1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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(Mark One)
X Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the Quarter ended December 31, 1995
OR
_____ Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Commission File Number 0-14824
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PLEXUS CORP.
(Exact name of registrant as specified in charter)
Wisconsin 39-1344447
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(State of Incorporation) (IRS Employer Identification No.)
55 Jewelers Park Drive Neenah, Wisconsin 54957-0156
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(Address of principal executive offices) (ZIP Code)
(414) 722-3451
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(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
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As of February 5, 1996 there were 6,497,697 shares of Common Stock of
the Company outstanding.
2
PLEXUS CORP.
Index to Form 10-Q
Page
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Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets....................3
Condensed Consolidated Statements of Operations..........4
Condensed Consolidated Statements
of Cash Flows............................................5
Notes to Condensed Consolidated Financial Statements.....6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..........7-8
Part II
Item 6. Exhibits and Reports on Form 8-K.....................8
Signature........................................................8
3
PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share and Per Share Amounts)
December 31, 1995 September 30, 1995
(unaudited)
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ASSETS
Current assets:
Cash $ 1,408 $ 3,569
Accounts receivable, net
of allowance of $145 38,294 47,560
Inventories 55,588 48,966
Deferred income taxes 904 904
Prepaid expenses and other 3,269 1,930
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Total current assets 99,463 102,929
Property, plant and equipment, net 11,614 11,829
Other 297 330
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Total assets $111,374 $115,088
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 107 $ 107
Accounts payable 28,267 23,279
Customer deposits 5,404 3,530
Accrued liabilities:
Salaries and wages 3,202 2,618
Other 1,893 2,093
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Total current liabilities 38,873 31,627
Long-term debt 30,209 41,734
Deferred income taxes 718 718
Stockholders' equity:
Series A preferred stock, $.01 par value,
$1,000 face value, 7,000 shares
authorized and issued (aggregate
liquidation preference of $7 million) 0 0
Preferred stock $.01 par value, 4,993,000
shares authorized, none issued - -
Common Stock, $.01 par value,
30,000,000 shares authorized,
6,493,897 issued 65 65
Additional paid-in capital 14,182 14,160
Retained earnings 27,327 26,784
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41,574 41,009
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Total liabilities and
stockholders' equity $ 111,374 $115,088
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See notes to condensed consolidated financial statements
4
PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Share and Per Share Amounts)
Unaudited
Threee-Month Period Ended
December 31,
1995 1994
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Net sales $ 71,308 $ 65,341
Cost of sales 66,635 60,983
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Gross profit 4,673 4,358
Selling and administrative expenses 2,895 2,418
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Operating income 1,778 1,940
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Other income (expense):
Interest expense (574) (742)
Other 115 270
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(459) (472)
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Income before income taxes 1,319 1,468
Provision for income taxes 514 573
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Net Income $ 805 $ 895
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Net income per common share
- primary and fully diluted $ .11 $ .13
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Common equivalent shares outstanding 7,267,294 7,070,274
==================================
See notes to condensed consolidated financial statements
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PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Unaudited
Three-Month Period Ended
December 31, December 31,
1995 1994
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Cash flows from operating activities:
Net Income $ 805 $ 895
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 812 494
Net decrease in working capital
excluding cash and debt 8,551 2,133
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10,168 3,522
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Cash flows from investing activities:
Additions to property, plant & equipment (596) (205)
Other, net 33 24
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(563) (181)
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Cash flows from financing activities:
Issuance of common stock 22 -
Net decrease in outstanding debt (11,525) (1,923)
Dividends paid - preferred stock (263) -
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(11,766) (1,923)
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Net (decrease) increase in cash ($2,161) $1,418
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See notes to condensed consolidated financial statements
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PLEXUS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31, 1995
NOTE (1) - BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the Company without audit and pursuant to the rules and regulations
of the Securities and Exchange Commission. In the opinion of the Company, the
financial statements reflect all adjustments, which consist only of normal
recurring adjustments, necessary to present fairly the financial position of
Plexus Corp. at December 31, 1995 and the results of operations for the
three-month periods ended December 31, 1995 and 1994 and the cash flows for the
same three-month periods.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the SEC rules and
regulations dealing with interim financial statements. However, the Company
believes that the disclosures made in the condensed consolidated financial
statements included herein are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's 1995 Annual Report.
