-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K9IUjteQa3QEtuqJgJ7fcLrEiV7PsSASVPnJjGW9VahNjhLlxwhGHWQi4FbADYtR n9Gr+fNnGLKOsrgYNJKudg== 0000067472-95-000019.txt : 19951119 0000067472-95-000019.hdr.sgml : 19951119 ACCESSION NUMBER: 0000067472-95-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOLEX INC CENTRAL INDEX KEY: 0000067472 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC CONNECTORS [3678] IRS NUMBER: 362369491 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07491 FILM NUMBER: 95591478 BUSINESS ADDRESS: STREET 1: 2222 WELLINGTON CT CITY: LISLE STATE: IL ZIP: 60532 BUSINESS PHONE: 7089694550 MAIL ADDRESS: STREET 1: 2222 WELLINGTON COURT CITY: LISLE STATE: IL ZIP: 60532 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE -------- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 ------------------------------- OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE -------- SECURITIES EXCHANGE ACT OF 1934 For the transition period from ----------------------------------- Commission File Number 0-7491 MOLEX INCORPORATED ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 36-2369491 -------------------------------- --------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2222 Wellington Court, Lisle, Illinois 60532 ----------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 708-969-4550 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----------- ------------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (applicable only to corporate registrants). At September 30, 1995: Common Stock 49,993,172 Shares Class A Common Stock 50,649,337 Shares Class B Common Stock 94,255 Shares MOLEX INCORPORATED FORM 10-Q SEPTEMBER 30, 1995 INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Information - Unaudited Condensed Consolidated Balance Sheets -- 2 September 30, 1995 and June 30, 1995 Condensed Consolidated Statements of Income -- 3 Three Months Ended September 30, 1995 and 1994 Condensed Consolidated Statements of Cash Flows -- 4 Three Months Ended September 30, 1995 and 1994 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION 10 -1- MOLEX INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - In Thousands) ASSETS ------
Sept. 30, June 30, 1995 1995 CURRENT ASSETS: --------- --------- Cash $ 194,712 $ 253,552 Short-term investments 57,818 59,563 Accounts receivable - net 269,371 282,814 Inventories 153,897 150,836 Other current assets 26,973 26,271 --------- --------- Total current assets 702,771 773,036 PROPERTY, PLANT AND EQUIPMENT - NET 552,992 567,303 OTHER ASSETS 108,852 100,681 --------- --------- $1,364,615 $1,441,020 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable $ 114,682 $ 128,146 Accrued expenses 82,598 85,748 Other current liabilities 49,602 64,152 --------- --------- Total current liabilities 246,882 278,046 DEFERRED ITEMS 13,085 13,310 ACCRUED POSTRETIREMENT BENEFITS 30,170 32,170 LONG-TERM DEBT, less portion due currently 8,349 8,122 MINORITY INTEREST 2,343 2,104 SHAREHOLDERS' EQUITY Common stock 5,225 4,177 Paid-in capital 101,620 101,534 Retained earnings 884,684 850,533 Treasury stock (46,987) (35,749) Deferred unearned compensation (12,697) (13,771) Cumulative translation adjustments 131,941 200,544 --------- --------- Total shareholders' equity 1,063,786 1,107,268 --------- --------- $1,364,615 $1,441,020 ========= ========= The accompanying notes are an integral part of these condensed consolidated financial statements. -2-
MOLEX INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited - In Thousands Except per Share)
THREE MONTHS ENDED ----------------------- Sept. 30, Sept. 30, 1995 1994 -------- -------- NET REVENUE $338,176 $268,899 COST OF SALES 201,298 153,424 -------- -------- Gross Profit 136,878 115,475 OPERATING EXPENSES: Selling 35,874 30,180 Administrative 47,763 38,504 -------- -------- Total Operating Expenses 83,637 68,684 Income from Operations 53,241 46,791 OTHER INCOME: Foreign currency transaction gain (loss) 707 (54) Interest 3,122 1,637 -------- -------- Total Other Income 3,829 1,583 Income before Income Taxes and Minority Interest 57,070 48,374 INCOME TAXES 21,856 20,957 -------- -------- Income before Minority Interest 35,214 27,417 MINORITY INTEREST (57) (63) -------- -------- NET INCOME $ 35,157 $ 27,354 ======== ======== EARNINGS PER COMMON SHARE $ .35 $ 0.28 ======== ======== CASH DIVIDENDS PER COMMON SHARE $ 0.0150 $ 0.0064 ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING DURING THE PERIOD 100,743 99,398 ======== ======== The accompanying notes are an integral part of these condensed consolidated financial statements. -3-
MOLEX INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - In Thousands)
THREE MONTHS ENDED ----------------------- Sept. 30, Sept. 30, 1995 1994 -------- -------- CASH AND CASH EQUIVALENTS, Beginning of Period $253,552 $220,681 CASH AND CASH EQUIVALENTS PROVIDED FROM (USED FOR): Operations: Net income 35,157 27,354 Add (deduct) non-cash items included in net income: Depreciation and amortization 29,034 24,127 Minority interest 57 63 Amortization of deferred unearned compensation 1,074 753 Loss on sale of property, plant and equipment 237 96 Other credits to net income (11) (770) Current items: Accounts receivable (4,374) 1,280 Inventories (13,172) (6,852) Prepaid expenses (5,668) (3,935) Accounts payable (1,979) (4,379) Accrued expenses 18 1,741 Income taxes (10,444) (4,433) -------- -------- NET CASH PROVIDED FROM OPERATIONS 29,929 35,045 Investments: Purchases of property, plant and equipment (54,227) (32,204) Proceeds from sale of property, plant and equipment 1,323 458 Increase in other assets (10,176) (8,768) Decrease in short-term investments 1,605 1,040 -------- -------- NET CASH USED FOR INVESTMENTS (61,475) (39,474) Financing: Increase in long-term debt 227 23 Decrease in long-term debt (58) (125) Cash dividends paid (808) (636) Purchase of treasury stock (11,103) - Disposition of treasury stock 818 183 Exercise of stock options 181 239 -------- -------- NET CASH USED FOR FINANCING (10,743) (316) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (16,551) 446 -------- -------- (58,840) (4,299) -------- -------- CASH AND CASH EQUIVALENTS, End of Period $194,712 $216,382 ======== ======== The accompanying notes are an integral part of these condensed consolidated financial statements. -4-
