Good morning and welcome to the Plexus Corp Conference Call regarding its Fiscal Fourth Quarter 2015 Earnings Announcement. My name is Cynthia and I will be your operator for today’s call. 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. 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, Cynthia. Good morning, everyone, and thank you for joining us today. Before Some of the statements made and information during our call today will be forward-looking statements as they will not be limited to historical facts. The words believe, expect, intend, plan, anticipate and similar terms often identified 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 filing 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 those measures are used for internal management goals and decision-making, because they provide additional insight into financial performance. In addition, management uses these and other non-GAAP measures, such as adjusted net income and adjusted operating margins, to provide a better understanding of core performance for 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 this call this morning to access the live webcast and supporting materials at Plexus' website at www.plexus.com, clicking on Investor Relations at the top of that page and then Event Calendar. Joining me today are Dean Foate, Chairman, President and Chief Executive Officer of Plexus; Todd Kelsey, Executive Vice President and Chief Operating Officer; Pat Jermain, Senior Vice President and Chief Financial Officer; and Steven Frisch, Executive Vice President and Chief Customer Officer. Let me now turning the call over to Dean Foate. Dean?

Thank you, Angelo, and good morning, everyone. Please advance to Slide 3. Yesterday, after the close of the market, we reported results for our fiscal fourth quarter of 2015. Revenue was $660 million with diluted EPS of $0.70. Both results were consistent with our guidance. During the quarter, our sectors largely performed inline with our expectations with a modest beat in our Defense and Aerospace sector. Please advance to Slide 4. For the full fiscal year we achieved strong top-line growth of approximately 12% to $2.7 billion meeting our enduring growth goal and setting a new record revenue level for the company. Our economic return was approximately 3%, below our goal of 5% but solidly in value creation territory. While our initiatives to improve operating margin performance to deliver tangible results, revenues fell precipitously below earlier expectations denying the anticipated leverage as we exited the fiscal year. Please advance to Slid 5. Our sector growth was fairly well balanced with double-digit growth in three of our four sectors. Our Healthcare/Life Sciences sector grew just 8% following a very strong performance in fiscal 2014. We remain confident in our longer-term growth potential in our Healthcare/Life Sciences sector and we enjoy excellent market penetration with our Engineering Solutions business. Please advance to Slide 6. Taking a look at our regional view, I am pleased that we delivered growth in all three regions, while our EMEA region – while our EMEA growth percentage was the highest of the three, the growth rate was on a relative small revenue base. The modest dollar level of revenue growth was enough to swing the region to profitability as we have planned as fiscal 2016 unfolds we need to grow at a even more aggressive rate to drive appropriate returns on our investments in that important market.…

Thank you, Dean. Good morning everyone. Please advance to Slide 10 for insight in to the performance of our market sectors during Q4 of fiscal 2015 as well as our expectations for the sectors in fiscal Q1 of 2016. Our Networking/Communications sector was down 19% sequentially in Q4 which was inline with our expectations. Shipments to two of our top three customers had significant declines from Q3 while performance in the remainder of the sector was mixed. We experienced a recent major softening of Q1 demand as seven of our top 10 Networking/Communications customers reduced forecast from earlier expectations. As a result, we now expect fiscal Q1 Networking/Communications revenue to be down in the high teens when just a one quarter ago, we expected growth in the sector. Our Healthcare/Life Sciences sector was up 2% sequentially in Q4, inline with our expectations of a low single-digit increase. Demand was relatively stable within the quarter. Looking ahead to fiscal Q1, we currently anticipate revenue in our Healthcare/Life Sciences sector to be up in the low single-digits as new program ramps offset sluggish end-markets. Seven of our top-10 customers reduced their Q1 forecast from the prior period. Overall, we expect a good growth year in fiscal 2016 within our Healthcare/Life Sciences market sector as a result of recent program wins. Our Industrial/Commercial sector was up 14% sequentially in our fiscal Q4, slightly above our expectations of low double-digit growth. Seven of our top 10 customers grew sequentially in the quarter, as we benefited from multiple new program ramps. We currently anticipate that our Industrial/Commercial sector will be down in the low teens percentage range in our fiscal Q1 as we see significant softening in the semiconductor capital equipment space and continuing weakness in oil and gas. Despite these market challenges and the…

