(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Exhibit Number | Description | |
99.1 | ||
104 | Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document) |
Date: January 22, 2020 | PLEXUS CORP. | |
(Registrant) | ||
By: /s/ Patrick J. Jermain | ||
Patrick J. Jermain | ||
Executive Vice President and Chief Financial Officer |
• | Record quarterly revenue of $852 million during the fiscal first quarter of 2020 |
• | GAAP diluted EPS of $1.03 |
• | Non-GAAP adjusted diluted EPS of $1.00, excluding a net benefit of $0.03 per share related to special tax items |
• | Initiates fiscal second quarter 2020 revenue guidance of $790 to $830 million with GAAP diluted EPS of $0.80 to $0.90, excluding any non-recurring charges |
Three Months Ended | ||||||||
Jan 4, 2020 | Jan 4, 2020 | Apr 4, 2020 | ||||||
Q1F20 Results | Q1F20 Guidance | Q2F20 Guidance | ||||||
Summary GAAP Items | ||||||||
Revenue (in millions) | $852 | $780 to $820 | $790 to $830 | |||||
Operating margin | 4.7 | % | 4.5% to 4.9% | 4.0% to 4.5% | ||||
Diluted EPS (1) | $1.03 | $0.87 to $0.97 | $0.80 to $0.90 | |||||
Summary Non-GAAP Items (2) | ||||||||
Adjusted diluted EPS (1) | $1.00 | |||||||
Return on invested capital (ROIC) | 14.7 | % | ||||||
Economic return | 5.9 | % | ||||||
(1) | Includes stock-based compensation expense of $0.17 for Q1F20 results, $0.18 for Q1F20 guidance and $0.21 for Q2F20 guidance. Q2F20 guidance excludes any non-recurring charges. | |||||||
(2) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures and a reconciliation to GAAP. |
• | Won 30 manufacturing programs during the quarter representing $167 million in annualized revenue when fully ramped into production |
• | Trailing four quarter wins total $843 million in annualized revenue when fully ramped into production |
• | Purchased $6.3 million of our shares at an average price of $69.82 per share under our existing share repurchase program |
Quarterly Comparison | Three Months Ended | ||||||||||
Jan 4, 2020 | Sept 28, 2019 | Dec 29, 2018 | |||||||||
(in thousands, except EPS) | Q1F20 | Q4F19 | Q1F19 | ||||||||
Revenue | $ | 852,409 | $ | 810,195 | $ | 765,544 | |||||
Gross profit | 79,190 | 77,789 | 72,383 | ||||||||
Operating income | 39,934 | 37,527 | 36,951 | ||||||||
Net income | 31,006 | 36,831 | 22,226 | ||||||||
Diluted EPS | 1.03 | 1.23 | 0.69 | ||||||||
Adjusted net income (1) | 30,192 | 27,788 | 29,261 | ||||||||
Adjusted diluted EPS (1) | 1.00 | 0.93 | 0.91 | ||||||||
Gross margin | 9.3 | % | 9.6 | % | 9.5 | % | |||||
Operating margin | 4.7 | % | 4.6 | % | 4.8 | % | |||||
Adjusted operating margin (1) | 4.7 | % | 4.8 | % | 4.8 | % | |||||
ROIC (1) | 14.7 | % | 13.1 | % | 14.6 | % | |||||
Economic return (1) | 5.9 | % | 4.1 | % | 5.6 | % | |||||
(1) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures discussed and/or disclosed in this release, such as adjusted operating margin, adjusted net income, adjusted diluted EPS, ROIC and economic return, and a reconciliation of these measures to GAAP. |
Business Segments ($ in millions) | Three Months Ended | ||||||||||
Jan 4, 2020 | Sept 28, 2019 | Dec 29, 2018 | |||||||||
Q1F20 | Q4F19 | Q1F19 | |||||||||
Americas | $ | 353 | $ | 344 | $ | 354 | |||||
Asia-Pacific | 451 | 416 | 378 | ||||||||
