Plexus Corp. (NASDAQ:PLXS) Q4 2023 Earnings Conference Call October 26, 2023 8:30 AM ET Company Participants Shawn Harrison – Vice President-Communications and Investor Relations Todd Kelsey – Chief Executive Officer Steve Frisch – President and Chief Strategy Officer Pat Jermain – Executive Vice President and Chief Financial Officer Oliver Mihm – Executive Vice President and Chief Operating Officer Conference Call Participants David Williams – The Benchmark Company Melissa Fairbanks – Raymond James & Assoc ...

| --- | --- | --- | --- | |-------|-------|---------------------------------------------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | Fiscal fourth quarter 2023 highlights October 25, 2023 | | | | | | | Safe harbor and fair disclosure statement 2 PLEXUS CORP. Revenue ($ millions) ROIC 4,500 4 16% 12% Revenue ROIC Consistently strong performance! PLEXUS CORP. 1,124 1,094 1,071 1,022 1,024 600 700 800 900 1,000 1,100 1,200 Q4 F22 Q1 F23 Q2 F23 Q3 F23 Q4 F23 $1.78 $1.49 $1.45 $1.32 $1.44 ...

Fiscal 2023 fourth quarter guidance | --- | --- | --- | --- | |-------|----------------------------------------------------|------------------|--------------------------------| | | | | | | | REVENUE GUIDE • Robust commercial aerospace demand | | Q4F23 Guidance | | | • Ongoing new program ramps | Revenue | $1.00 billion to $1.04 billion | | | • Incremental weakness in semicap | | | | | • Modest softening of some industrial markets | GAAP Diluted EPS | $1.18 to $1.36* | • Ongoing supply chain challenges EPS G ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________________________________________________________________________________ FORM 10-Q ____________________________________________________________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 2023 O ...

Plexus Corporation (NASDAQ:PLXS) Q3 2023 Earnings Conference Call July 27, 2023 8:30 AM ET Company Participants Shawn Harrison - VP, Communications & IR Todd Kelsey - CEO & Director Steven Frisch - President & Chief Strategy Officer Patrick Jermain - EVP & CFO Oliver Mihm - EVP & COO Conference Call Participants David Williams - The Benchmark Company Melissa Fairbanks - Raymond James & Associates Steven Fox - Fox Advisors Matthew Sheerin - Stifel, Nicolaus & Company Anja Soderstrom - Sidoti & Company Christ ...

Safe harbor and fair disclosure statement PLEXUS CORP. | --- | --- | --- | --- | |------------------|-----------------|------------------------|-----------------| | | Q2F23 Results | Q2F23 Guidance | Q1F23 Results | | Revenue | $1.07 billion | $1.02 to $1.07 billion | $1.09 billion | | GAAP Diluted EPS | $1.45(1) | $1.06 to $1.24(1) | $1.49(1) | • Stronger than anticipated performance by Engineering and Sustaining Services (1) Our Q1F23 results and Q2F23 guidance and results included $0.21 of stock-based co ...

