By Molex Incorporated (NASDAQ: MOLX and MOLXA), a global electronic components company, today reported results for its second quarter ended December 31, 2011.
Three Months Ended | ||||||||||
| Dec. 31, | Sept. 30, | Dec. 31, | ||||||||
USD millions, except per share data | 2011 | 2011 | 2010 | |||||||
| Net revenue | $ | 857.6 | $ | 936.0 | $ | 901.5 | ||||
| Net income | 64.0 | 80.5 | 78.3 | |||||||
| Earnings per share | 0.36 | 0.46 | 0.45 | |||||||
Revenue for the December 2011 quarter was $857.6 million, down 8.4% from the September 2011 quarter and 4.9% from the December 2010 quarter. The impact of the floods in Thailand reduced revenue in the December quarter by approximately $15 million. Revenue in local currencies declined 7.8% from the September 2011 quarter and 6.6% from the December 2010 quarter. Net income for the December 2011 quarter was $64.0 million or $0.36 per share, compared with net income of $80.5 million or $0.46 per share for the September 2011 quarter and net income of $78.3 million or $0.45 per share for the December 2010 quarter. In the December 2011 quarter, we recorded a one-time charge for additional income tax expense of $2.7 million ($0.02 per share). This charge reflects the cumulative effect of a reduction in future tax benefits from deferred tax assets in Japan resulting from a decrease in the Japanese statutory corporate tax rate enacted in November 2011.
"We continue to be optimistic about the future as our new product pipeline is quite strong and long-term growth opportunities remain healthy," commented Martin P. Slark, Molex's Chief Executive Officer. "The uncertain economic environment coupled with the disruption from the floods in Thailand, however, made the December quarter challenging from a booking and revenue perspective. We are pleased with our cost control, cash flow and resulting margins and are encouraged by improvements in recent booking trends. During the quarter we completed the purchase of Temp-Flex Cable, Inc., a specialty wire and cable company. Temp-Flex increases our presence in the medical market and will complement our high performance cable business."
Other financial highlights for the quarter ended December 31, 2011:
- Gross profit margin was 30.7%, compared with 30.1% in the December 2010 quarter and 31.3% in the September 2011 quarter.
- SG&A expense was $163.1 million, compared with $159.0 million in the December 2010 quarter and $169.2 million in the September 2011 quarter.
- Capital expenditures were $52.3 million or 6.1% of revenue.
- Depreciation and amortization was $59.9 million or 7.0% of revenue.
- Backlog was $346.3 million, a decrease of $40.9 million or 10.6% from the September 2011 quarter.
- The book-to-bill ratio was 0.95 to 1.
- Inventory days outstanding was 91 days compared with 87 days in the December 2010 quarter and 84 days in the September 2011 quarter.
- Accounts receivable days outstanding was 71 days compared with 73 days in the December 2010 quarter and 69 days in the September 2011 quarter.
- Cash flow from operations was $141.0 million.
- The effective tax rate was 33.7%. Excluding the impact of the adjustment for deferred tax assets in Japan, the effective tax rate was 30.9%.
Outlook
Based upon current order rates, backlog and normal seasonality, the Company estimates revenue in a range of $830 to $860 million for the March 2012 quarter. At this level of revenue, the Company expects earnings per share in a range of $0.32 to $0.36 assuming constant foreign currency rates and commodity prices and an effective tax rate of 32%.
Earnings Conference Call Information
A conference call will be held on Wednesday, January 25, 2012 at 8:30 am central time. Please dial (888) 679-8038 to participate in the call. International callers should dial (617) 213-4850. Please dial in at least five minutes prior to the start of the call and refer to participant pass code 82556528. 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 (888) 286-8010 or (617) 801-6888 / pass code 34557282.
