Plexus Announces Fiscal Third Quarter Financial Results
- Reports fiscal third quarter 2023 revenue of $1.02 billion, GAAP operating margin of 2.8% and GAAP diluted EPS of $0.56, including $0.76 of restructuring and other charges and $0.14 of stock-based compensation expense
- Reports fiscal third quarter 2023 non-GAAP operating margin of 5.0% and non-GAAP diluted EPS of $1.32, including $0.14 of stock-based compensation expense
- Initiates fiscal fourth quarter 2023 revenue guidance of $1.00 billion to $1.04 billion with GAAP diluted EPS of $1.18 to $1.36, including $0.19 of stock-based compensation expense
|Three Months Ended|
|Jul 1, 2023||Jul 1, 2023||Sep 30, 2023|
|Q3F23 Results||Q3F23 Guidance (1)||Q4F23 Guidance|
|Summary GAAP Items|
|Revenue (in billions)||$1.02||$1.00 to $1.05||$1.00 to $1.04|
|Operating margin (2)||2.8||%||2.3% to 2.8%||4.7% to 5.2%|
|Diluted EPS (3)||$0.56||$0.28 to $0.46||$1.18 to $1.36|
|Summary Non-GAAP Items (4)|
|Adjusted operating margin (5)||5.0||%||4.5% to 5.0%|
|Adjusted diluted EPS (6)||$1.32||$1.05 to $1.23|
|Return on invested capital (ROIC)||13.5||%|
|(1) On May 18, 2023, the Company announced updates to its fiscal third quarter 2023 GAAP guidance because of an additional one-time, non-recurring charge taken during the quarter related to an arbitration decision.
|(2) Q3F23 results and guidance include restructuring and other charges of 220 bps.
|(3) Includes stock-based compensation expense of $0.14 for Q3F23 results, $0.19 for Q3F23 guidance and $0.19 for Q4F23 guidance.
Q3F23 results include $0.76 per share related to restructuring and other charges, net of tax.
Q3F23 guidance includes $0.77 per share related to restructuring and other charges, net of tax.
|(4) Refer to Non-GAAP Supplemental Information in Tables 1 and 2 for additional information regarding non-GAAP financial measures.
|(5) Q3F23 results and guidance exclude restructuring and other charges of 220 bps in operating margin.
|(6) Q3F23 results exclude $0.76 per share related to restructuring and other charges, net of tax, but include stock-based compensation expense of $0.14.
Q3F23 guidance excludes $0.77 per share related to restructuring and other charges, net of tax, but includes stock-based compensation expense of $0.19.
Fiscal Third Quarter 2023 Information
- Won 30 manufacturing programs during the quarter representing a record $321 million in annualized revenue when fully ramped into production
- Delivered trailing four-quarter manufacturing wins of $968 million in annualized revenue when fully ramped into production
- Purchased $13.5 million of our shares at an average price of $90.49 per share under our current $50.0 million share repurchase authorization, leaving $9.1 million available
Todd Kelsey, Chief Executive Officer, commented, “Plexus delivered a solid fiscal third quarter with revenue of $1.02 billion, non-GAAP operating margin of 5.0% and non-GAAP EPS of $1.32. Our team’s continued ability to mitigate supply chain challenges, along with improvements in manufacturing efficiency and better than anticipated performance from our engineering team, contributed to non-GAAP operating margin meeting the high end of our guidance range and non-GAAP EPS exceeding our guidance range. The fiscal third quarter represented the fifth consecutive quarter with operating margin exceeding 5%.”
Patrick Jermain, Executive Vice President and Chief Financial Officer, commented, “For the fiscal third quarter, we delivered return on invested capital of 13.5%, which was 450 basis points above our weighted average cost of capital. We drove this result and created substantial shareholder value through strong operating performance, prudent capital investments and a modest reduction in inventory compared to the prior quarter. As we continue these efforts, we are guiding improvement to our cash cycle for the fiscal fourth quarter and expect to generate positive free cash flow for the quarter and fiscal 2023.”
Mr. Kelsey continued, “We are guiding fiscal fourth quarter revenue of $1.00 billion to $1.04 billion, GAAP operating margin of 4.7% to 5.2% and GAAP EPS of $1.18 to $1.36. Increasingly robust commercial aerospace demand and continued new program ramps are being offset by incrementally weaker demand for semiconductor capital equipment, a modest softening in some industrial markets and continued supply chain challenges.”
Mr. Kelsey concluded, “We remain confident in achieving our goal of $5 billion in revenue with 5.5% GAAP operating margin by our fiscal 2025. As fiscal 2024 progresses, we anticipate that revenue growth will accelerate once demand stabilizes in certain markets, new program ramp momentum increases and supply chain challenges lessen. Supporting our growth expectation is the knowledge that Plexus’ best in class capabilities and focus on operational excellence are resonating with customers as demonstrated by our fiscal third quarter wins performance. During the quarter, we won 30 new manufacturing programs worth a record $321 million, including several competitive share gains, while maintaining a robust funnel of qualified manufacturing opportunities of $4 billion. Furthermore, new engineering program wins and the funnel of qualified engineering opportunities expanded versus the prior quarter, both positive leading indicators of future manufacturing wins. Over the long term, we believe our strong execution and accelerating program wins position Plexus to continue to deliver industry leading revenue growth and profitability.”