Plexus Corp (NASDAQ: PLXS) reported Q1 EPS of $1.00, $0.07 better than the analyst estimate of $0.93. Revenue for the quarter came in at $852 million versus the consensus estimate of $803.38 million.

• Record quarterly revenue of $852 million during the fiscal first quarter of 2020
• GAAP diluted EPS of $1.03
• Non-GAAP adjusted diluted EPS of $1.00, excluding a net benefit of $0.03 per share related to special tax items
• Initiates fiscal second quarter 2020 revenue guidance of $790 to $830 million with GAAP diluted EPS of $0.80 to $0.90, excluding any non-recurring charges

Fiscal First Quarter 2020 Information

• Won 30 manufacturing programs during the quarter, representing $167 million in annualized revenue when fully ramped into production
• Trailing four quarter wins total $843 million in annualized revenue when fully ramped into production
• Purchased $6.3 million of our shares at an average price of $69.82 per share under our existing share repurchase program

Todd Kelsey, President and CEO, commented, “I am pleased with our strong performance in the fiscal first quarter, during which we delivered record quarterly revenue of $852 million and adjusted diluted EPS of $1.00, each result exceeding the high end of our expectations entering the quarter. This revenue represents 11% growth over the comparable period in fiscal 2019 and 5% growth sequentially. Our Healthcare/Life Sciences sector exceeded our expectations coming into the quarter as our team responded to increased demand from several of our customers. The Industrial/Commercial sector was exceptionally strong as we capitalized on further strengthening in the semiconductor capital equipment sub-sector. Our global teams continue to prioritize operational excellence, and through that focus delivered fiscal first quarter operating margin of 4.7%."

Patrick Jermain, Executive Vice President and CFO, commented, “During the fiscal first quarter, we generated $61 million in free cash flow, a result that was above our projections. Compared to the prior year fiscal first quarter during which we had cash outflows of $58 million, this quarter’s strong result positions us well to generate over $100 million in free cash flow for fiscal 2020. Fiscal first quarter cash cycle of 71 days was favorable to our expectations and sequentially lower by 9 days, as we benefited from continued progress on our working capital initiatives. Over the past two quarters we have reduced our cash cycle by 18 days, largely due to our success with these initiatives.”

Mr. Kelsey continued, “As we look ahead to the fiscal second quarter, we expect revenue to moderate from the exceptionally strong fiscal first quarter. As such, we are guiding revenue in the range of $790 to $830 million. We anticipate revenue at this level will lead to GAAP diluted EPS in the range of $0.80 to $0.90, excluding any non-recurring charges, a projection that is impacted by seasonal payroll costs and the pause of two larger programs in our engineering organization. We are proactively responding to these program pauses by strategically repositioning our Boulder Design Center to co-locate with our existing manufacturing facility in Boise, ID, creating an Aerospace and Defense Center of Excellence. This combination of engineering and manufacturing services will provide the synergies and cost advantages of a campus environment while delivering a compelling service offering for our customers in the Aerospace and Defense sector.”

Mr. Kelsey concluded, “Our outlook for fiscal 2020 remains generally unchanged from previous expectations as we anticipate sequentially increasing revenue during the second half of the fiscal year. Coupling this with our largely stable end-markets, a talented work force focused on delighting our customers, and our comprehensive service offerings, we anticipate solid operating performance with a return to operating margin within our target range of 4.7% to 5.0%. This would lead to robust EPS expansion for the fiscal year.”

GUIDANCE:

Plexus Corp sees Q2 2020 EPS of $0.80-$0.90, versus the consensus of $0.96. Plexus Corp sees Q2 2020 revenue of $790-830 million, versus the consensus of $821.36 million.

For earnings history and earnings-related data on Plexus Corp (PLXS) click here.