RESULTS OF OPERATIONS
Consolidated Performance Summary. The following table presents selected consolidated financial data (dollars in millions, except per share data):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 | | April 1, 2023 | | April 2, 2022 |
Net sales | | $ | 1,070.8 | | | $ | 888.7 | | | $ | 2,164.7 | | | $ | 1,706.2 | |
Cost of sales | | 967.8 | | | 812.2 | | | 1,960.6 | | | 1,559.7 | |
Gross profit | | 103.0 | | | 76.5 | | | 204.2 | | | 146.5 | |
Gross margin | | 9.6 | % | | 8.6 | % | | 9.4 | % | | 8.6 | % |
Operating income | | 56.9 | | | 35.8 | | | 114.3 | | | 66.3 | |
Operating margin | | 5.3 | % | | 4.0 | % | | 5.3 | % | | 3.9 | % |
Other expense | | 9.1 | | | 4.5 | | | 17.0 | | | 8.2 | |
Income tax expense | | 7.0 | | | 4.4 | | | 14.2 | | | 7.8 | |
Net income | | 40.8 | | | 26.9 | | | 83.0 | | | 50.3 | |
Diluted earnings per share | | $ | 1.45 | | | $ | 0.95 | | | $ | 2.94 | | | $ | 1.76 | |
Return on invested capital* | | | | | | 13.8 | % | | 10.2 | % |
Economic return* | | | | | | 4.8 | % | | 0.9 | % |
*Non-GAAP metric; refer to "Return on Invested Capital ("ROIC") and economic return" below and Exhibit 99.1 for more information. |
Net sales. For the three months ended April 1, 2023, net sales increased $182.1 million, or 20.5%, as compared to the three months ended April 2, 2022. For the six months ended April 1, 2023, net sales increased $458.5 million, or 26.9%, as compared to the six months ended April 2, 2022.
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.
A discussion of net sales by reportable segment is presented below (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 | | April 1, 2023 | | April 2, 2022 |
Net sales: | | | | | | | | |
AMER | | $ | 407.8 | | | $ | 311.2 | | | $ | 797.5 | | | $ | 588.5 | |
APAC | | 587.3 | | | 533.9 | | | 1,229.2 | | | 1,025.6 | |
EMEA | | 101.8 | | | 73.7 | | | 191.2 | | | 146.6 | |
Elimination of inter-segment sales | | (26.1) | | | (30.1) | | | (53.2) | | | (54.5) | |
Total net sales | | $ | 1,070.8 | | | $ | 888.7 | | | $ | 2,164.7 | | | $ | 1,706.2 | |
AMER. Net sales for the three months ended April 1, 2023 in the AMER segment increased $96.6 million, or 31.0%, as compared to the three months ended April 2, 2022. The increase in net sales was driven by a $64.0 million increase in production ramps of new products for existing customers and overall net increased customer end-market demand, inclusive of a partial easing of supply chain constraints that had previously created limitations with meeting available customer demand. The increase was also driven by higher pricing associated with inflated component prices.
During the six months ended April 1, 2023, net sales in the AMER segment increased $209.0 million, or 35.5%, as compared to the six months ended April 2, 2022. The increase in net sales was driven by a $137.8 million increase in production ramps of new products for existing customers and overall net increased customer end-market demand, inclusive of a partial easing of supply chain constraints. The increase was also driven by higher pricing associated with inflated component prices and a $15.0 million increase in production ramps for new customers.
APAC. Net sales for the three months ended April 1, 2023 in the APAC segment increased $53.4 million, or 10.0%, as compared to the three months ended April 2, 2022. The increase in net sales was driven by overall net increased customer end-
market demand inclusive of a partial easing of supply chain constraints. The increase was also driven by higher pricing associated with inflated component prices and a $5.7 million increase in production ramps of new products for existing customers.
During the six months ended April 1, 2023, net sales in the APAC segment increased $203.6 million, or 19.9%, as compared to the six months ended April 2, 2022. The increase in net sales was driven by overall net increased customer end-market demand inclusive of a partial easing of supply chain constraints. The increase was also driven by higher pricing associated with inflated component prices and a $18.8 million increase in production ramps of new products for existing customers.
