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): January 26, 2022
____________________________________________________________________________________________________________________________________
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 January 26, 2022, Plexus Corp. (“we” or the “Company”) announced results for the fiscal first quarter ended January 1, 2022. A copy of the Company’s related press release is furnished as Exhibit 99.1 to this report.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On January 26, 2022, the Company announced the appointment of Steven J. Frisch to President and Chief Strategy Officer and Oliver K. Mihm to Executive Vice President and Chief Operating Officer, with each appointment effective immediately. With his promotion, Mr. Frisch assumes the responsibilities of driving the long-term growth of the enterprise, innovation across the Company’s global operations and the execution of the Company’s strategy. These responsibilities include oversight of the Company’s go-to-market, manufacturing technology, engineering solutions, quality, and information technology organizations. With his promotion, Mr. Mihm assumes the responsibilities of ensuring global operational alignment and execution, including oversight of the Company’s regional operations and the aftermarket services and supply chain organizations. Messrs. Frisch and Mihm will report to Todd Kelsey, who will continue as Chief Executive Officer with his responsibilities unchanged.
Mr. Frisch, age 55, joined Plexus in 1990 as a design engineer. Since 2016, Mr. Frisch has served as Executive Vice President and Chief Operating Officer. Prior to that appointment, Mr. Frisch served in various roles including Executive Vice President and Chief Customer Officer, Executive Vice President – Global Customer Services, and Regional President – EMEA, led the Company’s Global Engineering Solutions and held various leadership positions across the Company. Mr. Frisch holds a bachelor's degree in electrical engineering and technology from the Milwaukee School of Engineering, a master's degree in electrical engineering and computer science from Marquette University and a master's degree in business administration from the University of Wisconsin-Madison.
Mr. Mihm, age 50, joined Plexus in 2000 as a design engineer. Since 2020, Mr. Mihm has served as Executive Vice President – Global Supply Chain and Operational Solutions, previously serving as Executive Vice President Supply Chain since 2019. From 2015 to 2019, Mr. Mihm served as Regional President – EMEA. Prior to that, Mr. Mihm was Industrial Market Sector Vice President, led the Company’s Global Engineering Solutions business and held various leadership roles within the Company’s Engineering Solutions organization. Mr. Mihm holds a bachelor’s degree in electrical and electronics engineering from the Pennsylvania State University College of Engineering and a master’s degree in business administration with a specialization in international business from Marquette University.
The Compensation and Leadership Development Committee of the Board of Directors of the Company approved compensation arrangements for Messrs. Frisch and Mihm in their new positions. For information regarding Mr. Frisch’s current compensation, see the Company’s Definitive Proxy Statement for its 2022 annual meeting of shareholders, which was filed with the Securities and Exchange Commission on December 17, 2021. Mr. Frisch’s salary will be $625,000 for 2022, his target payout under the Company’s annual cash incentive plan (the Variable Incentive Compensation Plan, or VICP) will be 85%, and he will receive grants of 10,960 RSUs and 10,150 PSUs under the Company’s equity incentive plan for the fiscal year. Mr. Mihm’s base salary will be $480,000 for fiscal 2022, his target
payout under the VICP will be 75%, and he will receive grants of 6,580 RSUs and 6,090 PSUs under the Company’s equity incentive plan for the fiscal year.
There are no arrangements or understandings between Messrs. Frisch and Mihm and any other person pursuant to which they were selected to serve in the roles described above, nor do either of these individuals have any familial relationship with any director or executive officer of the Company. There are not any transactions in which Messrs. Frisch or Mihm has an interest requiring disclosure under Item 404(a) of Regulation S-K.
A copy of the Company’s related press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are filed herewith:
| Exhibit Number | Description |
|---|---|
| 99.1 | Earnings release issued by Plexus Corp., dated January 26, 2022 |
| 99.2 | Press release issued by Plexus Corp., dated January 26, 2022 |
| 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: January 26, 2022 | PLEXUS CORP. |
|---|---|
| (Registrant) | |
| By: /s/ Patrick J. Jermain | |
| Patrick J. Jermain | |
| Executive Vice President and Chief Financial Officer |
Document
Plexus Announces Fiscal First Quarter Financial Results
NEENAH, WI – January 26, 2022 - Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal first quarter ended January 1, 2022, and guidance for our fiscal second quarter ending April 2, 2022.
