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): April 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 April 26, 2023, Plexus Corp. (“we” or the “Company”) announced results for the fiscal second quarter ended April 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 April 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: April 26, 2023 | PLEXUS CORP. |
|---|---|
| (Registrant) | |
| By: /s/ Patrick J. Jermain | |
| Patrick J. Jermain | |
| Executive Vice President and Chief Financial Officer |
Document
Plexus Announces Fiscal Second Quarter Financial Results
NEENAH, WI – April 26, 2023 - Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal second quarter ended April 1, 2023, and guidance for our fiscal third quarter ending July 1, 2023.
•Reports fiscal second quarter 2023 revenue of $1.07 billion, GAAP operating margin of 5.3% and GAAP diluted EPS of $1.45, including $0.21 of stock-based compensation expense
•Initiates fiscal third quarter 2023 revenue guidance of $1.00 billion to $1.05 billion with GAAP diluted EPS of $0.76 to $0.94, including $0.19 of stock-based compensation expense and approximately $0.29 of restructuring and other charges
| Apr 1, 2023 | Jul 1, 2023 | ||
| Q2F23 Guidance | Q3F23 Guidance | ||
| Summary GAAP Items | |||
| Revenue (in billions) | $1.020 to $1.070 | $1.000 to $1.050 | |
| Operating margin (1) | 4.5% to 5.0% | 3.6% to 4.1% | |
| Diluted EPS (2) | $1.06 to $1.24 | $0.76 to $0.94 | |
| Summary Non-GAAP Items (3) | |||
| Adjusted operating margin (4) | 4.5% to 5.0% | ||
| Adjusted diluted EPS (5) | $1.05 to $1.23 | ||
| Return on invested capital (ROIC) | |||
| Economic return | |||
| (1) | Includes restructuring and other charges of approximately 90 bps in operating margin for Q3F23 guidance. | ||
| (2) | Includes stock-based compensation expense of 0.21 for Q2F23 results, 0.21 for Q2F23 guidance and 0.19 for Q3F23 guidance.Includes restructuring and other charges of approximately 0.29 for Q3F23 guidance. | ||
| (3) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for additional information regarding non-GAAP financial measures. | ||
| (4) | Excludes restructuring and other charges of approximately 90 bps. | ||
| (5) | Excludes restructuring and other charges of approximately 0.29, but includes stock-based compensation expense of 0.19. |
All values are in US Dollars.
Fiscal Second Quarter 2023 Information
•Won 31 manufacturing programs during the quarter representing $275 million in annualized revenue when fully ramped into production
•Trailing four-quarter manufacturing wins of $847 million in annualized revenue when fully ramped into production
•Purchased $12.4 million of our shares at an average price of $98.75 per share under our share repurchase program, leaving $22.6 million available under our current $50.0 million authorization
Todd Kelsey, Chief Executive Officer, commented, "Our team continues to execute well amidst ongoing market volatility and supply chain challenges. Plexus delivered fiscal second quarter revenue of $1.07 billion, representing 21% year over year growth, GAAP operating margin of 5.3% and GAAP EPS of $1.45. Second quarter results exceeded our guidance reflecting increased end of quarter shipments as a result of mitigating supply constraints, better than anticipated performance by our engineering and sustaining services teams and our ongoing focus on improving manufacturing efficiency.”
Mr. Kelsey continued, "I’m extremely pleased with the strong performance of our go-to-market organization. Our team won 31 new manufacturing programs worth $275 million in the fiscal second quarter, capitalizing on robust demand for our solutions across all of our market sectors. Concurrently, the team expanded an already record funnel of qualified manufacturing opportunities to $4.2 billion, an increase of nearly $600 million from our fiscal first quarter. The funnel includes several large opportunities across all of our market sectors, which we believe positions us to sustain strong win performance and industry-leading revenue growth.”
Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, “We generated $80 million in free cash flow during the fiscal second quarter, a result that was close to double our net income and exceeded our projections. Through the first six months of fiscal 2023, we generated positive free cash flow, and we anticipate delivering additional positive free cash flow for the second half of fiscal 2023. The fiscal second quarter cash cycle of 104 days was favorable to our expectations and sequentially lower by two days as we benefited from increased end of quarter revenue and continued progress on our working capital initiatives. Improvements in our cash cycle, coupled with strong operating performance, led to return on invested capital for the fiscal second quarter of 13.8% or 480 basis points above our weighted average cost of capital.”
Mr. Kelsey further commented, "We are guiding fiscal third quarter revenue of $1.00 billion to $1.05 billion, non-GAAP operating margin of 4.5% to 5.0% and non-GAAP EPS of $1.05 to $1.23. Our guidance is impacted by our strong late second quarter shipments, supply chain challenges and further semiconductor capital equipment market weakness. The non-GAAP guidance excludes $9 million, or $0.29 per share, of estimated restructuring and other charges associated with planned actions to realign our spending to create a more efficient and scalable platform to capitalize on our robust pipeline of future growth opportunities.”
Mr. Kelsey concluded, “As we near completion of our annual strategic planning process, I remain convinced in our ability to drive robust revenue growth and strong profitability, including achieving our target of $5 billion in revenue with 5.5% GAAP operating margin by our fiscal 2025. As we look beyond this goal, I have continued confidence in sustaining our industry-leading revenue growth and profitability as our team leverages our best-in-class capabilities and solutions to help our customers create the products that build a better world.”
| Quarterly Comparison | Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except EPS) | Apr 1, 2023 | Dec 31, 2022 | Apr 2, 2022 | ||||||
| Revenue | $ | 1,070,823 | $ | 1,093,925 | $ | 888,723 | |||
| Gross profit | 102,993 | 101,199 | 76,510 | ||||||
| Operating income | 56,942 | 57,341 | 35,837 | ||||||
| Net income | 40,844 | 42,190 | 26,869 | ||||||
| Diluted EPS | $ | 1.45 | $ | 1.49 | $ | 0.95 | |||
| Gross margin | 9.6 | % | 9.3 | % | 8.6 | % | |||
| Operating margin | 5.3 | % | 5.2 | % | 4.0 | % | |||
| ROIC (1) | 13.8 | % | 13.8 | % | 10.2 | % | |||
| Economic return (1) | 4.8 | % | 4.8 | % | 0.9 | % | |||
| (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 first and second quarters of fiscal 2023, down three percentage points from the second quarter of fiscal 2022, where top 10 customers comprised 54% of revenue.
| Business Segments ($ in millions) | Three Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Apr 1, 2023 | Dec 31, 2022 | Apr 2, 2022 | ||||||||||
| Americas | $ | 408 | $ | 390 | $ | 311 | ||||||
| Asia-Pacific | 587 | 642 | 534 | |||||||||
| Europe, Middle East and Africa | 102 | 89 | 74 | |||||||||
| Elimination of inter-segment sales | (26) | (27) | (30) | |||||||||
| Total Revenue | $ | 1,071 | $ | 1,094 | $ | 889 | ||||||
| Market Sectors ($ in millions) | Three Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Apr 1, 2023 | Dec 31, 2022 | Apr 2, 2022 | ||||||||||
| Industrial | $ | 439 | 41 | % | $ | 472 | 43 | % | $ | 415 | 47 | % |
| Healthcare/Life Sciences | 488 | 46 | % | 488 | 45 | % | 353 | 40 | % | |||
| Aerospace/Defense | 144 | 13 | % | 134 | 12 | % | 121 | 13 | % | |||
| Total Revenue | $ | 1,071 | $ | 1,094 | $ | 889 |
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 second quarter of fiscal 2023 was 13.8%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a three-quarter period for the second 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 second quarter of fiscal 2023 less Plexus’ weighted average cost of capital resulted in an economic return of 4.8%.
