NEENAH, WI -- Plexus today reported fiscal second quarter revenue of $619 million, down 5% from a year ago but in line with guidance, and said its longtime CEO would step down at the end of the fiscal year.

For the period ended Apr. 2, the EMS company reported net income of $16.8 million, down 28.9% from April 2015. Gross margin fell 60 basis points to 8.6%, and operating margin was down 70 basis points to 3.8%. The cash cycle improved five days sequentially to 66 days.

For the quarter, Networking/Communications sector sales plunged 25% year-over-year to $157 million. Healthcare/Life Sciences was flat at $190 million, and Industrial/Commercial was up 5.6% to $169 million. Defense/Security/Aerospace rose 14.4% to $103 million.

The company won 38 programs during the quarter worth approximately $174 million in annualized revenue when fully ramped into production

Outgoing CEO and president Dean Foate said, "The greatly improved operational performance in our fiscal second quarter sets up our expectation that we will return to our target operating margin range of 4.7% to 5% in our fiscal third quarter; one quarter ahead of earlier expectations.”

Plexus guided for revenue of $640 million to $670 million for its fiscal third quarter ending July 2.

Foate announced he would step down as of Oct. 2, at the end of Plexus' fiscal year. The company's board has named executive vice president and chief operating officer Todd Kelsey to replace Foate as president and chief executive. Foate will remain executive chairman until Sept. 30, 2017, at which time the Board intends to appoint him non-executive chairman of the board.

In a statement, Foate called himself "fortunate to work with the best management team in the industry."

Kelsey, he added, is a "seasoned leader that knows our industry well and has amassed a comprehensive knowledge of Plexus while cultivating strong relationships with our customers. He has been instrumental in developing and driving key strategic initiatives and I am confident in his ability to deliver industry-leading results.”

Kelsey joined Plexus in 1994 as a design engineer and was named vice president of Plexus’ Neenah Design Center in 2002, senior vice president of Plexus Engineering Solutions in 2006, senior vice president Global Customer Services in 2007 and executive vice president Global Customer Services in 2011. He was promoted to his current position in 2013. He holds bachelor’s and master’s degrees in electrical engineering from the University of Wisconsin-Madison and a master’s degree in business administration from the University of Wisconsin-Oshkosh.

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