Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Plexus Announces Fiscal Fourth Quarter and Fiscal Year 2022 Financial Results By: Plexus via GlobeNewswire October 26, 2022 at 16:15 PM EDT NEENAH, WI, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal fourth quarter and fiscal year ended October 1, 2022, and guidance for our fiscal first quarter 2023 ending December 31, 2022. Reports record fiscal fourth quarter 2022 revenue of $1.12 billion, GAAP operating margin of 5.5% and GAAP diluted EPS of $1.78, including $0.18 of stock-based compensation expenseReports record fiscal 2022 revenue of $3.81 billion, GAAP operating margin of 4.7% and GAAP diluted EPS of $4.86, including $0.82 of stock-based compensation expenseInitiates fiscal first quarter 2023 revenue guidance of $1.08 to $1.13 billion with GAAP diluted EPS of $1.40 to $1.58, including $0.20 of stock-based compensation expense Three Months Ended Oct 1, 2022 Oct 1, 2022 Dec 31, 2022 Q4F22 Results Q4F22 Guidance Q1F23 GuidanceSummary GAAP Items Revenue (in millions)$1,124 $980 to $1,020 $1,080 to $1,130Operating margin5.5% 4.7% to 5.2% 5.0% to 5.5%Diluted EPS (1)$1.78 $1.19 to $1.35 $1.40 to $1.58 Summary Non-GAAP Items (2) Return on invested capital (ROIC)13.0% Economic return3.7% (1) Includes stock-based compensation expense of $0.18 for Q4F22 results, $0.22 for Q4F22 guidance and $0.20 for Q1F23 guidance.(2) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures and a reconciliation to the comparable GAAP measures. Fiscal Fourth Quarter 2022 Information Won 32 manufacturing programs during the quarter representing $214 million in annualized revenue when fully ramped into productionTrailing four-quarter manufacturing wins of $1 billion in annualized revenue when fully ramped into productionPurchased $3.5 million of our shares at an average price of $90.63 per share under our share repurchase program, leaving $46.5 million of the current $50 million authorization remaining Fiscal Year 2022 Information GAAP diluted EPS of $4.86ROIC of 13.0%, delivered an economic return of 370 basis points above our weighted average cost of capital of 9.3%Purchased $50.4 million of our shares at an average price of $83.55 per share under our share repurchase programs Todd Kelsey, Chief Executive Officer, commented, "The unwavering commitment to operational excellence of Plexus’ nearly 25,000 dedicated team members resulted in accelerating momentum as our fiscal 2022 progressed, culminating in record quarterly revenue and operating profit. With this strong base to build upon entering our fiscal 2023, the benefit of a large backlog of unfulfilled demand, share gains and participation in secular growth markets, we see the opportunity for continued momentum while acknowledging ongoing uncertainties in the macroeconomic outlook and geopolitical climate." Mr. Kelsey continued, "Our fiscal fourth quarter revenue of $1.12 billion, representing year-over-year growth of 33%, 5.5% GAAP operating margin and GAAP EPS of $1.78 exceeded our guidance. Our further success in mitigating the challenges from constrained component supply resulted in strong sequential revenue growth that drove outstanding profitability." Mr. Kelsey further commented, "Our funnel of qualified manufacturing opportunities remains at a record $3.4 billion, while quarterly new manufacturing program wins totaled $214 million. Included in these wins is an exciting opportunity with a new customer in vehicle, truck and bus electrification, building upon our existing presence in this secular growth market." Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, "Our fiscal fourth quarter cash cycle of 100 days was consistent with expectations. The quarter included strategic investments in working capital to support the significant revenue delivered in the fiscal fourth quarter and projected future growth. I was pleased with our ability to steadily improve operating performance and manage working capital to drive sequential improvement in our ROIC as we moved through our fiscal year. Fiscal 2022 ROIC of 13% equated to 370 basis points of economic return, creating substantial shareholder value. While working capital investments will continue in support of our customers’ strong demand, we expect our cash cycle to improve as our fiscal 2023 progresses." Mr. Kelsey concluded, "We are guiding fiscal first quarter revenue of $1.08 billion to $1.13 billion, GAAP operating margin of 5.0% to 5.5% and GAAP EPS of $1.40 to $1.58. Our guidance reflects the benefit from ongoing new program ramps and robust customer demand with consideration given to the continuation of supply chain challenges and macroeconomic uncertainty. We also anticipate an impact to GAAP EPS due to the absence of foreign exchange gains and greater interest and income tax expense relative to the prior quarter.” Quarterly & Annual ComparisonThree Months Ended Twelve Months Ended(in thousands, except EPS)Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Revenue$1,123,848 $981,341 $843,238 $3,811,368 $3,368,865 Gross profit 107,105 93,618 78,967 347,229 323,296 Operating income 62,314 49,561 42,342 178,185 176,268 Net income 50,457 37,494 33,341 138,243 138,912 Diluted EPS$1.78 $1.33 $1.16 $4.86 $4.76 Gross margin 9.5% 9.5% 9.4% 9.1% 9.6%Operating margin 5.5% 5.1% 5.0% 4.7% 5.2% ROIC (1) 13.0% 11.5% 15.4% 13.0% 15.4%Economic return (1) 3.7% 2.2% 7.3% 3.7% 7.3% (1) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures discussed and/or disclosed in this release, such as adjusted operating margin, adjusted net income, adjusted diluted EPS, ROIC and economic return and a