10/23/2024 | Press release | Distributed by Public on 10/23/2024 14:35
Three Months Ended | ||||
Sep 28, 2024 | Sep 28, 2024 | Dec 28, 2024 | ||
Q4F24 Results
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Q4F24 Guidance
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Q1F25 Guidance
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Summary GAAP Items | ||||
Revenue (in millions) | $1,051 | $990 to $1,030 | $960 to $1,000 | |
Operating margin | 5.1 | % | 4.6% to 5.0% | 4.9% to 5.3% |
Diluted EPS | $1.48 | $1.14 to $1.29 | $1.25 to $1.40 | |
Summary Non-GAAP Items (1) | ||||
Adjusted operating margin (2) | 6.2 | % | 5.6% to 6.0% | 5.7% to 6.1% |
Adjusted EPS (3) | $1.85 | $1.50 to $1.65 | $1.52 to $1.67 | |
Return on invested capital (ROIC) | 11.8 | % | ||
Economic return | 3.6 | % | ||
(1) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for additional information regarding non-GAAP financial measures. | |||
(2) | Excludes stock-based compensation expense of approximately 110 bps for Q4F24 results, 100 bps for Q4F24 guidance, and 50 bps for Q1F25 guidance. Q1F25 guidance excludes restructuring charges of approximately 30 bps. | |||
(3) |
Excludes stock-based compensation expense, net of tax, of $0.37 for Q4F24 results, $0.36 for Q4F24 guidance and $0.19 for Q1F25 guidance. Q1F25 guidance excludes restructuring charges of approximately $0.08.
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Quarterly & Annual Comparison | Three Months Ended | Twelve Months Ended | ||||||||
(in thousands, except EPS) | Sep 28, 2024 | Jun 29, 2024 | Sep 30, 2023 | Sep 28, 2024 | Sep 30, 2023 | |||||
Revenue | $ | 1,050,569 | $ | 960,751 | $ | 1,023,947 | $ | 3,960,827 | $ | 4,210,305 |
Gross profit | 107,912 | 94,415 | 96,716 | 378,530 | 394,554 | |||||
Operating income | 53,858 | 39,246 | 53,333 | 167,732 | 195,820 | |||||
Net income | 41,221 | 25,140 | 40,261 | 111,815 | 139,094 | |||||
Diluted EPS | $ | 1.48 | $ | 0.91 | $ | 1.44 | $ | 4.01 | $ | 4.95 |
Gross margin | 10.3 | % | 9.8 | % | 9.4 | % | 9.6 | % | 9.4 | % |
Operating margin | 5.1 | % | 4.1 | % | 5.2 | % | 4.2 | % | 4.7 | % |
ROIC (1) | 11.8 | % | 10.4 | % | 13.4 | % | 11.8 | % | 13.4 | % |
Economic return (1) | 3.6 | % | 2.2 | % | 4.4 | % | 3.6 | % | 4.4 | % |
(1) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures discussed and/or disclosed in this release, such as adjusted operating margin, adjusted net income, adjusted diluted EPS, ROIC and economic return. |
Business Segments ($ in millions) | Three Months Ended | Twelve Months Ended | ||||||||
Sep 28, 2024 | Jun 29, 2024 | Sep 30, 2023 | Sep 28, 2024 | Sep 30, 2023 | ||||||
Americas | $ | 335 | $ | 332 | $ | 389 | $ | 1,323 | $ | 1,558 |
Asia-Pacific | 618 | 522 | 557 | 2,213 | 2,358 | |||||
Europe, Middle East and Africa | 128 | 137 | 108 | 542 | 403 | |||||
Elimination of inter-segment sales | (30) | (30) | (30) | (117) | (109) | |||||
Total Revenue | $ | 1,051 | $ | 961 | $ | 1,024 | $ | 3,961 | $ | 4,210 |
Market Sectors ($ in millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Sep 28, 2024 | Jun 29, 2024 | Sep 30, 2023 | Sep 28, 2024 | Sep 30, 2023 | ||||||||||||||||
Aerospace/Defense | $ | 184 | 18 | % | $ | 178 | 18 | % | $ | 158 | 15 | % | $ | 698 | 19 | % | $ | 579 | 14 | % |
Healthcare/Life Sciences | 415 | 39 | % | 380 | 40 | % | 449 | 44 | % | 1,555 | 38 | % | 1,875 | 44 | % | |||||
Industrial | 452 | 43 | % | 403 | 42 | % | 417 | 41 | % | 1,708 | 43 | % | 1,756 | 42 | % | |||||
