Good morning and welcome to the Plexus Corporation Conference Call regarding its Fiscal First Quarter 2022 Earnings Announcement. My name is Carmen, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open the conference call for questions. The conference call is scheduled to last approximately one hour. Please note that this conference is being recorded. I would now like to turn the call over to Mr. Shawn Harrison, Plexus Vice President of Communications and Investor Relations. Shawn.

Thank you, Carmen. Good morning and thank you for joining us today. Some of the statements made and information provided during our call today will be forward-looking statements including, without limitation, those regarding revenue, gross margin, selling and administrative expense, operating margin, other income and expense, taxes, cash cycle, capital allocation, and future business outlook, including the impact of COVID-19 on the Company's business and the results of operations. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results and actual results could differ materially from those expressed or implied in the forward-looking statements. For a list of those factors that could cause actual results to differ materially from those discussed, please refer to the company's periodic SEC filings, particularly the risk factors in our Form 10-K filing for the fiscal year ended October 2nd, 2021, as supplemented by our form 10-Q filings and the safe harbor and fair disclosure statement in yesterday's press release. We encourage participants on the call this morning to access the live webcast and supporting materials at Plexus's website at www.plexus.com, clicking on Investors at the top of that page. Joining me today are Todd Kelsey, Chief Executive Officer, Steve Frisch, President and Chief Strategy Officer, Pat Jermain, Executive Vice President and Chief Financial Officer, and Oliver Mihm, Executive Vice President and Chief Operating Officer. Consistent with prior earnings calls, Todd will provide summary comments before turning the call over to Steve and Pat for further details. Let me now turn the call over to Todd Kelsey. Todd?

