Good morning and welcome to the Plexus Corp. Conference Call regarding its Fiscal Second Quarter 2015 Earnings Announcement in listen-only mode. 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’ Senior Vice President, Chief Administrative Officer, and General Counsel. Angelo?

Thank you, Lorene. Good morning, everyone, and thank you for joining us today. Before we begin, I should remind everyone that statements made during our call today and information including in this supporting material that is not historical in nature, such as statements in the future tense and statements that include believe, expect, intend, plan, anticipate and similar terms 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 factors that could cause actual results to differ materially from those discussed, please refer to the company’s periodic SEC filings, particularly the Risk Factors in our Form 10-K for the fiscal year ended September 27, 2014, and the Safe Harbor and Fair Disclosure Statement in yesterday’s press release. Plexus provides non-GAAP supplemental information such as return on invested capital, economic return and free cash flow because such measurement is used for internal management goals and decision-making and because they provide additional insight into financial performance. In addition, management uses these and other non-GAAP measures such as purposes of period-to-period comparisons. For a full reconciliation of non-GAAP supplemental information, please refer to yesterday’s press release and our periodic SEC filings. We encourage participants on the call this morning to access the live webcast and supporting materials at Plexus’ website at www.plexus.com, by clicking on Investor Relations at the top of the page and then Events Calendar. Joining me today are Dean Foate, Chairman, President and Chief Executive Officer; Todd Kelsey, Executive Vice President and Chief Operating Officer; and Pat Jermain, Senior Vice President and Chief Financial Officer. Also joining us today is Steve Frisch, Executive Vice President and Chief Customer Officer, who will be offering additional insight into our market sectors. Let me now turn the call over to Dean Foate. Dean?

Thank you, Angelo, and good morning, everyone. Please advance to Slide 3. Yesterday, after the market close, we reported results for our fiscal second quarter of 2015. Revenues were $651 million, above the midpoint of our guidance and down approximately 2% from the prior quarter. Relatively to the comparable quarter last year, revenues increased about 17%. Second quarter diluted EPS of $0.69 was a $0.01 above the midpoint of our guidance range. Please advance to Slide 4. Before Pat and Todd provide further context in details regarding our performance this quarter, I will summarize a few notable items. While we guided quarter-over-quarter contraction in our Networking/Communications and Healthcare/Life Sciences sectors, both outperformed our expectations due to better than anticipated end-market demand. Our go-to-market teams delivered another strong quarter of manufacturing solutions wins, the $209 million performance was well above our target of $160 million and brings our trailing four quarter results to $852 million positioning us for continued growth. Our operating performance was largely in line with expectations. Operating margin was 4.5% consistent with our guidance and below our target range as we continue to invest in program transitions related to site consolidation initiatives. Our cash cycle improved to 59 days better than our guidance and a 13-day improvement over the prior quarter when we encountered and anticipated quarter-end challenges. Our cash cycle improvement contributed to free cash flow of $124 million. Return on invested capital was 14.5%, resulting an economic return of 3.5%. Advancing now to our fiscal third quarter guidance on Slide 5. We are establishing fiscal third quarter 2015 revenue guidance of $670 million to $700 million, suggesting a 5% sequential growth at the midpoint of the range. At that level of revenue, we anticipate diluted EPS of $0.71 to $0.79, including approximately $0.10 per share of stock-based compensation expense, but excluding any unanticipated special items. The midpoint of our EPS guidance suggest a 9% sequential increase over the prior quarter. I will now turn the call over to Todd for some further comments about our market sectors and operating performance. Todd?