reconciliation of these measures to their comparable GAAP measures. Business Segment and Market Sector Revenue Plexus measures operational performance and allocates resources on a geographic segment basis. Plexus also reports revenue based on the market sector breakout set forth in the table below, which reflects Plexus’ market sector focused strategy. Top 10 customers comprised 58% of revenue during the fourth quarter of fiscal 2022. This is up two percentage points from each of the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021. For fiscal 2022, top 10 customers comprised 56% of revenue, up one percentage point from fiscal 2021. Business Segments ($ in millions)Three Months Ended Twelve Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Americas$380 $343 $307 $1,311 $1,318 Asia-Pacific 689 586 494 2,300 1,851 Europe, Middle East and Africa 85 84 74 316 313 Elimination of inter-segment sales (30) (32) (32) (116) (113)Total Revenue$1,124 $981 $843 $3,811 $3,369 Market Sectors ($ in millions)Three Months Ended Twelve Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Industrial$52046% $45446% $39246% $1,75346% $1,54946%Healthcare/Life Sciences 46742% 40141% 33340% 1,56541% 1,32739%Aerospace/Defense 13712% 12613% 11814% 49313% 49315%Total Revenue$1,124 $981 $843 $3,811 $3,369 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 fiscal year 2022 was 13.0%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a five-quarter period for the fiscal year. 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 was 9.3%. ROIC for fiscal year 2022 less Plexus’ weighted average cost of capital resulted in an economic return of 3.7%. Free Cash Flow Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended October 1, 2022, cash flows used in operations was $0.4 million, less capital expenditures of $16.7 million, resulting in negative free cash flow of $17.1 million. For the fiscal year ended October 1, 2022, cash flows used in operations was $26.3 million, less capital expenditures of $101.6 million, resulting in negative free cash flow of $127.9 million. Cash Cycle DaysThree Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021Days in Accounts Receivable60 57 56Days in Contract Assets11 12 13Days in Inventory144 160 116Days in Accounts Payable(72) (87) (76)Days in Cash Deposits(43) (40) (24)Annualized Cash Cycle *100 102 85* 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 Q4 Earnings Conference Call and WebcastWhen: Thursday, October 27, 2022 at 8:30 a.m. Eastern TimeWhere: 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:Audio conferencing link:https://register.vevent.com/register/BI0fdf9621f40541699b8a6ce0d8aa8fa8 Webcast link:https://edge.media-server.com/mmc/p/w4wswspi Replay: The webcast will be archived on the Plexus website and will be available as on-demand for 12 months Investor and Media ContactShawn Harrison+1.920.969.6325shawn.harrison@plexus.com About PlexusSince 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 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; the potential effect of other world or local events or other events outside our control (such as the 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. PLEXUS CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)(unaudited) Three Months Ended Twelve Months Ended Oct 1, Oct 2, Oct 1, Oct 2, 2022 2021 2022 2021 Net sales$1,123,848 $843,238 $3,811,368 $3,368,865 Cost of sales 1,016,743 764,271 3,464,139 3,045,569 Gross profit 107,105 78,967 347,229 323,296 Operating expenses: Selling and administrative expenses 44,791 36,625 167,023 143,761 Restructuring and impairment charges — — 2,021 3,267 Operating income 62,314 42,342 178,185 176,268 Other income (expense): Interest expense (5,544) (3,159) (15,858) (14,253)Interest income 454 300 1,305 1,372 Miscellaneous, net (282) (54) (5,329) (2,976)Income before income taxes 56,942 39,429 158,303 160,411 Income tax expense 6,485 6,088 20,060 21,499 Net income$50,457 $33,341 $138,243 $138,912 Earnings per share: Basic$1.82 $1.18 $4.96 $4.86 Diluted$1.78 $1.16 $4.86 $4.76 Weighted average shares outstanding: Basic 27,710 28,179 27,862 28,575 Diluted 28,293 28,775 28,439 29,167 PLEXUS CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except per share data)(unaudited) Oct 1, Oct 2, 2022 2021 ASSETS Current assets: Cash and cash equivalents$274,805 $270,172 Restricted cash 665 341 Accounts receivable 737,696 519,684 Contract assets 138,540 115,283 Inventories 1,602,783 972,312 Prepaid expenses and other 61,633 53,094 Total current assets 2,816,122 1,930,886 Property, plant and equipment, net 444,705 395,094 Operating lease right-of-use assets 65,134 72,087 Deferred income taxes 39,075 27,385 Other assets 28,189 36,441 Total non-current assets 577,103 531,007 Total assets$3,393,225 $2,461,893 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt and finance lease obligations$273,971 $66,313 Accounts payable 805,583 634,969 Customer deposits 480,486 204,985 Accrued salaries and wages 88,876 75,394 Other accrued liabilities 357,273 147,042 Total current liabilities 2,006,189 1,128,703 Long-term debt and finance lease obligations, net of current portion 187,776 187,033 Accrued income taxes payable 42,019 47,974 Long-term operating lease liabilities 33,628 37,970 Deferred income taxes 6,327 5,677 Other liabilities 21,555 26,304 Total non-current liabilities 291,305 304,958 Total liabilities 2,297,494 1,433,661 Shareholders’ equity: Common stock, $.01 par value, 200,000 shares authorized, 54,084 and 53,849 shares issued, respectively, and 27,679 and 28,047 shares outstanding, respectively 541 538 Additional