<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 204.14a-11(c) or Section
240.14a-12
PLEXUS CORP.
(Name of Registrant as Specified in Its Charter)
PLEXUS CORP.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed Maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if fee paid with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
PLEXUS CORP.
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH, WISCONSIN 54957-0156
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
ON FEBRUARY 14, 1996
To shareholders of Plexus Corp.:
The annual meeting of shareholders of Plexus Corp. will be held at the
Valley Inn, located at 123 East Wisconsin Avenue, Neenah, Wisconsin, on
Wednesday, February 14, 1996 at 10:00 a.m., for the following purposes:
(1) To elect eight directors to serve until the next annual meeting
and until their successors have been duly elected.
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record on the books of Plexus at the close of
business on December 15, 1995 will be entitled to vote at the meeting or any
adjournment of the meeting.
Your attention is called to the Proxy Statement accompanying this
notice for a more complete statement regarding the matters to be acted upon at
the meeting.
By Order of the Board of Directors
Joseph D. Kaufman
Secretary
Neenah, Wisconsin
January 5, 1996
PLEASE INDICATE YOUR VOTING DIRECTIONS, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER FIND THAT YOU MAY BE
PRESENT OR FOR ANY OTHER REASON DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT
ANY TIME BEFORE IT IS VOTED.
<PAGE> 3
PROXY STATEMENT
PLEXUS CORP.
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH, WISCONSIN 54957-0156
* * * * * * *
SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Plexus Corp. ("Plexus" or the
"Company") for the annual meeting of shareholders on Wednesday, February 14,
1996. Shares represented by properly executed proxies received by Plexus will
be voted at the meeting and any adjournment thereof in accordance with the
terms of such proxies, unless revoked. Proxies may be revoked at any time
prior to the voting thereof either by written notice filed with the secretary
or acting secretary of the meeting or by oral notice to the presiding officer
during the meeting.
Shareholders of record at the closing of business on December 15, 1995
will be entitled to one vote on each matter presented for each share so held.
At that date there were 6,493,897 shares of Common Stock outstanding. Any
shareholder entitled to vote may vote either in person or by duly authorized
proxy. Representation of a majority of the outstanding shares will constitute
a quorum at the meeting. Abstentions and shares which are the subject of
broker non-votes will be counted for the purpose of determining whether a
quorum exists at the meeting. Shares represented at a meeting for any purpose
accounted in the quorum for all matters to be considered at the meeting. The
voted proxies will be tabulated by the persons appointed as inspectors of
election.
Directors are elected by a plurality of the votes cast by the holders
of the Company's Common Stock entitled to vote at the election at a meeting at
which a quorum is present. "Plurality" means that the individuals who receive
the highest number of votes are elected as directors, up to the number of
directors to be chosen at the meeting. Any votes attempted to be cast
"AGAINST" a candidate are not given legal effect and are not counted as votes
cast in the election of directors. Therefore, any shares which are not voted,
whether by withheld authority, broker non-vote or otherwise, have no effect in
the election of directors except in the extent that the failure to vote for any
individual results in another individual receiving a larger number of votes.
Shareholders who own shares as part of Plexus' Employee Stock Savings
Plan (the "Savings Plan") will receive a separate proxy for the purpose of
voting their shares held in their account. Shares held by the Savings Plan for
which designations are not received will be voted by the Savings Plan's Trustee
at its discretion, as provided in the Savings Plan.
Expenses in connection with the solicitation of proxies will be paid by
Plexus. Upon request, Plexus will reimburse brokers, dealers, banks and voting
trustees, or their nominees, for reasonable expenses incurred in forwarding
copies of the proxy material and annual report to the beneficial owners of
shares which such persons hold of record. Solicitation of proxies will be
principally by mail. Proxies may also be solicited in person, or by telephone,
telegraph or fax, by officers and regular employees of Plexus.
This proxy material is being mailed to shareholders commencing on or
about January 5, 1996.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock by each Director, and all
Directors and Officers as a group as of December 1, 1995.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME OWNED (1) OUTSTANDING
---- ------------ -----------
<S> <C> <C>
Allan C. Mulder 584,663(2) 8.5%
Peter Strandwitz 264,272 4.0%
Gerald A. Pitner 215,827 3.3%
John L. Nussbaum 109,866 1.7%
Harold R. Miller 106,999 1.6%
Robert A. Cooper 41,500 *
Thomas J. Prosser 31,500 *
Rudolph T. Hoppe 3,366(3) *
All officers and directors
as a group (11 persons) 1,399,460 19.9%
</TABLE>
- ---------------
* Less than 1%
(1) The specified persons have sole voting and sole dispositive powers as
to all such shares. The above amounts include shares subject to
options granted under the Company's 1988 Stock Option Plan and the 1995
Executive Stock Option Plan (together, the "Option Plans") and the 1995
Directors' Stock Option Plan (the "Directors' Option Plan") which are
exercisable within 60 days. These options include those held by
Mr. Strandwitz (75,000), Mr. Nussbaum (39,999), Mr. Pitner (19,999),
Messrs. Miller, Cooper, Prosser and Hoppe (1,500 each), and all
officers and directors as a group (167,370).
