1
FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT No. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
-----------------------
Date of Report: May 23, 2000
PLEXUS CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 000-14824 39-1344447
- ---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number Identification No.)
55 Jewelers Park Drive, Neenah, Wisconsin 54957-0156
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(920) 722-3451
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2
This amendment is being filed to provide historical pro forma financial
information of an acquired operation and Plexus pro forma financial information
reflecting the acquisition. The information relates to Plexus' acquisition of
the turnkey electronic contract manufacturing operations of Elamex, S.A. de C.V.
("Elamex") on May 23, 2000. The information was not reasonably available at the
time the original 8-K was filed.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
See "Index to Financial Statements - Elamex" on the following page. The
Elamex statements exclude sales and other data relating to a customer
arrangement that was specifically excluded from the assets and operations that
were purchased by Plexus.
(b) Pro Forma Financial Information
See "Index to Financial Statements - Plexus Corp. Pro Forma" on the
following page.
(c) Exhibits
The following exhibit is filed with this amendment:
Exhibit 23.1 Consent of Deloitte & Touche LLP
-2-
3
INDEX TO FINANCIAL STATEMENTS
Page No.
--------
Contract Electronics Manufacturing Services Operations of Elamex
Audited Financial Statements:
Independent Auditors' Report.......................................... F-1
Balance Sheet at December 31, 1999.................................... F-2
Statement of Income and Changes in Parent Company's
Investment and Net Advances for the year ended
December 31, 1999............................................ F-3
Statement of Cash Flows for the year ended
December 31,1999............................................. F-4
Notes to Financial Statements......................................... F-5
Unaudited Condensed Interim Financial Statements:
Statements of Operations for the quarters
ended March 31, 2000 and 1999................................ F-10
Balance Sheets at March 31, 2000 and December 31, 1999................ F-11
Statements of Cash Flows for the quarters ended
March 31, 2000 and 1999...................................... F-12
Notes to Unaudited Condensed Financial Statements..................... F-13
Plexus Corp. Pro Forma
Unaudited Pro Forma Condensed Combined Financial Information
Statement of Operations for the six months
ended March 31, 2000........................................ F-14
Statement of Operations for the year ended
September 30, 1999.......................................... F-14
Balance Sheet at March 31, 2000....................................... F-15
Notes to Unaudited Pro Forma Condensed Combined
Financial Statements........................................ F-16
4
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Elamex, S.A. de C.V.
Ciudad Juarez, Mexico
We have audited the accompanying balance sheet of the Contract Electronics
Manufacturing Services Operations of Elamex, S.A. de C.V. as of December 31,
1999, and the related statements of income and changes in parent company's
investment and net advances and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Contract Electronics Manufacturing
Services operations of Elamex, S.A. de C.V. as of December 31, 1999, and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Deloitte & Touche LLP
Houston, Texas
May 31, 2000
F-1
5
CONTRACT ELECTRONICS MANUFACTURING SERVICES
OPERATIONS OF ELAMEX, S.A. de C.V.
BALANCE SHEET,
DECEMBER 31, 1999 (IN THOUSANDS OF U.S. $)
- --------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Receivables:
Trade accounts, net of allowance for doubtful accounts of $98 $ 8,686
Other receivables 181
-------
Total receivables 8,867
Inventories, net 14,327
Prepaid expenses 204
-------
Total current assets 23,398
PROPERTY, PLANT AND EQUIPMENT, Net 11,019
-------
TOTAL $34,417
=======
LIABILITIES AND PARENT COMPANY'S INVESTMENT AND NET ADVANCES
CURRENT LIABILITIES:
Accounts payable $ 5,379
Accrued salaries and wages 814
Deferred income taxes 1,644
-------
Total current liabilities 7,837
DEFERRED INCOME TAXES 812
COMMITMENTS AND CONTINGENCIES
PARENT COMPANY'S INVESTMENT AND NET ADVANCES 25,768
-------
TOTAL $34,417
=======
See accompanying notes to financial statements.
F-2
6
CONTRACT ELECTRONICS MANUFACTURING SERVICES
OPERATIONS OF ELAMEX, S.A. de C.V.
