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Plexus Corp.
55 Jewelers Park Drive
Neenah, WI 54957-0156
United States - Map
Phone: 920-722-3451
Fax: 920-722-3220
Web Site: http://www.plexus.com
DETAILS
Index Membership: S&P 600 SmallCap
S&P 1500 Super Comp
Sector: Technology
Industry: Printed Circuit Boards
Full Time Employees: NaN
BUSINESS SUMMARY
Plexus Corp., together with its subsidiaries, operates in the electronics manufacturing services industry. It provides product realization services to original equipment manufacturers and other technology companies in the wireline/networking, wireless infrastructure, medical, industrial/commercial, and defense/security/aerospace industries. The company's product realization services include development and design, materials procurement and management, prototyping and new product introduction, testing, manufacturing, product configuration, direct order fulfillment, logistics, and test/repair. Plexus Corp. operates in the United States, Mexico, Asia, and Europe. The company was founded in 1979 and is headquartered in Neenah, Wisconsin.
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Plexus Announces Q4 Revenue of $426 Million and EPS of $0.53
Wednesday October 31, 4:04 pm ET
Sets Fiscal 2008 Revenue Growth Target of 15% to 18%
Initiates Q1 Revenue Guidance of $440 - $460 Million
NEENAH, Wis., Oct. 31 /PRNewswire-FirstCall/ -- Plexus Corp. (Nasdaq: PLXS - News) today announced:
-- Q4 Fiscal 2007 Results: Revenue for the fiscal 4th quarter ended
September 29, 2007 was $426 million with diluted GAAP EPS of $0.53,
including $0.03 per share of stock option expense and $0.02 per share
of restructuring costs.
-- Fiscal 2008 Revenue Growth Target: Consistent with the Company's
strategic objectives, Plexus is targeting revenue growth in the range
of 15% to 18% in fiscal 2008.
-- Q1 Fiscal 2008 Guidance: The Company established fiscal 1st quarter
revenue guidance of $440 to $460 million with EPS, excluding any
restructuring charges, in the range of $0.58 to $0.63, including
approximately $0.03 per share of stock option expense.
Dean Foate, President and CEO, commented, "Our return on invested capital (ROIC) for fiscal 2007 of 17.6% was above our weighted average cost of capital (WACC) and consistent with our long-term financial model. Despite being at the low end of our revenue guidance for Q4, we exceeded our earnings expectations, driven primarily by a favorable mix of customer programs, better than expected labor efficiencies and strong performance by our engineering services organization (Technology Group). Relative to our guidance for Q4, our Medical Sector was exceptionally strong while our Defense Sector revenues were lower than expected, as we experienced an approximately $15 million push-out in the production schedule for a significant defense customer to the first quarter of fiscal 2008. Q4 included approximately $44 million of revenue for this customer."
Ginger Jones, Chief Financial Officer, added "Our operating income for Q4 was favorably impacted by approximately $0.01 as a result of several items: we recognized approximately $2.9 million of pre-tax benefit for shipments of inventory that we had previously written down for a financially distressed customer, which was offset by a $0.9 million pre-tax restructuring charge as we scaled our Mexican operations to match current revenue levels, as well as a $1.3 million pre-tax warranty-related charge. Offsetting the favorable net impact to operating income, we continued to experience losses in our Mexican facility, and our tax rate for fiscal 2007 was higher than expected at approximately 22%, primarily due to the regional mix of production in Q4. This resulted in an effective tax rate of 25% for the fourth quarter, which reduced diluted earnings per share for the quarter by approximately $0.04."
Foate said, "Looking forward, we are expecting a strong start to fiscal 2008, with Q1 revenue in the range of $440 million to $460 million with single digit growth in all of our Market Sectors, with the exception of our Defense Sector where we expect sequential revenue growth to exceed 25%. Including the production push-out from Q4 and a small follow-on order from our large defense customer, we are currently expecting approximately $54 million in revenue from this program in Q1 followed by approximately $26 million in Q2."