EMEA. Net sales for the three months ended April 1, 2023 in the EMEA segment increased $28.1 million, or 38.1%, as compared to the three months ended April 2, 2022. The increase in net sales was driven by overall net increased customer end-market demand inclusive of a partial easing of supply chain constraints.
During the six months ended April 1, 2023, net sales in the EMEA segment increased $44.6 million, or 30.4%, as compared to the six months ended April 2, 2022. The increase in net sales was driven by overall net increased customer end-market demand inclusive of a partial easing of supply chain constraints.
Our net sales by market sector were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 | | April 1, 2023 | | April 2, 2022 |
Net sales: | | | | | | | | |
Industrial | | $ | 439.3 | | | $ | 414.7 | | | $ | 911.4 | | | $ | 778.5 | |
Healthcare/Life Sciences | | 487.3 | | | 353.2 | | | 975.2 | | | 697.7 | |
Aerospace/Defense | | 144.2 | | | 120.8 | | | 278.1 | | | 230.0 | |
Total net sales | | $ | 1,070.8 | | | $ | 888.7 | | | $ | 2,164.7 | | | $ | 1,706.2 | |
Industrial. Net sales for the three months ended April 1, 2023 in the Industrial sector increased $24.6 million, or 5.9%, as compared to the three months ended April 2, 2022. The increase in net sales was driven by a $10.7 million increase due to production ramps of new products for existing customers, a partial easing of supply chain constraints and higher pricing associated with inflated component prices. The increase was partially offset by overall net decreased customer end-market demand.
During the six months ended April 1, 2023, net sales in the Industrial sector increased $132.9 million, or 17.1%, as compared to the six months ended April 2, 2022. The increase in net sales was driven by overall net increased customer end-market demand inclusive of a partial easing of supply chain constraints. The increase was also driven by higher pricing associated with inflated component prices, a $9.4 million increase in production ramps for new customers and a $23.2 million increase due to production ramps of new products for existing customers.
Healthcare/Life Sciences. Net sales for the three months ended April 1, 2023 in the Healthcare/Life Sciences sector increased $134.1 million, or 38.0%, as compared to the three months ended April 2, 2022. The increase in net sales was driven by overall net increased customer end-market demand inclusive of a partial easing of supply chain constraints. The increase was also driven by higher pricing associated with inflated component prices and a $66.8 million increase due to production ramps of new products for existing customers.
During the six months ended April 1, 2023, net sales in the Healthcare/Life Sciences sector increased $277.5 million, or 39.8%, as compared to the six months ended April 2, 2022. The increase in net sales was driven by a $126.9 million increase due to production ramps of new products for existing customers and overall net increased customer end-market demand, inclusive of a partial easing of supply chain constraints. The increase was also driven by higher pricing associated with inflated component prices.
Aerospace/Defense. Net sales for the three months ended April 1, 2023 in the Aerospace/Defense sector increased $23.4 million, or 19.4%, as compared to the three months ended April 2, 2022. The increase was driven by overall net increased customer end-market demand and increased pricing associated with inflated component prices.
During the six months ended April 1, 2023, net sales in the Aerospace/Defense sector increased $48.1 million, or 20.9%, as compared to the six months ended April 2, 2022. The increase was driven by overall net increased customer end-market demand and increased pricing associated with inflated component prices, a $10.6 million increase due to production ramps of new products for existing customers and a $9.2 million increase in production ramps for a new customer.
Cost of sales. Cost of sales for the three months ended April 1, 2023 increased $155.6 million, or 19.2%, as compared to the three months ended April 2, 2022, while cost of sales for the six months ended April 1, 2023 increased $400.9 million, or 25.7%, as compared to the six months ended April 2, 2022. Cost of sales is comprised primarily of material and component costs, labor costs and overhead. For the three and six months ended April 1, 2023 and April 2, 2022, approximately 89% to 90% of the total cost of sales was variable in nature and fluctuated with sales volumes. Of these amounts, approximately 87% to 88% of the variable costs for the three and six months ended April 1, 2023 and April 2, 2022, were related to material and component costs.
