10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________________________________________________________________

FORM 10-Q

____________________________________________________________________________________________________________________________________

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 29, 2018

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-14423

____________________________________________________________________________________________________________________________________

PLEXUS CORP.

(Exact name of registrant as specified in charter)

____________________________________________________________________________________________________________________________________

Wisconsin	39-1344447
(State of Incorporation)	(IRS Employer Identification No.)

One Plexus Way

Neenah, Wisconsin 54957

(Address of principal executive offices)(Zip Code)

Telephone Number (920) 969-6000

(Registrant’s telephone number, including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of January 29, 2019, there were 30,914,029 shares of common stock outstanding.    

PLEXUS CORP.

TABLE OF CONTENTS

December 29, 2018

PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
Condensed Consolidated Statements of Comprehensive Income (Loss)	3
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Shareholders' Equity	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
ITEM 2. MANAGEMENT'S DICUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
"Safe Harbor" Cautionary Statement Under the Private Securities Litigation Reform Act of 1995	19
Overview	19
Results of Operations	20
Liquidity of Capital Resources	24
Contractual Obligations, Commitments and Off-Balance Sheet Obligations	28
Disclosure About Critical Accounting Policies	29
New Accounting Pronouncements	29
ITEM 3. QUANTITATIVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4. CONTROLS AND PROCEDURES	30
PART II. OTHER INFORMATION	31
ITEM 1A. Risk Factors	31
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	31
ITEM 6. Exhibits	31
SIGNATURES	32

PART I.     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

Unaudited

	Three Months Ended
	December 29, 2018			December 30, 2017
Net sales	$	765,544		$	677,294
Cost of sales	693,161			613,771
Gross profit	72,383			63,523
Selling and administrative expenses	35,432			31,966
Operating income	36,951			31,557
Other income (expense):
Interest expense	(2,249		)	(3,725		)
Interest income	525			1,555
Miscellaneous, net	(1,112		)	(346		)
Income before income taxes	34,115			29,041
Income tax expense	11,889			127,534
Net income (loss)	$	22,226		$	(98,493	)
Earnings (loss) per share:
Basic	$	0.71		$	(2.93	)
Diluted	$	0.69		$	(2.93	)
Weighted average shares outstanding:
Basic	31,403			33,567
Diluted	32,286			33,567
Comprehensive income (loss):
Net income (loss)	$	22,226		$	(98,493	)
Other comprehensive income (loss):
Derivative instrument fair value adjustment	378			1,539
Foreign currency translation adjustments	(1,871		)	2,142
Other comprehensive income (loss)	(1,493		)	3,681
Total comprehensive income (loss)	$	20,733		$	(94,812	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

Unaudited

	December 29, 2018			September 29, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	188,799		$	297,269
Restricted cash	4,074			417
Accounts receivable, net of allowances of $1,094 and $885, respectively	428,487			394,827
Contract assets	82,775			—
Inventories, net	798,271			794,346
Prepaid expenses and other	31,435			30,302
Total current assets	1,533,841			1,517,161
Property, plant and equipment, net	361,311			341,306
Deferred income taxes	10,832			10,825
Intangible assets, net	7,807			8,239
Other	55,892			55,111
Total non-current assets	435,842			415,481
Total assets	$	1,969,683		$	1,932,642
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	8,633		$	5,532
Accounts payable	516,989			506,322
Customer deposits	112,663			90,782
Accrued salaries and wages	58,532			66,874
Other accrued liabilities	83,004			68,163
Total current liabilities	779,821			737,673
Long-term debt and capital lease obligations, net of current portion	187,567			183,085
Long-term accrued income taxes payable	63,848			56,130
Deferred income taxes payable	14,610			14,376
Other liabilities	18,674			20,235
Total non-current liabilities	284,699			273,826
Total liabilities	1,064,520			1,011,499
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.01 par value, 5,000 shares authorized, none issued or outstanding	—			—
Common stock, $.01 par value, 200,000 shares authorized, 52,591 and 52,567 shares issued, respectively, and 30,992 and 31,838 shares outstanding, respectively	526			526
Additional paid-in capital	587,011			581,488
Common stock held in treasury, at cost, 21,599 and 20,729 shares, respectively	(761,189		)	(711,138		)
Retained earnings	1,092,287			1,062,246
Accumulated other comprehensive loss	(13,472		)	(11,979		)
Total shareholders’ equity	905,163			921,143
Total liabilities and shareholders’ equity	$	1,969,683		$	1,932,642

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

Unaudited

	Common Stock
	Shares		Amount		Additional Paid-In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balances, September 30, 2017	33,464		$	519	$	555,297	$	(574,104	)	$	1,049,206		$	(4,979	)	$	1,025,939
Net income (loss)	—		—		—		—			(98,493		)	—			(98,493		)
Other comprehensive income (loss)	—		—		—		—			—			3,681			3,681
Treasury shares purchased	(158	)	—		—		(9,547		)	—			—			(9,547		)
Share-based compensation expense	—		—		3,896		—			—			—			3,896
Exercise of stock options, including tax benefits	301		3		8,369		—			—			—			8,372
Balances, December 30, 2017	33,607		$	522	$	567,562	$	(583,651	)	$	950,713		$	(1,298	)	$	933,848
Balances, September 29, 2018	31,838		$	526	$	581,488	$	(711,138	)	$	1,062,246		$	(11,979	)	$	921,143
Net income (loss)	—		—		—		—			22,226			—			22,226
Cumulative effect adjustment for adoption of new accounting pronouncement (1)	—		—		—		—			7,815			—			7,815
Other comprehensive income (loss)	—		—		—		—			—			(1,493		)	(1,493		)
Treasury shares purchased	(870	)	—		—		(50,051		)	—			—			(50,051		)
Share-based compensation expense	—		—		4,753		—			—			—			4,753
Exercise of stock options, including tax benefits	24		—		770		—			—			—			770
Balances, December 29, 2018	30,992		$	526	$	587,011	$	(761,189	)	$	1,092,287		$	(13,472	)	$	905,163

(1) See Note 1, "Basis of Presentation", for a discussion of recently adopted accounting pronouncements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Unaudited

	Three Months Ended
	December 29, 2018			December 30, 2017
Cash flows from operating activities
Net income (loss)	$	22,226		$	(98,493	)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	12,574			11,702
Deferred income taxes	943			21,906
Share-based compensation expense	4,753			3,896
Other, net	51			(46		)
Changes in operating assets and liabilities, excluding impacts of acquisition:
Accounts receivable	(34,240		)	31,461
Contract assets	(6,339		)	—
Inventories	(74,344		)	(14,016		)
Other current and noncurrent assets	(2,221		)	(4,453		)
Accrued income taxes payable	10,811			106,156
Accounts payable	7,928			8,756
Customer deposits	22,050			(5,195		)
Other current and noncurrent liabilities	2,467			7,432
Cash flows (used in) provided by operating activities	(33,341		)	69,106
Cash flows from investing activities
Payments for property, plant and equipment	(24,903		)	(16,702		)
Proceeds from sales of property, plant and equipment	49			173
Business acquisition	1,180			—
Cash flows used in investing activities	(23,674		)	(16,529		)
Cash flows from financing activities
Borrowings under debt agreements	231,500			216,314
Payments on debt and capital lease obligations	(229,469		)	(324,192		)
Repurchases of common stock	(50,051		)	(9,547		)
Proceeds from exercise of stock options	796			8,513
Payments related to tax withholding for share-based compensation	(26		)	(141		)
Cash flows used in financing activities	(47,250		)	(109,053		)
Effect of exchange rate changes on cash and cash equivalents	(548		)	2,073
Net decrease in cash and cash equivalents and restricted cash	(104,813		)	(54,403		)
Cash and cash equivalents and restricted cash:
Beginning of period	297,686			569,254
End of period	$	192,873		$	514,851

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

PLEXUS CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED DECEMBER 29, 2018 AND DECEMBER 30, 2017

Unaudited

1.    Basis of Presentation

Basis of Presentation:

The accompanying Condensed Consolidated Financial Statements included herein have been prepared by Plexus Corp. and its subsidiaries (together “Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). The accompanying Condensed Consolidated Financial Statements reflect all adjustments, which include normal recurring adjustments necessary for the fair statement of the consolidated financial position of the Company as of December 29, 2018 and September 29, 2018, and the results of operations for the three months ended December 29, 2018 and December 30, 2017, and the cash flows and shareholders' equity for the same three month periods.

The Company’s fiscal year ends on the Saturday closest to September 30. The Company uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter, therefore, ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. All fiscal quarters presented herein included 13 weeks.

Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to the SEC’s rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2018 Annual Report on Form 10-K.

Recently Adopted Accounting Pronouncements:

In October 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-16 related to the income tax consequences of intra-entity transfers of assets other than inventory. The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. The Company adopted this guidance under the modified retrospective approach during the first quarter of fiscal 2019. The Company recognized no net impact to its fiscal 2019 opening Retained Earnings balance upon adoption and does not anticipate any material impact to the Company's future Consolidated Financial Statements.

In August 2016, the FASB issued ASU 2016-15 related to the classification of certain cash receipts and cash payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new standard addresses certain issues where diversity in practice was identified. It also amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities and clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The Company adopted this guidance during the first quarter of fiscal 2019 with no material impact to the Company's Condensed Statements of Cash Flows.

In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue relating to contracts with customers that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services ("Topic 606"). Topic 606 also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and is effective for the Company beginning in the first quarter of fiscal year 2019.

On September 30, 2018, the Company adopted and applied Topic 606 to all contracts using the modified retrospective method of adoption. Upon adoption, the Company recognized an increase to its beginning Retained Earnings balance of $7.8 million. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 13, "Revenue from Contracts with Customers," for further information.

Recently Issued Accounting Pronouncements Not Yet Adopted:

In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the

7

classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and plans to adopt the standard in the first quarter of fiscal year 2020.

In August 2017, the FASB issued ASU 2017-12 related to the accounting for hedging activities. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and the timing of adoption.

The Company believes that no other recently issued accounting standards will have a material impact on its Consolidated Financial Statements, or apply to its operations.

2.    Inventories

Inventories as of December 29, 2018 and September 29, 2018 consisted of the following (in thousands):

	December 29, 2018		September 29, 2018
Raw materials	$	637,324	$	579,377
Work-in-process	70,956		102,337
Finished goods	89,991		112,632
Total inventories, net	$	798,271	$	794,346

In certain circumstances, per contractual terms, customer deposits are received by the Company to offset obsolete and excess inventory risks. The total amount of customer deposits related to inventory and included within current liabilities on the accompanying Condensed Consolidated Balance Sheets as of December 29, 2018 and September 29, 2018 was $110.7 million and $87.7 million, respectively.

In the first quarter of fiscal year 2019, the Company adopted and applied Topic 606 to all contracts using the modified retrospective method of adoption. The prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 13, "Revenue from Contracts with Customers," for further information.

3.Debt, Capital Lease Obligations and Other Financing

Debt and capital lease obligations as of December 29, 2018 and September 29, 2018, consisted of the following (in thousands):

	December 29, 2018			September 29, 2018
4.05% Senior Notes, due June 15, 2025	$	100,000		$	100,000
4.22% Senior Notes, due June 15, 2028	50,000			50,000
Borrowings under the credit facility	3,000			—
Capital lease and other financing obligations	44,368			39,857
Unamortized deferred financing fees	(1,168		)	(1,240		)
Total obligations	196,200			188,617
Less: current portion	(8,633		)	(5,532		)
Long-term debt and capital lease obligations, net of current portion	$	187,567		$	183,085

On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain

8

financial ratios such as a total leverage ratio and a minimum interest coverage ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a make-whole amount. Interest on the 2018 Notes is payable semiannually. At December 29, 2018, the Company was in compliance with the covenants under the 2018 NPA.

The Company also has a senior unsecured revolving credit facility (the "Credit Facility"), with a $300.0 million maximum commitment that expires on July 5, 2021. The Credit Facility may be further increased to $500.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During the three months ended December 29, 2018, the highest daily borrowing was $107.5 million; the average daily borrowings were $47.6 million. The Company borrowed $231.5 million and repaid $228.5 million of revolving borrowings under the Credit Facility during the three months ended December 29, 2018. The Company was in compliance with all financial covenants relating to the Credit Facility, which are generally consistent with those in the 2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.175% as of December 29, 2018.

The fair value of the Company’s debt, excluding capital leases, was $150.5 million and $151.9 million as of December 29, 2018 and September 29, 2018, respectively. The carrying value of the Company's debt, excluding capital leases, was $153.0 million and $150.0 million as of December 29, 2018 and September 29, 2018, respectively. If measured at fair value in the financial statements, the Company's debt would be classified as Level 2 in the fair value hierarchy. Refer to Note 4, "Derivatives," for further information regarding the Company's fair value calculations and classifications.

4.    Derivatives

All derivatives are recognized in the accompanying Condensed Consolidated Balance Sheets at their estimated fair value. The Company uses derivatives to manage the variability of foreign currency obligations. The Company has cash flow hedges related to forecasted foreign currency obligations, in addition to non-designated hedges to manage foreign currency exposures associated with certain foreign currency denominated assets and liabilities. The Company does not enter into derivatives for speculative purposes.

Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss" in the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of the cash flows. In the next twelve months, the Company estimates that $1.3 million of unrealized losses, net of tax, related to cash flow hedges will be reclassified from other comprehensive income (loss) into earnings. Changes in the fair value of the non-designated derivatives related to recognized foreign currency denominated assets and liabilities are recorded in "Miscellaneous, net" in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).

The Company enters into forward currency exchange contracts for its operations in Malaysia and Mexico on a rolling basis. TheCompany had cash flow hedges outstanding with a notional value of $74.1 million as of December 29, 2018, and $74.0 million as of September 29, 2018. These forward currency contracts fix the exchange rates for the settlement of future foreign currency obligations that have yet to be realized. The total fair value of the forward currency exchange contracts was a $1.3 millionliability as of December 29, 2018, and a $1.7 millionliability as of September 29, 2018.

The Company had additional forward currency exchange contracts outstanding with a notional value of $34.6 million as of December 29, 2018, and $28.6 million as of September 29, 2018. The Company did not designate these derivative instruments as hedging instruments. The net settlement amount (fair value) related to these contracts is recorded on the Condensed Consolidated Balance Sheets as either a current or long-term asset or liability, depending on the term, and as an element of "Miscellaneous, net" within the Condensed Consolidated Statements of Comprehensive Income (Loss). The total fair value of these derivatives was a $0.4 millionasset as of December 29, 2018, and a $0.1 millionliability as of September 29, 2018.

9

The tables below present information regarding the fair values of derivative instruments and the effects of derivative instruments on the Company’s Condensed Consolidated Financial Statements:

Fair Values of Derivative Instruments
In thousands of dollars
	Asset Derivatives					Liability Derivatives
		December 29, 2018		September 29, 2018			December 29, 2018		September 29, 2018
Derivatives designated as hedging instruments	Balance Sheet Classification	Fair Value		Fair Value		Balance Sheet Classification	Fair Value		Fair Value
Foreign currency forward contracts	Prepaid expenses and other	$	47	$	292	Other accrued liabilities	$	1,361	$	1,984

Fair Values of Derivative Instruments
In thousands of dollars
	Asset Derivatives					Liability Derivatives
		December 29, 2018		September 29, 2018			December 29, 2018		September 29, 2018
Derivatives not designated as hedging instruments	Balance Sheet Classification	Fair Value		Fair Value		Balance Sheet Classification	Fair Value		Fair Value
Foreign currency forward contracts	Prepaid expenses and other	$	460	$	42	Other accrued liabilities	$	68	$	81

Derivative Impact on Accumulated Other Comprehensive Income (Loss) ("OCI")
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)
	December 29, 2018			December 30, 2017
Foreign currency forward contracts	$	(388	)	$	2,714

Derivative Impact on Gain (Loss) Recognized in Income
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Classification of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)
		December 29, 2018			December 30, 2017
Foreign currency forward contracts	Selling and administrative expenses	$	(82	)	$	105
Foreign currency forward contracts	Cost of sales	$	(684	)	$	991
Treasury Rate Locks	Interest expense	$	—		$	79

Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized on Derivatives in Income	Amount of Gain (Loss) on Derivatives Recognized in Income
		December 29, 2018		December 30, 2017
Foreign currency forward contracts	Miscellaneous, net	$	787	$	(535	)

There were no gains or losses recognized in income for derivatives related to ineffective portions and amounts excluded from effectiveness testing for the three months ended December 29, 2018 and December 30, 2017.

