Good morning ladies and gentlemen and welcome to the Plexus Corporation conference call regarding its first fiscal quarter 2008 earnings announcement. (Operator instructions.) I would now like to call the over to Mr. Angelo Ninivaggi, Plexus Vice President, General Counsel, and Secretary, Angelo. Angelo Ninivaggi Hello and thank you for joining us this morning. Before we begin I would like to establish that statements made during this conference call that are not historical in nature are forward looking statements. Forward looking statements are not guarantees since there are inherent difficulties in predicting future results and actual results could differ materially form those expressed or implied in the forward looking statements. For a list of major factors that could cause actual results to differ materially from those projected please refer to the company’s periodic SEC filings. The company provides non-GAAP supplemental information. These non-GAAP income statements exclude transactions that are not expected to have an effect on future operations. Such transactions include restructuring costs, as well as the establishment or reduction of the valuation allowance for deferred tax assets. These non-GAAP financial data are provided to facilitate meaningful period to period comparisons of underlying operational performance by eliminating infrequent or unusual charges. Similar non-GAAP financial measure inkling ROIC are used for internal management assessments because such measure provide additional insight into ongoing financial performance. Some comments concerning earnings comparisons on this call may refer to non-GAAP earnings. For a full reconciliation of non-GAAP earnings to GAAP results please refer to yesterday’s press release and our periodic SEC filings. Joining me this morning is Dean Foate, President and CEO, and Ginger Jones, Vice President and CFO. Today’s call will cover discussion of Q1 results, guidance for Q2 ‘08, and some expectations for the full year. Let me now turn the call over to Dean Foate, Dean.

Thank you Angelo, and good morning to everyone. Last night we reported results for our first fiscal quarter of 2008. Revenues were at $458 million, with GAAP earnings per share of $0.58. Revenue was at the higher end of our guidance range, while earnings came in at a lower end of guidance for the quarter. The first quarter overall revenue performance was largely as expected, although we did achieve stronger performance in the US than earlier forecasts indicated. Currently, we expect the improved outlook in the US to continue to the fiscal year, necessitating the overall increase to our tax rate. Ginger will provide some further details on the tax rate, and other items following my comments. Let me continue by providing a few details about our revenues by market sector in the first quarter, and our outlook by sector in the second quarter. Our Wireline/Networking Sector experienced a modest 2% sequential decline in our first quarter, coming in slightly below our expectations for modest growth. The miss was largely attributable to a single newer account that experienced unanticipated end market softness. We currently expect low double digit growth on our Wireline Sector in the second quarter, driven largely by the ramp of recent program wins. Our Wireless Infrastructure Sector was up 17% sequentially during the quarter, performing better than expected as a couple of leading accounts in this sector beat earlier forecasts. Our second quarter outlook currently indicates that revenues in this sector will be flat. Customer accounts in our Medical Sector performed largely as expected in Q1, driving an 8% sequential improvement in revenues. Looking ahead to Q2, we expect flat to modest sequential growth in new program ramps, offset the seasonal sequential decline of a leading medical account. Our Industrial/Commercial Sector was up 8% sequentially in Q1,…

Thank you Dean. Good morning everyone. I will begin with a discussion of the first quarter results. Our first quarter guidance was for EPS of $0.58 to $0.63, and we came in at $0.58. The change in our tax rate estimate for 2008 was a major factor that led to this variation from the midpoint of our guidance. Our anticipated income in the United States for ‘08 is now higher than when we established our Q1 guidance. This shift is a result of increased revenue forecast for the remaining quarters of fiscal 2008, from existing and new customers for programs produced in the United States. The quarterly tax rate is based on our estimated pre-tax earnings by taxing jurisdiction for the full year, so this change in forecasted earnings impacts our tax rate for the first quarter. As a result, EPS was $0.02 lower than anticipated. In addition, we estimated our stock based compensation expense to be $0.03 per share when we created our Q1 guidance. Actual stock based compensation was $0.04 per share for the quarter. Both factors, the tax rate and the stock based compensation lowered EPS by $0.03 compared to our original guidance. Gross margin was 12.1% in the first quarter, consistent with our Q1 expectations. This is a decrease from the 12.6% recognized in the fourth quarter of 07, the result of the following. First, our Engineering services group had a good first quarter in 2008, but was down from the very strong results in the fourth quarter of 2007. Second, included in cost to goods sold in the first quarter are additional compensation costs, including accruals for the 2008 variable incentive plan, stock based compensation expense, and annual compensation increases. These negative pressures were offset by the improved customer mix in the first quarter, including…

Thank you, Ginger. As we open the call for questions we ask that you please limit yourself to one question and one follow up. (Inaudible) we will now take some questions.