MOLEX INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) Consolidated Financial Statements The condensed consolidated financial statements have been prepared from the Company's books and records without audit and are subject to year-end adjustments. The interim financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of information for the interim periods presented. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Molex Incorporated 1995 Annual Report to Shareholders and the 1995 Annual Report on Form 10-K. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year. (2) Earnings per Common Share On October 21, 1994, the Board of Directors of Molex Incorporated declared a twenty-five percent (25%) stock dividend. One quarter (1/4) share of Common Stock was paid on November 28, 1994 to shareholders of record as of November 7, 1994 for each share of Common Stock and Class B Common Stock outstanding. In addition, one quarter (1/4) share of Class A Common Stock was paid for each share of Class A Common Stock outstanding. All shares outstanding, earnings and dividends have been retroactively restated for the stock split effected in the form of a stock dividend. On August 2, 1995, the Board of Directors of Molex Incorporated declared a twenty-five percent (25%) stock dividend. One quarter (1/4) share of Common Stock was paid on September 15, 1995 to shareholders of record as of August 25, 1995 for each share of Common Stock and Class B Common Stock outstanding. In addition, one quarter (1/4) share of Class A Common Stock was distributed for each share of Class A Common Stock outstanding. All shares outstanding, earnings and dividends have been retroactively restated for the stock split effected in the form of a stock dividend. Earnings per common share (including Common Stock, Class A Common Stock and Class B Common Stock) have been computed using the weighted average number of common shares outstanding during the periods. For the periods ended September 30, 1995 and 1994, the shares shown as outstanding in the Condensed Consolidated Statements of Income do not require adjustments for common stock equivalents, as they do not have a material dilutive effect after applying the treasury stock method. -5- (3) Short-Term Investments Short-term investments are available for sale and consist of a variety of highly-liquid investments, with maturities generally less than twelve months. Certain reclassifications have been made to the prior year's financial statements in order to conform to the 1996 classifications. (4) Inventories Inventories are valued at the lower of first-in, first-out cost or market. Inventories, in thousands of dollars, consisted of the following: Sept. 30, June 30, 1995 1995 ----------- ----------- Raw materials $ 29,471 $ 29,424 Work in process 55,832 59,042 Finished goods 68,594 62,370 ----------- ----------- $153,897 $150,836 =========== =========== -6- MOLEX INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Consolidated net revenues were $338.2 million for the quarter ended September 30, 1995, increasing 25.8 percent over net revenues for the corresponding quarter of the prior fiscal year. Compared to the same quarter in the prior year, the generally lower value of the US dollar compared to other currencies worldwide increased net revenues by $5.0 million for the quarter. Excluding the effects of currency fluctuation, growth in net revenues would have equaled 23.9 percent for the three months ended September 30, 1995. Molex continued to exceed its goal of increasing net revenues at twice the growth rate of the worldwide connector market. All geographic regions gained market share as local currency net revenue growth was in excess of 10 percent for the three months ended September 30, 1995. Net revenues in Europe increased 36.4 percent in U.S. dollars and 27.0 percent in local currencies for the quarter ended September 30, 1995. We are continuing to see increased demand for interconnection products in most of Europe, and are pleased with the increased sales we are making to the European automotive and mobile telecommunication industries. For the three months ended September 30, 1995, revenues in the Americas Region (including the U.S. Region and Americas Non-U.S.) increased 33.1 percent from the prior year in local currencies. We continue to see increased customer sales to the automotive market and fiber optic sales continue to experience robust growth. Net revenues in the Far East North increased 16.4 percent in U.S. dollars and 11.7 percent in local currencies for the quarter compared to the same period in the prior year. The Japanese economy overall remains difficult. In spite of this, our Japanese domestic sales improved slightly over the same quarter in the prior