Good morning, ladies and gentlemen, and welcome to the Plexus Corp. conference call regarding its fourth fiscal quarter 2010 earnings announcement. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open the conference call for questions. This 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, you may now begin your conference.

Thank you. Good morning all 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, such as statements in the future tense and statements including believe, expect, intend, plan, anticipate and similar terms and concepts 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 Form 10-K filings for the fiscal year ended October 3rd, 2009 and the Safe Harbor and Fair Disclosure statement in yesterday’s press release. The company provides non-GAAP supplemental information. For example, our call today may refer to earnings or earnings per share, EPS, excluding restructuring costs or other unusual items. Non-GAAP financial data is provided to facilitate meaningful period-to-period comparisons of underlying operational performance by eliminating infrequent or unusual charges. Similar non-GAAP financial measures including return on invested capital are used for internal management assessments 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; Todd Kelsey, Senior Vice President of Global Customer Services; and Michael Buseman, Senior Vice President of Global Manufacturing Operations. Let me now turn the call over to Dean Foate. Dean?

Thank you, Angelo, and good morning everyone. Last night we reported results for our fourth fiscal quarter of 2010. Revenues were $556 million, up 3.6% sequentially with EPS of $0.65. Both revenue and earnings exceeded the higher end of our guidance range. We are pleased to deliver a strong quarter bringing a close to a really wonderful year. Fiscal 2010 was an excellent year for Plexus with organic revenue growth of 25%, driving full year revenue above $2 billion, a significant and exciting milestone for the company. We grew revenues in all of our market sectors with the lone exception being our smallest sector, Defense, Security, and Aerospace. We grew revenues in all regions, the Americas, EMEA, and Asia-Pacific. The APAC region experienced exceptional growth, and in combination with your facility in Mexico shifted the company’s revenue mix in favor of low-cost regions for the first time. Our engineering solutions group contributed meaningfully to our financial performance, delivering highly valued solutions to our customers and exciting new products into manufacturing. Importantly, our teams are disciplined and consistently focused not just on growth, but on delivering profitable revenue growth. As a consequence, we delivered full year EPS of $2.19, an 87% improvement over the prior year, while improving our return on invested capital performance to 19.5%. We remain committed to ROIC as a key variable and compensation incentive metric for the company. One of our enduring financial goals is to deliver ROIC at least 500 basis points above our weighted average cost of capital, a fundamental delivering economic profit and shareholder value. Turning now to some additional insight into our sector [ph] performance by market sector and our current expectations for early fiscal 2011. Our Wireline/Networking sector was down 1% in Q4, in line with our expectations when we established guidance…

Thank you, Dean. As Dean mentioned earlier, revenue and earnings exceeded the high-end of our guidance range. The gross profit performance for the quarter ended largely as we expected at 10.1% for the fourth fiscal quarter. This was in line with our slightly below the third fiscal quarter. Selling and administrative costs were 27.4 million, lower than our expectations for the quarter, and our spending in the third fiscal quarter. The reduction in spending was the result of slightly lower incentive compensation than expected, and restraint in hiring and managing discretionary spending. SG&A costs as a percentage of revenue decreased again this quarter to 4.9%, an expected result as we obtained better leverage from the increased revenue during the fourth quarter. The last item for discussion on the income statement relates to our tax rate. Our tax rate for fiscal 2010 was 1%. This was lower than the 2% tax rate used when we established our guidance for this quarter, due to the regional mix of earnings in the fourth quarter. Consequently, diluted EPS for the fourth quarter was $0.02 higher than we would anticipate. As a reminder, variations in mix of forecast earnings between jurisdictions can have a significant impact quarter to quarter on our estimated tax rate. Earnings in our Asian locations benefit from negotiated tax holidays in both Malaysia and China, while US earnings are taxed at the full 38% Federal and State tax rate. For the full year, we are very pleased to report that we delivered results in line with our financial model of 20% ROIC, 10% gross margin and 5% operating margin. Results for the year as we disclosed were ROIC of 19.5, gross profit of 10.3%, and 4.9% operating profit. Moving on to the balance sheet and cash flow, working capital was largely…

Yes, ma'am. (Operator instructions) Our first question comes from Reik Read of Robert W. Baird.

