<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION
----- 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
OR
----- TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-14824
PLEXUS CORP.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1344447
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 JEWELERS PARK DRIVE, NEENAH, WISCONSIN 54957-0156
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 722-3451
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $.01
PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report(s)) and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of December 12, 1995, 6,493,897 shares of Common Stock were outstanding, and
the aggregate market value of the shares of Common Stock (based upon the
$16.375 closing sale price on the last trading date prior thereto, as reported
on the NASDAQ National Market System) held by non-affiliates (excludes shares
reported as beneficially owned by directors and officers - does not constitute
an admission as to affiliate status) was approximately $92.6 million.
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<CAPTION>
PART OF FORM 10-K
INTO WHICH PORTIONS OF
DOCUMENT DOCUMENT ARE INCORPORATED
-------- -------------------------
<S> <C>
Annual Report to Shareholders for
the fiscal year ended September 30, 1995 Part II
Proxy Statement for 1996 Annual
Meeting of Shareholders Part III
</TABLE>
<PAGE> 2
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT
Plexus Corp., through its subsidiaries (together "Plexus" or the
"Company"), provides services relating to the design of electronic products and
assemblies; manufacture, programming and testing of such assemblies; and the
design and manufacture of related test equipment. The Company's design and
production services are provided to customers under various arrangements.
Other than test equipment products, the Company does not design or manufacture
its own proprietary products.
The Company's designed and manufactured products include printed circuit
boards, power supplies, telecommunications terminals, microprocessor-based
equipment, test equipment, electronic meters and intelligent burn-in chambers.
These products are used in a wide variety of manufactured goods, including
computers, telecommunications equipment, production and industrial control
equipment, medical equipment, word processing equipment and automobiles.
Plexus is a Wisconsin corporation incorporated in 1979. Its principle
subsidiaries are Electronic Assembly Corporation and Technology Group, Inc.
The Company also owns a minority equity interest in certain other companies.
The Company's principal office is located at 55 Jewelers Park Drive, Neenah,
Wisconsin 54957-0156, and its telephone number is (414) 722-3451.
ELECTRONIC PRODUCTS
GENERAL BACKGROUND. The Company's services involve the design of
electronic products and systems, the arrangement of electronic components
thereon, and the assembly and testing of such products including the
incorporation of the electronic assemblies into the final product housing. The
products designed and assembled by the Company consist primarily of electronic
components assembled on printed circuit boards and programmed to perform
specific functions. The electronic components include computer memory chips,
microprocessors, integrated circuits, resistors, capacitors, transformers, and
switches. Printed circuit boards are the basic element in the manufacture of
most electronic products and act as the interconnection platforms for various
integrated circuits and electronic components. In addition to the Company's
ability to design and manufacture complete electronic products, the Company
also has the capacity of designing and assembling printed circuitry products
and products utilizing circuit boards with multiple layers of circuitry.
The various types of electronic product services offered by the Company
are discussed below. A customer of the Company may utilize any or all of these
services. The Company charges for these services under a variety of pricing
methods that vary accordingly to the customer or type of service involved.
PRODUCT DESIGN. The Company, primarily through its Technology Group, Inc.
subsidiary, provides product design and engineering services. These services
include software development, circuit design, printed circuit board layout, and
product housing design. The Company's design services provide customers with a
product which is capable of performing an intended function and which can be
manufactured in an efficient and economical manner.
The Company's technologies involve the design of electronic systems,
including printed circuit boards and the arrangement of electronic components
thereon, and the development and/or programming of the application software
necessary to control the functions of those components. The Company's
personnel design printed circuit boards using computer assisted design
equipment and software. This equipment permits the design of complex
multi-layered printed circuit boards which not only have wiring on the top and
bottom surfaces but also incorporate multiple inside layers of circuitry.
<PAGE> 3
The Company's design service may include initial feasibility studies,
product concept definition, development or specifications for product feature
and functions, product engineering specifications, microprocessor design,
design of circuit and custom or semi-custom computer chips, software
development, drafting, prototype production and testing, and development of
test specifications and procedures.
PRODUCT MANUFACTURE. The Company, primarily through its Electronic
Assembly Corporation subsidiary, manufactures electronic products and
assemblies for use in a wide variety of industries and applications.
The Company's assembly processes involve the fabrication of products from
components manufactured to specification by others. Electronic components such
as memory chips, microprocessing units, integrated circuits, resistors,
capacitors, transformers, switches, wire and related items are purchased as
stock items from a variety of manufacturers and distributors. The Company is
not dependent upon any single supplier for such material. The Company's
printed circuit boards and certain other components are manufactured for it to
its customers' specifications. The Company believes these products would be
available from a variety of sources and that the loss of any single source of
supply would not materially affect the Company's business. However, the
Company did experience some shortages of memory and logic devices during fiscal
1994, which were a result of market-wide shortages of these devices. The
Company believes that these shortages are not continuing.
The Company's manufacturing operations include product assembly, testing,
and assembly into the final product housing. While the Company has automated
various aspects of many processes, the assembly of components into electronic
products remains a labor-intensive process generally requiring a high degree of
precision and dexterity in the assembly stage and multiple quality control
checks prior to shipment. The Company utilizes specially designed equipment
and techniques to maintain its ability to assemble efficiently a wide variety
of electronic products.
PRODUCT TESTING. The increasingly complex design and assembly techniques
for production of electronic products have created a need for the Company's
services in designing and assembling test equipment for electronic assemblies.
Such test equipment includes functional test fixtures for testing printed
circuit assemblies; in-circuit component measurement testers; and intelligent
burn-in chambers, which temperature cycle products under load. The Company
designs and assembles test products for testing customers' products.
The Company believes that the design and production of test equipment is
an important factor in its ability to provide products of consistent and high
quality.
SMARTHOUSE PARTNERSHIP. In fiscal 1990, SmartHouse, L.P. ("SHLP") became
a customer of the Company. SHLP is a limited partnership affiliated with the
National Home Builders Association which is in the process of introducing an
energy and communications distribution system that enables home automation
through incorporating a new type of electrical wiring and gas piping that works
together with electronic components to allow electrical, gas, telephone,
coaxial and communication sub-systems and home appliances to be functionally
interactive. The Company entered into a research and licensing ("R&L")
agreements with SHLP to develop a control center, which is the primary user
interface for the SmartHouse home automation system and for other
SmartHouse-related products. Nationwide, consumer and builder acceptance of
the SmartHouse concept has been slower than anticipated.
To finance certain expenditures relating to the development and design of
the Smart House-related products and to reduce its potential risk, the Company
has sponsored and invested in a research and development partnership, Plexus
Home Automation Limited Partnership ("PHALP"), of which a Plexus subsidiary is
general partner. As part of PHALP's formation in 1992, Plexus transferred
rights and obligations under its R&L agreements with SHLP to PHALP, and PHALP
purchased the rights to prior related research from Plexus. In fiscal 1995,
the Company made no additional investments in, and performed no services for,
the Partnership.
-2-
<PAGE> 4
OTHER BUSINESSES
The Company also holds minority interests in certain other companies,
generally in related industries; the investments in these interests aggregated
$150,000 at September 30, 1995. These investments are not material to the
overall success of the Company.
CUSTOMERS AND MARKETING
The Company performs services for a wide variety of customers ranging from
large multi-national companies to smaller companies. Because of the variety of
services it offers, its flexibility in design and manufacturing, and its
ability to timely respond to customer needs, the Company believes it is well
positioned to offer its services to customers in its market segments. For many
customers, the Company functions as both a design and production arm, thus
permitting customers to concentrate on concept development and marketing and to
avoid the expense of development of manufacturing capacity. This method
provides an economical and efficient alternative to in-house production.
The Company markets its services primarily through its own employees. It
also employs several sales representative agencies covering selected customer
accounts. The representatives are paid commissions based upon sales.
During fiscal 1995, the Company's services were sold to approximately 122
customers. The customers include 5 subsidiaries or divisions of International
Business Machines Corporation ("IBM") and 4 subsidiaries or divisions of
General Electric Company ("GE"), all of which the Company considers separate
customers. Other than IBM and GE, no customer accounted for as much as 10% of
the Company's fiscal 1995 sales. Although sales to the various IBM and GE
subsidiaries, divisions and locations represented approximately 26% and 17%,
respectively, of the Company's total sales in fiscal 1995 (compared to 39% and
16%, respectively, in fiscal 1994), orders were received from the various
independent IBM and GE production facilities, each of which contracts
independently of the others. In fiscal 1995, sales to IBM were reduced due to
the termination of Company services relating to particular IBM product lines,
although the Company remains an IBM supplier for several other product lines.
The Company believes that its sales to different IBM and GE locations are not
dependent on sales to other locations. While the complete loss of either IBM
or GE as a customer would have a significant negative impact on the Company,
the Company does not believe the loss of all IBM or GE divisions to be a likely
possibility.
The Company expects that its historic dependency on IBM and GE will be
further reduced in fiscal 1996 as a percentage of total sales. However, the
Company expects revenue growth in fiscal 1996 from both IBM and GE, as well as
from expanded programs for other existing customers and programs from new
customers.
Substantially all of Plexus' business is done on a project by project
basis for its customers. Although Plexus has several projects and customers
for which it provides services on a continuing basis, the timing and nature of
particular customer projects can vary significantly from period to period.
Substantial changes in the nature or timing of these projects affect the
Company's sales and profitability from period to period.
COMPETITION
The market for electronic products and services provided by the Company is
highly competitive, primarily on the basis of engineering, testing and
production capability, and the capacity for prompt delivery, quality and price.
The capability to design in a timely manner and the capacity to produce
quality items and to assure prompt delivery are particularly important in the
electronics industry. The average product designed and assembled by the
Company has a technologically useful life of only 18 months to three years.
Through its design
-3-
<PAGE> 5
and production services, the Company serves as an extension or replacement for
its customers' engineering, testing and manufacturing operations.
Competitors in the electronics design and assembly field are numerous and
range in size from several very large multi-national companies with
substantially greater resources than the Company to many smaller companies
competing only in specific aspects of the Company's business. The Company also
"competes" against companies which determine to manufacture items in-house
rather than contract with a third-party manufacturer. The Company estimates
that it controls approximately two percent of the domestic market in the
outsourced electronics manufacturing services industry.
EMPLOYEES
As of December 1, 1995, the Company employed full time approximately 2,350
persons. These employees included approximately 254 professional and
engineering employees and approximately 1,596 employees who work in assembly.
The Company has never experienced a work stoppage due to a labor dispute,
considers its relations with employees to be very good, and is not a party to
any labor contract. To date, the Company has not had any difficulty
fulfilling its employment needs.
PATENTS AND TRADEMARKS
The Company does not own any material patents or copyrights. The Company
owns the servicemark "Plexus". Also, the Company has a non- exclusive license
in system technology for SmartHouse, L.P. (see "SmartHouse Partnership" above).
ENGINEERING, TESTING AND DEVELOPMENT
The Company believes that its engineering, testing and development
capabilities are significant factors in the success of its business. The
Company maintains a design team of 118 employees, including 102 hardware and
software design engineers and support staff, and utilizes an integrated design
system in the Company's engineering services. See also "SmartHouse
Partnership" above regarding the use of a research and development partnership
to finance the Company's development of SmartHouse-related products.
MATERIALS AND COMPONENTS
The Company does not generally fabricate the component parts which it uses
for the products which it assembles. However, the Company uses various
component parts which are manufactured by others. Important components include
integrated circuits, resistors, capacitors and printed circuit boards; these
components may be either custom or standard. The Company has numerous
suppliers for these components and has generally not experienced difficulties
obtaining the components needed for its assemblies. However, beginning in late
fiscal 1993, there has been an industry-wide shortage of certain component
parts (semiconductor devices) which has resulted in some delayed deliveries and
higher prices to the Company (and to other companies in related industries).
ENVIRONMENTAL COMPLIANCE
The Company believes that it is in compliance with all federal, state and
local environmental laws, and does not anticipate any significant expenditures
in maintaining its compliance.
-4-
<PAGE> 6
ITEM 2. PROPERTIES
The Company owns its headquarters, the Plexus Technology Center, in
Neenah, Wisconsin, which consists of approximately 45,000 square feet and
includes Plexus' headquarters office. The Technology Center provides office,
design and testing space for the Company.
Three of the Company's manufacturing facilities are located at Neenah,
Wisconsin, and the fourth at Richmond, Kentucky. The facilities in the
original Neenah complex, which are owned by the Company and were built in the
period from 1980 to 1985, contain an aggregate of approximately 80,000 square
feet of assembly and office space. The two Wisconsin facilities owned by the
Company (the headquarters and the original manufacturing complex) are subject
to mortgages securing the Company's bank debt.
In 1990, the Company occupied an additional assembly facility in Neenah,
Wisconsin, with approximately 110,000 square feet of assembly and office space,
which provides additional capacity. The Company leases this facility under a
fifteen year lease.
In January 1994, the Company occupied a new surface mount assembly
facility in Neenah, Wisconsin. This facility is approximately 175,000 square
feet, and is used for manufacturing purposes. The Company leases the facility
under a twenty year lease.
In 1985, the Company opened an assembly facility with approximately 45,000
square feet of assembly and office space, which it owns in Richmond, Kentucky.
The Company also uses substantial specialized equipment in its operations.
The Company leases a substantial amount of this equipment. Equipment owned by
the Company is pledged to secure bank debt.
The Company believes that its equipment and facilities are modern, well
maintained and adequate for its present needs. However, continued expansion of
the Company's business may require additional facility expansion in the future.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company is a
party or of which any of its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 1995.
-5-
<PAGE> 7
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table contains certain information regarding the present
executive officers of the Company, who are elected by the Board of Directors
after each annual meeting of shareholders for one-year terms or until replaced
by the Board of Directors.
<TABLE>
<CAPTION>
Present
Office
Name Age Position Held Since
---- --- -------- ----------
<S> <C> <C> <C>
Peter Strandwitz 58 Chairman, Chief Executive Office, Director
1979
John L. Nussbaum 53 President, Director, acting Chief 1995(1)
Financial Officer
Gerald A. Pitner 54 Executive Vice President, Director 1989
Charles C. Williams 59 Vice President 1989
Joseph D. Kaufman 38 Vice President, Secretary and General
1990
Counsel
William F. Denney 62 Vice President, Treasurer and Controller 1995(2)
</TABLE>
(1) Mr. Nussbaum has served as President and a director of the Company since
1980. Mr. Nussbaum became acting Chief Financial Officer in 1995.
(2) Mr. Denney has served as the Vice President and Controller of the Company
since 1990, and became Treasurer in 1995.
