Three Months Ended | ||||||||||||||||||||
Mar 30, 2024 | Mar 30, 2024 | Jun 29, 2024 | ||||||||||||||||||
Q2F24 Results | Q2F24 Guidance | Q3F24 Guidance (1) | ||||||||||||||||||
Summary GAAP Items | ||||||||||||||||||||
Revenue (in millions) | $967 | $930 to $970 | $960 to $1,000 | |||||||||||||||||
Operating margin (2) | 3.0 | % | 3.0% to 3.4% | 3.9% to 4.3% | ||||||||||||||||
Diluted EPS (3) | $0.58 | $0.48 to $0.63 | $0.80 to $0.95 | |||||||||||||||||
Summary Non-GAAP Items (4) | ||||||||||||||||||||
Adjusted operating margin (5) | 4.2 | % | 4.0% to 4.4% | |||||||||||||||||
Adjusted EPS (6) | $0.94 | $0.80 to $0.95 | ||||||||||||||||||
Adjusted operating margin, prospectively (7) | 5.2% to 5.6% | |||||||||||||||||||
Adjusted EPS, prospectively (8) | $1.22 to $1.37 | |||||||||||||||||||
Return on invested capital (ROIC) | 9.9 | % | ||||||||||||||||||
Economic return | 1.7 | % | ||||||||||||||||||
(1) | Historically, Plexus has included stock-based compensation expense in adjusted operating margin and adjusted EPS. Beginning in the fiscal third quarter, Plexus will issue guidance and present adjusted operating margin and adjusted EPS excluding stock-based compensation expense. Refer to the Non-GAAP Supplemental Information Table 3 for a reconciliation between the historic presentation and prospective presentation. | |||||||||||||||||||
(2) | Includes restructuring and other charges, net, of 120 bps for Q2F24 results, 100 bps for Q2F24 guidance and 70 bps for Q3F24 guidance. Includes stock-based compensation expense of 73 bps for Q2F24 results, 72 bps for Q2F24 guidance, and 60 bps for Q3F24 guidance. | |||||||||||||||||||
(3) | Includes stock-based compensation expense of $0.25 for Q2F24 results, $0.25 for Q2F24 guidance and $0.21 for Q3F24 guidance. Includes, net of tax, restructuring and other charges, net, of $0.36 for Q2F24 results, $0.32 for Q2F24 guidance, and $0.21 for Q3F24 guidance. | |||||||||||||||||||
(4) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for additional information regarding non-GAAP financial measures. | |||||||||||||||||||
(5) | Excludes restructuring and other charges, net, of 120 bps for Q2F24 results and 100 bps for Q2F24 guidance. Excludes stock-based compensation expense of 73 bps for Q2F24 results and 72 bps for Q2F24 guidance. | |||||||||||||||||||
(6) | Q2F24 results excludes, net of tax, $0.36 per share related to restructuring and other charges, net, but includes stock-based compensation expense of $0.25. Q2F24 guidance excludes $0.32 per share related to restructuring and other charges, net, but includes stock-based compensation expense of $0.25. | |||||||||||||||||||
(7) | Excludes 70 bps for restructuring charges and 60 bps related to stock-based compensation expense. | |||||||||||||||||||
(8) | Excludes $0.21 per share related to restructuring charges and $0.21 per share related to stock-based compensation expense. |
Quarterly Comparison | Three Months Ended | ||||||||||||||||
(in thousands, except EPS) | Mar 30, 2024 | Dec 30, 2023 | Apr 1, 2023 | ||||||||||||||
Revenue | $ | 966,900 | $ | 982,607 | $ | 1,070,823 | |||||||||||
Gross profit | 88,063 | 88,140 | 102,993 | ||||||||||||||
Operating income | 29,470 | 45,158 | 56,942 | ||||||||||||||
Net income | 16,239 | 29,215 | 40,844 | ||||||||||||||
Diluted EPS | $ | 0.58 | $ | 1.04 | $ | 1.45 | |||||||||||
Gross margin | 9.1 | % | 9.0 | % | 9.6 | % | |||||||||||
Operating margin | 3.0 | % | 4.6 | % | 5.3 | % | |||||||||||
ROIC (1) | 9.9 | % | 10.3 | % | 13.8 | % | |||||||||||
Economic return (1) | 1.7 | % | 2.1 | % | 4.8 | % | |||||||||||