STATEMENT OF INCOME AND CHANGES IN PARENT COMPANY'S
INVESTMENT AND NET ADVANCES
FOR THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS OF U.S. $)
- --------------------------------------------------------------------------------
NET SALES $ 69,190
COST OF SALES 62,748
--------
Gross profit 6,442
--------
OPERATING EXPENSES:
General and administrative 3,437
Selling 1,230
--------
Total operating expenses 4,667
--------
OPERATING INCOME 1,775
INCOME TAX PROVISION (652)
--------
NET INCOME 1,123
PARENT COMPANY'S INVESTMENT AND NET ADVANCES, JANUARY 1, 1999 22,400
ADVANCES FROM PARENT COMPANY, Net 2,245
--------
PARENT COMPANY'S INVESTMENT AND NET ADVANCES,
DECEMBER 31, 1999 $ 25,768
========
See accompanying notes to financial statements.
F-3
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CONTRACT ELECTRONICS MANUFACTURING SERVICES
OPERATIONS OF ELAMEX, S.A. de C.V.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999 (IN THOUSANDS OF U.S. $)
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,123
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,880
Deferred income taxes (2,982)
Changes in operating assets and liabilities:
Trade accounts receivable 2,656
Other receivables (157)
Inventories (3,252)
Prepaid expenses (130)
Accounts payable 1,171
Accrued salaries and wages (10)
-------
Net cash provided by operating activities 1,299
-------
CASH FLOWS FROM INVESTING ACTIVITIES - Purchases of property
and equipment (3,080)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations (464)
Advances from parent company, net 2,245
-------
Net cash provided by financing activities 1,781
-------
NET CHANGE IN CASH --
CASH, BEGINNING OF YEAR --
-------
CASH, END OF YEAR $ --
=======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
Cash paid during the year for interest $ 20
=======
See accompanying notes to financial statements.
F-4
8
CONTRACT ELECTRONICS MANUFACTURING SERVICES OPERATIONS
OF ELAMEX, S.A. DE C.V.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS - The accompanying financial statements include
certain assets, liabilities and operations related to the contract
electronics manufacturing services operations ("CEMS" or the "Company") of
Elamex, S.A. de C.V. ("Elamex"). On March 30, 2000, Elamex entered into an
agreement pursuant to which Elamex agreed to sell to Plexus Corp. certain
contracts, and the related assets and liabilities to service the
contracts, which were part of Elamex's contract manufacturing services
operations. Effective April 1, 2000, the operations of the Company were
maintained as a separate entity. The CEMS operations were purchased by
Plexus Corp. on May 23, 2000 for U.S. $53.7 million in cash, subject to
adjustment. During 1999, the operations of CEMS were included as a
component within a division of Elamex. The accompanying financial
statements and related notes reflect the historical results of operations
and cash flows of CEMS while it was operated by Elamex. The statement of
income and changes in parent company's investment and net advances
includes all revenues and costs directly attributable to CEMS, including
costs for personnel, facilities, functions and services used by the
business and allocations of costs for certain administrative functions and
services performed by centralized departments of Elamex. Substantially all
of the general and administrative costs have been allocated to the CEMS
operation based on Elamex management's estimate of costs attributable to
the CEMS operation. Such costs are not necessarily indicative of the costs
that would have been incurred if CEMS had been a separate entity.
The Company provides contract electronics manufacturing services to
customers primarily located in the United States of America. All of the
Company's manufacturing, machinery and equipment are located in facilities
in Ciudad Juarez, Mexico.
BASIS OF PRESENTATION - The financial statements and accompanying notes
are prepared in U.S. dollars, the functional and reporting currency of the
Company, in accordance with accounting principles generally accepted in
the United States of America (the "U.S.").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MANAGEMENT ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the U.S.
requires management to make certain estimates that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
FOREIGN CURRENCY - The functional currency of the Company is the U.S.
dollar, the currency of the primary economic environment in which the
Company operates. Gains and losses on foreign currency transactions and
remeasurement of balance sheet amounts are reflected in net income.
