PLXS - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Plexus Fiscal Fourth Quarter 2024 Earnings Conference call. [Operator Instructions] I would now like to turn the call over to Shawn Harrison, Vice President of Investor Relations.

You may begin.

Shawn Harrison

you us thank and morning, for today. joining Good

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

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

clicking before call, Plexus's President Executive Officer; Harbor participants will list ] as live to a could press September today fiscal particularly and Chief Kelsey, and actual periodic For Chief XXXX, webcast our factors of Executive Fair cause Streaming those by filings, on in and results President XX, the statement www.plexus.com, earnings are that [ at Safe supporting the from supplemented Vice materially Todd Form release. We this in and provide website, Pat Oliver the President discussed, and Operating of on to the Officer. With page. at over for today's our summary further Chief Executive access Form morning XX-K to Financial the SEC the XX-Q to call differ risk call encourage factors our year-ended details. Disclosure please Officer; Jermain, filing turning refer comments materials Oliver that filings the Vice and for top the Mihm, Investors Todd company's Pat

that, in on Xth, in me to XXXX and now Todd? first the our over Todd please Todd, Conference the Raymond XXth. With Kelsey. note City in quarter, turn let Conference Chicago over during November I Before call One-on-One turn Consumer York Plexus December participate will Midwest the on call fiscal James New TMT Stifel's to that

Todd Kelsey

the testament exceptional XXXX Good X. Thank dedication members our more Plexus Slide fiscal a you, morning, Shawn. of performance, exited and than team to everyone. Please with focus XX,XXX to advance globally.

excellence service XXXX, in us share capturing exceptional for fiscal Our quarter, throughout team's solid fiscal fiscal pull-in XXXX, data gaining results. the market quarterly resulted to the Plexus and leading delivering commitment customer positioning late in fourth to a

In addition, increasing and quarterly robust our Plexus operating driving percent ongoing resulted producing margin year focus anticipated, on non-GAAP team's our efficiency earlier achieving margin operating goal one X-plus than EPS. in

more previous also cash XXXX flow cash free cash fiscal flow in record $XXX quarter. our to performance record We of flow free million free the The cash annual our stellar than pushed Xx million, representing flow. generation generated $XXX free

to continue aerospace fiscal year XXXX, new We ramps. anticipate aided remain by mixed. We defense anticipate strong market our revenue within growth gains while sectors market and program sector another for ongoing share trends noting and our for

We delivered be shareholder toward X. fiscal by Sciences quarter Revenue advance flow from quarters, recovering growth tremendous We focused that and subsectors, of and expect our free $X.XX continue cash Healthcare/Life in in modest deployed to recent While our meaningful market of on generating sectors share growth gains. results. program new creating guidance billion certain we strong will demand remain supported fourth margin industrial performance financial additional value. Please operating ramps, exceeded to producing maintaining range. Slide EPS and

points market ongoing sequentially X.X% market region. Non-GAAP of margin EMEA the exceeding experienced activity we multiple progressed, XX quarter more basis industrial across X.X% to X.X% the that customers in and our sector long-term sectors demand As stronger goal, the guidance weakness and in our of pull-in offset range. demand with expanding a met than operating

favorable reduction ] $X.XX upside, in operating late surge. from performance, the a our led Non-GAAP advance margin revenue Our tax leverage to focus robust margin on of demand driving Slide EPS and X. benefiting guidance rate. Please operational healthy to exceeded further and also efficiency range, interest quarter expense, [

For production. market million the Healthcare/Life result ramped in in $XXX revenue annual million. $XXX is XX this programs when sector into fourth of fully the quarter, contribution fiscal Included Sciences from we manufacturing another worth won strong quarterly

generated $XXX For billion to X. than over market wins, program our long-term. Please sector, of team this program sector fiscal $X exceptional anticipation Sciences including in Slide of of a million more supporting growth Healthcare/Life our manufacturing revenue go-to-market market XXXX, the the wins for advance record

X Scope X% $X improve sites X cleaner responsible by We and to through business Foundation. shareholders, highlights our Community X% of million technology, fiscal reuse, energy. In reduced of as our support recycling customers, operational strategic impact optimize our increased selection, waste-to-landfill our than following team our are Plexus goal sustainable our more efficiencies, we continue through create Plexus's members, reduced value communities We from and manufacturing XXXX. continue social practices. globally, over efforts, for through our We to and vendor and to double emissions our The across globally over by waste generation. XX% and reduced we transition and global donated the sources