* * *
-6-
<PAGE> 8
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
Information in response to this item is incorporated herein by reference
from "Information on Common Stock" on page 20 of the Company's Annual Report to
Shareholders for the Fiscal Year ended September 30, 1995 ("1995 Annual
Report").
ITEM 6. SELECTED FINANCIAL DATA.
Incorporated by reference from "Financial Highlights" on page 1 of the
1995 Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Incorporated by reference from "Management Discussion and Analysis" on
pages 9 through 10 of the 1995 Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See following "List of Financial Statements and Financial Statement
Schedules", and accompanying reports, statements and schedules, which follow
beginning on page F.1, all of whcih are incorporated by reference herein.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information in response to this item is incorporated herein by reference
to "Election of Directors" in the Registrant's Proxy Statement for its 1996
Annual Meeting of Shareholders ("1996 Proxy Statement") and from "Security
Ownership of Certain Beneficial Owners and Management-- Compliance with Section
16(a) of the Securities Exchange Act of 1934" in the 1996 Proxy Statement and
"Executive Officers of the Registrant" in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to the paragraph under "Election of
Directors - Directors' Compensation" and "Executive Compensation" in the 1996
Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to "Security Ownership of Certain
Beneficial Owners and Management" in the 1996 Proxy Statement.
-7-
<PAGE> 9
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to "Executive Compensation--Compensation
Committee Interlocks and Insider Participation" in the 1996 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed:
1. and 2. Financial Statements and Financial Statement Schedules. See
following List of Financial Statements and Financial Statement
Schedules, on page F-1, which is incorporated herein by
reference.
3. Exhibits. See Exhibit Index included as the last pages of this
report, which index is incorporated herein by reference.
(b) Reports on Form 8-K.
No reports on Form 8-K filed by the Company during the last quarter of
fiscal 1995.
-8-
<PAGE> 10
PLEXUS CORP. 10-K
SEPTEMBER 30, 1995
CONTENTS
Pages
-----
Report of Independent Accountants F-2
Consolidated Balance Sheets as of September 30, 1995 and 1994 F-3
Consolidated Statements of Operations for the three years ended
September 30, 1995, 1994 and 1993 F-4
Consolidated Statements of Stockholders' Equity for the three years
ended September 30, 1995, 1994 and 1993 F-5
Consolidated Statements of Cash Flows for the three years ended
September 30, 1995, 1994 and 1993 F-6
Notes to Consolidated Financial Statements F7 - F15
Financial Statement Schedules:
Report of Independent Accounts F-16
Schedule II - Valuation and Qualifying Accounts F-17
F-1
<PAGE> 11
Report of Independent Accountants
To the Shareholders and
Board of Directors
Plexus Corp.:
We have audited the accompanying consolidated balance sheets of
Plexus Corp. and Subsidiaries as of September 30, 1995 and 1994,
and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years
in the period ended September 30, 1995. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Plexus Corp. and Subsidiaries as of
September 30, 1995 and 1994, and the consolidated results of
their operations and their cash flows for each of the three
years in the period ended September 30, 1995, in conformity with
generally accepted accounting principles.
Coopers & Lybrand, LLP
Milwaukee, Wisconsin
November 17, 1995
F-2
<PAGE> 12
PLEXUS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
as of September 30, 1995 and 1994
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 3,569 $ 1,081
Accounts receivable, net of allowance of $145 and $130 in 1995
and 1994, respectively 47,560 43,699
Inventories 48,966 60,047
Deferred income taxes 904 743
Prepaid expenses and other 1,930 3,200
------------ ------------
Total current assets 102,929 108,770
Property, plant and equipment, net 11,829 12,856
Other 330 395
------------ ------------
Total assets $ 115,088 $ 122,021
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 107 $ 550
Accounts payable 23,279 36,891
Customer deposits 3,530 3,501
Accrued liabilities:
Salaries and wages 2,618 2,182
Other 2,093 2,862
------------ ------------
Total current liabilities 31,627 45,986
Long-term debt 41,734 40,691
Deferred income taxes 718 465
Stockholders' equity:
Series A preferred stock, $.01 par value, $1,000 face value,
7,000 shares authorized, issued and outstanding - -
Preferred stock, $.01 par value, 4,993,000 shares authorized,
none issued or outstanding - -
Common stock, $.01 par value, 30,000,000 shares authorized,
6,491,345 and 6,460,498 issued and outstanding, respectively 65 65
Additional paid-in capital 14,160 13,829
Retained earnings 26,784 20,985
------------ ------------
41,009 34,879
------------ ------------
Total liabilities and stockholders' equity $ 115,088 $ 122,021
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 13
PLEXUS CORP. AND SUBSIDARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended September 30, 1995, 1994, and 1993
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
1995 1994 1993
--------------- ----------------- ----------------
<S> <C> <C> <C>
Net sales $ 283,134 $ 242,483 $ 159,597
Cost of sales 259,438 226,313 146,523
--------------- ---------------- ----------------
Gross profit 23,696 16,170 13,074
Selling and administrative expenses 11,261 8,244 6,764
--------------- ---------------- ----------------
Operating income 12,435 7,926 6,310
--------------- ---------------- ----------------
Other income (expense):
Interest expense (2,470) (3,152) (1,608)
Miscellaneous 317 156 (572)
--------------- ---------------- ----------------
(2,153) (2,996) (2,180)
--------------- ---------------- ----------------
10,282 4,930 4,130
Income taxes 3,939 1,873 1,560
--------------- ---------------- ----------------
Net income $ 6,343 $ 3,057 $ 2,570
=============== ================ ================
Net income per common and common
equivalent share
Primary $ 0.89 $ 0.46 $ 0.40
=============== ================ ================
Fully diluted $ 0.88 $ 0.46 $ 0.40
=============== ================ ================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE> 14
PLEXUS CORP. AND SUBSIDARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the years ended September 30, 1995, 1994 and 1993
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
------------------------- -------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balances, September 30, 1992 - $ - 6,448,173 $ 64
Exercise of stock options - - - -
Net income - - - -
------------ ------------ ------------ ------------
Balances, September 30, 1993 - - 6,448,173 64
Exercise of stock options - - 12,325 1
Issuance of Series A Preferred Stock 7,000 - - -
Net income - - - -
------------ ------------ ------------ ------------
Balances, September 30, 1994 7,000 - 6,460,498 65
Exercise of stock options - - 30,847 -
Net income - - - -
Preferred dividends ($77.69 per share) - - - -
------------ ------------ ------------ ------------
Balances, September 30, 1995 7,000 $ - 6,491,345 $ 65
============ ============ ============ ============
Additional Total
Paid-In Retained Stockholders'
Capital Earnings Equity
---------- -------- ------------
<C> <C> <C>
Balances, September 30, 1992 $ 7,708 $ 15,358 $ 23,130
Exercise of stock options (899) - (899)
Net income - 2,570 2,570
-------------- ---------- ---------------
Balances, September 30, 1993 6,809 17,928 24,801
Exercise of stock options 20 - 21
Issuance of Series A Preferred Stock 7,000 - 7,000
Net income - 3,057 3,057
-------------- ---------- ---------------
Balances, September 30, 1994 13,829 20,985 34,879
Exercise of stock options 331 - 331
Net income - 6,343 6,343
Preferred dividends ($77.69 per share) - (544) (544)
-------------- ---------- ---------------
Balances, September 30, 1995 $ 14,160 $ 26,784 $ 41,009
============== ========== ===============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE> 15
PLEXUS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended September 30, 1995, 1994 and 1993
(in thousands)
<TABLE>
<CAPTION>
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 6,343 $ 3,057 $ 2,570
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation and amortization 3,237 3,103 2,555
Deferred income taxes 92 (156) (164)
Changes in assets and liabilities:
Accounts receivable, net (3,861) (22,367) (3,164)
Inventories 11,081 (10,599) (19,854)
Prepaid expenses and other 1,270 (690) (1,453)
Accounts payable (13,612) 12,869 10,251
Customer deposits 29 2,627 (94)
Accrued liabilities (333) 860 (332)
Other (58) 125 137
-------------- -------------- --------------
Net cash flows provided by (used in) operating activities 4,188 (11,171) (9,548)
-------------- -------------- --------------
Cash flows from investing activities:
Proceeds on sale of property, plant and equipment 19 9,104 -
Payments for property, plant and equipment (2,106) (5,288) (8,233)
-------------- -------------- --------------
Net cash flows provided by (used in) investing activities (2,087) 3,816 (8,233)
-------------- -------------- --------------
Cash flows from financing activities:
Proceeds from debt 121,900 110,791 137,500
Payments on debt (121,300) (110,219) (119,763)
Issuance of preferred stock - 7,000 -
Issuance of common stock 331 21 -
Payments of preferred dividends (544) - -
-------------- -------------- --------------
Net cash flows provided by financing activities 387 7,593 17,737
Net increase (decrease) in cash -------------- -------------- --------------
2,488 238 (44)
Cash at beginning of year 1,081 843 887
-------------- -------------- --------------
Cash at end of year $ 3,569 $ 1,081 $ 843
============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-6
<PAGE> 16
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
a. Consolidation Principles: The consolidated financial statements include
the accounts of Plexus Corp. and its subsidiaries, all of which are
wholly-owned. All significant intercompany transactions have been
eliminated.
b. Inventories: Inventories are valued primarily at the lower of
standard cost or market. Standard cost approximates costs determined by the
first-in, first-out (FIFO) method.
c. Property, Plant and Equipment and Depreciation: These assets
are stated at cost. Depreciation, determined on the straight-line method,
is based on lives assigned to the major classes of depreciable assets as
follows:
<TABLE>
<S> <C>
Buildings and improvements 18-40 years
Machinery and equipment 3-10 years
Office furniture and equipment 5-10 years
Vehicles 3-5 years
</TABLE>
d. Revenue Recognition: Revenue is recognized primarily when
inventory is shipped. Revenue relating to product design and development
contracts is recognized as costs are incurred utilizing the
percentage-of-completion method.
e. Income Taxes: Deferred income taxes are provided for
differences between the bases of assets and liabilities for financial and
tax reporting purposes.
f. Stock Options: Proceeds from the sale of newly issued common stock to
employees under the Company's stock option plan are credited to common stock
to the extent of par value and the excess to additional paid-in-capital.
Income tax benefits attributable to stock options exercised are recorded as
an increase in additional paid-in-capital.
g. Net Income Per Common and Common Equivalent Share: The computations of
primary and fully diluted net income per common share for 1995 and 1994 are
based upon the weighted average number of common shares outstanding plus the
effect of common shares contingently issuable relating to outstanding stock
options using the treasury stock method and common shares contingently
issuable relating to the convertible preferred stock using the if-converted
method. In 1993, stock options did not impact net income per share as they
were either insignificant or antidilutive, thus the computations are based
solely upon the weighted average number of common shares outstanding during
the period. The fully diluted calculation reflects additional dilution from
stock options and convertible preferred shares applying the market price at
the end of the period when that price is higher than the average market
price for the period.
The common equivalent shares outstanding for the calculation of primary
and fully diluted net income per common share were 7,137,487 and 7,249,286
in 1995, respectively. In 1994, and 1993, the common equivalent shares
outstanding for the calculation of primary and fully diluted net income per
common share were 6,705,239, and 6,448,173, respectively.
F-7
<PAGE> 17
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
1. SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
h. Reclassification: Certain prior years' amounts have been
reclassified to conform to the 1995 presentation.
2. INVENTORIES:
The major classes of inventories at September 30, 1995 and 1994 are as
follows (in thousands):
<TABLE>
<CAPTION>
1995 1994
--------------- ---------------
<S> <C> <C>
Assembly parts $ 33,950 $ 38,156
Work-in-process 14,782 21,383
Finished goods 234 508
--------------- ---------------
$ 48,966 $ 60,047
=============== ===============
</TABLE>
3. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, net at September 30, 1995 and
1994 consist of the following (in thousands):
<TABLE>
<CAPTION>
1995 1994
---------------- ---------------
<S> <C> <C>
Land and improvements $ 731 $ 731
Buildings and improvements 7,664 7,614
Machinery and equipment 13,881 12,682
Office furniture and equipment 6,954 6,108
Vehicles 671 663
Construction-in-progress 193 783
---------------- ---------------
30,094 28,581
Less accumulated depreciation 18,265 15,725
---------------- ---------------
$ 11,829 $ 12,856
================ ===============
</TABLE>
F-8
<PAGE> 18
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
4. DEBT:
Long-term debt at September 30, 1995 and 1994 consists of the
following (in thousands):
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Revolving credit arrangement (described below) $ 41,500 $ 37,100
$3,500,000 Bank Promissory Note, paid in 1995 - 3,500
Other notes and obligations with a weighted average interest
rate of 5.9%. 341 641
-------------- --------------
41,841 41,241
Less current portion 107 550
-------------- --------------
$ 41,734 $ 40,691
============== ==============
</TABLE>
The revolving credit arrangement matures in July 1998 and provides for
maximum borrowings of $55,000,000, with all or a portion of the principal
bearing interest at a prime based or a LIBOR based rate as elected by the
Company. These rates range from prime plus 1/4% to prime plus 1/2% and LIBOR
plus 2% to LIBOR plus 2 1/2%, depending on the Company's consolidated debt to
worth ratio, as defined by the Loan Agreement. The weighted average interest
rate for this agreement was 7.7% at September 30, 1995. The amount available
under this agreement is limited to 80% of qualified accounts receivable and 50%
of qualified inventory. Inventory borrowings are limited to $27,500,000. A
commitment fee of 1/4 of 1% per annum on the unused portion of this arrangement
is payable quarterly.
During 1995, the Company has an interest rate cap agreement with a
commercial bank which limited the Company's interest rate on a portion of its
floating rate long-term debt to 8% or 8.5%, depending on the rate charged on the
revolving credit arrangement. The agreement had a notional amount of
$10,000,000 and expires on October 7, 1996.
The revolving credit agreement, as amended, includes covenants which require
the maintenance of various debt to net worth ratios.
The aggregate scheduled maturities of long-term debt in subsequent years
are as follows (in thousands):
<TABLE>
<S> <C>
1996 $ 107
1997 63
1998 41,509
1999 10
2000 10
Thereafter 142
-----------
$ 41,841
===========
</TABLE>
Cash paid for interest during the years ended September 30, 1995, 1994 and
1993 was $2,954,000, $3,248,000 and $1,727,000, respectively.
F-9
<PAGE> 19
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. INCOME TAXES:
The Company and its subsidiaries file a consolidated Federal income tax return.