Thank you, Todd, and good morning everyone. Our fiscal fourth quarter results are summarized on Slide 16. Fourth quarter revenue of $669 million was above the midpoint of our guidance and relatively consistent with both the fiscal third quarter and prior year fiscal fourth quarter. Gross margin of 8.9%, was above – was also above the midpoint of our guidance and above the fiscal third quarter gross margin of 8.8%. Consistent with our expectations, we saw margin improvements from our EMEA operations, our aerospace factory in Wisconsin, and the continued ramp of business within our Guadalajara site. Anticipated and highlighted last quarter, these improvements were partially offset by an underabsorption of fixed costs due to the reduction in fourth quarter revenue for our Networking/Communications sector. Selling and administrative expense of $30.7 million was consistent with our expectations and as a percentage of revenue it was approximately 4.6%. For fiscal 2015, SG&A as a percentage of revenue was also 4.6%, the lowest level we’ve seen in several years which is a result of improved productivity and prudent management of expenses. Operating margin of 4.3% was at the midpoint of our guidance, and consistent with the fiscal third quarter. Included in operating margin is approximately 40 basis points of stock-based compensation expense. Diluted earnings per share of $0.70 was slightly above the midpoint of our guidance. We continue to see minimal impact to revenue and earnings from currency fluctuations related to our EMEA operations. Turning now to the balance sheet on Slide 17. Return on invested capital was 14% for fiscal 2015, reflecting an economic return of 3% based on our weighted average cost of capital of 11%. Although delivering a nice spread above our cost of capital, this year’s return was below the 15.2% for fiscal 2014 while invested capital grew…

Thank you. [Operator Instructions] And our first question comes from Mark Delaney with Goldman Sachs. You may begin.

Yes, good morning and thanks very much for taking the questions. The first question is on the programs that the company is planning to wind down. As I understand they weren't meeting the returns targets of Plexus at this point. But maybe you can just talk about why you ended up in a situation where they weren't hitting your returns targets, because some of those programs actually look like they are fairly sizable, I mean, especially by my math that the networking program at $29 million of revenue next quarter, I mean, that's something like 20% of that segment’s sales. And so, it seems like a sizable program and I'm trying to understand why it's not at the return targets anymore?

This is Steven. The first one on Industrial/Commercial, that program was in our transportation sub-sector and it is more of an automotive type product and from a strategy standpoint, Plexus has not pursued the automotive market as that part became more of an automotive type application. The margin structure and that customers expectations in terms of what they needed for, the long-term supply solution didn’t really line up with Plexus’s strategy. And so, we actually started a conversation with them over a year ago and talked about realigning their supply base to – the supplier base we matched with the needs of ours. So that was a long-term discussion with them in terms of winding that down. In terms of the Networking/Communications one, we’ve talked quite a bit over time in terms of projects or programs in that space have a tendency to get commoditized over time. And that’s what happened with this one. The customer was under some significant pressure for cost reduction opportunities. And Plexus decided not to pursue basically aggressively going after a price model. So, working with the customer we are basically unwinding that project as well. So, both cases, looking at kind of the margin profile and the customers’ expectations on the supply chain solution we didn’t feel that, we were a great fit for them. So we worked with them to unwind both of them.

I would just make the final point that on the Networking/Communications program, they have a portfolio of business with particular customer. The piece that we are exiting is focused in the networking space where Steve said is highly commoditized and we are retaining other pieces of business that make more sense and where we can achieve the kinds of returns that we expect to achieve.

Okay. And then for a follow-up question, I was hoping to get a better sense on the outlook for the March quarter. I mean, I understand some of these programs are going to be winding down, I appreciate the clarity on that. For the existing business what sort of trends should we expect there? I understand there are some macro headwinds you have been seeing and you think, June starts to grow again. I am just hoping you can help us better separate some of the program wind downs with some of the macro and seasonal effects that we’d normally see in the March quarter?

Yes, as I said, we expect to be inline or about flat quarter to quarter from our fiscal Q1 to Q2. So, the implication of that with the program wind downs is that the rest of the businesses is seeing some growth and Todd do you want to comment more on that sector-wise or?

