Angelo Ninivaggi - Vice President, General Counsel & Secretary Dean Foate - President & Chief Executive Officer Ginger Jones - Vice President & Chief Financial Officer

Shawn Harrison - Longbow Research Jim Suva - Citigroup Kevin Kessel - JP Morgan Amit Daryanani - RBC Capital Markets William Stein - Credit Suisse Reik Reed - Robert Baird and Company Shawn Hannan - Needham & Company Sherri Scribner - Deutsche Bank

Thank you, Cherish. Hello and thank you for joining us this morning.

Before we begin, I would like to establish that certain statements made during this conference call that are not historical in nature are forward-looking statements. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results and actual results could differ materially from those expressed or implied in the forward-looking statements.

For a list of major factors that could cause actual results to differ materially from those projected, please refer to the company’s periodic SEC filings, particularly the risk factors in our most recent Form10-Q filing. The company provides non-GAAP supplemental information such as earnings or earnings per share, excluding restructuring costs and adjustment for the valuation allowance on deferred tax assets.

These non-GAAP financial data are provided to facilitate meaningful period-to-period comparisons of underlying operational performance by eliminating infrequent or unusual charges. Similar non-GAAP financial measures including return on invested capital or ROIC are used for internal management assessment because such measures provide additional insight into ongoing financial performance.

For a full reconciliation, of non-GAAP supplemental information, please refer to yesterday’s press release and our periodic SEC filings. Joining me this morning are Dean Foate, President and Chief Executive Officer, and Ginger Jones, Vice President and Chief Financial Officer.

We will begin today’s call with Dean providing fourth quarter commentary about our market sector performance and outlook, our new business winds and opportunity funnel and capacity utilization. Ginger will follow up with details about fourth quarter and full year financial performance, discuss some risk mitigation initiatives in light of the current environment, and provide our guidance for the first quart of fiscal 2009.

Dean will then return to review some highlights for fiscal 2008, and his thoughts about fiscal 2009. We will then open the call up for questions.

Please limit your questions to one question and one follow-up. Let me now turn the time over to Dean Foate.

Thank you, Angelo and good morning everyone. Last night we reported results for our fourth fiscal quarter of 2008.

Revenues were at $476 million with GAAP EPS of $0.43. Both revenue and earnings were within our guidance range.

Overall fourth quarter returns grew about 4% sequentially from our third fiscal quarter. Our medical sector was the only sector that did not grow during the quarter although it performed better than earlier expectation.

Our wireline networking sector was softer than expected in the fourth quarter, ending up just 1%, as four of our top ten accounts performed below earlier expectations. We currently expect flat to down performance in our wireline networking sector in the first quarter, while our top three accounts are currently expected to grow in this quarter.

The strength will be offset by anticipated weakness in the remaining seven of our top ten accounts. While our wireless infrastructure sector was up strong this quarter, although slightly below earlier expectations, we currently expect a lower single-digit decline in Q1, as end market demand softens for the majority of our limited portfolio customers in this sector.

Our medical sector was down about 2% in Q4, performing a little better then the mid single-digit decline expected, that is 10 of our top 10 accounts or as 8 of our top 10 accounts beat earlier forecast. We currently anticipate that our medical sector will be up strong, with mid-teens growth in Q1, as 6 of our top 10 accounts indicate improved demands.

The overall performance of our industrial commercial sector was stronger than expected, up about 4% in the fourth quarter, looking ahead to Q1, we currently expect a soft quarter, with a mid-single -- with mid-teens percentage decline, as 14 of our 15 leading accounts are forecasting weak demand. Revenues in our defense and aerospace sector were up about 25% in Q4, in line with expectations as 4 of our top 5 accounts all delivered growth.

Looking ahead to Q1, we currently anticipate another strong quarter for this sector, with revenues currently expected to be up about 33%, as 3 of our top 5 accounts are forecasting growth. Included in the projected growth is about $12 million of production and service for our ended sonic defense account.

Beyond the $12 million forecasted in Q1, we currently have about $12 million of additional production forecasted for this account through the remainder of fiscal 2009. Turning now to new business wins.

We enjoyed an exceptional quarter of new manufacturing business wins in Q4. We won 19 significant new programs, which we currently estimate will deliver partly $200 million in annualized revenue when the programs are ramped with production over the coming quarters, subject of course to risks around the timing and ultimate utilization of the forecasted revenues.

In addition to these manufacturing wins, we have also won a new confidential customer program in an industrial sector to produce a complex mechatronics product. This program is currently forecasted to delivery.

$30 million of revenue, largely in the second half of fiscal 2009. Depending upon market acceptance, economic factors, and the general uncertainty and risk of new to market products, this program could potentially result in a new top 5 customer for Plexus.

This program represents the second significant mechatronics win for Plexus since we made the strategic decision this past year to pursue opportunities in this space. Our overall funnel manufacturing opportunities continues to be strong at just over $1.8 billion of qualified new business.

On the engineering services front, we won approximately $16 million in new programs during the fourth quarter. Overall, demand for engineering services has continued to hold up over the last few quarters.

We believe customers are closely watching their R&D spend as a result of the current economic uncertainty, and we have seen some delays if decision-making. But, in most cases customer who have committed to invest in new product development programs have followed through with purchase orders.

