PLEXUS CORP

Cash and cash equivalents and restricted cash were $249.4 million as of January 3, 2026, as compared to $306.8 million as of September 27, 2025.

As of January 3, 2026, 91% of our cash and cash equivalents balance was held outside of the U.S. by our foreign subsidiaries. Based on current expectations, we believe that our projected cash flows provided by operations, available cash and cash equivalents, potential borrowings under the Credit Facility, and our leasing capabilities should be sufficient to meet our working capital and fixed capital requirements, as well as execute our share repurchase authorization as management deems appropriate, for the next twelve months.

Cash Flows. The following table provides a summary of cash flows (in millions):

Operating Activities. Cash flows used in operating activities were $15.4 million for the three months ended January 3, 2026, as compared to cash flows provided by operating activities of $53.6 million for the three months ended December 28, 2024. The decrease was primarily due to cash flow improvements (reductions) of:

•$3.9 million increase in net income.

•$(85.8) million in inventory cash flows driven by an increase in inventory associated with ramping programs in the three months ended January 3, 2026 compared to a decrease in inventory driven by inventory reduction efforts in the three months ended December 28, 2024.

•$(40.6) million in accounts receivable cash flows driven by an increase in net sales as well as the timing of shipments and mix of customer payment terms.

•$(18.3) million in accounts payables cash flows primarily driven by the timing of materials procurement and payments to suppliers.

•$(17.8) million in other current and non-current asset cash flows primarily driven by an increase in non-hedge derivative assets and prepayments to suppliers in the three months ended January 3, 2026 as compared a decrease in the three months ended December 28, 2024.

•$84.0 million in advanced payments from customers cash flows as prior year had a significant outflow of deposit returns due to inventory management efforts.

•$5.8 million in contract assets cash flows corresponding to changes in demand from over time customers.

The following table provides a summary of cash cycle days for the periods indicated (in days):

We calculate days in accounts receivable and contract assets as each balance sheet item for the respective quarter divided by annualized sales for the respective quarter by day. We calculate days in inventory, accounts payable and advanced payments as each balance sheet line item for the respective quarter divided by annualized cost of sales for the respective quarter by day. We calculate annualized cash cycle as the sum of days in accounts receivable, days in contract assets and days in inventory, less days in accounts payable and days in advanced payments.

As of January 3, 2026, annualized cash cycle days increased one day compared to December 28, 2024 due to the following:

Days in accounts receivable for the three months ended January 3, 2026 increased two days compared to the three months ended December 28, 2024. The increase is primarily attributable to the timing of customer shipments and payments as well as the mix of customer payment terms.

Days in contract assets for the three months ended January 3, 2026 increased one day compared to the three months ended December 28, 2024. The increase is primarily attributed to an increase in demand from customers with arrangements requiring revenue to be recognized over time as products are produced.

Days in inventory for the three months ended January 3, 2026 decreased ten days compared to the three months ended December 28, 2024. The decrease is primarily attributable to increased net sales and continued inventory management efforts.

Days in accounts payable for the three months ended January 3, 2026 increased two days compared to the three months ended December 28, 2024. The increase is primarily attributable to timing of materials procurement and payments to suppliers.

Days in advanced payments for the three months ended January 3, 2026 decreased ten days compared to the three months ended December 28, 2024. The decrease was primarily attributable to a return of advanced payments to customers due to continued inventory management efforts.

Free Cash Flow. We define free cash flow ("FCF"), a non-GAAP financial measure, as cash flow generated or used in operations less capital expenditures. FCF was $(50.6) million for the three months ended January 3, 2026 compared to $27.1 million for the three months ended December 28, 2024, a decrease of $77.7 million.

Non-GAAP financial measures, including FCF, are used for internal management assessments because such measures provide additional insight to investors into ongoing financial performance. In particular, we provide FCF because we believe it offers insight into the metrics that are driving management decisions. We view FCF as an important financial metric as it demonstrates our ability to generate cash and can allow us to pursue opportunities that enhance shareholder value. FCF is a non-GAAP financial measure that should be considered in addition to, not as a substitute for, measures of our financial performance prepared in accordance with GAAP.

