EX-99.1 2 c86959exv99w1.txt PRESS RELEASE EXHIBIT 99.1 [PLEXUS LOGO] FOR IMMEDIATE RELEASE PLEXUS ANNOUNCES FISCAL Q3 REVENUE OF $275 MILLION TAKES $5.5 MILLION (PRE-TAX) RESTRUCTURING CHARGE INITIATES Q4 REVENUE GUIDANCE OF $270 TO $280 MILLION WITH EPS OF $0.09 TO $0.11 NEENAH, WI, July 21, 2004 -- Plexus Corp. (NASDAQ: PLXS) today announced that revenue for its third fiscal quarter increased 40% to $274.8 million, compared to $195.6 million in the prior year period. The Company reported a loss for the third fiscal quarter of $(0.8) million, equivalent to $(0.02) per diluted share. The net loss for the period included $5.5 million ($4.4 million after tax) of restructuring costs, mainly to increase accruals related to previous restructuring actions. Excluding these restructuring costs, the Company had pro-forma net income of $3.6 million, the equivalent of $0.08 per fully diluted share. The Company provides non-GAAP supplemental information -- more specifically, pro-forma net income and EPS excluding restructuring costs. These non-GAAP financial data are provided to facilitate meaningful period-to-period comparisons of underlying operational performance by eliminating infrequent or unusual charges. Similar non-GAAP measures are used for internal management assessments because such measures provide additional insight into ongoing financial performance. Please refer to the attached accompanying reconciliations of the GAAP net income/(loss) and EPS to the non-GAAP supplemental data. Dean Foate, President and Chief Executive Officer of Plexus, commented, "This is our fifth consecutive quarter of revenue growth, with revenues increasing 8 percent over the second quarter. Higher revenues and increased productivity, partially offset by actions to achieve substantial inventory reductions, drove 10 basis point gross margin expansion during the quarter to 8.4%." "We are intensely focused on improving our working capital utilization and return on capital employed," continued Foate, "Inventories were down 16%, or $31.2 million, to $166.8 million in the third quarter, as we worked through new program inventory builds from the prior quarter and continued to advance our lean supply chain initiatives with customers and suppliers." "As we look to our fourth fiscal quarter, we are initiating revenue guidance of $270 to $280 million with EPS of $0.09 to $0.11," Foate added. Gordon Bitter, Chief Financial Officer, said, "We incurred $5.5 million in restructuring charges during the third quarter, of which $4.2 million was to recognize additional lease obligations for two previously vacated facilities near Seattle, WA. The remaining $1.3 million was primarily for severance and other termination costs related to the consolidation of a satellite PCB-design office in Hillsboro, OR into our Boulder Design Center." "Our balance sheet remains very strong. We ended the quarter with cash and short-term investments of approximately $55.8 million. In addition, we increased our bank credit facility last week from $100 million to $150 million," Bitter concluded. FISCAL Q3 HIGHLIGHTS o Sales by industry were:
INDUSTRY Q3 - FISCAL 2004 Q2 - FISCAL 2004 ------------------------------- -------------------- -------------------- Networking/Datacom 47% 42% Medical 28% 29% Industrial/Commercial 16% 15% Computing 4% 10% Transportation/Other 5% 4%
o Top 10 customers comprised 54% of sales during the quarter, down from 55% in the previous quarter. o Juniper Networks, with 14% of sales, was the only customer representing more than 10% of sales for the quarter. o Cash flow used in operations was approximately $0.8 million for the quarter. o Days sales outstanding in accounts receivable decreased to 46 days compared to 49 days in the second quarter of fiscal 2004. o Inventory decreased sequentially from the second quarter by approximately $31 million to $167 million, while annualized turns increased to 5.5 turns this quarter from 5.2 turns in the second quarter of fiscal 2004. CONFERENCE CALL/WEBCAST AND REPLAY INFORMATION WHAT: Plexus Corp.'s Fiscal Q3 Earnings Conference Call WHEN: Thursday, July 22, 2004 at 8:30 