Plexus Corp. (NASDAQ:PLXS) Q2 2023 Earnings Conference Call April 27, 2023 9:00 AM ET Company Participants Shawn Harrison - VP, Communications & IR Todd Kelsey - CEO Steve Frisch - President & CSO Patrick Jermain - EVP & CFO Conference Call Participants David Williams - The Benchmark Company James Ricchiuti - Needham & Company Matthew Sheerinerin - Stifel Nicolaus Paul Chung - JPMorgan Anja Soderstrom - Sidoti & Company Operator Good morning, and welcome to the Plexus Corp. Conference Call regarding its Fis ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the company's financial statements, management's analysis, market risk disclosures, and internal control information [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The financial statements present the company's performance for the three and six months ended April 1, 2023, showing significant growth in net sales and income, stable assets, and positive operating cash flow [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Net sales increased 20.5% to $1.07 billion for Q2 FY2023, with net income rising 52.0% to $40.8 million, reflecting strong year-over-year growth Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended April 1, 2023 | Three Months Ended April 2, 2022 | YoY Change | Six Months Ended April 1, 2023 | Six Months Ended April 2, 2022 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,070,823 | $888,723 | +20.5% | $2,164,748 | $1,706,179 | +26.9% | | **Gross profit** | $102,993 | $76,510 | +34.6% | $204,192 | $146,506 | +39.4% | | **Operating income** | $56,942 | $35,837 | +58.9% | $114,283 | $66,310 | +72.3% | | **Net income** | $40,844 | $26,869 | +52.0% | $83,034 | $50,292 | +65.1% | | **Diluted EPS** | $1.45 | $0.95 | +52.6% | $2.94 | $1.76 | +67.0% | [Condensed Consolidated Balance Sheet](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets slightly decreased to $3.38 billion, while inventories increased to $1.65 billion, and total liabilities decreased to $2.20 billion as of April 1, 2023 Key Balance Sheet Items (in thousands) | Account | April 1, 2023 | October 1, 2022 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $269,664 | $274,805 | | Inventories, net | $1,649,719 | $1,602,783 | | **Total Assets** | **$3,382,020** | **$3,393,225** | | **Current Liabilities** | | | | Accounts payable | $729,225 | $805,583 | | Customer deposits | $531,683 | $480,486 | | **Total Liabilities** | **$2,199,638** | **$2,297,494** | | **Total Shareholders' Equity** | **$1,182,382** | **$1,095,731** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned positive to $57.2 million for the six months ended April 1, 2023, driven by higher net income and managed inventory investments Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended April 1, 2023 | Six Months Ended April 2, 2022 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $57,156 | $(4,653) | | **Net cash used in investing activities** | $(47,615) | $(64,258) | | **Net cash (used in) provided by financing activities** | $(18,424) | $107,801 | | **Net (decrease) increase in cash** | $(5,106) | $38,363 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes reveal inventories of $1.65 billion, total debt of $482.7 million, active use of derivative instruments, and a Q3 2023 restructuring plan - Total inventories reached **$1.65 billion**, partially offset by customer deposits of **$516.7 million**[25](index=25&type=chunk) - Total debt and finance lease obligations were **$482.7 million** as of April 1, 2023[26](index=26&type=chunk) - The company uses foreign currency forward contracts to hedge cash flows, with a notional value of **$192.9 million** for designated hedges as of April 1, 2023[31](index=31&type=chunk) - For the six months ended April 1, 2023, approximately **81% of revenue** was recognized over time[78](index=78&type=chunk) - The company repurchased **$23.9 million** of its common stock under the 2023 Program in the first six months of fiscal 2023[60](index=60&type=chunk) - In April 2023, the company committed to a restructuring plan and expects to incur approximately **$9.0 million** in costs during the third quarter of fiscal 2023[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the 20.5% year-over-year revenue growth, improved operating margin, positive free cash flow, and ongoing capital management amidst market pressures [Overview](index=23&type=section&id=Overview) Plexus navigates global supply chain constraints, inflation, and geopolitical trade restrictions, maintaining a strong balance sheet with $270 million in cash and available credit - The company is experiencing global supply chain constraints, impacting its