Good morning, ladies and gentlemen and welcome to the Plexus Corp. conference call regarding its first fiscal quarter 2009 earnings announcement. (Operator instructions) After a brief discussion by management we will open the conference call for questions. The conference call is scheduled to last approximately one hour. I would now like to turn the call over to Mr. Angelo Ninivaggi, Plexus’ Vice President, General Counsel and Secretary. Angelo?

Thank you, Latricia. Hello everyone 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 from 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, particularly the risk factors in our most recent Form10-Q filing. The company provides non-GAAP supplemental information such as earnings per share, earnings or earnings per share, excluding restructuring costs. 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 measures, including ROIC are used for internal management assessment because such measures provide additional insight into ongoing financial performance. For a full reconciliation of non-GAAP supplemental information, please refer to yesterday’s press release and our periodic SEC filings. Joining me this morning are Dean Foate, President and Chief Executive Officer; Ginger Jones, Vice President and Chief Financial Officer; and Todd Kelsey, Senior Vice President, Global Customer Services. We will begin today’s call with Dean providing first quarter commentary about market sector performance and outlook, our new business wins and opportunity following [ph] capacity utilization. Ginger will follow up with details about first quarter financial performance, discuss our guidance for the second quarter of fiscal 2009 and discus our risk mitigation approach in light of the current environment. Dean will then make some closing comments. Let me now turn the time over to Dean Foate. Dean?

Thank you, Angelo. Good morning, everyone. Last night we reported results for our first fiscal quarter of 2009. Revenues were $456 million with GAAP earnings per share of $0.43. Our first quarter 2009 guidance range was conservative as we had anticipated continuing degradation of demand in our customers' end-markets. Experiencing a challenging quarter, we managed to achieve revenues at the low end of the guidance range and diluted EPS at the higher end of the range. Overall revenues declined 4% sequentially from the prior quarter and were flat when compared to the prior-year first quarter. Sector performance was mixed compared to our expectations at the beginning of the quarter. First, I will comment on the sectors that managed to grow sequentially during the quarter. Medical, Defense, Security, and Aerospace. Our Medical sector is up 12% in Q1 performing slightly below our expectations for mid-teens growth, as three new program ramps supported a typically stronger seasonal quarter for Medical. Our current outlook for Q2 is for the Medical sector revenues to decline in the low teen percentage range as a leading account experiences a seasonal decline and the economic climates subdues end market demand for customers in this sector. Revenues in our Defense/Security/Aerospace sector were up about 18% in Q1, below our expectations for 33% growth as four of our top 5 accounts missed their earlier forecasts. Looking ahead to Q2, we currently anticipate a low single digit percentage decline in revenue for this sector as the ramp of new program is offset by softer forecasts from four of our leading accounts in the sector. Our Wireless Infrastructure sector performed in line with expectations, declining about 5% in the quarter. We currently expect a low-teens percentage decline in Q2 as four of our top 5 accounts are forecasting weaker demand and…

Thank you, Dean and good morning everyone. As Dean mentioned earlier in the call, revenue and diluted earnings per share were within our guidance range. Gross margin was 10.2% for the first fiscal quarter, slightly lower than our fiscal fourth quarter result of 10.5%, and in line with our expectations. During the quarter, we recorded inventory reserves of approximately $2 million for obsolete and inactive inventory. This number is consistent with reserves recorded in the fourth quarter of fiscal 2008 and modestly higher than in normal quarters. I will discuss how we are approaching risk with our customers in more detail shortly. Selling and administrative costs decreased from the prior quarter to $25.3 million before restructuring charges and was below our expectations for the quarter. This reduction was the result of actions taken to reduce spending, including reduced hiring and reduced discretionary spending such as consulting and travel. It was also impacted by lower levels of incentive compensation recorded in the first quarter compared to what was recorded in the fiscal fourth quarter of 2008. These reductions were enough to align SG&A spending with the reduced level of revenue in the quarter with SG&A costs as a percentage of revenue decreasing from 5.6% in the fourth quarter to 5.5% in the first quarter. We recorded approximately $550,000 in restructuring charges in the first fiscal quarter related to a reduction in work force at our facility in Juarez, Mexico. This action was taken as productivity improvements and leaner manufacturing processes at the site have reduced the need for some of the staffing at the site. This site has done excellent job of improving performance, including these productivity improvements, a strong manage team, new customer wins, excellent execution, and improved customer satisfaction. We would consider ourselves well on the way to profitability…

