8-K
PLEXUS CORP (PLXS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________________________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
____________________________________________________________________________________________________________________________________
Date of Report (Date of earliest event reported): July 26, 2023
____________________________________________________________________________________________________________________________________
PLEXUS CORP.
(Exact name of registrant as specified in its charter)
____________________________________________________________________________________________________________________________________
| Wisconsin | 001-14423 | 39-1344447 |
|---|---|---|
| (State or other jurisdiction<br> of incorporation) | (Commission <br>File Number) | (IRS Employer <br>Identification No.) |
One Plexus Way
Neenah, Wisconsin 54957
(Address of principal executive offices) (Zip Code)
Telephone Number (920) 969-6000
(Registrant’s telephone number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| 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 |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On July 26, 2023, Plexus Corp. (“we” or the “Company”) announced results for the fiscal third quarter ended July 1, 2023. A copy of the Company’s related press release is furnished as Exhibit 99.1 to this report.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are filed herewith:
| Exhibit Number | Description |
|---|---|
| 99.1 | Press release issued by Plexus Corp., dated July 26, 2023 |
| 104 | Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document) |
* * * * *
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 26, 2023 | PLEXUS CORP. |
|---|---|
| (Registrant) | |
| By: /s/ Patrick J. Jermain | |
| Patrick J. Jermain | |
| Executive Vice President and Chief Financial Officer |
Document
Plexus Announces Fiscal Third Quarter Financial Results
NEENAH, WI – July 26, 2023 - Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal third quarter ended July 1, 2023, and guidance for our fiscal fourth quarter ending September 30, 2023.
•Reports fiscal third quarter 2023 revenue of $1.02 billion, GAAP operating margin of 2.8% and GAAP diluted EPS of $0.56, including $0.76 of restructuring and other charges and $0.14 of stock-based compensation expense
•Reports fiscal third quarter 2023 non-GAAP operating margin of 5.0% and non-GAAP diluted EPS of $1.32, including $0.14 of stock-based compensation expense
•Initiates fiscal fourth quarter 2023 revenue guidance of $1.00 billion to $1.04 billion with GAAP diluted EPS of $1.18 to $1.36, including $0.19 of stock-based compensation expense
| Jul 1, 2023 | ||
| Q3F23 Guidance (1) | ||
| Summary GAAP Items | ||
| Revenue (in billions) | 1.00 to 1.05 | |
| Operating margin (2) | 2.3% to 2.8% | |
| Diluted EPS (3) | 0.28 to 0.46 | |
| Summary Non-GAAP Items (4) | ||
| Adjusted operating margin (5) | 4.5% to 5.0% | |
| Adjusted diluted EPS (6) | 1.05 to 1.23 | |
| Return on invested capital (ROIC) | ||
| Economic return | ||
| (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. |
All values are in US Dollars.
Fiscal Third Quarter 2023 Information
•Won 30 manufacturing programs during the quarter representing a record $321 million in annualized revenue when fully ramped into production
•Delivered trailing four-quarter manufacturing wins of $968 million in annualized revenue when fully ramped into production
•Purchased $13.5 million of our shares at an average price of $90.49 per share under our current $50.0 million share repurchase authorization, leaving $9.1 million available
Todd Kelsey, Chief Executive Officer, commented, “Plexus delivered a solid fiscal third quarter with revenue of $1.02 billion, non-GAAP operating margin of 5.0% and non-GAAP EPS of $1.32. Our team’s continued ability to mitigate supply chain challenges, along with improvements in manufacturing efficiency and better than anticipated performance from our engineering team, contributed to non-GAAP operating margin meeting the high end of our guidance range and non-GAAP EPS exceeding our guidance range. The fiscal third quarter represented the fifth consecutive quarter with operating margin exceeding 5%.”
Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, “For the fiscal third quarter, we delivered return on invested capital of 13.5%, which was 450 basis points above our weighted average cost of capital. We drove this result and created substantial shareholder value through strong operating performance, prudent capital investments and a modest reduction in inventory compared to the prior quarter. As we continue these efforts, we are guiding improvement to our cash cycle for the fiscal fourth quarter and expect to generate positive free cash flow for the quarter and fiscal 2023.”
Mr. Kelsey continued, “We are guiding fiscal fourth quarter revenue of $1.00 billion to $1.04 billion, GAAP operating margin of 4.7% to 5.2% and GAAP EPS of $1.18 to $1.36. Increasingly robust commercial aerospace demand and continued new program ramps are being offset by incrementally weaker demand for semiconductor capital equipment, a modest softening in some industrial markets and continued supply chain challenges.”