Well, from a sector standpoint, I mean, obviously we are seeing some headwinds in Networking/Communications in the current quarter. We expect a minor recovery, I would say within that sector as we go out to the following quarters. But where we expect to see more strength is in the other three quarters and that’s primarily a result of new program wins though. The end-markets in general are soft and if we look at our forecast for the current quarter, our fiscal Q1 revenue has come down from our previous expectations in all four sectors from quarter over quarter. So we are seeing general softness but the strength we’ve had in program wins over the past several years is really driving the growth that we expect to see in those other three sectors to offset the program exits.

Thank you very much.

And our next question comes from Shawn Harrison with Longbow Research. You may begin.

Hi, morning. I wanted to get into – I guess, more detail on the cost reduction actions and just how much of what's occurring either with the SG&A coming down this quarter, kind of the cost reduction actions which look to be all COGS based over the next two quarters being permanent so that if we look at your model in the back-half of the year, if demand rises, you are not going to see a degradation in margins?

Shawn, this is Todd. So with the cost reduction activities, first of all, Pat had mentioned, SG&A reductions in the current quarter and those are not factored into the cost reduction targets that I gave the $6 million to $8 million. So this is real cost that’s coming out, call it for the long-term and will only be adjusted up in the case of revenue coming in. So you can expect that $6 million to $8 million to be incremental to the SG&A that’s coming out right now.

And the SG&A that’s come out right now, is this temporary or are these permanent cuts?

Well, the SG&A coming out right now is, a heavy percentage of that is variable incentive compensation.

Okay. Second question, I guess, the stock is not going to open higher this morning, definitely going to open lower. Why not front-load the buyback understanding that you are going to be free cash flow positive for the year? I understand you like to fund it with free cash flow, but if you are going to improve cost as such and the earnings power will step-up in the back-half of the year, why not use an opportunity to get at the market right now?

Yes, Shawn, this is Pat. I’ll answer that, I mean, we’ve stuck with this strategy of consistently repurchasing throughout the year and I don’t want to get into trying to predict the market, the dollar cost averaging is worthwhile for us in the past. From time-to-time we do discuss this strategy with the Board, based on our intrinsic valuation and decide whether we want to change is warranted. So we will continue to do that, but we are not prepared to change our strategy at this point.

Pat, if I may clarify something real quick, the free cash flow number, does that include cash restructuring cost or is that prior to any cash restructuring cost?

It’s prior to restructuring cost.

Thank you.

Yes.

And our next question comes from Sherri Scribner with Deutsche Bank. You may begin.

Hi, thank you. I wanted to dig a little bit in to the Networking/Communications segment. I know that a number of customers, I know - I heard you comment that a number of customers cut their forecast. Are you seeing any of this tied to weakness in Asia? Maybe you could give us a little bit of geographic detail on what you think the cuts are related to? We’ve heard from other companies that networking is a little bit weak, but trying to get a little more detail on what’s driving that for you specifically.

This is Steve. A general comment back from customers about China is that, they are seeing softness compared to what their expectations were, but they are still seeing growth. So, there is obviously some impact playing into, to the softness, but they are still optimistic in terms of the fact that they are growing in that region. What percentage is specifically called out that is impacting us. It’s difficult to look at customer-by-customer and say that their growth projections are truly, they are attributed strictly to Asia. So for us, it’s an impact, but we don’t know that it’s meaningful across each of the different sectors and I know that’s not a very clear answer, but that’s the best we are getting from our customers.

Okay, that’s helpful. And then I was hoping the 9% gross margins in the back-half of the year, I just wanted some clarification, is that in the back-half of your fiscal 2016? Or is that in the back-half of calendar 2016? Since there is a slight difference. Thanks.

Sherri, this is Pat. Yes, it’s fiscal 2016.

Okay, thanks.

Thank you.

And our next question comes from Matt Sheerin with Stifel. You may begin.

Yes, thanks. I just wanted to get back to the issue with the communications customer where you are winding down programs. But it sounds like, this customer is not going away, right? So, what percentage of revenue will you retain with that customer?

I don’t know what – I don’t have the break out, you are saying what percentage of – what we had versus what’s…

Yes, I am just trying to figure out what your discussion was going from what x run rate to what kind of run rate in terms of profitability. I am just trying to figure out whether or not you're going to eventually just phase this relationship out?

