PLEXUS CORP (PLXS) FY 2022 MD&A

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Plexus Corp. and its subsidiaries (together "Plexus," the "Company", "our", or "we") participate in the Electronic Manufacturing Services ("EMS") industry. Since 1979, we have been partnering with companies to create the products that build a better world. We are a global leader with a team of nearly 25,000 individuals who are dedicated to providing Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing and Sustaining Services. We specialize in serving customers in industries with highly complex products and demanding regulatory environments. We deliver customer service excellence to leading global companies in the Industrial, Healthcare/Life Sciences and Aerospace/Defense market sectors by providing innovative, comprehensive solutions throughout the product's lifecycle. We provide these innovative solutions to customers in the Americas ("AMER"), Asia-Pacific ("APAC") and Europe, Middle East and Africa ("EMEA") regions.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide an analysis of both short-term results and future prospects from management’s perspective, including an assessment of the financial condition and results of operations, events and uncertainties that are not indicative of future operations and any other financial or statistical data that we believe will enhance the understanding of our company’s financial condition, cash flows and other changes in financial condition and results of operations. The information should be read in conjunction with our consolidated financial statements included herein and "Risk Factors" included in Part I, Item 1A herein.

A discussion regarding our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 is presented below. A discussion regarding our financial condition and results of operations for fiscal 2021 compared to fiscal 2020 is incorporated herein by reference from Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on the Form 10-K for the fiscal year ended October 2, 2021, which was filed with the SEC on November 19, 2021, and is available on the SEC’s website at www.sec.gov as well as our Investor Relations website at www.plexus.com.

Market Pressures Update

We have experienced, and expect to continue to experience, an inability to procure certain components on a timely basis due to global supply chain constraints. These constraints have impacted our ability to meet customer demand and may inhibit our ability to capture the demand from our customers. We remain in close contact with our suppliers to understand the impacts on their businesses and operations and continue to take steps to validate their ability to deliver to us on time. However, the extended lead-times have required us to make additional investments in inventory to satisfy customer demand, which we expect to persist.

Over the past few quarters, the global supply chain constraints have led to inflation in some of the components we acquire, as well as labor and operating costs. We expect the increase in costs, including labor-related issues which have become more pronounced, to continue in the near future. We have been, and expect to continue to be, subject to such inflationary and general labor cost increases including in our Malaysia operations where the government has imposed a mandatory increase to the minimum wage that went into effect in our third quarter of fiscal 2022. While we have been largely able to mitigate the impacts of inflation through our contractual rights with customers on pricing, the pricing recoveries received may be dilutive to our operating margin. The inability to offset these costs in future periods or the impacts of continued inflation on end markets and our customers may affect our operating results, cash flows and inventory levels, which could increase as a result of higher component prices or the negative effects of inflation on customer end-market demand.

We continue to monitor the global impacts of COVID-19 and take steps to mitigate the potential risks to us posed by its spread and related circumstances and impacts. These efforts will continue as requirements change, new risks are identified and infections impact us. The spread and resurgence of COVID-19 from new variants in jurisdictions where we operate may make our ability to mitigate the impacts of the spread of the virus on our productivity more challenging.

The recent conflict between Russia and Ukraine has negatively impacted the global economy and led to various economic sanctions being imposed by the U.S., United Kingdom, European Union and other countries against Russia. While the impacts of the conflict have not been material on our operating results, as we do not have operations or material customers or suppliers in either country, it is not possible to predict the broader consequences of this conflict. Changing U.S. government export regulations, particularly relating to advanced semiconductors and chip-manufacturing equipment, may limit the ability to ship certain customer product to China, and source the components necessary to manufacture customer product in China.