(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. |
Business Segments ($ in millions) | Three Months Ended | ||||||||||||||||
Mar 30, 2024 | Dec 30, 2023 | Apr 1, 2023 | |||||||||||||||
Americas | $ | 322 | $ | 334 | $ | 408 | |||||||||||
Asia-Pacific | 521 | 552 | 587 | ||||||||||||||
Europe, Middle East and Africa | 155 | 122 | 102 | ||||||||||||||
Elimination of inter-segment sales | (31) | (25) | (26) | ||||||||||||||
Total Revenue | $ | 967 | $ | 983 | $ | 1,071 |
Market Sectors ($ in millions) | Three Months Ended | |||||||||||||||||||||||||
Mar 30, 2024 | Dec 30, 2023 | Apr 1, 2023 | ||||||||||||||||||||||||
Healthcare/Life Sciences | $ | 379 | 39 | % | $ | 381 | 39 | % | $ | 488 | 46 | % | ||||||||||||||
Industrial | 418 | 43 | % | 435 | 44 | % | 439 | 41 | % | |||||||||||||||||
Aerospace/Defense | 170 | 18 | % | 167 | 17 | % | 144 | 13 | % | |||||||||||||||||
Total Revenue | $ | 967 | $ | 983 | $ | 1,071 |
Cash Cycle Days | Three Months Ended | |||||||||||||||||||
Mar 30, 2024 | Dec 30, 2023 | Apr 1, 2023 | ||||||||||||||||||
Days in Accounts Receivable | 61 | 61 | 56 | |||||||||||||||||
Days in Contract Assets | 12 | 12 | 11 | |||||||||||||||||
Days in Inventory | 158 | 161 | 156 | |||||||||||||||||
Days in Accounts Payable | (65) | (66) | (69) | |||||||||||||||||
Days in Advanced Payments (1) | (75) | (73) | (72) | |||||||||||||||||
Annualized Cash Cycle (2) | 91 | 95 | 82 | |||||||||||||||||
(1) | Includes a reclassification in the presentation of advanced payments from customers reflected in prior period amounts. As of April 1, 2023, the impact of this reclassification was an increase in the Company's days in advanced payments and a reduction in annualized cash cycle by 22 days. | |||||||||||||||||||
(2) | Plexus calculates 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 advanced payments. |
What: | Plexus Fiscal 2024 Q2 Earnings Conference Call and Webcast | ||||
When: | Thursday, April 25, 2024 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, plexus.com. Participants can also join utilizing the links below: Audio conferencing link: https://register.vevent.com/register/BI408fb95be3e440b981d3e0808adddf91 Webcast link: https://edge.media-server.com/mmc/p/wrgz2xex | ||||
Replay: | The webcast will be archived on the Plexus website and will be available as on-demand for 12 months |
PLEXUS CORP. AND SUBSIDIARIES | |||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
Mar 30, | Apr 1, | Mar 30, | Apr 1, | ||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net sales | $ | 966,900 | $ | 1,070,823 | $ | 1,949,507 | $ | 2,164,748 | |||||||||||||||
Cost of sales | 878,837 | 967,830 | 1,773,304 | 1,960,556 | |||||||||||||||||||
Gross profit | 88,063 | 102,993 | 176,203 | 204,192 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and administrative expenses | 47,555 | 46,051 | 90,537 | 89,909 | |||||||||||||||||||
Restructuring and other charges, net | 11,038 | — | 11,038 | — | |||||||||||||||||||
Operating income | 29,470 | 56,942 | 74,628 | 114,283 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (8,293) | (8,287) | (15,910) | (15,181) | |||||||||||||||||||
Interest income | 817 | 759 | 1,625 | 1,693 | |||||||||||||||||||
Miscellaneous, net | (3,027) | (1,612) | (6,529) | (3,556) | |||||||||||||||||||
Income before income taxes | 18,967 | 47,802 | 53,814 | 97,239 | |||||||||||||||||||
Income tax expense | 2,728 | 6,958 | 8,360 | 14,205 | |||||||||||||||||||
Net income | $ | 16,239 | $ | 40,844 | $ | 45,454 | $ | 83,034 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.59 | $ | 1.48 | $ | 1.65 | $ | 3.00 | |||||||||||||||