Our team the customers chain. drive we to we across to engagement. sustainable as help more our assessed over global We products XX,XXX XX% sustainable hours supply paid environmental and social members factors volunteer continue market. local fiscal responsible surpassing on and to communities, over XXXX And chain our value spend our of deliver contributed practices our their business

named who the thrilled Finally, what for this heart we Programs of we XXX one we and our to do. at the be in Internship are past investment who Top the people U.S. Yello, of were are by XXXX quarter, recognizing

received healthier team and also associated the to performance build better Commerce. XXXX. Please of stewardship, EPS inclusive who to Wisconsin gains dedication business position, we XXXX to our on share wins XXXX vision Friend practices, and focus Large X. a world. program our Thanks share XXXX environmental begin increasing all for fiscal in from market our Award is Business the on delivering driving by our to the market solid focus excellence, of will presented help the recognition our to given members in products expansion completing sustainable of and by our and of strong service a our fiscal improved these advance the efficiency that and our enabled and of the build new supported fiscal achievements, many throughout deploying throughout category outstanding create customer that upon We subsectors, repurchase conditions Slide continue in This borrowing with We for Environment Sustainability reducing program. Manufacturers toward performance, profitability and fiscal flow leverage created our operational cash free sectors witnessed Company

quarter fiscal non-GAAP to first quarter stronger guiding of $X.XX non-GAAP $X.XX. million operating range $XXX billion, to of After the of we are $X.X XXXX, resuming We to X.X% fiscal margin demand expect anticipated in fiscal revenue revenue environment pause our ongoing with growth than finish challenged continues. year an X.X%, fiscal the along and first in with EPS sequential the as to before EMEA, to

that of XXXX, additional while exceeding maintaining to reflecting we healthcare growth inventory Healthcare/Life and growth Oliver to corrections, remaining strength, should continue and substantial the defense, benefiting aerospace growth for now remains will revenue navigate through benefits quarters, call the ramps, will profitability, a performance reflecting our program our result generation challenged inventory the margin industrial, in witness to share turn flow and but strong continuation performance deploying a creating industrial operating while market demand, in program over ongoing in by from of gains, our increase new new broader market and growth leveraging forecasts, fiscal the expect from robust analysis in operational anticipate ramps, market Oliver? robust end market recovery toward cash free Sciences third-party moderate expansion, SemiCap, shareholder recent within meaningful of gains, strong modest moderate sectors. and For value. I corrections efforts weak a market revenue share efficiency as any EPS growth, demand. We rebound in we and of market

Oliver Mihm

each our on sector X, annualized of fiscal some Good increased fiscal our quarter region, I morning. of I very and prior the our fiscal review in we fiscal fourth then for revenue quarter, guidance, the the opportunities. Starting represented a aerospace begin X% upside, sector sector first reflecting quarter, revenue drove the contribution and market for performance above our of demand fourth increased engineering a fiscal our fiscal with growth aerospace the an than of directional and from Slide Multiple subsector. Consistent expectations XXXX Todd. and commentary revenue. sector sequentially Thank with provide will for each review uncertainty funnel of sector each our XXXX. revenue and the year and commercial of qualified the in customers expectation sectors, saw stronger XX%. our more performance manufacturing market you, robust will growth defense solutions, for the the exceeding with overview defense also up quarter wins offset for demand inside flat for cautiousness for strong stemming XX%, of with XXXX which anticipated in than revenue aerospace

We defense with space revenue the in in aerospace in aerospace for activity more first decline subsector. pooling expect high than offsetting the quarter, single-digits customer the conservatism to fiscal QX sector strength into commercial the and and of subsector, our

complex facility. solidifies This wins prime $XX were included with Our Boise, strong the further fiscal and for sector defense Idaho a million, for of the largest at program aerospace product relationship the fourth for and quarter one assembly our defense our contractors. win

will maintained award manufacturing engineering where a won facility. have engagement. from solutions program our our first be built customer in also We defense Wisconsin Neenah, a This longstanding we

fiscal diversifying Finally, continued to engineering progress record for defense in generate reflecting sector and solutions hit wins our opportunities a high XXXX, the aerospace growth. and