Mr. Kelsey concluded, “We remain confident in achieving our goal of $5 billion in revenue with 5.5% GAAP operating margin by our fiscal 2025. As fiscal 2024 progresses, we anticipate that revenue growth will accelerate once demand stabilizes in certain markets, new program ramp momentum increases and supply chain challenges lessen. Supporting our growth expectation is the knowledge that Plexus’ best in class capabilities and focus on operational excellence are resonating with customers as demonstrated by our fiscal third quarter wins performance. During the quarter, we won 30 new manufacturing programs worth a record $321 million, including several competitive share gains, while maintaining a robust funnel of qualified manufacturing opportunities of $4 billion. Furthermore, new engineering program wins and the funnel of qualified engineering opportunities expanded versus the prior quarter, both positive leading indicators of future manufacturing wins. Over the long term, we believe our strong execution and accelerating program wins position Plexus to continue to deliver industry leading revenue growth and profitability.”
| 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 Segment and Market Sector Revenue
Plexus measures operational performance and allocates resources on a geographic segment basis. Plexus also reports revenue based on the market sector breakout set forth in the table below, which reflects Plexus’ market sector focused strategy. Top 10 customers comprised 51% of revenue during both the second and third quarters of fiscal 2023, down five percentage points from the third quarter of fiscal 2022.
| 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 |
Non-GAAP Supplemental Information
Plexus provides non-GAAP supplemental information, such as ROIC, economic return and free cash flow because such measures are used for internal management goals and decision-making, and because they provide management and investors with additional insight into financial performance. In addition, management uses these and other non-GAAP measures, such as adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted EPS, to provide a better understanding of core performance for purposes of period-to-period comparisons. Plexus believes that these measures are also useful to investors because they provide further insight by eliminating the effect of non-recurring items that are not reflective of continuing operations. For additional information on non-GAAP measures, please refer to the attached Non-GAAP Supplemental Information tables.
ROIC and Economic Return
ROIC for the third quarter of fiscal 2023 was 13.5%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a four-quarter period for the third fiscal quarter. Invested capital is defined as equity plus debt and operating lease obligations, less cash and cash equivalents. Plexus' weighted average cost of capital for fiscal 2023 is 9.0%. ROIC for the third quarter of fiscal 2023 less Plexus’ weighted average cost of capital resulted in an economic return of 4.5%.
Free Cash Flow
Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended July 1, 2023, cash flows provided by operations of $18.8 million, less capital expenditures of $30.3 million, resulted in negative free cash flow of $11.5 million. This result included $20.3 million of one-time, non-recurring charges paid during the fiscal third quarter.
| 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. |
Conference Call and Webcast Information
| 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:<br><br><br><br>Audio conferencing link:<br><br>https://register.vevent.com/register/BI14413298f1df4ebf8824d93e71fda163<br><br>Webcast link:<br><br>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 |
Investor and Media Contact
Shawn Harrison
+1.920.969.6325
shawn.harrison@plexus.com
About Plexus
Since 1979, Plexus has been partnering with companies to create the products that build a better world. We are a team of nearly 25,000 individuals who are dedicated to providing Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing and Sustaining Services. Plexus is a global leader that specializes in serving customers in markets with highly complex products and demanding regulatory environments. Plexus delivers customer service excellence to leading companies by providing innovative, comprehensive solutions throughout a product’s lifecycle. For more information about Plexus, visit our website at www.plexus.com.