A reconciliation of FCF to our financial statements that were prepared using GAAP as follows (in millions):

Investing Activities. Cash flows used in investing activities were $35.1 million for the three months ended January 3, 2026 compared to $26.4 million for the three months ended December 28, 2024. The increase in cash used in investing activities was due to an $8.7 million increase in capital expenditures.

We currently estimate capital expenditures for fiscal 2026 will be approximately $100.0 million to $120.0 million to support new program ramps and replace older equipment.

Financing Activities. Cash flows used in financing activities were $8.0 million for the three months ended January 3, 2026 compared to $52.8 million for the three months ended December 28, 2024. The decrease was primarily attributable to net borrowings on the credit facility for the three months ended January 3, 2026 of $20.0 million compared to net repayments on the credit facility for the three months ended December 28, 2024 of $35.0 million, partially offset by an increase of $9.6 million in cash used to repurchase our common stock.

On August 14, 2024, the Board of Directors approved a share repurchase program under which we were authorized to repurchase up to $50.0 million of our common stock (the "2025 Program"). The 2025 Program became effective upon completion of the 2024 Program and was completed in fiscal 2025. During the three months ended December 28, 2024, we repurchased 84,823 shares under this program for $12.8 million at an average price of $151.19 per share.

On May 14, 2025, the Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $100.0 million of our common stock (the “2026 Program”). The 2026 Program became effective upon completion of the 2025 Program and has no expiration. During the three months ended January 3, 2026, we repurchased 152,987 shares under this program for $22.4 million at an average price of $146.36 per share. As of January 3, 2026, $62.6 million of authority remained under the 2026 Program.

All shares repurchased under the aforementioned programs were recorded as treasury stock.

We have Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch (formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd.) (the "MUFG RPA"), HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA") and other unaffiliated financial institutions, under which we may elect to sell receivables, at a discount. These facilities are uncommitted facilities. The maximum facility amount under the MUFG RPA as of January 3, 2026 is $340.0 million. The maximum facility amount under the HSBC RPA as of January 3, 2026 is $70.0 million. The MUFG RPA will be automatically extended each year unless any party gives no less than 10 days prior notice that the agreement should not be extended. The terms of the HSBC RPA are generally consistent with the terms of the MUFG RPA previously discussed.

We sold $216.3 million and $151.2 million of trade accounts receivable under these programs during the three months ended January 3, 2026 and December 28, 2024, respectively, in exchange for cash proceeds of $214.5 million and $149.7 million, respectively. As of January 3, 2026 and September 27, 2025, $225.2 million and $214.4 million, respectively, of accounts receivables sold under trade accounts receivable programs and subject to servicing by us remained outstanding.

In all cases, the sale discount was recorded within "Miscellaneous, net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale. For further information regarding the receivable sale programs, see Note 13, "Trade Accounts Receivable Sale Programs," in Notes to Condensed Consolidated Financial Statements.

Based on current expectations, we believe that our projected cash flows provided by operations, available cash and cash equivalents, potential borrowings under the Credit Facility, and our leasing capabilities should be sufficient to meet our working capital and fixed capital requirements, as well as execution upon our share repurchase authorizations as management deems appropriate, for the next twelve months. We believe our balance sheet is positioned to support the potential future challenges presented by macroeconomic factors including increased working capital requirements associated with longer lead-times for components, increased component and labor costs, and operating inefficiencies due to supply chain constraints. As of the end of the first quarter of fiscal 2026, cash and cash equivalents and restricted cash were $249 million, while debt, finance lease and other financing obligations were $158 million. If our future financing needs increase, then we may need to arrange additional debt or equity financing. Accordingly, we evaluate and consider from time to time various financing alternatives to supplement our financial resources. However, we cannot be assured that we will be able to make any such arrangements on acceptable terms or at all.