• Fiscal fourth quarter 2016 revenue of $653 million
• GAAP diluted EPS of $0.56; non-GAAP adjusted diluted EPS of $0.82, excluding $0.26 per share of special items
• Initiates fiscal first quarter 2017 revenue guidance of $620 to $650 million with GAAP diluted EPS of $0.74 to $0.82

/EIN News/ -- NEENAH, Wis., Oct. 26, 2016 (GLOBE NEWSWIRE) -- Plexus (NASDAQ:PLXS) today announced financial results for its fiscal fourth quarter ended October 1, 2016, and guidance for its fiscal first quarter ending December 31, 2016.

Fiscal Fourth Quarter 2016 Information

• Won 37 programs during the quarter representing approximately $200 million in annualized revenue when fully ramped into production
• Trailing four quarter wins total approximately $747 million in annualized revenue
• Purchased $7.1 million of our shares at an average price of $45.81 per share

Fiscal Year 2016 Information

• Revenue: $2.6 billion, down 3.7% from prior year
• Diluted EPS: $2.24, including $0.57 per share of stock-based compensation expense
• ROIC: 13.8%, 280 basis points above our weighted average cost of capital
• Purchased $30 million of our shares at an average price of $39.43 per share

Todd Kelsey, President and CEO, commented, “Despite late fiscal fourth quarter revenue headwinds, we achieved solid operating performance and EPS, resulting in adjusted EPS firmly in our guidance range.  Our revenue was slightly below guidance as a result of softness within our Networking/Communications sector and the temporary impact to our Xiamen, China operations from Typhoon Meranti that made landfall on September 15, 2016.  When reflecting on fiscal 2016, I am pleased with our operational performance.  We quickly executed our cost reduction and productivity improvement initiatives to overcome a challenging revenue environment in the first half of the fiscal year, enabling us to achieve adjusted operating margin at the high-end of our target range of 4.7% to 5.0% in the back half of the fiscal year.”

Patrick Jermain, Senior Vice President and CFO, commented, “During the quarter we successfully repatriated $100 million in cash from our overseas operations.  We believe the additional cash will enable us to maximize shareholder value by returning excess cash to shareholders through our previously announced share repurchase program.”  Mr. Jermain continued, “Fiscal fourth quarter cash cycle days were higher than anticipated at 71 days.  The most significant contributing factor was an increase in accounts receivables due to the timing of customer shipments and mix.  We exited the fiscal year with annual free cash flow of approximately $97 million, more than doubling our performance over the prior year.”

Mr. Kelsey continued, “In the fiscal first quarter of 2017, we anticipate strong operating performance despite near-term revenue softness as a result of a delay in orders with a large Industrial/Commercial customer and further end-market weakness within our Networking/Communications market sector.  As a result, we are guiding fiscal first quarter revenue of $620 to $650 million with diluted GAAP EPS in the range of $0.74 to $0.82.  With previously disclosed restructuring activities behind us and improved resiliency in our model, we are guiding GAAP operating margin in the range of 4.9% to 5.2% for the fiscal first quarter of 2017.”

Mr. Kelsey concluded, “We have confidence in our outlook for fiscal 2017 based on our strengthening wins momentum and record funnel.  We currently anticipate that we will return to sequential growth after the fiscal first quarter and grow revenue within each of our market sectors for the full fiscal year.  Consequently, we are increasingly optimistic that our goal of a $3 billion annual revenue run rate as we exit the fiscal year is attainable.  Furthermore, with the exception of our seasonally challenged fiscal second quarter, we anticipate delivering operating margins within our target range throughout fiscal 2017.”

Non-GAAP Financial Measures
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 management and investors additional insight into financial performance.  In addition, management uses these and other non-GAAP measures, such as adjusted net income, adjusted gross margin and adjusted operating margin, to provide a better understanding of core performance for purposes of period-to-period comparisons.  Plexus believes that these measures are also useful to investors because they provide further insight by eliminating the effect of items that are not reflective of continuing operations.  For a full reconciliation of non-GAAP measures to comparable GAAP measures, please refer to Non-GAAP Supplemental Information and the attached Non-GAAP Supplemental Information Tables.

Market Sector and Segment Revenue 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.  Top 10 customers comprised 59% of revenue during the fiscal fourth quarter and fiscal year 2016, down one percentage point from the fiscal third quarter 2016 and up three percentage points from the prior fiscal year.

Non-GAAP Supplemental Information
ROIC and Economic Return
ROIC for fiscal 2016 and the fiscal fourth quarter was 13.8%.  The Company defines ROIC as tax-effected annualized adjusted operating profit divided by average invested capital over a five-quarter period for the fourth quarter.  Invested capital is defined as equity plus debt, less cash and cash equivalents.  The Company’s fiscal 2016 weighted average cost of capital was 11.0%.  ROIC for fiscal 2016 and the fiscal fourth quarter less the Company’s weighted average cost of capital resulted in an economic return of 2.8%.

Free Cash Flow Calculation
The Company defines free cash flow as cash flows provided by operations less capital expenditures.  For the three months ended October 1, 2016, cash flows provided by operations was $5.1 million, less capital expenditures of $7.3 million, resulting in negative free cash flow of $2.2 million.  For the twelve months ended October 1, 2016, cash flows provided by operations was $127.7 million, less capital expenditures of $31.1 million, resulting in free cash flow of $96.6 million.

Conference Call and Webcast Information

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 Healthcare/Life Sciences, Industrial/Commercial, Networking/Communications 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, including as a result of a facility closure; 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; our ability to manage successfully and execute a complex business model characterized by high product mix, low volumes and demanding quality, regulatory, and other requirements; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; increasing regulatory and compliance requirements; the potential effects of regional results on our taxes and ability to use deferred tax assets and net operating losses; 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; potential economic weakness and other effects resulting from the June 2016 vote of the United Kingdom to exit the European Union; the potential effect of other 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 2015 Form 10-K).

Investor and Media Contact
Susan Hanson
+1.920.751.5491
susan.hanson@plexus.com