(2) Mr. Mulder, 10618 Spicewood Trail, Boynton Beach, Florida, owns 188,624
shares of Company common stock, and 5,000 shares of Company Class A
Preferred Stock which may be converted into 396,039 shares of Company
Common Stock. In accordance with SEC rules, the above number assumes
full conversion; however, no shares of Company Class A Preferred Stock
have yet been converted.
(3) Excludes 950 shares owned by Mr. Hoppe's wife, of which he disclaims
beneficial ownership because he does not share voting or dispositive
power.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission. Officers, directors and greater
than 10% shareholders (collectively "insiders") are required by SEC regulation
to furnish the Company with copies of all Section 16(a) forms they file.
All publicly-held companies are required to disclose the names of any
insiders who fail to make any such filing on a timely basis within the preceding
two years, and the number of delinquent filings and transactions, based solely
on a review of the copies of the Section 16(a) forms furnished to the Company,
or written representations that no such forms were required. On the basis of
filings and written representations received by the Company, the Company
believes that, during fiscal 1995 and the preceding fiscal year, except as
previously disclosed, the Company's insiders have complied with all Section
16(a) filing requirements applicable to them.
-2-
<PAGE> 5
ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the Board of Directors has
determined that there shall be eight directors elected at the annual meeting of
shareholders to serve until their successors are duly elected and qualified.
The persons who are nominated as directors and for whom proxies will be
voted (unless otherwise specified by a shareholder) are named below. If any of
the nominees should decline or be unable to act as a director, which eventuality
is not foreseen, the proxies will be voted with discretionary authority for a
substitute nominee designated by the Board of Directors.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AND AGE AND BUSINESS EXPERIENCE (1) SINCE
------------ --------------------------- -----------------
<S> <C> <C>
Robert A. Cooper, 69 Senior Vice President of Dain Bosworth 1983
(2)(3) Incorporated (brokerage and other financial
services); also, director of Bando McGlocklin
Capital Corporation (registered small business
investment company)
Rudolph T. Hoppe, 69 (2) Retired; previously President and Director of The 1987
Glenora Company (investments); also, director of
St. Francis Capital Corp. (savings bank holding
company)
Allan C. Mulder, 79 Retired 1995
Harold R. Miller, 67 (3) Retired; previously Chairman of the Board of 1980
Marathon Engineers/Architects/Planners, Inc.
(architectural and engineering services)
John L. Nussbaum, 53 President and Director of the Company 1980
Gerald A. Pitner, 54 Executive Vice President and Director of the 1980
Company
Thomas J. Prosser, 59 Vice President-Investment Banking of Robert W. 1987
(2)(3) Baird & Co., Incorporated (brokerage and other
financial services)
Peter Strandwitz, 58 Chairman of the Board, Chief Executive Officer and 1979
Director of the Company
</TABLE>
- ---------------
(1) Unless otherwise noted, all directors have been employed in their
principal occupation listed above for the past five years or more.
(Notes continued on next page)
-3-
<PAGE> 6
(2) Member of the Compensation Committee, which held two meetings during
fiscal 1995. The Compensation Committee considers and makes
recommendations to the Board of Directors with respect to officers'
salaries and bonuses, reviews, approves and administers compensation
plans, and awards stock options.
(3) Member of the Audit Committee, which met twice in fiscal 1995. The
Audit Committee selects outside auditors, monitors their activities
and reviews their final reports.
The Board of Directors held four meetings during fiscal 1995. Each
Director attended at least 75% of the aggregate of the total number of meetings
of the Board and the total number of meetings of all committees of the Board on
which such director served during the year.
Directors' Compensation.
Each director of the Company who is not an officer or employee of the
Company or a subsidiary receives an annual directors' fee of $5,000 and an
additional $500 fee per meeting date on which the director attends a meeting of
the Board of Directors or any of its committees.
In addition, each director who is not an officer or employee of the
Company or a subsidiary is entitled in each fiscal year to receive an option for
1,500 shares of Company Common Stock, at its market value on the date of grant,
under the Company's 1995 Directors' Option Plan. The Directors' Option Plan was
approved by Company shareholders in February 1995. Options thereunder are fully
vested upon grant, may be exercised after a minimum six month holding period,
and must be exercised prior to the earlier of ten years after grant or one year
after the persons cease to be a director. In accordance with the Directors'
Option Plan, each of the then-saving non-employees directors received fiscal
1995 option for 1,500 shares, exercisable at $12.625 per share, on February 15,
1995, and each of the non-employee directors received a fiscal 1996 option for
1,500 shares, exercisable at $16.625 per share, on December 1, 1995.