Included in "general and administrative expenses" on the accompanying
consolidated statement of income are foreign exchange losses of $20,656
for the year ended December 31, 1999. Assets and liabilities of the
Company are denominated in U.S. dollars except for approximately $512,000
in certain accrual salaries and wages. Certain balance sheet amounts
(primarily inventories, property, plant and equipment, accumulated
depreciation and prepaid expenses) denominated in other than U.S. dollars
are remeasured
F-5
9
at weighted-average exchange rates for the relevant period the transaction
was recorded. Assets and liabilities denominated in pesos are translated
to U.S. dollars at the exchange rate published in the Diario Official de
la Federacion (the "Oficial Gazette of the Federation"), which is the
approximate rate at which a receivable or payable can be settled as of
December 31, 1999.
In addition, the Company has recorded a net deferred tax liability
pursuant to Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes" (see Note 6). The recorded amount of
approximately $2,456,000 at December 31, 1999 represents the net dollar
value of amounts provided for temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective Mexican tax bases.
INVENTORIES - Inventories are stated at the lower of cost or market. Cost
is determined using the first-in first-out ("FIFO") method. Inventory cost
includes material, labor, and overhead. Inventory reserves, which are
charged to cost of sales, are provided for excess inventory, obsolete
inventory, and for differences between inventory cost and its net
realizable value.
PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are stated
at cost, less accumulated depreciation and amortization. Plant and
equipment under capital leases are stated at the lower of their fair value
at the inception of the lease or the present value of minimum lease
payments. Depreciation and amortization are calculated using the
straight-line method over the shorter of related lease terms or estimated
useful lives of the assets. The policy of the Company is to charge amounts
expended for maintenance and repairs to expense and to capitalize
expenditures for major replacements and improvements.
LONG-LIVED ASSETS - The Company records impairment losses on long-lived
assets used in operations when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of those
assets.
PARENT COMPANY'S INVESTMENT AND NET ADVANCES - Operations of the Company
were funded through advances from Elamex. Such advances have no defined
repayment terms.
INCOME TAXES - For the year ended December 31, 1999, the CEMS operations
have been included in the consolidated tax return with the majority
stockholder of Elamex. For purposes of these financial statements, federal
income taxes are provided as if the CEMS operations had filed a separate
return on a stand-alone basis. The Company accounts for income taxes under
the asset and liability method as required by SFAS No. 109. Under the
asset and liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. Under SFAS No. 109, the effect on
deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Provisions for taxes are made based upon the applicable tax laws of
Mexico. In conformity with SFAS No. 109, deferred tax assets and
liabilities are not provided for differences related to assets and
liabilities that are remeasured from pesos into U.S. dollars using
historical exchange rates and that result from indexing for Mexican tax
purposes or exchange rate changes.
REVENUE RECOGNITION - Contract electronic manufacturing services sales are
recognized at the time the order is shipped. Anticipated losses on
contract electronic manufacturing services are charged to operations as
soon as they are determined.
F-6
10
POSTRETIREMENT BENEFITS - Employees are entitled to certain benefits upon
retirement after 15 years or more of service (seniority premiums), in
accordance with the Mexican Federal Labor Law. The benefits are accrued as
a liability and recognized as expense during the year in which services
are rendered.
FINANCIAL INSTRUMENTS - The carrying amounts of financial instruments,
including receivables, accounts payable and accrued expenses approximated
fair value as of December 31, 1999 because of the relatively short
maturity of these instruments.
NEW ACCOUNTING STANDARDS - In June 1998, the Financial Accounting
Standards Board issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 requires all derivatives
to be recognized as assets or liabilities on the balance sheet and
measured at fair value. Changes in the fair value of derivatives should
be recognized in either Net Income or Other Comprehensive Income,
depending on the designated purpose of the derivative. This statement will
be effective for CEMS on January 1, 2001. CEMS is currently determining
the impact this statement will have on its financial position and results
of operations.
