ý | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Wisconsin | 39-1344447 | |
(State of Incorporation) | (IRS Employer Identification No.) |
Large accelerated filer ý | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | |
(Do not check if a smaller reporting company) |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Net sales | $ | 635,019 | $ | 616,664 | |||
Cost of sales | 570,663 | 566,605 | |||||
Gross profit | 64,356 | 50,059 | |||||
Selling and administrative expenses | 30,453 | 27,028 | |||||
Restructuring and other charges | — | 1,507 | |||||
Operating income | 33,903 | 21,524 | |||||
Other income (expense): | |||||||
Interest expense | (3,274 | ) | (3,534 | ) | |||
Interest income | 1,071 | 932 | |||||
Miscellaneous | (674 | ) | (1,620 | ) | |||
Income before income taxes | 31,026 | 17,302 | |||||
Income tax expense | 2,847 | 2,854 | |||||
Net income | $ | 28,179 | $ | 14,448 | |||
Earnings per share: | |||||||
Basic | $ | 0.84 | $ | 0.43 | |||
Diluted | $ | 0.82 | $ | 0.42 | |||
Weighted average shares outstanding: | |||||||
Basic | 33,534 | 33,396 | |||||
Diluted | 34,544 | 34,062 | |||||
Comprehensive income: | |||||||
Net income | $ | 28,179 | $ | 14,448 | |||
Other comprehensive income (loss): | |||||||
Derivative instrument fair value adjustments | (5,403 | ) | 5,744 | ||||
Foreign currency translation adjustments | (11,359 | ) | (6,606 | ) | |||
Other comprehensive loss | (16,762 | ) | (862 | ) | |||
Total comprehensive income | $ | 11,417 | $ | 13,586 |
December 31, 2016 | October 1, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 496,505 | $ | 432,964 | |||
Restricted cash | 1,342 | — | |||||
Accounts receivable, net of allowances of $2,517 and $2,368, respectively | 343,661 | 416,888 | |||||
Inventories | 564,813 | 564,131 | |||||
Prepaid expenses and other | 24,066 | 19,364 | |||||
Total current assets | 1,430,387 | 1,433,347 | |||||
Property, plant and equipment, net | 284,968 | 291,225 | |||||
Deferred income taxes | 4,709 | 4,834 | |||||
Other | 36,115 | 36,413 | |||||
Total non-current assets | 325,792 | 332,472 | |||||
Total assets | $ | 1,756,179 | $ | 1,765,819 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and capital lease obligations | $ | 78,879 | $ | 78,507 | |||
Accounts payable | 375,601 | 397,200 | |||||
Customer deposits | 83,491 | 84,637 | |||||
Accrued salaries and wages | 40,666 | 41,806 | |||||
Other accrued liabilities | 50,256 | 48,286 | |||||
Total current liabilities | 628,893 | 650,436 | |||||
Long-term debt, capital lease obligations and other financing, net of current portion | 184,136 | 184,002 | |||||
Other liabilities | 15,608 | 14,584 | |||||
Total non-current liabilities | 199,744 | 198,586 | |||||
Total liabilities | 828,637 | 849,022 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Preferred stock, $.01 par value, 5,000 shares authorized, none issued or outstanding | — | — | |||||
Common stock, $.01 par value, 200,000 shares authorized, 51,516 and 51,272 shares issued, respectively, and 33,556 and 33,457 shares outstanding, respectively | 515 | 513 | |||||
Additional paid-in capital | 537,034 | 530,647 | |||||
Common stock held in treasury, at cost, 17,960 and 17,815 shares, respectively | (547,029 | ) | (539,968 | ) | |||
Retained earnings | 965,323 | 937,144 | |||||
Accumulated other comprehensive loss | (28,301 | ) | (11,539 | ) | |||
Total shareholders’ equity | 927,542 | 916,797 | |||||
Total liabilities and shareholders’ equity | $ | 1,756,179 | $ | 1,765,819 |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 28,179 | $ | 14,448 | |||
Adjustments to reconcile net income to cash flows provided by operating activities: | |||||||
Depreciation | 11,449 | 12,029 | |||||
Amortization of deferred financing fees | 77 | 81 | |||||
(Gain) loss on sale of property, plant and equipment | (111 | ) | 9 | ||||
Share-based compensation expense | 3,625 | 3,390 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 68,537 | 22,290 | |||||
Inventories | (5,570 | ) | 17,292 | ||||
Other current and noncurrent assets | (4,808 | ) | (345 | ) | |||
Accounts payable | (18,635 | ) | (28,975 | ) | |||
Customer deposits | (417 | ) | (9,168 | ) | |||
Other current and noncurrent liabilities | (2,875 | ) | (9,785 | ) | |||
Cash flows provided by operating activities | 79,451 | 21,266 | |||||
Cash flows from investing activities: | |||||||
Payments for property, plant and equipment | (6,950 | ) | (11,745 | ) | |||
Proceeds from sale of property, plant and equipment | 124 | 14 | |||||
Cash flows used in investing activities | (6,826 | ) | (11,731 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings under credit facility | 73,597 | 139,000 | |||||
Payments on debt and capital lease obligations | (73,475 | ) | (140,196 | ) | |||
Debt issuance costs | — | (70 | ) | ||||
Repurchases of common stock | (7,061 | ) | (8,463 | ) | |||
Proceeds from exercise of stock options | 5,124 | 10 | |||||
Minimum tax withholding related to vesting of restricted stock | (2,360 | ) | — | ||||
Cash flows used in financing activities | (4,175 | ) | (9,719 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (3,567 | ) | (2,194 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 64,883 | (2,378 | ) | ||||
Cash, cash equivalents and restricted cash: | |||||||
Beginning of period | 432,964 | 357,106 | |||||
End of period | $ | 497,847 | $ | 354,728 |
December 31, 2016 | October 1, 2016 | ||||||
Raw materials | $ | 417,635 | $ | 414,303 | |||
Work-in-process | 66,763 | 69,423 | |||||
Finished goods | 80,415 | 80,405 | |||||
Total inventories | $ | 564,813 | $ | 564,131 |
December 31, 2016 | October 1, 2016 | ||||||
Borrowing under the credit facility | $ | 75,000 | $ | 75,000 | |||
5.20% senior notes, due June 15, 2018 | 175,000 | 175,000 | |||||
Capital lease, non-cash financing of leased facility and other obligations | 14,043 | 13,614 | |||||
Unamortized deferred financing fees | (1,028 | ) | (1,105 | ) | |||
Total obligations | 263,015 | 262,509 | |||||
Less: current portion | (78,879 | ) | (78,507 | ) | |||
Long-term debt and capital lease obligations, net of current portion | $ | 184,136 | $ | 184,002 |
Fair Values of Derivative Instruments | ||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
December 31, 2016 | October 1, 2016 | December 31, 2016 | October 1, 2016 | |||||||||||||||||
Derivatives Designated as Hedging Instruments | Balance Sheet Classification | Fair Value | Fair Value | Balance Sheet Classification | Fair Value | Fair Value | ||||||||||||||
Interest rate swaps | Prepaid expenses and other | $ | — | $ | — | Other accrued liabilities | $ | 36 | $ | 132 | ||||||||||
Foreign currency forward contracts | Prepaid expenses and other | $ | — | $ | — | Other accrued liabilities | $ | 5,906 | $ | 486 |
Fair Values of Derivative Instruments | ||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
December 31, 2016 | October 1, 2016 | December 31, 2016 | October 1, 2016 | |||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Balance Sheet Classification | Fair Value | Fair Value | Balance Sheet Classification | Fair Value | Fair Value | ||||||||||||||
Foreign currency forward contracts | Prepaid expenses and other | $ | 48 | $ | 182 | Other accrued liabilities | $ | 722 | $ | 130 |
Derivative Impact on Accumulated Other Comprehensive Loss | ||||||||
for the Three Months Ended | ||||||||
In thousands of dollars | ||||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) (“OCI”) on Derivatives (Effective Portion) | ||||||||
Derivatives in Cash Flow Hedging Relationships | December 31, 2016 | January 2, 2016 | ||||||
Interest rate swaps | $ | (11 | ) | $ | 257 | |||
Foreign currency forward contracts | $ | (5,218 | ) | $ | 2,289 |
Derivative Impact on Gain (Loss) Recognized in Income | ||||||||||
for the Three Months Ended | ||||||||||
In thousands of dollars | ||||||||||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ||||||||||
Derivatives in Cash Flow Hedging Relationships | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | December 31, 2016 | January 2, 2016 | |||||||
Interest rate swaps | Interest expense | $ | (107 | ) | $ | (127 | ) | |||
Foreign currency forward contracts | Selling and administrative expenses | $ | 21 | $ | (323 | ) | ||||
Foreign currency forward contracts | Cost of goods sold | $ | 181 | $ | (2,829 | ) | ||||
Treasury rate locks | Interest expense | $ | 79 | $ | 81 |
Amount of Gain on Derivatives Recognized in Income | ||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain Recognized on Derivatives in Income | December 31, 2016 | January 2, 2016 | |||||||
Foreign currency forward contracts | Miscellaneous income (expense) | $ | 75 | $ | 37 |
Fair Value Measurements Using Input Levels Liability | ||||||||||||||||
In thousands of dollars | ||||||||||||||||
December 31, 2016 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Interest rate swaps | $ | — | $ | (36 | ) | $ | — | $ | (36 | ) | ||||||
Foreign currency forward contracts | $ | — | $ | (6,580 | ) | $ | — | $ | (6,580 | ) | ||||||
October 1, 2016 | ||||||||||||||||
Interest rate swaps | $ | — | $ | (132 | ) | $ | — | $ | (132 | ) | ||||||
Foreign currency forward contracts | $ | — | $ | (434 | ) | $ | — | $ | (434 | ) |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Net income | $ | 28,179 | $ | 14,448 | |||
Basic weighted average common shares outstanding | 33,534 | 33,396 | |||||
Dilutive effect of share-based awards outstanding | 1,010 | 666 | |||||
Diluted weighted average shares outstanding | 34,544 | 34,062 | |||||
Earnings per share: | |||||||
Basic | $ | 0.84 | $ | 0.43 | |||
Diluted | $ | 0.82 | $ | 0.42 |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Net sales: | |||||||
