Molex Reports Record Revenue and EPS

 
TIDMMOL 
 
 

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Molex Incorporated (NASDAQ: MOLX and MOLXA), a global electronic components company, today reported results for its first quarter ended September 30, 2011.

 
                                      Three Months Ended 
                                      Sept. 30,   Jun. 30,   Sept. 30, 
USD millions, except per share data   2011        2011       2010 
Net revenue                           $ 936.0     $ 913.7    $ 897.7 
Net income                              80.5        77.3       75.1 
Earnings per share                      0.46        0.44       0.43 
 
 

Revenue for the September 2011 quarter was $936.0 million, an increase of 2.4% from the June 2011 quarter and an increase of 4.3% from the September 2010 quarter. This is a record for the Company and above the high end of the guidance provided on August 3, 2011. Revenue in local currencies increased 1.2% from the June 2011 quarter and declined 1.6% from the September 2010 quarter. Net income for the September 2011 quarter was $80.5 million or $0.46 per share, compared with net income of $77.3 million or $0.44 per share for the June 2011 quarter and net income of $75.1 million or $0.43 per share for the September 2010 quarter.

"Molex had another strong quarter, once again setting records for revenue and earnings per share. Production in Japan increased during the quarter as our operations recovered from the earthquake and tsunami and as our customers pushed to prepare for the Christmas selling season," commented Martin P. Slark, Molex's Chief Executive Officer. "We successfully converted the higher revenue to income, which allowed us to expand our margins and exceed our guidance for the September quarter."

"While near term demand for our products is impacted by economic uncertainty, we remain confident that the long term trends of increased mobility, growth in emerging markets and a hardware replacement cycle will continue to drive the industry forward. With our global footprint, innovative design capabilities and improved cost structure, we are well positioned to capitalize on these opportunities."

Other financial highlights for the quarter ended September 30, 2011:

 
 
    -- Gross profit margin was 31.3% in the September 2011 quarter, compared 

with 30.6% in the September 2010 quarter and 30.8% in the June 2011

quarter.

 
    -- SG&A expense was $169.2 million, or 18.1% of revenue compared with 

17.5% in the September 2010 quarter and 18.4% in the June 2011 quarter.

 
    -- Capital expenditures were $42.8 million or 4.6% of revenue. 
 
    -- Depreciation and amortization was $61.2 million or 6.5% of revenue. 
 
    -- Backlog was $387.2 million, a decrease of $31.3 million or 7.5% from 

the June 2011 quarter.

 
    -- The book-to-bill ratio was 0.97 to 1 for the September 2011 quarter. 
 
    -- Inventory days outstanding was 84 days compared with 85 days in the 

September 2010 quarter and 84 days in the June 2011 quarter.

 
    -- Accounts receivable days outstanding was 69 days compared with 76 days 

in the September 2010 quarter and 72 days in the June 2011 quarter.

 
    -- Cash flow from operations was $150.5 million, an increase of 141% from 

the September 2010 quarter and a new record.

 
    -- The effective tax rate was 32.6%. Excluding the reversal of a tax 

benefit for a significant number of employee stock options that

expired unexercised during the quarter, the effective tax rate was

30.0%.

Outlook

At the current time, the global economic environment is very difficult to interpret and this uncertainty as well as our recent incoming order trend has been reflected in the Company's outlook for the coming quarter. The Company estimates revenue in a range of $870 to $910 million for the December 2011 quarter. At this level of revenue, the Company expects earnings per share in a range of $0.37 to $0.43 assuming constant foreign currency rates and 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 Tuesday, October 25, 2011 at 7:30 am 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 469 206 39#. 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 am central time at [phone] or [phone] / pass code 47915877.

Other Investor Events

Oct 28, 2011 - Molex Annual Meeting of Stockholders in Lisle, IL

Nov 16, 2011 - UBS Global Technology & Services Conference in New York, NY

Nov 30, 2011 - Credit Suisse Annual Technology Conference, Scottsdale, AZ

Dec 7, 2011 - NASDAQ OMX 27th 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 "anticipates," "expects," "believes," "intends," "plans," "projects," "estimates," "potential," 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 are subject to risks, uncertainties and assumptions including those associated with the operation of our business, including the risk that customer demand will decrease either temporarily or permanently, whether due to the Company's actions or the demand for the Company's products, and that the Company may not be able to respond through cost reductions in a timely and effective manner; the risk that the value of our inventory may decline; price cutting, new product introductions and other actions by our competitors; fluctuations in the costs of raw materials that the Company is not able to pass through to customers because of existing contracts or market factors; the availability of credit and general market liquidity; fluctuations in currency exchange rates; natural disasters; the financial condition of our customers; labor cost increases; and the ability to realize cost savings from cost reduction initiatives, the outcome of legal proceedings and losses resulting from unauthorized activities in Molex Japan.