I just wanted to ask a broad question first. If you look at the bookings in the last two years they've kind of been out sized relative to what we've seen historically, probably $50 million or so more a quarter. It seems like a lot of the share gains that occurred during the disruption were really the key contributor to that, so I guess the question is, is there a reason that you would expect those to continue and this is the kind of the sustainable level of bookings or should they start to come back down as they – as they indicated this quarter?

Well, I think you know to be clear, we certainly, we benefited because we were financially strong EMS provider through a difficult time. And so we certainly benefited to some extent with some programs coming out of maybe Tier 3s or even out of some of our larger competitors that were consolidating footprint, and that was a benefit to it. But I would also say that we have been working very hard on really refining our go to market strategy over the last several years around this sector orientation, and really adding some exceptional talent to go out and develop those markets, understand the markets longer term, and how we could provide value. And, you know, in addition to that the processes that sit behind the teams, which Todd is a leader or part of this, with the customer management organization. He is in the room today and Mike Buseman leads the other part, called the hunters versus the gatherers approach. But essentially it is a much more mature organization, much better processes and much better understanding of the markets and how we’re going to add share. So the summary of all that is we built that engine to consistently deliver strong revenue growth, new programs with existing customers, as well as new targeted accounts. And I would expect that we are going to continue to perform at this level, and in fact, even though it was a nice number this quarter, really the engine is designed to deliver more than that on a quarterly basis.

Okay. And then, Dean, maybe you could give us a comment on the wireline side. You talk about that being a little bit mixed. It sounds like in the marketplace there is some evidence of some slowing and maybe you could talk a little bit about that enterprise versus Telco and what you're seeing out there.

Yes, I think we are seeing it is – we are seeing some strong performance with some of the newer technologies around enterprise. We are also seeing some of the infrastructure build out going on with the providers. I think what we’re just seeing is a bit of a mixed performance as a result or a consequence of specific customers and their product cycles. And in particular, we have one customer we got caught behind the curve a little bit on a product cycle, and has lost some share to a competitor, and so we are seeing the impact of that. So that is yes, and then also in that sector is the Avocent program, and we talked about Starent quite extensively in the script here, but the Avocent program is also starting to have a little bit of volatility as we begin to manage down that elements of that relationship here in the coming quarters.

Great. Thank you.

You are welcome.

Thank you. Our next question comes from William Stein of Credit Suisse.

This is Rahul Chadha on behalf of Will.

Happy to having you.

So keeping on the same track Starent and Avocent, could you give us an update of the ramp down plans now? Because my impression is that earlier the Avocent program was – looks like it was going to ramp down starting with June quarter. Could you just give us the progression of the ramp down for both and the magnitude as well?

Yes. I will just repeat what I said on Starent just to be clear that we really believe that the Starent program now, the way they have laid it out for us, the new customer Cisco, is they want that program ramped down within this quarter. So, our fiscal first quarter is December quarter, and so we are aggressively working with them. Frankly, at this point it is in our interest to get that behind us. So we are working aggressively to ramp that down. We will see how it comes out, but that is the goal right now to get it completely ramped down through the quarter, and of course that creates a bit of a revenue hold going into Q2, which is why we are cautioning a little bit on the linearity of Q2. Now Todd can give you a little bit more insight into Avocent, which is certainly going to wind down in parts, but has a little uncertain path.

Sure. So, thank you Dean. So, with respect to Avocent and Emerson, as of today, we have been unable to reach a mutually agreeable business model with them. So we are expecting that this business will eventually exit. And the way we are projecting it out, we don’t expect it to be an overly aggressive exit, but we are projecting a ramp down throughout fiscal 2011. We expect the program could be completely out either at the very end of fiscal ’11, or may be early fiscal ’12. So that is in essence the way we project the ramp down for the Avocent business.