27

Table of Contents

We believe our balance sheet is positioned to support the potential future challenges presented by the macro-economic pressures we are facing. As of October 1, 2022, cash and cash equivalents and restricted cash were $275 million, while debt, finance lease obligations and other financing were $462 million. To further ensure our ability to meet the needs of working capital investments to support anticipated revenue growth, we refinanced our revolving credit facility, expanding the maximum commitment from $350 million to $500 million during the third quarter of fiscal 2022. Borrowings under our Credit Facility as of October 1, 2022 were $263 million, leaving $237 million of our revolving commitment of $500 million available for use as of October 1, 2022 as well as the ability to expand our revolving commitment to $750 million upon mutual agreement with the bank. Refer to Note 4, "Debt, Finance Lease Obligations and Other Financing," in Notes to Consolidated Financial Statements and "Management’s Discussion and Analysis Liquidity and Capital Resources" in Part II, Item 7 for further information.

RESULTS OF OPERATIONS

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

Net sales. Fiscal 2022 net sales increased $442.5 million, or 13.1%, as compared to fiscal 2021.

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

As a percentage of consolidated net sales, net sales attributable to customers representing 10% or more of consolidated net sales as well as the percentage of net sales attributable to our ten largest customers for the indicated fiscal years were as follows:

A discussion of net sales by reportable segment is presented below for the indicated fiscal years (in millions):

28

Table of Contents

AMER. Net sales for fiscal 2022 in the AMER segment decreased $6.7 million, or 0.5%, as compared to fiscal 2021. The decrease in net sales was driven by net decreased customer end-market demand, a $49.4 million decrease for end-of-life products, a $41.1 million decrease due to the discontinuation of programs with existing customers and the impact of supply chain constraints that have created limitations with meeting available customer demand. These decreases were substantially offset by a $118.4 million increase in production ramps of new products for existing customers and a $43.8 million increase in production ramps for new customers, as well as increased pricing associated with inflated component prices.

APAC. Net sales for fiscal 2022 in the APAC segment increased $450.0 million, or 24.3%, as compared to fiscal 2021. The increase in net sales was driven by overall net increased customer end-market demand and increased pricing associated with inflated component prices, a $97.8 million increase in production ramps of new products for existing customers, an $8.8 million increase in production ramps for new customers and a partial recovery of supply chain constraints that had previously created limitations with meeting available customer demand. These increases were partially offset by a $33.1 million decrease for end-of-life products and a $6.9 million decrease due to the discontinuation of a program with an existing customer.

EMEA. Net sales for fiscal 2022 in the EMEA segment increased $3.6 million, or 1.2%, as compared to fiscal 2021. The increase in net sales was driven by a $10.0 million increase in production ramps of new products for existing customers, partially offset by overall net decreased customer end-market demand.

Our net sales by market sector for the indicated fiscal years were as follows (in millions):

Industrial. Net sales for fiscal 2022 in the Industrial sector increased $203.7 million, or 13.2%, as compared to fiscal 2021. The increase in net sales was driven by overall net increased customer end-market demand and increased pricing associated with inflated component prices, a $73.8 million increase due to production ramps of new products for existing customers and a $41.1 million increase in production ramps for new customers, partially offset by the impact of supply chain constraints that have created limitations with meeting available customer demand. The increase was further offset by a $41.7 million decrease due to the discontinuation of programs with existing customers and an $18.6 million decrease for end-of-life products.

Healthcare/Life Sciences. Net sales for fiscal 2022 in the Healthcare/Life Sciences sector increased $238.9 million, or 18.0%, as compared to fiscal 2021. The increase in net sales was driven by overall net increased customer end-market demand and increased pricing associated with inflated component prices, a $115.2 million increase due to production ramps of new products for existing customers and a partial recovery of supply chain constraints that had previously created limitations with meeting available customer demand. These increases were partially offset by a $55.1 million decrease for end-of-life products and a $6.9 million decrease due to the discontinuation of a program with an existing customer.

Aerospace/Defense. Net sales for fiscal 2022 in the Aerospace/Defense sector decreased $0.1 million, or less than 0.1%, as compared to fiscal 2021. The decrease was driven by net decreased customer end-market demand and a $9.1 million decrease due to end-of-life products. These decreases were substantially offset by a $37.2 million increase due to production ramps of new products for existing customers and an $8.2 million increase in production ramps for new customers.