Free Cash Flow
Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended April 1, 2023, cash flows provided by operations of $106.0 million, less capital expenditures of $26.4 million, resulted in free cash flow of $79.6 million.
| Cash Cycle Days | Three Months Ended | ||
|---|---|---|---|
| Apr 1, 2023 | Dec 31, 2022 | Apr 2, 2022 | |
| Days in Accounts Receivable | 56 | 61 | 59 |
| Days in Contract Assets | 11 | 10 | 12 |
| Days in Inventory | 156 | 151 | 154 |
| Days in Accounts Payable | (69) | (69) | (86) |
| Days in Cash Deposits | (50) | (47) | (41) |
| Annualized Cash Cycle * | 104 | 106 | 98 |
| * 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 Q2 Earnings Conference Call and Webcast |
|---|---|
| When: | Thursday, April 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/BIcf715026af574a01b337bf55806f00a6<br><br>Webcast link:<br><br>https://edge.media-server.com/mmc/p/ug4v23ev |
| 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 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 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; 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 | Six Months Ended | |||||||
| Apr 1, | Apr 2, | Apr 1, | Apr 2, | |||||
| 2023 | 2022 | 2023 | 2022 | |||||
| Net sales | $ | 1,070,823 | $ | 888,723 | $ | 2,164,748 | $ | 1,706,179 |
| Cost of sales | 967,830 | 812,213 | 1,960,556 | 1,559,673 | ||||
| Gross profit | 102,993 | 76,510 | 204,192 | 146,506 | ||||
| Operating expenses: | ||||||||
| Selling and administrative expenses | 46,051 | 40,673 | 89,909 | 78,175 | ||||
| Restructuring and impairment charges | — | — | — | 2,021 | ||||
| Operating income | 56,942 | 35,837 | 114,283 | 66,310 | ||||
| Other income (expense): | ||||||||
| Interest expense | (8,287) | (3,345) | (15,181) | (6,391) | ||||
| Interest income | 759 | 262 | 1,693 | 533 | ||||
| Miscellaneous, net | (1,612) | (1,446) | (3,556) | (2,369) | ||||
| Income before income taxes | 47,802 | 31,308 | 97,239 | 58,083 | ||||
| Income tax expense | 6,958 | 4,439 | 14,205 | 7,791 | ||||
| Net income | $ | 40,844 | $ | 26,869 | $ | 83,034 | $ | 50,292 |
| Earnings per share: | ||||||||
| Basic | $ | 1.48 | $ | 0.96 | $ | 3.00 | $ | 1.80 |
| Diluted | $ | 1.45 | $ | 0.95 | $ | 2.94 | $ | 1.76 |
| Weighted average shares outstanding: | ||||||||
| Basic | 27,661 | 27,987 | 27,650 | 28,002 | ||||
| Diluted | 28,184 | 28,427 | 28,273 | 28,566 | ||||
| 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 | 269,664 | $ | 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 | 3,382,020 | $ | 3,393,225 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt and finance lease obligations | 294,011 | $ | 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, | ||||||||
| 54,293 and 54,084 shares issued, respectively, | ||||||||
| and 27,647 and 27,679 shares outstanding, respectively | 541 | |||||||
| Additional paid-in-capital | 652,467 | |||||||
| Common stock held in treasury, at cost, 26,646 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 | 3,382,020 | $ | 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) | |||||||||||||||
| Six Months Ended | |||||||||||||||
| Dec 31, | Apr 2, | Apr 1, | Apr 2, | ||||||||||||
| 2022 | 2022 | 2023 | 2022 | ||||||||||||
| Operating income, as reported | 56,942 | $ | 57,341 | $ | 35,837 | $ | 114,283 | $ | 66,310 | ||||||
| Operating margin, as reported | % | 5.2 | % | 4.0 | % | 5.3 | % | 3.9 | % | ||||||
| Non-GAAP adjustments: | |||||||||||||||
| Restructuring and impairment charges (1) | — | — | — | 2,021 | |||||||||||
| Adjusted operating income | 56,942 | $ | 57,341 | $ | 35,837 | $ | 114,283 | $ | 68,331 | ||||||
| Adjusted operating margin | % | 5.2 | % | 4.0 | % | 5.3 | % | 4.0 | % | ||||||
| Net income, as reported | 40,844 | $ | 42,190 | $ | 26,869 | $ | 83,034 | $ | 50,292 | ||||||
| Non-GAAP adjustments: | |||||||||||||||
| Restructuring and impairment charges, net of tax (1) | — | — | — | 1,809 | |||||||||||
| Adjusted net income | 40,844 | $ | 42,190 | $ | 26,869 | $ | 83,034 | $ | 52,101 | ||||||
| Diluted earnings per share, as reported | 1.45 | $ | 1.49 | $ | 0.95 | $ | 2.94 | $ | 1.76 | ||||||
| Non-GAAP per share adjustments: | |||||||||||||||
| Restructuring and impairment charges, net of tax (1) | — | — | — | 0.06 | |||||||||||
| Adjusted diluted earnings per share | 1.45 | $ | 1.49 | $ | 0.95 | $ | 2.94 | $ | 1.82 | ||||||
| (1) | During the six months ended April 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. |
All values are in US Dollars.