Thank you, Dean. Good morning. Please advance to Slide 6 for insight into the performance of our market sectors during Q2 of fiscal 2015 as well as our current expectations for the fiscal third quarter of 2015. Our Networking/Communications sector was down 10% sequentially in Q1, which exceeded our expectations of a decline in the mid-teens percentage point range. One of our top customers significantly exceeded expectations on the strength of new product demand, while performance in the reminder of the sector was mixed. We expect our Networking/Communications sector to be up in the high single-digit in fiscal Q3, as one of our top customers continues to show strength in the marketplace and several additional Communications customers are projecting improved demand. While the sector remains volatile, we continue to expect healthy year-over-year growth in fiscal 2015. Our Healthcare/Life Sciences sector was down 3% sequentially in Q2, slightly better than our expectations of a mid single-digit decline. Nine of our top 10 customers outperformed expectations within the quarter continuing a trend of near-term demand strengthening. Looking ahead to fiscal Q3, we currently anticipate revenue in our Healthcare/Life Sciences sector to be down in the low-single-digit, as eight of our top 10 customers are forecasting quarter-over-quarter decline primarily as a result of end-market softness. We expect to return to sequential growth in the sector as we exit fiscal 2015 on the strength of previously reported new program win. Our Industrial/Commercial sector was up 8% sequentially in our fiscal Q2, slightly above our expectation. Most of our semiconductor capital equipment customers strengthened in the quarter, while performance in the reminder of the sector was mixed. We currently anticipate that our Industrial/Commercial sector will be up in the high-single-digit in our fiscal Q3 as a result of new program ramps and strengthening demand with…

Thank you, Todd, and good morning everyone. Our fiscal second quarter results are summarized on Slide 12. Second quarter revenue was $651 million which was above the midpoint of our guidance range for the quarter and 17% above the prior year second quarter. Gross margin was 9.2% in line with our expectations and consistent with the fiscal first quarter. We overcame seasonal cost during the fiscal second quarter as a result of operational improvements throughout our manufacturing site. Selling and administrative expenses were $30.3 million, also in line with our expectation and slightly below the fiscal first quarter primarily due to lower variable incentive compensation expense. For the second quarter, SG&A as a percentage of revenue was approximately 4.7%, which was consistent with the fiscal first quarter. Operating margin of 4.5% was consistent with our guidance range and diluted earnings per share of $0.69 was slightly above the midpoint of our guidance. No restructuring charges were recorded during the second quarter. I would like to also provide a few comments on our currency exposure and the impact to our European operations from the strengthening U.S. dollar. Currently, a small portion of our revenue, approximately 5%, is denominated in currencies other than the U.S. dollar. The current quarter negative impact on revenue and earnings for our European operations was less than 1% of our overall results when compared to both our quarterly forecast and the prior year second quarter. Turning now to the balance sheet on Slide 13, return on invested capital was 14.5% for the fiscal second quarter. With a lower average invested capital base, we saw a 10 basis point sequential improvement in return on invested capital. We generated an economic return of 3.5% based on our fiscal 2015 weighted average cost of capital of 11%. During the quarter,…

Okay. Thank you, Pat. Everyone please advance to Slide 16 for a review of our fiscal year financial goal [Audio Gap] new business wins performance continues to be strong providing opportunities for market share gains. Additionally, well overall end markets can hardly be characterized as robust we are benefiting from demand strength with specific customers. With our strong revenue growth guidance this quarter, we are now comfortable increasing our full-year revenue expectations to a range of 13% to 14.5%. We continue to believe our business model is healthy with operating margins in the range of 4.7% to 5%. We anticipate delivering results in our target range as we exit the fiscal year. In support of our higher revenue expectations for the year, we are adjusting our free cash flow guidance to a healthy, but more conservative range of $70 million to $90 million. Our key measure for shareholder value creation in economic return, we are starving for 4% to 5%. Reviewing our key supporting initiatives, we currently expect that our new facility in Guadalajara will become profitable in our fiscal fourth quarter. A fall of new business opportunities to Guadalajara continues to strengthen providing excellent opportunities for continuing growth. We had projected our AMER region would begin to sustain profitability in fiscal Q3 while our newer facility in Ronnie remains on track. Our overall soft revenue forecast in the region pushes our expectations for profitability improvement out at fiscal Q4. As a reminder, during the fiscal year we completed the consolidation of facilities in Neenah, Wisconsin and we consolidated our Juarez facility into a new facility in Guadalajara, Mexico. While we are making progress on our operational excellence initiatives we still have meaningful opportunities to improve our overall performance metrics in our Americas region. Finally, our market sector forecast continues to offer mix performance for the fair amount of intra-quarter volatility. And with that operator we will not take questions.