As compared to the three months ended April 2, 2022, the increase in cost of sales for the three months ended April 1, 2023 was primarily driven by the increase in net sales, inflated component costs, an increase in fixed costs and labor costs, partially offset by a positive shift in customer mix. As compared to the six months ended April 2, 2022, the increase in cost of sales for the six months ended April 1, 2023 was primarily driven by the increase in net sales, inflated component costs, an increase in fixed costs, and increased labor costs, partially offset by a positive shift in customer mix and improvements in operational efficiencies.
Gross profit. Gross profit for the three months ended April 1, 2023 increased $26.5 million, or 34.6%, as compared to the three months ended April 2, 2022. Gross margin of 9.6% for the three months ended April 1, 2023 increased 100 basis points compared to the three months ended April 2, 2022. The primary drivers of the increase in gross profit and gross margin for the three months ended April 1, 2023 were the increase in net sales and positive shift in customer mix, partially offset by inflated component costs as well as an increase in fixed costs and labor costs.
Gross profit for the six months ended April 1, 2023 increased $57.7 million, or 39.4%, as compared to the six months ended April 2, 2022. Gross margin of 9.4% for the six months ended April 1, 2023 increased 80 basis points compared to the six months ended April 2, 2022. The primary drivers of the increase in gross profit and gross margin for the six months ended April 1, 2023 were the increase in net sales, a positive shift in customer mix and improvements in operational efficiencies, partially offset by inflated component costs, an increase in fixed costs and an increase in labor costs.
Operating income. Operating income for the three months ended April 1, 2023 increased $21.1 million, or 58.9%, as compared to the three months ended April 2, 2022. Operating margin of 5.3% for the three months ended April 1, 2023 increased 130 basis points compared to the three months ended April 2, 2022. The primary driver of the increase in operating income and operating margin for the three months ended April 1, 2023 was the result of the increase in gross profit and gross margin, partially offset by a $5.4 million increase in selling and administrative expenses ("S&A"). The increase in S&A was primarily due to an increase in compensation costs.
Operating income for the six months ended April 1, 2023 increased $48.0 million, or 72.4%, as compared to the six months ended April 2, 2022. Operating margin of 5.3% for the six months ended April 1, 2023 increased 140 basis points compared to the six months ended April 2, 2022. The primary driver of the increase in operating income and operating margin for the six months ended April 1, 2023 was the result of the increase in gross profit and gross margin along with a $2.0 million decrease in restructuring and impairment charges, partially offset by an $11.7 million increase in S&A. The increase in S&A was primarily due to an increase in compensation costs.
A discussion of operating income by reportable segment presented below (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 | | April 1, 2023 | | April 2, 2022 |
Operating income: | | | | | | | | |
AMER | | $ | 25.8 | | | $ | 7.8 | | | $ | 43.2 | | | $ | 9.6 | |
APAC | | 69.7 | | | 60.8 | | | 148.1 | | | 121.5 | |
EMEA | | 1.8 | | | 0.4 | | | 1.2 | | | 1.4 | |
Corporate and other costs | | (40.4) | | | (33.2) | | | (78.2) | | | (66.2) | |
Total operating income | | $ | 56.9 | | | $ | 35.8 | | | $ | 114.3 | | | $ | 66.3 | |
AMER. Operating income increased $18.0 million for the three months ended April 1, 2023 as compared to the three months ended April 2, 2022, primarily as a result of an increase in net sales, improvements in operational efficiencies and a positive shift in customer mix, partially offset by inflated component costs and an increase in S&A.
During the six months ended April 1, 2023, operating income in the AMER segment increased $33.6 million as compared to the six months ended April 2, 2022, primarily as a result of an increase in net sales, improvements in operational efficiencies and a positive shift in customer mix, partially offset by inflated component costs and an increase in S&A.
APAC. Operating income increased $8.9 million for the three months ended April 1, 2023 as compared to the three months ended April 2, 2022, primarily as a result of an increase in net sales and a positive shift in customer mix, partially offset by inflated component costs, increased fixed costs and increased labor costs.
During the six months ended April 1, 2023, operating income in the APAC segment increased $26.6 million as compared to the six months ended April 2, 2022, primarily as a result of an increase in net sales, a positive shift in customer mix and improvements in operational efficiencies, partially offset by inflated component costs, an increase in fixed costs, increased labor costs and an increase in S&A.