XXXX This new to for strength will increases the uncertainty inventory fiscal quarter demand the Revenue procuring a from strength mid-single demand in product commercial of sector increase. Fiscal for beat a sector aerospace corrections up saw aerospace as at a advance by X% expectations the was subsector, and XXXX the demand defense as Slide normalization revenue year outlook the of resolve discussed as expectation headwind bullish, softness, be fiscal market our third of ramp our sector on components and subsector above our program X. pooling of of new in our prices. market Healthcare/Life progresses. Please previously a digit quarter Sciences in for the continues XX% result launch. inside Sciences and Our well sequentially supported defense decline to our the as Healthcare/Life a that and

the engineering our decline for manufacturing wins dynamic to significant fourth than corrections the inventory more For our sector activity high for of million. X fourth strong offsetting included quarter. Wisconsin performance facility. expect customer Neenah, awards $XXX the Sciences Wins solutions. Healthcare/Life second Sciences existing quarter from single-digits, the from Healthcare/Life marked an fiscal quarter, and the sector fiscal quarter continued continued some fiscal into reflecting at momentum the consecutive pooling first is of we This

in experience of our development new of these represents world our in reflects from sustaining execution engagement, ongoing class on outsourcing engineering, historical the of subsector, our of awards commercialization the services customer contribute and success. the strength One support and to work depth and resources ability our

of production a execution the Healthcare/Life produced remarkable be won launches. based a aggregate therapeutic increase. Sciences in This also in XXXX fiscal new the XX% Chicago, facility. The an device historical will We reflect their support wins of our for a Illinois a for record existing for and product product on year-over-year sector customer high,

and quarter. in and we market on to XX, of ongoing the growth modest strength of revenue our the from ramps, through sequentially by decline a offset generally remain revenue sector a result inventories. Advancing X% expectation recovery in driven subsectors inventory in quarter our to soft correction. fourth working end in inside optimistic to increased XX% fiscal subsectors. Fiscal various a and normalization As a from increases Healthcare/Life were and industrial demand improvements, XXXX, look than saw above more SemiCap program Sciences customers by and XXXX program primarily the the fiscal Slide single-digit sector, sector, for demand strength for energy the of was high our we beginnings benefiting the return new industrial a The increase for the an SemiCap ramps, subsector

through work revenue customers. improvement the quarter, SemiCap in offset quarter, fiscal and program more instability, fourth demand to upside with ahead being industrial than fiscal subsectors some continuing continued by demand is the to the volatility in experienced Looking near-term first X

next the As product the test decline we market a and million included expect first a wins sector in measurement with for revenue fiscal mid-single customer. of existing for quarter. Industrial $XX result, an to industrial fourth sector quarter fiscal generation win digits the

products These included in Our platforms gains wins also will customer. an campus. X Malaysia on for share SemiCap our built be existing Penang,

compliant confirmed to position the that nuclear growth. Assurance We are services quality is enabling energy our Plexus in support has a Nuclear of expands note revenue Compliance energy. for and pleased Quality existing that customer system NQA-X. providing this also standard to an with audited in to differentiation, leadership facility the ASME's Idaho our This subsector Boise, continued is firms standard

a fiscal expectation in for to of growth unchanged. return Our industrial the sector XXXX remains

the Slide fiscal subsectors billion, for customer wins turn view XXXX, a SemiCap new programs the Slide of market. XX, APAC instability for a remains of road fiscal optimism the $XXX quarter continued of review robust a of This robust strength our of wins to wins fourth of as collaborative execution. The million. campus. consecutive the for progress fiscal now market us of program management. In the progresses, fiscal reflects relationship aggregate built space is SemiCap our financial team increased for Plexus the an performance. award funnel Scotland prior qualified over fiscal a wins in a seeing normalization growth in regional our support ramps, result sequential increasing marks customer Our This acceptance. This their for of manufacturing typical to supplier the into region's either second year. These exceptionally funnel Wins XXXX. I share general Malaysia funnel an The our advance to our XX% launch fourth or The decline the outgrowth for wins subsector are $XX included customer. our in market that subsector The uncertainty APAC facility review million is of helping America's regional new resolve fiscal product region's awards quarter strength included our Pat? our and the in million strong team quarter our new gain fourth year of weakness. Advancing X with Neenah, $X from manufacturing will the map. Please and Wisconsin review the of executes over assemblies win wins award will our by of industrial highlights reflects offsetting our reflective in-depth harvesting from the of qualified continued strategic SemiCap included Penang, $X.X fiscal be XX of existing customers. the share program for strong quarter. The with award with at existing The were opportunities. performance. we the manufacturing in XXXX EMEA call the product to the an and market experiencing subsector gain opportunities can as at existing of for in summary, wins continued currently gives corrections, inventory will Pat of activity region strong

