Plexus Announces Fiscal Second Quarter Financial Results

Neenah, Wisconsin, UNITED STATES

NEENAH, WI , April 27, 2022 (GLOBE NEWSWIRE) -- Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal second quarter ended April 2, 2022, and guidance for our fiscal third quarter ending July 2, 2022.

  • Reports fiscal second quarter revenue of $889 million, GAAP operating margin of 4.0% and GAAP diluted EPS of $0.95, including $0.21 of stock-based compensation expense
  • Initiates fiscal third quarter revenue guidance of $885 to $925 million with GAAP diluted EPS of $1.02 to $1.18, including $0.21 of stock-based compensation expense
 Three Months Ended
 Apr 2, 2022 Apr 2, 2022 Jul 2, 2022
 Q2F22 Results Q2F22 Guidance Q3F22 Guidance
Summary GAAP Items     
Revenue (in millions)$889  $820 to $860 $885 to $925
Operating margin 4.0% 3.6% to 4.0% 4.4% to 4.9%
Diluted EPS (1)$0.95  $0.76 to $0.92 $1.02 to $1.18
Summary Non-GAAP Items (2)     
Return on invested capital (ROIC) 10.2%    
Economic return 0.9%    
(1) Includes stock-based compensation expense of $0.21 for Q2F22 results, $0.23 for Q2F22 guidance and $0.21 for Q3F22 guidance.
(2) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures and a reconciliation to GAAP.

Fiscal Second Quarter 2022 Information

  • Won 38 manufacturing programs during the quarter representing $313 million in annualized revenue when fully ramped into production
  • Trailing four quarter manufacturing wins exceed $1.1 billion in annualized revenue when fully ramped into production
  • Purchased $25.0 million of our shares at an average price of $81.79 per share under our share repurchase program, leaving $11.7 million of our current $50 million authorization remaining

Todd Kelsey, CEO, commented, “Our focus on delivering operational excellence for our customers resulted in fiscal second quarter revenue of $889 million and GAAP EPS of $0.95, both exceeding our guidance range. Our engineering, supply chain, manufacturing and aftermarket services teams all played important roles in delivering the upside performance.”

Mr. Kelsey continued, “Our go-to-market team continues to produce exceptional results positioning us for sustained growth. Fiscal second quarter new manufacturing program wins totaled $313 million in annual revenue when fully ramped into production, reflecting the best quarterly performance in a decade and nearly an all-time record. This exceptional performance propelled our trailing four-quarter wins to another record high of more than $1.1 billion. In addition to the strong wins, our funnel of qualified manufacturing opportunities expanded to a record level of $3.4 billion. Momentum in manufacturing wins and qualified opportunities, when combined with robust new engineering engagements for the second consecutive quarter, supports our 9% to 12% revenue CAGR goal.”

Patrick Jermain, Executive Vice President and CFO, commented, “We generated $53 million in free cash flow during the fiscal second quarter, a result that was double our net income and exceeded our projections. The fiscal second quarter cash cycle of 98 days was favorable to our expectations and sequentially lower by five days as we benefited from increased revenue and continued progress on our working capital initiatives. While we expect an investment in working capital during the fiscal third quarter to support projected revenue growth, we anticipate generating positive free cash flow for the second half of fiscal 2022.”

Mr. Kelsey further commented, “We are guiding fiscal third quarter revenue of $885 to $925 million, which reflects the benefits of ongoing strong customer demand and new program ramps as well as the challenges created by continued supply chain constraints. We anticipate the revenue ramp will further leverage an operating cost structure built to support much greater levels of customer demand, resulting in expanded GAAP operating margin of 4.4% to 4.9% and GAAP EPS of $1.02 to $1.18.”

Mr. Kelsey concluded, “We are encouraged by the accelerating momentum demonstrated by our fiscal second quarter performance. We now see the potential to deliver quarterly sequential revenue growth through fiscal 2022 and into fiscal 2023 with expansion in GAAP EPS.”

Quarterly ComparisonThree Months Ended
(in thousands, except EPS)Apr 2, 2022 Jan 1, 2022 Apr 3, 2021
Revenue$888,723  $817,456  $880,885 
Gross profit 76,510   69,996   91,002 
Operating income 35,837   30,473   50,687 
Net income 26,869   23,423   41,763 
Diluted EPS$0.95  $0.82  $1.42 
Gross margin 8.6%  8.6%  10.3%
Operating margin 4.0%  3.7%  5.8%
ROIC (1) 10.2%  10.0%  17.3%
Economic return (1) 0.9%  0.7%  9.2%
(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 and second quarters of fiscal 2022, up one percentage point from the second quarter of fiscal 2021 when the top 10 customers comprised 55% of revenue.