All right. Thanks, Ginger, and just a couple of quick comments before we take questions. Despite the significant challenges in our customer’s end market, largely as a consequence of the troubled global economy we remain optimistic about our future. Through fiscal 2008, our 5-year organic compounded annual growth rate is 18%. Our new program wins over the last two quarters are exceptionally strong, demonstrating the strength of our go-to market strategy and the value of the Plexus brand. Our execution metrics, customer satisfaction, and retention remain high. Our balance sheet is solid. While we are not immune from the challenges and uncertainties affecting the economy as a whole and our customers’ end markets, we believe we are well positioned to manage through this difficult economic cycle and to prosper when the recovery ensues. In the meantime, we continue to take prudent actions to adjust our cost structure appropriately and protect our balance sheet, while continuing to make selective strategic investments to enable longer-term growth. Angelo?

(: Reik Read – Robert W. Baird and Company: Hi, good morning.

Good morning. Reik Read – Robert W. Baird and Company: Ginger, you kept the CapEx plans flat as you indicated, and yet you guys are seeing a reasonable number of deferrals. And I am assuming that a good portion of that CapEx is really new equipment. So, why not try to delay that new equipment a little bit and reduce that CapEx number in what is clearly an uncertain and weakening environment?

Thanks, Reik. I think the first part of the answer is that we have modest addition to our footprint that we are making and that were made in the first quarter, and that was $23.5 million of capital spending. So, about a third of that capital for the year is already spent and committed for those modest investments growth [ph]. What is ahead of us in the forecast, we are going to manage carefully. It is currently appears to be needed for programs that are transitioning in to the extent that those are delayed further or that we have less confidence in the forecast we will reduce some of that capital spending. Reik Read – Robert W. Baird and Company: Okay. And then Dean, you kind of touched on this in your comments, but do you have a sense for the customer inventory issues that are out there? And are they still in a mode where they are – their customers are telling them that they want to reduce inventory or do you think things have gotten at least pretty lean so you’ve got better visibility.

Well, it’s a great question and one that we’ve really been trying to drill into, in fact that’s part of the reason why I asked Todd Kelsey, who runs our customer management organization on a global basis to really try to understand. Whether or not we’re really going to see a trough quarter here in Q2, and so I am just going to let Todd comment on maybe a couple of the sectors and what we're seeing relative to inventory.

Sure, thank you, Dean and thanks, Reik. With respect to our various market sectors, in our Wireline sector we have several key customers that have substantial inventory positions right now on the order of five or six major customers within that sector. So, the expectation is that they will utilize that inventory during the course of our fiscal second quarter and return to more normal demand patterns in fiscal Q3 and Q4, which is the indication that they are giving us right. We also have a few customers within our Industrial/Commercial sectors that have a similar salutation, particularly in the semiconductor capital equipment area. So, those are the two primary areas. The remainder of our customer base particularly if you look at our Medical sector and Defense/Security/Aerospace sector, we believe those customers are in good inventory situations as a whole. Reik Read – Robert W. Baird and Company: Great. Thank you, guys.

Our next question comes from William Stein with Credit Suisse. William Stein – Credit Suisse: Great. Thank you. Regarding the large military customer that provides periodic revenue, did we see anything from that in the quarter? I seem to recall we were expecting, I think 12 million this quarter, and a few million per quarter for the rest of the year. Do I have that right, and can you update us on that?

William Stein – Credit Suisse: Is that based on intelligence from the customer, or is that just a conservative assumption?

It’s based on both, I would say it has shifted more toward intelligence from the customer what we are hearing about the future of the technology. William Stein – Credit Suisse: Okay. And regarding the new wins that you talk about every quarter, always helpful color. I'm just trying to understand how you think about that flowing into the income statement over time. I am sure it’s different quarter by quarter and customer by customer, but can you help us think about how long it typically takes these new wins to ramp?

