Molex Incorporated Molex Reports Fourth Quarter and Full Fiscal Year Results

 
TIDMMOL 
 
 

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Molex Incorporated (NASDAQ: MOLX and MOLXA), a global electronic components company, today reported results for its fourth quarter and full fiscal year ended June 30, 2012.

 
Fourth Quarter Results 
                                      Three Months Ended 
                                      Jun. 30,   Mar. 31,   Jun. 30, 
USD millions, except per share data   2012       2012       2011 
Net revenue                           $ 858.5    $ 837.1    $ 913.7 
Net income                              72.0       64.9       77.3 
Earnings per share                      0.40       0.36       0.44 
 
 

Net revenue for the June 2012 quarter was $858.5 million, a 2.6% increase from the March 2012 quarter and 6.0% decrease from the June 2011 quarter. In local currencies, net revenue increased 3.3% compared with the March 2012 quarter and decreased 4.4% compared with the June 2011 quarter. Orders for the June 2012 quarter were $901.0 million, an increase of 3.3% from the March 2012 quarter, resulting in a book-to-bill ratio of 1.05 to 1.0 for the June 2012 quarter.

Net income for the June 2012 quarter was $72.0 million or $0.40 per share, compared with $64.9 million, or $0.36 per share, for the March 2012 quarter and $77.3 million, or $0.44 per share, for the June 2011 quarter.

"We are encouraged with our margin performance in the June quarter even though revenue was below our expectations. More importantly, bookings have now increased sequentially in Q3 and Q4 and new product design activity remains extremely strong," commented Martin P. Slark, Chief Executive Officer. "At this time of global economic uncertainty, we have several new product introductions scheduled for the September quarter that, coupled with the pre-Christmas build, are expected to drive revenue growth at a rate in excess of the connector industry."

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

 
 
    -- Gross profit margin was 30.0%, compared with 30.5% in the March 2012 

quarter and 30.8% in the June 2011 quarter. The March 2012 quarter

benefitted from favorable product mix, while the June 2011 quarter was

achieved with higher revenue and lower commodity costs.

 
    -- SG&A expense was $161.6 million, compared with $163.9 million in the 

March 2012 quarter and $167.9 million in the June 2011 quarter. SG&A

expense included an insurance reimbursement of $6.0 million ($0.02 per

share) related to losses incurred as a result of the March 2011

earthquake and tsunami in Japan.

 
    -- Backlog was $416.4 million, an increase of $39.5 million or 10.5% from 

the March 2012 quarter. This increase is a direct result of orders for

new products that will launch in the September 2012 quarter.

 
    -- Capital expenditures were $77.7 million or 9.0% of revenue, including 

significant investments for new product introductions.

 
    -- The effective tax rate of 24.3% included a one-time benefit of $6.1 

million ($0.03 per share) due to the recognition of foreign tax

credits and the reversal of deferred tax liabilities related to the

repatriation of foreign earnings. Excluding the one-time benefit, the

effective tax rate was 30.8%.

 
Full Fiscal Year Results 
                                      Twelve Months Ended 
                                      Jun. 30,      Jun. 30, 
USD millions, except per share data   2012          2011 
Net revenue                           $ 3,489.2     $ 3,587.3 
Net income                              281.4         298.8 
Earnings per share                      1.59          1.70 
 
 

Net revenue for the full fiscal year ended June 30, 2012 was $3.5 billion, a 2.7% decrease from the prior fiscal year. Net revenue in local currencies decreased 4.3% from the prior fiscal year. Net income for the year ended June 30, 2012 was $281.4 million or $1.59 per share, compared with net income of $298.8 million or $1.70 per share in the prior fiscal year. The effective tax rate for the fiscal year ended June 30, 2012 was 29.7%.

"Despite the challenging economic environment, we are pleased with our overall operating performance during fiscal 2012. We worked hard to overcome disruptions from the earthquake and tsunami in Japan and the floods in Thailand. We were also very successful in fulfilling customer requirements in a record setting first quarter, which was followed by a significant slowdown in overall demand in the second quarter," commented Martin P. Slark. "For the full year we increased our gross margin while significantly improving our quality and delivery metrics, introduced many new products and generated record cash flow which allowed us to increase our dividend by 10%."

Outlook

Based upon current order rates, customer backlog and scheduled new product launches, the Company estimates revenue in a range of $900 to $940 million for the September 2012 quarter. At this level of revenue, the Company expects earnings per share in a range of $0.37 to $0.41 assuming constant foreign currency rates, unchanged commodity prices and an effective tax rate in the range of 30% to 32%.

Earnings Conference Call Information

A conference call will be held on Wednesday, August 8, 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 77269585. 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 71037736.

Other Investor Events

Sep. 05, 2012 - Citi's Annual 2012 Technology Conference in New York

Sep. 12, 2012 - Deutsche Bank's dbAccess 2012 Technology Conference in Las Vegas

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, 2011, and the Form 10-Q for the quarters ended September 30, 2011, December 31, 2011 and March 31, 2012.

