Plexus Announces Q2 Revenue of $360 Million and EPS of $0.22

NEENAH, Wis., April 25 /PRNewswire-FirstCall/ — Plexus Corp. (NASDAQ:PLXS) today announced results for its fiscal second quarter and provided forward-looking guidance for its fiscal third quarter and its full fiscal year 2007.

  — Q2 ’07 Results:  Revenue for the fiscal 2nd quarter ended
March 31, 2007 was $360 million with diluted GAAP EPS of $0.22,
including $0.02 per share of stock option expense.

— Q3 ’07 Guidance: The Company established fiscal 3rd quarter revenue
guidance of $365 to $375 million with EPS, excluding any restructuring
charges, in the range of $0.25 to $0.30, including approximately $0.03
per share of stock option expense.

— FY ’07 Target: Plexus revised its full fiscal year revenue growth
target to 6% to 8% over fiscal 2006.


Dean Foate, President and CEO, commented, “From a revenue perspective Q2 was better than we had anticipated with the Wireline/Networking and Medical sectors outperforming previous expectations. Looking forward we are expecting sequential growth in the back half of the year to be fueled primarily by the Wireline/Networking and Defense/Security/Aerospace sectors. Late in the second quarter we received follow-on purchase orders for a large defense program. We expect to deliver the bulk of these orders in Q4.”


Gordon Bitter, Chief Financial Officer, added, “Profitability in Q2 was substantially better than projected, as higher revenues and aggressively implemented cost controls helped achieve better than expected operating efficiencies. Unfortunately, we wrote down $5.9 million (pre-tax) of inventory purchased during the quarter due to financial concerns about a late-stage development customer.”


Foate concluded, “Plexus continues to be a solid execution engine for our customers. We are well positioned to service our target market sectors, and focused on delivering long-term value to our shareholders.”


Plexus provides non-GAAP supplemental information. These non-GAAP income statements exclude transactions that are not expected to have an effect on future operations. Such transactions include restructuring costs, as well as the establishment or reduction of the valuation allowance for deferred tax assets. 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 financial 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.


SECTOR BREAKOUT


Plexus reports revenue based on the industry sector breakout set forth in the table below, which reflects the Company’s sales and marketing focus.

       Industry                Q2 – Fiscal 2007     Q1 – Fiscal 2007
Wireline/Networking 45% 42%
Wireless Infrastructure 8% 9%
Medical 25% 27%
Industrial/Commercial 16% 16%
Defense/Security/Aerospace 6% 6%

FISCAL Q2 HIGHLIGHTS
— Top 10 customers comprised 59% of sales during the quarter, down 1
percentage point from the previous quarter.
— Juniper Networks Inc., with 19% of sales, and General Electric Corp.,
with 10% of sales, were the only customers representing 10% or more of
revenues for the quarter.
— Cash flow provided by operations was approximately $11.0 million for
the quarter.
— Capital expenditures for the quarter were $16.2 million.
— Cash Conversion Cycle:

Cash Conversion Cycle Q2 – Fiscal 2007 Q1 – Fiscal 2007
Days in Accounts Receivable 49 Days 46 Days
Days in Inventory 68 Days 63 Days
Days in Accounts Payable (54) Days (51) Days
Annualized Cash Cycle 63 Days 58 Days

Conference Call/Webcast and Replay Information

What: Plexus Corp.’s Fiscal Q2 Earnings Conference Call

When: Thursday, April 26th at 8:30 a.m. Eastern Time

Where: 800-514-0843 or 973-935-8412 with conference ID: 8600895
http://www.videonewswire.com/PLXS/042607/index.html
(requires Windows Media Player)

Replay: The call will be archived until May 3, 2007 at noon Eastern Time
http://www.videonewswire.com/PLXS/042607/index.html
or via telephone replay at 877-519-4471 or 973-341-3080
PIN: 8600895



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, test, manufacturing, 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 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,” “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, 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 industry; 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 our planned expansions in Asia; the adequacy of restructuring and similar charges as compared to actual expenses; possible unexpected costs and operating disruption in transitioning programs; the effect of general economic conditions and world events (such as 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.

