Plexus Corp (PLXS, Financial) released its 8-K filing on October 23, 2024, reporting impressive financial results for the fiscal fourth quarter and fiscal year ended September 28, 2024. The U.S.-based Electronic Manufacturing Services company, known for its comprehensive services from design to order fulfillment, exceeded analyst estimates with a quarterly revenue of $1.05 billion and a GAAP diluted EPS of $1.48, surpassing the estimated earnings per share of $1.25 and revenue of $1,007.89 million.
Performance Highlights and Challenges
Plexus Corp (PLXS, Financial) reported a fiscal 2024 revenue of $3.96 billion, with a GAAP operating margin of 4.2% and a GAAP diluted EPS of $4.01, outperforming the annual estimates of $3.89 EPS and $3,918.82 million in revenue. The company's non-GAAP results were even more impressive, with a fiscal fourth quarter operating margin of 6.2% and EPS of $1.85, excluding stock-based compensation expenses. These results highlight Plexus Corp's ability to manage costs effectively and drive profitability, which is crucial in the competitive hardware industry.
Financial Achievements and Industry Impact
Plexus Corp's financial achievements are significant for the hardware industry, where operational efficiency and cost management are critical. The company generated a record quarterly free cash flow of $194 million and completed its 2024 Share Repurchase Program, purchasing $19.5 million of shares. For the fiscal year, Plexus Corp achieved a record free cash flow of $341 million, more than double its previous record, and reduced its borrowing, ending the year in a net cash position.
Key Financial Metrics
Important metrics from Plexus Corp's financial statements include a return on invested capital (ROIC) of 11.8% and an economic return of 3.6%, indicating efficient use of capital and value creation above the company's weighted average cost of capital of 8.2%. The company's cash cycle improved significantly, with a reduction to 64 days, the best result in four years, reflecting effective working capital management.
| Metric | Q4 2024 | Fiscal 2024 |
|---|---|---|
| Revenue (in millions) | $1,051 | $3,961 |
| GAAP Operating Margin | 5.1% | 4.2% |
| GAAP Diluted EPS | $1.48 | $4.01 |
| Non-GAAP Operating Margin | 6.2% | 5.5% |
| Non-GAAP Diluted EPS | $1.85 | $5.72 |
Analysis and Future Outlook
Plexus Corp's strong performance in fiscal 2024 positions it well for continued growth in fiscal 2025. The company anticipates robust demand in the Aerospace/Defense sector and modest growth in Healthcare/Life Sciences and Industrial sectors. With a focus on operational excellence and sustainable business practices, Plexus Corp aims to create substantial shareholder value in the coming year.
Todd Kelsey, President and CEO, stated, "Our team's focus throughout the fiscal year on delivering customer service excellence while driving expanded operational performance resulted in exceptional fiscal fourth quarter financial results and, we believe, positions us well for fiscal 2025."
Overall, Plexus Corp's fiscal 2024 results demonstrate its resilience and strategic execution in a challenging market environment, making it an attractive consideration for value investors seeking opportunities in the hardware sector.
Explore the complete 8-K earnings release (here) from Plexus Corp for further details.