Europe, Middle East, and Africa | 85 | 81 | 73 | ||||||||
Elimination of inter-segment sales | (37) | (31) | (39) | ||||||||
Total Revenue | $ | 852 | $ | 810 | $ | 766 |
Market Sectors ($ in millions) | Three Months Ended | ||||||||||||||||
Jan 4, 2020 | Sept 28, 2019 | Dec 29, 2018 | |||||||||||||||
Q1F20 | Q4F19 | Q1F19 | |||||||||||||||
Healthcare/Life Sciences | $ | 312 | 37 | % | $ | 311 | 38 | % | $ | 301 | 39 | % | |||||
Industrial/Commercial | 310 | 36 | % | 264 | 33 | % | 219 | 29 | % | ||||||||
Aerospace/Defense | 172 | 20 | % | 174 | 21 | % | 123 | 16 | % | ||||||||
Communications | 58 | 7 | % | 61 | 8 | % | 123 | 16 | % | ||||||||
Total Revenue | $ | 852 | $ | 810 | $ | 766 | |||||||||||
Cash Cycle Days | Three Months Ended | ||||
Jan 4, 2020 Q1F20 | Sept 28, 2019 Q4F19 | Dec 29, 2018 Q1F19 | |||
Days in Accounts Receivable | 49 | 55 | 51 | ||
Days in Contract Assets | 12 | 10 | 10 | ||
Days in Inventory | 87 | 87 | 105 | ||
Days in Accounts Payable | (61) | (55) | (68) | ||
Days in Cash Deposits | (16) | (17) | (15) | ||
Annualized Cash Cycle * | 71 | 80 | 83 | ||
* We calculate cash cycle as the sum of days in accounts receivable, days in contract assets and days in inventory, less days in accounts payable and days in cash deposits. |
What: | Plexus Fiscal 2020 Q1 Earnings Conference Call and Webcast |
When: | Thursday, January 23, 2020 at 8:30 a.m. Eastern Time |
Where: | Participants are encouraged to join the live webcast at the investor relations section of the Plexus website, https://plexus.gcs-web.com/events-and-presentations/upcoming-events, where a slide presentation reviewing fiscal first quarter 2020 results will also be made available ahead of the conference call. Conference call at +1.800.708.4540 with passcode: 49281293 |
Replay: | The webcast will be archived on the Plexus website and available via telephone replay at +1.888.843.7419 or +1.630.652.3042 with passcode: 49281293 |
PLEXUS CORP. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
Jan 4, | Dec 29, | ||||||
2020 | 2018 | ||||||
Net sales | $ | 852,409 | $ | 765,544 | |||
Cost of sales | 773,219 | 693,161 | |||||
Gross profit | 79,190 | 72,383 | |||||
Selling and administrative expenses | 39,256 | 35,432 | |||||
Operating income | 39,934 | 36,951 | |||||
Other income (expense): | |||||||
Interest expense | (4,132 | ) | (2,249 | ) | |||
Interest income | 645 | 525 | |||||
Miscellaneous | (2,173 | ) | (1,112 | ) | |||
Income before income taxes | 34,274 | 34,115 | |||||
Income tax expense | 3,268 | 11,889 | |||||
Net income | $ | 31,006 | $ | 22,226 | |||
Earnings per share: | |||||||
Basic | $ | 1.06 | $ | 0.71 | |||
Diluted | $ | 1.03 | $ | 0.69 | |||
Weighted average shares outstanding: | |||||||
Basic | 29,147 | 31,403 | |||||
Diluted | 30,065 | 32,286 |
PLEXUS CORP. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
Jan 4, | Sept 28, | ||||||
2020 | 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 252,914 | $ | 223,761 | |||
Restricted cash | 2,208 | 2,493 | |||||
Accounts receivable | 461,705 | 488,284 | |||||
Contract assets | 107,040 | 90,841 | |||||
Inventories | 735,803 | 700,938 | |||||
Prepaid expenses and other | 33,719 | 31,974 | |||||
Total current assets | 1,593,389 | 1,538,291 | |||||
Property, plant and equipment, net | 387,509 | 384,224 | |||||
