PLXS - Earnings call transcript Q2 2022

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Operator

Good morning and welcome to the Plexus Corp Conference Call, regarding its Fiscal Second Quarter 2022 Earnings Announcement. My name is Abigail, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open the conference call for questions. The conference call is scheduled to last approximately one hour. conference recorded. this that note is being Please I to Mr. like to call over turn the would now Shawn Vice Harrison, Relations. Investor Plexus, President of and Communications, Shawn.

Shawn Harrison

Good everyone morning you, us and today. for joining thank

statements the business including without cycle, expense, on those our of the business Some administrative provided selling, gross taxes, outlook, capital limitation, the results impact and other expense, COVID-XX be statements, will cash operating regarding during margin, of and and forward-looking the call made operations. Company's margin, today future and revenue, allocation information and income of

in Forward-looking future differ guaranteeing statements or statements. are since not those from and are implied could inherent results difficulties the forward-looking predicting actual in expressed results materially

Please Form of cause periodic differ For company's second, release. results fiscal that risk fair a sec our XX-Q morning filings, the could filings and that supporting of supplemented particularly in October ended factors live on call website www.plexus.com, Investors webcast the in top encourage XXXX, filing list materials to clicking on We for yesterday's to as XX-K refer the at this by access at our and and the the year statement disclosure Plexus Form the those actual discussed. factors participants at page. to the materially from safe harbor press

prior and Officer. with Officer. over to Chief me call Jermain, Joining Consistent details. Steve comments Pat Officer, calls, Executive Chief today before Further are provide Todd And summary Pat Strategy Financial the President Executive President and Todd, Kelsey, Steve Frisch, turning Chief Vice will and earnings

to it call turn over the now over Let Todd Kelsey. Todd. turn me to

Todd Kelsey

that Slide a morning, achieved Good We revenue second our $XXX $XXX range everyone. Thank of result guidance of million. fiscal to X. million $XXX you, advance quarter Please to million, exceeded Shawn.

Sciences was than Life expectations more as supply quarter our in & entering Healthcare successful materials anticipated. chain our sectors team exceeded the and resolving Industrial Our constrained

from compensation expense. the end from incentive the was and variant $X.XX higher to per GAAP certain above-market we strong early prices. components to Omicron variable of the delivered of led combination earnings sector range. The margin revenue at result aerospace guidance exceeding EPS revenue compensation margin Our than demand. We our strong operating recovery met GAAP range stock-based increased result labor high in result, Defense growth commercial of expectations due COVID-XX impact of of the despite anticipated the finishing costs Aerospace and due included inefficiency to share of $X.XX. benefited our achieved as guidance $X.XX This and procuring X%, Malaysia, The $X.XX, of strong impact operating diluted to at of of

led execution feature that wins. new and complex another regulatory exceptional demanding of products to Our markets environments and strong highly business directly quarter

was than best more aftermarket million, totaled a new all-time trailing of our in This result with Our semi-cap which billion. a to of nearly The record propelled program an our expansion company. with services customer in $XXX share manufacturing market quarterly healthcare major aftermarket wins record wins result a $X.X significant gain another representing included decade. an and services exceptional an four-quarter existing engagement and performance high wins

funnel In a $X.X manufacturing the to record qualified wins, addition level expanded of strong opportunities billion. to of our

X% wins for with robust manufacturing engineering the goal. opportunities, CAGR XX% Lastly, in momentum qualified quarter, and new to engagements were combined our consecutive which the revenue second supports

wins and to expanding result Please and economy engineering is value offering our circular exceptional X. funnel. needs. sustainability continue supporting differentiated aftermarket customers The in advance an the to their Slide Our in end services

across of all As market we customer look demand quarter strong to the XXXX, fiscal sectors. third remains

rapid a is stabilized, we have of ramps demand significant small to are benefiting the with constrained upside. remains to supply. limiting and it ability and from appears Yet customer impact pipeline program chain our meet new number supply the of While broad

