Plexus Corp. · NASDAQ:PLXS
Plexus — Q3 2017 Earnings Presentation
17 slides from Plexus's earnings presentation, Jul 19, 2017
Slide 1: Fiscal Third Quarter 2017 Financial Results
FISCAL THIRD QUARTER 2017 FINANCIAL RESULTS July 20, 2017
Slide 2: Safe Harbor & Fair Disclosure Statement
SAFE HARBOR & FAIR DISCLOSURE STATEMENT 2 Any statements made during our call today and information included in the supporting material that is not historical in nature, such as statements in the future tense and statements that include "believe," "expect," "intend," "plan," "anticipate," and simila
Slide 3: Fiscal Third Quarter Results
FISCAL THIRD QUARTER RESULTS 3 Q3F17 Jul 1, 2017 Q3F17 Guidance Apr 19, 2017 Q2F17 Apr 1,2017 Revenue ($ millions) $619 $595 to $625 $604 Diluted EPS $0.74 $0.68 to $0.76 $0.84 ROIC 16.1% 16.8% • I/C, COMM and D/S/A all exceeded expectations • HC/LS, I/C and D/S/A revenue increased sequentially • Fi
Slide 4: Fiscal Fourth Quarter Guidance
FISCAL FOURTH QUARTER 4 Q4F17 Guidance Revenue $660 to $700 million GAAP Diluted EPS $0.77 to $0.87 Includes $0.13 stock-based compensation expense Midpoint of revenue guidance suggests significant sequential growth • Ramping new programs across multiple sectors • Potential record revenue quarter •
Slide 5: Engineering Solutions Expansion
ENGINEERING SOLUTIONS EXPANSION 5 Relocated Plexus’ flagship Neenah Design Center • New state-of-the-art facility near Plexus’ Global Headquarters • Capacity for additional 100+ engineers Opened Guadalajara Design Center • Located within Guadalajara manufacturing facility • Plexus’ first design cent
Slide 6: Additional Highlights
ADDITIONAL HIGHLIGHTS • Record Net Promoter Survey score – Overall NPS of 84% – Result highlights our focus on delivering Operational Excellence and Customer Service Excellence • Delivered Operating Margin of 4.8% – Fifth consecutive quarter at or above target operating margin range of 4.7% to 5.0%
Slide 7: Performance by Sector
PERFORMANCE BY SECTOR 7 Q3F17 Jul 1, 2017 Q2F17 Apr 1, 2017 Q3F17 vs. Q2F17 Q4F17 Expectations (percentage points) Healthcare/ Life Sciences $210 34% $205 34% + 2% Up mid single Industrial/ Commercial $201 32% $192 32% + 5% Down mid single Communications $99 16% $108 18% - 9% Up ~50% Defense/ Securi
Slide 8: Manufacturing Wins by Region
MANUFACTURING WINS BY REGION 8 • $220M in annualized manufacturing revenue when fully ramped (32 programs) • Fourth consecutive quarter with wins greater than $200M • Highest quarterly wins total in three years • Substantial wins in the EMEA region $87M $66M $67M Q3F17 AMER APAC EMEA Wins Momentum =
Slide 9: Manufacturing Wins by Sector
MANUFACTURING WINS BY SECTOR • Significant wins in D/S/A with continued strength in HC/LS and I/C • Sector wins support healthy portfolio $57M $60M $26M $77M Q3F17 HC/LS I/C COMM D/S/A 9
Slide 10: Manufacturing Wins Momentum
10 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Q3F15 Q4F15 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Q2F17 Q3F17 % o f TFQ S al es N ew W in s $ M TFQ Wins TFQ Wins % of TFQ Sales New Wins Goal 25% MANUFACTURING WINS MOMENTUM Quarterly Target: ~ $160M Trailin
Slide 11: Manufacturing Funnel
MANUFACTURING FUNNEL • Manufacturing funnel remains robust at $2.8B • HC/LS and I/C funnels consistently strong • Supports the delivery of our differentiated portfolio 11
Slide 12: Operating Performance
OPERATING PERFORMANCE Focused on exceptional operating results while growing revenue 12 Operating Margin Target Range: 4.7% to 5.0% * Represents midpoint of guidance 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Q3F15 Q4F15 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Q2F17 Q3F17 Q4F17*
Slide 13: Income Statement
INCOME STATEMENT 13 Q3F17 Comments Revenue $619 million Near upper end of guidance range of $595 to $625 million driven by strength in three of four market sectors Gross margin 9.9% Slightly below guidance range of 10.0% to 10.3% Selling & administrative expenses $31.7 million In-line with guidance
Slide 14: Balance Sheet and Cash Flows
BALANCE SHEET AND CASH FLOWS 14 Q3F17 Comments Return on invested capital 16.1% 560 basis points above fiscal 2017 WACC of 10.5% Share repurchases $10 million ~190,000 at an average price of $52.40 per share Free cash flow $6.5 million Cash from operations: $16.3 million Capital expenditures: $9.8 m
Slide 15: Working Capital Trends
WORKING CAPITAL TRENDS 15 Q3F15 Q4F15 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Q2F17 Q3F17 Inventory Days 88 85 88 91 87 87 90 103 107 A/R Days 48 53 53 48 51 58 49 48 47 A/P Days 62 60 59 62 62 61 60 64 65 Customer Deposit Days 12 12 11 11 13 13 13 14 13 Net Cash Cycle Days 62 66 71 66 63 71 66 73 76
Slide 16: Fiscal Fourth Quarter 2017 Guidance
FISCAL FOURTH QUARTER 2017 GUIDANCE 16 Guidance Revenue $660 to $700 million GAAP diluted EPS $0.77 to $0.87 Gross margin 9.4% to 9.8% SG&A $31.5 to $32.5 million Operating margin 4.7% to 5.1% Depreciation ~$11 million Q4 tax rate F17 tax rate 8% to 9% 8% to 9% Cash cycle days 69 to 73 days F17 capi
Slide 17: Q&A
Q&A ANALYSTS PLEASE CONFORM TO: ONE QUESTION ONE FOLLOW-UP THANKS