paid-in-capital 652,467 639,778 Common stock held in treasury, at cost, 26,405 and 25,802, respectively (1,093,483) (1,043,091)Retained earnings 1,572,234 1,433,991 Accumulated other comprehensive loss (36,028) (2,984)Total shareholders’ equity 1,095,731 1,028,232 Total liabilities and shareholders’ equity$3,393,225 $2,461,893 PLEXUS CORP. AND SUBSIDIARIESNON-GAAP SUPPLEMENTAL INFORMATION Table 1(in thousands, except per share data)(unaudited) Three Months Ended Twelve Months Ended Oct 1, Jul 2, Oct 2, Oct 1, Oct 2, 2022 2022 2021 2022 2021 Operating income, as reported$62,314 $49,561 $42,342 $178,185 $176,268 Operating margin, as reported 5.5% 5.1% 5.0% 4.7% 5.2% Non-GAAP adjustments: Restructuring and impairment charges (1) — — — 2,021 3,267 Adjusted operating income$62,314 $49,561 $42,342 $180,206 $179,535 Adjusted operating margin 5.5% 5.1% 5.0% 4.7% 5.3% Net income, as reported$50,457 $37,494 $33,341 $138,243 $138,912 Non-GAAP adjustments: Restructuring and impairment charges, net of tax (1) — — — 1,809 2,924 Adjusted net income$50,457 $37,494 $33,341 $140,052 $141,836 Diluted earnings per share, as reported$1.78 $1.33 $1.16 $4.86 $4.76 Non-GAAP per share adjustments: Restructuring and impairment charges, net of tax (1) — — — 0.06 0.10 Adjusted diluted earnings per share$1.78 $1.33 $1.16 $4.92 $4.86 (1) During the twelve months ended October 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 the Company’s APAC region. During the twelve months ended October 2, 2021, restructuring and impairment charges of $3.3 million, or $2.9 million net of taxes, were incurred for employee severance costs associated with the reduction of the Company's workforce primarily in the EMEA and AMER regions. PLEXUS CORP. AND SUBSIDIARIESNON-GAAP SUPPLEMENTAL INFORMATION Table 2(in thousands)(unaudited) ROIC and Economic Return Calculations Twelve Months Ended Nine Months Ended Twelve Months Ended Oct 1, Jul 2, Oct 2, 2022 2022 2021Operating income, as reported $178,185 $115,871 $176,268 Restructuring and impairment charges+ 2,021 + 2,021 + 3,267 Adjusted operating income $180,206 $117,892 $179,535 ÷ 3 $39,297 x 4 Adjusted annualized operating income $180,206 $157,188 $179,535 Adjusted effective tax ratex 13% x 14% x 13%Tax impact 23,427 22,006 23,340 Adjusted operating income (tax effected) $156,779 $135,182 $156,195 Average invested capital÷$1,207,357 ÷$1,178,134 ÷$1,014,742 ROIC 13.0% 11.5% 15.4%Weighted average cost of capital- 9.3% - 9.3% - 8.1%Economic return 3.7% 2.2% 7.3% Three Months EndedAverage Invested Capital CalculationsOct 1, Jul 2, Apr 2, Jan 1, Oct 2, 2022 2022 2022 2022 2021 Equity$1,095,731 $1,058,190 $1,040,591 $1,044,095 $1,028,232 Plus: Debt and finance lease obligations - current 273,971 250,012 222,393 151,417 66,313 Operating lease obligations - current (1) 7,948 8,640 9,266 9,507 9,877 Debt and finance lease obligations - long-term 187,776 184,707 186,069 187,075 187,033 Operating lease obligations - long-term 33,628 32,270 34,347 36,343 37,970 Less: Cash and cash equivalents (274,805) (276,608) (307,964) (217,067) (270,172) $1,324,249 $1,257,211 $1,184,702 $1,211,370 $1,059,253 Three Months EndedAverage Invested Capital CalculationsJul 3, Apr 3, Jan 2, Oct 3, 2021 2021 2021 2020 Equity$1,020,450 $1,013,952 $1,006,959 $977,480 Plus: Debt and finance lease obligations - current 60,468 50,229 148,408 146,829 Operating lease obligations - current (1) 9,130 9,314 9,351 7,724 Debt and finance lease obligations - long-term 187,690 188,730 188,148 187,975 Operating lease obligations - long-term 33,193 34,751 37,052 36,779 Less: Cash and cash equivalents (303,255) (294,370) (356,724) (385,807) $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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Plexus Announces Fiscal Fourth Quarter and Fiscal Year 2022 Financial Results By: Plexus via GlobeNewswire October 26, 2022 at 16:15 PM EDT NEENAH, WI, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal fourth quarter and fiscal year ended October 1, 2022, and guidance for our fiscal first quarter 2023 ending December 31, 2022. Reports record fiscal fourth quarter 2022 revenue of $1.12 billion, GAAP operating margin of 5.5% and GAAP diluted EPS of $1.78, including $0.18 of stock-based compensation expenseReports record fiscal 2022 revenue of $3.81 billion, GAAP operating margin of 4.7% and GAAP diluted EPS of $4.86, including $0.82 of stock-based compensation expenseInitiates fiscal first quarter 2023 revenue guidance of $1.08 to $1.13 billion with GAAP diluted EPS of $1.40 to $1.58, including $0.20 of stock-based compensation expense Three Months Ended Oct 1, 2022 Oct 1, 2022 Dec 31, 2022 Q4F22 Results Q4F22 Guidance Q1F23 GuidanceSummary GAAP Items Revenue (in millions)$1,124 $980 to $1,020 $1,080 to $1,130Operating margin5.5% 4.7% to 5.2% 5.0% to 5.5%Diluted EPS (1)$1.78 $1.19 to $1.35 $1.40 to $1.58 Summary Non-GAAP Items (2) Return on invested capital (ROIC)13.0% Economic return3.7% (1) Includes stock-based compensation expense of $0.18 for Q4F22 results, $0.22 for Q4F22 guidance and $0.20 for Q1F23 guidance.