AMER | $ | 314,651 | $ | 305,097 | |||
APAC | 309,969 | 299,346 | |||||
EMEA | 39,449 | 42,087 | |||||
Elimination of inter-segment sales | (29,050 | ) | (29,866 | ) | |||
$ | 635,019 | $ | 616,664 | ||||
Operating income (loss): | |||||||
AMER | $ | 14,797 | $ | 8,386 | |||
APAC | 48,240 | 36,952 | |||||
EMEA | (2,235 | ) | (735 | ) | |||
Corporate and other costs | (26,899 | ) | (23,079 | ) | |||
$ | 33,903 | $ | 21,524 | ||||
Other income (expense): | |||||||
Interest expense | $ | (3,274 | ) | $ | (3,534 | ) | |
Interest income | 1,071 | 932 | |||||
Miscellaneous | (674 | ) | (1,620 | ) | |||
Income before income taxes | $ | 31,026 | $ | 17,302 |
December 31, 2016 | October 1, 2016 | ||||||
Total assets: | |||||||
AMER | $ | 521,705 | $ | 590,850 | |||
APAC | 1,034,237 | 1,009,917 | |||||
EMEA | 131,014 | 136,636 | |||||
Corporate and eliminations | 69,223 | 28,416 | |||||
$ | 1,756,179 | $ | 1,765,819 |
Limited warranty liability, as of October 3, 2015 | $ | 5,847 | |
Accruals for warranties issued during the period | 1,777 | ||
Settlements (in cash or in kind) during the period | (1,515 | ) | |
Limited warranty liability, as of October 1, 2016 | 6,109 | ||
Accruals for warranties issued during the period | — | ||
Settlements (in cash or in kind) during the period | (1,252 | ) | |
Limited warranty liability, as of December 31, 2016 | $ | 4,857 |
Employee Termination and Severance Costs | Other Exit Costs | Total | |||||||||
Accrued balance, October 3, 2015 | $ | — | $ | — | $ | — | |||||
Restructuring and other charges | $ | 5,255 | $ | 1,779 | $ | 7,034 | |||||
Amounts utilized | $ | (4,571 | ) | $ | (1,621 | ) | $ | (6,192 | ) | ||
Accrued balance, October 1, 2016 | $ | 684 | $ | 158 | $ | 842 | |||||
Restructuring and other charges | — | — | — | ||||||||
Amounts utilized | (525 | ) | (106 | ) | (631 | ) | |||||
Accrued balance, December 31, 2016 | $ | 159 | $ | 52 | $ | 211 |
Three Months Ended | ||||||||
December 31, 2016 | January 2, 2016 | |||||||
Net sales | $ | 635.0 | $ | 616.7 | ||||
Cost of sales | 570.7 | 566.6 | ||||||
Gross profit | 64.3 | 50.1 | ||||||
Gross margin | 10.1 | % | 8.1 | % | ||||
Operating income | 33.9 | 21.5 | ||||||
Operating margin | 5.3 | % | 3.5 | % | ||||
Net income | 28.2 | 14.4 | ||||||
Diluted earnings per share | $ | 0.82 | $ | 0.42 | ||||
Return on invested capital* | 17.3 | % | 10.8 | % | ||||
Economic return* | 6.8 | % | (0.2 | )% | ||||
* Non-GAAP metric; refer to "Return on Invested Capital ("ROIC") and Economic Return" below for more information and Exhibit 99.1 for a reconciliation. |
Three Months Ended | ||||||||
Market Sector | December 31, 2016 | January 2, 2016 | ||||||
Healthcare/Life Sciences | $ | 211.0 | $ | 191.5 | ||||
Industrial/Commercial | 205.6 | 172.8 | ||||||
Communications | 131.4 | 156.8 | ||||||
Defense/Security/Aerospace | 87.0 | 95.6 | ||||||
Total net sales | $ | 635.0 | $ | 616.7 |
Three Months Ended | |||||
December 31, 2016 | January 2, 2016 | ||||
Effective tax rate | 9.2 | % | 16.5 | % |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Annualized operating income (tax effected) | $ | 124,763 | $ | 81,069 | |||
Average invested capital | 720,197 | 753,078 | |||||
After-tax ROIC | 17.3 | % | 10.8 | % | |||
WACC | 10.5 | % | 11.0 | % | |||
Economic Return | 6.8 | % | (0.2 | )% |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Net sales: | |||||||
AMER | $ | 314.7 | $ | 305.1 | |||
APAC | 310.0 | 299.4 | |||||
EMEA | 39.4 | 42.1 | |||||
Elimination of inter-segment sales | (29.1 | ) | (29.9 | ) | |||
Total net sales | $ | 635.0 | $ | 616.7 | |||
Operating income (loss): | |||||||
AMER | $ | 14.8 | $ | 8.4 | |||
APAC | 48.2 | 36.9 | |||||
EMEA | (2.2 | ) | (0.7 | ) | |||
Corporate expenses and other costs | (26.9 | ) | (23.1 | ) | |||
Total operating income | $ | 33.9 | $ | 21.5 |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Cash provided by operating activities | $ | 79.5 | $ | 21.3 | |||
Cash used in investing activities | $ | (6.8 | ) | $ | (11.7 | ) | |
Cash used in financing activities | $ | (4.2 | ) | $ | (9.7 | ) |
Three Months Ended | |||||
December 31, 2016 | January 2, 2016 | ||||
Days in accounts receivable | 49 | 53 | |||
Days in inventory | 90 | 88 | |||
Days in accounts payable | (60 | ) | (59 | ) | |
Days in cash deposits | (13 | ) | (11 | ) | |
Annualized cash cycle | 66 | 71 |
Three Months Ended | |||||||
December 31, 2016 | January 2, 2016 | ||||||
Cash flows provided by operating activities | $ | 79.5 | $ | 21.3 | |||
Payments for property, plant and equipment | (7.0 | ) | (11.8 | ) | |||
Free cash flow | $ | 72.5 | $ | 9.5 |
Payments Due by Fiscal Year | ||||||||||||||||||||
Contractual Obligations | Total | Remaining 2017 | 2018-2019 | 2020-2021 | 2022 and thereafter | |||||||||||||||
Long-Term Debt Obligations (1,2) | $ | 263.6 | $ | 82.4 | $ | 181.2 | $ | — | $ | — | ||||||||||
Capital Lease and Other Short-Term Debt Obligations | 5.8 | 3.7 | 1.7 | 0.4 | — | |||||||||||||||
Operating Lease Obligations | 28.9 | 7.2 | 13.0 | 8.0 | 0.7 | |||||||||||||||
Purchase Obligations (3) | 523.0 | 498.5 | 23.2 | 1.2 | 0.1 | |||||||||||||||
Other Long-Term Liabilities on the Balance Sheet (4) | 12.6 | 0.4 | 0.3 | 0.1 | 11.8 | |||||||||||||||
Other Long-Term Liabilities not on the Balance Sheet (5) | 6.6 | 2.6 | 0.2 | 0.9 | 2.9 | |||||||||||||||
Other Financing Obligations (6) | 12.5 | 1.1 | 3.1 | 3.2 | 5.1 | |||||||||||||||
Total Contractual Cash Obligations | $ | 853.0 | $ | 595.9 | $ | 222.7 | $ | 13.8 | $ | 20.6 |
1) | Includes amounts outstanding under the Credit Facility. As of December 31, 2016, the outstanding balance was $75.0 million. The amounts listed above include estimated interest obligations; see Note 3, "Debt, Capital Lease Obligations and Other Financing," in Notes to Condensed Consolidated Financial Statements for further information. |
2) | Includes $175.0 million in principal amount of the Notes. The amounts listed above include estimated interest obligations; see Note 3, "Debt, Capital Lease Obligations and Other Financing," in Notes to Condensed Consolidated Financial Statements for further information. |
3) | As of December 31, 2016, purchase obligations consist of commitments to purchase inventory and equipment in the ordinary course of business. |
4) | As of December 31, 2016, other long-term obligations on the balance sheet included deferred compensation obligations to certain of our former and current executive officers, as well as other key employees, and asset retirement obligations. We have excluded from the above table the impact of approximately $2.8 million, as of December 31, 2016, related to unrecognized income tax benefits. The Company cannot make reliable estimates of the future cash flows by period related to this obligation. |
5) | As of December 31, 2016, other long-term obligations not on the balance sheet consisted of guarantees and a commitment for salary continuation and certain benefits in the event employment of one executive officer of the Company is terminated without cause. Excluded from the amounts disclosed are certain bonus and incentive compensation amounts, which would be paid on a prorated basis in the year of termination. |
6) | Includes future minimum payments under the lease agreement for our Guadalajara, Mexico facility. Excludes $20.3 million of future minimum payments under renewal options from 2025 through 2034. |
Three Months Ended | |||||
December 31, 2016 | January 2, 2016 | ||||
Net sales | 7.8 | % | 8.2 | % | |
Total costs | 12.7 | % | 12.7 | % |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum approximate dollar value of shares that may yet be purchased under the plans or programs* | ||||||||||
October 2, 2016 to October 29, 2016 | 39,353 | $ | 46.22 | 39,353 | $ | 148,181,179 | ||||||||
October 30, 2016 to November 26, 2016 | 57,477 | $ | 47.50 | 57,477 | $ | 145,451,219 | ||||||||
November 27, 2016 to December 31, 2016 | 47,899 | $ | 52.46 | 47,899 | $ | 142,938,420 | ||||||||
Total | 144,729 | $ | 48.79 | 144,729 |
Plexus Corp. | ||
Registrant | ||
Date: 2/3/17 | /s/ Todd P. Kelsey | |
Todd P. Kelsey | ||
President and Chief Executive Officer | ||
Date: 2/3/17 | /s/ Patrick J. Jermain | |
Patrick J. Jermain | ||
Senior Vice President and Chief Financial Officer |
10.1 | Form of Restricted Stock Unit Award Agreement for Directors under the Plexus Corp. 2016 Omnibus Incentive Plan* | |
10.2 | Amended and Restated Master Accounts Receivable Purchase Agreement between Plexus Corp. and Plexus Manufacturing Sdn. Bhd., Plexus Intl. Sales & Logistics, LLC, and each additional seller party thereto from time to time as the Sellers, Plexus Corp., as Seller Representative, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the Purchaser, dated as of December 14, 2016.** | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes Oxley Act of 2002. | |
32.1 | Certification of the CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of the CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
99.1 | Reconciliation of ROIC and Economic Return to GAAP Financial Statements | |
101 | The following materials from Plexus Corp.’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Comprehensive Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
* Form of award agreement consistent with the terms of the 2016 Omnibus Incentive Plan. | ||
** Reflects non-material changes to the original agreement that were finalized in December 2016. |
TO: | _______________________________________ |
DATE: | _______________________________________ |
SECTION 1. | DEFINITIONS AND INTERPRETATION | 1 | |
Section 1.1. | Definitions | 1 | |
Section 1.2. | Interpretation | 10 | |