Adjusting capacity utilization and global growth, as expected are added to capacity utilization was healthy in Q4, at approximately 79% overall. In the coming quarters we currently expect our capacity utilization to come down little as we include our new site in Hangzhou, China, and the anticipated additional capacity in North America to support our large mechatronic’s program.

Ginger.

Thank you, Dean and good morning everyone. I’ll start with our fourth quarter results, as Dean mentioned earlier in the call, revenue and diluted earnings per share were within our guidance range, and were consistent with 20/10/5 financial model, which is a 20% ROIC target, 10% gross margin target and 5% operating margin target.

Digging a little deeper into these results gross margins was 10.5% for the fiscal fourth quarter, slightly lower than our fiscal -- Do we have the operator? Okay.

I’m going to proceed. Drilling a little deeper into these results, gross margin was 10.5% for the fiscal fourth quarter, slightly lower than our fiscal third quarter results of 10.7%, and in line with our expectations.

This declining gross margin from the prior quarter was a result of two major items during the quarter. First, changes in the mix of customers and programs decreased our gross margin slightly.

Second, during the quarter we recorded inventory reserves of approximately 2 million for obsolete and inactive inventory. Modestly higher than in normal quarters.

I will discuss how we are approaching inventory risks with our customer in more detail, shortly. SG&A cost increase slightly from the prior quarter of 26.8 million and was in line with our expectation for the quarter.

SG&A costs as a percentage of revenue decrease from 5.8% in the third quarter to 5.6% in the fourth quarter. SG&A expense was consistent with our guidance, and reflects investments in our market sector base of this development engine, variable incentive compensation program and continued investments to support our planned revenue growth.

For the full year, we are pleased to report our excellent results which meet our 20/10/5 model. ROIC was 20.1%, gross margin was 11.2% and operating margin before restructuring charges was 5.7%.

These results reflect excellent execution in all areas of our business. In addition to the strength in our underline business the full year was positively impacted by large orders from our unnamed defense customer in the first half of fiscal 2008, which generates results higher than our traditional model.

Beginning with the second half of 2008, we return to our more normal 20/10/5 financial model. Moving onto the balance sheet and cash flow.

The cash conversion cycle increased during the quarter, up 4 days compared to the third fiscal quarter cash cycle days of 68 days and 4 days higher than our expectation. As we saw in the press release days and receivables increased by 1 day to 49 day.

This increase was based on normal variation of customer payment term. Days in inventory decreased 4 days to 73 days, there were two major factors that drove the reductions in the inventory levels.

First, we saw reductions in inventory level just the core major customer. And second there was good discipline in conjunction with our customers and internal customer teams related to disposition of obsolete and inactive inventory.

Accounts payable days decreased by 7 days to 50 days, this was the result of the timing of purchases during the quarter which were weighted to the front end of the quarter to meet customer demand. We are mindful of these significant investments in working capital, and are working another ways to optimize them.

But we also recognize that with the right inventory we’re not able to grow with our customers report new business models like Agile, direct order performance or ramp up new programs. Including investments and working capital, ROIC for the quarter and fiscal year was 20.1% above our targeted 20% from our 20-10-5 model and well above our weighted average cost of capital.

We continue to believe that the ability to grow revenue and deliver ROIC above our WAC are the two most important aspects of our business. As I referred to our execution strong financial performance and investments on the balance sheet.

Free cash flow for the quarter was approximately 17 million negative, with year-to-date positive cash flow of 9 million. We spent 16.5 million in capital for the fiscal fourth quarter for a total of 54 million in capital expenditures for fiscal 2008.

During the fourth quarter, these capital expenditures included approximately 7 million in investments to support our continued growth, including modest expansions in two North American sites, and work to complete the fit out of our third facility in Penang, Malaysia. I’d now like to spend a few minutes talking about the current economic environment and how we’ve been responding.

First, we have increased the frequency of our reviews of customer risks related to both collectability of accounts and inventory. One of the benefits of our sector-based company go to market strategy is that the customer manager who are close to our customers and understand the financial issues for each of their sector.

Through this implicit from our customer management teams and our internal monitoring we are making judicious decisions about risks and reporting reserves as appropriate. During this quarter we recorded approximately 200,000 in reserves related to collectability of accounts receivable and 2 million in inventory reserves.

This is modestly higher than the amount we recorded in a more normal economic environment. We are also monitoring the healthcare supply chain partners.

We’ve increased the auditing of our suppliers financial condition to insure continuity of supply. In addition to our normal auditing processes we have increased the frequency of audits for our top matrix suppliers and customer directed suppliers.

In addition to customer risks, we’ve also been paying attention to treasury risks. We currently have approximately 166 million in cash, the majority of which is held in the United States.

We have reviewed all of our cash investments for potential exposure to be troubled institutions and have moved cash into three general types of investments. Government funds, fixed-time deposits, and money market funds.

All of these investments are with financial institutions that we believe are stable and appear well positioned for continued financial strength. We have also seen a decrease in interest rates for these investments both from lower market interest rates and from moving to investments with lower risk to pay a slightly lower interest rate.

As a result we are including slightly lower interest income in our forecast for the coming fiscal year. Related to credit and our ability to borrow, I’ll remind that we have generated cash in fiscal 2008 and currently expect to do so in fiscal 2009 as well.

Accordingly, we do not expect to borrow to meet our cash needs for the coming year. In the event that we would need to borrow, we have a $100 million line of credit that is available immediately.

