UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



ý☒	~~Quarterly Report Pursuant to Section~~	QUARTERLY REPORT PURSUANT TO SECTION 13 orOR 15(d) ~~of the Securities Exchange Act of~~OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December 30, 2017~~January 4, 2020



¨ ☐	~~Transition Report Pursuant to Section~~	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) ~~of the Securities Exchange Act of~~OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 001-14423

PLEXUS CORP.

(Exact name of registrant as specified in charter)



Wisconsin		39-1344447
(State or other jurisdiction of ~~Incorporation)~~incorporation)		(~~IRS~~I.R.S. Employer Identification No.)

One Plexus Way

Neenah, Wisconsin54957

(Address of principal executive offices)~~(Zip~~ (Zip Code)

Telephone Number ~~(920)~~ (920) 969-6000

(Registrant’s telephone number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	PLXS	The Nasdaq Global Select Market

Indicate by check mark whether the ~~registrant~~registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),; and (2) has been subject to such filing requirements for the past 90 days. Yesýx No ¨o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yesýx No ¨o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~"large~~“large accelerated filer,~~" "accelerated~~” “accelerated filer,~~" "smaller~~” “smaller reporting company,"” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filerý	x	Accelerated filer¨	☐	Non-accelerated filer ¨	☐
Smaller reporting company¨	☐	Emerging growth company¨
		~~(Do not check if a smaller reporting company)~~☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No ý☒

As of ~~January 30, 2018,~~February 4, 2020, there were ~~33,689,319~~29,355,176 shares of ~~Common Stock of the Company~~common stock outstanding.

PLEXUS CORP.

TABLE OF CONTENTS

~~December 30, 2017~~January 4, 2020




PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
Condensed Consolidated Statements of Comprehensive Income (Loss) ~~Income~~	3
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of ~~Cash Flows~~Shareholders' Equity	5
~~Notes to~~ Condensed Consolidated ~~Financial~~ Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
ITEM 2. MANAGEMENT'S DICUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1521
"Safe Harbor" Cautionary Statement Under the Private Securities Litigation Reform Act of 1995	1521
Overview	1521
Results of Operations	1622
Liquidity of Capital Resources	20
~~Contractual Obligations, Commitments and Off-Balance Sheet Obligations~~	24
~~Disclosure About Critical Accounting Policies~~	24
~~New Accounting Pronouncements~~	25
Contractual Obligations, Commitments and Off-Balance Sheet Obligations	30
Disclosure About Critical Accounting Policies	31
New Accounting Pronouncements	31
ITEM 3. QUANTITATIVE AND ~~QUALITIATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2632
ITEM 4. CONTROLS AND PROCEDURES	2632
PART II. OTHER INFORMATION	2734
ITEM 1A. Risk Factors	2734
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	2734
ITEM 6. Exhibits	2735
SIGNATURES	2836

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ~~INCOME~~

(in thousands, except per share data)

Unaudited


	Three Months Ended						Three Months Ended
	December 30, 2017			December 31, 2016			January 4, 2020			December 29, 2018
Net sales	$	677,294		$	635,019		$	852,409		$	765,544
Cost of sales	613,771			570,663			773,219			693,161
Gross profit	63,523			64,356			79,190			72,383
Selling and administrative expenses	31,966			30,453			39,256			35,432
Operating income	31,557			33,903			39,934			36,951
Other income (expense):
Interest expense	(3,725		)	(3,274		)	(4,132		)	(2,249		)
Interest income	1,555			1,071			645			525
Miscellaneous	(346		)	(674		)
Miscellaneous, net							(2,173		)	(1,112		)
Income before income taxes	29,041			31,026			34,274			34,115
Income tax expense	127,534			2,847			3,268			11,889
Net (loss) income	$	(98,493	)	$	28,179
(Loss) earnings per share:
Net income							$	31,006		$	22,226
Earnings per share:
Basic	$	(2.93	)	$	0.84		$	1.06		$	0.71
Diluted	$	(2.93	)	$	0.82		$	1.03		$	0.69
Weighted average shares outstanding:
Basic	33,567			33,534			29,147			31,403
Diluted	33,567			34,544			30,065			32,286
Comprehensive (loss) income:
Net (loss) income	$	(98,493	)	$	28,179
Other comprehensive income (loss):
Comprehensive income:
Net income							$	31,006		$	22,226
Other comprehensive income (loss) :
Derivative instrument fair value adjustment	1,539			(5,403		)	2,223			378
Foreign currency translation adjustments	2,142			(11,359		)	5,204			(1,871		)
Other comprehensive income (loss)	3,681			(16,762		)	7,427			(1,493		)
Total comprehensive (loss) income	$	(94,812	)	$	11,417
Total comprehensive income							$	38,433		$	20,733

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

Unaudited


	December 30, 2017			September 30, 2017			January 4, 2020			September 28, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	506,694		$	568,860		$	252,914		$	223,761
Restricted cash	8,157			394			2,208			2,493
Accounts receivable, net of allowances of $1,049 and $980, respectively	334,776			365,513
Inventories	669,894			654,642
Accounts receivable, net of allowances of $1,194 and $1,537, respectively							461,705			488,284
Contract assets							107,040			90,841
Inventories, net							735,803			700,938
Prepaid expenses and other	31,362			28,046			33,719			31,974
Total current assets	1,550,883			1,617,455			1,593,389			1,538,291
Property, plant and equipment, net	318,358			314,665			387,509			384,224
Deferred income tax assets	5,302			5,292
Other	41,664			38,770
Operating lease right-of-use assets							79,318			—
Deferred income taxes							14,127			13,654
Other assets							35,761			64,714
Total non-current assets	365,324			358,727			516,715			462,592
Total assets	$	1,916,207		$	1,976,182		$	2,110,104		$	2,000,883

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	179,881		$	286,934
Current portion of long-term debt and finance lease obligations							$	67,847		$	100,702
Accounts payable	420,984			413,999			515,484			444,944
Customer deposits	102,823			107,837			137,014			139,841
Accrued salaries and wages	52,483			49,376			52,527			73,555
Other accrued liabilities	61,006			49,445			116,979			106,461
Total current liabilities	817,177			907,591			889,851			865,503
Long-term debt and capital lease obligations, net of current portion	26,047			26,173
Long-term debt and finance lease obligations, net of current portion							186,827			187,278
Long-term accrued income taxes payable	99,897			—			59,572			59,572
Deferred income tax liabilities	21,906			—
Long-term operating lease liabilities							41,764			—
Deferred income taxes payable							6,463			5,305
Other liabilities	17,331			16,479			17,255			17,649
Total non-current liabilities	165,181			42,652			311,881			269,804
Total liabilities	982,358			950,243			1,201,732			1,135,307
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.01 par value, 5,000 shares authorized, none issued or outstanding	—			—			—			—
Common stock, $.01 par value, 200,000 shares authorized, 52,231 and 51,934 shares issued, respectively, and 33,607 and 33,464 shares outstanding, respectively	522			519
Common stock, $.01 par value, 200,000 shares authorized, 53,226 and 52,917 shares issued, respectively, and 29,222 and 29,004 shares outstanding, respectively							532			529
Additional paid-in capital	567,562			555,297			609,168			597,401
Common stock held in treasury, at cost, 18,624 and 18,470 shares, respectively	(583,651		)	(574,104		)
Common stock held in treasury, at cost, 24,004 and 23,913 shares, respectively							(899,577		)	(893,247		)
Retained earnings	950,713			1,049,206			1,208,606			1,178,677
Accumulated other comprehensive loss	(1,297		)	(4,979		)	(10,357		)	(17,784		)
Total shareholders’ equity	933,849			1,025,939			908,372			865,576
Total liabilities and shareholders’ equity	$	1,916,207		$	1,976,182		$	2,110,104		$	2,000,883

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

Unaudited



	Three Months Ended
	January 4, 2020			December 29, 2018
Common stock - shares outstanding
Beginning of period	29,004			31,838
Exercise of stock options and vesting of other stock awards	309			24
Treasury shares purchased	(91		)	(870		)
End of period	29,222			30,992

Total stockholders' equity, beginning of period	$	865,576		$	921,143
Common stock - par value
Beginning of period	529			526
Exercise of stock options and vesting of other stock awards	3			—
End of period	532			526
Additional paid-in capital
Beginning of period	597,401			581,488
Stock-based compensation expense	5,046			4,753
Exercise of stock options and vesting of other stock awards, including tax benefits	6,721			770
End of period	609,168			587,011
Treasury stock
Beginning of period	(893,247		)	(711,138		)
Treasury shares purchased	(6,330		)	(50,051		)
End of period	(899,577		)	(761,189		)
Retained earnings
Beginning of period	1,178,677			1,062,246
Net income	31,006			22,226
Cumulative effect adjustment for adoption of new accounting pronouncements (1)	(1,077		)	7,815
End of period	1,208,606			1,092,287
Accumulated other comprehensive (loss) income
Beginning of period	(17,784		)	(11,979		)
Other comprehensive income (loss)	7,427			(1,493		)
End of period	(10,357		)	(13,472		)
Total stockholders' equity, end of period	$	908,372		$	905,163

(1) See Note 1, "Basis of Presentation," for a discussion of recently adopted accounting pronouncements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Unaudited


	Three Months Ended						Three Months Ended
	December 30, 2017			December 31, 2016			January 4, 2020			December 29, 2018
Cash flows from operating activities
Net (loss) income	$	(98,493	)	$	28,179
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Depreciation	11,702			11,449
Amortization of deferred financing fees	78			77
Gain on sale of property, plant and equipment, net	(124		)	(111		)
Net income							$	31,006		$	22,226
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization							13,965			12,574
Deferred income taxes	21,906			—			1,666			943
Share-based compensation expense	3,896			3,625			5,046			4,753
Changes in operating assets and liabilities:
Other, net							57			51
Changes in operating assets and liabilities, excluding impacts of acquisition:
Accounts receivable	31,461			68,537			28,746			(34,240		)
Contract assets							(15,864		)	(6,339		)
Inventories	(14,016		)	(5,570		)	(31,626		)	(74,344		)
Other current and noncurrent assets	(4,453		)	(4,808		)	(2,829		)	(2,221		)
Accrued income taxes payable	106,156			394			(2,898		)	10,811
Accounts payable	8,756			(18,635		)	64,965			7,928
Customer deposits	(5,195		)	(417		)	(3,382		)	22,050
Other current and noncurrent liabilities	7,432			(3,269		)	(14,140		)	2,467
Cash flows provided by operating activities	69,106			79,451
Cash flows provided by (used in) operating activities							74,712			(33,341		)
Cash flows from investing activities
Payments for property, plant and equipment	(16,702		)	(6,950		)	(13,675		)	(24,903		)
Proceeds from sales of property, plant and equipment	173			124			283			49
Business acquisition							—			1,180
Cash flows used in investing activities	(16,529		)	(6,826		)	(13,392		)	(23,674		)
Cash flows from financing activities
Borrowings under credit facility and other short-term borrowings	216,314			73,597
Payments on debt and capital lease obligations	(324,192		)	(73,475		)
Borrowings under debt agreements							157,020			231,500
Payments on debt and finance lease obligations							(190,470		)	(229,469		)
Repurchases of common stock	(9,547		)	(7,061		)	(6,330		)	(50,051		)
Proceeds from exercise of stock options	8,513			5,124			9,850			796
Payments related to tax withholding for share-based compensation	(141		)	(2,360		)	(3,126		)	(26		)
Cash flows used in financing activities	(109,053		)	(4,175		)	(33,056		)	(47,250		)
Effect of exchange rate changes on cash and cash equivalents	2,073			(3,567		)	604			(548		)
Net (decrease) increase in cash and cash equivalents and restricted cash	(54,403		)	64,883
Net increase (decrease) in cash and cash equivalents and restricted cash							28,868			(104,813		)
Cash and cash equivalents and restricted cash:
Beginning of period	569,254			432,964			226,254			297,686
End of period	$	514,851		$	497,847		$	255,122		$	192,873

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLEXUS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED ~~DECEMBER 30, 2017~~JANUARY 4, 2020 AND DECEMBER ~~31, 2016~~29, 2018

Unaudited

1. Basis of Presentation

Basis of Presentation:

The accompanying Condensed Consolidated Financial Statements included herein have been prepared by Plexus Corp. and its subsidiaries (together “Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). ~~In the opinion of the Company, the~~The accompanying Condensed Consolidated Financial Statements reflect all adjustments, which include normal recurring adjustments necessary for the fair statement of the consolidated financial position of the Company as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017, and~~28, 2019, the results of operations and shareholders' equity for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, and the cash flows for the same three month periods.

The Company’s fiscal year ends on the Saturday closest to September 30. The Company uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter, therefore, ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. ~~All~~Fiscal 2020 includes 53 weeks; therefore, the first quarter of fiscal 2020 included 14 weeks while all other fiscal quarters presented herein included 13 weeks.

Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to the SEC’s rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s ~~2017~~2019 Annual Report on Form 10-K.

~~Certain prior period amounts have been reclassified to conform to the current period presentation.~~

Recently ~~Issued~~Adopted Accounting ~~Pronouncements Not Yet Adopted:~~

In August 2017, the Financial Accounting Standards Board (the "FASB") issued ASU 2017-12 related to the accounting for hedging activities. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. This guidance is effective for the Company beginning in the first quarter of fiscal year 2020 and early adoption is permitted. The Company is finalizing its assessment of the impact of the guidance, but does not believe it will have a material impact on the Company's Condensed Consolidated Financial Statements.

In October 2016, the FASB issued ASU 2016-16 related to the income tax consequences of intra-entity transfers of assets other than inventory. The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. This guidance is effective for the Company beginning in the first quarter of fiscal year 2019 and early adoption is permitted. This guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact this new standard may have on its Condensed Consolidated Financial Statements.

In August 2016, the FASB issued ASU 2016-15 related to the classification of certain cash receipts and cash payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new standard addresses certain issues where diversity in practice was identified. It also amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities and clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. This guidance is effective for the Company beginning in the first quarter of fiscal year 2019. Early adoption is permitted. The Company is currently assessing the impact this new standard may have on its Condensed Consolidated Statements of Cash Flows.

