1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
X Quarterly Report Under Section 13 or 15 (d) of the
----- Securities Exchange Act of 1934
For the Quarter ended March 31, 1995
OR
----- Transition Report Pursuant to Section
13 or 15(d) of the
Securities Exchange Act of 1934
----------------------------
Commission File Number 0-14824
----------------------------
PLEXUS CORP.
(Exact name of registrant as specified in charter)
Wisconsin 39-1344447
------------------------ --------------------------------
(State of Incorporation) (IRS Employer Identification No.)
55 Jewelers Park Drive Neenah, Wisconsin 54957-0156
----------------------------------------- ----------
(Address of principal executive offices) (ZIP Code)
(414) 722-3451
-------------------------------
(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
------- ------
As of May 8, 1995 there were 6,460,498 shares of Common Stock of the
Company outstanding.
2
PLEXUS CORP.
Index to Form 10-Q
Page
----
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.........................................................9
3
PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share and Per Share Amounts)
March 31, 1995 September 30, 1994
(unaudited)
-------------------- -------------------------
ASSETS
Current assets:
Cash $ 1,124 $ 1,081
Accounts receivable, net
of allowance of $130 38,090 43,699
Inventories 59,223 60,047
Deferred income taxes 743 743
Prepaid expenses and other 1,693 3,200
-------------------- -------------------------
Total current assets 100,873 108,770
Property, plant and equipment, net 12,311 12,856
Other 398 395
-------------------- -------------------------
Total assets $113,582 $122,021
==================== =========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 553 $ 550
Accounts payable 28,725 36,891
Customer deposits 4,181 3,501
Accrued liabilities:
Salaries and wages 2,595 2,182
Other 2,344 2,862
-------------------- -------------------------
Total current liabilities 38,398 45,986
Long-term debt 37,738 40,691
Deferred income taxes 465 465
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,
6,460,498 issued 65 65
Additional paid-in capital 13,829 13,829
Retained earnings 23,087 20,985
-------------------- -------------------------
36,981 34,879
-------------------- -------------------------
Total liabilities and
stockholders' equity $113,582 $122,021
==================== =========================
See notes to consolidated financial statements
4
PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Unaudited
Six-Month Period Ended
March 31, March 31,
1995 1994
------------------------------
Cash flows from operating activities:
Net Income $ 2,365 $ 1,727
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 1,217 1,233
Net increase in working capital
excluding cash and debt 86 (6,496)
------------------------------
3,668 (3,536)
------------------------------
Cash flows from investing activities:
Additions to property, plant & equipment (672) (3,368)
Other, net (3) 28
------------------------------
(675) (3,340)
------------------------------
Cash flows from financing activities:
Issuance of common stock - 13
Net increase (decrease) in outstanding debt (2,950) 7,407
------------------------------
(2,950) 7,420
------------------------------
Net increase in cash $ 43 $ 544
==============================
See notes to condensed consolidated financial statements
5
PLEXUS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Share and Per Share Amounts)
Unaudited
Three-Month Period Ended Six-Month Period Ended
March 31, March 31,
1995 1994 1995 1994
-------------------------------- ------------------------------
Net sales $ 69,380 $ 61,323 $ 134,721 $ 117,267
Cost of sales 63,442 56,841 124,425 109,195
-------------------------------- ------------------------------
Gross profit 5,938 4,482 10,296 8,072
Selling and administrative expenses 2,939 1,998 5,357 3,797
-------------------------------- ------------------------------
Operating income 2,999 2,484 4,939 4,275
-------------------------------- ------------------------------
Other income (expense):
Interest expense (715) (830) (1,457) (1,476)
Other 126 (4) 396 (13)
-------------------------------- ------------------------------
(589) (834) (1,061) (1,489)
-------------------------------- ------------------------------
Income before income taxes 2,410 1,650 3,878 2,786
Provision for income taxes 940 627 1,513 1,059
-------------------------------- ------------------------------
Net Income $ 1,470 $ 1,023 $ 2,365 $ 1,727
================================= ==============================
Net income per common share
primary and fully diluted $ .21 $ .16 $ .33 $ .27
================================= ==============================
Common equivalent
shares outstanding 7,106,850 6,459,265 7,088,537 6,454,695
================================= ==============================
See notes to condensed consolidated financial statements
6
PLEXUS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MARCH 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 March 31, 1995 and the results of operations for the
three-month periods and the six-month periods ended March 31, 1995 and 1994 and
the cash flows for the same six-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 1994 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:
March 31, September 30,
1995 1994
-------- --------
Assembly Parts $ 35,520 $ 38,156
Work-in-Process 23,465 21,616
Finished Goods 238 275
-------- --------
$ 59,223 $ 60,047
======== ========
NOTE (3)
The computations of primary and fully diluted net income per common share
for fiscal year 1995 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 second quarter and first six months of fiscal year 1994, stock options
did not impact net income per share as they were either insignificant or
antidilutive, thus the computations were based solely upon the weighted average
number of common shares outstanding during the period.
