MOLXA Molex Incorporated - Class A (MM)

Molex Incorporated (NASDAQ: MOLX) and (NASDAQ: MOLXA), a global electronic components company, today reported results for its second quarter ended December 31, 2012.

    Three Months Ended Dec 31,   Sept 30,   Dec 31,

USD millions, except per share data

2012 2012 2011   Net revenue $ 967.7 $ 916.9 $ 857.6 Net income 70.4 71.3 64.0 Earnings per share 0.39 0.40 0.36  

Net revenue for the December 2012 quarter was $967.7 million, an increase of 5.5% from the September 2012 quarter and 12.8% from the December 2011 quarter. In local currencies, net revenue increased 4.8% compared with the September 2012 quarter and 13.8% compared with the December 2011 quarter. Orders for the December 2012 quarter were $919.7 million, a decline of 2.6% from the September 2012 quarter and an increase of 12.8% from the December 2011 quarter.

Net income for the December 2012 quarter was $70.4 million or $0.39 per share, compared with $71.3 million, or $0.40 per share, for the September 2012 quarter and $64.0 million, or $0.36 per share, for the December 2011 quarter.

“Our results came in at the high end of our guidance range and we were particularly pleased to achieve record revenue this quarter as shipments were strong leading into the Christmas period. Bookings were weaker toward the latter part of the quarter and consistent with normal seasonal trends, were down 2.6% on a sequential basis. Our pipeline of new projects is strong and we will have a clearer view of the business trends for calendar year 2013 after Chinese New Year,” stated Martin P. Slark, Chief Executive Officer.

Other financial highlights for the quarter ended December 31, 2012:

• Gross profit margin was 29.9%, compared with 29.3% in the September 2012 quarter and 30.7% in the December 2011 quarter.
• SG&A expense was $181.0 million, compared with $163.1 million in the September 2012 quarter and $163.1 million in the December 2011 quarter. The September 2012 quarter included insurance proceeds of $9.9 million related to losses incurred from the March 2011 earthquake and tsunami in Japan.
• Backlog was $404.0 million, a decrease of 9.3% from the September 2012 quarter and an increase of 16.7% from the December 2011 quarter.
• The book-to-bill ratio for the December quarter was 0.95 to 1 compared with 1.03 to 1 for the September quarter and 0.95 to 1 for the December 2011 quarter.
• Capital expenditures were $78.6 million or 8.1% of revenue.
• Inventory days outstanding was 83 days compared with 84 days in the September 2012 quarter and 91 days in the December 2011 quarter.
• Accounts receivable days outstanding was 67 days compared with 69 days in the September 2012 quarter and 71 days in the December 2011 quarter.
• The effective tax rate was 31.1%.

Outlook

Based upon current order rates and customer backlog, the Company estimates revenue in the range of $900 to $930 million for the March 2013 quarter. At this level of revenue, the Company expects earnings per share in the range of $0.33 to $0.37, assuming constant foreign currency rates, unchanged 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 Wednesday, January 23, 2013 at 8:30 a.m. central time. Please dial (888) 679-8035 to participate in the call. International callers should dial (617) 213-4848. Please dial in at least five minutes prior to the start of the call and refer to participant pass code 88944879. 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 81162241.

Other Investor Events

Feb 12 – Goldman Sachs Technology and Internet Conference 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 “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, and the Form 10-Q for the quarter ended September 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 15 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, 2012 2012 (Unaudited)  

ASSETS

Current assets: Cash and cash equivalents $ 705,047 $ 637,417 Marketable securities 11,738 14,830 Accounts receivable, less allowances of $37,681 and $37,876, respectively 745,851 751,279 Inventories 566,889 531,825 Deferred income taxes 101,398 110,789 Other current assets   33,109   33,098 Total current assets 2,164,032 2,079,238 Property, plant and equipment, net 1,177,342 1,150,549 Goodwill 195,030 160,986 Non-current deferred income taxes 48,063 50,038 Other assets   180,130   170,692 Total assets $ 3,764,597 $ 3,611,503  