Operating lease right-of-use asset | 74,111 | — | |||||
Deferred income taxes | 14,127 | 13,654 | |||||
Other | 35,761 | 64,714 | |||||
Total non-current assets | 511,508 | 462,592 | |||||
Total assets | $ | 2,104,897 | $ | 2,000,883 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and finance lease obligations | $ | 67,847 | $ | 100,702 | |||
Accounts payable | 515,484 | 444,944 | |||||
Customer deposits | 137,014 | 139,841 | |||||
Accrued salaries and wages | 52,527 | 73,555 | |||||
Other accrued liabilities | 117,063 | 106,461 | |||||
Total current liabilities | 889,935 | 865,503 | |||||
Long-term debt and finance lease obligations, net of current portion | 186,827 | 187,278 | |||||
Accrued income taxes payable | 59,572 | 59,572 | |||||
Long-term operating lease liabilities | 36,473 | — | |||||
Deferred income taxes | 6,463 | 5,305 | |||||
Other liabilities | 17,255 | 17,649 | |||||
Total non-current liabilities | 306,590 | 269,804 | |||||
Total liabilities | 1,196,525 | 1,135,307 | |||||
Shareholders’ equity: | |||||||
Common stock, $.01 par value, 200,000 shares authorized, | |||||||
53,226 and 52,917 shares issued, respectively, | |||||||
and 29,222 and 29,004 shares outstanding, respectively | 532 | 529 | |||||
Additional paid-in-capital | 609,168 | 597,401 | |||||
Common stock held in treasury, at cost, 24,004 and 23,913, respectively | (899,577 | ) | (893,247 | ) | |||
Retained earnings | 1,208,606 | 1,178,677 | |||||
Accumulated other comprehensive loss | (10,357 | ) | (17,784 | ) | |||
Total shareholders’ equity | 908,372 | 865,576 | |||||
Total liabilities and shareholders’ equity | $ | 2,104,897 | $ | 2,000,883 | |||
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 1 | ||||||||||||
(in thousands, except per share data) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
Jan 4, | Sept 28, | Dec 29, | ||||||||||
2020 | 2019 | 2018 | ||||||||||
Operating income, as reported | 39,934 | $ | 37,527 | $ | 36,951 | |||||||
Operating margin, as reported | 4.7 | % | 4.6 | % | 4.8 | % | ||||||
Non-GAAP adjustments: | ||||||||||||
Restructuring costs (1) | — | 1,678 | — | |||||||||
Adjusted operating income | $ | 39,934 | $ | 39,205 | $ | 36,951 | ||||||
Adjusted operating margin | 4.7 | % | 4.8 | % | 4.8 | % | ||||||
Net income, as reported | $ | 31,006 | $ | 36,831 | $ | 22,226 | ||||||
Non-GAAP adjustments: | ||||||||||||
Special tax impacts (2) | (814 | ) | — | 7,035 | ||||||||
Restructuring costs, net of tax (1) | — | 1,502 | — | |||||||||
Accumulated foreign earnings assertion (3) | — | (10,545 | ) | — | ||||||||
Adjusted net income | $ | 30,192 | $ | 27,788 | $ | 29,261 | ||||||
Diluted earnings per share, as reported | $ | 1.03 | $ | 1.23 | $ | 0.69 | ||||||
Non-GAAP per share adjustments: | ||||||||||||
Special tax impacts (2) | (0.03 | ) | — | 0.22 | ||||||||
Restructuring costs, net of tax (1) | — | 0.05 | — | |||||||||
Accumulated foreign earnings assertion (3) | — | (0.35 | ) | — | ||||||||
Adjusted diluted earnings per share | $ | 1.00 | $ | 0.93 | $ | 0.91 | ||||||
(1) | During the three months ended September 28, 2019, restructuring costs of $1.7 million, $1.5 million net of taxes, were incurred. | |||||||||||