Thank you. [Operator instructions] And our first question comes from Sean Hannan from Needham and Company. Please go ahead.

Yes, thanks good morning and thanks for taking my question. Can you hear me?

Yes, we can.

Okay, great. So first is here to see if I can just get some clarity on what I think is being communicated on the margins, is 5% now officially no longer the hard bogey, is this an official step down into a revision within the models consider a 4.7% to a 5%, any color around that and what fundamentally has changed in that perspective if that is the case versus last quarter and how we've been thinking about that part of your model? Thanks.

Well I will start with it. I think Sean last year we drew a very hard line in the sand for 5% and gave us no room to sort of maneuver and also as a consequence for that we had some of the analyst take us up north of 5%, which also is not what we are trying to communicate. So, we decided to give ourselves a little room to maneuver here and say that we feel good about the company operating the 4.7% to 5% range. We will continue to strive for the higher-end of that range obviously. We think about 5% as being where we want to be, but we also want to acknowledge that quarter-to-quarter depending upon our revenue growth unfolds investments that we might be making are on the world that we would consider to be healthy in that range and we've been trying to adjust kind of our I guess our messaging around that. So that we stop apologizing for at 4.8% or 4.9%.

Okay. So it’s a matter of setting expectations of, hey we are going to have much more consistency in here.

That's correct.

Okay.

And Sean this is Pat, I would add to that, I think within that range of 4.7% to 5% we can generate a really strong economic return close to that 500 basis points. We are trying to strive for with good working capital management, we can get there.

Well Sean with the growth that certainly seems supportive.

Okay. Next question here is, and I guess is kind of multi-part looking to see if you can address some color on the various facilities. So Oradea, nice job there in terms of how that profitability is moving as well as the wins that you are gathering there, want to see if we can get a little bit more elaboration on how and what is going into that facility and how sustainable perhaps the upward trajectory can be there and then Guadalajara of course, we’ve gotten some delays, I don't think we've heard a lot of color around some of the continued delays around, it sounds like it’s sounds like it is purely manageable, but if we can get some better detail on that push? And then lastly APAC, I don't think that in terms of the wins that you folks have communicated for that reason that there is much to read there, just want to get a perspective, I suspect that the quarter is perhaps perceivably down a bit because you are such an outsize quarter in December, but any color on that would be great as well. Thanks.

This is Todd Sean. First of all with respect to Oradea, the Oradea customer base is a really nice customer base that has a lot of growth potential. So we added several new customers during the course of fiscal 2015 and had some that we that joined Plexus in fiscal 2014, but we're starting to see the ramp that we had anticipated from those customers and it’s progressing along the lines of our earlier expectations and the challenges I'd mentioned in AMER really result from our UK operations and really getting consistent revenue growth within our UK operations. So Oradea is progressing very well. We were profitable both at that site end and the region in Q2 although we will take a slight step back in the region in Q3 before resuming our growth and profitability in Q4. So stepping onto Guadalajara, Guadalajara we communicated last quarter that we would have a one quarter delay in the ramp in Guadalajara and we are on track to that revised schedule. So we had anticipated we’d have a fairly substantial losses within the site in both Q1 and Q2, which came to be true and that we would approach breakeven this current quarter in Q3, which that’s still on track to achieve profitability in Q4 and be near cooperate margin expectations in Q1 of fiscal 2015. So that's all well on track, the transitions that we had communicated earlier are moving forward and were beginning to have some success from the new business development standpoint. The funnel is very strong, I talked about the medical certification that we are putting in place with respect to the Guadalajara site and that’s having an impact and that would expect that we will close some healthcare business in that site during the current quarter. Then with respect to APAC, the APAC wins were very strong last quarter and they dropped a bit in Q2 and the reality is, I mean similar to what I talked about with the sectors that it is really tough to judge any particular region or sector on a one quarter performance, really need to look at the longer term trends. So, we feel good about the growth in our APAC region in fiscal 2015 as well as we look to fiscal 2016 that we are winning appropriate work for that region.

Great color, thanks so much.

You're welcome, thank you.

Thank you. And our next question comes from Brian Alexander from Raymond James. Please go ahead.

