Plexus Releases Fiscal Q1 2018 Financial Results

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Plexus today announced financial results for its fiscal first quarter ended December 30, 2017, and guidance for its fiscal second quarter ending March 31, 2018.  

Fiscal First Quarter 2018 Information

• Won 44 manufacturing programs during the quarter representing approximately $200 million in annualized revenue when fully ramped into production
• Trailing four quarter wins total approximately $794 million in annualized revenue when fully ramped into production
• Purchased $9.5 million of our shares at an average price of $60.25 per share
• $125 million of estimated tax expense related to U.S. Tax Reform

Todd Kelsey, president and CEO, commented, “We achieved record revenue of $677 million in our fiscal first quarter of 2018.  We again delivered operating margin within our target range of 4.7% to 5.0%, resulting in fiscal first quarter 2018 non-GAAP EPS of $0.75.  We incurred $125 million of tax expense as a consequence of U.S. Tax Reform, negatively impacting our GAAP diluted EPS.  Despite the large tax charge, we view the reform as immensely beneficial for Plexus as it provides us the opportunity to efficiently access our global cash.  Therefore, we are refining our capital allocation philosophy and plan, which we will share within the coming months.”  

Patrick Jermain, senior vice president and CFO, commented, “During the fiscal first quarter we generated $52 million in free cash flow, a result well above our projections.  Fiscal first quarter cash cycle of 67 days was favorable to our expectations as we benefitted from progress on our working capital initiatives.  As we look forward to the fiscal second quarter, we expect cash outflows of $30 to $50 million to support higher capital spending and working capital investments necessary for anticipated growth.  With this in mind, we still project free cash flow for fiscal 2018 to exceed $100 million.”  Mr. Jermain concluded, “We ended the quarter with a cash balance of $507 million, of which approximately 90% is held offshore.  With the recent U.S. Tax Reform, we look forward to deploying this cash in the best interests of our stakeholders.”  

Mr. Kelsey continued, “Looking forward, we anticipate continued sequential revenue growth as we benefit from new program ramps and improving end markets.  As a result, we are guiding fiscal second quarter 2018 revenue in the range of $670 to $710 million.  While we are working diligently to maintain our operating margin within our target range, we expect our margins to be under pressure in the current quarter due to multiple program ramps and seasonal payroll headwinds.  We are guiding GAAP EPS in the range of $0.68 to $0.78 for the fiscal second quarter 2018, exclusive of any additional impact related to U.S. Tax Reform.”    

Mr. Kelsey concluded, “Our revenue outlook for the remainder of fiscal 2018 continues to strengthen.  We currently expect growth across each of our market sectors, which would lead to double-digit revenue growth overall.  In addition, we anticipate operating margin within our target range for each of the final two quarters of the fiscal year.”

Business Segment and Market Sector Revenue

The Company 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 the Company’s global market sector focused business development strategy.  Top 10 customers comprised 58% of revenue during the quarter, up three percentage points from the fiscal fourth quarter of 2017.

About Plexus – The Product Realization Company

Since 1979, Plexus has been partnering with companies to create the products that build a better world.  We are a team of over 16,000, providing global Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing, and Aftermarket Services.  Plexus is an industry leader that specializes in serving customers with complex products used in demanding regulatory environments.  With a culture built around innovation and customer service, Plexus’ teams create customized end-to-end solutions to assure the realization of the most intricate products.