(2) | During the three months ended January 4, 2020, there was $1.9M in tax benefits related to US foreign tax credit regulations issued during the quarter, partially offset by $1.1M of tax expense as a result of special tax items. During the three months ended December 29, 2018, special tax expense of $7.0 million was recorded in accordance with new regulations issued in November 2018 under U.S. Tax Reform. These regulations impacted the treatment of foreign taxes paid. | |||||||||||
(3) | During the three and twelve months ended September 28, 2019, the Company reasserted that certain historical undistributed earnings of two foreign subsidiaries will be permanently reinvested, which resulted in a $10.5 million benefit. |
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 2 | ||||||||||||||
(in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
ROIC and Economic Return Calculations | Three Months Ended | Twelve Months Ended | Three Months Ended | |||||||||||
Jan 4, | Sept 28, | Dec 29, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||||
Operating income, as reported | $ | 39,934 | $ | 142,055 | $ | 36,951 | ||||||||
Restructuring costs | + | — | + | 1,678 | + | — | ||||||||
Adjusted operating income | $ | 39,934 | $ | 143,733 | $ | 36,951 | ||||||||
x | 4 | x | 4 | |||||||||||
Adjusted annualized operating income | $ | 159,736 | $ | 143,733 | $ | 147,804 | ||||||||
Adjusted effective tax rate | x | 13 | % | x | 16 | % | x | 15 | % | |||||
Tax impact | 20,766 | 22,997 | 22,171 | |||||||||||
Adjusted operating income (tax effected) | $ | 138,970 | $ | 120,736 | $ | 125,633 | ||||||||
Average invested capital | ÷ | $ | 942,793 | ÷ | $ | 923,107 | ÷ | $ | 862,528 | |||||
ROIC | 14.7 | % | 13.1 | % | 14.6 | % | ||||||||
Weighted average cost of capital | - | 8.8 | % | - | 9.0 | % | - | 9.0 | % | |||||
Economic return | 5.9 | % | 4.1 | % | 5.6 | % |
Three Months Ended | |||||||||||||||||||||||
Average Invested Capital | Jan 4, | Sept 28, | Jun 29, | Mar 30, | Dec 29, | Sept 29, | |||||||||||||||||
Calculations | 2020 | 2019 | 2019 | 2019 | 2018 | 2018 | |||||||||||||||||
Equity | $ | 908,372 | $ | 865,576 | $ | 860,791 | $ | 875,444 | $ | 905,163 | $ | 921,143 | |||||||||||
Plus: | |||||||||||||||||||||||
Debt and finance leases - current | 67,847 | 100,702 | 138,976 | 93,197 | 8,633 | 5,532 | |||||||||||||||||
Operating leases - current (1) (2) | 9,185 | — | — | — | — | — | |||||||||||||||||
Debt and finance leases - long-term | 186,827 | 187,278 | 187,581 | 187,120 | 187,567 | 183,085 | |||||||||||||||||
Operating leases - long-term (2) | 36,473 | — | — | — | — | — | |||||||||||||||||
Less: | |||||||||||||||||||||||
Cash and cash equivalents | (252,914) | (223,761) | (198,395) | (184,028) | (188,799) | (297,269) | |||||||||||||||||
$ | 955,790 | $ | 929,795 | $ | 988,953 | $ | 971,733 | $ | 912,564 | $ | 812,491 |
(1) | Included in Other accrued liabilities on the Condensed Consolidated Balance Sheets. | |||||
(2) | In the fiscal first quarter of 2020, the Company adopted and applied Topic 842 to all leases using the modified retrospective method of adoption. The prior year comparative information has not been restated and continued to be reported under the accounting standards in effect for fiscal 2019 and 2018. |
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