UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended July 4, 2009

or

(  ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-14423

PLEXUS CORP.

(Exact name of registrant as specified in charter)

Wisconsin		39-1344447
(State of Incorporation)		(IRS Employer Identification No.)

55 Jewelers Park Drive
Neenah, Wisconsin 54957-0156
(Address of principal executive offices)(Zip Code)
(920) 722-3451
(Registrant’s telephone number, including Area Code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ü           No ____

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ____            No ____

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ü		Accelerated filer ____
Non-accelerated filer ____		Smaller reporting company ____
(Do not check if smaller reporting company)

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ____            No ü

As of July 31, 2009, there were 39,478,946 shares of Common Stock of the Company outstanding.

July 4, 2009

PART I. FINANCIAL INFORMATION			3
ITEM 1. FINANCIAL STATEMENTS			3
Condensed Consolidated Statements Of Operations and Comprehensive Income			3
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements Of Cash Flows			5
Notes To Condensed Consolidated Financial Statements			6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			18
“Safe Harbor” Cautionary Statement			18
Overview			18
Executive Summary			19
Reportable Segments			21
Results Of Operations			22
Liquidity and Capital Resources			25
Contractual Obligations, Commitments and Off-Balance Sheet Obligations			27
Disclosure About Critical Accounting Policies			28
New Accounting Pronouncements			29
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			29
ITEM 4. CONTROLS AND PROCEDURES			30
PART II. OTHER INFORMATION			31
ITEM 1. LEGAL PROCEEDINGS			31
ITEM 1A. RISK FACTORS			31
ITEM 6. EXHIBITS			40
SIGNATURES			41

PART I. FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(in thousands, except per share data)
Unaudited

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Net salest		$	378,643			$	456,352			$	1,223,647			$	1,365,651
Cost of sales			344,038				407,520				1,106,694				1,209,714
Gross profit			34,605				48,832				116,953				155,937
Operating expenses:
Selling and administrative expenses			22,491				26,350				70,104				73,965
Goodwill impairment costs			-				-				5,748				-
Restructuring costs			-				-				2,823				-
			22,491				26,350				78,675				73,965
Operating income			12,114				22,482				38,278				81,972
Other income (expense):
Interest expense			(2,680	)			(2,262	)			(8,343	)			(3,720	)
Interest income			448				1,827				1,851				6,365
Miscellaneous			370				(258	)			712				(1,086	)
Income before income taxes			10,252				21,789				32,498				83,531
Income tax expense			1,042				4,357				1,222				16,706
Net income		$	9,210			$	17,432			$	31,276			$	66,825
Earnings per share:
Basic		$	0.23			$	0.42			$	0.79			$	1.50
Diluted		$	0.23			$	0.41			$	0.79			$	1.48
Weighted average shares outstanding:
Basic			39,445				41,962				39,382				44,674
Diluted			39,712				42,481				39,550				45,191
Comprehensive income:
Net income		$	9,210			$	17,432			$	31,276			$	66,825
Derivative instrument fair market value adjustment – net of income tax			671				(1,140	)			(3,491	)			(1,140	)
Foreign currency translation adjustments			831				174				(3,030	)			1,868
Comprehensive income		$	10,712			$	16,466			$	24,755			$	67,553

See notes to condensed consolidated financial statements.

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
Unaudited

		July 4,				September 27,
		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	215,493			$	165,970
Accounts receivable, net of allowances of $1,300 and $2,500, respectively			205,440				253,496
Inventories			313,457				340,244
Deferred income taxes			13,482				15,517
Prepaid expenses and other			10,184				11,742
Total current assets			758,056				786,969
Property, plant and equipment, net			195,548				179,123
Goodwill			-				7,275
Deferred income taxes			7,423				2,620
Other			15,649				16,243
Total assets		$	976,676			$	992,230
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations		$	17,000			$	16,694
Accounts payable			207,804				231,638
Customer deposits			27,180				26,863
Accrued liabilities:
Salaries and wages			26,602				41,086
Other			32,589				31,611
Total current liabilities			311,175				347,892
Long-term debt and capital lease obligations, net of current portion			138,301				154,532
Other liabilities			18,932				15,861
Total non-current liabilities			157,233				170,393
Commitments and contingencies			-				-
Shareholders’ equity:
Preferred stock, $.01 par value, 2,000 shares authorized, none issued or outstanding			-				-
Common stock, $.01 par value, 200,000 shares authorized, 46,905 and 46,772 shares issued, respectively, and 39,459 and 39,326 shares outstanding, respectively			469				468
Additional paid-in capital			362,672				353,105
Common stock held in treasury, at cost, 7,446 shares for both periods			(200,110	)			(200,110	)
Retained earnings			340,984				309,708
Accumulated other comprehensive income			4,253				10,774
			508,268				473,945
Total liabilities and shareholders’ equity		$	976,676			$	992,230

See notes to condensed consolidated financial statements.

PLEXUS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited

		Nine Months Ended
		July 4,				June 28,
		2009				2008
Cash flows from operating activities
Net income		$	31,276			$	66,825
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization			25,435				21,460
Gain on sale of property, plant and equipment			(13	)			(48	)
Goodwill impairment charges			5,748				-
Deferred income taxes			2,592				163
Stock based compensation expense			7,527				6,342
Changes in assets and liabilities:
Accounts receivable			47,111				(9,314	)
Inventories			26,071				(65,545	)
Prepaid expenses and other			2,152				(2,189	)
Accounts payable			(24,733	)			18,571
Customer deposits			568				11,753
Accrued liabilities and other			(14,464	)			16,906
Cash flows provided by operating activities			109,270				64,924
Cash flows from investing activities
Purchases of short-term investments			-				(53,400	)
Sales and maturities of short-term investments			-				106,400
Payments for property, plant and equipment			(42,195	)			(37,879	)
Proceeds from sales of property, plant and equipment			228				234
Cash flows (used in) provided by investing activities			(41,967	)			15,355
Cash flows from financing activities
Purchases of common stock			-				(181,025	)
Proceeds from debt issuance			-				150,000
Payments on debt and capital lease obligations			(16,366	)			(2,576	)
Proceeds from exercises of stock options			1,933				3,894
Income tax benefit of stock option exercises			108				1,091
Issuances of common stock under Employee Stock Purchase Plan			-				177
Cash flows used in financing activities			(14,325	)			(28,439	)
Effect of foreign currency translation on cash and cash equivalents			(3,455	)			550
Net increase in cash and cash equivalents			49,523				52,390
Cash and cash equivalents:
Beginning of period			165,970				154,109
End of period		$	215,493			$	206,499

See notes to condensed consolidated financial statements.

Unaudited

NOTE 1 — BASIS OF PRESENTATION

     The condensed consolidated financial statements included herein have been prepared by Plexus Corp. and its subsidiaries (“Plexus” or the “Company”) without audit and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of the Company, the condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments necessary for the fair-statement of the consolidated financial position of the Company as of July 4, 2009, and the results of operations for the three and nine months ended July 4, 2009 and June 28, 2008, and the cash flows for the same nine-month periods.

     Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to the SEC rules and regulations dealing with interim financial statements. However, the Company believes that the disclosures made in the condensed consolidated financial statements included herein are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2008 Annual Report on Form 10-K.

     The Company’s fiscal year ends on the Saturday closest to September 30. The Company also uses a “4-4-5” weekly accounting system for the interim periods in each quarter. Each quarter therefore ends on a Saturday at the end of the 4-4-5 period. Periodically, an additional week must be added to the fiscal year to re-align with the Saturday closest to September 30. Fiscal 2009 includes this additional week and the fiscal year-end will be on October 3, 2009. Therefore the accounting year for 2009 will include 371 days. The additional week was added to the first fiscal quarter, ended January 3, 2009, which included 98 days. The accounting periods for the three and nine months ended July 4, 2009, included 91 days and 280 days, respectively. The accounting periods for the three and nine months ended June 28, 2008 included 91 days and 273 days, respectively.

