Plexus (PLXS) Q4 2009 earnings summary

Executive summary

• FY09 net sales fell 12.2% YoY to $1,616.6M as weak global conditions and lower demand across all five end markets weighed on results; FY09 included 371 days vs. 364 in FY08.

• Lower sales and unfavorable customer mix reduced gross margin and ROIC; cost controls included discretionary spending cuts, workforce reductions and lower planned capital and working-capital investments.

Financial highlights

• FY09 revenue was $1,616.6M, gross profit $154.8M, operating income $53.1M and net income $46.3M, vs. $1,841.6M, $205.8M, $102.8M and $84.1M in FY08.

• FY09 diluted EPS was $1.17 vs. $1.92 in FY08; FY09 included a $5.7M goodwill impairment and $2.8M pre-tax restructuring costs, partly offset by a ~$1.4M favorable tax adjustment.

• Q4 FY09 revenue was $393.0M, gross profit $37.8M, net income $15.1M and diluted EPS $0.38; Q4 FY08 recorded $476.0M, $49.8M, $17.3M and $0.43, respectively.

• Operating cash flow rose to $170.3M from $64.2M in FY08; cash and equivalents were $258.4M at year-end, and capital expenditures were $57.4M.

Outlook and guidance

• FY10 goals: capitalize on new-business ramps and improving demand to increase operating income and return ROIC above estimated WACC; full-year revenue targets withheld pending more stable forecasts and visibility.

• Q1 FY10 revenue guidance was $405M–$430M; assuming sales in that range, diluted EPS guidance was $0.31–$0.36 before restructuring and asset impairment costs and anticipated litigation recovery.

• FY10 effective tax rate was expected near 0%; FY10 capital expenditures were projected at $60M–$70M, dependent on anticipated demand.