Cost of sales. Cost of sales for fiscal 2022 increased $418.5 million, or 13.7%, as compared to fiscal 2021. Cost of sales is comprised primarily of material and component costs, labor costs and overhead. In fiscal 2022 and 2021, approximately 89% to 90% of the total cost of sales was variable in nature and fluctuated with sales volumes. Approximately 88% of these costs in fiscal 2022 and 2021 were related to material and component costs.

As compared to fiscal 2021, the increase in cost of sales in fiscal 2022 was primarily driven by the increase in net sales, inflated component costs, an increase in fixed costs, reduced operational efficiencies and increased labor costs.

Gross profit. Gross profit for fiscal 2022 increased $23.9 million, or 7.4%, as compared to fiscal 2021. Gross margin of 9.1% decreased 50 basis points compared to fiscal 2021. The primary driver of the increase in gross profit as compared to fiscal 2021 was the increase in net sales and reduced employee compensation and supplies costs associated with COVID-19, partially offset by inflated component costs, increased fixed costs, reduced operational efficiencies and increased labor costs. The decrease in gross margin was primarily driven by pass-through effects of recoveries from inflated components and increased labor costs, partially offset by fixed cost leverage.

29

Table of Contents

Operating income. Operating income for fiscal 2022 increased $1.9 million, or 1.1%, as compared to fiscal 2021. Operating margin of 4.7% decreased 50 basis points compared to fiscal 2021. The primary driver of the increase in operating income as compared to fiscal 2021 was the result of the increase in gross profit along with a $1.2 million decrease in restructuring and impairment charges, partially offset by a $22.0 million increase in selling and administrative expenses ("S&A"). The increase in S&A was primarily due to an increase in compensation costs. The decrease in operating margin was primarily driven by the decrease in gross margin, driven by the factors previously discussed.

A discussion of operating income by reportable segment for the indicated fiscal years is presented below (in millions):

AMER. Operating income decreased $17.6 million in fiscal 2022 as compared to fiscal 2021, primarily as a result of a decrease in net sales, inflated component costs, increased fixed costs, reductions in operational efficiencies and increased labor costs. There was also an increase in bad debt expense compared to recovery of a previously reserved customer receivable in fiscal 2021. This was partially offset by a positive shift in customer mix.

APAC. Operating income increased $28.5 million in fiscal 2022 as compared to fiscal 2021, primarily as a result of an increase in net sales, partially offset by inflated component costs, increased fixed costs, increased labor costs and an increase in S&A.

EMEA. Operating income increased $8.9 million in fiscal 2022 as compared to fiscal 2021 primarily as a result of an increase in net sales, positive shift in customer mix, and a reduction in fixed costs. This was partially offset by an increase in S&A.

Other expense. Other expense for fiscal 2022 increased $4.0 million as compared to fiscal 2021. The increase in other expense for fiscal 2022 was primarily due to the increase in factoring fees of $2.4 million and interest expense of $1.6 million.

Income taxes. Income tax expense for fiscal 2022 was $20.1 million compared to $21.5 million for fiscal 2021. The decrease is primarily due to claiming a U.S. Research & Development tax credit and the geographic distribution of worldwide earnings.

Our annual effective tax rate varies from the U.S. statutory rate of 21.0% primarily due to the geographic distribution of worldwide earnings as well as a tax holiday granted to a subsidiary located in the APAC segment where we derive a significant portion of our earnings. Our effective tax rate may also be impacted by disputes with taxing authorities, tax planning activities, adjustments to uncertain tax positions and changes in valuation allowances.

We have been granted a tax holiday for a foreign subsidiary operating in the APAC segment. This tax holiday will expire on December 31, 2034, and is subject to certain conditions with which we expect to continue to comply. In fiscal 2022 and 2021, the holiday resulted in tax reductions, net of the impact of the global intangible low-taxed income provisions of the U.S. Tax Cuts and Jobs Act, of approximately $35.3 million ($1.27 per basic share, $1.24 per diluted share) and $34.4 million ($1.20 per basic share, $1.18 per diluted share), respectively.