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities: Current portion of short-term borrowings and long-term debt $ 115,869 $ 104,933 Accounts payable 344,997 355,491 Accrued expenses: Accrued liability for unauthorized activities in Japan 170,665 184,177 Income taxes payable 40,876 35,360 Other   200,084   212,035 Total current liabilities 872,491 891,996 Other non-current liabilities 19,700 18,174 Accrued pension and other postretirement benefits 95,424 115,176 Long-term debt   230,000   150,032 Total liabilities   1,217,615   1,175,378   Commitments and contingencies   Total stockholders’ equity   2,546,982   2,436,125 Total liabilities and stockholders’ equity $ 3,764,597 $ 3,611,503     Molex Incorporated Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share data)

  Three Months Ended Six Months Ended December 31, December 31, 2012   2011 2012   2011 Net revenue $ 967,735 $ 857,598 $ 1,884,656 $ 1,793,583 Cost of sales   678,565     594,661     1,327,069     1,237,918   Gross profit   289,170     262,937     557,587     555,665     Selling, general and administrative 181,028 163,073 344,149 332,298 Unauthorized activities in Japan   1,627     2,723     4,188     5,645   Total operating expenses   182,655     165,796     348,337     337,943     Income from operations 106,515 97,141 209,250 217,722   Interest (expense) income, net (1,133 ) (2,094 ) (1,943 ) (3,485 ) Other (expense) income   (3,151 )   1,482     (1,955 )   1,758   Total other (expense) income, net   (4,284 )   (612 )   (3,898 )   (1,727 )   Income before income taxes 102,231 96,529 205,352 215,995   Income taxes   31,837     32,513     63,644     71,462     Net income $ 70,394   $ 64,016   $ 141,708   $ 144,533     Earnings per share: Basic $ 0.40 $ 0.36 $ 0.80 $ 0.82 Diluted $ 0.39 $ 0.36 $ 0.79 $ 0.82   Dividends declared per share $ 0.2200 $ 0.2000 $ 0.4400 $ 0.4000   Average common shares outstanding: Basic 177,123 175,830 176,888 175,656 Diluted 178,854 176,985 178,743 176,778   Molex Incorporated Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

Six Months Ended

December 31, 2012   2011   Operating activities: Net income $ 141,708 $ 144,533 Add non-cash items included in net income: Depreciation and amortization 117,402 121,174 Share-based compensation 15,425 11,402 Other non-cash items 5,685 5,213 Changes in assets and liabilities: Accounts receivable 5,006 94,400 Inventories (34,831 ) (26,442 ) Accounts payable (5,326 ) (40,976 ) Other current assets and liabilities 9,605 (7,183 ) Other assets and liabilities   (97 )   (10,608 ) Cash provided from operating activities 254,577 291,513   Investing activities: Capital expenditures (148,041 ) (95,055 ) Acquisitions (55,299 ) (24,000 ) Proceeds from sales of property, plant and equipment 3,020 2,202 Proceeds from sales or maturities of marketable securities 8,399 6,553 Purchases of marketable securities (5,081 ) (4,787 ) Insurance proceeds and other investing activities   9,957   -   Cash used for investing activities (187,045 ) (115,087 )   Financing activities: Proceeds from revolving credit facility 90,000 75,000 Payments on revolving credit facility (10,000 ) (220,000 ) Proceeds from short-term loans and debt 178,089 - Payments on short-term loans and debt (158,620 ) (27,389 ) Proceeds from issuance of long-term debt - 149,713 Cash dividends paid (116,706 ) (70,186 ) Exercise of stock options 4,804 2,630 Other financing activities   (2,115 )   (2,087 ) Cash used for financing activities (14,548 ) (92,319 )   Effect of exchange rate changes on cash   14,646     (9,370 ) Net increase in cash and cash equivalents 67,630 74,737 Cash and cash equivalents, beginning of period   637,417     532,599   Cash and cash equivalents, end of period $ 705,047   $ 607,336