This facility is lead by the Bank of Montreal and includes a group of 16 banks. This facility is expandable to an additional 100 million under the same terms, but this accordion facility requires bank approval.

Last, we entered into interest rate swaps in late June to fix the interest rate on our new long-term debt. The counterparties to these swaps all appear stable and we see no significant risk around these swaps.

I’ll now turn to the guidance for the first quarter of fiscal 2009, if you’re looking at our earnings on year-over-year, I will remind you that while comparing earnings from the first quarter of fiscal 2008 to the first quarter of fiscal 2009, we should consider the impact of our unnamed defense program. The first half of fiscal 2008 include approximately $83 million in revenue for this program and as we discussed before, periods of the large concentration these order have earnings in access of our normal operating model.

Beginning with the second half of fiscal 2008, we have returned to the more normal operating model, the 20-10-5 financial model. Shifting to our traditional, sequential discussion of earnings, our guidance for the first quarter of fiscal 2009 will be consistent with that model as well.

Gross margins are expected to be lower than the gross margins in the fourth quarter based on our forecasted customer mix, but still the level slightly above our 10% gross margin target. Depreciation expense is expected to be approximately $8 million to $8.5 million in Q1 up from the $7.8 million in Q4.

SG&A for the first quarter of 2009 will be in the range of $26.5 million to$27 million consistent with the fourth fiscal quarter, the tax rate for fiscal 2009 is projected to be approximately 15% which we will use for the first fiscal quarter as well. But I will remind everyone that we’ve seen variations rate based on the mix of forecasted earnings between tax and jurisdiction.

Earnings in our Asian location benefit growth negotiated tax holidays in both Malaysia and China, while US earnings are taxed at the full 38% Federal and State Tax rate. This variation in tax rate means that relatively minor changes in our earnings can result in large swings in the tax rate.

Our expectations for the balance are for cash cycle days to be in the range of 68 to 70 days, down from our current 72 days. I will now turn to some additional comments on the full fiscal year.

The capital spending projection for fiscal 2009 is estimated to be in the range of $72 million to $75 million. This increase from fiscal 2008 is a result of continued investment to support growth, and includes completing the fit out of our newly announced leased facility in Hangzhou, China, and modest investments in North America to support our new business wins in mechatronics.

We expect to generate free cash flow in fiscal 2009 in the range of $30 million to $40 million. And with that, I have some final comments as you think about the 20/10/5 financial model going forward.

As we have discussed in the prior call and in our Investor Day in June, we believe the best way to create value for shareholders is through continued revenue growth and by consistently delivering our 20/10/5 model. We are carefully managing our portfolio of existing business, new programs, and investments to support growth while delivering that model.

First, as I mentioned, gross margin will trend back to the 10% in our financial model. Second, SG&A is currently above the 5% target in our financial model.

We are mindfully making investment in people, processes, and tools to support our growth targets. We are already seeing the benefits of this focus as SG&A as a percent of revenue decreased in the fourth quarter.

Our objective is to continue to leverage these investments, and return SG&A spending closer to our 5% target in the second half of fiscal ‘09. With that, I’ll turn the call back to Dean for a review of fiscal 2008, and some commentary on fiscal 2009.

Thank you, Ginger. Fiscal 2008 was an excellent year for Plexus.

We delivered organic revenue growth of 19.1%, ending the year at a record $1.84 billion. Our brand in the market continues to strengthen, and our focused development team delivered growth in all five of our end market sectors.

Our five year compounded annual growth rate now stands at 18%. Our commitment to profitable organic revenue growth delivered returns on invested capital of 20.1%, well above our weighted cost of capital.

Importantly, we made significant progress on a number of key initiatives during the year, let me highlight a few. First, in Asia Pacific, we completed the expansion of our facility in Xiamen, China, doubling our footprint in that location.

We leased facility in Hangzhou, China to service customers that require closer proximity to the Shanghai region of China. We continued to equip our newest and largest manufacturing facility in Penang, Malaysia to support growth with key customers.

We began a pilot to expand our first manufacturing facility in Penang, to support growth with medical and aerospace accounts. We increased engineering capabilities in our Asia technology center, we added industry leadership talent to our APAC go to market team and furthered our relationships with decision makers in the region.

Second in Europe, we made significant progress in defining our market entry strategy and timeline for low cost Europe so that we can exploit growing demand for services in this important region. We added significant industry talent to our UK operations team, and our broader European go-to-market team in anticipation of our low cost market entry.

To support our strategic decision to pursue mechatronics assembly, and a recent success in the UK, we leased a modest facility in proximity to our facility in Kelso, Scotland. Third, in North America, we greatly improved the execution and financial performance of our manufacturing operation in Juarez Mexico, added a significant new account and improved the opportunity file.

We now expect break even performance in the first half of fiscal 2009. While our overall revenues continue to go in US we made a proactive decision to exit our Boston area manufacturing site to optimize the competitiveness of our North American footprint.

We invested in additional facility adjacent to our Chicago facility to support growth with key medical accounts. We moved our San Jose operation into a newer larger facility to better service Silicon Valley area customers.

And finally, a few global initiatives, we substantially improved our business intelligence tools, standardizing globally and integrating with our global CRM and ERP systems. We continue to enhance our differentiated global supply chain solutions meeting our customers’ needs for forecast and service agility while optimizing working capital investments.

