Plexus Corp. revenue jumped on 13.7% while EBITDA Margin decreased slightly on 1.1 pp from 6.9% to 5.8%
10/24/2018 • About Plexus Corp. (
$PLXS) • By InTwits
Plexus Corp. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 5.8% in FY2018 vs. 6.9% in FY2017 vs. 6.2% in FY2014
- Plexus Corp. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: $63m in FY2018, $39m in FY2017, $31m in FY2016, $35m in FY2015, $65m in FY2014
- The company has business model with low profitability: ROIC is 9.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Plexus Corp.'s Revenue jumped on 13.7%. Revenue growth showed acceleration in FY18Q4 - it increased 15.1% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018.
Gross Margin decreased slightly on 1.2 pp from 10.1% to 9.0% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin decreased on 4.0 pp from 4.4% to 0.45% in FY2018. The efficient tax rate was 87.9% in FY2018 while the average for the last five years was 25.8%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.2% in FY2018. Plexus Corp.'s CAPEX/Revenue increased slightly on 0.86 pp from 1.3% in FY2015 to 2.2% in FY2018. It's average CAPEX/Revenue for the last three years was 1.6%. During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2016 at 1.2% and was growing since that time.
Accounts receivable as a % of Revenue decreased slightly on 0.72 pp from 14.5% to 13.7% in FY2018. Inventories as a % of Revenue increased slightly on 1.7 pp from 25.9% to 27.6% in FY2018. Accounts payable as a % of Revenue increased slightly on 1.1 pp from 18.2% to 19.4% in FY2018.
Plexus Corp. has spent
$12m on M&A in FY2018 which accounts for 0.43% of revenue.
Return on investment
The company operates at low ROIC (9.6%) and ROE (1.3%). ROIC decreased slightly on 0.66 pp from 10.3% to 9.6% in FY2018. ROE dropped on 10.2 pp from 11.5% to 1.3% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.7x and Debt / EBITDA is 1.1x. Debt dropped on 39.8% while cash dropped on 47.7%.
Plexus Corp. has good short term financial stability: Interest coverage ratio (ICR) is 9.7x. Plexus Corp. has no short term refinancing risk: cash is higher than short term debt (5,373.6%).
Average interest expence paid by the company was 6.5% in FY2018.
Valuation and dividends
The company's trades at EV/EBITDA 10.2x and P/E 138.8x.
Management team
Plexus Corp.'s CEO is Todd P Kelsey. Todd P Kelsey is a founder and has 2 years tenure with the company. CEO total compensation was
$6,673,723 in FY2018 which included
$915,000 salary.
At the end of financial year the company had 2.3% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 18,000 employees. The number of employees jumped on 12.5%. Average revenue per employee in FY2018 was
$159,639 and it increased slightly on 1.0%.
Financial and operational results
FY ended 09/29/2018
Plexus Corp. ($PLXS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,378 | 2,654 | 2,556 | 2,528 | 2,874 | 13.7% |
| Gross Profit | 226 | 240 | 227 | 256 | 258 | 0.7% |
| SG&A | 114 | 122 | 121 | 126 | 139 | 10.6% |
| EBITDA | 148 | 164 | 147 | 175 | 167 | -4.9% |
| EBIT | 101 | 115 | 99 | 130 | 118 | -8.9% |
| Interest expence | 12 | 14 | 15 | 14 | 12 | -10.0% |
| Tax | 6 | 12 | 11 | 10 | 95 | 868.9% |
| Net Income | 87 | 94 | 76 | 112 | 13 | -88.4% |
| Stock Based Compensation | 13 | 13 | 19 | 17 | 18 | 3.3% |
Balance Sheet
|
|---|
| Cash | 347 | 357 | 433 | 569 | 297 | -47.7% |
| Accounts Receivable | 324 | 385 | 417 | 366 | 395 | 8.0% |