(Operator instructions.) Your first question is coming from William Stein of Credit Suisse William Stein – Credit Suisse: Thanks guys, good morning. I was just wondering if you could comment on a couple of specific customer issues. First, I think we saw a sequential decline in the Juniper sales, I’m wondering if, they’ve been somewhat vocal about shifting their supply chain strategy a bit. I’m wondering if this is normal seasonality or of there’s a share loss there, is that something we should expect to continue? And the other is an update on GE, it’s a customer we haven’t heard you guys talk about in a while, and I’m wondering if we can get an update there. Thank you.

Certainly, I’ll first address Juniper, and I want to be careful, I don’t want to imply any guidance for Juniper, because as you know, they have a couple of different EMS providers that provide services to them. But related to our revenues for Juniper, I would say that the quarter-to-quarter sequential movement in revenues for Juniper from Q4 to Q1 is not a result of any share shift, it’s all a result of just the timing of quarters and the specific demand from Juniper during the quarter. And there’s nothing to be concerned about there. Our relationship continues to be quite positive, and we continue to gain additional new program wins with Juniper networks. GE, of course, GE is made up of several components, including of course, the largest is GE Healthcare, but we also are beginning to develop a significant position with GE Industrial Systems as well as some other divisions of GE. I would say that GE continues to remain a very significant customer for us; it has been displaced as our second largest customer by the large defense program. When that program comes to its end, if it ever does, as episodic as it is, GE will be back to being our number two largest customer, by overall revenues. So we don’t, there’s nothing, I think, underlying in the GE message, other than probably the rest of the business is probably growing a little bit faster than revenues with GE.

Thanks Dean. I just have one follow-up if I could. I’m wondering if you can talk a little bit about the visibility that you have with customers, I mean, you provided solid guidance. I’m wondering if you can talk about, when you give that guidance and you look at backlog, how much visibility do you have today? You know, how far in the future does true backlog go, relative to just forecast from customers, for which they have no liability.

That’s a great question. I mean, in reality, other than what the defense program, where we get hard-fixed purchase orders for specific quantities, in general we say that we don’t have backlog. And in fact, we really have is an agreement on business terms, and beyond that, we get a forecast from our customers, most of them for planning purposes, and we utilize that forecast, of course, to plan materials, supply and capacity, etc. And we essentially deliver increasingly to customers’ demand signals. So it’s really moved to more of a pull-based environment, and we really have very little forecast. Or, excuse me, backlog. In reality, there is a bit of, as part of the agreements with many customers, a bit of a fixed window in terms of how much they can vary a forecast within a specific period of time. But overall, I think the model of the business is that as long as we are managing materials and capacity to the customer’s forecast, the customers have the liability for the materials and for the work in process and final assemblies, if in fact we are staying within the agreement and within the windows associated with the overall forecast business plan that we put together with them when we strike an agreement. So, beyond that, longer term visibility, what we strive to do, and I think it’s one of the benefits of the market sector approach, is we try to, we roll our forecast in great detail with our customers every month, and we try to extend that forecast out to a rolling six quarters. And that’s the way we try to plan our business, and of course, beyond a couple of quarters, it gets increasingly subjective, based on what the customers are telling us, but also, what the market analysts are telling us about the customer’s position in the market, so we try to triangulate a number of different ways to try to plan where we believe the products that we manufacture are going to go. So I’d say we have decent visibility at this point, and of course, there seems to be a significant disconnect in terms of forecasted demand from our customers versus what we’re seeing in equities, in Wall Street.

Yup, that’s helpful. So when I was selling components, I think that window was on the order of two weeks. Is that the hard window for where customers are essentially completely liable for orders? Is that still, think about that as two weeks of kind of more solid backlog, and then the liability rolls down from there?

Yeah, but it varies greatly, customer to customer, based on the nature and complexity of the program and the number of assemblies that we have. William Stein – Credit Suisse: Okay Dean, thank you very much.

You’re welcome.