We continued our journey to become a leading enterprise, focusing on continuous improvement projects to drive productivity, quality, and customer service. We substantially increased our focus on organizational performance, accountability and the processes required to develop our people to insure that our organization is scalable, and that we are developing our talent into a competitive weapon.

Our market sector teams embarked upon an integrated solutions selling approach for engineering services business. The strategy yields strong growth and improvement in average program sizes, and we believe better leveraging to manufacturing.

Following the strategic decision to increase our focus on defense and aerospace we complete the build our focused go to market team. Our 2008, Investor Day held this past June, we clarified our market position, opportunities for growth, sector focus, go to market engine, value added differentiators, and financial models to support our strategy, to become the best in the world at serving the mid-to-low volume higher mix segment of the EMS market.

We accomplished a lot this past year, and perhaps most importantly, our strong organic growth rate and economic profit performance was an excellent achievement in a credit to the nearly 8,000 Plexus people around the world. Turning now to some parts on fiscal 2009.

In the past several years, we have consistently set our target revenue growth range of 155 to 18%, our fiscal first quarter guidance, in combination with our exceptional new business win performs past quarter suggest that we are off to a solid start for fiscal 2009. But when looking at Q1, it is clear that our medical and defense care and aerospace sectors will void the quarter.

As we examine our current fiscal 2009 forecast, in combination with our opportunity funnel and recent wins and compare the numbers to our position of last year this time the numbers suggest that we have a decent opportunity for growth. But given the current macroeconomic environment and our uncertainty in longer range customer forecast, we are refraining from providing full year 2009 revenue targets until forecast stabilized and visibility improves.

Further, when we consider the position of Plexus in the light of the current macroeconomic challenges, we are approaching the year with seasoned pragmatism, yet we cannot avoid a single longer term outlook. We believe that OEMs will be under increasing presser to improve financial flexibility and lower costs, resulting in the secular trend toward outsourcing to accelerate, particularly in underserved industry sectors where we are focused.

We also believe that in tough situations, the strong get stronger and the weak get weaker. Contrasting our situation today versus the prior economic meltdown, we believe we are well positioned to weather the storm and ultimately prosper.

A few contrasting points to consider, First, today most customers recognize that the EMS providers are not homogenous. Customers are increasingly adopting the best of breed strategy to outsourcing as the best approach for achieving competitive advantage in their markets.

Our brand as the best of breed in that Company, focusing on mid to low volume higher mid segment as a EMS market has never been stronger as demonstrated by a 5 year 18% organic chador and strong ROIC performance. Second, today our foot present is global and competitive.

We do not have a glut of capacity in noncompetitive locations as a result of an ill-fated strategy of OEM plant acquisitions. Third, we are among the leaders in ROIC performance, we are focused on disciplined working capital management and particular inventory management that support the needs of customers in this segment.

We have a solid balance sheet and access to capital. Fourth, we have a unique business intelligence -- set of business intelligence tools on top of our global common IT platform.

These tools in combination with a discipline responsive system management facilitate agile and accurate decision making. Fifth, our reputation for flawless execution, customer service, and valued add is second-to-none in this industry.

Our customer retention rate is at an all-time high. We have substantially increased our customer’s stickiness metrics, including penetration of our value added services, and gaining a significant or dominate share of customers outsourcing spent.

Sixth, we have become a magnet for talent and experienced industry veterans who have learned how to manage through difficulties while maintaining a passion for creating opportunities, and finally, as I have stated before, when we get up in the morning, we are not conflicted, we understand where we provide value in the EMS space. We believe we have uniquely aligned our go-to-market strategy, manufacturing operations, supply chain solutions, value added services, and our financial model to provide service excellence at the lowest total cost value proposition to customers in the mid to low volume, higher mix segment of the EMS market.

Back to you Angelo.

Cherish, we are now ready for questions, again, please limit your question to one question and one follow up.

Good morning, and congrats on the quarter. Just a quick clarification.

What was the forecast for the medical, as well as the defense and aerospace business here for the first quarter?

Sorry, we’re just shuffling papers here, Shawn trying to catch with the raw material.

I guess while you’re looking for that maybe if you could comment with the $200 million programs wins, maybe break that out between new and existing customers, the end markets, and how you expect that business to ramp through 2009?

Yes, and your first question was medical and industrial?

Medical and defense and aerospace?

Yes, we set the outlook for Q1 for medical was going to be up. I think I said the mid-teens strength, and then defense care and aerospace I said was going to be up in Q1, at about 33%.

Okay.

And then in terms of new business wins, we had, I think I characterized, 19 of them. The vast majority of those wins, I think 17%, 18% of them, were actually increased share with existing customers.

In terms of quantity we did manage to get wins in all of our sectors. The largest numbers of them was 8 of them were in the industrial sector, and then 4 in defense care and aerospace, 3 medical, 2 in wireless, and 2 in our wireline sector.

But I’m not going to break out the revenues associated with them individually at this point.

Okay. But maybe how you would expect maybe that 200 million in aggregate to ramp throughout the year.

It seem that it’s really backend loaded and nothing really in the first half of the year, if that’s safe to assume?

Yeah, it is safe to assume. Anytime we announce wins.

there is quite a bit of variability as to when the wins ramp up, but we do expect to see a fairly decent amount of it at this points, currently, in.09 but as I said, right now, uncertainty is I don’t know that we can anticipate normal performance out of new business wins, given the current environment. In other words, you know, will that 200 million hold up in terms of revenue volume, given just end market demand.