Income taxes consist of the (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Currently payable:
Federal $ 3,209 $ 1,706 $ 1,464
State 638 323 260
----------- ----------- -----------
3,847 2,029 1,724
----------- ----------- -----------
Deferred:
Federal 52 (210) (141)
State 40 54 (23)
----------- ----------- -----------
92 (156) (164)
----------- ----------- -----------
$ 3,939 $ 1,873 $ 1,560
=========== =========== ===========
</TABLE>
Following is a reconciliation of the Federal statutory income tax rate
to the effective tax rates reflected in the consolidated statements of
operations for the years ended September 30, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Federal statutory income tax rate 34.0 % 34.0 % 34.0 %
Increase (decrease) resulting from:
State income taxes, net of Federal
income tax benefit 4.4 5.0 4.2
Other, net (0.1) (1.0) (0.4)
----------- ----------- -----------
Effective tax rate 38.3 % 38.0 % 37.8 %
=========== =========== ===========
</TABLE>
F-10
<PAGE> 20
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. INCOME TAXES, CONTINUED:
The components of the net deferred income tax asset as of
September 30, 1995 and 1994, were as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994
----------- ------------
<S> <C> <C>
Deferred tax assets:
Accrued benefits $ 521 $ 415
Loss carryforwards 115 153
Partnership investment 122 120
Valuation reserves 209 417
Health insurance 31 31
Inventory capitalization 217 99
Other 340 117
----------- ------------
1,555 1,352
Less valuation allowance (181) (142)
----------- ------------
1,374 1,210
----------- ------------
Deferred tax liabilities:
Property, plant and equipment 997 827
Other 191 105
----------- ------------
1,188 932
----------- ------------
Net deferred income tax asset $ 186 $ 278
=========== ============
</TABLE>
Cash paid for income taxes for the years ended September 30,
1995, 1994 and 1993 was $4,577,000, $1,419,000 and $1,884,000,
respectively.
6. STOCKHOLDERS' EQUITY:
During 1994, the company issued 7,000 shares of Series A Preferred Stock
(the "Preferred Shares") with a face value of $1,000 per share at face
value. Dividends are earned on the face value of the Preferred Shares at
1/2 the sum of the prime rate less 1%. These dividends are cumulative and
payable semi-annually in arrears, when and as declared by the Company's
Board of Directors. At September 30, 1995, dividends of $8.25 per share
(aggregate $58,000) were in arrears on the Preferred Shares. Upon
liquidation of the Company, holders of the Preferred Shares would be
entitled to receive the face value of the Preferred Shares, plus any accrued
but unpaid dividends, whether declared or not, before any distribution to
the common shareholders of the Company. The Company may redeem the
Preferred Shares at any time on or after June 30, 1995, at face value plus
any accrued but unpaid dividends, whether declared or not. From and after
October 1, 1994 until June 30, 2004, the Preferred Shares are convertible
into common stock at a conversion price of $12.63 per share. The Company
has reserved 554,455 shares of its authorized but unissued common stock for
possible conversion.
F-11
<PAGE> 21
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
7. LEASE COMMITMENTS:
The Company has a number of operating lease agreements primarily
involving manufacturing equipment, computerized design equipment and
manufacturing facilities. These leases are noncancelable and expire on
various dates through 2014. Rent expense under all operating leases during
1995, 1994 and 1993 was approximately $12,491,090, $10,519,000 and
$7,742,000, respectively. Renewal and purchase options are available on
certain of these leases.
During 1994, the Company sold its Advanced Manufacturing Facility for
$9,250,000 and entered into an agreement to lease the facility back from
the purchaser. The lease calls for annual rental payments of $1,091,000
over twenty years and allows the Company to extend the lease for six
five-year periods. The lease has been accounted for as an operating lease.
The gain recognized on the sale was not significant.
The future minimum annual payments on these leases are as follows (in
thousands):
<TABLE>
<S> <C>
1996 $ 12,929
1997 7,958
1998 3,437
1999 1,823
2000 1,777
Thereafter 18,552
-------------
$ 46,476
</TABLE> =============
8. STOCK OPTION AND SAVINGS PLANS:
The Company's 1988 Stock Option Plan (the "1988 Plan") authorizes the
Company to grant options to purchase up to 900,000 shares of common stock.
All shares will be made available from authorized and unissued shares.
Officers and key employees of the Company are eligible to receive options.
The 1988 Plan provides for the granting of options at an option price of
not less than the fair market value on the date of grant. Options vest
over a three year period. Additionally, the 1988 Plan authorizes the
Company to grant 450,000 stock appreciation rights, none of which have been
granted as of September 30, 1995.
F-12
<PAGE> 22
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
8. STOCK OPTION AND SAVINGS PLANS, CONTINUED:
During 1995, the Company approved two stock option plans, the 1995
Executive Stock Option Plan (the "Executive Plan") and the 1995 Directors'
Stock Option Plan (the "Directors' Plan). The Executive Plan authorizes
the Company to grant options to purchase up to 1,000,000 shares of
common stock. All shares will be made available from authorized and
unissued shares. Options may be granted to officers and key employees of
the Company provided that no officer or key employee may be granted an
option or options covering, in the aggregate, more than 50,000 shares of
stock in any calendar year. The Executive Plan provides for the granting
of options at an option price of not less than the fair market value on the
date of grant. Options vest over a three year period after the date of
grant. Additionally, the Executive Plan authorizes the Company to grant
300,000 stock appreciation rights, none of which have been granted as of
September 30, 1995. The Executive Plan shall terminate on December 31,
2004 or at such earlier time as the Board of Directors may determine.
The Directors' Plan authorizes the Company to grant options to purchase up
to 100,000 shares of common stock. Shares may come from authorized but
unissued shares, from treasury shares held by the Company, from shares
purchased by the Company on an open market for such purpose, or from any
combination of the foregoing. At the first meeting of the Board of
Directors following the Company's 1995 annual meeting of shareholders, each
person then serving the Company as an outside director was granted a
nonqualified stock option to purchase 1,500 shares. Commencing December 1,
1995, and continuing on the first business day of each December thereafter
through December 1, 2004, each person then serving the Company as an
outside director shall automatically be granted a nonqualified stock option
to purchase 1,500 shares. The Directors' Plan provides for the granting of
options at an option price of not less than the fair market value on the
date of grant and shall terminate on December 31, 2004 or at such earlier
time as the Board may determine.
Stock option balances and transactions under the 1988 Plan, the Executive
Plan, and the Directors' Plan at and during the years ended September 30,
1995, 1994, and 1993 are summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ -------------
<S> <C> <C> <C>
Outstanding at beginning of year 560,661 402,161 247,162
Granted 239,000 178,000 160,500
Exercised (between $3.88 and $13.69 per share) (30,834) (16,500) -
Lapsed (24,838) (3,000) (5,501)
------------ ------------ ------------
Outstanding at end of year 743,989 560,661 402,161
============ ============ ============
Exercisable at end of year 349,945 252,696 127,366
============ ============ ============
Shares available for future options at end of year 1,100,000 2 175,002
============ ============ ============
</TABLE>
F-13
<PAGE> 23
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
8. STOCK OPTION AND SAVINGS PLANS, CONTINUED:
Options outstanding as of September 30, 1995 have exercise prices ranging
from $2.54 to $17.44 per share.
The Company's 401(k) savings plan covers all employees with one or more
years of service. The Company matches employee contributions up to 2.5% of
eligible earnings. The Company's contributions for 1995, 1994 and 1993
totaled $644,000, $563,000 and $498,000, respectively.
The Company is not obligated to provide any postretirement medical or life
insurance benefits to employees.
9. BUSINESS SEGMENT AND MAJOR CUSTOMERS:
The Company and its subsidiaries operate in one business segment, the
production and sale of electronic products including the designing,
manufacturing, programming and testing of computerized electronic
assemblies.
Approximate sales to various divisions of a major customer were 25.6%,
39.4% and 36.6% of consolidated net sales for the years ended September 30,
1995, 1994 and 1993, respectively. Additionally, sales to various
divisions of another major customer approximated 17.3%, 15.6% and 18.7% of
consolidated net sales for the years ended September 30, 1995, 1994 and
1993, respectively.
10. TRANSACTIONS WITH RELATED PARTIES:
During 1993 and 1992, a wholly-owned subsidiary of the Company, Plexus
General Partner Corp., made capital contributions totaling $700,000 to the
Plexus Home Automation Limited Partnership ("PHALP"). Several of the
limited partners of PHALP are officers, directors and/or shareholders of
the Company and/or other Company subsidiaries. The Company recorded
losses of $413,000 in the years 1993 through 1995 which reduced the
carrying value of this investment. PHALP became inactive during the latter
half of 1995 and as a result the Company wrote off its remaining investment
in the partnership of $57,000 and certain other related assets of $180,000.
The Company billed PHALP $41,000, $65,000 and $693,000, during the years
1995, 1994 and 1993, respectively, for certain services rendered by the
Company.
During 1994, promissory notes aggregating $5,000,000, which were payable to
certain shareholders of the Company who are also limited partners in PHALP,
were paid in full with the proceeds from the issuance of the Series A
Preferred Stock. The preferred shares were issued to and are held by the
former holders ofthe promissory notes described above.
F-14
<PAGE> 24
PLEXUS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
11. QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial data for the years ended September 30, 1995
and 1994 is as follows (in thousands except per share and stock price
amounts):
<TABLE>
<CAPTION>
First Second Third Fourth
1995 Quarter Quarter Quarter Quarter Total
------ ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $ 65,341 $ 69,380 $ 72,354 $ 76,059 $ 283,134
Gross profit 4,358 5,938 6,275 7,125 23,696
Net income 895 1,470 1,823 2,155 6,343
Income per common share *
Primary $ 0.13 $ 0.21 $ 0.26 $ 0.30 $ 0.89
Fully Diluted 0.13 0.21 0.26 0.30 0.88
Stock price:
High $ 10-3/4 $ 12-7/8 $ 14-3/4 $ 18-7/8 $ 18-7/8
Low 8-1/4 8-1/2 11-1/4 13-1/2 8-1/4
<CAPTION>
First Second Third Fourth
1994 Quarter Quarter Quarter Quarter Total
------ ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $ 55,944 $ 61,323 $ 55,004 $ 70,212 $ 242,483
Gross profit 3,590 4,482 3,644 4,454 16,170
Net income 704 1,023 304 1,026 3,057
Income per common share * $ 0.11 $ 0.16 $ 0.05 $ 0.15 $ 0.46
Stock price:
High $ 18 $ 17-1/2 $ 16-3/4 $ 12-1/2 $ 18
Low 14-1/4 15-1/4 11-3/4 10-1/4 10-1/4
</TABLE>
(*) Income per common share is computed independently for each quarter.
The annual per share amount may not equal the sum of the quarterly amounts
due to rounding. The amounts shown for 1994 represent primary and
fully diluted earnings per common share.
The Company recognized adjustments in the fourth quarter of 1995 and 1994
related principally to the adjustment of perpetual inventory records to
actual balances which decreased and increased quarterly earnings per
share by $(.02) and $0.05, respectively.
F-15
<PAGE> 25
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTS
To the Shareholders and
Board of Directors
Plexus Corp.:
Our report on the consolidated financial statements of Plexus Corp. is included
on page F-2 of this Form 10-K. In connection with our audits of such financial
statements, we have also audited the related consolidated financial statement
schedule listed in the index on page F-1 of this Form 10-K.
In our opinion, the consolidated financial statement schedule referred to
above, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material respects, the
information required to be included therein.
COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
November 17, 1995
F-16
<PAGE> 26
PLEXUS CORP. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
For The Years Ended September 30, 1995, 1994 and 1993
(Dollars in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- ------------------------------------------------------- -------- -------- -------- --------
Additions
Balance at Charged to Balance
Beginning Costs and Deductions At End of
Descriptions of Period of Period (A) Period
- ------------------------------------------------------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
1995:
Allowance for losses on accounts receivable
(deducted from the asset to which it relates) $130 $189 $174 $145
Allowance for inventory obsolescence
(deducted from the asset to which it relates) 735 152 580 307
---- ---- ---- ----
$865 $341 $754 $452
==== ==== ==== ====
1994:
Allowance for losses on accounts receivable
(deducted from the asset to which it relates) $130 $ 7 $ 7 $130
Allowance for inventory obsolenscence
(deducted from the asset to which it relates) 176 559 - 735
---- ---- ---- ----
$306 $566 $ 7 $865
==== ==== ==== ====
1993:
Allowance for losses on accounts receivable
(deducted from the asset to which it relates) $130 $ 35 $ 35 $130
Allowance for inventory obsolenscence
(deducted from the asset to which it relates) 176 - - 176
---- ---- ---- ----
$306 $ 35 $ 35 $306
==== ==== ==== ====
</TABLE>
F-17
<PAGE> 27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
December 20, 1995
PLEXUS CORP. By /s/ PETER STRANDWITZ
(Registrant) ------------------------
Peter Strandwitz, Chairman
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Peter Strandwitz, John L. Nussbaum and Joseph D.
Kaufman, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this report, and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and any other regulatory authority, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirement of the Security Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.*
SIGNATURE AND TITLE
<TABLE>
<S> <C>
/s/ Peter Strandwitz /s/ Harold R. Miller
--------------------------------------------------- ---------------------------------------------------
Peter Strandwitz, Chairman and Director Harold R. Miller, Director
(Chief Executive Officer
/s/ John L. Nussbaum /s/ Allan C. Mulder
--------------------------------------------------- ---------------------------------------------------
John L. Nussbaum, President, Chief Financial Allan C. Mulder, Director
Officer and Director
/s/ William F. Denney /s/ Gerald A. Pitner
--------------------------------------------------- ---------------------------------------------------
William F. Denney, Vice President, Treasurer Gerald A. Pitner, Director
and Controller
/s/ Robert A. Cooper /s/ Thomas J. Prosser
--------------------------------------------------- ---------------------------------------------------
Robert A. Cooper, Director Thomas J. Prosser, Director
/s/ Rudolph T. Hoppe
---------------------------------------------------
Rudolph T. Hoppe, Director
</TABLE>
________________
* Each of the above signatures is affixed as of December 20, 1995.
<PAGE> 28
EXHIBIT INDEX
PLEXUS CORP.
