Plexus Corp. · NASDAQ:PLXS
Plexus — Q4 2017 Earnings Presentation
17 slides from Plexus's earnings presentation, Oct 25, 2017
Slide 1: Fiscal fourth quarter 2017 financial results
Fiscal fourth quarter 2017 financial results October 26, 2017
Slide 2: Safe harbor and fair disclosure statement
PLEXUS CORP. 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 similar terms and concepts, are for
Slide 3: Fiscal fourth quarter results
PLEXUS CORP. • Record quarterly revenue with 8% sequential growth • HC/LS and COMM achieved meaningful revenue growth • Sixth consecutive quarter at or above target operating margin range (4.7% to 5.0%) 3 Fiscal fourth quarter results Q4F17 Sep 30, 2017 Q4F17 Guidance Jul19, 2017 Q3F17 Jul 1, 2017 R
Slide 4: Fiscal 2017 highlights
PLEXUS CORP. OPERATING MARGIN OF 5.1%, BEST SINCE FISCAL 2008 • Achieved record operating profit of $130M RETURN ON INVESTED CAPITAL OF 16.2% • Economic Return 570 basis points above WACC • 290 basis point improvement from Fiscal 2016 • Best result since Fiscal 2006 SUCCESS IN ENGINEERING SOLUTIONS
Slide 5: F18 – A look forward
PLEXUS CORP. 84% May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Net Promoter Score LAUNCHED NEW PLEXUS BRAND REBRANDED AEROSPACE/DEFENSE SECTOR FOCUSED ON DELIVERING STRONG OPERATING PERFORMANCE • Target operating margin of 4.7% to 5.0% each quarter GROWTH ACCELERATION STRATEGY • Differentiated po
Slide 6: Fiscal first quarter guidance
PLEXUS CORP. 6 Fiscal first quarter guidance Q1F18 Guidance Revenue $665 to $705 million GAAP Diluted EPS $0.75 to $0.85 Includes $0.11 stock-based compensation expense • Midpoint of revenue guidance suggests modest sequential growth • Expectations for sequential growth in I/C and COMM • Modest weak
Slide 7: Performance by sector
PLEXUS CORP. Revenue in millions 7 Performance by sector Q4F17 Sep 30, 2017 Q3F17 Jul 1, 2017 Q4F17 vs. Q3F17 Q1F18 Expectations (percentage points) Healthcare and Life Sciences $233 35% $210 34% + 11% Flat Industrial and Commercial $189 28% $201 32% - 6% Up mid single Communications $140 21% $99 16
Slide 8: Manufacturing wins
PLEXUS CORP. Manufacturing wins Q4F17 Wins: $172M New programs: 34 Trailing Four Quarters (TFQ) for Manufacturing Wins 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Q4F15 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Q2F17 Q3F17 Q4F17 % o f T F Q S a le s N e w W i
Slide 9: Manufacturing wins by region
PLEXUS CORP. • $172M in annualized manufacturing revenue when fully ramped (34 programs) • Wins balanced across regions • Gaining market share with customers in APAC and AMER • Investments in EMEA attracting new customers 9 Manufacturing wins by region AMER $74M APAC $54M EMEA $44M Q4F17 Wins Moment
Slide 10: Manufacturing wins by sector
PLEXUS CORP. • Continued strength in HC/LS • Key A/D wins in EMEA • I/C added two new customers 10 Manufacturing wins by sector HC/LS $73M I/C $27M COMM $22M A/D $50M Q4F17
Slide 11: Manufacturing funnel
PLEXUS CORP. • Manufacturing funnel near record at $3.0B • HC/LS exceptionally strong • Supports the growth goals for F18 and beyond 11 Manufacturing funnel HC/LS $1,382M I/C $810M COMM $395M A/D $442M Q4F17 2,073 2,299 2,532 2,304 2,764 2,814 3,036 2,778 3,029 - 500 1,000 1,500 2,000 2,500 3,000 3,
Slide 12: Operating performance
PLEXUS CORP. Focused on exceptional operating results while growing revenue Operating Margin Target Range: 4.7% to 5.0% 12 Operating performance *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 Q1F18*
Slide 13: Income statement
PLEXUS CORP. Income statement 13 Q4F17 Comments Revenue $670 million Within guidance range of $660 to $700 million Gross margin 9.9% Above guidance range of 9.4% to 9.8% Selling & administrative expenses $32.5 million Within guidance range of $31.5 to $32.5 million Operating margin 5.1% At high end
Slide 14: Balance sheet and cash flows
PLEXUS CORP. Balance sheet and cash flows 14 Q4F17 Comments Return on invested capital 16.2% 570 basis points above fiscal 2017 WACC of 10.5% Free cash flow $35.7 million Cash from operations: $49.8 million Capital expenditures: $14.1 million Share repurchases $10.3 million ~198,000 at an average pr
Slide 15: Working capital trends
PLEXUS CORP. Working capital trends 15 Q4F15 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Q2F17 Q3F17 Q4F17 Inventory Days 85 88 91 87 87 90 103 107 99 A/R Days 53 53 48 51 58 49 48 47 50 A/P Days 60 59 62 62 61 60 64 65 63 Customer Deposit Days 12 11 11 13 13 13 14 13 16 Net Cash Cycle Days 66 71 66 63 71 66 73 7
Slide 16: Fiscal first quarter 2018 guidance
PLEXUS CORP. Fiscal first quarter 2018 guidance 16 Guidance Revenue $665 to $705 million GAAP diluted EPS $0.75 to $0.85 Gross margin 9.3% to 9.7% SG&A $31.5 to $32.5 million Operating margin 4.6% to 5.0% Depreciation ~$12 million Q1 tax rate F18 tax rate 8% to 10% 8% to 10% Cash cycle days 68 to 72
Slide 17: Q&A
Q&A Analysts please conform to one question and one follow up. Thank you. 17