If we’re seeing end market demand programs as well with new program wins. But if you kind of dissect this, there is probably right now about 50% of that 200 million or so that we would expect to see in fiscal 2009.

Okay. And then I guess Ginger for you, on the operating expense profile, you know, ticking up only marginally here in the first quarter.

It sounds from your commentary that maybe we should expect that to hold relatively firm on a dollar basis through the year, maybe not have some of the variable compensation upticks that we’ve had in prior years past?

Yeah, I think that’s a fair assumption for ‘09 at this point, so I’m guessing if we look at SG&A, it should be in that 26.5% to 27% to27.05% range for ‘09.

Okay. Thank you very much.

Thank you.

It’s actually Jason Garcia calling in for Jim Suva.

Hi Jason

Good morning, everyone. Congrats on the new wins.

Just a quick follow-up to that. Any reason to think that ramp costs for these programs would be any different than historic ramps, as far as the costs are concerned?

And then secondly is the 30 million mechatronic win included if the 200 million or is that separate?

The first on the 200, well, let me address whether the 13 is included. The 13 is not included, it’s outside of that and we took it outside the 200 million because pretty significant at the 30 million in the quarter.

More importantly that program could be a top 5 customer program for Plexus as we move through fiscal’10. So, it could be a significant program for us.

Secondly program on out separately plus the ramp cost with that program will be a little more burden. So, as we need to have physical capacity to support the program in North America.

The remainder of the 200 million are as I said to Shawn earlier, that they are mostly incremental business wins with existing customers. So, we would expect those programs to ramp up with pretty decent returns, nothing unusual in terms of the challenges, especially with bringing on that business.

Okay, great. And then, obviously in order to get to SG&A at 5% of revenues, you’re going to have to see some revenue come in at the top, to be able to drive the leverage.

I’m just wonder, how realistic do you think that is in this type of macro environment, and at what do you start making plans to engage in cost cutting, or is this going to be a process of continuing to invest and waiting for the revenue the catch up?

I think a couple of comments on that Jason. First, we made some invest .s in our customer spacing market sector teams in ‘o, and we feel like most of that, those teams for place now, and beer going to be average able to leverage those teams for team 2009.

And clearly we will have revenues, you’re going to have to see some revenue come in at the top line so we can leverage those investments and get SG&A closer to our 5% margin. So it is obviously a combination of both of those for us.

I would also say we are thinking about what to do in worsening economic environment and we’ve season done some what ifs, and that it about a number of options. I think we you know, investors should know we’re taking that seriously, and want to make sure we have plans in place should our forecasts look like they’re going to get worse.

Okay, great, thank you.

Thank you.

Hi, guys, good morning. I just wanted to, I guess, further clarify the mechatronics, when you spoke about this quarter, $30 million is second and the year.

Is this the same win that you had alluded to a couple of quarters ago that you said at some point would likely ramp up in Mexico?

I don’t know that we alluded to this one before. We did win a new program for mix co separate from this piece of business, that’s going to contribute mightily to the Mexico situation in ‘09.

The $30 million is this problem is not likely to have any impact at all on Mexico, although we believe as the program gets larger, fits successful in the end market, that our Mexico facility will be a part of the solution as we look out into ‘10.

I guess when you refer to that one program, I don’t remember, a couple of quarters ago, thought you said could be 10 million or so roughly per quarter, and would maybe, just on its own, be big enough to tilt the lever towards profitability, that’s separate entirely from this?

That is correct.

Okay. That’s it, I appreciate that.

And then the other question have is when you look at the overall balance sheet Ginger for the customer deposits line that you guys break out, it looks like it’s up 2.5 times from where it was a year ago. Is that a function of you guys, of, you know, becoming more, careful around the customers that your engaging with that might be, you know, less financially able or is it I guess, the question is, are you dealing with more customers that are in a weakened financial state.

And therefore you’re seeing higher customer deposits, or have you changed your overall Terps in terms of taking customer notes from folks?

Yes first I don’t see any change in the mix of customers, and customers that we’re taking on, and their financial stability. I think we have a pretty good process of managing that, and so I don’t think it’s a reflex of out customer base.

I think it is a reflection of our discipline internally, and generally as inventory ages or becomes obsolete, we have a process in working with customers to make sure they either take that inventory, and we actually sell it to them and move it off our balance sheet, or if they don’t want to do that, then we like to have a customer deposit, so, in essence, that’s reserving against potential inventory issues in the future, not just a very practical and disciplined way of managing our inventory risks. So, I think is that’s a good reflect of our discipline around managing inventory.

Did any of the other reserves that you had taken previously out of Mexico and is mainly vertic any of them reverse in the quarter?

I think they were very small reversals in Mexico, nothing significant.

Nothing significant. And can you update us on whether or not, where it was, I guess relative to breakeven in that quarter?

To the Mexico facility lost $500,000. That’s about half of the loss in the third quarter, which is $1,1million.

For the full year the loss was $2.6 million and as Dean. said we have good visibility to breaking even in the first half of ‘09.

Thank you very much.

Thanks a lot, good morning guys. You talked about CapEx being $70 million to $75 million range for fiscal ‘09?

I did.

So, I guess if I look at that, looking at about a 36% increase in CapEx year-over-year, despite, I think you guys talking about you are not providing ‘09 guidance because visibility is bad, and markets relatively unstable. Can you help me understand why we have such a big CapEx when we’re unsure about what end markets are doing right now?

