Q3 2024 Plexus Corp Earnings Call Transcript
Key Points
- Plexus Corp (PLXS) delivered outstanding fiscal third-quarter financial results with revenue of $961 million within the guidance range.
- The company achieved a non-GAAP operating margin of 5.8%, exceeding the guidance range and representing a nearly 90 basis point sequential increase.
- Plexus Corp (PLXS) generated $114 million of free cash flow, the second highest quarterly performance in company history.
- The company won 35 manufacturing programs worth $279 million in annual revenue, including a record contribution within healthcare life sciences.
- Plexus Corp (PLXS) received awards for delivery performance and supplier excellence from top customers Honeywell Aerospace and Medtronic.
- Revenue from the industrial sector decreased by 4% sequentially, driven by new product introduction pushouts due to customer design revisions and regulatory issues.
- The aerospace and defense sector's revenue growth was below expectations due to supply constraints related to commercial aerospace program-specific components and customer design changes.
- Healthcare life sciences sector experienced a mid-teens year-over-year revenue decline, impacted by procuring components at above-market prices.
- The company anticipates higher SG&A expenses in fiscal 2025 due to increased incentive compensation tied to revenue growth and return on invested capital.
- Despite strong wins, the healthcare life sciences sector's revenue growth has been hampered by inventory corrections and component cost headwinds.
Good morning, and welcome to the Plexus Corp conference call regarding its fiscal third-quarter 2024 earnings announcement. My name is Maria, and I will be your operator for today's call. (Operator Instructions) Please note that this conference call is being recorded.
I would now like to turn the call over to Mr. Shawn Harrison, Plexus Vice President of Investor Relations. Shawn?
Good morning. Thank you for joining us today.
Some of the statements made and information provided during our call today will be forward-looking statements, including without limitation, those regarding revenue, gross margin, selling and administrative expense, operating margin, other income and expense, taxes, cash cycle, capital allocation, and future business outlook.
Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results, and actual results could differ materially from those expressed or implied in the forward-looking statements.
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