Okay thanks and good morning. The revenue outlook for the June quarter looks like 10% growth year-over-year at the midpoint so another quarter of double-digit growth potentially, but I think you said 13% to 14.5% for the year, which I think implies the September quarter revenue growth drops to mid-single digits, so just given the strength in new programs and the funnel why the deceleration and do you consider that to be more temporary, when do you think you might be back to double-digit growth and I have one follow-up.

I think it is you're absolutely right. We did the [indiscernible] and wondered how our folks would react to that, but I think it's just part of it is that we’ve seen just again a very strong quarter this quarter. I’m not concerned about this point because as she also pointed out that we have a very strong wins rate and we expect that to unfold. I also believe that again we are trying to communicate where we see the forecast today, but we continue to see this volatility and forecast and one of our sectors in particular continues to improve as the quarter unfolds so, you know the forecasts are hardly confident I would say from customers over a quarter or two. And there is still an opportunity for that I would say to improve depending upon how the customers react kind of inter quarter. Do you want to add any further color to the Todd?

Just one thing I’d add Brian is if you look at our Q4 F2014 revenue, it was very strong, so comparable a tough one for Q1 fiscal 2015.

Right. Okay, that makes sense. And then just a clarification on one more question. So, on the clarification, I think last quarter you talked about the Industrial/Commercial win of $100 million and I think you updated that to be $76 million on this call. I’m just curious if I heard that right. And then the question would be the mix of new wins changed, you had a drop in Communications and Healthcare and Life Sciences, but then you had the big win in Industrial and the big uptick in Defense and Aerospace, which sounds like that was really two large wins. I guess my question would be when you look at the new wins, are you finding that it’s more dependent on a handful of large programs versus historically when it was maybe more spread out and more about a larger number of small deals or has nothing really changed in kind of the lumpiness versus historical trends?

Brian, this is Steve. First of all, I will take the first part of that, which is the Industrial/Commercial win. Todd mentioned in our last call, we expect it to be about $100 million, it still is about $100 million, in fact it’s about $110 million. We closed $76 million of that in the quarter. There is about another $35 million in our funnel that we are working through with the customer and we do anticipate to be able to close and win that as well. The reason for splitting it was the ramp for the $76 million is quite quick, so we are ramping that even as we speak and the other $35 million is a little bit slower, so we are working through that with the customer. The other exciting part for me that we didn’t really have in the details here is there is also an engineering component to this. And so, part of that $21 million in engineering win also came from this customer. So that it seems working really well with them. And Todd, I think, I will let you do the second part.

Sure. So, a little more color around the wins data, Brain. And first of all, if we go back to the sector performance, again, I believe you need to think about this as a trend or a longer-term performance as opposed to current quarter performance. But I think on any given sector basis, we’re going to see significant volatility within the given sector. So, for instance, Healthcare/Life Sciences, you mentioned we had a weak quarter from a win standpoint this quarter in Q2, although we expect a very strong quarter in Q3. So I think when you normalize those two numbers once we get to the Q3 results, you will find something that looks reasonably appealing in that sector as well too. So with respect to the size of the wins and the size of the programs, I don’t think we are really seeing anything different. Now we did have a few significant programs this quarter that happened to close that really brought up the average size per win, one being Industrial/Commercial, the other being the two Defense/Security/Aerospace programs that I had mentioned. But there was also a number of others that really brought that average down. And I think the program side is tend to be similar, although one trend I would say that we are seeing is more activity in Healthcare/Life Sciences around customers that are interested in making major changes in their outsourcing strategy as we see cost pressures building within that market space.

Great. Great color. Thanks very much.

Thank you.

Thank you. And our next question comes from Amit Daryanani from RBC Capital Markets. Please go ahead.

Thanks a lot. Good morning, guys. First question to question to start off with, at the end of the operating margin bridge that you guys have in slide 11, you have 40 basis points of headwind going forward from growth investments, I’m not sure if I saw that in the prior slide, but maybe can you just talk about what those investments are centered around and how that may impact your future growth as you go forward?