(2) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures and a reconciliation to the comparable GAAP measures. Fiscal Fourth Quarter 2022 Information Won 32 manufacturing programs during the quarter representing $214 million in annualized revenue when fully ramped into productionTrailing four-quarter manufacturing wins of $1 billion in annualized revenue when fully ramped into productionPurchased $3.5 million of our shares at an average price of $90.63 per share under our share repurchase program, leaving $46.5 million of the current $50 million authorization remaining Fiscal Year 2022 Information GAAP diluted EPS of $4.86ROIC of 13.0%, delivered an economic return of 370 basis points above our weighted average cost of capital of 9.3%Purchased $50.4 million of our shares at an average price of $83.55 per share under our share repurchase programs Todd Kelsey, Chief Executive Officer, commented, "The unwavering commitment to operational excellence of Plexus’ nearly 25,000 dedicated team members resulted in accelerating momentum as our fiscal 2022 progressed, culminating in record quarterly revenue and operating profit. With this strong base to build upon entering our fiscal 2023, the benefit of a large backlog of unfulfilled demand, share gains and participation in secular growth markets, we see the opportunity for continued momentum while acknowledging ongoing uncertainties in the macroeconomic outlook and geopolitical climate." Mr. Kelsey continued, "Our fiscal fourth quarter revenue of $1.12 billion, representing year-over-year growth of 33%, 5.5% GAAP operating margin and GAAP EPS of $1.78 exceeded our guidance. Our further success in mitigating the challenges from constrained component supply resulted in strong sequential revenue growth that drove outstanding profitability." Mr. Kelsey further commented, "Our funnel of qualified manufacturing opportunities remains at a record $3.4 billion, while quarterly new manufacturing program wins totaled $214 million. Included in these wins is an exciting opportunity with a new customer in vehicle, truck and bus electrification, building upon our existing presence in this secular growth market." Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, "Our fiscal fourth quarter cash cycle of 100 days was consistent with expectations. The quarter included strategic investments in working capital to support the significant revenue delivered in the fiscal fourth quarter and projected future growth. I was pleased with our ability to steadily improve operating performance and manage working capital to drive sequential improvement in our ROIC as we moved through our fiscal year. Fiscal 2022 ROIC of 13% equated to 370 basis points of economic return, creating substantial shareholder value. While working capital investments will continue in support of our customers’ strong demand, we expect our cash cycle to improve as our fiscal 2023 progresses." Mr. Kelsey concluded, "We are guiding fiscal first quarter revenue of $1.08 billion to $1.13 billion, GAAP operating margin of 5.0% to 5.5% and GAAP EPS of $1.40 to $1.58. Our guidance reflects the benefit from ongoing new program ramps and robust customer demand with consideration given to the continuation of supply chain challenges and macroeconomic uncertainty. We also anticipate an impact to GAAP EPS due to the absence of foreign exchange gains and greater interest and income tax expense relative to the prior quarter.” Quarterly & Annual ComparisonThree Months Ended Twelve Months Ended(in thousands, except EPS)Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Revenue$1,123,848 $981,341 $843,238 $3,811,368 $3,368,865 Gross profit 107,105 93,618 78,967 347,229 323,296 Operating income 62,314 49,561 42,342 178,185 176,268 Net income 50,457 37,494 33,341 138,243 138,912 Diluted EPS$1.78 $1.33 $1.16 $4.86 $4.76 Gross margin 9.5% 9.5% 9.4% 9.1% 9.6%Operating margin 5.5% 5.1% 5.0% 4.7% 5.2% ROIC (1) 13.0% 11.5% 15.4% 13.0% 15.4%Economic return (1) 3.7% 2.2% 7.3% 3.7% 7.3% (1) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures discussed and/or disclosed in this release, such as adjusted operating margin, adjusted net income, adjusted diluted EPS, ROIC and economic return and a reconciliation of these measures to their comparable GAAP measures. Business Segment and Market Sector Revenue Plexus measures operational performance and allocates resources on a geographic segment basis. Plexus also reports revenue based on the market sector breakout set forth in the table below, which reflects Plexus’ market sector focused strategy. Top 10 customers comprised 58% of revenue during the fourth quarter of fiscal 2022. This is up two percentage points from each of the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021. For fiscal 2022, top 10 customers comprised 56% of revenue, up one percentage point from fiscal 2021. Business Segments ($ in millions)Three Months Ended Twelve Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Americas$380 $343 $307 $1,311 $1,318 Asia-Pacific 689 586 494 2,300 1,851 Europe, Middle East and Africa 85 84 74 316 313 Elimination of inter-segment sales (30) (32) (32) (116) (113)Total Revenue$1,124 $981 $843 $3,811 $3,369 Market Sectors ($ in millions)Three Months Ended Twelve Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Industrial$52046% $45446% $39246% $1,75346% $1,54946%Healthcare/Life Sciences 46742% 40141% 33340% 1,56541% 1,32739%Aerospace/Defense 13712% 12613% 11814% 49313% 49315%Total Revenue$1,124 $981 $843 $3,811 $3,369 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 fiscal year 2022 was 13.0%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a five-quarter period for the fiscal year. 