a.m. Eastern WHERE: 877-234-1973 with conference ID Plexus www.videonewswire.com/PLXS/072204 (requires Windows Media Player) REPLAY: The call will be archived until midnight on July 29, 2004 at www.videonewswire.com/PLXS/072204 or via telephone replay at 877-519-4471 with PIN: 4865702 NOTE: If you experience problems with the webcast, please email webcastsupport@tfprn.com. ABOUT PLEXUS CORP. -- THE PRODUCT REALIZATION COMPANY Plexus (www.plexus.com) is a contract manufacturer of electronics products providing product design, test, manufacturing, fulfillment and aftermarket solutions to branded product companies in the networking, datacommunications, medical, industrial, commercial, defense and computer industries. The Company's unique Focus Factory manufacturing model and global supply chain solutions, strategically enhanced by value-added product design and engineering services, are developed to optimize lowest total cost, scalability and responsiveness for programs requiring flexibility, technology and quality. Plexus provides award-winning customer service to more than 150 branded product companies in North America, Europe and Asia. SAFE HARBOR AND FAIR DISCLOSURE STATEMENT The statements contained in this release which are guidance or which are not historical facts (such as statements in the future tense and statements including "believe," "expect," "intend," "anticipate", "target" and similar terms and concepts) are forward-looking statements that involve risks and uncertainties, including, but not limited to: the economic performance of the electronics and technology industries; the risk of customer delays, changes or cancellations in both on-going and new programs; the Company's ability to secure new customers and maintain its current customer base; material cost fluctuations and the adequate availability of components and related parts for production; the effect of changes in average selling prices; the effect of start-up costs of new programs and facilities, including closing conditions and other preparations relating to the new Malaysia facility; the adequacy of restructuring and similar charges as compared to actual expenses; the effect of general economic conditions and world events (such as terrorism); the impact of increased competition; and other risks detailed in the Company's Securities and Exchange Commission filings. FOR FURTHER INFORMATION, PLEASE CONTACT: Kristian Talvitie, Director of Strategic Marketing and Communications 920-969-6160 or email at kristian.talvitie@plexus.com (financial tables follow) PLEXUS CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Three Months Ended Nine Months Ended June 30, June 30, ------------------------- ------------------------- 2004 2003 2004 2003 --------- --------- --------- --------- (unaudited) Net sales $ 274,817 $ 195,609 $ 767,552 $ 591,761 Cost of sales 251,838 183,780 703,765 554,769 --------- --------- --------- --------- Gross profit 22,979 11,829 63,787 36,992 Operating expenses: Selling and administrative expenses 17,907 16,250 50,685 49,819 Restructuring and impairment costs 5,494 19,649 5,494 51,489 --------- --------- --------- --------- 23,401 35,899 56,179 101,308 --------- --------- --------- --------- Operating income (loss) (422) (24,070) 7,608 (64,316) Other income (expense): Interest expense (741) (658) (2,134) (2,144) Miscellaneous 202 638 1,028 1,833 --------- --------- --------- --------- Income (loss) before income taxes and cumulative effect of change in accounting for goodwill (961) (24,090) 6,502 (64,627) Income tax expense (benefit) (193) (9,343) 1,300 (24,003) --------- --------- --------- --------- Income (loss) before cumulative effect of change in accounting for goodwill (768) (14,747) 5,202 (40,624) Cumulative effect of change in accounting for goodwill, net of income tax benefit of $4,755 - - - (23,482) --------- --------- --------- --------- Net income (loss) $ (768) $ (14,747) $ 5,202 $ (64,106) ========= ========= ========= ========= Earnings per share: Basic Income (loss) before cumulative effect of change in accounting for goodwill $ (0.02) $ (0.35) $ 0.12 $ (0.96) Cumulative