     In preparing the accompanying condensed consolidated financial statements, the Company has reviewed, as determined necessary by the Company’s management, events that have occurred after July 4, 2009, up until the issuance of the financial statements, which occurred on August 5, 2009.

NOTE 2 — INVENTORIES

     The major classes of inventories are as follows (in thousands):

		July 4,				September 27,
		2009				2008
Raw materials		$	229,873			$	241,041
Work-in-process			29,567				39,810
Finished goods			54,017				59,393
		$	313,457			$	340,244

     Per contractual terms, customer deposits are received by the Company to offset obsolete and excess inventory risks.

NOTE 3 — PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consisted of the following categories (in thousands):

		July 4,				September 27,
		2009				2008
Land, buildings and improvements		$	107,738			$	103,047
Machinery and equipment			215,516				200,001
Computer hardware and software			72,407				71,444
Construction in progress			22,541				11,827
			418,202				386,319
Less: accumulated depreciation and amortization			(222,654	)			(207,196	)
		$	195,548			$	179,123

NOTE 4 — LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

     On April 4, 2008, the Company entered into a second amended and restated credit agreement (the “Amended Credit Facility”) with a group of banks which allows the Company to borrow $150 million in term loans and $100 million in revolving loans. The $150 million in term loans was immediately funded and the $100 million revolving credit facility is currently available. The Amended Credit Facility is unsecured and the revolving credit facility may be increased by an additional $100 million (“the accordion feature”) if the Company has not previously terminated all or any portion of the Amended Credit Facility, there is no event of default existing under the Amended Credit Facility and both the Company and the administrative agent consent to the increase. The Amended Credit Facility expires on April 4, 2013. Borrowings under the Amended Credit Facility may be either through term loans or revolving or swing loans or letter of credit obligations. As of July 4, 2009, the Company has term loan borrowings of $131.3 million outstanding and no revolving borrowings under the Amended Credit Facility.

     The Amended Credit Facility amended and restated the Company’s prior revolving credit facility (“Revolving Credit Facility”) with a group of banks that allowed the Company to borrow up to $200 million of which $100 million was committed. The Revolving Credit Facility was due to expire on January 12, 2012 and was also unsecured. It also contained other terms and financial conditions, which were substantially similar to those under the Amended Credit Facility.

     The Amended Credit Facility contains certain financial covenants, which include a maximum total leverage ratio, maximum value of fixed rentals and operating lease obligations, a minimum interest coverage ratio and a minimum net worth test, all as defined in the agreement. As of July 4, 2009, the Company was in compliance with all debt covenants. If the Company incurs an event of default, as defined in the Amended Credit Facility (including any failure to comply with a financial covenant), the group of banks has the right to terminate the Amended Credit Facility and all other obligations, and demand immediate repayment of all outstanding sums (principal and accrued interest). Interest on borrowing varies depending upon the Company’s then-current total leverage ratio; as of July 4, 2009, the Company could elect to pay interest at a defined base rate or the LIBOR rate plus 1.25%. Rates would increase upon negative changes in specified Company financial metrics and would decrease upon reduction in the current total leverage ratio to no less than LIBOR plus 1.00%. The Company is also required to pay an annual commitment fee on the unused credit commitment based on its leverage ratio; the current fee is 0.30 percent. Unless the accordion feature is exercised, this fee applies only to the initial $100 million of availability (excluding the $150 million of term borrowings). Origination fees and expenses associated with the Amended Credit Facility totaled approximately $1.3 million and have been deferred. These origination fees and expenses will be amortized over the five-year term of the Amended Credit Facility. Equal quarterly principal repayments of the term loan of $3.75 million per quarter began June 30, 2008 and end on April 4, 2013 with a balloon repayment of $75.0 million.

     The Amended Credit Facility allows for the future payment of cash dividends or the future repurchases of shares provided that there be no event of default (including any failure to comply with a financial covenant) is existing at the time of, or would be caused by, a dividend payment or a share repurchase.

     Interest expense related to the commitment fee and amortization of deferred origination fees and expenses for the Amended Credit Facility totaled approximately $0.2 million and $0.5 million for the three and nine months ended July 4, 2009, respectively, and $0.2 million and $0.4 million for the three and nine months ended June 28, 2008, respectively. The fair value of the Company’s term loan debt was $110.2 million as of July 4, 2009. The Company uses quoted market prices when available or discounted cash flows to calculate these fair values.

NOTE 5 — DERIVATIVES AND FAIR VALUE MEASUREMENT

     All derivatives are recognized in the Condensed Consolidated Balance Sheets at their estimated fair value. On the date a derivative contract is entered into, the Company designates the derivative as a hedge of a recognized asset or liability (a “fair value hedge”), a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (a “cash flow hedge”), or a hedge of the net investment in a foreign operation. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of a derivative that qualify as a fair value hedge are recorded in earnings along with the gain or loss on the hedged asset or liability. Changes in the fair value of a derivative that qualifies as a cash flow hedge are recorded in “Accumulated other comprehensive income” in the Condensed Consolidated Balance Sheets until earnings are affected by the variability of cash flows. Changes in the fair value of a derivative used to hedge the net investment in a foreign operation are recorded in the “Accumulated other comprehensive income” account within shareholders’ equity.

     In June 2008, the Company entered into three interest rate swap contracts related to the $150 million in term loans under the Amended Credit Facility that have a total notional value of $150 million and mature on April 4, 2013. These interest rate swap contracts will pay the Company variable interest at the three month LIBOR rate, and the Company will pay the counterparties a fixed interest rate. The fixed interest rates for each of these contracts are 4.415%, 4.490% and 4.435%, respectively. These interest rate swap contracts were entered into to convert $150 million of the variable rate term loan under the Amended Credit Facility into fixed rate debt. The notional amount of the interest rate swap contracts declines over time at the same rate as the term loans. Based on the terms of the interest rate swap contracts and the underlying debt, these interest rate contracts were determined to be effective, and thus qualify as a cash flow hedge. As such, any changes in the fair value of these interest rate swaps are recorded in “Accumulated other comprehensive income” on the accompanying Condensed Consolidated Balance Sheets until earnings are affected by the variability of cash flows. The total fair value of these interest rate swap contracts is $9.0 million at July 4, 2009, and the Company has recorded this in “Other” current liabilities and “Other liabilities” in the accompanying Condensed Consolidated Balance Sheets. As of July 4, 2009, the total combined notional amount of the Company’s three receive-variable/pay-fixed interest rate swaps was $131.3 million.

