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Electronics Production | July 30, 2009

Plexus with 3% percent revenue drop

EMS-provider Plexus reported 3Q revenue (ended July 4, 2009) of $379 million, relative to the previous guidance of $355 to $385 million.

The company also issued a guidance for the fiscal Q4/ 2009; revenue is estimated to be between $380 and $405 million. Diluted EPS is estimated to be between $0.27 and $0.32, excluding any restructuring charges and including approximately $0.04 per share of stock-based compensation expense. Dean Foate, President and CEO, commented, "Fiscal third quarter revenues unfolded generally in line with our expectations. Overall revenues declined 3% sequentially from the fiscal second quarter with sequential declines in all sectors except our Wireline/Networking sector where we benefited from improved end-market demand. While our fiscal third quarter was challenging, we experienced a relatively low level of customer demand volatility, perhaps an indication that end-markets are stabilizing. During Q3 we won 15 new manufacturing programs that we currently anticipate will generate approximately $188 million in annualized revenue when fully ramped into production over the coming quarters, subject to risks around the timing and ultimate realization of the forecasted revenues. We continue to believe we are gaining market share." Mr. Foate continued, "We currently anticipate modest revenue growth in our fiscal fourth quarter of 2009 as we benefit from the continuing strong pace of new business wins. We are establishing fiscal fourth quarter revenue guidance of $380 to $405 million with diluted EPS of $0.27 to $0.32, excluding any restructuring charges and including approximately $0.04 per share of stock-based compensation expense. Looking further ahead to our fiscal first quarter of 2010, while we currently have visibility to modest sequential top line growth, we would caution that relative to fiscal fourth quarter 2009 results, first half fiscal 2010 operating margins will be pressured by mix shift, compensation-related cost increases and capacity investments that are necessary to support new program ramps that we anticipate will drive growth in the second half of the fiscal year." Ginger Jones, Vice President and CFO, commented, "Our diluted EPS was largely in line with our expectations for the quarter. The only significant difference from our expectations was a $0.01 reduction to EPS as a consequence of an increase to our full-year tax rate, which is now estimated to be 8% for the full year versus the 7% tax rate anticipated when we established our guidance for the fiscal third quarter. The one percentage point increase in the tax rate is due to improvement in forecasted earnings in higher-tax jurisdictions in the fourth quarter of fiscal 2009." Ms. Jones concluded, "The cost-cutting measures that we initiated during the fiscal second quarter delivered the savings we anticipated for the third quarter. Also as expected, we did not have any restructuring charges during the fiscal third quarter. We continue to closely monitor our revenue projections, production capacity and cost structure and have identified other cost-cutting measures that could be implemented quickly if warranted. We believe we have struck the proper balance of cost management and modest investments to support our many new program wins as well as our long-term growth strategy."
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