No, I don’t think it’s about phasing a relationship out. I think we are keeping maybe 25%, 30% of the overall revenue.

Okay.

In a different – somewhat different – focused in a different space within that overall sector.

And just within that sector, how is your strategy then changing, Dean, relative to the telecom infrastructure, networking where obviously more commodization, a lot of competition from much bigger global players versus niche communications, cable those kind of markets?

Yes, I would just say that we are generally looking at is, some of the – what I would consider to be sort of pure networking gear that has – let’s say average program sizes are enormous for each product line relative to our other kinds of business that we execute and the product life cycles are very short and we are seeing a lot of pressure with softer applications to essentially replace hardware or it’s driving down the pricing on hardware and commoditizing it. So, we are currently focused on, our shift is more, just set to more niche kind of opportunities that we also enjoy a pretty good position in the companies that play more in the cable space where our value proposition is stronger.

Okay. And then, relative to the guidance, so that that includes those two programs with the two different customers winding down, as well so that's part of that?

That’s correct.

Okay. And then, okay and that plays through the year. And then, just within on the Industrial side, that weakness you are seeing in semi-cap and other end-markets, do you see that continuing into March and June? Or is there – or any signs that those markets are beginning to stabilize?

No, we believe it is going to continue forward certainly into our Q2 if not Q3 which would be our June quarter. I would say that, the end-markets I am talking about is being quite challenged although, we are working with a number of those customers to try to improver our share position. So that we can potentially grow a little bit in those – in the sub-sector there. But we’ll have to see how that plays out, but clearly, when there is – that sort of pressure on these companies, it’s difficult for them to support multiple EMS partners and we’ve got a strong position with a number of them which is kind of to my commentary about growing the top-line, we are trying to take advantage of our strong execution, strong net promoter score as that we have with these customers and really get aggressive about increasing our share of the business as we expect a number of our customers will look to reduce the number of partners that they are working with.

Okay. Okay, great. Thanks a lot.

Thank you.

And our next question comes from Mitch Steves with RBC Capital Markets. You may begin.

Hey, thanks for taking my question. So I just kind of wanted to return to the 9% that gross margin target you guys have for the back-half of the year. If I plug in the numbers roughly speaking, it looks like that means that the net sales number would have to decline on a year-over-year basis in the back-half. just to get to the 5% margin. So just want to make sure the math I am doing there is roughly accurate?

I guess, I am trying to understand the – what you are saying that sales number is relevant to, if you look at the full year fiscal 2016 versus the full year 2015, clearly, it’s going to be a challenge for us to show top-line growth when you look at the first two quarter is being relatively flat at the current revenue level. But we do expect to see sequential growth at least for the moment as I said, in both Q3 and Q4 if we were not – yes, correct, if we were not unwinding those couple of programs, we would have saw the sequential growth in our – beginning in our second quarter. So, that’s part of the leverage that we are going to get to generate stronger margins, but we are also taking out a fair amount of cost. So, maybe, Pat, who can add me like maybe he can help clarify a little better.

Yes, I would just add show my guidance on gross margin was 7.7% to 8% and when Todd talked about the cost reductions, $7 million to $8 million that’s going to add about 100 basis points to our margin, our gross margin. So, my commentary was that, gross margin should get to 9% or above, 9% or higher.

Got it, okay that makes sense. And then just a quick one on the SG&A, so when would we expect this to get back to kind of a run rate of $30 million a quarter? Just like I can get an idea of the linearity or I guess, the ramp - revenue ramp after exiting this year?

It’s probably the back-half of fiscal 2016. But, again with some of the actions we are taking, we are going to see SG&A probably below $30, probably for the next foreseeable future and being in that range as a percentage of revenue 4.4 to 4.6.

Got it, okay. Thank you. Thank you very much.

Thank you.

And our next question comes from Andrew Huang with B. Riley. You may begin.

Thank you. To get to your 9% gross margin target, can you give us a sense of what kind of minimum revenue levels you need?

Yes, I think, Andrew, we can be at this lower level of revenue and get to 9%, again with the cost reductions Todd talked about. So, when we talk about 9%, again I am talking 9% and above. So with any additional revenue, we should be able to get north of 9%, but at the current revenue rate and the cost reductions discussed, we should achieve 9%.