Thank you. Your next question is coming from Alex Blanton of Ingalls & Snyder. Alex Blanton – Ingalls & Snyder: Well, I had a very similar question, so just let me take up the subject that you were talking about before. When you’re looking at business for the next few months, can you separate out what’s coming from new programs and what is basically coming from existing programs, and tell us what’s the demand picture for the existing programs? I’m trying to get a sense of, we know the overall market is growing, because of increased outsourcing, but I’m trying to get a sense of what your customers are indicating about the end market, because of course, as you mentioned, everybody on Wall Street is now, or not everybody, but most people are starting to price in a recession. We’re trying to get a sense of whether, how realistic that is, and are customers actually acting on such a belief by reducing their order rates?

That’s a great question, and let me just first give you a kind of a comparison to what we saw last year this quarter. When we came into the January conference call for our first quarter results last year, we described a very significant pullback in forecasted and market demand, across our customer base, almost regardless of sector. Alex Blanton – Ingalls & Snyder: This was when?

This was last year, this quarter. Alex Blanton – Ingalls & Snyder: At this time?

Yes. Alex Blanton – Ingalls & Snyder: Okay.

So you’ll see, if you look at our last year’s results, you’ll see a sequential decline from Q1 to Q2 that was fairly dramatic. We have not seen a similar pullback in forecasts from our customers at this point this year, and so it’s quite perplexing. As you point out, one of your questions was how much are we relying on current programs and market demand from existing programs, well, the further we get into the fiscal year, of course, the more we’re relying on programs already won, programs already transitioned to manufacturing, in order to hit our numbers for the full year. And, at this point, things have tilted significantly toward programs already won, already in manufacturing, and the end market demand, holding up associated with those programs, in order for Plexus to come into the overall 15-18% range that we have suggested with our target for the year. It becomes very difficult, especially as you get into the second half of the year; to win new programs and have them impact the fiscal year in which you won them. They really, it takes… Alex Blanton – Ingalls & Snyder: Yes. Okay, so what, by the end of the year, the new programs are actually by then existing programs is what you’re saying. Well, that’s very interesting, because - is there any seasonality in your business? Any purpose at looking at sell-through in the December quarter?

The only seasonality was what I referred to when I was talking about our medical sector performance. We typically see very strong performance from GE Healthcare in the first quarter of our fiscal year, the December quarter, and as a consequence of that, we see a pullback of their overall revenues in the second quarter, and then we see growth beyond that. So that’s the only real seasonality I think of significance among our customer makeup and sectors that we participate in. Alex Blanton – Ingalls & Snyder: So you haven’t seen an inventory buildup that could affect you?

Not at this point. Alex Blanton – Ingalls & Snyder:

Yup.

Thank you. Your next question is coming from Yuri Krapivin of Lehman Brothers. Yuri Krapivin – Lehman Brothers: Good morning everyone.

Good morning. Yuri Krapivin – Lehman Brothers: A question regarding potential follow-on order, for this large military program, I know that you cannot really comment on the size of that, yet another follow-on order, but maybe you can give us your best estimate, should that new follow-on order materialize, do you think that it will be similar in size to the most recent one that you received?

Well, you know, we had quite a debate about whether to even talk about the possibility that there was a follow-on order, just because it’s so uncertain, but I also recognize that some of the analysts do a pretty good job of ferreting out this sort of information, and it was out in the public domain that there is this potential, so we felt it was appropriate to mention it. But at this point, there is a great deal of uncertainty, I would say even more uncertainty surrounding the potential in the size than there was on previous orders, and so, I think at this point, the probabilities are so uncertain about when and how big that we really feel the best thing to do is just to continue to drive the business and act as if it’s not going to happen. And as I said in the script there, that even if it did, we have to actually have a hard order in hand now, almost, to affect revenues in fiscal 2008. So we’re really running out of time here for it to really have any impact on the current fiscal year. And my gut feel is I’m not betting on that it occurs, at this point. Yuri Krapivin – Lehman Brothers: Okay, great. And then, with respect to potential acquisitions, do you continue to evaluate potential acquisition targets in Europe, and do you think that you can actually announce some kind of a transaction in calendar ’’08 in Europe?

Well, whether or not we’re going to announce anything or not, there’s not enough certainty at this point. What we are in is in this surveying of the landscape and collecting, developing our list of opportunities. And that’s really the stage that we’re in, it’s an active project, we have a team of folks working on it, and as anybody that’s done these sort of, these kinds of opportunities, or chased these sort of opportunities knows, they’re not deterministic. And so, it’s possible that we could potentially get something done yet this year, that’s what we’re striving to do, but I couldn’t give you any kind of sense of certainty at this point. We’re just too early in the process. Yuri Krapivin – Lehman Brothers: Okay, thank you.