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 was 9.3%. ROIC for fiscal year 2022 less Plexus’ weighted average cost of capital resulted in an economic return of 3.7%. Free Cash Flow Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended October 1, 2022, cash flows used in operations was $0.4 million, less capital expenditures of $16.7 million, resulting in negative free cash flow of $17.1 million. For the fiscal year ended October 1, 2022, cash flows used in operations was $26.3 million, less capital expenditures of $101.6 million, resulting in negative free cash flow of $127.9 million. Cash Cycle DaysThree Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021Days in Accounts Receivable60 57 56Days in Contract Assets11 12 13Days in Inventory144 160 116Days in Accounts Payable(72) (87) (76)Days in Cash Deposits(43) (40) (24)Annualized Cash Cycle *100 102 85* 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 Q4 Earnings Conference Call and WebcastWhen: Thursday, October 27, 2022 at 8:30 a.m. Eastern TimeWhere: 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:Audio conferencing link:https://register.vevent.com/register/BI0fdf9621f40541699b8a6ce0d8aa8fa8 Webcast link:https://edge.media-server.com/mmc/p/w4wswspi Replay: The webcast will be archived on the Plexus website and will be available as on-demand for 12 months Investor and Media ContactShawn Harrison+1.920.969.6325shawn.harrison@plexus.com About PlexusSince 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 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; the potential effect of other world or local events or other events outside our control (such as the 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. PLEXUS CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)(unaudited) Three Months Ended Twelve Months Ended Oct 1, Oct 2, Oct 1, Oct 2, 2022 2021 2022 2021 Net sales$1,123,848 $843,238 $3,811,368 $3,368,865 Cost of sales 1,016,743 764,271 3,464,139 3,045,569 Gross profit 107,105 78,967 347,229 323,296 Operating expenses: Selling and administrative expenses 44,791 36,625 167,023 143,761 Restructuring and impairment charges — — 2,021 3,267 Operating income 62,314 42,342 178,185 176,268 Other income (expense): Interest expense (5,544) (3,159) (15,858) (14,253)Interest income 454 300 1,305 1,372 Miscellaneous, net (282) (54) (5,329) (2,976)Income before income taxes 56,942 39,429 158,303 160,411 Income tax expense 6,485 6,088 20,060 21,499 Net income$50,457 $33,341 $138,243 $138,912 Earnings per share: Basic$1.82 $1.18 $4.96 $4.86 Diluted$1.78 $1.16 $4.86 $4.76 Weighted average shares outstanding: Basic 27,710 28,179 27,862 28,575 Diluted 28,293 28,775 28,439 29,167 PLEXUS CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except per share data)(unaudited) Oct 1, Oct 2, 2022 2021 ASSETS Current assets: Cash and cash equivalents$274,805 $270,172 Restricted cash 665 341 Accounts receivable 737,696 519,684 Contract assets 138,540 115,283 Inventories 1,602,783 972,312 Prepaid expenses and other 61,633 53,094 Total current assets 2,816,122 1,930,886 Property, plant and equipment, net 444,705 395,094 Operating lease right-of-use assets 65,134 72,087 Deferred income taxes 39,075 27,385 Other assets 28,189 36,441 Total non-current assets 577,103 531,007 Total assets$3,393,225 $2,461,893 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt and finance lease obligations$273,971 $66,313 Accounts payable 805,583 634,969 Customer deposits 480,486 204,985 Accrued salaries and wages 88,876 75,394 Other accrued liabilities 357,273 147,042 Total current liabilities 2,006,189 1,128,703 Long-term debt and finance lease obligations, net of current portion 187,776 187,033 Accrued income taxes payable 42,019 47,974 Long-term operating lease liabilities 33,628 37,970 Deferred income taxes 6,327 5,677 Other liabilities 21,555 26,304 Total non-current liabilities 291,305 304,958 Total liabilities 2,297,494 1,433,661 Shareholders’ equity: Common stock, $.01 par value, 200,000 shares authorized, 54,084 and 53,849 shares issued, respectively, and 27,679 and 28,047 shares outstanding, respectively 541 538 Additional paid-in-capital 652,467 639,778 Common stock held in treasury, at cost, 26,405 and 25,802, respectively (1,093,483) (1,043,091)Retained earnings 1,572,234 1,433,991 Accumulated other comprehensive loss (36,028) (2,984)Total shareholders’ equity 1,095,731 1,028,232 Total liabilities and shareholders’ equity$3,393,225 $2,461,893 PLEXUS CORP. AND SUBSIDIARIESNON-GAAP SUPPLEMENTAL INFORMATION Table 1(in thousands, except per share data)(unaudited) Three Months Ended Twelve Months Ended Oct 1, Jul 2, Oct 2, Oct 1, Oct 2, 2022 2022 2021 2022 2021 Operating income, as reported$62,314 $49,561 $42,342 $178,185 $176,268 Operating margin, as reported 5.5% 5.1% 5.0% 4.7% 5.2% Non-GAAP adjustments: Restructuring and impairment charges (1) — — — 2,021 3,267 Adjusted operating income$62,314 $49,561 $42,342 $180,206 $179,535 Adjusted operating margin 5.5% 5.1% 5.0% 4.7% 5.3% Net income, as reported$50,457 $37,494 $33,341 $138,243 $138,912 Non-GAAP adjustments: Restructuring and impairment charges, net of tax (1) — — — 1,809 2,924 Adjusted net income$50,457 $37,494 $33,341 $140,052 $141,836 Diluted earnings per share, as reported$1.78 $1.33 $1.16 $4.86 $4.76 Non-GAAP per share adjustments: Restructuring and impairment charges, net of tax (1) — — — 0.06 0.10 Adjusted diluted earnings per share$1.78 $1.33 $1.16 $4.92 $4.86 (1) During the twelve months ended October 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 the Company’s APAC region. During the twelve months ended October 2, 2021, restructuring and impairment charges of $3.3 million, or $2.9 million net of taxes, were incurred for employee severance costs associated with the reduction of the Company's workforce primarily in the EMEA and AMER regions. PLEXUS CORP. AND SUBSIDIARIESNON-GAAP SUPPLEMENTAL INFORMATION Table 2(in thousands)(unaudited) ROIC and Economic Return Calculations Twelve Months Ended Nine Months Ended Twelve Months Ended Oct 1, Jul 