Sure, sure. Amit, this is Todd again. I will take you through that slide just a bit, and one of the reasons for adding the growth investment in there is I didn’t want you to get above 5% [indiscernible]. But I mean the reality is we do expect to invest in the business, a couple of capabilities or services where we are making some investments right now and expect to accelerate that would be in aftermarket services and expanding our capabilities there as well as microelectronics. We are doing certain activities from an IT infrastructure standpoint or have them planned on the horizon around our HR systems as well as our manufacturing systems and also around people, really talented investment in people to enable our future growth, automation within our facilities to really to continue to drive operational excellence, and then again getting the right people and talent to drive a culture of customer service excellence within the company. So those are area that we are thinking about. At this point, there is no new sites in the horizon, but at some point that will come into play as too, if we can continue the growth platform.

Got it. If I just follow up on your Communications/Networking networking markets, I think, you guys have been a bit more negative in demand trends there versus what you guys are talking about. So I’m just curious, I mean, what’s the linearity been like for you guys in that business and if the strength applies towards your commentary what you guys have for next quarter more reflective of couple of big wins or one big customer doing well or is it much more broad-based?

This is Steve. I will try and address that. The Networking/Communications sector for us is very heavily weighted towards the communications side. The few networking customers that we have, including the one large one in that portion of the sector are seeing challenges similar to what I think you’ve seen from other places. The one difference for us is that customer has a couple of new programs that are ramping with us that are doing well. So, although, their overall business is a bit soft, for Plexus it’s been pretty good. And then on the communications side, as Todd mentioned, we’ve seen decent opportunities from that side of the sector. So, not completely different from what you’re seeing elsewhere, but our mix and our position just in a little bit different spot.

Perfect. Thank you very much.

Thank you. And our next question comes from Matth Sheerin from Stifel. Please go ahead.

Yes, thanks. Just wanted to ask regarding your commentary regarding EMEA, it sounds like you are seeing a little bit of softness there and the profitability targets for the operation there pushed out a quarter or so. What’s behind that? Is that more broad-based weakness that you are seeing from customers there? Is that one specific area such as industrial?

Yeah, I will try to comment on this time around. I think that the way to think about this is that, as we communicated last quarter, we delayed a little bit with the new facility in Oradea. But it really – when you look at it overall, Oradea is actually tracking quite well, I mean the growth curve there is satisfactory and I would say appropriately within what you would expect our variability with the new facility coming up and the relative uncertainty of new programs as they ramp up. So I don’t think there is anything sort of systemic in the marketplace there. I think I’m quite happy with the way that’s coming up. The challenges, as Todd pointed out, is that the overall marketplace is soft, I would say, across the region. And the difficulty that we are seeing some from a revenue forecast standpoint affected to a greater extent our legacy facilities in the UK. And so, with the revenue coming down a little bit there that hampered the overall regional profitability. I don’t know that I would pin it on a particular sector. Why don’t you two guys – Todd or Steve might? I think it’s just, generally speaking, the marketplace there is overall soft. And that we feel at this point is delayed kind of our expectations by a quarter. But we think it’s at this point in better shape in Q4 and Q1 of our new fiscal year, what would be our December quarter.

Okay. That’s helpful. And then regarding the industrial markets in general, that’s another area where you are seeing some nice program wins, which contrast certainly from a bunch of other companies out there seeing cracks in the industrial markets particularly oil and gas. What’s the difference with Plexus? Do you not have much exposure to some of those markets?

Well, I would say, we had more exposure, but it’s been down a lot. So I think what you’re seeing from us is, yeah, the impact of oil and gas and sort of I would say the choppiness of the semiconductor capital equipment marketplace where we have – some customers doing well, other customers not doing so well, much of that has been reflected in our numbers now for a few quarters. So what you’re really seeing from us is the impact of two things; one, the strong new business wins that we’ve had; and then, just certain customers that have products that are kind of running counter to the overall softness in the market, products that are getting good acceptance with specific customers in the marketplace.

Okay. Thanks a lot.

You’re welcome.

Thank you. And our next question comes from Sherri Scribner from Deutsche Bank. Please go ahead.