•Reports fiscal first quarter revenue of $817 million, GAAP operating margin of 3.7% and GAAP diluted EPS of $0.82, including $0.22 of stock-based compensation expense and $0.06 of restructuring charges
•Initiates fiscal second quarter revenue guidance of $820 to $860 million with GAAP diluted EPS of $0.76 to $0.92, including $0.23 of stock-based compensation expense
| Jan 1, 2022 | Apr 2, 2022 | ||||
| Q1F22 Preliminary Results (3) | Q2F22 Guidance | ||||
| Summary GAAP Items | |||||
| Revenue (in millions) | 817 | $815 to $820 | $820 to $860 | ||
| Operating margin | % | 3.6% to 4.0% | |||
| Diluted EPS (1) | 0.82 | $0.80 to $0.84 | $0.76 to $0.92 | ||
| Summary Non-GAAP Items (2) | |||||
| Return on invested capital (ROIC) | % | ||||
| Economic return | % | ||||
| (1) | Includes stock-based compensation expense of 0.22 for Q1F22 results, 0.22 for Q1F22 preliminary results and 0.23 for Q2F22 guidance. | ||||
| (2) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures and a reconciliation to GAAP. | ||||
| (3) | Preliminary results issued on January 18, 2022; guidance provided on October 27, 2021, was revenue of 825 to 865 million and GAAP diluted EPS of 1.01 to 1.17, including 0.21 of stock based compensation expense. |
All values are in US Dollars.
Fiscal First Quarter 2022 Information
•Won 41 manufacturing programs during the quarter representing $271 million in annualized revenue when fully ramped into production
•Trailing four quarter manufacturing wins total $1.1 billion in annualized revenue when fully ramped into production
•Purchased $10.2 million of our shares at an average price of $91.74 per share under our share repurchase program. $36.7 million of our current $50 million authorization remains available to repurchase shares.
Todd Kelsey, CEO, commented, "Fiscal first quarter revenue of $817 million and GAAP diluted EPS of $0.82 were consistent with our preliminary results issued on January 18, 2022, which reflected the impact from unanticipated supply chain constraints in the Americas region that worsened in the final weeks of the quarter."
Mr. Kelsey continued, "Strong manufacturing program win performance, a multi-year high in the value of engineering wins and expansion of an already robust funnel of qualified manufacturing opportunities represented notable successes in the fiscal first quarter. Our trailing four-quarter new manufacturing program wins expanded 7% year over year to a record of $1.1 billion. Additionally, our funnel of qualified manufacturing opportunities reached an all-time high of $3.3 billion. The significant quantity of new engineering engagements, expansion in our funnel of manufacturing opportunities and acceleration in our win rate positions us to sustain our program wins momentum and supports our long-term revenue growth goal.”
Mr. Kelsey further commented, "We are guiding fiscal second quarter revenue of $820 to $860 million, which reflects the supply chain constraints that are again limiting our ability to meet robust customer demand. In addition, profitability will remain pressured given the operating infrastructure in place to support the strong customer forecasts and a seasonal increase in compensation costs. As such, we are guiding GAAP operating margin of 3.6% to 4.0% and GAAP EPS $0.76 to $0.92.”
Mr. Kelsey concluded, "We are committed to delivering upon our goals of 9% to 12% annual revenue growth with 5.5% GAAP operating margin and 15% ROIC over the long-term. We anticipate sequential improvement in revenue and GAAP EPS through the remainder of fiscal 2022, supported by new program ramps, as we progress toward these goals.”
| Quarterly Comparison | Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except EPS) | Jan 1, 2022 | Oct 2, 2021 | Jan 2, 2021 | ||||||
| Revenue | $ | 817,456 | $ | 843,238 | $ | 830,355 | |||
| Gross profit | 69,996 | 78,967 | 79,277 | ||||||
| Operating income | 30,473 | 42,342 | 46,866 | ||||||
| Net income | 23,423 | 33,341 | 36,199 | ||||||
| Diluted EPS | $ | 0.82 | $ | 1.16 | $ | 1.23 | |||
| Gross margin | 8.6 | % | 9.4 | % | 9.5 | % | |||
| Operating margin | 3.7 | % | 5.0 | % | 5.6 | % | |||
| ROIC (1) | 10.0 | % | 15.4 | % | 16.3 | % | |||
| Economic return (1) | 0.7 | % | 7.3 | % | 8.2 | % | |||
| (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, and a reconciliation of these measures to their comparable GAAP measures. |
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 56% of revenue during both the first quarter of fiscal 2022 and the fourth quarter of fiscal 2021, up one percentage point from the first quarter of fiscal 2021 where the top 10 customers comprised 55% of revenue.