Okay. And just so I understand this completely, Starent, the December quarter will exit at a completely ramp down run rate and Avocent, when does it start ramping down? I mean when do the revenues exactly start ramping down?

In essence, the Avocent revenue starts to ramp down in quarter two, but it is a very gradual ramp. That is the way I would characterize it.

Okay. And also if you guys could provide us an update on Coca-Cola? What does the ramp up progression look like and could you actually remind us of the – the size of the program as pertaining to fiscal '11?

Yes, I will be happy to start. We have talked about this program being when fully ramped to $100 million for each of the components, first the Freestyle, and second, the behind the counter, crew-serve unit. We have generally seen that, we have modeled that as between $150 million to $175 million of revenue for FY ’11, and I would say that is unchanged, but we see it more backend loaded than we would have thought about a quarter ago. So it will be modest in the December quarter, and then ramp pretty steeply beginning in the fiscal second quarter.

Okay. Thanks. Appreciate it.

Thank you. Our next question comes from Sherri Scribner of Deutsche Bank.

Hi. Thank you. You reiterated your revenue growth expectations of 15% to 18%. I'm trying to understand, you know we've got a flattish quarter in December and there are some headwinds in the March quarter, are you still comfortable with that 15% to 18% revenue growth for fiscal '11?

Yes.

Okay. That was a short answer. And then for fiscal 2Q, I'm just trying to get a sense of what type of seasonality you expect with the addition of the ramp downs and the impact of the changes in the programs? It also sound like we'll start to see the Coke deal ramp in 2Q, so I don't know if that offsets it, but in the press release and on the call you commented that you thought that Q2 would see some headwinds. So, trying to get a sense how much you think that might be down?

Yes, this is a challenge, because there is just a lot of moving pieces going on, and we just want to be a little bit cautious here. So, I think the way we see it at this point is probably the most likely outcome is a sequentially flattish to maybe down just slightly quarter in Q2. Now we got quite a bit of time to work on that and actually to try to level that a little bit more, in particular the Coca-Cola program and pull some of that back into the quarter, but right now as we see it, it is flat to down sequentially. And then as I indicated, we also then have some of these structural cost increases, the seasonal cost increases that are going to pressure margins in that quarter. So, as Ginger said, we are going to work hard to the extent that we can to try to protect the operating line and mitigate the pressure that we are going to see on gross margins through that transition quarter. But we want to caution that the linearity from Q1 to Q2 might be a little bit problematic before we start to see us returning to the models as we get into Q3, and see revenues coming back up again.

Okay. It sounds like revenue is slightly down, but we're going to see an impact to margins and is that primarily in the gross margin side because of the transitions or is that – are is there also some headwinds on the SG&A side?

Hi, Sherri. This is Ginger. I think there are impacts on both, and we are not guiding the second quarter yet, because we are still working through that, but we would expect challenges on the gross margin line based on the mix changing, right. So, mature revenues that are exiting and newer revenue that is inherently less profitable ramping up. And then we do have structural costs in our March quarter, our second fiscal quarter, including merit adjustments and other kinds of structural costs that typically lead to an increase in SG&A in that quarter. So if you look back on fiscal ’10 or ’09, you can see that there is traditionally a step up in SG&A costs in that quarter. So I think for both of those reasons, we’re thinking there will be a bit more pressure on the modeling the fiscal second-quarter.

Okay, perfect. And I just wanted to clarify; I don’t know if I misheard, but it sounded Dean like you said guidance for fiscal first quarter was 510 million, I think in the press release you said 550 million to 580 million.

Yes, it is 550 to 580.

Okay, great. Thank you.

I apologize if I misspoke on that.

Thanks.

You are welcome.

Thank you. Our next question comes from Joe Wittine of Longbow Research.

