Wisconsin | 001-14423 | 39-1344447 | ||||||||||||
(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 | ||||||
Common Stock, $0.01 par value | PLXS | The Nasdaq Global Select Market |
Exhibit Number | Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document) |
Date: July 26, 2023 | PLEXUS CORP. | |||||||
(Registrant) | ||||||||
By: /s/ Patrick J. Jermain |
||||||||
Patrick J. Jermain | ||||||||
Executive Vice President and Chief Financial Officer |
Three Months Ended | ||||||||||||||||||||
Jul 1, 2023 | Jul 1, 2023 | Sep 30, 2023 | ||||||||||||||||||
Q3F23 Results |
Q3F23 Guidance (1) |
Q4F23 Guidance |
||||||||||||||||||
Summary GAAP Items | ||||||||||||||||||||
Revenue (in billions) | $1.02 | $1.00 to $1.05 | $1.00 to $1.04 | |||||||||||||||||
Operating margin (2) | 2.8 | % | 2.3% to 2.8% | 4.7% to 5.2% | ||||||||||||||||
Diluted EPS (3) | $0.56 | $0.28 to $0.46 | $1.18 to $1.36 | |||||||||||||||||
Summary Non-GAAP Items (4) | ||||||||||||||||||||
Adjusted operating margin (5) | 5.0 | % | 4.5% to 5.0% | |||||||||||||||||
Adjusted diluted EPS (6) | $1.32 | $1.05 to $1.23 | ||||||||||||||||||
Return on invested capital (ROIC) | 13.5 | % | ||||||||||||||||||
Economic return | 4.5 | % | ||||||||||||||||||
(1) | On May 18, 2023, the Company announced updates to its fiscal third quarter 2023 GAAP guidance because of an additional one-time, non-recurring charge taken during the quarter related to an arbitration decision. | |||||||||||||||||||
(2) | Q3F23 results and guidance include restructuring and other charges of 220 bps. |
|||||||||||||||||||
(3) |
Includes stock-based compensation expense of $0.14 for Q3F23 results, $0.19 for Q3F23 guidance and $0.19 for Q4F23 guidance.
Q3F23 results include $0.76 per share related to restructuring and other charges, net of tax.
Q3F23 guidance includes $0.77 per share related to restructuring and other charges, net of tax.
|
|||||||||||||||||||
(4) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for additional information regarding non-GAAP financial measures. | |||||||||||||||||||
(5) | Q3F23 results and guidance exclude restructuring and other charges of 220 bps in operating margin. | |||||||||||||||||||
(6) |
Q3F23 results exclude $0.76 per share related to restructuring and other charges, net of tax, but include stock-based compensation expense of $0.14.
Q3F23 guidance excludes $0.77 per share related to restructuring and other charges, net of tax, but includes stock-based compensation expense of $0.19.
|
Quarterly Comparison | Three Months Ended | ||||||||||||||||
(in thousands, except EPS) | Jul 1, 2023 | Apr 1, 2023 | Jul 2, 2022 | ||||||||||||||
Revenue | $ | 1,021,610 | $ | 1,070,823 | $ | 981,341 | |||||||||||
Gross profit | 93,646 | 102,993 | 93,618 | ||||||||||||||
Operating income | 28,204 | 56,942 | 49,561 | ||||||||||||||
Net income | 15,799 | 40,844 | 37,494 | ||||||||||||||
Diluted EPS | $ | 0.56 | $ | 1.45 | $ | 1.33 | |||||||||||
Gross margin | 9.2 | % | 9.6 | % | 9.5 | % | |||||||||||
Operating margin | 2.8 | % | 5.3 | % | 5.1 | % | |||||||||||
ROIC (1) | 13.5 | % | 13.8 | % | 11.5 | % | |||||||||||
Economic return (1) | 4.5 | % | 4.8 | % | 2.2 | % | |||||||||||
(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 | ||||||||||||||||
Jul 1, 2023 | Apr 1, 2023 | Jul 2, 2022 | |||||||||||||||
Americas | $ | 371 | $ | 408 | $ | 343 | |||||||||||
Asia-Pacific | 572 | 587 | 586 | ||||||||||||||
Europe, Middle East and Africa | 105 | 102 | 84 | ||||||||||||||
Elimination of inter-segment sales | (26) | (26) | (32) | ||||||||||||||
Total Revenue | $ | 1,022 | $ | 1,071 | $ | 981 |
Market Sectors ($ in millions) | Three Months Ended | |||||||||||||||||||||||||