| Inventory | 526 | 569 | 564 | 655 | 794 | 21.3% |
| Accounts Payable | 396 | 401 | 397 | 414 | 506 | 22.3% |
| Short Term Debt | 4 | 4 | 79 | 287 | 6 | -98.1% |
| Long Term Debt | 262 | 258 | 184 | 26 | 183 | 599.5% |
Cash flow
|
|---|
| Capex | 65 | 35 | 31 | 39 | 63 | 62.9% |
| Acquisitions | | | | | 12 | |
Ratios
|
|---|
| Revenue growth | 6.7% | 11.6% | -3.7% | -1.1% | 13.7% | |
| EBITDA growth | 1.6% | 10.3% | -10.4% | 19.3% | -4.9% | |
|
|---|
| Gross Margin | 9.5% | 9.0% | 8.9% | 10.1% | 9.0% | -1.2% |
| EBITDA Margin | 6.2% | 6.2% | 5.7% | 6.9% | 5.8% | -1.1% |
| EBIT Margin | 4.2% | 4.3% | 3.9% | 5.1% | 4.1% | -1.0% |
| SG&A, % of revenue | 4.8% | 4.6% | 4.7% | 5.0% | 4.8% | -0.1% |
| SBC, % of revenue | 0.5% | 0.5% | 0.8% | 0.7% | 0.6% | -0.1% |
| Net Income Margin | 3.7% | 3.6% | 3.0% | 4.4% | 0.5% | -4.0% |
| CAPEX, % of revenue | 2.7% | 1.3% | 1.2% | 1.5% | 2.2% | 0.7% |
|
|---|
| ROIC | 10.0% | 10.7% | 8.7% | 10.3% | 9.6% | -0.7% |
| ROE | 11.8% | 11.6% | 8.7% | 11.5% | 1.3% | -10.2% |
| Net Debt/EBITDA | -0.5x | -0.6x | -1.2x | -1.5x | -0.7x | 0.8x |
| Interest coverage ratio (ICR) | 8.2x | 8.3x | 6.8x | 9.6x | 9.7x | 0.1x |
| Interest expence / Average debt | 4.6% | 5.3% | 5.6% | 4.7% | 6.5% | 1.8% |
People
|
|---|
| Insider ownership | 2.3% | 2.3% | 2.3% | 2.3% | 2.3% | 0.0% |
| Employees | 12,000 | 14,000 | 14,000 | 16,000 | 18,000 | 12.5% |
| Revenue/Employee, th. $ | 198 | 190 | 183 | 158 | 160 | 1.0% |
Plexus Corp. ($PLXS) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 677 | 699 | 726 | 771 | | 6.7% | 15.6% | 17.4% | 15.1% |
| EBITDA | 43 | 29 | 45 | 50 | | -4.6% | -33.0% | 9.4% | 8.8% |
| Net Income | -98 | 12 | 27 | 73 | | -449.5% | -58.0% | 3.6% | 150.8% |
Balance Sheet
|
|---|
| Cash | 507 | 402 | 333 | 297 | | 2.1% | -23.3% | -35.9% | -47.7% |
| Short Term Debt | 180 | 181 | 6 | 6 | | 128.0% | 95.2% | -97.6% | -98.1% |
| Long Term Debt | 26 | 27 | 180 | 183 | | -85.9% | -85.3% | 589.4% | 599.5% |
Ratios
|
|---|
| Gross Margin | 9.4% | 7.6% | 9.3% | 9.5% | | -0.8% | -3.0% | -0.6% | -0.4% |
| EBITDA Margin | 6.4% | 4.2% | 6.1% | 6.4% | | -0.8% | -3.0% | -0.4% | -0.4% |
| Net Income Margin | -14.5% | 1.8% | 3.6% | 9.4% | | -19.0% | -3.1% | -0.5% | 5.1% |
Peers in Electronic Manufacturing Servi
Below we provide Plexus Corp. benchmarking against other companies in Electronic Manufacturing Servi industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| Deswell Industries, Inc. ($DSWL) | | -7.0% | 17.1% | -0.1% | 36.3% |
| |
|---|
| Median (27 companies) | | 2.6% | 1.7% | 3.0% | 7.1% |
|---|
| Plexus Corp. ($PLXS) | | 11.6% | -3.7% | -1.1% | 13.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| |
|---|
| Median (27 companies) | 14.7% | 19.4% | 22.2% | 15.8% | 15.2% |
|---|
| Plexus Corp. ($PLXS) | 9.5% | 9.0% | 8.9% | 10.1% | 9.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (27 companies) | 4.4% | 5.2% | 4.8% | 4.5% | 4.7% |
|---|
| Plexus Corp. ($PLXS) | 6.2% | 6.2% | 5.7% | 6.9% | 5.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| |
|---|
| Median (27 companies) | 2.5% | 2.4% | 2.8% | 3.4% | 2.5% |
|---|
| Plexus Corp. ($PLXS) | 2.7% | 1.3% | 1.2% | 1.5% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (29 companies) | 4.4% | 4.9% | 6.2% | 4.2% | 6.4% |
|---|
| Plexus Corp. ($PLXS) | 10.0% | 10.7% | 8.7% | 10.3% | 9.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| |
|---|
| Median (22 companies) | 0.2x | -0.5x | 0.6x | 0.5x | 0.5x |
|---|
| Plexus Corp. ($PLXS) | -0.5x | -0.6x | -1.2x | -1.5x | -0.7x |