The year-end condensed consolidated balance sheet data was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principals.
NOTE (2) - INVENTORIES
The major classes of inventories (rounded to thousands) are as follows:
December 31, September 30,
1995 1995
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Assembly Parts $ 35,765 $ 33,950
Work-in-Process 19,691 14,782
Finished Goods 132 234
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$ 55,588 $ 48,966
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NOTE (3) - EARNINGS PER SHARE
The computations of primary and fully diluted net income per common share
for fiscal year 1996 are based upon the weighted average number of common
shares contingently issuable relating to the convertible preferred stock using
the if-converted method, and including additional dilution from stock options.
In the first quarter of fiscal year 1995 (December 31, 1994), stock options did
not impact net income per share as they were either insignificant or
antidilutive, thus the computation was based solely upon the weighted average
number of common shares outstanding during the period.
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PLEXUS CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended December 31, 1995 were $71,308,000 compared to
$65,341,000 for the same period one year ago, an increase of $5,967,000 or
9.1%. This increase was not as extensive as anticipated due to
customer-imposed delays in the first quarter of fiscal 1996 related to several
major new programs along with temporary component shortages affecting ongoing
programs. Despite the softness in the volume growth during this quarter, it is
still expected that the Company should achieve effective volume growth during
the fiscal year ending September 30, 1996 when these delayed new programs reach
scheduled production levels.
Cost of sales for the quarter ended December 31, 1995 was $66,635,000 compared
to $60,983,000 for the same period one year ago, an increase of $5,652,000 or
9.3%. This increase was attributed to an increase in fixed manufacturing costs
associated with new programs, which, as indicated above, were delayed. Both
staffing and equipment additions were necessitated to handle these programs.
Despite delays in several programs and increased fixed manufacturing costs,
gross profit for the quarter ended December 31, 1995 was $4,673,000 compared to
$4,358,000 for the same period one year ago, an increase of $315,000 or 7.2%.
As a percentage of net sales gross profit remained fairly constant at 6.5% for
the quarter ended December 31, 1995 compared to 6.7% for the same period one
year ago.
Selling and administrative expenses for the quarter ended December 31, 1995
were $2,895,000 compared to $2,418,000 for the same period one year ago
resulting from increased staffing during fiscal 1995 in customer service, data
collection and information systems. As a percentage of net sales selling and
administrative expenses increased to 4.1% for the quarter ended December 31,
1995 compared to 3.7% for the same period one year ago. Compared to the 4th
quarter ended September 30, 1995 (which included higher than normal expenses),
selling and administrative expense actually decreased $317,000.
Interest expense decreased $168,000 to $574,000 for the quarter ended December
31, 1995 compared to $742,000 for the same period one year ago due to reduced
borrowings required to support working capital coupled with lower interest
rates.
Other income decreased $155,000 to $115,000 for the quarter ended December 31,
1995 compared to $270,000 for the same period one year ago due primarily to a
reduction in carrying charges for inventories billed to customers.
Income taxes decreased for the quarter ended December 31, 1995 due to the
decrease in income before income taxes.
8
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities were $10,168,000 and $3,522,000 for the
three-month periods ended December 31, 1995 and 1994, respectively. Cash from
operations was provided primarily from decreases in accounts receivable and
increases in accounts payable offset by increases in inventory for the
three-month period ended December 31, 1995. Inventories increased because the
Company was unable to defer deliveries on component parts for several of the
major new programs that were delayed. The cash generated from operating
activities was utilized to reduce outstanding debt.
Capital additions of $596,000 were primarily concentrated in advanced
manufacturing equipment for the three-month period ended December 31, 1995.
The total debt to equity ratio as of December 31, 1995 was 1.7 to 1 compared to
1.8 to 1 at September 30, 1995.
The Company believes that its credit facilities, leasing capabilities and
projected cash flow from operations will be sufficient to meet its foreseeable
short-term and long-term capital and liquidity needs.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Statement Regarding Computation of Per Share
Earnings
(b) Reports on Form 8-K
--None--
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
2/12/96 /s/ Peter Strandwitz
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Date Peter Strandwitz
Chairman and CEO
2/12/96 /s/ Thomas B. Sabol
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Date Thomas B. Sabol
Vice President-Finance and
Chief Financial Officer