fiscal second quarter 2021 financial results

Fiscal second quarter 2021

financial resultsApril 22, 2021

PLEXUS CORP.

Any statements made during our call today and information included in the supporting material that is not historical in nature, such as statements in the future tense and statements that include "believe," "expect," "intend," "plan," "anticipate," and similar terms and concepts, are forward-looking statements. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results, and actual results could differ materially from those expressed or implied in the forward-looking statements. For a list of factors that could cause actual results to differ materially from those discussed, please refer to the Company’s periodic SEC filings, particularly the risk factors in our Form 10-K filing for the fiscal year ended October 03, 2020, as supplemented by our Form 10-Q filings, and the Safe Harbor and Fair Disclosure statement in yesterday’s press release.

Plexus provides non-GAAP supplemental information, such as ROIC, economic return, and free cash flow, because those measures are used for internal management goals and decision making, and because they provide additional insight into financial performance. In addition, management uses these and other non-GAAP measures, such as adjusted operating income, adjusted operating margin, adjusted net income, and adjusted earnings per share, to provide a better understanding of core performance for purposes of period-to-period comparisons. For a full reconciliation of non-GAAP supplemental information please refer to yesterday’s press release and our periodic SEC filings.

2

Safe harbor and fair disclosure statement

PLEXUS CORP.

3

Fiscal second quarter results

• GAAP operating margin of 5.8%

• Includes 23 bps of restructuring expense and 73 bps of stock-based compensation expense

• Best result since 2008

• IND and HC/LS exceeded expectations

• GAAP diluted EPS of $1.42 exceeded guidance range

(1) Includes $0.22 stock-based compensation expense and

$0.07 in restructuring charges

(2) Includes $0.22 stock-based compensation expense

(3) Includes $0.18 stock-based compensation expense

Q2F21 Results Q2F21 Guidance Q1F21 Results

Revenue ($ millions) $881 $860 to $900 $830

GAAP Diluted EPS $1.42(1) $1.17 to $1.32(2) $1.23(3)

PLEXUS CORP.

BUSINESS DEVELOPMENT

• Quarterly MFG wins of $284M

• Trailing four quarter wins > $1B, a new record

• 6 new logos, notable AMS win

• Engineering wins at 2 year high

THAILAND FACILITY

• 400,000 square feet

• Estimated completion in Q3F22

• Skilled workforce and established supply chain

• Significant customer interest

Fiscal second quarter accomplishments enable growth

4

PLEXUS CORP.

5

Fiscal 2021 third quarter guidance

Q3F21 Guidance

Revenue $875 to $915 million

GAAP Diluted EPS $1.23 to $1.38*

REVENUE GUIDE

• HC/LS demand strengthening, beginning of recovery for products related

to elective procedures

• Industrial demand robust in semiconductor capital equipment and

communications

• Aerospace and Defense demand appears to have troughed

• Demand exceeds guidance, but limited by supply chain constraints

EPS GUIDE

• Leveraging recent productivity gains

• GAAP operating margin of 5.1% to 5.6%, including 72 bps of stock comp.

FUTURE OUTLOOK

• Fiscal 2021 – mid-single digit revenue and potentially > 30% EPS growth

• Growth catalysts provide optimism for Fiscal 2022 and beyond

• Target 9-12% annual revenue growth, operating margins consistently > 5%

* Includes $0.22 of stock-based compensation expense.

PLEXUS CORP.

A leader in ESGIncreasing our positive impact on people and the planet, while driving enterprise value creation

Responsible Employer

Advocating for

diversity, encouraging

employee development

and ensuring ethical

labor practices.

Community Partner

Making a meaningful

impact to our

communities through

volunteerism and

charitable giving.

Global Citizen

Committed to

environmental

sustainability through

our operations, supplier

programs and product

design services.

Industry Steward

Active in industry

coalitions focused on

environmental,

ethical and healthy

working conditions.

Corporate Governance

A culture of

accountability that

competently and

ethically manages its

operations for the

long-term benefit of

shareholder.

Performance rated by Institutional Shareholders Services (ISS) in the top 30% in all categories

6

PLEXUS CORP.

Revenue in millions

7

Performance by sector

Q2F21

Apr 3, 2021

Q1F21

Jan 2, 2021Q2F21 vs. Q1F21

Q3F21 Expectations

(percentage points)

Industrial $407 46% $378 46% + 8% Down low single

Healthcare and Life Sciences $350 40% $319 38% + 10% Up mid single

Aerospace and Defense $124 14% $133 16% - 7% Flat

Total Revenue $881 100% $830 100% + 6%

PLEXUS CORP.

Manufacturing winsQ2F21 wins: $284M

New programs: 42

0%

5%

10%

15%

20%

25%

30%

35%

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

$1,100

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21

% o

f TFQ

Sale

s

New

Win

s $M

Trailing Four Quarters (TFQ) Manufacturing Wins

TFQ Wins TFQ Wins % of TFQ Sales New Wins

TFQ

$1.04B

Goal

25%

8

PLEXUS CORP.

Strong APAC wins performance

HC/LS Centers of Excellence were rewarded with large wins

Trailing Four Quarters (TFQ) wins supports continued growth

9

Manufacturing wins by region

AMER$119M

APAC$130M

EMEA$35M

Q2F21

85

137 136

89

119

0%

20%

40%

60%

80%

100%

-

20

40

60

80

100

120

140

160

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21 TFQ

Win

s %

of

TFQ

Revenue

Revenue (

$ m

illions)

AMER

Revenue TFQ Wins % of TFQ Revenue (MFG)

101 92 105 93

130

0%

20%

40%

60%

80%

100%

-

20

40

60

80

100

120

140

160

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21 TFQ

Win

s %

of

TFQ

Revenue

Revenue (

$ m

illions)

APAC


62

23

45 41

35

0%

20%

40%

60%

80%

100%

-

10

20

30

40

50

60

70

80

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21

TFQ

Win

s as

% o

f T

FQ

Revenue

Revenue (

$ m

illions)

EMEA


PLEXUS CORP.