Jul 1, 2023 | Apr 1, 2023 | Jul 2, 2022 | ||||||||||||||||||||||||
Industrial | $ | 428 | 42 | % | $ | 439 | 41 | % | $ | 454 | 46 | % | ||||||||||||||
Healthcare/Life Sciences | 451 | 44 | % | 488 | 46 | % | 401 | 41 | % | |||||||||||||||||
Aerospace/Defense | 143 | 14 | % | 144 | 13 | % | 126 | 13 | % | |||||||||||||||||
Total Revenue | $ | 1,022 | $ | 1,071 | $ | 981 |
Cash Cycle Days | Three Months Ended | ||||||||||||||||
Jul 1, 2023 | Apr 1, 2023 | Jul 2, 2022 | |||||||||||||||
Days in Accounts Receivable | 63 | 56 | 57 | ||||||||||||||
Days in Contract Assets | 12 | 11 | 12 | ||||||||||||||
Days in Inventory | 161 | 156 | 160 | ||||||||||||||
Days in Accounts Payable | (68) | (69) | (87) | ||||||||||||||
Days in Cash Deposits | (57) | (50) | (40) | ||||||||||||||
Annualized Cash Cycle * | 111 | 104 | 102 | ||||||||||||||
* 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 2023 Q3 Earnings Conference Call and Webcast |
||||
When: |
Thursday, July 27, 2023 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/BI14413298f1df4ebf8824d93e71fda163
Webcast link:
https://edge.media-server.com/mmc/p/86qn7nw4
|
||||
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 | Nine Months Ended | ||||||||||||||||||||||
Jul 1, | Jul 2, | Jul 1, | Jul 2, | ||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net sales | $ | 1,021,610 | $ | 981,341 | $ | 3,186,358 | $ | 2,687,520 | |||||||||||||||
Cost of sales | 927,964 | 887,723 | 2,888,520 | 2,447,396 | |||||||||||||||||||
Gross profit | 93,646 | 93,618 | 297,838 | 240,124 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and administrative expenses | 42,348 | 44,057 | 132,257 | 122,232 | |||||||||||||||||||
Restructuring and other charges | 23,094 | — | 23,094 | 2,021 | |||||||||||||||||||
Operating income | 28,204 | 49,561 | 142,487 | 115,871 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (8,231) | (3,923) | (23,412) | (10,314) | |||||||||||||||||||
Interest income | 598 | 318 | 2,291 | 851 | |||||||||||||||||||
Miscellaneous, net | (3,194) | (2,678) | (6,750) | (5,047) | |||||||||||||||||||
Income before income taxes | 17,377 | 43,278 | 114,616 | 101,361 | |||||||||||||||||||
Income tax expense | 1,578 | 5,784 | 15,783 | 13,575 | |||||||||||||||||||
Net income |
$ | 15,799 | $ | 37,494 | $ | 98,833 | $ | 87,786 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.57 | $ | 1.35 | $ | 3.58 | $ | 3.14 | |||||||||||||||
Diluted | $ | 0.56 | $ | 1.33 | $ | 3.51 | $ | 3.09 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 27,561 | 27,738 | 27,619 | 27,913 | |||||||||||||||||||
Diluted | 27,992 | 28,179 | 28,169 | 28,452 |
PLEXUS CORP. AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Jul 1, | Oct 1, | ||||||||||
2023 | 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 252,965 | $ | 274,805 | |||||||
Restricted cash | 589 | 665 | |||||||||
Accounts receivable | 706,898 | 737,696 | |||||||||
Contract assets | 132,995 | 138,540 | |||||||||
Inventories | 1,641,673 | 1,602,783 | |||||||||
Prepaid expenses and other | 64,166 | 61,633 | |||||||||
Total current assets | 2,799,286 | 2,816,122 | |||||||||
Property, plant and equipment, net | 476,482 | 444,705 | |||||||||
Operating lease right-of-use assets | 71,914 | 65,134 | |||||||||
Deferred income taxes | 40,350 | 39,075 | |||||||||
Other assets | 30,911 | 28,189 | |||||||||
Total non-current assets | 619,657 | 577,103 | |||||||||
Total assets | $ | 3,418,943 | $ | 3,393,225 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt and finance lease obligations | $ | 304,781 | $ | 273,971 | |||||||
Accounts payable | 697,112 | 805,583 | |||||||||