See also Note 6, "Income Taxes," in Notes to Consolidated Financial Statements for additional information regarding our tax rate.

The annual effective tax rate for fiscal 2023 is expected to be approximately 14.0% to 16.0% assuming no changes to tax laws.

Net Income. Net income for fiscal 2022 decreased $0.7 million, or 0.5%, from fiscal 2021 to $138.2 million. Net income decreased primarily as a result of the increase in other expense, partially offset by the increase in operating income and decrease in tax expense as previously discussed.

Diluted earnings per share. Diluted earnings per share increased to $4.86 in fiscal 2022 from $4.76 in fiscal 2021, primarily as a result of a reduction in diluted shares outstanding due to repurchase activity under our share repurchase plans, partially offset by decreased net income due to the factors discussed above.

Return on Invested Capital ("ROIC") and economic return. We use a financial model that is aligned with our business strategy and includes an ROIC goal of 15% which would exceed our weighted average cost of capital ("WACC") and represent positive economic return. Economic return is the amount our ROIC exceeds our WACC.

30

Table of Contents

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. We view ROIC and economic return as important measures in evaluating the efficiency and effectiveness of our long-term capital investments. We also use ROIC as a performance criteria in determining certain elements of compensation as well as 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 five-quarter period. Invested capital is defined as equity plus debt and operating lease liabilities, 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. Our WACC was 9.3% for fiscal 2022 and 8.1% for fiscal 2021. By exercising discipline to generate ROIC in excess of our WACC, our goal is to create value for our shareholders. Fiscal 2022 ROIC of 13.0% reflects an economic return of 3.7%, based on our weighted average cost of capital of 9.3%, and fiscal 2021 ROIC of 15.4% reflects an economic return of 7.3%, based on our weighted average cost of capital of 8.1%.

For a reconciliation of ROIC, economic return and adjusted operating income (tax effected) to our financial statements that were prepared using GAAP, see Exhibit 99.1 to this annual report on Form 10-K, which exhibit is incorporated herein by reference.

Refer to the table below, which includes the calculation of ROIC and economic return for the indicated fiscal years (dollars in millions):

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and restricted cash were $275.5 million as of October 1, 2022, as compared to $270.5 million as of October 2, 2021.

As of October 1, 2022, 78% of our cash and cash equivalents balance was held outside of the U.S. by our foreign subsidiaries. Currently, we believe that our cash balance, together with cash available under our Credit Facility, will be sufficient to meet our liquidity needs and potential share repurchases, if any, for the next twelve months and for the foreseeable future.

Our future cash flows from operating activities will be reduced by $47.7 million due to cash payments for U.S. federal taxes on the deemed repatriation of undistributed foreign earnings that are payable over an eight year period that began in fiscal 2019 with the first payment. The table below provides the expected timing of these future cash outflows, in accordance with the following installment schedule for the remaining four years (in millions):

31

Table of Contents

Cash Flows. The following table provides a summary of cash flows for fiscal 2022 and 2021 (in millions):

Operating Activities. Cash flows used in operating activities were $26.2 million for fiscal 2022, as compared to cash flows provided by operating activities of $142.6 million for fiscal 2021. The decrease was primarily due to cash flow (reductions) improvements of:

•$(446.5) million in inventory cash flows primarily attributable to longer lead times for certain components as a result of supply chain constraints, increasing our inventory as we retain components until the entirety of the assembly's materials are received. Supply chain constraints have also led to inflation in some of the components we acquire, increasing inventory. In addition, inventory levels have increased to support the ramp of customer programs.

•$(196.5) million in accounts receivable cash flows driven by increased net sales as well as timing of customer shipments and payments.

