Molex Incorporated Molex Reports First Quarter Results and Record Orders

 
TIDMMOL 
 
 

Molex Incorporated (NASDAQ: MOLX) and (NASDAQ: MOLXA), a global electronic components company, today reported results for its first quarter ended September 30, 2012.

First Quarter Results

 
                           Three Months Ended 
                           Sept. 30,    Jun. 30,    Sept. 30, 
USD millions, except       2012         2012        2011 
per share data 
Net revenue                $ 916.9      $ 858.5     $ 936.0 
Net income                   71.3         72.0        80.5 
Earnings per share           0.40         0.40        0.46 
 
 

Net revenue for the September 2012 quarter was $916.9 million, a 6.8% increase from the June 2012 quarter and a 2.0% decline from the September 2011 quarter. In local currencies, net revenue rose 6.9% compared with the June 2012 quarter and increased 0.6% compared with the September 2011 quarter. Orders for the September 2012 quarter were a record $943.9 million, an increase of 4.8% from the June 2012 quarter and 3.7% from the September 2011 quarter, resulting in a book-to-bill ratio of 1.03 to 1.0 for the September 2012 quarter.

Net income for the September 2012 quarter was $71.3 million or $0.40 per share, compared with $72.0 million, or $0.40 per share, for the June 2012 quarter and $80.5 million, or $0.46 per share, for the September 2011 quarter.

"Despite challenging global economic conditions and growing uncertainty in end markets, Molex continues to introduce new products driving growth higher than the overall connector market. With our reputation for quality, customer service and engineering, Molex is recognized as an industry leader and increasingly the supplier of choice as our customers continue to require innovative interconnect solutions," commented Martin P. Slark, Chief Executive Officer. "We have been expanding our M&A efforts over the past year and are pleased to announce that we acquired Affinity Medical Technologies in early October. Affinity manufactures custom medical interconnect products and systems and will complement our strategy of focusing on high growth markets."

Other financial highlights for the quarter ended September 30, 2012:

 
 
    -- Gross profit margin was 29.3%, compared with 30.0% in the June 2012 

quarter and 31.3% in the September 2011 quarter. The current quarter

gross margin was impacted by start-up costs and product mix related to

new programs launched in the quarter.

 
    -- SG&A expense was $163.1 million, compared with $161.6 million in the 

June 2012 quarter and $169.2 million in the September 2011 quarter.

SG&A expense included insurance proceeds of $9.9 million ($0.03 per

share) in the September 2012 quarter and $6.0 million ($0.02 per

share) in the June 2012 quarter related to losses incurred from the

March 2011 earthquake and tsunami in Japan.

 
    -- Backlog was $445.3 million, an increase of 6.9% from the June 2012 

quarter and 15.0% from the September 2011 quarter. These increases are

the result of orders for new products that were launched in the

September 2012 quarter.

 
    -- Capital expenditures were $69.4 million or 7.6% of revenue. 
 
    -- Inventory days outstanding was 84 days compared with 87 days in the 

June 2012 quarter and 84 days in the September 2011 quarter.

 
    -- Accounts receivable days outstanding was 69 days compared with 70 days 

in the June 2012 quarter and 69 days in the September 2011 quarter.

 
    -- The effective tax rate was 30.8%. 
 
    -- Cash dividends paid were $0.22 per share, an increase of 10% from the 

June 2012 quarter.

Outlook

Based upon current order rates and customer backlog, the Company estimates revenue in a range of $930 to $970 million for the December 2012 quarter. At this level of revenue, the Company expects earnings per share in a range of $0.36 to $0.40, assuming constant foreign currency rates, unchanged commodity prices and an effective tax rate of 32%.

Earnings Conference Call Information

A conference call will be held on Tuesday, October 23, 2012 at 8:30 a.m. central time. Please dial [phone] to participate in the call. International callers should dial [phone]. Please dial in at least five minutes prior to the start of the call and refer to participant pass code 14202097. Internet users will be able to access the webcast, including slide materials, live and in replay in the "Investors" section of the Company's website at www.molex.com. A 48-hour telephone replay will be available at approximately 10:30 a.m. central time at [phone] or [phone] / pass code 84134444.

Other Investor Events

Nov. 14, 2012 - UBS Global Technology Conference in New York

Dec. 04, 2012 - NASDAQ OMX 29th Investor Program in London

Forward-Looking Statements

Statements in this release that are not historical are forward-looking and are subject to various risks and uncertainties that could cause actual results to vary materially from those stated.Words such as "expect," "anticipate," "outlook," "forecast," "could," "project," "intend," "plan," "continue," "believe," "seek," "estimate," "should," "may," "assume," "potential," variations of such words and similar expressions are used to identify these forward-looking statements.Forward-looking statements are based on currently available information and include, among others, the discussion under "Outlook."These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Respective risks, uncertainties, and assumptions that could affect the outcome or results of operations are described in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2012, which is incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission.

We have based our forward-looking statements on our management's beliefs and assumptions based on information available to management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied, or forecast by our forward-looking statements. Reference is made in particular to forward-looking statements regarding growth strategies, industry trends, global economic conditions, success of customers, cost of raw materials, value of inventory, availability of credit, foreign currency exchange rates, labor costs, protection of intellectual property, cost reduction initiatives, acquisition synergies, manufacturing strategies, product development introduction and sales, regulatory changes, competitive strengths, income tax fluctuations, natural disasters, unauthorized access to data, government investigations and outcomes of legal proceedings. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

Molex Incorporated is a 74-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. Based in Lisle, Illinois, USA, the Company operates 41 manufacturing locations in 16 countries. The Molex website is www.molex.com.