| Business Segments ($ in millions) | Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jan 1, 2022 | Oct 2, 2021 | Jan 2, 2021 | ||||||||||
| Americas | $ | 277 | $ | 307 | $ | 327 | ||||||
| Asia-Pacific | 491 | 494 | 451 | |||||||||
| Europe, Middle East, and Africa | 73 | 74 | 79 | |||||||||
| Elimination of inter-segment sales | (24) | (32) | (27) | |||||||||
| Total Revenue | $ | 817 | $ | 843 | $ | 830 | ||||||
| Market Sectors ($ in millions) | Three Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Jan 1, 2022 | Oct 2, 2021 | Jan 2, 2021 | ||||||||||
| Industrial | $ | 364 | 45 | % | $ | 392 | 46 | % | $ | 378 | 46 | % |
| Healthcare/Life Sciences | 344 | 42 | % | 333 | 40 | % | 319 | 38 | % | |||
| Aerospace/Defense | 109 | 13 | % | 118 | 14 | % | 133 | 16 | % | |||
| Total Revenue | $ | 817 | $ | 843 | $ | 830 |
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 a full reconciliation of non-GAAP measures to comparable GAAP measures, please refer to the attached Non-GAAP Supplemental Information Tables.
ROIC and Economic Return
ROIC for the first quarter of fiscal 2022 was 10.0%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a two-quarter period for the first 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 2022 is 9.3%. ROIC for the first quarter of fiscal 2022 less Plexus’ weighted average cost of capital resulted in an economic return of 0.7%.
Free Cash Flow
Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended January 1, 2022, cash flows used in operations was $89.0 million, less capital expenditures of $33.2 million, resulting in negative free cash flow of $122.2 million.
| Cash Cycle Days | Three Months Ended | ||
|---|---|---|---|
| Jan 1, 2022 | Oct 2, 2021 | Jan 2, 2021 | |
| Days in Accounts Receivable | 66 | 56 | 53 |
| Days in Contract Assets | 12 | 13 | 12 |
| Days in Inventory | 145 | 116 | 93 |
| Days in Accounts Payable | (87) | (76) | (59) |
| Days in Cash Deposits | (33) | (24) | (19) |
| Annualized Cash Cycle * | 103 | 85 | 80 |
| * 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 2022 Q1 Earnings Conference Call and Webcast |
|---|---|
| When: | Thursday, January 27, 2022 at 8:30 a.m. Eastern Time |
| Where: | Participants are encouraged to join the live webcast at the investor relations section of the Plexus website, https://plexus.gcs-web.com/events-and-presentations/upcoming-events, where a slide presentation reviewing fiscal first quarter 2022 results will also be made available ahead of the conference call.<br><br><br><br>Conference Call: +1.866.922.5180 with passcode: 3582506 |
| Replay: | The webcast will be archived on the Plexus website and available via telephone replay at +1.855.859.2056 or +1.404.537.3406 with passcode: 3582506 |
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 over 19,000 individuals who are dedicated to providing Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing and Aftermarket Services. Plexus is a global leader that specializes in serving customers in industries 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 evolving effect, which may intensify, of COVID-19 on our employees, customers, suppliers, and logistics providers, including the impact of governmental actions being taken to curtail the spread of the virus. Other risks and uncertainties include, but are not limited to: 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 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 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; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; increasing regulatory and compliance requirements; the effects of U.S. Tax Reform, any tax law changes as a result of change in U.S. presidential administration, and of 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 (including as a result of the United Kingdom’s exit from the European Union); the potential effect of other world or local events or other events outside our control (such as 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 2021 Form 10-K and subsequently filed quarterly reports on Form 10-Q.