-4-
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total
compensation of the Company's Chief Executive Officer, and its two other highest
compensated executive officers for fiscal 1995 and the preceding two fiscal
years. No other Company executive officer received a total annual salary and
bonus in excess of $100,000 during the past fiscal year.
<TABLE>
<CAPTION>
Long Term
Annual Compensation (1) Compensation
----------------------- ------------
Awards
------
Fiscal Options/SARs All Other
Year Salary($)(2) Bonus ($) #(3) Compensation ($)(4)
---- ----------- -------- ------- ------------------
<S> <C> <C> <C> <C> <C>
Peter Strandwitz, 1995 $183,350 -0- 17,000 $2,310
Chairman and CEO 1994 $171,679 -0- 15,000 $2,391
1993 $176,908 -0- 15,000 $3,351
John L. Nussbaum, 1995 $145,941 -0- 15,000 $3,225
President 1994 $135,010 -0- 10,000 $3,021
1993 $138,762 -0- 10,000 $1,505
Gerald A. Pitner, 1995 $114,067 -0- 6,000 $2,395
Executive VP 1994 $109,067 -0- 5,000 $2,396
1993 $111,536 -0- 5,000 $2,471
</TABLE>
(1) While the named individuals received perquisites or other personal
benefits in the years shown, in accordance with SEC regulations, the
value of these benefits are not shown since they did not exceed, in
the aggregate, the lesser of $50,000 or 10% of the individual's salary
and bonus in any year.
(2) Fiscal 1994 had one less pay period than fiscal 1993.
(3) Represents number of shares for which options were granted under the
Company's Option Plans. No SARs have been granted.
(4) Reflects the Company's contributions to named executive officers'
accounts in the Savings Plan.
-5-
<PAGE> 8
STOCK OPTIONS
The following table sets forth information with respect to the grant
of stock options in fiscal 1995 to the three executive officers named in the
Summary Compensation Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants(1) Potential
- ------------------------------------------------------------------------------ Realized Value at
Assumed Annual
% of Rates of Stock Price
Total Options/ Exercise Appreciation
Options/ SARs Granted or Base for Option Term (2)
SARs to Employees Price Expiration ---------------------
Name Granted (#) in Fiscal Year ($/sh) Date 5% 10%
- ---- -------------- -------------- -------- ------------- --- ---
<S> <C> <C> <C> <C> <C> <C>
Peter Strandwitz 17,000 7% $13.875 6/30/05 $148,341 $375,924
John Nussbaum 15,000 6% $13.875 6/30/05 $130,889 $331,698
Gerald Pitner 6,000 3% $13.875 6/30/05 $ 52,355 $132,679
- --------------------------
</TABLE>
(1) No SARs were granted; all grants reflect stock options under the
Company's Option Plans.
(2) Assumes stated appreciation from the date of grant.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUE
The following table sets forth information with respect to the three
executive officers named in the Summary Compensation Table concerning the
number and value of options outstanding at September 30, 1995.
<TABLE>
<CAPTION>
Value of
Number of Unexercised In-the-
Unexercised Options/ Money Options/SARs
Shares SARs at FY-End (#)(2) at FY-End ($)(3)
Acquired on Value -------------------- ----------------
Name Exercise (#) Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Peter Strandwitz -0- -0- 75,000 / 32,000 $430,937 / $86,250
John Nussbaum -0- -0- 39,999 / 25,001 $170,203 / $57,505
Gerald Pitner -0- -0- 19,999 / 11,001 $ 85,096 / $28,756
- ----------------
</TABLE>
(1) Represents the difference between the exercise price and the reported
closing price on the date of exercise.
(2) Represents options granted under the Company's Option Plans. No SARs
have been granted.
(3) Represents the difference between the exercise price and the $16.625
reported closing price of the Company's Common Stock on September 30,
1995.
-6-
<PAGE> 9
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors (the
"Committee") sets general compensation policies for the Company. The Committee
makes the primary decisions with respect to compensation of the Chairman/Chief
Executive Officer (the "CEO"), the President and the Executive Vice President
of the Company; compensation decisions as to all other Company officers are
recommended by the CEO and the President, subject to approval by the Committee.
The Company's other compensation programs, such as the Savings Plan and the
Option Plans, are either originated or approved by the Committee; the Committee
grants stock options under the Option Plans.