Thank you.

Thank you. Your next question is coming from Steve Fox of Merrill Lynch. Steve Fox – Merrill Lynch: Hi, good morning. On the new wins, you mentioned 45% was coming from Wireline. Is that all with one customer, or can you give us a little more color on that one?

Yeah, it’s not all with one customer. Let me just see if I can give you a little sense of, a little bit of data on it here. Let’s see, the new wins in wireline, we actually had four of them. One of them was in our kind of the real sweet spot at $20-50 million, the others were in, two of them were in the 10-20 million, and one was smaller at 10 million. Steve Fox – Merrill Lynch: Great. And then, just looking at the business excluding the defense program, it looks like without that defense business you still would have been in that 10-5-5 model, is that correct? And then secondly, excluding defense, can you talk about any other mix effects, either in the quarter just completed or in your outlook?

Hey, this is Ginger. So, yeah, we believe that without the defense program we would have been consistent with our 20-10-5 model, which is why we’re guiding you in the second half of the year to go back to that model. And I don’t know that we have any other significant customers that we talk about from a mix perspective. Steve Fox – Merrill Lynch: Would you say end market, any other end markets that affected the mix either way, or not really?

In the current quarter I would say not, that there wasn’t any significant impact from end market sectors that affected mix dramatically. Steve Fox – Merrill Lynch: Okay, thank you.

You’re welcome.

Thank you. Your next question is coming from Brian White of Jeffries. Brian White – Jeffries: Yes, good morning. If we don’t get any more defense wins, is it fair to assume that profits in the second half of the year will be lower than the first half?

Yeah.

Yes.

But first I want to clarify that when we say defense, we talk primarily about this large account. Now, we have one other defense business as well, which, of course, is good business. But it’s clear that the contribution associated with this very large program will not be replaced with other new business wins. It’s going to run closer to our model. Brian White – Jeffries: Okay. And Dean, the defense program, the newer wins that you’ve been ramping IED related over the past couple of years here, are we still focused on the Humvee part of it, or are we also in the new MRAP vehicles?

Okay, so the recent defense programs for this large unnamed defense contract is some of them were for the MRAP vehicles as I understand it. But I keep referring to other wins in that sector. And those are non-IED related technologies. So they’re with other companies that have other technologies.

Finally, on Juniper, it does seem a little surprising that Juniper is down. Now, do you think this is because – you know the forecasts are for pretty good sequential growth in the December quarter, and actually the next two quarters are supposed to grow sequentially. Do you think it may be due to a mix of products you’re involved in, or potentially inventory that you had built? I’m just wondering why it would be a disconnect, because it went down fairly meaningfully, and yet everyone is modeling at pretty decent uptake with the company.

We would expect the growth revenues at Juniper in fiscal 2008.

Okay, fair enough. Thank you.

Thank you. Your next question is coming from Jim Suva of Citigroup. Jim Suva – Citigroup: Thank you very much. A quick clarification, I thought there was a mention about some inventory previous written down that came through, and if so it seems like that would be a benefit of about, if I do my tax right, about close to $0.02. Can you help me translate? It seems like not only did sales do better than expected, but EPS was lower. Why was that the case, especially with an inventory boost which would make it so, to be blunt here, it looks like you may have missed, if you exclude that flow through on EPS from the inventory reversal. And then I have a follow up.

Sure Jim. So we had expected that inventory reversal in the first quarter, so that was included in our original guidance. Jim Suva – Citigroup: And do you have any expectation of inventory reversals going forward?

We certainly hope the customer will continue to need the product, and will continue to have the ability to pay for it. So if that would happen, there may be benefit in the future quarters. Jim Suva – Citigroup: Or the reserve that you have there?

The, us recognizing the reserve is all dependant on us being able to ship inventory that we had produced for this customer and they were not able to take. It’s under the control of the customer, if they have the demand for the product and the ability to pay for it. Jim Suva – Citigroup: So the main reason why EPS was softer relative to the great strength in sales was because of taxes, is that right?

That’s right. So the increase in the tax rate to 18% had a 2% EPS impact. Jim Suva – Citigroup: Okay. Then my follow up, can you talk about –

Jim, can I just clarify that? I’m sorry. That was $0.02 EPS, not 2%. Jim Suva – Citigroup: Yeah, exactly. Can you talk about capacity, maybe calendar – either calendar or fiscal – say ’06 to ’07 and ’08. I know you’ve been expanding things. Maybe talk to us, with your utilization up so high, I guess the concern is, are you going to have enough capacity to be able to continue to grow the business? Maybe what type of square footage, 100,000, 200,000 type square footage have we looked at from ’06 to ’07 and to ’08?