Other Investor Events
Feb. 14, 2012 - Goldman Sachs Technology and Internet Conference 2012 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 "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, and the Form 10-Q for the quarter ended September 30, 2011, which are 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 40 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) | ||||||
| Dec. 31, | June 30, | |||||
| 2011 | 2011 | |||||
| (unaudited) | ||||||
ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 607,336 | $ | 532,599 | ||
| Marketable securities | 11,230 | 13,947 | ||||
| Accounts receivable, less allowances of $38,525 and $42,297 respectively | 708,197 | 811,449 | ||||
| Inventories | 552,264 | 535,953 | ||||
| Deferred income taxes | 130,759 | 129,158 | ||||
| Other current assets | 39,084 | 32,239 | ||||
| Total current assets | 2,048,870 | 2,055,345 | ||||
| Property, plant and equipment, net | 1,135,735 | 1,168,448 | ||||
| Goodwill | 166,409 | 149,452 | ||||
| Non-current deferred income taxes | 37,273 | 38,178 | ||||
| Other assets | 181,831 | 186,429 | ||||
| Total assets | $ | 3,570,118 | $ | 3,597,852 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Current portion of long-term debt and short-term borrowings | $ | 127,631 | $ | 119,764 | ||
| Accounts payable | 317,103 | 359,812 | ||||
| Accrued expenses: | ||||||
| Accrual for unauthorized activities in Japan | 188,601 | 182,460 | ||||
| Income taxes payable | 27,672 | 2,383 | ||||
| Other | 215,233 | 217,628 | ||||
| Total current liabilities | 876,240 | 882,047 | ||||
| Other non-current liabilities | 20,538 | 23,879 | ||||
| Accrued pension and postretirement benefits | 93,056 | 100,866 | ||||
| Long-term debt | 196,671 | 222,794 | ||||
| Total liabilities | 1,186,505 | 1,229,586 | ||||
| Commitments and contingencies | ||||||
| Total stockholders' equity | 2,383,613 | 2,368,266 | ||||
| Total liabilities and stockholders' equity | $ | 3,570,118 | $ | 3,597,852 | ||
Molex Incorporated | ||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net revenue | $ | 857,598 | $ | 901,465 | $ | 1,793,583 | $ | 1,799,137 | ||||||||
| Cost of sales | 594,661 | 630,420 | 1,237,918 | 1,253,016 | ||||||||||||
| Gross profit | 262,937 | 271,045 | 555,665 | 546,121 | ||||||||||||
| Selling, general and administrative | 163,073 | 159,044 | 332,298 | 316,100 | ||||||||||||
| Unauthorized activities in Japan | 2,723 | 2,713 | 5,645 | 8,255 | ||||||||||||
| Total operating expenses | 165,796 | 161,757 | 337,943 | 324,355 | ||||||||||||
| Income from operations | 97,141 | 109,288 | 217,722 | 221,766 | ||||||||||||
| Interest (expense) income, net | (2,094 | ) | (1,788 | ) | (3,485 | ) | (3,123 | ) | ||||||||
| Other income | 1,482 | 4,792 | 1,758 | 4,441 | ||||||||||||
| Total other (expense) income, net | (612 | ) | 3,004 | (1,727 | ) | 1,318 | ||||||||||
| Income before income taxes | 96,529 | 112,292 | 215,995 | 223,084 | ||||||||||||
| Income taxes | 32,513 | 34,009 | 71,462 | 69,697 | ||||||||||||
| Net income | $ | 64,016 | $ | 78,283 | $ | 144,533 | $ | 153,387 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.36 | $ | 0.45 | $ | 0.82 | $ | 0.88 | ||||||||
| Diluted | $ | 0.36 | $ | 0.45 | $ | 0.82 | $ | 0.88 | ||||||||
| Dividends declared per share | $ | 0.2000 | $ | 0.1750 | $ | 0.4000 | $ | 0.3275 | ||||||||
| Average common shares outstanding: | ||||||||||||||||
| Basic | 175,830 | 174,664 | 175,656 | 174,510 | ||||||||||||
| Diluted | 176,985 | 175,556 | 176,778 | 175,329 | ||||||||||||
Molex Incorporated | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Six Months Ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 144,533 | $ | 153,387 | ||||
| Add non-cash items included in net income: | ||||||||
| Depreciation and amortization | 121,174 | 120,804 | ||||||
| Share-based compensation | 11,402 | 11,460 | ||||||
| Other non-cash items | 5,213 | 7,275 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 94,400 | 3,221 | ||||||
| Inventories | (26,442 | ) | (67,631 | ) | ||||
| Accounts payable | (40,976 | ) | (36,945 | ) | ||||
| Other current assets and liabilities | (7,183 | ) | (11,280 | ) | ||||
| Other assets and liabilities | (10,608 | ) | 2,184 | |||||
| Cash provided from operating activities | 291,513 | 182,475 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (95,055 | ) | (132,728 | ) | ||||
| Acquisitions | (24,000 | ) | - | |||||
| Proceeds from sales of property, plant and equipment | 2,202 | 1,400 | ||||||
| Proceeds from sales or maturities of marketable securities | 6,553 | 5,203 | ||||||
| Purchases of marketable securities | (4,787 | ) | (3,612 | ) | ||||
| Cash used for investing activities | (115,087 | ) | (129,737 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from revolving credit facility | 75,000 | 50,000 | ||||||
| Payments on revolving credit facility | (220,000 | ) | (15,000 | ) | ||||
| Payments on short-term loans | (27,389 | ) | (11,479 | ) | ||||
| Proceeds from issuance of long-term debt | 150,000 | - | ||||||
| Payments of long-term debt | (287 | ) | (24,572 | ) | ||||
| Cash dividends paid | (70,186 | ) | (53,186 | ) | ||||
| Exercise of stock options | 2,630 | 1,820 | ||||||
| Other financing activities | (2,087 | ) | (1,954 | ) | ||||
| Cash used for financing activities | (92,319 | ) | (54,371 | ) | ||||
| Effect of exchange rate changes on cash | (9,370 | ) | 17,671 | |||||
| Net increase in cash and cash equivalents | 74,737 | 16,038 | ||||||
| Cash and cash equivalents, beginning of period | 532,599 | 376,352 | ||||||
| Cash and cash equivalents, end of period | $ | 607,336 | $ | 392,390 | ||||
Molex Incorporated
Steve Martens, VP Investor Relations
630-527-4344
