EX-99.1 2 c97038exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
(PLEXUS LOGO)
FOR IMMEDIATE RELEASE
PLEXUS REPORTS RECORD Q3 REVENUES OF $313.7 MILLION
Initiates Q4 Guidance: Revenue of $315 to $325 Million
NEENAH, WI, July 27, 2005 — Plexus Corp. (NASDAQ: PLXS) announced record revenues of $313.7 million for the third fiscal quarter ended July 2, 2005, up 14.2% compared to $274.8 million in the prior-year period. The net loss of $21.5 million, or $0.50 per fully diluted share, for the third fiscal quarter includes a previously announced impairment of goodwill and restructuring costs totaling $27.6 million ($27.5 million after-tax). Excluding these special items, the Company had pro-forma net income for the third fiscal quarter of $7.0 million, or $0.16 per fully diluted share.
Plexus provides non-GAAP supplemental information — more specifically, pro-forma net income and EPS excluding restructuring and impairment 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 and EPS to the non-GAAP supplemental data.
Dean Foate, President and Chief Executive Officer, said, “I’m extremely pleased with the progress we made this quarter in enhancing the Company’s fundamental financial performance on higher revenues and improved operations. As we had expected, our start-up facility in Penang, Malaysia became profitable in the quarter. Looking ahead, we anticipate revenues in the final fiscal quarter to be in the range of $315 to $325 million, and on these revenues we would anticipate fully diluted earnings per share before special items of $0.16 to $0.18.”
Gordon Bitter, Chief Financial Officer, added, “We continued to improve the balance sheet this quarter, and the cash conversion cycle was reduced by 9 days primarily due to better accounts payable. Cash and investments increased $34.1 million in the quarter.”
Bitter continued, “Goodwill impairment of $26.9 million in the third quarter reflects now-lowered profit and cash flow expectations from previous acquisitions in the U.K. and Mexico. Restructuring charges of $0.7 million during the quarter were primarily for additional severance costs associated with a reduction of corporate executive management, a previously disclosed site closure, and a planned workforce reduction at another facility.”
Bitter concluded, “The pro-forma effective tax rate for the year-to-date was reduced from 8% to 5.5%, and the impact of the lower rate in the third quarter was $0.01 per share. The lower tax rate was due to increased income in jurisdictions where we currently do not pay income taxes.”

 

 

REVISED SECTOR BREAKOUT
Effective in fiscal 2005, Plexus began reporting revenues based on the sector breakout set forth in the table below. These sectors better reflect the Company’s sales and marketing focus.
                 
Industry   Q3 — Fiscal 2005     Q2 — Fiscal 2005  
Wireline/Networking
     38%     37%
Wireless Infrastructure
     11%     11%
Medical
     28%     30%
Industrial/Commercial
     19%     17%
Defense/Security/Aerospace
     4%     5%
Fiscal Q3 Highlights
•   Top 10 customers comprised 60% of sales during the quarter, up from 59% in the previous quarter.
•   Juniper Networks, Inc., with 20% of sales, and General Electric Corp. with 12% of sales, were the only customers representing 10% or more of sales for the quarter.
•   Cash flow provided by operations was approximately $39.0 million for the quarter.
•   Cash Conversion Cycle
         
Cash Conversion Cycle   Q3 — Fiscal 2005   Q2 — Fiscal 2005
Days in Inventory
  56 Days   56 Days
Days in Accounts Receivable
  50 Days   51 Days
Days in Accounts Payable
  (44) Days   (36) Days
Annualized Cash Cycle
  62 Days   71 Days
Conference Call/Webcast and Replay Information
     
What:
  Plexus Corp.’s Fiscal Q3 Earnings Conference Call
 
    
When:
  Thursday, July 28th, 2005 at 8:30 a.m. Eastern
 
    
Where:
  877-234-1973 or 973-935-8412 with conference ID: Plexus
http://ir.plexus.com/
(requires Windows Media Player)
 
    
Replay:
  The call will be archived until August 5, 2005 at Noon
http://ir.plexus.com/
or via telephone replay at 877-519-4471 or 973-341-3080
PIN: 6211060
For further information, please contact:
Gordon Bitter, CFO
920-722-3451 or email at Gordon.Bitter@Plexus.com
(more)

 

 

About Plexus Corp. — The Product Realization Company
Plexus (www.plexus.com) participates in the Electronics Manufacturing Services (EMS) industry, providing product design, test, manufacturing and fulfillment and aftermarket solutions to branded product companies in the Wireline/Networking, Wireless Infrastructure, Medical, Industrial/Commercial and Defense/Security/Aerospace industries.
The Company’s unique Focused Factory manufacturing model and global supply chain solutions are strategically enhanced by value-added product design and engineering services. Plexus specializes in customer programs that require flexibility, scalability, 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), including all discussions of periods which are not yet completed, 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; the adequacy of restructuring and similar charges as compared to actual expenses, and possible unexpected costs and operating disruption in transitioning programs; 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.
(Financial tables follow)

 

 

PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    July 2,     June 30,     July 2,     June 30,  
    2005     2004     2005     2004  
Net sales
   $ 313,709     $ 274,817     $ 906,675     $ 767,552  
Cost of sales
     286,572       251,838       831,698       703,765  
 