SECTION 2. | PURCHASE AND SALE; UNCOMMITTED ARRANGEMENT; TERM | 10 | |
Section 2.1. | Offer to Purchase; Purchase and Sale | 10 | |
Section 2.2. | Purchase Price | 10 | |
Section 2.3. | Seller Representative | 11 | |
Section 2.4. | UNCOMMITTED ARRANGEMENT | 11 | |
Section 2.5. | Term | 11 | |
Section 2.6. | Maximum Facility Amount | 11 | |
SECTION 3. | FEES; LATE PAYMENT AMOUNT | 12 | |
Section 3.1. | Late Payment Amount | 12 | |
Section 3.2. | Payments Generally | 12 | |
SECTION 4. | NATURE OF FACILITY | 12 | |
Section 4.1. | True Sale | 12 | |
Section 4.2. | No Purchaser Liability | 13 | |
Section 4.3. | Further Assurances | 13 | |
SECTION 5. | SERVICER | 13 | |
Section 5.1. | Appointment of each Seller as a Servicer | 13 | |
Section 5.2. | Servicing Covenants | 13 | |
Section 5.3. | Unidentified Collections on Receivables; Return of Collections | 14 | |
Section 5.4. | Past Due Receivables | 14 | |
Section 5.5. | Termination of Appointment | 15 | |
SECTION 6. | SERVICING REPORTS | 15 | |
Section 6.1. | Servicing Reports | 15 | |
SECTION 7. | OTHER INFORMATION; THE SELLERS' BOOKS AND RECORDS; INSPECTION; THE PURCHASER'S RECORDS | 16 | |
Section 7.1. | Other Information | 16 | |
Section 7.2. | The Sellers’ Books and Records | 16 | |
Section 7.3. | Inspection | 16 | |
Section 7.4. | The Purchaser’s Records | 16 | |
SECTION 8. | CONDITIONS PRECEDENT | 16 | |
Section 8.1. | Conditions Precedent to the Closing Date | 16 | |
Section 8.2. | Conditions Precedent to the A&R Closing Date | 17 | |
Section 8.3. | Conditions Precedent to Initial Purchase from Plexus Malaysia | 18 | |
Section 8.4. | Conditions Precedent to Initial Purchase from Plexus Intl | 18 | |
Section 8.5. | Conditions Precedent to Each Purchase | 18 |
SECTION 9. | REPRESENTATIONS AND WARRANTIES | 19 | |
Section 9.1. | Generally | 19 | |
Section 9.2. | Purchased Receivables | 21 | |
SECTION 10. | CONVENANTS | 23 | |
Section 10.1. | The Sellers’ Covenants | 23 | |
SECTION 11. | REPURCHASE OF PURCHASED RECEIVABLES | 23 | |
Section 11.1. | Repurchase Price | 24 | |
Section 11.2. | Repurchase | 24 | |
Section 11.3. | Repurchase Date | 24 | |
Section 11.4. | Guaranty | 24 | |
SECTION 12. | TAXES, ETC. | 25 | |
Section 12.1. | Taxes | 25 | |
Section 12.2. | Duties and Taxes | 26 | |
SECTION 13. | MISCELLANEOUS | 26 | |
Section 13.1. | Indemnity | 26 | |
Section 13.2. | Expenses | 26 | |
Section 13.3. | Setoff | 27 | |
Section 13.4. | Notices, Addresses | 27 | |
Section 13.5. | Certificates and Determinations | 28 | |
Section 13.6. | Assignments and Transfers | 28 | |
Section 13.7. | Waivers, Remedies Cumulative | 28 | |
Section 13.8. | Accounting Treatment; Non-Reliance | 28 | |
Section 13.9. | Third Party Rights | 28 | |
Section 13.10. | Counterparts | 28 | |
Section 13.11. | Entire Agreement | 28 | |
Section 13.12. | Exclusion of Liability | 29 | |
Section 13.13. | Invalidity | 29 | |
Section 13.14. | Governing Law | 29 | |
Section 13.15. | Consent to Jurisdiction | 29 | |
Section 13.16. | WAIVER OF JURY TRIAL | 29 | |
Section 13.17. | USA Patriot Act | 30 | |
Section 13.18. | Confidentiality | 30 | |
Section 13.19. | Communication Through the PrimeRevenue System | 30 | |
Section 13.20. | Additional Sellers | 30 | |
Section 13.21. | Judgment Currency | 31 | |
Section 13.22. | Effect of Amendment and Restatement | 31 |
SECTION 1. | DEFINITIONS AND INTERPRETATION. |
(a) | with respect to any Receivable denominated in Dollars, LIBOR for a period equal to the Discount Period applicable to such Receivable determined as of two (2) Business Days prior to the applicable Purchase Date for such Receivable (or portion thereof); |
(b) | with respect to any Receivable denominated in Euro, EURIBOR for a period equal to the Discount Period applicable to such Receivable determined as of two (2) Business Days prior to the applicable Purchase Date for such Receivable (or portion thereof); and |
(c) | with respect to any Receivable denominated in Sterling, GBP LIBOR for a period equal to the Discount Period applicable to such Receivable determined on the applicable Purchase Date for such Receivable (or portion thereof). |
Term | Definition |
“SF” equals | Servicing Fee of such Receivable |
“NFV” equals | Net Face Value of such Receivable as of such Purchase Date |
“DP” equals | Discount Period applicable to such Receivable |
SECTION 2. | PURCHASE AND SALE; UNCOMMITTED ARRANGEMENT; TERM. |
Term | Definition |
“PP” equals | Purchase Price of such Receivable |
“NFV” equals | Net Face Value of such Receivable as of such Purchase Date |
“DR” equals | Discount Rate applicable to such Receivable |
“SF” equals | Servicing Fee applicable to such Receivable |
“DP” equals | Discount Period applicable to such Receivable |
SECTION 3. | FEES; LATE PAYMENT AMOUNT. |
SECTION 4. | NATURE OF FACILITY. |
SECTION 5. | SERVICER. |
SECTION 6. | SERVICING REPORTS. |
SECTION 7. | OTHER INFORMATION; THE SELLERS’ BOOKS AND RECORDS; INSPECTION; THE PURCHASER’S RECORDS. |
SECTION 8. | CONDITIONS PRECEDENT. |
SECTION 9. | REPRESENTATIONS AND WARRANTIES. |
SECTION 10. | COVENANTS. |
SECTION 11. | REPURCHASE OF PURCHASED RECEIVABLES. |
Term | Definition |
“RP” equals | Repurchase Price for such Purchased Receivable as of the applicable Repurchase Date |
“PP” equals | Purchase Price for such Purchased Receivable, net of any Collections received by the Purchaser with respect to such Purchased Receivable |
“AD” equals | Discount applicable to such Receivable and accrued for the period from the applicable Purchase Date to the applicable Repurchase Date |
“AO” equals | All other amounts then payable by the applicable Seller under the Purchase Documents with respect to such Purchased Receivable as of such Repurchase Date |
SECTION 12. | TAXES, ETC. |
SECTION 13. | MISCELLANEOUS. |
If to the Purchaser: | The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch 1251 Avenue of the Americas, 12th floor New York, NY 10020 Attn: Sanel Sehic Fax: 212-782-6448 E-mail: ssehic@us.mufg.jp |
If to the Sellers: | c/o Plexus Corp., as Seller Representative One Plexus Way Neenah, WI 54956 Attn: Florence Makope Email: florence.makope@plexus.com With a copy to: Plexus Corp. One Plexus Way Neenah, WI 54956 Attn: Megan Schleicher Email: megan.schleicher@plexus.com |
(i) | Each of the conditions precedent set forth in Section 8 of the Purchase Agreement has been satisfied or otherwise waived by the Purchaser. |
(ii) | After giving effect to the purchase of such Proposed Receivables, the Total Outstanding Amount of all Purchased Receivables of all Approved Obligors as of such date will not exceed the Maximum Facility Amount. |
(iii) | After giving effect to the purchase of such Proposed Receivables, the Total Outstanding Amount of all Purchased Receivables of any Approved Obligor will not exceed any applicable Approved Obligor Sublimit. |
(iv) | The representations and warranties made by the Sellers in Section 9.1 of the Purchase Agreement are true and correct in all material respects to the same extent as though made on and as of that date (except for those representations and warranties that are conditioned by materiality, which shall be true and correct in all respects), except to the extent such |
(v) | The representations and warranties made by the applicable Seller in Section 9.2 of the Purchase Agreement with respect to the Proposed Receivables are true and correct in all material respects to the same extent as though made on and as of that date (except for those representations and warranties that are conditioned by materiality, which shall be true and correct in all respects), except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date (except for those representations and warranties that are conditioned by materiality, which shall be true and correct in all respects). |
[Name of Seller] | Approved Obligor | Invoice Number | Invoice Amount | Invoice Date | Maturity Date | Purchase Date | Days to Maturity from Purchase | |
1. | ||||||||
2. | ||||||||
3. |
3.1. | To operate this Agreement, the Sellers and the Purchaser shall use the Program web portal, subject to Section 4.9 below. |
3.2. | Program related data will be updated and available for view access by the Sellers and the Purchaser on a day to day basis in the Program web portal. |
3.3. | The Sellers will upload and download information pertaining to Purchase Requests from the Program web portal. |
3.4. | As of the date of this Schedule, the Service Provider means PrimeRevenue. The Purchaser may replace the Service Provider at any time or terminate this Schedule, and will give written notice thereof to the Seller Representative. |
4.1. | The Sellers shall have the right to use the content of the Program web portal to print and use reports downloaded from the Program web portal, and to save reasonable copies to its hard drive, in each case solely for the purposes contemplated by the Agreement. Any copying, distribution, or commercial use of any of the content of the Program web portal not in furtherance of or related to the commercial purposes of the Agreement is strictly forbidden. Notwithstanding the foregoing, the Sellers are entitled to share any such content with its affiliates and its and such affiliates’ attorneys, accountants, and tax advisors, or any governmental authority. |