Patrick Jermain

Oliver, you, morning, good and Thank everyone.

million our X to of significant fixed across sequentially quarter last was sequentially the manufacturing Our higher points. gains results from exceeded productivity slightly regions XX above cash XX. improved incentive Gross improvements by due guidance as operating our and earlier X.X% gross target met additional Non-GAAP of guidance X and our to to linked flow expected. Non-operating operating $X.X delivered compensation year margin our than expense exceeded expense to million of anticipated $XX and on expectations. margin strong due primarily and XX.X% leverage of on better cost fiscal summarized expenses quarter. recognize all margin performance. We decreased results. Selling the Slide guidance and fixed than are of our while X%, was expense Efficiency performance basis fourth increased revenue administrative manufacturing led margin

rate. along exceeded interest cash of While flow we benefit a a expense foreign EPS this substantial of see higher favorable mentioned due Non-GAAP tax levels robust due end diluted a we our did with the performance, factors from losses quarter. in exchange experienced the reduction to to top guidance of $X.XX our

This from expectations. flow well wrapped We pleased million. our sheet cash $XX Turning were balance $XXX result spent cash in expenditures, with as performance extremely of cash on flow resulting XX. the year. our We our Slide capital cash $XXX free to on was and million flow delivered and above we up fiscal operations million free in

As the history. performance company Todd mentioned, in this was highest

more net we XXXX fiscal fiscal flow cash generated our record an record Xx $XXX our income. million, previous XXXX, and For than outcome of free double representing

we to program. million total the share With performance, by our support the strong repurchase debt quarter $XXX continuing while during reduced our

fiscal debt million. by For $XXX our XXXX, total we reduced

purchased we completed million, the repurchase previously which our quarter, authorized share for approximately shares the $XX.X $XX million During XXX,XXX of stock program.

purchased we our million $XXX XXXX, an stock of fiscal $XX.X price at For below slightly share. average per

Cash was We have sequentially year approximately the shares under revolving to the outstanding end facility. $XXX a million during available million with begun quarter. position. facility borrow We we fourth net $XX of year, our the higher the purchasing At million $XX the cash million $XX fiscal fiscal ended now under new program had $XXX authorized by credit of million. in under the

debt-to-EBITDA at conservative gross Our than X. a of was ratio level less

of cost year, cycle basis cycle invested which XX was of at capital by the expectations This was delivered details performance. this we XX of and For the XX level days. for our on Cash result exceptional above points return XX days, of XXX past year fiscal days was Slide fiscal average cash best XX.X%, the weighted to sequentially turn the end improved years. Please in on capital. delivered X the favorable to

revenue a sizable Our initiatives fiscal improved and contributed of days and days, cash days. by on inventory led in to XX continued progress X improvement accounts of reduction combination receivables working days. primarily from receivable Sequentially, lower year-end inventory cycle a our came collection by capital efforts. Increased

compared XXXX of gross million over inventory reduction of Our million balance. teams and $XXX $XXX delivered when fiscal to in year-end a sequential a reduction the

first to fourth margin quarter XX.X%. quarter. to the EPS in already be on for similar of revenue fiscal review gross midpoint, are the details, I'll XX.X% gross would fiscal the additional margin quarter, to At and range XX. Fiscal has the some Todd be expected the provided is first As Slide guidance summarized which

selling expect $XX.X which operating is administrative range the We exclusive range expense. expense million would margin $X.X million. This expected stock-based to expense expense. Fiscal of cash deploy and in excess quarter compensation as related first to $XX.X to of interest borrowing restructuring reduce in inclusive million represent million, approximately non-GAAP is and expense the our to be continue stock-based is $X of X.X%, activity. X.X% compensation of any sequential and anticipated to be approximately Nonoperating of improvement a we to

of XX% and outstanding XX% For the tax are effective rate fiscal first we an quarter, shares XX.X estimating diluted million. and between approximately

the fiscal we first for we up to XXXX, of fiscal the expectation compared fourth quarter. have will result that with this working the usage, a our Our in for expect on fiscal to of investments growth Based due last experienced sheet higher range XXXX the higher deploy to forecast, cash in to working increase our usage to quarters. payments X flow Despite several fiscal revenue year. anticipated of This XXXX. robust to XX follow excess XX is quarter, the expect to sequentially any million cash to this of expect in the would comment advanced the capital by trend the days continue will cycle inventory the free We plan to days. on create million return full cash the level balance investments reduction of result fiscal for $XXX range support primarily days, value. One additional shareholder for $XX revenue cash we efforts. With capital be linked to additional we continuing