As of due midpoint the chain million. guidance to and result, establishing are in lockdowns This expecting $XXX further a to range we COVID-XX China. revenue supply at estimate a $XXX impacts of Shanghai, growth revenue guidance sequential are includes our

these increased our operating of we X.X%, revenue, GAAP infrastructure, of $X expense. per support compensation anticipating including approximately of margin stock-based share diluted anticipate $X.XX, X.X% earnings deliver of XX And operating of levels, in $X.XX quarterly currently we further positive operating points demand. that in $X.XX the basis GAAP stock-based At range expense. compensation margin revenue With the to are expect leverage to over can and billion to including

impact markets in constraints Bangkok, COVID-XX growth current our not beyond and progress represented our Thailand expectations. operations to our potential of Our do In opportunities, site support strong to by continues end plan. funnel guidance chain according or latest supply of materially assumes the

The fiscal was and recently complete quarter. line first builds quarter will installed. in the fourth the We assembly commence third in qualification production fiscal

will as that We business have directly new site. into campus, a multiple well existing the site of programs to Penang piece from as planned the into launch substantial our transition

We a support and Thailand region. to expect campus future be of in create platform further strategy to in the growth, the first our we site multiple APAC as our

XXXX. to longer-term few encouraged growth, accelerating through by deliver XXXX a quarterly momentum our and outlook. Next, the quarter Fiscal We see our demonstrated I'm into now regarding the Fiscal sequential results. second fiscal by thoughts potential revenue

operating While expanding margin, GAAP and EPS.

see to Within supply, to component next continue our quarters. and the continue these programs over Sciences, into several Life XXXX XXXX. remainder With we several at Healthcare end strong the pipeline favorably impact ramps program should major fiscal markets, we of underway. demand Looking have

communications. Our Industrial semi-cap very demand is sector by strong, led and

make in through multi-quarter component availability on effort customer attacking focused to results supply. challenged, reflected a leveraging issues, is enhanced partnerships to by quarter secure as progress supply our second While continue fiscal we

our our to progress in services as target. $X a engineering, see ability robust and toward we program opportunities, make strengthening by factors of record business a optimism when These aftermarket led manufacturing, combined qualified our needs. wins Defense, positive in and demand aisle and aftermarket well with Aerospace within as aerospace and jets, billion revenue Finally, funnel supports commercial of new jets, single market

operating In and upon and now margin Steve addition, to goals over the our to invested we analysis return over Steve. X.X% turn will call committed on for of XX% performance long our market with XX% of X% I sectors remain to the additional GAAP revenue delivering term. of operations. the capital CAGR,

Steven Frisch

with you, of material the quarter. shortages the Todd. digit for as as a our the Thank fiscal team increase sectors start expectations market XX%. grew as our quarter The Good morning. well of for was supply review Industrial second a will quarter of Slide performance sector chain within result cleared quarter, market fiscal XXXX. our X the Starting above for third expectations with mid-single second our I on by sector, significantly revenue exceptional our fiscal

sector. our across Looking at of fiscal the demand remains XXXX, remainder robust Industrial

Although second of constraints customers ability quarter. our capture above the are expect to material or our demand, full limiting at fiscal to secure levels still we supply

flat to result, a a in Industrial expect we increases single low our the quarter. for As sector digit third fiscal

Our solid had fiscal Healthcare & for quarter. sector results Life Sciences second the

Healthcare addition remainder low grew & Sciences levels from sector. solutions revenue Life team of the of X%. add output a to manufacturing of the the Life shortages, projections decrease, Instead higher to clearing of our Healthcare Sciences & exceeded quarter. in single-digit sector In XXXX material revenue for We fiscal our engineering

new We continue program will sequential to expect that ramps support growth.