ability to meet customer demand and requiring additional inventory investments[92](index=92&type=chunk) - Inflationary pressures on components, labor, and operating costs are ongoing, largely mitigated through contractual pricing rights with customers[93](index=93&type=chunk) - As of Q2 2023, the company had **$270 million** in cash and cash equivalents and **$216 million** available under its revolving credit facility[96](index=96&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q2 2023 net sales grew 20.5% to $1.07 billion, driven by strong performance in Healthcare/Life Sciences, leading to expanded gross and operating margins and increased diluted EPS Net Sales by Market Sector (in millions) | Market Sector | Q2 2023 | Q2 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Industrial | $439.3 | $414.7 | +5.9% | | Healthcare/Life Sciences | $487.3 | $353.2 | +38.0% | | Aerospace/Defense | $144.2 | $120.8 | +19.4% | | **Total Net Sales** | **$1,070.8** | **$888.7** | **+20.5%** | Net Sales by Reportable Segment (in millions) | Segment | Q2 2023 | Q2 2022 | YoY Change | | :--- | :--- | :--- | :--- | | AMER | $407.8 | $311.2 | +31.0% | | APAC | $587.3 | $533.9 | +10.0% | | EMEA | $101.8 | $73.7 | +38.1% | - Gross margin for Q2 2023 increased to **9.6%** from 8.6% YoY, and operating margin increased to **5.3%** from 4.0% YoY[97](index=97&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) - Return on Invested Capital (ROIC) for the six months ended April 1, 2023 was **13.8%**, generating a positive economic return of **4.8%** above the company's **9.0%** WACC[134](index=134&type=chunk)[135](index=135&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20of%20Capital%20Resources) The company's liquidity remains strong with $270.4 million in cash, achieving positive free cash flow of $7.7 million for the first six months of fiscal 2023, a significant improvement year-over-year Free Cash Flow (FCF) Reconciliation (in millions) | Metric | Six Months Ended April 1, 2023 | Six Months Ended April 2, 2022 | | :--- | :--- | :--- | | Cash flows provided by (used in) operating activities | $57.2 | $(4.7) | | Payments for property, plant and equipment | $(49.5) | $(64.1) | | **Free cash flow** | **$7.7** | **$(68.8)** | Annualized Cash Cycle (in days) | Period | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Days in accounts receivable | 56 | 59 | | Days in contract assets | 11 | 12 | | Days in inventory | 156 | 154 | | Days in accounts payable | (69) | (86) | | Days in cash deposits | (50) | (41) | | **Annualized cash cycle** | **104** | **98** | - The company sold **$411.3 million** of trade accounts receivable in the first six months of fiscal 2023, receiving cash proceeds of **$406.5 million**[154](index=154&type=chunk) - Capital expenditures for fiscal 2023 are estimated to be between **$110.0 million** and **$130.0 million**[148](index=148&type=chunk) [Disclosure About Critical Accounting Policies](index=33&type=section&id=Disclosure%20About%20Critical%20Accounting%20Policies) No material changes were made to the company's critical accounting policies during the second quarter of fiscal 2023 - No material changes were made to critical accounting estimates in the second quarter of fiscal 2023[159](index=159&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Market risk exposure remains consistent with prior disclosures, primarily involving foreign currency and interest rate fluctuations, with management assessing no material financial impact from a 10% change - There were no material changes in exposure to market risk from foreign exchange and interest rates[161](index=161&type=chunk) - For the three months ended April 1, 2023, **9% of Net Sales** and **21% of Total Costs** were denominated in currencies other than the U.S. dollar[163](index=163&type=chunk) - Interest rate risk is primarily associated with the variable-rate Credit Facility, which had a borrowing rate of SOFR plus **1.10%** as of April 1, 2023[165](index=165&type=chunk) [Controls and Procedures](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[166](index=166&type=chunk) - No material changes to internal control over financial reporting occurred during the second quarter of fiscal 2023[167](index=167&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers updates on risk factors, equity security sales, and a list of exhibits filed with the report [Risk Factors](index=34&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes have occurred in the risk factors previously disclosed in the company's fiscal 2022 Annual Report on Form 10-K - No material changes have occurred in the risk factors set forth in the fiscal 2022 Form 10-K[168](index=168&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceed) During Q2 FY2023, the company repurchased 125,639 shares for $12.4 million under the 2023 Program, with $22.6 million remaining available Share Repurchases in Q2 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2023 | 21,085 | $108.70 | | Feb 2023 | 46,332 | $97.78 | | Mar 2023 | 58,222 | $95.92 | | **Total** | **125,639** | **$98.75** | - As of April 1, 2023, **$22.6 million** remained available for repurchase under the 2023 Program[169](index=169&type=chunk) [Exhibits](index=35&type=section&id=ITEM%206.