Total Revenue | $ | 1,051 | $ | 961 | $ | 1,024 | $ | 3,961 | $ | 4,210 |
Cash Cycle Days | Three Months Ended | ||
Sep 28, 2024 | Jun 29, 2024 | Sep 30, 2023 | |
Days in Accounts Receivable | 54 | 61 | 59 |
Days in Contract Assets | 10 | 11 | 13 |
Days in Inventory | 127 | 151 | 154 |
Days in Accounts Payable | (59) | (62) | (64) |
Days in Advanced Payments | (68) | (78) | (75) |
Annualized Cash Cycle (1) | 64 | 83 | 87 |
(1) | Plexus calculates 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 advanced payments. |
What:
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Plexus Fiscal 2024 Q4 Earnings Conference Call and Webcast
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When:
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Thursday, October 24, 2024 at 8:30 a.m. Eastern Time
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Where:
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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:
Webcast link:
https://events.q4inc.com/attendee/470217358
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Replay:
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The webcast will be archived on the Plexus website and will be available as on-demand for 12 months |
PLEXUS CORP. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(in thousands, except per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
Sep 28, | Sep 30, | Sep 28, | Sep 30, | |||||
2024 | 2023 | 2024 | 2023 | |||||
Net sales | $ | 1,050,569 | $ | 1,023,947 | $ | 3,960,827 | $ | 4,210,305 |
Cost of sales | 942,657 | 927,231 | 3,582,297 | 3,815,751 | ||||
Gross profit | 107,912 | 96,716 | 378,530 | 394,554 | ||||
Operating expenses: | ||||||||
Selling and administrative expenses | 54,054 | 43,383 | 190,541 | 175,640 | ||||
Restructuring and other charges, net | - | - | 20,257 | 23,094 | ||||
Operating income | 53,858 | 53,333 | 167,732 | 195,820 | ||||
Other income (expense): | ||||||||
Interest expense | (5,577) | (8,130) | (28,876) | (31,542) | ||||
Interest income | 1,220 | 847 | 3,860 | 3,138 | ||||
Miscellaneous, net | (4,087) | 347 | (13,184) | (6,403) | ||||
Income before income taxes | 45,414 | 46,397 | 129,532 | 161,013 | ||||
Income tax expense | 4,193 | 6,136 | 17,717 | 21,919 | ||||
Net income
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$ | 41,221 | $ | 40,261 | $ | 111,815 | $ | 139,094 |
Earnings per share: | ||||||||
Basic | $ | 1.52 | $ | 1.47 | $ | 4.08 | $ | 5.04 |
Diluted | $ | 1.48 | $ | 1.44 | $ | 4.01 | $ | 4.95 |
Weighted average shares outstanding: | ||||||||
Basic | 27,203 | 27,475 | 27,397 | 27,582 | ||||
Diluted | 27,783 | 27,972 | 27,909 | 28,114 |
PLEXUS CORP. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(in thousands, except per share data) | ||||
(unaudited) | ||||
Sep 28, | Sep 30, | |||
2024 | 2023 | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 345,109 | $ | 256,233 |
Restricted cash | 2,353 | 421 | ||
Accounts receivable | 622,366 | 661,542 | ||
Contract assets | 120,560 | 142,297 | ||
Inventories | 1,311,434 | 1,562,037 | ||
Prepaid expenses and other | 75,328 | 49,693 | ||
Total current assets | 2,477,150 | 2,672,223 | ||
Property, plant and equipment, net | 501,112 | 492,036 | ||
Operating lease right-of-use assets | 74,360 | 69,363 | ||
Deferred income taxes | 73,919 | 62,590 | ||
Other assets | 27,280 | 24,960 | ||
Total non-current assets | 676,671 | 648,949 | ||