these mid-single-digit increase. anticipate third programs For the in will a new result fiscal we quarter,

acquire to double-digit sector teams, materials by fiscal efforts a quarter. needed Defense delivered the Our XX% growth customers in their achieving team to increase Leveraging of chain strong second that were of of able Aerospace productions. projections we the our our achieve low our of the to and and supply

to strong products. XXXX, Looking at the forecast see private second continue military, of half and commercial, for we fiscal aerospace

Defense to for generate wins that ramped quarter. we when new material our to ability result current that all-time capture our teams and win’s we an third levels. availability from our quarter. of Please won short demand into XX in a to sector for record. fiscal advance in annualized was Aerospace manufacturing production. We the above our single-digit fiscal be gate million expect the However, production revenue million Slide The fully to result continues few for $XXX exceptional programs The limiting the expect performance an second flat a is our increase low to X for the overview is dollars and revenue

than However, a was trailing record. four-quarter of $X.X billion new our wins more

wins of revenue As four-quarters [indiscernible], the as defined supports which climbed our our X% which CAGR. is trailing a result, divided well to trailing by the above target a XX%, to is goal four-quarter revenue wins and of XX% of XX% our

XX customer is their share teams satisfaction with of business. coming With customer XX wins measures repeat customers, our Finally, from of the across expanded market existing rewarded are the of being of base. one best

The $XXX APAC the including our industrial heading manufacturing XX% wins in Next, Thailand. sector of Almost and manufacturing of we second fiscal regional can targeted the X. region, few a quarter quarter facility for wins exceptional on the Bangkok, new for wins are highlights Slide of review sector industrial for million. of

addition the industrial the the the Healthcare Life Sciences, wins defense benefited million region, $XXX sectors. of aerospace to for from in wins APAC In wins, strong from robust also and

in the to past deliver ability our few Southeast challenges in to years. APAC, the spite team's are we Going with continue regional of customers, Asia return forward, seeing customer for our these footprint visits enhanced of many

of high-performance wins. semiconductor We region. include accelerate highlights in The platform for are eight quarter of optimistic the the second ability wafers. in Slide wins to the to used Advance about a production the growth Fiscal industrial

We Guadalajara that be access program added ramp cable product in distributed to Thailand 'XX. facility early will a Mexico. in that this Industrial serves expect product use in a facility new team our The architecture. into our also manufactured Fiscal networks

completed Penang, manufactured services service start Sciences agreement established imaging with the repair will those to The won products Life Healthcare team advanced also management, will used in capabilities family region team what our our an be three in this regions. the we The existing The campus. customer. logo from in program new in large for Our devices manufacturing contrast and all applications. expect a Malaysia Americas of aftermarket

Finally, for of team We market customer. Defense from our life wins Sciences a for Slide addition support of I one the ten, like would this Aerospace won represents of as system, the Healthcare to customer. analyzer existing opportunity meaningful on relationship a aerospace award for with an the incentive of Including XXXX, start gain team. meaningful by example advanced on this our system the program the set a ultrasound significant This cockpit - the for of towler environmental teams executive won of record The to overview an of grew automated consumption success part expansion full to is can across an Life production by Medical sector ESG. with billion. an compensation alone of that second manufacturing the to whose is electricity fiscal of Slide as for finish our as We At we opportunities. program for was the Malaysia. manufacturing the Penang, their quarter. Wi Market fiscal a manufacturing Laboratories. our of approaching compared manufacture of the X% initiative fiscal in in to to biochemistry Life highlights team's Expansion goal of of Healthcare our XXXX of each Fi $X.X electricity the usage in our One ins we team, fiscal funnel a $X ESG focused the Sciences the least nine use in of billion initiatives globe. funnel location qualified funnel at XXXX. reduce reduction proceed led an plan share