Boy Jim, you’re taking me back into history here. If my numbers in my head are right, I think we’re at about 1.4 million square feet in ’06, and we’re looking at 1.8 million square feet of physical capacity today, now. When we give capacity utilization numbers we always put this disclaimer on it if you will, or clarification on it that says “as tooled”. In other words, when we look at our capacity we find that the most significant drivers of cost associated with capacity are equipment and people, and not necessarily empty square footage. Where we’re at right now is about 79% utilization of the as tooled capacity. We’re currently with 1.8 million square feet and the additions of physical capacity recently in Malaysia and then China have room to grow the business, probably exceeding $2 billion of physical capacity. The question is where is the demand for the capacity going to occur, what are the nature of the programs, particularly as they move to higher-level assemblies. In full system build we use more floor space, so it becomes a little bit squishy on exactly how much physical capacity we need. But clearly we’re looking now at the ‘09 and ‘010 and we’re saying we will likely run out of physical capacity. We need to begin to be putting that in place, and so we’re looking at an additional facility, potentially in China, yet to begin that project in the fiscal ’08. And of course we’re looking at the new market entry opportunity in Europe in order to gain essentially some business here and there. Jim Suva – Citigroup: That’s great. And do you need an additional 500,000 square feet or 1 million, or how should we think about what you really need to support your continued growth?

We probably would look at – we would just double the size in the China facility that we have now. I would say we probably, in ’09, would like to see another facility with capacity somewhere in the 150 to 200,000 square feet in order to enable growth in ’09, ‘010. That’s the way we see it. Jim Suva – Citigroup: Thank you very much, and congratulations.

Thank you.

Your next question is coming from Kevin Kessel of Bear Stearns Kevin Kessel – Bear Stearns : Good morning.

Good morning Kevin. Kevin Kessel – Bear Stearns : Going back to the announcement of the new wins in the quarter, you said I think 11 of the 15 were for existing customers?

11 of the 14. Kevin Kessel – Bear Stearns : I’m sorry, 11 of the 14. So would those be additive? In other words, is this a situation where you’ve got the customer program going end of life and now you’ve won the follow on, or are these additive products to what you’re currently doing that don’t have end of life scheduled in front of them?

Typically they represent new programs, additional share gain. Of course you have to balance that against the short product life cycles that many of these customers have. So even when they launch a new product, they have other products that overlap those products for a period of time. They may go away, there may be a completely new product line or a new direction. That’s why I always caution against taking the annualized revenue number and just stacking it right on top of our current performance because the reality is that we probably lose 4 to 7% of the business every year based on end of life, average selling prices coming down, all those kind of things. We struggle to find the best way to try to give you some sense, a consistent sense, of the health of the new business wins. We find that the best way to do it is just to announce the programs that we see. It’s not like there’s a change in demand for an existing product. It’s always new products that we had to go and compete with to win, and we try to give you our best estimate of what the annualized revenue would be associated with those programs when they’re fully ramped. Kevin Kessel – Bear Stearns : I understand. But I guess at the same time what you seem to be saying is that in the case of the majority of these wins, or most if not all of the 11 existing, at this point at least it’s not on a road map that the customer’s giving you, saying here this program you won is Generation 2 of Generation 1 that won’t disappear when you ramp up the next one.

Correct. Kevin Kessel – Bear Stearns : Okay. Also, the overall amount seems pretty healthy. I think the highest you’ve booked, when I look, actually in the last three years or more, in terms of an annual contribution basis of a little over 150, and it brings your last five quarters to 600 million in terms of what you’ve announced. I understand what you’re saying, you can’t stack it on top. But even if you look at half that amount, which would be pretty conservative potentially, that still indicates like 20% growth off of last year’s revenue base. Is that a fair way to think about it, or is that not?

That’s not a bad way to look at it, but you have to also keep in mind that we’re trying to replace a very big chunk of business with – especially with the defense program, that’s going to go away in our view. Kevin Kessel – Bear Stearns : Right, in second half.

Yeah. Kevin Kessel – Bear Stearns : But the contribution in the first half was pretty healthy 70 million-ish.