%20Exhibits) The report includes required CEO and CFO certifications, a reconciliation of non-GAAP measures, and financial data in Inline XBRL format as exhibits - The report includes required CEO/CFO certifications, a reconciliation of ROIC to GAAP, and XBRL data files as exhibits[171](index=171&type=chunk)

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the quarter ended December 31, 2022, detailing financial position and performance through key statements and notes [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Net sales increased 33.8% to $1.09 billion and net income grew 80.1% to $42.2 million for the three months ended December 31, 2022 Three Months Ended (in thousands, except per share data) | Financial Metric | Dec 31, 2022 | Jan 1, 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $1,093,925 | $817,456 | +33.8% | | Gross profit | $101,199 | $69,996 | +44.6% | | Operating income | $57,341 | $30,473 | +88.2% | | Net income | $42,190 | $23,423 | +80.1% | | Diluted EPS | $1.49 | $0.82 | +81.7% | [Condensed Consolidated Balance Sheet](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of December 31, 2022, total assets were $3.40 billion, with inventories at $1.65 billion and total liabilities at $2.25 billion, strengthening shareholders' equity to $1.15 billion Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Oct 1, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $247,880 | $274,805 | | Inventories, net | $1,645,011 | $1,602,783 | | Total assets | $3,395,292 | $3,393,225 | | Total liabilities | $2,245,033 | $2,297,494 | | Total shareholders' equity | $1,150,259 | $1,095,731 | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Total shareholders' equity increased from $1.10 billion to $1.15 billion for the three months ended December 31, 2022, driven by net income and partially offset by treasury stock purchases - Net income of **$42.2 million** was the primary driver of the increase in retained earnings and total equity[14](index=14&type=chunk) - The company purchased **$11.5 million** in treasury stock during the quarter, reducing shares outstanding[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended December 31, 2022, cash decreased by $27.6 million, with $48.8 million used in operating activities and $39.4 million provided by financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Dec 31, 2022 | Three Months Ended Jan 1, 2022 | | :--- | :--- | :--- | | Cash flows used in operating activities | $(48,794) | $(88,979) | | Cash flows used in investing activities | $(21,582) | $(33,370) | | Cash flows provided by financing activities | $39,438 | $70,043 | | Net decrease in cash | $(27,559) | $(52,122) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail inventories at $1.65 billion, debt at $516.3 million, APAC as the largest revenue contributor, and 81% of revenue recognized over time - Inventories increased to **$1.65 billion** as of Dec 31, 2022, up from **$1.603 billion** as of Oct 1, 2022[24](index=24&type=chunk) - Total debt and finance lease obligations were **$516.3 million** as of Dec 31, 2022[26](index=26&type=chunk) - During the quarter, the company repurchased **115,723 shares** for **$11.5 million** under its 2023 share repurchase program[56](index=56&type=chunk) - Approximately **81%** of the company's revenue for the three months ended Dec 31, 2022 was recognized over time[71](index=71&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=18&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance, highlighting a **33.8% year-over-year revenue increase** driven by strong demand, while addressing market pressures and liquidity [Overview](index=21&type=section&id=Overview) Plexus operates in the EMS industry, specializing in complex products, while navigating global supply chain constraints, component and labor cost inflation, and U.S. export controls on China - The company is experiencing global supply chain constraints, leading to an inability to procure certain components on a timely basis and requiring