4.2. | Service Provider retains all right, title, and interest in and to its Program web portal, including all software and other intellectual property underlying the Program web portal and associated therewith, all derivative works thereof, and in all media, but specifically excluding any materials, intellectual property or information provided by the Sellers or the Purchaser (collectively, “Member Content”), all of which shall remain the property of the contributing party. Other than a royalty-free license to use the Program web portal during the term of this Schedule, nothing contained herein shall be construed as the grant of a license or other right by Service Provider to the Sellers of the Program web portal or any intellectual property underlying or associated with the Program web portal. The Sellers grant to Service Provider for the term of this Schedule a royalty free, non-exclusive license to use, reproduce, display and modify the Seller’s Member Content for the purpose of allowing Service Provider to render the contracted-for services to the Purchaser. |
4.3. | All of the design, text, graphics and the selection and arrangement thereof included in the Program web portal are protected by the copyright laws of the United States and other countries. The Program web portal and all associated intellectual property rights are owned by Service Provider and its licensors. All rights not expressly granted to the Sellers are reserved to Service Provider and its licensors. Each Seller acknowledges that (a) the Program web portal incorporates confidential and proprietary information developed or acquired by Service Provider, including the software underlying the Program web portal; (b) it shall use such information solely for the purposes set forth herein; and (c) it shall not disclose any such information to third parties except to its affiliates, and its and their employees, officers, legal counsel, financial advisors and auditors, so long as such parties are bound by written or fiduciary obligations no less stringent than those set forth herein, and the Sellers remain primarily responsible for any unauthorized use or disclosure of the information by such third parties. This Section 4.3 shall survive the termination of this Schedule for a period of one year. |
4.4. | Service Provider may access and use the non-public financial, transactional and other information that is processed under this Agreement or otherwise acquired by Service Provider in connection with the Program web portal (“Seller Data”) for the purposes of providing and operating the Program web portal. In addition, Service Provider may access and use Seller Data on an aggregate basis for the purpose of preparing statistical analyses, reports, and benchmarking statistics for Service Provider’s own use and for general marketing purposes related to trends and overall use of the Program web portal and related services. Each Seller represents that it has the right to permit Service Provider to use Seller Data as described in this Agreement and that such use will not violate any third person’s rights. |
4.5. | Each Seller acknowledges that Service Provider may transfer Seller Data to a third person, in connection with: (a) any assignment arising from the acquisition of all or substantially all of its assets or equity interests; or (b) a delegation of hosting or other duties, provided that such third party service provider agrees to abide by appropriate confidentiality obligations. |
4.6. | The parties may disclose Seller Data if required by applicable law to any government body, or duly authorized representatives thereof, upon an audit or other inspection by any of the same of the records or facilities of Service Provider. The Sellers will be notified promptly upon receipt of any order and upon the implementation of any change in laws which requires disclosure of Seller Data. |
4.7. | Each Seller hereby acknowledges that Service Provider reserves the right to: (a) terminate the Sellers’ access to and use of the Program web portal if any Seller permits any unauthorized third person or entity to access and use the Program web portal; and (b) interrupt or disable access to and use of all or any part of the Program web portal if necessary to prevent or protect against fraud, hacking, or illegal conduct or otherwise protect Service Provider’s personnel or the Program web portal, in Service Provider’s sole discretion and without notice. |
4.8. | EACH SELLER ACKNOWLEDGES THAT NO WARRANTIES OR CONDITIONS, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE MADE BY SERVICE PROVIDER WITH RESPECT TO THE PROGRAM WEB PORTAL, THE UNDERLYING SOFTWARE, OR ANY SERVICES PROVIDED BY SERVICE PROVIDER, AND SUCH PROGRAM WEB PORTAL, SOFTWARE, AND SERVICES ARE PROVIDED ON AN “AS IS, WHERE IS, AND AS AVAILABLE” BASIS. SERVICE PROVIDER EXPRESSLY DISCLAIMS LIABILITY AND SPECIFICALLY DENIES ANY RESPONSIBILITY FOR (A) THE COMPLETENESS, ACCURACY OR QUALITY OF INFORMATION OR ANY MEMBER CONTENT OBTAINED THROUGH THE PROGRAM WEB PORTAL, AND (B) THE SELLERS’ USE OF OR INABILITY TO USE THE PROGRAM WEB PORTAL. THE USE OF THE PROGRAM WEB PORTAL, AND ANY MEMBER CONTENT OR INFORMATION OBTAINED VIA THE PROGRAM WEB PORTAL, IS AT THE SELLERS’ RISK. |
4.9. | The Purchaser has the obligation to view the Messages sent in accordance with this Schedule and to act upon them under the terms of the Agreement, and, during any unavailability of the Program web portal for the purposes hereof, or following the change of Service Provider, accept or receive Purchase Requests and other notices as otherwise provided in the Agreement. |
5.1. | such Seller’s authorized employees may access the Program web portal using a unique user ID and password issued by System Provider. The Sellers and each authorized employee shall not allow |
5.2. | it will not intentionally or knowingly interfere with, defeat, disrupt, circumvent or tamper with or attempt to gain unauthorized access to the Program web portal or other information or instruction that is, by the terms of the Agreement to be transmitted through the Program web portal, or with the restrictions on use of functionality or access to information on any portion of the Program web portal, or attempt to do so; and |
5.3. | it will not intentionally or knowingly introduce into any portion of the Program web portal any device, software or routine, including but not limited to viruses, Trojan horses, worms, time bombs and cancelbots or other data or code that harms, or may adversely affect, the operation of the Program web portal. |
6.1. | The Sellers’ use of the Program web portal is solely to settle genuine and lawful commercial trade transactions, arising in the ordinary course of business, for the purchase or sale of goods (including Receivables as defined under the Agreement) and/or services by or to a Seller from or to the Purchaser or other third parties. The Sellers shall not use the Program web portal for investment or arbitrage functions or purposes, or for any money laundering purpose, or in contravention of any law or regulation, and any activity undertaken via the Program web portal shall not be used in furtherance of any of the foregoing. |
6.2. | Information provided by the Sellers to the Purchaser or Service Provider from time to time in connection with this Schedule is and shall be true and accurate in all material respects at the time given. |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Todd P. Kelsey | |
Todd P. Kelsey | |
President and Chief Executive Officer |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Patrick J. Jermain | |
Patrick J. Jermain | |
Senior Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Todd P. Kelsey | |
Todd P. Kelsey | |
President and Chief Executive Officer | |
February 3, 2017 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Patrick J. Jermain | |
Patrick J. Jermain | |
Senior Vice President and Chief Financial Officer | |
February 3, 2017 |
Three Months Ended | Twelve Months Ended | Three Months Ended | ||||||||||||
December 31, 2016 | October 1, 2016 | January 2, 2016 | ||||||||||||
Operating income, as reported | $ | 33,903 | $ | 99,439 | $ | 21,524 | ||||||||
Typhoon-related losses | — | 2,871 | — | |||||||||||
Accelerated stock-based compensation expense | — | 5,210 | — | |||||||||||
Restructuring and other charges | — | 7,034 | 1,507 | |||||||||||
Adjusted operating income | $ | 33,903 | $ | 114,554 | $ | 23,031 | ||||||||
x | 4 | x | 4 | |||||||||||
Annualized adjusted operating income | $ | 135,612 | $ | 114,554 | $ | 92,124 | ||||||||
Tax rate | x | 8 | % | x | 11 | % | x | 12 | % | |||||
Tax impact | 10,849 | 12,601 | 11,055 | |||||||||||
Adjusted operating income (tax effected) | $ | 124,763 | $ | 101,953 | $ | 81,069 | ||||||||
Average invested capital | $ | 720,197 | $ | 739,986 | $ | 753,078 | ||||||||
ROIC | 17.3 | % | 13.8 | % | 10.8 | % | ||||||||
Weighted average cost of capital ("WACC") | 10.5 | % | 11.0 | % | 11.0 | % | ||||||||
Economic return | 6.8 | % | 2.8 | % | (0.2 | )% |
Dec 31, | Oct 1, | Jul 2, | Apr 2, | Jan 2, | Oct 3, | ||||||||||||||||||
Average Invested Capital | 2016 | 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||||||||
Equity | $ | 927,542 | $ | 916,797 | $ | 895,175 | $ | 871,111 | $ | 850,794 | $ | 842,272 | |||||||||||
Plus: | |||||||||||||||||||||||
Debt—current | 78,879 | 78,507 | 78,279 | 2,300 | 2,864 | 3,513 | |||||||||||||||||
Debt—long-term | 184,136 | 184,002 | 184,479 | 259,565 | 259,289 | 259,257 | |||||||||||||||||
Less: | |||||||||||||||||||||||
Cash and cash equivalents | (496,505 | ) | (432,964 | ) | (433,679 | ) | (409,796 | ) | (354,728 | ) | (357,106 | ) | |||||||||||
Average invested capital | $ | 694,052 | $ | 746,342 | $ | 724,254 | $ | 723,180 | $ | 758,219 | $ | 747,936 |
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Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 31, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | PLEXUS CORP | |
Entity Central Index Key | 0000785786 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 33,691,275 |
