Plexus Announces Fiscal Third Quarter Financial Results and Fourth Quarter Guidance
- Record quarterly revenue of $857 million for the fiscal third quarter of 2020
- GAAP diluted EPS of $1.20
- Initiates fiscal fourth quarter 2020 revenue guidance of $850 to $890 million with GAAP diluted EPS guidance of $1.05 to $1.20, excluding unforeseen impacts relating to COVID-19
Todd Kelsey, President and CEO, commented, “I am incredibly proud of our global Plexus team as they managed through the complexities arising from COVID-19 while delivering record quarterly revenue of $857 million and GAAP diluted earnings per share of $1.20. This strong performance led to GAAP operating margin of 5.3%, our best quarterly margin result in three years. Further, our team overcame the challenges of the pandemic to deliver exceptional manufacturing wins of $252 million annualized when fully ramped into production. In addition to traditionally strong wins from our existing customers, our team’s innovative virtual business development efforts resulted in a meaningful number of new target customer wins. Our global team’s demonstrated ability in providing superior execution continues to position us for future growth.”
Patrick Jermain, Executive Vice President and CFO, commented, “During the fiscal third quarter, we delivered a return on invested capital of 12.9%. This equates to an economic return of 410 basis points above our weighted average cost of capital, creating solid shareholder value. A combination of exceptional operating performance and improved working capital generated this return, an improvement of 150 basis points over the previous quarter. The increase in fiscal third quarter revenue and improvements in our inventory management contributed to an eight day sequential improvement in our fiscal third quarter cash cycle days. We generated $37 million of free cash flow during the quarter, exceeding our net income.”
Mr. Jermain continued, “We are well-positioned with a strong balance sheet. Cash of approximately $300 million was sequentially higher by $73 million while our short-term debt increased $38 million. In May, we executed a 364-day term loan with several of our credit facility banks. We secured $138 million through this offering. With the proceeds, we repaid existing borrowing under our revolving credit facility. At the end of the fiscal third quarter, there was no outstanding borrowing under this facility, therefore allowing us the full use of the $350 million facility.”
Mr. Kelsey continued, “While we expect continued end market volatility, our aggregate demand is anticipated to remain strong in our fiscal fourth quarter. As a result, we are guiding revenue in the range of $850 to $890 million. At this anticipated revenue level, coupled with expected sustained solid operating performance, we are guiding GAAP diluted EPS in the range of $1.05 to $1.20. In providing this guidance, we have taken into consideration known constraints with the global supply chain and workforce challenges that could occur due to COVID-19. However, our guidance assumes no large scale closures of our facilities, or those of our suppliers or customers, due to COVID-19, nor does it assume that the COVID-19 outbreak will materially impact end markets beyond what has already occurred.”
Mr. Kelsey concluded, “As we move into the early part of fiscal 2021, we anticipate certain COVID-related demand to moderate in advance of the anticipated benefit of growth from new program ramps later in the year. Despite the known impacts related to COVID-19, we see a path to continued strength in operating performance throughout fiscal 2021.”