additional investments in inventory[83](index=83&type=chunk) - Inflationary pressures on components, labor, and operating costs are expected to continue, though the company has been largely able to mitigate impacts through contractual pricing rights with customers[84](index=84&type=chunk) - As of Q1 fiscal 2023, the company had **$248 million** in cash and **$180 million** available under its revolving credit facility to support potential future challenges[87](index=87&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Net sales for Q1 fiscal 2023 increased 33.8% year-over-year to $1.09 billion across all segments and sectors, with operating margin improving to 5.2% and operating income rising 87.9% Net Sales by Reportable Segment (in millions) | Segment | Q1 FY23 | Q1 FY22 | Change (%) | | :--- | :--- | :--- | :--- | | AMER | $389.7 | $277.3 | +40.5% | | APAC | $641.9 | $491.7 | +30.5% | | EMEA | $89.4 | $72.9 | +22.6% | | **Total** | **$1,093.9** | **$817.5** | **+33.8%** | Net Sales by Market Sector (in millions) | Market Sector | Q1 FY23 | Q1 FY22 | Change (%) | | :--- | :--- | :--- | :--- | | Industrial | $472.1 | $363.8 | +29.8% | | Healthcare/Life Sciences | $487.9 | $344.5 | +41.6% | | Aerospace/Defense | $133.9 | $109.2 | +22.6% | | **Total** | **$1,093.9** | **$817.5** | **+33.8%** | - Operating margin increased to **5.2%** from **3.7%** year-over-year, and operating income rose **87.9%** to **$57.3 million**[98](index=98&type=chunk) - Return on Invested Capital (ROIC) improved to **13.8%** from **10.0%** in the prior-year quarter, generating a positive economic return of **4.8%**[111](index=111&type=chunk)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended the quarter with $247.9 million in cash, with cash used in operating activities at $48.8 million, an annualized cash cycle of 106 days, and negative free cash flow of $71.9 million - Cash and cash equivalents were **$247.9 million** as of December 31, 2022, with **87%** held outside the U.S[113](index=113&type=chunk)[114](index=114&type=chunk) - The annualized cash cycle increased to **106 days** from **103 days** year-over-year, primarily due to a **six-day** increase in inventory days and an **eighteen-day** decrease in accounts payable days[116](index=116&type=chunk)[117](index=117&type=chunk) - Free Cash Flow (a non-GAAP measure) was **$(71.9) million**, an improvement from **$(122.2) million** in the prior-year quarter, mainly due to a smaller working capital investment in inventory[122](index=122&type=chunk)[124](index=124&type=chunk) - The company sold **$185.6 million** of trade accounts receivable during the quarter, receiving cash proceeds of **$183.6 million**[131](index=131&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=27&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes in market risk exposure were reported, with foreign currency and interest rate risks deemed not to have a material effect from a hypothetical 10% change - There were no material changes in market risk exposure from the 2022 Annual Report on Form 10-K[137](index=137&type=chunk) - A hypothetical **10.0%** change in the value of the U.S. dollar or in interest rates would not have a material effect on the company's financial position, results, or cash flows as of December 31, 2022[139](index=139&type=chunk)[141](index=141&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the first quarter of fiscal 2023 - The CEO and CFO concluded that the company's disclosure controls and procedures are effective at a reasonable assurance level[142](index=142&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[143](index=143&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1A. Risk Factors](index=28&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes have occurred in the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended October 1, 2022 - No material changes have occurred in the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended October 1, 2022[144](index=144&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceed) During the quarter, the company repurchased **115,723 shares** for approximately **$11.5 million** under the 2023 Program, with **$35.0 million** remaining in authorization Share Repurchases for Q1 FY2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2 - Oct 29, 2022 | 47,769 | $91.16 | | Oct 30 - Nov 26, 2022 | 30,306 | $102.60 | | Nov 27 - Dec 31, 2022 | 37,648 | $106.41 | | **Total** | **115,723** | **$99.12** | - As of December 31, 2022, approximately **$35.0 million** remained available for repurchase under the 2023 Program[145](index=145&type=chunk) [ITEM 6. EXHIBITS](index=29&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications, non-GAAP financial measure reconciliations, and Inline XBRL formatted statements - Exhibits filed include CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and a reconciliation of ROIC to GAAP (99.1)[147](index=147&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) [Signatures](index=30&type=section&id=Signatures) The report was duly signed on February 3, 2023, by Todd P. Kelsey, Chief Executive Officer, and Patrick J. Jermain, Executive Vice President and Chief Financial Officer, on behalf of Plexus Corp - The report is signed by CEO Todd P. Kelsey and CFO Patrick J. Jermain[149](index=149&type=chunk)