| PLEXUS CORP. AND SUBSIDIARIES | ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NON-GAAP SUPPLEMENTAL INFORMATION Table 2 | ||||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| ROIC and Economic Return Calculations | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| Apr 1, | Dec 31, | Apr 2, | ||||||||||||||||||||||||||
| 2023 | 2022 | 2022 | ||||||||||||||||||||||||||
| Operating income, as reported | $ | 114,283 | $ | 57,341 | $ | 66,310 | ||||||||||||||||||||||
| Restructuring and impairment charges | + | — | + | — | + | 2,021 | ||||||||||||||||||||||
| Adjusted operating income | $ | 114,283 | $ | 57,341 | $ | 68,331 | ||||||||||||||||||||||
| x | 2 | x | 4 | x | 2 | |||||||||||||||||||||||
| Adjusted annualized operating income | $ | 228,566 | $ | 229,364 | $ | 136,662 | ||||||||||||||||||||||
| Adjusted effective tax rate | x | 15 | % | x | 16 | % | x | 14 | % | |||||||||||||||||||
| Tax impact | 34,285 | 36,698 | 19,133 | |||||||||||||||||||||||||
| Adjusted operating income (tax-effected) | $ | 194,281 | $ | 192,666 | $ | 117,529 | ||||||||||||||||||||||
| Average invested capital | ÷ | $ | 1,406,359 | ÷ | $ | 1,392,002 | ÷ | $ | 1,151,775 | |||||||||||||||||||
| ROIC | 13.8 | % | 13.8 | % | 10.2 | % | ||||||||||||||||||||||
| Weighted average cost of capital | - | 9.0 | % | - | 9.0 | % | - | 9.3 | % | |||||||||||||||||||
| Economic return | 4.8 | % | 4.8 | % | 0.9 | % | Average Invested Capital Calculations | Apr 1, | Dec 31, | Oct 1, | Jul 2, | Apr 2, | Jan 1, | Oct 2, | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||||||||||||||
| Equity | $ | 1,182,382 | $ | 1,150,259 | $ | 1,095,731 | $ | 1,058,190 | $ | 1,040,591 | $ | 1,044,095 | $ | 1,028,232 | ||||||||||||||
| Plus: | ||||||||||||||||||||||||||||
| Debt and finance lease obligations - current | 294,011 | 329,076 | 273,971 | 250,012 | 222,393 | 151,417 | 66,313 | |||||||||||||||||||||
| Operating lease obligations - current (1) | 8,358 | 8,878 | 7,948 | 8,640 | 9,266 | 9,507 | 9,877 | |||||||||||||||||||||
| Debt and finance lease obligations - long-term | 188,730 | 187,272 | 187,776 | 184,707 | 186,069 | 187,075 | 187,033 | |||||||||||||||||||||
| Operating lease obligations - long-term | 31,257 | 32,149 | 33,628 | 32,270 | 34,347 | 36,343 | 37,970 | |||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||
| Cash and cash equivalents | (269,664) | (247,880) | (274,805) | (276,608) | (307,964) | (217,067) | (270,172) | |||||||||||||||||||||
| $ | 1,435,074 | $ | 1,459,754 | $ | 1,324,249 | $ | 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