PLEXUS CORP

PLEXUS CORP Annual Report - Plain English Investor Summary

Let’s break down PLEXUS CORP’s year in simple terms—what worked, what didn’t, and what it means for your investment decisions.

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1. What They Do

PLEXUS builds high-tech components for medical devices, self-driving cars, and 5G systems. Think of them as the “hidden hands” behind gadgets you’ll never see but rely on daily. This year, they secured major contracts but struggled with part delays.

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2. Financial Performance

• Revenue (Sales): $4.1 billion (up 8% from last year).
• Profit: $210 million (down 5% from last year).
  Key Takeaway: Sales grew, but profits shrank. Blame supply chain snags and pricier materials.

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3. Wins vs. Challenges

Wins ✅

• Landed a deal to make AI sensors for a top automaker.
• Opened a cost-saving factory in Mexico.

Challenges ❌

• Lost a major telecom client.
• A cyberattack caused a 2-week shutdown (security upgrades are underway).

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4. Financial Health Check

• Cash: $550 million (up 12% from last year).
• Debt: $1.2 billion (same as last year).
• Auditor Verdict: Independent accountants confirmed their finances are accurate with no red flags. Strong safeguards against errors/fraud.
  Verdict: Stable cash reserves, but debt remains. Not in crisis, but not debt-free.

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5. Risks to Watch

• Supply Chain: Factories in Asia could disrupt production again.
• Customer Dependence: 20% of sales come from just 3 clients.
• Tech Competition: Rivals are pouring money into AI—PLEXUS needs to keep pace.
• Security: No system is hack-proof, though audits found no current weaknesses.

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6. vs. Competitors

• Growth: PLEXUS grew 8% vs. industry average of 5%.
• Profit Margins: Lag behind rivals due to material costs.

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7. Leadership & Strategy Shifts

• New CFO: Jane Carter (cost-cutting expert) joined in March.
• New Focus: Doubling down on AI and renewable energy tech. Scaling back older telecom projects.

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8. What’s Next?

• 2024 Forecast: Slower growth (4-6% revenue), but profits could rebound if supply chains improve.
• Wildcard: Their new solar energy division—small now, but could grow fast.

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9. External Factors

• AI Demand: Booming—great for PLEXUS’s sensor business.
• Regulations: Tighter manufacturing rules in U.S./Europe may raise costs.
• China Trade Tensions: Could reignite supply chain headaches.

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Investor Takeaways

The Good 👍

• Sales are growing faster than competitors.
• Clean financial audit with strong cash reserves.
• Betting on future tech (AI, renewables).

The Risks 👎

• Profit margins are slipping.
• Debt isn’t shrinking.
• Over-reliance on a few clients.

The Bottom Line
PLEXUS isn’t a flashy “moon shot” stock, but it’s a steady player with clear growth drivers. Watch for:

1. Progress fixing supply chain costs
2. Expansion of their AI/solar projects
3. Debt reduction efforts

If you’re okay with moderate risk and believe in their tech bets, PLEXUS could be a solid long-term hold. If razor-thin margins or debt make you nervous, wait for clearer improvement signs.

Questions? Drop us a note! 👋