$XX $XXX related in million Malaysia. million, footprint spending We the the $XXX mainland to to million expect on inclusive expansion of of of Penang, capital is range approximately which

our let's in within interest We support services and questions. significant ensure to opportunities investing open region growth the region. With continue are we for Bailey, the in now that, broad-based to customer call see this

Operator

Williams first with from Instructions] comes Benchmark the line [Operator Your David question Company. the of

David Williams

solid really the on results here. Congrats

Todd Kelsey

David. Thanks,

David Williams

the for or the hoped is guess the talked question in the bit without resolved But and as defense, Boeing first you about could a how as of and timing aerospace full we how contract that? maybe the be about the around I and really thinking Obviously, are and from of for had How you're about we that curious avoid back. yesterday kind maybe that being your thinking renewed do print script. this So that me just about about some you production associated And coming the just year the conversation aerospace of with that risk you in their defense? year? think

Todd Kelsey

strike maybe we of and our But certainly been But were as the one a start wasn't I'll the to way think Oliver people of the the lot yesterday our or here. in as resolved at conservative go projections disappointing went want through I things as add discussion through in will for we've looked preparation Yes, the Boeing. have anticipating. we that we call, Boeing

we and the talk how aerospace strong anticipated about out. Boeing when at plays defense, that conservative So a relatively in growth takes situation look

that, for So at I opportunity we're for this some get potential today. that point, We some situation in we resolution think what provide think if reasonably the could us. is upside de-risked

of 'XX, with but And think new another aerospace ramps subsector. said, through lot our the XX% be the in the defense when strong like growth looks that potential that double-digits. we of certainly defense driven has into within sector program and So level the about a at strength fiscal is not for 'XX, year, to

David Williams

I there, down. think, new good. quarter, some It SemiCap of, Great been the color it. for maybe several the secondly area lot around sounds of up, opportunity equipment like Very here certainly discussion been program just variable it's demand trends you. some this appreciate is an and wins a on There's got I then And you've space. Okay. there.

you're goes maybe think, just, do space, concerned the trends? that just, And that that, anything with? as for you the equipment generally? for there de-risked I maybe the that guess, So into estimation on year is you anything view think Have of you about that demand SemiCap? you SemiCap And how do

Todd Kelsey

Yes.

conservative relatively at a at SemiCap we're as look too. well general, in think I

expect share market market and mentioned to forecast as I gains. prepared expect and we'd would in the -- remarks, of because the outgrow we to Now outgrow

decade we there that outperform can projections have see out that so. or past think we're I and you So the going expect you or in WFE as take general that, any for for to SemiCap

think way So I SemiCap. to the about that's think

even well a it double-digits expect from this a into taking the be year, would here view. we growth conservative to So

Operator

line with next Your Associates. Melissa comes question James & from the Fairbanks Raymond of

Melissa Dailey Fairbanks

I'll the had Oliver. guided had quarter. been echo one some pretty broadband got to for quite in for communications the in business non-SemiCap last industrial? congrats the you great some on if dig the could recovery weak we It On time. Wondering I've call, into sector. the

wondering if expectations update give us what Just the you going could that on an business forward? are and

Oliver Mihm

Yes. about Happy tied flat that the and answer we quarter. always certain and a is here for that we look. in to much build macro fruition, our to prior to Yes, Certainly, also growth we projects that. communications outlook recognize coming to projects what the is our Certainly, more is talked but and those in not tailwinds linear. that recognize path fruition exist,

Melissa Dailey Fairbanks

No kidding. years. lot of with experience over that A the

my Pat, obviously, XQ. reduction a the focus in cash I on of really cycle maybe it's So know outlook, for whole follow-up, been team. for great the

cash to How year? what You've target target for look view days of levels flow longer-term like, XQ. to is? with the cash $XX guided should What higher us peak that the to Can $XXX million million free we you the remind in the trough cycle investment? bump especially