     The tables below present information regarding the fair values of derivative instruments and the effects of derivative instruments on the Company’s Statements of Operations:

Fair Values of Derivative Instruments

In thousands of dollars

Asset Derivatives

Liability Derivatives

July 4,

June 28,

July 4,

June 28,

2009

2008

2009

2008

Derivatives designated

Balance

Balance

Balance

Balance

as hedging instruments

Sheet

Fair

Sheet

Fair

Sheet

Fair

Sheet

Fair

under Statement 133

Location

Value

Location

Value

Location

Value

Location

Value

Interest rate swaps

-

-

Current liabilities - Other

$

2,239

Current liabilities - Other

$

392

Interest rate swaps

-

-

Other liabilities

$

6,717

Other liabilities

$

1,568

The Effect of Derivative Instruments on the Statements of Operations

for the Three Months Ended

In thousands of dollars

Amount of Gain or

Location of Gain or

Amount of Gain or (Loss)

(Loss) Recognized in

Location of Gain or

Amount of Gain or

(Loss) Recognized in

Recognized in Income on

Derivatives in

Other Comprehensive

(Loss) Reclassified from

(Loss) Reclassified from

Income on Derivative

Derivative (Ineffective

Statement 133 Cash

Income (“OCI”) on

Accumulated OCI into

Accumulated OCI into

(Ineffective Portion and

Portion and Amount

Flow Hedging

Derivative (Effective

Income (Effective

Income (Effective

Amount Excluded from

Excluded from

Relationships

Portion)

Portion)

Portion)

Effectiveness Testing)

Effectiveness Testing)

July 4,

June 28,

July 4,

June 28,

July 4,

June 28,

2009

2008

2009

2008

2009

2008

Interest rate swaps

$

53

$

1,960

Interest income (expense)

$

(1,098)

$

-

Other income (expense)

$

-

$

-

The Effect of Derivative Instruments on the Statements of Operations

for the Nine Months Ended

In thousands of dollars

Location of Gain or

Amount of Gain or (Loss)

Location of Gain or

Amount of Gain or

(Loss) Recognized in

Recognized in Income on

Derivatives in

Amount of Gain or

(Loss) Reclassified from

(Loss) Reclassified from

Income on Derivative

Derivative (Ineffective

Statement 133 Cash

(Loss) Recognized in

Accumulated OCI into

Accumulated OCI into

(Ineffective Portion and

Portion and Amount

Flow Hedging

OCI on Derivative

Income (Effective

Income (Effective

Amount Excluded from

Excluded from

Relationships

(Effective Portion)

Portion)

Portion)

Effectiveness Testing)

Effectiveness Testing)

July 4,

June 28,

July 4,

June 28,

July 4,

June 28,

2009

2008

2009

2008

2009

2008

Interest rate swaps

$

(8,379)

$

1,960

Interest income (expense)

$

(2,379)

$

-

Other income (expense)

$

-

$

-

     The Company adopted a newly issued accounting statement on September 28, 2008, for fair value measurements of financial assets and liabilities. The Company elected to defer adoption of this statement for non-financial assets and liabilities as permitted. The accounting statement for fair value measurements defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (or exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting statement established a fair value hierarchy based on three levels of inputs that may be used to measure fair value. The input levels are:

     Level 1: Quoted (observable) market prices in active markets for identical assets or liabilities.

     Level 2: Inputs other than Level 1 that are observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

     Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

     The following table lists the fair values of our financial instruments as of July 4, 2009, by input level as defined above:

				Fair Value Measurements Using Input Levels: (in thousands)
				Level 1					Level 2					Level 3					Total
	Derivatives
	Interest rate swap derivative			$	-				$	8,956				$	-				$	8,956
	Total derivative liabilities at fair value			$	-				$	8,956				$	-				$	8,956

     The Company also has $2.0 million of auction rate securities that are valued using Level 3 inputs. There has been no change in the fair value of these securities since September 27, 2008.

NOTE 6 — EARNINGS PER SHARE

     The following is a reconciliation of the amounts utilized in the computation of basic and diluted earnings per share (in thousands, except per share amounts):

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Basic and Diluted Earnings Per Share:
Net income		$	9,210			$	17,432			$	31,276			$	66,825
Basic weighted average common shares outstanding			39,445				41,962				39,382				44,674
Dilutive effect of stock options			267				519				168				517
Diluted weighted average shares outstanding			39,712				42,481				39,550				45,191
Earnings per share:
Basic		$	0.23			$	0.42			$	0.79			$	1.50
Diluted		$	0.23			$	0.41			$	0.79			$	1.48

     For both the three and nine months ended July 4, 2009, stock-based awards to purchase approximately 2.7 million shares of common stock were outstanding but not included in the computation of diluted earnings per share because the stock-based awards’ exercise prices were greater than the average market price of the common shares and, therefore, their effect would be anti-dilutive.

     For the three and nine months ended June 28, 2008, stock-based awards to purchase approximately 1.7 million shares and 1.6 million shares, respectively, of common stock were outstanding but not included in the computation of diluted earnings per share because the stock-based awards’ exercise prices were greater than the average market price of the common shares and, therefore, their effect would be anti-dilutive.

NOTE 7 — STOCK-BASED COMPENSATION

     The Company recognized $2.1 million and $7.5 million of compensation expense associated with stock-based awards for the three and nine months ended July 4, 2009, respectively, and $1.8 million and $6.3 million for the three and nine months ended June 28, 2008, respectively.

     The Company continues to use the Black-Scholes valuation model to determine the fair value of stock options and stock appreciation rights and recognizes the stock-based compensation expense over the stock-based awards’ vesting period. The Company uses the fair value at the date of grant to value restricted stock units.

NOTE 8 — SHAREHOLDERS’ EQUITY

     In February, 2008, the Company’s Board of Directors approved, and the Company commenced, a share repurchase program authorizing the Company to repurchase up to $200 million of common stock. Through a combination of two accelerated stock repurchase agreements and open market purchases, from February 2008 to July 2008, the Company repurchased a total of 7.4 million shares at a volume-weighted average price of $26.87 per share, for a total equal to the authorized $200 million.

NOTE 9 — INCOME TAXES

     Income taxes for the three and nine months ended July 4, 2009 were $1.0 million and $1.2 million, respectively. The effective tax rates, excluding the effect of discrete events, for the three and nine months ended July 4, 2009 were approximately 10 percent and 8 percent, respectively. The net discrete events for the second fiscal quarter were $1.4 million, consisting of approximately $1.6 million, including interest, related to the conclusion of federal and state audits, which resulted in a reduction of the liability imposed by Financial Accounting Standards Board (“FASB”) accounting standards, offset by an additional provision of $0.2 million for changes in state tax laws.

     Income taxes for the three and nine months ended June 28, 2008 were $4.4 million and $16.7 million, respectively. The effective tax rate for both the three and nine months ended June 28, 2008 was 20 percent. The change in the effective tax rate for the current year period compared to the prior year period was primarily due to a larger proportion of the Company’s projected fiscal 2009 pre-tax income in our North American sites, driven by customer and product mix.

     The Company has evaluated legislative changes for various jurisdictions in which it operates and determined that they should not have a material impact on the expected effective income tax rate for the current year.

     The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Upon adoption, total accrued penalties and net accrued interest with respect to income taxes was approximately $0.1 million and has not changed materially subsequent to adoption.

     During the quarter, the Company recorded a reduction of the liability by approximately $0.7 million, including interest. This reduction related primarily to payments to the Internal Revenue Service and other adjustments which were previously accrued for as part of the reserve for unrecognized income tax benefits.

     It is reasonably possible that a number of uncertain tax positions related to federal and state tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company’s consolidated results of operations, financial position and cash flows.

NOTE 10 — GOODWILL

     During the second quarter of fiscal 2009, the Company recorded a goodwill impairment charge of $5.7 million, which was the Company’s sole goodwill asset. The impairment wrote off the entire carrying value of its goodwill related to its Kelso, Scotland (“Kelso”) facility, which is the sole reporting unit in the European reportable segment. The impairment charge was driven by adverse macroeconomic conditions that contributed to an overall reduction in demand for the Company’s offerings in the Kelso facility. These conditions led to an “interim triggering event”, which caused management to perform an interim goodwill impairment test. This test resulted in the determination that the carrying value of the goodwill relating to Kelso was fully impaired and therefore an impairment charge of $5.7 million was taken.