In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This guidance is effective for the Company

beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Condensed Consolidated Financial Statements and the timing of adoption.Pronouncements:

In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue relating to contracts with customers that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services ("Topic 606"). On September 30, 2018, the Company adopted and applied Topic 606 to all contracts using the modified retrospective method of adoption. Upon adoption, the Company recognized an increase to its fiscal 2019 beginning Retained earnings balance of $7.8 million.

In February 2016, the FASB issued ASU 2016-02 (“Topic 842”), which is intended to improve financial reporting of lease transactions by requiring lessees to recognize most leases as a right-of-use (“ROU”) asset and lease liability on their balance sheets for the rights and obligations created by leases, but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. ASU 2016-02 also requires disclosures ~~enabling users of financial statements to understand~~regarding the ~~nature,~~ amount, timing and ~~uncertainty~~judgments related to accounting for an entity’s leases and related cash flows.

On September 29, 2019, the Company adopted Topic 842 using the modified retrospective method of ~~revenue~~adoption, which allows financial information for comparative periods prior to adoption not to be updated. The Company recognized right-of-use assets and ~~cash flows arising from~~operating lease liabilities on its Consolidated Balance Sheets, but the standard did not have a material impact on its Consolidated Statements of Comprehensive Income or Consolidated Statements of Cash Flows.

ASC 842 provides optional practical expedients to assist with transition to the new standard. Management elected the package of practical expedients offered, which allows entities to not reassess: (i) whether any contracts prior to the adoption date are or contain leases, (ii) lease classification, and (iii) whether capitalized initial direct costs continue to meet the definition of initial direct costs under the new guidance. For all new and modified leases after adoption, management elected the short-term lease recognition exemption for all of the Company’s leases that qualify, in addition to the practical expedient to not separate lease and nonlease components. Refer to Note 7, "Leases," for further information.

In August 2017, the FASB issued ASU 2017-12 related to the accounting for hedging activities. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the

assessment of hedge effectiveness. The Company adopted this guidance during the first quarter of fiscal 2020 with ~~customers~~no material impact to the Company's Consolidated Financial Statements; however, the impact of the new standard on future periods will depend on the facts and circumstances of future transactions.

Recently Issued Accounting Pronouncements Not Yet Adopted:

In June 2016, the FASB issued ASU 2016-13, which replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and required consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance is effective for the Company beginning in the first quarter of fiscal year ~~2019.~~

2021. Early adoption is permitted. The Company ~~developed a comprehensive project plan that includes a global cross-functional team~~is currently in the process of ~~representatives to conduct an assessment~~assessing the impact of ~~Topic 606 and its potential impacts on~~ the ~~Company. The project plan includes analyzing the standard’s impact on the Company’s various revenue streams, comparing its historical accounting policies and practices to the requirements~~adoption of the new standard ~~and identifying potential differences from applying the requirements of the new standard to~~on its contracts. The Company is in the process of identifying and implementing appropriate changes to its current accounting policies, business processes, systems and controls to support revenue recognition and disclosures under Topic 606.

The Company has determined that the new standard will result in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue will be recognized "over time," as products are produced, as opposed to at a "point in time" upon physical delivery. The new standard could have a material impact on the Company's consolidated financial statements upon initial adoption, primarily as the Company recognizes an increase in contract assets for unbilled receivables with a corresponding reduction in finished goods and work-in-process inventory. The Company presently expects to adopt Topic 606 at the beginning of fiscal 2019 using the modified retrospective approach.Consolidated Financial Statements.

The Company believes that no other recently issued accounting standards will have a material impact on its Consolidated Financial Statements, or apply to its operations.

2. Inventories

Inventories as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017~~28, 2019 consisted of the following (in thousands):



	January 4, 2020		September 28, 2019
Raw materials	$	599,624	$	577,545
Work-in-process	51,732		49,315
Finished goods	84,447		74,078
Total inventories, net	$	735,803	$	700,938

December 30, 2017 September 30, 2017
Raw materials $ 501,323
$ 477,921
Work-in-process 85,634
86,367
Finished goods 82,937
90,354
Total inventories $ 669,894
$ 654,642

In certain circumstances, per contractual terms, customer deposits are received by the Company to offset obsolete and excess inventory risks. The total amount of customer deposits related to inventory and included within current liabilities on the accompanying Condensed Consolidated Balance Sheets as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017~~28, 2019 was ~~$102.1~~$134.0 million and ~~$106.2~~$136.5 million, respectively.

3.Debt, ~~Capital~~Finance Lease Obligations and Other Financing

Debt, ~~capital~~finance lease obligations and other ~~obligations~~financing as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017,~~28, 2019 consisted of the following (in thousands):



	January 4, 2020			September 28, 2019
4.05% Senior Notes, due June 15, 2025	$	100,000		$	100,000
4.22% Senior Notes, due June 15, 2028	50,000			50,000
Borrowings under the credit facility	62,000			95,000
Finance lease and other financing obligations	44,114			44,492
Unamortized deferred financing fees	(1,440		)	(1,512		)
Total obligations	254,674			287,980
Less: current portion	(67,847		)	(100,702		)
Long-term debt and finance lease obligations, net of current portion	$	186,827		$	187,278

December 30, 2017 September 30, 2017
5.20% Senior notes, due June 15, 2018 $ 175,000
$ 175,000
Borrowings under the credit facility —
108,000
Capital lease and other financing obligations 31,644
30,901
Unamortized deferred financing fees (716 ) (794 )
Total obligations 205,928

313,107
Less: current portion (179,881 ) (286,934 )
Long-term debt and capital lease obligations, net of current portion $ 26,047
$ 26,173

~~The~~On June 15, 2018, the Company ~~has outstanding 5.20%~~entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 ~~(the "Notes"). As~~NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of ~~December 30, 2017 and September 30, 2017, $175.0 million was outstanding. The related Note Purchase Agreement contains~~ certain financial ~~covenants, which include~~ratios such as a ~~maximum~~ total leverage ratio and a minimum interest coverage ~~ratio and~~ratio. The 2018 Notes may be prepaid in whole

or in part at any time, subject to payment of a ~~minimum net worth test, all as defined in~~make-whole amount; interest on the ~~agreement.~~2018 Notes is payable semiannually. As of ~~December 30, 2017,~~January 4, 2020, the Company was in compliance with ~~all such~~the covenants ~~relating to~~under the ~~Notes and~~2018 NPA.

On May 15, 2019, the ~~Note Purchase Agreement.~~

~~The~~ Company ~~also has a~~refinanced its then-existing senior unsecured revolving credit facility (the "Prior Credit Facility") by entering into a new 5-year senior unsecured revolving credit facility (collectively with the Prior Credit Facility, referred to as the "Credit Facility"), ~~with a~~which expanded the maximum commitment from $300.0 million to $350.0 million and extended the maturity from July 5, 2021 to May 15, 2024. The maximum commitment ~~that expires on July 5, 2021. The~~under the Credit Facility may be further increased to ~~$500.0~~$600.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During the three months ended ~~December 30, 2017,~~January 4, 2020, the highest daily borrowing was ~~$193.0~~$164.5 million; the average daily borrowings were ~~$134.2 million and the~~$128.1 million. The Company borrowed ~~$215.5~~$156.5 million and repaid ~~$323.5~~$189.5 million of revolving borrowings under the Credit ~~Facility. The~~Facility during the three months ended January 4, 2020. As of January 4, 2020, the Company was in compliance with all financial covenants relating to the Credit Agreement, which are generally consistent with those in the ~~Note Purchase Agreement~~2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was ~~assessed at an annual rate of 0.175%, payable quarterly,~~0.125% as of ~~December 30, 2017.~~January 4, 2020.

The fair value of the Company’s debt, excluding ~~capital~~finance leases, was ~~$175.2~~$219.4 million and ~~$284.5~~$252.3 million as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017,~~28, 2019, respectively. The carrying value of the Company's debt, excluding ~~capital~~finance leases, was ~~$175.0~~$212.0 million and ~~$283.0~~$245.0 million as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017,~~28, 2019, respectively. If measured at fair value in the financial statements, the Company's debt would be classified as Level 2 in the fair value hierarchy. Refer to Note 4, "Derivatives," for further information regarding the Company's fair value calculations and classifications.

4. Derivatives

~~Derivatives:~~

All derivatives are recognized in the accompanying Condensed Consolidated Balance Sheets at their estimated fair value. The Company uses derivatives to manage the variability of foreign currency obligations. The Company has cash flow hedges related to ~~variable rate debt and~~ forecasted foreign currency obligations, in addition to non-designated hedges to manage foreign currency exposures associated with certain foreign currency denominated assets and liabilities. The Company does not enter into derivatives for speculative purposes.

~~U.S. GAAP, requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. Accordingly, the~~The Company designates some foreign currency exchange contracts as cash flow hedges of forecasted foreign currency expenses.

Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss" in the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of the cash flows. In the next twelve months, the Company estimates that ~~$3.6~~$1.6 million of unrealized gains, net of tax, related to cash flow hedges will be reclassified from other comprehensive income (loss) into earnings. Changes in the fair value of the non-designated derivatives related to recognized foreign currency denominated assets and liabilities are recorded in "Miscellaneous, ~~other income (expense)"~~net" in the accompanying Condensed Consolidated Statements of Comprehensive ~~Income.~~Income (Loss).

The Company enters into forward currency exchange contracts for its ~~Malaysian~~ operations in Malaysia and Mexico on a rolling basis. The Company had cash flow hedges outstanding with a notional value of ~~$68.4~~$79.8 million as of ~~December 30, 2017~~January 4, 2020, and ~~$67.0~~$80.0 million as of September ~~30, 2017.~~28, 2019. These forward currency contracts fix the exchange rates for the settlement of future foreign currency obligations that have yet to be realized. The total fair value of the forward currency exchange contracts was a ~~$3.6~~$1.6 million asset as of ~~December 30, 2017~~January 4, 2020, and a ~~$2.0~~$0.6 million ~~asset~~liability as of September ~~30, 2017.~~28, 2019.

The Company had additional forward currency exchange contracts outstanding as of ~~December 30, 2017,~~January 4, 2020, with a notional value of ~~$17.8~~$17.2 million; there were ~~$10.6~~$34.4 million such contracts outstanding as of September ~~30, 2017.~~28, 2019. The Company did not designate these derivative instruments as hedging instruments. ~~In accordance with U.S. GAAP, the~~The net settlement amount (fair value) related to these contracts is recorded on the Condensed Consolidated Balance Sheets as either a current or long-term asset or liability, depending on the term, and as an element of "Miscellaneous, ~~other income (expense).~~net." The total fair value of these derivatives was a ~~$0.3~~$0.1 million ~~liability~~asset as of ~~December 30, 2017,~~January 4, 2020, and a ~~$0.1~~$0.9 million ~~liability~~asset as of September ~~30, 2017.~~28, 2019.

The tables below present information regarding the fair values of derivative instruments and the effects of derivative instruments on the Company’s Condensed Consolidated Financial Statements:

Fair Values of Derivative Instruments (in thousands)

Derivative Assets

Derivative Liabilities

January 4,
2020

September 28,
2019

January 4,
2020

September 28,
2019

Derivatives designated as hedging instruments

Balance Sheet

Classification

Fair Value

Balance Sheet

Classification

Fair Value

Forward currency forward contracts

Prepaid expenses and other

1,581

156

Other accrued liabilities

—

798

Fair Values of Derivative Instruments
In thousands of dollars
   Asset Derivatives Liability Derivatives
      December 30,
2017 September 30,
2017    December 30,
2017 September 30,
2017
Derivatives designated as hedging instruments
Balance Sheet
Classification
Fair Value Fair Value
Balance Sheet
Classification
Fair Value Fair Value
Forward currency forward contracts Prepaid expenses and other $ 3,642
$ 2,024
Other accrued liabilities $ —
$ —

Fair Values of Derivative Instruments (in thousands)

Derivative Assets

Derivative Liabilities

January 4,
2020

September 28,
2019

January 4,
2020

September 28,
2019

Derivatives not designated as hedging instruments

Balance Sheet

Classification

Fair Value

Balance Sheet

Classification

Fair Value

Forward currency forward contracts

Prepaid expenses and other

912

Other accrued liabilities

Fair Values of Derivative Instruments
In thousands of dollars
   Asset Derivatives Liability Derivatives
      December 30,
2017 September 30,
2017    December 30,
2017 September 30,
2017
Derivatives not designated as hedging instruments
Balance Sheet
Classification
Fair Value Fair Value
Balance Sheet
Classification
Fair Value Fair Value
Forward currency forward contracts Prepaid expenses and other $ 28
$ 35
Other accrued liabilities $ 351
$ 118



The Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) ("OCL") (in thousands)
for the Three Months Ended
Derivatives in Cash Flow Hedging Relationships	Amount of Income (Loss) Recognized in OCL on Derivatives
Derivatives in Cash Flow Hedging Relationships	January 4, 2020		December 29, 2018
Forward currency forward contracts	$	2,185	$	(388	)

Derivative Impact on Accumulated Other Comprehensive Loss ("OCL")
for the Three Months Ended

In thousands of dollars
Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) ("OCI") on Derivatives (Effective Portion)
December 30, 2017 December 31, 2016
Interest rate swaps $ —
$ (11 )
Forward currency forward contracts $ 2,714
$ (5,218 )



Derivative Impact on (Loss) Gain Recognized in Condensed Consolidated Statements of Comprehensive Income (in thousands)
for the Three Months Ended
Derivatives in Cash Flow Hedging Relationships	Classification of Loss Reclassified from Accumulated OCL into Income	Amount of Loss Reclassified from Accumulated OCL into Income
Derivatives in Cash Flow Hedging Relationships		January 4, 2020			December 29, 2018
Forward currency forward contracts	Cost of sales	$	(27	)	$	(684	)
Forward currency forward contracts	Selling and administrative expenses	$	(11	)	$	(82	)

Derivative Impact on Gain (Loss) Recognized in Income
for the Three Months Ended

In thousands of dollars
Derivatives in Cash Flow Hedging Relationships Classification of Gain (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
December 30, 2017 December 31, 2016
Interest rate swaps Interest expense $ —
$ (107 )
Forward currency forward contracts Selling and administrative expenses $ 105
$ 21
Forward currency forward contracts Cost of sales $ 991
$ 181
Treasury Rate Locks Interest expense $ 79
$ 79



Derivatives Not Designated as Hedging Instruments	Location of Gain Recognized on Derivatives in Income	Amount of (Loss) Gain on Derivatives Recognized in Income
Derivatives Not Designated as Hedging Instruments	Location of Gain Recognized on Derivatives in Income	January 4, 2020			December 29, 2018
Forward currency forward contracts	Miscellaneous, net	$	(410	)	$	787

Derivatives Not Designated as Hedging Instruments Location of (Loss) Gain Recognized on Derivatives in Income Amount of (Loss) Gain on Derivatives Recognized in Income
December 30, 2017 December 31, 2016
Forward currency forward contracts Miscellaneous other income (expense) $ (535 ) $ 75

There were no gains or losses recognized in income for derivatives related to ineffective portions and amounts excluded from effectiveness testing for the three months ended December 30, 2017 and December 31, 2016.