The Company's policy, which is adhered to by the Committee, is to
fairly compensate individuals for their contributions to the Company, but also
to provide value to the Company's shareholders and to consider the ability of
the Company to fund any compensation decisions, plans or programs. The
Committee believes that fair compensation packages are necessary to attract and
retain qualified executive officers. To be effective in attracting and
retaining competent individuals, compensation packages must balance short-term
and long-term considerations, as well as provide incentives to individuals
based upon the performance of the Company. For the past several fiscal years,
the Committee has evaluated compensation of Company executive officers in the
context of continuing growth, but also the continuing need for capital to
support that growth and the occasional effect on earnings of that growth. The
Committee has not retained outside consultants, and has not relied in a
significant fashion upon outside market surveys.
In determining the compensation of the CEO, the Committee reviews
numerous factors, although most of these factors are not subject to
quantification or specific weight. The primary factors reviewed (in no
particular order) are the importance of the individual's contribution to the
Company's strategic planning and long-term success; the importance of the
individual to key customer relationships; special projects and tasks undertaken
by the individual during the preceding year; and performance of the Company's
sales and earnings. Salaries are generally determined in July or August of
each year, and become effective immediately.
In establishing the CEO's fiscal 1995 compensation, the Committee took
note of his role as the Company's chief strategic planner and of his role as
the primary customer contact for several important Company customers. Also,
the Committee noted the substantial improvement in the Company's results in
fiscal 1994. During fiscal 1994, sales increased substantially. Through June
30, 1994 (the most recent information the Committee had at its disposal), net
sales increased 46% from the previous fiscal year period. Net income decreased
slightly for that period, although the Committee expected an increase in net
earnings for the year as a whole (which, in fact, occurred). Based upon these
factors, the Committee determined in August, 1994 that the CEO's (and the two
other named officers') compensation level should temporarily remain the same,
but be reviewed after full fiscal 1994 results were known. Based upon the
above factors, that the Company's financial situation was improving, and that
while the Committee did not feel enough improvement had not yet occurred to
then warrant an increase in the CEO's (and the other named executed officers')
salary, the Committee determined that an increase was then warranted for most
other executive officers.
The Committee again reviewed the CEO's (and the other named executive
officers') compensation in December 1994, after full fiscal 1994 financial and
performance information became available. That information indicated, among
other things, a 52% increase in sales and 19% increase in net earnings for all
of fiscal 1994 as compared to fiscal 1993. The Committee determined that a
4.6% increase in CEO compensation was appropriate, in view of the results above
and the deferral of the increase.
The Company had historically not paid bonuses to employees. In view
of the Committee's expectation of the Company's improved financial position and
results through August 1994, the Committee determined it would be in the
Company's best interests to provide, beginning in fiscal 1995, its executive
officers with a tangible performance-based incentive beyond that contained in
the Option Plans. Such a bonus arrangement would
-7-
<PAGE> 10
further motivate officers to continue the improved performance, and provide
specific non-market criteria to evaluate performance. The Committee therefore
recommended, and the Board of Directors subsequently approved, the Plexus Corp.
1995 Senior Executive Incentive Compensation Plan (the "Bonus Plan"), which
became effective in fiscal 1995. Under the Bonus Plan, senior executive
officers are eligible to receive bonuses ranging from 2.5% up to 100% of their
annual salary provided the Company achieves certain performance goals
established in advance by the Committee with respect to after-tax return on
average equity and after-tax earnings per share. For fiscal 1995, for the
minimum bonus to be earned, the Company was required to increase after-tax
earnings per share to $1.41 per share (a 207% increase over fiscal 1994) or
after-tax return on average equity to 25.50% (a 150% increase over fiscal
1994). The Committee believed that both minimum targets were very aggressive.
Because the Company did not meet these targets, no bonus was paid. However,
the Committee took note of the fiscal 1995 improvements in determining
increased salaries for fiscal 1996, and the Committee retained the same targets
for fiscal 1996.
To continue to make available stock option incentives, the Committee
recommended, and the Board of Directors adopted (subject to shareholder
approval), the 1995 Executive Stock Option Plan. Shareholders approved the
plan in February 1995. The Committee believes that the option plans provide
participants with a long-term incentive to increase the overall value of the
Company by providing them with a stake in the increasing value of the Company's
Common Stock on a long-term basis. Consistent with this approach, the
Committee granted to the CEO options for 17,000 shares during fiscal 1995,
which was an increase of 2,000 shares (or 13%) over the options awarded to the
CEO in fiscal 1994, and reflects the Committee's determination to increase the
stock option portion of the CEO's compensation somewhat more than the cash
portion.
The Committee also believes that the Savings Plan provides an
additional stock-based incentive. Although employees (including the CEO) may
choose from a variety of investment funds for their contributions under the
Savings Plan, Company matching contributions on behalf of participants are made
to the Company Stock Fund of the Savings Plan, having the effect of increasing
the participants' stock ownership.
The factors used to determine other executive officers' compensation
are essentially the same as those used for the CEO. As with the CEO, Messrs.
