NEENAH, Wis., Aug. 12 /PRNewswire-FirstCall/ — Plexus Corp. (NASDAQ:PLXS) today announced its intention to close its Ayer, MA manufacturing facility. The Company plans to transition products manufactured in this facility to other Plexus facilities, primarily in Neenah, WI. The closure of the facility is expected by March 2009.
Dean Foate, President and CEO, commented, “As part of our proactive, strategic planning process we have carefully evaluated the value proposition and long-term viability of each of our United States manufacturing locations to ensure we optimize capacity to deliver intelligent, profitable growth that generates ROIC in excess of our weighted average cost of capital. After this analysis, we determined that our Ayer facility was not strategically aligned with our future growth prospects. We also concluded that we could deliver greater value to our Ayer facility customers by providing services at other Plexus locations, primarily in the United States.”
Ginger Jones, Chief Financial Officer, added, “This decision will result in the separation of approximately 170 employees from the approximately 65,000 sq ft Ayer facility over the first and second fiscal quarters of 2009. We anticipate restructuring charges related to this action of approximately $2.0 million beginning in the fourth fiscal quarter of 2008. We anticipate that this closure will generate savings in the range of $4 — 5 million dollars annually.”
Foate continued, “As a result of the hard work and dedication of our employees in Ayer, the facility has performed very well in recent years. The closure of a facility is never an easy decision and we are sensitive to the impacts on our employees, their families and the community. Yet, it is clear that a changing marketplace requires that we proactively take this action now to serve the best long-term interests of our Company and shareholders. We will continue to leverage the strength of our market sector-based strategic planning process to proactively align our footprint to meet the future needs of customers, as demonstrated by other recently announced facility expansions in the United States and other regions of the world. We will continue our quest to be the best EMS company in the world at serving customers with products in the mid- to low-volume, higher-mix segment of the market.”
About Plexus Corp. — The Product Realization Company
Plexus (http://www.plexus.com/) is an award-winning participant in the Electronics Manufacturing Services (EMS) industry, providing product design, supply chain and materials management, manufacturing, test, fulfillment and aftermarket solutions to branded product companies in the Wireline/Networking, Wireless Infrastructure, Medical, Industrial/Commercial and Defense/Security/Aerospace market sectors.
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 mid- to low-volume, higher-mix customer programs that require flexibility, scalability, technology and quality.
Plexus provides award-winning customer service to more than 100 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,” “plan,” “anticipate,” “goal,” “target” and similar terms and concepts), including all discussions of expected restructuring charges and savings, and other discussions regarding periods which are not yet completed, are forward-looking statements that involve risks and uncertainties. Risks and uncertainties relating to the Ayer closure include, but are not limited to the possible inadequacy of restructuring and similar charges as compared to actual expenses; failure of expected efficiencies and cost savings to materialize to the expected degree; possible unexpected costs and expenses in transitioning programs from Ayer to our other facilities; and possible negative effects from the transition on our customer relationships and orders. Other risks and uncertainties of our business include, but are not limited to: the economic performance of the electronics, technology and defense industries; the risk of customer delays, changes or cancellations in both ongoing and new programs; the poor visibility of future orders in the defense market sector and the uncertainty of defense appropriations and spending; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers and maintain its current customer base; the risks of concentration of work for certain customers; 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 our recent and planned expansions; the degree of success and the costs of efforts to improve the financial performance of our Mexican operations; the costs and inherent uncertainties of pending litigation; the effect of general economic conditions and world events (such as increases in oil prices, terrorism and war in the Middle East); the impact of increased competition; and other risks detailed in the Company’s Securities and Exchange Commission filings (particularly in Part II, Item 1A of our quarterly report on Form 10-Q for the quarter ended June 28, 2008).
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