2, Oct 2, 2022 2022 2021Operating income, as reported $178,185 $115,871 $176,268 Restructuring and impairment charges+ 2,021 + 2,021 + 3,267 Adjusted operating income $180,206 $117,892 $179,535 ÷ 3 $39,297 x 4 Adjusted annualized operating income $180,206 $157,188 $179,535 Adjusted effective tax ratex 13% x 14% x 13%Tax impact 23,427 22,006 23,340 Adjusted operating income (tax effected) $156,779 $135,182 $156,195 Average invested capital÷$1,207,357 ÷$1,178,134 ÷$1,014,742 ROIC 13.0% 11.5% 15.4%Weighted average cost of capital- 9.3% - 9.3% - 8.1%Economic return 3.7% 2.2% 7.3% Three Months EndedAverage Invested Capital CalculationsOct 1, Jul 2, Apr 2, Jan 1, Oct 2, 2022 2022 2022 2022 2021 Equity$1,095,731 $1,058,190 $1,040,591 $1,044,095 $1,028,232 Plus: Debt and finance lease obligations - current 273,971 250,012 222,393 151,417 66,313 Operating lease obligations - current (1) 7,948 8,640 9,266 9,507 9,877 Debt and finance lease obligations - long-term 187,776 184,707 186,069 187,075 187,033 Operating lease obligations - long-term 33,628 32,270 34,347 36,343 37,970 Less: Cash and cash equivalents (274,805) (276,608) (307,964) (217,067) (270,172) $1,324,249 $1,257,211 $1,184,702 $1,211,370 $1,059,253 Three Months EndedAverage Invested Capital CalculationsJul 3, Apr 3, Jan 2, Oct 3, 2021 2021 2021 2020 Equity$1,020,450 $1,013,952 $1,006,959 $977,480 Plus: Debt and finance lease obligations - current 60,468 50,229 148,408 146,829 Operating lease obligations - current (1) 9,130 9,314 9,351 7,724 Debt and finance lease obligations - long-term 187,690 188,730 188,148 187,975 Operating lease obligations - long-term 33,193 34,751 37,052 36,779 Less: Cash and cash equivalents (303,255) (294,370) (356,724) (385,807) $1,007,676 $1,002,606 $1,033,194 $970,980 (1)Included in other accrued liabilities on the Condensed Consolidated Balance Sheets.
NEENAH, WI, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal fourth quarter and fiscal year ended October 1, 2022, and guidance for our fiscal first quarter 2023 ending December 31, 2022. Reports record fiscal fourth quarter 2022 revenue of $1.12 billion, GAAP operating margin of 5.5% and GAAP diluted EPS of $1.78, including $0.18 of stock-based compensation expenseReports record fiscal 2022 revenue of $3.81 billion, GAAP operating margin of 4.7% and GAAP diluted EPS of $4.86, including $0.82 of stock-based compensation expenseInitiates fiscal first quarter 2023 revenue guidance of $1.08 to $1.13 billion with GAAP diluted EPS of $1.40 to $1.58, including $0.20 of stock-based compensation expense Three Months Ended Oct 1, 2022 Oct 1, 2022 Dec 31, 2022 Q4F22 Results Q4F22 Guidance Q1F23 GuidanceSummary GAAP Items Revenue (in millions)$1,124 $980 to $1,020 $1,080 to $1,130Operating margin5.5% 4.7% to 5.2% 5.0% to 5.5%Diluted EPS (1)$1.78 $1.19 to $1.35 $1.40 to $1.58 Summary Non-GAAP Items (2) Return on invested capital (ROIC)13.0% Economic return3.7% (1) Includes stock-based compensation expense of $0.18 for Q4F22 results, $0.22 for Q4F22 guidance and $0.20 for Q1F23 guidance.(2) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures and a reconciliation to the comparable GAAP measures. Fiscal Fourth Quarter 2022 Information Won 32 manufacturing programs during the quarter representing $214 million in annualized revenue when fully ramped into productionTrailing four-quarter manufacturing wins of $1 billion in annualized revenue when fully ramped into productionPurchased $3.5 million of our shares at an average price of $90.63 per share under our share repurchase program, leaving $46.5 million of the current $50 million authorization remaining Fiscal Year 2022 Information GAAP diluted EPS of $4.86ROIC of 13.0%, delivered an economic return of 370 basis points above our weighted average cost of capital of 9.3%Purchased $50.4 million of our shares at an average price of $83.55 per share under our share repurchase programs Todd Kelsey, Chief Executive Officer, commented, "The unwavering commitment to operational excellence of Plexus’ nearly 25,000 dedicated team members resulted in accelerating momentum as our fiscal 2022 progressed, culminating in record quarterly revenue and operating profit. With this strong base to build upon entering our fiscal 2023, the benefit of a large backlog of unfulfilled demand, share gains and participation in secular growth markets, we see the opportunity for continued momentum while acknowledging ongoing uncertainties in the macroeconomic outlook and geopolitical climate." Mr. Kelsey continued, "Our fiscal fourth quarter revenue of $1.12 billion, representing year-over-year growth of 33%, 5.5% GAAP operating margin and GAAP EPS of $1.78 exceeded our guidance. Our further success in mitigating the challenges from constrained component supply resulted in strong sequential revenue growth that drove outstanding profitability." Mr. Kelsey further commented, "Our funnel of qualified manufacturing opportunities remains at a record $3.4 billion, while quarterly new manufacturing program wins totaled $214 million. Included in these wins is an exciting opportunity with a new customer in vehicle, truck and bus electrification, building upon our existing presence in this secular growth market." Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, "Our fiscal fourth quarter cash cycle of 100 days was consistent with expectations. The quarter included strategic investments in working capital to support the significant revenue delivered in the fiscal fourth quarter and projected future growth. I was pleased with our ability to steadily improve operating performance and manage working capital to drive sequential improvement in our ROIC as we moved through our fiscal year. Fiscal 2022 ROIC of 13% equated to 370 basis points of economic return, creating substantial shareholder value. While working capital investments will continue in support of our customers’ strong demand, we expect our cash cycle to improve as our fiscal 2023 progresses." Mr. Kelsey concluded, "We are guiding fiscal first quarter revenue of $1.08 billion to $1.13 billion, GAAP operating margin of 5.0% to 5.5% and GAAP EPS of $1.40 to $1.58. Our guidance reflects the benefit from ongoing new program ramps and robust customer demand with consideration given to the continuation of supply chain challenges and macroeconomic uncertainty. We also anticipate an impact to GAAP EPS due to the absence of foreign exchange gains and greater interest and income tax expense relative to the prior quarter.” Quarterly & Annual ComparisonThree Months Ended Twelve Months Ended(in thousands, except EPS)Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Revenue$1,123,848 $981,341 $843,238 $3,811,368 $3,368,865 Gross profit 107,105 93,618 78,967 347,229 323,296 Operating income 62,314 49,561 42,342 178,185 176,268 Net income 50,457 37,494 33,341 138,243 138,912 Diluted EPS$1.78 $1.33 $1.16 $4.86 $4.76 Gross margin 9.5% 9.5% 9.4% 9.1% 9.6%Operating margin 5.5% 5.1% 5.0% 4.7% 5.2% ROIC (1) 13.0% 11.5% 15.4% 13.0% 15.4%Economic return (1) 3.7% 2.2% 7.3% 3.7% 7.3% (1) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for non-GAAP financial measures discussed and/or disclosed in this release, such as adjusted operating margin, adjusted net income, adjusted diluted EPS, ROIC and economic return and a reconciliation of these measures to their comparable GAAP measures. Business Segment and Market Sector Revenue Plexus measures operational performance and allocates resources on a geographic segment basis. Plexus also reports revenue based on the market sector breakout set forth in the table below, which reflects Plexus’ market sector focused strategy. Top 10 customers comprised 58% of revenue during the fourth quarter of fiscal 2022. This is up two percentage points from each of the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021. For fiscal 2022, top 10 customers comprised 56% of revenue, up one percentage point from fiscal 2021. Business Segments ($ in millions)Three Months Ended Twelve Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Americas$380 $343 $307 $1,311 $1,318 Asia-Pacific 689 586 494 2,300 1,851 Europe, Middle East and Africa 85 84 74 316 313 Elimination of inter-segment sales (30) (32) (32) (116) (113)Total Revenue$1,124 $981 $843 $3,811 $3,369 Market Sectors ($ in millions)Three Months Ended Twelve Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021 Oct 1, 2022 Oct 2, 2021Industrial$52046% $45446% $39246% $1,75346% $1,54946%Healthcare/Life Sciences 46742% 40141% 33340% 1,56541% 1,32739%Aerospace/Defense 13712% 12613% 11814% 49313% 49315%Total Revenue$1,124 $981 $843 $3,811 $3,369 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 fiscal year 2022 was 13.0%. Plexus defines ROIC as tax-effected annualized adjusted operating income divided by average invested capital over a five-quarter period for the fiscal year. 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 was 9.3%. ROIC for fiscal year 2022 less Plexus’ weighted average cost of capital resulted in an economic return of 3.7%. Free Cash Flow Plexus defines free cash flow as cash flows provided by operations less capital expenditures. For the three months ended October 1, 2022, cash flows used in operations was $0.4 million, less capital expenditures of $16.7 million, resulting in negative free cash flow of $17.1 million. For the fiscal year ended October 1, 2022, cash flows used in operations was $26.3 million, less capital expenditures of $101.6 million, resulting in negative free cash flow of $127.9 million. Cash Cycle DaysThree Months Ended Oct 1, 2022 Jul 2, 2022 Oct 2, 2021Days in Accounts Receivable60 57 56Days in Contract Assets11 12 13Days in Inventory144 160 116Days in Accounts Payable(72) (87) (76)Days in Cash Deposits(43) (40) (24)Annualized Cash Cycle *100 102 85* 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 Q4 Earnings Conference Call and WebcastWhen: Thursday, October 27, 2022 at 8:30 a.m. Eastern TimeWhere: 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:Audio conferencing link:https://register.vevent.com/register/BI0fdf9621f40541699b8a6ce0d8aa8fa8 Webcast link:https://edge.media-server.com/mmc/p/w4wswspi Replay: The webcast will be archived on the Plexus website and will be available as on-demand for 12 months Investor and Media ContactShawn Harrison+1.920.969.6325shawn.harrison@plexus.com About PlexusSince 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 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; the potential effect of other world or local events or other events outside our control (such as the 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. PLEXUS CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)(unaudited) Three Months Ended Twelve Months Ended Oct 1, Oct 2, Oct 1, Oct 2, 2022 2021 2022 2021 Net sales$1,123,848 $843,238 $3,811,368 $3,368,865 Cost of sales 1,016,743 764,271 3,464,139 3,045,569 Gross profit 107,105 78,967 347,229 323,296 Operating expenses: Selling and administrative expenses 44,791 36,625 167,023 143,761 Restructuring and impairment charges — — 2,021 3,267 Operating income 62,314 42,342 178,185 176,268 Other income (expense): Interest expense (5,544) (3,159) (15,858) (14,253)Interest income 454 300 