I think the first answer to that is if you look back we’ve had 18% revenue growth over the last five years and that growth has to go somewhere, and so as we look forward, although we’re not willing to give guidance for ‘09 yet, we still feel like we have a decent shot at growth in ‘09. There is a significant portion of that capital that is related to new facilities to support that growth, and we obviously manage that prudently.

If we see forecasts change significantly, we will adjust our capital spending appropriately, given our outlook now we think that’s a reasonable guidance for you to start from.

All right. And then, just kind of going back to the comment on inability for fiscal ‘09 guidance.

Can you talk about what the linearity saw in fiscal Q4? Are you essential seeing audit cuts in OEMs, or you just seeing the incremental orders being a lot more cautious than they have in the past?

Let me characterize Q4 in couple of ways, one, is that we did see certain customers start pushing we called it pole signals towards the back end of the quarter. So, we saw from the way we started the quarter, we thought we assumed that certain level of linearity, and it became more backend loaded as we moved through the quarter.

Second, I would say that when we entered the quarter, we took a different bias in our guidance so we biased our guidance more pessimistically, I would say, than our typical conservative guidance that turned out be to a good decision. So, we did see a degradation of demand, fairly broad swath of customers as the quarter unfolded.

So, as indicated that part for we took the same approach here in our fiscal Q1, when we rolled up our forecast, we took a different approach again in our guidance, and we biased it pessimistically off of our forecast with the assumption that we would achieve further degradation in demand. So, just to give you a little sense of color on how we’re viewing the world at this point, well we have not seen a mass capitulation of customer forecast at the point.

Looking forward right now our forecasts appear, reasonably, healthy and normal, and as Ginger said, as she kind of signaling on the CapEx, we currently -- forecasts would suggest we’re going to grow this coming year but you know what’s happening on Wall Street and look at how the stocks are trading for our customers, there’s quite a bit of uncertainty, which causes us some pause in terms of what we’re willing to go out on a limb for here in terms of our revenue growth range for the year.

Got it. It essentially sounds like had you guys are reading Wall Street Journal, you would feel better about your business?

Yes, if would turn off the TV, stop reading the papers and watching the ticker, we would be all right.

Okay. Fair enough, thanks a lot guys.

Thank you. Thanks for taking my question.

Just want to make sure I heard correctly, the wire line networking sector, you’re expecting that to be down, I think if I put in all of your guldens for the other segments in my model, it looks like down about 10% at the mid-point? Is that kind of a fair assumption?

You said a wireline, or wireless, I’m sorry.

Wireline?

Wireline? We’re projecting right now to be flat to down slightly.

So not quite the severity of the decline that you’re looking for. We’re talking about Q1.

Okay. I guess normal, if there is a normal seasonal pattern here, I think it’s up a little more than that, can you talk about and of course the, similar little bit of weakness, I guess, in the last quarter, and you mentioned that and of the top customers were weak there, is there any outsized weakness at your number one customer, and any update on the relationship there?

I know that there has been some move of some of the business that you that wasn’t really well suited for Plexus, lower end product that shipped it to another contract manufacturer. Any extension of that activity?

Yes, let me just be clear on Q1 and wire line. I did say that we expected our top three customers to be up in Q1, so there is strength there, and but we are going to end up flat to down slightly, because the rest of our top 10 customers, 7 of them, are all down in the quarter, so it’s quite a mixed bag here of performance so we’re seeing the strength of the top 3.

Relative to our top customer, what would say is in fiscal 2007, we grew revenues 15%, in fiscal 2008, we grew revenues 15%, in fiscal 2009, we would expect to grow revenues again. And so we feel good about our position with that customer and with the portfolio of products that we supplied for them.

The relationship continues to develop at a strategic level. I talked about the investments that we’ve been making at our largest facility in Penang, Malaysia, and of course part of those investments are to support our growing relationship with Juniper Networks.

Great. I appreciate that.

Just one follow-up. Can you talk about the competitive environment as it relates to pricing?

Are you seeing any undisciplined competitors come in and offer pricing that doesn’t make sense?

We’re hearing a lot of that chatter in the marketplace. I don’t know that we have experienced anything significant at this point.

I would say that it is one of the situations where we recognize that we have a number of competitors that are in a weak position One might immediately assume that they’re going to become irrational in terms of pricing to gain additional business, but on the said I’d of that, I’m not sure they can afford to take on additional programs where they tonight make money, because they’re not making any money now. So I don’t these going to be some, no question, I think that we’re going to see probably an increase of some desperation pricing in the marketplace, but I think that it’s going to be easier for the stronger competitors to go hunting else where than it is to go hunting against the Plexus customers.

Great, Thank you.

Thank you.

Hey, good morning. Can you guys just talk a little bit about, as you look at your forecast, the level of volatility that you’re seeing, and are there any discernable trends that you’re uncovering, and by segment to the extent you can talk about it?

Well, I would say that, it’s not a fire sale, so we haven’t seen what I would call just exceptional volatility. I would say when we do see volatility, it intends to be more biased down than it is up.

I think that the wireline kind of networking sector probably is probably moves the most, but it’s not surprising, given that the demand fulfillment model, in terms of how lean the supply chain is, and how we deliver completed producing to the customer our customers end customers, causes quite a bit of volatility as we move through the quarter, and it’s a little bit more difficult to have a kind of a level forecast there. So, I’m not surprised by that volatility.

