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Electronics Production | January 23, 2008

Plexus announces Q1 revenue of $458 Million

Revenue for the fiscal 1st quarter ended December 29, 2007 was $458 million. The Company established fiscal 2nd quarter revenue guidance of $440 to $460 million with EPS, excluding any restructuring charges.
ROIC for the first quarter was 25.9%, which was influenced positively by a favorable mix of programs in the quarter. The Company defines quarterly ROIC as tax-effected operating income, excluding restructuring costs, divided by average capital employed over a rolling two quarter period. Capital employed is defined as equity plus debt, less cash and cash equivalents and short-term investments. Cash flow provided by operations was approximately $16.6 million for the quarter. Top 10 customers comprised 63% of revenue during the quarter, down 2 percentage points from the previous quarter. Juniper Networks Inc., with 19% of revenue, and an un-named defense sector customer, with 12% of revenue, were the only customers representing 10% or more of revenue for the quarter. Capital expenditures for the quarter were $13.6 million.

Dean Foate, President and CEO, commented, "Our return on invested capital (ROIC) for Q1 of 25.9% is a great way to start off fiscal 2008. Our Q1 revenue of $458 million was up 7.7% sequentially and in line with our expectations. We are establishing Q2 revenue guidance of $440 to $460 million. This implies that Q2 revenue will be relatively flat to Q1, but it is important to note that Q2 revenue includes a significant reduction of $28 million from a large un-named defense program versus the $56 million included in Q1. Excluding this defense program, revenue grew approximately 5% sequentially in Q1 and is expected to grow 3% to 8% sequentially in Q2. No additional production for this defense program is forecasted beyond Q2."

"Looking ahead to revenue for fiscal 2008," Foate continued, "we are cautiously optimistic that our customer forecasts and new business development efforts will support revenue growth in our target range of 15% to 18%, although we remain mindful of the potential impact of a turbulent global economy."

Ginger Jones, Chief Financial Officer, added "Our gross margins for Q1 were 12.1%, consistent with our Q1 guidance. Because fiscal 2008 US income is expected to be higher than previously anticipated, we are now expecting our tax rate this year to be approximately 18% rather than the 15% rate used when we established our Q1 guidance last quarter. Consequently, our EPS in Q1 was $0.02 lower than we would have anticipated with revenue near the high-end of our guidance range. Q1 results include improved financial performance for our Mexico site, which was able to narrow operating losses to $395,000 in the first quarter through a combination of previously announced restructuring efforts and income of approximately $1 million from the shipment of previously written-down inventories."
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