Pat. in establishing specific XXXX, each the With the consumption our equipment of for a and subset consumption this of One challenges all are exciting be and metering electricity are our reduction. on will year this I least facility turn monitor like come. specific beginning. of the exceed consumption or continue track for the years in X% XXXX the project facilities. baseline true electricity install can a achieve in-depth our technology meet of objective only to to environment site functions electricity With and and impact our the locations best sub technology practices plans of part can efforts enterprise, goal completed on each a first to for within for of fiscal an the review to many our call large manufacturing of cooling with fiscal is of heating at this all sharing implementing to across efforts and manufacturing reduce to performance. we is fiscal efforts The the technology, will the reduction half financial Pat the now our that

Patrick Jermain

you, Good Thank morning, Steven. everyone.

revenue fixed Gross and performance. was guidance to for U.S. second Gross the additional the taxes improved of linked summarized Slide reset fiscal high-end fiscal results cost of expense, Selling Our headwinds was incentive quarter due payroll primarily guidance million at consistent X.X% higher are on of with our margin variable from XX. from despite administrative for margin the leverage to stronger $XX.X quarter. increases, expense the to and employees. the seasonal of first-quarter, compensation cost compensation due revenue the above was

approximately a of compensation of was points inclusive revenue performance. above of to in As the end which expenses. due were of X%, X.X%, consistent percentage above at margin was revenue with XX expenses of was top basis factoring the stock-based our slightly to first-quarter. $X.XX our due primarily Non-operating SG&A guidance The of stronger EPS the was expense. fiscal operating GAAP a higher was diluted guidance, GAAP result expectations which expectations

Slide on Turning cash to our sheet and balance flow XX.

flow extremely in expenditures generating million of expectations. result delivered double $XX exceeded we quarter, free flow our This second million. and performance. cash cash from net fiscal capital the cash We spent operations free pleased $XX with million our and $XX income on For was were

review During were under we the share we second $XX the the We had year, Directors million. for fiscal of approximately approximately Later will authorization. repurchased X% new $XX of outstanding aggressive of a quarter, our our fiscal million or this authorization. shares XXX,XXX current our remaining opportunity At stock, Board with our for repurchase of the we shares quarter, program. end our with

on $XXX cash credit the favorable revolving while benefited balance the net revenue lower sheet $XXX $XX We increased million days, Slide million generation. sheet in $XXX million progress balance was end sequentially million, the of a Our part the to higher turn debt Total under fiscal and at to expectation was and our Please cash initiatives. facility. million. five cycle available XX approximately past by strong on details Cash in quarter-end debt capital days. of sequentially need continued the increased quarter $XXX by inventory for due new supply increase with are million, $XXX borrow challenges to second support our had from Sequentially, included by Substantially million, in was working to the inventory almost We to steady our an in eight days. quarters program drive second we while days increase half the the year. along of customers ramps, the to days reflects as was higher inventory deposit Customer anticipated fiscal several in partnered cash increase which the $XXX nine. over cycle. XX The offsetting revenue customer investments. understood days increased in deposits to improved by with well flow share chain days

our days inventory We sequentially in XX% compares due timing have program. of three by and of than seven activity over This XX% to less deposits. the ago. receivable payments years our primarily increased factoring improved to Days under receivables covered with

be which of points Todd, third expected As productivity better to already At summarized has than second gross additional is costs third fixed fiscal the the in some and contributing quarter be our are quarter. revenue margin gross review provided of Slide across guidance improvement. details leverage for the EPS on fiscal X.X%. XX. Fiscal the anticipated I'll margin quarter, midpoint basis the to approximately XX regions, would Improved of higher to and the all X.X are range

continued necessary as matched by support we gross We infrastructure demand to anticipated expect available margin supply. near-term maintain some pressure not yet on the

fiscal the in expenses range quarter. of to consistent selling $XX expect administrative and second million We fairly million, with $XX

of days. due the four days is this will Our investments. result Sequentially, Based to XXX to working investments expectation in increase an additional of second expect capital for that cash the forecast, compared inventory cycle balance we our days of XXX primarily increase on revenue capital will sheet working fiscal quarter. to level

the cash a quarter. third quarter, flow support anticipate fourth working we of during expect cash during capital free use we to While generate investments positive fiscal to offsetting fiscal the