Okay. And then, perhaps on a more positive note, maybe you could give us an update on the progress with the large multinational OEM in the Industrial segment? And then I think you also mentioned some potential needle movers that could happen during fiscal 2016.

This is Steve. In regards to the Industrial/Commercial customers I referred to previously, we did win our first small opportunity with them that we are prototyping and doing some NPIs some initial projects that’s actually happening in Oradea, Romania facility which is very nice. We do have about additional $25 million of opportunities identified in our funnel that we are pursuing and we talked about these getting to be a $100 million run rate at some point in the future and we still believe that and they are still talking to us about that. But one of the reasons we didn’t recognize it initially was we knew it was going to be a little bit of a smaller ramp and we’d have to win these projects. So, it’s progressing nicely and kind of inline with what we expected. So that’s going well. In returns to the opportunities that Dean talked about, one of the things that we are seeing with some of the customer base is they are really evaluating their sourcing strategy, whether they do it in-house versus looking for a complete outsource. So we have a opportunities identified that we are talking with customers about them exiting their facilities which if they decide to do that, obviously there would be meaningful impact right off the bat. So there are a few those that we are pursuing and our customers – we are expecting our customers and make those decisions within the year. So, we are aggressively going after those.

Thank you.

And our next question comes from Steven Fox with Cross Research. You may begin.

Thanks, good morning. Dean, I was wondering if we could step back a little bit and look at the entirety of the business over the last few years, you guys have been in the 4% to 5% range from time-to-time but not consistently unusually it’s taken some extraordinary actions to get there. Can you talk about the reasonableness of sustaining that type of level of operating margin and especially given that it seems like the footprint was well adjusted for current demand levels before you announced last night? A – Dean Foate: Yes, I would just, I know that we are getting challenged here to have credibility around getting to a range, but we know internally that the math works if we just get the capacity aligned right and get the returns on the newer investments that we’ve made over the last few years with new facilities. But, if you look at what we had thought was going to unfold for us in fiscal 2015, we expect it to be at a much higher run rate of revenue in our fourth quarter than we ended up at because we saw this end-markets starting to weaken primarily in the Networking/Communications space as we pre-announced our Q3. So, if we had gotten that that additional revenue like we thought, we would have been solidly up in that range and if you look at our fiscal Q1, our forecast probably back in June timeframe was probably $100 million to $110 million higher or for Q1 than what we are actually going to execute. And, Q1 the reduction in revenue there is not related to the loss of any programs, any share shift, it’s all related to end-markets coming down. Every one of our market sectors came down and of course we saw there…

And Dean, just to summarize those thoughts which I appreciate. So you are basically saying that I guess, the management challenge is just sort of timing all the capacity to the business as opposed to individual programs meeting your margin targets; is that correct? A – Dean Foate: Yes, I would say over the last two years, we are probably a little bit overly assertive in terms of the numbers of projects that we had going on, bringing up Oradea,, bringing up Guadalajara, consolidating three facilities into one here in Nina and we just had a lot of things going on and quite frankly, as we started to get out – come out of the back-end of fiscal 2015, a lot of the hard work and the improvements that we expected were starting to unfold. What we didn’t anticipate was revenue creating the way it is, which means now, we got – we know there are a list of things that we got to go after. Now, hope we take some comfort in that, we’ve managed through downturns, particularly as the great recession I think quite well, if you look at our performance through that, we, I think, outperformed a number of our competitors through that period and came out stronger and growing and of course we had the calamity where a largest customer hung us out the dry and we laid out the plan to recover from that and I think that unfolded with near precision to what we said would happen. So I think we got – we should get some credibility around a say do ratio. If we are going to get – Todd is talking about, getting this cost out, we’ll get the cost out and we will get ourselves back to where we need to be and again there is not and it’s not like we don’t have revenue growth opportunities in front of us. We do, these sort of the pressure that this creates in the marketplace has a tendency to create opportunities for growth. So, it’s just – we just got to get down with the work that needs to be done.

Thanks very much. Appreciate the color. A – Dean Foate: You are welcome, sure.

And our next question comes from James Suva with Citi. You may begin.