Diluted | $ | 0.58 | $ | 1.45 | $ | 1.62 | $ | 2.94 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 27,542 | 27,661 | 27,513 | 27,650 | |||||||||||||||||||
Diluted | 27,929 | 28,184 | 27,982 | 28,273 |
PLEXUS CORP. AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Mar 30, | Sep 30, | ||||||||||
2024 | 2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 265,053 | $ | 256,233 | |||||||
Restricted cash | 41 | 421 | |||||||||
Accounts receivable | 645,523 | 661,542 | |||||||||
Contract assets | 131,174 | 142,297 | |||||||||
Inventories | 1,518,729 | 1,562,037 | |||||||||
Prepaid expenses and other | 70,531 | 49,693 | |||||||||
Total current assets | 2,631,051 | 2,672,223 | |||||||||
Property, plant and equipment, net | 493,803 | 492,036 | |||||||||
Operating lease right-of-use assets | 63,106 | 69,363 | |||||||||
Deferred income taxes | 62,665 | 62,590 | |||||||||
Other assets | 26,032 | 24,960 | |||||||||
Total non-current assets | 645,606 | 648,949 | |||||||||
Total assets | $ | 3,276,657 | $ | 3,321,172 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt and finance lease obligations | $ | 245,964 | $ | 240,205 | |||||||
Accounts payable | 627,427 | 646,610 | |||||||||
Advanced payments from customers | 716,172 | 760,351 | |||||||||
Accrued salaries and wages | 72,880 | 94,099 | |||||||||
Other accrued liabilities | 74,392 | 71,402 | |||||||||
Total current liabilities | 1,736,835 | 1,812,667 | |||||||||
Long-term debt and finance lease obligations, net of current portion | 192,025 | 190,853 | |||||||||
Accrued income taxes payable | 17,198 | 31,382 | |||||||||
Long-term operating lease liabilities | 33,915 | 38,552 | |||||||||
Deferred income taxes | 4,429 | 4,350 | |||||||||
Other liabilities | 32,493 | 28,986 | |||||||||
Total non-current liabilities | 280,060 | 294,123 | |||||||||
Total liabilities | 2,016,895 | 2,106,790 | |||||||||
Shareholders’ equity: | |||||||||||
Common stock | 545 | 543 | |||||||||
Additional paid-in-capital | 663,130 | 661,270 | |||||||||
Common stock held in treasury | (1,151,997) | (1,134,429) | |||||||||
Retained earnings | 1,756,782 | 1,711,328 | |||||||||
Accumulated other comprehensive loss | (8,698) | (24,330) | |||||||||
Total shareholders’ equity | 1,259,762 | 1,214,382 | |||||||||
Total liabilities and shareholders’ equity | $ | 3,276,657 | $ | 3,321,172 | |||||||
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 1 | ||||||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
Mar 30, | Dec 30, | Apr 1, | Mar 30, | Apr 1, | ||||||||||||||||||||||||||||
2024 | 2023 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
Operating income, as reported | $ | 29,470 | $ | 45,158 | $ | 56,942 | $ | 74,628 | $ | 114,283 | ||||||||||||||||||||||
Operating margin, as reported | 3.0 | % | 4.6 | % | 5.3 | % | 3.8 | % | 5.3 | % | ||||||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Restructuring costs (1) | 13,288 | — | — | 13,288 | — | |||||||||||||||||||||||||||
Other non-recurring income (2) | (2,250) | — | — | (2,250) | — | |||||||||||||||||||||||||||
Non-GAAP operating income | $ | 40,508 | $ | 45,158 | $ | 56,942 | $ | 85,666 | $ | 114,283 | ||||||||||||||||||||||
Non-GAAP operating margin | 4.2 | % | 4.6 | % | 5.3 | % | 4.4 | % | 5.3 | % | ||||||||||||||||||||||
Net income, as reported | $ | 16,239 | $ | 29,215 | $ | 40,844 | $ | 45,454 | $ | 83,034 | ||||||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Restructuring costs, net of tax (1) | 11,893 | — | — | 11,893 | — | |||||||||||||||||||||||||||
Other non-recurring income, net of tax (2) | (2,014) | — | — | (2,014) | — | |||||||||||||||||||||||||||