Other factors, risks and uncertainties are set forth in Item 1A "Risk Factors" of the Company's Form 10-K for the year ended June 30, 2011, which is incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission.Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate.Actual outcomes and results may differ materially from what is expressed in these forward-looking statements.As a result, this release speaks only as of its date and Molex disclaims any obligation to revise these forward-looking statements or to provide any updates regarding information contained in this release resulting from new information, future events 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 39 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, 
                                               2011          2011 
                                               (unaudited) 
ASSETS 
Current assets: 
Cash and cash equivalents                      $ 557,376     $ 532,599 
Marketable securities                            11,150        13,947 
Accounts receivable, less allowances             782,833       811,449 
of $40,685 and $42,297  respectively 
Inventories                                      547,209       535,953 
Deferred income taxes                            131,819       129,158 
Other current assets                             40,917        32,239 
Total current assets                             2,071,304     2,055,345 
Property, plant and equipment, net               1,144,023     1,168,448 
Goodwill                                         148,349       149,452 
Non-current deferred income taxes                39,404        38,178 
Other assets                                     177,498       186,429 
Total assets                                   $ 3,580,578   $ 3,597,852 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities: 
Current portion of long-term debt              $ 129,781     $ 119,764 
and short-term borrowings 
Accounts payable                                 349,657       359,812 
Accrued expenses: 
Accrual for unauthorized activities in Japan     191,873       182,460 
Income taxes payable                             32,349        2,383 
Other                                            222,930       217,628 
Total current liabilities                        926,590       882,047 
Other non-current liabilities                    22,253        23,879 
Accrued pension and postretirement benefits      96,232        100,866 
Long-term debt                                   176,925       222,794 
Total liabilities                                1,222,000     1,229,586 
Commitments and contingencies 
Total stockholders' equity                       2,358,578     2,368,266 
Total liabilities and stockholders' equity     $ 3,580,578   $ 3,597,852 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Income 
(in thousands, except per share data) 
(unaudited) 
                                      Three Months Ended 
                                      September 30, 
                                      2011         2010 
Net revenue                           $ 935,985    $ 897,672 
Cost of sales                           643,257      622,596 
Gross profit                            292,728      275,076 
Selling, general and administrative     169,225      157,056 
Unauthorized activities in Japan        2,922        5,542 
Total operating expenses                172,147      162,598 
Income from operations                  120,581      112,478 
Interest expense, net                   1,391        1,335 
Other (income) expense                  (276    )    351 
Total other expense, net                1,115        1,686 
Income before income taxes              119,466      110,792 
Income taxes                            38,949       35,688 
Net income                            $ 80,517     $ 75,104 
Earnings per share: 
Basic                                 $ 0.46       $ 0.43 
Diluted                               $ 0.46       $ 0.43 
Dividends declared per share          $ 0.2000     $ 0.1525 
Average common shares outstanding: 
Basic                                   175,466      174,370 
Diluted                                 176,585      175,156 
 
 
Molex Incorporated 
Condensed Consolidated Statements of Cash Flows 
(in thousands) 
(unaudited) 
                                                 Three Months Ended 
                                                 September 30, 
                                                 2011          2010 
Operating activities: 
Net income                                       $ 80,517      $ 75,104 
Add non-cash items included in net income: 
Depreciation and amortization                      61,239        59,108 
Share-based compensation                           5,135         5,149 
Other non-cash items                               5,991         8,634 
Changes in assets and liabilities: 
Accounts receivable                                22,927        (29,343 ) 
Inventories                                        (18,260  )    (57,988 ) 
Accounts payable                                   (10,702  )    (24,876 ) 
Other current assets and liabilities               28,890        27,886 
Other assets and liabilities                       (25,188  )    (1,079  ) 
Cash provided from operating activities            150,549       62,595 
Investing activities: 
Capital expenditures                               (42,804  )    (71,192 ) 
Proceeds from sales of property,                   1,396         643 
plant and equipment 
Proceeds from sales or maturities                  4,868         2,184 
of marketable securities 
Purchases of marketable securities                 (2,777   )    (1,257  ) 
Cash used for investing activities                 (39,317  )    (69,622 ) 
Financing activities: 
Proceeds from revolving credit facility            30,000        20,000 
Payments on revolving credit facility              (195,000 )    (10,000 ) 
Payments on short-term loans                       (27,266  )  - 
Proceeds from issuance of long-term debt           150,000       797 
Payments of long-term debt                         (143     )    (24,840 ) 
Cash dividends paid                                (35,068  )    (26,565 ) 
Exercise of stock options                          620           358 
Other financing activities                         (1,014   )    (967    ) 
Cash used for financing activities                 (77,871  )    (41,217 ) 
Effect of exchange rate changes on cash            (8,584   )    12,536 
Net increase (decrease) in                         24,777        (35,708 ) 
cash and cash equivalents 
Cash and cash equivalents, beginning of period     532,599       376,352 
Cash and cash equivalents, end of period         $ 557,376     $ 340,644 
 
 

Steve Martens, VP Investor RelationsMolex Incorporated630-527-4344