Fair Value Measurements:

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses quoted market prices when available or discounted cash flows to calculate

fair value. The accounting guidance establishes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are:

Level 1: Quoted (observable) market prices in active markets for identical assets or liabilities.

Level 2: Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

The following table lists the fair values of ~~assets (liabilities)~~liabilities of the Company’s derivatives as of ~~December 30, 2017~~January 4, 2020 and September ~~30, 2017,~~28, 2019, by input level:



Fair Value Measurements Using Input Levels Asset/(Liability) (in thousands)
January 4, 2020	Level 1		Level 2		Level 3		Total
Derivatives
Forward currency forward contracts	$	—	$	1,590	$	—	$	1,590

September 28, 2019
Derivatives
Forward currency forward contracts	$	—	$	216	$	—	$	216

Fair Value Measurements Using Input Levels Asset/(Liability)
In thousands of dollars
December 30, 2017 Level 1 Level 2 Level 3 Total
Derivatives
Forward currency forward contracts $ —
$ 3,319
$ —
$ 3,319

September 30, 2017
Derivatives
Forward currency forward contracts $ —
$ 1,941
$ —
$ 1,941

The fair value of ~~interest rate swaps and~~ foreign currency forward contracts is determined using a market approach, which includes obtaining directly or indirectly observable values from third parties active in the relevant markets. ~~The primary input in the fair value of the interest rate swaps is the relevant LIBOR forward curve.~~ Inputs in the fair value of the foreign currency forward contracts include prevailing forward and spot prices for currency and interest rate forward curves.

5. Income Taxes

On December 22, 2017, the U.S. Tax Cuts & Jobs Act was enacted ("Tax Reform"). Due to the complexities in implementing Tax Reform, the SEC issued Staff Accounting Bulletin 118, which allows the Company to record a provisional tax expense when uncertainty or other factors may impact the final outcome. In accordance with U.S. GAAP, which requires the Company to recognize the effects of Tax Reform in the period of enactment, $124.5 million of tax expense was recorded during the three months ended December 30, 2017 due to Tax Reform. The $124.5 million includes $101.8 million of U.S. federal and state taxes on the deemed repatriation of undistributed foreign earnings, which are payable over an eight year period beginning in fiscal 2019, and $22.7 million of foreign withholding taxes due to a change in the Company's permanently reinvested assertion on certain foreign earnings that are payable upon repatriation to the U.S. The Company believes this is a reasonable estimate of tax expense related to Tax Reform using all analyses, interpretations and guidance available at this time. The Company continues to assess the impact of Tax Reform, and the final impact may differ from this estimate, perhaps materially, due to, among other things, changes in interpretations, assumptions, and/or guidance that may be issued in the near future or actions the Company may take as a result.

Of the $124.5 million of income tax expense, $99.9 million is recorded in "Long-term accrued income taxes payable," $21.9 million is recorded in "Deferred income tax liabilities" and $2.7 million is recorded in “Other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets.

Income tax expense for the three months ended ~~December 30, 2017~~January 4, 2020 was ~~$127.5~~$3.3 million ~~which included $124.5~~compared to $11.9 million ~~due to the impact of Tax Reform. Income tax expense~~ for the three months ended December ~~31, 2016 was $2.8 million.~~29, 2018.

The effective tax rates for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016~~29, 2018 were ~~439.2%~~9.5% and ~~9.2%~~34.9%, respectively. The effective tax rate for the three months ended ~~December 30, 2017 increased~~January 4, 2020 decreased from the effective tax rate for the three months ended December ~~31, 2016,~~29, 2018, primarily due to the additional impact of the U.S. Tax Cuts & Jobs Act of $7.0 million recorded during the three months ended December 29, 2018. The Company also recorded a ~~428.8 percentage point impact~~$1.9 million benefit related to ~~Tax Reform and an overall decrease in pretax earnings and decreased earnings in jurisdictions where~~guidance issued by the ~~Company maintains valuation allowances.~~U.S. Department of the Treasury regarding foreign tax credits partially offset by $1.1 million of special tax items during the three months ended January 4, 2020.

There were no material additions to the amount of unrecognized tax benefits recorded for uncertain tax positions as of ~~December 30, 2017, as compared to September 30, 2017.~~January 4, 2020. The Company recognizes accrued interest and penalties on

uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three months ended ~~December 30, 2017 and December 31, 2016 were~~January 4, 2020 was not material.

One or more uncertain tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company's consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. ~~or any~~The Company is under audit in various foreign jurisdictions ~~in which the Company operates.~~but settlement is not expected to have a material impact.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended ~~December 30, 2017,~~January 4, 2020, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the EMEA segment and a partial valuation against its net deferred tax assets in certain jurisdictions within the AMER ~~and EMEA segments,~~segment, as it was more likely than not that these assets would not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until it determines it is more likely than not that the deferred tax assets will be realized.

6. Earnings Per Share

The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016~~29, 2018 (in thousands, except per share amounts):



	Three Months Ended
	January 4, 2020		December 29, 2018
Net income	$	31,006	$	22,226
Basic weighted average common shares outstanding	29,147		31,403
Dilutive effect of share-based awards and options outstanding	918		883
Diluted weighted average shares outstanding	30,065		32,286
Earnings per share:
Basic	$	1.06	$	0.71
Diluted	$	1.03	$	0.69

Three Months Ended
December 30, 2017 December 31, 2016
Net (loss) income $ (98,493 ) $ 28,179
Basic weighted average common shares outstanding 33,567
33,534
Dilutive effect of share-based awards outstanding —
1,010
Diluted weighted average shares outstanding 33,567
34,544
(Loss) earnings per share:
Basic $ (2.93 ) $ 0.84
Diluted $ (2.93 ) $ 0.82

For the three months ended ~~December 30, 2017,~~January 4, 2020 there were no0 antidilutive shares, but the total number of potentially dilutive share-based awards was 1.1 million. However, these awards were not included in the computation of diluted loss per share, as doing so would have decreased the loss per share.

awards. For the three months ended December ~~31, 2016,~~29, 2018 share-based awards for approximately 0.1 million shares were not included in the computation of diluted earnings per share as they were antidilutive.

See also Note 12, "Shareholders' Equity," for information regarding the Company's share repurchase plans.

7. Leases

The Company’s lease portfolio includes both real estate and non-real estate type leases which are accounted for as either finance or operating leases. Real estate leases generally include office, warehouse and manufacturing facilities and non-real estate leases generally include office equipment and vehicles. The Company determines if a contract is or contains a lease at inception. The Company’s leases have remaining lease terms of less than 1 year to 41 years. Renewal options that are deemed reasonably certain are included as part of the lease term for purposes of calculating the right-of-use (“ROU”) assets and lease liability. Variable lease payments are generally expensed as incurred and include certain index-based changes in rent, certain nonlease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. The Company elected the practical expedient to not separate lease and nonlease components, as such non-lease components are included in the calculation of the ROU asset and lease liability and included in the lease expense over the term of the lease. The Company uses a discount rate to calculate the ROU asset and lease liability. When the implicit rate is known or provided in the lease documents, the Company is required to use this rate. In cases in which the implicit rate is not known, the Company uses an estimated incremental borrowing rate.

Operating lease ROU assets and lease liabilities are recorded on the date the Company takes possession of the leased assets with expense recognized on a straight-line basis over the lease term. Leases with an estimated total term of 12 months or less are not recorded on the balance sheet and the lease expense is recognized on a straight-line basis over the lease term. Generally, the Company's lease agreements do not contain material residual value guarantees or material restrictive covenants.

Upon adoption of ASU 2016-02, the Company recorded $45.5 million of right-of-use assets and lease liabilities, related to its existing operating lease portfolio. The Company also reclassified amounts previously held on the balance sheet to right-of-use assets and lease liabilities upon adoption due to existing arrangements subject to the new standard, including $30.2 million of prepaid leases in other non-current assets. The accounting for the Company’s finance leases remained substantially unchanged. In addition, the company recognized a $1.1 million reduction to retained earnings as a result of two existing build-to-suit arrangements for the facilities in Guadalajara, Mexico that were reassessed to be finance leases under the new standard. The adoption of this new standard did not have a material impact on the Condensed Consolidated Statements of Cash Flows or Condensed Consolidated Statements of Comprehensive Income.

As a result of the adoption, the following adjustments were made to the opening balances of the Company's Condensed Consolidated Balance Sheets (in thousands):



	September 28, 2019		Impacts due to adoption of Topic 842			September 29, 2019
ASSETS
Prepaid expenses and other	$	31,974	$	(170	)	$	31,804
Operating right-of-use assets	—		75,790			75,790
Property, plant and equipment, net	384,224		(1,833		)	382,391
Deferred income taxes	13,654		432			14,086
Other non-current assets	64,714		(30,193		)	34,521
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	106,461	$	7,939		$	114,400
Long-term debt and finance lease obligations, net of current portion	187,278		(207		)	187,071
Long-term operating lease liabilities	—		37,371			37,371
Retained earnings	1,178,677		(1,077		)	1,177,600

The components of lease expense for three months ended January 4, 2020 were as follows (in thousands):



	Three Months Ended
	January 4, 2020
Finance lease expense:
Amortization of right-of-use assets	$	1,194
Interest on lease liabilities	1,291
Operating lease expense	3,181
Other lease expense	120
Total	$	5,786

Based on the nature of the ROU asset, amortization of finance right-of-use assets, operating lease expense and other lease expense are recorded within either cost of goods sold or selling and administrative expenses and interest on finance lease liabilities is recorded within interest expense on the Condensed Consolidated Statements of Comprehensive Income. Other lease expense includes lease expense for leases with an estimated total term of twelve months or less and variable lease expense related to variations in lease payments as a result of a change in factors or circumstances occurring after the lease possession date.

The following tables sets forth the amount of lease assets and lease liabilities included in the Company’s Condensed Consolidated Balance Sheets was (in thousands):



	Financial Statement Line Item	January 4, 2020
ASSETS
Finance lease assets	Property, plant and equipment, net	$	37,281
Operating lease assets	Right-of-use operating lease assets	79,318
Total lease assets		$	116,599

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Finance lease liabilities	Current portion of long-term debt and finance lease obligations	$	2,718
Operating lease liabilities	Other accrued liabilities	9,102
Non-current
Finance lease liabilities	Long-term debt and finance lease obligations, net of current portion	36,946
Operating lease liabilities	Long-term operating lease liabilities	41,764
Total lease liabilities		$	90,530

Other information related to the Company’s leases was as follows:



	Three Months Ended
	January 4, 2020
Weighted-average remaining lease term (in years)
Finance leases	13.3
Operating leases	17.9
Weighted-average discount rate
Finance leases	17.7		%
Operating leases	3.0		%
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows used in finance leases	$	1,124
Operating cash flows used in operating leases	3,179
Finance cash flows used in finance leases	719
ROU assets obtained in exchange for lease liabilities (in thousands)
Operating leases	$	7,503
Finance leases	274

Future minimum lease payments required under finance and operating leases as of January 4, 2020, were as follows (in thousands):



	Operating leases			Finance leases
Remaining 2020	$	7,979		$	5,572
2021	8,789			6,555
2022	8,006			6,064
2023	7,575			5,305
2024	5,979			4,988
2025 and thereafter	20,500			98,729
Total minimum lease payments	58,828			127,213
Less: imputed interest	(7,962		)	(87,549		)
Present value of lease liabilities	$	50,866		$	39,664

As of January 4, 2020, the Company’s future operating leases that have not yet commenced are immaterial.

Future minimum lease payments required under long-term operating and capital leases as of September 28, 2019, were as follows (in thousands):



	Operating leases		Capital leases
2020	$	10,395	$	6,734
2021	6,554		3,490
2022	5,584		2,884
2023	5,153		1,652
2024	3,713		958
Thereafter	9,426		34,143
Total	$	40,825	$	49,861

8. Share-Based Compensation

The Company recognized ~~$3.9~~$5.0 million and ~~$3.6~~$4.8 million of compensation expense associated with share-based awards for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, respectively.

The Company uses the Black-Scholes valuation model to determine the fair value of stock options and stock-settled ~~stock~~ appreciation rights ("SARs"). The Company uses its stock price on grant date as the fair value assigned to restricted stock units ("RSUs").

Performance stock units ("PSUs") are payable in shares of the Company's common stock. Beginning for fiscal 2017 grants, PSUs vest based on the relative total shareholder return ("TSR") of the Company's common stock as compared to the companies in the Russell 3000 index, a market condition, and the Company's economic return performance during the three year performance period, a performance condition. The Company uses the Monte Carlo valuation model to determine the fair value of PSUs at the date of grant for PSUs that vest based on the relative TSR of the Company's common stock. The Company uses its stock price on grant date as the fair value assigned to PSUs that vest based on the Company's economic return performance. The PSUs granted in fiscal 2016 and prior years vest based solely on the relative TSR of the Company's common stock as compared to companies in the Russell 3000 Index during a three year performance period. The number of shares that may be issued pursuant to PSUs ranges from ~~zero~~0 to ~~0.4~~0.5 million and is dependent upon the Company's TSR and economic return performance over the applicable performance periods.