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Fair Value Measurements:

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses quoted market prices when available or discounted cash flows to calculate fair value. The accounting guidance establishes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are:

Level 1:  Quoted (observable) market prices in active markets for identical assets or liabilities.

Level 2:  Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

The following table lists the fair values of liabilities of the Company’s derivatives as of December 29, 2018 and September 29, 2018, by input level:

Fair Value Measurements Using Input Levels (Liability)/Asset
In thousands of dollars
December 29, 2018	Level 1		Level 2			Level 3		Total
Derivatives
Forward currency forward contracts	$	—	$	(922	)	$	—	$	(922	)
September 29, 2018
Derivatives
Forward currency forward contracts	$	—	$	(1,731	)	$	—	$	(1,731	)

The fair value of foreign currency forward contracts is determined using a market approach, which includes obtaining directly or indirectly observable values from third parties active in the relevant markets. Inputs in the fair value of the foreign currency forward contracts include prevailing forward and spot prices for currency and interest rate forward curves.

5.    Income Taxes

Income tax expense for the three months ended December 29, 2018 was $11.9 million. Income tax expense for the three months ended December 30, 2017 was $127.5 million.

On December 22, 2017, the U.S. Tax Cuts & Jobs Act was enacted ("Tax Reform"). Due to the complexities in implementing Tax Reform, the SEC issued Staff Accounting Bulletin 118, which allowed the Company to record a tax expense when uncertainty or other factors may impact the final outcome. During fiscal year 2018, the Company made reasonable estimates related to the impact of Tax Reform and, in accordance with SAB118, recorded a net income tax expense of $85.9 million. The components of the tax expense included $61.2 million of U.S. federal and state taxes on deemed repatriation of historical undistributed foreign earnings, which are payable over an eight year period beginning in fiscal 2019, $21.8 million of foreign withholding taxes due to a change in the Company’s permanently reinvested assertion on foreign earnings that are payable upon repatriation to the U.S. and $2.9 million for unrecognized tax benefits related to the implementation of Tax Reform.

For the three months ended December 29, 2018, the Company recorded a $7.0 million increase to its income tax expense, inclusive of unrecognized tax benefits, as a result of additional proposed guidance issued by the U.S. Department of the Treasury on November 28, 2018, related to Tax Reform. The guidance related to the treatment of foreign taxes paid that impacted the tax on the deemed repatriation of historical undistributed foreign earnings. The Company's final tax expense recorded for Tax Reform was $92.9 million. Additionally, the effects of the Global Intangible Low-Taxed Income provision added by Tax Reform have been recorded in the three months ended December 29, 2018. The Company has elected to treat the income tax effects of this provision as a period cost.

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The effective tax rates for the three months ended December 29, 2018 and December 30, 2017, were 34.9% and 439.2%, respectively. The effective tax rate for the three months ended December 29, 2018 decreased from the effective tax rate for the three months ended December 30, 2017, primarily due to the impact of Tax Reform.

For the three months ended December 29, 2018, the Company recorded an income tax benefit of $1.7 million primarily related to unrecognized tax benefits as the U.S. Department of the Treasury issued additional guidance for Tax Reform. The Company recognizes accrued interest and penalties on uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three months ended December 29, 2018 was not material.

One or more uncertain tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company's consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. or any foreign jurisdictions in which the Company operates.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended December 29, 2018, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the EMEA segment and a partial valuation against its net deferred tax assets in certain jurisdictions within the AMER segment, as it was more likely than not that these assets would not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until it determines it is more likely than not that the deferred tax assets will be realized.

6.    Earnings Per Share

The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share for the three months ended December 29, 2018 and December 30, 2017 (in thousands, except per share amounts):

	Three Months Ended
	December 29, 2018		December 30, 2017
Net income (loss)	22,226		(98,493		)
Basic weighted average common shares outstanding	31,403		33,567
Dilutive effect of share-based awards outstanding	883		—
Diluted weighted average shares outstanding	32,286		33,567
Earnings (loss) per share:
Basic	$	0.71	$	(2.93	)
Diluted	$	0.69	$	(2.93	)

For the three months ended December 29, 2018, share-based awards for approximately 0.1 million shares were not included in the computation of diluted earnings per share as they were antidilutive. For the three months ended December 30, 2017, there were no antidilutive shares, but the total number of potentially dilutive share-based awards was 1.1 million; however, these awards were not included in the computation of diluted loss per share, as doing so would have decreased the loss per share.

See also Note 11, "Shareholders' Equity," for information regarding the Company's share repurchase plans.

7.    Share-Based Compensation

The Company recognized $4.8 million and $3.9 million of compensation expense associated with share-based awards for the three months ended December 29, 2018 and December 30, 2017, respectively.

The Company uses the Black-Scholes valuation model to determine the fair value of stock options and stock-settled stock appreciation rights ("SARs"). The Company uses its stock price on grant date as the fair value assigned to restricted stock units ("RSUs").

Performance stock units ("PSUs") are payable in shares of the Company's common stock. Beginning for fiscal 2017 grants, PSUs vest based on the relative total shareholder return ("TSR") of the Company's common stock as compared to the companies in the Russell 3000 index, a market condition, and the Company's economic return performance during the three year performance period, a performance condition. The Company uses the Monte Carlo valuation model to determine the fair value of PSUs at the date of grant for PSUs that vest based on the relative TSR of the Company's common stock. The Company

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uses its stock price on grant date as the fair value assigned to PSUs that vest based on the Company's economic return performance. The PSUs granted in fiscal 2016 and prior years vest based solely on the relative TSR of the Company's common stock as compared to companies in the Russell 3000 Index during a three year performance period. The number of shares that may be issued pursuant to PSUs ranges from zero to 0.4 million and is dependent upon the Company's TSR and economic return performance over the applicable performance periods.

The Company recognizes share-based compensation expense over the share-based awards' vesting period.

8.    Litigation

The Company is party to lawsuits in the ordinary course of business. Management does not believe that these proceedings, individually or in the aggregate, will have a material positive or adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

9.    Reportable Segments

Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources. The Company uses an internal management reporting system, which provides important financial data to evaluate performance and allocate the Company’s resources on a regional basis. Net sales for the segments are attributed to the region in which the product is manufactured or the service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other expenses. Corporate and other expenses primarily represent corporate selling and administrative expenses, and restructuring costs and other charges, if any. These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the segments are the same as for the Company taken as a whole.

Information about the Company’s three reportable segments for the three months ended December 29, 2018 and December 30, 2017, respectively, is as follows (in thousands):

	Three Months Ended
	December 29, 2018			December 30, 2017
Net sales:
AMER	$	353,867		$	299,043
APAC	378,112			346,123
EMEA	72,298			63,832
Elimination of inter-segment sales	(38,733		)	(31,704		)
	$	765,544		$	677,294
Operating income (loss):
AMER	$	14,450		$	10,523
APAC	51,811			50,532
EMEA	996			(1,121		)
Corporate and other costs	(30,306		)	(28,377		)
	$	36,951		$	31,557
Other income (expense):
Interest expense	(2,249		)	(3,725		)
Interest income	525			1,555
Miscellaneous, net	(1,112		)	(346		)
Income before income taxes	34,115			29,041

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	December 29, 2018		September 29, 2018
Total assets:
AMER	$	718,078	$	645,791
APAC	989,574		937,510
EMEA	193,002		193,797
Corporate and eliminations	69,029		155,544
	$	1,969,683	$	1,932,642

10.    Guarantees

The Company offers certain indemnifications under its customer manufacturing agreements. In the normal course of business, the Company may from time to time be obligated to indemnify its customers or its customers’ customers against damages or liabilities arising out of the Company’s negligence, misconduct, breach of contract, or infringement of third party intellectual property rights. Certain agreements have extended broader indemnification, and while most agreements have contractual limits, some do not. However, the Company generally does not provide for such indemnities and seeks indemnification from its customers for damages or liabilities arising out of the Company’s adherence to customers’ specifications or designs or use of materials furnished, or directed to be used, by its customers. The Company does not believe its obligations under such indemnities are material.

In the normal course of business, the Company also provides its customers a limited warranty covering workmanship, and in some cases materials, on products manufactured by the Company. Such warranty generally provides that products will be free from defects in the Company’s workmanship and meet mutually agreed-upon specifications for periods generally ranging from 12 months to 24 months. The Company’s obligation is generally limited to correcting, at its expense, any defect by repairing or replacing such defective product. The Company’s warranty generally excludes defects resulting from faulty customer-supplied components, design defects or damage caused by any party or cause other than the Company.

The Company provides for an estimate of costs that may be incurred under its limited warranty at the time product revenue is recognized and establishes additional reserves for specifically identified product issues. These costs primarily include labor and materials, as necessary, associated with repair or replacement and are included in the Company's accompanying Condensed Consolidated Balance Sheets in "Other accrued liabilities." The primary factors that affect the Company’s warranty liability include the value and the number of shipped units and historical and anticipated rates of warranty claims. As these factors are impacted by actual experience and future expectations, the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Below is a table summarizing the activity related to the Company’s limited warranty liability for the three months ended December 29, 2018 and December 30, 2017 (in thousands):

	Three Months Ended
	December 29, 2018			December 30, 2017
Reserve balance, beginning of period	$	6,646		$	4,756
Accruals for warranties issued during the period	1,900			1,017
Settlements (in cash or in kind) during the period	(1,255		)	(1,352		)
Reserve balance, end of period	$	7,291		$	4,421

11.    Shareholders' Equity

On February 14, 2018, the Board of Directors approved a stock repurchase plan under which the Company is authorized to repurchase $200.0 million of its common stock (the "2018 Program"). The 2018 Program commenced upon completion of the 2016 Program, as defined below. During the three months ended December 29, 2018, the Company repurchased 869,949 shares under this program for $50.1 million, at an average price of $57.53 per share. As of December 29, 2018, $128.8 million of authority remained under the 2018 Program.

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On June 6, 2016, the Board of Directors authorized a multi-year stock repurchase program under which the Company was authorized to repurchase up to $150.0 million of its common stock beginning in fiscal 2017 (the "2016 Program"). During the three months ended December 30, 2017, the Company repurchased 158,466 shares for $9.5 million, at an average price of $60.25 per share.

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

12.    Trade Accounts Receivable Sale Programs

The Company has Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch, formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd. (the "MUFG RPA"), and HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA"), under which the Company may elect to sell receivables, at a discount, on an ongoing basis. As of December 29, 2018, the maximum facility amounts were $230.0 million and $60.0 million, respectively. The MUFG RPA is subject to expiration on October 3, 2019, but 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.

Transfers of receivables under the programs are accounted for as sales and, accordingly, receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Proceeds from the transfer reflect the face value of the receivables less a discount. The sale discount is recorded within "Miscellaneous, net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale.

The Company sold $232.5 million and $162.4 million of trade accounts receivable under these programs during the three months ended December 29, 2018 and December 30, 2017, respectively, in exchange for cash proceeds of $231.2 million and $161.5 million, respectively.

13.    Revenue from Contracts with Customers

Impact of Adopting Topic 606

The Company adopted Topic 606 using the modified retrospective method. The new standard resulted in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue is recognized "over time," as products are produced, as opposed to at a "point in time" based upon shipping terms. As a result of adoption of Topic 606, the following adjustments were made to the opening balances of the Company's Condensed Consolidated Balance Sheets (in thousands):

	Balance at September 29, 2018		Impacts due to adoption of Topic 606			Balance at September 30, 2018
ASSETS
Contract assets	$	—	$	76,417		$	76,417
Inventories	794,346		(68,959		)	725,387
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	68,163	$	(357	)	$	67,806
Retained earnings	1,062,246		7,815			1,070,061

The cumulative effect of applying the new guidance in Topic 606 resulted in the Company increasing its opening Retained Earnings balance by $7.8 million due to certain customer contracts requiring revenue recognition over time. Contract assets in the amount of $76.4 million were recognized due to the recognition of revenue on an over time basis for some customers rather than at a specific point in time. Inventory declined $69.0 million primarily due to earlier recognition of costs related to the contracts for which revenue was recognized on an over time basis. The decline in other accrued liabilities is primarily due to the reclassification of deferred revenue to contract assets for prepayments associated with revenue recognized over time, partially offset by an increase in taxes payable associated with the increase in revenue recognized over time.

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The effects of the adoption on the Company's Condensed Consolidated Financial Statements for the three months ended December 29, 2018 were as follows (in thousands):

	Three Months Ended
	December 29, 2018 As Reported		Adjustments due to Topic 606		December 29, 2018 As Adjusted - Without Adoption of ASC Topic 606
Net sales	$	765,544	$	6,185	$	759,359
Cost of sales	693,161		5,194		687,967
Gross profit	72,383		991		71,392
Operating income	36,951		991		35,960
Income before income taxes	34,115		991		33,124
Income tax expense	11,889		194		11,695
Net income	$	22,226	$	797	$	21,429

	December 29, 2018 As Reported		Effect of the Adoption of ASC Topic 606			December 29, 2018 As Adjusted - Without Adoption of ASC Topic 606
ASSETS
Contract assets	$	82,775	$	82,775		$	—
Inventories	798,271		(74,152		)	872,423
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	83,004	$	11		$	82,993
Retained earnings	1,092,287		8,612			1,083,675

Significant Judgments

Topic 606 results in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue is now recognized "over time" as products are produced, as opposed to at a "point in time" based upon shipping terms. Upon adopting the standard, revenue is now recognized over time for arrangements with customers for which: (i) the Company's performance does not create an asset with an alternative use to the Company, and (ii) the Company has an enforceable right to payment for performance completed to date. Revenue recognized over time will be estimated based on costs incurred to date plus a reasonable profit margin. If either of the two conditions noted above are not met to recognize revenue over time, revenue will be recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying arrangement.

The Company recognizes revenue when a contract exists and when, or as, it satisfies a performance obligation by transferring control of a product or service to a customer. Contracts are accounted for when they have approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

The Company generally enters into a master services arrangement that establishes the framework under which business will be conducted. These arrangements represent the master terms and conditions of the Company's services that apply to individual orders, but they do not commit the customer to work with, or to continue to work with, the Company nor do they obligate the customer to any specific volume or pricing of purchases. Moreover, these terms can be amended in appropriate situations. Customer purchase orders are received for specific quantities with predominantly fixed pricing and delivery requirements. Thus, for the majority of our contracts, there is no guarantee of any revenue to the Company until a customer submits a purchase order. As a result, the Company generally considers its arrangement with a customer to be the combination of the master services arrangement and the purchase order. Most of the Company's arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct.

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. A performance obligation is satisfied over time if the Company has an enforceable right to payment, including a reasonable profit margin.

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Determining if an enforceable right to payment includes a reasonable profit margin requires judgment and is assessed on a contract by contract basis.

Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided; if such requirements or obligations exist, then a sale is recognized at the time when such requirements are completed and such obligations are fulfilled.

The Company does not allow for a general right of return. Net sales include amounts billed to customers for shipping and handling and out-of-pocket expenses. The corresponding shipping and handling costs and out-of-pocket expenses are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from net sales.

Practical Expedients

The Company applied the following practical expedients during the adoption of Topic 606:

• The Company elected not to disclose information about remaining performance obligations as its performance obligations generally have expected durations of one year or less.

• The Company will account for certain shipping and handling as activities to fulfill the promise to transfer the good, instead of a promised service to its customer.

• The Company elected not to adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less.

Contract Costs

For contracts requiring over time revenue recognition, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which occurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the costs incurred to date.

There were no other costs to obtain or fulfill customer contracts.

Disaggregated Revenue

The tables below include the Company’s net sales for the three months ended December 29, 2018, disaggregated by geographic reportable segment and market sector (in thousands):

	Three Months Ended December 29, 2018
	Reportable Segment:
	AMER		APAC		EMEA		Total
Market Sector:
Healthcare/Life Sciences	$	115,765	$	152,106	$	32,707	$	300,578
Industrial/Commercial	83,718		116,271		19,153		219,142
Communications	90,464		30,975		1,920		123,359
Aerospace/Defense	62,373		42,094		17,998		122,465
External revenue	$	352,320	$	341,446	$	71,778	$	765,544
Inter-segment sales	1,547		36,666		520		38,733
Total sales revenue	$	353,867	$	378,112	$	72,298	$	804,277

For the three months ended December 29, 2018, 89.0% of the Company's revenue was recognized as products and services were transferred over time.

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Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and deferred revenue on the Company’s accompanying Condensed Consolidated Balance Sheets.