Joe calling in for Sean Harrison. It is hard to believe it is maybe, you spoke about the trends within wireline in a follow-up question. I was just wondering if you can give any more detail on exactly what happened. I think just to clarify you said a couple of customers softened disappointments and then maybe one of those got caught behind a product cycle. But any more detail you can provide on exactly what the issue was? Was it an issue they changed their schedules and weren't able to get product out or any more detail I guess would help? Thanks.

Well, I don’t think it is any secret that. People know that Arris is one of our customers, and I think the print on Arris is pretty clear as to what some of the challenges are that they are seeing in their end markets at this point, competitive pressure. So we are seeing that effect. And then also, I guess that we are starting to see some of the – some of the Avocent business was starting to transition. We also have the customer now who is, as they set up sales channels for the Avocent product it is causing some volatility as well in forecast. So I think the bigger of those two effects really has been Arris, and that is what I would focus the attention.

Okay. Thanks. And then a quick follow-up on defense and aerospace, granted it's a small segment for you, but you saw it down year and some of that was maybe GE [ph] going away in the prior fiscal year. But what do your customers see as you look out into next year as austerity measures get more and more into the headlines. Relative to your customer base, do you have pretty wide mix of big defense contractors? So any commentary you can provide on there on customer discussions?

Yes, I think there is two stories here. Primarily I think that we are seeing the shift for the dominance of revenue in that sector to aerospace. And there is a lot of exciting things happening in aerospace with the launch of some of the new airplane platforms that are coming into the marketplace, and of course we’re starting to see the airlines getting more profitable so the refresh on those technologies and the fuel efficiency and range of some of the new aircraft is pretty compelling. So we worked hard to build that relationship with Honeywell, as well as quite a long list of other companies that provide subassemblies into those new airplanes. We are certainly seeing some weakness in the defense piece of it, although the down pressure on those companies may further accelerate and move towards lower cost solution for them. There is still a substantial amount of revenue, I would say wildly substantial amount of revenue that still is internally manufactured within the defense contractors. So in the little bit long run, it might actually create some better opportunities as they work to try to take down their cost structure and create a little bit more flexible and little bit more lean manufacturing solution. So we still see opportunities there. It is just that they come slow, and generally come in smaller chunks, I would say, than what we see in a lot of the other sectors. I don’t know Todd if you want add anything to that?

Sure. So, basically I would say internally we see Defense, Security, and Aerospace much like we did Medical a few years back, where we really needed to rebuild the customer base, or build the customer base, and the team has done a great job as you mentioned, we have a great customer base within this sector. We are positioned well. We are expecting strong growth out of this sector as we move forward. So we think FY ’11 could be a real nice year for this sector.

Very helpful. Thanks everyone.

Thank you.

Thank you. Our next question comes from Sean Hannan of Needham & Company.

Good morning.

Good morning.

So I have really topically one question, but kind of multi part, I was looking to see if we can get a little bit more color around the wins that you had in the quarter, both on the actual wins and then the engineering. The degree to which these are existing versus new customers, and also business that you're taking away from competitors and – and the segments that we're really talking about here?

Okay. Well, let me start with kind of the breakdown by sector, and I will give you maybe the percentages by sector. I can break it down for you that way. If you look at the combined – if you break down that total number, the combined percentage for wireline and wireless together was about a third of the revenue, another third of the revenue was in the Industrial/Commercial sector. And the other – the remaining was split pretty equally between Medical, and Defense, Security, and Aerospace. So, a reasonably balanced performance I would say for the wins. As we look at it from a customers-versus-targets categorization, in terms of win quantities now, I think we said 24 wins, 21 were with existing customers. So, this was all you know increasing the share that we have with those customers capturing new product launches with those customers, and then the remaining then were 3, were with the new targeted accounts that we think we can grow with nicely into the future. I don’t really have any specific data in front of me on takeaways from competitors at this point unless Todd is sitting right next to me here – he is looking down at this and knows of anything obvious here. But I think most of this was bid all competitively in the marketplace and we just won it versus competitors winning it. So I don’t think it was an extraction.