10-K FOR YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
INCORPORATED BY FILED
EXHIBIT NO. EXHIBIT REFERENCE TO HEREWITH
----------- ------- ------------ --------
<S> <C> <C> <C>
3(i) Restated Articles of Plexus Exhibit 3(i) to
Corp., as amended through Plexus' Quarterly
June 29, 1994 Report on Form 10-Q
for the quarter ended
June 30, 1994
("6/30/94 10-Q")
3(ii) Bylaws of Plexus Corp. Exhibit 3.2 to
Plexus' Registration
Statement on Form
S-18 (No. 33-2106C)
("S-18")
4.1 Restated Articles of Exhibit 3(i) to
Incorporation of Plexus Corp. 6/30/94 10-Q
10.1(a) Loan, Mortgage and Security Exhibit 10.9 to S-18
Agreement by and between
Electronic Assembly Corporation
("EAC") (successor to Electronic
Assembly Inc.) and City of
Richmond, Kentucky, dated as of
August 1, 1985 *[paid]
(b) Guaranty Agreement by and between Exhibit 10.5 to S-18
Plexus Corp. and Citizens
Fidelity Bank and Trust Company,
Trustee as of August 1, 1985
10.2 Employment Agreements dated
11/15/88** with
(a) William F. Denney Exhibit 10.10(b) to
1988 10-K
(b) Joseph D. Kaufman Exhibit 10.10(c) to
1988 10-K
10.3(a) Employee Savings Plan** Exhibit 10.11 to 1988 10-K
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>
INCORPORATED BY FILED
EXHIBIT NO. EXHIBIT REFERENCE TO HEREWITH
----------- ------- ------------ --------
<S> <C> <C> <C>
(b) First Amendment thereto, Exhibit 4(b)(2) to
effective as of January 1, 1989
Plexus' Amendment No.
1 to Registration
Statement on Form S-8
No. 33-23490 ("S-8")
(c) Second Amendment thereto, Exhibit 4(b)(3) to
effective as of October 1, 1990 S-8
(d) Amendments as of September 1, Exhibit 10.3(d) to
1993 and December 1, 1993 Plexus' Annual Report
on Form 10-K for the
year ended
September 30, 1993
("1993 10-K")
10.4 1988 Stock Option Plan, as
amended** Exhibit 12.12 to
Plexus' Annual Report
on Form 10-K for the
year ended
September 30, 1992
("1992 10-K")
10.5(a) Revolving Credit Agreement dated Exhibit 10.14(a) to
as of April 18, 1991 among First Plexus' Quarterly
Wisconsin National Bank of Report on Form 10-Q
Milwaukee, Valley Bank (now M&I for the quarter ended
Bank-Fox Valley) and Harris Trust March 31, 1991
and Savings Bank, and First ("2/31/91 10-Q")
Wisconsin National Bank of
Milwaukee, as Agent for the
Banks*
(b) Security and Guaranty Agreements
related thereto by:
(i) EAC Exhibit 10.14(b)(1) to
3/3/91 10-Q
(ii)(A) Plexus Corp. Exhibit 10.14(b)(ii)
to 3/31/91 10-Q
(B) Amendment No. 1 thereto Exhibit
dated March 1, 1992 10.5(b)(ii)(B) to
1993 10-K
</TABLE>
<PAGE> 30
<TABLE>
<CAPTION>
INCORPORATED BY FILED
EXHIBIT NO. EXHIBIT REFERENCE TO HEREWITH
----------- ------- ------------ --------
<S> <C> <C> <C>
(C) Amendment No. 2 thereto Exhibit
dated July 30, 1993 10.5(b)(ii)(C) to
1993 10-K
(iii) Technology Group, Inc. Exhibit 10.14(b)(iii)
to 3/31/91 10-Q
(c) Amendment No. 1 to the Revolving Exhibit 10.14(c) to
Credit Agreement, dated 8/1/92 1992 10-K
(d) Amendment No. 2 to the Revolving Exhibit 10.14(d) to
Credit Agreement, dated 1/15/92 1992 10-K
(e) Amendment No. 3 to the Revolving Exhibit 10.14(e) to
Credit Agreement, dated 3/1/92 1992 10-K
(f) Amendment No. 4 to the Revolving Exhibit 10.14(f) to
Credit Agreement, dated 6/10/92 1992 10-K
(g) Amendment No. 5 to the Revolving Exhibit 10.14(g) to
Credit Agreement, dated 7/21/92 1992 10-K
(h) Amendment No. 6 to the Revolving Exhibit 10.14(b) to
Credit Agreement, dated 7/30/93 1992 10-K
(i) Amendment No. 7 to the Revolving Exhibit 10.5(i) to
Credit Agreement, dated 11/15/93 1993 10-K
(j) Cap Confirmation dated 10/8/93 Exhibit 10.5(j) to
1993 10-K
(k) Amendment No. 8 to the Revolving Exhibit 10 to 6/30/94
Credit Agreement, dated 6/30/94 10-Q
(l) Amendment No. 9 to the Revolving Exhibit 10.5(l) to
Credit Agreement, dated 8/1/94 Plexus' Annual Report
on Form 10-K for the
year ended
September 30, 1994
("1994 10-K")
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>
INCORPORATED BY FILED
EXHIBIT NO. EXHIBIT REFERENCE TO HEREWITH
----------- ------- ------------ --------
<S> <C> <C> <C>
(m) Amendment No. 10 to the Revolving X
Credit Agreement, dated
January 27, 1995
(n) Amendment No. 11 to the Revolving Exhibit 4 to Plexus'
Credit Agreement, dated July 28, Quarterly Report on
1995 Form 10-Q for the
quarter ended
June 30, 1995
10.6(a) Promissory Note dated as of Exhibit 10.6(a) to
7/30/93 among EAC and M&I Bank- 1993 10-K
Fox Valley [paid]
(b) Real Estate Mortgage related Exhibit 10.15(b) to
thereto dated 7/30/92 among EAC 1992 10-K
and M&I Bank-Fox Valley
[released]
(c) Security and Guaranty Agreements
related thereto by:
(i) Plexus Corp. Exhibits 10.15(c)(i),
(ii) Technology Group, Inc. (ii) and (iii) to
(iii) EAC 1992 10-K
(d) Promissory Note dated as of Exhibit 10.6(d) to
August 30, 1994 among EAC and M&I 1994 10-K
Bank Fox Valley [paid]
10.7(a) Plexus Home Automation Limited Exhibit 10.16 to 1992
Partnership Agreement dated as of 10-K
4/1/92 among Plexus General
Partner Corp. and the Limited
Partners
(b) Amendments thereto Exhibit 10.7(b) to
1993 10-K
10.8(a) Lease Agreement between Neenah Exhibit 10.8(a) to
(WI) QRS 11-31, Inc. ("QRS: 1994 10-K
11-31") and EAC, dated August 11,
1994*
(b) Bill of Sale of EAC to QRS: 11-31 Exhibit 10.8(b) to
dated August 31, 1994, together 1994 10-K
with related Seller's/Lessee's
Certificate of EAC
</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>
INCORPORATED BY FILED
EXHIBIT NO. EXHIBIT REFERENCE TO HEREWITH
----------- ------- ------------ --------
<S> <C> <C> <C>
(c) Guaranty and Suretyship Agreement Exhibit 10.8(c) to
between Plexus Corp. and QRS: 11- 1994 10-K
31 dated August 11, 1994,
together with related Guarantor's
Certificate of Plexus Corp.
10.9 Plexus Corp. 1995 Executive Stock Exhibit 10.9 to 1994
Option Plan** 10-K
10.10 Plexus Corp. 1995 Directors' Exhibit 10.10 to 1994
Stock Option Plan** 10-K
10.11 Plexus Corp. 1995 Senior Exhibit 10.11 to 1994
Executive Incentive Compensation 10-K
Plan**
10.12 Master Lease dated October 21, Exhibit 10.12 to 1994
1994 between Plexus and Norwest 10-K
Equipment Finance*
10.13 Master Lease Agreement dated Exhibit 10.13 to 1994
August 17, 1992 between Plexus 10-K
and Capital Associates Intl.,
Inc.*
10.14 Lease Agreement dated January 31, Exhibit 10.14 to 1994
1992 between Plexus and Hewlett- 10-K
Packard Company*
10.15 Form of Lease of Personal Exhibit 10.15 to 1994
Property between EAC and M&I 10-K
First National Leasing Corp.
11 Statement regarding computation X
of Per Share Earnings
13 Annual Report to Shareholders X
(Printer's Draft)
21 List of Subsidiaries X
</TABLE>
<PAGE> 33
<TABLE>
INCORPORATED BY FILED
EXHIBIT NO. EXHIBIT REFERENCE TO HEREWITH
----------- ------- ------------ --------
<S> <C> <C> <C>
23 Consent of Coopers & Lybrand X
L.L.P.
24 Power of Attorney (Signature Page
Hereto)
27 Financial Data Schedule X
99 Form 11-K for Employee Savings X
Plan
- ----------------------
</TABLE>
* Excludes certain schedules and/or exhibits, which will be furnished to the
Commission upon request.
** Designates management compensatory plans or agreements.
<PAGE> 1
AMENDMENT NO. 10 TO REVOLVING CREDIT AGREEMENT
as of January __, 1995
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
NBD Bank, N.A.
611 Woodward Avenue
Detroit, Michigan 48226
Gentlemen:
Electronic Assembly Corporation, a Wisconsin corporation (the
"Company"), hereby agrees with you as follows:
1. Definitions. Reference is made to the Revolving
Credit Agreement dated as of April 18, 1991, as amended through Amendment No. 9
thereto dated as of August 1, 1994 (the "Loan Agreement") between the Company
and each of you, pursuant to which the Company has issued its revolving credit
notes, each dated July 30, 1993, in the aggregate principal amount of
$40,000,000 (the "Existing Notes"). All capitalized terms used and not
otherwise defined herein shall have the meanings given to such terms by the
Loan Agreement as supplemented and amended hereby.
2. Extension of Commitment Period. The Company has
requested that the Banks agree to extend the Termination Date and the final
maturity of the Existing Notes from July 30, 1996 to July 31, 1997. The Banks
are willing to grant such extension subject to all of the terms and conditions
hereof. Any additional loans made pursuant to the revolving credit as so
extended, together with the unpaid balance of the Existing Notes, shall be
evidenced by new promissory notes of the Company in the form of Exhibit A
annexed hereto (the "New Notes") to be dated as of the date hereof, in the
amounts of the Banks' respective Commitments, which shall be executed by the
Company and delivered to the Banks against the return of the Existing Notes to
the Company. Accrued interest on the Existing Notes outstanding on the date of
issuance of the New Notes shall be included in interest due on the New Notes on
the first interest payment date specified therein.
<PAGE> 2
3. Amendments to Loan Agreement. Upon issuance of the
New Notes, the Loan Agreement shall be amended as of the date hereof as
follows:
(a) All references in the Loan Agreement to the Notes
issued thereunder and the loans evidenced thereby shall refer to the
New Notes issued hereunder and the loans evidenced thereby (including
the unpaid balances of the Existing Notes).
(b) All references to the Loan Agreement in the Loan
Agreement and in any related agreements shall refer to the Loan
Agreement as amended hereby.
(c) The date of July 30, 1996 set forth in Section 1.38
of the Loan Agreement ("Termination Date") shall be amended to July
31, 1997.
4. Representations and Warranties. The Company repeats
and reaffirms the representations and warranties set forth in Section 3 of the
Loan Agreement as of the date hereof, except that the representations in
Section 3.2 of the Loan Agreement are hereby made with respect to the audited
consolidated financial statements of Plexus Corp. as of September 30, 1994.
The Company also represents and warrants that the execution, delivery and
performance of this Amendment are within the corporate powers of the Company,
have been duly authorized by all necessary corporate action and do not and will
not (i) violate any provision of the articles of incorporation or by-laws of
the Company or of any law, rule, regulation, order or judgment presently in
effect having applicability to the Company; (ii) require the consent or
approval of, or filing or registration with, any governmental body, agency or
authority; or (iii) result in any breach of or constitute a default under any
indenture or other agreement or instrument under which the Company or any
Subsidiary is a party or by which it or its properties may be bound or
affected.
5. Conditions. Without limiting any of the other terms
of the Loan Agreement as amended hereby, this Amendment shall not become
effective, and the Banks shall not be required to make any further loans to the
Company unless and until:
(a) No Default or Event of Default shall have
occurred and be continuing after giving effect to this Amendment and
neither the business nor the assets nor the financial condition of the
Company or any Guarantor shall have been materially adversely affected
as the result of any event or development since September 30, 1994;
and
(b) All proceedings taken in connection with the
transactions contemplated by this Amendment and all instruments,
authorizations and other documents applicable thereto shall be
satisfactory in form and
-2-
<PAGE> 3
substance in the reasonable opinion of the Banks and their counsel.
6. Confirmation of Loan Agreement, etc. Except as
expressly provided above, the Loan Agreement and the other agreements related
thereto shall remain in full force and effect.
7. Fees and Expenses. The Company shall be responsible
for the payment of all fees and out-of-pocket disbursements reasonably incurred
by the Banks in connection with the preparation, execution, delivery,
administration and enforcement of this Amendment including without limitation
the reasonable fees and disbursements of counsel for the Banks, whether or not
any transaction contemplated by this Amendment is consummated.
8. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws (other than the conflict of laws
rules) of the State of Wisconsin.
9. Counterparts. This Amendment may be signed in any
number of counterparts with the same effect as if the signatures thereto any
hereto were upon the same instrument.
If the foregoing is satisfactory to you, please sign the form
of acceptance below and return a signed counterpart hereof to the Company.
Very truly yours,
ELECTRONIC ASSEMBLY CORPORATION
By:
__________________________________
Title:
___________________________________
Agreed to as of the date first above written.
FIRSTAR BANK MILWAUKEE, N.A.
By:
__________________________________
Title:
___________________________________
HARRIS TRUST AND SAVINGS BANK
By:
__________________________________
Title:
___________________________________
NBD BANK, N.A.
By:
__________________________________
Title:
___________________________________
-3-
<PAGE> 4
The undersigned guarantors hereby consent to the foregoing
Amendment to Loan Agreement, and agree that their respective Corporate Guaranty
Agreements, each dated as of April 18, 1991, as amended, and all collateral or
security therefor, shall remain in full force and effect notwithstanding the
amendments made above.
Dated as of January __, 1995.
PLEXUS CORP.
By:
______________________________
Title:
_______________________________
TECHNOLOGY GROUP, INC.
By:
______________________________
Title:
_______________________________
-4-
<PAGE> 5
EXHIBIT A
REVOLVING CREDIT NOTE
$_____________ _____________, 199_
FOR VALUE RECEIVED, the undersigned, ELECTRONIC ASSEMBLY
CORPORATION, hereby promises to pay to the order of _______________ (the
"Payee"), on July 31, 1997, at the office of Firstar Bank Milwaukee, N.A., as
Agent for the payee hereof, at 777 East Wisconsin Avenue, Milwaukee, Wisconsin
in lawful money of the United States of America and in immediately available
funds, the principal amount of _______________ Dollars ($__________) or, if
less, the aggregate unpaid principal amount of all loans made by the Payee to
the undersigned under the Revolving Credit Agreement dated as of April 18,
1991, as amended from time to time (the "Credit Agreement"), by and among the
undersigned, Firstar Bank Milwaukee, N.A., for itself and as Agent, and certain
other banks named therein, together with interest on the principal amount
hereof from time to time unpaid. Interest (computed on the basis of the actual
number of days elapsed and a year of 360 days) shall accrue on such unpaid
principal amount from time to time at the rate or rates set forth in the Credit
Agreement, and shall be payable monthly on the first Business Day of each
month, or at such other times as may be provided in the Credit Agreement.