Consolidated Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Income Statement [Abstract] | ||
Net sales | $ 635,019 | $ 616,664 |
Cost of sales | (570,663) | (566,605) |
Gross profit | 64,356 | 50,059 |
Selling and administrative expenses | 30,453 | 27,028 |
Restructuring and other charges | 0 | 1,507 |
Operating income | 33,903 | 21,524 |
Other income (expense): | ||
Interest expense | (3,274) | (3,534) |
Interest Income | 1,071 | 932 |
Miscellaneous | (674) | (1,620) |
Income before income taxes | 31,026 | 17,302 |
Income tax expense | 2,847 | 2,854 |
Net income | $ 28,179 | $ 14,448 |
Earnings per share: | ||
Basic | $ 0.84 | $ 0.43 |
Diluted | $ 0.82 | $ 0.42 |
Weighted average shares outstanding: | ||
Basic | 33,534 | 33,396 |
Diluted | 34,544 | 34,062 |
Comprehensive income: | ||
Net income | $ 28,179 | $ 14,448 |
Derivative instrument fair value adjustments | (5,403) | 5,744 |
Foreign currency translation adjustments | (11,359) | (6,606) |
Other comprehensive loss | (16,762) | (862) |
Total comprehensive income | $ 11,417 | $ 13,586 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 2,517 | $ 2,368 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 51,516,000 | 51,272,000 |
Common stock, shares outstanding | 33,556,000 | 33,457,000 |
Treasury stock, shares | 17,960,000 | 17,815,000 |
Basis Of Presentation and Significant Accounting Policies |
3 Months Ended |
---|---|
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation And Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying Condensed Consolidated Financial Statements included herein have been prepared by Plexus Corp. and its subsidiaries (together “Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). In the opinion of the Company, the accompanying Condensed Consolidated Financial Statements reflect all adjustments, which include normal recurring adjustments necessary for the fair statement of the consolidated financial position of the Company as of December 31, 2016 and October 1, 2016, and the results of operations for the three months ended December 31, 2016 and January 2, 2016, and the cash flows for the same three month periods. The Company’s fiscal year ends on the Saturday closest to September 30. The Company also uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter, therefore, ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. All fiscal quarters presented herein included 13 weeks. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to the SEC’s rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2016 Annual Report on Form 10-K. The Company’s reportable segments consist of the “Americas” (“AMER”), “Asia-Pacific” (“APAC”) and “Europe, Middle East, and Africa” (“EMEA”) segments. Refer to Note 9, "Reportable Segments," for further details on reportable segments. Cash and Cash Equivalents Cash and cash equivalents include short-term, highly liquid investments and are classified as Level 1 in the fair value hierarchy described below. Fair Value of Financial Instruments The Company holds financial instruments consisting of cash and cash equivalents, accounts receivable, certain deferred compensation assets held under trust arrangements, accounts payable, debt, derivatives, and capital lease obligations. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and capital lease obligations as reported in the Condensed Consolidated Financial Statements approximate fair value. Derivatives and certain deferred compensation assets held under trust arrangements are recorded at fair value. Accounts receivable are reflected at net realizable value based on anticipated losses due to potentially uncollectible balances. Anticipated losses are based on management’s analysis of historical losses and changes in customers’ credit status. The fair value of the Company’s long-term debt was $251.0 million and $251.4 million as of December 31, 2016 and October 1, 2016, respectively. The carrying value of the Company’s long-term debt was $250.0 million as of both December 31, 2016 and October 1, 2016. The Company uses quoted market prices when available or discounted cash flows to calculate the fair value of its debt. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy described below. Refer to Note 4, "Derivatives and Fair Value Measurements," for further details on derivatives. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance establishes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are: Level 1: Quoted (observable) market prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability. |
Inventories |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories as of December 31, 2016 and October 1, 2016 consisted of (in thousands):
Customer deposits are received by the Company for various reasons, including to offset certain obsolete and excess inventory risks. The total amount of customer deposits related to inventory and included within current liabilities on the accompanying Condensed Consolidated Balance Sheets as of December 31, 2016 and October 1, 2016 was $79.8 million and $74.6 million, respectively. |
Debt, Capital Lease Obligations and Other Financing |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Capital Lease Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt, Capital Lease Obligations And Other Financing | Debt, Capital Lease Obligations and Other Financing Debt, capital lease and other obligations as of December 31, 2016 and October 1, 2016, consisted of the following (in thousands):
The Company has a senior unsecured revolving credit facility (the “Credit Facility”) with a $300.0 million maximum commitment that expires on July 5, 2021. The Credit Facility may be further increased to $500.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During the three months ended December 31, 2016, the highest daily borrowing was $138.0 million, the average daily borrowing was $117.0 million and the Company borrowed and repaid $73.0 million of revolving borrowings under the Credit Facility. The financial covenants (as defined under the related Credit Agreement) require that the Company maintain, as of each fiscal quarter end, a maximum total leverage ratio and a minimum interest coverage ratio. As of December 31, 2016, the Company was in compliance with all financial covenants of the Credit Agreement. Borrowings under the Credit Facility bear interest, at the Company’s option, at a eurocurrency or base rate plus, in each case, an applicable interest rate margin based on the Company’s then-current leverage ratio (as defined in the Credit Agreement). As of December 31, 2016, the interest rate under the Credit Agreement was LIBOR plus 1.125% (or 1.760%). As of December 31, 2016, the $75.0 million of outstanding borrowing under the Credit Facility is effectively at a fixed interest rate as a result of a $75.0 million interest rate swap contract discussed in Note 4, "Derivatives and Fair Value Measurements." The Company is required to pay an annual commitment fee based on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.175% as of December 31, 2016. The Company also has outstanding 5.20% senior notes, due on June 15, 2018 (the “Notes”). As of December 31, 2016 and October 1, 2016, $175.0 million of Notes was outstanding, and the Company was in compliance with all financial covenants relating to the Notes, which are generally consistent with those in the Credit Agreement discussed above. |
Derivatives And Fair Value Measurements |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives And Fair Value Measurements | Derivatives and Fair Value Measurements All derivatives are recognized in the accompanying Condensed Consolidated Balance Sheets at their estimated fair value. The Company uses derivatives to manage the variability of foreign currency obligations and interest rates. The Company has cash flow hedges related to variable rate debt and forecasted foreign currency obligations, in addition to non-designated hedges to manage foreign currency exposures associated with certain foreign currency denominated assets and liabilities. The Company does not enter into derivatives for speculative purposes. ASC Topic 815-10, “Derivatives and Hedging,” requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. In accordance with ASC Topic 815-10, the Company designates some foreign currency exchange contracts and float-to-fixed interest rate derivative contracts as cash flow hedges of forecasted foreign currency expenses and of variable rate interest payments, respectively. Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in “Accumulated other comprehensive loss” in the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of the cash flows. In the next twelve months, the Company estimates that $5.9 million of unrealized losses, net of tax, related to cash flow hedges will be reclassified from other comprehensive loss into earnings. Changes in the fair value of the non-designated derivatives related to recognized foreign currency denominated assets and liabilities are recorded in "Miscellaneous income (expense)" in the accompanying Condensed Consolidated Statements of Comprehensive Income. The Company enters into forward currency exchange contracts for its Malaysian operations on a rolling basis. The Company had cash flow hedges outstanding with a notional value of $67.7 million as of December 31, 2016 and $73.7 million as of October 1, 2016. These forward currency contracts fix the exchange rates for the settlement of future foreign currency obligations that have yet to be realized. The total fair value of the cash flow hedges was a $5.9 million liability as of December 31, 2016 and a $0.5 million liability as of October 1, 2016. The Company had additional forward currency exchange contracts outstanding with a notional value of $111.2 million as of December 31, 2016 and $109.6 million as of October 1, 2016. The Company did not designate these derivative instruments as hedging instruments. In accordance with ASC Topic 815-10, the net settlement amount (fair value) related to these contracts is recorded on the Condensed Consolidated Balance Sheets as either a current or long-term asset or liability, depending on the term, and as an element of "Miscellaneous income (expense)." The total fair value of these derivatives was a net $0.7 million liability as of December 31, 2016 and a net $0.1 million asset as of October 1, 2016. In 2013, the Company entered into a $75.0 million notional amount interest rate swap contract, which expires on May 5, 2017, related to $75.0 million of borrowings outstanding under the Credit Facility. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counterparty a fixed interest rate. The fixed interest rate for the contract is 0.875%. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the Credit Facility, the interest rate contract was determined to be effective, and thus qualifies as a cash flow hedge. As such, any changes in the fair value of the interest rate swap are recorded in "Accumulated other comprehensive loss" on the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of cash flows. The total fair value of the interest rate swap contract as of both December 31, 2016 and October 1, 2016, was approximately a $0.1 million liability. The notional amount of the Company’s interest rate swap was $75.0 million as of both December 31, 2016 and October 1, 2016. The tables below present information regarding the fair values of derivative instruments (as defined in Note 1, "Basis of Presentation and Significant Accounting Policies") and the effects of derivative instruments on the Company’s Condensed Consolidated Financial Statements:
There were no gains or losses recognized in income for derivatives related to ineffective portions or amounts excluded from effectiveness testing for the three months ended December 31, 2016 and January 2, 2016. The following table lists the fair values of liabilities of the Company’s derivatives as of December 31, 2016 and October 1, 2016, by input level, as defined in Note 1, "Basis of Presentation and Significant Accounting Policies":
The fair value of interest rate swaps and foreign currency forward contracts is determined using a market approach, which includes obtaining directly or indirectly observable values from third parties active in the relevant markets. The primary input in the fair value of the interest rate swaps is the relevant LIBOR forward curve. Inputs in the fair value of the foreign currency forward contracts include prevailing forward and spot prices for currency and interest rate forward curves. |
Income Taxes |
3 Months Ended |
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Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the three months ended December 31, 2016 and January 2, 2016 was $2.8 million and $2.9 million, respectively. The effective tax rates for the three months ended December 31, 2016 and January 2, 2016 were 9.2 percent and 16.5 percent, respectively. The effective tax rate for the three months ended December 31, 2016 decreased from the effective tax rate for the three months ended January 2, 2016, primarily due to an increase in pre-tax earnings in lower tax-rate jurisdictions and in jurisdictions where the Company maintains a valuation allowance. The Company’s effective tax rate will fluctuate with the geographic distribution of its worldwide earnings, changes in tax laws, disputes with taxing authorities, tax planning activities, adjustments to uncertain tax positions and changes in valuation allowances. There were no material additions to the amount of unrecognized tax benefits recorded for uncertain tax positions as of December 31, 2016 as compared to October 1, 2016. The Company recognizes accrued interest and penalties on uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three months ended December 31, 2016 was not material. It is possible that one or more federal and state tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company's consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. or any foreign jurisdictions in which the Company operates. The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended December 31, 2016, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the AMER and EMEA segments, as it was more likely than not that these assets would not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until it determines it is more likely than not that the deferred tax assets will be realized. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share for the three months ended December 31, 2016 and January 2, 2016 (in thousands, except per share amounts):
For the three months ended December 31, 2016 and January 2, 2016 share-based awards for approximately 0.1 million and 0.8 million shares, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive. |
Share-Based Compensation |
3 Months Ended |
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Dec. 31, 2016 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company recognized $3.6 million and $3.4 million of compensation expense associated with share-based awards for the three months ended December 31, 2016 and January 2, 2016, respectively. The Company uses the Black-Scholes valuation model to determine the fair value of stock options and stock-settled stock appreciation rights ("SARs"). The Company uses its stock price on grant date as the fair value assigned to restricted stock units ("RSUs"). The Company uses the Monte Carlo valuation model to determine the fair value of performance stock units ("PSUs") at the date of grant. The PSUs granted in fiscal 2016 and prior years are payable in shares and vest based on the relative total shareholder return ("TSR") of the Company's common stock as compared to companies in the Russell 3000 Index during a three year performance period. The number of shares that may be issued pursuant to PSUs ranges from zero to 0.3 million. The Company recognizes share-based compensation expense over the share-based awards' vesting period. |
Litigation |
3 Months Ended |
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Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company is party to lawsuits in the ordinary course of business. Management does not believe that these proceedings, individually or in the aggregate, will have a material positive or adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Reportable Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources. The Company uses an internal management reporting system, which provides important financial data to evaluate performance and allocate the Company’s resources on a regional basis. Net sales for segments are attributed to the region in which the product is manufactured or the service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other expenses. Corporate and other expenses primarily represent corporate selling and administrative expenses, and restructuring and other charges, if any. These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the segments are the same as for the Company taken as a whole. Information about the Company’s three reportable segments for the three months ended December 31, 2016 and January 2, 2016, respectively, is as follows (in thousands):
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Guarantees |
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||
Guarantees | Guarantees The Company offers certain indemnifications under its customer manufacturing agreements. In the normal course of business, the Company may from time to time be obligated to indemnify its customers or its customers’ customers against damages or liabilities arising out of the Company’s negligence, misconduct, breach of contract, or infringement of third party intellectual property rights. Certain agreements have extended broader indemnification, and while most agreements have contractual limits, some do not. However, the Company generally does not provide for such indemnities and seeks indemnification from its customers for damages or liabilities arising out of the Company’s adherence to customers’ specifications or designs or use of materials furnished, or directed to be used, by its customers. The Company does not believe its obligations under such indemnities are material. In the normal course of business, the Company also provides its customers a limited warranty covering workmanship, and in some cases materials, on products manufactured by the Company. Such warranty generally provides that products will be free from defects in the Company’s workmanship and meet mutually agreed-upon specifications for periods generally ranging from 12 months to 24 months. If a product fails to comply with the Company’s limited warranty, the Company’s obligation is generally limited to correcting, at its expense, any defect by repairing or replacing such defective product. The Company’s warranty generally excludes defects resulting from faulty customer-supplied components, customer design defects or damage caused by any party or cause other than the Company. The Company provides for an estimate of costs that may be incurred under its limited warranty at the time product revenue is recognized and establishes additional reserves for specifically identified product issues. These costs primarily include labor and materials, as necessary, associated with repair or replacement and are included in the Company's accompanying Condensed Consolidated Balance Sheets in "Other accrued liabilities." The primary factors that affect the Company’s warranty liability include the value and the number of shipped units and historical and anticipated rates of warranty claims. As these factors are impacted by actual experience and future expectations, the Company regularly assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Below is a table summarizing the activity related to the Company’s limited warranty liability for fiscal 2016 and the three months ended December 31, 2016 (in thousands):