Contract Assets: For performance obligations satisfied at a point in time, billing occurs subsequent to revenue recognition, at which point the customer has been billed and the resulting asset is recorded within accounts receivable. For performance obligations satisfied over time as work progresses, the Company has an unconditional right to payment which results in the recognition of contract assets. The following table summarizes the activity in the Company's contract assets during the three months ended December 29, 2018 (in thousands):

	Contract Assets
Beginning balance, September 29, 2018	$	—
Cumulative effect adjustment at September 29, 2018	76,417
Revenue recognized	681,712
Amounts collected or invoiced	(675,354		)
Ending balance, December 29, 2018	$	82,775

Deferred Revenue: Deferred revenue is recorded when consideration is received from a customer prior to transferring goods or services to the customer under the terms of the contract, which is included in other accrued liabilities. The advance payment is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract, offset obsolete and excess inventory risks and to protect the company from the other party failing to adequately complete some or all of its obligations under the contract. Deferred revenue is recognized into revenue when all revenue recognition criteria are met. For performance obligations satisfied over time, recognition will occur as work progress, otherwise deferred revenue will be recognized based upon shipping terms.

14.    Acquisition

On July 27, 2018, the Company purchased the assets of one of the business lines of Cascade Controls, Inc. ("Cascade"), a new product introduction company in Portland, Oregon, for $12.4 million in cash, subject to certain customary post-closing adjustments. In the three months ended December 29, 2018, the Company received a $1.2 million purchase price adjustment as a result of a post-closing adjustment.

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

"SAFE HARBOR" CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

The statements contained in this Form 10-Q that are guidance or which are not historical facts (such as statements in the future tense and statements including believe, expect, intend, plan, anticipate, goal, target and similar terms and concepts), including all discussions of periods which are not yet completed, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include, but are not limited to: the risk of customer delays, changes, cancellations or forecast inaccuracies in both ongoing and new programs; the lack of visibility of future orders, particularly in view of changing economic conditions; the economic performance of the industries, sectors and customers we serve; the effects of shortages and delays in obtaining components as a result of economic cycles, natural disasters or otherwise; the effects of tariffs and other trade protection measures; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers, maintain our current customer base and deliver product on a timely basis; the particular risks relative to new or recent customers, programs or services, which risks include customer and other delays, start-up costs, potential inability to execute, the establishment of appropriate terms of agreements, and the lack of a track record of order volume and timing; the risks of concentration of work for certain customers; the effect of start-up costs of new programs and facilities; possible unexpected costs and operating disruption in transitioning programs, including transitions between Company facilities; the risk that new program wins and/or customer demand may not result in the expected revenue or profitability; the fact that customer orders may not lead to long-term relationships; our ability to manage successfully and execute a complex business model characterized by high product mix, low volumes and demanding quality, regulatory, and other requirements; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; increasing regulatory and compliance requirements; risks related to information technology systems and data security; the effects of U.S. Tax Reform and of related foreign jurisdiction tax developments; current or potential future barriers to the repatriation of funds that are currently held outside of the United States as a result of actions taken by other countries or otherwise; the potential effects of jurisdictional results on our taxes, tax rates, and our ability to use deferred tax assets and net operating losses; the risks associated with excess and obsolete inventory, including the risk that inventory purchased on behalf of our customers may not be consumed or otherwise paid for by the customer, resulting in an inventory write-off; the weakness of areas of the global economy; the effect of changes in the pricing and margins of products; raw materials and component cost fluctuations; the potential effect of fluctuations in the value of the currencies in which we transact business; the effects of changes in economic conditions, political conditions and tax matters in the United States and in the other countries in which we do business (including as a result of the United Kingdom’s pending exit from the European Union); the potential effect of other world or local events or other events outside our control (such as changes in energy prices, terrorism and weather events); the impact of increased competition; changes in financial accounting standards; and other risks detailed herein and in our other Securities and Exchange Commission filings (particularly in "Risk Factors" in our fiscal 2018 Form 10-K).

*    *    *

OVERVIEW

Plexus Corp. and its subsidiaries (together “Plexus,” the “Company,” or "we") participate in the Electronic Manufacturing Services ("EMS") industry. Since 1979, Plexus has been partnering with companies to create the products that build a better world. We are a team of over 19,000 employees, providing global support for all facets of the product realization process – Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing, and Aftermarket Services – to companies in the Healthcare/Life Sciences, Industrial/Commercial, Communications and Aerospace/Defense market sectors. Plexus is an industry leader that specializes in serving customers with complex products used in demanding regulatory environments in the Americas ("AMER"), Asia-Pacific ("APAC") and Europe, Middle East, and Africa ("EMEA") regions. Plexus delivers customer service excellence to leading global companies by providing innovative, comprehensive solutions throughout the product’s lifecycle.

The following information should be read in conjunction with our Condensed Consolidated Financial Statements included herein, the “Risk Factors” section in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended September 29, 2018, and our “Safe Harbor” Cautionary Statement included above.

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RESULTS OF OPERATIONS

Consolidated Performance Summary. The following table presents selected consolidated financial data (dollars in millions, except per share data):

	Three Months Ended
	December 29, 2018			December 30, 2017
Net sales	$	765.5		$	677.3
Cost of sales	693.2			613.8
Gross profit	72.4			63.5
Gross margin	9.5		%	9.4		%
Operating income	37.0			31.6
Operating margin	4.8		%	4.7		%
Net income (loss)	22.2			(98.5		)
Diluted earnings (loss) per share	$	0.69		$	(2.93	)
Return on invested capital*	14.6		%	16.2		%
Economic return*	5.6		%	6.7		%
*Non-GAAP metric; refer to "Return on Invested Capital ("ROIC") and Economic Return" below for more information and Exhibit 99.1 for a reconciliation.

Net sales. For the three months ended December 29, 2018, net sales increased$88.2 million, or 13.0%, as compared to the three months ended December 30, 2017.

Net sales are analyzed by management by geographic segment, which reflects the Company's reportable segments, and by market sector. Management measures operational performance and allocates resources on a geographic segment basis. The Company’s global business development strategy is based on our targeted market sectors.

A discussion of net sales by reportable segment is presented below (in millions):

	Three Months Ended
	December 29, 2018			December 30, 2017
Net sales:
AMER	$	353.9		$	299.0
APAC	378.1			346.1
EMEA	72.3			63.8
Elimination of inter-segment sales	(38.8		)	(31.6		)
Total net sales	$	765.5		$	677.3

AMER. Net sales for the three months ended December 29, 2018 in the AMER segment increased$54.9 million, or 18.4%, as compared to the three months ended December 30, 2017. The increase in net sales was due to a $23.9 million increase due to the ramp of new products for existing customers as well as overall net increased customer end-market demand.

APAC. Net sales for the three months ended December 29, 2018 in the APAC segment increased$32.0 million, or 9.2%, as compared to the three months ended December 30, 2017. The increase in net sales was primarily the result of a $33.1 million increase due to the ramp of new products for existing customers, $4.5 million due to the ramp of production for new customers and net increased customer end-market demand. Partially offsetting these increases were reductions in net sales of $26.0 million due to a disengagement with a customer.

EMEA. Net sales for the three months ended December 29, 2018 in the EMEA segment increased$8.5 million, or 13.3%, as compared to the three months ended December 30, 2017. The increase in net sales was primarily due to a $9.3 million increase due to the ramp of new products for existing customers and net increased customer end-market demand, partially offset by $4.1 million due to reduction of business with an existing customer.

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A discussion of net sales by market sector is presented below (in millions):

	Three Months Ended
	December 29, 2018		December 30, 2017
Market Sector:
Healthcare/Life Sciences	$	300.6	$	237.1
Industrial/Commercial	219.1		206.8
Communications	123.3		133.6
Aerospace/Defense	122.5		99.8
Total net sales	$	765.5	$	677.3

Healthcare/Life Sciences. Net sales for the three months ended December 29, 2018 in the Healthcare/Life Sciences sector increased$63.5 million, or 26.8%, as compared to the three months ended December 30, 2017. The increase was driven by increases in net sales of $16.1 million due to the ramp of new products for existing customers, $4.5 million from the ramp of production for new customers and net increased customer end-market demand.

Industrial/Commercial. Net sales for the three months ended December 29, 2018 in the Industrial/Commercial sector increased$12.3 million, or 5.9%, as compared to the three months ended December 30, 2017. The increase was primarily driven by increases in net sales of $24.5 million due to the ramp of new products for existing customers, partially offset by net decreased customer end-market demand.

Communications. Net sales for the three months ended December 29, 2018 in the Communications sector decreased$10.3 million, or 7.7%, as compared to the three months ended December 30, 2017. The reduction in net sales was primarily driven by a $27.0 million decrease in net sales due to a disengagement with a customer. Partially offsetting these decreases were increases in net sales of $14.7 million due to the ramp of production of new products for existing customers and net increased customer end-market demand.

Aerospace/Defense. Net sales for the three months ended December 29, 2018 in the Aerospace/Defense sector increased$22.7 million, or 22.7%, as compared to the three months ended December 30, 2017. The increase was primarily attributable to a $15.2 million increase in net sales that resulted from the ramp of new products for existing customers and net increased customer end-market demand. Partially offsetting these increases were reductions in net sales of $4.6 million due to reduction of business with an existing customer.

Cost of sales. Cost of sales for the three months ended December 29, 2018increased$79.4 million, or 12.9%, as compared to the three months ended December 30, 2017. Cost of sales is comprised primarily of material and component costs, labor costs and overhead. For the three months ended December 29, 2018 and December 30, 2017, approximately 90% and 89%, respectively, of the total cost of sales was variable in nature and fluctuated with sales volumes. Of this amount, approximately 90% and 91%, respectively, of these costs in each period were related to material and component costs. As compared to the prior year period, the increase in cost of sales for the three months ended December 29, 2018 was primarily due to the increase in net sales.

Gross profit. Gross profit for the three months ended December 29, 2018increased$8.9 million, or 14.0%, as compared to the three months ended December 30, 2017. Gross margin of 9.5% increased 10 basis points as compared to the three months ended December 30, 2017. The primary driver of the increase in gross profit was the net sales increase, as noted above, and improved fixed cost leverage gained from the increase in net sales from the comparative period last year.

Operating income. Operating income for the three months ended December 29, 2018increased$5.4 million, or 17.1% as compared to the three months ended December 30, 2017 as a result of the increase in gross profit, partially offset by a $3.5 million increase in selling and administrative expenses ("S&A") primarily due to an increase in compensation expense. Operating margin of 4.8% increased 10 basis points as compared to the three months ended December 30, 2017.

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A discussion of operating income by reportable segment is presented below (in millions):

	Three Months Ended
	December 29, 2018			December 30, 2017
Operating income (loss):
AMER	$	14.5		$	10.5
APAC	51.8			50.5
EMEA	1.0			(1.1		)
Corporate and other costs	(30.3		)	(28.3		)
Total operating income	$	37.0		$	31.6

AMER. Operating income for the three months ended December 29, 2018increased$4.0 million as compared to the three months ended December 30, 2017, primarily as a result of the increase in net sales, a positive shift in customer mix and improved productivity, partially offset by increased costs to support new program ramps.

APAC. Operating income for the three months ended December 29, 2018increased$1.3 million as compared to the three months ended December 30, 2017, primarily as a result of the increase in net sales, partially offset by a negative shift in customer mix and increased costs to support new program ramps.

EMEA. Operating income for the three months ended December 29, 2018 increased $2.1 million as compared to the three months ended December 30, 2017, primarily due to the increase in net sales, a positive shift in customer mix and improved productivity.

Other expense. Other expense for the three months ended December 29, 2018 increased $0.3 million as compared to the three months ended December 30, 2017.

Income taxes. Income tax expense and effective income tax rates for the indicated periods were as follows:

	Three Months Ended
	December 29, 2018			December 30, 2017
Income tax expense, as reported	$	11.9		$	127.5
Impact of Tax Reform	(7.0		)	(124.5		)
Income tax expense, as adjusted (1)	$	4.9		$	3.0

	Three Months Ended
	December 29, 2018		December 30, 2017
Effective tax rate, as reported	34.9	%	439.2	%
Impact of Tax Reform	(20.7	)%	(428.8	)%
Effective tax rate, as adjusted (1)	14.2	%	10.4	%
(1) We believe the non-GAAP presentation of income tax expense and the effective tax rate excluding the impact of Tax Reform provides additional insight over the change from the comparative reporting periods by excluding these non-recurring expenses. In addition, the Company believes that its effective tax rate, as adjusted, enhances the ability of investors to analyze the Company’s operating performance and supplements, but does not replace, its effective tax rate calculated in accordance with U.S. GAAP.

On December 22, 2017, the U.S. Tax Cuts & Jobs Act was enacted ("Tax Reform"). Due to the complexities in implementing Tax Reform, the SEC issued Staff Accounting Bulletin 118, which allowed the Company to record a tax expense when uncertainty or other factors may impact the final outcome. During fiscal year 2018, the Company made reasonable estimates related to the impact of Tax Reform and, in accordance with SAB118, recorded a net income tax expense of $85.9 million. For the three months ended December 29, 2018, the Company recorded a $7.0 million adjustment to its income tax expense, inclusive of unrecognized tax benefits, as a result of proposed additional guidance issued by the U.S. Department of the Treasury on November 28, 2018, related to Tax Reform. The guidance related to the treatment of foreign taxes paid that impacted the tax on the deemed repatriation of historical undistributed foreign earnings. Additionally, the effects of the Global

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Intangible Low-Taxed Income provision added by Tax Reform have been recorded in the three months ended December 29, 2018. The Company has elected to treat the income tax effects of this provision as a period cost.

Income tax expense for the three months ended December 29, 2018 and December 30, 2017, was $11.9 million and $127.5 million, respectively. The impacts related to Tax Reform included in income tax expense for the three months ended December 29, 2018 and December 30, 2017, was $7.0 million and $124.5 million, respectively. The effective tax rate for the three months ended December 29, 2018 and December 30, 2017 was 34.9% and 439.2%, respectively. As noted in the table above, the impact of Tax Reform on the effective tax rate for the three months ended December 29, 2018 and December 30, 2017, was 20.7% and 428.8%, respectively. The remaining increase in income tax expense and the effective tax rate is primarily due to the Global Intangible Low-Tax Income provision of Tax Reform recorded during the three months ended December 29, 2018.

As a result of Tax Reform, our U.S. statutory tax rate for fiscal 2019 is 21%. Our effective tax rate varies from our blended U.S. statutory rate primarily due to the geographic distribution of worldwide earnings as well as a tax holiday granted to a subsidiary within our APAC segment, where we derive a significant portion of our earnings. In addition, our effective tax rate has been impacted by changes due to Tax Reform discussed above. Our effective tax rate may be impacted by disputes with taxing authorities, tax planning activities, adjustments to uncertain tax positions and changes in valuation allowances.

The estimated effective income tax rate for fiscal 2019 is expected to be between 13% and 15%.

Net income (loss). Net income for the three months ended December 29, 2018 was $22.2 million as compared to the net loss of $98.5 million for the three months ended December 30, 2017. Net income increased primarily as a result of the $115.6 million decrease in income tax expense, which, as noted above, was substantially due to the impact of Tax Reform, as well as the increase in net sales noted above.

Diluted earnings (loss) per share. Diluted earnings per share for the three months ended December 29, 2018 was $0.69, as compared to a diluted loss per share of $2.93 for the three months ended December 30, 2017, primarily as a result of decreased tax expense related to Tax Reform and increased net income in the three months ended December 29, 2018, as noted above.

Return on Invested Capital ("ROIC") and Economic Return. We use a financial model that is aligned with our business strategy and includes a ROIC goal of 500 basis points over our weighted average cost of capital ("WACC"), which we refer to as "Economic Return," and a 4.7% to 5.0% operating margin target. Our primary focus is on our Economic Return goal of 5.0%, which is designed to create shareholder value and generate sufficient cash to self-fund our targeted organic revenue growth rate of 12.0%. ROIC and Economic Return are non-GAAP financial measures.

Non-GAAP financial measures, including ROIC and Economic Return, are used for internal management goals and decision making because such measures provide management and investors additional insight into financial performance. In particular, we provide ROIC and Economic Return because we believe they offer insight into the metrics that are driving management decisions because we view ROIC and Economic Return as important measures in evaluating the efficiency and effectiveness of our long-term capital requirements. We also use a derivative measure of ROIC as a performance criteria in determining certain elements of compensation, and certain compensation incentives are based on Economic Return performance.

We define ROIC as tax-effected operating income before restructuring and other special items divided by average invested capital over a rolling two-quarter period for the first quarter. Invested capital is defined as equity plus debt, less cash and cash equivalents. Other companies may not define or calculate ROIC in the same way. ROIC and other non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of our financial performance prepared in accordance with U.S. generally accepted accounting principles ("GAAP").