This Note is one of the New Notes issued under the Credit
Agreement, as amended by Amendment No. 10 thereto dated as of the date hereof,
and is subject to permissive and mandatory prepayment, in each case upon the
terms provided in the Credit Agreement. This Note is payable and secured in
accordance with, is governed by and subject to, and is entitled to the benefits
of, the Credit Agreement. All capitalized terms used herein shall have the
meanings assigned to them in the Credit Agreement.
This Note shall be construed in accordance with the laws
(other than the conflict of laws rules) of the State of Wisconsin. The
undersigned waives presentment, protest and notice of dishonor, and agrees, in
the event of default hereunder, to pay all costs and expenses of collection,
including reasonable attorneys' fees.
ELECTRONIC ASSEMBLY CORPORATION
By:___________________________
Title:________________________
<PAGE> 1
EXHIBIT 11
1995 10-K
PLEXUS CORP.
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
for the years ended September 30, 1995, 1994 and 1993
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------------------------------------
1995 1994 1993
--------------------------- ------------------------ --------------------------
COMMON COMMON COMMON
AND AND AND
COMMON FULLY COMMON FULLY COMMON FULLY
EQUIVALENT DILUTED EQUIVALENT DILUTED EQUIVALENT(1) DILUTED(1)
---------- ---------- ---------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 6,343 $ 6,343 $ 3,057 $ 3,057 $ 2,570 $ 2,570
========== ========== ========== ========== ============ ===========
Weighted average number of
common shares outstanding 6,474 6,474 6,458 6,458 6,448 6,448
Adjustments:
Assumed issuances under
stock option plan 108 220 108 108 102 133
Assumed conversion of preferred
stock 555 555 139 139 - -
---------- ---------- ---------- --------- ------------ -----------
7,137 7,249 6,705 6,705 6,550 6,581
========== ========== ========== ========== ============ ===========
Net income per common share $ 0.89 $ 0.88 $ 0.46 $ 0.46 $ 0.39 $ 0.39
========== ========== ========== ========== ============ ===========
</TABLE>
(1) Per share amounts calculated using actual unrounded amounts have a dilutive
effect of less than 3%, thus net income per common share disclosed in the
consolidated statements of operations is based solely on the weighted
average number of common shares outstanding.
<PAGE> 1
BUSINESS DESCRIPTION
Plexus, a product development company, was formed in 1979 when two electronics
companies merged together. The unique concept underlying the formation of
Plexus was that of manufacturing and developing products for other industries.
Plexus' headquarters and two of their subsidiaries are located in Neenah,
Wisconsin. One subsidiary is Technology Group, Inc. (TGI), which is comprised
of the engineering staff and product development facilities. The other
subsidiary is Electronic Assembly Corporation (EAC), which is comprised of the
manufacturing staff and facilities. Plexus also has an EAC manufacturing
facility in Richmond, Kentucky.
Plexus Corp., through its subsidiaries, designs, develops, manufactures and
tests a variety of electronic products for major corporations on an
international basis. The Company has no proprietary products, but its designs
are used in a variety of fields, including: computer, medical, industrial,
communications, consumer and automotive fields.
Due to its commitment to quality, the Company utilizes the latest equipment,
tools and methods in manufacturing and engineering. This ensures that its
customers are receiving the most up-to-date technology available to produce a
quality, cost-effective product.
TABLE OF CONTENTS
Financial Highlights . . . . . . . . . . . . . . . . 1
Letter to Shareholders . . . . . . . . . . . . . . . 2
Business Review . . . . . . . . . . . . . . . . . . 4
Management's Discussion and Analysis . . . . . . . . 9
Consolidated Financial Statements. . . . . . . . . . 11
Shareholder Information . . . . . . . . . . . . . . 20
<PAGE> 2
FINANCIAL HIGHLIGHTS
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
(in thousands, except share and per share amounts)
OPERATING STATEMENT DATA 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Sales $283,134 $242,483 $159,597 $157,376 $120,434
Cost of sales 259,438 226,313 146,523 140,681 107,102
Gross profit 23,696 16,170 13,074 16,695 13,332
Operating expenses 11,261 8,244 6,764 6,968 5,806
Operating income 12,435 7,926 6,310 9,727 7,526
Other expenses 2,153 2,996 2,180 1,517 1,772
Income before income tax 10,282 4,930 4,130 8,210 5,754
Income tax 3,939 1,873 1,560 3,160 2,115
- -----------------------------------------------------------------------------------------------------------------
Net income $ 6,343 $ 3,057 $ 2,570 $ 5,050 $ 3,639
=================================================================================================================
Net income per common share:
Primary: $ .89 $ .46 $ .40 $ .80 $ .59
Fully diluted: $ .88 $ .46 $ .40 $ .80 $ .59
Cash dividends per common share $ -- $ -- $ -- $ -- $ --
=================================================================================================================
BALANCE SHEET DATA
Working capital $ 71,302 $ 62,784 $ 45,169 $31,370 $23,442
Total assets 115,088 122,021 95,149 62,689 54,529
Long-term debt 41,734 40,691 40,064 20,461 19,729
Stockholders' equity 41,009 34,879 24,801 23,130 16,603
</TABLE>
NET SALES
($ in millions)
[BAR GRAPH]
NET INCOME
($ in millions)
[BAR GRAPH]
NET INCOME PER SHARE
(in dollars)
[BAR GRAPH]
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
YEAR ENDED SEPTEMBER 30, 1995 COMPARED TO
YEAR ENDED SEPTEMBER 30, 1994
Net sales for the fiscal year ended September 30, 1995 increased $40,651,000 or
16.7% to $283,134,000 from $242,483,000 for the fiscal year ended September 30,
1994. After a slow first quarter, volume increased steadily during fiscal year
1995, due to an increased customer base. Management believes that these new
strategic relationships are a result of the Company's investment and
development of its outstanding technology package and facilities. The Company
will continue to be selective in the enlargement of its customer base, seeking
market leaders that want to develop a long-term relationship. A portion of
this increase continues to be sales allocable to component parts used in
assemblies ("part sales") as distinguished from sales allocable to services;
parts sales tend to have lower margins to the Company than services sales.
Cost of sales for the fiscal year ended September 30, 1995 increased
$33,125,000 or 14.6% to $259,438,000 from $226,313,000 for the fiscal year
ended September 30, 1994. The increase in costs of sales results from the
increased level of sales and from those costs associated with increased parts
sales. Increased utilization of the Advanced Manufacturing Center and more
efficient use of capacity in the other plants enabled gross profit to increase
$7,526,000 or 46.5% for the fiscal year ended September 30, 1995 to $23,696,000
from $16,170,000 for the fiscal year ended September 30, 1994. Gross profit
margin as a percentage of sales increased to 8.4% from 6.7%.
Selling and administrative expenses for the fiscal year ended September 30,
1995 increased $3,017,000 to $11,261,000 from $8,244,000 for the fiscal year
ended September 30, 1994. This increase is due to management's decision to
improve customer service, data collection, and information systems with
additional staffing. The Company also incurred larger than normal
expenditures during the fourth quarter of the fiscal year for group health,
employee procurement, supplies, customer relations, and charitable donations.
These events caused an increase in selling and administrative expenses to 4.0%
for fiscal 1995 as a percentage of net sales compared to 3.4% for fiscal 1994.
Interest expense decreased $682,000 for the fiscal year ended September 30,
1995 to $2,470,000 from $3,152,000 for the fiscal year ended September 30,
1994. This decrease is due to decreases in the amount of average daily
borrowings on the Company's line of credit related to working capital
requirements in the latter half of the fiscal year and decreases in interest
rates. Miscellaneous income of $317,000 for fiscal year 1995 compared to
miscellaneous income of $156,000 was due to increased amount of charges billed
back to customers covering inventory carrying costs, and the one-time effect of
a write-off in fiscal 1994.
Income taxes increased $2,066,000 for the fiscal year ended September 30, 1995
to $3,939,000 from $1,873,000 for the fiscal year ended September 30, 1994.
This increase is due to the increased level of pretax profits.
The Company's two largest customers in sales in each of the past several years
were International Business Machines Corporation (through up to six
subsidiaries or divisions) and General Electric Company (through up to five
subsidiaries or divisions). Each of the entities contracts independently of
the others, and the Company does not believe that sales to any of these
customers depend upon sales to the others. In fiscal 1995, sales to
International Business Machines Corporation were reduced due to the termination
of several projects relating to IBM product lines, although IBM remains a
significant customer. While the loss of all, or a substantial portion of, the
business with IBM or General Electric would have a material adverse effect on
the Company's sales and profitability, the Company does not believe this to be
a likely possibility. The Company expects that its historic dependency on IBM
and GE will be further reduced in fiscal 1996 as a percentage of total sales.
The Company expects, however, revenue growth in fiscal 1996 from both IBM and
GE, as well as from expanded programs for other existing customers and programs
from new customers.
Substantially all of the Company's business is done on a project by project
basis for its customers. Although the Company has several projects and
customers for which it provides services on a continuing basis, the timing and
nature of particular customer projects can vary significantly from period to
period. Substantial changes in the nature or timing of these projects can
affect the Company's sales and profitability from period to period.
YEAR ENDED SEPTEMBER 30, 1994 COMPARED TO
YEAR ENDED SEPTEMBER 30, 1993
During the year ended September 30, 1994, net sales increased $82,886,000 or
52% to $242,483,000 from $159,597,000 for the fiscal year ended September 30,
1993. This increase was made possible due to increased capacity provided by
the Company's new Advanced Manufacturing Center which was completed and began
operations during the beginning of fiscal year 1994. The largest portion of
this increase related to part sales as distinguished from sales allocable to
services.
Cost of sales increased $79,790,000 to $226,313,000 for the fiscal year ended
September 30, 1994 compared to $146,523,000 for the fiscal year ended September
30, 1993. Approximately 86% of this increase was in the cost of component
parts associated with the increase in parts sales, with the balance of the
increase arising from other expenses such as labor and related payroll costs
due to increase staffing, and fixed manufacturing expenses related to the
Advanced Manufacturing Center. As a result of the increased parts sales,
increased cost of key component parts especially during the first fiscal
quarter resulting from a worldwide shortage of key components (logic and memory
devices), increased staffing and fixed manufacturing expenses, gross profit
decreased to 6.7% of net sales for the fiscal year ended September 30, 1994
compared to 8.2% of net sales for the fiscal year ended September 30, 1993.
However actual gross profit increased 23.6% to $16,170,000 in fiscal 1994 from
$13,074,000 for fiscal year 1993 as a result of the increased sales.
<PAGE> 4
MANAGEMENT'S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
Selling and administrative expenses as a percentage of net sales decreased to
3.4% for the fiscal year ended September 30, 1994 compared to 4.2% of net sales
for the fiscal year ended September 30, 1993. Selling and administrative
expenses are expected to remain at a level relatively consistent with the
fourth quarter of fiscal 1994 as the Company believes it has in place the
structure and personnel, with the possible addition of one or two positions, to
support increased sales.
Other income and expense increased $816,000 to $2,996,000 for the fiscal year
ended September 30, 1994 compared to $2,180,000 for the fiscal year ended
September 30, 1993. Interest expense increased $1,544,000 to $3,152,000 from
$1,608,000 for the fiscal year ended September 30, 1993. The increase in
interest expense in fiscal year 1994 is due to increased average daily
borrowings on the Company's line of credit related to working capital
requirements and also higher interest rates. The Company's increased interest
expense on its line of credit was offset in part by the Company's sale and
leaseback transaction in late fiscal 1994 as detailed below. Miscellaneous
income of $156,000 for fiscal year 1994 compared to miscellaneous expense of
$572,000 for fiscal year 1993 primarily relating to write-off of a minority
investment and an allocated loss on the Company's investment in Plexus Home
Automation Limited Partnership.
Income taxes for the fiscal year ended September 30, 1994 increased $313,000 to
$1,873,000 primarily due to increased pretax profit. Effective October 1, 1992
the Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes". This change did not have a significant effect
on reported net earnings for the fiscal year 1994 or 1993.
LIQUIDITY AND CAPITAL RESOURCES
As shown in the Company's statements of cash flows, cash increased $2,488,000
during fiscal 1995. This increase is a result of $4,188,000 provided by
operations and $387,000 provided by financing activities, offset by $2,087,000
used in investing activities. Net cash provided by operations is a result
primarily from net income, non-cash items and improved controls over inventory,
offset by decreased accounts payable and increased accounts receivables. Net
cash used in investing activities is a result primarily from purchase of
equipment.
Working capital increased to $71,302,000 at September 30, 1995 from $62,784,000
at September 30, 1994. Accounts receivable increased $3,861,000 because of
increased sales volume for the year. Inventories decreased $11,081,000 as a
result of improved procurement and materials management initiatives.
Management expects to make additional progress on improving cash flow from
operations.
The Company leases the majority of its machinery and equipment additions under
operating lease arrangements. The Company anticipates continued use of lease
financing arrangements as a means to finance machinery and equipment. The
Company believes that anticipated revenues from operations will be sufficient
to fund these obligations for the foreseeable future. The Company has total
future commitments of $46,476,000 related to noncancelable operating leases
(see Note 7 to the Consolidated Financial Statements); lease payments are
included in cost of goods sold.
Payment for property, plant and equipment for fiscal 1995, 1994 and 1993 was
$2,106,000, $5,288,000, and $8,233,000, respectively. Except for the Advanced
Manufacturing Center, these acquisitions were financed from working capital.
The Advanced Manufacturing Center was permanently financed by use of a sale and
leaseback transaction in August, 1994. Management has currently budgeted
capital expenditures in fiscal year 1996 of approximately $2,000,000.
The Company's debt-to-equity ratio was 1.8 to 1 at September 30, 1995 and 2.5
to 1 at September 30, 1994. The Company was in compliance with debt-to-equity,
and similar ratios, under its debt facilities at both dates.