EMEA. Operating income increased $1.4 million for the three months ended April 1, 2023 as compared to the three months ended April 2, 2022 primarily as a result of an increase in net sales and improvements in operational efficiencies, partially offset by inflated component costs, a negative shift in customer mix and increased fixed costs.
During the six months ended April 1, 2023, operating income in the EMEA segment decreased $0.2 million as compared to the six months ended April 2, 2022, primarily as a result of inflated component costs, increased fixed costs and an increase in S&A, partially offset by an increase in net sales and improvements in operational efficiencies.
Other expense. Other expense for the three months ended April 1, 2023 increased $4.6 million as compared to the three months ended April 2, 2022. The increase in other expense for the three months ended April 1, 2023 was primarily due to the increase in interest expense of $4.9 million due to a higher average interest rate and the higher average daily borrowing levels. The increase was also due to an increase in factoring fees of $2.0 million, partially offset by an increase of other miscellaneous income of $2.0 million.
Other expense for the six months ended April 1, 2023 increased $8.8 million as compared to the six months ended April 2, 2022. The increase in other expense was primarily driven by an increase in interest expense of $8.8 million due to a higher average interest rate and the higher average daily borrowing levels. The increase was also due to an increase in factoring fees of $3.5 million, partially offset by an increase of other miscellaneous income of $2.9 million.
Income taxes. Income tax expense for the three and six months ended April 1, 2023 was $7.0 million and $14.2 million, respectively, compared to $4.4 million and $7.8 million for the three and six months ended April 2, 2022, respectively. The increase is primarily due to an increase in pre-tax book income and change in the geographic distribution of pre-tax book income.
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.
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 the three months ended April 1, 2023 increased $13.9 million, or 51.7%, from the three months ended April 2, 2022 to $40.8 million. Net income increased primarily as a result of the increase in operating income, partially offset by an increase in tax expense and other expense, as previously discussed.
Net income for the six months ended April 1, 2023 increased $32.7 million, or 65.0%, from the six months ended April 2, 2022 to $83.0 million. Net income increased primarily as a result of the increase in operating income, partially offset by an increase in tax expense and other expense, as previously discussed.
Diluted earnings per share. Diluted earnings per share increased to $1.45 for the three months ended April 1, 2023 from $0.95 for the three months ended April 2, 2022, primarily as a result of increased net income due to the factors previously discussed as well as a reduction in diluted shares outstanding due to repurchase activity under our share repurchase plans.
Diluted earnings per share increased to $2.94 for the six months ended April 1, 2023 from $1.76 for the six months ended April 2, 2022 primarily as a result of increased net income due to the factors previously discussed as well as a reduction in diluted shares outstanding due to repurchase activity under our share repurchase plans.
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.
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 three-quarter period for the second quarter. 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 ("U.S. GAAP").
We review our internal calculation of WACC annually. Our WACC is 9.0% for fiscal 2023 as compared to 9.3% for fiscal 2022. By exercising discipline to generate ROIC in excess of our WACC, our goal is to create value for our shareholders. For the six months ended April 1, 2023, ROIC of 13.8% reflects an economic return of 4.8%, based on our weighted average cost of capital of 9.0%. For the six months ended April 2, 2022, ROIC of 10.2% reflects an economic return of 0.9%, based on our weighted average cost of capital of 9.3% for that fiscal year.
For a reconciliation of ROIC, economic return and adjusted operating income (tax-effected) to our financial statements that were prepared using U.S. GAAP, see Exhibit 99.1 to this quarterly report on Form 10-Q, 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 period (dollars in millions):
| | | | | | | | | | | | | | |
| | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 |
Adjusted operating income (tax-effected) | | $ | 194.3 | | | $ | 117.5 | |
Average invested capital | | 1,406.4 | | | 1,151.8 | |
After-tax ROIC | | 13.8 | % | | 10.2 | % |
WACC | | 9.0 | % | | 9.3 | % |
Economic return | | 4.8 | % | | 0.9 | % |
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents and restricted cash were $270.4 million as of April 1, 2023, as compared to $275.5 million as of October 1, 2022.
