Plexus Announces Fiscal Second Quarter Financial Results
NEENAH, WI, (GLOBE NEWSWIRE) — Plexus Corp. (NASDAQ: PLXS) today announced financial results for our fiscal second quarter ended March 30, 2024, and guidance for our fiscal third quarter ending June 29, 2024.
- Reports fiscal second quarter 2024 revenue of $967 million, GAAP operating margin of 3.0% and GAAP diluted EPS of $0.58, including $0.25 of stock-based compensation expense and $0.36 of restructuring and other charges, net
- Reports fiscal second quarter 2024 non-GAAP operating margin of 4.2% and non-GAAP diluted EPS of $0.94, including $0.25 of stock-based compensation expense
- Initiates fiscal third quarter 2024 revenue guidance of $960 million to $1.00 billion with GAAP diluted EPS of $0.80 to $0.95, including $0.21 of stock-based compensation expense and $0.21 of restructuring charges. Fiscal third quarter 2024 non-GAAP EPS guidance of $1.22 to $1.37 excludes both stock-based compensation expense and restructuring charges.
| Three Months Ended | |||||||
| Mar 30, 2024 | Mar 30, 2024 | Jun 29, 2024 | |||||
| Q2F24 Results | Q2F24 Guidance | Q3F24 Guidance (1) | |||||
| Summary GAAP Items | |||||||
| Revenue (in millions) | $967 | $930 to $970 | $960 to $1,000 | ||||
| Operating margin (2) | 3.0 | % | 3.0% to 3.4% | 3.9% to 4.3% | |||
| Diluted EPS (3) | $0.58 | $0.48 to $0.63 | $0.80 to $0.95 | ||||
| Summary Non-GAAP Items (4) | |||||||
| Adjusted operating margin (5) | 4.2 | % | 4.0% to 4.4% | ||||
| Adjusted EPS (6) | $0.94 | $0.80 to $0.95 | |||||
| Adjusted operating margin, prospectively (7) | 5.2% to 5.6% | ||||||
| Adjusted EPS, prospectively (8) | $1.22 to $1.37 | ||||||
| Return on invested capital (ROIC) | 9.9 | % | |||||
| Economic return | 1.7 | % | |||||
| (1) | Historically, Plexus has included stock-based compensation expense in adjusted operating margin and adjusted EPS. Beginning in the fiscal third quarter, Plexus will issue guidance and present adjusted operating margin and adjusted EPS excluding stock-based compensation expense. Refer to the Non-GAAP Supplemental Information Table 3 for a reconciliation between the historic presentation and prospective presentation. |
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| (2) | Includes restructuring and other charges, net, of 120 bps for Q2F24 results, 100 bps for Q2F24 guidance and 70 bps for Q3F24 guidance. Includes stock-based compensation expense of 73 bps for Q2F24 results, 72 bps for Q2F24 guidance and 60 bps for Q3F24 guidance. |
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| (3) | Includes stock-based compensation expense of $0.25 for Q2F24 results, $0.25 for Q2F24 guidance and $0.21 for Q3F24 guidance. Includes, net of tax, restructuring and other charges, net, of $0.36 for Q2F24 results, $0.32 for Q2F24 guidance and $0.21 for Q3F24 guidance. |
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| (4) | Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for additional information regarding non-GAAP financial measures. |
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| (5) | Excludes restructuring and other charges, net, of 120 bps for Q2F24 results and 100 bps for Q2F24 guidance. Excludes stock-based compensation expense of 73 bps for Q2F24 results and 72 bps for Q2F24 guidance. |
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| (6) | Q2F24 results excludes, net of tax, $0.36 per share related to restructuring and other charges, net, but includes stock-based compensation expense of $0.25. Q2F24 guidance excludes $0.32 per share related to restructuring and other charges, net, but includes stock-based compensation expense of $0.25. |
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| (7) | Excludes 70 bps for restructuring charges and 60 bps related to stock-based compensation expense. |
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| (8) | Excludes $0.21 per share related to restructuring charges and $0.21 per share related to stock-based compensation expense. |
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Fiscal Second Quarter 2024 Information
- Won 32 manufacturing programs during the quarter representing $255 million in annualized revenue when fully ramped into production.
- Purchased $17.6 million of our shares at an average price of $94.39 per share under our repurchase programs, leaving $38.1 million available under our current $50.0 million authorization.
Todd Kelsey, Chief Executive Officer, commented, “Plexus delivered fiscal second quarter revenue of $967 million and non-GAAP EPS of $0.94, each of which met the top end of our guidance. Non-GAAP operating margin of 4.2% met our expectation entering the quarter. In addition, we generated free cash flow of $65 million, a particularly strong result.”
Mr. Kelsey continued, “For the fiscal second quarter, our team won 32 new manufacturing programs worth $255 million in annualized revenue. Capitalizing on the value created by our differentiated service offering and superior execution, our go-to-market organization is winning significant new outsourcing opportunities and capturing market share in support of sustaining our industry-leading revenue growth.”
Mr. Kelsey commented, “We are guiding fiscal third quarter revenue of $960 million to $1.00 billion, non-GAAP operating margin of 5.2% to 5.6% and non-GAAP EPS of $1.22 to $1.37. We believe our revenue growth is in the early stages of inflecting higher, benefiting from robust demand within our Aerospace and Defense market sector, gradually recovering semiconductor capital equipment demand and new program ramps that are mitigating inventory correction headwinds in our Healthcare/Lifesciences and Industrial market sectors. For the fiscal third quarter, our non-GAAP operating margin excludes approximately $6.5 million of restructuring charges associated with realigning manufacturing capabilities to best support long-term customer needs and also excludes approximately $6.2 million of stock-based compensation expense.”
Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, “The $65 million of free cash flow generated during the fiscal second quarter significantly exceeded our net income and our expectations. Continued progress on our working capital initiatives contributed to this strong performance, resulting in fiscal second quarter cash cycle of 91 days, 10 days favorable to our expectations and sequentially lower by four days. Aided by the improvements in our cash cycle, return on invested capital for the fiscal second quarter was 9.9%, or 170 basis points above our weighted average cost of capital. We have generated $33 million of free cash flow through the first six months of fiscal 2024 and, with further progress expected on our working capital initiatives, we now anticipate delivering approximately $100 million of free cash flow in fiscal 2024. Finally, we repurchased $17.6 million of our shares during the fiscal second quarter. We expect to execute the remaining $38.1 million of our current authorization during the second half of fiscal 2024, creating additional shareholder value.”
Mr. Kelsey concluded, “We continue to anticipate a strong finish to fiscal 2024 with expansion in revenue and non-GAAP operating margin each quarter as well as robust free cash flow generation, positioning us for further momentum into fiscal 2025. Supporting this outlook is the previously highlighted strength in certain market sectors and subsectors, new program ramps, improving utilization of our engineering team and the benefits from recent restructuring actions.”