Thank you, Shawn. Good morning, everyone. Please advance to Slide 3. I'm pleased to announce the promotion of Steven Frisch, previously our Chief Operating Officer, to President and Chief Strategy Officer, and Oliver Mihm, previously our Executive Vice President of global supply chain and operational solutions, to Executive Vice President and Chief Operating Officer. These promotions create leadership bandwidth and best leverage our talent, which is some of the most tenured in our industry. In addition, these appointments support Plexus's long-term succession planning and strengthen our position to sustain industry-leading revenue growth and operating performance as we build toward our goal of $5 billion in revenue with a 5.5% GAAP operating margin by fiscal 2025. In Steve's new role, our team will continue to benefit from his leadership and extensive knowledge of Plexus, our customers, and our industry developed throughout his 30-plus years with the Company. I expect these attributes and Steve's history of delivering results will position him to succeed in driving industry-leading revenue growth along with the organizational alignment of our market-driven strategy, while ensuring that technology and innovation are in place to sustain our success. In Oliver's new role, Plexus will continue to benefit from his focus on developing solutions to improve operational efficiency and drive customer success. His achievements during his more than 20 years at the company position him to expand our one Plexus operational model and advance our commitment to flawless execution and customer service excellence. Following these appointments, my responsibilities and priorities remain unchanged. Steve and Oliver, congratulations on your new roles. I look forward to your contributions to Plexus's continued success in the years ahead. Please advance to Slide 4. Our fiscal first-quarter results were in line with our preliminary results provided on Tuesday, January 18th, 2022. We delivered revenue of $817 million and GAAP EPS of $0.82. The EPS result included $0.06 of restructuring charges primarily associated with severance costs due to a facility transition in our APAC region and $0.22 of stock-based compensation expense. Our revenue was below our expectations entering the quarter, primarily as a result of unanticipated supply chain challenges in the Americas region, which worsened in the final weeks of the quarter. The reduced revenue combined with an unfavorable product mix, operational inefficiencies, and the previously mentioned restructuring charges led to the EPS result. While supply constraints remain severe, demand continues to be exceptionally strong, and our ability to win new business continues to accelerate. Both position us well for future growth as we continue to resolve supply chain challenges. With $271 million of wins this quarter, our trailing four quarters of manufacturing and aftermarket services wins hit a new record level of $1.1 billion, representing a 7% year-over-year expansion. Included in this quarter's wins were programs from each of our previously highlighted secular growth markets of robotic-assisted surgery, warehouse and factory automation, and commercial space. Even with the exceptional wins performance, the team expanded the funnel of qualified opportunities to a record $3.3 billion. In addition, the value of our engineering wins totaled $38 million, a multiyear high. Strong engineering wins signal an active new program development environment for our customers and our leading indicator of manufacturing program wins and future revenue growth. Please advance to Slide 5. As we look to the second quarter of fiscal 2022, customer demand is strong across all market sectors. However, supply chain challenges are again limiting our ability to meet the entirety of the robust demand. As a result, we are establishing a revenue guidance range of $820 million to $860 million. At this revenue level, profitability will be pressured given the costs associated with maintaining the operating infrastructure needed to support the approximately $1 billion in quarterly revenue that is reflected in our customers’ forecasts. Additionally, we'll be negatively impacted by the typical seasonal increase in compensation costs. As such, we are anticipating GAAP operating margin in the range of 3.6% to 4%, including approximately 80 basis points of stock-based compensation expense. At these revenues and operating margin levels, we expect to deliver GAAP diluted earnings per share of $0.76 to $0.92, including $0.23 of stock-based compensation expense. Our guidance assumes supply chain constraints and COVID-19, including the Omicron variant, do not further materially impact end markets or our operations. Next, a few thoughts regarding our longer-term outlook. Looking at our end markets, we see strong demand with limited indications of perishability over the next several quarters. Within Healthcare Life Sciences, we have several major program ramps underway, including those supporting robotic-assisted surgery. With pipelined component supply, these programs should favorably impact the second half of the fiscal year. We could also benefit further from a more thorough recovery of elective procedures and its associated equipment. Our Industrial sector demand is very strong, led by semiconductor capital equipment and communications. While supply is challenged, we continue to make progress through a multi-quarter effort focused on attacking component availability issues coupled with leveraging customer partnerships to secure supply. Finally, within Aerospace and Defense, we see a strengthening of demand in commercial aerospace, led by single aisle jets, business jets, and aftermarket needs. When these positive market factors are combined with robust new program wins in manufacturing aftermarket services in engineering, as well as a record funnel of qualified opportunities, we remain optimistic in our ability to make progress toward our $5 billion revenue target. In the long term, we remain committed to delivering upon our goals of 9% to 12% revenue growth with a 5.5% GAAP operating margin and a 15% return on invested capital. We anticipate sequential improvement in revenue and EPS through the remainder of fiscal 2022 as we progress toward these goals. I will now turn the call over to Steve for additional analysis of the performance of our market sectors and operations. Steve.