Finally, facility. our call $XXX new million expected million, is range for capital which of in Thailand Abigail, for spending now the to to for the XXXX $XX let's fiscal million that, questions. open be approximately includes With $XXX

Operator

Instructions]. question your comes Thank open. Needham, from Jim line line first of with is And you. [Operator the our Ricchiuti

James Ricchiuti

the a I wanted bit focus morning. you. to market. Thank little Good on Industrial

First, ago. to what months supply terms or Industrial semi-cap you were moderating in extending seeing or timing are chain six visibility just what that in beyond so perhaps quarter challenges market I'm wondering And for in the the the market seeing, the growth of are the broader if in you in say vertical the Industrial this contributing issue is the a category.

Steven Frisch

strong to for would if demand strength is customer say the that and us, remains anything, I out. continues duration Steve, the stretch this of Yeah,

half look of in people what back of lots think were like talking about XXXX. it does the I

see For and us into the through we and 'XX. 'XX customers, strength continuing our

think and to chain ones those that constraints, ability the bit, to aggressive it's but by being the customers drive far for been going the I the most inventory continue and deliver, muted to time the some continuing as a quite here. is by is strength probably are supply projections belief

James Ricchiuti

potentially I if it. cases? ramps or -- or this and on isolated you just alluded this catch-up changes color of Is a above ramping any of Got that. the wondering customer the in some you actually one-off new think and to that kind provide some is you faster just are some And I'm behavior none product seeing could

Todd Kelsey

there's a Jim are these Todd this been lining kind programs. together. of are the all new pipelined been so are planned in plus have we're ramps. planned -- situation for very number is time, that that -- are -- these year on up some a of for And they'd And substantial and these materials a And where small product ones

-- of million end the And kind and a the production on from the revenue. impact and of to ramping to think they've about them quarter standpoint. $XX phase revenue. and a impact of phase or really the So, so we're combined major, ramp design having getting per of to in about in anywhere incremental as they're meaningful of having good from shape a are material They're we $XX they're gotten

they're So, -- substantial up. line they they as when

James Ricchiuti

about. of the or Todd, color, we talking programs Any products on might be type

Todd Kelsey

the impact, Healthcare all three the sectors, Well, -- would dominated our there's within I sector. of it's say

So, of we revenue the be a several meaningful move ramps. reflective and will in that see directly program through our quarters as jump Healthcare these major you next will

James Ricchiuti

back in I'll jump Clear. queue. you. Thank the

Operator

you. Thank

advisors. line Our next Fox question comes with Fox of the from Steven

is line Your open.

Steven Fox

can hear Hi, me. you

Todd Kelsey

Yes.

Steven Fox

questions Two morning. could. good Hey, if from me I

First it numbers subtract out now, are these understand a that's are do a even of out, are types from days, still on you but pointed deposit And then up I the I as is be substantial How holding big all even mean, to say doubled. these the you year-over-year, tying these cash how these inventories. I envision a then you're for being getting going holding if its year purpose have balances. these amount. would I'll inventory which levels. [indiscernible], you much inventories you follow-up. add And like abnormally

Todd Kelsey

there. Pat, we it. where no I I year can when utilization our at Steve, help tying cash, if you was were which look of the From standpoint up revolver, with last out

XXX around liquidity lot a a available customers. we've million, lot to got inventory we're us, fortunate support Now our related needs. and of for cash that And is to of

offsetting it of you down in pretty do don't that staying referenced, for next to And I a doing the fiscal forecasting see the it gross we're we're over similar the going. third balance significantly high I'm quarters. think what where at where to I coming be point. of it I that's the quarter. as see see a I So couple standpoint XX% deposits inventory. From our near-term. are

current next improving in light that and days that we forecasting year is we'll over customers in thing see on think place initiatives quarters. back our inventory an there's coming added we'll from that XX, planning down three perspective, see half to our active I'd revenue One especially supply and to in environment. work the with of add with going the and four the into days Steve, balances the this, I the expect of start the to around

inventory already like it's down. well not here There's in activity that underway goes So, or that's the that place. guessing is back hoping we're, we're

a roll for start a this start you down and of takes So, little as bit it for to that a over of quarter those these bit high through levels right see days. and watermark will time the review come we're The inventory these the get current to ending efforts. to see to