I would say there was one significant extraction that came in the wireline sector, and then the new wins, or the target wins, there was one very substantial win in the wireless. So, that is positioned to ramp relatively quickly. And one very significant win in Industrial/Commercial that will be a much slower ramp.

Terrific. And then on the engineering side, I'm assuming that roughly what 70% is Medical focused?

Well, you could have had the numbers right in front of you. It is actually, 74% this quarter was Medical, and of course, always very strong. And then another 18 to 20 was Industrial/Commercial.

Great. Thanks so much.

Thank you.

Thank you. Our next question comes from Brian Alexander of Raymond James.

Yes. Just how confident are you that you will get back to the 10, 5 margin model in the second half? Seems like you will be below it in the first half, and I know you've got facilities ramping over in Asia, and I believe in Europe, which will introduce more costs. You're aggressively ramping the Coke business, which could have some pressure on margins in the early stages of that, and you're going to have a higher OpEx structure given some of the comp increases. So just your confidence level that in the second half you should be able to achieve that model.

Yes. I don’t think we see anything in the marketplace in terms of how we were pricing business there, or how we run the business. Just from a fundamental standpoint that would suggest that we have to walk away from that model, which is why Ginger reiterated it and rebranded it to some extent today. So, we’re quite confident. In fact we try to say that we don’t use it as an excuse, the ramping of new business with customers or adding facilities is an excuse for margin pressure. And I think in a normal case, that is true, and we have proven that we can absorb those costs as we grow the business and deliver on the margin. Now, while we are having excuse quite frankly is that we have got an unusual situation here where we have a couple of customers that are leaving Plexus, and leaving Plexus pretty quickly, and particularly in the case of Starent, and that is a bit of an unusual event for us, and that we haven’t lost a significant customer account in quite a number of years, quite frankly. So this is an unusual situation for us that is causing a bit of nonlinearity here in the next couple of quarters, and particularly in quarter two that we just have to work through. Just to put that in perspective, the Starent business was anywhere from 25 million to 35 million in a given quarter. It was up and down as they move through the year. So that is a pretty big chunk of revenue to just kind of evaporate all out of one quarter, and we’re replacing quite a bit of that. So, if we can keep that quarter sequentially flat to the prior quarter that will be a pretty good victory, and I think some evidence that we are in fact bringing in new programs to replace it. It is just that as we keep saying, the new programs take a little bit of time to come up to full margin, and we are losing something that was quite a mature program that delivered nicely for us.

Okay. And, Dean, just you commented you had – I think you said 56 programs in the funnel at a range of $10 million to $50 million. I realize averages can be misleading, but if I assume the average size of those programs is somewhere around $20 million that would imply over half of your funnel consists of programs in that range of $10 million to $50 million. Is that a typical funnel composition or are you seeing the funnel skewed towards larger programs? Because I notice your wins have been much smaller. I think they've been trending to $5 million or $6 million and how does your win rate on programs in that kind of dollar range compare to your average win rate?

Yes. Let me just clear up. I may have misspoke here too as Sherri corrected me on something else. But I tried to say 55 programs in that range, the 10 million to 50 million range, which is this is where we have really go out and we compete really well. There is just three of them that are greater than 50 million at this point in that funnel. Todd, I guess you could comment on the success rate, I suppose, but there is obviously a lot of variability in terms of how long these programs sit in the funnel, and actually when you convert them to actual business.

Yes, I mean, I would say that our success rate in this 10 to 50 range is solid and in-line with I would call the entire funnel. So that is an area we try to target. We think it is a good space for us. As you pointed out and as Dean mentioned, our wins are probably a bit lower then we like them right now. But our teams are working hard to get that back up to be in that 1$50 million range that we have displayed over the last few years.

So the fact that the wins that you have been achieving have trended lower, they used to be closer to $10 million now they are $5 million. Is there any interpretation of that or anything we should draw conclusions about that? Is the pricing on some of the large deals getting more competitive or is it just the nature of the end markets where you're winning or just the program sizes are smaller?