                        
 
                                
Gross profit
     27,137       22,979       74,977       63,787  
 
                                
Operating expenses:
                                
Selling and administrative expenses
     19,298       17,846       56,615       50,519  
Restructuring and impairment costs
     27,644       5,494       39,162       5,494  
 
                        
 
     46,942       23,340       95,777       56,013  
 
                        
 
                                
Operating income (loss)
     (19,805 )     (361 )     (20,800 )     7,774  
 
                                
Other income (expense):
                                
Interest expense
     (878 )     (802 )     (2,640 )     (2,300 )
Miscellaneous
     207       202       1,403       1,028  
 
                        
 
                                
Income (loss) before income taxes
     (20,476 )     (961 )     (22,037 )     6,502  
 
                                
Income tax expense (benefit)
     1,022       (193 )     897       1,300  
 
                        
 
                                
Net income (loss)
   $ (21,498 )   $ (768 )   $ (22,934 )   $ 5,202  
 
                        
 
                                
Earnings per share:
                                
Basic
   $ (0.50 )   $ (0.02 )   $ (0.53 )   $ 0.12  
 
                        
Diluted
   $ (0.50 )   $ (0.02 )   $ (0.53 )   $ 0.12  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     43,369       43,056       43,291       42,890  
 
                        
Diluted
     43,369       43,056       43,291       43,944  
 
                        

 

 

PLEXUS CORP.
NON-GAAP SUPPLEMENTAL INFORMATION
(in thousands, except per share data)
                                 
    Three Months Ended     Nine Months Ended  
    July 2,     June 30,     July 2,     June 30,  
    2005     2004     2005     2004  
    (unaudited)  
Net income (loss) — GAAP
   $ (21,498 )   $ (768 )   $ (22,934 )   $ 5,202  
 
                                
Add income tax expense (benefit)
     1,022       (193 )     897       1,300  
 
                        
 
                                
Income (loss) before income taxes — GAAP
     (20,476 )     (961 )     (22,037 )     6,502  
 
                                
Add: Restructuring and impairment costs*
     27,644       5,494       39,162       5,494  
 
                        
 
                                
Income (loss) before income taxes and excluding restructuring and impairment costs — Non-GAAP
     7,168       4,533       17,125       11,996  
 
                                
Income tax expense (benefit) — Non-GAAP
     146       907       942       2,399  
 
                        
 
                                
Net income — Non-GAAP
   $ 7,022     $ 3,626     $ 16,183     $ 9,597  
 
                        
 
                                
Earnings per share — Non-GAAP:
                                
Basic
   $ 0.16     $ 0.08     $ 0.37     $ 0.22  
 
                        
Diluted
   $ 0.16     $ 0.08     $ 0.37     $ 0.22  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     43,369       43,056       43,291       42,890  
 
                        
Diluted
     43,881       43,810       43,788       43,944  
 
                        
 
                                
* Summary of restructuring and impairment costs
 
                                
Restructuring and impairment costs:
                                
Goodwill impairment
   $ 26,915     $ —     $ 26,915     $ —  
Severance costs
     653       743       2,190       743  
Lease exit costs and other
     65       4,703       5,754       4,703  
Asset impairments
     11       48       4,303       48  
 
                        
Total restructuring and impairment costs
   $ 27,644     $ 5,494     $ 39,162     $ 5,494  
 
                        

 

 

PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
                 
    July 2,     September 30,  
    2005     2004  
    (unaudited)  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 64,225     $ 40,924  
Short-term investments
     6,000       4,005  
Accounts receivable
     170,877       148,301  
Inventories
     174,750       173,518  
Deferred income taxes
     202       1,727  
Prepaid expenses and other
     10,973       5,972  
 
            
 
                
Total current assets
     427,027       374,447  
 
                
Property, plant and equipment, net
     120,252       129,586  
Goodwill, net
     7,005       34,179  
Deferred income taxes
     1,161       —  
Other
     8,236       7,496  
 
            
 
                
Total assets
   $ 563,681     $ 545,708  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Current portion of long-term debt and capital lease obligations
   $ 1,165     $ 811  
Accounts payable
     138,172       100,588  
Customer deposits
     14,542       11,952  
Accrued liabilities:
                
Salaries and wages
     22,069       26,050  
Other
     20,762       19,686  
 
            
 
                
Total current liabilities
     196,710       159,087  
 
                
Long-term debt and capital lease obligations
     22,523       23,160  
Other liabilities
     14,043       12,048  
Deferred income taxes
     3,646       —  
 
                
Shareholders’ equity:
                
Common stock, $.01 par value, 200,000 shares authorized, 43,518 and 43,184 shares issued and outstanding, respectively
     435       432  
Additional paid-in-capital
     271,144       267,925  
Retained earnings
     48,326       71,260  
Accumulated other comprehensive income
     6,854       11,796  
 
            
Total shareholders’ equity
     326,759       351,413  
 
            
 
                
Total liabilities and shareholders’ equity
   $ 563,681     $ 545,708  
 
            
###