NEENAH, Wis., Oct. 27 /PRNewswire-FirstCall/ -- Plexus Corp. today announced that revenue for its fourth fiscal quarter increased 26% to $273.3 million, compared to $216.1 million in the prior-year period. The Company reported a loss for its fourth fiscal quarter of $(36.8) million, equivalent to $(0.85) per diluted share. The net loss for the period included a previously announced $36.8 million valuation allowance related to deferred tax assets, and $3.8 million of previously announced restructuring and impairment costs. Excluding these items the Company had pro- forma net income for its fourth fiscal quarter of $3.9 million, or $0.09 per fully diluted share.
For the full year Plexus achieved revenue of $1,040.9 million and recorded a net loss of $(31.6) million, equivalent to a loss of $(0.74) per share. Excluding restructuring and impairment charges and tax adjustments, the Company reported pro-forma net income of $13.5 million, equivalent to EPS of $0.31 for fiscal 2004. For fiscal 2003, the Company reported revenue of $807.8 million and a net loss of $(68.0) million, equivalent to a loss of $(1.61) per share. On a pro-forma basis, Plexus reported a net loss of $(7.2) million, equivalent to a loss of $(0.17) per share for fiscal 2003.
The Company provides non-GAAP supplemental information -- more specifically, pro-forma net income and EPS excluding restructuring and impairment costs and tax adjustments. These non-GAAP financial data are provided to facilitate meaningful period-to-period comparisons of underlying operational performance by eliminating infrequent or unusual charges. Similar non-GAAP measures are used for internal management assessments because such measures provide additional insight into ongoing financial performance. Please refer to the attached accompanying reconciliations of the GAAP net income/(loss) and EPS to the non-GAAP supplemental data.
Dean Foate, President and Chief Executive Officer of Plexus, commented, "At the outset of fiscal 2004, our primary objective was to return the company to profitability. To accomplish this, we adopted the mindset of 'all good things come from customers.' We re-tooled our Sales & Marketing engine to drive revenue growth and strengthen our customer portfolio, while retaining our focus on operational excellence and our reputation for industry-leading customer service. We were successful in achieving the industry's highest organic (without acquisition) growth rate of 29% and generating a Return on Capital Employed (ROCE) of 5.4% for fiscal 2004, based on our pro-forma operating income. This is a 930 basis point improvement in ROCE compared to fiscal 2003."
"As we look to fiscal 2005," continued Foate, "our primary objective remains to increase profitability. We expect to achieve this goal with improvements in capacity utilization and operating efficiencies through a combination of moderate revenue expansion and lean manufacturing and inventory management initiatives. Additionally, we will remain intensely focused on working capital utilization and return on capital employed."
"For the full fiscal year of 2005, we are currently planning revenue growth of 15% to 18%. As we look more specifically to our first fiscal quarter, we are initiating revenue guidance of $280 to $290 million with EPS of $0.09 to $0.11, excluding any previously announced restructuring and impairment charges," Foate concluded.
Gordon Bitter, Chief Financial Officer, added, "Despite higher sequential revenue, profit expansion in the first fiscal quarter will be moderated by previously announced higher start-up losses at the new facility in Penang, Malaysia, incremental costs associated with the transitioning of programs from the Seattle manufacturing and engineering site, and continued near-term weakness at a couple of sites."
"We are expecting improved sales and earnings in the second half of the year," Bitter continued, "as revenues increase and the drag on earnings from Penang and Seattle dissipate. Our overall tax rate is currently expected to be between 5% and 8% in 2005."
"Our balance sheet remains very strong. We ended the year with cash and short-term investments of approximately $44.9 million. In addition, we have no borrowings outstanding on our bank credit facility," concluded Bitter.
Fiscal Q4 Highlights
-- Sales by industry were:
Industry Q4 - Fiscal 2004 Q3 - Fiscal 2004
Networking/Datacom 43% 47%
Medical 33% 28%
Industrial/Commercial 15% 16%
Computing 4% 4%
Transportation/Other 5% 5%
-- Top 10 customers comprised 55% of sales during the quarter, up from
54% in the previous quarter.
-- Juniper Networks, with 15% of sales, was the only customer
representing more than 10% of sales for the quarter.
-- Cash flow generated from operations was approximately $19.6 million
for the quarter.
-- Days sales outstanding in accounts receivable increased to 50 days
compared to 46 days in the third quarter of fiscal 2004.
-- Inventory increased sequentially from the third quarter by
approximately $7 million to $174 million, while annualized turns
decreased to 5.8 turns this quarter from 6.0 turns in the third
quarter of fiscal 2004.
Conference Call/Webcast and Replay Information
What: Plexus Corp.'s Fiscal Q4 Earnings Conference Call
When: Thursday, October 28, 2004 at 8:30 a.m. Eastern
Where: 877-234-1973 with conference ID Plexus
http://ir.plexus.com/ (requires Windows Media Player)
Replay: The call will be archived until midnight on November 4, 2004
at http://ir.plexus.com/ or via telephone replay at
877-519-4471
PIN: 5220384
Contact: Paula Peltier, 920-720-6647, paula.peltier@plexus.com
NOTE: If you experience problems with the webcast, please email webcast.info@thomson.com .
About Plexus Corp. - The Product Realization Company
Plexus ( http://www.plexus.com/ ) is a contract manufacturer of electronics products providing product design, test, manufacturing, fulfillment and aftermarket solutions to branded product companies in the networking, datacommunications, medical, industrial, commercial, defense and computer industries.
The Company's unique Focus Factory manufacturing model and global supply chain solutions, strategically enhanced by value-added product design and engineering services, are developed to optimize lowest total cost, scalability and responsiveness for programs requiring flexibility, technology and quality. Plexus provides award-winning customer service to more than 150 branded product companies in North America, Europe and Asia.