We review our internal calculation of WACC annually, and our estimated WACC is 9.0% for fiscal 2019. By exercising discipline to generate ROIC in excess of our WACC, our goal is to create value for our shareholders. ROIC was 14.6% and 16.2% for the three months ended December 29, 2018 and December 30, 2017, respectively.

For a reconciliation of ROIC and Economic Return to our financial statements that were prepared using U.S. GAAP, see Exhibit 99.1 to this quarterly report on Form 10-Q, which is incorporated herein by reference.

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Refer to the table below, which includes the calculation of ROIC and Economic Return (dollars in millions) for the indicated periods:

	Three Months Ended
	December 29, 2018			December 30, 2017
Annualized operating income (tax effected)	$	125.6		$	113.6
Average invested capital	862.5			701.6
After-tax ROIC	14.6		%	16.2		%
WACC	9.0		%	9.5		%
Economic Return	5.6		%	6.7		%

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and restricted cash were $192.9 million as of December 29, 2018, as compared to $297.7 million as of September 29, 2018.

As of December 29, 2018, 96.5% of our cash balance was held outside of the U.S. by our foreign subsidiaries. With the enactment of Tax Reform, we believe that our offshore cash can be accessed in a more tax efficient manner than before Tax Reform. Currently, we believe that our cash balance, together with cash available under our Credit Facility, will be sufficient to meet our liquidity needs, including potential share repurchases, for the next twelve months and for the foreseeable future.

Our future cash flows from operating activities will be reduced by $80.0 million due to cash payments for accrued income taxes related to Tax Reform. The table below provides the expected timing of these future cash outflows, excluding $10.6 million of foreign withholding taxes on the deemed repatriation of undistributed foreign earnings since the exact timing of the payments is unknown as of December 29, 2018. The remaining $69.4 million represents U.S. federal taxes on the deemed repatriation of undistributed foreign earnings that are payable over an eight year period in accordance with the following installment schedule beginning in the fiscal second quarter of 2019 (in millions):

2019	$	5.6
2020	5.6
2021	5.6
2022	5.6
2023	5.6
2024	10.4
2025	13.9
2026	17.1
Total	$	69.4

Cash Flows. The following table provides a summary of cash flows for the periods presented, excluding the effect of exchange rates on cash and cash equivalents and restricted cash (in millions):

	Three Months Ended
	December 29, 2018			December 30, 2017
Cash (used in) provided by operating activities	$	(33.3	)	$	69.1
Cash used in investing activities	$	(23.7	)	$	(16.5	)
Cash used in financing activities	$	(47.3	)	$	(109.1	)

Operating Activities. Cash flows used in operating activities were $33.3 million for the three months ended December 29, 2018, as compared to cash flows provided by operating activities of $69.1 million for the three months ended December 30, 2017. The decrease was primarily due to cash flow (reductions) improvements of:

• $(65.7) million in accounts receivable cash flows, which resulted primarily from the increase in net sales and the timing of shipments in the quarter.

• $(60.3) million in inventory cash flows driven by increased inventory levels to support the ramp of customer programs and continued longer lead times for certain components.

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• $27.2 million in customer deposit cash flows driven by significant deposits received from two customers during the three months ended December 29, 2018.

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

	Three Months Ended
	December 29, 2018	December 30, 2017
Days in accounts receivable	51	45
Days in contract assets	10	—
Days in inventory	105	100
Days in accounts payable	(68)	(63)
Days in cash deposits	(15)	(15)
Annualized cash cycle	83	67

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 cash deposits 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 cash deposits. On September 30, 2018, the Company adopted Accounting Standards Update No. 2014-09 (“ASU 2014-09”), Revenue Recognition (Topic 606).  For the three months ended December 29, 2018, cash cycle days include contract assets and an associated reduction in inventory. As the guidance was adopted using a modified retrospective approach, no impact to prior periods was required to be recognized.

As of December 29, 2018, annualized cash cycle days increasedsixteen days compared to December 30, 2017 due to the following factors:

Days in accounts receivable for the three months ended December 29, 2018increasedsix days compared to the three months ended December 30, 2017. The increase is primarily attributable to the timing of shipments in the quarter.

Days in contract assets for the three months ended December 29, 2018increasedten days compared to the three months ended December 30, 2017 due to Topic 606 revenue recognition adoption.

Days in inventory for the three months ended December 29, 2018increasedfive days compared to the three months ended December 30, 2017. The increase is primarily attributable to increased inventory levels to support the ramp of customer programs and continued longer lead times for certain components. This increase is partially offset by inventory that was recognized with over time revenue as part of our adoption of Topic 606.

Days in accounts payable for the three months ended December 29, 2018 increased five days compared to the three months ended December 30, 2017. The increase is primarily driven by increased purchasing activity to support anticipated higher revenue levels.

Days in cash deposits for the three months ended December 29, 2018 remained consistent compared to the three months ended December 30, 2017.

Free Cash Flow. We define free cash flow ("FCF"), a non-GAAP financial measure, as cash flows provided by operations less capital expenditures. FCF was $(58.2) million for the three months ended December 29, 2018, compared to $52.4 million for the three months ended December 30, 2017, a decrease of $110.6 million, primarily due to a $102.4 million decrease in cash flows provided by operations, due to the factors discussed above, and a $8.2 million increase in capital expenditures, discussed below.

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.

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

	Three Months Ended
	December 29, 2018			December 30, 2017
Cash flows (used in) provided by operating activities	$	(33.3	)	$	69.1
Payments for property, plant and equipment	(24.9		)	(16.7		)
Free cash flow	$	(58.2	)	$	52.4

Investing Activities. Cash flows used in investing activities were $23.7 million for the three months ended December 29, 2018 compared to $16.5 million for the three months ended December 30, 2017. The increase in cash used in investing activities was due to a $8.2 million increase in capital expenditures primarily to fund both the purchase of equipment and building improvements for the new manufacturing facility in Penang, Malaysia, and the construction of a second manufacturing facility in Guadalajara, Mexico, as well as to support new capabilities, new program ramps, and replace older equipment.

We estimate funded capital expenditures for fiscal 2019 to be approximately $70.0 to $90.0 million, of which $24.9 million was utilized through the first three months of fiscal 2019. The remaining fiscal 2019 capital expenditures are anticipated to be used primarily in the construction of the second manufacturing facility in Guadalajara, Mexico, and to support new program ramps as well as to replace older equipment. We believe our estimated capital expenditures will continue to be funded from cash flows provided by operations, and may be supplemented by available cash or borrowings, if required.

Financing Activities.Cash flows used in financing activities were $47.3 million for the three months ended December 29, 2018 compared to cash flows provided by financing activities of $109.1 million for the three months ended December 30, 2017. The decrease was primarily attributable to a $105.0 million decrease in pay-downs on our revolving credit facility partially offset by a $40.5 million increase in cash used to repurchase our common stock.

On February 14, 2018, the Board of Directors approved a stock repurchase plan under which the Company is authorized to repurchase $200.0 million of its common stock (the "2018 Program"). The 2018 Program commenced upon completion of the 2016 Program, as defined below. During the three months ended December 29, 2018, the Company repurchased 869,949 shares under this program for $50.1 million, at an average price of $57.53 per share. As of December 29, 2018, $128.8 million of authority remained under the 2018 Program.

On June 6, 2016, the Board of Directors authorized a multi-year stock repurchase program under which the Company was authorized to repurchase up to $150.0 million of its common stock beginning in fiscal 2017 (the "2016 Program"). During the three months ended December 30, 2017, the Company repurchased 158,466 shares for $9.5 million, at an average price of $60.25 per share.

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

On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ratios such as a total leverage ratio and a minimum interest coverage ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a make-whole amount; interest on the 2018 Notes is payable semiannually. As of December 29, 2018, the Company was in compliance with the covenants under the 2018 NPA.

The Company's Credit Facility has a $300.0 million maximum commitment that expires on July 5, 2021. The Credit Facility may be further increased to $500.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. For further information regarding the Credit Facility, see Note 3, "Debt, Capital Lease Obligations and Other Financing" in Notes to Condensed Consolidated Financial Statements. The financial covenants (as defined under the related Credit Facility) require, among other covenants, that the Company maintain, as of each fiscal quarter end, a maximum total leverage ratio and a minimum interest coverage ratio. As of December 29, 2018, the Company was in compliance with all financial covenants of the Credit Facility.

The Credit Facility and the 2018 NPA allow for the future payment of cash dividends or the repurchase of shares provided that no event of default (including any failure to comply with a financial covenant) exists at the time of, or would be caused by, the dividend payment or the share repurchases. We have not paid cash dividends in the past and do not currently anticipate paying

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them in the future. However, we evaluate from time to time potential uses of excess cash, which in the future may include share repurchases above those already authorized, a special dividend or recurring dividends.

The Company has Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch, formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd. (the "MUFG RPA"), and HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA"), under which the Company may elect to sell receivables, at a discount, on an ongoing basis. As of December 29, 2018, the maximum facility amounts were $230.0 million and $60.0 million, respectively. The MUFG RPA is subject to expiration on October 3, 2019, but 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.

The Company sold $232.5 million and $162.4 million of trade accounts receivable under these programs during the three months ended December 29, 2018 and December 30, 2017, respectively, in exchange for cash proceeds of $231.2 million and $161.5 million, respectively.

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 12, "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 for the next twelve months. If our future financing needs increase, 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.

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CONTRACTUAL OBLIGATIONS, COMMITMENTS AND OFF-BALANCE SHEET OBLIGATIONS

Our disclosures regarding contractual obligations and commercial commitments are located in various parts of our regulatory filings. Information in the following table provides a summary of our contractual obligations and commercial commitments as of December 29, 2018 (dollars in millions):

	Payments Due by Fiscal Year
Contractual Obligations	Total		Remaining2019		2020-2021		2022-2023		2024 and thereafter
Debt Obligations (1)	$	205.1	$	6.4	$	13.8	$	13.8	$	171.1
Capital Lease Obligations (2)	50.4		5.7		6.6		3.7		34.4
Operating Lease Obligations	37.1		7.5		14.7		7.2		7.7
Purchase Obligations (3)	729.0		671.5		56.5		0.8		0.2
Repatriation Tax on Undistributed Foreign Earnings (4)	69.4		5.6		11.2		11.0		41.6
Other Liabilities on the Balance Sheet (5)	13.2		1.4		2.8		2.6		6.4
Other Liabilities not on the Balance Sheet (6)	7.9		0.9		0.7		1.4		4.9
Other Financing Obligations (7)	120.9		2.9		8.7		9.1		100.2
Total Contractual Cash Obligations	$	1,233.0	$	701.9	$	115.0	$	49.6	$	366.5

1) Includes $150.0 million in principal amount of 2018 Notes as well as interest; see Note 3, "Debt, Capital Lease Obligations and Other Financing" in Notes to Condensed Consolidated Financial Statements for further information.

2) As of December 29, 2018, capital lease obligations consists of capital lease payments and interest as well as the non-cash financing obligation related to the failed sale-leasebacks in Guadalajara, Mexico.

3) As of December 29, 2018, purchase obligations consist primarily of purchases of inventory and equipment in the ordinary course of business.

4) Consists of U.S. federal income taxes on the deemed repatriation of undistributed foreign earnings due to Tax Reform. Refer to "Liquidity and Capital Resources" above for further detail.

5) As of December 29, 2018, other obligations on the balance sheet included deferred compensation obligations to certain of our former and current executive officers, as well as other key employees, and an asset retirement obligation. We have excluded from the above table the impact of approximately $4.2 million, as of December 29, 2018, related to unrecognized income tax benefits. The Company cannot make reliable estimates of the future cash flows by period related to these obligations.

6) As of December 29, 2018, other obligations not on the balance sheet consist of guarantees and a commitment for salary continuation and certain benefits in the event employment of one executive officer of the Company is terminated without cause. Excluded from the amounts disclosed are certain bonus and incentive compensation amounts, which would be paid on a prorated basis in the year of termination.

7) Includes future minimum lease payments for two facilities in Guadalajara, Mexico, leased under 10-year and 15-year base lease agreements, both of which include two 5-year renewal options.

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DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES

Our critical accounting policies are disclosed in our 2018 annual report on Form 10-K. Other than the item noted below, there were no material changes to these policies.

Revenue Recognition: Topic 606 results in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue is now recognized "over time" as products are produced, as opposed to at a "point in time" based upon shipping terms. Upon adopting the standard, revenue is now recognized over time for arrangements with customers for which: (i) the Company's performance does not create an asset with an alternative use to the Company, and (ii) the Company has an enforceable right to payment for performance completed to date. Revenue recognized over time will be estimated based on costs incurred to date plus a reasonable profit margin. If either of the two conditions noted above are not met to recognize revenue over time, revenue will be recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying arrangement.

The Company recognizes revenue when a contract exists and when, or as, it satisfies a performance obligation by transferring control of a product or service to a customer. Contracts are accounted for when they have approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

The Company generally enters into a master services arrangement that establishes the framework under which business will be conducted. These arrangements represent the master terms and conditions of the Company's services that apply to individual orders, but they do not commit the customer to work with, or to continue to work with, the Company nor do they obligate the customer to any specific volume or pricing of purchases. Moreover, these terms can be amended in appropriate situations. Customer purchase orders are received for specific quantities with predominantly fixed pricing and delivery requirements. Thus, for the majority of our contracts, there is no guarantee of any revenue to the Company until a customer submits a purchase order. As a result, the Company generally considers its arrangement with a customer to be the combination of the master services arrangement and the purchase order. Most of the Company's arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct.

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. A performance obligation is satisfied over time if the Company has an enforceable right to payment, including a reasonable profit margin. Determining if an enforceable right to payment includes a reasonable profit margin requires judgment and is assessed on a contract by contract basis.

If an enforceable right to payment for work-in-process does not exist, revenue is recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contract.

For contracts requiring over time revenue recognition, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which occurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the costs incurred to date.

Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided; if such requirements or obligations exist, then a sale is recognized at the time when such requirements are completed and such obligations are fulfilled.

The Company does not allow for a general right of return. Net sales include amounts billed to customers for shipping and handling and out-of-pocket expenses. The corresponding shipping and handling costs and out-of-pocket expenses are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from net sales.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 1, "Basis of Presentation," in Notes to Condensed Consolidated Financial Statements for further information regarding new accounting pronouncements.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in foreign exchange and interest rates. We selectively use financial instruments to reduce such risks. We do not use derivative financial instruments for speculative purposes.

Foreign Currency Risk

Our international operations create potential foreign exchange risk. Our policy is to selectively hedge our foreign currency denominated transactions in a manner that partially offsets the effects of changes in foreign currency exchange rates. We typically use foreign currency contracts to hedge only those currency exposures associated with certain assets and liabilities denominated in non-functional currencies. Corresponding gains and losses on the underlying transaction generally offset the gains and losses on these foreign currency hedges.

Our percentages of transactions denominated in currencies other than the U.S. dollar for the indicated periods were as follows:

	Three Months Ended
	December 29, 2018	December 30, 2017
Net Sales	9.3%	9.8%
Total Costs	15.6%	14.9%

The Company has evaluated the potential foreign currency exchange rate risk on transactions denominated in currencies other than the U.S. dollar for the periods presented above. Based on the Company’s overall currency exposure, as of December 29, 2018, a 10.0% change in the value of the U.S. dollar relative to our other transactional currencies would not have a material effect on the Company’s financial position, results of operations, or cash flows.

Interest Rate Risk

We have financial instruments, including cash equivalents and debt, which are sensitive to changes in interest rates. The primary objective of our investment activities is to preserve principal, while maximizing yields without significantly increasing market risk. To achieve this, we maintain our portfolio of cash equivalents in a variety of highly rated securities, money market funds and certificates of deposit, and limit the amount of principal exposure to any one issuer. In addition, debt and other financing obligations primarily have fixed rates to further limit exposure.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission ("SEC") is recorded, processed, summarized and reported on a timely basis. The Company’s Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have reviewed and evaluated, with the participation of the Company’s management, the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report (the "Evaluation Date"). Based on such evaluation, the CEO and CFO have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective, at the reasonable assurance level, (a) in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act, and (b) in assuring that information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

During the first quarter of fiscal 2019, other than explained below, there have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Effective September 30, 2018, we adopted the new revenue standard under ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method of adoption. The adoption of this guidance required changes to our processes, policies and internal controls to meet the impact of the new standard and disclosure requirements.