Thank you so much, especially for all the details thus far in the call. As you think back about these customer program transitions, were they at one point meeting or exceeding your goals and the products just get mature or were they kind of just hopeful that the expansion could increase with your relationship with them? Or was it, now they are just asking for more aggressive pricing that causes such a change, because it’s kind of sad to see a customer or a product transition away or of course, it could also just be the normal life of things once they mature and get older they feather out. Can you help us understand kind of each of those two different product scenarios of kind of how they played, the strategy of historically and the outlook? A – Dean Foate: Sure, Jim. I think the networking business in particular, we’ve been a player in that marketplace for a long, long time and I mean, everybody knows that we had very large customer surprises one day until as they weren’t going to do business with us anymore. And part of it is the pressure that they were seeing in the marketplace and I think their conclusion was that, we weren’t going to be able to get the cost – the pricing on those products where they needed it to be. And rather to challenge us to get there, they decided to walk away from us, it was an elegant departure, but it happened. But if you look at what’s been happening in that marketplace is an enormous amount of a pressure on some of these companies as the natural commoditization and frankly disruptive changes taking place in that market. Part of it is the software-defined networking and just, et cetera, et…

Great and then my follow-up on the networking one, it sounds like, you will continue to do additional programs and products with that customer. A – Dean Foate: Yes.

Can you help us understand about has there been a past history of lots of past products you just kind of feather out and turn-off your portfolio, because they don't meet your needs or is this kind of a newer phenomena because the question would be, is this that customer, are they used to you being a great partner and then feathering something out or is this kind of new and does it add risk to does this partner then start to say, well, maybe if they are feather off this - my other products that I may need to reassess? A – Dean Foate: Yes, I mean, it’s hard to predict the future there, but I think our relationship is strong. It’s essentially another kind of division within this company that we’ve had, enjoyed a position with for a long time. We provide a certain level of aftermarket services for products and so, we are long pretty tight with them, but in any case, we enjoy this business. We think there maybe more share that we can gain here, but I would also say that, at the level that we are at now it’s as a concentration it de-risks materially.

Great, thank you again for all the details. A – Dean Foate: Thank you, Jim.

And our next question comes from Rob Crystal with Goldman Sachs. You may begin.

I just wanted to ask a little bit further about the buyback in terms of thinking about it more from the standpoint of the economic return you guys have always been returns focused. So, could you comment on that a little bit maybe? Thanks.

Yes, I mean, we think having a buyback program is a good method of returning capital to our shareholders. We’ve had a consistent program in place the last several years. Again, what I stated earlier, doing it consistently throughout the year, I think brings rigor to focusing our cash flow generation especially in the US and I’d mention again that the basis for our share repurchase program is cash flow generation in the US along with our ability to lever up in the US. Having access to offshore cash is a significant tax impact for us if we are bringing the FX. We take that into consideration and our decision on what level to set the repurchase at. So we’ve been pleased with the levels we’ve been and we will continue that this year and continue to evaluate the return it brings to our shareholders.

Pat, I guess you if you understand the flow of working capital, I'm guessing bankers would = commercial bankers would as well. So, why not be more aggressive if the stock is weak over the next three to six months given your - I'll forget whether it was, say do was Dean's comment, et cetera. So, given that you do have a strong history of that, why not potentially be more aggressive if the market dislocates?

Yes, part of it is, just when I look at the quarterly free cash flow generation and I mentioned this in my commentary that we are looking at a negative $20 million to $40 million in free cash flow for the first quarter. So a lot of that’s driven by higher working capital requirements that we are working through and trying to get our arms around and reduce, but that’s impacting our ability to provide more of a share repurchase in the near-term and our ability to lever up further to support a more accelerated program. Now it’s not to say we wouldn’t potentially look at levering up even further but I think before we get – we need to get through some of the restructuring activities as well to see what the impact on our cash is going to be from those decisions. So I am just not at this point, ready to accelerate it.

I understand, but we should think that, given that you are economically focused that if it made sense to pull it forward because the stock was even more attractive that that would be a strong consideration, that is a reasonable thought?

Yes, definitely.

Thank you.

And our next question comes from Shawn Harrison with Longbow Research. You may begin.