In December 1999, the Staff of the Securities and Exchange Commission
("SEC") issued Staff Accounting Bulletin 101 ("SAB 101"), "Revenue
Recognition in Financial Statements," which provides guidance related to
revenue recognition. SAB 101 allows companies to report any changes in
revenue recognition related to adoption of its provisions as an accounting
change at the time of implementation. Companies must adopt SAB 101 no
later than December 31, 2000, effective as of January 1, 2000. CEMS is
currently determining the impact this statement will have in its
financial position and results of operations.
3. INVENTORIES
Inventories as of December 31, 1999 (in thousands of U.S. $) consist of
the following:
Raw materials $ 9,471
Work-in-process 1,032
Finished goods 3,824
--------
Total $ 14,327
========
4. PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment as of December 31, 1999 (in
thousands of U.S.$) is as follows:
ESTIMATED
USEFUL LIVES
(YEARS)
Machinery and equipment 3 - 10 $ 17,857
Leasehold improvements 10 1,331
--------
Total 19,188
Less accumulated depreciations (8,169)
--------
Total $ 11,019
========
5. LEASES
The Company utilizes certain machinery and equipment and occupies certain
buildings under noncancelable operating lease arrangements that expire at
various dates through 2009, some of which have renewal options for
additional periods. Rental expense under operating lease agreements
aggregated approximately $455,000 for the year ended December 31, 1999.
F-7
11
Future minimum lease obligations at December 31, 1999 having an initial or
remaining term in excess of one year are as follows:
2000 $ 1,498
2001 1,498
2002 1,498
2003 1,313
2004 1,313
Thereafter 6,565
-----
Total minimum obligations $13,685
=======
6. INCOME TAXES
Mexican tax legislation requires that companies pay a tax calculated as
the greater of tax resulting from taxable income or tax on the total value
of certain assets less certain liabilities (assets tax). Taxes resulting
from net income are calculated using Mexican tax regulations, which define
deductibility of expenses and recognize certain effects of inflation.
The tax provision differs from the statutory tax rate of 35% in 1999 on
taxable income as follows:
Statutory tax rate 35.0%
Nondeductible expenses 7.3%
Inflationary effects on monetary items and depreciation
expense for tax purposes only (3.2)
Other (2.4)
-----
36.7%
=====
Income tax expense for the year ended December 31, 1999 consists of
current expense of approximately $3,634,000 and a deferred benefit of
approximately $2,982,000.
The tax effects of significant temporary differences representing deferred
tax liabilities as of December 31, 1999 are as follows:
Property, plant and equipment $ 812
Inventories 1,644
------
Total net deferred tax liability $2,456
======
7. RELATED-PARTY TRANSACTIONS
The Company leases manufacturing facilities from related parties. Included
in general and administrative expenses are rental payments under these
leases of approximately $358,000 for the year ended December 31, 1999.
F-8
12
8. COMMITMENTS AND CONTINGENCIES
The Mexican Federal Labor Law requires a severance payment for all
permanent employees that are terminated by the employer. This payment is
calculated on the basis of 90-days' pay for termination anytime during the
first year of employment, with an additional 12 days per pay year for each
year of service thereafter up to two times minimum wage. While most of the
Company's Mexican assembly labor is hired under temporary labor contracts
during the first two months of employment, the labor force is changed to
permanent labor contracts after this period. The Company has agreements
with many of its contract-assembly customers which require that the
customers pay the severance costs incurred, in the event that assembly
contracts are terminated prior to their scheduled completion. In
management's opinion, any severance costs incurred upon the termination of
any manufacturing contracts would not be material.
Seniority premiums to which employees are entitled upon retirement after
15 years or more of service, in accordance with the Mexican Federal Labor
Law, are recognized as expense during the year in which services are
rendered based on actuarial computations. Included in accrued salaries and
wages is approximately $36,000 as of December 31, 1999, which fully
accrues for these estimated seniority obligations. No significant
seniority payments have been made during 1999.
