Apr 25, 2003 Plexus Corp. (Nasdaq: PLXS), today announced results for its second fiscal quarter ended March 31, 2003. Below, please find summary results.
SUMMARY FINANCIAL RESULTS
(dollars in thousands, except per share data)
Three Months Ended
March 31,
2003 2002
Sales $190,773 $231,162
Gross Margin 5.0% 8.9%
Operating margin (3.8%) (0.9%)
Net Loss $(5,044) $(2,154)
EPS $(0.12) $(0.05)
Dean Foate, President and Chief Executive Officer of Plexus, said, "Financial results for the second quarter were in line with our revised guidance of March 20, 2003. Looking forward, we currently expect the second quarter to be our trough quarter for the year. We are initiating revenue guidance for the third quarter of $190 to $200 million, recognizing the current global economic environment and the fluctuation in end-market demand across all our industry sectors. Assuming this level of revenue, we expect an EPS loss of $(0.10) to $(0.07) for Q3, excluding the costs of the restructuring discussed below."
Mr. Foate continued, "We continue to refine Plexus' capabilities, footprint and resources in line with evolving customer demands. To this end, we are initiating a restructuring program to close our Kentucky manufacturing operations and re-focus our PCB-design group. In addition, we are effecting a reduction in force in both our engineering and corporate organizations. We expect these actions to better position the Company strategically, as well as to improve both capacity utilization and the bottom line."
Tom Sabol, Chief Operating Officer, commented, "We expect the Kentucky manufacturing site to be closed by the end of September with production shifted to other sites in the United States and Mexico. The other actions outlined will be completed during our fiscal third quarter. Approximately 400 employees, or 8% of our total workforce, will be affected by this restructuring. Our combined restructuring actions, including previously announced actions, will reduce our global manufacturing square footage to approximately 1.4 million square feet, from our peak of 1.8 million square feet."
Gordon Bitter, Chief Financial Officer, added, "We currently estimate approximately $12 million of restructuring charges to close the Kentucky site, re-focus the PCB-design group, and to effect the reduction in force. Severance of approximately $5 million is the only significant cash charge, and the remaining $7 million of non-cash charges relate to the expected write-down in the value of the fixed assets in Kentucky."
Mr. Bitter continued, "These actions should result in approximately $6 million to $8 million in annualized cost savings. We expect to record the restructuring charge in the third fiscal quarter and begin to see the benefits in the fourth quarter. We anticipate the full effect of the benefits will be attained in the first quarter of fiscal 2004."
Mr. Bitter concluded, "The second quarter balance sheet remained very strong. We had over $112 million of cash and short term investments, and the only significant debt items are two capitalized leases in the amount of $26 million."
Fiscal Q2 Highlights
Sales by industry were:
Industry Q2-Fiscal 2003 Q1-Fiscal 2003
Networking/Datacom 33% 35%
Medical 33% 34%
Industrial/Commercial 16% 14%
Computing 11% 12%
Transportation/Other 7% 5%
Top 10 customers comprised 54% of sales during the quarter, compared to 57% in the previous quarter.
Siemens was the only customer representing more than 10% of sales for the quarter.
Cash flow from operations was approximately $15 million for the quarter.
Days sales outstanding in accounts receivable improved to 45 days compared to 47 days in the first quarter of fiscal 2003.
Inventory increased sequentially by approximately $0.9 million to $104.9 million, while annualized turns decreased to 6.9 turns this quarter from 7.7 turns in the first fiscal quarter of 2003.
Conference Call/Webcast and Replay Information
NOTE: THE COMPANY WILL NOT ACCEPT INVESTOR CALLS PRIOR TO THE APRIL 24 CONFERENCE CALL.
When: April 24, 2003 at 9:00a.m. Eastern.
Dial in: 800-362-0574 with conference ID: Plexus
Webcast: http://www.videonewswire.com/PLXS/042103 (requires Windows Media Player).
Replay: 800-839-3612 or 402-220-2972 or http://www.videonewswire.com/PLXS/042403 The call will be archived until midnight on May 1, 2003.
NOTE: If you experience problems with the webcast, please email webcastsupport@tfprn.com.
Plexus (www.plexus.com) ) provides product realization services on a global basis to original equipment manufacturers (OEMs) in the networking/datacommunications, medical, industrial, commercial and computer electronics industries. Plexus offers engineering and product development, new product introduction (NPI), prototyping, material procurement and management, assembly, testing, manufacturing, complex final system assembly, global fulfillment and sustaining services.