Safe Harbor and Fair Disclosure Statement
The statements contained in this release which are guidance or which are not historical facts (such as statements in the future tense and statements including "believe," "expect," "intend," "anticipate," "target" and similar terms and concepts) are forward-looking statements that involve risks and uncertainties, including, but not limited 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 secure new customers and maintain its current customer base; 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, including preparations relating to the new Malaysia facility; the adequacy of restructuring and similar charges as compared to actual expenses, and possible unexpected costs and operating disruption in transitioning programs; the effect of general economic conditions and world events (such as terrorism); 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 Twelve Months Ended
September 30, September 30,
2004 2003 2004 2003
(unaudited)
Net sales $273,306 $216,076 $1,040,858 $807,837
Cost of sales 250,315 200,103 954,080 754,872
Gross profit 22,991 15,973 86,778 52,965
Operating expenses:
Selling and
administrative
expenses 17,740 15,333 68,259 65,152
Restructuring and
impairment costs 3,809 7,855 9,303 59,344
21,549 23,188 77,562 124,496
Operating income
(loss) 1,442 (7,215) 9,216 (71,531)
Other income (expense):
Interest expense (780) (673) (3,080) (2,817)
Miscellaneous 447 791 1,475 2,624
Income (loss) before
income taxes and
cumulative effect of
change in accounting
for goodwill 1,109 (7,097) 7,611 (71,724)
Income tax expense
(benefit) 37,891 (3,224) 39,191 (27,228)
Loss before
cumulative effect
of change in
accounting for
goodwill (36,782) (3,873) (31,580) (44,496)
Cumulative effect of
change in accounting
for goodwill, net of
income tax benefit
of $4,755 - - - (23,482)
Net loss $(36,782) $ (3,873) $(31,580) $ (67,978)
Earnings per share:
Basic
Loss before
cumulative effect
of change in
accounting for
goodwill $(0.85) $(0.09) $ (0.74) $(1.05)
Cumulative effect of
change in accounting
for goodwill - - - (0.56)
Net loss $(0.85) $(0.09) $ (0.74) $(1.61)
Diluted
Loss before cumulative
effect of change in
accounting for
goodwill $(0.85) $(0.09) $ (0.74) $(1.05)
Cumulative effect of
change in accounting
for goodwill - - - (0.56)
Net loss $(0.85) $(0.09) $ (0.74) $(1.61)
Weighted average shares
outstanding:
Basic 43,168 42,522 42,961 42,284
Diluted 43,168 42,522 42,961 42,284
NON-GAAP SUPPLEMENTAL INFORMATION
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
September 30, September 30,
2004 2003 2004 2003
(unaudited)
Net loss - GAAP $(36,782) $(3,873) $(31,580) $(67,978)
Add cumulative effect
of change in
accounting for
goodwill, net of
income tax benefit
of $4,755 - - - (23,482)
Loss before cumulative
effect of change in
accounting for
goodwill - GAAP (36,782) (3,873) (31,580) (44,496)
Add income tax expense
(benefit) - GAAP 37,891 (3,224) 39,191 (27,228)
Income (loss) before
income taxes and
cumulative effect of
change in accounting
for goodwill - GAAP 1,109 (7,097) 7,611 (71,724)
Add: Restructuring and
impairment costs* 3,809 7,855 9,303 59,344
Income (loss) before
income taxes and
excluding restructuring
and impairment costs
- Non-GAAP 4,918 758 16,914 (12,380)
Income tax expense
(benefit) - Non-GAAP 984 318 3,383 (5,200)
Net income (loss)
- Non-GAAP $3,934 $440 $13,531 $(7,180)
Earnings per share
- Non-GAAP:
Basic $0.09 $0.01 $0.31 $(0.17)
Diluted $0.09 $0.01 $0.31 $(0.17)
Weighted average shares
outstanding:
Basic 43,168 42,522 42,961 42,284
Diluted 43,593 43,388 43,834 42,284
Summary of restructuring and impairment costs*
Restructuring and
impairment costs:
Fixed asset
impairment $2,059 $5,240 $2,107 $32,451
Severance costs 1,750 2,349 2,493 10,358
Lease termination
costs - 266 4,703 10,940
Write-off of goodwill - - - 5,595
Total restructuring and
impairment costs $3,809 $7,855 $9,303 $59,344
PLEXUS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
September 30, September 30,
2004 2003
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $40,924 $58,993
Short-term investments 4,005 19,701
Accounts receivable 148,301 111,125
Inventories 173,518 136,515
Deferred income taxes 2,798 23,723
Prepaid expenses and other 4,901 8,326
Total current assets 374,447 358,383
Property, plant and equipment, net 129,586 131,510
Goodwill, net 34,179 32,269
Deferred income taxes - 24,921
Other 7,496 5,971
Total assets $545,708 $553,054
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
capital lease obligations $ 811 $958
Accounts payable 100,588 91,445
Customer deposits 11,952 14,779
Accrued liabilities:
Salaries and wages 26,050 17,133
Other 19,686 23,753
Total current liabilities 159,087 148,068
Long-term debt and capital lease obligations 23,160 23,502
Other liabilities 12,048 10,468
Commitments and contingencies - -
Shareholders' equity:
Common stock, $.01 par value, 200,000 shares
authorized, 43,184 and 42,607 shares issued
and outstanding, respectively 432 426
Additional paid-in-capital 267,925 261,214
Retained earnings 71,260 102,840
Accumulated other comprehensive income 11,796 6,536
Total shareholders' equity 351,413 371,016
Total liabilities and shareholders' equity $545,708 $553,054
Plexus Corp.