That’s a very good question, and of course we’ve had a great pace of new wins here over the last several quarters, and actually when we look at Q4 or – fiscal 2008 in total, it was just a phenomenal year of new business wins. And of course as you win those when you are winning them in the second, third, fourth quarter that revenue start to shift out to the end of the fiscal year in which it is won and in many cases it’s almost all the next fiscal year. So, we are actually seeing the benefit of those new wins in the back half of ’08 starting to flow now into ’09, although you would not know it by looking at our Q2 revenues, because the downdraft of revenues from our current customer base in their end market has just been unprecedented, at least in my long tenure here at Plexus. As you said, as a rule of thumb, I think you've got to think about most of these wins particularly if they are with new customers. And usually I tend to separate them out. But the new customer wins tend to take some time, and usually can be from the point of announcement to the time we actually start seeing revenue can be a couple quarters out into the future. New programs wins with existing customers can happen a little bit quicker, but there is no question that there is a delay from announcement to when we actually see the revenues. William Stein – Credit Suisse: You say a couple quarters?

A couple quarters in general. William Stein – Credit Suisse: That's the start, and what about to fully ramp? Like another couple? Is that the right way to think about it?

Yes, but I hate to just throw down a rule of thumb, because it so variable, but I would say that’s a good way to think about it. William Stein – Credit Suisse: That’s helpful. Thank you.

Yes, I just look at the ’08 revenues. We are going to see most of them – a lot of that when you look at it, was won in the back half of '08, and we should see – we are starting to see those ramps now and I think the primary impact of them should be in the back half of ’09 and on into ’10. But I would just caution that new program wins, they are subject to the same market risks as the existing programs. And so, what we do is we try to give you very consistent methodology and try to calibrate the revenue size of those based on the best information we have at the time we announce them. But end market demand can cause a problem with new program wins and I would even say there’s probably a little additional uncertainty from programs potentially getting cancelled or just failing in the end markets. And one of them that we talked about last quarter was this very large mechatronics program. Originally, we had a pretty confident $30 million plugged in to '09 for the early production for that product with the bulk of that revenue, which could be substantial in ‘010 we’ve just, as I said, trimmed that $30 million back to $11 million now because that customer is concerned about the current economic situation and slowed down the production ramp. So, it’s a challenging environment right now. William Stein – Credit Suisse: Are there any similar, what I think of as lumpy programs in the pipeline that you think are close to closing?

Lumpy as in – I guess when I hear that, I think you are drawing an analogy maybe to the defense program that we had that was extraordinarily lumpy. We don’t have anything to my knowledge, I'm looking over at Todd right now, that wouldn’t be anything near like that program was. William Stein – Credit Suisse: Or similar to the mechatronics one that deserves to be highlighted on the call?

The mechatronics one, we highlighted only because it’s a new area of focus for us and because of its significance, what we believe it could be in terms of significant size, and so we want to separate it out and make sure you are aware of it. But there is nothing else that stands out. William Stein – Credit Suisse: Thanks, Dean.

Thank you.

Our next question comes from Sherri Scribner with Deutsche Bank. Sherri Scribner – Deutsche Bank: Hi, thank you. I just wanted to try to figure out how to think about the SG&A going forward, Ginger, you gave a lot of detail for March. But it sounds like we have more costs that will come out and so thinking about the June number, is that somewhere around – is that – should I think about it in terms of a $24 million number? What is kind of the run rate going forward for that?

Yes, Sherri, I think that SG&A for Q3 and Q4 will trend down modestly from what we expect in Q2. Sherri Scribner – Deutsche Bank: Okay. And then in terms of the gross margin as it trends through the year, obviously the mix it sounds like we are not going to see great mix and obviously we are dealing with a slow down. Do you expect to be able to return to your 10% gross margin model as we exit the year or as we move into the second half of the fiscal year? Or what is your thinking there?

Right now our visibility for gross margin for the balance of the year would have it in the range of 9% to 9.5%. Sherri Scribner – Deutsche Bank: Okay. And then I just have a quick question on the balance sheet, it looks like the deferred income taxes went up in the quarter, $8 million and I am just wondering was there a change in the way that you do your taxes, or why did that happen?

