Molex Reports First Quarter Results and Record Orders

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

2012

2012

2011

Net revenue

$

916.9

$

858.5

$

936.0

Net income

71.3

72.0

80.5

Earnings per share

0.40

0.40

0.46


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,

2012

2012

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

685,972

$

637,417

Marketable securities

16,111

14,830

Accounts receivable, less allowances of $37,401 and $37,876, respectively

770,976

751,279

Inventories

564,377

531,825

Deferred income taxes

109,101

110,789

Other current assets

38,341

33,098

Total current assets

2,184,878

2,079,238

Property, plant and equipment, net

1,178,875

1,150,549

Goodwill

161,163

160,986

Non-current deferred income taxes

52,653

50,038

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 payable

412,429

355,491

Accrued expenses:

Accrual for unauthorized activities in Japan

189,040

184,177

Income taxes payable

49,828

35,360

Other

228,098

212,035

Total current liabilities

954,469

891,996

Other non-current liabilities

19,321

18,174

Accrued pension and other postretirement benefits

113,847

115,176

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 administrative

163,121

169,225

Unauthorized activities in Japan

2,561

2,922

Total operating expenses

165,682

172,147

Income from operations

102,735

120,581

Interest (expense), net

(810

)

(1,391

)

Other income

1,196

276

Total other income (expense), net

386

(1,115

)

Income before income taxes

103,121

119,466

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:

Basic

176,621

175,466

Diluted

178,564

176,585

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 amortization

57,742

61,239

Share-based compensation

6,160

5,135

Other non-cash items

3,767

5,991

Changes in assets and liabilities:

Accounts receivable

(7,903

)

22,927

Inventories

(28,902

)

(18,260

)

Accounts payable

49,569

(10,702

)

Other current assets and liabilities

4,326

28,890

Other assets and liabilities

11,331

(25,188

)

Cash provided from operating activities

167,404

150,549

Investing activities:

Capital expenditures

(69,413

)

(42,804

)

Proceeds from sales of property, plant and equipment

1,914

1,396

Proceeds from sales or maturities of marketable securities

3,168

4,868

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 facility

10,000

30,000

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 options

1,715

620

Other financing activities

(1,026

)