Patrick Jermain

going Yes. at XX of 'XX, days. Sure we the first back can. to were fiscal quarter I mean

cash kind cycle year as this year for question at the And to XX-day midpoint have of And XX now really hitting resets to a your end go mid-XXs target. for XX been what were QX of signaling expectations. our of So X of improvement, we with, to days, obviously, have we pleased pleased of 'XX a with. a ago, kind to

look said several quarters, yes, fiscal we have our QX. days years I 'XX, inventory several QX. script, years, seen to of And investment seen through several efforts see that's in improvement first of going maybe an typically in us We'll last So 'XX. the in the not something XX as cash in every correct the expect investment in just cash continue something Melissa, to fiscal to we've I quarter. I last quarter -- an first

will some inventory payments We along with reduction. advanced of see that return

get point in of XX XXs. the for my to we'll steadily kind back has like be see, that to be for level, QX Whether reset we'll high will it to we Expectation is XXs. bring So as I'd 'XX, high XX into see then my the it get to expectation down. and more a would that expectations but the start back

Melissa Dailey Fairbanks

Wow, that's That's just in one quick fantastic. great. follow-up. could squeak if Maybe I

kind environment, give payments. You did advanced supply mention -- of those inventory advanced like are with do that expect So like be a in payments? the working going along some see still now still Are of if to your of you your your to normalized investment? capital commitments we balance own customers you customers return some a more we're eager of customer that up,

Patrick Jermain

Yes.

we're I think advanced excess point where those and obsolete to inventory typically and pursuing starts a see where age type those is is we when get to of of payments.

we're So that excess of still I inventory. think seeing improving, chain supply that can happen. But obviously, less with

Melissa Dailey Fairbanks

Okay. Great.

Operator

the Company. line & Ricchiuti with of from question next Needham comes Jim Your

Chris Grenga

Congrats for [ on results. is This on Chris Grenga ] Jim. the

Patrick Jermain

Thanks, Chris.

Chris Grenga

guess, one in particular Is stronger-than-expected a would anything out that point quarter? any could could you you there's there I You broad describe a mentioned you call of thing Is that the the there broad that the and drove driver pull-in or results. pull-in during as that to that? --

Todd Kelsey

impacted sector. interesting every The was thing Yes. it

saw the we -- were So we there pull-ins different and for reasons that saw.

Some demand saw looking were with that of program for were this. were success new uptick they demand -- just where end customers Others their ramps. people

we saw saw to So the of million. tune to we broad-based -- close quite $XX was what

but think that fact. revenue sequentially that impact, down impact the mean, cognizant million causing $XX QX, -- I one $XX in near certainly our or that we're So things is I of million is really what's

Chris Grenga

you in for longer how you or have longer persist dynamic much persist? much correction with customers, how you you inventory it. health that to into is expected sense to imbalance Got the any visibility in a do expect have -- And conversations care, do or do

Oliver Mihm

when that. This exactly to is out. I'll difficult that's going predict to come Yes, take Certainly, Oliver.

to think dynamic, XX% -- had inventory last we as last time that at already talked XX% I quarter, worked whole, we of fact a thought as our we we that, through look about the portfolio correction that. the

here I'll engineering also sector. talked we and of this last solutions momentum outlook as decision-making a note that we good quarter, revenue about leading view that for indicator that generally in and

to us for And I as look think we growth. optimism 'XX so, fiscal here that gives continued revenue

Todd Kelsey

Yes. there's faster But flow little couple the Life overall, and situations we're seeing is where corrections couple Sciences add of than healthcare significant. color Chris, are -- still one-off there in within here, fairly care, health a corrections A in additional the are through I'd a that

Operator

Fox from line Your with Advisors. of Fox Steven question the comes next

Steven Fox

all Just you following any is you just broad-based, from know up standpoint? there a said customers why does FQX. draw 'XX? it it I was growth And macro preclude growing, but understand on from mentioned. But Can say, what draw the think I reduce it conclusions pull-ins fiscal Or it that your conclusions? along you was any would in for does those XX% sort you you program specific? -- pull-ins to of lines, -- the

Todd Kelsey

Yes.

the the look maybe, question, Steve, to and pull-ins. fiscal on then it, look We're start looks as the the the, So we answering some with to slower pull-ins additional by higher When difficult, 'XX start as comparable going fiscal the provide little mid-singles I it from call I I'll a to I with 'XX, say. I'm at over Oliver revenue projecting we impacting maybe of pass 'XX. think 'XX, in revenue a would as think well double-digits standpoint, 'XX to detail

revenue some on growth strong QX we we a the through year. quarterly the we think hit and of balance basis and move once sequential progress, fiscal pretty can we make good So expect

Oliver Mihm

more from I customer-specific Yes. earlier, we the the pulled had think launch And a mentioned certainly pull-ins, program then on situations, that in of were that, a just as number there customer. reflect aggressively Todd specific adding to on

Taking earlier showing -- our strength for themes, macro a space in in remarks, back and showed some subsector we step looking mentioned strength QX.