No, I don’t think there was anything in particular there. We booked our year-end tax entry at the end of the December quarter. So, I don’t think there was anything of interest there. Sherri Scribner – Deutsche Bank: Okay. Thanks.

Our next question comes from Sean Harrison with Longbow Research. Sean Harrison – Longbow Research: Hi, good morning. Wanted to get into a statement that was made in the earnings release about the second quarter being the potential bottom. Just the thought behind that statement. Is it because you think these inventory builds will essentially stop here, exiting the March quarter you are going to have some new programs rolling on and its restructuring cost? Is that kind of the primary though behind that?

Yes, I think just in general we look at the fork [ph] and we're trying to do the best we can, of course, customer by customer, sector by sector and there is no question that this has been a tremendous downdraft in revenues for us that really I think accelerated as we did our November forecast roll. And so we really do a detailed roll every month and we started to see it coming down dramatically. And of course we try to do the best we can on a six quarter rolling basis. So, we are looking out quite a bit in time. As we look at Q2 right now, there are enough customers in Q2 that have an inventory position that we believe, and of course, working with them believe that they are going to work down that inventory position. So, we are going to start to see the pull through on admittedly, a low revenue level, than they have been running at historically, but a revenue level that’s up from the – in Q3 versus the Q2 revenue. Additionally, we do have – we had very strong pattern of new business wins in the back half of ‘08 and early ‘09 here. And we're starting to ramp some of those programs. We believe we are going to get the effect of that now. Having said all this there is no certainty at this point. This is our – we do the best we can here with the numbers that we have. We drove in and done a lot of diligence with our customers. At this point we believe that it looks like the trough. I got to tell you just from a macro perspective if the rate of decline on a monthly basis with each one of our customers continued at the place they have been continuing over the last couple of months, you know our customers – we would have a substantial number of 150 customers out of business in the next couple of quarters. So there's got to be – definitely there's got to be a bottom somewhere and for us it is our best judgment at this point is that it looks like that is going to occur in the second quarter for us. Okay and I guess the follow-up to that is given some of these monthly revisions is that slowed in kind of January and what you are seeing end of February?

Well we are trying to – it is slowing in certain quarters but of course it came down hard in Q2. So it is our expectation here again is that the down drop towards – into Q2 is largely for someone to try to correct inventory. Okay and then just following up on the gross margin and restructuring I think there is supposed to be something like $4 million to $5 million in annual savings from the Boston closure in the back half of the year along with maybe some of the other moves that you have been implementing here – you are implementing here over the past say the past 120 days. I'm guessing what is the offset to that is its new program ramps or other initiatives going on out there that are going to keep the gross margins in this 9% to 9.5% range instead of seeing an up tick in the back half of the year from restructuring savings.

Yes John, we definitely asking are seeing some benefit in the back half of the year from our decision last summer to shut our Boston facility. I think offsetting that are a couple of things. So first, we are bringing some new capacity online and we talked about that in the script this morning in Hangzhou, China; and in Appleton, just for the Mechatronics customer. That is a new footprint which although not outrageously expensive does cost a little bit of a down drop in margins in the second half of the year. And I think secondly Mexico is recovering a little slower than we had expected given the challenge I talked about to their top line and then lastly we have seen reduced revenues in our North American operations and so that is causing some negative leverage around some of those operating sites that is dampening gross margins in the back half of the year. Okay and then just a quick point of classification Dean you said $2.1 billion pipeline, you said that is up $300 million from last quarter?

That is correct. Okay, thanks.

Thank you.

Your next question comes from Stephen Fox with Bank of America. Stephen Fox – Bank of America: Hi good morning.

Good morning. Stephen Fox – Bank of America: Not to take to beat up too much on that trough statement, but I understand that business has been bleak for a lot of your customers, inventories are going to get worked off but when you look at some of the longer life-cycle products, how much impact do you expect or are your customers expecting them to have say the last nine months of the year and what kind of true demand levels could we be looking at say versus a year ago. In other words what kind of slope do you imagine after March?