******
F-9
13
CONTRACT ELECTRONICS MANUFACTURING SERVICES OPERATIONS OF
ELAMEX, S.A. DE C.V.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
Unaudited
Three Months Ended
March 31,
-------------------------------------------
2000 1999
---- ----
Net sales $ 16,605 $ 17,861
Cost of sales 15,989 15,955
-------- --------
Gross profit
616 1,906
Selling, general and administrative expenses 873 1,138
-------- --------
Operating income (loss) (257)
768
Income tax provision (benefit)
(93) 277
-------- --------
Net income (loss) $ (164) $ 491
======== ========
See notes to condensed financial statements
F-10
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CONTRACT ELECTRONICS MANUFACTURING SERVICES OPERATIONS OF
ELAMEX, S.A. DE C.V.
CONDENSED BALANCE SHEETS
(in thousands)
Unaudited
March 31, December 31,
2000 1999
------------------------ -----------------------
ASSETS
Current assets:
Trade accounts receivable, net $ 9,772 $ 8,686
Other receivables -- 181
Inventories, net 12,247 14,327
Prepaid expenses and other 169 234
------- -------
Total current assets 22,188 23,428
Property, plant and equipment, net 11,768 11,019
------- -------
Total $33,956 $34,447
======= =======
LIABILITIES AND PARENT COMPANY'S INVESTMENT AND NET ADVANCES
Current liabilities:
Accounts payable $ 4,548 $ 5,379
Other accrued expenses 898 814
Deferred income taxes 1,386 1,644
------- -------
Total current liabilities 6,832 7,837
Deferred income taxes 485 812
Parent company's investment and net advances 26,639 25,798
------- -------
Total $33,956 $34,447
======= =======
See notes to condensed financial statements
F-11
15
CONTRACT ELECTRONICS MANUFACTURING SERVICES OPERATIONS OF
ELAMEX, S.A. DE C.V.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited
Three Months Ended
March 31,
-------------------------------------
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (164) $ 491
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 674 639
Deferred income taxes (585) --
Changes in operating assets and liabilities:
Trade accounts and other receivables (905) (415)
Inventories 2,080 (1,516)
Prepaid expenses and other 65 (80)
Accounts payable (831) 570
Other accrued expenses 84 274
------- -------
Cash flows provided by (used in) operating activities 418 (37)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (1,423) (448)
------- -------
Cash flows used in investing activities (1,423) (448)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from parent company 1,005 485
------- -------
Cash flows provided by financing activities 1,005 485
------- -------
Net increase in cash and cash equivalents -- --
------- -------
Cash and cash equivalents:
Beginning of period -- --
End of period ------- -------
$ -- $ --
======= =======
See notes to condensed financial statements
F-12
16
CONTRACT ELECTRONICS MANUFACTURING SERVICES OPERATIONS OF ELAMEX, S.A.DE C.V.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
NOTE 1 - BASIS OF PRESENTATION
The condensed financial statements included herein have been prepared
by Elamex, S.A. de C.V. (Elamex), without audit and pursuant to the rules and
regulations of the United States Securities and Exchange Commission. In the
opinion of Management, the financial statements reflect all adjustments, which
consist only of normal recurring adjustments, necessary to present fairly the
financial position of Contract Electronics Manufacturing Services Operations
(CEMS) of Elamex at March 31, 2000 and the results of its operations and its
cash flows for the three months ended March 31, 2000 and 1999.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to the SEC rules and regulations for interim financial statements. However,
management believes that the disclosures made in the condensed financial
statements included herein are adequate to make the information presented not
misleading. It is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included in CEMS'
December 31, 1999 audited financial statements included herein.
The condensed balance sheet data at December 31, 1999 was derived from
audited financial statements, but does not include all disclosures required by
accounting principles generally accepted in the Untied States of America.
NOTE 2: ACQUISITION
On May 23, 2000, Plexus Corp. (Plexus) completed its acquisition of
CEMS pursuant to a Stock Purchase Agreement dated March 30, 2000 (Agreement). In
accordance with the Agreement, on April 1, 2000 Elamex transferred specified
tangible and intangible assets and certain liabilities of its turnkey electronic
contract manufacturing operations in Juarez, Mexico to two newly formed
corporations. Plexus then purchased the stock of these corporations for U.S.
$53.7 million, subject to adjustment upon the final determination of the net
book value of these corporations. The purchase price was paid in cash.