Safe Harbor and Fair Disclosure Statement
The statements contained in this press release that are guidance or which are not historical facts (such as statements in the future tense and statements including believe, expect, intend, plan, anticipate, goal, target and similar terms and concepts), including all discussions of periods which are not yet completed, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include the effect of inflationary pressures on our costs of production, profitability, and on the economic outlook of our markets; the effects of shortages and delays in obtaining components as a result of economic cycles, natural disasters or otherwise; the risk of customer delays, changes, cancellations or forecast inaccuracies in both ongoing and new programs; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; the lack of visibility of future orders, particularly in view of changing economic conditions; the economic performance of the industries, sectors and customers we serve; the outcome of litigation and regulatory investigations and proceedings, including the results of any challenges with regard to such outcomes; the effects of tariffs, trade disputes, trade agreements and other trade protection measures; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers, maintain our current customer base and deliver product on a timely basis; the risks of concentration of work for certain customers; the particular risks relative to new or recent customers, programs or services, which risks include customer and other delays, start-up costs, potential inability to execute, the establishment of appropriate terms of agreements, and the lack of a track record of order volume and timing; the effects of start-up costs of new programs and facilities or the costs associated with the closure or consolidation of facilities; possible unexpected costs and operating disruption in transitioning programs, including transitions between Company facilities; the risk that new program wins and/or customer demand may not result in the expected revenue or profitability; the fact that customer orders may not lead to long-term relationships; our ability to manage successfully and execute a complex business model characterized by high product mix and demanding quality, regulatory, and other requirements; the risks associated with excess and obsolete inventory, including the risk that inventory purchased on behalf of our customers may not be consumed or otherwise paid for by the customer, resulting in an inventory write-off; risks related to information technology systems and data security; increasing regulatory and compliance requirements; any tax law changes and related foreign jurisdiction tax developments; current or potential future barriers to the repatriation of funds that are currently held outside of the United States as a result of actions taken by other countries or otherwise; the potential effects of jurisdictional results on our taxes, tax rates, and our ability to use deferred tax assets and net operating losses; the weakness of areas of the global economy; the effect of changes in the pricing and margins of products; raw materials and component cost fluctuations; the potential effect of fluctuations in the value of the currencies in which we transact business; the effects of changes in economic conditions, political conditions and tax matters in the United States and in the other countries in which we do business; the potential effect of other world or local events or other events outside our control (such as the conflict between Russia and Ukraine, escalating tensions between China and Taiwan or China and the United States, changes in energy prices, terrorism, global health epidemics and weather events); the impact of increased competition; an inability to successfully manage human capital; changes in financial accounting standards; and other risks detailed herein and in our other Securities and Exchange Commission filings, particularly in Risk Factors contained in our fiscal 2022 Form 10-K.
| 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) | ||||||||
| Oct 1, | ||||||||
| 2022 | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 252,965 | $ | 274,805 | |||||
| Restricted cash | 665 | |||||||
| Accounts receivable | 737,696 | |||||||
| Contract assets | 138,540 | |||||||
| Inventories | 1,602,783 | |||||||
| Prepaid expenses and other | 61,633 | |||||||
| Total current assets | 2,816,122 | |||||||
| Property, plant and equipment, net | 444,705 | |||||||
| Operating lease right-of-use assets | 65,134 | |||||||
| Deferred income taxes | 39,075 | |||||||
| Other assets | 28,189 | |||||||
| Total non-current assets | 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 | 805,583 | |||||||
| Customer deposits | 480,486 | |||||||
| Accrued salaries and wages | 88,876 | |||||||
| Other accrued liabilities | 357,273 | |||||||
| Total current liabilities | 2,006,189 | |||||||
| Long-term debt and finance lease obligations, net of current portion | 187,776 | |||||||
| Accrued income taxes payable | 42,019 | |||||||
| Long-term operating lease liabilities | 33,628 | |||||||
| Deferred income taxes | 6,327 | |||||||
| Other liabilities | 21,555 | |||||||
| Total non-current liabilities | 291,305 | |||||||
| Total liabilities | 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 | 541 | |||||||
| Additional paid-in-capital | 652,467 | |||||||
| Common stock held in treasury, at cost, 26,796 and 26,405, respectively | (1,093,483) | |||||||
| Retained earnings | 1,572,234 | |||||||
| Accumulated other comprehensive loss | (36,028) | |||||||
| Total shareholders’ equity | 1,095,731 | |||||||
| Total liabilities and shareholders’ equity | 3,418,943 | $ | 3,393,225 |
All values are in US Dollars.
| PLEXUS CORP. AND SUBSIDIARIES | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP SUPPLEMENTAL INFORMATION Table 1 | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Nine Months Ended | |||||||||||||||
| Apr 1, | Jul 2, | Jul 1, | Jul 2, | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Operating income, as reported | 28,204 | $ | 56,942 | $ | 49,561 | $ | 142,487 | $ | 115,871 | ||||||
| Operating margin, as reported | % | 5.3 | % | 5.1 | % | 4.5 | % | 4.3 | % | ||||||
| Non-GAAP adjustments: | |||||||||||||||
| Restructuring costs (1) | — | — | 8,865 | 2,021 | |||||||||||
| Other non-recurring charges (2) | — | — | 14,229 | — | |||||||||||
| Adjusted operating income | 51,298 | $ | 56,942 | $ | 49,561 | $ | 165,581 | $ | 117,892 | ||||||
| Adjusted operating margin | % | 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 | 1,809 | |||||||||||
| Other non-recurring charges, net of tax (2) | — | — | 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 | 0.06 | |||||||||||
| Other non-recurring charges, net of tax (2) | — | — | 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. |
All values are in US Dollars.
| 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. | |||||||||||||||||||||
| --- | --- |
9