     The changes in the carrying amount of goodwill for fiscal 2008 and for the nine months ended July 4, 2009 for the European reportable segment were as follows (in thousands):

		Europe
Balance as of September 29, 2007		$	8,062
Foreign currency translation adjustment			(787	)
Balance as of September 27, 2008			7,275
Foreign currency translation adjustment			(1,527	)
Goodwill impairment			(5,748	)
Balance as of July 4, 2009		$	-

NOTE 11 — BUSINESS SEGMENT, GEOGRAPHIC AND MAJOR CUSTOMER INFORMATION

     Reportable segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in assessing performance and allocating resources.

     The Company uses an internal management reporting system, which provides important financial data to evaluate performance and allocate the Company’s resources on a geographic basis. Net sales for segments are attributed to the region in which the product is manufactured or service is performed. The services provided, manufacturing processes used, class of customers serviced and order fulfillment processes used are similar and generally interchangeable across the segments. A segment’s performance is evaluated based upon its operating income (loss). A segment’s operating income (loss) includes its net sales less cost of sales and selling and administrative expenses, but excludes corporate and other costs, interest expense, other income (loss), and income taxes. Corporate and other costs primarily represent corporate selling and administrative expenses, and restructuring and impairment costs. These costs are not allocated to the segments, as management excludes such costs when assessing the performance of the segments. Inter-segment transactions are generally recorded at amounts that approximate arm’s length transactions. The accounting policies for the regions are the same as for the Company taken as a whole.

     Information about the Company’s four reportable segments for the three and nine months ended July 4, 2009 and June 28, 2008 were as follows (in thousands):

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Net sales:
United States		$	226,372			$	312,172			$	771,540			$	964,160
Asia			147,729				153,104				434,308				398,116
Mexico			19,437				22,012				57,482				55,249
Europe			13,083				17,077				38,043				53,400
Elimination of inter-segment sales			(27,978	)			(48,013	)			(77,726	)			(105,274	)
		$	378,643			$	456,352			$	1,223,647			$	1,365,651
Depreciation and amortization:
United States		$	2,489			$	2,241			$	7,599			$	6,623
Asia			4,133				3,216				11,793				8,998
Mexico			569				449				1,641				1,349
Europe			194				203				564				622
Corporate			1,278				1,258				3,838				3,868
		$	8,663			$	7,367			$	25,435			$	21,460
Operating income (loss):
United States		$	13,492			$	24,593			$	51,554			$	92,233
Asia			15,369				16,811				44,870				42,192
Mexico			(992	)			(1,053	)			(2,667	)			(2,158	)
Europe			(54	)			2,112				1,875				6,267
Corporate and other costs			(15,701	)			(19,981	)			(57,354	)			(56,562	)
		$	12,114			$	22,482			$	38,278			$	81,972
Capital expenditures:
United States		$	717			$	4,612			$	15,893			$	13,402
Asia			6,234				7,173				18,351				20,298
Mexico			1,214				269				1,961				377
Europe			2,472				693				2,839				1,111
Corporate			1,257				1,230				3,151				2,691
		$	11,894			$	13,977			$	42,195			$	37,879

		July 4,				September 27,
		2009				2008
Total assets:
United States		$	347,458			$	418,534
Asia			335,549				304,252
Mexico			52,737				41,671
Europe			88,250				97,874
Corporate			152,682				129,899
		$	976,676			$	992,230

     The following enterprise-wide information is provided in accordance with the required segment disclosures. Sales to unaffiliated customers are ascribed to a geographic region based on the Company’s location providing product or services (in thousands):

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Net sales:
United States		$	226,372			$	312,172			$	771,540			$	964,160
Malaysia			132,132				129,718				377,217				337,329
China			15,597				23,386				57,091				60,787
Mexico			19,437				22,012				57,482				55,249
United Kingdom			13,083				17,077				38,043				53,400
Elimination of inter-segment sales			(27,978	)			(48,013	)			(77,726	)			(105,274	)
		$	378,643			$	456,352			$	1,223,647			$	1,365,651

		July 4,				September 27,
		2009				2008
Long-lived assets:
United States		$	48,604			$	38,900
Malaysia			72,022				71,369
China			14,878				10,398
Mexico			7,450				7,111
United Kingdom			7,063				15,238
Romania			3,601				-
Corporate			41,930				43,382
		$	195,548			$	186,398

     Long-lived assets as of July 4, 2009 and September 27, 2008 exclude other long-term assets totaling $23.1 million and $18.9 million, respectively.

     Restructuring and impairment costs are not allocated to reportable segments, as management excludes such costs when assessing the performance of the reportable segments. Such costs are included within “Corporate and other costs” in the above operating income (loss) table. For the three months ended July 4, 2009, the Company did not incur any restructuring and impairment costs. For the nine months ended July 4, 2009, the Company incurred $8.6 million of restructuring and impairment costs.

     The percentages of net sales to customers representing 10 percent or more of total net sales for the indicated periods were as follows:

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Juniper Networks, Inc.			23	%			23	%			21	%			21	%

     No other customers accounted for 10 percent or more of net sales in either period.

NOTE 12 — GUARANTEES

     The Company offers certain indemnification commitments under its customer manufacturing agreements. In the normal course of business, the Company may from time to time be obligated to indemnify its customers or its customers’ customers against damages or liabilities arising out of the Company’s negligence, misconduct, breach of contract, or infringement of third party intellectual property rights. Certain agreements have extended broader indemnification, and while most agreements have contractual limits, some do not. However, the Company generally does not provide for such indemnities, and seeks indemnification from its customers for damages or liabilities arising out of the Company’s adherence to customers’ specifications or designs, or use of materials furnished, or directed to be used, by its customers. The Company does not believe its obligations under such indemnities are material.

     In the normal course of business, the Company also provides its customers a limited warranty covering workmanship, and in some cases materials, on products manufactured by the Company. Such warranty generally provides that products will be free from defects in the Company’s workmanship and meet mutually agreed-upon specifications for periods generally ranging from 12 months to 24 months. If a product fails to comply with the Company’s limited warranty, the Company’s obligation is generally limited to correcting, at its expense, any defect by repairing or replacing such defective product. The Company’s warranty generally excludes defects resulting from faulty customer-supplied components, customer design defects or damage caused by any party or cause other than the Company.

     The Company provides for an estimate of costs that may be incurred under its limited warranty at the time product revenue is recognized and establishes additional reserves for specifically identified product issues. These costs primarily include labor and materials, as necessary, associated with repair or replacement. The primary factors that affect the Company’s warranty liability include the value and the number of shipped units and historical and anticipated rates of warranty claims. As these factors are impacted by actual experience and future expectations, the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.

     Below is a table summarizing the activity related to the Company’s limited warranty liability for fiscal 2008 and for the nine months ended July 4, 2009 (in thousands):

Limited warranty liability, as of September 29, 2007		$	5,043
Accruals for warranties issued during the period			350
Settlements (in cash or in kind) during the period			(1,341	)
Limited warranty liability, as of September 27, 2008			4,052
Accruals for warranties issued during the period			377
Settlements (in cash or in kind) during the period			(76	)
Limited warranty liability, as of July 4, 2009		$	4,353

NOTE 13 — CONTINGENCIES

     Two securities class action lawsuits were filed in the United States District Court for the Eastern District of Wisconsin on June 25 and June 29, 2007, against the Company and certain Company officers and/or directors. On November 7, 2007, the two actions were consolidated, and a consolidated class action complaint was filed on February 1, 2008. The consolidated complaint named the Company and the following individuals as defendants: Dean A. Foate, President, Chief Executive Officer and a Director of the Company; F. Gordon Bitter, the Company’s former Senior Vice President and Chief Financial Officer; and Paul Ehlers, the Company’s former Executive Vice President and Chief Operating Officer. The consolidated complaint alleged securities law violations and sought unspecified damages relating generally to the Company’s statements regarding its defense sector business in early calendar 2006. On April 15, 2008, the Company and the individual defendants filed a motion to dismiss the consolidated class action complaint, which was opposed by the plaintiffs.