| PLEXUS CORP. AND SUBSIDIARIES | ||||
|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | ||||
| Jan 1, | Jan 2, | |||
| 2022 | 2021 | |||
| Net sales | $ | 817,456 | $ | 830,355 |
| Cost of sales | 747,460 | 751,078 | ||
| Gross profit | 69,996 | 79,277 | ||
| Operating expenses: | ||||
| Selling and administrative expenses | 37,502 | 32,411 | ||
| Restructuring and impairment charges | 2,021 | — | ||
| Operating income | 30,473 | 46,866 | ||
| Other income (expense): | ||||
| Interest expense | (3,046) | (4,086) | ||
| Interest income | 271 | 374 | ||
| Miscellaneous, net | (923) | (1,518) | ||
| Income before income taxes | 26,775 | 41,636 | ||
| Income tax expense | 3,352 | 5,437 | ||
| Net income | $ | 23,423 | $ | 36,199 |
| Earnings per share: | ||||
| Basic | $ | 0.84 | $ | 1.25 |
| Diluted | $ | 0.82 | $ | 1.23 |
| Weighted average shares outstanding: | ||||
| Basic | 28,018 | 28,861 | ||
| Diluted | 28,709 | 29,539 | ||
| PLEXUS CORP. AND SUBSIDIARIES | ||||
| --- | --- | --- | --- | |
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (in thousands, except per share data) | ||||
| (unaudited) | ||||
| Oct 2, | ||||
| 2021 | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | 217,067 | $ | 270,172 | |
| Restricted cash | 341 | |||
| Accounts receivable | 519,684 | |||
| Contract assets | 115,283 | |||
| Inventories | 972,312 | |||
| Prepaid expenses and other | 53,094 | |||
| Total current assets | 1,930,886 | |||
| Property, plant and equipment, net | 395,094 | |||
| Operating lease right-of-use assets | 72,087 | |||
| Deferred income taxes | 27,385 | |||
| Other assets | 36,441 | |||
| Total non-current assets | 531,007 | |||
| Total assets | 2,709,646 | $ | 2,461,893 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Current liabilities: | ||||
| Current portion of long-term debt and finance lease obligations | 151,417 | $ | 66,313 | |
| Accounts payable | 634,969 | |||
| Customer deposits | 204,985 | |||
| Accrued salaries and wages | 75,394 | |||
| Other accrued liabilities | 147,042 | |||
| Total current liabilities | 1,128,703 | |||
| Long-term debt and finance lease obligations, net of current portion | 187,033 | |||
| Accrued income taxes payable | 47,974 | |||
| Long-term operating lease liabilities | 37,970 | |||
| Deferred income taxes | 5,677 | |||
| Other liabilities | 26,304 | |||
| Total non-current liabilities | 304,958 | |||
| Total liabilities | 1,433,661 | |||
| Shareholders’ equity: | ||||
| Common stock, .01 par value, 200,000 shares authorized, | ||||
| 53,909 and 53,849 shares issued, respectively, | ||||
| and 27,997 and 28,047 shares outstanding, respectively | 538 | |||
| Additional paid-in-capital | 639,778 | |||
| Common stock held in treasury, at cost, 25,912 and 25,802, respectively | (1,043,091) | |||
| Retained earnings | 1,433,991 | |||
| Accumulated other comprehensive loss | (2,984) | |||
| Total shareholders’ equity | 1,028,232 | |||
| Total liabilities and shareholders’ equity | 2,709,646 | $ | 2,461,893 |
All values are in US Dollars.