Hi, I wanted to follow-up on three things. Last quarter, I know there was - talk about the margin expansion opportunities in aerospace. Did you hit those this quarter, because you fixed the bottlenecks or is there still upside to come from just fixing the problems within the aerospace business?

Yes, we did fixed the aerospace bottlenecks, Shawn. There is continued upside and growth opportunities the sector. So we are expecting a bit of softening this quarter just as a result of an inventory reset or inventory correction from one of our customers but beyond that, we do see the opportunity for strong growth in fiscal 2016.

But to be clear, the margin headwinds that were there no longer apparent?

Okay.

The margin headwind is due to the capacity constraints that are no longer apparent.

Okay.

We are still working through the productivity improvements that I’ve talked about in previous calls and that’s reflected within the $6 million to $8 million in cost improvements that I’ve talked about.

Okay, that’s helpful. And then just as a follow-up. So I mean, you just pointed about earlier in the call a bit in the middle of the call, but potential large outsourcing wins, what exactly does that mean? How much of that is tied to semi-cap companies consolidating into one supplier? How much of that is tied to just going from internal to external, and what are the odds that they actually hit this year and actually begin to ramp? A – Dean Foate: Yes, it’s hard to give you odds at this point. I mean, it’s a couple of that, I would had in my mind were related to the Healthcare/Life Sciences marketplace for customers to have physical assets for their manufacturing product today and the reconsidering whether they should continue to do that. And those in that situation, our preferred method would be to take – first would be to just extract the business on this ideal fashion way, if that doesn’t play out, then our next preferred method would be to do, what we call a manage and play so we come into the facility, take over ownership of it we’d recognize revenues on day one, we’d have a services agreement for the employees and the staff and we would then work to exit the business out of that facility into our facility. And those things tend to be a little bit undeterministic in terms of timing but there is certainly a handful of those now that are in play and of course that they would – the decision to get made and we’d have recognition of the revenue since we took over control of the facility.

But nothing tied to just consolidating now suppliers to one or anything of that nature is? A – Dean Foate: There is plenty of opportunities like that, but those are not more in our normal funnel. Those are just, typical go get additional market share kinds of plays and those unfolds every year and you see, like you say, you tend to see an acceleration when there is more pressure on the suppliers and then we are winning some additional share in semiconductor capital equipment because of the reduction of supply chain partners.

Okay and then last, just considering you had two customer that didn't meet the return targets. Were there any other customers at the precipitous of well, maybe we should keep them, maybe we shouldn't, and so there is risk moving through 2016 that we get into 2017 and you face a similar hurdle? A – Dean Foate: There are always. Customers that we prune, if they don’t unfold the way we thought, but none that were as material as these two customers and as I said earlier, we had expected a strong enough growth to unfold in 2016 that we would still achieve single high to low double-digit growth even with the unwinding of these relationships. But given with the revenue coming down the way it did, and trying to explain flat quarter-to-quarter between Q1 and Q2, I felt we needed to give a quite a bit of insight, one is because of the size of the programs but also because of that the impact on our Q2. So, there isn’t anything that we are contemplating today that’s of the size that we would unwind. And maybe, you wouldn’t have even noticed the Industrial/Commercial one had our year kind of been on track, well it’s what we had expected just a quarter or so ago.

Okay, thanks, Dean. A – Dean Foate: Yes. I just want to make a comment too on the full fiscal year, because we are getting to the end here. We are – we talked about, it’s going to be tough to grow this year, but I would say, when you think about how we are going to commodity here in terms of the mix of business in our pie chart, we are expecting pretty strong growth in Healthcare/Life Sciences for the moment, up double-digits and in Defense/Security/Aerospace also for the moment up double-digit percentages. Industrial/Commercial because we are unwinding a pretty substantial piece of business right now looks to be just marginally up although we’ve got a number of opportunities where we think we could improve upon that. It’s the Networking/Communications sector that’s going to be the most challenged, but we are – like I say, rotating ourselves to what we think is a more defendable position and de-risking the overall business by getting out of some of the most volatile and commodity like product technologies in that space. So, we are going to – of course, the most margin challenged as well. So I want to give you that sort of sense of kind of how this is going to unfold for the full fiscal year.

And we have no further questions at this time.

All right, well, I want to thank everyone for their questions and obviously we have work to do. So, thank you very much.

Thank you, ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.