1,305 1,372 Miscellaneous, net (282) (54) (5,329) (2,976)Income before income taxes 56,942 39,429 158,303 160,411 Income tax expense 6,485 6,088 20,060 21,499 Net income$50,457 $33,341 $138,243 $138,912 Earnings per share: Basic$1.82 $1.18 $4.96 $4.86 Diluted$1.78 $1.16 $4.86 $4.76 Weighted average shares outstanding: Basic 27,710 28,179 27,862 28,575 Diluted 28,293 28,775 28,439 29,167 PLEXUS CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except per share data)(unaudited) Oct 1, Oct 2, 2022 2021 ASSETS Current assets: Cash and cash equivalents$274,805 $270,172 Restricted cash 665 341 Accounts receivable 737,696 519,684 Contract assets 138,540 115,283 Inventories 1,602,783 972,312 Prepaid expenses and other 61,633 53,094 Total current assets 2,816,122 1,930,886 Property, plant and equipment, net 444,705 395,094 Operating lease right-of-use assets 65,134 72,087 Deferred income taxes 39,075 27,385 Other assets 28,189 36,441 Total non-current assets 577,103 531,007 Total assets$3,393,225 $2,461,893 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt and finance lease obligations$273,971 $66,313 Accounts payable 805,583 634,969 Customer deposits 480,486 204,985 Accrued salaries and wages 88,876 75,394 Other accrued liabilities 357,273 147,042 Total current liabilities 2,006,189 1,128,703 Long-term debt and finance lease obligations, net of current portion 187,776 187,033 Accrued income taxes payable 42,019 47,974 Long-term operating lease liabilities 33,628 37,970 Deferred income taxes 6,327 5,677 Other liabilities 21,555 26,304 Total non-current liabilities 291,305 304,958 Total liabilities 2,297,494 1,433,661 Shareholders’ equity: Common stock, $.01 par value, 200,000 shares authorized, 54,084 and 53,849 shares issued, respectively, and 27,679 and 28,047 shares outstanding, respectively 541 538 Additional paid-in-capital 652,467 639,778 Common stock held in treasury, at cost, 26,405 and 25,802, respectively (1,093,483) (1,043,091)Retained earnings 1,572,234 1,433,991 Accumulated other comprehensive loss (36,028) (2,984)Total shareholders’ equity 1,095,731 1,028,232 Total liabilities and shareholders’ equity$3,393,225 $2,461,893 PLEXUS CORP. AND SUBSIDIARIESNON-GAAP SUPPLEMENTAL INFORMATION Table 1(in thousands, except per share data)(unaudited) Three Months Ended Twelve Months Ended Oct 1, Jul 2, Oct 2, Oct 1, Oct 2, 2022 2022 2021 2022 2021 Operating income, as reported$62,314 $49,561 $42,342 $178,185 $176,268 Operating margin, as reported 5.5% 5.1% 5.0% 4.7% 5.2% Non-GAAP adjustments: Restructuring and impairment charges (1) — — — 2,021 3,267 Adjusted operating income$62,314 $49,561 $42,342 $180,206 $179,535 Adjusted operating margin 5.5% 5.1% 5.0% 4.7% 5.3% Net income, as reported$50,457 $37,494 $33,341 $138,243 $138,912 Non-GAAP adjustments: Restructuring and impairment charges, net of tax (1) — — — 1,809 2,924 Adjusted net income$50,457 $37,494 $33,341 $140,052 $141,836 Diluted earnings per share, as reported$1.78 $1.33 $1.16 $4.86 $4.76 Non-GAAP per share adjustments: Restructuring and impairment charges, net of tax (1) — — — 0.06 0.10 Adjusted diluted earnings per share$1.78 $1.33 $1.16 $4.92 $4.86 (1) During the twelve months ended October 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 the Company’s APAC region. During the twelve months ended October 2, 2021, restructuring and impairment charges of $3.3 million, or $2.9 million net of taxes, were incurred for employee severance costs associated with the reduction of the Company's workforce primarily in the EMEA and AMER regions. PLEXUS CORP. AND SUBSIDIARIESNON-GAAP SUPPLEMENTAL INFORMATION Table 2(in thousands)(unaudited) ROIC and Economic Return Calculations Twelve Months Ended Nine Months Ended Twelve Months Ended Oct 1, Jul 2, Oct 2, 2022 2022 2021Operating income, as reported $178,185 $115,871 $176,268 Restructuring and impairment charges+ 2,021 + 2,021 + 3,267 Adjusted operating income $180,206 $117,892 $179,535 ÷ 3 $39,297 x 4 Adjusted annualized operating income $180,206 $157,188 $179,535 Adjusted effective tax ratex 13% x 14% x 13%Tax impact 23,427 22,006 23,340 Adjusted operating income (tax effected) $156,779 $135,182 $156,195 Average invested capital÷$1,207,357 ÷$1,178,134 ÷$1,014,742 ROIC 13.0% 11.5% 15.4%Weighted average cost of capital- 9.3% - 9.3% - 8.1%Economic return 3.7% 2.2% 7.3% Three Months EndedAverage Invested Capital CalculationsOct 1, Jul 2, Apr 2, Jan 1, Oct 2, 2022 2022 2022 2022 2021 Equity$1,095,731 $1,058,190 $1,040,591 $1,044,095 $1,028,232 Plus: Debt and finance lease obligations - current 273,971 250,012 222,393 151,417 66,313 Operating lease obligations - current (1) 7,948 8,640 9,266 9,507 9,877 Debt and finance lease obligations - long-term 187,776 184,707 186,069 187,075 187,033 Operating lease obligations - long-term 33,628 32,270 34,347 36,343 37,970 Less: Cash and cash equivalents (274,805) (276,608) (307,964) (217,067) (270,172) $1,324,249 $1,257,211 $1,184,702 $1,211,370 $1,059,253 Three Months EndedAverage Invested Capital CalculationsJul 3, Apr 3, Jan 2, Oct 3, 2021 2021 2021 2020 Equity$1,020,450 $1,013,952 $1,006,959 $977,480 Plus: Debt and finance lease obligations - current 60,468 50,229 148,408 146,829 Operating lease obligations - current (1) 9,130 9,314 9,351 7,724 Debt and finance lease obligations - long-term 187,690 188,730 188,148 187,975 Operating lease obligations - long-term 33,193 34,751 37,052 36,779 Less: Cash and cash equivalents (303,255) (294,370) (356,724) (385,807) $1,007,676 $1,002,606 $1,033,194 $970,980 (1)Included in other accrued liabilities on the Condensed Consolidated Balance Sheets.