     On March 6, 2009, the court granted the motion of the Company and the individual defendants to dismiss the consolidated class action complaint. Although the court gave leave to the plaintiffs to file an amended complaint until March 31, 2009, no such amended complaint was filed. On July 23, 2009, a final judgment was entered by the court formally dismissing the action; the plaintiffs have until August 24, 2009 to exercise a right of appeal.

     The Company is party to certain lawsuits in the ordinary course of business. Management does not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Due to their immateriality, all expenses associated with these lawsuits are expensed as incurred.

NOTE 14 — RESTRUCTURING AND IMPAIRMENT COSTS

     Fiscal 2009 restructuring and impairment costs: For the three months ended July 4, 2009, the Company did not incur any restructuring or impairment costs.

     For the nine months ended July 4, 2009, the Company incurred $8.6 million of restructuring and impairment costs, which consisted of the following:

	•		$5.7 million related to goodwill impairment (see Note 10 above)
	•		$1.2 million related to severance from the reduction of our workforce across our United States facilities,     which affected approximately 125 employees
	•		$0.8 million related to severance from the reduction of our workforce in Juarez, Mexico, which affected     approximately 320 employees and
	•		$0.9 million related to the fixed assets written-down related to the closure of our Ayer, Massachusetts facility     and at Corporate.

     Fiscal 2008 restructuring and impairment costs: For the three and nine months ended June 28, 2008, the Company did not incur any restructuring or impairment costs.

     The table below summarizes the Company’s accrued restructuring and impairment liabilities as of July 4, 2009 (in thousands):

		Employee				Lease
		Termination				Obligations and				Non-cash
		and Severance				Other Exit				Asset
		Costs				Costs				Impairments				Total
Accrued balance, September 29, 2007		$	989			$	-			$	-			$	989
Restructuring costs			2,350				-				-				2,350
Adjustments to provisions			(231	)			-				-				(231	)
Amounts utilized			(1,070	)			-				-				(1,070	)
Accrued balance, September 27, 2008			2,038				-				-				2,038
Restructuring and impairment costs			1,947				876				5,748				8,571
Amounts utilized			(3,229	)			(789	)			(5,748	)			(9,766	)
Accrued balance, July 4, 2009		$	756			$	87			$	-			$	843

     We expect to pay the remaining accrued restructuring and impairment liabilities in the next twelve months.

NOTE 15 — NEW ACCOUNTING STATEMENTS

     In December 2007, the Financial Accounting Standards Board (“FASB”) issued a statement regarding business combinations (whether full, partial or step acquisitions) which will result in all assets and liabilities of an acquired business being recorded at their fair values. Certain forms of contingent consideration and certain acquired contingencies will be recorded at fair value at the acquisition date. The statement also stated acquisition costs will generally be expensed as incurred and restructuring costs will be expensed in periods after the acquisition date. This statement is effective for financial statements issued for fiscal years beginning after December 15, 2008 and will be effective for the Company beginning October 4, 2009.

     In September 2006, the FASB issued a statement regarding fair value measurements. This statement defined fair value, established a framework for measuring fair value in generally accepted accounting principles and established a hierarchy that categorized and prioritized the sources to be used to estimate fair value. The statement also expanded financial statement disclosures about fair value measurements. On February 12, 2008, the FASB issued additional guidance which delayed the effective date of the original statement for one year for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Both the statement and the additional guidance were effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company adopted the statement on September 28, 2008, as required, with no effect on the measurement of the Company’s financial assets and financial liabilities or on its consolidated results of operations, financial position or cash flows. The Company’s only financial asset and financial liability to which this statement applied during the three months ended July 4, 2009, was a floating-to-fixed interest rate swap that matures on April 4, 2013.

We are continuing to evaluate the impact the statement will have on the determination of fair value related to non-financial assets and non-financial liabilities in the future.

     In February 2007, the FASB issued a statement permitting an entity to choose to measure many financial instruments and certain other items at fair value. The fair value option permits a company to choose to measure eligible items at specified election dates. A company will report unrealized gains and losses on items for which the fair value option has been elected in earnings after adoption. The statement was effective for the Company on September 28, 2008 and, as permitted, the Company has not elected the “fair value option” for its financial assets and financial liabilities.

     In December 2007, the FASB issued a statement that changed the accounting and reporting for minority interests, which will now be termed “non-controlling interests.” The statement requires non-controlling interests to be presented as a separate component of equity and requires the amount of net income attributable to the parent and to the non-controlling interest to be separately identified on the consolidated statement of operations. It is effective for fiscal years beginning on or after December 15, 2008. The Company is currently assessing the impact of this statement on its consolidated results of operations, financial position and cash flows.

     In March 2008, the FASB issued a statement changing the disclosure requirements for derivative instruments and hedging activities. This statement requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted this statement during the second fiscal quarter of 2009. The principal impact to the Company was to require the expansion of its disclosure regarding its derivative instruments. See Note 5.

     In May 2009, the FASB issued a statement which modified the definition of what qualifies as a subsequent event — those events or transactions that occur following the balance sheet date, but before the financial statements are issues, or are available to be issued — and required companies to disclose the date through which it has evaluated subsequent events and the basis for determining that date. The Company has adopted this statement in the third fiscal quarter of 2009. See Note 1.

     In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for transfers of financial assets. This amendment requires greater transparency and additional disclosures for transfers of financial assets and the entity’s continuing involvement with them and changes the requirements for derecognizing financial assets. In addition, this amendment eliminates the concept of a qualifying special-purpose entity (QSPE). This amendment is effective for financial statements issued for fiscal years beginning after November 15, 2009. The Company is currently assessing the impact of this amendment on its consolidated results of operations, financial position and cash flows.

     In June 2009, the FASB also issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). The elimination of the concept of a QSPE, as discussed above, removes the exception from applying the consolidation guidance within this amendment. This amendment requires an enterprise to perform a qualitative analysis when determining whether or not it must consolidate a VIE. The amendment also requires an enterprise to continuously reassess whether it must consolidate a VIE. Additionally, the amendment requires enhanced disclosures about an enterprise’s involvement with VIEs and any significant change in risk exposure due to that involvement, as well as how its involvement with VIEs impacts the enterprise’s financial statements. Finally, an enterprise will be required to disclose significant judgments and assumptions used to determine whether or not to consolidate a VIE. This amendment is effective for financial statements issued for fiscal years beginning after November 15, 2009. The Company is currently assessing the impact of this amendment on its consolidated results of operations, financial position and cash flows.

