 2013 and September 28, 2013) was $650,061. | ||||||||||||
Fiscal 2014 first quarter average invested capital (December 28, 2013 and September 28, 2013) was $638,697. |
PLEXUS CORP. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
March 29, | September 28, | ||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $323,695 | $341,865 | |||||
Accounts receivable | 301,374 | 305,350 | |||||
Inventories | 462,209 | 404,020 | |||||
Deferred income taxes | 3,891 | 3,917 | |||||
Prepaid expenses and other | 25,360 | 23,870 | |||||
Total current assets | 1,116,529 | 1,079,022 | |||||
Property, plant and equipment, net | 333,315 | 325,061 | |||||
Deferred income taxes | 2,477 | 2,510 | |||||
Other | 42,421 | 41,091 | |||||
Total assets | $1,494,742 | $1,447,684 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and capital lease obligations | $3,901 | $3,574 | |||||
Accounts payable | 348,205 | 313,404 | |||||
Customer deposits | 43,866 | 69,295 | |||||
Accrued liabilities: | |||||||
Salaries and wages | 37,017 | 42,553 | |||||
Other | 53,592 | 42,550 | |||||
Total current liabilities | 486,581 | 471,376 | |||||
Long-term debt and capital lease obligations, net of current portion | 256,090 | 257,773 | |||||
Deferred income taxes | 2,128 | 2,128 | |||||
Other liabilities | 13,450 | 17,106 | |||||
Total non-current liabilities | 271,668 | 277,007 | |||||
Shareholders’ equity: | |||||||
Common stock, $.01 par value, 200,000 shares authorized, | |||||||
53,670 and 49,176 shares issued, respectively, | |||||||
and 37,726 and 33,600 shares outstanding, respectively | 537 | 492 | |||||
Additional paid-in-capital | 464,510 | 449,368 | |||||
Common stock held in treasury, at cost, 15,944 and 15,576, respectively | (464,525) | (449,968) | |||||
Retained earnings | 715,351 | 679,172 | |||||
Accumulated other comprehensive income | 20,620 | 20,237 | |||||
Total shareholders’ equity | 736,493 | 699,301 | |||||
Total liabilities and shareholders’ equity | $1,494,742 | $1,447,684 |
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