At September 30, 1995, the Company had $41,500,000 outstanding on its Revolving
Credit Facility, as compared to $37,100,000 at September 30, 1994. The Company
increased this Revolving Credit Facility in July 1995, to permit maximum
borrowings of $55,000,000 (increased from $40,000,000) and extended the
termination date and final maturity of the existing notes from July 31, 1997 to
July 31, 1998. The Company used $3,500,000 of the additional credit to pay off
an outstanding $3,500,000 promissory note to a financial institution which it
had used to replace certain Industrial Revenue Bond debt. The Company also
paid off its $200,000 industrial revenue bond for its Kentucky facility. On
October 7, 1993, the Company entered into an interest rate cap agreement which
limits the interest rate portion of its floating rate long term debt to 8% or
8.5%, depending on the rate charged in the revolving credit agreement. The
agreement has a notional amount of $10,000,000 and expires on October 7, 1996.
The Company does not believe that these arrangements create any material
exposure to the Company relating to "derivatives" or similar arrangements.
The Company has not paid dividends on its common stock, but has reinvested its
earnings to support its working capital and expansion requirements. Except for
future dividend requirements on the Series A preferred stock, the Company
intends to continue to employ its earnings in the development and expansion of
the business and does not expect to pay cash dividends in the foreseeable
future.
The Company believes that its existing credit facilities, leasing capabilities,
and projected cash flow from operations will be sufficient to meet its
foreseeable short term and long term capital and liquidity needs.
<PAGE> 5
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net sales $283,134 $242,483 $159,597
Cost of sales 259,438 226,313 146,523
- ------------------------------------------------------------------------------------------------
Gross profit 23,696 16,170 13,074
Selling and administrative expenses 11,261 8,244 6,764
- ------------------------------------------------------------------------------------------------
Operating income 12,435 7,926 6,310
- ------------------------------------------------------------------------------------------------
Other income (expense)
Interest expense (2,470) (3,152) (1,608)
Miscellaneous 317 156 (572)
- ------------------------------------------------------------------------------------------------
(2,153) (2,996) (2,180)
- ------------------------------------------------------------------------------------------------
10,282 4,930 4,130
Income taxes 3,939 1,873 1,560
- ------------------------------------------------------------------------------------------------
Net income $ 6,343 $ 3,057 $ 2,570
================================================================================================
Net income per common and common
equivalent share
Primary $ .89 $ .46 $ .40
================================================================================================
Fully diluted $ .88 $ .46 $ .40
================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 6
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1995 AND 1994
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS 1995 1994
<S> <C> <C>
Current assets:
Cash $ 3,569 $ 1,081
Accounts receivable, net of allowance of $145 and $130
in 1995 and 1994, respectively 47,560 43,699
Inventories 48,966 60,047
Deferred income taxes 904 743
Prepaid expenses and other 1,930 3,200
- -----------------------------------------------------------------------------------------------------------------
Total current assets 102,929 108,770
Property, plant and equipment, net 11,829 12,856
Other 330 395
- -----------------------------------------------------------------------------------------------------------------
Total assets $115,088 $122,021
=================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 107 $ 550
Accounts payable 23,279 36,891
Customer deposits 3,530 3,501
Accrued liabilities:
Salaries and wages 2,618 2,182
Other 2,093 2,862
- -----------------------------------------------------------------------------------------------------------------
Total current liabilities 31,627 45,986
Long-term debt 41,734 40,691
Deferred income taxes 718 465
Stockholders' equity:
Series A preferred stock, $.01 Par value, $1,000 face value, 7,000 shares
authorized, issued and outstanding - -
Preferred stock, $.01 Par value, 4,993,000 shares authorized,
none issued or outstanding - -
Common stock, $.01 Par value, 30,000,000 shares authorized,
6,491,345 and 6,460,498 issued and outstanding, respectively 65 65
Additional paid-in capital 14,160 13,829
Retained earnings 26,784 20,985
- -----------------------------------------------------------------------------------------------------------------
41,009 34,879
- -----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $115,088 $122,021
=================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Additional Total
PREFERRED STOCK COMMON STOCK Paid-in Retained Stockholder's
Shares Amount Shares Amount Capital Earnings Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balances,
September 30, 1992 - $ - 6,448,173 $64 $ 7,708 $15,358 $23,130
Exercise of stock options - - - - (899) - (899)
Net income - - - - - 2,570 2,570
- -------------------------------------------------------------------------------------------------------------------------------
Balances,
September 30, 1993 - - 6,448,173 64 6,809 17,928 24,801
Exercise of stock options - - 12,325 1 20 - 21
Issuance of Series A
Preferred Stock 7,000 - - - 7,000 - 7,000
Net Income - - - - - 3,057 3,057
- -------------------------------------------------------------------------------------------------------------------------------
Balances,
September 30, 1994 7,000 - 6,460,498 65 13,829 20,985 34,879
Exercise of stock options - - 30,847 - 331 - 331
Net income - - - - - 6,343 6,343
Preferred dividends
($77.69 Per share) - - - - - (544) (544)
- -------------------------------------------------------------------------------------------------------------------------------
Balances,
September 30, 1995 7,000 $ - 6,491,345 $65 $14,160 $26,784 $41,009
===============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1995, 1994 AND 1993
(in thousands)
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES 1995 1994 1993
<S> <C> <C> <C>
Net income $ 6,343 $ 3,057 $ 2,570
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation and amortization 3,237 3,103 2,555
Deferred income taxes 92 (156) (164)
Changes in assets and liabilities:
Accounts receivable, net (3,861) (22,367) (3,164)
Inventories 11,081 (10,599) (19,854)
Prepaid expenses and other 1,270 (690) (1,453)
Accounts payable (13,612) 12,869 10,251
Customer deposits 29 2,627 (94)
Accrued liabilities (333) 860 (332)
Other (58) 125 137
- ----------------------------------------------------------------------------------------------------------------------
Net cash flows provided by (used in)
operating activities 4,188 (11,171) (9,548)
- ----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of property, plant and equipment 19 9,104 -
Payments for property, plant and equipment (2,106) (5,288) (8,233)
- ----------------------------------------------------------------------------------------------------------------------
Net cash flows provided by (used in)
investing activities (2,087) 3,816 (8,233)
- ----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt 121,900 110,791 137,500
Payments on debt (121,300) (110,219) (119,763)
Issuance of preferred stock - 7,000 -
Issuance of common stock 331 21 -
Payments of preferred dividends (544) - -
- ----------------------------------------------------------------------------------------------------------------------
Net cash flows provided by financing activities 387 7,593 17,737
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 2,488 238 (44)
Cash at beginning of year 1,081 843 887
- ----------------------------------------------------------------------------------------------------------------------
Cash at end of year $ 3,569 $ 1,081 $ 843
=======================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
Consolidation Principles: The consolidated financial statements include the
accounts of Plexus Corp. and its subsidiaries, all of which are wholly-owned.
All significant intercompany transactions have been eliminated.
Inventories: Inventories are valued primarily at the lower of standard cost or
market. Standard cost approximates costs determined by the first-in, first-out
(FIFO) method.
Property, Plant and Equipment and Depreciation: These assets are stated at
cost. Depreciation, determined on the straight-line method, is based on lives
assigned to the major classes of depreciable assets as follows:
Buildings and improvements 18-40 years
Machinery and equipment 3-10 years
Office furniture and equipment 5-10 years
Vehicles 3-5 years
Revenue Recognition: Revenue is recognized primarily when inventory is shipped.
Revenue relating to product design and development contracts is recognized as
costs are incurred utilizing the percentage-of-completion method.
Income Taxes: Deferred income taxes are provided for differences between the
bases of assets and liabilities for financial and tax reporting purposes.
Stock Options: Proceeds from the sale of newly-issued common stock to employees
under the Company's stock option plan are credited to common stock to the
extent of par value and the excess to additional paid-in-capital. Income tax
benefits attributable to stock options exercised are recorded as an increase in
additional paid-in-capital.
Net Income Per Common and Common Equivalent Share: The computations of primary
and fully diluted net income per common share for 1995 and 1994 are based upon
the weighted average number of common shares outstanding plus the effect of
common shares contingently issuable relating to outstanding stock options using
the treasury stock method and common shares contingently issuable relating to
the convertible preferred stock using the if-converted method. In 1993, stock
options did not impact net income per share as they were either insignificant
or antidilutive, thus the computations are based solely upon the weighted
average number of common shares outstanding during the period. The fully
diluted calculation reflects additional dilution from stock options and
convertible preferred shares applying the market price at the end of the period
when that price is higher than the average market price for the period.
The common equivalent shares outstanding for the calculation of primary and
fully diluted net income per common share were 7,137,487 and 7,249,286 in 1995,
respectively. In 1994, and 1993, the common equivalent shares outstanding for
the calculation of primary and fully diluted net income per common share were
6,705,239, and 6,448,173, respectively.
Reclassification: Certain prior years' amounts have been reclassified to
conform to the 1995 presentation.
NOTE 2 - INVENTORIES:
The major classes of inventories at September 30, 1995 and 1994 are as follows
(in thousands):
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Assembly parts $33,950 $38,156
Work-in-process 14,782 21,383
Finished goods 234 508
-----------------------
$48,966 $60,047
=======================
</TABLE>
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment, net at September 30, 1995 and 1994 consist of
the following (in thousands):
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Land and improvements $ 731 $ 731
Buildings and improvements 7,664 7,614
Machinery and equipment 13,881 12,682
Office furniture and equipment 6,954 6,108
Vehicles 671 663
Construction-in-progress 193 783
------------------------
$30,094 $28,581
Less accumulated
depreciation 18,265 15,725
------------------------
$11,829 $12,856
========================
</TABLE>
<PAGE> 10
NOTE 4 - DEBT:
Long-term debt at September 30, 1995 and 1994 consists of the following (in
thousands):
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revolving credit arrangement
(described below) $41,500 $37,100
$3,500,000 Bank Promissory Note,
paid in 1995 - 3,500
Other notes and obligations with
a weighted average interest
rate of 5.9% 341 641
--------------------
41,841 41,241
Less current portion 107 550
--------------------
$41,734 $40,691
====================
</TABLE>
The revolving credit arrangement matures in July 1998 and provides for maximum
borrowings of $55,000,000, with all or portion of the principal bearing
interest at a prime-based or a LIBOR-based rate as elected by the Company.
These rates range from prime plus 1/4% to prime plus 1/2% and LIBOR plus 2% to
LIBOR plus 2 1/2%, depending on the Company's consolidated debt-to-worth ratio,
as defined by the Loan Agreement. The weighted average interest rate for this
agreement was 7.7% at September 30, 1995. The amount available under this
agreement is limited to 80% of qualified accounts receivable and 50% of
qualified inventory. Inventory borrowings are limited to $27,500,000. A
commitment fee of 1/4 of 1% per annum on the unused portion of this arrangement
is payable quarterly.
During 1995, the Company has an interest rate cap agreement with a commercial
bank which limited the Company's interest rate on a portion of its floating
rate long-term debt to 8% or 8.5%, depending on the rate charged on the
revolving credit arrangement. The agreement had a notional amount of
$10,000,000 and expires on October 7, 1996.
The revolving credit agreement, as amended, includes covenants which require
the maintenance of various debt-to-net worth ratios.
The aggregate scheduled maturities of long-term debt in subsequent years are as
follows (in thousands):
<TABLE>
<S> <C>
1996 $ 107
1997 63
1998 41,509
1999 10
2000 10
Thereafter 142
-------
$41,841
=======
</TABLE>
Cash paid for interest during the years ended September 30, 1995, 1994 and 1993
was $2,954,000, $3,248,000 and $1,727,000, respectively.
NOTE 5 - INCOME TAXES:
The Company and its subsidiaries file a consolidated Federal income tax return.
Income taxes consist of the following (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Currently payable:
Federal $3,209 $1,706 $1,464
State 638 323 260
---------------------------------
3,847 2,029 1,724
---------------------------------
Deferred:
Federal 52 (210) (141)
State 40 54 (23)
---------------------------------
92 (156) (164)
---------------------------------
$3,939 $1,873 $1,560
=================================
</TABLE>
Following is a reconciliation of the Federal statutory income tax rate to the
effective tax rates reflected in the consolidated statements of operations for
the years ended September 30, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Federal statutory income tax rate 34.0% 34.0% 34.0%
Increase (decrease) resulting from:
State income taxes, net of
Federal income tax benefit 4.4 5.0 4.2
Other, net (0.1) (1.0) (0.4)
-------------------------
Effective tax rate 38.3% 38.0% 37.8%
=========================
</TABLE>
<PAGE> 11
Notes to Consolidated Financial Statements
The components of the net deferred income tax asset as
of September 30, 1995 and 1994, were as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax assets:
Accrued benefits $ 521 $ 415
Loss carryforwards 115 153
Partnership investment 122 120
Valuation reserves 209 417
Health insurance 31 31
Inventory capitalization 217 99
Other 340 117
---------------------
1,555 1,352
Less valuation allowance (181) (142)
---------------------
1,374 1,210
---------------------
Deferred tax liabilities:
Property, plant and equipment 997 827
Other 191 105
---------------------
1,188 932
---------------------
Net deferred income tax asset $ 186 $ 278
=====================
</TABLE>
Cash paid for income taxes for the years ended September 30, 1995, 1994 and
1993 was $4,577,000, $1,419,000 and $1,884,000, respectively.
NOTE 6 - STOCKHOLDERS' EQUITY:
During 1994, the company issued 7,000 shares of Series A Preferred Stock (the
"Preferred Shares") with a face value of $1,000 per share at face value.
Dividends are earned on the face value of the Preferred Shares at 1/2 the sum
of the prime rate less 1%. These dividends are cumulative and payable
semi-annually in arrears, when and as declared by the Company's Board of
Directors. At September 30, 1995, dividends of $8.25 per share (aggregate
$58,000) were in arrears on the Preferred Shares. Upon liquidation of the
Company, holders of the Preferred Shares would be entitled to receive the face
value of the Preferred Shares, plus any accrued but unpaid dividends, whether
declared or not, before any distribution to the common shareholders of the
Company. The Company may redeem the Preferred Shares at any time on or after
June 30, 1995, at face value plus any accrued but unpaid dividends, whether
declared or not. From and after October 1, 1994 until June 30, 2004, the
Preferred Shares are convertible into common stock at a conversion price of
$12.63 per share. The Company has reserved 554,455 shares of its authorized but
unissued common stock for possible conversion.
NOTE 7 - LEASE COMMITMENTS:
The Company has a number of operating lease agreements primarily involving
manufacturing equipment, computerized design equipment and manufacturing
facilities. These leases are noncancelable and expire on various dates through
2014. Rent expense under all operating leases during 1995, 1994 and 1993 was
approximately $12,491,090, $10,519,000 and $7,742,000, respectively. Renewal
and purchase options are available on certain of these leases.