The Company recognizes share-based compensation expense over the share-based awards' vesting period.

Table of Contents

Plexus Corp.

Notes to Consolidated Financial Statements

9. Litigation

The Company is party to lawsuits in the ordinary course of business. ~~Although the outcome of these legal matters cannot be predicted with certainty, management~~Management does not ~~expect~~believe that these proceedings, individually or in the aggregate, will have a material positive or adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

9.10. Reportable Segments

Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources. The Company uses an internal management reporting system, which provides important financial data ~~to the chief operating decision maker~~ to evaluate performance and allocate the Company’s resources on a regional basis. Net sales for the segments are attributed to the region in which the product is manufactured or the service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other expenses. Corporate and other expenses primarily represent corporate selling and administrative expenses, and restructuring costs and other charges, if any. These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the segments are the same as for the Company taken as a whole.

Information about the Company’s ~~three~~3 reportable segments for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, respectively, is as follows (in thousands):



	Three Months Ended
	January 4, 2020			December 29, 2018
Net sales:
AMER	$	353,476		$	353,867
APAC	451,142			378,112
EMEA	84,477			72,298
Elimination of inter-segment sales	(36,686		)	(38,733		)
	$	852,409		$	765,544

Operating income (loss):
AMER	$	12,297		$	14,450
APAC	62,378			51,811
EMEA	(314		)	996
Corporate and other costs	(34,427		)	(30,306		)
	$	39,934		$	36,951
Other income (expense):
Interest expense	$	(4,132	)	$	(2,249	)
Interest income	645			525
Miscellaneous, net	(2,173		)	(1,112		)
Income before income taxes	$	34,274		$	34,115

Three Months Ended
December 30, 2017 December 31, 2016
Net sales:
AMER $ 299,043
$ 314,651
APAC 346,123
309,969
EMEA 63,832
39,449
Elimination of inter-segment sales (31,704 ) (29,050 )
$ 677,294
$ 635,019

Operating income (loss):
AMER $ 10,523
$ 14,797
APAC 50,532
48,240
EMEA (1,121 ) (2,235 )
Corporate and other costs (28,377 ) (26,899 )
$ 31,557
$ 33,903
Other income (expense):
Interest expense (3,725 ) (3,274 )
Interest income 1,555
1,071
Miscellaneous (346 ) (674 )
Income before income taxes $ 29,041
$ 31,026

December 30,
2017 September 30,
2017
Total assets:
AMER $ 567,275
$ 595,851
APAC 1,127,066
1,163,111
EMEA 175,569
172,830
Corporate and eliminations 46,297
44,390
$ 1,916,207
$ 1,976,182

~~10.~~



	January 4, 2020		September 28, 2019
Total assets:
AMER	$	789,067	$	751,990
APAC	993,354		958,744
EMEA	232,581		209,541
Corporate and eliminations	95,102		80,608
	$	2,110,104	$	2,000,883

11. Guarantees

The Company offers certain indemnifications under its customer manufacturing agreements. In the normal course of business, the Company may from time to time be obligated to indemnify its customers or its customers’ customers against damages or liabilities arising out of the Company’s negligence, misconduct, breach of contract, or infringement of ~~third party~~third-party intellectual property rights. Certain agreements have extended broader indemnification, and while most agreements have contractual limits, some do not. However, the Company generally does not provide for such indemnities and seeks indemnification from its customers for damages or liabilities arising out of the Company’s adherence to customers’ specifications or designs or use of materials furnished, or directed to be used, by its customers. The Company does not believe its obligations under such indemnities are material.

In the normal course of business, the Company also provides its customers a limited warranty covering workmanship, and in some cases materials, on products manufactured by the Company. Such warranty generally provides that products will be free from defects in the Company’s workmanship and meet mutually agreed-upon specifications for periods generally ranging from 12 months to 24 months. ~~If a product fails to comply with the Company’s limited warranty, the~~The Company’s obligation is generally limited to correcting, at its expense, any defect by repairing or replacing such defective product. The Company’s warranty generally excludes defects resulting from faulty customer-supplied components, ~~customer~~ design defects or damage caused by any party or caused other than by the Company.

The Company provides for an estimate of costs that may be incurred under its limited warranty at the time product revenue is recognized and establishes additional reserves for specifically identified product issues. These costs primarily include labor and materials, as necessary, associated with repair or replacement and are included in the Company's accompanying Condensed Consolidated Balance Sheets in ~~"Other~~"other current accrued liabilities." The primary factors that affect the Company’s warranty liability include the value and the number of shipped units and historical and anticipated rates of warranty claims. As these factors are impacted by actual experience and future expectations, the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Below is a table summarizing the activity related to the Company’s limited warranty liability for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016~~29, 2018 (in thousands):



	Three Months Ended
	January 4, 2020			December 29, 2018
Reserve balance, beginning of period	$	6,276		$	6,646
Accruals for warranties issued during the period	364			1,900
Settlements (in cash or in kind) during the period	(776		)	(1,255		)
Reserve balance, end of period	$	5,864		$	7,291

Three Months Ended
December 30, 2017 December 31, 2016
Reserve balance, beginning of period $ 4,756
$ 6,109
Accruals for warranties issued during the period 1,017
—
Settlements (in cash or in kind) during the period (1,352 ) (1,252 )
Reserve balance, end of period $ 4,421
$ 4,857

~~11.~~12. Shareholders' Equity

On ~~June 6, 2016,~~August 20, 2019, the Board of Directors approved a ~~multi-year~~new stock repurchase ~~program~~plan under which the Company is authorized to repurchase ~~up to $150.0~~$50.0 million of its common stock ~~beginning in fiscal 2017.~~(the "2019 Program"). The 2019 Program commenced upon completion of the 2018 Program, as defined below. During the three months ended January 4, 2020, the Company repurchased 90,667 shares under the 2019 Program program for $6.3 million at an average price of $69.82 per share. As of January 4, 2020, $40.4 million of authority remained under the 2019 Program.

Table of Contents

Plexus Corp.

Notes to Consolidated Financial Statements

On February 14, 2018, the Board of Directors approved a stock repurchase plan under which the Company was authorized to repurchase $200.0 million of its common stock (the "2018 Program"). During the three months ended December ~~30, 2017,~~29, 2018, the Company repurchased ~~158,466~~869,949 shares under the 2018 Program program for ~~approximately $9.5~~$50.1 million, at an average price of ~~$60.25~~$57.53 per share. ~~During~~The 2018 Program was completed during the ~~three months ended December 31, 2016, the Company repurchased 144,729 shares for approximately $7.1 million, at an average price~~fiscal fourth quarter of ~~$48.79 per share.~~2019, when all share repurchase authority under it was exhausted.

All shares repurchased under the aforementioned ~~program~~programs were recorded as treasury stock.

~~12.~~13. Trade Accounts Receivable Sale Programs

The Company has Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch (formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd.~~, New York Branch~~) (the ~~"BTMU~~"MUFG RPA"), and HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA"), under which the Company may elect to sell receivables at a ~~discount,~~discount. These facilities are uncommitted facilities. The MUFG RPA was amended on ~~an ongoing basis. As of~~ December ~~30, 2017,~~23, 2019 to increase the maximum facility ~~amounts~~amount from $280.0 million to $340.0 million. The maximum facility amount under the HSBC RPA as of ~~these uncommitted facilities were $160.0 million and~~January 4, 2020 is $60.0 ~~million, respectively.~~million. The ~~BTMU~~MUFG RPA ~~is subject to expiration on October 3, 2018, but~~ will be automatically extended each year unless any party gives no less than 10 days prior notice that the agreement should not be extended. The terms of the HSBC RPA are generally consistent with the terms of the ~~BTMU~~MUFG RPA discussed above.

~~The Company sold receivables under a former trade accounts receivable sale program that expired during the first fiscal quarter of 2017.~~

Transfers of receivables under the programs are accounted for as sales and, accordingly, receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Proceeds from the transfer reflect the face value of the receivables less a discount. The sale discount is recorded within "Miscellaneous, ~~other income (expense)"~~net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale.

The Company sold ~~$162.4~~$227.8 million and ~~$77.8~~$232.5 million of trade accounts receivable under these programs during the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, respectively, in exchange for cash proceeds of ~~$161.5~~$226.6 million and ~~$77.4~~$231.2 million, respectively.

14. Revenue from Contracts with Customers

Significant Judgments

Revenue is recognized over time for arrangements with customers for which: (i) the Company's performance does not create an asset with an alternative use to the Company, and (ii) the Company has an enforceable right to payment, including reasonable profit margin, for performance completed to date. Revenue recognized over time is estimated based on costs incurred to date plus a reasonable profit margin. If either of the two conditions noted above are not met to recognize revenue over time, revenue is recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying arrangement.

The Company recognizes revenue when a contract exists and when, or as, it satisfies a performance obligation by transferring control of a product or service to a customer. Contracts are accounted for when they have approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

The Company generally enters into a master services arrangement that establishes the framework under which business will be conducted. These arrangements represent the master terms and conditions of the Company's services that apply to individual orders, but they do not commit the customer to work with, or to continue to work with, the Company nor do they obligate the customer to any specific volume or pricing of purchases. Moreover, these terms can be amended in appropriate situations. Customer purchase orders are received for specific quantities with predominantly fixed pricing and delivery requirements. Thus, for the majority of our contracts, there is no guarantee of any revenue to the Company until a customer submits a purchase order. As a result, the Company generally considers its arrangement with a customer to be the combination of the master services arrangement and the purchase order. Most of the Company's arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct.

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. A performance obligation is satisfied over time if the Company has an enforceable right to payment, including a reasonable profit margin.

Determining if an enforceable right to payment includes a reasonable profit margin requires judgment and is assessed on a contract by contract basis.

Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided; if such requirements or obligations exist, then a sale is recognized at the time when such requirements are completed and such obligations are fulfilled.

The Company does not allow for a general right of return. Net sales include amounts billed to customers for shipping and handling and out-of-pocket expenses. The corresponding shipping and handling costs and out-of-pocket expenses are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from net sales.

Contract Costs

For contracts requiring over time revenue recognition, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which occurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the costs incurred to date.

There were no other costs to obtain or fulfill customer contracts.

Disaggregated Revenue

The table below includes the Company’s revenue for the three months ended January 4, 2020 and December 29, 2018, respectively, disaggregated by geographic reportable segment and market sector (in thousands):



	Three Months Ended January 4, 2020
	Reportable Segment:
	AMER		APAC		EMEA		Total
Market Sector:
Healthcare/Life Sciences	$	124,196	$	149,725	$	38,366	$	312,287
Industrial/Commercial	91,921		199,346		18,733		310,000
Aerospace/Defense	105,489		43,249		23,384		172,122
Communications	27,966		28,691		1,343		58,000
External revenue	349,572		421,011		81,826		852,409
Inter-segment sales	3,904		30,131		2,651		36,686
Segment revenue	$	353,476	$	451,142	$	84,477	$	889,095



	Three Months Ended December 29, 2018
	Reportable Segment:
	AMER		APAC		EMEA		Total
Market Sector:
Healthcare/Life Sciences	$	115,765	$	152,106	$	32,707	$	300,578
Industrial/Commercial	83,718		116,271		19,153		219,142
Aerospace/Defense	62,373		42,094		17,998		122,465
Communications	90,464		30,975		1,920		123,359
External revenue	352,320		341,446		71,778		765,544
Inter-segment sales	1,547		36,666		520		38,733
Segment revenue	$	353,867	$	378,112	$	72,298	$	804,277

For the three months ended January 4, 2020 and December 29, 2018, approximately 91% and 89%, respectively, of the Company's revenue was recognized as products and services were transferred over time, respectively.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and deferred revenue on the Company’s accompanying Condensed Consolidated Balance Sheets.

Contract Assets: For performance obligations satisfied at a point in time, billing occurs subsequent to revenue recognition, at which point the customer has been billed and the resulting asset is recorded within accounts receivable. For performance obligations satisfied over time as work progresses, the Company has an unconditional right to payment, which results in the recognition of contract assets. The following table summarizes the activity in the Company's contract assets for the three months ended January 4, 2020 and December 29, 2018 (in thousands):



	Three Months Ended
	January 4, 2020			December 29, 2018
Contract assets, beginning of period	$	90,841		$	—
Cumulative effect adjustment at September 29, 2018	—			76,417
Revenue recognized during the period	772,708			681,712
Amounts collected or invoiced during the period	(756,509		)	(675,354		)
Contract assets, end of period	$	107,040		$	82,775

Deferred Revenue: Deferred revenue is recorded when consideration is received from a customer prior to transferring goods or services to the customer under the terms of the contract, which is included in other accrued liabilities. As of January 4, 2020 and September 28, 2019 the balance of prepayments from customers that remained in Other accrued liabilities was $74.8 million and $67.9 million, respectively. The advance payment is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract, offset obsolete and excess inventory risks and to protect the company from the other party failing to adequately complete some or all of its obligations under the contract. Deferred revenue is recognized into revenue when all revenue recognition criteria are met. For performance obligations satisfied over time, recognition will occur as work progresses; otherwise deferred revenue will be recognized based upon shipping terms.

15. Acquisition

On July 27, 2018, the Company purchased the assets of one of the business lines of Cascade Controls, Inc., a new product introduction company in Portland, Oregon, for $12.4 million in cash, subject to certain customary post-closing adjustments. In the three months ended December 29, 2018, the Company received a $1.2 million purchase price adjustment as a result of a post-closing adjustment.

16. Subsequent Event

On January 22, 2020, the Company announced the decision to close a leased facility within the AMER segment, and transition the service offerings to another Company-owned facility in the region to provide synergies and cost advantages of a campus environment. We are assessing the impacts of the announcement on our Condensed Consolidated Financial Statements.