Steven Fox

just intensive programs? That's was A you morning on business out consistently this comment the in grow then new thinking sort guys like earnings lot There's that's to Germany, sensitivity the business, some that helpful. statement. And about U.S. to as news seem fiscal how see this these sort world. week etc. Thanks. the be on quarter-after-quarter gauge economic in much despite you year. you or of the calls of -- lot comes of where can into Like risk wondering a economic and Great. programs of next do going sort subpar it the CapEx how would reward of usual, when of everything I that of

Patrick Jermain

changes The in I believe areas demand to pent-up relatively new products. insensitive, right now. environment There these there's are for Yeah. significant new economic are the where programs

economic market ramping in it as So, we a on strong our and comments. is at a of at programs is and this keep our point a But effectively news and with it's as just consider these point coming too matter thoughts there we well the certainly, out eye lot this close particular. of very

Steven Fox

you. Thank that. appreciate I

Operator

Thank you.

Our comes Matt Sheerin next from question Stifel. with

Your line is open.

Matthew Sheerin

good everyone. and Thanks, Yes. morning,

environment. another supply question on Just the

two upside due after nice constraints. of quarters had certainly supply the missing to You've

you like You but there did opportunity supply sound left June are how happening at in are the are or the quarter Doesn't on or still seeing it peers what you based table March of revenue the in terms revenue saying. loosen much missed of ahead reasons, that's Is execution? have quarter? on build the inventory other that, And either all? any

Steven Frisch

this This one. is Yes, I'll take crack Matt. at a Steve.

so so know shortages being predictable as In we been very by see work We terms the for of the that us. we where but more itself, them. are, supply more still it and it's stable, constrained, say I would

is especially calls I With shortage shortages. our aerospace. cooperation at gotten thing a much at driving and customer the supply better the up in we've think conquering, and teams, we're more splitting with dividing customers and like chain list, one regular efficient weekly

working that's And so been better.

on additional set of $XXX million terms of the out would we of for for table, we the in demand are it. there us do what In neighborhood we believe leaving could procure materials the if

So, still we the it what discussion. the the mean, softened little available if bit little gives far us, of goes a we're up optimism being able demand and back to I as here even from end, back to that's economic on things a the bit to look deliver everything yet. that's year to half so

Matthew Sheerin

that just cost. for a And that. the seen prices across-the-board we've you're up, seeing, thanks Okay, logistics pressures inflationary component question regarding go obviously and then

it but up, pass-through at like some are margins going sounds their your a going to customers, right. so put point, that's Your that's on to pressure margins,

your on of that? the In much increases growth. ASP with other customers is of units the working Are reflected how a is, versus in then pass-through components. so, And concern. And you that that revenue is question words,

Steven Frisch

amount linked wouldn't I an to working are customers seen. us, we're is not working our that that a previous we're be have There can of percentage, for with say at with is it's does with pass-through but significant is our there it. that have pricing to could component a that we've above that, for And our X% customers. our but that margin manage start impact It that I paying margins, Matt. not been this to necessarily revenue does And a to we that that X% certain pricing. few point. margin

Matthew Sheerin

Okay.

In help us right? and sales higher terms you the that? because quantify own of on just is in inventory on can units, not how up that's pricing impacted inventory So, your

Steven Frisch

I our that would seen X% be I of that again we've inflated to higher X% prices of mean, it's recently. because probably inventory value

Matthew Sheerin

Okay.

Steven Frisch

Okay.