Nussbaum and Pitner received increases in December 1994; other executive
officers received increases in August 1994. Increases in executive officers'
salaries (other than the CEO, but including three persons who ceased being
executive officers during fiscal 1995) for fiscal 1995 varied from 2% to 5%.
The increases varied depending upon the Committee's view of the adequacy of the
particular officers' compensation compared to that officer's performance and
duties (especially when those duties significantly changed since the last
salary increase). The Committee also approved stock option awards for most of
the other executive officers of the Company, which awards varied from 15,000
shares to 4,000 shares. The number of shares subject to options granted to
executive officers was generally the same or greater than the number granted in
the preceding fiscal year, with appropriate changes to reflect the Committee's
perception of individual circumstances.
The Committee believes that it is highly unlikely that the
compensation of any executive officer, including the CEO, will exceed $1
million in any fiscal year. Therefore, except with respect to the Company's
option plans, it has not taken any action with respect to the provisions of
Section 162 of the Internal Revenue Code which limits the deductibility of
compensation to certain executive officers of over $1 million in any fiscal
year. Because of the shareholder approval of the option plans, the Committee
believes that any compensation income under them would not be subject to the
Internal Revenue Code's deduction limitation.
Members of the Compensation Committee:
Rudolph T. Hoppe, Chair
Robert A. Cooper
Thomas J. Prosser
-8-
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No Company insiders are members of the Committee. All of the
directors who are members of the Committee are non-employees of the Company.
CERTAIN TRANSACTIONS
In March 1991, the Company entered into a research and licensing
("R&L") agreement with Smart House, L.P. ("SHLP"), an unaffiliated partnership
affiliated with the National Home Builders Association, formed to promote the
development of a new home energy and communications system that would enable
home automation through incorporating a new type of electrical wiring and gas
piping which works together with electronic components to allow electrical,
gas, telephone, coaxial and communication subsystems and home appliances to be
functionally interactive. The Company's original R&L Agreement was to develop
a control center, the primary user interface for the Smart House home
automation system. Subsequently, the Company entered into some more R&L
Agreements with SHLP for other Smart House-related products.
To finance certain expenditures relating to the development and design
of these Smart House-related products, the Company formed Plexus Home
Automation Limited Partnership ("PHALP") of which a Company subsidiary is
general partner. Through the general partner, and subsequent purchase of 12 of
50 outstanding limited partnership interests, Plexus has contributed
approximately 42% of the capital of the Partnership. In addition, 19 of the 50
limited partnership interests in PHALP are owned by directors of the Company,
including 4 interests owned by Committee members. Limited partners owning the
remaining 19 of PHALP's 50 limited partnership interests are otherwise
unaffiliated with the Company.
During fiscal 1995, the Partnership made purchases of approximately
$41,000 from the Company, at the Company's normal billing rates.
-9-
<PAGE> 12
PERFORMANCE GRAPH
The following graph compares the cumulative total return on Company
Common Stock with the NASDAQ Stock Market Index for U.S. Companies and the
NASDAQ Stock Market Index for Electronics Components Companies (both of which
include the Company). The values on the graph show the relative performance of
an investment of $100 made on September 30, 1990, in Company Common Stock and
in each of the indices.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
AMONG PLEXUS CORP., NASDAQ US STOCK INDEX, & NASDAQ
ELECTRONICS COMPONENTS INDEX
Fiscal Year Ending September 30
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Plexus 100 191 560 407 283 443
NASDAQ 100 157 176 231 233 321
NASDAQ/Electronics 100 141 193 372 362 725
</TABLE>
AUDITORS
The Board of Directors intends to reappoint the firm of Coopers &
Lybrand L.L.P. as independent auditors to audit the financial statements of
Plexus for fiscal 1996. Representatives of Coopers & Lybrand L.L.P. are
expected to be present at the annual meeting of shareholders to respond to
appropriate questions and make a statement if they desire to do so.
-10-
<PAGE> 13
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than
September 6, 1996 in order to be considered for inclusion in next year's annual
meeting proxy statement.
By Order of the Board of Directors
Joseph D. Kaufman
Secretary
Neenah, Wisconsin
January 5, 1996
A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1995, WILL BE PROVIDED WITHOUT CHARGE TO EACH RECORD OR
BENEFICIAL OWNER OF SHARES OF THE COMPANY'S COMMON STOCK AS OF DECEMBER 15,
1995, ON THE WRITTEN REQUEST OF SUCH PERSON DIRECTED TO: JOSEPH D. KAUFMAN,
SECRETARY, PLEXUS CORP., 55 JEWELERS PARK DRIVE, P.O. BOX 156, NEENAH,
WISCONSIN 54957-0156.
-11-
<PAGE> 14
PLEXUS CORP.
PROXY FOR 1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Peter Strandwitz, John L. Nussbaum, Gerald A.