Right. Kevin Kessel – Bear Stearns : So I’m just thinking, ’08 versus ’07 comps relative to company targets is 15 to 18. That’s why you guys remain confident, it sounds, because of the bookkeeping, it sounds like. The other question I have here is on Mexico, backing up at that reserve, it was about a little over $1 million loss, still, I guess, Ginger, you’re saying that by the end of the year you expect it to hopefully break even by the fourth fiscal quarter?

That is correct. Kevin Kessel – Bear Stearns : And, in terms of what would have to happen, I think that you guys, maybe in a prior call, had discussed the run rates of that facility. I think it was at 15 million, if I’m not mistaken, per quarter. I think that in order to break even you felt that you had to be at 25? Is that still the case?

Yeah. So we ended the year at a run rate of about $60 million of revenue for that facility, and we think to get where we need to be they need to be closer to $100 million, so that’s about a $40 million gap of revenue for the year and that’s certainly one of the key issues we’re trying to address as we get that site back to profitability. Kevin Kessel – Bear Stearns : Where did it end the quarter in December? Mexico.

I don’t have the revenue with me in front of me Kevin, but I can certainly get that for you. Kevin Kessel – Bear Stearns : And lastly, I think in the past you guys have discussed the potential to do a stock buy-back, and the fact that right now the focus is still remaining on acquisitions and organic growth. But given the market’s severe correction and where the stock’s been recently, have you given any more thought to that? Or just in general to even looking at leverage, Because by my calculation buy-back at these levels would be pretty significant in terms of accretion.

We are certainly looking at all of our options. Obviously we want to drive organic growth, so a strategic acquisition is important to us, but we’re certainly looking at other opportunities as well. Kevin Kessel – Bear Stearns : Thank you.

Thank you.

Thank you. Your next question is coming from Shawn Harrison of Longbow Research. Shawn M. Harrison – Longbow Research: Hi good morning.

Good morning Shawn. Shawn M. Harrison – Longbow Research: Just a few quick follow-ups. Looking at the program wins and putting that up against Mexico, how many of those wins are targeted for Mexico, and do those wins get you most of the way towards bridging that revenue gap that you’ve had over the past two quarters in terms of program wins?

We did not – in this particular period we did not win any new business for Mexico. In the prior period, however, we did, and so that program is transitioning and beginning to ramp up in Mexico during this quarter. Which is of course good news, but that one single program is not going to be enough to get it done overall. So we’re working with a great deal of focus and intensity to try to improve that outlook. We’re also looking at the value proposition for some of our current customers, moving certain programs down to that facility. Shawn M. Harrison – Longbow Research: Is that, the changing value proposition is that in some way just brought about by the increased demand for your US facilities? Just having to move capacity around?

Some of it is, some of it is also just the natural progression with relationships where they, many of them are most comfortable, particularly high technology products, to start them at a US facility and as the products become a little more mature and the relationship becomes more mature that building certain subassemblies or even completed products in a lower cost geography makes sense for them. And of course with the proximity of that facility and its ability to provide the full product back into the US is a pretty strong and compelling opportunity for some of these customers to take off costs but still maintain their agility to service customers in North American end markets. Shawn M. Harrison – Longbow Research: Okay, then two quick final questions. On operating expenses expected to take up this quarter, should we expect them to hold steady on a dollar basis through the remainder of the fiscal year? Secondly, on a buy back, I think right now it’s about $25 million that you would be allowed to buy back in terms of stock. If you’re going to look at a buy back, would you consider increasing that before coming to market?

So Shawn, on the SG&A, we believe that our current forecasts are that they’ll be pretty flat through the balance of the year, so that’s Q’s 2, 3 and 4 on SG&A. On a buy back, we are currently under discussion about all of those options, including utilizing our existing repurchase authorization, or requesting a larger one. So I really can’t speak in any more detail about it at this point. Shawn M. Harrison – Longbow Research: Thank you very much.

And I’m also going to go back before the next question, operator, and answer that question about Mexico revenue. Mexican revenue was $16 million in the first quarter, so up from our fourth quarter of ’07 but still shy from our target rate. The new customer addition that Dean talked about is just beginning to ramp into that facility and we’ll see more benefit from that in the second half of ’08. Ready for our next question.

Your next question is coming from Amit Daryanani of RBC Capital Markets. Amit Daryanani – RBC Capital Markets: Thanks. I just have a few quick questions. One, on the SG&A increase. Could you just talk about how much of it is because of the compensation increase in Asia versus increase investments in general?

It’s split about 50-50. Amit Daryanani – RBC Capital Markets: All right. About the inventory reversal. Is this for the same customer that we took a 5 million head back in fiscal Q2 of ’07?