Business Segments ($ in millions)Three Months Ended
 Apr 2, 2022 Jan 1, 2022 Apr 3, 2021
Americas$311  $277  $365 
Asia-Pacific 534   491   459 
Europe, Middle East and Africa 74   73   83 
Elimination of inter-segment sales (30)  (24)  (26)
Total Revenue$889  $817  $881 

Market Sectors ($ in millions)Three Months Ended
 Apr 2, 2022 Jan 1, 2022 Apr 3, 2021
Industrial$41547% $36445% $40746%
Healthcare/Life Sciences 35340%  34442%  35040%
Aerospace/Defense 12113%  10913%  12414%
Total Revenue$889  $817  $881 

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 second quarter of fiscal 2022 was 10.2%. 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 2022 is 9.3%. ROIC for the second quarter of fiscal 2022 less Plexus’ weighted average cost of capital resulted in an economic return of 0.9%.

Free Cash Flow
Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended April 2, 2022, cash flows provided by operations of $84.3 million, less capital expenditures of $30.9 million, resulted in free cash flow of $53.4 million.

Cash Cycle DaysThree Months Ended
 Apr 2, 2022 Jan 1, 2022 Apr 3, 2021
Days in Accounts Receivable59 66 52
Days in Contract Assets12 12 12
Days in Inventory154 145 89
Days in Accounts Payable(86) (87) (61)
Days in Cash Deposits(41) (33) (20)
Annualized Cash Cycle *98 103 72
* 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 Q2 Earnings Conference Call and Webcast
When:Thursday, April 28, 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,, where a slide presentation reviewing fiscal second quarter 2022 results will also be made available ahead of the conference call.

Conference Call: +1.866.922.5180 with passcode: 5067109
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: 5067109

Investor and Media Contact
Shawn Harrison

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 20,000 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

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 the recent conflict between Russia and Ukraine, 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.

(in thousands, except per share data)
 Three Months Ended Six Months Ended
 Apr 2, Apr 3, Apr 2, Apr 3,
  2022   2021   2022   2021 
Net sales$888,723  $880,885  $1,706,179  $1,711,240 
Cost of sales 812,213   789,883   1,559,673   1,540,961 
Gross profit 76,510   91,002   146,506   170,279 
Operating expenses:       
Selling and administrative expenses 40,673   38,286   78,175   70,697 
Restructuring and impairment charges    2,029   2,021   2,029 
Operating income 35,837   50,687   66,310   97,553 
Other income (expense):       
Interest expense (3,345)  (3,818)  (6,391)  (7,904)
Interest income 262   390   533   764 
Miscellaneous, net (1,446)  (825)  (2,369)  (2,343)
Income before income taxes 31,308   46,434   58,083   88,070 
Income tax expense 4,439   4,671   7,791   10,108 
Net income$26,869  $41,763  $50,292  $77,962 
Earnings per share:       
Basic$0.96  $1.45  $1.80  $2.71 
Diluted$0.95  $1.42  $1.76  $2.65 
Weighted average shares outstanding:       
Basic 27,987   28,736   28,002   28,799 
Diluted 28,427   29,310   28,566   29,409 