     In June 2009, the FASB issued the FASB Accounting Standards Codification (Codification). The Codification will become the single source for all authoritative GAAP recognized by the FASB to be applied for financial statements issued for periods ending after September 15, 2009. The Codification does not change GAAP and the Company has determined that it will not have an impact on its consolidated results of operations, financial position and cash flows.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

“SAFE HARBOR” CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

     The statements contained in this Form 10-Q that provide guidance or are not historical facts (such as statements in the future tense and statements including “believe,” “expect,” “intend,” “plan,” “anticipate,” “goal,” “target” and similar terms and concepts), including all discussions of periods which are not yet completed, are forward-looking statements that involve risks and uncertainties, including, but not limited to:

	•		the economic performance of the electronics, technology and defense industries
	•		the risk of customer delays, changes or cancellations in both ongoing and new programs
	•		the poor visibility of future orders, particularly in view of current economic conditions
	•		the effects of the volume of revenue from certain sectors or programs on our margins in particular periods
	•		our ability to secure new customers and maintain our current customer base and deliver product on a timely basis
	•		the risks relative to new customers, including a recently announced customer in the Industrial/Commercial sector, which risks include customer delays, start-up costs, our potential inability to execute and lack of a track record of order volume and timing
	•		the risks of concentration of work for certain customers
	•		the risk that new program wins and/or customer demand may not result in the expected revenue or profitability
	•		the fact that customer orders may not lead to long-term relationships
	•		the weakness of the global economy and the continuing instability of the global financial markets and banking system, including the potential inability on our part or that of our customers or suppliers to access cash investments and credit facilities
	•		material cost fluctuations and the adequate availability of components and related parts for production
	•		the effect of changes in average selling prices
	•		the effect of start-up costs of new programs and facilities, including our recent and planned expansions, such as our new facilities in Hangzhou, China and Oradea, Romania
	•		the adequacy of restructuring and similar charges as compared to actual expenses
	•		the degree of success and the costs of efforts to improve the financial performance of our Mexican operations
	•		possible unexpected costs and operating disruption in transitioning programs
	•		the potential effect of world or local events (such as drug cartel-related violence in Juarez, Mexico, changes in oil prices, terrorism and war in the Middle East)
	•		the impact of increased competition and
	•		other risks detailed below in “Risk Factors”, otherwise herein, and in our Securities and Exchange Commission filings.

OVERVIEW

     The following information should be read in conjunction with our condensed consolidated financial statements included herein and the “Risk Factors” section in Item 1A of “Part II. Other Information.”

     Plexus Corp. and its subsidiaries (together “Plexus,” the “Company,” or “we”) participate in the Electronic Manufacturing Services (“EMS”) industry. We provide product realization services to original equipment manufacturers (“OEMs”) and other technology companies in the wireline/networking, wireless infrastructure, medical, industrial/commercial and defense/security/aerospace market sectors. We provide advanced electronics design, manufacturing and testing services to our customers with a focus on the mid-to-lower-volume, higher-mix segment of the EMS market. Our customers’ products typically require exceptional production and supply-chain flexibility, necessitating an optimized demand-pull-based manufacturing and supply chain solution across an integrated global platform.

Many of our customers’ products require complex configuration management and direct order fulfillment to their customers across the globe. In such cases we provide global logistics management and after-market service and repair. Our customers’ products may have stringent requirements for quality, reliability and regulatory compliance. We offer our customers the ability to outsource all phases of product realization, including product specifications; development, design and design validation; regulatory compliance support; prototyping and new product introduction; manufacturing test equipment development; materials sourcing, procurement and supply-chain management; product assembly/manufacturing, configuration and test; order fulfillment, logistics and service/repair.

     Plexus is passionate about its goal to be the best EMS company in the world at providing services for customers that have mid-to-lower-volume requirements and a higher mix of products. We have tailored our engineering services, manufacturing operations, supply-chain management, workforce, business intelligence systems, financial goals and metrics specifically to support these types of programs. Our flexible manufacturing facilities and processes are designed to accommodate customers with multiple product-lines and configurations as well as unique quality and regulatory requirements. Each of these customers is supported by a multi-disciplinary customer team and one or more uniquely configured “focus factories” supported by a supply-chain and logistics solution specifically designed to meet the flexibility and responsiveness required to support that customer’s fulfillment requirements.

     Our go-to-market strategy is also tailored to our target market sectors and business strategy. We have business development and customer management teams that are dedicated to each of the five sectors we serve. These teams are accountable for understanding the sector participants, technology, unique quality and regulatory requirements and longer-term trends. Further, these teams help set our strategy for growth in their sectors with a particular focus on expanding the services and value-add that we provide to our current customers while strategically targeting select new customers to add to our portfolio.

     Our financial model is aligned with our business strategy, with our primary focus to earn a return on invested capital (“ROIC”) in excess of our weighted average cost of capital (“WACC”). The smaller volumes, flexibility requirements and fulfillment needs of our customers typically result in greater investments in inventory than many of our competitors, particularly those that provide EMS services for high-volume, less complex products with less stringent requirements (such as consumer electronics). In addition, our cost structure relative to these peers includes higher investments in selling and administrative costs as a percentage of sales to support our sector-based go-to-market strategy, smaller program sizes, flexibility, and complex quality and regulatory compliance requirements. By exercising discipline to generate a ROIC in excess of our WACC, our goal is to ensure that Plexus creates a value proposition for our shareholders as well as our customers.

     Our customers include both industry-leading OEMs and other technology companies that have never manufactured products internally. As a result of our focus on serving market sectors that rely on advanced electronics technology, our business is influenced by technological trends such as the level and rate of development of telecommunications infrastructure, the expansion of networks and use of the Internet. In addition, the federal Food and Drug Administration’s approval of new medical devices, defense procurement practices and other governmental approval and regulatory processes can affect our business. Our business has also benefited from the trend to increased outsourcing by OEMs.

     We provide most of our contract manufacturing services on a turnkey basis, which means that we procure some or all of the materials required for product assembly. We provide some services on a consignment basis, which means that the customer supplies the necessary materials, and we provide the labor and other services required for product assembly. Turnkey services require material procurement and warehousing, in addition to manufacturing, and involve greater resource investments than consignment services. Other than certain test equipment and software used for internal operations, we do not design or manufacture our own proprietary products.

EXECUTIVE SUMMARY

     As a consequence of the Company’s use of a “4-4-5” weekly accounting system, periodically an additional week must be added to the fiscal year to re-align with a fiscal year end at the Saturday closest to September 30. In fiscal 2009, this requires an additional week, which was added to the first fiscal quarter. Therefore, the comparisons between the first three quarters of fiscal 2009 and fiscal 2008 reflect that the first three quarters of fiscal 2009 included 280 days while the first three quarters in fiscal 2008 included 273 days.

     Three months ended July 4, 2009. Net sales for the three months ended July 4, 2009 decreased by $77.8 million, or 17.0 percent, as compared to the three months ended June 28, 2008 to $378.6 million. Net sales declined in each of our market sectors except defense/security/aerospace, which had a slight increase, as compared to the prior-year period due to decreased demand resulting from overall economic conditions.

     The impact of overall economic conditions has significantly contributed to reduced revenue, gross margin and ROIC below our normal expectations for the business. As a result, we took action in the second fiscal quarter of 2009 to control costs, including reducing discretionary spending and workforce reductions, as described in Note 14 in Notes to Condensed Consolidated Financial Statements. In addition, we are taking what we believe are prudent steps to reduce capital expenditures and working capital investments to balance potential future growth with current results. New program wins in the last three quarters have exceeded our average for the prior fiscal year of approximately $135 million per quarter; as a result we believe we need to continue to invest cautiously to support these new customers and programs. We have also identified other cost-cutting measures that could be implemented quickly if forecasted revenues decline further or market conditions worsen.

     Gross margins were 9.1 percent for the three months ended July 4, 2009, which compared unfavorably to 10.7 percent for the three months ended June 28, 2008. Gross margins in the current-year period were negatively impacted by the decline in net sales, particularly related to our largest customer and another significant customer, as well as unfavorable changes in customer mix. Fixed manufacturing costs remained fairly consistent across periods, although we began to experience some benefits from the cost cutting measures we initiated in the second fiscal quarter of 2009.

     Selling and administrative expenses decreased $3.9 million, or 14.7 percent, to $22.5 million for the three months ended July 4, 2009 compared to the prior-year period. The decrease can be attributed primarily to lower compensation expenses associated with decreased accruals for variable incentive compensation as well as overall reductions as a result of the cost cutting measures we initiated in the second fiscal quarter of 2009.

