NEENAH, WI -- Plexus Corp.'s net income was a record $25.1 million on a 27% gain in revenues for the period ended July 1. The EMS firm reported a record $397.4 million for the quarter. Sequential growth in the third quarter was exceptional. Gross margins expanded 50 basis points sequentially to 11.5% of revenues, and operating margins rose 75 basis points to 6% of revenues.

The company will close its facility in Maldon, England, to reduce manufacturing capacity and relocate the programs to a facility in Kelso, Scotland, by the end of 2006 or early in 2007. About 77 employees will be laid off.


Plexus lost $21.5 million a year ago, brought down by restructuring costs of $27.6 million.

Sales were driven by production "for an important new program in the defense sector and renewed strength in the wireline/networking sector," CEO and president Dean Foate said.

Plexus guided for fiscal fourth-quarter revenues of $390 million to $405 million, which would translate to 18.3 to 19.5% topline growth for the year.

The shutdown of the Maldon plant is expected to cost $1 million.

Cash conversion improved by three to 53 days during the quarter. Cash and investments increased $20.1 million over the prior quarter-end to $169.8 million. Cash flow from operations was approximately $7 million. Capital expenditures were $4.8 million.

The top 10 customers comprised 63% of sales during the quarter, up 5 points from the previous quarter. Juniper Networks (19%), General Electric (11%) and an unnamed defense customer (10%) were the customers representing 10% or more of revenues. However, as reported earlier, Plexus will lose some of the Juniper business during the December quarter.

Wireline/Networking made up 38% of sales, wireless Infrastructure 6%, medical 25%, industrial/commercial 17%, and defense/security/aerospace 14%.