Plexus Corp. · NASDAQ:PLXS
Plexus — Q1 2017 Earnings Presentation
17 slides from Plexus's earnings presentation, Jan 18, 2017
Slide 1: Fiscal First Quarter 2017 Financial Results
FISCAL FIRST QUARTER 2017 FINANCIAL RESULTS January 19, 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 First Quarter Results
FISCAL FIRST QUARTER RESULTS 3 Q1F17 Guidance Oct 26, 2016 Q1F17 Dec 31, 2016 Q4F16 Oct 1, 2016 Q1F17 vs. Q4F16 Revenue ($ millions) $620 to $650 $635 $653 - 3% Diluted EPS $0.82 $0.56 + 46% Non-GAAP Diluted EPS excluding special items $0.74 to $0.82 $0.82 $0.82 Flat ROIC 17.3% 13.8% + 350 bps • Str
Slide 4: Q1F17 Highlights
Q1F17 HIGHLIGHTS • Record operating profit of $33.9M – Operating margin of 5.3% • Cash cycle of 66 days – One day below the low end of our guidance range • Free cash flow of $73M • Return on invested capital of 17.3% – Economic Return (ER) 680 basis points above WACC – ER performance best since fisc
Slide 5: Fiscal Second Quarter Guidance
FISCAL SECOND QUARTER 5 Q2F17 Guidance Revenue $620 to $650 million GAAP Diluted EPS $0.71 to $0.79 Includes $0.11 stock-based compensation expense Midpoint of guidance suggests flat revenue • Order delays with an Industrial/Commercial customer • End-market weakness in Communications • Underlying gr
Slide 6: F17 Focus: Sustained Revenue Growth
F17 FOCUS: SUSTAINED REVENUE GROWTH Efficiently transition and ramp new programs Leverage strong Net Promoter Scores Accelerate wins momentum Increase funnel of qualified Manufacturing Solutions opportunities Continue the Quest for Excellence • Deliver Operational Excellence; exceptional quality pro
Slide 7: Performance by Sector
PERFORMANCE BY SECTOR 7 Q1F17 Dec 31, 2016 Q4F16 Oct 1, 2016 Q1F17 vs. Q4F16 Q2F17 Expectations (percentage points) Healthcare/ Life Sciences $211 33% $192 29% + 9% Flat Industrial/ Commercial $206 32% $231 35% - 11% Down mid single Communications $131 21% $128 20% + 3% Down mid single Defense/ Secu
Slide 8: Manufacturing Wins by Region
MANUFACTURING WINS BY REGION 8 • $217M in annualized manufacturing revenue when fully ramped (51 programs) • Third consecutive quarter with wins greater than $190M • Balanced wins across the regions $106M $67M $44M Q1F17 AMER APAC EMEA Wins Momentum = TFQ Wins / TFQ Revenue
Slide 9: Manufacturing Wins by Sector
MANUFACTURING WINS BY SECTOR • Wins balanced across market sectors • Sector wins support healthy portfolio $55M $64M $54M $44M Q1F17 HC/LS I/C COMM D/S/A 9
Slide 10: Manufacturing Wins Momentum
MANUFACTURING WINS MOMENTUM Trailing Four Quarters (TFQ) for Manufacturing Wins TFQ $785M 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 % o f T FQ S al es N ew W in s $M TFQ Wins TFQ Wins % of TFQ Sales New Wins Goal 25% Quarterly Target: ~ $160M 10
Slide 11: Manufacturing Funnel
MANUFACTURING FUNNEL • Record manufacturing funnel at $2.8B • HC/LS and I/C funnels strong, with D/S/A funnel on upward trajectory • Supports the delivery of our differentiated portfolio 11
Slide 12: Revenue and Operating Margin
3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 450 500 550 600 650 700 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Q2F17* R ev en ue $ M Revenue Adjusted Operating Margin REVENUE AND OPERATING MARGIN Operating Margin Target Range: 4.7% to 5.0% * Represents midpoint of guidance 12
Slide 13: Income Statement
INCOME STATEMENT 13 Q1F17 Comments Revenue $635 million At midpoint of guidance range of $620 to $650 million Gross margin 10.1% Above guidance range of 9.6% to 9.8%; sequential improvement of 20 basis points from operational performance and supply chain productivity Selling & administrative expense
Slide 14: Balance Sheet and Cash Flows
BALANCE SHEET AND CASH FLOWS 14 Q1F17 Comments Return on invested capital 17.3% 680 basis points above fiscal 2017 WACC of 10.5% Share repurchases $7.1 million ~145,000 at an average price of $48.79 per share Free cash flow $73 million Cash from operations: $80 million Capital expenditures: $7 milli
Slide 15: Working Capital Trends
WORKING CAPITAL TRENDS 15 Q1F14 Q2F14 Q3F14 Q4F14 Q1F15 Q2F15 Q3F15 Q4F15 Q1F16 Q2F16 Q3F16 Q4F16 Q1F17 Inventory Days 83 84 84 80 82 86 88 85 88 91 87 87 90 A/R Days 51 49 48 44 52 48 48 53 53 48 51 58 49 A/P Days 64 63 67 60 53 63 62 60 59 62 62 61 60 Customer Deposit Days 8 8 8 8 9 12 12 12 11 11
Slide 16: Fiscal Second Quarter 2017 Guidance
FISCAL SECOND QUARTER 2017 GUIDANCE 16 Guidance Revenue $620 to $650 million GAAP diluted EPS $0.71 to $0.79 Gross margin 9.8% to 10.1% SG&A $30.5 to $31.5 million Operating margin 4.9% to 5.2% Depreciation ~$12 million Q2 tax rate F17 tax rate 9% to 11% 8% to 10% Cash cycle days 65 to 69 days F17 c
Slide 17: Q&A
Q&A ANALYSTS PLEASE CONFORM TO: ONE QUESTION ONE FOLLOW-UP THANKS