| PLEXUS CORP. AND SUBSIDIARIES | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP SUPPLEMENTAL INFORMATION Table 1 | |||||||||
| (in thousands, except per share data) | |||||||||
| (unaudited) | |||||||||
| Oct 2, | Jan 2, | ||||||||
| 2021 | 2021 | ||||||||
| Operating income, as reported | 30,473 | $ | 42,342 | $ | 46,866 | ||||
| Operating margin, as reported | % | 5.0 | % | 5.6 | % | ||||
| Non-GAAP adjustments: | |||||||||
| Restructuring and impairment charges (1) | — | — | |||||||
| Adjusted operating income | 32,494 | $ | 42,342 | $ | 46,866 | ||||
| Adjusted operating margin | % | 5.0 | % | 5.6 | % | ||||
| Net income, as reported | 23,423 | $ | 33,341 | $ | 36,199 | ||||
| Non-GAAP adjustments: | |||||||||
| Restructuring and impairment charges, net of tax (1) | — | — | |||||||
| Adjusted net income | 25,232 | $ | 33,341 | $ | 36,199 | ||||
| Diluted earnings per share, as reported | 0.82 | $ | 1.16 | $ | 1.23 | ||||
| Non-GAAP per share adjustments: | |||||||||
| Restructuring and impairment charges, net of tax (1) | — | — | |||||||
| Adjusted diluted earnings per share | 0.88 | $ | 1.16 | $ | 1.23 | ||||
| (1) | During the three months ended January 1, 2022, restructuring and impairment charges of 2.0 million, or 1.8 million net of taxes, were primarily incurred for employee severance costs associated with a facility transition in our Asia-Pacific 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 | Three Months Ended | Twelve Months Ended | Three Months Ended | |||||||||||||||||||||||
| Jan 1, | Oct 2, | Jan 2, | ||||||||||||||||||||||||
| 2022 | 2021 | 2021 | ||||||||||||||||||||||||
| Operating income, as reported | $ | 30,473 | $ | 176,268 | $ | 46,866 | ||||||||||||||||||||
| Restructuring and impairment charges | + | 2,021 | + | 3,267 | + | — | ||||||||||||||||||||
| Adjusted operating income | $ | 32,494 | $ | 179,535 | $ | 46,866 | ||||||||||||||||||||
| x | 4 | x | 4 | |||||||||||||||||||||||
| Adjusted annualized operating income | $ | 129,976 | $ | 179,535 | $ | 187,464 | ||||||||||||||||||||
| Adjusted effective tax rate | x | 13 | % | x | 13 | % | x | 13 | % | |||||||||||||||||
| Tax impact | 16,897 | 23,340 | 24,370 | |||||||||||||||||||||||
| Adjusted operating income (tax effected) | 113,079 | $ | 156,195 | $ | 163,094 | |||||||||||||||||||||
| Average invested capital | ÷ | 1,135,312 | ÷ | $ | 1,014,742 | ÷ | $ | 1,002,087 | ||||||||||||||||||
| ROIC | 10.0 | % | 15.4 | % | 16.3 | % | ||||||||||||||||||||
| Weighted average cost of capital | - | 9.3 | % | - | 8.1 | % | - | 8.1 | % | |||||||||||||||||
| Economic return | 0.7 | % | 7.3 | % | 8.2 | % | Average Invested Capital Calculations | Jan 1, | Oct 2, | Jul 3, | Apr 3, | Jan 2, | Oct 3, | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||||||||||
| Equity | $ | 1,044,095 | $ | 1,028,232 | $ | 1,020,450 | $ | 1,013,952 | $ | 1,006,959 | $ | 977,480 | ||||||||||||||
| Plus: | ||||||||||||||||||||||||||
| Debt and finance lease obligations - current | 151,417 | 66,313 | 60,468 | 50,229 | 148,408 | 146,829 | ||||||||||||||||||||
| Operating lease obligations - current (1) | 9,507 | 9,877 | 9,130 | 9,314 | 9,351 | 7,724 | ||||||||||||||||||||
| Debt and finance lease obligations - long-term | 187,075 | 187,033 | 187,690 | 188,730 | 188,148 | 187,975 | ||||||||||||||||||||
| Operating lease obligations - long-term | 36,343 | 37,970 | 33,193 | 34,751 | 37,052 | 36,779 | ||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cash and cash equivalents | (217,067) | (270,172) | (303,255) | (294,370) | (356,724) | (385,807) | ||||||||||||||||||||
| $ | 1,211,370 | $ | 1,059,253 | $ | 1,007,676 | $ | 1,002,606 | $ | 1,033,194 | $ | 970,980 | (1) | Included in other accrued liabilities on the Condensed Consolidated Balance Sheets. | |||||||||||||
| --- | --- |
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Document
Plexus Names Steve Frisch President and Chief Strategy Officer and Oliver Mihm Chief Operating Officer
NEENAH, WI – January 26, 2022 - Plexus Corp. (NASDAQ: PLXS) announced today the appointment of Steve Frisch, 55, to President and Chief Strategy Officer and Oliver Mihm, 50, to Executive Vice President and Chief Operating Officer.
