Molex Incorporated Molex Reports Revenue and EPS above Guidance

 
TIDMMOL 
 
 

Molex Incorporated (NASDAQ: MOLX) and (NASDAQ: MOLXA), a global electronic components company, today reported results for its first quarter ended September 30, 2013.

First Quarter Results

 
                                      Three Months Ended 
                                      Sep 30,   Jun 30,   Sep 30, 
USD millions, except per share data   2013      2013      2012 
Net revenue                           $ 936.4   $ 882.9   $ 916.9 
Net income                              84.1      57.1      71.3 
Earnings per share                      0.46      0.32      0.40 
 
 

Net revenue for the September 2013 quarter was $936.4 million, an increase of 6.1% from the June 2013 quarter and an increase of 2.1% from the September 2012 quarter. In local currencies, net revenue increased 6.1% compared with the June 2013 quarter and 4.0% compared with the September 2012 quarter. Orders for the September 2013 quarter were $939.1 million, an increase of 6.7% from the June 2013 quarter and a decrease of 0.5% from the September 2012 quarter.

Net income for the September 2013 quarter was $84.1 million, an increase of 47.1% from the June 2013 quarter and an increase of 17.9% from the September 2012 quarter. Earnings per share was $0.46 for the September 2013 quarter, $0.32 for the June 2013 quarter and $0.40 for the September 2012 quarter. Net income for the September 2013 quarter was impacted by an after-tax charge of $5.4 million ($0.03 per share) for costs associated with the pending merger with Koch Industries.

"Continued improvement in our core markets drove solid sequential revenue growth during the September quarter, as we exceeded the top end of our guidance range for both revenue and earnings per share. The automotive, telecom and mobile devices markets were very strong during the quarter, and are areas where Molex has exceptional technology and a breadth of innovative product offerings," commented Martin P. Slark, Chief Executive Officer. "Higher revenue, favorable product mix, lower material costs, and increased equipment utilization drove margins and earnings per share above expectation, despite merger-related expenses."

Other financial highlights for the quarter ended September 30, 2013:

 
 
    -- Gross profit margin was 32.3%, compared with 29.1% in the June 2013 

quarter and 29.3% in the September 2012 quarter.

 
    -- SG&A expense was $179.4 million, compared with $174.0 million in the 

June 2013 quarter and $163.1 million in the September 2012 quarter.

The current quarter includes $8.0 million of pre-tax costs associated

with the pending merger. Excluding the merger-related costs, SG&A

expense would be $171.4 million or 18.3% of revenue.

 
    -- Backlog was $471.6 million, an increase of 4.2% from the June 2013 

quarter and an increase of 5.9% from the September 2012 quarter.

 
    -- The book-to-bill ratio was 1 to 1 compared with 1 to 1 for the June 

2013 quarter and 1.03 to 1 for the September 2012 quarter.

 
    -- Capital expenditures were $47.0 million or 5.0% of revenue. 
 
    -- Inventory days outstanding was 88 days compared with 84 days in the 

June 2013 quarter and 84 days in the September 2012 quarter.

 
    -- Accounts receivable days outstanding was 68 days compared with 69 days 

in the June 2013 quarter and 69 days in the September 2012 quarter.

 
    -- The effective tax rate was 29.0%, which included a $1.2 million 

benefit due to the release of a valuation reserve resulting from

improved operating performance.

Merger Agreement

On September 9, 2013, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Koch Industries, Inc. which, if completed, will result in Molex stockholders receiving $38.50 per share in cash or a total purchase price of approximately $7.2 billion. Final consideration will also include a dividend adjustment amount.

The transaction is subject to customary closing conditions, approval by the holders of a majority of common voting shares (Common Stock and Class B Common Stock, voting separately as a class) and regulatory approvals, but is not subject to any condition with regard to the financing of the transaction. Additional details are included in the Company's 2013 Proxy Statement.

The Annual Meeting of Stockholders has been scheduled for November 15, 2013, and regulatory approvals are pending with the following jurisdictions: the European Union, China, Israel, Japan, Mexico, South Korea, Turkey and Ukraine.

Earnings Conference Call Information

A conference call will be held on Wednesday, October 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 94153617. 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 49270509.

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 intended to identify such forward-looking statements.Forward-looking statements are based on currently available information.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, 2013, which is incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission.Among other risks and uncertainties, there can be no guarantee that the pending merger with Koch Industries, Inc. will be completed, or if it is completed, the time frame in which it will be completed. The pending merger is subject to the satisfaction of certain conditions contained in the Merger Agreement. Pursuing the pending merger could disrupt certain of our current plans, operations, business, and employee relationships. 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, 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 75-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. Based in Lisle, Illinois, USA, the Company operates 45 manufacturing locations in 17 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 (MOL, MOLA). The Company's voting common stock (MOLX) is included in the S&P 500 Index.