Total assets | $ | 3,153,821 | $ | 3,321,172 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Current portion of long-term debt and finance lease obligations | $ | 157,325 | $ | 240,205 |
Accounts payable | 606,378 | 646,610 | ||
Advanced payments from customers | 709,152 | 760,351 | ||
Accrued salaries and wages | 94,448 | 94,099 | ||
Other accrued liabilities | 75,991 | 71,402 | ||
Total current liabilities | 1,643,294 | 1,812,667 | ||
Long-term debt and finance lease obligations, net of current portion | 89,993 | 190,853 | ||
Accrued income taxes payable | 17,198 | 31,382 | ||
Long-term operating lease liabilities | 32,275 | 38,552 | ||
Deferred income taxes | 8,234 | 4,350 | ||
Other liabilities | 38,002 | 28,986 | ||
Total non-current liabilities | 185,702 | 294,123 | ||
Total liabilities | 1,828,996 | 2,106,790 | ||
Shareholders' equity: | ||||
Common stock | 545 | 543 | ||
Additional paid-in-capital | 680,638 | 661,270 | ||
Common stock held in treasury | (1,190,115) | (1,134,429) | ||
Retained earnings | 1,823,143 | 1,711,328 | ||
Accumulated other comprehensive income (loss) | 10,614 | (24,330) | ||
Total shareholders' equity | 1,324,825 | 1,214,382 | ||
Total liabilities and shareholders' equity | $ | 3,153,821 | $ | 3,321,172 |
PLEXUS CORP. AND SUBSIDIARIES | ||||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 1 | ||||||||||
(in thousands, except per share data) | ||||||||||
(unaudited) | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||
Sep 28, | Jun 29, | Sep 30, | Sep 28, | Sep 30, | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||
Operating income, as reported | $ | 53,858 | $ | 39,246 | $ | 53,333 | $ | 167,732 | $ | 195,820 |
Operating margin, as reported | 5.1 | % | 4.1 | % | 5.2 | % | 4.2 | % | 4.7 | % |
Non-GAAP adjustments: | ||||||||||
Restructuring costs (1) | - | 9,219 | - | 22,507 | 8,865 | |||||
Other non-recurring (income) charges (2) | - | - | - | (2,250) | 14,229 | |||||
Stock-based compensation (3) | 10,849 | 7,205 | 5,824 | 30,485 | 21,379 | |||||
Non-GAAP operating income | $ | 64,707 | $ | 55,670 | $ | 59,157 | $ | 218,474 | $ | 240,293 |
Non-GAAP operating margin | 6.2 | % | 5.8 | % | 5.8 | % | 5.5 | % | 5.7 | % |
Net income, as reported | $ | 41,221 | $ | 25,140 | $ | 40,261 | $ | 111,815 | $ | 139,094 |
Non-GAAP adjustments: | ||||||||||
Restructuring costs, net of tax (1) | - | 8,251 | - | 20,144 | 7,920 | |||||
Other non-recurring charges, net of tax (2) | - | - | - | (2,014) | 13,346 | |||||
Stock-based compensation, net of tax (3) | 10,306 | 6,845 | 5,824 | 29,582 | 21,379 | |||||
Adjusted net income | $ | 51,527 | $ | 40,236 | $ | 46,085 | $ | 159,527 | $ | 181,739 |
Diluted earnings per share, as reported | $ | 1.48 | $ | 0.91 | $ | 1.44 | $ | 4.01 | $ | 4.95 |
Non-GAAP per share adjustments: | ||||||||||
Restructuring costs, net of tax (1) | - | 0.30 | - | 0.72 | 0.28 | |||||
Other non-recurring charges, net of tax (2) | - | - | - | (0.07) | 0.47 | |||||
Stock-based compensation, net of tax (3) | 0.37 | 0.24 | 0.21 | 1.06 | 0.76 | |||||
Adjusted diluted earnings per share | $ | 1.85 | $ | 1.45 | $ | 1.65 | $ | 5.72 | $ | 6.46 |
(1) |
During the three months ended June 29, 2024, restructuring and impairment charges of $9.2 million, or $8.3 million net of taxes, were incurred for employee severance costs associated with a reduction in the Company's workforce as well as closure costs associated with a site in the Company's AMER region.