Thank you, Todd. Good morning. I will start on Slide 6 with a review of our performance by market sector for the fiscal first quarter, as well as our expectations for the market sectors for the second quarter of fiscal 2022. Unanticipated supply chain constraints, especially in our Americas region, late in the fiscal first-quarter, impacted revenue for all of our market sectors. Starting with our Industrial sector, fiscal first-quarter revenue declined 7% versus our expectation of a low single-digit decrease. For the fiscal second quarter, demand is very robust across all of the subsectors within the Industrial sector. Although our ability to capture the full revenue potential is gated by material availability, we still expect a mid-single-digit increase in our Industrial sector for the fiscal second quarter. In our Healthcare Life Sciences sector, we also experienced some volatility late in the quarter. However, the operational teams were able to offset a portion of the challenges. In aggregate, the sector's revenue grew over 3% in the fiscal first-quarter. The result was slightly below our expectations of a mid-single-digit decrease. Looking at the fiscal second quarter, we anticipate the supply environment to continue to limit our ability to capture the robust demand from our Healthcare Life Sciences customers. The result is that we expect a low single-digit decline in our Healthcare Life Sciences sector for the fiscal second-quarter. The supply challenges in the fiscal first-quarter resulted in a 7% decline in our Aerospace and Defense sector, which was below our expectations of a low single-digit decrease. As we start the fiscal second-quarter, demand remains strong and our short-term visibility with some critical components has improved. As such, we expect to capture a low double-digit revenue increase in our Aerospace and Defense sector during the fiscal second quarter. Please advance to slide 7 for an overview of our wins performance for the fiscal first quarter. We won 41 new manufacturing programs that we expect to generate $271 million in annualized revenue when fully ramped into production. The strong wins increased our trailing four-quarter wins to a record amount of almost $1.1 billion. At that level, our win momentum of 32%, which is defined as the trailing four-quarters of wins divided by the trailing four quarters of revenue, is well above our 25% goal and highlights the potential for meaningfully higher revenue levels. Next, we can review the manufacturing wins by region and by sector for the fiscal first-quarter on Slide 8. The strong wins of $196 million in the Americas benefited from the exceptional performance of the Healthcare Life Sciences sector. Over 85% of the $152 million in Healthcare Life Sciences wins will be manufactured in the Americas. Likewise, a majority of the aerospace and defense sector's wins will be produced in the United States. The APAC and EMEA regional wins of $45 million and $30 million, respectively, were each driven by industrial wins from existing customers. The team's ability to drive operational excellence and customer service excellence through fiscal 2021 enabled the securing of additional business. Please advance to Slide 9 for highlights of the fiscal first-quarter wins. The industrial wins include a high-density server program for the European market. In order to reduce the carbon footprint associated with the supply chain of their product, the customer is transferring the production from another supplier in the Asia-Pacific region to Plexus's facility in Oradea, Romania. The industrial team also added a new customer who is focused on warehouse automation. The customer will be outsourcing their internal production of the complete assembly to Plexus's facility in Guadalajara, Mexico. Our Healthcare Life Sciences team expanded our market share in the robotic-assisted surgical market with an award from an existing customer during the fiscal first quarter. The team also secured the production of a next-generation RF Surgical Generator from a current customer. The product is being designed by Plexus's engineering solutions team, who will launch it into our Neenah, Wisconsin facility. In addition, the Healthcare Life Sciences team won a meaningful single-use catheter program from an existing customer. Included in the Aerospace and Defense wins are two new defense programs that require U.S. manufacturing. The team also expanded the relationship with an existing commercial space customer by securing the production of a satellite power system. All three of these opportunities will be manufactured in our Boise, Idaho facility. We can proceed to Slide 10 for highlights of our funnel of qualified manufacturing opportunities. Even with the strong wins performance, the market sector teams added several meaningful new opportunities to our funnel in the fiscal first quarter. The result is a record funnel in excess of $3.3 billion as we start the fiscal second quarter. Additions to the funnel include two larger outsourcing programs from existing Healthcare Life Science customers. They're reevaluating their internal marketing and manufacturing strategies. One opportunity is related to aftermarket services, while the other is a single-use device. Our industrial sector added a meaningful opportunity from a potential new customer who develops automation equipment. The company needs to consolidate their outsourcing into a larger global partner who can support their growing business. I would like to finish with an update on the progress of our new manufacturing facility near Bangkok, Thailand on Slide 11. Construction of the 400,000 square foot manufacturing center is expected to be complete on-time and on-budget in the fiscal third quarter. The project team has done an outstanding job of keeping the project on track in spite of the many challenges created by the pandemic and supply chain disruptions. The site General Manager, along with several members of the management team and technical staff have been hired and are on-site in our Penang, Malaysia operations, preparing for the facility's opening. Installation of the first production equipment, the state-of-the-art surface mount assembly line, will start next week. We expect to commence production qualification of the first customer product by the end of the fiscal third quarter. It is exciting to see the realization of a strategic expansion in Southeast Asia nearing completion. I will now turn the call to Pat for an in-depth review of our financial performance. Pat?

