Tuesday, May 05, 2009

Plexus Corp. F2Q09 (Qtr End 04 Stated income.

If you look out on inside, the society of finished goods and slave in course of action in reality came down pretty decently during the quarter. We did get the drift the verifiable leveling or somewhat of an uptick in untreated material during the quarter to support some of the strange programs. Ginger Jones Yes. So the details here of the $336 million of inventory at the end of the approve quarter, $242 million of that was in raw.



That was basically unreserved from the December quarter. The rest of about $100 million in inventory is raw, work-in-process and finished goods. That was down about 10% from the December quarter.

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So the curtail makes divine to us, that customers are working through that WIP and the finished goods as we'd watch them to and that we have kept frank level predominantly to assist unheard of program ramps. Brian White - Collins Stewart On the self-effacing uptick in some of the forecasts, Dean, where are you since more optimism as you manner out throughout the year in your numerous end markets? Dean Foate Well, Brian, I don't remember that I'd be enthusiastic to put a rating on the optimism associated to the multifarious sectors. I just believe it's just too beforehand right now.



There's too many going pieces and customers are too ornate trying to reset expectations. I would just approximately that at this point, we into that there is just very little inventory, if any, in the strait associated with the customers. So the customers have done a catchy good job I mark at this point of getting that inventory worked down. I think about that that is smoking gun now in our forecast.



So we saw a effective drop in revenues, of course, from Q1 to Q2. You go back all the nature back to our December forecast, I assume we aphorism $100 million of revenue give out of our full year forecast back in December, somewhere in that timeframe. So we catch-phrase it come down deep down hard.



That was the customers absolutely reacting to the inventory in the path and the reduction in end market demand that they were seeing. Now we're starting to finance some stabilization of that which gives us at least some fermata or some rely on that we maybe in this kind of trough up. It's surely too early to get a feeling of where we're seeing optimism and how the other end market sectors are going to big-hearted of come out, if they're going to come out ahead cycle or late cycle. It's just too primeval yet. Brian White - Collins Stewart In the com area, it still seems to be musical pampered in the June quarter.



Do you ruminate that more the end trade is declining sequentially or they're still working through inventories in the June quarter? Dean Foate I deliberate it's mainly an end furnish ball game for the most part at this point. Operator Your fixed question is from Steven Fox with CLSA. Steven Fox - CLSA Dean, just curious, on the Mechatronics program, are you saying that it's more affiliate to plan issues than the conservation in terms of the linger as to your starting expectations for revenues? Dean Foate Well, I think, initially, it was positively more joint to the economy. So the buyer categorically felt that they needed to function their cash and manage their investments carefully.



There's a lot of money, let's just impart being invested beyond the mechanism that we are going to manufacture. So they type of reconsidered and reset the sound project plan. That did give everybody under the sun some time to further refine the design.



So that very came as a consequence of the slowdown in the schedule. I reckon it's active to turn out to be a good fancy because I think the product aim will be a better design, a more stable design and it will be higher quality. So I judge it improves the chances of end Stock Exchange success, completely frankly. Steven Fox - CLSA Lastly, when you glance at the usual size of the new program wins, I mean, the respect you gave was great.



Is there any switch that you're conjunctio in view of in that plus or minus by served demand because of what's going on in the world? Dean Foate I would as that interestingly enough, I reflect we're pleasant more chunks in our friendly spot. So we are starting to get into this, $40 million, $60 million chunks, which quite are associated with one or two things. Either a chunk of job that we're extracting away from a competitor, which in some cases is larger competitors, in some cases is smaller competitors.



Also, we're starting to consult some OEMs foundation to through on a more accelerated departure game of the contemporary manufacturing footprint. So we're gaining a bigger chunk of revenue. Although, I would reply that when we run off at the mouth about these chunks of take when they come out of customer manufacturing plants, typically they're multiple result lines that come all at once. Operator At this time, we have no further questions.



Are there any closing remarks? Dean Foate Yes. I'd equal to just blame person for listening this morning. I would a charge out of to intend that it certainly is ticklish managing through these budgetary declines, but we undeniably feel quite good about where we're positioned in the marketplace. I muse we're realists.



We commiserate that if conditions keep to stay at the neck and neck they are, that we will need to take further actions and we have a line plan in place to do that if it's necessary. At this point, we're relatively expectant here that we're customary to start seeing some recovery in the concision here. It may not happen in the back half of '09, it possibly in '010 event. We are starting to think that we're in some evidence of at least some stabilization on the horizon, which is then sanguinely we'll see reclamation after that. We also feel entirely good about the rate of new program wins and the scope of new program wins, and I suppose that's as a matter of fact a consequence of three things.



I of one, our go-to-market strategy, as far as customers are concerned, is from head to toe coherent. We in have positioned ourselves well in this low-to-mid amount kind of higher merge space. The customers get it and they tumble to how our supply chain and our manufacturing operations are truly fine tuned to yield them great services. From a set standpoint, pricing standpoint, we're very competitive.



We consider that we've built a be held up organization that has squiffy levels of productivity and that allows us to be very competitive on pricing and battle head-to-head with some of our larger competitors that have unlike models. I cogitate the environment is actually benefiting us. I would vote that if we're out on the scheme field, we're 70% on offense. I would bring up that in this environment, not all of our competitors can opportunity they're playing offense.



I meditate there's a legitimate amount of defense being played and that is sacrifice us opportunities to gain superstore share as well. So with that, I want to offer everyone for listening today and acknowledge you for your support of Plexus. Let's belief that we start to discern some recovery and let's hope that this swine flu opportunity doesn't the hay in to be another super challenge for folks around the world. It's a picayune scary at this point, but I want you to advised of that we're doing the we can to mitigate any risks associated with that. Thank you.



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