Well, I don’t know. That's a great question and one I don't know that I can give you any sort of accurate answer to. There is no question that in general when you look at on a program by program basis that we are going to see, you know, our revenue levels in the back half of the year in ‘09 that are lower than the back half of ’08. So for us it is really the issues we are going to have. Let me just make this statement, we are doing a great job from a standpoint of customer retention and program retention. So we are not seeing program walk away from us because of the competitive situation in the marketplace. What we are really just seeing is the impact of end market demand on our customers in the pull through that end-market demand to us. And our growth here is – if it comes which we believe it will start to again happen in the third and fourth quarter but again I can’t sit here and say that this is absolute by any stretch. It is going to come from the newer program ramps that are sitting on top of some additional share that we won with these customers. And that is about the best I can characterize it for you at this point. Stephen Fox – Bank of America: Okay that is helpful. And then just one clarification, the inventory comments about discussions, inventory discussions going on with your customers, would you read that as just short of more full disclosure on your part or is there a concern that some of the inventory risk during this downturn is transferring back to the EMS provider from the OEM customer.

Steve I think it is just an acknowledgement on our part that whenever we have a slowing economy, inventory issues come up with our customers. And so we want everyone to know that we are managing that aggressively, we are working through those issues with our customers and where appropriate we are booking reserves, which we did in the December quarter and we did in the September quarter. So I don't think there is cause for alarm but it is certainly an issue that we are managing closely and we wanted to make sure we communicated that. Stephen Fox – Bank of America: Great, thank you very much.

Thank you.

Your next question comes from Sean Hannan with Needham & Company. Sean Hannan – Needham & Company: Yes good morning. Thank you. So just getting back actually to the funnel, that was actually a decent growth quarter over quarter and what I wanted to see if I could get some color on is does this number, the $2.1 billion, does that reflect some of the downward adjustments that you would have in some of your business outlook. Is that effectively modified and I would look to an example such as the Mechatronics program, you know albeit it is a pretty small number for us, the 2.1, but just trying to get a sense of how that ties to the wins that you have communicated over the last couple of quarters.

I will let Todd take a shot at that and then I will fill in if I feel it is necessary.

Sure thing Sean. So with respect to the funnel we have – Dean talked about our forecasting process that really month by month we are making our best most accurate assessments of the forecast. The same holds true at the funnel. So any and we are working very closely with our customers and with the key contracts contacts within our customers to provide the most accurate information so that we have it for our internal planning in that we can provide it to all of you as well too. So those are the numbers that have updated on a monthly basis and would indicate any down graphs that our customers are projecting or any delays that our customers are currently projecting. Now that obviously is subject to change as we win those programs and they transition into manufacturing. But that is our best estimate of the size of those programs as of the time of this call.

And let me just add a little bit of I think color to the situation too. I think it is important to understand that we shifted our go-to-market strategy here a number of years ago to the sector-based alignment and we have been building that team of some really exceptional people and we really turned our go-to-market strategy, our business development team into what I view is a very strong execution engine and so I feel very good about the breakdown in each sector and the accountability to go out and win business and bring in new business. I would also say that the EMS market place in general is a pretty troubled industry. And that is becoming readily apparent to customers in this industry. And the companies’ here that have a strategy and a value proposition that is strong and make sense of the strong balance sheet are becoming more and more favored with customers. They are very concerned about the financial stability and quite frankly the footprint stability of some of our competitors. And so we are starting to see and win business essentially as a consequence of our strong performance of our financial strength and of an execution model that really make sense for these customers and so, you know, you never want to wish for a recession but in some respects I think this recession is going to be end up being quite favorable to us as we start to move through it. Sean Hannan – Needham & Company: That is helpful thank you. Then if I could just quickly follow up just more administratively, typically you will break out the segmentation of your wins in the quarter and then also what medical represented as percentage of your engineering wins.

Yes, I did not do that, you are correct this time around and I'm trying to see if I got a little – here I do have a little bit of piece of paper in here. I don't have a complete percent – no, no know I do have a fairly decent breakdown here. In terms of the manufacturing business we I will just give you the count, we announced 14 of them. Four of the wins were in our wire line sector, four or two of them were in wireless, four of them were in medical, two in industrial and two in defense, carrier, and aerospace. So we had a pretty good spread of the wins. Engineering wins about 68% of the total was in the medical marketplace. Sean Hannan – Needham & Company: That is very helpful. Thanks Dean.