Customer deposits | 582,172 | 480,486 | |||||||||
Accrued salaries and wages | 79,935 | 88,876 | |||||||||
Other accrued liabilities | 276,977 | 357,273 | |||||||||
Total current liabilities | 1,940,977 | 2,006,189 | |||||||||
Long-term debt and finance lease obligations, net of current portion | 187,468 | 187,776 | |||||||||
Accrued income taxes payable | 31,382 | 42,019 | |||||||||
Long-term operating lease liabilities | 40,515 | 33,628 | |||||||||
Deferred income taxes | 4,444 | 6,327 | |||||||||
Other liabilities | 29,795 | 21,555 | |||||||||
Total non-current liabilities | 293,604 | 291,305 | |||||||||
Total liabilities | 2,234,581 | 2,297,494 | |||||||||
Shareholders’ equity: | |||||||||||
Common stock, $.01 par value, 200,000 shares authorized, | |||||||||||
54,294 and 54,084 shares issued, respectively, |
|||||||||||
and 27,498 and 27,679 shares outstanding, respectively |
543 | 541 | |||||||||
Additional paid-in-capital | 655,675 | 652,467 | |||||||||
Common stock held in treasury, at cost, 26,796 and 26,405, respectively |
(1,130,914) | (1,093,483) | |||||||||
Retained earnings | 1,671,067 | 1,572,234 | |||||||||
Accumulated other comprehensive loss | (12,009) | (36,028) | |||||||||
Total shareholders’ equity | 1,184,362 | 1,095,731 | |||||||||
Total liabilities and shareholders’ equity | $ | 3,418,943 | $ | 3,393,225 | |||||||
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 1 | ||||||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Jul 1, | Apr 1, | Jul 2, | Jul 1, | Jul 2, | ||||||||||||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
Operating income, as reported | $ | 28,204 | $ | 56,942 | $ | 49,561 | $ | 142,487 | $ | 115,871 | ||||||||||||||||||||||
Operating margin, as reported | 2.8 | % | 5.3 | % | 5.1 | % | 4.5 | % | 4.3 | % | ||||||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Restructuring costs (1) | 8,865 | — | — | 8,865 | 2,021 | |||||||||||||||||||||||||||
Other non-recurring charges (2) | 14,229 | — | — | 14,229 | — | |||||||||||||||||||||||||||
Adjusted operating income | $ | 51,298 | $ | 56,942 | $ | 49,561 | $ | 165,581 | $ | 117,892 | ||||||||||||||||||||||
Adjusted operating margin | 5.0 | % | 5.3 | % | 5.1 | % | 5.2 | % | 4.4 | % | ||||||||||||||||||||||
Net income, as reported | $ | 15,799 | $ | 40,844 | $ | 37,494 | $ | 98,833 | $ | 87,786 | ||||||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Restructuring costs, net of tax (1) | 7,920 | — | — | 7,920 | 1,809 | |||||||||||||||||||||||||||
Other non-recurring charges, net of tax (2) | 13,346 | — | — | 13,346 | — | |||||||||||||||||||||||||||
Adjusted net income | $ | 37,065 | $ | 40,844 | $ | 37,494 | $ | 120,099 | $ | 89,595 | ||||||||||||||||||||||
Diluted earnings per share, as reported | $ | 0.56 | $ | 1.45 | $ | 1.33 | $ | 3.51 | $ | 3.09 | ||||||||||||||||||||||
Non-GAAP per share adjustments: | ||||||||||||||||||||||||||||||||
Restructuring costs, net of tax (1) | 0.28 | — | — | 0.28 | 0.06 | |||||||||||||||||||||||||||
Other non-recurring charges, net of tax (2) | 0.48 | — | — | 0.47 | — | |||||||||||||||||||||||||||
Adjusted diluted earnings per share | $ | 1.32 | $ | 1.45 | $ | 1.33 | $ | 4.26 | $ | 3.15 | ||||||||||||||||||||||
(1) | During the three and nine months ended July 1, 2023, restructuring costs of $8.9 million, or $7.9 million net of taxes, were incurred for employee severance costs associated with a reduction in the Company's workforce as well as a lease agreement termination. During the nine months ended July 2, 2022, restructuring and impairment charges of $2.0 million, or $1.8 million net of taxes, were incurred for employee severance costs associated with a facility transition in the Company's APAC region. |