~~ITEM 2.~~


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

"SAFE HARBOR" CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

The statements contained in this Form 10-Q that are guidance or which are not historical facts (such as statements in the future tense and statements including believe, expect, intend, plan, anticipate, goal, target and similar terms and concepts), including all discussions of periods which are not yet completed, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include, but are not limited to: the risk of customer delays, changes, cancellations or forecast inaccuracies in both ongoing and new programs; the lack of visibility of future orders, particularly in view of changing economic conditions; the economic performance of the industries, sectors and customers we serve; the effects of shortages and delays in obtaining components as a result of economic cycles, natural disasters or otherwise; the effects of tariffs, trade disputes, trade agreements and other trade protection measures; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers, maintain our current customer base and deliver product on a timely basis; the risks of concentration of work for certain customers; the particular risks relative to new or recent customers, programs or services, which risks include customer and other delays, start-up costs, potential inability to execute, the establishment of appropriate terms of agreements, and the lack of a track record of order volume and timing; the ~~risks of concentration of work for certain customers; the effect~~effects of start-up costs of new programs and facilities; possible unexpected costs and operating disruption in transitioning programs, including transitions between Company facilities; the risk that new program wins and/or customer demand may not result in the expected revenue or profitability; the fact that customer orders may not lead to long-term relationships; our ability to manage successfully and execute a complex business model characterized by high product mix ~~low volumes~~ and demanding quality, regulatory, and other requirements; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; increasing regulatory and compliance requirements; risks related to information technology systems and data security; the effects of U.S. Tax Reform and of related foreign jurisdiction tax developments; the potential effects of jurisdictional results on our taxes, tax rates, and our ability to use deferred tax assets and net operating losses; the effects of shortages and delays in obtaining components as a result of economic cycles or natural disasters; the risks associated with excess and obsolete inventory, including the risk that inventory purchased on behalf of our customers may not be consumed or otherwise paid for by the customer, resulting in an inventory write-off; risks related to information technology systems and data security; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; increasing regulatory and compliance requirements; the effects of U.S. Tax Reform and of related foreign jurisdiction tax developments; current or potential future barriers to the repatriation of funds that are currently held outside of the United States as a result of actions taken by other countries or otherwise; the potential effects of jurisdictional results on our taxes, tax rates, and our ability to use deferred tax assets and net operating losses; the weakness of areas of the global economy; the effect of changes in the pricing and margins of products; raw materials and component cost fluctuations; the potential effect of fluctuations in the value of the currencies in which we transact business; the effects of changes in economic conditions, political conditions ~~trade protection measures,~~ and tax matters in the United States and in the other countries in which we do business (including as a result of the United Kingdom’s pending exit from the European Union); the potential effect of other world or local events or other events outside our control (such as changes in energy prices, terrorism, global health epidemics and weather events); the impact of increased competition; an inability to successfully manage human capital; changes in financial accounting standards; and other risks detailed herein and in our other Securities and Exchange Commission filings (particularly in "Risk Factors" in our fiscal ~~2017~~2019 Form 10-K).

* * *

OVERVIEW

Plexus Corp. and its subsidiaries (together ~~“Plexus,”~~"Plexus," the ~~“Company,”~~"Company," or "we") participate in the Electronic Manufacturing Services ("EMS") industry. We partner with our customers to create the products that build a better world. Since 1979, Plexus has been partnering with companies to ~~create~~transform concepts into branded products and deliver them to the ~~products that build~~market. From idea to aftermarket and everything in between, Plexus is a ~~better world. We are a team of over 16,000 employees,~~global leader in providing ~~global~~ support for all the facets of the product realization process –- Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing, and Aftermarket ~~Services – to companies in the Healthcare/Life Sciences, Industrial/Commercial, Communications and Aerospace/Defense market sectors.~~Services. Plexus ~~is an industry leader that specializes in serving customers with complex products used in demanding regulatory environments~~delivers comprehensive end-to-end solutions in the Americas ("AMER"), ~~Asia-Pacific ("APAC") and~~ Europe, Middle East, and Africa ("EMEA") ~~regions. 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.~~Asia-Pacific ("APAC") regions for our customers.

The following information should be read in conjunction with our Condensed Consolidated Financial Statements included herein, the ~~“Risk Factors”~~"Risk Factors" section in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended September ~~30, 2017,~~28, 2019, and our ~~“Safe Harbor”~~"Safe Harbor" Cautionary Statement included above.

RESULTS OF OPERATIONS

Consolidated Performance Summary. The following table presents selected consolidated financial data (dollars in millions, except per share data):


	Three Months Ended						Three Months Ended
	December 30, 2017			December 31, 2016			January 4, 2020			December 29, 2018
Net sales	$	677.3		$	635.0		$	852.4		$	765.5
Cost of sales	613.8			570.7			773.2			693.2
Gross profit	63.5			64.3			79.2			72.4
Gross margin	9.4		%	10.1		%	9.3		%	9.5		%
Operating income	31.6			33.9			39.9			37.0
Operating margin	4.7		%	5.3		%	4.7		%	4.8		%
Net (loss) income	(98.5		)	28.2
Diluted (loss) earnings per share	$	(2.93	)	$	0.82
Net income							31.0			22.2
Diluted earnings per share							$	1.03		$	0.69
Return on invested capital*	16.2		%	17.3		%	14.7		%	14.6		%
Economic return*	6.7		%	6.8		%	5.9		%	5.6		%
*Non-GAAP metric; refer to "Return on Invested Capital ("ROIC") and Economic Return" below for more information and Exhibit 99.1 for a reconciliation.

Net sales. For the three months ended ~~December 30, 2017,~~January 4, 2020, net sales increased ~~$42.3~~$86.9 million, or ~~6.7%~~11.4%, as compared to the three months ended December ~~31, 2016.~~29, 2018.

Net sales are analyzed by management by geographic segment, which reflects the Company's reportable segments, and by market sector. Management measures operational performance and allocates resources on a geographic segment basis. The Company’s global business development strategy is based on our targeted market sectors.

A discussion of net sales by reportable segment is presented below (in millions):


	Three Months Ended						Three Months Ended
	December 30, 2017			December 31, 2016			January 4, 2020			December 29, 2018
Net sales:
AMER	$	299.0		$	314.7		$	353.5		$	353.9
APAC	346.1			310.0			451.1			378.1
EMEA	63.8			39.4			84.5			72.3
Elimination of inter-segment sales	(31.6		)	(29.1		)	(36.7		)	(38.8		)
Total net sales	$	677.3		$	635.0		$	852.4		$	765.5

AMER. Net sales for the three months ended ~~December 30, 2017~~January 4, 2020 in the AMER segment decreased ~~$15.7~~$0.4 million, or ~~5.0%~~0.1%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The ~~reduction~~decrease in net sales was driven by ~~decreases~~a reduction in net sales of ~~$32.2~~$16.9 million ~~from end-of-life products, $4.7 million from customer disengagements~~due to manufacturing transfers to our APAC segment and overall net decreased customer end-market ~~demand. Partially offsetting these decreases~~demand in the Communications sector. The decrease was mostly offset by a ~~net sales~~$52.6 million increase ~~of $22.8 million from the ramp~~in production ramps of new ~~programs~~products for existing customers and an $11.7 million increase in production ramps for new customers.

APAC. Net sales for the three months ended ~~December 30, 2017~~January 4, 2020 in the APAC segment increased ~~$36.1~~$73.0 million, or ~~11.6%~~19.3%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The increase in net sales was ~~primarily due to~~driven by a ~~$37.1~~$22.9 million increase in production ramps of new products for existing customers, a $16.9 million increase due to ~~the ramp of new programs for existing customers~~manufacturing transfers from our AMER segment and overall net increased customer end-market demand. ~~These increases were~~The increase was partially offset by a $9.3 million decrease ~~of $5.8 million that resulted from an~~for end-of-life ~~product.~~products.

EMEA. Net sales for three months ended December 30, 2017 in the EMEA segment increased $24.4 million, or 61.9%, as compared to three months ended December 31, 2016. The increase in net sales was primarily attributable to increases of $14.9 million due to the ramp of new programs for existing customers and net increased customer end-market demand.

~~Our net sales by market sector for the indicated periods were as follows (in millions):~~

Three Months Ended
Market Sector December 30, 2017 December 31, 2016
Healthcare/Life Sciences $ 237.1
$ 211.0
Industrial/Commercial 206.8
205.6
Communications 133.6
131.4
Aerospace/Defense 99.8
87.0
Total net sales $ 677.3
$ 635.0

~~Healthcare/Life Sciences~~.Net sales for the three months ended ~~December 30, 2017~~January 4, 2020 in the ~~Healthcare/Life Sciences sector~~EMEA segment increased ~~$26.1~~$12.2 million, or ~~12.4%~~16.9%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The increase ~~was primarily driven by increases~~ in net sales was the result of ~~$18.2~~a $6.0 million ~~due to the ramp~~increase in production ramps of new ~~programs~~products for existing customers ~~as well as~~and overall net increased customer end-market demand.

~~Industrial/Commercial~~

Our net sales by market sector is presented below (in millions):



	Three Months Ended
	January 4, 2020		December 29, 2018
Market Sector:
Healthcare/Life Sciences	$	312.3	$	300.6
Industrial/Commercial	310.0		219.1
Aerospace/Defense	172.1		122.5
Communications	58.0		123.3
Total net sales	$	852.4	$	765.5

Healthcare/Life Sciences. Net sales for the three months ended ~~December 30, 2017~~January 4, 2020 in the ~~Industrial/Commercial~~Healthcare/Life Sciences sector increased ~~$1.2~~$11.7 million, or ~~0.6%~~3.9%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The increase was ~~primarily~~ driven by ~~increases~~a $15.2 million increase in ~~net sales of $37.9 million due to the ramp~~production ramps of new ~~programs~~products for existing customers ~~as well as~~and overall net increased customer end-market demand. ~~Mostly offsetting the increases were decreases in net sales~~The increase was partially offset by a decrease of ~~$37.9~~$6.4 million ~~from~~for end-of-life ~~products and $10.3 million related to customer disengagements.~~products.

~~Communications~~Industrial/Commercial. Net sales for the three months ended ~~December 30, 2017~~January 4, 2020 in the ~~Communications~~Industrial/Commercial sector increased ~~$2.2~~$90.9 million, or ~~1.7%~~41.5%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The increase was ~~primarily~~ driven by a $28.0 million increase in production ramps of new products for existing customers and overall net increased customer end-market demand.

Aerospace/Defense. Net sales for the three months ended ~~December 30, 2017~~January 4, 2020 in the Aerospace/Defense sector increased ~~$12.8~~$49.6 million, or ~~14.7%~~40.5%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The increase was ~~primarily~~ driven by a ~~$9.4~~$29.9 million increase ~~due to the ramp of~~in production ramps of new products for existing customers, ~~as well as~~a $5.1 million increase in production ramps for new customers and overall net increased customer end-market demand.

~~Cost of sales.~~ ~~Cost of~~Communications. Net sales for the three months ended ~~December 30, 2017 increased $43.1~~January 4, 2020 in the Communications sector decreased $65.3 million, or ~~7.6%~~53.0%, as compared to the three months ended December ~~31, 2016.~~29, 2018. The decrease was driven by overall net decreased customer end-market demand.

Cost of sales. Cost of sales for the three months ended January 4, 2020 increased $80.0 million, or 11.5%, as compared to the three months ended December 29, 2018. Cost of sales is comprised primarily of material and component costs, labor costs and overhead. For ~~both~~ the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, approximately ~~89.0%~~89% and 90%, respectively, of the total cost of sales was variable in nature and fluctuated with sales volumes. Of ~~this amount,~~these amounts, approximately ~~91.0%~~89% and 90%, respectively, of these costs in each period were related to material and component costs. As ~~a result of primarily using a cost-plus markup pricing arrangement with our customers, changes~~compared to the prior year period, the increase in ~~costs typically result in corresponding changes in price, which generally results in an immaterial impact on gross profit. Cost~~cost of sales ~~increased more than~~for the ~~6.7%~~three months ended January 4, 2020 was primarily due to the increase in net sales ~~primarily due to a shift in customer mix as well as increased~~and fixed ~~labor and overhead~~ costs to support new program ramps.

Gross profit. Gross profit for the three months ended ~~December 30, 2017 decreased $0.8~~January 4, 2020 increased $6.8 million, or ~~1.2%~~9.4%, as compared to the three months ended December ~~31, 2016.~~29, 2018. Gross margin of 9.3% decreased 70by 20 basis points as compared to the three months ended December ~~31, 2016.~~29, 2018. The primary driver of the ~~decreases~~increase in gross profit was the increase in net sales, partially offset by higher fixed costs to support new program ramps and a negative shift in customer mix, which drove the decrease in gross ~~margin~~margin.

Operating income. Operating income for the three months ended January 4, 2020 increased $2.9 million, or 7.8%, as compared to the three months ended December ~~31, 2016, was~~29, 2018 as a result of the ~~larger percentage~~ increase in ~~cost~~gross profit, partially offset by a $3.8 million increase in selling and administrative expenses ("S&A") that was primarily due to an increase in compensation expense. Operating margin of ~~sales as~~4.7% decreased 10 basis points compared to the ~~increase~~three months ended December 29, 2018 primarily due to the decrease in ~~net sales, driven by~~gross margin as a result of the factors ~~previously discussed.~~discussed above.

~~Operating income.~~

A discussion of operating income by reportable segment is presented below (in millions):



	Three Months Ended
	January 4, 2020			December 29, 2018
Operating income (loss):
AMER	$	12.3		$	14.5
APAC	62.4			51.8
EMEA	(0.3		)	1.0
Corporate and other costs	(34.5		)	(30.3		)
Total operating income	$	39.9		$	37.0

AMER. Operating income for the three months ended ~~December 30, 2017~~January 4, 2020 decreased ~~$2.3~~$2.2 million as compared to the three months ended December ~~31, 2016~~29, 2018, primarily as a result of ~~the decrease in gross profit~~increased fixed costs to support new program ramps and ~~a $1.5 million~~an increase in ~~selling and administrative expenses ("~~S~~&A").~~&A primarily due to an increase in compensation expense, partially offset by a positive shift in customer mix.