Editor's note: Molex is traded on the NASDAQ Global Select Market (MOLX and MOLXA) in the United States and on the London Stock Exchange. The Company's voting common stock (MOLX) is included in the S&P 500 Index.

 
Molex Incorporated 
Condensed Consolidated Balance Sheets 
(in thousands) 
                                                 Sept. 30,      June 30, 
                                                 2012           2012 
                                                 (Unaudited) 
ASSETS 
Current assets: 
Cash and cash equivalents                        $ 685,972      $ 637,417 
Marketable securities                              16,111         14,830 
Accounts receivable, less allowances of            770,976        751,279 
$37,401 and $37,876,  respectively 
Inventories                                        564,377        531,825 
Deferred income taxes                              109,101        110,789 
Other current assets                               38,341         33,098 
Total current assets                               2,184,878      2,079,238 
Property, plant and equipment, net                 1,178,875      1,150,549 
Goodwill                                           161,163        160,986 
Non-current deferred income taxes                  52,653         50,038 
Other assets                                       168,309        170,692 
Total assets                                     $ 3,745,878    $ 3,611,503 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities: 
Current portion of short-term borrowings         $ 75,074       $ 104,933 
and long-term debt 
Accounts payable                                   412,429        355,491 
Accrued expenses: 
Accrual for unauthorized activities in Japan       189,040        184,177 
Income taxes payable                               49,828         35,360 
Other                                              228,098        212,035 
Total current liabilities                          954,469        891,996 
Other non-current liabilities                      19,321         18,174 
Accrued pension and other                          113,847        115,176 
postretirement benefits 
Long-term debt                                     150,000        150,032 
Total liabilities                                  1,237,637      1,175,378 
Commitments and contingencies 
Total stockholders' equity                         2,508,241      2,436,125 
Total liabilities and stockholders' equity       $ 3,745,878    $ 3,611,503 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Income 
(Unaudited) 
(in thousands, except per share data) 
                                          Three Months Ended 
                                          September 30, 
                                          2012          2011 
Net revenue                               $ 916,921     $ 935,985 
Cost of sales                               648,504       643,257 
Gross profit                                268,417       292,728 
Selling, general and administrative         163,121       169,225 
Unauthorized activities in Japan            2,561         2,922 
Total operating expenses                    165,682       172,147 
Income from operations                      102,735       120,581 
Interest (expense), net                     (810    )     (1,391  ) 
Other income                                1,196         276 
Total other income (expense), net           386           (1,115  ) 
Income before income taxes                  103,121       119,466 
Income taxes                                31,807        38,949 
Net income                                $ 71,314      $ 80,517 
Earnings per share: 
Basic                                     $ 0.40        $ 0.46 
Diluted                                   $ 0.40        $ 0.46 
Dividends declared per share              $ 0.2200      $ 0.2000 
Average common shares outstanding: 
Basic                                       176,621       175,466 
Diluted                                     178,564       176,585 
 
 
Molex Incorporated 
Condensed Consolidated Statements 
of Cash Flows 
(Unaudited) 
(in thousands) 
                                              Three Months Ended 
                                              September 30, 
                                              2012          2011 
Operating activities: 
Net income                                    $ 71,314      $ 80,517 
Add non-cash items included 
in net income: 
Depreciation and amortization                   57,742        61,239 
Share-based compensation                        6,160         5,135 
Other non-cash items                            3,767         5,991 
Changes in assets and liabilities: 
Accounts receivable                             (7,903  )     22,927 
Inventories                                     (28,902 )     (18,260  ) 
Accounts payable                                49,569        (10,702  ) 
Other current assets and liabilities            4,326         28,890 
Other assets and liabilities                    11,331        (25,188  ) 
Cash provided from operating activities         167,404       150,549 
Investing activities: 
Capital expenditures                            (69,413 )     (42,804  ) 
Proceeds from sales of property,                1,914         1,396 
plant and equipment 
Proceeds from sales or maturities               3,168         4,868 
of marketable securities 
Purchases of marketable securities              (4,099  )     (2,777   ) 
Insurance proceeds and other                    9,722       - 
investing activities 
Cash used for investing activities              (58,708 )     (39,317  ) 
Financing activities: 
Proceeds from revolving credit facility         10,000        30,000 
Payments on revolving credit facility           (10,000 )     (195,000 ) 
Payments on short-term loans and debt           (31,611 )     (27,409  ) 
Proceeds from issuance of long-term debt      -               150,000 
Cash dividends paid                             (38,827 )     (35,068  ) 
Exercise of stock options                       1,715         620 
Other financing activities                      (1,026  )     (1,014   ) 
Cash used for financing activities              (69,749 )     (77,871  ) 
Effect of exchange rate changes on cash         9,608         (8,584   ) 
Net increase in cash and cash equivalents       48,555        24,777 
Cash and cash equivalents,                      637,417       532,599 
beginning of period 
Cash and cash equivalents, end of period      $ 685,972     $ 557,376 
 
 

Molex IncorporatedSteve Martens, VP Investor Relations630-527-4344