Molex Reports First Quarter Results and Record Orders

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Molex Reports First Quarter Results and Record Orders

LISLE, Ill.--(BUSINESS WIRE)-- Molex Incorporated (NAS: MOLX) and (NAS: 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 per share data

201220122011
 
Net revenue$916.9$858.5$936.0
Net income71.372.080.5
Earnings per share0.400.400.46
 

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 (888) 679-8018 to participate in the call. International callers should dial (617) 213-4845. 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 (888) 286-8010 or (617) 801-6888 / 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,
20122012
(Unaudited)
 

ASSETS

Current assets:
Cash and cash equivalents$685,972$637,417
Marketable securities16,11114,830
Accounts receivable, less allowances of $37,401 and $37,876, respectively770,976751,279
Inventories564,377531,825
Deferred income taxes109,101110,789
Other current assets 38,341 33,098
Total current assets2,184,8782,079,238
Property, plant and equipment, net1,178,8751,150,549
Goodwill161,163160,986
Non-current deferred income taxes52,65350,038
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 and long-term debt$75,074$104,933
Accounts payable412,429355,491
Accrued expenses:
Accrual for unauthorized activities in Japan189,040184,177
Income taxes payable49,82835,360
Other 228,098 212,035
Total current liabilities954,469891,996
Other non-current liabilities19,32118,174
Accrued pension and other postretirement benefits113,847115,176
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 administrative163,121169,225
Unauthorized activities in Japan 2,561  2,922 
Total operating expenses 165,682  172,147 
 
Income from operations102,735120,581
 
Interest (expense), net(810)(1,391)
Other income 1,196  276 
Total other income (expense), net 386  (1,115)
 
Income before income taxes103,121119,466
 
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:
Basic176,621175,466
Diluted178,564176,585
 
 

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 amortization57,74261,239
Share-based compensation6,1605,135
Other non-cash items3,7675,991
Changes in assets and liabilities:
Accounts receivable(7,903)22,927
Inventories(28,902)(18,260)
Accounts payable49,569(10,702)
Other current assets and liabilities4,32628,890
Other assets and liabilities 11,331  (25,188)
Cash provided from operating activities167,404150,549
 
Investing activities:
Capital expenditures(69,413)(42,804)
Proceeds from sales of property, plant and equipment1,9141,396
Proceeds from sales or maturities of marketable securities3,1684,868
Purchases of marketable securities(4,099)(2,777)
Insurance proceeds and other investing activities 9,722 - 
Cash used for investing activities(58,708)(39,317)
 
Financing activities:
Proceeds from revolving credit facility10,00030,000
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 options1,715620
Other financing activities (1,026)
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