Matthew Sheerin

lot. a thanks Okay,

Patrick Jermain

Sure.

Operator

the comes next Our of Melissa question Fairbanks James. Raymond with from line

Your is line open.

Melissa Fairbanks

is improved you quarter Great quarter outperformed March, March when and just or guide. XQ with very suggested sourcing, forward the and million going Hi, about it into short met Last how due in you've to that forward? guys. but could we year. had that. you with drive revenue It quarter significantly of some in between that that quarter little like each you Thanks timing a a $XX pulls we little Is was maybe should looks pretty maybe million or much. XQ incremental this Maybe the in the shipments? $XX bit be outlet thinking of

Todd Kelsey

of a of think more a more towards is so I we be there's $XX be high-end QX couple delivered the comparison strong. the end mean, just on talking number because $XX if even, one we'd the high things difficult would of about I the guidance was the this to million.

levels The have there. lockdowns could thing those around I still I that's maybe though is factored into mean, our too. the could hit guide other think we and Shanghai that are

we that's of its through flowing impact right So, all, the supply chain supply that's Shanghai we due chain have site a about impacted in because but to region impact. in now. on course have factored of lockdowns the don't order of million $XX to And APAC $XX at

Melissa Fairbanks

for so now. Thanks. much. That's Thanks perfect. Okay, for me all

Todd Kelsey

Melissa. Thanks,

Operator

Thank you.

line Our Paul next question comes JPMorgan. Cheng with of from the

line Your open. is

Paul Cheng

taking Hi. my Thanks questions. for

record the expand this quarter. to wins just on So

You customers firm you from as surge discussions in result? cases And from the talk more the this have potential kind have of a follow-up. of more with Is so customers having kind Malaysia well. taking and this most of the new logos here. incremental notice I how manufacturing business I positive about navigated you in-house Are wins. competitors. driving market could or structural move if mentioned is existing And share or then wins

Steven Frisch

Sure.

the then at looking their new of pretty customers it's I terms well In outsourcing internal basically between program manufacturing. wins, balanced gains, and think ramps, share market

looking the say areas. and And after would three from program me, [indiscernible] terms their of that really the in so, the to automation we're with do. going increasing, for to areas, I size we're what and warehouse all robots us are of They're to benefiting asking that's the asking at funnel in do us surgical due they're those systems. sizes and whole markets

flowing quarter are we the and us larger you good saw for pretty this through, the at so, feel and of we strategy about a couple that wins the opportunities. have with think And I way

I look a would of to terms We future, continuing put As logos. see of last still opportunities. significant in new years. I that year interested We able some in are introducing we mix pretty the This that year on that. to as it in did we 'XX achieve logos, to customers, what but aggressively and new new add go still maybe previous not we're as effort were

think teams our strategies I So, executing the quite effectively. are

Todd Kelsey

an wins COVID in surge during the and XX% as of around at team and more address that we beat a Malaysia points little in maybe had question given that And was I that. through time in And about Omicron to and how like -- handled surge, the we've Malaysia. commitments. give in quarter just I'd out Malaysia to with any color share our able mean, has our impact as then at Paul, that had gain. the various manage workforce their the in and much quarterly And

from So, just to the an COVID. really long there whole it tremendous due was nearly was was quarter I and absences -- performance it say impact would

Paul Cheng

X.X? expectation half, mentioned breakeven to XQ on you Are for facility usage. on targets job some there. couple on year? next the kind of in the free of flow, the quarters? for XQ for your rebound margins, rebound still Pat back with margins of can your second Thailand offset for Great long-term when expect we just we then into And cash operating here positive nice you What's Do And some ramping. pressures then sequentially quarter next in

