Plexus(US:PLXS)2025-01-31 13:13Financial Performance - For the three months ended December 28, 2024, net sales decreased by $6.5 million, or 0.7%, compared to the same period in 2023, totaling $976.1 million[92] - Gross profit increased by $12.6 million, or 14.3%, with a gross margin of 10.3%, up 130 basis points from 9.0% in the prior year[102] - Operating income rose by $1.7 million, or 3.8%, with an operating margin of 4.8%, an increase of 20 basis points compared to the previous year[103] - Net sales in the AMER segment decreased by $35.9 million, or 11.6%, primarily due to decreased customer end-market demand[95] - APAC segment net sales increased by $54.3 million, or 9.8%, driven by production ramps of new products and increased customer demand[96] - EMEA segment net sales decreased by $20.1 million, or 16.6%, also due to decreased customer end-market demand[97] - Net income for the three months ended December 28, 2024 increased by $8.1 million, or 27.7%, to $37.3 million compared to the same period in 2023[110] - Diluted earnings per share rose to $1.34 for the three months ended December 28, 2024, up from $1.04 for the same period in 2023[111] Cash Flow and Capital Expenditures - Free cash flow (FCF) was $27.1 million for the three months ended December 28, 2024, an increase of $58.8 million compared to $(31.7) million for the same period in 2023[128] - Cash flows provided by operating activities were $53.6 million for the three months ended December 28, 2024, compared to cash flows used in operating activities of $3.0 million for the same period in 2023[121] - Cash and cash equivalents decreased to $317.8 million as of December 28, 2024, down from $347.5 million as of September 28, 2024[117] - Capital expenditures for fiscal 2025 are estimated to be approximately $120.0 million to $150.0 million, including $60.0 million for footprint expansion in Penang, Malaysia[131] Tax and Income - Income tax expense for the three months ended December 28, 2024, was $6.2 million, up from $5.6 million in the prior year, reflecting an increase in pre-tax book income[108] - The annual effective tax rate for fiscal 2025 is expected to be approximately 14.0% to 16.0% assuming no changes to tax laws[110] Return on Investment - The return on invested capital (ROIC) improved to 13.8% from 10.3% year-over-year[92] - Economic return increased to 4.9% from 2.1% in the previous year[92] - Return on Invested Capital (ROIC) for the three months ended December 28, 2024 was 13.8%, reflecting an economic return of 4.9% based on a weighted average cost of capital (WACC) of 8.9%[115] Inventory and Share Repurchase - Days in inventory decreased by 27 days to 134 days for the three months ended December 28, 2024, compared to 161 days for the same period in 2023[125] - The company repurchased 84,823 shares for $12.8 million at an average price of $151.19 per share during the three months ended December 28, 2024[135] Financial Position and Risks - As of the end of Q1 fiscal 2025, cash and cash equivalents were $318 million, while total debt and financing obligations amounted to $211 million[140] - The company anticipates that its cash flows from operations and available cash will be sufficient to meet working capital and fixed capital requirements for the next twelve months[140] - The company has evaluated its foreign currency exposure, with 10% of net sales and 16% of total costs denominated in currencies other than the U.S. dollar as of December 28, 2024[146] - A 10% change in the value of the U.S. dollar relative to other currencies would not have a material effect on the company's financial position or cash flows[146] - The primary interest rate risk is associated with the Credit Facility, with a borrowing rate of SOFR plus 1.00% as of December 28, 2024[149] - A 10% change in interest rates would not have a material effect on the company's financial position or cash flows[149] - The company may need to arrange additional debt or equity financing if future financing needs increase[140] - The company selectively hedges foreign currency transactions to mitigate potential foreign exchange risks[145] - There were no material changes in market risk exposure from foreign exchange and interest rates compared to the previous fiscal year[144] - The company continuously evaluates various financing alternatives to supplement its financial resources[140]