Pitner, and Joseph D. Kaufman, and any of them, proxies, with full power of
substitution, to vote all shares of stock which the undersigned is entitled to
vote at the annual meeting of shareholders of Plexus Corp. to be held at the
Valley Inn, located at 123 East Wisconsin Avenue, Neenah, Wisconsin, on
Wednesday, February 14, 1996 at 10:00 a.m. Central Time, or at any adjournment
thereof, as follows, hereby revoking any proxy previously given:
(1)ELECTION OF DIRECTORS:
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as specified to the contrary below) to vote for all nominees listed
below
Robert A. Cooper, Rudolph T. Hoppe, Harold R. Miller, Allan C. Mulder,
John L. Nussbaum, Gerald A. Pitner, Thomas J. Prosser, Peter Strandwitz
(INSTRUCTION: To withhold authority to vote for any individual nominee, please
print that nominee's name on the following line.)
_________________________________________
(2)In their discretion on such other matters as may properly come before the
meeting or any adjournment thereof; all as set out in the Notice and Proxy
Statement relating to the meeting, receipt of which is hereby acknowledged.
(Continued and to be signed on reverse side)
_________________________________________________________________
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" EACH OF THE DIRECTORS LISTED IN PROPOSAL (1).
Dated______________________________, 1996
________________________________________
(Please sign exactly as name appears at left.)
___________________________________________
(If stock is owned by more than one person, all
owners should sign. Persons signing as
executors, administrators, trustees or in
similar capacities should so indicate.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<PAGE> 1
1995
annual
report
<PAGE> 2
55 Jewelers Park Drive
Post Office Box 156
Neenah, WI 54957-0156
Product developement,
manufacturing and
testing solutions for the
electronics industry.
<PAGE> 3
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., which is comprised of the
engineering staff and product development facilities. The other is Electronic
Assembly Corporation, which is comprised of the manufacturing staff and
facilities. Plexus also has a 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> 4
DIRECTORS AND OFFICERS
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> 5
HIGHLIGHTS OF A VERY GOOD YEAR
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 $ .89 $ .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)
<TABLE>
<CAPTION>
Net
Year Sales
<S> <C>
91 120
92 160
93 163
94 240
95 285
</TABLE>
NET INCOME
($ In Millions)
<TABLE>
<CAPTION>
Net
Year Income
<S> <C>
91 3.6
92 5.1
93 2.7
94 3.2
95 6.5
</TABLE>
NET INCOME PER SHARE
(In Dollars)
<TABLE>
<CAPTION>
Net
Income
Per
Year Share
<S> <C>
91 .59
92 .80
93 .40
94 .45
95 .90
</TABLE>
PLEXUS CORP. 1 1995 ANNUAL REPORT
<PAGE> 6
TO OUR SHAREHOLDERS
LETTER TO SHAREHOLDERS
TO OUR SHAREHOLDERS
Sales increased 17% in fiscal 1995 and net income increased 107%. This is a
reversal from 1994 in which sales increased much more than earnings (52% versus
19%). I believe that this reversal demonstrates that the Company is very
serious about improving its operating efficiencies, attaining better margins,
and fully controlling its inventory.
Both the sales and earnings were records for the Company.
As everyone knows, the world of electronics is expanding at a dazzling pace.
Technologies are changing and improving constantly. New alliances are announced
daily. As a result of this, a worldwide shortage of electronic components
exists that is expected to continue for several years. Semiconductor
manufacturers in particular are allocating product to a limited number of
customers.
[PHOTO]
PETER STRANDWITZ, CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
In order to cope in this dynamic environment, Plexus formed and staffed a
corporate procurement organization in 1995 whose primary purpose is to create
very strong supplier alliances to assure a flow of component parts at the best
prices.
In 1995 the Company also strengthened its banking relationships with the
addition of two more major banks to its banking consortium. Strong financial
relationships are essential in order for Plexus to grow substantially in 1996
and beyond.
The Company is also actively investigating other relationships of a strategic
nature.
Plexus' product development, manufacturing and test technologies remain
outstanding and are continuing to attract a great deal of interest from major
corporations.
Although we do not expect much, if any, improvement in the first quarter of
fiscal 1996 because of product start-ups, we believe that 1996 will develop
into the most exciting and rewarding year in the Company's history, with
several announcements of significance.
Very truly yours,
PETER STRANDWITZ
Chairman and Chief Executive Officer
Plexus Corp.
Plexus Corp. 2 1995 Annual Report
<PAGE> 7
DESIGN
PRODUCT DEVELOPMENT
Global competition has made the fast track even faster. Every industry - from
cars to computers - is feeling the pressure to speed up product development.
