Molex Incorporated Molex Reports Record Revenue for Fiscal 2013 Second Quarter

 
TIDMMOL 
 
 

If transmission is garbled or cut off, please only contact Business Wire directly at 312/223-1037 for retransmission.

Molex Incorporated (NASDAQ: MOLX) and (NASDAQ: MOLXA), a global electronic components company, today reported results for its second quarter ended December 31, 2012.

 
                                      Three Months Ended 
                                      Dec 31,   Sept 30,   Dec 31, 
USD millions, except per share data   2012      2012       2011 
Net revenue                           $ 967.7   $ 916.9    $ 857.6 
Net income                              70.4      71.3       64.0 
Earnings per share                      0.39      0.40       0.36 
 
 

Net revenue for the December 2012 quarter was $967.7 million, an increase of 5.5% from the September 2012 quarter and 12.8% from the December 2011 quarter. In local currencies, net revenue increased 4.8% compared with the September 2012 quarter and 13.8% compared with the December 2011 quarter. Orders for the December 2012 quarter were $919.7 million, a decline of 2.6% from the September 2012 quarter and an increase of 12.8% from the December 2011 quarter.

Net income for the December 2012 quarter was $70.4 million or $0.39 per share, compared with $71.3 million, or $0.40 per share, for the September 2012 quarter and $64.0 million, or $0.36 per share, for the December 2011 quarter.

"Our results came in at the high end of our guidance range and we were particularly pleased to achieve record revenue this quarter as shipments were strong leading into the Christmas period. Bookings were weaker toward the latter part of the quarter and consistent with normal seasonal trends, were down 2.6% on a sequential basis. Our pipeline of new projects is strong and we will have a clearer view of the business trends for calendar year 2013 after Chinese New Year," stated Martin P. Slark, Chief Executive Officer.

Other financial highlights for the quarter ended December 31, 2012:

 
 
    -- Gross profit margin was 29.9%, compared with 29.3% in the September 

2012 quarter and 30.7% in the December 2011 quarter.

 
    -- SG&A expense was $181.0 million, compared with $163.1 million in the 

September 2012 quarter and $163.1 million in the December 2011

quarter. The September 2012 quarter included insurance proceeds of

$9.9 million related to losses incurred from the March 2011 earthquake

and tsunami in Japan.

 
    -- Backlog was $404.0 million, a decrease of 9.3% from the September 2012 

quarter and an increase of 16.7% from the December 2011 quarter.

 
    -- The book-to-bill ratio for the December quarter was 0.95 to 1 compared 

with 1.03 to 1 for the September quarter and 0.95 to 1 for the

December 2011 quarter.

 
    -- Capital expenditures were $78.6 million or 8.1% of revenue. 
 
    -- Inventory days outstanding was 83 days compared with 84 days in the 

September 2012 quarter and 91 days in the December 2011 quarter.

 
    -- Accounts receivable days outstanding was 67 days compared with 69 days 

in the September 2012 quarter and 71 days in the December 2011 quarter.

 
    -- The effective tax rate was 31.1%. 
 

Outlook

Based upon current order rates and customer backlog, the Company estimates revenue in the range of $900 to $930 million for the March 2013 quarter. At this level of revenue, the Company expects earnings per share in the range of $0.33 to $0.37, 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, January 23, 2013 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 88944879. 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 81162241.

Other Investor Events

Feb 12 - Goldman Sachs Technology and Internet Conference in San Francisco, CA

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, and the Form 10-Q for the quarter ended September 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 15 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) 
                                             Dec. 31,      June 30, 
                                             2012          2012 
                                             (Unaudited) 
ASSETS 
Current assets: 
Cash and cash equivalents                    $ 705,047     $ 637,417 
Marketable securities                          11,738        14,830 
Accounts receivable, less allowances of        745,851       751,279 
$37,681 and $37,876,  respectively 
Inventories                                    566,889       531,825 
Deferred income taxes                          101,398       110,789 
Other current assets                           33,109        33,098 
Total current assets                           2,164,032     2,079,238 
Property, plant and equipment, net             1,177,342     1,150,549 
Goodwill                                       195,030       160,986 
Non-current deferred income taxes              48,063        50,038 
Other assets                                   180,130       170,692 
Total assets                                 $ 3,764,597   $ 3,611,503 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities: 
Current portion of short-term borrowings     $ 115,869     $ 104,933 
and long-term debt 
Accounts payable                               344,997       355,491 
Accrued expenses: 
Accrued liability for unauthorized             170,665       184,177 
activities in Japan 
Income taxes payable                           40,876        35,360 
Other                                          200,084       212,035 
Total current liabilities                      872,491       891,996 
Other non-current liabilities                  19,700        18,174 
Accrued pension and other                      95,424        115,176 
postretirement benefits 
Long-term debt                                 230,000       150,032 
Total liabilities                              1,217,615     1,175,378 
Commitments and contingencies 
Total stockholders' equity                     2,546,982     2,436,125 
Total liabilities and stockholders' equity   $ 3,764,597   $ 3,611,503 
 
