Plexus Reports Record Revenue of $2.7 Billion and 12% Annual Growth for Fiscal 2015

• Fiscal fourth quarter revenue of $669 million
  
• Diluted quarterly EPS of $0.70
• Initiates fiscal first quarter 2016 revenue guidance of $600 - $625 million with diluted EPS of $0.41 to $0.48

NEENAH, Wis., Oct. 28, 2015 (GLOBE NEWSWIRE) -- Plexus (NASDAQ:PLXS) today announced financial results for its fiscal fourth quarter ended October 3, 2015.

 Additional Fiscal Fourth Quarter 2015 Information 

• Won 34 programs during the quarter representing approximately $167 million in annualized revenue when fully ramped into production
• Trailing four quarter wins total approximately $713 million in annualized revenue
• Purchased $7.5 million of our shares at an average price of $38.25 per share

Fiscal Year 2015 Information

• Revenue: $2.7 billion, up 12% from prior year
  
• Diluted EPS: $2.74, including $0.39 per share of stock-based compensation expense
• ROIC: 14.0%, 300 basis points above our weighted average cost of capital
• Purchased $30 million of our shares at an average price of $40.26 per share

Dean Foate, Chairman, President and CEO, commented, “Fiscal fourth quarter revenue and EPS results were consistent with our guidance.  Revenues were $669 million, relatively flat from the prior quarter and the comparable quarter last year, as softness in certain end markets unfolded as anticipated.  Overall, I am pleased with our performance for fiscal 2015.  We delivered record revenue of $2.7 billion, achieving our enduring growth goal of 12%.  Our economic return, while short of our goal, was solidly in value creation territory at 3% for the fiscal year."

Mr. Foate continued, “Looking forward to fiscal 2016, while our visibility is limited, we anticipate a challenging start to the year due to market sector weakness, particularly in Networking/Communications and Industrial/Commercial, in the first half of the fiscal year.  We are guiding fiscal first quarter 2016 revenue of $600 to $625 million with diluted EPS in the range of $0.41 to $0.48.”

Patrick Jermain, Senior Vice President and CFO, commented, “The lower level of revenue in the first half of fiscal 2016 is creating a misaligned cost structure. We are determining the appropriate cost reduction and control actions to mitigate our near-term margin challenges and are assessing our global capacity levels against our longer-term strategic value propositions in order to take prompt action to address the situation.”

Plexus provides non-GAAP supplemental information, such as ROIC, Economic Return, and free cash flow, because such 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 net income and adjusted operating margin, to provide a better understanding of core performance for purposes of period-to-period comparisons.  For a full reconciliation of non-GAAP measures to comparable GAAP measures, please refer to the attached non-GAAP supplemental data.

Market Sector Breakout

Plexus reports revenue based on the market sector breakout set forth in the table below, which reflects the Company’s global market sector focused business development strategy.  The Company measures operational performance and allocates resources on a geographic segment basis.  Please refer to the attached supplemental information for a breakout of revenue by reportable geographic segments.

Fiscal Fourth Quarter 2015 Supplemental Information

Fiscal fourth quarter cash cycle was 66 days. The Company delivered $21.0 million in cash flow provided by operations and used $8.2 million for capital investments during the quarter, resulting in positive free cash flow of $12.8 million. The Company defines free cash flow as cash flow provided by (or used in) operations less capital expenditures.  Top 10 customers comprised 55% of revenue during the quarter, down two percentage points from the prior quarter.

 Fiscal 2015 Supplemental Information

The Company delivered $76.6 million in cash flow provided by operations and used $35.1 million for capital investments during fiscal 2015, resulting in positive free cash flow of $41.5 million. Top 10 customers comprised 56% of revenue during fiscal 2015, up one percentage point from 2014.

ROIC for fiscal 2015 and its fiscal fourth quarter was 14.0%.  The Company defines ROIC as tax-effected annualized operating profit, before special items, divided by average invested capital over a five-quarter period for the fourth quarter and a four-quarter period for the third quarter.  Invested capital is defined as equity plus debt, less cash and cash equivalents. The Company’s weighted average cost of capital for fiscal 2015 was 11.0%.

Conference Call and Webcast Information

Investor and Media Contact

Susan Hanson
+1.920.751.5491
susan.hanson@plexus.com

About Plexus – The Product Realization Company

Plexus (www.plexus.com) delivers optimized Product Realization solutions through a unique Product Realization Value Stream service model.  This customer-focused services model seamlessly integrates innovative product conceptualization, design, commercialization, manufacturing, fulfillment and sustaining services to deliver comprehensive end-to-end solutions for customers in the America, European and Asia-Pacific regions.

Plexus is the industry leader in servicing mid-to-low volume, higher complexity customer programs characterized by unique flexibility, technology, quality and regulatory requirements.  Award-winning customer service is provided to over 140 branded product companies in the Networking/Communications, Healthcare/Life Sciences, Industrial/Commercial and Defense/Security/Aerospace market sectors.

Safe Harbor and Fair Disclosure Statement

The statements contained in this press release that are guidance or which are not historical facts (such as statements in the future tense and statements including believe, expect, intend, plan, anticipate, goal, target and similar terms and concepts), including all discussions of periods which are not yet completed, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include, but are not limited to: the risk of customer delays, changes, cancellations or forecast inaccuracies in both ongoing and new programs; the lack of visibility of future orders, particularly in view of changing economic conditions; the economic performance of the industries, sectors and customers we serve; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers, maintain our current customer base and deliver product on a timely basis; the particular risks relative to new or recent customers, programs or services, which risks include customer and other delays, start-up costs, potential inability to execute, the establishment of appropriate terms of agreements, and the lack of a track record of order volume and timing; the risks of concentration of work for certain customers; the effect of start-up costs of new programs and facilities; possible unexpected costs and operating disruption in transitioning programs; the risk that new program wins and/or customer demand may not result in the expected revenue or profitability; the fact that customer orders may not lead to long-term relationships; the adequacy of restructuring and similar charges as compared to actual expenses; our ability to manage successfully a complex business model characterized by high customer and product mix, low volumes and demanding quality, regulatory, and other requirements; increasing regulatory and compliance requirements; the potential effects of regional results on our taxes and ability to use deferred tax assets; risks related to information technology systems and data security; the effects of shortages and delays in obtaining components as a result of economic cycles or natural disasters; the risks associated with excess and obsolete inventory, including the risk that inventory purchased on behalf of our customers may not be consumed or otherwise paid for by the customer, resulting in an inventory write-off; the weakness of areas of the global economy; the effect of changes in the pricing and margins of products;  raw materials and component cost fluctuations; the potential effect of fluctuations in the value of the currencies in which we transact business; the potential effect of world or local events or other events outside our control (such as changes in energy prices, terrorism and weather events); the impact of increased competition; and other risks detailed in our Securities and Exchange Commission filings (particularly in "Risk Factors" in our fiscal 2014 Form 10-K).

Free Cash Flow Calculation

The Company defines free cash flow as cash flow provided by (or used in) operations less capital expenditures.  For the three months ended October 3, 2015, cash flow provided by operations was $21.0 million less capital expenditures of $8.2 million, resulting in free cash flow of $12.8 million.  For the twelve months ended October 3, 2015, cash flow provided by operations was $76.6 million less capital expenditures of $35.1 million, resulting in free cash flow of $41.5 million.