~~A discussion of operating income (loss) by reportable segment is presented below (in millions):~~

Three Months Ended
December 30, 2017 December 31, 2016
Operating income (loss):
AMER $ 10.5
$ 14.8
APAC 50.5
48.2
EMEA (1.1 ) (2.2 )
Corporate and other costs (28.3 ) (26.9 )
Total operating income $ 31.6
$ 33.9

~~AMER.~~ APAC. Operating income for the three months ended ~~December 30, 2017 decreased $4.3~~January 4, 2020 increased $10.6 million as compared to the three months ended December ~~31, 2016, primarily as a result of increased fixed labor and overhead costs to support new program ramps as well as decreased net sales.~~

~~APAC.~~ ~~Operating income for the three months ended December 30, 2017 increased $2.3 million as compared to the three months ended December 31, 2016,~~29, 2018, primarily as a result of the increase in net sales, ~~which was~~ partially offset by a negative shift in customer ~~mix.~~mix and increased fixed costs to support new program ramps.

EMEA. Operating ~~loss~~income for the three months ended ~~December 30, 2017~~January 4, 2020 decreased ~~$1.1~~$1.3 million as compared to the three months ended December ~~31, 2016,~~29, 2018, primarily ~~due to~~as a result of increased ~~net sales and higher leverage of~~ fixed costs ~~which costs remained relatively flat.~~to support new program ramps and a negative shift in customer mix, partially offset by an increase in net sales.

Other ~~income (expense).~~expense. Other expense for the three months ended ~~December 30, 2017 decreased $0.4~~January 4, 2020 increased $2.8 million as compared to the three months ended December ~~31, 2016.~~29, 2018, primarily due to an increase of $1.9 million in interest expense and the impact of foreign exchange volatility, which resulted in a foreign exchange loss of $0.9 million during the three months ended January 4, 2020 as compared to a $0.2 million foreign exchange gain during the three months ended December 29, 2018.

Income taxes. ~~Effective~~ Income tax expense and effective income tax rates ~~for the indicated periods were as follows:~~is presented below (dollars in millions):

Three Months Ended
December 30, 2017 December 31, 2016
Effective tax rate, as reported 439.2 % 9.2 %
Impact of Tax Reform (428.8 )% — %
Effective tax rate, as adjusted (1) 10.4 % 9.2 %

(1) We believe the non-GAAP presentation of the effective annual tax rate excluding the impact of Tax Reform provides additional insight over the change from the comparative reporting periods by eliminating non-recurring expenses due to new legislation. In addition, the Company believes that its effective tax rate, as adjusted, enhances the ability of investors to analyze the Company’s operating performance and supplements, but does not replace, its effective tax rate calculated in accordance with U.S. GAAP.



	Three Months Ended
	January 4, 2020		December 29, 2018
Income tax expense, as reported (GAAP)	$	3.3	$	11.9
Special tax items	0.8		(7.0		)
Income tax expense, as adjusted (non-GAAP) (1)	$	4.1	$	4.9



	Three Months Ended
	January 4, 2020		December 29, 2018
Effective tax rate, as reported (GAAP)	9.5	%	34.9	%
Special tax items	2.4		(20.7	)
Effective tax rate, as adjusted (non-GAAP) (1)	11.9	%	14.2	%

(1) We believe the non-GAAP presentation of income tax expense and the effective tax rate excluding special tax items provides additional insight into the change between comparative reporting periods by isolating the impact of these significant, special items. In addition, we believe that our income tax expense, as adjusted, and effective tax rate, as adjusted, enhance the ability of investors to analyze our operating performance and supplement, but do not replace, income tax expense and effective tax rate calculated in accordance with U.S. GAAP.

For the three months ended January 4, 2020, we recorded a tax benefit of $1.9 million benefit related to guidance issued by the U.S. Department of the Treasury regarding foreign tax credits partially offset by $1.1 million of other special tax items. For the three months ended December ~~22, 2017,~~29, 2018, we recorded a $7.0 million adjustment to income tax expense, inclusive of unrecognized tax benefits, as a result of proposed additional guidance issued by the U.S. Department of the Treasury, related to the U.S. Tax Cuts &and Jobs Act ~~was enacted~~ ("Tax Reform"). Tax Reform makes significant changes to U.S. corporate income tax, including transitioning the U.S. to a dividend exemption system and requiring a deemed dividend on historical undistributed earnings of foreign subsidiaries at a reduced tax rate. Tax Reform also includes provisions that may impact us beginning in fiscal 2019, such as a U.S. tax on certain foreign low-taxed earnings and a limitation placed on the deductibility of domestic interest expense. U.S. GAAP requires us to recognize the effects of Tax Reform in the period of enactment, which is the current quarter. The SEC issued guidance that allows us to record a provisional tax expense when uncertainty or other factors may impact the final outcome.

Income tax expense for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016~~29, 2018 was ~~$127.5~~$3.3 million and ~~$2.8~~$11.9 million, respectively. The decrease in income tax expense and the effective tax rate is primarily due to the impact of Tax Reform ~~for~~recorded in the three months ended December ~~30, 2017 was $124.5 million.~~

We believe the tax expense of $124.5 million recorded in the quarter ended December 30, 2017 is a reasonable estimate of tax expense related to Tax Reform using all analyses, interpretations and guidance available at the time. We continue to assess the impact of Tax Reform on our business, and the final impact may differ from this estimate, perhaps materially, due to, among other things changes in interpretations, assumptions, and/or guidance that may be issued in the near future or actions we may take as a result.

~~The effective tax rates for~~29, 2018. During the three months ended ~~December 30, 2017 and December 31, 2016 were 439.2% and 9.2%, respectively. The effective~~January 4, 2020, we recorded a benefit related to guidance issued by the U.S. Department of the Treasury regarding foreign tax credits partially offset by special tax items.

Our U.S. statutory tax rate for ~~the three months ended December 30, 2017 increased from the effective tax rate for the~~

three months ended December 31, 2016, due to a 428.8 percentage point impact related to Tax Reform and an overall decrease in pretax earnings and decreased earnings in jurisdictions where the Company maintains valuation allowances.

~~The impact of Tax Reform on our income tax expense~~fiscal 2020 is ~~reflected in the following table (in millions):~~

Three Months Ended
December 30, 2017 December 31, 2016
Income tax expense, as reported $ 127.5
$ 2.8
Impact of Tax Reform (124.5 ) —
Income tax expense, as adjusted (1) $ 3.0
$ 2.8

(1) We believe the non-GAAP presentation of income tax expense excluding the impact of Tax Reform provides additional insight over the change from the comparative reporting periods by eliminating non-recurring expenses due to new legislation. In addition, the Company believes that its income tax expense, as adjusted, enhances the ability of investors to analyze the Company’s operating performance and supplements, but does not replace, its income tax expense calculated in accordance with U.S. GAAP.

The income tax expense of $124.5 million recorded in the quarter ended December 30, 2017 as a result of Tax Reform includes $101.8 million for federal and state purposes on the deemed repatriation of our historical undistributed foreign earnings. This amount is payable over an eight year period beginning in fiscal 2019. An additional tax expense of $22.7 million was recorded for foreign withholding taxes that are payable upon repatriation to the U.S. due to a change in our permanently reinvested assertion on certain foreign earnings.

~~Due to Tax Reform, our blended U.S. statutory rate for fiscal 2018 is 24.5%~~21%. ~~This results from a statutory tax rate of 35% for the first three months of fiscal 2018, and a statutory tax rate of 21% for the remainder of fiscal 2018.~~ Our effective tax rate varies from our blended U.S. statutory rate ~~of 24.5%~~ primarily due to the geographic distribution of worldwide earnings as well as a tax holiday granted to a subsidiary within our APAC segment, where we derive a significant portion of our earnings. In addition, our effective tax rate has been impacted by changes due to Tax Reform as discussed ~~above, and~~above. Our effective tax rate may be impacted by disputes with taxing authorities, tax planning activities, adjustments to uncertain tax positions and changes in valuation allowances.

The estimated effective income tax rate for fiscal ~~2018~~2020 is expected to be between ~~102%~~13% and ~~110%. Excluding the impact of Tax Reform discussed above, the estimated effective income tax rate, as adjusted, for fiscal 2018 is expected to be between 10.0% and 12.0%~~15%.

Net ~~(loss)~~ income.Net ~~loss of $98.5 million~~income for the three months ended ~~December 30, 2017 reflected a decrease of $126.7~~January 4, 2020 increased $8.8 million, ~~as compared to the net income of $28.2 million reported in~~or 39.6%, from the three months ended December ~~31, 2016. The decrease was~~29, 2018 to $31.0 million. Net income increased primarily as a result of the ~~$124.5 million of~~increase in operating income and decrease in income tax expense ~~that was recorded during the three months ended December 30, 2017 in connection with Tax Reform.~~as previously discussed.

Diluted ~~(loss)~~ earnings per share. Diluted ~~loss per share for the three months ended December 30, 2017 was $2.93, a $3.75 decrease from the $0.82~~ earnings per share for the three months ended January 4, 2020 increased to $1.03 from $0.69 for the three months ended December ~~31, 2016,~~29, 2018, primarily as a result of ~~decreased~~increased net income due to ~~increased tax expense related~~the factors discussed above and a reduction in diluted shares outstanding due to ~~Tax Reform.~~repurchase activity under the Company's stock repurchase plans.

Return on Invested Capital ("ROIC") and ~~Economic Return.~~economic return. We use a financial model that is aligned with our business strategy and includes a ROIC goal of 500 basis points over our weighted average cost of capital ("WACC"), which we refer to as ~~"Economic Return,~~"economic return." and a 4.7% to 5.0% operating margin target. Our primary focus is on our Economic Return goal of 5.0%, which is designed to create shareholder value and generate sufficient cash to self-fund our targeted organic revenue growth rate of 12.0%. ROIC and Economic Return are non-GAAP financial measures.

Non-GAAP financial measures, including ROIC and ~~Economic Return,~~economic return, are used for internal management goals and decision making because such measures provide management and investors additional insight into financial performance. In particular, we provide ROIC and ~~Economic Return~~economic return because we believe they offer insight into the metrics that are driving management decisions because we view ROIC and ~~Economic Return~~economic return as important measures in evaluating the efficiency and effectiveness of our long-term capital requirements. We also use a derivative measure of ROIC as a performance criteria in determining certain elements of compensation, and certain compensation incentives are based on ~~Economic Return~~economic return performance.

We define ROIC as tax-effected operating income before restructuring and other special items divided by average invested capital over a rolling two-quarter period for the first quarter. Invested capital is defined as equity plus debt and operating lease liabilities, less cash and cash equivalents. Other companies may not define or calculate ROIC in the same way. ROIC and other non-GAAP financial

measures should be considered in addition to, not as a substitute for, measures of our financial performance prepared in accordance with U.S. generally accepted accounting principles ~~in the United States of America~~ ("~~U.S.~~ GAAP").

We review our internal calculation of WACC annually, and our estimated WACC is ~~9.5%~~8.8% for fiscal ~~2018.~~2020. By exercising discipline to generate ROIC in excess of our WACC, our goal is to create value for our shareholders. ROIC was ~~16.2%~~14.7% and ~~17.3%~~14.6% for the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, respectively.

For a reconciliation of ROIC and ~~Economic Return~~economic return to our financial statements that were prepared using ~~U.S.~~ GAAP, see Exhibit 99.1 to this quarterly report on Form 10-Q, which ~~exhibit~~ is incorporated herein by reference.

Refer to the table below, which includes the calculation of ROIC and ~~Economic Return~~economic return (dollars in millions) for the indicated periods:

Three Months Ended
December 30, 2017 December 31, 2016
Annualized operating income (tax effected) $ 113.6
$ 124.8
Average invested capital 701.6
720.2
After-tax ROIC 16.2 % 17.3 %
WACC 9.5 % 10.5 %
Economic Return 6.7 % 6.8 %



	Three Months Ended
	January 4, 2020			December 29, 2018
Adjusted operating income (tax-effected)	$	139.0		$	125.6
Average invested capital	945.4			862.5
ROIC	14.7		%	14.6		%
WACC	8.8		%	9.0		%
Economic return	5.9		%	5.6		%

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and restricted cash were ~~$514.9~~$255.1 million as of ~~December 30, 2017,~~January 4, 2020, as compared to ~~$569.3~~$226.3 million as of September ~~30, 2017.~~28, 2019.

As of ~~December 30, 2017, approximately 91.0%~~January 4, 2020, 94% of our cash balance was held outside of the U.S. by our foreign subsidiaries. With the enactment of Tax Reform, we believe that our offshore cash can be accessed in a more tax efficient manner. As previously discussed, we recorded $124.5 million of tax expense during the three months ended December 30, 2017 associated with the repatriation of undistributed foreign earnings and the reversal of our permanently reinvested assertion on certain foreign earnings in connection withmanner than before Tax Reform. ~~As of December 30, 2017, subject~~Currently, we believe that our cash balance, together with cash available under our Credit Facility, will be sufficient to meet our liquidity needs and potential ~~limitations imposed by other countries, we anticipate repatriating a substantial portion of offshore cash~~share repurchases, if any, for the next twelve months and ~~are refining our associated capital allocation plan with a goal of enhancing shareholder value. Apart from funding~~for the $124.5 million in taxes payable related to Tax Reform, other potential uses of such capital include reinvestment in the business to support growth and productivity improvements, returning cash to shareholders, and paying off all or a portion of the $175.0 million in principal amount of Senior Notes due on June 15, 2018 (the "Notes").foreseeable future.