Amit, we don’t like to disclose that level of granularity about our customers. We have had inventory write offs in the past, there were several of them in fiscal 2007. Amit Daryanani – RBC Capital Markets: All right. The reason I’m asking is because I think you guys reversed about $1 million back in fiscal Q3 of ’07, sorry a 1.5 at that point, and 1 million at this time, so it looks like you saw about $2.5 million that you potentially did potentially reverse for the down in the next few quarters. Is that right?

That’s in the neighborhood of what we would have if that customer has the ability to take the product and to pay for it. Amit Daryanani – RBC Capital Markets: Is there anything – I think you said 1 million that was built into your guidance for the December quarter, is anything that's built into the March quarter guidance at this point?

I don’t really want to get into that level of specificity, given that it's unclear at this point if the customer would have the ability to pay for it. Amit Daryanani – RBC Capital Markets: All right, but the 1 million was built into your guidance for December when you guys provided it though. Right?

Yes it was, for the December quarter. Amit Daryanani – RBC Capital Markets: All right, thanks.

Thank you.

Thank you, next question is coming from Reik Read of Robert Baird & Company. Reik Read – Robert W Baird & Co: Hey good morning, I just, Dean, I want to broaden up the European question and I know it's still early and that revenues probably wouldn’t be until next year, but can you give us a sense for what you think that opportunity is, and the planned investments that you might have to make this year and where those investments might be?

Yeah, I wish we were a little further along so I could give you at least some sense of the range of the opportunities but at this point we really just are way too early in the process. I mean, we're developing the target list, trying to identify which ones, which opportunities might make sense and of course, as I said earlier it's very (undeterministic) that you're going to actually even consummate a deal based on the willingness of the targets. So, I'm afraid I just can't give you any sense of how this thing might shake out. I mean, clearly we're not looking to go and conquer Europe. I mean, we'd look at it as we've taken a conservative approach entering that marketplace. We're not doing it just to buy revenues, we're really – what we're trying to do is get an opportunity that allows us to gain access to the marketplace and to gain access to that marketplace and then leverage not only the facility that we might acquire but also is importantly develop the relationships to accelerate the flow of product from the European market into our facilities in Asia, and essentially provide more of the order fulfillment and back into the processes closer to the European end market, which is where we feel we're most hampered in order to adequately service that marketplace. So, it's just there are just too many variables associated with any potential at this point to give you any sort of clarity on what it might look like. Reik Read – Robert W Baird & Co: But it also doesn’t sound like investments would be coming in all that greater degree in the next couple of quarters?

I think that's fair to say. It will happen in the later part of '08 if it happens this year. Reik Read – Robert W Baird & Co: Okay, and then just going back to the strength in the US. I just want to make sure I understand correctly. Can you talk a little bit about where you are seeing that additional strength come from, and to the extent that you can, what's driving it?

Yeah, I think the strength regionally is – it's really, it's more broad based than you might expect. We just saw just some better expected end market demand from current customers (loans), some new customer ramps. We also saw some customers a little less enthusiastic to move product over to Asia than what we had originally put into our plan when we came into the year. So, I don’t know that there's much to take away from it other than that the new business development engine is driving some of it with the new business wins in that the flow of product over to low cost jurisdictions has got a little more sanity and is a little more planned for than just push everything to Asia. Reik Read – Robert W Baird & Co: And then just on your comment with respect to being a little bit more cautious on hiring new engineering talent, is that a – because it sounds like you're seeing reasonably good demand, is that just a function of just the uncertainty that's out there and you're trying to be cautious? Or is there something more?

This is a challenge. I mean clearly there is a significant disconnect and of course we have a fairly broad view I guess, of the electronics marketplace here with our end market exposure, and there's quite a big disconnect between what's going on in Wall Street and the demand that we're seeing from our customers. So at this point for both manufacturing and engineering services, the demand picture hasn’t really changed. We’ve seen a little bit more turbulence in forecasts perhaps, but we really haven’t seen any significant demand change but we recognize we cant defy gravity. I mean, if the customers' end markets start to come apart, then of course, our demand is going to come down dramatically and of course that's going to be painful. We need to plan accordingly. But I would say the one thing, and this is just an editorial comment, is I think that as a company in the EMS marketplace I think we're in a pretty darn good position to weather the storm versus perhaps some of the competition out there. So, we don’t want to say "bring it on here" at all but at this point, I think, we're just trying to be prudent in terms of communicating what we see as potential risks and probably one of the earlier risks is that we would see some of the engineering services business start to soften up potentially. Reik Read – Robert W Baird & Co: Right, thanks.