During the twelve months ended September 28, 2024, restructuring costs of $22.5 million, or $20.1 million net of taxes, were incurred for employee severance costs associated with a reduction in the Company's workforce as well as closure costs associated with a site in the Company's EMEA region and with a site in the Company's AMER region.
During the twelve months ended September 30, 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.
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(2) |
During the twelve months ended September 28, 2024, insurance proceeds of $2.3 million, or $2.0 million net of taxes, were received related to an arbitration decision associated with a contractual matter that occurred in the Company's EMEA region in fiscal 2023. During the twelve months ended September 30, 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. |
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(3) |
During fiscal 2024, Plexus began excluding total stock-based compensation expense from adjusted operating margin and adjusted EPS to provide meaningful comparisons to investors as most of our peer companies exclude such charges. These amounts include the accelerated stock-based compensation expense noted on Table 2. |
PLEXUS CORP. AND SUBSIDIARIES | |||||||||
NON-GAAP SUPPLEMENTAL INFORMATION Table 2 | |||||||||
(in thousands)
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(unaudited) | |||||||||
ROIC and Economic Return Calculations | Twelve Months Ended | Nine Months Ended | Twelve Months Ended | ||||||
Sep 28, | Jun 29, | Sep 30, | |||||||
2024 | 2024 | 2023 | |||||||
Operating income, as reported | $ | 167,732 | $ | 113,874 | $ | 195,820 | |||
Restructuring and other charges | 20,257 | 20,257 | 23,094 | ||||||
Accelerated stock-based compensation (1) | + | 5,063 | + | 892 | + | - | |||
Adjusted operating income | $ | 193,052 | $ | 135,023 | $ | 218,914 | |||
÷ | 3 | ||||||||
$ | 45,008 | ||||||||
x | 4 | ||||||||
Adjusted annualized operating income | $ | 193,052 | $ | 180,032 | $ | 218,914 | |||
Adjusted effective tax rate | x | 13 | % | x | 16 | % | x | 13 | % |
Tax impact | 25,097 | 28,805 | 28,459 | ||||||
Adjusted operating income (tax-effected) | $ | 167,955 | $ | 151,227 | $ | 190,455 | |||
Average invested capital | ÷ | $ | 1,418,698 | ÷ | $ | 1,454,871 | ÷ | $ | 1,425,626 |
ROIC | 11.8 | % | 10.4 | % | 13.4 | % | |||
Weighted average cost of capital | - | 8.2 | % | - | 8.2 | % | - | 9.0 | % |
Economic return | 3.6 | % | 2.2 | % | 4.4 | % |
Average Invested Capital Calculations | Sep 28, | Jun 29, | Mar 30, | Dec 30, | Sep 30, | |||||
2024 | 2024 | 2024 | 2023 | 2023 | ||||||
Equity | $ | 1,324,825 | $ | 1,266,360 | $ | 1,259,762 | $ | 1,266,755 | $ | 1,214,382 |
Plus: | ||||||||||
Debt and finance lease obligations - current | 157,325 | 258,175 | 245,964 | 251,119 | 240,205 | |||||
Operating lease obligations - current (2) | 14,697 | 7,990 | 8,281 | 9,172 | 8,363 | |||||
Debt and finance lease obligations - long-term
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89,993 | 90,715 | 192,025 | 192,118 | 190,853 | |||||
Operating lease obligations - long-term | 32,275 | 31,923 | 33,915 | 35,989 | 38,552 | |||||
Less: Cash and cash equivalents | (345,109) | (269,868) | (265,053) | (231,982) | (256,233) | |||||
$ | 1,274,006 | $ | 1,385,295 | $ | 1,474,894 | $ | 1,523,171 | $ | 1,436,122 |
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 (2) | 8,772 | 8,358 | 8,878 | 7,948 | ||||
Debt and finance lease obligations - long-term
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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 |
(1) | During the nine months ended June 29, 2024 and the twelve months ended September 28, 2024, $0.9 million and $5.1 million, respectively, of accelerated stock-based compensation expense was recorded in selling and administrative expense in the accompanying Consolidated Statements of Operations as a result of executive retirement agreements. |
(2) | Included in other accrued liabilities on the Condensed Consolidated Balance Sheets. |