7
PLEXUS CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the second fiscal quarter ended March 31, 1995 increased
$8,057,000 or 13.1% to $69,380,000 from $61,323,000 for the second fiscal
quarter ended March 31, 1994. Net sales for the six-month period ended March
31, 1995 increased $17,454,000 or 14.9% to $134,721,000 from $117,267,000 for
the same six-month period ended March 31, 1994. This increase reflects
additional volume from both new and existing customers which was made possible
due to the additional capacity provided by the Company's Advanced Manufacturing
Facility. Management is optimistic that this growth will continue throughout
fiscal year 1995.
Cost of goods sold for the second fiscal quarter ended March 31, 1995 increased
$6,601,000 or 11.6% to $63,442,000 from $56,841,000. Cost of goods sold for
the six-month period ended March 31, 1995 increased $15,230,000 or 13.9% to
$124,425,000 from $109,195,000 for the same six-month period ended March 31,
1994. These increases were primarly related to labor and other variable costs,
and are due to the increased sales volume both in the second quarter and first
six months of fiscal year 1995.
Gross profit for the second fiscal quarter ended March 31, 1995 increased
$1,456,000 or 32.5% to $5,938,000 from $4,482,000 for the second fiscal quarter
ended March 31, 1994. Gross profit for the six-month period ended March 31,
1995 increased $2,224,000 or 27.6% to $10,296,000 from $8,072,000 for the same
six-month period ended March 31, 1994. These increases and the improved gross
profit margins as a percentage of net sales are due to the increased sales
volume, as the additional capacity and fixed manufacturing costs are better
utilized and absorbed.
Selling and administrative expenses for the second fiscal quarter ended March
31, 1995 were $2,939,000 compared to $1,998,000 for the second fiscal quarter
ended March 31, 1994, an increase of $941,000. For the six-month period ended
March 31, 1995, selling and administrative expenses increased $1,560,000 to
$5,357,000 from $3,797,000 for the same six-month period ended March 31, 1994.
These increases are primarly due to the hiring of additional 38 administrative
personnel during the second fiscal quarter of 1995, and bad debt expense of
$117,000.
Interest expense for the second fiscal quarter ended March 31, 1995 decreased
$115,000 to $715,000 from $830,000 for the same period one year ago. This
decrease is due to decreased borrowings required to support working capital.
For the six-month period ended March 31, 1995 interest expense is down only
slightly despite the positive effect of the second fiscal quarter because of
the higher average daily borrowings required on the Company's line of credit
incurred during the first fiscal quarter, and the increasing interest rate
environment.
Other income increased $130,000 during the second quarter and $409,000 for the
first six months of fiscal year 1995. These numbers are net after a write off
to expense during the second fiscal quarter of a $73,000 investment related to
Smarthouse. Management does not expect any additional write off of
investments.
Income taxes increased both for the second fiscal quarter and the six-month
period ended March 31, 1995 due to increased pre-tax profit.
8
LIQUIDITY AND CAPITAL RESOURCES
The total debt to equity ratio at March 31, 1995 was 2.07 to 1 compared to 2.50
to 1 at September 30, 1994. This reduction was primarily due to decreased
borrowings under the Company's Revolving Credit Facility and earnings retained
in the Company for the first half of the fiscal year.
Working capital decreased $309,000 from $62.8 million at September 30, 1994.
Both the Accounts receivable decrease of $5.6 million to $38.1 million and
Accounts payable decrease of $8.2 million are due to timing. Inventories
decreased $.8 million.
As shown in the Company's statements of cash flows, cash increased by $43,000
for the first six months of fiscal year 1995. The net increases reflects $3.7
million in net cash provided by operating activities, offset by $2.9 million
used in financing activities primarily reduction in debt and $.7 million used
in investing activities primarily acquisiton of equipment. The net cash used
in financing activities resulted from a reduction of debt.
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. Management anticipates
increasing its revolving credit facility during the fourth quarter of fiscal
year 1995.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Shareholders on February 15, 1995, management's
nominees named below were elected as directors, by the indicated votes cast for
and withheld with respect to each nominee. Of the 6,198,616 shares of Common
Stock which were represented at the meeting, at least 6,118,286 shares (99%)
were voted for the election of all of management's nominees. There were no
abstentions or broker non-votes with respect to the election of directors.
Name of Nominee For Withheld
--------------- --- --------
Robert A. Cooper 6,122,575 76,041
Rudolph T. Hoppe 6,118,286 80,330
Harold R. Miller 6,123,725 74,891
John L. Nussbaum 6,124,525 74,091
Gerald A. Pitner 6,124,486 74,130
Thomas J. Prosser 6,120,575 78,041
Peter Strandwitz 6,124,125 74,491
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--
9
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.
5/8/95 /s/ Peter Strandwitz
- - ------ -------------------------------
Date Peter Strandwitz
Chairman and CEO
5/8/95 /s/ Thomas N. Turriff
- - ------ -------------------------------
Date Thomas N. Turriff
Vice President - Finance