Plexus Corp. Reports Second Quarter Results

Diluted EPS of $0.27; Net Income Increases 25 Percent



Apr 19, 2001, 01:00 ET from Plexus Corp.

    NEENAH, Wis., April 19 /PRNewswire/ -- Plexus Corp. (Nasdaq: PLXS), a
 leading provider of design, manufacturing and testing services to the
 electronics industry, today reported sales and earnings for its second quarter
 of fiscal 2001.
 
                          Summary of Financial Results
                 (dollars in thousands, except per share data)
 
                              Three Months Ended         Six Months Ended
                                   March 31,                  March 31,
                             2001          2000         2001*          2000
 
      Net sales            $280,284      $161,994     $552,381      $309,088
      Operating income      $19,582       $15,102      $43,265       $28,489
      Operating margin         7.0%          9.3%         7.8%          9.2%
      Net income            $11,656        $9,352      $24,869       $17,606
      EPS-diluted             $0.27         $0.25        $0.58        $ 0.47
      Cash EPS - diluted **   $0.28         $0.25        $0.60        $ 0.47
 
 
      *Amounts include one-time e2E Corporation (e2E) merger-related charges
       (see note to the condensed consolidated statements of operations).
 
      **Excludes the after-tax impact of goodwill amortization.
 
     Plexus' year-to-date fiscal 2001 results give effect to the merger with
 e2E as of October 1, 2000.  The e2E transaction was accounted for as a
 pooling-of-interests; however, prior period results were not restated due to
 the immateriality of e2E's results to the combined organization.  All per
 share financial information reflects the Company's two-for-one stock split
 effective August 31, 2000.
 
     Financial Highlights
     Sales for the second quarter of fiscal 2001 were $280.3 million, an
 increase of 73 percent from $162.0 million in the same quarter a year ago.
 Internal growth accounted for slightly less than half of the increase in the
 Company's sales, while the remainder resulted from acquisitions.  Plexus
 reported a 25 percent increase in net income to $11.7 million, from net income
 of $9.4 million for the second fiscal quarter of 2000.  Diluted cash EPS and
 diluted EPS rose 12 percent and 8 percent, respectively, to $0.28 and $0.27.
 Results for the quarter included approximately $30 million of raw material
 pass-through sales, sold back to customers at minimal markup and without the
 customary value-added services.
     Second quarter gross profit increased 45 percent to $33.6 million, while
 the gross profit margin of 12.0 percent decreased from 14.3 percent in the
 second quarter of fiscal 2000.  Operating income increased 30 percent to
 $19.6 million, while the operating margin decreased to 7.0 percent from
 9.3 percent in the second quarter of fiscal 2000.  These results are in line
 with the revised guidance given by Plexus on March 29, 2001.
     For the six months ending March 31, 2001, net income, diluted cash EPS and
 diluted EPS rose 41 percent, 28 percent and 23 percent, respectively, to
 $24.9 million, or diluted cash EPS of $0.60 and diluted EPS of $0.58.  Net
 sales rose 79 percent to $552.4 million compared to $309.1 million for the
 prior year period.
     For the second quarter of fiscal 2001, annualized return on average equity
 was 11.7 percent and annualized return on average assets was 7.9 percent.
 
     Operational Highlights
     For the quarter, sales to the networking/datacommunications industry
 represented 41 percent of total sales, up 1 percentage point from the first
 quarter.  Sales to the medical industry remained strong at 22 percent of total
 sales.  The remaining 37 percent of total sales were to the industrial
 (18 percent), high-end computing (13 percent), and transportation/other
 (6 percent) industries.
     For the quarter, the Company's top ten customers represented 58 percent of
 business, consistent with the first quarter of fiscal 2001 and down from
 69 percent in the second quarter of last year.  Cisco Systems, Inc. was
 Plexus' largest customer at 12 percent of revenues for the quarter, and was
 the Company's only 10 percent customer.  Lucent Technologies represented
 slightly less than 10 percent of sales for the quarter.  Based on recently
 revised customer forecasts, Cisco and Lucent are not expected to be 10 percent
 customers in the Company's fiscal third quarter.
     Our New Product Introduction (NPI) business strategy continues to attract
 new customers.  For the quarter, the Company added 21 new customers.  Many of
 these new customers represented emerging technology companies attracted to our
 business strategy, as well as companies from our traditionally strong market
 segments.
     In recognition of Plexus' industry leadership and commitment to
 excellence, Technology Forecasters, Inc. and Circuits Assembly Magazine
 awarded Plexus with the Overall Service Excellence Award in the large company
 category.  The Service Excellence Award Program offers an opportunity for EMS
 companies to see how they compare to their peers in customer satisfaction.
 This is Plexus' fourth Service Excellence Award since 1998.
 