Customer needs are quickly changing, product life cycles are getting shorter,
and "time-to-market" has become as much a competitive requirement as quality
and price. Companies that cannot adjust to the accelerated pace soon fall
behind or drop out of the race. Success in product development is a critical
issue for technology-driven companies. Success in today's highly competitive
global environment most often depends on being the first to develop and
introduce new products. Plexus provides all of these services in a
cost-effective manner.
WE PROVIDE A DYNAMIC ENVIRONMENT OFFERING "ONE-STOP SHOPPING", FROM PRODUCT
CONCEPT TO MANUFACTURING...
A PRODUCT DEVELOPMENT PARTNER
Technology Group, Inc. is a full-service product development partner. We
provide a dynamic environment offering one-stop shopping, from product concept
to manufacturing, or the ability to handle any segment of that process. At
Technology Group, projects are headed by engineers with a business sense that
supplements technical expertise. Each customer is given high priority. It is
clear to us that we have embarked on a mission important not only to the client
but also to ourselves.
New products require that we have several diverse in-house engineering
capabilities, including software design, mechanical design, and digital
design. The capital expenditures and the associated fixed costs for such an
undertaking are often beyond the means of even well-established and profitable
businesses.
PLEXUS CORP. HEADQUARTERS IN NEENAH, WIS.
Plexus Corp. 4 1995 Annual Report
<PAGE> 8
DEVELOP
PRODUCT DEVELOPMENT
Most companies admit to having a difficult time controlling development
projects. Because of the relatively small economies of scale, high risks, and
expensive expertise needed at each level, it can be difficult for a single
company to support the full chain of activities in-house.
Technology Group provides improved time-to-market, improved competitiveness and
reduced capital investment, not to mention, reduced costs, improved management
and reduced risks. Many new technologies dictate outsourcing new product
development.
OUR STAFF BRINGS A WIDE VARIETY OF EXPERIENCE AND EXPERTISE TO THE TABLE.
TOP LEVEL PERSONNEL
High-tech product development requires many different degrees of expertise.
Hiring personnel with a high level of sophistication has been one of Technology
Group's most important goals. Producing leading edge products requires the
joint and lengthy effort of a team of experts. Plexus employs a range of
specialists with different skills on whom they call as needed during different
phases of a project. The staff includes project managers, industrial designers,
electronics (hardware) engineers, mechanical engineers, software engineers,
manufacturing engineers, assembly/quality assurance personnel, and so forth.
We have a broad range of equipment and expertise. Since we may not know what
the next project might be, we have to be more up-to-date in the knowledge of
current technologies. Those who rely on us often dominate fast-changing
markets.
HIRING PERSONNEL WITH A HIGH LEVEL OF SOPHISTICATION HAS BEEN ONE OF TECHNOLOGY
GROUP'S MOST IMPORTANT GOALS.
Plexus Corp. 5 1995 Annual Report
<PAGE> 9
QUALITY
MANUFACTURING & TESTING SERVICES
Plexus is committed to making the investments required to maintain and
strengthen our position as a world class provider of design, test and
manufacturing services. Our success, and the success of our customers, depends
upon our ability to provide the highest levels of technology to our customers.
We continue to be committed to providing these services at costs that are
competitive worldwide. Our efforts are focused on maintaining our technological
edge while keeping costs affordable.
PLEXUS MANUFACTURING SITE, NEENAH, WIS.
Our structure is constantly streamlined to assure that it is extremely cost
effective. Since the beginning, we have seen the value in leveraging the
information available from our key suppliers, and have used these partners as a
means to bring on new technology. We have formed partnerships with leading
providers of assembly equipment, test equipment and design automation tools.
Through these partnerships, we offer world-class capabilities.
TESTING...A KEY CONSIDERATION THROUGHOUT THE DEVELOPMENT PROCESS
OUR EFFORTS ARE FOCUSED ON MAINTAINING OUR TECHNOLOGICAL EDGE WHILE KEEPING
COSTS AFFORDABLE.
Plexus has continued to maintain its leadership position in the area of Test
Technology with many additions to our suite of tools and processes. During 1995
Plexus added new state-of-the-art X-Ray Laminography capabilities which allow
for inspection and testing of advanced packaging and manufacturing
technologies.
Plexus has also upgraded its Combinational Test capabilities with the addition
of high node count test systems. These
BY STRENGTHENING PARTNERSHIPS WITH KEY SUPPLIERS, PLEXUS IS ABLE TO OFFER THE
MOST CURRENT TECHNOLOGY AT A VERY COMPETITIVE COST.
Plexus Corp. 6 1995 Annual Report
<PAGE> 10
A LEADER
MANUFACTURING & TESTING SERVICES
systems will allow Plexus to conduct Combinational test on assemblies with
greater than 5,000 nodes.
The addition of these tools provides Plexus with the test and inspection
capabilities required by our customers with complex assemblies.