During 1994, the Company sold its Advanced Manufacturing Facility for
$9,250,000 and entered into an agreement to lease the facility back from the
purchaser. The lease calls for annual rental payments of $1,091,000 over twenty
years and allows the Company to extend the lease for six five-year periods. The
lease has been accounted for as an operating lease. The gain recognized on the
sale was not significant.
The future minimum annual payments on these leases are as follows (in
thousands):
<TABLE>
<S> <C>
1996 $12,929
1997 7,958
1998 3,437
1999 1,823
2000 1,777
Thereafter 18,552
-------
$46,476
=======
</TABLE>
NOTE 8 - STOCK OPTION AND SAVINGS PLANS:
The Company's 1988 Stock Option Plan (the "1988 Plan") authorizes the Company
to grant options to purchase up to 900,000 shares of common stock. All shares
will be made available from authorized and unissued shares. Officers and key
employees of the Company are eligible to receive options. The 1988 Plan
provides for the granting of options at an option price of not less than the
fair market value on the date of grant. Options vest over a three-year period.
Additionally, the 1988 Plan authorizes the Company to grant 450,000 stock
appreciation rights, none of which have been granted as of September 30, 1995.
During 1995, the Company approved two stock option plans, the 1995 Executive
Stock Option Plan (the "Executive Plan") and the 1995 Directors' Stock Option
Plan (the "Directors' Plan). The Executive Plan authorizes the Company to grant
options to purchase up to 1,000,000 shares of common stock. All shares will be
made available from authorized and unissued shares. Options may be
<PAGE> 12
Notes to Consolidated Financial Statements
granted to officers and key employees of the Company provided that no officer
or key employee may be granted an option or options covering, in the aggregate,
more than 50,000 shares of stock in any calendar year. The Executive Plan
provides for the granting of options at an option price of not less than the
fair market value on the date of grant. Options vest over a three-year period
after the date of grant. Additionally, the Executive Plan authorizes the
Company to grant 300,000 stock appreciation rights, none of which have been
granted as of September 30, 1995. The Executive Plan shall terminate on
December 31, 2004 or at such earlier time as the Board of Directors may
determine.
The Directors' Plan authorizes the Company to grant options to purchase up to
100,000 shares of common stock. Shares may come from authorized but unissued
shares, from treasury shares held by the Company, from shares purchased by the
Company on an open market for such purpose, or from any combination of the
foregoing. At the first meeting of the Board of Directors following the
Company's 1995 annual meeting of shareholders, each person then serving the
Company as an outside director was granted a nonqualified stock option to
purchase 1,500 shares. Commencing December 1, 1995, and continuing on the first
business day of each December thereafter through December 1, 2004, each person
then serving the Company as an outside director shall automatically be granted
a nonqualified stock option to purchase 1,500 shares. The Directors' Plan
provides for the granting of options at an option price of not less than the
fair market value on the date of grant and shall terminate on December 31, 2004
or at such earlier time as the Board may determine.
Stock option balances and transactions under the 1988 Plan, the Executive Plan,
and the Directors' Plan at and during the years ended September 30, 1995, 1994,
and 1993 are summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Outstanding at beginning
of year 560,661 402,161 247,162
Granted 239,000 178,000 160,500
Exercised (between $3.88
and $13.69 per share) (30,834) (16,500) -
Lapsed (24,838) (3,000) (5,501)
-------------------------------
Outstanding at end of year 743,989 560,661 402,161
===============================
Exercisable at end of year 349,945 252,696 127,366
===============================
Shares available for future
options at end of year 1,100,000 2 175,002
===============================
</TABLE>
Options outstanding as of September 30, 1995 have exercise prices ranging from
$2.54 To $17.44 per share.
The Company's 401(k) savings plan covers all employees with one or more years
of service. The Company matches employee contributions up to 2.5% of eligible
earnings. The Company's contributions for 1995, 1994 and 1993 totaled $644,000,
$563,000 and $498,000, respectively.
The Company is not obligated to provide any postretirement medical or life
insurance benefits to employees.
NOTE 9 - BUSINESS SEGMENT AND MAJOR CUSTOMERS:
The Company and its subsidiaries operate in one business segment, the
production and sale of electronic products including the designing,
manufacturing, programming and testing of computerized electronic assemblies.
Approximate sales to various divisions of a major customer were 25.6%, 39.4%
and 36.6% of consolidated net sales for the years ended September 30, 1995,
1994 and 1993, respectively. Additionally, sales to various divisions of
another major customer approximated 17.3%, 15.6% and 18.7% of consolidated net
sales for the years ended September 30, 1995, 1994 and 1993, respectively.
NOTE 10 - TRANSACTIONS WITH RELATED PARTIES:
During 1993 and 1992, a wholly-owned subsidiary of the Company, Plexus General
Partner Corp., made capital contributions totaling $700,000 to the Plexus Home
Automation Limited Partnership ("PHALP"). Several of the limited partners of
PHALP are officers, directors and/or shareholders of the Company and/or other
Company subsidiaries. The Company recorded losses of $413,000 in the years 1993
through 1995 which reduced the carrying value of this investment. PHALP became
inactive during the latter half of 1995 and as a result the Company wrote off
its remaining investment in the partnership of $57,000 and certain other
related assets of $180,000. The Company billed PHALP $41,000, $65,000 and
$693,000, during the years 1995, 1994 and 1993, respectively, for certain
services rendered by the Company.
During 1994, promissory notes aggregating $5,000,000, which were payable to
certain shareholders of the Company who are also limited partners in PHALP,
were paid in full with the proceeds from the issuance of the Series A Preferred
Stock. The preferred shares were issued to and are held by the former holders
of the promissory notes described above.
<PAGE> 13
NOTE 11 - QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial data for the years ended September 30, 1995 and
1994 is as follows (in thousands except per share and stock price amounts):
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1995 QUARTER QUARTER QUARTER QUARTER TOTAL
<S> <C> <C> <C> <C> <C>
Net sales $65,341 $69,380 $72,354 $76,059 $283,134
Gross profit 4,358 5,938 6,275 7,125 23,696
Net income 895 1,470 1,823 2,155 6,343
Income per common share*
Primary $ 0.13 $ 0.21 $ 0.26 $ 0.30 $ 0.89
Fully diluted 0.13 0.21 0.26 0.30 0.88
Stock price:
High $10 3/4 $12 7/8 $14 3/4 $18 7/8 $ 18 7/8
Low 8 1/4 8 1/2 11 1/4 13 1/2 8 1/4
1994
Net sales $55,944 $61,323 $55,004 $70,212 $242,483
Gross profit 3,590 4,482 3,644 4,454 16,170
Net income 704 1,023 304 1,026 3,057
Income per common share* $ 0.11 $ 0.16 $ 0.05 $ 0.15 $ 0.46
Stock price:
High $ 18 $17 1/2 $16 3/4 $12 1/2 18
Low 14 1/4 15 1/4 11 3/4 10 1/4 $ 10 1/4
</TABLE>
(*) Income per common share is computed independently for each quarter. The
annual per share amount may not equal the sum of the quarterly amounts due to
rounding. The amounts shown for 1994 represent primary and fully diluted
earnings per common share.
The Company recognized adjustments in the fourth quarter of 1995 and 1994
related principally to the adjustment of perpetual inventory records to actual
balances which decreased and increased quarterly earnings per share by $(.02)
and $0.05, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF PLEXUS CORP.
We have audited the accompanying consolidated balance sheets of Plexus Corp.
and Subsidiaries as of September 30, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended September 30, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Plexus Corp. and
Subsidiaries as of September 30, 1995 and 1994, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended September 30, 1995, in conformity with generally accepted accounting
principles.
Milwaukee, Wisconsin COOPERS & LYBRAND L.L.P.
November 17, 1995
<PAGE> 14
SHAREHOLDER INFORMATION
INFORMATION ON COMMON STOCK
For the years ended September 30, 1995 and 1994, the Company's Common Stock has
traded on the NASDAQ National Market System; the price information for that
period represents high and low sale prices.
The Company has not paid any cash dividends. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" for a discussion of
the Company's dividend intentions and Note 4 to the Consolidated Financial
Statements for restrictions on dividend payments.
<TABLE>
<CAPTION>
PRICE RANGE OF PRICE RANGE OF
Fiscal Year Ended COMMON STOCK Fiscal Year Ended COMMON STOCK
September 30, 1995 Low High September 30, 1994 low high
<S> <C> <C> <C> <C> <C>
First quarter 81/4 103/4 First quarter 141/4 18
Second quarter 81/2 127/8 Second quarter 151/4 171/2
Third quarter 111/4 143/4 Third quarter 113/4 163/4
Fourth quarter 131/2 187/8 Fourth quarter 101/4 121/2
Year 81/4 187/8 Year 101/4 18
</TABLE>
INVESTOR INFORMATION
Plexus Corp. Common Stock is traded over-the-counter on the NASDAQ National
Market System, symbol PLXS. As of September 30, 1995, there were approximately
2,500 shareholders of record. A copy of Plexus Corp.'s 1994 Form 10-K Report to
the Securities and Exchange Commission is available to the shareholders upon
written request to:
Joseph D. Kaufman, Secretary
Plexus Corp.
55 Jewelers Park Drive
P.O. Box 156
Neenah, WI 54957-0156
TRANSFER AGENT AND REGISTRAR
Firstar Trust Company
615 E. Michigan street
P.O. Box 2077
Milwaukee, WI 53201-2077
(800) 637-7549
AUDITORS
Coopers & Lybrand
411 E. Wisconsin Avenue
Milwaukee, WI 53202
<PAGE> 15
BOARD OF DIRECTORS
ROBERT A. COOPER
Senior Vice President
Dain Bosworth Inc.
(Brokerage and other financial services)
RUDOLPH T. HOPPE
Retired; previously President and Director
The Glenora Company
(Investments)
HAROLD R. MILLER
Retired; previously Chairman of the Board
Marathon Engineers/Architects/Planners, Inc.
(Architects and engineers)
ALLAN C. MULDER
Retired; previously Chairman of the Board
Miller Electric Manufacturing Co.
(Manufacturer of welding equipment)
JOHN L. NUSSBAUM
President
Plexus Corp.
GERALD A. PITNER
Executive Vice President
Plexus Corp.
THOMAS J. PROSSER
Vice President - Investment Banking
Robert W. Baird & Co., Inc.
(Brokerage and other financial services)
PETER STRANDWITZ
Chairman and Chief Executive Officer
Plexus Corp.
EXECUTIVE OFFICERS
PETER STRANDWITZ
Chairman and Chief Executive Officer
JOHN L. NUSSBAUM
President
GERALD A. PITNER
Executive Vice President
CHARLES C. WILLIAMS
Vice President
WILLIAM F. DENNEY
Vice President and Controller
JOSEPH D. KAUFMAN
Vice President, Secretary and General Counsel
<PAGE> 16
[LOGO OF PLEXUS]
55 Jewelers Park Drive
Post Office Box 156
Neenah, WI 54957-0156
Product development,
manufacturing and testing
solutions for the electronics
industry.
<PAGE> 17
1995 PLEXUS
ANNUAL REPORT
<PAGE> 1
Exhibit 21
1995 10-K
Subsidiaries of Plexus Corp.
1. Electronic Assembly Corporation, a Wisconsin corporation
2. Technology Group, Inc., a Wisconsin corporation
3. Plexus General Partner Corp., a Wisconsin corporation
<PAGE> 1
EXHIBIT 23
[LETTERHEAD OF COOPERS & LYBRAND]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Plexus Corp. and Subsidiaries on Form S-8 (File No.'s 33-23490, 33-28309,
33-56932, 33-89862, and 33-89864) of our report dated November 17, 1995 on our
audits of the consolidated financial statements of Plexus Corp. and
Subsidiaries as of September 30, 1995 and 1994, and for each of the three years
in the period ended September 30, 1995, which report is included in this Annual
Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P
-----------------------
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
December 20, 1995
<PAGE> 2
[COOPERS & LYBRAND LETTERHEAD]
EX-23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Plexus Corp. on Form S-8 (File No. 33-23490, 33-28309, 33-56932, 33-89862, and
33-89864) of our report dated December 15, 1995 on our audits of the financial
statements and supplemental schedules of the Plexus Corp. Employee Stock
Savings Plan as of September 30, 1995 and 1994, and for the years then ended,
which report is included in this Annual Report on Form 11-K.
/S/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
December 15, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<CASH> 3,569
<SECURITIES> 0
<RECEIVABLES> 47,560
<ALLOWANCES> 145
<INVENTORY> 48,966
<CURRENT-ASSETS> 102,929
<PP&E> 30,094
<DEPRECIATION> 18,265
<TOTAL-ASSETS> 115,088
<CURRENT-LIABILITIES> 31,627
<BONDS> 0
0
0
<COMMON> 65
<OTHER-SE> 40,944
<TOTAL-LIABILITY-AND-EQUITY> 115,088
<SALES> 283,134
<TOTAL-REVENUES> 283,134
<CGS> 259,438
<TOTAL-COSTS> 259,438
<OTHER-EXPENSES> 11,261
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,470
<INCOME-PRETAX> 10,282
<INCOME-TAX> 3,939
<INCOME-CONTINUING> 6,343
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,343
<EPS-PRIMARY> .89
<EPS-DILUTED> .88
</TABLE>
<PAGE> 1
INFORMATION FURNISHED IN LIEU OF
FORM 11-K
ANNUAL REPORT
Pursuant to Rule 15d-21 under the
Securities Exchange Act of 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
(Full title of plan)
PLEXUS CORP.
55 Jewelers Park Drive
Neenah, Wisconsin 54956
(Name of issuer of securities held pursuant to
the plan and the address of
its principal executive office)
EXHIBIT 99
1995 10-K
<PAGE> 2
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
REPORT ON AUDIT OF FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<PAGE> 3
CONTENTS
PAGES
-----
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits 3
Statements of Changes in Net Assets Available for
Plan Benefits 4
Notes to Financial Statements 5-10
Supplemental Schedules:
Form 5500, Item 27(a) - Schedule of Assets Held for
Investment Purposes, September 30, 1995 11
Form 5500, Item 27(d) - Schedule of Reportable
Transactions for the year ended September 30, 1995 12
1
<PAGE> 4
[Coopers & Lybrand Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator
and Employee-Participants
We have audited the financial statements of the Plexus Corp. Employee Stock
Savings Plan as listed on the accompanying index. These financial statements
are the responsibility of the Plan Administrator. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
September 30, 1995 and 1994, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules as listed on
the accompanying index are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Coopers & Lybrand LLP
Milwaukee, Wisconsin
December 15, 1995
2
<PAGE> 5
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
Employer Securities Fund $ 7,786,431 $4,248,262
Balanced Fund 1,021,279 663,033
Diversified Equity Fund 945,735 512,781
Principal Fund 508,925 343,642
----------- ----------
Net assets available for plan benefits $10,262,370 $5,767,718
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
for the years ended September 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Contributions:
Employee pre-tax $ 1,187,497 $ 1,026,773
Employer 644,443 562,902
----------- -----------
1,831,940 1,589,675
Net appreciation in fair value of investments 2,916,337 (1,732,820)
Interest Income 33,316 17,135
----------- -----------
4,781,593 (126,010)
----------- -----------
Withdrawal and distributions to participants (286,941) (318,226)
----------- -----------
Net increase 4,494,652 (444,236)
Net assets available for plan benefits:
Beginning of period 5,767,718 6,211,954
----------- -----------
End of period $10,262,370 $ 5,767,718
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN:
The following description of the Plexus Corp. Employee Stock Savings Plan
(the "Plan") provides only general information. Participants should refer to
the Plan agreement for a more complete description of the Plan's provisions.