     Outlook (Note: The following statements are forward looking; actual
 results may differ materially.  See "Safe Harbor and Fair
 Disclosure Statement" below.)
 
     Due to the continued soft end-market demand, primarily in the
 networking/datacom market, the Company currently expects third quarter sales
 to be in the range of $235 million to $250 million.  Assuming these levels of
 sales, the Company expects operating earnings per share to be between $0.20
 and $0.24, down from $0.27 in the comparable quarter of fiscal 2000.  This
 outlook is unchanged from the guidance given by Plexus on March 29, 2001.  The
 Company is limiting its guidance to the fiscal third quarter, due to the
 uncertainty and the lack of visibility associated with its customers' end-
 markets.
     Plexus has initiated several measures to realign its cost structure to the
 revised sales outlook.  The most significant and difficult measure was the
 reduction of approximately 5 percent of its workforce at the beginning of its
 fiscal third quarter.  "As an award winning service company, we highly value
 the quality of our employees, but this reduction was absolutely necessary to
 improve our cost structure," said Dean Foate, Chief Operating Officer.  In
 addition, the company has taken steps to reduce discretionary spending and has
 pushed out certain planned capital expenditures.  Plexus estimates that it
 will record a pre-tax restructuring charge of less than $1 million associated
 with the workforce reduction in its fiscal third quarter.
     "We are confident that the global demand for electronic manufacturing
 services will continue to grow, even as we face periods of softness in U.S.
 demand," said John Nussbaum, President and Chief Executive Officer.  "We
 believe our position in the medical and industrial sectors provides us with a
 diversified portfolio of end-markets and will help to mitigate softer demand
 in other sectors.  We remain committed to our successful business strategy of
 focusing on higher value add technology sectors and expanding our global
 reach."
 
     Company Description
     Headquartered in Neenah, Wisconsin, Plexus provides product realization
 services to original equipment manufacturers (OEMs) in the
 networking/telecommunications, medical, industrial, computer and
 transportation electronics industries.  The Company offers product development
 and design services, material procurement and management, prototyping,
 assembly, testing, manufacturing, final system box build and distribution.  To
 learn more, visit the Company web site at www.plexus.com .
 
     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" and similar 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 complete acquisition transactions and
 integrate acquired operations, the Company's ability to secure new customers
 and maintain its and acquired operations' current customer base, the results
 of cost reduction efforts, 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, the effect of general economic conditions, 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)
 
                             Three Months Ended          Six Months Ended
                                  March 31,                  March 31,
                              2001         2000          2001          2000
                                              (unaudited)
 
     Net sales             $280,284      $161,994     $552,381      $309,088
     Cost of sales          246,709       138,891      480,454       265,436
       Gross profit          33,575        23,103       71,927        43,652
 
     Operating expenses:
       Selling &
        administrative
        expenses             13,102         7,968       25,869        15,098
 
       Goodwill amortization    891            33        1,779            65
       Merger costs               -             -        1,014             -
 
                             13,993         8,001       28,662        15,163
 
 
       Operating income      19,582        15,102       43,265        28,489
     Other income (expense):
       Interest expense      (1,372)           (2)       (3,199)          (4)
       Miscellaneous          1,217           486        2,016           858
       Income before income
        taxes                19,427        15,586       42,082        29,343
     Income taxes             7,771         6,234       17,213        11,737
       Net income           $11,656        $9,352      $24,869       $17,606
     Earnings per share:
       Basic                  $0.28         $0.26        $0.61         $0.50
       Diluted                $0.27         $0.25        $0.58         $0.47
 
     Weighted average shares
      outstanding:
       Basic                 41,198        35,488       40,738        35,332
       Diluted               43,213        38,066       43,097        37,762
 
     Supplemental
      information:
     Income before goodwill
      amortization and
      income taxes          $20,318       $15,619      $43,861       $29,408
 
     Income taxes             8,127         6,248       17,941        11,763
 
     Cash net income
      before goodwill
      amortization          $12,191        $9,371      $25,920       $17,645
 
     Cash earnings per share:
       Basic                  $0.30         $0.26        $0.64         $0.50
       Diluted                $0.28         $0.25        $0.60         $0.47
 
     Note to the Condensed Consolidated Statements of Operations
 
     The six months ended March 31, 2001 data include the one-time merger
 charges associated with the e2E transaction.  Such after-tax charges totaled
 approximately $1.0 million, or $0.02 per diluted share, in the first quarter
 of fiscal 2001.
 