HC/LS achieved record quarterly wins with 2 new logos

IND expanded customer portfolio with 2 new logos

A/D added 2 new logos to Space subsector

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Manufacturing wins by sector

HC/LS $153MIND

$96M

A/D $35M

Q2F21102

147

119

81

153

0%

10%

20%

30%

40%

50%

60%

-

20

40

60

80

100

120

140

160

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21 TFQ

Win

s %

of

TFQ

Revenue

Revenue (

$ m

illions)

Healthcare and Life Sciences


86 85

108 108

96

0%

10%

20%

30%

40%

50%

60%

-

20

40

60

80

100

120

140

160

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21 TFQ

Win

s %

of

TFQ

Revenue

Revenue (

$ m

illions)

Industrial


60

20

59

34 35

0%

10%

20%

30%

40%

50%

60%

-

20

40

60

80

100

120

140

160

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21 TFQ

Win

s %

of

TFQ

Revenue

Revenue (

$ m

illions)

Aerospace and Defense


PLEXUS CORP.

CLASS III DEFIBRILLATOR (HC/LS)

• Transfer from customer’s internal manufacturing

• Production location: Penang, Malaysia

SINGLE USE DEVICE (HC/LS)

• Breast biopsy for cancer detection

• Production location: Penang, Malaysia

DIABETES MONITOR (HC/LS)

• Next generation device

• Production location: Guadalajara, Mexico

WAREHOUSE AUTOMATION (IND)

• Automated picking system

• Production location: Appleton, Wisconsin

CABLE ACCESS PRODUCT (IND)

• Distributed access architecture

• Production location: Guadalajara, Mexico

LARGE DEFENSE PROGRAM (A/D)

• Advanced technology built in the United States

• Production location: Boise, Idaho

SECURE COMMUNICATION DEVICE (A/D)

• New addition to a family of products

• Production location: Oradea, Romania

Fiscal second quarter wins highlights

11

PLEXUS CORP.

12

Manufacturing funnel

HC/LS$1,754MIND

$583M

A/D$700M

Q2F21

Healthy qualified manufacturing funnel in excess of $3 billion

2,394 2,485

2,715

3,289

3,037

-

500

1,000

1,500

2,000

2,500

3,000

3,500

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21

Revenue (

$ m

illions)

Funnel of Qualified Manufacturing Opportunities

PLEXUS CORP.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Q2F20 Q3F20 Q4F20 Q1F21 Q2F21 Q3F21*

Q2F21 GAAP Operating Margin: 5.8%

Sustained strong margin performance driven by operational improvements

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Operating performance

*Represents midpoint of guidance

PLEXUS CORP.

Income statement

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Q2F21 Comments

Revenue $881 million At the midpoint of guidance range

Gross margin 10.3% Above guidance range of 9.5% to 10.0%

Selling & administrative expenses $38.3 million Within guidance range of $38.0 to $39.0 million

GAAP operating margin 5.8% Above our guidance range of 5.0% to 5.5%

Non-operating expenses $4.3 million Below guidance range of $4.6 to $5.0 million

GAAP diluted EPS $1.42 Above guidance range of $1.17 to $1.32

PLEXUS CORP.

Cash flow and balance sheet

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Q2F21 Comments

Free cash flow $75 millionCash from operations: $82 million

Capital expenditures: $7 million

Share repurchases $29.2 million Approx. 349,000 shares at an average price of $83.39 per share

Cash balance $295 million Sequentially lower by $62 million

Total debt $239 million Sequentially lower by $98 million

Return on invested capital 17.3% 920 basis points above fiscal 2021 WACC of 8.1%

Cash cycle days 72 days Below guidance range of 74 to 78 days

PLEXUS CORP.

Working capital trends

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Q3F19 Q4F19 Q1F20 Q2F20 Q3F20 Q4F20 Q1F21 Q2F21

Inventory Days 95 87 87 99 97 85 93 89

Contract Asset Days 12 10 12 13 12 11 12 12

A/R Days 52 55 49 55 55 48 53 52

A/P Days 54 55 61 62 65 57 59 61

Customer Deposit Days 16 17 16 18 20 18 19 20

Net Cash Cycle Days 89 80 71 87 79 69 80 72

-

20

40

60

80

100

120

Q3F19 Q4F19 Q1F20 Q2F20 Q3F20 Q4F20 Q1F21 Q2F21

Days

Net Cash Cycle Days Inventory Days Contract Asset Days

A/R Days A/P Days Customer Deposit Days

PLEXUS CORP.

Fiscal third quarter 2021 guidance

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Guidance

Revenue $875 to $915 million

GAAP diluted EPS $1.23 to $1.38

Gross margin 9.5% to 10.0%

SG&A $39.0 to $40.0 million

GAAP operating margin 5.1% to 5.6%

Depreciation and amortization Approximately $15 million

Non-operating expenses $3.8 to $4.2 million

Effective tax rate 12% to 14%

Diluted weighted average shares outstanding Approximately 29.2 million

Cash cycle days 77 to 81 days

Q&A

Thank you.

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fiscal second quarter 2021 financial results

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