You are welcome.

The next question comes from Amit Daryanani with RBC. Amit Daryanani – RBC Capital Markets: Thanks, good morning guys. I had a question on just on the question on the inventory that you kept [ph] at the end of the quarter, could you just talk about what was that as a dollar amount in finished goods sold at the end of the quarter?

I am sorry, Amit. You broke up a little bit there. Were you asking for inventory at the end of the quarter? Amit Daryanani – RBC Capital Markets:

So inventory in total in dollar terms increased by about $6 million during the quarter. Days of inventory went up by 4 days; about half of that, 2 days, was for transition. New programs coming into Plexus and as we built buffer stock to support transfers within Plexus. The other two days was from slowing. So customers who have lower revenue demands in the future and so as a consequence we have more inventory than we expected. Amit Daryanani – RBC Capital Markets: Got it.

Does that help you? Amit Daryanani – RBC Capital Markets: Yes that helps me. I guess, you know, you go to announce headcount reductions pertaining to the Mexico facility, I assume a lot of these cuts, I see all these cuts are probably done to attain or get back to the 20-10-5 model. Can you get back to that model on a $400 million run rate what sort of revenue number did you guys have in your mind when you announced these reductions?

Well we certainly had the Q2 number in our sights as we were making those reductions, although we certainly don't hope to stay at that revenue level. We're not going to call the full-year yet from a revenue perspective. We are trying to size the business to what we see ahead of us and we'll make decisions going forward if that business either grows or decreases from that. Amit Daryanani – RBC Capital Markets: Maybe if you just help me reconcile these things then, I think early in the call you made a comment you expect margins to be sub 10% through the end of the year but now I think you're telling us that you know, the reductions are done in mind to get this 20-10-5 model, I mean, it seems you don't, the revenue rate stay at these levels for the next few quarters?

No I don't think you can make that assumption. We are we have sized the business to the revenue run rate we see and our best case in given what we are seeing with the investments I kind of walked through earlier. We have a positive impact from Boston coming out, but we have invested in new sites that are a modest drag on gross margin, the two new sites Hangzhou, China and our site in Appleton and with some other reductions in revenue particularly in North America those sites are seeing lower performance than we would like to see based on the amount of revenue they have and that gets our growth margins 9% to 9.5% range. Amit Daryanani – RBC Capital Markets: Got it thanks a lot.

Thank you.

Your next question comes from Jim Suva with Citigroup. Jim Suva – Citigroup: Thanks and Dean you'd mentioned that your guidance last quarter was pretty conservative. Can you tell us about for your March quarter? Are you taken the exact same approach meaning rolling up your customers and taking it down by a similar percent or you just rolling up your customers and is your conservatism if any more or less than what you gave for December?

That's a good question Jim and what we did is I used the same methodology. So we have a method that we typically use during periods of growth when we start to see the economy start to soften, in anticipation of that we started to apply a more conservative bias to the way that we provide guidance and we have continued that bias here into the coming quarter. Jim Suva – Citigroup: And has that magnitude of that bias remains stable meaning you know if you adjust it down by 5% or 10%, is it the same amount or compared to last quarter did you increase that bias to be even more conservative?

I'd say it's a similar conservative bias. Jim Suva – Citigroup: Okay great. And then as a quick follow-up when we think about your new ramps that are in the pipeline and based upon your long history there, when we go through an economic downturn do those ramps become more risk than the existing product as you know, end-to-end customers may be a little more cautious on receiving goods because they get in frees or shock mode for spending or does the new pipeline wins have a little bit more protection than the existing products already out there.

I think it's just it really is a customer and program-by-program specific issue. I think some of these you know, ramps are products that replaces other technology and is new and improved higher performance technology, and so there is, in particularly with existing customers there is a fairly I would say high level of confidence that those programs will ramp up and be successful. In other cases they are new to the market technology, you know, the market is maybe being developed for that technology and perhaps that adds incremental risks. So I would say, you know, you have to look at it and say with some of these, you know, certainly there is an incremental risk about I don't know that you could generalize too much about it. Jim Suva – Citigroup: Okay last housekeeping question. In the past times, you've talked about plans to consider expanding into Europe with the global recession are we looking it, you know, postponing or delaying that or just didn't come up during the conference call so far.