Plexus is accounting for the acquisition of CEMS using the purchase
method of accounting. Therefore, the effects of the acquisition will be
reflected on Plexus' financial statements from and subsequent to the acquisition
date.
NOTE 3 - INVENTORIES
The major classes of inventories are as follows (in thousands):
March 31, December 31,
2000 1999
---------- ------------
Assembly parts $ 9,013 $ 9,471
Work-in-process 467 1,032
Finished goods 2,767 3,824
-------- ---------
$ 12,247 $ 14,327
======== =========
F-13
17
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
The following unaudited pro forma condensed combined statements of operations
combine the historical consolidated statements of operations of Plexus Corp.
(Plexus or the Company) and the contract electronics manufacturing services
operations of Elamex, S.A. de C.V. (EMS), giving effect to the acquisition, as
if it had been effective as of the beginning of the periods indicated. This
information should be read in conjunction with the historical consolidated
financial statements and notes of Plexus and EMS. The pro forma financial data
presented below does not necessarily indicate the actual financial results,
which would have occurred if the acquisition had been completed on the dates
indicated, or that may result in the future.
PLEXUS CORP.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 2000
(Amounts in thousands, except per share data)
Pro Forma Pro Forma
Plexus EMS Adjustments Results
------ --- ----------- -------
(Note 1)
Net sales $309,088 $32,802 $341,890
$ -
Cost of sales 265,436 31,074 296,510
-------- ------- -------- --------
Gross profit 43,652 1,728 - 45,380
Selling and administrative expenses 15,163 2,188 - 17,351
Goodwill amortization - - 976 A 976
-------- ------- -------- --------
Operating income 28,489 (460) (976) 27,053
Other, net 854 - (1,500) B (646)
-------- ------- -------- --------
Income (loss) before income taxes 29,343 (460) (2,476) 26,407
Income tax expense (benefit) 11,737 (184) (990) C 10,563
-------- ------- -------- --------
Net income (loss) $ 17,606 $ (276) $ (1,486) $ 15,844
======== ======= ======== ========
Basic earnings per share $ 1.00 $ 0.90
Diluted earnings per share $ 0.93 $ 0.84
Weighted average shares outstanding:
Basic 17,666 17,666
Diluted 18,881 18,881
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
F-14
18
PLEXUS CORP.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1999
(Amounts in thousands, except per share data)
Pro Forma Pro Forma
Plexus EMS Adjustments Results
------ --- ----------- -------
(Note 1)
Net sales $492,414 $ 69,190 $ - $561,604
Cost of sales 426,005 62,748 - 488,753
-------- -------- --------- --------
Gross profit 66,409 6,442 - 72,851
Selling and administrative expenses 31,981 4,667 - 36,648
Goodwill amortization - - 1,952 A 1,952
-------- -------- --------- --------
Operating income 34,428 1,775 (1,952) 34,251
Other, net 1,721 - (3,000) B (1,279)
-------- -------- --------- --------
Income (loss) before income taxes 36,149 1,775 (4,952) 32,972
Income tax expense (benefit) 15,838 652 (1,981) C 14,509
-------- -------- --------- --------
Net income (loss) $ 20,311 $ 1,123 $ (2,971) $ 18,463
======== ======== ========= ========
Basic earning per share $ 1.17 $ 1.07
Diluted earnings per share $ 1.10 $ 1.00
Weighted average shares outstanding:
Basic 17,323 17,323
Diluted 18,510 18,510
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
F-15
19
UNAUDITED PRO FORMA CONDENSED COMBINED PLEXUS FINANCIAL INFORMATION
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
The following unaudited pro forma condensed combined balance sheet combines the
historical consolidated balance sheets of Plexus with EMS, giving effect to the
acquisition as if it had been effective on March 31, 2000. This information
should be read together with the historical consolidated financial statements
and notes of Plexus and EMS. The pro forma financial data presented below does
not necessarily indicate the actual financial position that would have occurred
if the acquisition had been completed on March 31, 2000, or that may result in
the future.
