Plexus Provides Update on Unverified List Removal

Rhea-AI Summary

Plexus Corp. (NASDAQ: PLXS) has received notification that its China subsidiary, Plexus Xiamen, will be removed from the Bureau of Industry and Security’s Unverified List due to a delay in routine verification of a shipment, swiftly rectified through strong cooperation. The Department of Commerce is expected to publish the removal in January 2024. Plexus remains committed to compliance with U.S. export control laws.

Market Research Analyst

The removal of Plexus Corp.'s subsidiary from the BIS Unverified List is a positive development that can have a significant impact on the company's operations in China. Being on the Unverified List often restricts a company's ability to engage in export and import activities, which can hamper supply chains and revenue streams. With this obstacle removed, Plexus can potentially secure more business opportunities in China, a key manufacturing hub.

Investors should note that the company's proactive approach to resolving the verification delay and its commitment to compliance with U.S. export control laws may improve its reputation and reliability among partners and customers. This can lead to improved investor confidence and might positively influence Plexus's stock price in the medium to long term.

Legal Expert

From a legal perspective, Plexus's swift resolution of the compliance issue demonstrates effective risk management. The implications of being on the Unverified List include potential fines and loss of export privileges, which can lead to significant financial repercussions. By navigating the complexities of export control laws and collaborating with the BIS, Plexus has mitigated these risks, which is an important consideration for stakeholders concerned with corporate governance and legal compliance.

Financial Analyst

This development is likely to be viewed favorably by the market, as it eliminates a potential barrier to trade that could have affected Plexus's financial performance. Investors may expect an improvement in the company's financial metrics in subsequent quarters as a result of regained operational efficiencies and market access. The removal from the Unverified List may also reduce the cost of compliance and associated legal expenditures, potentially leading to better profit margins.

However, it is important to monitor how quickly Plexus can capitalize on this development and whether it will translate into tangible financial growth. Additionally, the market will be observing the company's ability to maintain compliance and avoid future regulatory issues, which could impact investor sentiment and stock volatility.

NEENAH, WI, Dec. 27, 2023 (GLOBE NEWSWIRE) -- Plexus Corp. (NASDAQ: PLXS) today received notification through official written correspondence from the U.S. Department of Commerce that its China subsidiary (“Plexus Xiamen”) will be removed from the Bureau of Industry and Security’s (“BIS”) Unverified List. Through no fault of Plexus or the BIS, a delay in the routine verification of a shipment to Plexus Xiamen occurred, which as a result of strong cooperation between the organizations has now been swiftly rectified. The Department of Commerce has commenced an administrative process to publish the removal of Plexus from the Unverified List in the Federal Register, which the company anticipates to occur in January 2024. Plexus remains committed to compliance with all applicable U.S. export control laws, and to working with BIS in a transparent, collaborative manner.

Investor and Media Contact

Shawn Harrison
+1.920.969.6325
shawn.harrison@plexus.com

About Plexus
Since 1979, Plexus has been partnering with companies to create the products that build a better world. We are a team of nearly 25,000 individuals who are dedicated to providing Design and Development, Supply Chain Solutions, New Product Introduction, Manufacturing and Sustaining Services. Plexus is a global leader that specializes in serving customers in industries with highly complex products and demanding regulatory environments. Plexus delivers customer service excellence to leading companies by providing innovative, comprehensive solutions throughout a product’s lifecycle. For more information about Plexus, visit our website at www.plexus.com.

Safe Harbor and Fair Disclosure Statement
The statements contained in this press release that are guidance or which 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. These risks and uncertainties include the effect of inflationary pressures on our costs of production, profitability, and on the economic outlook of our markets; the effects of shortages and delays in obtaining components as a result of economic cycles, natural disasters or otherwise; the risk of customer delays, changes, cancellations or forecast inaccuracies in both ongoing and new programs; the effects of our Xiamen, China subsidiary being placed on the Bureau of Industry and Security’s Unverified List; the ability to realize anticipated savings from restructuring or similar actions, as well as the adequacy of related charges as compared to actual expenses; the lack of visibility of future orders, particularly in view of changing economic conditions; the economic performance of the industries, sectors and customers we serve; the outcome of litigation and regulatory investigations and proceedings, including the results of any challenges with regard to such outcomes; the effects of tariffs, trade disputes, trade agreements and other trade protection measures; the effects of the volume of revenue from certain sectors or programs on our margins in particular periods; our ability to secure new customers, maintain our current customer base and deliver product on a timely basis; the risks of concentration of work for certain customers; the particular risks relative to new or recent customers, programs or services, which risks include customer and other delays, start-up costs, potential inability to execute, the establishment of appropriate terms of agreements, and the lack of a track record of order volume and timing; the effects of start-up costs of new programs and facilities or the costs associated with the closure or consolidation of facilities; possible unexpected costs and operating disruption in transitioning programs, including transitions between Company facilities; 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; our ability to manage successfully and execute a complex business model characterized by high product mix and demanding quality, regulatory, and other requirements; the risks associated with excess and obsolete inventory, including the risk that inventory purchased on behalf of our customers may not be consumed or otherwise paid for by the customer, resulting in an inventory write-off; risks related to information technology systems and data security; increasing regulatory and compliance requirements; any tax law changes and related foreign jurisdiction tax developments; current or potential future barriers to the repatriation of funds that are currently held outside of the United States as a result of actions taken by other countries or otherwise; the potential effects of jurisdictional results on our taxes, tax rates, and our ability to use deferred tax assets and net operating losses; the weakness of areas of the global economy; the effect of changes in the pricing and margins of products; raw materials and component cost fluctuations; the potential effect of fluctuations in the value of the currencies in which we transact business; the effects of changes in economic conditions, political conditions and tax matters in the United States and in the other countries in which we do business; the potential effect of other world or local events or other events outside our control (such as the conflict between Russia and Ukraine, conflict in the Middle East, escalating tensions between China and Taiwan or China and the United States, changes in energy prices, terrorism, global health epidemics and weather events); the impact of increased competition; an inability to successfully manage human capital; changes in financial accounting standards; and other risks detailed herein and in our other Securities and Exchange Commission filings, particularly in Risk Factors contained in our fiscal 2023 Form 10-K.

Why was Plexus Xiamen on the Unverified List?

Plexus Xiamen was on the Unverified List due to a delay in routine verification of a shipment, which has now been rectified.

When will Plexus Xiamen be removed from the Unverified List?

The removal of Plexus Xiamen from the Unverified List is expected to be published in the Federal Register in January 2024.

How does this notification impact Plexus Corp. (PLXS) stock?

The notification of Plexus Xiamen's removal from the Unverified List is a positive development that reflects the company's commitment to compliance and collaboration with the U.S. Department of Commerce.

What are Plexus Corp.'s plans for compliance with U.S. export control laws?

Plexus Corp. remains committed to compliance with all applicable U.S. export control laws and to working with the Bureau of Industry and Security in a transparent, collaborative manner.