Jones commented, "Due to customer mix, we are also expecting Q1 to be an exceptionally strong earnings quarter, with EPS, excluding any restructuring charges, in the range of $0.58 to $0.63, including approximately $0.03 per share of stock option expense. Looking to future quarters in fiscal 2008, we believe that successfully executing on our strategy to gain market share and grow revenues 15% to 18% will deliver a more consistently sustainable ' 20-10-5' financial model (20% ROIC target, 10% gross margin target and 5% operating earnings target)."
Foate concluded, "We believe Plexus offers a unique value proposition that creates competitive advantage for OEMs with mid- to low-volume, higher-mix requirements in the market sectors we serve, and that this is the foundation of our goal to double the size of Plexus over a 4- to 5-year horizon. Consistent with this goal we are setting a 15% to 18% revenue growth objective for fiscal 2008. Our strong start to the year suggests that the near-term objective is achievable, yet we are mindful of growing economic uncertainly that could derail end-market demand."
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, including ROIC, 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.
MARKET SECTOR BREAKOUT
Plexus reports revenue based on the market sector breakout set forth in the table below, which reflects the Company's sales and marketing focus.
Market Sector Q4 - Fiscal 2007 Q3 - Fiscal 2007
Wireline/Networking 42% 46%
Wireless Infrastructure 8% 9%
Medical 21% 24%
Industrial/Commercial 15% 14%
Defense/Security/Aerospace 14% 7%
FISCAL Q4 HIGHLIGHTS
-- Annual ROIC was 17.6%. The Company defines ROIC as tax-effected
operating income, excluding restructuring costs, divided by average
capital employed over a rolling five quarter period. Capital employed
is defined as equity plus debt, less cash and cash equivalents and
short-term investments.
-- Cash flow provided by operations was approximately $23.0 million for
the quarter.
-- Top 10 customers comprised 65% of sales during the quarter, up 1
percentage point from the previous quarter.
-- Juniper Networks Inc., with 22% of sales, and an un-named defense
sector customer, with 10% of sales, were the only customers
representing 10% or more of revenues for the quarter.
-- Capital expenditures for the quarter were $10.0 million.
-- Cash Conversion Cycle:
Cash Conversion Cycle Q4 - Fiscal 2007 Q3 - Fiscal 2007
Days in Accounts Receivable 49 Days 48 Days
Days in Inventory 68 Days 68 Days
Days in Accounts Payable (58) Days (53) Days
Annualized Cash Cycle 59 Days 63 Days
Conference Call/Webcast and Replay Information
What: Plexus Corp.'s Fiscal Q4 Earnings Conference Call
When: Thursday, November 1st at 8:30 a.m. Eastern Time
Where: 888-693-3477 or 973-582-2710 with conference ID: 9261576
http://www.videonewswire.com/PLXS/110107
(requires Windows Media Player)
Replay: The call will be archived until November 8, 2007 at noon
Eastern Time
http://www.videonewswire.com/PLXS/110107
or via telephone replay at 877-519-4471 or 973-341-3080
PIN: 9261576
For further information, please contact:
Kristian Talvitie, Vice President - Marketing, Branding and Communications
920-969-6160 or
[email protected]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 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 market sector and the uncertainty of defense appropriations and spending; the Company's 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 expansions in Asia; the adequacy of restructuring and similar charges as compared to actual expenses; the degree of success and the costs of efforts to improve the financial performance of its Mexican operations; possible unexpected costs and operating disruption in transitioning programs; 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.
PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006
Net sales $425,679 $396,942 $1,546,264 $1,460,557
Cost of sales 371,960 352,061 1,382,725 1,301,857
Gross profit 53,719 44,881 163,539 158,700
Operating expenses:
Selling and
administrative
expenses 21,175 20,354 82,263 78,438
Restructuring and
asset impairment
costs 906 - 1,838 -
22,081 20,354 84,101 78,438
Operating income 31,638 24,527 79,438 80,262
Other income (expense):
Interest expense (742) (855) (3,168) (3,507)
Interest income 2,371 1,937 9,099 6,163
Miscellaneous income
(expense) (32) (223) (1,115) 434
Income before income taxes
and cumulative
effect of change in 33,235 25,386 84,254 83,352
accounting principle
- net of income tax
Income tax expense
(benefit) 8,332 (17,758) 18,536 (17,178)
Income before
cumulative effect
of change in 24,903 43,144 65,718 100,530
accounting principle
Cumulative effect
of change in
accounting principle - 505 - 505
- net of income tax
Net income $24,903 $42,639 $65,718 $100,025
Earnings per share:
Basic:
Income before
cumulative $0.54 $0.93 $1.42 $2.23
effect of change in
accounting principle
- net of
income tax
Cumulative effect
of change - 0.01 - 0.01
in accounting
principle
- net of income tax
$0.54 $0.92 $1.42 $2.22
Diluted:
Income before
cumulative $0.53 $0.92 $1.41 $2.16
effect of change in
accounting principle
- net of income tax
Cumulative effect
of change - 0.01 - 0.01
in accounting
principle - net
of income tax
$0.53 $0.91 $1.41 $2.15
Weighted average shares
outstanding:
Basic 46,375 46,208 46,312 45,146
Diluted 46,864 46,860 46,739 46,490
PLEXUS CORP.
NON-GAAP SUPPLEMENTAL INFORMATION
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006
Net income - - GAAP $24,903 $42,639 $65,718
$100,025
Add cumulative effect
of change in
accounting principle
- net of income tax - 505 - 505
Add income tax expense
(benefit) ** 8,332 (17,758) 18,536 (17,178)
Income before income
taxes and cumulative
effect of change
in accounting
principle - net of
income tax - GAAP 33,235 25,386 84,254 83,352
Add:Restructuring and
impairment costs* 906 - 1,838 -
Income before cumulative
effect of change in
accounting - net of
income taxes and
excluding restructuring and
impairment costs
- Non-GAAP 34,141 25,386 86,092 83,352
Income tax expense
(benefit) - Non-GAAP 8,535 (83) 18,940 496
Net income - Non-GAAP $25,606 $25,469 $67,152 $82,856
Earnings per share
- Non-GAAP:
Basic $0.55 $0.55 $1.45 $1.84
Diluted $0.55 $0.54 $1.44 $1.78
Weighted average
shares outstanding:
Basic 46,375 46,208 46,312 45,146
Diluted 46,864 46,860 46,739 46,490
* Summary of restructuring and impairment costs
Restructuring and impairment costs:
Severance costs $906 $- $1,838 $-
** Impact related to the reversal of the valuation allowance
Reversal of the valuation allowance
to income taxes $ - $ (17,674) $- $(17,674)
PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
September 29, 2007 September 30, 2006
ASSETS
Current assets:
Cash and cash equivalents $154,109 $164,912
Short-term investments 55,000 30,000
Accounts receivable 230,826 209,737
Inventories 275,854 224,342
Deferred income taxes 12,932 10,232
Prepaid expenses and other 5,434 6,226
Total current assets 734,155 645,449
Property, plant and equipment, net 159,517 134,437
Goodwill, net 8,062 7,400
Deferred income taxes 2,310 4,542
Other 12,472 9,634
Total assets $916,516 $801,462
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations $1,720 $997
Accounts payable 237,034 215,332
Customer deposits 10,381 7,091
Accrued liabilities:
Salaries and wages 23,149 33,153
Other 34,755 29,808
Total current liabilities 307,039 286,381
Capital lease obligations, net of
current portion 25,082 25,653
Other liabilities 9,372 7,861
Deferred income taxes 1,758 -
Shareholders' equity:
Common stock, $.01 par value,
200,000 shares authorized, 46,402
and 46,217 shares issued
and outstanding, respectively 464 462
Additional paid-in-capital 336,603 312,785
Retained earnings 224,586 158,868
Accumulated other comprehensive income 11,612 9,452
Total shareholders' equity 573,265 481,567
Total liabilities and
shareholders' equity $916,516 $801,462
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Source: Plexus Corp.