|||||||||||||||||||||||||||||||
(2) | During the three and nine months ended July 1, 2023, a one-time, non-recurring charge of $14.2 million, or $13.3 million net of taxes, was incurred for an arbitration decision regarding a contractual matter in the Company's EMEA region. |
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||||||||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 2 | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
ROIC and Economic Return Calculations | Nine Months Ended | Six Months Ended | Nine Months Ended | |||||||||||||||||||||||
Jul 1, | Apr 1, | Jul 2, | ||||||||||||||||||||||||
2023 | 2023 | 2022 | ||||||||||||||||||||||||
Operating income, as reported | $ | 142,487 | $ | 114,283 | $ | 115,871 | ||||||||||||||||||||
Restructuring and other charges | + | 23,094 | + | — | + | 2,021 | ||||||||||||||||||||
Adjusted operating income | $ | 165,581 | $ | 114,283 | $ | 117,892 | ||||||||||||||||||||
÷ | 3 | x | 2 | ÷ | 3 | |||||||||||||||||||||
$ | 55,194 | $ | 39,297 | |||||||||||||||||||||||
x | 4 | x | 4 | |||||||||||||||||||||||
Adjusted annualized operating income | $ | 220,776 | $ | 228,566 | $ | 157,188 | ||||||||||||||||||||
Adjusted effective tax rate | x | 13 | % | x | 15 | % | x | 14 | % | |||||||||||||||||
Tax impact | 28,701 | 34,285 | 22,006 | |||||||||||||||||||||||
Adjusted operating income (tax-effected) | $ | 192,075 | $ | 194,281 | $ | 135,182 | ||||||||||||||||||||
Average invested capital | ÷ | $ | 1,423,003 | ÷ | $ | 1,406,359 | ÷ | $ | 1,178,134 | |||||||||||||||||
ROIC | 13.5 | % | 13.8 | % | 11.5 | % | ||||||||||||||||||||
Weighted average cost of capital | - | 9.0 | % | - | 9.0 | % | - | 9.3 | % | |||||||||||||||||
Economic return | 4.5 | % | 4.8 | % | 2.2 | % |
Average Invested Capital Calculations | Jul 1, | Apr 1, | Dec 31, | Oct 1, | |||||||||||||||||||
2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||
Equity | $ | 1,184,362 | $ | 1,182,382 | $ | 1,150,259 | $ | 1,095,731 | |||||||||||||||
Plus: | |||||||||||||||||||||||
Debt and finance lease obligations - current | 304,781 | 294,011 | 329,076 | 273,971 | |||||||||||||||||||
Operating lease obligations - current (1) | 8,772 | 8,358 | 8,878 | 7,948 | |||||||||||||||||||
Debt and finance lease obligations - long-term |
187,468 | 188,730 | 187,272 | 187,776 | |||||||||||||||||||
Operating lease obligations - long-term | 40,515 | 31,257 | 32,149 | 33,628 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Cash and cash equivalents | (252,965) | (269,664) | (247,880) | (274,805) | |||||||||||||||||||
$ | 1,472,933 | $ | 1,435,074 | $ | 1,459,754 | $ | 1,324,249 |
Average Invested Capital Calculations | Jul 2, | Apr 2, | Jan 1, | Oct 2, | |||||||||||||||||||
2022 | 2022 | 2022 | 2021 | ||||||||||||||||||||
Equity | $ | 1,058,190 | $ | 1,040,591 | $ | 1,044,095 | $ | 1,028,232 | |||||||||||||||
Plus: | |||||||||||||||||||||||
Debt and finance lease obligations - current | 250,012 | 222,393 | 151,417 | 66,313 | |||||||||||||||||||
Operating lease obligations - current (1) | 8,640 | 9,266 | 9,507 | 9,877 | |||||||||||||||||||
Debt and finance lease obligations - long-term |
184,707 | 186,069 | 187,075 | 187,033 | |||||||||||||||||||
Operating lease obligations - long-term | 32,270 | 34,347 | 36,343 | 37,970 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Cash and cash equivalents | (276,608) | (307,964) | (217,067) | (270,172) | |||||||||||||||||||
$ | 1,257,211 | $ | 1,184,702 | $ | 1,211,370 | $ | 1,059,253 |
(1) | Included in other accrued liabilities on the Condensed Consolidated Balance Sheets. |