I also see right now that we have some of our strongest competitors in this market place seem to be doing and biggest customers tend to be doing okay, at least the way we look at it going forward at this point. Wireless for us is always a little bit volatile.

We don’t have a very large portfolio of customers, so we don’t get the smoothing effect you would get when you get a larger portfolio. But those customers tend to be, at this point, most of our customers in that market tend to be, I think, in a position where they’re going to be, you know, able to grow in the current market place, unless there’s.

like I say, a complete meltdown. Medical, I think, is going to hang in there pretty decently.

We’re currently projecting medical to be up through the fiscal year, and I think that’s just, you know, the nature of that segment tends. to be a little bit more immune tow the current, you know, economic pressures, although it’s not as immune as it used to be, because the buying decisions of the large medical providers are approaching.

Starting to head more in the direction of what you would call more commercial business practices, but in general, I think it techs to be more immune to volatility in the economy. Industrial commercial is where we have the largest portfolio of customer it is be ask that one tends to be at least I think indicating to us today to be a more similar reflex to what you see happening in the economy, where we’re seeing quite a bit of trim back of forecast, and of course that’s where our capital semiconductor capital equipment customers are.

We have very decent portfolio those customers and they have been down for some time, and appear to be continuing their struggle probably as through all of 09. And I just recently read somewhere.

that suggest made did not believe there’s going to be a ton for some time a turn back and 09 of 10 so a bit of a struggle. Defense and aerospace is a sector that I think offers some opportunities for us.

I think that the kind of business that we have there, aside from the one big episodic program tends to be reasonably healthy at this point. We also have our avionics business in there, and now that the Boeing strike appears to be abated, we believe that that offers some opportunity for us for growth in the coming years, as well.

So, you know, when you separate out the big large episodic program. So we’re feeling, you know, at this point like, you know, the customer forecast like I said.

Tend to be -- tend to trend down when there are changes, but as I said earlier, we haven’t seen a wholesale capitulation.

Okay, great, thank you Dean.

Thank you.

Yes, thank you. Good morning.

If I could just follow up on the mechatronics program, if you could elaborate on the nature of these programs in general, how you would view the stickiness of these types of programs or customers, in terms of fall on revenues say versus your other industrial customers and then also as part of that, how do we think about those types of margin profiles for your business?

Well, I’ll let Ginger talk about the margin profiles, but in general, the programs are different in their nature, in that they tend to take up quite a bit more floor space in our facilities, although the floor space needs tend to be less expense on a per square foot basis, and the term of mechatronics applies to devices that have a lot of mechanical components, but some fluid or motion mechanisms in them, as a greater percentage of the assembly than typical electronic product, which it would some electronics with a plaster or metal wrapper or both around it. In terms of the stickiness of the business, I think that the business can be sticky because the supply chain challenges of establishing these programs are pretty significant.

You’ve got a lot of materials moving a at fairly high velocity. You do need to have, like I said, quite a bit of floor space available in order to bring these programs up, and so I think there’s from the standpoint of the way we look at it, and the standpoint of our engineering solutions capability to out customers design kind of products and make improvements and also to make evolutionary changes to the product to go after additional markets, I think is quite good.

So, we feel quite strong about the possibility of Plexus growing our business substantially in thus market. We think it’s one that’s quite underserved by the EMS industry, and we think we are uniquely positioned to be able to have success here.

Ginger, did you want to comment about the margin, or perhaps the ROIC component of these programs, probably useful information.

I would say that at this point we don’t see any significance variance from our kind of normal programs. This is still a product that would fit our sweet spot of lower volume, higher complexity.

I think the one differentiation is going to be on the working capital side as Dean alluded to. These are going to have a number of components, and there will be investments on the balance sheet for that, but I also thing they’re going to turn much more quickly.

So, I think as we look at the combination of all of that, we would expect a similar ROI profile to the business we have today.

Thank you that is very helpful, thank you. If I can also just follow up on your guidance for next quarter, specifically within medical, I think that there’s been a lot of commentary out there, and correct me if I’m wrong, that there has been a lot of pull back, Dean I think you had alluded to this earlier, in that some of the purchasing decisions are becoming little bit more in line with other types of verticals, there’s been an inventory, I guess, correction in the marketplace in the imaging space overall, medical over the last year or two.

So, just was curious in terms of what specifically is going to be driving the growth for next quarter, and this outlook?

It’s a number of things, I think. One is I think just in generally we’ve done a better job of increasing our share of business in this space.

We’ve won a number of new programs here over the last year that are going to help us in the medical sector. Also, when you look at the ‘08, suffered from the kind of reset in demand in imaging with the reimbursement changes of the Federal Government, and also in our largest customer there, GE, had these difficulties with the FDA at one of their facilities, which hampered growth in medical for us in 2008.

So, ultimately in 2008, we’re up about we’re up about 4% in medical, it’s not at all where we would have liked to have been, but when you look inside that number, if you set aside the FDA-related issues and reimbursement challenges, we actually had a pretty decent year in medical where we gained a couple of very significant new accounts, new program that kind came through our engineering organization, and is now moving into manufacturing. So, when you peel it back, it was actually quite a good year.

As we look into ‘09, we expect to carry that momentum, so the prior programs, the ones out of engineering, the gain share that we’ve had during the course of the year, would expect a drive top line as ‘09 unfolds.

That’s terrific thanks very much.

