Plexus Provides Update on Unverified List Designation
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Insights
The inclusion of Plexus Corp's subsidiary on the Bureau of Industry and Security’s Unverified List raises concerns regarding the company's export compliance practices. While not an immediate prohibition on business, it signals increased scrutiny by U.S. authorities. This development could potentially lead to delays in transactions, increased operational costs due to enhanced compliance requirements and reputational damage. Stakeholders should monitor the situation closely as the company's efforts to address the BIS's questions will be crucial in determining the speed of resolution and the long-term impact on the company's international operations.
From a financial perspective, Plexus Corp's situation may affect investor sentiment and stock performance, particularly if the issue leads to disruptions in supply chain operations or impacts key customer relationships. Investors should consider the potential for future restrictions, which could impair the subsidiary's ability to contribute to Plexus's overall revenue. It is essential to analyze the company's forthcoming disclosures about the resolution of this matter and to assess the effectiveness of its export compliance program in mitigating similar risks.
In the broader context of U.S.-China trade relations, Plexus Corp's case exemplifies the challenges companies face when operating within jurisdictions subject to heightened U.S. regulatory oversight. The electronics manufacturing services industry, where Plexus operates, is particularly sensitive to export controls due to the strategic nature of its products. Industry peers will likely observe Plexus's response as a benchmark for compliance standards. This incident underscores the importance of robust internal controls and proactive engagement with regulatory entities.
NEENAH, WI, Dec. 20, 2023 (GLOBE NEWSWIRE) -- On December 19, 2023, Plexus Corp. (NASDAQ: PLXS) learned that the U.S Department of Commerce placed its Xiamen, China subsidiary (“Plexus Xiamen”) on the Bureau of Industry and Security’s (“BIS”) Unverified List. Companies appearing on the Unverified List are not barred from conducting business with the United States and their U.S. customers and suppliers.
Plexus maintains a robust export compliance program across all of its international operations and is not currently aware of any facts or circumstances meriting the designation. We are also working to understand and address BIS’s questions and expedite Plexus Xiamen's removal from the Unverified List. 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.
FAQ
Why was Plexus Xiamen placed on the Unverified List by the U.S Department of Commerce?
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