CONFERENCE CALL TOMORROW, THURSDAY APRIL 22 AT 8:30 AM ET
Dial in: 888-489-9486 with conference ID: Plexus
Webcast: www.videonewswire.com/PLXS/042204
(PLEXUS LOGO)
FOR IMMEDIATE RELEASE
PLEXUS ANNOUNCES FISCAL Q2 REVENUE OF $254 MILLION AND EPS OF $0.08
INCREASES TARGET FOR FY04 REVENUE GROWTH TO 25% TO 30%
INITIATES Q3 REVENUE GUIDANCE OF $255 TO $265 MILLION WITH EPS OF $0.08 TO $0.10
NEENAH, WI, April 21, 2004 -- Plexus Corp. (Nasdaq: PLXS) today announced
revenue for its second quarter of fiscal 2004 increased 33% to $254.3 million
compared to $190.8 million in the comparable prior year period. Net income for
the second fiscal quarter was $3.5 million, equivalent to $0.08 earnings per
diluted share. There was a net loss in the prior year second fiscal quarter of
($5.0) million or ($0.12) per diluted share.
Dean Foate, President and Chief Executive Officer of Plexus, commented, "This is
our fourth consecutive quarter of revenue growth and EPS improvement, excluding
restructuring charges. Due to our increasingly effective sales and marketing
efforts and improving end-market conditions, we are now targeting 25% to 30%
year-over-year revenue growth for fiscal 2004, up from the previously stated
target of 15% to 20%. We are growing in all of our regional markets, especially
in Asia, where we recently announced the purchase of an additional facility in
Penang, Malaysia to support our global customer base."
"However," continued Foate, "this better than anticipated growth brings with it
certain execution challenges. Our inventories have grown by 22% in the quarter
and our margin expansion has temporarily slowed from expectations as we
integrate new program wins. We expect improvements on both fronts in the coming
quarters as we move customer programs to optimized material supply chain
strategies and improve productivity in our Focus Factories where we have added
nearly 1,000 new employees so far this year."
"Considering these factors," added Foate, "we are initiating revenue guidance
for the fiscal third quarter of $255 to $265 million and EPS of $0.08 to $0.10."
Gordon Bitter, Chief Financial Officer, commented, "Manufacturing inefficiencies
associated with rapid growth limited gross margin expansion to 8.3% compared to
8.2% in the prior quarter. We expect continued margin improvement in the coming
quarters as we complete program transitions, the training of new employees, as
well as other initiatives. However, this will be partially offset by start-up
expenses for the new Asian facility in the 3rd and 4th quarters of fiscal 2004."
"SG&A expense was lower than expected in the second quarter," Bitter continued,
"mainly due to recoveries of previously written-off accounts receivable and
lower spending for outside consultants. We expect SG&A to increase modestly in
the latter half of 2004, reflecting additional investment in Sales and Marketing
and elsewhere in the organization to drive growth into 2005."
"Turning to the balance sheet, cash and short-term investments remained at the
first quarter level of about $59 million, but we used approximately $15 million
of our $100 million credit facility to finance higher working capital. We
anticipate positive cash flow from reductions in inventory plus improvements in
margins in the third quarter," Bitter concluded.
(more)
FISCAL Q2 HIGHLIGHTS
o Sales by industry were:
INDUSTRY Q2 - FISCAL 2004 Q1 - FISCAL 2004
------------------------------- --------------------- ---------------------
Networking/Datacom 42% 39%
------------------------------- --------------------- ---------------------
Medical 29% 33%
------------------------------- --------------------- ---------------------
Industrial/Commercial 15% 12%
------------------------------- --------------------- ---------------------
Computing 10% 11%
------------------------------- --------------------- ---------------------
Transportation/Other 4% 5%
------------------------------- --------------------- ---------------------
o Top 10 customers comprised 55% of sales during the quarter, compared to 60% in
the previous quarter.
o Juniper Networks, with 13% of sales, was the only customer representing more
than 10% of sales for the quarter.
o Cash flow used in operations was approximately $16.6 million for the quarter.
o Days sales outstanding in accounts receivable increased to 49 days compared to
45 days in the first quarter of fiscal 2004.
o Inventory increased sequentially from the first quarter by approximately $35.1
million to $198.0 million, while annualized turns decreased to 5.2 turns this
quarter from 5.8 turns in the first quarter of fiscal 2004.
CONFERENCE CALL/WEBCAST AND REPLAY INFORMATION
WHEN: Thursday, April 22, 2004 at 8:30 a.m. Eastern
DIAL IN: 888-489-9486 with conference ID PLEXUS
WEBCAST: www.videonewswire.com/PLXS/042204 (requires Windows Media Player)
REPLAY: 800-633-8284 with passcode: 21189823
or www.videonewswire.com/PLXS/042204
The call will be archived until midnight on April 29, 2004.
NOTE: If you experience problems with the webcast, please email
webcastsupport@tfprn.com.