30

PART II. OTHER INFORMATION

ITEM 1A.    Risk Factors

In addition to the risks and uncertainties discussed herein, particularly those discussed in the “Safe Harbor” Cautionary Statement and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, see the risk factors set forth in Part I, Item 1A of our annual report on Form 10-K for the fiscal year ended September 29, 2018.

ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides the specified information about the repurchases of shares by the Company during the three months ended December 29, 2018.

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum approximate dollar value of shares that may yet be purchased under the plans or programs*
September 30, 2018 to October 27, 2018	246,967	$	55.44	246,967	$	165,138,176
October 28, 2018 to November 24, 2018	311,082	$	58.89	311,082	$	146,818,411
November 25, 2018 to December 29, 2018	311,900	$	57.84	311,900	$	128,779,079
Total	869,949	$	57.53	869,949

* On February 14, 2018, the Board of Directors approved a stock repurchase plan under which the Company is authorized to repurchase $200.0 million of its common stock (the "2018 Program"). As of December 29, 2018, $128.8 million of authority remained under that Program.

ITEM 6. Exhibits

The list of exhibits is included below:

Exhibit  No.	Exhibit
31.1	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Reconciliation of ROIC to GAAP and Economic Return Financial Statements
101	The following materials from Plexus Corp.’s Quarterly Report on Form 10-Q for the quarter ended December 29, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Comprehensive Income (Loss), (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Shareholders' Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Plexus Corp.
	Registrant
Date: 2/1/19	/s/ Todd P. Kelsey
	Todd P. Kelsey
	President and Chief Executive Officer
Date: 2/1/19	/s/ Patrick J. Jermain
	Patrick J. Jermain
	Senior Vice President and Chief Financial Officer

32

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Todd P. Kelsey, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Plexus Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 1, 2019

/s/ Todd P. Kelsey

Todd P. Kelsey

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Patrick J. Jermain, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Plexus Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 1, 2019

/s/ Patrick J. Jermain

Patrick J. Jermain

Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Plexus Corp. (the “Company”) on Form 10-Q for the quarterly period ended December 29, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Todd P. Kelsey, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Todd P. Kelsey

Todd P. Kelsey

President and Chief Executive Officer

February 1, 2019

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Plexus Corp. and will be retained by Plexus Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Plexus Corp. (the “Company”) on Form 10-Q for the quarterly period ended December 29, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Patrick J. Jermain, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Patrick J. Jermain

Patrick J. Jermain

Senior Vice President and Chief Financial Officer

February 1, 2019

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Plexus Corp. and will be retained by Plexus Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

										Exhibit 99.1
Return on Invested Capital ("ROIC") and Economic Return Calculations (dollars in thousands):
	Three Months Ended				Twelve Months Ended				Three Months Ended
	Dec 29,				Sept 29,				Dec 30,
	2018				2018				2017
Operating income, as reported		$	36,951			$	118,283			$	31,557
One-time employee bonus	+	—			+	13,512			+	—
Adjusted operating income		$	36,951			$	131,795			$	31,557
	x	4							x	4
Adjusted annualized operating income		$	147,804			$	131,795			$	126,228
Adjusted effective tax rate	x	15		%	x	10		%	x	10		%
Tax impact		22,171				13,180				12,623
Adjusted operating income (tax effected)		$	125,633			$	118,615			$	113,605
Average invested capital	÷	$	862,528		÷	$	735,598		÷	$	701,635
ROIC		14.6		%		16.1		%		16.2		%
Weighted average cost of capital	-	9.0		%	-	9.5		%	-	9.5		%
Economic return		5.6		%		6.6		%		6.7		%

	Three Months Ended
Average Invested Capital	Dec 29,		Sept 29,		Jun 30,		Mar 31,		Dec 30,		Sept 30,
	2018		2018		2018		2018		2017		2017
Equity	$	905,163	$	921,143	$	882,360	$	920,503	$	933,849	$	1,025,939
Plus:
Debt - current	8,633		5,532		6,365		180,772		179,881		286,934
Debt - long-term	187,567		183,085		180,204		27,217		26,047		26,173
Less:
Cash and cash equivalents	(188,799)		(297,269)		(332,723)		(402,470)		(506,694)		(568,860)
	$	912,564	$	812,491	$	736,206	$	726,022	$	633,083	$	770,186

XML

Document And Entity Information - shares	3 Months Ended
	Dec. 29, 2018	Jan. 29, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 29, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Registrant Name	PLEXUS CORP
Entity Central Index Key	0000785786
Current Fiscal Year End Date	--09-28
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		30,914,029

XML

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Income Statement [Abstract]
Net sales	$ 765,544	$ 677,294
Cost of sales	693,161	613,771
Gross profit	72,383	63,523
Selling and administrative expenses	35,432	31,966
Operating income	36,951	31,557
Other income (expense):
Interest expense	(2,249)	(3,725)
Interest income	525	1,555
Miscellaneous, net	(1,112)	(346)
Income before income taxes	34,115	29,041
Income tax expense	11,889	127,534
Net income (loss)	$ 22,226	$ (98,493)
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.71	$ (2.93)
Diluted (in dollars per share)	$ 0.69	$ (2.93)
Weighted average shares outstanding:
Basic (in shares)	31,403	33,567
Diluted (in shares)	32,286	33,567
Other comprehensive income (loss):
Derivative instrument fair value adjustment	$ 378	$ 1,539
Foreign currency translation adjustments	(1,871)	2,142
Other comprehensive income (loss)	(1,493)	3,681
Total comprehensive income (loss)	$ 20,733	$ (94,812)

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Current assets:
Cash and cash equivalents	$ 188,799	$ 297,269
Restricted cash	4,074	417
Accounts receivable, net of allowances of $1,094 and $885, respectively	428,487	394,827
Contract assets	82,775	0
Inventories, net	798,271	794,346
Prepaid expenses and other	31,435	30,302
Total current assets	1,533,841	1,517,161
Property, plant and equipment, net	361,311	341,306
Deferred income taxes	10,832	10,825
Intangible assets, net	7,807	8,239
Other	55,892	55,111
Total non-current assets	435,842	415,481
Total assets	1,969,683	1,932,642
Current liabilities:
Current portion of long-term debt and capital lease obligations	8,633	5,532
Accounts payable	516,989	506,322
Customer deposits	112,663	90,782
Accrued salaries and wages	58,532	66,874
Other accrued liabilities	83,004	68,163
Total current liabilities	779,821	737,673
Long-term debt and capital lease obligations, net of current portion	187,567	183,085
Long-term accrued income taxes payable	63,848	56,130
Deferred income taxes payable	14,610	14,376
Other liabilities	18,674	20,235
Total non-current liabilities	284,699	273,826
Total liabilities	1,064,520	1,011,499
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $.01 par value, 5,000 shares authorized, none issued or outstanding	0	0
Common stock, $.01 par value, 200,000 shares authorized, 52,591 and 52,567 shares issued, respectively, and 30,992 and 31,838 shares outstanding, respectively	526	526
Additional paid-in capital	587,011	581,488
Common stock held in treasury, at cost, 21,599 and 20,729 shares, respectively	(761,189)	(711,138)
Retained earnings	1,092,287	1,062,246
Accumulated other comprehensive loss	(13,472)	(11,979)
Total shareholders’ equity	905,163	921,143
Total liabilities and shareholders’ equity	$ 1,969,683	$ 1,932,642

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 1,094	$ 885
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	52,591,000	52,567,000
Common stock, shares outstanding (in shares)	30,992,000	31,838,000
Treasury stock, shares (in shares)	21,599,000	20,729,000

XML

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands		Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Sep. 30, 2017			33,464,000
Beginning balance at Sep. 30, 2017		$ 1,025,939	$ 519	$ 555,297	$ (574,104)	$ 1,049,206	$ (4,979)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		(98,493)				(98,493)
Other comprehensive income (loss)		3,681					3,681
Treasury shares purchased (in shares)			(158,000)
Treasury shares purchased		(9,547)			(9,547)
Share-based compensation expense		3,896		3,896
Exercise of stock options, including tax benefits (in shares)			301,000
Exercise of stock options, including tax benefits		8,372	$ 3	8,369
Ending balance (in shares) at Dec. 30, 2017			33,607,000
Ending balance at Dec. 30, 2017		933,848	$ 522	567,562	(583,651)	950,713	(1,298)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect adjustment for adoption of new accounting principle in pronouncement	[1]	$ 7,815				7,815
Beginning balance (in shares) at Sep. 29, 2018		31,838,000	31,838,000
Beginning balance at Sep. 29, 2018		$ 921,143	$ 526	581,488	(711,138)	1,062,246	(11,979)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)		22,226				22,226
Other comprehensive income (loss)		(1,493)					(1,493)
Treasury shares purchased (in shares)			(870,000)
Treasury shares purchased		(50,051)			(50,051)
Share-based compensation expense		4,753		4,753
Exercise of stock options, including tax benefits (in shares)			24,000
Exercise of stock options, including tax benefits		$ 770		770
Ending balance (in shares) at Dec. 29, 2018		30,992,000	30,992,000
Ending balance at Dec. 29, 2018		$ 905,163	$ 526	$ 587,011	$ (761,189)	$ 1,092,287	$ (13,472)

[1] See Note 1, "Basis of Presentation", for a discussion of recently adopted accounting pronouncements.

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Cash flows from operating activities
Net income (loss)	$ 22,226	$ (98,493)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	12,574	11,702
Deferred income taxes	943	21,906
Share-based compensation expense	4,753	3,896
Other, net	51	(46)
Changes in operating assets and liabilities, excluding impacts of acquisition:
Accounts receivable	(34,240)	31,461
Contract assets	(6,339)	0
Inventories	(74,344)	(14,016)
Other current and noncurrent assets	(2,221)	(4,453)
Accrued income taxes payable	10,811	106,156
Accounts payable	7,928	8,756
Customer deposits	22,050	(5,195)
Other current and noncurrent liabilities	2,467	7,432
Cash flows (used in) provided by operating activities	(33,341)	69,106
Cash flows from investing activities
Payments for property, plant and equipment	(24,903)	(16,702)
Proceeds from sales of property, plant and equipment	49	173
Business acquisition	1,180	0
Cash flows used in investing activities	(23,674)	(16,529)
Cash flows from financing activities
Borrowings under debt agreements	231,500	216,314
Payments on debt and capital lease obligations	(229,469)	(324,192)
Repurchases of common stock	(50,051)	(9,547)
Proceeds from exercise of stock options	796	8,513
Payments related to tax withholding for share-based compensation	(26)	(141)
Cash flows used in financing activities	(47,250)	(109,053)
Effect of exchange rate changes on cash and cash equivalents	(548)	2,073
Net decrease in cash and cash equivalents and restricted cash	(104,813)	(54,403)
Cash and cash equivalents and restricted cash:
Beginning of period	297,686	569,254
End of period	$ 192,873	$ 514,851

XML

Basis of Presentation

3 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Basis of Presentation:

The accompanying Condensed Consolidated Financial Statements included herein have been prepared by Plexus Corp. and its subsidiaries (together “Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). The accompanying Condensed Consolidated Financial Statements reflect all adjustments, which include normal recurring adjustments necessary for the fair statement of the consolidated financial position of the Company as of December 29, 2018 and September 29, 2018, and the results of operations for the three months ended December 29, 2018 and December 30, 2017, and the cash flows and shareholders' equity for the same three month periods.

The Company’s fiscal year ends on the Saturday closest to September 30. The Company uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter, therefore, ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. All fiscal quarters presented herein included 13 weeks.

Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to the SEC’s rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2018 Annual Report on Form 10-K.

Recently Adopted Accounting Pronouncements:

In October 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-16 related to the income tax consequences of intra-entity transfers of assets other than inventory. The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. The Company adopted this guidance under the modified retrospective approach during the first quarter of fiscal 2019. The Company recognized no net impact to its fiscal 2019 opening Retained Earnings balance upon adoption and does not anticipate any material impact to the Company's future Consolidated Financial Statements.

In August 2016, the FASB issued ASU 2016-15 related to the classification of certain cash receipts and cash payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new standard addresses certain issues where diversity in practice was identified. It also amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities and clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The Company adopted this guidance during the first quarter of fiscal 2019 with no material impact to the Company's Condensed Statements of Cash Flows.

In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue relating to contracts with customers that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services ("Topic 606"). Topic 606 also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and is effective for the Company beginning in the first quarter of fiscal year 2019.

On September 30, 2018, the Company adopted and applied Topic 606 to all contracts using the modified retrospective method of adoption. Upon adoption, the Company recognized an increase to its beginning Retained Earnings balance of $7.8 million. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 13, "Revenue from Contracts with Customers," for further information.

Recently Issued Accounting Pronouncements Not Yet Adopted:

In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and plans to adopt the standard in the first quarter of fiscal year 2020.

In August 2017, the FASB issued ASU 2017-12 related to the accounting for hedging activities. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and the timing of adoption.

The Company believes that no other recently issued accounting standards will have a material impact on its Consolidated Financial Statements, or apply to its operations.

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Inventories

3 Months Ended

Dec. 29, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories as of December 29, 2018 and September 29, 2018 consisted of the following (in thousands):

	December 29, 2018		September 29, 2018
Raw materials	$	637,324	$	579,377
Work-in-process	70,956		102,337
Finished goods	89,991		112,632
Total inventories, net	$	798,271	$	794,346

In certain circumstances, per contractual terms, customer deposits are received by the Company to offset obsolete and excess inventory risks. The total amount of customer deposits related to inventory and included within current liabilities on the accompanying Condensed Consolidated Balance Sheets as of December 29, 2018 and September 29, 2018 was $110.7 million and $87.7 million, respectively.

In the first quarter of fiscal year 2019, the Company adopted and applied Topic 606 to all contracts using the modified retrospective method of adoption. The prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 13, "Revenue from Contracts with Customers," for further information.

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Debt, Capital Lease Obligations and Other Financing

3 Months Ended

Dec. 29, 2018

Debt and Capital Lease Obligations [Abstract]

Debt, Capital Lease Obligations and Other Financing

Debt, Capital Lease Obligations and Other Financing

Debt and capital lease obligations as of December 29, 2018 and September 29, 2018, consisted of the following (in thousands):

	December 29, 2018			September 29, 2018
4.05% Senior Notes, due June 15, 2025	$	100,000		$	100,000
4.22% Senior Notes, due June 15, 2028	50,000			50,000
Borrowings under the credit facility	3,000			—
Capital lease and other financing obligations	44,368			39,857
Unamortized deferred financing fees	(1,168		)	(1,240		)
Total obligations	196,200			188,617
Less: current portion	(8,633		)	(5,532		)
Long-term debt and capital lease obligations, net of current portion	$	187,567		$	183,085

On June 15, 2018, the Company entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which it issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount of 4.05% Series A Senior Notes, due on June 15, 2025, and $50.0 million in principal amount of 4.22% Series B Senior Notes, due on June 15, 2028 (collectively, the “2018 Notes”), in a private placement. The 2018 NPA includes customary operational and financial covenants with which the Company is required to comply, including, among others, maintenance of certain financial ratios such as a total leverage ratio and a minimum interest coverage ratio. The 2018 Notes may be prepaid in whole or in part at any time, subject to payment of a make-whole amount. Interest on the 2018 Notes is payable semiannually. At December 29, 2018, the Company was in compliance with the covenants under the 2018 NPA.

The Company also has a senior unsecured revolving credit facility (the "Credit Facility"), with a $300.0 million maximum commitment that expires on July 5, 2021. The Credit Facility may be further increased to $500.0 million, generally by mutual agreement of the Company and the lenders, subject to certain customary conditions. During the three months ended December 29, 2018, the highest daily borrowing was $107.5 million; the average daily borrowings were $47.6 million. The Company borrowed $231.5 million and repaid $228.5 million of revolving borrowings under the Credit Facility during the three months ended December 29, 2018. The Company was in compliance with all financial covenants relating to the Credit Facility, which are generally consistent with those in the 2018 NPA discussed above. The Company is required to pay a commitment fee on the daily unused revolver credit commitment based on the Company's leverage ratio; the fee was 0.175% as of December 29, 2018.

The fair value of the Company’s debt, excluding capital leases, was $150.5 million and $151.9 million as of December 29, 2018 and September 29, 2018, respectively. The carrying value of the Company's debt, excluding capital leases, was $153.0 million and $150.0 million as of December 29, 2018 and September 29, 2018, respectively. If measured at fair value in the financial statements, the Company's debt would be classified as Level 2 in the fair value hierarchy. Refer to Note 4, "Derivatives," for further information regarding the Company's fair value calculations and classifications.