 
Molex 
Incorporated 
Condensed 
Consolidated 
Statements 
of Income 
(Unaudited) 
(in thousands, 
except 
per share 
data) 
                 Three Months Ended        Six Months Ended 
                 December 31,              December 31, 
                 2012         2011         2012           2011 
Net revenue      $ 967,735    $ 857,598    $ 1,884,656    $ 1,793,583 
Cost of sales      678,565      594,661      1,327,069      1,237,918 
Gross profit       289,170      262,937      557,587        555,665 
Selling,           181,028      163,073      344,149        332,298 
general 
and 
administrative 
Unauthorized       1,627        2,723        4,188          5,645 
activities 
in Japan 
Total              182,655      165,796      348,337        337,943 
operating 
expenses 
Income from        106,515      97,141       209,250        217,722 
operations 
Interest           (1,133  )    (2,094  )    (1,943    )    (3,485    ) 
(expense) 
income, net 
Other              (3,151  )    1,482        (1,955    )    1,758 
(expense) 
income 
Total other        (4,284  )    (612    )    (3,898    )    (1,727    ) 
(expense) 
income, net 
Income before      102,231      96,529       205,352        215,995 
income taxes 
Income taxes       31,837       32,513       63,644         71,462 
Net income       $ 70,394     $ 64,016     $ 141,708      $ 144,533 
Earnings per 
share: 
Basic            $ 0.40       $ 0.36       $ 0.80         $ 0.82 
Diluted          $ 0.39       $ 0.36       $ 0.79         $ 0.82 
Dividends        $ 0.2200     $ 0.2000     $ 0.4400       $ 0.4000 
declared 
per share 
Average common 
shares 
outstanding: 
Basic              177,123      175,830      176,888        175,656 
Diluted            178,854      176,985      178,743        176,778 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Cash Flows 
(Unaudited) 
(in thousands) 
                                                 Six Months Ended 
                                                 December 31, 
                                                 2012          2011 
Operating activities: 
Net income                                       $ 141,708     $ 144,533 
Add non-cash items included in net income: 
Depreciation and amortization                      117,402       121,174 
Share-based compensation                           15,425        11,402 
Other non-cash items                               5,685         5,213 
Changes in assets and liabilities: 
Accounts receivable                                5,006         94,400 
Inventories                                        (34,831  )    (26,442  ) 
Accounts payable                                   (5,326   )    (40,976  ) 
Other current assets and liabilities               9,605         (7,183   ) 
Other assets and liabilities                       (97      )    (10,608  ) 
Cash provided from operating activities            254,577       291,513 
Investing activities: 
Capital expenditures                               (148,041 )    (95,055  ) 
Acquisitions                                       (55,299  )    (24,000  ) 
Proceeds from sales of property,                   3,020         2,202 
plant and equipment 
Proceeds from sales or maturities                  8,399         6,553 
of marketable securities 
Purchases of marketable securities                 (5,081   )    (4,787   ) 
Insurance proceeds and other                       9,957       - 
investing activities 
Cash used for investing activities                 (187,045 )    (115,087 ) 
Financing activities: 
Proceeds from revolving credit facility            90,000        75,000 
Payments on revolving credit facility              (10,000  )    (220,000 ) 
Proceeds from short-term loans and debt            178,089     - 
Payments on short-term loans and debt              (158,620 )    (27,389  ) 
Proceeds from issuance of long-term debt         -               149,713 
Cash dividends paid                                (116,706 )    (70,186  ) 
Exercise of stock options                          4,804         2,630 
Other financing activities                         (2,115   )    (2,087   ) 
Cash used for financing activities                 (14,548  )    (92,319  ) 
Effect of exchange rate changes on cash            14,646        (9,370   ) 
Net increase in cash and cash equivalents          67,630        74,737 
Cash and cash equivalents, beginning of period     637,417       532,599 
Cash and cash equivalents, end of period         $ 705,047     $ 607,336