PLEXUS CORP.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 2000
(Amounts in thousands)
Pro Forma Pro Forma
Plexus EMS Adjustments Combined
------ --- ----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 25,250 $ - $ (13,740) D $ 11,510
Short-term investments 5,005 - - 5,005
Accounts receivable 74,963 9,772 - 84,735
Inventories 107,345 12,247 - 119,592
Other 10,954 169 - 11,123
-------- -------- --------- --------
Total current assets 223,517 22,188 (13,740) 231,965
Property, plant and equipment, net 42,011 11,768 - 53,779
Other 2,473 - 27,101 E 29,574
--------- -------- --------- --------
Total assets $268,001 $ 33,956 $ 13,361 $315,318
======== ======== ========= ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 69,053 $ 4,548 - $ 73,601
Other 27,243 2,284 - 29,527
-------- -------- --------- --------
Total current liabilities 96,296 6,832 103,128
Long-term debt 137 - 40,000 D 40,137
Other 2,486 485 - 2,971
-------- -------- --------- --------
Shareholders' equity:
Common stock and additional
paid-in capital 56,673 - - 56,673
Parent company's investment in EMS - 26,639 (26,639) F -
Retained earnings 112,409 - - 112,409
-------- -------- --------- --------
Total shareholders' equity 169,082 26,639 (26,639) 169,082
-------- -------- --------- --------
Total liabilities and shareholders' equity
$268,001 $ 33,956 $ 13,361 $315,318
======== ======== ========= ========
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation: The unaudited pro forma condensed combined
financial statements have been prepared as if Plexus acquired the net
assets of EMS on the date of the balance sheet or as of the beginning of
the period for purposes of the statements of operations. For purposes of
the unaudited pro forma condensed combined statements of operations, the
EMS's statement of operations for the six months ended March 31, 2000 have
been combined with the Plexus' statement of operations for the six months
ended March 31, 2000 and the EMS's statement of operations for the year
ended December 31, 1999 have been combined with the Plexus' statement of
operations for the year ended September 30, 1999. This presentation has the
effect of including the EMS's statement of operations for the three months
ended December 31, 1999 in both statements of operations. Unaudited net
sales and net loss for EMS were $16,198,000 and ($122,000), respectively,
for the three months ended December 31, 1999.
The acquisition has been accounted for in the unaudited pro forma condensed
combined financial statements using the purchase method. Pro forma
adjustments are required to adjust the historical financial statements of
Plexus and EMS to reflect the use of cash and the addition of debt used to
finance the acquisition, additional interest expense associated with such
debt and amortization of intangible assets resulting from the application
of the purchase method of accounting.
2. Acquisition of EMS: On May 23, 2000, Plexus completed the acquisition
of EMS from Elamex S.A. de C.V. (Elamex) pursuant to a Stock Purchase
Agreement dated March 30, 2000 (Agreement). In accordance with the
agreement, on April 1, 2000 Elamex transferred specified tangible and
intangible assets and certain liabilities of its turnkey electronic
manufacturing operations in Juarex, Mexico to two newly formed
corporations. Under terms of the purchase agreement, Plexus then purchased
the stock of these corporations for U.S. $53.7 million in cash, subject to
adjustment upon the final determination of the net book value of EMS.
Plexus financed the acquisition from its working capital and pre-existing
credit facility.
3. Pro forma Adjustments:
A. To amortize estimated goodwill over 15 years as if the acquisition
occurred at the beginning of the period presented. This estimate is
preliminary subject to appraisals being completed.
B. To increase interest expense by applying Plexus' 1999 borrowing rate of
7.5% to debt incurred to finance the acquisition. An increase or
decrease of 1/8% would change the interest expense by $25,000 and
$50,000 for the six months ended March 31, 2000 and the year ended
September 30, 1999, respectively.
C. To record the income tax benefit resulting from the net of lower
earnings due to increased interest expense and goodwill amortization.
D. To record cash used and debt acquired to finance the acquisition.
E. Gives effect to the purchase accounting fair value adjustments for
intangible assets. Actual goodwill to be recorded will be based upon the
fair value of net assets acquired on the transaction date.
F. To eliminate parent company's investment in EMS.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 4, 2000 /s/ Thomas B. Sabol
------------------------------------------
Thomas B. Sabol
Chief Financial Officer