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Derivatives

3 Months Ended

Dec. 29, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

All derivatives are recognized in the accompanying Condensed Consolidated Balance Sheets at their estimated fair value. The Company uses derivatives to manage the variability of foreign currency obligations. The Company has cash flow hedges related to forecasted foreign currency obligations, in addition to non-designated hedges to manage foreign currency exposures associated with certain foreign currency denominated assets and liabilities. The Company does not enter into derivatives for speculative purposes.

Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in "Accumulated other comprehensive loss" in the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of the cash flows. In the next twelve months, the Company estimates that $1.3 million of unrealized losses, net of tax, related to cash flow hedges will be reclassified from other comprehensive income (loss) into earnings. Changes in the fair value of the non-designated derivatives related to recognized foreign currency denominated assets and liabilities are recorded in "Miscellaneous, net" in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).

The Company enters into forward currency exchange contracts for its operations in Malaysia and Mexico on a rolling basis. TheCompany had cash flow hedges outstanding with a notional value of $74.1 million as of December 29, 2018, and $74.0 million as of September 29, 2018. These forward currency contracts fix the exchange rates for the settlement of future foreign currency obligations that have yet to be realized. The total fair value of the forward currency exchange contracts was a $1.3 millionliability as of December 29, 2018, and a $1.7 millionliability as of September 29, 2018.

The Company had additional forward currency exchange contracts outstanding with a notional value of $34.6 million as of December 29, 2018, and $28.6 million as of September 29, 2018. The Company did not designate these derivative instruments as hedging instruments. The net settlement amount (fair value) related to these contracts is recorded on the Condensed Consolidated Balance Sheets as either a current or long-term asset or liability, depending on the term, and as an element of "Miscellaneous, net" within the Condensed Consolidated Statements of Comprehensive Income (Loss). The total fair value of these derivatives was a $0.4 millionasset as of December 29, 2018, and a $0.1 millionliability as of September 29, 2018.

The tables below present information regarding the fair values of derivative instruments and the effects of derivative instruments on the Company’s Condensed Consolidated Financial Statements:

Fair Values of Derivative Instruments
In thousands of dollars
	Asset Derivatives					Liability Derivatives
		December 29, 2018		September 29, 2018			December 29, 2018		September 29, 2018
Derivatives designated as hedging instruments	Balance Sheet Classification	Fair Value		Fair Value		Balance Sheet Classification	Fair Value		Fair Value
Foreign currency forward contracts	Prepaid expenses and other	$	47	$	292	Other accrued liabilities	$	1,361	$	1,984

Fair Values of Derivative Instruments
In thousands of dollars
	Asset Derivatives					Liability Derivatives
		December 29, 2018		September 29, 2018			December 29, 2018		September 29, 2018
Derivatives not designated as hedging instruments	Balance Sheet Classification	Fair Value		Fair Value		Balance Sheet Classification	Fair Value		Fair Value
Foreign currency forward contracts	Prepaid expenses and other	$	460	$	42	Other accrued liabilities	$	68	$	81

Derivative Impact on Accumulated Other Comprehensive Income (Loss) ("OCI")
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)
	December 29, 2018			December 30, 2017
Foreign currency forward contracts	$	(388	)	$	2,714

Derivative Impact on Gain (Loss) Recognized in Income
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Classification of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)
		December 29, 2018			December 30, 2017
Foreign currency forward contracts	Selling and administrative expenses	$	(82	)	$	105
Foreign currency forward contracts	Cost of sales	$	(684	)	$	991
Treasury Rate Locks	Interest expense	$	—		$	79

Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized on Derivatives in Income	Amount of Gain (Loss) on Derivatives Recognized in Income
		December 29, 2018		December 30, 2017
Foreign currency forward contracts	Miscellaneous, net	$	787	$	(535	)

There were no gains or losses recognized in income for derivatives related to ineffective portions and amounts excluded from effectiveness testing for the three months ended December 29, 2018 and December 30, 2017.

Fair Value Measurements:

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses quoted market prices when available or discounted cash flows to calculate fair value. The accounting guidance establishes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are:

Level 1:  Quoted (observable) market prices in active markets for identical assets or liabilities.

Level 2:  Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

The following table lists the fair values of liabilities of the Company’s derivatives as of December 29, 2018 and September 29, 2018, by input level:

Fair Value Measurements Using Input Levels (Liability)/Asset
In thousands of dollars
December 29, 2018	Level 1		Level 2			Level 3		Total
Derivatives
Forward currency forward contracts	$	—	$	(922	)	$	—	$	(922	)
September 29, 2018
Derivatives
Forward currency forward contracts	$	—	$	(1,731	)	$	—	$	(1,731	)

The fair value of foreign currency forward contracts is determined using a market approach, which includes obtaining directly or indirectly observable values from third parties active in the relevant markets. Inputs in the fair value of the foreign currency forward contracts include prevailing forward and spot prices for currency and interest rate forward curves.

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Income Taxes

3 Months Ended

Dec. 29, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense for the three months ended December 29, 2018 was $11.9 million. Income tax expense for the three months ended December 30, 2017 was $127.5 million.

On December 22, 2017, the U.S. Tax Cuts & Jobs Act was enacted ("Tax Reform"). Due to the complexities in implementing Tax Reform, the SEC issued Staff Accounting Bulletin 118, which allowed the Company to record a tax expense when uncertainty or other factors may impact the final outcome. During fiscal year 2018, the Company made reasonable estimates related to the impact of Tax Reform and, in accordance with SAB118, recorded a net income tax expense of $85.9 million. The components of the tax expense included $61.2 million of U.S. federal and state taxes on deemed repatriation of historical undistributed foreign earnings, which are payable over an eight year period beginning in fiscal 2019, $21.8 million of foreign withholding taxes due to a change in the Company’s permanently reinvested assertion on foreign earnings that are payable upon repatriation to the U.S. and $2.9 million for unrecognized tax benefits related to the implementation of Tax Reform.

For the three months ended December 29, 2018, the Company recorded a $7.0 million increase to its income tax expense, inclusive of unrecognized tax benefits, as a result of additional proposed guidance issued by the U.S. Department of the Treasury on November 28, 2018, related to Tax Reform. The guidance related to the treatment of foreign taxes paid that impacted the tax on the deemed repatriation of historical undistributed foreign earnings. The Company's final tax expense recorded for Tax Reform was $92.9 million. Additionally, the effects of the Global Intangible Low-Taxed Income provision added by Tax Reform have been recorded in the three months ended December 29, 2018. The Company has elected to treat the income tax effects of this provision as a period cost.

The effective tax rates for the three months ended December 29, 2018 and December 30, 2017, were 34.9% and 439.2%, respectively. The effective tax rate for the three months ended December 29, 2018 decreased from the effective tax rate for the three months ended December 30, 2017, primarily due to the impact of Tax Reform.

For the three months ended December 29, 2018, the Company recorded an income tax benefit of $1.7 million primarily related to unrecognized tax benefits as the U.S. Department of the Treasury issued additional guidance for Tax Reform. The Company recognizes accrued interest and penalties on uncertain tax positions as a component of income tax expense. The amount of interest and penalties recorded for the three months ended December 29, 2018 was not material.

One or more uncertain tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company's consolidated results of operations, financial position and cash flows. The Company is not currently under examination by taxing authorities in the U.S. or any foreign jurisdictions in which the Company operates.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a net deferred tax asset will not be realized. During the three months ended December 29, 2018, the Company continued to record a full valuation allowance against its net deferred tax assets in certain jurisdictions within the EMEA segment and a partial valuation against its net deferred tax assets in certain jurisdictions within the AMER segment, as it was more likely than not that these assets would not be fully realized based primarily on historical performance. The Company will continue to provide a valuation allowance against its net deferred tax assets in each of the applicable jurisdictions going forward until it determines it is more likely than not that the deferred tax assets will be realized.

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Earnings Per Share

3 Months Ended

Dec. 29, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share for the three months ended December 29, 2018 and December 30, 2017 (in thousands, except per share amounts):

	Three Months Ended
	December 29, 2018		December 30, 2017
Net income (loss)	22,226		(98,493		)
Basic weighted average common shares outstanding	31,403		33,567
Dilutive effect of share-based awards outstanding	883		—
Diluted weighted average shares outstanding	32,286		33,567
Earnings (loss) per share:
Basic	$	0.71	$	(2.93	)
Diluted	$	0.69	$	(2.93	)

For the three months ended December 29, 2018, share-based awards for approximately 0.1 million shares were not included in the computation of diluted earnings per share as they were antidilutive. For the three months ended December 30, 2017, there were no antidilutive shares, but the total number of potentially dilutive share-based awards was 1.1 million; however, these awards were not included in the computation of diluted loss per share, as doing so would have decreased the loss per share.

See also Note 11, "Shareholders' Equity," for information regarding the Company's share repurchase plans.

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Share-Based Compensation

3 Months Ended

Dec. 29, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company recognized $4.8 million and $3.9 million of compensation expense associated with share-based awards for the three months ended December 29, 2018 and December 30, 2017, respectively.

The Company uses the Black-Scholes valuation model to determine the fair value of stock options and stock-settled stock appreciation rights ("SARs"). The Company uses its stock price on grant date as the fair value assigned to restricted stock units ("RSUs").

Performance stock units ("PSUs") are payable in shares of the Company's common stock. Beginning for fiscal 2017 grants, PSUs vest based on the relative total shareholder return ("TSR") of the Company's common stock as compared to the companies in the Russell 3000 index, a market condition, and the Company's economic return performance during the three year performance period, a performance condition. The Company uses the Monte Carlo valuation model to determine the fair value of PSUs at the date of grant for PSUs that vest based on the relative TSR of the Company's common stock. The Company uses its stock price on grant date as the fair value assigned to PSUs that vest based on the Company's economic return performance. The PSUs granted in fiscal 2016 and prior years vest based solely on the relative TSR of the Company's common stock as compared to companies in the Russell 3000 Index during a three year performance period. The number of shares that may be issued pursuant to PSUs ranges from zero to 0.4 million and is dependent upon the Company's TSR and economic return performance over the applicable performance periods.

The Company recognizes share-based compensation expense over the share-based awards' vesting period.

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Litigation

3 Months Ended

Dec. 29, 2018

Commitments and Contingencies Disclosure [Abstract]

Litigation

Litigation

The Company is party to lawsuits in the ordinary course of business. Management does not believe that these proceedings, individually or in the aggregate, will have a material positive or adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

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Reportable Segments

3 Months Ended

Dec. 29, 2018

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources. The Company uses an internal management reporting system, which provides important financial data to evaluate performance and allocate the Company’s resources on a regional basis. Net sales for the segments are attributed to the region in which the product is manufactured or the service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other expenses. Corporate and other expenses primarily represent corporate selling and administrative expenses, and restructuring costs and other charges, if any. These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the segments are the same as for the Company taken as a whole.

Information about the Company’s three reportable segments for the three months ended December 29, 2018 and December 30, 2017, respectively, is as follows (in thousands):

	Three Months Ended
	December 29, 2018			December 30, 2017
Net sales:
AMER	$	353,867		$	299,043
APAC	378,112			346,123
EMEA	72,298			63,832
Elimination of inter-segment sales	(38,733		)	(31,704		)
	$	765,544		$	677,294
Operating income (loss):
AMER	$	14,450		$	10,523
APAC	51,811			50,532
EMEA	996			(1,121		)
Corporate and other costs	(30,306		)	(28,377		)
	$	36,951		$	31,557
Other income (expense):
Interest expense	(2,249		)	(3,725		)
Interest income	525			1,555
Miscellaneous, net	(1,112		)	(346		)
Income before income taxes	34,115			29,041

	December 29, 2018		September 29, 2018
Total assets:
AMER	$	718,078	$	645,791
APAC	989,574		937,510
EMEA	193,002		193,797
Corporate and eliminations	69,029		155,544
	$	1,969,683	$	1,932,642

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Guarantees

3 Months Ended

Dec. 29, 2018

Guarantees [Abstract]

Guarantees

Guarantees

The Company offers certain indemnifications under its customer manufacturing agreements. In the normal course of business, the Company may from time to time be obligated to indemnify its customers or its customers’ customers against damages or liabilities arising out of the Company’s negligence, misconduct, breach of contract, or infringement of third party intellectual property rights. Certain agreements have extended broader indemnification, and while most agreements have contractual limits, some do not. However, the Company generally does not provide for such indemnities and seeks indemnification from its customers for damages or liabilities arising out of the Company’s adherence to customers’ specifications or designs or use of materials furnished, or directed to be used, by its customers. The Company does not believe its obligations under such indemnities are material.

In the normal course of business, the Company also provides its customers a limited warranty covering workmanship, and in some cases materials, on products manufactured by the Company. Such warranty generally provides that products will be free from defects in the Company’s workmanship and meet mutually agreed-upon specifications for periods generally ranging from 12 months to 24 months. The Company’s obligation is generally limited to correcting, at its expense, any defect by repairing or replacing such defective product. The Company’s warranty generally excludes defects resulting from faulty customer-supplied components, design defects or damage caused by any party or cause other than the Company.

The Company provides for an estimate of costs that may be incurred under its limited warranty at the time product revenue is recognized and establishes additional reserves for specifically identified product issues. These costs primarily include labor and materials, as necessary, associated with repair or replacement and are included in the Company's accompanying Condensed Consolidated Balance Sheets in "Other accrued liabilities." The primary factors that affect the Company’s warranty liability include the value and the number of shipped units and historical and anticipated rates of warranty claims. As these factors are impacted by actual experience and future expectations, the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

Below is a table summarizing the activity related to the Company’s limited warranty liability for the three months ended December 29, 2018 and December 30, 2017 (in thousands):

	Three Months Ended
	December 29, 2018			December 30, 2017
Reserve balance, beginning of period	$	6,646		$	4,756
Accruals for warranties issued during the period	1,900			1,017
Settlements (in cash or in kind) during the period	(1,255		)	(1,352		)
Reserve balance, end of period	$	7,291		$	4,421

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Shareholders' Equity

3 Months Ended

Dec. 29, 2018

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders' Equity

On February 14, 2018, the Board of Directors approved a stock repurchase plan under which the Company is authorized to repurchase $200.0 million of its common stock (the "2018 Program"). The 2018 Program commenced upon completion of the 2016 Program, as defined below. During the three months ended December 29, 2018, the Company repurchased 869,949 shares under this program for $50.1 million, at an average price of $57.53 per share. As of December 29, 2018, $128.8 million of authority remained under the 2018 Program.

On June 6, 2016, the Board of Directors authorized a multi-year stock repurchase program under which the Company was authorized to repurchase up to $150.0 million of its common stock beginning in fiscal 2017 (the "2016 Program"). During the three months ended December 30, 2017, the Company repurchased 158,466 shares for $9.5 million, at an average price of $60.25 per share.

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

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Trade Accounts Receivable Sale Programs

3 Months Ended

Dec. 29, 2018

Receivables [Abstract]

Trade Accounts Receivable Sale Programs

Trade Accounts Receivable Sale Programs

The Company has Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch, formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd. (the "MUFG RPA"), and HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA"), under which the Company may elect to sell receivables, at a discount, on an ongoing basis. As of December 29, 2018, the maximum facility amounts were $230.0 million and $60.0 million, respectively. The MUFG RPA is subject to expiration on October 3, 2019, but 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.

Transfers of receivables under the programs are accounted for as sales and, accordingly, receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Proceeds from the transfer reflect the face value of the receivables less a discount. The sale discount is recorded within "Miscellaneous, net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale.

The Company sold $232.5 million and $162.4 million of trade accounts receivable under these programs during the three months ended December 29, 2018 and December 30, 2017, respectively, in exchange for cash proceeds of $231.2 million and $161.5 million, respectively.

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Revenue From Contracts with Customers

3 Months Ended

Dec. 29, 2018

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Impact of Adopting Topic 606

The Company adopted Topic 606 using the modified retrospective method. The new standard resulted in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue is recognized "over time," as products are produced, as opposed to at a "point in time" based upon shipping terms. As a result of adoption of Topic 606, the following adjustments were made to the opening balances of the Company's Condensed Consolidated Balance Sheets (in thousands):

	Balance at September 29, 2018		Impacts due to adoption of Topic 606			Balance at September 30, 2018
ASSETS
Contract assets	$	—	$	76,417		$	76,417
Inventories	794,346		(68,959		)	725,387
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	68,163	$	(357	)	$	67,806
Retained earnings	1,062,246		7,815			1,070,061

The cumulative effect of applying the new guidance in Topic 606 resulted in the Company increasing its opening Retained Earnings balance by $7.8 million due to certain customer contracts requiring revenue recognition over time. Contract assets in the amount of $76.4 million were recognized due to the recognition of revenue on an over time basis for some customers rather than at a specific point in time. Inventory declined $69.0 million primarily due to earlier recognition of costs related to the contracts for which revenue was recognized on an over time basis. The decline in other accrued liabilities is primarily due to the reclassification of deferred revenue to contract assets for prepayments associated with revenue recognized over time, partially offset by an increase in taxes payable associated with the increase in revenue recognized over time.