Thank you, Steve. And good morning, everyone. Our fiscal first quarter results are summarized on Slide 12. Gross margin of 8.6% was below our guidance primarily due to unfavorable customer mix and operational inefficiencies as a result of supply chain constraints. Our fixed manufacturing costs were managed at a level favorable to our expectations, which minimized the cost leverage impact from lower sequential revenue. Selling and administrative expenses were consistent with our guidance. During the quarter, we incurred $2 million of restructuring charges, primarily related to our facility transition in our Asia-Pacific region. Included in our GAAP operating margin was 30 basis points related to these restructuring charges and approximately 80 basis points of stock-based compensation expense. Non-operating expenses were slightly favorable to expectations as a result of lower interest and factoring expenses. GAAP diluted EPS of $0.82 was consistent with our preliminary results provided on January 18th. Turning to our cash flow and balance sheet on Slide 13. During the quarter, we purchased approximately 110,000 shares of our stock for $10.2 million. At the end of the fiscal first quarter, we had approximately $37 million remaining under our current authorization. As anticipated for the fiscal first quarter, we made investments in working capital to support our customers' demand. Cash investments in operations totaled $89 million while capital expenditures totaled $33 million, creating a $122 million usage of cash. With a strong and liquid balance sheet, these investments were funded through a combination of cash and borrowing under our revolving credit facility. Our quarter-end balance sheet included cash of $218 million and debt of $338 million. We had $140 million outstanding under our $350 million revolving credit facility. During the fiscal first quarter, we experienced an increase in working capital requirements, which led to cash cycle days above our expectations and sequentially higher by 18 days. Please turn to Slide 14 for details on our cash cycle. Sequentially, inventory days increased by 29. The increase in days was indicative of the challenging supply chain environment. With extended component lead times, we are securing inventory earlier to improve our ability to meet customer demand. At the same time, volatility in supplier deliveries is impacting our ability to manufacture and deliver products to our customers. Substantially offsetting the increase in inventory days were increases in both payable days and customer deposit days. With elevated purchasing activity, payable days sequentially increased by 11 days. Customer deposits increased over $60 million while days improved by nine as we partnered with customers to share in inventory investments. We have over 20% of our inventory covered with deposits. This compares to less than 15% three years ago. In addition, we have been successful in collecting fees from customers related to extended inventory purchases and carrying periods. ASM receivables were sequentially higher primarily due to temporary factors along with the timing of shipments, which were weighted more towards the last month of the quarter compared to last quarter. We expect to see improvement in our receivable days during the fiscal second quarter. As Todd has already provided the revenue and EPS guidance for the fiscal second quarter, I'll review some additional details which are summarized on Slide 15. Fiscal second-quarter gross margin is expected to be in the range of 8.2% to 8.6%. Seasonal compensation cost increases, as well as a reset of payroll taxes for U.S. employees, will negatively impact gross margin by more than 50 basis points. In addition, we expect near-term pressure on gross margin as we maintain the infrastructure necessary to support anticipated customer demand and new program ramps. We expect selling and administrative expenses in the range of $38.5 million to $39.5 million, sequentially higher, primarily due to seasonal compensation headwinds, which total about $1 million. Our expectation for the balance sheet is that working capital investments will increase compared to the fiscal first quarter. Based on our revenue forecast, we expect this level of working capital will result in cash cycle days of 107 days to 111 days, sequentially an investment of six additional days, primarily due to inventory requirements. We continue to invest in working capital to support anticipated sequential growth as we move through fiscal 2022. We are taking the necessary measures now in order to fulfill our customers' demand, even if that results in added working capital investments. For the fiscal second quarter, we expect free cash flow to be negative as we make needed investments in working capital and capital additions. Finally, capital spending for fiscal 2022 continues to be in the range of $100 million to $120 million. This includes approximately $50 million for our new Thailand facility. For the fiscal year, we anticipate free cash flow in the range of breakeven to a usage of cash in support of our investments. With that Carmen, let's now open the call for questions.

Thank you. We have a question from Steven Fox. Your line is open.