                               PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
March 31, April 1, March 31, April 1,
2007 2006 2007 2006

Net sales $ 360,175 $ 337,911 $ 741,010 $ 666,217
Cost of sales 328,533 300,870 669,713 597,901

Gross profit 31,642 37,041 71,297 68,316

Operating expenses:
Selling and
administrative
expenses 20,572 19,301 40,918 36,530
Restructuring costs 419 — 932 —
20,991 19,301 41,850 36,530

Operating income 10,651 17,740 29,447 31,786

Other income (expense):
Interest expense (761) (1,001) (1,686) (1,831)
Interest income 2,153 1,453 4,464 2,573
Miscellaneous income
(expense) (82) 345 (631) 19

Income before income
taxes 11,961 18,537 31,594 32,547

Income tax expense 1,803 — 6,319 253

Net income $ 10,158 $ 18,537 $ 25,275 $ 32,294

Earnings per share:
Basic $ 0.22 $ 0.42 $ 0.55 $ 0.73
Diluted $ 0.22 $ 0.40 $ 0.54 $ 0.71

Weighted average shares
outstanding:
Basic 46,296 44,633 46,269 44,265
Diluted 46,601 46,347 46,698 45,760

PLEXUS CORP.
NON-GAAP SUPPLEMENTAL INFORMATION
(in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
March 31, April 1, March 31, April 1,
2007 2006 2007 2006

Net income — GAAP $ 10,158 $ 18,537 $ 25,275 $ 32,294

Add income tax expense 1,803 — 6,319 253

Income before income
taxes — GAAP 11,961 18,537 31,594 32,547

Add: Restructuring
costs* 419 — 932 —

Income before income taxes
and excluding
restructuring costs —
Non-GAAP 12,380 18,537 32,526 32,547

Income tax expense —
Non-GAAP 1,866 — 6,505 253

Net income – Non-GAAP $ 10,514 $ 18,537 $ 26,021 $ 32,294

Earnings per share —
Non-GAAP:
Basic $ 0.23 $ 0.42 $ 0.56 $ 0.73
Diluted $ 0.23 $ 0.40 $ 0.56 $ 0.71

Weighted average shares
outstanding:
Basic 46,296 44,633 46,269 44,265
Diluted 46,601 46,347 46,698 45,760

* Summary of restructuring costs

Restructuring costs:
Lease exit costs and
other $ — $ — $ — $ —
Asset impairments — — — —
Severance costs 419 — 932 —
Total restructuring costs $ 419 $ — $ 932 $ —

PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)

March 31, September 30,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $ 132,706 $ 164,912
Short-term investments 45,000 30,000
Accounts receivable 194,442 209,737
Inventories 244,129 224,342
Deferred income taxes 10,378 10,232
Prepaid expenses and other 7,477 6,226

Total current assets 634,132 645,449

Property, plant and equipment, net 149,907 134,437
Goodwill, net 7,783 7,400
Deferred income taxes 4,606 4,542
Other 11,440 9,634

Total assets $ 807,868 $ 801,462

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of capital lease
obligations $ 1,643 $ 997
Accounts payable 192,744 215,332
Customer deposits 7,601 7,091
Accrued liabilities:
Salaries and wages 22,850 33,153
Other 30,022 29,808

Total current liabilities 254,860 286,381

Capital lease obligations 25,551 25,653
Other liabilities 9,434 7,861

Shareholders’ equity:
Common stock, $.01 par value, 200,000
shares authorized, 46,328 and 46,217
shares issued and outstanding,
respectively 463 462

Additional paid-in-capital 322,762 312,785
Retained earnings 184,143 158,868
Accumulated other comprehensive income 10,655 9,452

Total shareholders’ equity 518,023 481,567

Total liabilities and shareholders’
equity $ 807,868 $ 801,462


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Source: Plexus Corp.