We SemiCap talked about also the subsector.

grew that QX continues So underlying pickup. and in sequentially show demand to

we So be, say on overall that, to the mind look 'XX would the that be the think, and all comes outlook. our that would well-positioned we F reflections we're we trend. And macro as other I think contemplate macro again, I'd -- term of at

Todd Kelsey

made more defense. I about to and one Shawn, And the aerospace thing want to back statement go --

there well. as in conservatism Just -- we added some

unknown chain. so for trying adjust the to And related to Boeing the supply

Steven Fox

out then on details quarter? that it. the called the that's whether an curious further issue volatility about customers. give you Got Can And what ongoing helpful. X last and any you program us was with on beyond That's just

Oliver Mihm

for those, note they're just Yes. situations. that of I'll one-off both

working to with customer dynamic. demand I'll are them the from is resolve that And not perspective, perishable. also help that those note We our for programs both of my

Operator

Markets. question of next comes with Barger line Your KeyBanc Capital from Steve the

Unknown Analyst

full how year. question This sure operating achievement [ some there by that benefit My Barger. on was that really pull accelerating here X% ] for is from quarter, the other the reflects really, on more is the my but And here Jacob I'm done Steve you those a or actions in margin, question work first Moore forward on that the actions? most? think is, much performance of margin target there are be structural what do to is

Oliver Mihm

that warehouse to focusing in equipment I'll continued example, Oliver. we I'll and focus up Certainly, By that automation start have hit us generally and broadly I'll of add. to that. And as expect note of have and campus they technology deployed through manufacturing we different around 'XX more improvements X the just utilization both aligned improvements note investments well want then a result significant on This in organization, and efficiency open we organizationally, space that a a is comments project see and well help pieces continue lastly, pick would as fiscal we've continued as rate a my then there. the say things propagate fruit colleagues will capital continue on as also if performance I'll fiscal from drive as Yes, automation to we we or year. both in angles, through organization that to as of those think of Penang our innovation in efficiency. we profitability to they and continuous additional margin the and any all margin intensity. improvement. the enhancement way driving terms bear optimization And of innovation and both

Patrick Jermain

of kind we at right. as performance in fiscal Yes. look quarterly expect you're 'XX, the And Jacob, I

For guiding midpoint I'm a of QX, X.X%.

on quarter burdened merit The the March cost are increases. lower some is fixed we So losing leverage by revenue.

coming on half improvements pointed So productivity point this will margins to. Oliver of start we year see at the we that down with before improving back margins

I'm X.X%, this is tells us sorry, not think of -- I But quarter. be just we can X.X% target achieve what the every that may hitting

Unknown Analyst

helpful. That's

you need can follow-on there non-GAAP a sales there. growth you a is level X% to year? the just Do think you of hit maybe for And clarify full So threshold there? get to

Patrick Jermain

It I X% year, that. be sequential full fiscal we'll that going 'XX second quarter benefit growth want that below hitting slightly see. in revenue think the X.X%. what to for the to exiting Whether us. But the we're we to be the get to going could is see we is starting

Unknown Analyst

Got it.

was there. a which the Okay. quarters, I This past I last -- question were addressed, me. on mostly And got cash months the think X for sustainability my was of actually you free flow first one going you that maybe -- And near-term But see could opportunities touch return capital what your maybe highest cash it's going on allocation a priorities? here, down forward? as bit to come some expand use like to do to it you

Todd Kelsey

Yes.

we've well, I think down job bringing debt. think great a -- I done

outstanding only we've got So the $XX million facility. credit under revolving

we've have million repurchase over we month, free upon. last we're of about visiting with cash new to authorization the flow do be a other deploy we're significant Board executing quarters. the our generated And $XX to So X next that going opportunities share

see I'd we capital. debt in we further say footprint growth, So the repurchase do some year from as a priority have in And Malaysia. working program, in again, But later share the we standpoint, will I some mentioned, expansion investment with reduction. maybe as get

