Plexus Corp. F3Q08 (Qtr End 06/28/08) Earnings Call Transcript

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2008-07-25 11:08:11.0

Tags: Plexus

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Brian White with Collins Stewart.

Brian White - Collins Stewart

When we look at the medical market, it showed very nice upside. I think at the analyst day that the comments weren’t overly bullish there, so what surprised you and are some of the FDA issues and reimbursement concerns behind the medical area?

Dean Foate

First let me address the second part of your question, which is related to the FDA and the reimbursements. The FDA issue that was plaguing one of our key customers in now behind us so we are seeing production back to kind of a normal pattern of production. It’s hard to say whether or not the demand is going to return to what it would have been had they never had that FDA-related issue.

On the reimbursement side of things, there hasn’t, to my knowledge, been any change and that still is going to be a challenge for manufacturers of imaging-related products.

What happened in the quarter with key customers I think it’s just a situation where some of our customers were maybe a little too conservative in their forecasts that they gave us. They had a little more success in the quarter than originally anticipated and some improved demand. In looking forward, we expect it to pull back a little bit. Not to the level that we saw in Q2, if my memory serves me correct, but we will see maybe perhaps a 4% to 5% pull back and then we’ll be back to, hopefully, sequential growth here as we come into 2009.

Brian White - Collins Stewart

And just on the defense area, you said $3.0 million of the episodic program in the fourth quarter, $25.0 potentially in 2009, so how is that going to play out in 2009? Is it front-end loaded, back-end loaded, linear?

Dean Foate

At this point we’re still trying to nail down the whole production plan for the year but it’s safe to say that it’s going to be more front-end loaded and we’ll see probably the bulk of that in the first couple quarters of the year.

Operator

Your next question comes from Shawn Harrison with Longbow Research.

Shawn Harrison - Longbow Research

Just maybe a two-part question, the program wins, if you can kind of break that out by end market.

Dean Foate

It was pretty strong in our Wireline sector, we had 4 of the wins in that sector. 3 of the wins were in our Medical sector, and then the 4 and 3, respectively, Industrial/Commercial and Defense/Security/Aerospace. So a pretty balanced result, at least in quantity.

 

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