Hi, good morning. Two questions if I could. I guess, first of all, just stepping back and thinking about where you're at from a supply chain standpoint and the revenue guidance today versus getting to, say, the $1 billion you mentioned in terms of revenue support that you see in your order book. What do you think has to happen and at what pace to start realizing all the business that you've won on a more consistent basis? And then I had a follow-up.

Yes. I’ll begin, and Oliver may have additional insights. Regarding demand, we have the infrastructure ready to support about a billion dollars in revenue, aligning with our customers' current forecasts. Notably, our operating margin goal is approximately 5.5%, and this revenue level would help achieve those margin targets. However, in the near term, over the next couple of quarters, we do not anticipate a significant enough supply chain improvement to reach that billion-dollar target. Looking ahead to Q3, we expect a significant increase in revenue driven by major new program launches, for which we have been preparing materials for some time. Furthermore, many customers, especially in the semiconductor capital equipment sector, have maintained strong demand for an extended period and we are finally seeing supply availability aligning with earlier predictions. Consequently, we expect to achieve the sequential revenue and EPS growth we are targeting. However, reaching a billion-dollar quarter in fiscal '22 may be hindered unless there are substantial positive developments in the supply chain.

That's really helpful. And then just in terms of what surprised you at the end of this past quarter, it was definitely a big swing in aerospace defense, and I know generally there's some niche components that go into those programs, but it's swinging back to low double-digit growth this quarter. Can you just sort of talk about that area in particular in terms of what happened there and why it's coming back so quickly in terms of just supply chain?

I'll pass it to Steve for a little bit of color on the sectors.

Sure. As you look at this, I mean, Aerospace and Defense side was more in electronic components. We did see a couple of things happen at the end of the quarter. For example, we saw shortages in wiring harness suppliers, the sub-tier suppliers that supply the connectors to them. We saw some shortages in those, and those were a surprise at the end of the quarter. So we now have our teams working with our suppliers to help drive supply until we're engaged at the second tier and third tier level. But on the Aerospace and Defense side, it was more focused on some electrical components.

Great. Thank you very much.

Thank you. Our next question comes from Matt Sheerin with Stifel. Your line is open.

Yes. Thanks. And good morning. Yeah, you just gave some explanation of the issues that you saw late in the quarter. Could you expand on some of the other issues? Was it just the component shortages or was it also logistics issues or other issues with your suppliers? We're not hearing from some of your peers similar commentary. Everybody's having an issue and some are missing, but it seems like your issues are more severe than others so we're trying to figure out exactly why you're seeing that.

So I'll start here and then pass to Oliver for a little bit of color around the supply chain in general. I think when we look at, first of all, the issues that occurred late in the quarter, I mean, there were a few fairly significant issues that impacted larger programs, I guess it would be the way to put it. So that's how I had an impact on us. And there were a combination of custom and electronics components. I mean, I think when we look at us versus competitors, I mean, I think everybody's having challenges with supply. I mean, you see the commentary coming out. There are challenges with supply. We were impacted a bit more in revenue, and I believe it has a lot to do with the sectors in which we participate in a big way. I mean, I think I can't speak to our competitors and what their results look like, but many of their portfolios are quite a lot different from ours. The thing I would add is that anecdotally, we're performing very well right now, and that shows up in the new customer wins as well as the awards we're receiving. We talked about two significant customer awards last quarter. There are two more really significant ones that if they haven't been announced, they're being announced later today. So we continue to pick up awards that are leading to new business, supplier awards leading to new business with our customers, as well as winning a large share of new business. So I feel comfortable about the way we're performing other than, obviously we don't want to see these issues crop up at the end of the quarter and become surprises. So we're looking to get beyond that. So Oliver, why don't you jump in for a minute.

Yes, the issue impacting Q1 was broad across numerous commodities and suppliers, including semiconductor supply. As Steve mentioned previously, we see a similar supply dynamic to what we saw in fiscal '21. We see supply chain constraints remaining quite challenging. We see lead times remaining extended across virtually all of our commodity segments. While portions of our supply base are making investments into capacity, there's uncertainty as to whether these changes will significantly impact '22.

