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Electronics Production | January 21, 2010

Plexus profit rise

EMS provider Plexus reports fiscal first quarter revenue of $430 million.
Dean Foate, President and CEO, commented, "We are pleased to announce a strong start to fiscal 2010 with overall revenues growing ten percent sequentially to $430 million with EPS of $0.44, aided in part by a legal settlement. Good margin performance in combination with disciplined working capital management delivered return on invested capital of 18.1%. As anticipated, we experienced robust sequential revenue growth in both our Wireline/Networking and Medical sectors during the quarter. While revenues were essentially flat in our Industrial/Commercial sector, this was an improvement over our earlier expectations. Our Wireless Infrastructure and Defense/Security/Aerospace sectors were both down sequentially for the quarter."

Ginger Jones, Vice President and CFO, commented, "Gross and operating margins were 10.3% and 4.7% respectively for the first fiscal quarter, better than our expectations when we set guidance for the quarter. Our diluted EPS for the first fiscal quarter was favorably impacted by three items. First, we received settlement funds for a legal matter in the amount of $3.2 million which was recorded as a reduction to cost of sales, benefiting gross profit by 0.7 percentage points. Consequently, diluted EPS for the quarter reflects a $0.05 benefit associated with this settlement. Second, our estimated tax rate is now 1% for the full year, lower than our earlier expectations of 5% for the full year. As a result, diluted EPS for the quarter reflects a $0.02 benefit associated with the lower tax rate. Finally, stock option expense was $0.01 less than expected. The first fiscal quarter was strong from a working capital perspective, with cash cycle days up only one day from the fourth fiscal quarter. This is a very good result considering the strong revenue growth in the first fiscal quarter, anticipated growth in the second fiscal quarter and the tightening supply-chain environment."

Mr. Foate concluded, "Our current expectation is that our second fiscal quarter will be exceptional. Improving end-market conditions in combination with new business wins that ramp during the quarter should result in strong revenue growth and earnings leverage. We are establishing second fiscal quarter revenue guidance of $470 to $495 million with diluted EPS of $0.44 to $0.52, excluding any restructuring charges and including approximately $0.07 per share of stock-based compensation expense. Looking further ahead, while we currently anticipate sequential revenue growth to continue in our third and fourth fiscal quarters, we expect the rate of revenue growth to moderate in comparison to the growth rate implied by the second quarter guidance."

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