Our future cash flows from operating activities will be reduced by ~~$124.5~~$65.1 million due to ~~the~~ cash payments of accrued income taxes related to Tax Reform. The table below provides our best estimate of the timing and amount of these future cash flows but these amounts may change, perhaps materially, as noted within "Results of Operations - Income Taxes" above. The $124.5 million includes $100.0 million offor U.S. federal taxes on the deemed repatriation of undistributed foreign earnings ~~which~~that are payable over an eight year period that began in fiscal 2019 with the first payment. The table below provides the expected timing of these future cash outflows, in accordance with the following installment schedule ~~beginning in fiscal 2019~~for the remaining seven years (in millions):


2019	$	8.0
2020	8.0
Remaining 2020			$	5.5
2021	8.0		5.7
2022	8.0		5.7
2023	8.0		5.7
2024	15.0		10.6
2025	20.0		14.2
2026	25.0		17.7
Total	$	100.0	$	65.1

The schedule above excludes an additional $22.7 million of foreign withholding taxes and $1.8 million of state taxes on the deemed repatriation of undistributed foreign earnings since the exact timing of the payments is unknown as of December 30, 2017.

Cash Flows. The following table provides a summary of cash flows for the periods presented, excluding the effect of exchange rates on cash and cash equivalents and restricted cash (in millions):


	Three Months Ended						Three Months Ended
	December 30, 2017			December 31, 2016			January 4, 2020			December 29, 2018
Cash provided by operating activities	$	69.1		$	79.5
Cash provided by (used in) operating activities							$	74.7		$	(33.3	)
Cash used in investing activities	$	(16.5	)	$	(6.8	)	$	(13.4	)	$	(23.7	)
Cash used in financing activities	$	(109.1	)	$	(4.2	)	$	(33.1	)	$	(47.3	)

Operating Activities. Cash flows provided by operating activities ~~during~~were $74.7 million for the three months ended ~~December 30, 2017 was $69.1 million,~~January 4, 2020, as compared to ~~$79.5~~cash flows used in operating activities of $33.3 million for the three months ended December ~~31, 2016.~~29, 2018. The ~~decrease~~increase was primarily due to ~~an $11.9~~cash flow improvements (reductions) of:

$63.0 million ~~increase in cash used for working capital primarily driven by a $37.1 million decrease~~ in accounts receivable cash flows, ~~due to~~which resulted primarily from the ~~initial implementation~~timing of a new factoring program during the three months ended December 31, 2016 and an $8.4 million increase in cash used for inventory to support increased revenue levels. This was partially offset by improvements of $27.4shipments.

$57.0 million in accounts ~~payable~~payables cash flows driven by increased purchasing activity to support increased net sales.

$42.7 million in ~~support of~~inventory cash flows driven by inventory management efforts.

$(25.4) million in customer deposit cash flows driven by a significant deposit received from one customer in the ~~increased inventory levels and the timing of payments and a $10.7~~prior year.

$(16.6) million ~~decrease~~ in ~~cash used for~~ other current and noncurrent liabilities ~~which resulted primarily~~cash flows driven by decreases in advance payments from ~~a $7.8 million increase in restricted cash.~~customers and accrued salaries and wages due to timing of the quarter-end.

The following table provides a summary of cash cycle days for the periods indicated (in days):


	Three months ended		Three Months Ended
	December 30, 2017	December 31, 2016	January 4, 2020	December 29, 2018
Days in accounts receivable	45	49	49	51
Days in contract assets			12	10
Days in inventory	100	90	87	105
Days in accounts payable	(63)	(60)	(61)	(68)
Days in cash deposits	(15)	(13)	(16)	(15)
Annualized cash cycle	67	66	71	83

We calculate days in accounts receivable and contract assets as ~~accounts receivable~~each balance sheet item for the respective quarter divided by annualized sales for the respective quarter by day. We calculate days in inventory, accounts payable, and cash deposits as each balance sheet line item for the respective quarter divided by annualized cost of sales for the respective quarter by day. We calculate annualized cash cycle as the sum of days in accounts receivable, days in contract assets and days in inventory, less days in accounts payable and days in cash deposits.

As of ~~December 30, 2017,~~January 4, 2020, annualized cash cycle days ~~increased one day~~decreased twelve days compared to December ~~31, 2016~~29, 2018 due to the following factors:

Days in accounts receivable for the three months ended ~~December 30, 2017~~January 4, 2020 decreased ~~four~~2 days compared to the three months ended December ~~31, 2016.~~29, 2018. The decrease is primarily attributable to the timing of customer shipments with the additional week in the quarter.

Days in contract assets for the three months ended January 4, 2020 increased ~~annualized net sales as~~2 days compared to the three months ended December ~~31, 2016 and an $84.6 million~~29, 2018. The increase ~~in accounts receivable sold under factoring programs, which was partially offset by an increase in accounts receivable that resulted~~is due to increased demand from ~~an increase in the length of payment terms~~customers with ~~certain customers.~~arrangements requiring revenue to be recognized over time as products are produced.

Days in inventory for the three months ended ~~December 30, 2017 increased ten~~January 4, 2020 decreased eighteen days compared to the three months ended December ~~31, 2016.~~29, 2018. The ~~increase~~decrease is primarily attributable to support new program ramps and as a result of experiencing longer lead times for certain components for new programs. In order to maintain a high level of customer service, we are procuring components earlier, which has led to the increase in inventory.inventory management efforts.

Days in accounts payable for the three months ended ~~December 30, 2017 increased three~~January 4, 2020 decreased 7 days compared to the three months ended December ~~31, 2016.~~29, 2018. The ~~increase~~decrease is primarily ~~driven by increased~~attributable to reduced purchasing activity ~~to support higher revenue levels, which was partially offset by the increase~~ in ~~annualized cost of sales.~~connection with our inventory management efforts.

Days in cash deposits for the three months ended ~~December 30, 2017~~January 4, 2020 increased ~~two days~~1 day compared to the three months ended December ~~31, 2016.~~29, 2018. The increase was primarily ~~driven by an increase in customer deposits primarily due~~attributable to significant deposits received from two customers ~~during the three months ended December 30, 2017 as we actively seek deposits~~ to cover higher inventory balances.

Free Cash Flow. We define free cash flow ("FCF"), a non-GAAP financial measure, as cash flow provided by (used in) operations less capital expenditures. FCF was $61.0 million for the three months ended ~~December 30, 2017 was $52.4 million, a decrease of $20.1 million from the $72.5~~January 4, 2020 compared to $(58.2) million for the three months ended December ~~31, 2016, primarily due to a $10.4 million decrease in cash flows provided by operations, due to the factors discussed above, and a $9.7 million~~29, 2018, an increase ~~in capital expenditures, discussed below.~~of $119.2 million.

Non-GAAP financial measures, including FCF, are used for internal management assessments because such measures provide additional insight to investors into ongoing financial performance. In particular, we provide FCF because we believe it offers insight into the metrics that are driving management decisions. We view FCF as an important financial metric as it demonstrates our ability to generate cash and can allow us to pursue opportunities that enhance shareholder value. FCF is a non-GAAP financial measure that should be considered in addition to, not as a substitute for, measures of our financial performance prepared in accordance with ~~U.S.~~ GAAP.

A reconciliation of FCF to our financial statements that were prepared using ~~U.S.~~ GAAP follows (in millions):


	Three months ended						Three Months Ended
	December 30, 2017			December 31, 2016			January 4, 2020			December 29, 2018
Cash flows provided by operating activities	$	69.1		$	79.5
Cash flows provided by (used in) operating activities							$	74.7		$	(33.3	)
Payments for property, plant and equipment	(16.7		)	(7.0		)	(13.7		)	(24.9		)
Free cash flow	$	52.4		$	72.5		$	61.0		$	(58.2	)

Investing Activities. Cash flows used in investing activities ~~totaled $16.5~~were $13.4 million for the three months ended January 4, 2020 compared to $23.7 million for the three months ended December ~~30, 2017, an increase of $9.7 million as compared to $6.8 million for the three months ended December 31, 2016.~~29, 2018. The ~~increase~~decrease in cash used in investing activities was due to a ~~$9.7~~$11.2 million ~~increase~~decrease in capital expenditures, primarily due to ~~support new capabilities, new program ramps, and to replace or refresh older equipment.~~the construction of a second manufacturing facility in Guadalajara, Mexico which was completed in the fiscal first quarter of 2020.

We estimate funded capital expenditures for fiscal ~~2018~~2020 to be approximately ~~$80.0~~$55.0 to ~~$90.0~~$70.0 million, of which ~~$16.7~~$13.7 million was utilized through the first three months of fiscal ~~2018.~~2020. The remaining fiscal ~~2018~~2020 capital expenditures are anticipated to be used primarily to ~~fund a building purchase in Penang, Malaysia, and to~~ support new program ramps ~~and~~as well as to replace ~~or refresh~~ older equipment. We believe our estimated capital expenditures will continue to be funded from cash flows provided by operations, and may be supplemented by available cash or borrowings, if required.

Financing Activities.Cash flows used in financing activities ~~totaled $109.1~~were $33.1 million for the three months ended ~~December 30, 2017, an increase of $104.9 million as~~January 4, 2020 compared to cash flows used in financing activities of ~~$4.2~~$47.3 million for the three months ended December ~~31, 2016.~~29, 2018. The ~~increase~~decrease was primarily attributable to a $43.7 million decrease in cash used to repurchase our common stock and a $9.1 million increase in proceeds from the exercise of stock options. This change was partially offset by an increase of $36.0 million in pay-downs ofon our revolving credit ~~facility, under which there were no outstanding borrowings as of December 30, 2017, as compared to $75.0 million of outstanding borrowings as of December 31, 2016.~~facility.

On ~~June 6, 2016,~~August 20, 2019, the Board of Directors approved a ~~multi-year~~new stock repurchase ~~program under~~plan, pursuant to which the Company is authorized to repurchase ~~up to $150.0~~$50.0 million of its common stock ~~beginning in fiscal 2017, subject~~(the "2019 Program"). The 2019 Program commenced upon completion of the 2018 Program, as defined below. During the three months ended January 4, 2020, the Company repurchased 90,667 shares under the 2019 Program for $6.3 million at an average price of $69.82. As of January 4, 2020, $40.4 million of authority remained under the 2019 Program.

On February 14, 2018, the Board of Directors approved a stock repurchase plan under which the Company was authorized to ~~market conditions and other considerations.~~repurchase $200.0 million of its common stock (the "2018 Program"). During the three months ended December ~~30, 2017,~~29, 2018, the Company repurchased ~~158,466~~869,949 shares under this program for ~~approximately $9.5~~$50.1 million, at an average price of ~~$60.25~~$57.53 per share. ~~During~~The 2018 Program was completed during the ~~three months ended December 31, 2016, the Company repurchased 144,729 shares for approximately $7.1 million, at an average price~~fiscal fourth quarter of ~~$48.79 per share.~~ 2019, when all share repurchase authority under it was exhausted.

All shares repurchased under the ~~repurchase~~aforementioned programs were recorded as treasury stock.

~~In fiscal 2011, Plexus~~On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued ~~$175.0~~an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the ~~Notes.~~“2018 Notes”), in a private placement. The ~~related Note Purchase Agreement contains~~2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ~~covenants, which include~~ratios such as a ~~maximum~~ total leverage ratio and a minimum interest coverage ~~ratio and~~ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a ~~minimum net worth test, all as defined in~~make-whole amount; interest on the ~~agreement.~~2018 Notes is payable semiannually. As of ~~December 30, 2017,~~January 4, 2020, the Company was in compliance with ~~all such~~the covenants ~~relating to~~under the ~~Notes and~~2018 NPA.

On May 15, 2019, the Note Purchase Agreement. With Tax Reform, we are refining our capital allocation plan and are considering potentially paying down all of the Notes, or refinancing the Notes, or a portion thereof, with a similar long-term product, although we can provide no assurances of the availability of such financing on attractive, or any, terms.

~~The~~ Company ~~also has a~~refinanced its then-existing senior unsecured revolving credit facility (the "Prior Credit Facility") by entering into a new 5-year senior unsecured revolving credit facility (collectively with the Prior Credit Facility, referred to as the "Credit Facility") ~~with a~~, which expanded the maximum commitment from $300.0 million to $350.0 million and extended the maturity from July 5, 2021 to May 15, 2024. The maximum commitment ~~that expires on July 5, 2021. The~~under the Credit Facility may be further increased to ~~$500.0~~$600.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. ~~For further information regarding~~During the three months ended January 4, 2020, the highest daily borrowing was $164.5 million; the average daily borrowings were $128.1 million. The Company borrowed $156.5 million and repaid $189.5 million of revolving borrowings under the Credit Facility ~~see Note 3, "Debt, Capital Lease Obligations and Other Financing," in Notes to Condensed Consolidated Financial Statements.~~

~~The financial covenants (as defined under~~during the ~~Credit Agreement) require, among other covenants, that the Company maintain, as of each fiscal quarter end, a maximum total leverage ratio and a minimum interest coverage ratio.~~three months ended January 4, 2020. As of ~~December 30, 2017,~~January 4, 2020, the Company was in compliance with all financial covenants ofrelating to the Credit ~~Agreement.~~Agreement, which are generally consistent with those in the 2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.175% as of January 4, 2020.

The Credit Agreement and the ~~Note Purchase Agreement~~2018 NPA allow for the future payment of cash dividends or the repurchase of shares provided that no event of default (including any failure to comply with a financial covenant) exists at the time of, or would be caused by, the dividend payment or the share repurchases. We have not paid cash dividends in the ~~past and do not currently anticipate paying them in~~past. However, the ~~future. However, we evaluate~~Board of Directors of the Company evaluates from time to time potential uses of excess cash, which in the future may include share repurchases above those already authorized, a special dividend or recurring dividends.

The Company sold ~~receivables under a former trade accounts receivable sale program that expired during the first fiscal quarter of 2017.~~

~~The Company sold $162.4~~$227.8 million and ~~$77.8~~$232.5 million of trade accounts receivable under these programs during the three months ended ~~December 30, 2017~~January 4, 2020 and December ~~31, 2016,~~29, 2018, respectively, in exchange for cash proceeds of ~~$161.5~~$226.6 million and ~~$77.4~~$231.2 million, respectively.

In all cases, the sale discount was recorded within "Miscellaneous, ~~other income (expense)"~~net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale. For further information regarding the receivable sale programs, see Note ~~12,~~14, "Trade Accounts Receivable Sale Programs," in Notes to Condensed Consolidated Financial Statements.