     Net income for the three months ended July 4, 2009 decreased to $9.2 million from $17.4 million in the prior-year period, and diluted earnings per share decreased to $0.23 from $0.41 in the prior-year period. In addition to the items noted above, net income was favorably impacted by a decrease in our effective tax rate to 10 percent in the current-year period as compared to 20 percent in the prior-year period. The benefit in income tax expense for the current-year period was the result of adjusting year-to-date income tax expense to the effective rate of 8 percent, excluding discrete events of $1.4 million. We currently expect the annual effective tax rate for fiscal 2009 to be approximately 8 percent, excluding the discrete events, which is 1 percentage point higher than we anticipated at the end of second fiscal quarter due to a larger proportion of the Company’s projected fiscal 2009 pre-tax income in our North American sites, driven by customer and product mix.

     Nine months ended July 4, 2009. Net sales for the nine months ended July 4, 2009 decreased by $142.1 million or 10.4 percent, over the nine months ended June 28, 2008 to $1,223.6 million. Net sales declined in all of our market sectors during the current-year period. The overall reduction in our net sales was driven primarily by overall poor economic conditions, in particular by customers in the industrial/commercial, defense/security/aerospace and wireline/networking sectors. Leading the decline in the defense/security/aerospace sector was decreased demand of $58.6 million from our unnamed defense customer.

     Gross margins were 9.6 percent for the nine months ended July 4, 2009, which was less than the 11.4 percent for the nine months ended June 28, 2008. Gross margins in the current-year period were negatively impacted by the decline in net sales and unfavorable changes in customer mix, particularly related to our large unnamed defense customer.

     Selling and administrative expenses decreased $3.9 million, or 5.2 percent, to $70.1 million for the nine months ended July 4, 2009. Decreases in lower variable incentive compensation and reductions related to cost-cutting measures were partially offset by increases attributable to an additional week in the current-year period, additional compensation expense for stock-based compensation and expenses related to expansions in our Asian facilities.

     The Company also recorded restructuring and impairment charges of $8.6 million for the nine months ended July 4, 2009. These charges were mainly due to goodwill impairment and severance related to the reduction of workforce across our facilities. See “Restructuring and impairment actions” in “Results of Operations” below.

     Net income for the nine months ended July 4, 2009 decreased to $31.3 million from $66.8 million in the prior-year period, and diluted earnings per share decreased to $0.79 from $1.48 in the prior-year period.

     We currently expect the annual effective tax rate for fiscal 2009, excluding discrete events, to be approximately 8 percent, as explained above, which is 1 percentage point higher than earlier anticipated.

     Fiscal 2009 outlook. We currently expect net sales in the fourth quarter of fiscal 2009 to be in the range of $380 million to $405 million; however, our results will ultimately depend upon the actual level of customer orders and production, which could vary, and may be affected further by the weakened economy. Assuming that net sales are in the range noted above, we would currently expect to earn, before any restructuring and impairment costs, between $0.27 to $0.32 per diluted share in the fourth quarter of fiscal 2009.

REPORTABLE SEGMENTS

     A further discussion of financial performance by reportable segment is presented below (dollars in millions):

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Net sales:
United States		$	226.4			$	312.2			$	771.5			$	964.2
Asia			147.7				153.1				434.3				398.1
Mexico			19.4				22.0				57.5				55.2
Europe			13.1				17.1				38.0				53.4
Elimination of inter-segment sales			(28.0	)			(48.0	)			(77.7	)			(105.2	)
		$	378.6			$	456.4			$	1,223.6			$	1,365.7
Operating income (loss):
United States		$	13.5			$	24.6			$	51.6			$	92.2
Asia			15.3				16.8				44.9				42.2
Mexico			(1.0	)			(1.0	)			(2.7	)			(2.2	)
Europe			-				2.1				1.9				6.3
Corporate and other costs			(15.7	)			(20.0	)			(57.4	)			(56.5	)
		$	12.1			$	22.5			$	38.3			$	82.0

	•		United States: Net sales for the three months ended July 4, 2009 decreased $85.8 million, or 27.5 percent, from the three months ended June 28, 2008, to $226.4 million. This reportable segment experienced significant net sales decline due to decreased demand mainly from our largest customer. The decrease from this customer was due in part to the economic pullback as well as from the transfer of some production from the United States reportable segment to the Asia reportable segment. Decreased demand was also noted from a significant defense/security/aerospace customer and a significant medical customer. Operating income for the three months ended July 4, 2009 decreased $11.1 million from the three months ended June 28, 2008. Operating income in the current-year period was negatively impacted by the decline in net sales.
			Net sales for the nine months ended July 4, 2009 decreased $192.7 million, or 20.0 percent, over the nine months ended June 28, 2008 to $771.5 million. Net sales decreased in the current-year period due to decreased demand mainly from our unnamed defense/security/aerospace customer, as well as the transfer of production for a wireline/networking customer’s product to our Asia reportable segment and the decrease in the demand for this customer as well. Decreased demand was also noted from another wireline/networking customer and another defense/security/aerospace customer. Operating income for the nine months ended July 4, 2009 decreased $40.6 million from the nine months ended June 28, 2008. Operating income in the current-year period was negatively impacted by the decline in net sales and unfavorable changes in customer mix, particularly related to our unnamed defense customer.

	•		Asia: Net sales for the three months ended July 4, 2009 decreased $5.4 million, or 3.5 percent, over the three months ended June 28, 2008 to $147.7 million. This decline reflected decreased demand from an industrial/commercial customer as well as overall decreased demand from several other customers across all sectors, partially offset by the transfer of production for a wireline/networking customer’s product from the United States reportable segment to the Asian reportable segment. Operating income for the three months ended July 4, 2009 decreased $1.5 million over the three months ended June 28, 2008, as a result of decreased net sales and changes in customer mix.
			Net sales for the nine months ended July 4, 2009 increased $36.2 million, or 9.1 percent, over the nine months ended June 28, 2008 to $434.3 million. This growth reflected increased net sales to several customers with the most significant customer growth coming from the transfer of production of a wireline/networking customer’s product from the United States reportable segment to the Asian reportable segment as well as increased net sales from two additional customers in the wireline/networking sector and a customer in the medical sector. Operating income for the nine months ended July 4, 2009 improved $2.7 million over the nine months ended June 28, 2008, primarily as a result of higher net sales in the first quarter of fiscal 2009.
	•		Mexico: Net sales for the three months ended July 4, 2009 decreased $2.6 million or 11.8 percent, from the three months ended June 28, 2008, to $19.4 million. The net sales decrease was primarily driven by decreased demand from an industrial/commercial customer and a medical customer. These losses were offset, in part, by increased demand from another industrial/commercial customer. Operating loss for the three months ended July 4, 2009 was comparable to the prior-year period.
			Net sales for the nine months ended July 4, 2009 increased $2.3 million, or 4.2 percent, from the nine months ended June 28, 2008, to $57.5 million. The net sales increase was primarily attributable to the addition of a new customer in the wireline/networking sector. In addition, there was increased demand from an industrial/commercial customer, offset by decreased demand from another wireline/networking customer and another industrial/commercial customer. Operating loss for the nine months ended July 4, 2009 increased $0.5 million over the nine months ended June 28, 2008 to $2.7 million due to reduced gross margin, resulting from changes in customer mix, as well as restructuring charges.
	•		Europe: Net sales for the three months ended July 4, 2009 decreased $4.0 million, or 23.4 percent, to $13.1 million, from the three months ended June 28, 2008. The net sales decline was primarily due to decreased demand from an industrial/commercial customer. Operating income for the three months ended July 4, 2009 decreased by $2.1 million from the prior-year period due primarily to decreased net sales.
			Net sales for the nine months ended July 4, 2009 decreased $15.4 million, or 28.8 percent, to $38.0 million, from the nine months ended June 28, 2008. The change in net sales can be attributed to a decrease in the exchange rate as well as decreased demand from one customer in the industrial/commercial sector. Operating income for the nine months ended July 4, 2009 decreased $4.4 million from the nine months ended June 28, 2008 primarily as a result of decreased net sales as well as unfavorable change in customer mix.