                                  PLEXUS CORP.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,   September 30,
                                                        2001          2000
                                                            (unaudited)
     ASSETS
     Current assets:
       Cash and cash equivalents                      $42,213         $5,293
       Short-term investments                          36,225              -
       Accounts receivable, net of allowance of
        $3,584 and $1,522, respectively               131,785        140,048
       Inventories                                    199,329        215,998
       Deferred income taxes                           10,458          9,109
       Prepaid expenses and other                       8,558          4,451
 
         Total current assets                         428,568        374,899
 
     Property, plant and equipment, net               117,910         89,500
     Goodwill, net                                     48,394         48,882
     Other                                              3,335          2,327
 
         Total assets                                $598,207       $515,608
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Current portion of long-term debt               $8,109         $8,365
       Accounts payable                                89,947        106,257
       Customer deposits                               11,991         10,126
       Accrued liabilities:
         Salaries and wages                            16,344         19,039
         Other                                         14,078         17,516
 
         Total current liabilities                    140,469        161,303
 
     Long-term debt                                    49,101        141,409
     Deferred income taxes                              1,721          1,056
     Other liabilities                                  2,687          2,478
 
     Shareholders' equity:
       Common stock, $.01 par value, 200,000
        shares authorized, 41,234 and 37,054 issued
        and outstanding, respectively                     412            371
       Additional paid-in-capital                     244,725         72,699
       Retained earnings                              160,610        136,577
       Accumulated other comprehensive loss            (1,518)          (285)
                                                      404,229        209,362
 
       Total liabilities and shareholders' equity    $598,207       $515,608
 
 

SOURCE Plexus Corp.
    NEENAH, Wis., April 19 /PRNewswire/ -- Plexus Corp. (Nasdaq: PLXS), a
 leading provider of design, manufacturing and testing services to the
 electronics industry, today reported sales and earnings for its second quarter
 of fiscal 2001.
 
                          Summary of Financial Results
                 (dollars in thousands, except per share data)
 
                              Three Months Ended         Six Months Ended
                                   March 31,                  March 31,
                             2001          2000         2001*          2000
 
      Net sales            $280,284      $161,994     $552,381      $309,088
      Operating income      $19,582       $15,102      $43,265       $28,489
      Operating margin         7.0%          9.3%         7.8%          9.2%
      Net income            $11,656        $9,352      $24,869       $17,606
      EPS-diluted             $0.27         $0.25        $0.58        $ 0.47
      Cash EPS - diluted **   $0.28         $0.25        $0.60        $ 0.47
 
 
      *Amounts include one-time e2E Corporation (e2E) merger-related charges
       (see note to the condensed consolidated statements of operations).
 
      **Excludes the after-tax impact of goodwill amortization.
 
     Plexus' year-to-date fiscal 2001 results give effect to the merger with
 e2E as of October 1, 2000.  The e2E transaction was accounted for as a
 pooling-of-interests; however, prior period results were not restated due to
 the immateriality of e2E's results to the combined organization.  All per
 share financial information reflects the Company's two-for-one stock split
 effective August 31, 2000.
 