Adjusted net income | $ | 26,118 | $ | 29,215 | $ | 40,844 | $ | 55,333 | $ | 83,034 | ||||||||||||||||||||||
Diluted earnings per share, as reported | $ | 0.58 | $ | 1.04 | $ | 1.45 | $ | 1.62 | $ | 2.94 | ||||||||||||||||||||||
Non-GAAP per share adjustments: | ||||||||||||||||||||||||||||||||
Restructuring costs, net of tax (1) | 0.43 | — | — | 0.43 | — | |||||||||||||||||||||||||||
Other non-recurring income, net of tax (2) | (0.07) | — | — | (0.07) | — | |||||||||||||||||||||||||||
Adjusted diluted earnings per share | $ | 0.94 | $ | 1.04 | $ | 1.45 | $ | 1.98 | $ | 2.94 | ||||||||||||||||||||||
(1) | During the three and six months ended March 30, 2024, restructuring and impairment charges of $13.3 million, or $11.9 million net of taxes, were incurred for employee severance costs associated with a reduction in the Company's workforce as well as closure costs associated with a site in the Company's EMEA region. | |||||||||||||||||||||||||||||||
(2) | During the three and six months ended March 30, 2024, insurance proceeds of $2.3 million, or $2.0 million net of taxes, were received related to an arbitration decision associated with a contractual matter that occurred in the Company's EMEA region in fiscal 2023. |
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 2 | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
ROIC and Economic Return Calculations | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||
Mar 30, | Dec 30, | Apr 1, | ||||||||||||||||||||||||
2024 | 2023 | 2023 | ||||||||||||||||||||||||
Operating income, as reported | $ | 74,628 | $ | 45,158 | $ | 114,283 | ||||||||||||||||||||
Restructuring and other charges, net | + | 11,038 | + | — | + | — | ||||||||||||||||||||
Adjusted operating income | $ | 85,666 | $ | 45,158 | $ | 114,283 | ||||||||||||||||||||
x | 2 | x | 4 | x | 2 | |||||||||||||||||||||
Adjusted annualized operating income | $ | 171,332 | $ | 180,632 | $ | 228,566 | ||||||||||||||||||||
Adjusted effective tax rate | x | 15 | % | x | 16 | % | x | 15 | % | |||||||||||||||||
Tax impact | 25,700 | 28,901 | 34,285 | |||||||||||||||||||||||
Adjusted operating income (tax-effected) | $ | 145,632 | $ | 151,731 | $ | 194,281 | ||||||||||||||||||||
Average invested capital | ÷ | $ | 1,478,062 | ÷ | $ | 1,479,647 | ÷ | $ | 1,406,359 | |||||||||||||||||
ROIC | 9.9 | % | 10.3 | % | 13.8 | % | ||||||||||||||||||||
Weighted average cost of capital | - | 8.2 | % | - | 8.2 | % | - | 9.0 | % | |||||||||||||||||
Economic return | 1.7 | % | 2.1 | % | 4.8 | % |
Average Invested Capital Calculations | Mar 30, | Dec 30, | Sep 30, | Jul 1, | Apr 1, | Dec 31, | Oct 1, | ||||||||||||||||||||||||||||||||||
2024 | 2023 | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||||||||||||||||||||||
Equity | $ | 1,259,762 | $ | 1,266,755 | $ | 1,214,382 | $ | 1,184,362 | $ | 1,182,382 | $ | 1,150,259 | $ | 1,095,731 | |||||||||||||||||||||||||||
Plus: | |||||||||||||||||||||||||||||||||||||||||
Debt and finance lease obligations - current | 245,964 | 251,119 | 240,205 | 304,781 | 294,011 | 329,076 | 273,971 | ||||||||||||||||||||||||||||||||||
Operating lease obligations - current (1) | 8,281 | 9,172 | 8,363 | 8,772 | 8,358 | 8,878 | 7,948 | ||||||||||||||||||||||||||||||||||
Debt and finance lease obligations - long-term | 192,025 | 192,118 | 190,853 | 187,468 | 188,730 | 187,272 | 187,776 | ||||||||||||||||||||||||||||||||||
Operating lease obligations - long-term | 33,915 | 35,989 | 38,552 | 40,515 | 31,257 | 32,149 | 33,628 | ||||||||||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | (265,053) | (231,982) | (256,233) | (252,965) | (269,664) | (247,880) | (274,805) | ||||||||||||||||||||||||||||||||||