     For our significant customers, we generally manufacture products in more than one location. Net sales to Juniper Networks, Inc. (“Juniper”), our largest customer, occur in the United States and Asia. Net sales to General Electric Company (“GE”), a significant customer, occur in the United States, Asia and Mexico. See Note 11 in Notes to Condensed Consolidated Financial Statements for certain financial information regarding our reportable segments, including a detail of net sales by reportable segment.

RESULTS OF OPERATIONS

     Net sales. Net sales for the indicated periods were as follows (dollars in millions):

		Three Months Ended								Variance								Nine Months Ended								Variance
		July 4,				June 28,				Increase/								July 4,				June 28,				Increase/
		2009				2008				(Decrease)								2009				2008				(Decrease)
Net Sales		$	378.6			$	456.4			$	(77.8	)			(17	)%		$	1,223.6			$	1,365.7			$	(142.1	)			(10	)%

     For the three months ended July 4, 2009, we experienced net sales decline in each of our market sectors, except for a small increase in defense/security/aerospace. Our net sales decline in the wireline/networking sector was driven by decreased demand from our largest customer.

The net sales decline in the industrial/commercial sector was spread across many customers and was primarily a result of decreased demand. Our net sales decline in the medical sector was primarily due to decreased demand from two customers. Our wireless infrastructure sector declined as a result of decreased demand primarily from two customers and our defense/security/aerospace sector increased net sales slightly over the prior-year period.

     For the nine months ended July 4, 2009, net sales declined in all of our market sectors as compared to the prior-year period, due primarily to decreased demand by customers in the industrial/commercial, defense/security/aerospace and wireline/networking sectors. Our industrial/commercial sector was unfavorably impacted by decreased demand from many existing customers. Leading the decline in the defense/security/aerospace sector was decreased demand of $58.6 million from our unnamed defense customer. Our net sales decline in our wireline/networking sector was primarily due to decreased demand from our largest customer, partially offset by increased demand from a new customer. Offsetting these net sales declines was an increase in demand from a medical customer.

     Our net sales by market sector for the indicated periods were as follows:

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
Industry		2009				2008				2009				2008
Wireline/Networking			48	%			47	%			46	%			43	%
Wireless Infrastructure			9	%			9	%			9	%			9	%
Medical			21	%			22	%			23	%			21	%
Industrial/Commercial			12	%			16	%			12	%			16	%
Defense/Security/Aerospace			10	%			6	%			10	%			11	%

     The percentages of net sales to customers representing 10 percent or more of net sales and net sales to our ten largest customers for the indicated periods were as follows:

		Three Months Ended								Nine Months Ended
		July 4,				June 28,				July 4,				June 28,
		2009				2008				2009				2008
Juniper			23	%			23	%			21	%			21	%
Top 10 customers			57	%			62	%			59	%			62	%

     Net sales to our largest customers may vary from time to time depending on the size and timing of customer program commencements, terminations, delays, modifications and transitions. We remain dependent on continued sales to our significant customers, and we generally do not obtain firm, long-term purchase commitments from our customers. Customers’ forecasts can and do change as a result of changes in their end-market demand and other factors, including global economic conditions. Any material change in forecasts or orders from these major accounts, or other customers, could materially affect our results of operations. In addition, as our percentage of net sales to customers in a specific sector becomes larger relative to other sectors, we will become increasingly dependent upon economic and business conditions affecting that sector.

     Gross profit and gross margin. Gross profit and gross margins for the indicated periods were as follows (dollars in millions):

		Three Months Ended								Variance								Nine Months Ended								Variance
		July 4,				June 28,				Increase/								July 4,				June 28,				Increase/
		2009				2008				(Decrease)								2009				2008				(Decrease)
Gross Profit		$	34.6			$	48.8			$	(14.2	)			(29	)%		$	117.0			$	155.9			$	(38.9	)			(25	)%
Gross Margin			9.1	%			10.7	%											9.6	%			11.4	%

     For the three months ended July 4, 2009, gross profit and gross margin were impacted by the following:

•

decreased net sales in all four of the reportable segments, particularly related to our largest customer and another significant customer

	•		unfavorable changes in customer mix and
	•		increased costs related to facilities in China, Romania, Mexico and the North American mechatronics facility, which are not at full capacity.

     For the nine months ended July 4, 2009, gross profit and gross margin were adversely impacted by the following:

	•		decreased net sales in the U.S. and European reportable segments
	•		unfavorable changes in customer mix, particularly related to our unnamed defense customer
	•		a moderate increase in fixed manufacturing costs associated with salaries and benefits as a result of annual wage increases, an additional week in the nine month period and expansion in Asia and
	•		increased costs related to facilities in China, Romania, Mexico and the North American mechatronics facility, which are not at full capacity.

     Gross margins reflect a number of factors that can vary from period to period, including product and service mix, the level of new facility start-up costs, inefficiencies resulting from the transition of new programs, product life-cycles, sales volumes, price reductions, overall capacity utilization, labor costs and efficiencies, the management of inventories, component pricing and shortages, the mix of turnkey and consignment business, fluctuations and timing of customer orders, changing demand for our customers’ products and competition within the electronics industry. Additionally, turnkey manufacturing involves the risk of inventory management and a change in component costs can directly impact average selling prices, gross margins and net sales. Although we focus on maintaining gross margins, there can be no assurance that gross margins will not decrease in future periods.

     Design work performed by the Company is not the proprietary property of Plexus and all costs incurred with this work are considered reimbursable by our customers. We do not track research and development costs that are not reimbursed by our customers and we consider these amounts immaterial.

     Selling and administrative expenses. Selling and administrative expenses (“S&A”) for the indicated periods were as follows (dollars in millions):

		Three Months Ended								Variance								Nine Months Ended								Variance
		July 4,				June 28,				Increase/								July 4,				June 28,				Increase/
		2009				2008				(Decrease)								2009				2008				(Decrease)
S&A		$	22.5			$	26.4			$	(3.9	)			(15	)%		$	70.1			$	74.0			$	(3.9	)			(5	)%
Percent of net sales			5.9	%			5.8	%											5.7	%			5.4	%

     The dollar decrease in S&A for the three months ended July 4, 2009 is attributed to decreased compensation expenses for variable incentive compensation and overall reductions as a result of the cost cutting measures we initiated in the second fiscal quarter of 2009. S&A as a percentage of net sales increased as a result of the decreased net sales in the three months ended July 4, 2009, as compared to the prior-year period.

     The dollar S&A expense for the nine months ended July 4, 2009 decreased due to lower variable incentive compensation and overall reductions as a result of cost cutting measures offset by increases attributable to an additional week in the current-year period, additional compensation expense for stock-based compensation and expenses related to expansions in our Asian facilities. S&A as a percentage of net sales increased as a result of the decreased net sales in the nine months ended July 4, 2009 as compared to the prior-year period.

     Restructuring and impairment actions: For the three months ended July 4, 2009, the Company did not incur any restructuring and impairment costs.

     For the nine months ended July 4, 2009, the Company incurred $8.6 million of restructuring and impairment costs, which consisted of the following:

	•		$5.7 million related to goodwill impairment in our European reportable segment
	•		$1.2 million related to severance from the reduction of our workforce across our United States facilities,    which affected approximately 125 employees
	•		$0.8 million related to severance from the reduction of our workforce in Juarez, Mexico, which affected    approximately 320 employees and