Based on current expectations, we believe that our projected cash flows provided by operations, available cash and cash equivalents, potential borrowings under the Credit Facility ~~potential pay-down and/or refinancing of the Notes~~ and our leasing capabilities should be sufficient to meet our working capital and fixed capital requirements for the next twelve ~~months, including the repayment of the Notes.~~months. If our future financing needs increase, we may need to arrange additional debt or equity financing. Accordingly, we evaluate and consider from time to time various financing alternatives to supplement our financial resources. However, we cannot be assured that we will be able to make any such arrangements on acceptable terms.

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND OFF-BALANCE SHEET OBLIGATIONS

Our disclosures regarding contractual obligations and commercial commitments are located in ~~various parts of~~ our ~~regulatory~~SEC filings. Information in the following table provides a summary of our contractual obligations and commercial commitments as of ~~December 30, 2017~~January 4, 2020 (dollars in millions):


	Payments Due by Fiscal Year										Payments Due by Fiscal Year
Contractual Obligations	Total		Remaining 2018		2019-2020		2021-2022		2023 and thereafter		Total		Remaining 2020		2021-2022		2023-2024		2025 and thereafter
Short-Term Debt Obligations (1)	$	179.0	$	179.0	$	—	$	—	$	—
Capital Lease and Other Financing Obligations (2)	38.1		5.2		6.0		3.0		23.9
Debt Obligations (1)											$	252.2	$	65.1	$	12.4	$	12.2	$	162.5
Finance Lease Obligations											127.2		5.6		12.6		10.3		98.7
Operating Lease Obligations	32.9		6.7		15.7		5.2		5.3		58.8		8.0		16.8		13.6		20.4
Purchase Obligations ~~(3)~~(2)	547.1		513.2		33.5		0.2		0.2		638.4		604.5		33.4		0.4		0.1
Repatriation Tax on Undistributed Foreign Earnings ~~(4)~~(3)	100.0		—		16.0		16.0		68.0		65.1		5.5		11.4		16.3		31.9
Other Long-Term Liabilities on the Balance Sheet (5)	14.4		0.2		0.2		0.2		13.8
Other Long-Term Liabilities not on the Balance Sheet (6)	6.3		2.6		0.8		—		2.9
Other Financing Obligations (7)	31.4		1.1		3.2		3.3		23.8
Other Liabilities on the Balance Sheet (4)											17.6		3.0		5.6		0.9		8.1
Other Liabilities not on the Balance Sheet (5)											8.1		4.0		0.2		0.5		3.4
Total Contractual Cash Obligations	$	949.2	$	708.0	$	75.4	$	27.9	$	137.9	$	1,167.4	$	695.7	$	92.4	$	54.2	$	325.1


1)	~~Includes $175.0~~As of January 4, 2020, debt obligations includes $150.0 million in principal amount of 2018 Notes as well as interest; see Note 3, "Debt, ~~Capital~~Finance Lease Obligations and Other Financing," in Notes to Condensed Consolidated Financial Statements for further information.


2)	As of December 30, 2017, capital lease and other financing obligations consists of capital lease payments and interest as well as a non-cash financing obligation related to the failed sale-leaseback of a building in Guadalajara, Mexico.


3)	~~As of December 30, 2017,~~January 4, 2020, purchase obligations consist primarily of purchases of inventory and equipment in the ordinary course of business.


4)3)	As of January 4, 2020, repatriation tax on undistributed foreign earnings consists of U.S. federal income taxes on the deemed repatriation of undistributed foreign earnings due to Tax ~~Reform, which is our best estimate and may change, perhaps materially.~~Reform. Refer to "Liquidity and Capital Resources" above for further detail.

5)4)

As of ~~December 30, 2017,~~January 4, 2020, other ~~long-term~~ obligations on the balance sheet included deferred compensation obligations to certain of our former and current executive officers, as well as other key employees, other financing obligations arising from information technology maintenance agreements, and asset retirement ~~obligations.~~obligations related to our buildings. We have excluded from the above table the impact of approximately ~~$3.1~~$2.2 million, as of ~~December 30, 2017,~~January 4, 2020, related to unrecognized income tax benefits. The Company cannot make reliable estimates of the future cash flows by period related to these obligations.

6)5)

As of ~~December 30, 2017,~~January 4, 2020, other ~~long-term~~ obligations not on the balance sheet ~~consisted~~consist of guarantees and a commitment for salary continuation and certain benefits in the event employment of one executive officer of the Company is terminated without cause. Excluded from the amounts disclosed are certain bonus and incentive compensation amounts, which would be paid on a prorated basis in the year of termination.


7)	~~Includes future minimum lease payments under the 10-year base lease agreement in Guadalajara as well as two 5-year renewal options.~~

DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are disclosed in our ~~2017~~2019 annual report on Form 10-K. ~~Other than the item noted below, during~~During the first quarter of fiscal ~~2018,~~2020, there were no material ~~changes to these policies.~~changes.

Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. With the enactment of Tax Reform, the Company now provides for additional U.S. and foreign income taxes that would become payable upon the repatriation of undistributed earnings of foreign subsidiaries. The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. In determining whether a valuation allowance is required, the Company takes into account such factors as prior earnings history, expected future earnings, carryback and carryforward periods, and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 1, "Basis of Presentation," in Notes to Condensed Consolidated Financial Statements for further information regarding new accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in foreign exchange and interest rates. We selectively use financial instruments to reduce such risks. We do not use derivative financial instruments for speculative purposes.

Foreign Currency Risk

Our international operations create potential foreign exchange risk. Our policy is to selectively hedge our foreign currency denominated transactions in a manner that partially offsets the effects of changes in foreign currency exchange rates. We typically use foreign currency contracts to hedge only those currency exposures associated with certain assets and liabilities denominated in non-functional currencies. Corresponding gains and losses on the underlying transaction generally offset the gains and losses on these foreign currency hedges.

Our percentages of transactions denominated in currencies other than the U.S. dollar for the indicated periods were as follows:


	Three Months Ended		Three Months Ended
	December 30, 2017	December 31, 2016	January 4, 2020	December 29, 2018
Net Sales	9.8%	7.8%	10.3%	9.3%
Total Costs	14.9%	12.7%	16.0%	15.6%

The Company has evaluated the potential foreign currency exchange rate risk on transactions denominated in currencies other than the U.S. dollar for the periods presented above. Based on the Company’s overall currency exposure, as of ~~December 30, 2017,~~January 4, 2020, a ~~10.0%~~10% change in the value of the U.S. dollar relative to our other transactional currencies would not have a material effect on the Company’s financial position, results of operations, or cash flows.

Interest Rate Risk

We have financial instruments, including cash equivalents and debt, which are sensitive to changes in interest rates. The primary objective of our investment activities is to preserve principal, while maximizing yields without significantly increasing market risk. To achieve this, we maintain our portfolio of cash equivalents in a variety of highly rated securities, money market funds and certificates of deposit, and limit the amount of principal exposure to any one issuer.

As of January 4, 2020, our only material interest rate risk is associated with our Credit Facility. Borrowings under the Credit Facility bear interest, at the Company's option, at a eurocurrency or base rate plus, in each case, an applicable interest rate margin based on the Company's then-current leverage ratio (as defined in the Credit Agreement). As of January 4, 2020, the borrowing rate under the Credit Agreement was LIBOR plus 1.10%. The Company is monitoring developments related to LIBOR; see also Part I, Item 1A "Risk Factors" of our annual report on Form 10-K for the fiscal year ended September 28, 2019 for more information. Borrowings under the 2018 NPA are based on a fixed interest rate, thus mitigating much of our interest rate risk. Based on the Company's overall interest rate exposure, as of January 4, 2020, a 10.0% change in interest rates would not have a material effect on the Company's financial position, results of operations, or cash flows.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission ("SEC") is recorded, processed, summarized and reported on a timely basis. The Company’s Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have reviewed and evaluated, with the participation of the Company’s management, the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report (the "Evaluation Date"). Based on such evaluation, the CEO and CFO have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective, at the reasonable assurance level, (a) in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act, and (b) in assuring that information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

During the first quarter of fiscal ~~2018,~~2020, other than explained below, there have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Effective September 29, 2019, we adopted the new leasing standard under ASC 2016-02, Leasing, using the modified retrospective method of adoption. The adoption of this guidance required changes to our processes, policies and internal controls to meet the impact of the new standard and disclosure requirements.

PART II. OTHER INFORMATION

~~ITEM 1A. Risk Factors~~


ITEM 1A.	Risk Factors

In addition to the risks and uncertainties discussed herein, particularly those discussed in the “Safe Harbor” Cautionary Statement and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, see the risk factors set forth in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended September ~~30, 2017.~~28, 2019 that have had no material changes, except as set forth below.

The impact of the coronavirus on our operations, and the operations of our customers, suppliers and logistics providers, may harm our business.

We are actively assessing and responding where possible to the potential impact of the coronavirus outbreak in China. This includes evaluating the impact on our employees, customers, suppliers, and logistics providers as well as evaluating governmental actions being taken to curtail the spread of the virus. The significance of the impact on Plexus is yet uncertain; however, a material adverse effect on our employees, customers, suppliers, and logistics providers could have a material adverse effect on Plexus. In addition, supply chain or logistics disruptions could materially impact our operations outside China since we purchase a meaningful level of components from Chinese suppliers for our sites in other countries.

~~ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds~~


ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides the specified information about the repurchases of shares by the Company during the three months ended ~~December 30, 2017.~~

January 4, 2020.

Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum approximate dollar value of shares that may yet be purchased under the plans or programs*
October 1, 2017 to October 28, 2017 66,792
$ 58.47
66,792
$ 111,958,503
October 29, 2017 to November 25, 2017 39,932
$ 61.14
39,932
$ 109,517,258
November 26, 2017 to December 30, 2017 51,742
$ 61.85
51,742
$ 106,317,079
Total 158,466
$ 60.25
158,466



Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum approximate dollar value of shares that may yet be purchased under the plans or programs*
September 29, 2019 to November 2, 2019	47,306	$	63.68	47,306	$	43,708,530
November 3, 2019 to November 30, 2019	18,262	$	75.35	18,262	$	42,332,408
December 1, 2019 to January 4, 2020	25,099	$	77.36	25,099	$	40,390,820
Total	90,667	$	69.82	90,667

* On ~~June 6, 2016,~~August 20, 2019, the Board of Directors approved a ~~multi-year~~new stock repurchase ~~program~~plan under which the Company is authorized to repurchase ~~up to $150.0~~$50.0 million of its common stock (the "2019 Program"). The 2019 Program commenced upon completion of the stock repurchase plan approved by the Board of Directors on February 14, 2018, pursuant to which the Company was authorized to repurchase $200.0 million of its common stock. The 2019 Program has no expiration.


~~ITEM 6.~~	~~Exhibits~~

ITEM 6. EXHIBITS

The list of exhibits is included below:



Exhibit No.		Exhibit
10.1		Amendment No. 10 to Amended and Restated Master Accounts Receivable Purchase Agreement between Plexus Corp. and Plexus Manufacturing Sdn. Bhd., Plexus Intl. Sales & Logistics, LLC, Plexus Services Ro SRL, Plexus Corp. (UK) Limited and each additional seller party thereto from time to time as the Sellers, Plexus Corp., as Seller Representative, and MUFG Bank Ltd. (f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch), as the Purchaser, dated as of December 23, 2019.
31.1		Certification of Chief Executive Officer pursuant to Section 302(a) of the ~~Sarbanes Oxley~~Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302(a) of the ~~Sarbanes Oxley~~Sarbanes-Oxley Act of 2002.
32.1		Certification of the CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002
32.2		Certification of the CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002
99.1		Reconciliation of ROIC ~~and Economic Return~~ to GAAP ~~Financial Statements~~and economic return financial statements
101		The following materials from Plexus Corp.’s Quarterly Report on Form 10-Q for the quarter ended ~~December 30, 2017,~~January 4, 2020, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Comprehensive Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Shareholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and ~~(iv)~~(v) Notes to Condensed Consolidated Financial Statements.
101.INS		Inline XBRL Instance Document (the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




			Plexus Corp.
			Registrant

Date:	2/~~2/18~~7/2020		/s/ Todd P. Kelsey
			Todd P. Kelsey
			President and Chief Executive Officer

Date:	2/~~2/18~~7/2020		/s/ Patrick J. Jermain
			Patrick J. Jermain
		~~Senior~~	Executive Vice President and Chief Financial Officer

2836



	December 30, 2017			September 30, 2017
5.20% Senior notes, due June 15, 2018	$	175,000		$	175,000
Borrowings under the credit facility	—			108,000
Capital lease and other financing obligations	31,644			30,901
Unamortized deferred financing fees	(716		)	(794		)
Total obligations	205,928			313,107
Less: current portion	(179,881		)	(286,934		)
Long-term debt and capital lease obligations, net of current portion	$	26,047		$	26,173



Derivative Impact on Accumulated Other Comprehensive Loss ("OCL")
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) ("OCI") on Derivatives (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	December 30, 2017		December 31, 2016
Interest rate swaps	$	—	$	(11	)
Forward currency forward contracts	$	2,714	$	(5,218	)



Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized on Derivatives in Income	Amount of (Loss) Gain on Derivatives Recognized in Income
Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized on Derivatives in Income	December 30, 2017			December 31, 2016
Forward currency forward contracts	Miscellaneous other income (expense)	$	(535	)	$	75



	December 30, 2017		September 30, 2017
Total assets:
AMER	$	567,275	$	595,851
APAC	1,127,066		1,163,111
EMEA	175,569		172,830
Corporate and eliminations	46,297		44,390
	$	1,916,207	$	1,976,182



	Three Months Ended
Market Sector	December 30, 2017		December 31, 2016
Healthcare/Life Sciences	$	237.1	$	211.0
Industrial/Commercial	206.8		205.6
Communications	133.6		131.4
Aerospace/Defense	99.8		87.0
Total net sales	$	677.3	$	635.0