•$(22.1) million in contract assets cash flows, driven by increased demand from customers who recognize revenue over time in the current year compared to consistent demand in the prior year.

•$24.8 million in other current and non-current asset cash flows, driven by a greater increase in prepaid expenses and miscellaneous receivables in the prior year.

•$64.3 million in accounts payables cash flows driven by increased purchasing activity to support the ramp of customer programs as well as supply chain constraints leading to inflation in some of the components we acquire.

•$167.8 million in other current and non-current liabilities cash flows driven by an increase in advance payments from customers to cover inflated component prices driven by supply chain constraints.

•$237.7 million in customer deposit cash flows driven by significant deposits received from customers in the current year to cover certain inventory balances associated with longer lead-times and inflation in some of the components we acquire as a result of supply chain constraints.

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

We calculate days in accounts receivable and contract assets as each balance sheet item for the respective quarter divided by annualized sales for the respective quarter by day. We calculate days in inventory, accounts payable and 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.

32

Table of Contents

As of October 1, 2022, annualized cash cycle days increased fifteen days compared to October 2, 2021 due to the following:

Days in accounts receivable for the three months ended October 1, 2022 increased four days compared to the three months ended October 2, 2021. The increase is primarily attributable to the timing of customer shipments and payments and mix of customer payment terms, partially offset by an increase in factored receivables.

Days in contract assets for the three months ended October 1, 2022 decreased two days compared to the three months ended October 2, 2021. The decrease is primarily attributable to increased net sales, partially offset by increased demand from customers with arrangements requiring revenue to be recognized over time as products are produced.

Days in inventory for the three months ended October 1, 2022 increased twenty-eight days compared to the three months ended October 2, 2021. The increase is primarily attributable to longer lead times for certain components as a result of supply chain constraints, increasing our inventory level as we retain components until the entirety of the assembly's materials are received. Supply chain constraints have also led to inflation in some of the components we acquire, increasing inventory. In addition, inventory levels have increased to support the ramp of customer programs.

Days in accounts payable for the three months ended October 1, 2022 decreased four days compared to the three months ended October 2, 2021. The decrease is primarily attributable to timing of materials procurement and payments to suppliers, as well as increased net sales.

Days in cash deposits for the three months ended October 1, 2022 increased nineteen days compared to the three months ended October 2, 2021. The increase was primarily attributable to significant deposits received from customers to cover certain increasing inventory balances.

Free Cash Flow. We define free cash flow ("FCF"), a non-GAAP financial measure, as cash flow (used in) provided by operations less capital expenditures. FCF was $(127.9) million for fiscal 2022 compared to $85.5 million for fiscal 2021, a decrease of $213.4 million. The decrease in FCF was primarily due to working capital investments, particularly in inventory, to support our customers.

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

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

Investing Activities. Cash flows used in investing activities were $101.6 million for fiscal 2022 compared to $57.0 million for fiscal 2021. The increase in cash used in investing activities was due to a $44.5 million increase in capital expenditures, primarily due to our manufacturing footprint expansion in Bangkok, Thailand.

We utilized available cash and financing cash flows as the sources for funding our operating requirements during fiscal 2022. We currently estimate capital expenditures for fiscal 2023 will be approximately $110.0 million to $130.0 million to support new program ramps and replace older equipment. This estimate does not contemplate any site expansions.

Financing Activities. Cash flows provided by financing activities were $139.3 million for fiscal 2022 compared to cash flows used in financing activities of $203.9 million for fiscal 2021. The increase was primarily attributable to an increase of $291.0 million in net borrowings on the credit facility and a decrease of $58.1 million in cash used to repurchase our common stock.

On August 20, 2019, the Board of Directors approved a share repurchase program under which we were authorized to repurchase $50.0 million of our common stock (the "2019 Program"). The 2019 Program commenced upon completion of previous share repurchase programs. During fiscal 2021, we repurchased 73,560 shares under this program for $5.3 million at an average price of $72.44 per share.