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Shareholders' Equity |
3 Months Ended |
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Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Equity On June 6, 2016, the Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to $150.0 million of its common stock beginning in fiscal 2017. During the three months ended December 31, 2016, the Company repurchased 144,729 shares for approximately $7.1 million, at an average price of $48.79 per share. On August 20, 2015, the Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to $30.0 million of its common stock during fiscal 2016. During the three months ended January 2, 2016, the Company repurchased 227,312 shares for approximately $8.5 million, at an average price of $37.23 per share. All shares repurchased under the aforementioned programs were recorded as treasury stock. |
Trade Accounts Receivable Sale Programs |
3 Months Ended |
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Dec. 31, 2016 | |
Receivables [Abstract] | |
Trade Accounts Receivable Sale Programs | Trade Accounts Receivable Sale Programs On October 4, 2016, the Company entered into a Master Accounts Receivable Purchase Agreement (the “RPA”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (the “Purchaser”), which agreement was subsequently amended and restated as of December 14, 2016. Pursuant to the RPA, the Company and certain of its subsidiaries (each, a “Seller”) may sell to the Purchaser up to an aggregate of $100.0 million in accounts receivable owed to such Sellers by specified customers. In exchange, the Purchaser pays a purchase price for each purchased receivable equal to the net face value of the receivable less an agreed upon discount. The facility represented by the RPA is non-committed, meaning that the Company and each other Seller acknowledge that they have not paid a commitment or comparable fee to the Purchaser, and that the Purchaser does not have a continuing obligation to purchase any receivable from any Seller. The Purchaser pays an agreed-upon servicing fee to each Seller with respect to each purchased receivable sold by such Seller, consistent with common market practices. The RPA contains representations, warranties, covenants, and termination events that are customary for factoring transactions of this type. The RPA is subject to expiration on October 3, 2017, but will be automatically extended each year unless any party gives no less than 10 days prior notice that the agreement should not be extended. During the three months ended January 2, 2016, the Company sold receivables under a former trade accounts receivable sale program that expired during the first fiscal quarter of 2017. Transfers of receivables under the programs are accounted for as sales and, accordingly, receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Proceeds from the transfer reflect the face value of the receivables less a discount. The discount is recorded within "Miscellaneous expense" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale. The Company sold $77.8 million and $22.3 million of trade accounts receivable during the three months ended December 31, 2016 and January 2, 2016, respectively, and in exchange, received cash proceeds of $77.4 million and $22.1 million, respectively. |
Restructuring and Other Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Charges | Restructuring and Other Charges The Company incurred no restructuring and other charges during the three months ended December 31, 2016. For the three months ended January 2, 2016, the Company incurred restructuring and other charges of $1.5 million, which consisted of $1.4 million of employee termination and severance costs and $0.1 million of other exit costs. The restructuring accrual balance is expected to be utilized by the end of the second fiscal quarter of 2017. The restructuring and other charges for the three months ended January 2, 2016, were incurred primarily in the AMER segment and related largely to the Company's closure of its manufacturing facility in Fremont, California as a result of the Company’s optimization of its capacity to better reflect customer demand. The Company also recorded restructuring and other charges in the EMEA segment related to the partial closure of its Livingston, Scotland facility to align with reduced end-market demand, particularly in the oil and gas industry. These charges are recorded within "Restructuring and other charges" on the Condensed Consolidated Statements of Comprehensive Income. Restructuring liabilities are recorded within "Other accrued liabilities" in the Condensed Consolidated Balance Sheets. In the three months ended December 31, 2016 and January 2, 2016, the Company did not recognize an income tax benefit for these restructuring and other charges due to tax losses in the jurisdictions where the restructuring and other charges occurred. The Company's restructuring accrual activity for fiscal 2016 and the three months ended December 31, 2016 follows (in thousands):
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New Accounting Pronouncements |
3 Months Ended |
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Dec. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (“FASB”) issued amendments to its guidance to address the classifications and presentation of changes in restricted cash in the statement of cash flows. The Company adopted this guidance retrospectively during the first quarter of fiscal 2017 and, as a result, the Company included restricted cash within the Consolidated Statement of Cash Flows, which was not material. The retrospective adoption did not impact the prior period Consolidated Statement of Cash Flows since there was no restricted cash during any of the prior periods presented. Amounts included in restricted cash represent cash received from customers to settle invoices sold under the RPA and is therefore contractually required to be set aside. The restrictions will lapse when the cash is remitted to the purchaser. In October 2016, the FASB issued a new accounting standard to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. This guidance is effective for the Company beginning in the first quarter of fiscal year 2019 and early adoption is permitted. This guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact this new standard may have on its Consolidated Financial Statements. In March 2016, the FASB issued guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The Company adopted this guidance prospectively during the first fiscal quarter of 2017. As such, beginning in the first fiscal quarter of 2017, the Company recognizes all excess tax benefits and tax deficiencies as income tax benefit or expense as a discrete item. An income tax benefit of approximately $4.9 million was recognized upon adoption and in the first fiscal quarter of 2017 a benefit of $0.6 million was also recognized. Due to the Company having a valuation allowance in the jurisdictions in which the income tax benefit was recorded, the income tax benefit was directly offset by an increase to the Company's valuation allowance resulting in no financial statement impact. The adoption did not have any other material impacts and will not materially impact the Company's future financial statements as long as the Company remains in a valuation allowance in the jurisdictions in which share based compensation awards and options vest and are exercised, respectively. In February 2016, the FASB issued guidance that primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and the timing of adoption. In May 2014, the FASB issued amended guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The new standard will become effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted for annual reporting periods beginning after December 15, 2016. The Company is currently in the process of evaluating the impact of the adoption of this guidance on its Consolidated Financial Statements. |
Basis Of Presentation and Significant Accounting Policies (Policy) |
3 Months Ended |
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Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements included herein have been prepared by Plexus Corp. and its subsidiaries (together “Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). In the opinion of the Company, the accompanying Condensed Consolidated Financial Statements reflect all adjustments, which include normal recurring adjustments necessary for the fair statement of the consolidated financial position of the Company as of December 31, 2016 and October 1, 2016, and the results of operations for the three months ended December 31, 2016 and January 2, 2016, and the cash flows for the same three month periods. The Company’s fiscal year ends on the Saturday closest to September 30. The Company also uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter, therefore, ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. All fiscal quarters presented herein included 13 weeks. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to the SEC’s rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2016 Annual Report on Form 10-K. The Company’s reportable segments consist of the “Americas” (“AMER”), “Asia-Pacific” (“APAC”) and “Europe, Middle East, and Africa” (“EMEA”) segments. Refer to Note 9, "Reportable Segments," for further details on reportable segments. |