effect of change in accounting for goodwill - - - (0.56) --------- --------- --------- --------- Net income (loss) $ (0.02) $ (0.35) $ 0.12 $ (1.52) ========= ========= ========= ========= Diluted Income (loss) before cumulative effect of change in accounting for goodwill $ (0.02) $ (0.35) $ 0.12 $ (0.96) Cumulative effect of change in accounting for goodwill - - - (0.56) --------- --------- --------- --------- Net income (loss) $ (0.02) $ (0.35) $ 0.12 $ (1.52) ========= ========= ========= ========= Weighted average shares outstanding: Basic 43,056 42,285 42,890 42,204 ========= ========= ========= ========= Diluted 43,056 42,285 43,944 42,204 ========= ========= ========= =========
(more) PLEXUS CORP. NON-GAAP SUPPLEMENTAL INFORMATION (in thousands, except per share data)
Three Months Ended Nine Months Ended June 30, June 30, ----------------------- ---------------------- 2004 2003 2004 2003 -------- -------- -------- -------- (unaudited) Net income (loss) - GAAP $ (768) $(14,747) $ 5,202 $(64,106) Add cumulative effect of change in accounting for goodwill, net of income tax benefit of $4,755 - - - (23,482) -------- -------- -------- -------- Income (loss) before cumulative effect of change in accounting for goodwill - GAAP (768) (14,747) 5,202 (40,624) Add income tax expense (benefit) (193) (9,343) 1,300 (24,003) -------- -------- -------- -------- Income (loss) before income taxes and cumulative effect of change in accounting for goodwill -- GAAP (961) (24,090) 6,502 (64,627) Add: Restructuring and impairment costs* 5,494 19,649 5,494 51,489 -------- -------- -------- -------- Income (loss) before income taxes and excluding restructuring and impairment costs -- Non-GAAP 4,533 (4,441) 11,996 (13,138) Income tax expense (benefit) -- Non-GAAP 907 (1,865) 2,399 (5,518) -------- -------- -------- -------- Net income (loss) -- Non-GAAP $ 3,626 $ (2,576) $ 9,597 $ (7,620) ======== ======== ======== ======== Earnings per share -- Non-GAAP: Basic $ 0.08 $ (0.06) $ 0.22 $ (0.18) ======== ======== ======== ======== Diluted $ 0.08 $ (0.06) $ 0.22 $ (0.18) ======== ======== ======== ======== Weighted average shares outstanding: Basic 43,056 42,285 42,890 42,204 ======== ======== ======== ======== Diluted 43,810 42,285 43,944 42,204 ======== ======== ======== ======== * SUMMARY OF RESTRUCTURING AND IMPAIRMENT COSTS Restructuring and impairment costs: Fixed asset impairment $ 48 $ 15,884 $ 48 $ 27,211 Severance costs 743 2,757 743 8,009 Lease termination costs 4,703 1,008 4,703 10,674 Write-off of goodwill - - - 5,595 -------- -------- -------- -------- Total restructuring and impairment costs $ 5,494 $ 19,649 $ 5,494 $ 51,489 ======== ======== ======== ========
(more) PLEXUS CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, September 30, 2004 2003 -------- ------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 55,703 $ 58,993 Short-term investments 79 19,701 Accounts receivable 138,393 111,125 Inventories 166,841 136,515 Deferred income taxes 14,401 23,723 Prepaid expenses and other 7,973 8,326 -------- -------- Total current assets 383,390 358,383 Property, plant and equipment, net 122,757 131,510 Goodwill, net 34,230 32,269 Deferred income taxes 26,625 24,921 Other 6,550 5,971 -------- -------- Total assets $573,552 $553,054 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt and capital lease obligations $ 1,038 $ 958 Accounts payable 75,605 91,445 Customer deposits 14,348 14,779 Accrued liabilities: Salaries and wages 24,190 17,133 Other 19,873 23,753 -------- -------- Total current liabilities 135,054 148,068 Long-term debt and capital lease obligations 39,248 23,502 Other liabilities 12,137 10,468 Commitments and contingencies - - Shareholders' equity: Common stock, $.01 par value, 200,000 shares authorized, 43,071 and 42,607 shares issued and outstanding, respectively 431 426 Additional paid-in-capital 266,456 261,214 Retained earnings 108,042 102,840 Accumulated other comprehensive income 12,184 6,536 -------- -------- Total shareholders' equity 387,113 371,016 -------- -------- Total liabilities and shareholders' equity $573,552 $553,054 ======== ========
###