As of April 1, 2023, 86% 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 be sufficient to cover 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 $42.0 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 three years (in millions):
| | | | | |
2024 | $ | 10.6 | |
2025 | 14.1 | |
2026 | 17.3 | |
Total | $ | 42.0 | |
Cash Flows. The following table provides a summary of cash flows (in millions):
| | | | | | | | | | | | | | |
| | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 |
Cash provided by (used in) operating activities | | $ | 57.2 | | | $ | (4.7) | |
Cash used in investing activities | | (47.6) | | | (64.3) | |
Cash (used in) provided by financing activities | | (18.4) | | | 107.8 | |
Operating Activities. Cash flows provided by operating activities were $57.2 million for the six months ended April 1, 2023, as compared to cash flows used in operating activities of $4.7 million for the six months ended April 2, 2022. The change was primarily due to cash flow improvements (reductions) of:
•$32.7 million increase in net income.
•$371.7 million in inventory cash flows driven by inventory levels increasing at a slower rate in the six months ended April 1, 2023 as compared to the six months ended April 2, 2022. In the six months ended April 1, 2023, inventory levels have primarily increased to support the ramp of customer programs, as well as supply chain constraints have led to inflation in some of the components we acquire, increasing inventory.
•$138.5 million in accounts receivable cash flows driven by timing of shipments, mix of customer payment terms and increased factoring of receivables.
•$7.6 million in other current and non-current assets driven by a lesser increase in prepayments to suppliers as compared to the six months ended April 2, 2022.
•$6.3 million in contract assets cash flows driven by increases in advance payments received from customers who recognize revenue over time.
•$(224.4) million in accounts payables cash flows primarily driven by the timing of materials procurement and payments to suppliers.
•$(157.3) million in other current and non-current liabilities cash flows driven by releases of advance payments to customers as we sold products that contained inflated component prices.
•$(113.2) million in customer deposit cash flows driven by deposits increasing at a slower rate in the six months ended April 1, 2023 as compared to the six months ended April 2, 2022, consistent with inventory cash flows. Deposit increases in both periods were primarily to cover certain inventory balances.
The following table provides a summary of cash cycle days for the periods indicated (in days): | | | | | | | | | | | | | | |
| | Three Months Ended |
| | April 1, 2023 | | April 2, 2022 |
Days in accounts receivable | | 56 | | 59 |
Days in contract assets | | 11 | | 12 |
Days in inventory | | 156 | | 154 |
Days in accounts payable | | (69) | | (86) |
Days in cash deposits | | (50) | | (41) |
Annualized cash cycle | | 104 | | 98 |
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.
As of April 1, 2023, annualized cash cycle days increased six days compared to April 2, 2022 due to the following:
Days in accounts receivable for the three months ended April 1, 2023 decreased three days compared to the three months ended April 2, 2022. The decrease is primarily attributable to an increase in factored receivables.
Days in contract assets for the three months ended April 1, 2023 decreased one day compared to the three months ended April 2, 2022. The decrease is primarily attributable to an increase in advance payments received from customers with arrangements requiring revenue to be recognized over time as products are produced.
Days in inventory for the three months ended April 1, 2023 increased two days compared to the three months ended April 2, 2022. The increase is primarily attributable to increased inventory levels to support the ramp of customer programs. Inventory levels also increased due to customer demand volatility as well as supply chain constraints which have led to inflation in some of the components we acquire.
Days in accounts payable for the three months ended April 1, 2023 decreased seventeen days compared to the three months ended April 2, 2022. The decrease is primarily attributable to timing of materials procurement and payments to suppliers.
Days in cash deposits for the three months ended April 1, 2023 increased nine days compared to the three months ended April 2, 2022. 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 operations less capital expenditures. FCF was $7.7 million for the six months ended April 1, 2023 compared to $(68.8) million for the six months ended April 2, 2022, an improvement of $76.5 million. The improvement in FCF was primarily due to lower working capital investments in inventory to support our customers in the six months ended April 1, 2023 as compared to the six months ended April 2, 2022.
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 U.S. GAAP.