Yes, one of the – it is a bit on the end markets. I mean we’re clearly winning more business right now in the Defense, Security, and Aerospace sector, and those tend to be small. And it is very rare to get something that even approaches 10 million in the DSA sector on an individual opportunity.

Okay.

I think I just want to add one point of clarification is that even though these program wins will be relatively small, but the total revenue opportunity with these customers is quite large, and so we don’t typically make a point of going out and engaging with a customer, where we think we can only get $10 million to $15 million of total available revenue. We look at companies where we can actually accumulate a significant amount of revenue over a period of time. So, we will engage with a small program, and then build that piece of business. And that is why you see this fairly high win count with the existing customer base in our normal communications that we provide every quarter.

Okay. That's very helpful. Thank you.

You are welcome.

Thank you. Our next question comes from Ryan Jones of RBC Capital Markets.

Thank you. I was just wondering how much pricing was an issue if at all in the Avocent and Starent business moving away, and then just to clarify on the outlook for the March quarter next year. The losses for these customers were already baked into your internal plan, I thought for 2011. Just could you remind me on that? And then so if we look at the target for 15% to 18% growth for next year, can you give us detail on what the business ex these losses would have done year-on-year?

Yes. Let me just – I will just comment first on pricing. I mean, the Starent program really had nothing to do with pricing. It really came down to Cisco did not have a relationship with Plexus. They were not interested in having yet another contract manufacturer in the portfolio of contract manufacturers, and so, as soon as the deal was done they announced that this was what their intent was. Now we tried to persuade them otherwise, and we have been working to engage – and created a real opportunity for us to engage with Cisco at a very significant level, and felt we were going to continue to work that channel that we have opened up, and we have, I think, some good dialogue going on that might lead us to relationship there over the longer term. But it really had nothing to do with pricing. Now Todd – I will let Todd comment on Avocent, which is clearly a pricing thing, and I just want to make sure I come back. I have one point here, which is kind of when you are leading is that we absolutely had this baked into your fiscal 2011 plan that we have been communicating now for several quarters that this was an inevitable outcome.

So, with respect to Avocent pricing is definitely an issue with Avocent. So we have had a lot of dialogue with Emerson with regards to pricing on the Avocent business, pricing as well as other business trends. I mean the entire suite of business terms there, and we have yet to be able to reach an agreement that we both feel good about. So that is why we are projecting it is going to leave.

And just the last piece I would add, I would say that we certainly were expecting both of these accounts to transition out over FY ’11, but Starent is moving out more quickly than we had anticipated. So when we had talked to people a quarter ago, we would have thought both programs ramped down over the course of four quarters, and Starent is moving much more quickly, and so that was different than their expectation a quarter or two ago.

Okay. That's really helpful. And then I think you also talked a little bit about in the prior quarter about some temporary weakness in Europe both from a direct standpoint and from an indirect demand standpoint. So I was wondering if you could comment on European linearity during the September quarter as well.

Yes. The Europe issue that we saw back in kind of late May, early June has I think, I think there was just a little bit more excitement about end market strength there. And I think that it reset itself to a more realistic level, and I don’t know that it is turned back up or getting any worse. I mean Todd is looking at me like he's saying there is really no chance. So it is reset to a different level, and that is the way we see it going forward.

All right. Thank you. Very helpful. Appreciate it.

Thank you.

(Operator instructions) Our next question comes from Lou Miscioscia of Collin Stewart.

Okay. Thank you. The Coca-Cola program actually was very interesting. Just wondering if you all have been successful in targeting any of the other major kiosks that we see out there and anything specific there you had success, or at least going after that.

Well, we are certainly targeting the kiosk marketplace. I would say that Coca-Cola is that biggest success to date.

I think that was Todd commenting there, and I think this was clearly, I would say the kind of sub strategy within two of our market sectors is to identify similar or like technologies, and of course the kiosk market is a growing market and so we see that there is I think significant long-term opportunities there for us. We just haven’t pulled any aggressive finish line yet at this point.