The effects of the adoption on the Company's Condensed Consolidated Financial Statements for the three months ended December 29, 2018 were as follows (in thousands):

	Three Months Ended
	December 29, 2018 As Reported		Adjustments due to Topic 606		December 29, 2018 As Adjusted - Without Adoption of ASC Topic 606
Net sales	$	765,544	$	6,185	$	759,359
Cost of sales	693,161		5,194		687,967
Gross profit	72,383		991		71,392
Operating income	36,951		991		35,960
Income before income taxes	34,115		991		33,124
Income tax expense	11,889		194		11,695
Net income	$	22,226	$	797	$	21,429

	December 29, 2018 As Reported		Effect of the Adoption of ASC Topic 606			December 29, 2018 As Adjusted - Without Adoption of ASC Topic 606
ASSETS
Contract assets	$	82,775	$	82,775		$	—
Inventories	798,271		(74,152		)	872,423
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	83,004	$	11		$	82,993
Retained earnings	1,092,287		8,612			1,083,675

Significant Judgments

Topic 606 results in a change to the timing of revenue recognition for a significant portion of the Company's revenue, whereby revenue is now recognized "over time" as products are produced, as opposed to at a "point in time" based upon shipping terms. Upon adopting the standard, revenue is now recognized over time for arrangements with customers for which: (i) the Company's performance does not create an asset with an alternative use to the Company, and (ii) the Company has an enforceable right to payment for performance completed to date. Revenue recognized over time will be estimated based on costs incurred to date plus a reasonable profit margin. If either of the two conditions noted above are not met to recognize revenue over time, revenue will be recognized following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying arrangement.

The Company recognizes revenue when a contract exists and when, or as, it satisfies a performance obligation by transferring control of a product or service to a customer. Contracts are accounted for when they have approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

The Company generally enters into a master services arrangement that establishes the framework under which business will be conducted. These arrangements represent the master terms and conditions of the Company's services that apply to individual orders, but they do not commit the customer to work with, or to continue to work with, the Company nor do they obligate the customer to any specific volume or pricing of purchases. Moreover, these terms can be amended in appropriate situations. Customer purchase orders are received for specific quantities with predominantly fixed pricing and delivery requirements. Thus, for the majority of our contracts, there is no guarantee of any revenue to the Company until a customer submits a purchase order. As a result, the Company generally considers its arrangement with a customer to be the combination of the master services arrangement and the purchase order. Most of the Company's arrangements with customers create a single performance obligation as the promise to transfer the individual manufactured product or service is capable of being distinct.

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. A performance obligation is satisfied over time if the Company has an enforceable right to payment, including a reasonable profit margin. Determining if an enforceable right to payment includes a reasonable profit margin requires judgment and is assessed on a contract by contract basis.

Generally, there are no subjective customer acceptance requirements or further obligations related to goods or services provided; if such requirements or obligations exist, then a sale is recognized at the time when such requirements are completed and such obligations are fulfilled.

The Company does not allow for a general right of return. Net sales include amounts billed to customers for shipping and handling and out-of-pocket expenses. The corresponding shipping and handling costs and out-of-pocket expenses are included in cost of sales. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from net sales.

Practical Expedients

The Company applied the following practical expedients during the adoption of Topic 606:

• The Company elected not to disclose information about remaining performance obligations as its performance obligations generally have expected durations of one year or less.

• The Company will account for certain shipping and handling as activities to fulfill the promise to transfer the good, instead of a promised service to its customer.

• The Company elected not to adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less.

Contract Costs

For contracts requiring over time revenue recognition, the selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. The Company uses a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which occurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress, the extent of progress towards completion is measured based on the costs incurred to date.

There were no other costs to obtain or fulfill customer contracts.

Disaggregated Revenue

The tables below include the Company’s net sales for the three months ended December 29, 2018, disaggregated by geographic reportable segment and market sector (in thousands):

	Three Months Ended December 29, 2018
	Reportable Segment:
	AMER		APAC		EMEA		Total
Market Sector:
Healthcare/Life Sciences	$	115,765	$	152,106	$	32,707	$	300,578
Industrial/Commercial	83,718		116,271		19,153		219,142
Communications	90,464		30,975		1,920		123,359
Aerospace/Defense	62,373		42,094		17,998		122,465
External revenue	$	352,320	$	341,446	$	71,778	$	765,544
Inter-segment sales	1,547		36,666		520		38,733
Total sales revenue	$	353,867	$	378,112	$	72,298	$	804,277

For the three months ended December 29, 2018, 89.0% of the Company's revenue was recognized as products and services were transferred over time.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, contract assets, and deferred revenue on the Company’s accompanying Condensed Consolidated Balance Sheets.

Contract Assets: For performance obligations satisfied at a point in time, billing occurs subsequent to revenue recognition, at which point the customer has been billed and the resulting asset is recorded within accounts receivable. For performance obligations satisfied over time as work progresses, the Company has an unconditional right to payment which results in the recognition of contract assets. The following table summarizes the activity in the Company's contract assets during the three months ended December 29, 2018 (in thousands):

	Contract Assets
Beginning balance, September 29, 2018	$	—
Cumulative effect adjustment at September 29, 2018	76,417
Revenue recognized	681,712
Amounts collected or invoiced	(675,354		)
Ending balance, December 29, 2018	$	82,775

Deferred Revenue: Deferred revenue is recorded when consideration is received from a customer prior to transferring goods or services to the customer under the terms of the contract, which is included in other accrued liabilities. The advance payment is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract, offset obsolete and excess inventory risks and to protect the company from the other party failing to adequately complete some or all of its obligations under the contract. Deferred revenue is recognized into revenue when all revenue recognition criteria are met. For performance obligations satisfied over time, recognition will occur as work progress, otherwise deferred revenue will be recognized based upon shipping terms.

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Acquisition

3 Months Ended

Dec. 29, 2018

Acquisition [Abstract]

Acquisition

Acquisition

On July 27, 2018, the Company purchased the assets of one of the business lines of Cascade Controls, Inc. ("Cascade"), a new product introduction company in Portland, Oregon, for $12.4 million in cash, subject to certain customary post-closing adjustments. In the three months ended December 29, 2018, the Company received a $1.2 million purchase price adjustment as a result of a post-closing adjustment.

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Basis of Presentation (Policies)

3 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation:

The accompanying Condensed Consolidated Financial Statements included herein have been prepared by Plexus Corp. and its subsidiaries (together “Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”). The accompanying Condensed Consolidated Financial Statements reflect all adjustments, which include normal recurring adjustments necessary for the fair statement of the consolidated financial position of the Company as of December 29, 2018 and September 29, 2018, and the results of operations for the three months ended December 29, 2018 and December 30, 2017, and the cash flows and shareholders' equity for the same three month periods.

The Company’s fiscal year ends on the Saturday closest to September 30. The Company uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter, therefore, ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. All fiscal quarters presented herein included 13 weeks.

Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted pursuant to the SEC’s rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the Condensed Consolidated Financial Statements included herein are adequate to make the information presented not misleading. It is suggested that these Condensed Consolidated Financial Statements be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2018 Annual Report on Form 10-K.

Recently Adopted and Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements:

In October 2016, the Financial Accounting Standards Board (the "FASB") issued ASU 2016-16 related to the income tax consequences of intra-entity transfers of assets other than inventory. The new standard eliminates the exception for an intra-entity transfer of an asset other than inventory and requires an entity to recognize the income tax consequences when the transfer occurs. The Company adopted this guidance under the modified retrospective approach during the first quarter of fiscal 2019. The Company recognized no net impact to its fiscal 2019 opening Retained Earnings balance upon adoption and does not anticipate any material impact to the Company's future Consolidated Financial Statements.

In August 2016, the FASB issued ASU 2016-15 related to the classification of certain cash receipts and cash payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new standard addresses certain issues where diversity in practice was identified. It also amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities and clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The Company adopted this guidance during the first quarter of fiscal 2019 with no material impact to the Company's Condensed Statements of Cash Flows.

In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue relating to contracts with customers that depicts the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services ("Topic 606"). Topic 606 also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and is effective for the Company beginning in the first quarter of fiscal year 2019.

On September 30, 2018, the Company adopted and applied Topic 606 to all contracts using the modified retrospective method of adoption. Upon adoption, the Company recognized an increase to its beginning Retained Earnings balance of $7.8 million. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Refer to Note 13, "Revenue from Contracts with Customers," for further information.

Recently Issued Accounting Pronouncements Not Yet Adopted:

In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and plans to adopt the standard in the first quarter of fiscal year 2020.

In August 2017, the FASB issued ASU 2017-12 related to the accounting for hedging activities. The pronouncement expands and refines hedge accounting, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The Company is currently in the process of assessing the impact of the adoption of the new standard on its Consolidated Financial Statements and the timing of adoption.

The Company believes that no other recently issued accounting standards will have a material impact on its Consolidated Financial Statements, or apply to its operations.

Fair Value of Financial Instruments

Fair Value Measurements:

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses quoted market prices when available or discounted cash flows to calculate fair value. The accounting guidance establishes a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are:

Level 1:  Quoted (observable) market prices in active markets for identical assets or liabilities.

Level 2:  Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

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Inventories (Tables)

3 Months Ended

Dec. 29, 2018

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories as of December 29, 2018 and September 29, 2018 consisted of the following (in thousands):

	December 29, 2018		September 29, 2018
Raw materials	$	637,324	$	579,377
Work-in-process	70,956		102,337
Finished goods	89,991		112,632
Total inventories, net	$	798,271	$	794,346

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Debt, Capital Lease Obligations and Other Financing (Tables)

3 Months Ended

Dec. 29, 2018

Debt and Capital Lease Obligations [Abstract]

Schedule of Debt and Capital Lease Obligations

Debt and capital lease obligations as of December 29, 2018 and September 29, 2018, consisted of the following (in thousands):

	December 29, 2018			September 29, 2018
4.05% Senior Notes, due June 15, 2025	$	100,000		$	100,000
4.22% Senior Notes, due June 15, 2028	50,000			50,000
Borrowings under the credit facility	3,000			—
Capital lease and other financing obligations	44,368			39,857
Unamortized deferred financing fees	(1,168		)	(1,240		)
Total obligations	196,200			188,617
Less: current portion	(8,633		)	(5,532		)
Long-term debt and capital lease obligations, net of current portion	$	187,567		$	183,085

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Derivatives (Tables)

3 Months Ended

Dec. 29, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Values of Derivative Instruments

The tables below present information regarding the fair values of derivative instruments and the effects of derivative instruments on the Company’s Condensed Consolidated Financial Statements:

Fair Values of Derivative Instruments
In thousands of dollars
	Asset Derivatives					Liability Derivatives
		December 29, 2018		September 29, 2018			December 29, 2018		September 29, 2018
Derivatives designated as hedging instruments	Balance Sheet Classification	Fair Value		Fair Value		Balance Sheet Classification	Fair Value		Fair Value
Foreign currency forward contracts	Prepaid expenses and other	$	47	$	292	Other accrued liabilities	$	1,361	$	1,984

Fair Values of Derivative Instruments
In thousands of dollars
	Asset Derivatives					Liability Derivatives
		December 29, 2018		September 29, 2018			December 29, 2018		September 29, 2018
Derivatives not designated as hedging instruments	Balance Sheet Classification	Fair Value		Fair Value		Balance Sheet Classification	Fair Value		Fair Value
Foreign currency forward contracts	Prepaid expenses and other	$	460	$	42	Other accrued liabilities	$	68	$	81

Schedule of Derivative Impact on Accumulated Other Comprehensive Income (Loss)

Derivative Impact on Accumulated Other Comprehensive Income (Loss) ("OCI")
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)
	December 29, 2018			December 30, 2017
Foreign currency forward contracts	$	(388	)	$	2,714

Schedule of Derivative Impact on Gain (Loss) Recognized in Income (Designated as Hedging Instruments)

Derivative Impact on Gain (Loss) Recognized in Income
for the Three Months Ended
In thousands of dollars
Derivatives in Cash Flow Hedging Relationships	Classification of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)
		December 29, 2018			December 30, 2017
Foreign currency forward contracts	Selling and administrative expenses	$	(82	)	$	105
Foreign currency forward contracts	Cost of sales	$	(684	)	$	991
Treasury Rate Locks	Interest expense	$	—		$	79

Schedule of Derivative Impact on Gain (Loss) Recognized in Income (Not Designated as Hedging Instruments)

Derivatives Not Designated as Hedging Instruments	Location of (Loss) Gain Recognized on Derivatives in Income	Amount of Gain (Loss) on Derivatives Recognized in Income
		December 29, 2018		December 30, 2017
Foreign currency forward contracts	Miscellaneous, net	$	787	$	(535	)

Schedule of Derivatives Fair Value Measurements Using Input Levels

The following table lists the fair values of liabilities of the Company’s derivatives as of December 29, 2018 and September 29, 2018, by input level:

Fair Value Measurements Using Input Levels (Liability)/Asset
In thousands of dollars
December 29, 2018	Level 1		Level 2			Level 3		Total
Derivatives
Forward currency forward contracts	$	—	$	(922	)	$	—	$	(922	)
September 29, 2018
Derivatives
Forward currency forward contracts	$	—	$	(1,731	)	$	—	$	(1,731	)

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Earnings Per Share (Tables)

3 Months Ended

Dec. 29, 2018

Earnings Per Share [Abstract]

Reconciliation of Amounts Utilized in Computation of Basic and Diluted Earnings Per Share

The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share for the three months ended December 29, 2018 and December 30, 2017 (in thousands, except per share amounts):

	Three Months Ended
	December 29, 2018		December 30, 2017
Net income (loss)	22,226		(98,493		)
Basic weighted average common shares outstanding	31,403		33,567
Dilutive effect of share-based awards outstanding	883		—
Diluted weighted average shares outstanding	32,286		33,567
Earnings (loss) per share:
Basic	$	0.71	$	(2.93	)
Diluted	$	0.69	$	(2.93	)

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Reportable Segments (Tables)

3 Months Ended

Dec. 29, 2018

Segment Reporting [Abstract]

Schedule of Reportable Segments Information

Information about the Company’s three reportable segments for the three months ended December 29, 2018 and December 30, 2017, respectively, is as follows (in thousands):

	Three Months Ended
	December 29, 2018			December 30, 2017
Net sales:
AMER	$	353,867		$	299,043
APAC	378,112			346,123
EMEA	72,298			63,832
Elimination of inter-segment sales	(38,733		)	(31,704		)
	$	765,544		$	677,294
Operating income (loss):
AMER	$	14,450		$	10,523
APAC	51,811			50,532
EMEA	996			(1,121		)
Corporate and other costs	(30,306		)	(28,377		)
	$	36,951		$	31,557
Other income (expense):
Interest expense	(2,249		)	(3,725		)
Interest income	525			1,555
Miscellaneous, net	(1,112		)	(346		)
Income before income taxes	34,115			29,041

	December 29, 2018		September 29, 2018
Total assets:
AMER	$	718,078	$	645,791
APAC	989,574		937,510
EMEA	193,002		193,797
Corporate and eliminations	69,029		155,544
	$	1,969,683	$	1,932,642

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Guarantees (Tables)

3 Months Ended

Dec. 29, 2018

Guarantees [Abstract]

Schedule of Activity Related to Limited Warranty Liability

Below is a table summarizing the activity related to the Company’s limited warranty liability for the three months ended December 29, 2018 and December 30, 2017 (in thousands):

	Three Months Ended
	December 29, 2018			December 30, 2017
Reserve balance, beginning of period	$	6,646		$	4,756
Accruals for warranties issued during the period	1,900			1,017
Settlements (in cash or in kind) during the period	(1,255		)	(1,352		)
Reserve balance, end of period	$	7,291		$	4,421

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Revenue From Contracts with Customers (Tables)

3 Months Ended

Dec. 29, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Impacts of Adoption of New Accounting Pronouncement

As a result of adoption of Topic 606, the following adjustments were made to the opening balances of the Company's Condensed Consolidated Balance Sheets (in thousands):