 
Molex Incorporated 
Condensed Consolidated Balance Sheets 
(in thousands) 
                                             Sep 30,       Jun 30, 
                                             2013          2013 
                                             (Unaudited) 
ASSETS 
Current assets: 
Cash and cash equivalents                    $ 665,156     $ 711,561 
Marketable securities                          11,083        10,378 
Accounts receivable, less allowances of        736,983       703,434 
$41,376 and $40,855,  respectively 
Inventories                                    580,481       531,810 
Deferred income taxes                          54,100        54,163 
Other current assets                           39,901        32,538 
Total current assets                           2,087,704     2,043,884 
Property, plant and equipment, net             1,128,494     1,114,092 
Goodwill                                       231,050       191,053 
Non-current deferred income taxes              51,735        52,543 
Other assets                                   187,034       185,282 
Total assets                                 $ 3,686,017   $ 3,586,854 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities: 
Short-term borrowings and current            $ 42,458      $ 54,283 
portion of long-term debt 
Accounts payable                               354,565       347,700 
Accrued expenses: 
Salaries, commissions and bonuses              123,729       113,433 
Other                                          144,866       127,652 
Income taxes payable                           20,833        15,966 
Total current liabilities                      686,451       659,034 
Other non-current liabilities                  20,702        18,382 
Accrued pension and other                      74,431        76,275 
postretirement benefits 
Long-term debt                                 315,000       310,000 
Total liabilities                              1,096,584     1,063,691 
Commitments and contingencies 
Total stockholders' equity                     2,589,433     2,523,163 
Total liabilities and stockholders' equity   $ 3,686,017   $ 3,586,854 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Income 
(Unaudited) 
(in thousands, except per share data) 
                                      Three Months Ended 
                                      Sep 30, 
                                      2013         2012 
Net revenue                           $ 936,367    $ 916,921 
Cost of sales                           633,816      648,504 
Gross profit                            302,551      268,417 
Selling, general and administrative     179,429      163,121 
Unauthorized activities in Japan        -            2,561 
Total operating expenses                179,429      165,682 
Income from operations                  123,122      102,735 
Interest expense, net                   (1,827  )    (810    ) 
Other (expense) income, net             (2,918  )    1,196 
Total other (expense) income, net       (4,745  )    386 
Income before income taxes              118,377      103,121 
Income taxes                            34,298       31,807 
Net income                            $ 84,079     $ 71,314 
Earnings per share: 
Basic                                 $ 0.47       $ 0.40 
Diluted                               $ 0.46       $ 0.40 
Dividends declared per share          $ 0.24       $ 0.22 
Average common shares outstanding: 
Basic                                   178,247      176,621 
Diluted                                 181,545      178,564 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Cash Flows 
(Unaudited) 
(in thousands) 
                                                 Three Months Ended 
                                                 Sep 30, 
                                                 2013          2012 
Operating activities: 
Net income                                       $ 84,079      $ 71,314 
Add (deduct) non-cash items 
included in net income: 
Depreciation and amortization                      57,245        57,742 
Share-based compensation                           6,195         6,160 
Other non-cash items                               (206     )    3,767 
Changes in assets and liabilities: 
Accounts receivable                                (14,881  )    (7,903  ) 
Inventories                                        (32,900  )    (28,902 ) 
Accounts payable                                   (1,359   )    49,569 
Other current assets and liabilities               10,521        4,326 
Other assets and liabilities                       (9,843   )    11,331 
Cash provided from operating activities            98,851        167,404 
Investing activities: 
Capital expenditures                               (47,018  )    (69,413 ) 
Acquisitions                                       (62,993  )    - 
Proceeds from sales of property,                   131           1,914 
plant and equipment 
Proceeds from sales or maturities                  1,789         3,168 
of marketable securities 
Purchases of marketable securities                 (2,574   )    (4,099  ) 
Insurance proceeds and other                       (920     )    9,722 
investing activities 
Cash used for investing activities                 (111,585 )    (58,708 ) 
Financing activities: 
Proceeds from revolving credit facility,           63,510        10,000 
short-term loans and debt 
Payments on revolving credit facility,             (70,557  )    (41,611 ) 
short-term loans and debt 
Cash dividends paid                                (42,723  )    (38,827 ) 
Exercise of stock options                          7,680         1,715 
Other financing activities                         (1,112   )    (1,026  ) 
Cash used for financing activities                 (43,202  )    (69,749 ) 
Effect of exchange rate changes on cash            9,531         9,608 
Net (decrease) increase in                         (46,405  )    48,555 
cash and cash equivalents 
Cash and cash equivalents, beginning of period     711,561       637,417 
Cash and cash equivalents, end of period         $ 665,156     $ 685,972 
 
 

Molex IncorporatedSteve Martens, VP Investor Relations630-527-4344

 
 
 
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