     Financial Highlights
     Sales for the second quarter of fiscal 2001 were $280.3 million, an
 increase of 73 percent from $162.0 million in the same quarter a year ago.
 Internal growth accounted for slightly less than half of the increase in the
 Company's sales, while the remainder resulted from acquisitions.  Plexus
 reported a 25 percent increase in net income to $11.7 million, from net income
 of $9.4 million for the second fiscal quarter of 2000.  Diluted cash EPS and
 diluted EPS rose 12 percent and 8 percent, respectively, to $0.28 and $0.27.
 Results for the quarter included approximately $30 million of raw material
 pass-through sales, sold back to customers at minimal markup and without the
 customary value-added services.
     Second quarter gross profit increased 45 percent to $33.6 million, while
 the gross profit margin of 12.0 percent decreased from 14.3 percent in the
 second quarter of fiscal 2000.  Operating income increased 30 percent to
 $19.6 million, while the operating margin decreased to 7.0 percent from
 9.3 percent in the second quarter of fiscal 2000.  These results are in line
 with the revised guidance given by Plexus on March 29, 2001.
     For the six months ending March 31, 2001, net income, diluted cash EPS and
 diluted EPS rose 41 percent, 28 percent and 23 percent, respectively, to
 $24.9 million, or diluted cash EPS of $0.60 and diluted EPS of $0.58.  Net
 sales rose 79 percent to $552.4 million compared to $309.1 million for the
 prior year period.
     For the second quarter of fiscal 2001, annualized return on average equity
 was 11.7 percent and annualized return on average assets was 7.9 percent.
 
     Operational Highlights
     For the quarter, sales to the networking/datacommunications industry
 represented 41 percent of total sales, up 1 percentage point from the first
 quarter.  Sales to the medical industry remained strong at 22 percent of total
 sales.  The remaining 37 percent of total sales were to the industrial
 (18 percent), high-end computing (13 percent), and transportation/other
 (6 percent) industries.
     For the quarter, the Company's top ten customers represented 58 percent of
 business, consistent with the first quarter of fiscal 2001 and down from
 69 percent in the second quarter of last year.  Cisco Systems, Inc. was
 Plexus' largest customer at 12 percent of revenues for the quarter, and was
 the Company's only 10 percent customer.  Lucent Technologies represented
 slightly less than 10 percent of sales for the quarter.  Based on recently
 revised customer forecasts, Cisco and Lucent are not expected to be 10 percent
 customers in the Company's fiscal third quarter.
     Our New Product Introduction (NPI) business strategy continues to attract
 new customers.  For the quarter, the Company added 21 new customers.  Many of
 these new customers represented emerging technology companies attracted to our
 business strategy, as well as companies from our traditionally strong market
 segments.
     In recognition of Plexus' industry leadership and commitment to
 excellence, Technology Forecasters, Inc. and Circuits Assembly Magazine
 awarded Plexus with the Overall Service Excellence Award in the large company
 category.  The Service Excellence Award Program offers an opportunity for EMS
 companies to see how they compare to their peers in customer satisfaction.
 This is Plexus' fourth Service Excellence Award since 1998.
 
     Outlook (Note: The following statements are forward looking; actual
 results may differ materially.  See "Safe Harbor and Fair
 Disclosure Statement" below.)
 
     Due to the continued soft end-market demand, primarily in the
 networking/datacom market, the Company currently expects third quarter sales
 to be in the range of $235 million to $250 million.  Assuming these levels of
 sales, the Company expects operating earnings per share to be between $0.20
 and $0.24, down from $0.27 in the comparable quarter of fiscal 2000.  This
 outlook is unchanged from the guidance given by Plexus on March 29, 2001.  The
 Company is limiting its guidance to the fiscal third quarter, due to the
 uncertainty and the lack of visibility associated with its customers' end-
 markets.
     Plexus has initiated several measures to realign its cost structure to the
 revised sales outlook.  The most significant and difficult measure was the
 reduction of approximately 5 percent of its workforce at the beginning of its
 fiscal third quarter.  "As an award winning service company, we highly value
 the quality of our employees, but this reduction was absolutely necessary to
 improve our cost structure," said Dean Foate, Chief Operating Officer.  In
 addition, the company has taken steps to reduce discretionary spending and has
 pushed out certain planned capital expenditures.  Plexus estimates that it
 will record a pre-tax restructuring charge of less than $1 million associated
 with the workforce reduction in its fiscal third quarter.
     "We are confident that the global demand for electronic manufacturing
 services will continue to grow, even as we face periods of softness in U.S.
 demand," said John Nussbaum, President and Chief Executive Officer.  "We
 believe our position in the medical and industrial sectors provides us with a
 diversified portfolio of end-markets and will help to mitigate softer demand
 in other sectors.  We remain committed to our successful business strategy of
 focusing on higher value add technology sectors and expanding our global
 reach."
 