ABOUT PLEXUS CORP. -- THE PRODUCT REALIZATION COMPANY
Plexus (www.plexus.com) is a contract manufacturer of electronics products
providing product design, test, manufacturing, fulfillment and aftermarket
solutions to branded product companies in the networking, datacommunications,
medical, industrial, commercial, defense and computer industries.
The Company's unique Focus Factory manufacturing model and global supply chain
solutions, strategically enhanced by value-added product design and engineering
services, are developed to optimize lowest total cost, scalability and
responsiveness for programs requiring flexibility, technology and quality.
Plexus provides award-winning customer service to more than 150 branded product
companies in North America, Europe and Asia.
SAFE HARBOR AND FAIR DISCLOSURE STATEMENT
The statements contained in this release 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) are
forward-looking statements that involve risks and uncertainties, including, but
not limited to: the economic performance of the electronics and technology
industries; the risk of customer delays, changes or cancellations in both
on-going and new programs; 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 closing conditions and other preparations relating to
the new Malyasia facility; the effect of general economic conditions and world
events (such as terrorism); the impact of increased competition; and other risks
detailed in the Company's Securities and Exchange Commission filings.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Kristian Talvitie, Director of Strategic Marketing and Communications
920-969-6160 or email at kristian.talvitie@plexus.com
(financial tables follow)
PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------------ ------------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $ 254,272 $ 190,773 $ 492,735 $ 396,152
Cost of sales 233,091 181,150 451,927 370,989
--------- --------- --------- ---------
Gross profit 21,181 9,623 40,808 25,163
Operating expenses:
Selling and administrative expenses 16,422 16,815 32,778 33,570
Restructuring and impairment costs - - - 31,840
--------- --------- --------- ---------
16,422 16,815 32,778 65,410
--------- --------- --------- ---------
Operating income (loss) 4,759 (7,192) 8,030 (40,247)
Other income (expense):
Interest expense (730) (712) (1,393) (1,590)
Miscellaneous 310 678 826 1,301
--------- --------- --------- ---------
Income (loss) before income taxes and cumulative
effect of change in accounting for goodwill 4,339 (7,226) 7,463 (40,536)
Income tax expense (benefit) 868 (2,182) 1,493 (14,660)
--------- --------- --------- ---------
Income (loss) before cumulative effect of change in
accounting for goodwill 3,471 (5,044) 5,970 (25,876)
Cumulative effect of change in accounting for
goodwill, net of income tax benefit of $4,755 - - - (23,482)
--------- --------- --------- ---------
Net income (loss) $ 3,471 $ (5,044) $ 5,970 $ (49,358)
========= ========= ========= =========
Earnings per share:
Basic
Income (loss) before cumulative effect of change in
accounting for goodwill $ 0.08 $ (0.12) $ 0.14 $ (0.61)
Cumulative effect of change in accounting
for goodwill - - - (0.56)
--------- --------- --------- ---------
Net income (loss) $ 0.08 $ (0.12) $ 0.14 $ (1.17)
========= ========= ========= =========
Diluted
Income (loss) before cumulative effect of change in
accounting for goodwill $ 0.08 $ (0.12) $ 0.14 $ (0.61)
Cumulative effect of change in accounting
for goodwill - - - (0.56)
--------- --------- --------- ---------
Net income (loss) $ 0.08 $ (0.12) $ 0.14 $ (1.17)
========= ========= ========= =========
Weighted average shares outstanding:
Basic 42,962 42,260 42,806 42,164
========= ========= ========= =========
Diluted 44,157 42,260 43,969 42,164
========= ========= ========= =========
(more)
PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
March 31, September 30,
2004 2003
---------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 51,386 $ 58,993
Short-term investments 8,079 19,701
Accounts receivable 137,246 111,125
Inventories 198,010 136,515
Deferred income taxes 16,780 23,723
Prepaid expenses and other 7,625 8,326
-------- --------
Total current assets 419,126 358,383
Property, plant and equipment, net 126,357 131,510
Goodwill, net 34,543 32,269
Deferred income taxes 23,306 24,921
Other 6,710 5,971
-------- --------
Total assets $610,042 $553,054
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations $ 1,639 $ 958
Accounts payable 111,685 91,445
Customer deposits 15,873 14,779
Accrued liabilities:
Salaries and wages 23,693 17,133
Other 21,033 23,753
-------- --------
Total current liabilities 173,923 148,068
Long-term debt and capital lease obligations, net of current obligation 38,542 23,502
Other liabilities 8,938 10,468
Shareholders' equity:
Common stock, $.01 par value, 200,000 shares authorized,
43,039 and 42,607 shares issued and outstanding, respectively 430 426
Additional paid-in-capital 266,288 261,214
Retained earnings 108,810 102,840
Accumulated other comprehensive income 13,111 6,536
-------- --------
Total shareholders' equity 388,639 371,016
-------- --------
Total liabilities and shareholders' equity $610,042 $553,054
======== ========