It did not come up during the conference call and I just kind of would like to – that's a good opportunity for me just to talk about the global footprint in general and I will get to your question on Eastern Europe. I want to remind everybody that we have been talking about further expansion in China. Part of that expansion was in Xiamen, where we already have an existing facility. That existing facility was doubled in size last year and we had talked about putting up a second building in Xiamen, China right adjacent to the existing facility. We have delayed that investment at this point. Hangzhou, we of course talked about investing there, we did invest in Hangzhou, China. We feel it is important for us to be in closer proximity decision-makers in the Shanghai region of China. That plant started operations in our first fiscal quarter this year and as I said in my script that would begin shipping products here in the second quarter. So we have that investment up and running. Certainly it is a drag on earnings and it is an opportunity for us to essentially pull back if we had to, although we don't think it's the right thing to do right now based upon the pipeline of opportunities that we have in front of us and the commitments we have made to customers. Now moving on to Europe, we still believe that the investment into Eastern Europe is an important part of our global footprint. During that last economic explosion, we were bold and made an investment in Penang, Malaysia and in China and that turned out to be a very wise decision. We believe that the Eastern European decision is also very important. We have got a number of customers that we have been talking to here over the last couple of quarters about seeking a new facility there. So we are working very hard to try to get that facility identified, you know, and get started up. Now we would see it as a purchase or lease, I would say it's more accurate a lease of what we call an existing building and that we would be able to very carefully control our costs as we bring that facility up. So we still see that even in the current economic climate what we see in front of us as an important investment to make. But again it's one that if everything starts to come unraveled here further in the back half of the year, one that we could, you know defer capital investment that sort of thing and in the hiring of people into the facility. Jim Suva – Citigroup: Great. Thank you very much.

Thank you.

Our next question is from Brian White with Collins Stewart. Brian White – Collins Stewart: Hi good morning. Dean, just on the engineering front I think this the first quarter you've talked about some softening in engineering and I think you focused on product development. If you could just give us a little more color on what's going on there? Is this market share? In sourcing, is it not putting out as many new products by your customers?

Yes and hat I commented on is there is really a couple of groups, several groups within our engineering services business and of course one of the groups is test, equipment and development. So these are the folks that work carefully with either our product development organization or our customer’s product development organizations to put in place test solutions that go into our manufacturing operations to support new program ramps. That group is very busy which shouldn't be a surprise considering we have been winning new programs at a fairly rapid clip. The new product development people however is – although there are currently busy it is a little bit more been hand to mouth. So the visibility to new programs has come down. There is a little better of – you know, let's protect our internal engineers here in the short run you know, going on in our customers organization. So seeing a bit of a pullback and we did do some trimming of headcount in that organization. Now at this point we think that we are fine and that we believe is that you know as the economy continues to stay soft, we will actually see an acceleration of outsourcing of product development which is not in consistent what we seen in prior difficult economic cycles. Brian White – Collins Stewart: Okay. I thought in the last downturn actually engineering business as I remember came under significant pressure and customers didn’t source.

Yes. We had a very different organization at that point. So if you when you look at part of that organization we had a very large PCB design organization. That was really a kind of a one of our merchant operation. So we took that organization, just basically illuminated it from our portfolio. So if you look inside what really happened here with outsourcing of product development as we looked through that recession, we saw customers have headcount freezes in their own engineering organizations or reductions in headcount, but they still needed to get their product development efforts done if they were going to move forward. So we started seeing more outsourcing as we started to move through the recession. Brian White – Collins Stewart: Okay. So you're not concerned about the engineering business here in this downturn?

Yes here I am concerned and we've got a lot of focus on making sure we bring new programs in there but it's not something that is keeping me awake at night, and of course, the engineers are – we can deploy them, you know, where the product development people over to help with test equipment, we can also help have them work on productivity initiatives and other things within manufacturing. So we got some extraordinarily talented people on that part of the organization, and you know, it's not the size of it is not something that is going to keep me awake at night in terms of you know, negative leverage or anything from that part of the organization. Brian White – Collins Stewart: And then on the medical account, just if you can give us a little more color here Dean, the decline, significant decline in the March quarter. What is this driven by?