     Company Description
     Headquartered in Neenah, Wisconsin, Plexus provides product realization
 services to original equipment manufacturers (OEMs) in the
 networking/telecommunications, medical, industrial, computer and
 transportation electronics industries.  The Company offers product development
 and design services, material procurement and management, prototyping,
 assembly, testing, manufacturing, final system box build and distribution.  To
 learn more, visit the Company web site at www.plexus.com .
 
     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" and similar 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 complete acquisition transactions and
 integrate acquired operations, the Company's ability to secure new customers
 and maintain its and acquired operations' current customer base, the results
 of cost reduction efforts, 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, the effect of general economic conditions, 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)
 
                             Three Months Ended          Six Months Ended
                                  March 31,                  March 31,
                              2001         2000          2001          2000
                                              (unaudited)
 
     Net sales             $280,284      $161,994     $552,381      $309,088
     Cost of sales          246,709       138,891      480,454       265,436
       Gross profit          33,575        23,103       71,927        43,652
 
     Operating expenses:
       Selling &
        administrative
        expenses             13,102         7,968       25,869        15,098
 
       Goodwill amortization    891            33        1,779            65
       Merger costs               -             -        1,014             -
 
                             13,993         8,001       28,662        15,163
 
 
       Operating income      19,582        15,102       43,265        28,489
     Other income (expense):
       Interest expense      (1,372)           (2)       (3,199)          (4)
       Miscellaneous          1,217           486        2,016           858
       Income before income
        taxes                19,427        15,586       42,082        29,343
     Income taxes             7,771         6,234       17,213        11,737
       Net income           $11,656        $9,352      $24,869       $17,606
     Earnings per share:
       Basic                  $0.28         $0.26        $0.61         $0.50
       Diluted                $0.27         $0.25        $0.58         $0.47
 
     Weighted average shares
      outstanding:
       Basic                 41,198        35,488       40,738        35,332
       Diluted               43,213        38,066       43,097        37,762
 
     Supplemental
      information:
     Income before goodwill
      amortization and
      income taxes          $20,318       $15,619      $43,861       $29,408
 
     Income taxes             8,127         6,248       17,941        11,763
 
     Cash net income
      before goodwill
      amortization          $12,191        $9,371      $25,920       $17,645
 
     Cash earnings per share:
       Basic                  $0.30         $0.26        $0.64         $0.50
       Diluted                $0.28         $0.25        $0.60         $0.47
 
     Note to the Condensed Consolidated Statements of Operations
 
     The six months ended March 31, 2001 data include the one-time merger
 charges associated with the e2E transaction.  Such after-tax charges totaled
 approximately $1.0 million, or $0.02 per diluted share, in the first quarter
 of fiscal 2001.
 
                                  PLEXUS CORP.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,   September 30,
                                                        2001          2000
                                                            (unaudited)
     ASSETS
     Current assets:
       Cash and cash equivalents                      $42,213         $5,293
       Short-term investments                          36,225              -
       Accounts receivable, net of allowance of
        $3,584 and $1,522, respectively               131,785        140,048
       Inventories                                    199,329        215,998
       Deferred income taxes                           10,458          9,109
       Prepaid expenses and other                       8,558          4,451
 
         Total current assets                         428,568        374,899
 
     Property, plant and equipment, net               117,910         89,500
     Goodwill, net                                     48,394         48,882
     Other                                              3,335          2,327
 
         Total assets                                $598,207       $515,608
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Current portion of long-term debt               $8,109         $8,365
       Accounts payable                                89,947        106,257
       Customer deposits                               11,991         10,126
       Accrued liabilities:
         Salaries and wages                            16,344         19,039
         Other                                         14,078         17,516
 
         Total current liabilities                    140,469        161,303
 
     Long-term debt                                    49,101        141,409
     Deferred income taxes                              1,721          1,056
     Other liabilities                                  2,687          2,478
 
     Shareholders' equity:
       Common stock, $.01 par value, 200,000
        shares authorized, 41,234 and 37,054 issued
        and outstanding, respectively                     412            371
       Additional paid-in-capital                     244,725         72,699
       Retained earnings                              160,610        136,577
       Accumulated other comprehensive loss            (1,518)          (285)
                                                      404,229        209,362
 
       Total liabilities and shareholders' equity    $598,207       $515,608
 
 SOURCE  Plexus Corp.