I think most of my questions have been asked, but I wanted to ask about the CapEx investment, Pat. It looks like you are still expecting $50 million in CapEx this year, which suggest a pretty significant ramp up in the back half. I don’t think it’s for facilities, but can you give us some more detail on what you guys are investing in? Thanks.

Yeah, there is some facilities still going on with Guadalajara that will take place in the back half but [Audio Gap].

[Audio Gap] levels or go up or down?

I think that’s probably reasonable in the -- maybe $40 million $60 million range.

Great. Thank you.

Thank you and thanks for asking Pat a question.

Thank you. And our next comes from Mark Delaney from Goldman Sachs. Please go ahead.

Yes, good morning, and thanks very much for taking the question. First question is around some M&A activity, Ares announcing a deal to acquire Pace. I know it’s still very early, but given Ares is a material customer for you, if you have any initial thoughts about how that may impact the company?

Yeah, so, of course, we are aware of the Ares acquisition of Pace. And then, I guess, right now, we’d say, we don’t expect that much of an impact. One of the things that came out in the release is that Ares is basically controlling the company that will result, so we would expect that our relationship would stay very strong with Ares.

Okay. Appreciate that. And then for a follow-up question around the networking segment wins. For the last three quarters now, the wins rate in the networking business has been running lower, is that something that’s been deliberate that you guys are may be backing away from some of those programs maybe because of pricing or is there something else that’s causing that? And then, what are the lower win rates in the networking sector for the last three quarters imply about your ability to grow in networking in fiscal 2016?

Mark, this is Steve. I think we’ve communicated it for several quarters, actually even going back to last year that networking portion of the Networking/Communications sector is [indiscernible] that we’re kind of deemphasizing. So its deliberateness is purposeful in terms of what we’ve done there. We are still aggressively going after communications in some select portions of networking, but we do see it as a sector that’s going to stay within the portfolio, but we are just being much more selective of what we go after.

Thank you very much.

Thank you.

Thank you. And our next question comes from Shawn Harrison from Longbow Research. Please go ahead.

Hi, good morning. I will go back to Pat to make sure he is awake. I have a two-fold question on margin. I guess, operational improvements was 30 basis points this quarter, I mean that’s $2 million, if my math is right, which is a lot. How did that come about? And then, I guess, secondarily on margins, what exactly happened to increase the Aerospace cost? Was it challenges of integrating business? Or is it more businesses coming in? Just a little bit more detail there

You want me to --

You want to take the first?

On margin improvement? Yeah, I think what I had mentioned Shawn was that we were offsetting the seasonal cost that we see from merit and payroll reset and a lot of that is just from operational productivity improvements that we’d got going on in the sites, a lot of lean activity to drive out waste and improve productivity. So, we saw a pretty much even offset from the merit increases with those operational improvements.

So with respect to the Aerospace and the additional investments there, as we get into the quarter in Q2, we felt that with the new business that we had ramping there that there was other investments that we needed to make along a capital and a human resources and a layout standpoint, process standpoint within the facility to really service those customers properly and ramp the business properly. So, we made the call to make those investments and service our customers’ right. Now we still believe that as we get this business ramped and as we move to a more stable state that will recover all of the inefficiencies that we built into the site.

And just a follow-up on that first response, so the 30 basis points, it’s productivity gains, I mean is that something that we can expect every year, you should be able to offset some merit-based inflation and other inflation you’re seeing?

Yeah. I believe that that’s our goal is to offset those costs because we’ve got that culture of lean and productivity improvements that we continue to drive. So the expectation would be that, yes, we can offset those cost.

Yeah, I think what Pat really saying is, that’s really part of how we think about our annual operating plan. As you know, we are in a marketplace where it’s difficult to have any sort of ability to push through inflationary cost on to the customers through price. And so the expectation is that we try to offset all of those inflationary costs by driving productivity in our sites and regions to work on that throughout the year in terms of how they’re going to make that happen.

And then it is just another follow-up question, there was a comment on medical that you’re seeing I guess customers look at ways to I guess significantly alter their manufacturing because of a cost focus. Does that mean existing business with Plexus going to lower cost sites or does that mean that you are going to see a large opportunity of incremental outsourcing break free?