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, 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, 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 73-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. Based in Lisle, Illinois, USA, the Company operates 40 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 
(Unaudited) 
(in thousands) 
                                               June 30,     June 30, 
                                               2012         2011 
ASSETS 
Current assets: 
Cash and cash equivalents                      $ 637,417    $ 532,599 
Marketable securities                            14,830       13,947 
Accounts receivable, less allowances 
of $37,876 and $42,297, respectively             751,279      811,449 
Inventories                                      531,825      535,953 
Deferred income taxes                            110,789      129,158 
Other current assets                             33,098       32,239 
Total current assets                             2,079,238    2,055,345 
Property, plant and equipment, net               1,150,549    1,168,448 
Goodwill                                         160,986      149,452 
Non-current deferred income taxes                50,038       38,178 
Other assets                                     170,692      186,429 
Total assets                                   $ 3,611,503  $ 3,597,852 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities: 
Current portion of long-term debt              $ 104,933    $ 119,764 
and short-term borrowings 
Accounts payable                                 355,491      359,812 
Accrued expenses: 
Salaries, commissions and bonuses                89,404       90,913 
Restructuring                                    10,250       14,049 
Accrual for unauthorized activities in Japan     184,177      182,460 
Other                                            112,381      112,666 
Income taxes payable                             30,221       2,383 
Total current liabilities                        886,857      882,047 
Other non-current liabilities                    18,174       23,879 
Accrued pension and postretirement benefits      115,176      100,866 
Long-term debt                                   150,032      222,794 
Total liabilities                                1,170,239    1,229,586 
Commitments and contingencies 
Total stockholders' equity                       2,441,264    2,368,266 
Total liabilities and stockholders' equity     $ 3,611,503  $ 3,597,852 
 
 
Molex 
Incorporated 
Condensed 
Consolidated 
Statements 
of Income 
(Unaudited) 
(in thousands, 
except 
per share 
data) 
                 Three Months Ended        Years Ended 
                 June 30,                  June 30, 
                 2012         2011         2012           2011 
Net revenue      $ 858,526    $ 913,666    $ 3,489,189    $ 3,587,334 
Cost of sales      600,904      632,264      2,420,726      2,499,197 
Gross profit       257,622      281,402      1,068,463      1,088,137 
Selling,           161,581      167,914      657,732        643,462 
general 
and 
administrative 
Unauthorized       3,093        3,366        11,259         14,476 
activities 
in Japan 
Total              164,674      171,280      668,991        657,938 
operating 
expenses 
Income from        92,948       110,122      399,472        430,199 
operations 
Interest           (663    )    (859    )    (5,360    )    (5,708    ) 
(expense) 
income, net 
Other income       2,836        (318    )    6,155          5,448 
(expense) 
Total other        2,173        (1,177  )    795            (260      ) 
income 
(expense) 
Income before      95,121       108,945      400,267        429,939 
income taxes 
Income taxes       23,160       31,669       118,890        131,131 
Net income       $ 71,961     $ 77,276     $ 281,377      $ 298,808 
Earnings per 
share: 
Basic            $ 0.41       $ 0.44       $ 1.60         $ 1.71 
Diluted          $ 0.40       $ 0.44       $ 1.59         $ 1.70 
Dividends        $ 0.2200     $ 0.2000     $ 0.8200       $ 0.7025 
declared 
per share 
Average common 
shares 
outstanding: 
Basic              176,437      175,253      175,980        174,812 
Diluted            178,231      176,795      177,382        175,943 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Cash Flows 
(Unaudited) 
(in thousands) 
                                                Years Ended 
                                                June 30, 
                                                2012          2011 
Operating activities: 
Net income                                      $ 281,377     $ 298,808 
Add (deduct) non-cash items 
included in net income: 
Depreciation and amortization                     236,974       242,171 
Deferred income taxes                             10,236        37,514 
Loss on sale of property, plant and equipment     2,580         4,843 
Share-based compensation                          23,335        22,461 
Other non-cash items                              (20,561  )    (22,554  ) 
Changes in assets and liabilities: 
Accounts receivable                               44,161        (16,401  ) 
Inventories                                       (5,338   )    (25,916  ) 
Accounts payable                                  312           (63,984  ) 
Other current assets and liabilities              (10,246  )    (9,298   ) 
Other assets and liabilities                      10,889        (1,493   ) 
Cash provided from operating activities           573,719       466,151 
Investing activities: 
Capital expenditures                              (227,101 )    (262,246 ) 
Proceeds from sales of property,                  3,444         1,804 
plant and equipment 
Proceeds from sales or maturities                 12,496        11,936 
of marketable securities 
Purchases of marketable securities                (14,934  )    (8,328   ) 
Acquisitions                                      (24,000  )    (18,847  ) 
Other investing activities                        22,400        4,972 
Cash used for investing activities                (227,695 )    (270,709 ) 
Financing activities: 
Proceeds from revolving credit facility           75,000        105,000 
Payments on revolving credit facility             (260,000 )    (20,000  ) 
Proceeds from short-term loans and                -             57,620 
current portion of long-term debt 
Payments on short-term loans and current          (53,748  )    (60,270  ) 
portion of long-term debt 
Proceeds from issuance of long-term debt          150,000       - 
Payments on long-term debt                        (575     )    (48,356  ) 
Cash dividends paid                               (140,638 )    (114,410 ) 
Exercise of stock options                         7,873         7,269 
Other financing activities                        (4,194   )    (4,044   ) 
Cash used for financing activities                (226,282 )    (77,191  ) 
Effect of exchange rate changes on cash           (14,924  )    37,996 
Net increase (decrease) in                        104,818       156,247 
cash and cash equivalents 
Cash and cash equivalents, beginning of year      532,599       376,352 
Cash and cash equivalents, end of year          $ 637,417     $ 532,599 
 
 

Molex IncorporatedSteve Martens, 630-527-4344VP Investor Relations