(inaudible).

Sure thanks. Hello Brian. Brian White – Collins Stewart: Hi.

So if we talk about our significant medical account there are a few different factors that are occurring with that account. One is the – they typically are seasonally soft in our Q2 and seasonably very strong in our Q1. So we tend to typically see a pretty significant difference between Q1 and Q2 limit. This is not atypical at this point. On the other – on other fronts though there is definitely a reduction in healthcare capital expenditures that are going on that is impacting certain portions of the business of call it higher end imaging equipment. The Deficit Reduction Act is also still playing a role in the procurement of new equipment in these places. There is also still a bit of an impact from the previous FDA shutdown where that product line has not fully recovered. So while it certainly out in the marketplace and there are no issues from a regulatory standpoint there, the end market demand for that product line has not recovered to levels previously projected. Brian White – Collins Stewart:

It is – let us it is certainly – first of all I would say a very much a reducing portion of our portfolio and that's been one of the big impacts of our medical sector team is developing a more diverse customer base and we are starting to see really the fruits of that effort in the last several quarters. So it's on the order of say maybe a third to less than a half of our business right in that range and in an increasingly smaller piece of the business. Brian White – Collins Stewart: Okay thank you.

The next question comes from Dale Womington [ph] with Delaware Capital [ph]. Dale Womington – Delaware Capital: Yes. Quick question as it relates to inventory buildup. It depends upon your client for this, I mean in terms of your contractual relationship with these guys in terms of you mentioned that you are talking to them about the buildup of this inventory.

I think there are contractual arrangements with our customers is if we purchase to their requirements, there are ultimately responsible for the inventory. So although we would purchase it and hold it on our balance sheet, contractually they are responsible for taking it either as finished goods when we build it for them or if we are not able to build it based on other issues or lack of demand, they would need to pay us for that inventory and take delivery or pay us a deposit in many cases in which we hold their inventory for a period of time where we also have cash on our balance sheet to offset that. We record those cash deposits on our balance sheet in our liability and that increased during the quarter ended in December by about $5 million and so we are actively managing those accounts that have inventory that might be in excess of what they need right away to make sure that they live up to their contractual obligations and that we manage the risk on our balance sheet. Dale Womington – Delaware Capital: Okay, and one last question. Given the change in landscape, what could be your revenue run rate be in terms of break even point of view. At what run rate you are break even?

At what run rate would we breakeven? Dale Womington – Delaware Capital: Yes for revenue.

Well, if you look at our March quarter, we have given the range of 375 to 405, and at that rate we are well in excess of break even. We have earnings below what we would like to see but certainly good earnings in comparison to the industry. So I think at this point we are not ready to disclose what our break even revenue rate would be, obviously, significantly below what we are seeing for the second quarter. Dale Womington – Delaware Capital: Thanks.

Thank you.

You have no further questions at this time. Are there any closing remarks?

Yes, I just like to make a few closing remarks. We are definitely in a very difficult period of time, and as I said, we still remain optimistic. I think that Plexus has a very strong brand in this industry and we are doing a great job winning new business. I think as we are trying to telegraph we are not retrenching, we are making sure that we prudently manage our costs because you know there is a fair amount of uncertainty here in front of us. But at the same time we feel quite good about our longer term prospects and so therefore we have not gotten to the point where we have taken sort of a meat axe [ph], I would say, to our cost structure. We still feel it is important to make certain investments to enable longer term growth. There are investments that we can slow down and trim if need be if things get worse. But at this point we still feel pretty good about the long-term prospects of Plexus and of course, of our ability here to manage through what is going to be a difficult quarter and then hopefully get back to at least some growth here in the back half of the year and then hopefully enjoy a decent fiscal 2010, as we are all hopeful the economy begins to recover. So I want to thank all of you for the support, the great questions today and I want to thank the Plexus folks around the world for working through – tough but doing the right things here on behalf of our customers and shareholders. Thank you.

Thank you for participating in today's conference call and you may now disconnect.