You're welcome.

(Operator Instructions.) Your next question is coming from John Emrich of Ironworks Capital. John Emrich – Ironworks Capital: Hello. I've got you, okay. I just had to pick up the phone. What is the organic growth rate without the one big defense contract, both in the quarter just reported and generally implied for the March quarter for the company? And if you pulled that out, what's your organic growth rate looking like?

Ginger, do you have that number?

I have it for the sector, John. I have not broken it out for the company as a whole so the organic for the Defense/Security/Aerospace sector was up 38% sequentially from Q4 FO6 to Q1 F08. John Emrich – Ironworks Capital: How about year over year? Do you have that?

Well, I have it. If we look back from '06 – if you take that program out of our numbers completely and you go back '05 to '06, I believe we grew about 13%. '06 to '07 I believe we grew about 6.8%. John Emrich – Ironworks Capital: You just don’t know what it is in…?

We know what it is in '08 but we haven’t – we're just giving you a range 'for 08 of 15-18% overall. So we haven’t communicated precision beyond that. John Emrich – Ironworks Capital: Yeah, I can back out the contract. And then I know its already been mentioned twice but I just make the observation on the cash and the share repurchase that I know you're inquisitive. I also know you are very focused on economic value added and you've got cash that's out – the $210 million earning 3 or 4% going lower every day and you can pay ten times earnings for a business generating 20% plus returns on capital. My guess is you couldn’t do anything close to that in the acquisition market in that terms of quality to value ratio, so I'll be anxious to hear the company come forward and clarify their views on share repurchases as soon as you know.

Okay, thank you. John Emrich – Ironworks Capital: Thank you.

Thank you. (Operator Instructions.) Your next question is coming from Rich Kugele of Needham & Company. Richard Kugele – Needham & Company: Thank you, good morning. Just one last question. There have been some changes within the law of – labor laws in China. I think they increased both, or decreased the hours plus increasing overtime and there's been some environmental changes. How does this factor into your thinking for your China facilities? I know you've mentioned you thought about expanding them but, any comments there on some of these significant Chinese changes?

Yeah, you're absolutely right. These are factors that of course come into our decision processes on our looking to expand. I would just say that if you look at Plexus overall we've got a significant concentration of our capacity today in Asia, in Penang, Malaysia, and we feel that we've probably made about as big a bet in Penang, Malaysia as is appropriate from an overall risk management standpoint for the company and from an access to the talent that we need to drive the business. So, you go to China right now, we do enjoy a tax holiday in China. We've recently just doubled the size of footprint in Xiamen, China, but even with that doubling of the footprint we're looking at, I think, about 120,000 square feet. So, we look at that versus the 700,000 square feet we have in Penang, Malaysia and we think the most appropriate thing for us to do, even with the economic impacts associated with some of the changes in labor laws etcetera in China, that it still is compelling for us to consider further investment there. And our investment probably would be a sister facility to the current one in Xiamen so it will take advantage of that team there but essentially facilitate putting up a building adjacent to it of similar size, if not maybe a little bit larger. And then a second location in China, closer to Shanghai but not in the fray. So, in a proximity there that makes it easy for customers that have decision making in Shanghai to gain access to a Plexus facility. But we don’t want to be right on top of everybody else and compete in the same labor market as everyone else. So, that's the way we see it. But we don’t see, the current changes, they are not insignificant, but we don’t view them as impediments to us to invest further. Richard Kugele – Needham & Company: Okay, great, thank you very much.

Thank you, it appears we have no further questions.

Okay, I want to thank everyone for the great questions that they brought forward to us today. Clearly we just came off of what we believe was a pretty decent quarter in light of all the economic turbulence that's going on out there. There is clearly a strong quarter in front of us, as we see it today, with the current forecasts that we have. But as I said earlier, we recognize that we cannot defy gravity so if our customers forecasts start to come apart and start to come into alignment with what's happening in the equity markets or what the view of the equity markets is, then bets are off. But at this point the business seems to be holding up and we're feeling pretty good about at least our prospects out of quarter and our ability to really overcome the decrease of our large defense program being offset by growth with current customers as well as new business wins with new targeted customers looking forward. So, thanks again for your continuing interest in Plexus. Have a good day everyone.

Thank you, this concludes today's teleconference. You may now disconnect.