33

Table of Contents

On August 13, 2020, the Board of Directors approved a share repurchase program under which we were authorized to repurchase up to $50.0 million of our common stock (the "2021 Program"). On November 18, 2020, the Board of Directors approved an additional $50.0 million in share repurchase authority under the existing 2021 Program such that there then existed a total of $100.0 million in share repurchase authority under the program. The 2021 program commenced upon completion of the 2019 Program. During fiscal 2021, we completed the 2021 Program by repurchasing 1,171,246 shares under this program for $100.0 million at an average price of $85.40 per share.

On August 11, 2021, the Board of Directors approved a share repurchase program under which we were authorized to repurchase up to $50.0 million of its common stock (the "2022 Program"). The 2022 Program commenced upon completion of the 2021 Program. During fiscal 2022 and 2021, we completed the 2022 Program by repurchasing 564,718 and 34,381 shares under this program for $46.9 million and $3.1 million at an average price of $83.07 and $90.16 per share, respectively.

On August 18, 2022, the Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $50.0 million of its common stock (the "2023 Program"). The 2023 Program became effective immediately and has no expiration. During fiscal 2022, we purchased 38,397 shares under this program for $3.5 million at an average price of $90.63 per share. As of October 1, 2022, $46.5 million of authority remained under the 2023 Program.

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

On June 15, 2018, we entered into a Note Purchase Agreement (the “2018 NPA”) pursuant to which we issued an aggregate of $150.0 million in principal amount of unsecured senior notes, consisting of $100.0 million in principal amount 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 we are 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 October 1, 2022, we were in compliance with the covenants under the 2018 NPA.

On June 9, 2022, we refinanced our then-existing senior unsecured revolving credit facility (as amended by that certain Amendment No. 1 to Credit Agreement dated April 29, 2020, the "Prior Credit Facility") by entering into a new 5-year revolving credit facility (collectively with the Prior Credit Facility, referred to as the "Credit Facility"), which expanded the maximum commitment from $350.0 million to $500.0 million and extended the maturity from May 15, 2024 to June 9, 2027. The maximum commitment under the Credit Facility may be further increased to $750.0 million, generally by mutual agreement of the lenders and us, subject to certain customary conditions. During fiscal 2022, the highest daily borrowing was $385.0 million; the average daily borrowings were $232.1 million. We borrowed $758.0 million and repaid $550.0 million of revolving borrowings ("revolving commitment") under the Credit Facility during fiscal 2022. As of October 1, 2022, we were in compliance with all financial covenants relating to the Credit Facility, which are generally consistent with those in the 2018 NPA discussed above. We are required to pay a commitment fee on the daily unused credit facility based on our leverage ratio; the fee was 0.125% as of October 1, 2022.

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. 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.

We have Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch (formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd.) (the "MUFG RPA"), HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA") and other unaffiliated financial institutions, under which we may elect to sell receivables, at a discount. These facilities are uncommitted facilities. The maximum facility amount under the MUFG RPA as of October 1, 2022 is $340.0 million. The maximum facility amount under the HSBC RPA as of October 1, 2022 is $60.0 million. The MUFG RPA will be automatically extended each year unless any party gives no less than 10 days prior notice that the agreement should not be extended. The terms of the HSBC RPA are generally consistent with the terms of the MUFG RPA previously discussed.

We sold $787.5 million and $730.5 million of trade accounts receivable under these programs during fiscal 2022 and 2021, respectively, in exchange for cash proceeds of $783.1 million and $728.4 million, respectively. As of October 1, 2022 and October 2, 2021, $222.5 million and $176.0 million, respectively, of accounts receivables sold under trade accounts receivable programs and subject to servicing by us remained outstanding and had not yet been collected.

34

Table of Contents

In all cases, the sale discount was recorded within "Miscellaneous, net" in the Consolidated Statements of Comprehensive Income in the period of the sale. For further information regarding the receivable sale programs, see Note 14, "Trade Accounts Receivable Sale Programs," in Notes to Consolidated Financial Statements.