Okay. And then just a quick follow-up on pricing, you mentioned how full you are 85% capacity even though some things are moving out. Does it give you the ability to price a little bit richer as you bring some new programs on or is it really just trying to maintain a comparable at this level what the markets are really, even though you're pretty tight on space you can't really price up that much higher?

Yes. I think pricing is eventually the thing in the EMS industry. Generally speaking, it has been without any sort of pricing power, and it is really kind of a market based pricing. So for us, we just have to be competitive in pricing, and really the way that we succeed in winning relationships and winning the customer is by selling the value of Plexus, which is really a more a agile and flexible manufacturing solutions for direct order fulfillment and of course, then the front-end of the business is really helping customers innovate new and exciting product technologies, and it is a significant differentiator for us. And really plays well to customers that have this complex high-technology in these medium to lower volume space. And the customer can see and we can demonstrate that this is not a sideshow for Plexus. This is what we do. This is what we’re all about. They can go visit all of our factories around the world, and see like technologies that are challenging in our manufacturing plants. So that is really the key differentiator for us, and pricing really is something that we really don’t have a lot of power over in the equation. And quite frankly, there is still a lot of capacity available generally speaking in the overall EMS industry that puts pressure on the pricing model.

Okay. That's help. Thank you.

You are welcome.

Thank you. Our next question comes from Jim Suva of Citi.

Congratulations to you and your team. A quick question about the new business wins. When we kind of look at them on a year-over-year basis, they have been down on a year-over-year basis for about the past five quarters. Can you discuss kind of the new business wins and the ability to add incremental revenues? I think you had targeted 15% sales. Is there a good rule of thumb that 10% of the business kind of matures and rolls off each year, therefore, you kind of need at the current rate, you know, a little bit higher new business programs to be able to beat that 15% rate? Because it looks look you're kind of just tacking along to maybe15% for the year ahead. Is that the right way to think about it or just address the new business wins issue overall?

Yes, I think Jim, I think you are going to see some ebb and flows quarter-by-quarter in terms of how successfully we are bringing in new revenues. As I look back to the third quarter, I think we had 141, the second quarter we had 137, and now this quarter we had 115. So it is up and down a little bit, but overall in FY ’10 we had about $500 million in annualized revenues that we won that represents about obviously 25% of the full year revenues in FY ’10, and of course that $500 million in new revenue largely executes or begins to ramp up late in the fiscal year that you win it, or in the following year. So, you always are kind of pushing out ahead in terms of new revenue wins. I think we look at it and say, we like to see certainly 25% to 35% of our annualized revenue in the win category on a go forward basis, and of course, that implies that we have to continue to ramp up that quarterly win rate. I think right now we’re on a good track. I think we did really well in fiscal ’10, and frankly if you go back to fiscal ’09, which was really an exceptional year. Some of that revenue is actually still ramping up today. So you have to kind of level it out over a longer period of time. But right now the pace that we are on with new revenue wins is certainly sufficient to drive 15% or better, 15% is our stated enduring goal for top line growth, but the pace we’re on right now is a little bit stronger than that, as you would typically see maybe 7% or so of revenues roll off as a consequence of end of life programs.

Great. Thank you very much.

You are welcome.

Thank you and I’m showing no further questions at this time.

Okay. Well, once again I appreciate the great questions that you folks always ask every quarter. It was an absolutely good year for Plexus. We are looking forward to fiscal ’11 that we expect to be a very good year for the company as well. Unfortunately business isn’t always perfectly linear, and I think we’re going – you will have maybe a little bit of pothole here that we’re going to step into in Q2, although we are working to certainly mitigate that effect, and as you know, we tend to be a bit of a conservative bunch. But we just want to let you know, and be clear that things don’t look perfect quarter-to-quarter as we come through FY ’11, but we certainly are excited about full year and are quite confident in the new program wins that we already have in the business, and the ability to ramp those up throughout the year, and deliver them for the full year. So, thanks very much for the questions, and enjoy the rest of your day and the weekend. Bye.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may all now disconnect. Thank you and have a nice day.