Patrick Jermain

a too. things mind expecting that when and that, I the one to is growth, supporting year of we add this we're to just mean, comes think first allocation, year. good I'd about Yes. capital growth obviously,

on impact our to 'XX. as So certainly that's to free -- cash going compared flow an fiscal have

Operator

comes Matt line Your with next question Stifel. the Sheerin of from

Matthew Sheerin

on last follow-up and gross the a Just question the margin. seeing regarding strength you're margins particularly in

margin in the You processes, efficient drop. about, a on you sector higher X% of just percentage you more bit been the higher are wondering what, little talked services, factory engineering or percentage just X% And has talked a a automation, gross down mix? revenue. of about to addition things guiding if sequential defense/aerospace I'm You're also benefiting from

profile forward? what's we could segments and the as go within that talk going different to margin about maybe So you drive

Todd Kelsey

start, Matt. can I Yes,

quarter. mean, cost fixed points margin. I higher right. losing in of we're about We're You're covering basis probably first contribution the that XX with leverage

that's not improvements. From mix, and of of it's with, coming along Some services the of from and customer difference productivity on much sector again, sectors. a between a further mix as automation Oliver touched perspective,

within driving profitability. It any comes wouldn't certain I say is to a better to almost necessarily weighting sector So customers. additional

Oliver Mihm

add on to then I'll that. And

hits of margin we rather that engineering terms from perspective, operations. our certainly the the than up of our as than number In pick mix, hitting and fiscal solutions sector's rest that a expect higher a progresses, to revenue year

Matthew Sheerin

Could is? us that you business remind how big

Todd Kelsey

kind It's million $XXX a get We we is it. greater don't way framed than the specifics. into lot of of

Matthew Sheerin

with business, your to very margins high relative right? But

Todd Kelsey

Yes.

Operator

Your Soderstrom. of next question comes from line Anja the

Todd Kelsey

Anja? Just that faint. you're really

Anja Soderstrom

Okay. I'm sorry.

in do expansion be expansion, Malaysia expanding you there? are -- the when And So support you do to completed? And products the to of to terms expect do what of what magnitude expect it? you kind

Todd Kelsey

Yes.

market sectors of in So we our support all Malaysia.

that currently We consists have of quite large different a campus X facilities. there

targeting facility, SemiCap the all growth campus, in that's Penang sectors. not our around be in would But When new -- of the particular. support again, Sciences is about the Malaysia our area. So of our we we around Healthcare/Life we're within in this Malaysia, some and sixth think

fiscal some late able So in regarding completion year. is -- Yes, first customer we shipments hit expect to the to be

Anja Soderstrom

energy in led involved to what in compliance, we that? from And that? can And Okay. get to of terms you getting having attain what's what you that? the expect And -- the nuclear

Todd Kelsey

Yes.

So that was our customer. driven by

of So involved an supply energy we products the that nuclear award that's had part chain. some

the and came us audited customer And to out standard. so that

Patrick Jermain

already that interest additional the the we that have fact this again, nuclear an customers that fairly a It's we've have rigorous the -- standard in supports ability. energy had subsector. And

Operator

further at over questions turn time. Todd will I no Chief to Kelsey, for Plexus's the Executive back and are Officer, President There this remarks. call closing

Todd Kelsey

Bailey. Thank just and our I'd our the a call. to key like you, of of themes call Yes. summarize bit

fiscal support, I Plexus a solid themes members investors, XXXX, today's free our generation. additional We shareholders, all, of first as Reiterating So analysts we're call, delivering of robust your for operating morning. always. the who sustained thank flow value call joined shareholder the growth, this team revenue key margin appreciate through cash creating want positioned and to and our

displayed to growth, look robust new well and ramps our growth we and gains moderate we fiscal revenue by As We've anticipate share industrial new defense program aerospace as aided Healthcare/Life given and revenue as end markets to strong margin recent than XXXX, increased greater of in Sciences our year quarters our operational of the by fiscal goal on strong X% projected. operating continue operational This earlier us XXXX. one performance in leverage efficiency positions than focus non-GAAP to ability achieving target programs.

position fiscal again, cash and shareholder record flow Finally, delivered XXXX, free day. strong debt us and allowing Plexus growth EPS value. to to we have deliver these The reduce nice fiscal you generate in combination additional XXXX. in Thank of factors a

Operator

concludes call. This today's conference

You may disconnect. now

Plexus (PLXS) 24 Oct 242024 Q4 Earnings call transcript