Based on current expectations, we believe that our projected cash flows provided by operations, available cash and cash equivalents, potential borrowings under the Credit Facility and our leasing capabilities should be sufficient to meet our working capital and fixed capital requirements, as well as execution upon our share repurchase authorizations as management deems appropriate, for the next twelve months. We believe our balance sheet is positioned to support the potential future challenges presented by macro-economic factors including increased working capital requirements associated with longer lead-times for components, increased component and labor costs, and operating inefficiencies due to supply chain constraints or workplace safety restrictions. As of the end of the fourth quarter of fiscal 2022, cash and cash equivalents and restricted cash were $275 million, while debt, finance lease obligations and other financing were $462 million. To further ensure our ability to meet the needs of working capital investments to support anticipated revenue growth, we refinanced our credit facility, expanding the maximum commitment from $350.0 million to $500.0 million, as discussed above. If our future financing needs increase, then we may need to arrange additional debt or equity financing. Accordingly, we evaluate and consider from time to time various financing alternatives to supplement our financial resources. However, we cannot be assured that we will be able to make any such arrangements on acceptable terms or at all.

35

Table of Contents

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 October 1, 2022 (dollars in millions):

1)Debt obligations includes $150.0 million in principal amount of 2018 Notes and $263.0 million of borrowings on the revolving commitment of the Credit Facility, as well as interest.

2)Purchase obligations consist primarily of purchases of inventory and equipment in the ordinary course of business.

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

4)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, other financing obligations arising from information technology maintenance agreements and asset retirement obligations related to our buildings. We have excluded from the above table the impact of approximately $9.0 million, as of October 1, 2022, related to unrecognized income tax benefits. We cannot make reliable estimates of the future cash flows by period related to these obligations.

5)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 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.

36

Table of Contents

DISCLOSURE ABOUT CRITICAL ACCOUNTING ESTIMATES

Our accounting policies are disclosed in Note 1 "Description of Business and Significant Accounting Policies" of Notes to Consolidated Financial Statements. During fiscal 2022 there were no material changes to these policies. Our critical accounting estimates are described below:

Revenue Recognition: Revenue is recognized over time for arrangements with customers for which: (i) our performance does not create an asset with an alternative use to us, and (ii) we have an enforceable right to payment, including reasonable profit margin, for performance completed to date. If either of the two conditions noted above are not met to recognize revenue over time, 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 arrangement.

For contracts requiring over time revenue recognition, we calculate the revenue to recognize using the costs incurred to date plus a reasonable profit margin. We use historical information to estimate the profit margin associated with the performance obligation that is satisfied over time. We reevaluate our estimate of profit margins on a quarterly basis. While experience has shown that trends in profit margins are not volatile, changes in pricing or cost efficiencies could create significant fluctuations for certain performance obligations. As actual experience becomes available, we use the data to update the historical averages and compare the results to estimates. Based on review of profits margins we update our estimate to the model as necessary.

See Note 15 "Revenue from Contracts with Customers" of Notes to Consolidated Financial Statements for further information on our revenue recognition policies.

Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We maintain valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. In determining whether a valuation allowance is required, we take into account such factors as:

•Prior earnings history. A pattern of recent financial reporting losses in a jurisdiction is heavily weighted as a source of negative evidence. We also consider the strength and trend of earnings, as well as other relevant factors. In certain circumstances, historical earnings may not be as relevant due to changes in our business operations;

•Expected future earnings. Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable positive evidence. Projections of future taxable income exclusive of reversing temporary differences are an additional source of positive evidence;

•Tax planning strategies. If necessary and available, tax planning strategies would be implemented to accelerate taxable amounts to utilize expiring carryforwards. These strategies would be a source of additional positive evidence.

See Note 6 "Income Taxes" of Notes to Consolidated Financial Statements for further information on our income tax policies.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 1, "Description of Business and Significant Accounting Policies," in Notes to Consolidated Financial Statements regarding recent accounting pronouncements.

37

Table of Contents