A reconciliation of FCF to our financial statements that were prepared using U.S. GAAP as follows (in millions):
| | | | | | | | | | | | | | |
| | Six Months Ended |
| | April 1, 2023 | | April 2, 2022 |
Cash flows provided by (used in) operating activities | | $ | 57.2 | | | $ | (4.7) | |
Payments for property, plant and equipment | | (49.5) | | | (64.1) | |
Free cash flow | | $ | 7.7 | | | $ | (68.8) | |
Investing Activities. Cash flows used in investing activities were $47.6 million for the six months ended April 1, 2023 compared to $64.3 million for the six months ended April 2, 2022. The decrease in cash used in investing activities was due to a $14.7 million decrease in capital expenditures, as the manufacturing footprint expansion in Bangkok, Thailand has been substantially completed.
We 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 used in financing activities were $18.4 million for the six months ended April 1, 2023 compared to cash flows provided by financing activities of $107.8 million for the six months ended April 2, 2022. The decrease was primarily attributable to lower borrowings on the credit facility in the six months ended April 1, 2023 of $21.0 million as compared to the six months ended April 2, 2022 of $157.0 million and a decrease of $11.3 million in cash used to repurchase our common stock.
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 our common stock (the "2022 Program"). The 2022 Program commenced upon completion of the 2021 Program and was completed in fiscal 2022. During the three months ended April 2, 2022, we repurchased 305,707 shares under this program for $25.0 million at an average price of $81.79 per share. During the six months ended April 2, 2022, we repurchased 416,147 shares under this program for $35.2 million at an average price of $84.43 per share.
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 our common stock (the "2023 Program"). The 2023 Program became effective immediately and has no expiration. During the three months ended April 1, 2023, we repurchased 125,639 shares under this program for $12.4 million at an average price of $98.75 per share. During the six months ended April 1, 2023, we repurchased 241,362 shares under this program for $23.9 million at an average price of $98.93 per share. As of April 1, 2023, $22.6 million of the 2023 Program remained available to repurchase shares.
All shares repurchased under the aforementioned programs were recorded as treasury stock.
We have Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch (formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd.) (the "MUFG RPA"), HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA") and other unaffiliated financial institutions, under which we may elect to sell receivables, at a discount. These facilities are uncommitted facilities. The maximum facility amount under the MUFG RPA as of April 1, 2023 was $340.0 million. The maximum facility amount under the HSBC RPA as of April 1, 2023 was $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 $225.7 million and $202.2 million of trade accounts receivable under these programs, or their predecessors, during the three months ended April 1, 2023 and April 2, 2022, respectively, in exchange for cash proceeds of $222.9 million and $201.5 million, respectively. We sold $411.3 million and $350.2 million of trade accounts receivable under these programs, or their predecessors, during the six months ended April 1, 2023 and April 2, 2022, respectively, in exchange for cash proceeds of $406.5 million and $349.0 million, respectively. As of April 1, 2023 and October 1, 2022, $233.4 million and $222.5 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.
In all cases, the sale discount was recorded within "Miscellaneous, net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale. For further information regarding the receivable sale programs, see Note 13, "Trade Accounts Receivable Sale Programs," in Notes to Condensed Consolidated Financial Statements.
Based on current expectations, we believe that our projected cash flows provided by operations, available cash and cash equivalents, our leasing capabilities and potential borrowings under our 5-year senior unsecured revolving credit facility
(referred to as the "Credit Facility"), including our ability to expand our revolving commitment, 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. As of the end of the second quarter of fiscal 2023, cash and cash equivalents and restricted cash were $270.4 million, while debt, finance lease obligations and other financing were $482.7 million. If our future financing needs increase, including to support additional capital expenditures or investments in the growth of our business, 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.
DISCLOSURE ABOUT CRITICAL ACCOUNTING ESTIMATES
Our critical accounting policies are disclosed in our 2022 Annual Report on Form 10-K. During the second quarter of fiscal 2023, there were no material changes.
NEW ACCOUNTING PRONOUNCEMENTS
See Note 1, "Basis of Presentation," in Notes to Condensed Consolidated Financial Statements regarding recent accounting pronouncements.