year. Far East South net revenues for the quarter ended September 30, 1995 increased 16.6 percent in U.S. dollars and 14.4 percent in local currencies. Sales in this region remain strong due to continued growth in the personal computer and hard disk drive industries. The region is also gaining market share due to increased customer penetration at many of the multinational companies that have relocated manufacturing operations to the region. -7- For the three months ended September 30, 1995, 70 percent of Molex's worldwide net revenues were generated from its international operations, compared to 72 percent for the same period during the prior fiscal year. International operations are subject to currency fluctuations and government actions. Molex monitors its currency exposure in each country and implements strategies to respond to changing economic and political environments. Due to the uncertainty of the foreign exchange markets, Molex cannot reasonably predict future trends related to foreign currency fluctuations. Foreign currency fluctuations have impacted results in the past and may impact results in the future. The gross profit percentage of 40.5 percent for the three months ended September 30, 1995 decreased from the 42.9 percent reported during the comparable period of the previous fiscal year. The decline in the gross profit percentage is primarily due to start- up costs for new automotive programs and several new projects in Japan. For the three months ended September 30, 1995, depreciation and amortization expenses have increased at a lower rate than the increase in net revenues. Depreciation and amortization expenses currently represent 8.6 percent of sales compared to 9.0 percent of sales during the same period of the prior fiscal year. Operating expenses as a percent of net revenue for the three months ended September 30, 1995 improved slightly from the same period a year ago, reflecting the continued management focus on the control of expenses. Foreign currency transaction gains were $.7 million for the quarter ended September 30, 1995 compared to the $.1 million loss in the same quarter of the prior year. The foreign currency transaction gain for the quarter is primarily due to the weakening of the Japanese yen relative to the dollar during the quarter ended September 30, 1995. Interest income, net of interest expense, increased 90.7 percent for the quarter ended September 30, 1995. The increase reflects the higher balance of cash and short-term investments during the period coupled with a slight increase in average interest rates in countries where Molex has significant short-term investments. Interest expense has remained relatively unchanged from the prior year. The effective tax rate for the quarter ended September 30, 1995 equaled 38.3 percent as compared to 43.3 percent reported for the same period in the prior fiscal year. This decrease is primarily caused by increased pretax profitability in countries with lower effective tax rates coupled with the ability of the Company to utilize its foreign tax credits. Net income for the quarter was $35.2 million or 35 cents per share, a 28.5 percent increase compared with $27.4 million or 28 cents per share for the same quarter last fiscal year. Excluding the effects of currency fluctuations, net income for the quarter increased 26.3 percent over the same quarter last fiscal year. -8- LIQUIDITY AND CAPITAL One of Molex's many financial strengths is its exceptionally strong balance sheet. Working capital at September 30, 1995 remains strong at $455.9 million, down from $495.0 million at June 30, 1995 primarily due to the exchange effect of the stronger U.S. dollar. The Company purchased 260,000 shares of treasury stock during the quarter ended September 30, 1995. Management believes that the Company's current liquidity and financial flexibility are adequate to support its current growth. OUTLOOK The prospects for the remainder of fiscal 1996 continue to look promising. Demand for interconnection products remains strong in the United States and Europe. In Japan, Molex's business levels continue to increase modestly over the prior year. Molex will continue to push into new markets and expand our product line through the introduction of new and innovative products. The Mod- Tap W. Corporation acquisition is expected to better position Molex to expand into the rapidly growing local area network market. We continue to see the effects of Molex's ability to control costs and improve productivity. We will continue to review and challenge all activities in the Company with the goal of improving customer service and operating efficiencies. -9- Part II - Other Information Items 1 - 6. Not Applicable -10- S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MOLEX INCORPORATED ------------------- (Registrant) Date November 10, 1995 /s/ JOHN C. PSALTIS ------------------ ----------------------- John C. Psaltis Corporate Vice President, Treasurer and Chief Financial Officer Date November 10, 1995 /s/ LOUIS A. HECHT ------------------ ----------------------- Louis A. Hecht Corporate Secretary and General Counsel EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MOLEX INC. REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 3-MOS JUN-30-1996 SEP-30-1995 1 194,712 57,818 281,616 (12,245) 153,897 702,771 1,218,241 (665,249) 1,364,615 246,882 8,349 5,225 0 0 1,058,561 1,364,615 338,176 338,176 201,298 83,637 (707) 0 (3,122) 57,070 21,856 35,214 0 0 0 35,157 .35 .35
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