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Plexus Announces Q1 Revenue of $381 Million and EPS of $0.32
January 24, 2007 | PRNewswireEstimated reading time: 4 minutes
Plexus Corp. (NASDAQ:PLXS) today announced results for its fiscal first quarter and provided forward-looking guidance for its fiscal second quarter and its full fiscal year 2007.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
-- Q1 '07 Results: Revenue for the 1st fiscal quarter ended December 30,
2006 was $381 million with diluted GAAP EPS of $0.32.
-- Q2 '07 Guidance: The Company established 2nd quarter revenue guidance
of $345 to $355 million with EPS, excluding any restructuring charges,
in the range of $0.15 to $0.19.
-- FY '07 Target: Plexus revised its full fiscal year revenue growth
target to 8% to 12% over fiscal 2006.
Dean Foate, President and CEO, commented, "From a revenue perspective, in Q1 we achieved slightly better than expected performance in our Medical market sector. While the Wireline market sector experienced double-digit growth over the previous quarter, Q1 sales for this market sector remained lower than we had expected. Our other market sectors also experienced lower than expected sales, resulting in slightly less than expected overall revenue in Q1. As we look to Q2, we are experiencing softness with a number of customers across all of our market sectors. Additionally, we continue to have poor visibility into the decision-making process concerning potential follow-on orders for a large defense contract."
"We expect revenue growth to resume in the second half of our fiscal year," continued Foate. "However, given the outlook for Q2, general ambiguity around longer-term economic conditions, and uncertainty around the defense contract, we feel it is prudent to revise our FY '07 revenue expectations."
Gordon Bitter, Chief Financial Officer, commented, "From a profitability perspective, Q1 was in line with our expectations. It is worth noting that Q1 results included approximately $0.5 million in severance and retention costs related to the previously announced closure of our Maldon, <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />England facility, as well as $1.9 million in stock-based compensation."
"Profits in Q2 and the back half of the year will be adversely impacted by some product mix shifts, as well as the investments we are making to better position Plexus for the long term," continued Bitter. "We expect our new facility in Malaysia to be operational in the fiscal second quarter, and the expansion in China to be completed by September. We are also upgrading manufacturing equipment in Mexico and some sites in the US. Despite these investments, we have ample liquidity to continue to support the growth of current and new customers, and we continue to have one of the lowest debt-to-equity ratios in the industry."
Foate concluded, "Our performance over the last few quarters has clearly demonstrated an attractive, viable business model with ROIC exceeding our cost of capital. While I am disappointed with the revised revenue outlook for the current year, this remains an exciting time for Plexus. We are increasingly focused on the long-term needs of our customers and the market sectors we serve. Our market-sector-based business development strategy continues to gain traction, our pipeline for new business remains strong, and our value proposition is becoming increasingly differentiated from our competition."
Plexus provides non-GAAP supplemental information. These non-GAAP income statements exclude transactions that are not expected to have an effect on future operations. Such transactions include restructuring and asset impairment costs, as well as the establishment or reduction of the valuation allowance for deferred tax assets. 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 financial 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 and EPS to the non-GAAP supplemental data.
SECTOR BREAKOUT
Plexus reports revenue based on the industry sector breakout set forth in the table below, which reflects the Company's sales and marketing focus.
Industry Q1 - Fiscal 2007 Q4 - Fiscal 2006
Wireline/Networking 42% 38%
Wireless Infrastructure 9% 8%
Medical 27% 25%
Industrial/Commercial 16% 18%
Defense/Security/Aerospace 6% 11%
FISCAL Q1 HIGHLIGHTS
-- Top 10 customers comprised 60% of sales during the quarter, up
1 percentage point from the previous quarter.
-- Juniper Networks Inc., with 19% of sales, and General Electric Corp.,
with 13% of sales, were the only customers representing 10% or more of
revenues for the quarter.
-- Cash flow used in operations was approximately $7.8 million for the
quarter.
-- Capital expenditures for the quarter were $14.0 million.
-- Cash Conversion Cycle:
Cash Conversion Cycle Q1 - Fiscal 2007 Q4 - Fiscal 2006
Days in Accounts Receivable 46 Days 48 Days
Days in Inventory 63 Days 58 Days
Days in Accounts Payable (51) Days (56) Days
Annualized Cash Cycle 58 Days 50 Days
Conference Call/Webcast and Replay Information
What: Plexus Corp.'s Fiscal Q1 Earnings Conference Call
When: Thursday, January 25th at 8:30 a.m. Eastern Time
Where: 800-514-0843 or 973-935-8412 with conference ID: 8226459
http://www.videonewswire.com/PLXS/012507
(requires Windows Media Player)
Replay: The call will be archived until February 1, 2007 at noon Eastern
Time
http://www.videonewswire.com/PLXS/012507
or via telephone replay at 877-519-4471 or 973-341-3080
PIN: 8226459
About Plexus Corp. - The Product Realization Company
Plexus ( http://www.plexus.com/ ) is an award-winning participant in the Electronics Manufacturing Services (EMS) industry, providing product design, test, manufacturing, fulfillment and aftermarket solutions to branded product companies in the Wireline/Networking, Wireless Infrastructure, Medical, Industrial/Commercial and Defense/Security/Aerospace industries.
The Company's unique Focused Factory manufacturing model and global supply chain solutions are strategically enhanced by value-added product design and engineering services. Plexus specializes in customer programs that require flexibility, scalability, technology and quality.