These promotions expand senior leadership bandwidth and further leverage organizational talent to guide successful execution of Plexus’ strategy within the current demand and operating environment. In addition, the appointments strengthen Plexus’ position to maintain industry-leading revenue growth and operating performance to create shareholder value. With his promotion, Mr. Frisch assumes the responsibilities of driving the long-term growth of the enterprise, innovation across Plexus’ global operations and the execution of Plexus’ strategy. These responsibilities include oversight of Plexus’ go-to-market, manufacturing technology, engineering solutions, quality and information technology organizations. With his promotion, Mr. Mihm assumes the responsibilities of ensuring global operational alignment and flawless global execution including oversight of Plexus’ regional operations and the aftermarket services and supply chain organizations.
Todd Kelsey, Chief Executive Officer, commented, “These promotions support long-term succession planning and the ability to successfully execute our strategy that is comprised of a defined market focus, superior execution, a passion for excellence and a disciplined financial model. Steve and Oliver are positioned to employ their unique talents and substantial industry expertise to support Plexus’ vision to help create the products that build a better world and our goal of $5 billion in revenue with a 5.5% GAAP operating margin by our fiscal 2025.”
Mr. Kelsey continued, “Steve is an experienced leader with an extensive knowledge of our company, customers and industry. These attributes make him exceptionally qualified to succeed in his new role, driving superior revenue growth though global alignment of our market-driven strategy, and ensuring that the technology and innovation are in place to sustain Plexus’ success. Throughout his more than 30-year tenure with Plexus, Steve has demonstrated a reputation for developing high performing teams, establishing new strategies, building on Plexus’ competitive advantages and delivering results that drive shareholder value.”
Mr. Kelsey concluded, “Oliver’s experiences across our organization, along with his consistent pattern of leadership and delivering outstanding results, positions him to expand upon our One Plexus operational model and advance Plexus’ commitment to flawless execution and customer service excellence. During Oliver’s more than 20-year tenure with Plexus, he has elevated team members and organizations and successfully implemented new solutions to improve operational efficiency and facilitate customer success. These efforts have furthered Plexus’ market leadership position and created shareholder value.”
Mr. Frisch joined Plexus in 1990 as a design engineer. Since 2016, Mr. Frisch served as Executive Vice President and Chief Operating Officer. Prior to that appointment, Mr. Frisch was Executive Vice
President and Chief Customer Officer, served as Executive Vice President – Global Customer Services, Regional President – EMEA, led Plexus’ Global Engineering Solutions and held various leadership positions across the Company. Mr. Frisch holds a bachelor's degree in electrical engineering and technology from the Milwaukee School of Engineering, a master's degree in electrical engineering and computer science from Marquette University and a master's degree in business administration from the University of Wisconsin-Madison.
Mr. Mihm joined Plexus in 2000 as a design engineer. Since 2020, Mr. Mihm has served as Executive Vice President – Global Supply Chain and Operational Solutions, previously serving as Executive Vice President Supply Chain since 2019. From 2015 to 2019, Mr. Mihm served as Regional President – EMEA. Prior to that, Mr. Mihm was Industrial Market Sector Vice President, led our Global Engineering Solutions and held various leadership roles within our Engineering Solutions organization. Mr. Mihm holds a bachelor’s degree in electrical and electronics engineering from the Pennsylvania State University College of Engineering and a master’s degree in business administration with a specialization in international business from Marquette University.
Investor and Media Contact
Shawn Harrison
+1.920.969.6325
shawn.harrison@plexus.com
About Plexus Corp.
Since 1979, Plexus has been partnering with companies to create the products that build a better world. We are a team of over 19,000 individuals who are dedicated to providing Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing and Aftermarket Services. Plexus is a global leader that specializes in serving customers in industries 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 evolving effect, which may intensify, of COVID-19 on our employees, customers, suppliers, and logistics providers, including the impact of governmental actions being taken to curtail the spread of the virus. Other risks and uncertainties include, but are not limited to: 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 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 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; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; increasing regulatory and compliance requirements; the effects of U.S. Tax Reform, any tax law changes as a result of change in U.S. presidential administration, and of 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 (including as a result of the United Kingdom’s exit from the European Union); the potential effect of other world or local events or other events outside our control (such as 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 2021 Form 10-K and subsequently filed quarterly reports on Form 10-Q.