Okay. Thanks so much for that. You talked about some new program wins. It doesn't sound like the issues that you're facing are negatively impacting your relationships with those customers or your ability to continue to expand?

No, not at all. I mean, our win rate, if anything, is going up and certainly our win magnitudes are going up. So again, I'd say the anecdotal evidence suggests we're performing very well in the market.

Yeah, I would add that, firstly, I had several calls with some of the customers that have been challenged, and as I'm talking to their executive teams, they're acknowledging that they're having supply challenges from many suppliers; it's not just us. From a relationship standpoint, it's a very collaborative environment where we're trying to manage through the pandemic together. They have been very appreciative. As Todd mentioned, I think you'll see here coming out on announcements of a couple of additional awards that we've received from a supplier in terms of how we are managing through the pandemic.

Okay, great. And just lastly, regarding the long-term operating margin goals that you have above 5%. I know obviously the next couple of quarters are going to be tough. But is that sort of a number now that we really should look towards fiscal '23 instead of seeing that this year just because of the issues?

Yeah. Matt, this is Pat. Yes. I mean, we're driving towards that goal in the back half of this year, but as we go into '23, that's where with the additional revenue and leverage we can gain. I think that's a reasonable margin to be at. As we've talked about in the past, there are some quarters that are more challenging, like this March quarter where we have seasonal compensation increases going into effect. So that could impact the quarter in '23, but in some quarters, we may be able to get above 5.5%.

Thank you for taking my questions. So I'm just wondering with all these challenges you have now where the supply chain and components availability, are there some major strategic changes you're making to your organization that are going to be able to sort of benefit you when the supply chain environment is improving?

Yeah, Anja. This is Oliver. I'd be happy to take that question. Broadly, the organization has been quite nimble and agile as we adapt. I'll offer some examples of what I view as the three axes of the dynamic: the customer-facing side, in terms of the Plexus, and the supplier-facing side. For example, on the customer front, we've established a playbook that captures best practices, includes things like working with our customers to secure firm purchase orders over an extended horizon. This enables us to extend firm purchase orders to our supply base over that same extended horizon. We do this because we know that a firm purchase order is one of the best ways you can assure allocation from a supplier. We've also established pre-approval spending authorization with our customers. This empowers our procurement teams to act quickly and secure more expensive products from the open market in these types of situations where hours and minutes can make a difference. From an internal Plexus perspective, we've collaborated with a third party to implement an automated digital linkage that cross-references our global critical shortage list against inventory at approximately 100 key suppliers and distributors. Lastly, on the supplier-facing side, we're working very collaboratively, as Steve mentioned, with our sub-tier suppliers to help work through and resolve the constraints to allow product to flow. Our close global collaboration enables us to be agile in this regard.

Okay. Thank you that was a good overview. And then also, I'm just curious how you navigate the inflationary environment. I know you can pass through a lot of costs to customers, but do you think it ultimately will sort of impact the demand from your customers or their businesses are sort of mission-critical so they're going to need this demand, or how do you foresee this affecting you?

I'll jump in here, Oliver, or I should say Anja, and then the rest of the team can provide some additional support. In general, when we look at inflation, the direct impact to us is relatively low because we are able to pass along component costs. Now it may slightly impact the margin on those components, but not necessarily the profit dollars on those components. Labor costs have a little bit more of an impact because obviously it's a little harder to pass those through, but we can make that up through productivity. So we really don't see from a cost structure as inflation having a major negative impact on us. The one concern I would have as I think about inflation is, what is it going to do to the demand environment? And could there be a point where prices get to the point that it impacts demand on a more macro basis across the economy? I view it as a macro situation though versus the Plexus situation. What I would say is that in this environment today, the demand is incredibly high.

Anja, on another point. Todd touched on the income statement impact. From a balance sheet standpoint, with the higher prices, we've seen an increase in inventory value too, so that accounts for some of the increase that we experienced at the end of the first quarter.