Financial Data and Key Metrics Changes - The company reported fiscal first quarter revenue of $1.09 billion, reflecting a 34% year-over-year growth [80] - GAAP operating margin was 5.2%, including stock-based compensation expense [84] - GAAP EPS was $1.49, which included $0.21 of stock-based compensation expense [84] - The company anticipates fiscal second quarter revenue guidance of $1.02 billion to $1.07 billion, with GAAP operating margin expected to be between 4.5% and 5% [24] Business Line Data and Key Metrics Changes - The Industrial sector revenue declined by 9% in the fiscal first quarter, with expectations of a 10% decline in the fiscal second quarter due to reduced demand from SemiCap customers [25] - The Healthcare/Life Sciences sector grew by 4% in the fiscal first quarter, with expectations for flat revenue in the fiscal second quarter before returning to growth [82] - The Aerospace and Defense sector declined by 2% in the fiscal first quarter, but is expected to see low single-digit growth in the fiscal second quarter [82] Market Data and Key Metrics Changes - The company’s funnel of qualified manufacturing opportunities increased by nearly $250 million to a record $3.6 billion [62] - The EMEA region saw exceptionally strong wins, contributing $93 million in the fiscal first quarter [26] - Demand in the Semiconductor Capital Equipment (SemiCap) sector is projected to be down by 10%, impacting overall revenue expectations by approximately 2% [14][15] Company Strategy and Development Direction - The company aims to achieve a GAAP operating margin of 5.5% by the end of fiscal 2023, focusing on resolving supply chain challenges and capitalizing on new program ramps [81] - The company is committed to environmental, social, and governance (ESG) initiatives, joining the Semiconductor Climate Consortium to reduce greenhouse gas emissions [60] - The company expects to return to sequential revenue growth in the fiscal second half, driven by strong demand in Healthcare/Life Sciences and Aerospace and Defense sectors [81] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing supply chain challenges, particularly with lagging edge semiconductors, but anticipates a reversal of trends in decision-making processes for customers [3][5] - The company remains optimistic about fiscal 2023, despite macroeconomic uncertainties, and expects to outperform market growth rates [81] - Management highlighted that the Aerospace and Defense sector is recovering, with supply constraints being the main gating factor [81][93] Other Important Information - The company made cash investments in operations totaling $49 million and capital expenditures of $23 million during the fiscal first quarter [7] - The balance sheet at quarter-end included cash of $248 million and debt of $516 million, with $180 million available to borrow under the credit facility [7] - The company is targeting to end fiscal 2023 with close to $50 million of free cash flow [85] Q&A Session Summary Question: What are the expectations for SemiCap demand? - Management expects SemiCap demand to be down by 10%, impacting overall revenue by about 2% [14][15] Question: How is the inventory and working capital situation? - Management indicated that inventory days are expected to increase, but they aim to reduce cash cycle days by 5 to 10 days by the end of fiscal 2023 [39][40] Question: What is the outlook for the Aerospace and Defense sector? - Management noted that demand is recovering, and they expect low single-digit growth in the sector for the fiscal second quarter [82][93] Question: How does the company plan to address supply chain challenges? - Management is focused on working with customers to improve the supply pipeline and resolve existing challenges [93] Question: What are the expectations for free cash flow? - Management anticipates free cash flow generation in the second half of the year, targeting close to $50 million by the end of fiscal 2023 [85]