	Balance at September 29, 2018		Impacts due to adoption of Topic 606			Balance at September 30, 2018
ASSETS
Contract assets	$	—	$	76,417		$	76,417
Inventories	794,346		(68,959		)	725,387
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	68,163	$	(357	)	$	67,806
Retained earnings	1,062,246		7,815			1,070,061

The effects of the adoption on the Company's Condensed Consolidated Financial Statements for the three months ended December 29, 2018 were as follows (in thousands):

	Three Months Ended
	December 29, 2018 As Reported		Adjustments due to Topic 606		December 29, 2018 As Adjusted - Without Adoption of ASC Topic 606
Net sales	$	765,544	$	6,185	$	759,359
Cost of sales	693,161		5,194		687,967
Gross profit	72,383		991		71,392
Operating income	36,951		991		35,960
Income before income taxes	34,115		991		33,124
Income tax expense	11,889		194		11,695
Net income	$	22,226	$	797	$	21,429

	December 29, 2018 As Reported		Effect of the Adoption of ASC Topic 606			December 29, 2018 As Adjusted - Without Adoption of ASC Topic 606
ASSETS
Contract assets	$	82,775	$	82,775		$	—
Inventories	798,271		(74,152		)	872,423
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accrued liabilities	$	83,004	$	11		$	82,993
Retained earnings	1,092,287		8,612			1,083,675

Schedule of Disaggregation of Revenue

The tables below include the Company’s net sales for the three months ended December 29, 2018, disaggregated by geographic reportable segment and market sector (in thousands):

	Three Months Ended December 29, 2018
	Reportable Segment:
	AMER		APAC		EMEA		Total
Market Sector:
Healthcare/Life Sciences	$	115,765	$	152,106	$	32,707	$	300,578
Industrial/Commercial	83,718		116,271		19,153		219,142
Communications	90,464		30,975		1,920		123,359
Aerospace/Defense	62,373		42,094		17,998		122,465
External revenue	$	352,320	$	341,446	$	71,778	$	765,544
Inter-segment sales	1,547		36,666		520		38,733
Total sales revenue	$	353,867	$	378,112	$	72,298	$	804,277

Schedule of Contract Assets

The following table summarizes the activity in the Company's contract assets during the three months ended December 29, 2018 (in thousands):

	Contract Assets
Beginning balance, September 29, 2018	$	—
Cumulative effect adjustment at September 29, 2018	76,417
Revenue recognized	681,712
Amounts collected or invoiced	(675,354		)
Ending balance, December 29, 2018	$	82,775

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Basis of Presentation Narrative (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 30, 2018	Sep. 29, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings	$ 1,092,287	$ 1,070,061	$ 1,062,246
ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings	$ 8,612
Adjustments due to the adoption of ASU 2014-09 | ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings		$ 7,815

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 30, 2018	Sep. 29, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 637,324		$ 579,377
Work-in-process	70,956		102,337
Finished goods	89,991		112,632
Total inventories, net	$ 798,271	$ 725,387	$ 794,346

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Inventories - Narrative (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Inventory [Line Items]
Customer deposits	$ 112,663	$ 90,782
Inventory
Inventory [Line Items]
Customer deposits	$ 110,700	$ 87,700

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Debt, Capital Lease Obligations and Other Financing - Schedule of Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Debt Instrument [Line Items]
Long-term debt, gross	$ 153,000	$ 150,000
Capital lease and other financing obligations	44,368	39,857
Unamortized deferred financing fees	(1,168)	(1,240)
Total obligations	196,200	188,617
Less: current portion	(8,633)	(5,532)
Long-term debt and capital lease obligations, net of current portion	187,567	183,085
Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 150,000	$ 150,000
Senior Notes | 4.05% Senior Notes, due June 15, 2025
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.05%	4.05%
Long-term debt, gross	$ 100,000	$ 100,000
Senior Notes | 4.22% Senior Notes, due June 15, 2028
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.22%	4.22%
Long-term debt, gross	$ 50,000	$ 50,000
Line of Credit | Borrowings under the credit facility
Debt Instrument [Line Items]
Long-term debt, gross	$ 3,000

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Debt, Capital Lease Obligations and Other Financing - Narrative (Details) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Debt Instrument [Line Items]
Amount of debt outstanding	$ 153,000,000		$ 150,000,000
Amount borrowed	231,500,000	$ 216,314,000
Debt, Fair Value	150,500,000		151,900,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum commitment	300,000,000.0
Amount credit facility may be further increased	500,000,000.0
Highest daily borrowings	107,500,000
Average daily borrowings	$ 47,600,000
Annual commitment fee	0.175%
Senior Notes
Debt Instrument [Line Items]
Amount of debt outstanding	$ 150,000,000		150,000,000
Senior Notes | 4.05% Senior Notes, due June 15, 2025
Debt Instrument [Line Items]
Amount of debt outstanding	$ 100,000,000		$ 100,000,000
Interest rate	4.05%		4.05%
Senior Notes | 4.22% Senior Notes, due June 15, 2028
Debt Instrument [Line Items]
Amount of debt outstanding	$ 50,000,000		$ 50,000,000
Interest rate	4.22%		4.22%
Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Amount of debt outstanding	$ 3,000,000
Amount borrowed	231,500,000
Amount repaid	$ 228,500,000

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Derivatives - Schedule of Fair Values of Derivative Instruments (Details) - Foreign currency forward contracts - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Derivatives not designated as hedging instruments
Derivatives, Fair Value [Line Items]
Asset Derivatives	$ 400
Liability Derivatives		$ 100
Prepaid expenses and other | Derivatives designated as hedging instruments
Derivatives, Fair Value [Line Items]
Asset Derivatives	47	292
Prepaid expenses and other | Derivatives not designated as hedging instruments
Derivatives, Fair Value [Line Items]
Asset Derivatives	460	42
Other accrued liabilities | Derivatives designated as hedging instruments
Derivatives, Fair Value [Line Items]
Liability Derivatives	1,361	1,984
Other accrued liabilities | Derivatives not designated as hedging instruments
Derivatives, Fair Value [Line Items]
Liability Derivatives	$ 68	$ 81

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Derivatives - Schedule of Derivative Impact on Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Foreign currency forward contracts | Derivatives designated as hedging instruments | Derivatives in Cash Flow Hedging Relationships
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)	$ (388)	$ 2,714

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Derivatives - Schedule of Derivative Impact on Gain (Loss) Recognized in Income (Designated as Hedging Instruments) (Details) - Derivatives designated as hedging instruments - Derivatives in Cash Flow Hedging Relationships - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Foreign currency forward contracts | Selling and administrative expenses
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)	$ (82)	$ 105
Foreign currency forward contracts | Cost of sales
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)	(684)	991
Treasury Rate Locks | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)	$ 0	$ 79

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Derivatives - Schedue of Derivative Impact on Gain (Loss) Recognized in Income (Not Designated as Hedging Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Derivatives not designated as hedging instruments | Foreign currency forward contracts | Miscellaneous, net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) on Derivatives Recognized in Income	$ 787	$ (535)

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Derivatives - Schedule of Derivatives Fair Value Measurements Using Input Levels (Details) - Recurring - Foreign currency forward contracts - USD ($) $ in Thousands	Dec. 29, 2018	Sep. 29, 2018
Derivative liability	$ 922	$ 1,731
Level 1
Derivative asset	0	0
Level 2
Derivative liability	922	1,731
Level 3
Derivative asset	$ 0	$ 0

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Derivatives - Narrative (Details) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Estimated unrealized losses, net of tax, expected to be reclassified in next 12 months	$ 1,300,000
Gains (losses) recognized in income for derivatives related to ineffective portions and amounts excluded from effectiveness testing	0	$ 0
Derivatives designated as hedging instruments | Derivatives in Cash Flow Hedging Relationships | Foreign currency forward contracts
Notional amount of forward exchange contracts	74,100,000		$ 74,000,000
Fair value of derivative liability	1,300,000		1,700,000
Derivatives not designated as hedging instruments | Foreign currency forward contracts
Notional amount of forward exchange contracts	34,600,000		28,600,000
Fair value of derivative asset	$ 400,000
Fair value of derivative liability			$ 100,000

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Income Taxes - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Income Tax Disclosure [Abstract]
Income tax expense	$ 11,889	$ 127,534
Tax Reform Income Tax Expense (Benefit)	92,900		$ 85,900
Tax Cuts and Jobs Act of 2017, Tax on Deemed Repatriation of Foreign Earnings			61,200
Deferred Tax Liabilities, Undistributed Foreign Earnings			21,800
Other tax expense (benefit)			$ (2,900)
Tax Cuts and Jobs Act of 2017 Income Tax Expense, Increase	$ 7,000
Effective income tax rate	34.90%	439.20%
Unrecognized tax benefits	$ 1,700

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Earnings Per Share - Reconciliation of Amounts Utilized in Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Earnings Per Share [Abstract]
Net income (loss)	$ 22,226	$ (98,493)
Basic weighted average common shares outstanding (in shares)	31,403	33,567
Dilutive effect of share-based awards outstanding (in shares)	883	0
Diluted weighted average shares outstanding (in shares)	32,286	33,567
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.71	$ (2.93)
Diluted (in dollars per share)	$ 0.69	$ (2.93)

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Earnings Per Share - Narrative (Details) - shares shares in Millions	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share		1.1
Share-based awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Diluted Earnings Per Share	0.1	0.0

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Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Expense	$ 4.8	$ 3.9
Performance Shares [Member] | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares that may be issued (in shares)	0
Performance Shares [Member] | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares that may be issued (in shares)	400,000

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Reportable Segments - Reportable Segments Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Net sales	$ 765,544	$ 677,294
Operating income (loss):	36,951	31,557
Interest expense	(2,249)	(3,725)
Interest income	525	1,555
Miscellaneous, net	(1,112)	(346)
Income before income taxes	34,115	29,041
Total assets	1,969,683		$ 1,932,642
Elimination of inter-segment sales
Net sales	(38,733)	(31,704)
Corporate
Operating income (loss):	(30,306)	(28,377)
Corporate and eliminations
Total assets	69,029		155,544
AMER | Operating Segments
Net sales	353,867	299,043
Operating income (loss):	14,450	10,523
Total assets	718,078		645,791
APAC | Operating Segments
Net sales	378,112	346,123
Operating income (loss):	51,811	50,532
Total assets	989,574		937,510
EMEA | Operating Segments
Net sales	72,298	63,832
Operating income (loss):	996	$ (1,121)
Total assets	$ 193,002		$ 193,797

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Reportable Segments - Narrative (Details)	3 Months Ended
	Dec. 29, 2018 segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Guarantees - Narrative (Details)	3 Months Ended
	Dec. 29, 2018
Minimum
Product Warranty Liability [Line Items]
Product warranty specification period	12 months
Maximum
Product Warranty Liability [Line Items]
Product warranty specification period	24 months

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Guarantees - Schedule of Activity Related to Limited Warranty Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Movement in Standard Product Warranty Accrual [Roll Forward]
Limited warranty liability, beginning balance	$ 6,646	$ 4,756
Accruals for warranties issued during the period	1,900	1,017
Settlements (in cash or in kind) during the period	(1,255)	(1,352)
Limited warranty liability, ending balance	$ 7,291	$ 4,421

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Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Feb. 14, 2018	Jun. 06, 2016
Equity, Class of Treasury Stock [Line Items]
Amount repurchased	$ 50,051	$ 9,547
2018 Stock Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Authorized repurchase amount			$ 200,000
Amount repurchased (in shares)	869,949
Amount repurchased	$ 50,100
Average repurchase price (in dollars per share)	$ 57.53
Remaining authorized repurchase amount	$ 128,800
2016 Stock Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Authorized repurchase amount				$ 150,000
Amount repurchased (in shares)		158,466
Amount repurchased		$ 9,500
Average repurchase price (in dollars per share)		$ 60.25

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Trade Accounts Receivable Sale Programs - Narrative (Details) - USD ($)	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Amount Received From Trade Accounts Receivable Sold To Third Party [Line Items]
Trade accounts receivable sold	$ 232,500,000	$ 162,400,000
Cash proceeds	231,200,000	$ 161,500,000
MUFG RPA
Amount Received From Trade Accounts Receivable Sold To Third Party [Line Items]
Maximum facility amount	$ 230,000,000
Minimum prior notice required to cancel automatic extension	10 days
HSBC RPA
Amount Received From Trade Accounts Receivable Sold To Third Party [Line Items]
Maximum facility amount	$ 60,000,000

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Revenue From Contracts with Customers - Schedule of Impacts of Adoption of New Accounting Pronouncement (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 30, 2018	Sep. 29, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract assets	$ 82,775		$ 76,417	$ 0
Inventories, net	798,271		725,387	794,346
Other accrued liabilities	83,004		67,806	68,163
Retained earnings	1,092,287		1,070,061	$ 1,062,246
Net sales	765,544	$ 677,294
Cost of sales	693,161	613,771
Gross profit	72,383	63,523
Operating income	36,951	31,557
Income before income taxes	34,115	29,041
Income tax expense	11,889	127,534
Net income (loss)	22,226	$ (98,493)
ASU 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract assets	82,775
Inventories, net	(74,152)
Other accrued liabilities	11
Retained earnings	8,612
Net sales	6,185
Cost of sales	5,194
Gross profit	991
Operating income	991
Income before income taxes	991
Income tax expense	194
Net income (loss)	797
Balance without the adoption of ASU 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract assets	0
Inventories, net	872,423
Other accrued liabilities	82,993
Retained earnings	1,083,675
Net sales	759,359
Cost of sales	687,967
Gross profit	71,392
Operating income	35,960
Income before income taxes	33,124
Income tax expense	11,695
Net income (loss)	$ 21,429
Adjustments due to the adoption of ASU 2014-09 | ASU 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract assets			76,417
Inventories, net			(68,959)
Other accrued liabilities			(357)
Retained earnings			$ 7,815

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Revenue From Contracts with Customers - Schedule of Disaggregation of Revenue (Details) $ in Thousands	3 Months Ended
	Dec. 29, 2018 USD ($)
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	$ 804,277
Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	765,544
Elimination of inter-segment sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	38,733
Healthcare/Life Sciences | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	300,578
Industrial/Commercial | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	219,142
Communications | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	123,359
Aerospace/Defense | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	122,465
AMER
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	353,867
AMER | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	352,320
AMER | Elimination of inter-segment sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	1,547
AMER | Healthcare/Life Sciences | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	115,765
AMER | Industrial/Commercial | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	83,718
AMER | Communications | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	90,464
AMER | Aerospace/Defense | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	62,373
APAC
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	378,112
APAC | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	341,446
APAC | Elimination of inter-segment sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	36,666
APAC | Healthcare/Life Sciences | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	152,106
APAC | Industrial/Commercial | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	116,271
APAC | Communications | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	30,975
APAC | Aerospace/Defense | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	42,094
EMEA
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	72,298
EMEA | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	71,778
EMEA | Elimination of inter-segment sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	520
EMEA | Healthcare/Life Sciences | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	32,707
EMEA | Industrial/Commercial | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	19,153
EMEA | Communications | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	1,920
EMEA | Aerospace/Defense | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer	$ 17,998

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Revenue From Contracts with Customers - Schedule of Contract Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Sep. 30, 2018	Sep. 29, 2018
Change in Contract with Customer Assets [Line Items]
Contract assets	$ 82,775	$ 76,417	$ 0
Revenue recognized	681,712
Amounts collected or invoiced	(675,354)
Balance without the adoption of ASU 2014-09
Change in Contract with Customer Assets [Line Items]
Contract assets	0
ASU 2014-09
Change in Contract with Customer Assets [Line Items]
Contract assets	$ 82,775
ASU 2014-09 | Adjustments due to the adoption of ASU 2014-09
Change in Contract with Customer Assets [Line Items]
Contract assets		$ 76,417

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Revenue From Contracts with Customers - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 29, 2018	Sep. 30, 2018	Sep. 29, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings	$ 1,092,287	$ 1,070,061	$ 1,062,246
Contract assets	82,775	76,417	0
Inventories, net	$ 798,271	725,387	$ 794,346
Transferred over Time [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percentage of Revenue	89.00%
ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings	$ 8,612
Contract assets	82,775
Inventories, net	$ (74,152)
Adjustments due to the adoption of ASU 2014-09 | ASU 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained earnings		7,815
Contract assets		76,417
Inventories, net		$ (68,959)

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Acquisition - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Sep. 29, 2018
Acquisition [Abstract]
Payments to Acquire Businesses, Net of Cash Acquired			$ 12,400
Business acquisition	$ 1,180	$ 0