(in thousands, except per share data)
 Apr 2, Oct 2,
  2022   2021 
Current assets:   
Cash and cash equivalents$307,964  $270,172 
Restricted cash 912   341 
Accounts receivable 571,085   519,684 
Contract assets 116,087   115,283 
Inventories 1,374,285   972,312 
Prepaid expenses and other 64,640   53,094 
Total current assets 2,434,973   1,930,886 
Property, plant and equipment, net 425,874   395,094 
Operating lease right-of-use assets 67,062   72,087 
Deferred income taxes 27,271   27,385 
Other assets 34,868   36,441 
Total non-current assets 555,075   531,007 
Total assets$2,990,048  $2,461,893 
Current liabilities:   
Current portion of long-term debt and finance lease obligations$222,393  $66,313 
Accounts payable 767,536   634,969 
Customer deposits 364,572   204,985 
Accrued salaries and wages 62,010   75,394 
Other accrued liabilities 242,626   147,042 
Total current liabilities 1,659,137   1,128,703 
Long-term debt and finance lease obligations, net of current portion 186,069   187,033 
Accrued income taxes payable 42,330   47,974 
Long-term operating lease liabilities 34,347   37,970 
Deferred income taxes 5,295   5,677 
Other liabilities 22,279   26,304 
Total non-current liabilities 290,320   304,958 
Total liabilities 1,949,457   1,433,661 
Shareholders’ equity:   
Common stock, $.01 par value, 200,000 shares authorized, 54,077 and 53,849 shares issued, respectively, and 27,859 and 28,047 shares outstanding, respectively 541   538 
Additional paid-in-capital 641,175   639,778 
Common stock held in treasury, at cost, 26,218 and 25,802, respectively (1,078,226)  (1,043,091)
Retained earnings 1,484,283   1,433,991 
Accumulated other comprehensive loss (7,182)  (2,984)
Total shareholders’ equity 1,040,591   1,028,232 
Total liabilities and shareholders’ equity$2,990,048  $2,461,893 

(in thousands, except per share data)
 Three Months Ended Six Months Ended
 Apr 2, Jan 1, Apr 3, Apr 2, Apr 3,
  2022   2022   2021   2022   2021 
Operating income, as reported$35,837  $30,473  $50,687  $66,310  $97,553 
Operating margin, as reported 4.0%  3.7%  5.8%  3.9%  5.7%
Non-GAAP adjustments:         
Restructuring and impairment charges (1)    2,021   2,029   2,021   2,029 
Adjusted operating income$35,837  $32,494  $52,716  $68,331  $99,582 
Adjusted operating margin 4.0%  4.0%  6.0%  4.0%  5.8%
Net income, as reported$26,869  $23,423  $41,763  $50,292  $77,962 
Non-GAAP adjustments:         
Restructuring and impairment charges, net of tax (1)    1,809   1,816   1,809   1,816 
Adjusted net income$26,869  $25,232  $43,579  $52,101  $79,778 
Diluted earnings per share, as reported$0.95  $0.82  $1.42  $1.76  $2.65 
Non-GAAP per share adjustments:         
Restructuring and impairment charges, net of tax (1)    0.06   0.07   0.06   0.06 
Adjusted diluted earnings per share$0.95  $0.88  $1.49  $1.82  $2.71 
(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. During the three months ended April 3, 2021, restructuring charges of $2.0 million, or $1.8 million net of taxes, were incurred for employee severance costs associated with a reduction in workforce primarily in the EMEA region.

(in thousands)
ROIC and Economic Return Calculations Six Months Ended Three Months Ended Six Months Ended
 Apr 2, Jan 1, Apr 3,
 2022  2022  2021 
Operating income, as reported $66,310   $30,473   $97,553 
Restructuring and impairment charges+ 2,021  + 2,021  + 2,029 
Adjusted operating income $68,331   $32,494   $99,582 
 x 2  x 4  x 2 
Adjusted annualized operating income $136,662   $129,976   $199,164 
Adjusted effective tax ratex 14% x 13% x 13%
Tax impact  19,133    16,897    25,891 
Adjusted operating income (tax effected) $117,529   $113,079   $173,273 
Average invested capital÷$1,151,775  ÷$1,135,312  ÷$1,002,260 
ROIC  10.2%   10.0%   17.3%
Weighted average cost of capital- 9.3% - 9.3% - 8.1%
Economic return  0.9%   0.7%   9.2%

 Three Months Ended
Average Invested Capital CalculationsApr 2, Jan 1, Oct 2, Jul 3, Apr 3, Jan 2, Oct 3,
  2022   2022   2021   2021   2021   2021   2020 
Equity$1,040,591  $1,044,095  $1,028,232  $1,020,450  $1,013,952  $1,006,959  $977,480 
Debt and finance lease obligations - current 222,393   151,417   66,313   60,468   50,229   148,408   146,829 
Operating lease obligations - current (1) 9,266   9,507   9,877   9,130   9,314   9,351   7,724 
Debt and finance lease obligations - long-term 186,069   187,075   187,033   187,690   188,730   188,148   187,975 
Operating lease obligations - long-term 34,347   36,343   37,970   33,193   34,751   37,052   36,779 
Cash and cash equivalents (307,964)  (217,067)  (270,172)  (303,255)  (294,370)  (356,724)  (385,807)
 $1,184,702  $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.