It’s really more outsourcing. So it’s not necessarily a movement of work within our facilities but I was referring to movement of business from customer facilities to our facility.

I guess what’s the timeline that could happen, Pat?

It’s ongoing. I mean we are just seeing more opportunities there. So we wouldn’t have anything to report right now, but there are activities that we are having discussion.

Okay.

Fortunately these things tend to be not so determinant.

Are these big lumpy opportunities or these going to become small trickle out?

This is Steve. I think you’ll probably see both and I think the ones that Todd is referring to could be big and lumpy, but I think the other part to keep in mind here is at least the medical device or so. The regulatory requirements are also going to dictate some of the transition timing and we have to work through that to really try and understand what could possibly happen in what timeframe.

Very helpful. Thanks so much.

You’re welcome.

Thank you. And our next question comes from Steven Fox from Cross Research. Please go ahead.

Yeah, thanks. Good morning. Just first question on your revenue growth, I was wondering if you can look at the quarter we are in and then maybe also the quite guidance for the September quarter and breakdown how much is related to new program wins that are ramping versus end demand because you have the 11% and the 8% growth roughly. And then how the new programs that you’ve won are actually ramping? Whether you are seeing any delays in certain markets or maybe accelerations? And then I have a follow-up.

First, Steve, this is Todd. So from a standpoint of the growth, it’s primarily new programs. The end markets are relatively choppy. Now, we are – as we alluded to in the prepared comments as well as earlier in some of the questions, there are certain customers that are performing well. But overall we would say the end markets are soft yet and we are primarily benefitting from new programs. From a ramp standpoint, overall the ramps have been pretty good but the one area where we are seeing challenges is in the EMEA region. We are seeing some significant and consistent delays in program ramps within that region and that’s leading to some of our Q3 challenges in the EMEA region.

And before I ask my follow-up, just on those comments, why – if the markets are soft, why you still think new programs ramp as expected? I would think some of its going to be tied together like you mentioned with EMEA. Is there anything you can point to that would - is allowing you to continue to ramp these programs while you have the uncertainty and demand?

This is Steve. On the ones that we’ve been talking about, these are relatively new products where I think the customers have done a decent job anticipating where the markets are going. So I think we are benefitting from the fact that they’ve hit the sweet spot on the market a little bit and maybe their overall business is suffering a bit, but the products that we are ramping are the ones that they see as the revenue growth engines for them. So that’s probably more of what – in terms of what we are benefiting from in terms of the customers driving new product development for us.

And I would say it’s not like a new – the soft markets are something new. This is something we and certainly our customers have been dealing with now for a few years. So with the new program wins, much of the softness generally speaking is already baked into the new revenue expectations for the wins.

Got it. That’s helpful. And then just going back to the calm networking markets, I understand what you are saying about where you guys are playing versus what you’re not playing. But if you extended out that commentary not just for the next quarter, but say over the course of the next year in combination with the fact that the wins there maybe are less in other markets. Should we think of that market as maybe moving more towards flattish or do you have a more optimistic view that you can continue to grow in that segment overall?

But we anticipated to continue to grow, this is Steve. The pie chart that we put up in terms of where [indiscernible] we see that as a main, trying to maintain that as a healthy mix to the business. So we are definitely investing in want to keep that sector at the same level that has been running at, so definitely a growth area for us as well.

Great, thank you very much.

Thank you. And our next question comes from Jim Suva from Citi. Please go ahead.

Thanks and congratulations to you and your team there, Plexus. Your win rate has been absolutely fantastic and when we see the foreign currency exchanges rates changing and some of the EMEA commentary that you’ve made today, can you help us, I know you don’t guide beyond the current year and stop right there, but would it be fair to just say you guys are going to be looking at above 15% growth next year or should we need to layer in some of these concerns? Again because the win rate is super impressive and it’s way above your growth rate line, yet I’m just kind of wondering to make sure that people just don’t get ahead of themselves or is that these things have all been accounted for currency exchange EMEA and things like that because the win rates are just too strong. And they have been consistently strong, so it is not like been a one quarter, it’s just been very consistent layering of good trends.