Thank you.

Just a follow up, Ginger I just wanted to clarify on the free cash flow you gave earlier you said, I think $30 million to $35 million?

Yes its $30 million to $40 million.

$30 million to $40 million of free cash flow?

Yes.

Okay. So then, we’re talking essentially like $110 million or so for cash flow from operations, give or take, for this year?

Yes hold on just getting there, yes exactly.

And then, also, can you say of the CapEx, is any -- is there a component of that $70 to $75 million that right now is being incorporated into an Eastern European expansion effort, or expectation of one happening?

No at this point this CapEx does not anticipate any investment in Eastern Europe, although as we talk that we are getting further down the path of making a decision about both the right location and how we make that investment.

Okay, is that something that at this point could very well happen in fiscal ‘09, or is it still too hard to say?

No, I think we will have a decision in fiscal ‘09.

A decision would happen, and you think actually something would from the perspective of investment also happen?

It’s one of those investments, Kevin, that if things go bad, we could defer until later, but at this point, we’re moving ahead and trying to get to our chosen location, and the specific opportunity for entry, and then we’ll look at how we feel about our forecast and the economic situation looking forward and we’ll make the call, but we’re very close, I think, to deciding what we want to do, it’s just to whether or not we’re going to pull the trigger is yet uncertain. And we’ll be talking about that here in a couple of weeks, so when we have a board meeting.

Got it. And then, Dean we are in the new wins from existing customers, did you say 17 to 18 of the wins were from existing, or percent of the wins were from existing?

That was a quantity so we said 19 wins, separate from this one large program, and I said 17 or 18, depending upon how you slice and dice it, is what the customers additional share.

Existing share was existing, okay and then just lastly housekeeping. On the stock can you give us a break down on cost of goods sold and SG&A?

For the fourth quarter?

Yes.

So for the fourth quarter of ‘08, the total dollar of stock based compensation was 2.4 million was and of that, 1.7 million was in SG&A.

Okay. And then for next year, do you guys have any sort of an expectation for roughly where stock compensation will run?

Can you tell us where our stock is going to trade, Kevin?

Yes, I’ll help you out a little bit there. I think it’s going to be roughly in line with that for the first quarter, so for the first quarter we think it’s about $0.06 of EPS, I think its about 3.1 in total, and 2.4 million on the SG&A line.

Thanks very much.

Thank you.

Hi, thank you. I wanted to ask a little bit about the restructuring charges you took for the Boston facility.

Are we done now with those restructuring charges? And I think in the press release, you mentioned that you expected to see cost savings of 4 to 5 million from that from closing that facility, but you suggested SG&A would be similar to what we’ve seen now.

So should we expect to see that savings in COGS, and when should we start to see that?

I’ll starting with your restructuring charges first, there’s going to be a modest amount of restructuring still to come as we wrap up the facility and transition out of that facility over the first and second quarter, and I would characterize that in the range of kind of $400,000, to $500,000, and most of that may happen in the second quarter as we actually shut town the facility. We do still expect savings in the range of $4 million to $5 million.

I think that is going to be obviously weighted to the second half of the year, after we close the facility. And I think you’ll see we haven’t really split out how that is going to be between cost of goods sold and SG&A.

I think we’ll see a model impact on SG&A, and most of it in cost of goods sold.

Okay. That’s helpful.

And then in terms of your cost base. In the COGS component of your income statement, how much of that would you characterizes a fixed versus variable related to your program?

Yes, I think kind of I don’t have the specific information in front of me, Sherry. I think the general rule of thumb is it’s about 80% variable and about 20% fixed, but I happy to get you some but I happy to get you some more detail on that off line.

Okay, thanks.

Hi, just two quick follow ups. Kevin’s question on the expansion in Eastern Europe, have you decide whether Europe looking Greenfield, or in turns of maybe an acquisition, I guess, has that been decided?

Our significant preamp at this point, and most likely would to be Greenfield.

Okay. And then just second question.

I know Ginger you mentioned lower interest income assumption, but could you remind me what is the interest rate any the debt now, and kind of what are you using for an interest income assumption?

Sure. The interest on the new long term debt is 5.7%, and that’s fixed, and that was fully reflected in our fourth quarter, we had that debt outstanding for the full quarter, so that’s probably not a bad measurement as you look at the fourth quarter.

It’s harder to give you an estimate on the interest income. I would say kind of the fourth quarter rate maybe down a little bit as we’ve moved into more conservative investments over the fourth quarter.

Some of our -- we have cash all over the world earning different interest rates, so I would just ask you to take a look at I that fourth quarter and maybe move that down slightly.

Okay. Thank you.

Thank you.

All right, well, will that I want to thank everyone for joining us today. Again, once again, we’re really pleased with the way our year unfolded, and I want to thank once again all of the employees who might be listening in, because they really did an outstanding job for Plexus this past year.

Hopefully ‘09 unfolds to be a similar year, but at this point I just willing to be an oracle and predict what will happen in the macroeconomic environment, but we are realistic in terms of you, and we’re willing to do what we need to do to maintain the financial health of the Company. But, at the same time we’re optimistic about the year, and I think as you could kind of sense from us, we feel that not all things are bleak, and that there’s a good opportunity here for Plexus and we think longer term we think, we’re really well positioned to capitalize on market opportunities, given the strength of the business and the strength of the brand.

So, thank you once again for joining us, and have a good day. Thank you.