Hi, good morning. Thanks, guys. I think you've explained what's driving the sharp increase in inventory well. It sounds like inventory is going to grow again in March. Just wondering, what are your thoughts on when inventories will start to normalize? Is the sequential revenue growth expected this year enough to bring it back to normal levels, or do you feel like this is kind of the new normal, where your customers expect you to carry a higher level of inventory going forward?

Yeah. Melissa, this is Pat. Maybe I'll tackle it from both a dollar’s perspective and a day’s perspective. From a dollar standpoint, we could be at this level for a while. Now, I do think when we get to Q3 and Q4, it will level out similar to where we're at, at Q2. But from a day’s perspective, I think we see some improvement. We'll see an increase in Q2, as I mentioned. Q3, I think we will see improvement with revenue increasing, and that will continue into Q4. From an overall cash cycle days perspective, I think we can get back to a level similar to where we ended fiscal '21, which was at 85 days in total. Not necessarily our long-term goal, but I think as we move into '23, we'll have additional opportunities with some of the items Oliver mentioned in improving our purchasing and our ability to secure components. I think we can drive cash cycle days below 80 back into kind of the mid-70s, lower 70s range, and that would be my target.

What I would add too, Melissa, is I don't see a change in sentiment long-term with customers to hold more inventory. I mean, I think they see the challenges as well with additional inventory. It's just a matter of the supply environment more closely matching the demand environment. I think we'll get back to a more normal state as that occurs.

As I mentioned in the script, I was really pleased with how customers partnered with us to support us with deposits to cash deposits.

Hi. Thanks for taking my questions. Just on the fiscal year '22 shape of revenues, you mentioned sequential increases throughout the year, but as we think about lapping the Q3 shutdowns in Malaysia last year, should we expect a larger sequential increase in Q3 and maybe a more modest sequential increase in Q4?

Not necessarily. We are discussing quarter-over-quarter increases when I refer to sequential increases, but the increases from Q2 to Q3 and Q3 to Q4 could be very similar, or they might be more evenly spread towards Q4. Currently, a lot depends on how the supply chain progresses, but we are fairly confident in sequential revenue and EPS growth. The key question is how much growth we can expect, as this hinges on the supply planned for new program launches and ongoing programs. We have set a revenue growth goal of 9% to 12%, and current demand would clearly support that, even with the rough start to fiscal 2022. However, I don't believe supply will support that growth as well, so we are anticipating somewhat more modest growth in 2022, but it will still be a growth year.

Got you. And then follow-up on industrial; revenues have kind of slowed as we've been lapping some tough comps, and manufacturing wins have slowed a bit on trailing four quarters. Are there particular subsectors driving some of the softness or just some tough compares, and should we expect more ramp in industrial more so in '23? Where are you seeing pockets of strength there? Thanks.

Steve, you want to take that?

If you examine the industrial sector, it seems more related to cost issues rather than any fundamental softening in the market. The semiconductor capital market has remained quite strong. Looking ahead to the new program launches in warehouse and factory automation, these topics have come up in discussions about expected program ramps for the latter half of this year and into 2023. However, some challenges have arisen due to supply issues, primarily linked to steel and racking materials used in warehouses, which have hindered those ramps. There are various factors at play, but from an industrial perspective, across all subsectors for the rest of the year, we anticipate growth, so I don't perceive any significant weakness in particular areas. It seems more like a comparison to our successes from the previous year.

Great. Thank you.

Thank you. I'm not showing any further questions in the queue. You may continue, Todd, with any final thoughts.

Sure. Thank you, Carmen. First, I want to thank the analyst for all the great questions today. Thanks for participating, and I'd like to thank everybody who joined our call today. As you can tell, we're certainly pleased with our Q1 results, but we feel really confident in our future outlook and that we're positioning ourselves well for the future. So again, thank you for joining our call today. We appreciate your support and interest in Plexus.

And with that, ladies and gentlemen, we conclude today's conference. Thank you for your participation and you may now disconnect. Have a great day.