Cash And Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include short-term, highly liquid investments and are classified as Level 1 in the fair value hierarchy described below. |
Fair Value Of Financial Instruments | Fair Value of Financial Instruments The Company holds financial instruments consisting of cash and cash equivalents, accounts receivable, certain deferred compensation assets held under trust arrangements, accounts payable, debt, derivatives, and capital lease obligations. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and capital lease obligations as reported in the Condensed Consolidated Financial Statements approximate fair value. Derivatives and certain deferred compensation assets held under trust arrangements are recorded at fair value. Accounts receivable are reflected at net realizable value based on anticipated losses due to potentially uncollectible balances. Anticipated losses are based on management’s analysis of historical losses and changes in customers’ credit status. The fair value of the Company’s long-term debt was $251.0 million and $251.4 million as of December 31, 2016 and October 1, 2016, respectively. The carrying value of the Company’s long-term debt was $250.0 million as of both December 31, 2016 and October 1, 2016. The Company uses quoted market prices when available or discounted cash flows to calculate the fair value of its debt. If measured at fair value in the financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy described below. Refer to Note 4, "Derivatives and Fair Value Measurements," for further details on derivatives. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance establishes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are: Level 1: Quoted (observable) market prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability. |
Inventories (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventories | Inventories as of December 31, 2016 and October 1, 2016 consisted of (in thousands):
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Debt, Capital Lease Obligations and Other Financing Debt, Capital Lease Obligations and Other Financing (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt and Capital Lease Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Debt And Capital Lease Obligations | Debt, capital lease and other obligations as of December 31, 2016 and October 1, 2016, consisted of the following (in thousands):
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Derivatives And Fair Value Measurements (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Values of Derivative Instruments | The tables below present information regarding the fair values of derivative instruments (as defined in Note 1, "Basis of Presentation and Significant Accounting Policies") and the effects of derivative instruments on the Company’s Condensed Consolidated Financial Statements:
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location |
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Schedule of The Effect of Derivative on Accumulated Other Comprehensive Income |
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Reclassification out of Accumulated Other Comprehensive Income |
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Schedule of Fair Value Measurements Using Input Levels Asset/(Liability) | The following table lists the fair values of liabilities of the Company’s derivatives as of December 31, 2016 and October 1, 2016, by input level, as defined in Note 1, "Basis of Presentation and Significant Accounting Policies":
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Reconciliation Of Amounts Utilized In Computation Of Basic And Diluted Earnings Per Share | The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share for the three months ended December 31, 2016 and January 2, 2016 (in thousands, except per share amounts):
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Reportable Segments(Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Financial Information About Company's Reportable Segments |
Information about the Company’s three reportable segments for the three months ended December 31, 2016 and January 2, 2016, respectively, is as follows (in thousands):
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Guarantees (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule Of Limited Warranty Liability | Below is a table summarizing the activity related to the Company’s limited warranty liability for fiscal 2016 and the three months ended December 31, 2016 (in thousands):
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Restructuring and Other Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | The Company's restructuring accrual activity for fiscal 2016 and the three months ended December 31, 2016 follows (in thousands):
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Basis Of Presentation and Significant Accounting Policies (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Oct. 01, 2016 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Fair value of long-term debt | $ 251.0 | $ 251.4 |
Long-term Debt | $ 250.0 | $ 250.0 |
Inventories (Schedule Of Inventories) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Oct. 01, 2016 |
---|---|---|
Raw materials | $ 417,635 | $ 414,303 |
Work-in-process | 66,763 | 69,423 |
Finished goods | 80,415 | 80,405 |
Inventory, net | $ 564,813 | $ 564,131 |
Inventory (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Oct. 01, 2016 |
---|---|---|
Customer deposits | $ 83,491 | $ 84,637 |
Inventories [Member] | ||
Customer deposits | $ 79,800 | $ 74,600 |
Debt, Capital Lease Obligations And Other Financing (Schedule Of Debt And Capital Lease Obligations) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Oct. 01, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Line of Credit, Current | $ 75,000 | $ 75,000 |
Senior Notes, principal outstanding | 175,000 | 175,000 |
Capital Lease Obligations | 14,043 | 13,614 |
Debt Issuance Costs, Net | (1,028) | (1,105) |
Debt and Capital Lease Obligations | $ 263,015 | $ 262,509 |
Derivatives And Fair Value Measurements Derivatives and Fair Value Measurements (Schedule Of The Effect Of Derivatives On Accumulated Other Comprehensive Income) - Cash Flow Hedging [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Interest Rate Swap [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (11) | $ 257 |
Foreign Exchange Forward [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (5,218) | $ 2,289 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 2,847 | $ 2,854 |
Effective tax rates | 9.20% | 16.50% |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Earnings Per Share [Abstract] | ||
Net income | $ 28,179 | $ 14,448 |
Basic weighted average common shares outstanding | 33,534 | 33,396 |
Dilutive effect of share-based awards outstanding | 1,010 | 666 |
Diluted weighted average shares outstanding | 34,544 | 34,062 |
Earnings per share, Basic | $ 0.84 | $ 0.43 |
Earnings per share, Diluted | $ 0.82 | $ 0.42 |
Antidilutive securities excluded from computation of diluted earnings per share | 100 | 800 |
Guarantees (Details) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2016
USD ($)
mo
|
Oct. 01, 2016
USD ($)
|
|
Limited warranty liability, beginning balance | $ 6,109 | $ 5,847 |
Accruals for warranties issued during the period | 1,777 | |
Settlements (in cash or in kind) during the period | 1,252 | 1,515 |
Limited warranty liability, ending balance | $ 4,857 | $ 6,109 |
Minimum [Member] | ||
Product Warranty Specification Period | mo | 12 | |
Maximum [Member] | ||
Product Warranty Specification Period | mo | 24 |
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jun. 06, 2016 |
Aug. 20, 2015 |
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Stockholders' Equity Note [Abstract] | ||||
Stock Repurchase Program, Authorized Amount | $ 150,000 | $ 30,000 | ||
Stock Repurchased During Period, Shares | 144,729 | 227,312 | ||
Repurchases of common stock | $ 7,061 | $ 8,463 | ||
Average price of repurchased shares | $ 48.79 | $ 37.23 |
Trade Accounts Receivable Sale Programs (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Receivables [Abstract] | ||
Maximum Limit Accounts Receivable Sale Program | $ 100.0 | |
Trade Accounts Receivable Sold | 77.8 | $ 22.3 |
Amount Received From Trade Accounts Receivable Sold To Third Party | $ 77.4 | $ 22.1 |
Restructuring and Other Charges (Narrative) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Oct. 01, 2016 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Other Charges | $ 0 | $ 1,507 | |
AMER | Fremont [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Other Charges | 0 | $ 7,034 | |
AMER | Employee Severance [Member] | Fremont [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Other Charges | 0 | 1,394 | 5,255 |
AMER | Other Restructuring [Member] | Fremont [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Other Charges | $ 0 | $ 113 | $ 1,779 |
New Accounting Pronouncements (Details) - Valuation Allowance of Deferred Tax Assets [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Oct. 01, 2016 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 4.9 | |
Share Based Compensation Excess Tax Benefits Amount | $ 0.6 |
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