Yes, I wish I could comment to you that we are going to be a double digit growth again next year, but it is just a little too early to look that far in the future and make any sort of commitment, you know this far. And I think as we come towards the end of our fiscal year we will have a better read on how this is going to unfold, but Jim there is no question that the out quarter forecast from customers tend to very conservative and it is challenging to really kind of get more than a few quarters out in the future and have any sort of real confidence about how the numbers are going and frankly I don’t know that the customers themselves spend the whole lot of time driving those forecasts or trying to make sure they are accurate. I think in some respects at least to us because I think that in some cases the MS industry has become more responsive and more agile for the customers the supply chain dynamics are generally pretty good in terms of our ability to get the materials to full fill. So, I think the customers don’t feel a need to really drive longer term forecast necessarily having planned supply chain and capacity. They believe that you are going to be able to respond to them in very short order that makes longer range forecast really challenging. I mean if you just look at the arithmetic and if you - if you would anticipate that we’re going hang on all of our customers and we’re going to see marginal growth in existing programs with the normal sort of programs going into life and then you layer on top the new business wins that will suggest next year could be really quite a good year, another year similar to this year, but it’s just, I would just feel uncomfortable yet trying to set the bar that high until we get a little closer to it.

Okay great. And then as a follow-up is there any relation to like the next quarter softness or uncertainty and the new business ramp dollar amount meaning it seems that the customers will adjust quarterly, but do the win rates in the forecast, are they related into [indiscernible] have a bridge there or they are just like two totally different isolated discussions in variable?

This is Steve. It really is two different discussions, especially when you look by sector. Those industrial commercial sector that we mentioned, we are ramping that even as we speak. We just announced the win this quarter and that will be ramped here within a quarter or two. If you look at some of the healthcare life sciences stuff, we could win that and it would literally be, it could be four quarters or before they start to hit any kind of descent volume. So, it really is opportunity by opportunity that we have to look at it in terms of where we expect the ramp to be.

I think this won’t get long here at a time I think the wins rate of the percent of our trailing four quarters is a good parameter of the health of the business going forward, but they try to translate that directly into the forecast is kind of difficult.

Okay. Thank you and again congratulations to you and your team at Plexus.

Thank you Jim.

Thank you. And our next question comes from Todd Schwartzman from Sidoti and Company. Please go ahead.

Thanks and good morning. Most of my questions have been asked already, but and you may have touched on this also, but can you discuss the puts and takes that led you to lower the fiscal ’15 free cash flow guidance by, I think it was $10 million at the mid-point?

Yes. Todd this is Pat. You really do remind the revenue outlook for the full year that’s going to take additional working capital requirements for us. So it is the main reason behind it.

And the tightening or the greater specificity of the - of the revenue outlook for the year it just took a function of time where you now have pin pointed that that 13% to 14.5% number that just took a function of where we are in the calendar?

Yeah I think it is true in terms of similar functions state in the [indiscernible] but I think that we have been stating greater than 10% or double digit revenue growth and if you do the arithmetic and where we are at with the third quarter guidance that became clear that either we were going to be closer to that moving towards 14% or so, or we are going to end with a flat or a down quarter, if we are stuck with the 10% number. So, it’s all like we needed to make sure that we weren’t spending big signals about what was going to happen in Q4 and so we fully expect that to be a sequentially up quarter and of course if the arithmetic than suggest that’s going to be closer to the new guide range.

Got it. Thanks a lot.

You’re welcome.

Thank you. And I am showing no further questions at this time.

Alright well with that then we are going to wrap it up, I want to thank everyone for the questions, hopefully you detected at least a reasonable amount of optimism here with the team, coming through this year and achieving double digit revenue growth in the range that we are seeing it is the - is quite an achievement I think considering the overall marketplaces that our customers are participating in while we are not quite happy with our operating performance, but I think you can sense that from us as well. We believe we are going to get up into our target range here as we come to the year and we are really focused on hanging on to performance in that range as we move through the new fiscal year and we are hopeful that none of you were asking that we will see another strong revenue growth year in the coming year if the economies around the world cooperate at least in a reasonable way. So, with that thank you very much.

Thank you. And thank you ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.