Steven Frisch

quickly. be with ramping don't can significant think Thailand. I business going to Paul, for start the reasons. I a there that few in pretty Yeah. We're impact's

used margin approach operating and over generating cash a three investment profitability so I not that we'll QX areas I I start and we've few on facility over mentioned startup think campus as there's I team corporate in the bit to an also an QX. think two impact be other there do using that a in next flow We're we're the perspective, we'll revenue to So, offset we're corporate think utilizing that ramping of where quite From to averages. a environment Penang periods. we'll the significant quarter really will get quarters to

to break anywhere an even think I year, full the to For investment.

at about of million. were were six cash to look usage a you months, the where we at $XX If we of $XX first for

So, lower but see it first the may number. six investments I we for still think year, a bit be some full than will the months

Todd Kelsey

Paul, to to there, asked that's operating back really revenue The about X.X% ramp I'd And dependent. add question one thing margin. your you

place next So, the that demand see hit north this that's quarters. That's as we quarters, right over ramp X's. to And back as should the into $X a we've that's few structure couple which of is -- got the those it billion in service levels, now. the we of

Steven Frisch

factored Thailand And that margin into the we've goal. in startup

Paul Cheng

investments And get for great. heavy after lastly, levels. of next cap, we on there harvest XXXX And you kind back to then of revert is year forecast Okay, maybe spend CapEx last the and this maybe the year some and done bulk working year.

we maybe Is way about normalize free a Thank think here flow right the So see that 'XX. cash you bit in it? you.

Todd Kelsey

is Paul. It

year levels, for low the do a was CapEx, free 'XX in that -- our between back whether FXX probably I pretty Now flow improvement get for of in cash bit levels see 'XX. us. quite improvement It's a but 'XX and we of to

Paul Cheng

Thank Great. you.

Operator

Thank you.

Our line Ricchiuti next James the comes question Needham. of from with

Your open. line is

James Ricchiuti

to left the the demand a there. go made wanted comment out roughly you've XXX about you of back that Just million additional earlier to

supply me, Looking in like some supply chain you of I December a could number what As initiatives wonder to chain inventories? see out you do the look the some that the did including. result June remind have underway, for and how of quarter with challenges. investment of quarter the that the changing? just you Obviously, if

Patrick Jermain

Yeah, roll going continue the over few quarters in December now, large to amounts around a demand basis. next Jim. a forward that million. quarter, we're was similar the Right appears pretty of it Right to $XXX on still quarter-over-quarter it

James Ricchiuti

Got it and last the question manufacturing show, me slide is wins. that from you

as begin wondering certainly industrial wins large like a amount the customers terms it the to -- revenue characterize year so? like you able as You with over number existing and there's move that if to there's sounds a fair the or it next on if needle potential some be color either have to but these looks of might applications, and they scale I'm in exceptional do the provide

Patrick Jermain

in that Life dialogue Todd to the Healthcare similar mean, ramps that about that had I Sciences. Yeah, are

some the 'XX. If you those look those 'XX back go are of Healthcare at the and wins benefits you ramps in of to fiscal wins, really

it will at kind go and assessment that these we add wins our corporation look a and look as we meaningful industrial 'XX, way strong that as it. at ramp I and So believe is 'XX, these in is expectation the of into to revenue that fair the so I

nice, has we've us semi-cap good us a across Historically, strong been as of well. as past. the mix, about there's sector. been terms for the Obviously, management for healthy warehouse has in the wins talked In

just of So, I quite across benefiting that well we're sector. from the industrial think efforts subsectors good within all

James Ricchiuti

you. quarter, the way. by Thank on Congrats Alright. the

Todd Kelsey

Thanks, Jim.

Patrick Jermain

Thanks, Jim.

Operator

at showing Thank questions to this like you. now back I further to would the conference time. Kelsey. turn Instructions]. I'm [Operator Todd no

Todd Kelsey

you, nice Abigail. our and and thank I'd joined Alright. And We in your day. a support today. interest who Thank Plexus appreciate everybody like to very certainly your call have

Operator

conference today's This Thank call. concludes you for participating.

disconnect. may You now

Plexus (PLXS) 28 Apr 222022 Q2 Earnings call transcript