The information we collect on each test is available to the customer in a
variety of formats. Not only are we able to offer high quality test solutions,
we can also provide the data necessary to drive continuous quality improvement.
A DEDICATION TO LONG-LASTING CUSTOMER RELATIONSHIPS
There are several reasons for choosing a product development and manufacturing
partner. Most companies realize valuable market share can be gained by reducing
time-to-market. Some feel they have better ways to utilize their capital than
adding buildings, equipment and staff. Still others, pressured by downsizing,
have engineering and manufacturing departments that are over-burdened or have
not been able to keep pace with technology.
CUSTOMERS CAN DEPEND ON PLEXUS TO BE A RELIABLE AND RESOURCEFUL SINGLE-SOURCE
PARTNER.
For many, creating a "strategic partnership" is the first natural conclusion to
their strategic thinking about outsourcing. In forming a strategic partnership,
a company seeks to outsource a critical activity to a non-competing company
that can perform it more effectively, yet still maintain control of the crucial
relationships with its customers.
PLEXUS MAINTAINS ITS LEADERSHIP POSITION IN TESTING COMPLEX ASSEMBLIES BY
CONTINUALLY INVESTING IN THE LATEST TEST TECHNOLOGY.
Whatever the reason, customers can depend on Plexus to be a reliable and
resourceful single source partner. We know that trust and confidentiality are
essential elements in any business relationship.
Plexus Corp. 7 1995 Annual Report
<PAGE> 11
COMMITTED
STRATEGIC PARTNERSHIPS
The most successful alternative to in-house product development is forming
strategic partnerships with a company that can manage engineering, design, and
even manufacturing projects on a turnkey basis.
SINCE PLEXUS HAS NO PROPRIETARY PRODUCTS, CUSTOMERS RECEIVE OUR TOTAL
ATTENTION. OUR SOLE PRODUCT IS OUR SERVICES.
We are committed to providing the support necessary to assure the product
development, manufacturing and testing of our customers' designs. This helps
our partners gain market share in some of the world's most competitive
industries.
Since Plexus has no proprietary products, customers receive our total
attention. Our sole product is our services.
PLEXUS OFFERS YEARS OF PRODUCT DEVELOPMENT AND MANUFACTURING EXPERIENCE
In order to stay on the leading edge of the industry, Plexus has leading
experts in the industry on staff to anticipate future demands for new
engineering, test and manufacturing technologies, so these technologies are
available when needed by our customers. This staff is available to our customer
base to consult on technology issues, and to help customers with the
outsourcing transition. At Plexus, we understand the pitfalls associated with
bringing a new product to market. Our design and manufacturing staffs have the
knowledge and experience to help minimize the risks in a cost-effective manner.
As a turnkey product development and/or manufacturing partner, Plexus will do
whatever it takes to meet customer requirements.
It is evident why forward-thinking companies have chosen Plexus as their
product development and manufacturing partner. At Plexus, we provide solutions
today for tomorrow's complex electronic challenges.
OUR ENGINEERING STAFF IS EQUIPPED WITH THE LATEST SOFTWARE AND COMPUTER
TECHNOLOGY TO ENSURE A TIMELY, FLEXIBLE DEVELOPMENT PROCESS.
Plexus Corp. 8 1995 Annual Report
<PAGE> 12
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 ("parts 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 cost 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 parts 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.
Plexus Corp. 9 1995 Annual Report
<PAGE> 13
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.
Plexus Corp. 10 1995 Annual Report
<PAGE> 14
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 259,438 266,313 146,523
-------- -------- --------
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.
Plexus Corp. 11 1995 Annual Report
<PAGE> 15
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 $ 115,008 $ 122,021
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Plexus Corp. 12 1995 Annual Report
<PAGE> 16
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.
Plexus Corp. 13 1995 Annual Report
<PAGE> 17
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.
Plexus Corp 14 995 Annual Report
<PAGE> 18
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:
<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>
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>
Plexus Corp. 15 1995 Annual Report
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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>
Plexus Corp. 16 1995 Annual Report
<PAGE> 20
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
Plexus Corp. 17 1995 Annual Report
<PAGE> 21
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 non-qualified 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 non-qualified 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.
Plexus Corp. 18 1995 Annual Report
<PAGE> 22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
Plexus Corp. 19 1995 Annual Report
<PAGE> 23
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 8 1/4 10 3/4 First Quarter 14 1/4 18
Second Quarter 8 1/2 12 7/8 Second Quarter 15 1/4 17 1/2
Third Quarter 11 1/4 14 3/4 Third Quarter 11 3/4 16 3/4
Fourth Quarter 13 1/2 18 7/8 Fourth Quarter 10 1/4 12 1/2
Year 8 1/4 18 7/8 Year 10 1/4 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 1995 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
Plexus Corp. 20 1995 Annual Report