$ | 1,474,894 | $ | 1,523,171 | $ | 1,436,122 | $ | 1,472,933 | $ | 1,435,074 | $ | 1,459,754 | $ | 1,324,249 |
(1) | Included in other accrued liabilities on the Condensed Consolidated Balance Sheets. |
PLEXUS CORP. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 3 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
Dec 31, | Apr 1, | Jul 1, | Sep 30, | Dec 30, | Mar 30, | ||||||||||||||||||||||||||||||||||||
2022 | 2023 | 2023 | 2023 | 2023 | 2024 | ||||||||||||||||||||||||||||||||||||
Net sales | $ | 1,093,925 | $ | 1,070,823 | $ | 1,021,610 | $ | 1,023,947 | $ | 982,607 | $ | 966,900 | |||||||||||||||||||||||||||||
Operating income, as reported | 57,341 | 56,942 | 28,204 | 53,333 | 45,158 | 29,470 | |||||||||||||||||||||||||||||||||||
Operating margin, as reported | 5.2 | % | 5.3 | % | 2.8 | % | 5.2 | % | 4.6 | % | 3.0 | % | |||||||||||||||||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||||||||||||||||||||
Restructuring costs | — | — | 8,865 | — | — | 13,288 | |||||||||||||||||||||||||||||||||||
Other non-recurring charges, net of tax | — | — | 14,229 | — | — | (2,250) | |||||||||||||||||||||||||||||||||||
Non-GAAP operating income, previously reported | 57,341 | 56,942 | 51,298 | 53,333 | 45,158 | 40,508 | |||||||||||||||||||||||||||||||||||
Non-GAAP operating margin, previously reported | 5.2 | % | 5.3 | % | 5.0 | % | 5.2 | % | 4.6 | % | 4.2 | % | |||||||||||||||||||||||||||||
Stock-based compensation | 5,819 | 5,907 | 3,829 | 5,824 | 5,335 | 7,096 | |||||||||||||||||||||||||||||||||||
Non-GAAP operating income | $ | 63,160 | $ | 62,849 | $ | 55,127 | $ | 59,157 | $ | 50,493 | $ | 47,604 | |||||||||||||||||||||||||||||
Non-GAAP operating margin | 5.8 | % | 5.9 | % | 5.4 | % | 5.8 | % | 5.1 | % | 4.9 | % | |||||||||||||||||||||||||||||
Net income, as reported | $ | 42,190 | $ | 40,844 | $ | 15,799 | $ | 40,261 | $ | 29,215 | $ | 16,239 | |||||||||||||||||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||||||||||||||||||||
Restructuring costs, net of tax | — | — | 7,920 | — | — | 11,893 | |||||||||||||||||||||||||||||||||||
Other non-recurring charges, net of tax | — | — | 13,346 | — | — | (2,014) | |||||||||||||||||||||||||||||||||||
Adjusted net income, previously reported | 42,190 | 40,844 | 37,065 | 40,261 | 29,215 | 26,118 | |||||||||||||||||||||||||||||||||||
Stock-based compensation | 5,819 | 5,907 | 3,829 | 5,824 | 5,335 | 7,096 | |||||||||||||||||||||||||||||||||||
Adjusted net income | $ | 48,009 | $ | 46,751 | $ | 40,894 | $ | 46,085 | $ | 34,550 | $ | 33,214 | |||||||||||||||||||||||||||||
Diluted weighted average shares outstanding | 28,305 | 28,184 | 27,992 | 27,972 | 28,013 | 27,929 | |||||||||||||||||||||||||||||||||||
Diluted earnings per share, as previously reported | $ | 1.49 | $ | 1.45 | $ | 0.56 | $ | 1.44 | $ | 1.04 | $ | 0.58 | |||||||||||||||||||||||||||||
Non-GAAP per share adjustments: | |||||||||||||||||||||||||||||||||||||||||
Restructuring costs, net of tax | — | — | 0.28 | — | — | 0.43 | |||||||||||||||||||||||||||||||||||
Other non-recurring charges, net of tax | — | — | 0.48 | — | — | (0.07) | |||||||||||||||||||||||||||||||||||
Adjusted diluted earnings per share, previously reported | 1.49 | 1.45 | 1.32 | 1.44 | 1.04 | 0.94 | |||||||||||||||||||||||||||||||||||
Stock-based compensation | 0.21 | 0.21 | 0.14 | 0.21 | 0.19 | 0.25 | |||||||||||||||||||||||||||||||||||
Adjusted diluted earnings per share | $ | 1.70 | $ | 1.66 | $ | 1.46 | $ | 1.65 | $ | 1.23 | $ | 1.19 | |||||||||||||||||||||||||||||