A. GENERAL: The Plan, effective January 1, 1989, is a contributory defined
contribution plan covering all employees of Plexus Corp. (the "Company")
who have completed one year of service. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
B. CONTRIBUTIONS: Employee pre-tax contributions are based on voluntary
written elections by the participants directing the Company to defer a
stated amount from the participants' compensation. Participants may
elect to defer a stated amount from the participants' of 1% up to 2.5%
of their annual compensation as a basic contribution. In addition,
participants may elect to defer up to additional 7.5% of their annual
compensation as a supplemental contribution. The Company will make a
matchng contribution on behalf of a participant equal to 100% of the
basic contribution. All Company matching contributions are allocated to
the Employer Securities Fund. There is no Company matching of the
supplemental contribution. Contributions are limited by Section 401(k)
of the Internal Revenue Code.
The Plan allows participants to elect the investment vehicle for their
contributions from among several investment options. Investment options
consist of an Employer Securities Fund, a Balanced Fund, a Principal
Fund, and a Diversified Equity Fund, or any combination of the four,
maintained by the Associated Bank, N.A. (the "Trustee"). The Employer
Securities Fund invests primarily in the common stock of the Company.
The Balanced Fund invests primarily in a combination of equity, fixed
income and money market securities (or similar investments), with the
objective of producing consistent long-term growth. The Principal Fund
invests primarily in guaranteed investment contracts, commercial paper,
and other money market securities (or similar investments), with the
objective of providing safety of principal while generating interset
income. The Diversified Equity Fund invests in a diversified portfolio
of common stocks with the goal of producing a high total return from a
combination of stock price appreciation and cash dividends. For all four
funds, there is no guarantee as to future returns nor is there a
guarantee against loss of principal.
C. PARTICIPANT ACCOUNTS AND ALLOCATIONS: Each participant's account is
credited with the participant's contribution and allocations of Company
contributions and Fund investment earnings. Allocations are based on
participant account balances in relation to total Fund account balances,
as defined by the Plan document. Participants in the Employer Securities
Fund are allocated an undivided interest in the shares held by the Fund.
At September 30, 1995 and 1994, the Employer Securities Fund held
462,679 and 383,596 shares of Plexus Corp. common stock valued at
$16.625 and $10.625 per share, respectively.
5
<PAGE> 8
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED:
D. VESTING AND DISTRIBUTIONS: Participants immediately vest in all
contributions made to the Plan. Participant accounts are distributable
in the form of a lump sum payment or annual installments (period not to
exceed the period permitted under Section 401(1)(9) of the code) of cash
or in whole shares of the Company securities as elected by the
participant upon a participant's retirement, termination of employment,
death, disability, financial hardship or attainment of age 59-1/2.
Participants with account balances exceeding $3,500 as of the
distribution determination date may elect to defer distribution until
the participant's attainment of age 65 or termination of employment,
whichever is later. In any event, participant distributions may not be
deferred past April 1 of the calendar year following the year in which
the participant attains age 70-1/2. Forfeitures of unclaimed
distributions are used to reduce Company matching contributions.
E. PLAN TERMINATION: Although it has not expressed any intent to do so,
the Company has the right under the Plan to discontinue its
contributions at any time and to terminate the Plan subject to the
provisions set forth in ERISA. In the event of Plan termination, the
accounts of the participants shall be nonforfeitable.
F. CHANGES TO THE PLAN: Commencing January 1, 1996, Plexus Corp.'s
Employee Stock Savings Plan will be modified. Associated mutual funds
will be eliminated and replaced with eight mutual funds maintained by
Riggs National Bank of Washington, D.C., the new trustee. The new
investment advisor will be Robert W. Baird & Co. of Milwaukee, WI. In
addition, participants will be allowed to invest up to 15% of their
income in increments of 5%. Participants will be allowed to transfer
among all of the funds on a daily basis (except Plexus Common Stock
which is limited to one transfer per month), and will have access to
their accounts on a daily basis via an interactive telephone system. The
Company match will remain at 2.5% and remain in Plexus Common Stock.
6
<PAGE> 9
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF ACCOUNTING POLICIES:
The significant accounting policies followed by the Plan in presenting
these financial statements are as follows:
A. INVESTMENTS: Investments in the Employer Securities Fund consist
primarily of investments in Company securities which are traded on the
NASDAQ exchange and are valued at the last reported sales price on the
last business day preceding the valuation date. Investments in the
Balanced Fund, the Principal Fund, and the Diversified Equity Fund
consist of units of participation, representing an interest in the
underlying assets of certain commingled trust funds maintained by the
Trustee, rather than ownership of specific assets. The value of a unit
or participation is the total value of the respective fund divided by
the number of units outstanding. The trusts' investments in securities
traded on a national securities exchange are valued at the last
reported sales price. Obligations of U.S. Government securities and
securities traded on the over-the-counter market are valued at the mean
between hid and asked prices. Other securities are stated at fair
market value as determined from independent sources. Money market funds
held by the trusts are valued at cost which approximates fair value.
The market value of all non-money market funds is determined on a
monthly basis. Money market funds are valued on a daily basis.
Purchases and sales of securities are reflected on a trade-date basis.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
B. INTEREST INCOME: Interest income from securities is recorded as earned
on an accrual basis.
C. ADMINISTRATIVE EXPENSES: Expenses incurred in the administration of
the Plan are paid by the Company and are not reflected within these
financial statements.
7
<PAGE> 10
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENTS AND FUND ACTIVITY:
The current value of investments and other assets in each fund at September
30, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
1995
----------------------------------------------------------------------
Employer
Securities Balanced Diversified Principal
Fund Fund Equity Fund Fund Total
----------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
Plexus Corp. Common Stock $7,692,038 $ -- $ -- $ -- $7,692,038
Associated Pension and Profit Sharing
Intermediate Term Bond Fund -- 382,892 -- -- 382,892
Associated Pension and Profit Sharing Capital
Appreciation Fund -- 60,425 91,559 -- 152,014
Associated Bank, N.A. Retirement and Pension
Cash Investment Fund 35,437 43,263 3,530 452,964 535,194
Associated Pension and Profit Sharing Equity
Income Fund -- 82,479 140,644 -- 223,123
Associated Pension and Profit Sharing Regional
Bank Fund -- 59,897 90,797 -- 150,694
Associated Pension and Profit Sharing Common
Stock Fund -- 277,234 429,564 -- 706,798
Associated Pension and Profit Sharing Foreign
Equity Fund -- 101,026 165,381 -- 266,407
----------- ---------- ----------- --------- -----------
Total Investments 7,727,475 1,007,216 921,505 452,964 10,109,160
Contributions receivable:
Employer 52,359 -- -- -- 52,359
Employee 38,298 22,154 27,106 10,118 97,678
Accrued interest income 162 223 34 2,149 2,568
Transfers requested (32,469) (8,280) (2,895) 43,644 --
Other 606 (34) (17) 50 605
----------- ---------- ----------- --------- -----------
Net assets available for plan benefits $7,786,431 $1,021,279 $945,735 $506,925 $10,262,370
=========== ========== =========== ========= ===========
</TABLE>
8
<PAGE> 11
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENTS AND FUND ACTIVITY, CONTINUED:
<TABLE>
<CAPTION>
1994
-----------------------------------------------------------------------------
Employer Diversified
Securities Balanced Equity Principal
Fund Fund Fund Fund Total
---------- --------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
Plexus Corp. Common Stock $4,075,708 $ -- $ -- $ -- $4,075,706
Associated Bank, N.A. Pension and Profit Sharing
Bond Fund -- 257,205 -- -- 257,205
Associated Bank, N.A. Pension and Profit Sharing
Capital Appreciation Fund -- 39,083 49,826 -- 88,909
Associated Bank, N.A. Retirement and Pension Cash
Investment Fund 58,537 19,370 2,544 325,373 405,824
Associated Bank, N.A. Pension and Profit Sharing
Equity Income Fund -- 51,754 73,049 -- 124,803
Associated Bank, N.A. Pension and Profit Sharing
Regional Bank Fund -- 38,243 43,337 -- 81,580
Associated Bank, N.A. Pension and Profit Sharing
Stock Fund -- 173,606 282,250 -- 405,858
Associated Bank, N.A. Pension and Profit Sharing
Worldwide Collective Trust Fund -- 63,454 81,624 -- 145,078
---------- -------- -------- -------- ----------
Total investments 4,134,245 642,717 482,630 325,373 5,584,965
Contributions receivable:
Employer 63,231 -- -- -- 63,231
Employee 49,719 25,245 30,529 11,964 117,457
Accrued interest income 194 92 16 1,253 1,555
Transfers requested 393 (5,021) (394) 5,022 --
---------- -------- -------- -------- ----------
Net assets available for plan benefits $4,248,262 $633,033 $512,781 $343,642 $5,767,718
========== ======== ======== ======== ==========
</TABLE>
A summary of the activity in each of the funds for the years ended
September 30, 1994 and 1994, follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1995
-----------------------------------------------------------------------------
Employer Diversified
Securities Balanced Equity Principal
Fund Fund Fund Fund Total
---------- --------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employer $ 644,443 $ -- $ -- $ -- $ 644,443
Employee 485,663 261,165 318,868 121,801 1,187,497
Interest income 8,142 1,750 481 22,944 33,316
Net appreciation of investments 2,601,126 152,866 162,345 -- 2,916,337
---------- ---------- -------- -------- -----------
3,739,374 415,781 481,694 144,745 4,781,594
Deductions:
Withdrawal and distributions to participants 186,171 29,290 25,600 45,881 266,942
Transfers 15,034 28,245 23,140 (66,419) --
---------- ---------- -------- -------- -----------
Net increase (decrease) 3,538,169 358,246 432,954 (20,538) 4,494,652
Assets available for benefits:
Beginning of year 4,248,262 663,033 512,781 343,642 5,767,716
---------- ---------- -------- -------- -----------
End of year $7,786,431 $1,021,279 $945,735 $508,925 $10,262,370
========== ========== ======== ======== ===========
</TABLE>
9
<PAGE> 12
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENTS AND FUND ACTIVITY, CONTINUED:
<TABLE>
<CAPTION>
Year Ended September 30, 1994
-----------------------------------------------------------------------------
Employer Diversified
Securities Balanced Equity Principal
Fund Fund Fund Fund Total
---------- --------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
Additions:
Contributions:
Employer $ 562,902 $ -- $ -- $ -- $ 562,902
Employee 474,971 240,063 196,965 114,774 1,026,773
Interest income 1,946 1,252 2,967 10,970 17,135
Net appreciation (depreciation) of investments (1,776,405) 29,201 14,384 -- (1,732,820)
---------- -------- -------- -------- ------------
(736,586) 270,516 214,316 125,744 (126,010)
Deductions:
Withdrawal and distribution to participants 253,141 34,325 5,266 25,493 318,226
Transfers 60,526 208,080 (303,731) 35,125 --
---------- -------- -------- -------- ------------
Net increase (decrease) (1,050,253) 28,110 512,781 65,126 (444,236)
Assets available for benefits:
Beginning of year 5,295,515 634,923 -- 278,516 6,211,954
---------- -------- -------- -------- -----------
End of year $4,248,262 $663,033 $512,781 $343,642 $5,767,718
========== ======== ======== ======== ===========
</TABLE>
4. TAX STATUS:
The United States Treasury Department advised the Plan on May 15, 1990 that
the Plan constitutes a qualified trust under Section 401(a) of the
Internal Revenue Code and is therefore exempt from Federal income taxes
under provisions of Section 501(a).
The Plan has been amended since receiving the determination letter.
However, the plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code. Therefore, no provision for income taxes has
been included in the financial statements.
Participants will not be subject to income tax on contributions made on
their behalf by the Company nor on the plan earnings credited to their
account until such time as they withdraw all or any part of their
accumulated balance.
10
<PAGE> 13
]PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
FORM 5500, ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -------- ------------------------------- -------------------------------- ---------- ----------
Identity of Issuer,
Borrower, Lessor, Current
or Similar Party Description of Investment Cost Value
- -------- ------------------------------- -------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
Plexus Corp. Common stock $4,021,722 $7,692,038
Associated Bank, N.A. Intermediate Term Bond Fund 328,068 382,892
Associated Bank, N.A. Pension and Profit Sharing
Capital Appreciation Fund 113,927 152,014
Associated Bank, N.A. Retirement and Pension Cash
Investment Fund 535,194 535,194
Associated Bank, N.A. Pension and Profit Sharing Equity
Income Fund 176,629 223,123
Associated Bank, N.A. Pension and Profit Sharing
Common Stock Fund 531,387 706,798
Associated Bank, N.A. Pension and Profit Sharing
Foreign Equity Fund 235,501 266,407
---------- -----------
$6,058,188 $10,109,160
========== ===========
</TABLE>
* Party-in-interest transactions, which are exempt from prohibited transaction
rules under Section 408(b) of ERISA.
See Report of Independent Accountants.
11
<PAGE> 14
PLEXUS CORP. EMPLOYEE STOCK SAVINGS PLAN
FORM 5500, ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column G Column I
- -------------- -------------------- ----------- -------- --------- -------------
Identity of Purchase Selling Cost of
Party Involved Description of Asset Price Price Asset Gain (loss)
- -------------- -------------------- ----------- -------- --------- -------------
<S> <C> <C> <C> <C> <C>
Plexus Corp. Common Stock $1,121,570 (12) $ - $ - $ -
Associated Retirement and
Pension Cash
Investment Fund 1,999,652 (117) 1,870,282 (130) 1,870,282 -
</TABLE>
NOTES:
(A) Columns E and F are omitted as they are not applicable.
(B) Column H is omitted as such amounts are the same as Column D.
(C) Figures in parentheses indicate number of individual transactions in total
series.
See Report of Independent Accountants.
12
