-----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, NpvoRweDGkZsP09EyavW5dhqgRB6gDm9/GRPV8WokK79c5PcCaNfeDiuH6lPJXhE YYQNUnmnoNFJfIDnHJ08JQ== 0000067472-96-000003.txt : 19960213 0000067472-96-000003.hdr.sgml : 19960213 ACCESSION NUMBER: 0000067472-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960212 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: 96515590 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 December 31, 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 December 31, 1995: Common Stock 49,807,629 Class A Common Stock 50,645,512 Class B Common Stock 94,255 MOLEX INCORPORATED FORM 10-Q DECEMBER 31, 1995 INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Information - Unaudited Condensed Consolidated Balance Sheets -- 2 December 31, 1995 and June 30, 1995 Condensed Consolidated Statements of Income -- 3 Three Months and Six Months Ended December 31, 1995 and 1994 Condensed Consolidated Statements of Cash Flows -- 4 Six Months Ended December 31, 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 11 -1- MOLEX INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - In Thousands) ASSETS ------
Dec. 31, June 30, 1995 1995 CURRENT ASSETS: --------- --------- Cash $ 202,489 $ 253,552 Marketable securities 62,686 59,563 Accounts receivable - net 256,045 282,814 Inventories 157,492 150,836 Other current assets 26,667 26,271 --------- --------- Total current assets 705,379 773,036 PROPERTY, PLANT AND EQUIPMENT - NET 577,626 567,303 OTHER ASSETS 106,621 100,681 --------- --------- $1,389,626 $1,441,020 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable $ 115,231 $ 128,146 Accrued expenses 82,853 85,748 Other current liabilities 58,933 64,152 --------- --------- Total current liabilities 257,017 278,046 DEFERRED ITEMS 14,023 13,310 ACCRUED POSTRETIREMENT BENEFITS 30,706 32,170 LONG-TERM DEBT, less portion due currently 7,645 8,122 MINORITY INTEREST 2,860 2,104 SHAREHOLDERS' EQUITY Common stock 5,236 4,177 Paid-in capital 103,894 101,534 Retained earnings 917,583 850,533 Treasury stock (61,289) (35,749) Deferred unearned compensation (11,591) (13,771) Cumulative translation adjustments 123,542 200,544 --------- --------- Total shareholders' equity 1,077,375 1,107,268 --------- --------- $1,389,626 $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 SIX MONTHS ENDED ----------------------- ----------------------- Dec. 31, Dec. 31, Dec. 31, Dec, 31, 1995 1994 1995 1994 -------- -------- -------- -------- NET REVENUE $344,483 $274,961 $682,659 $543,860 COST OF SALES 207,545 158,495 408,843 311,919 -------- -------- -------- -------- Gross Profit 136,938 116,466 273,816 231,941 OPERATING EXPENSES: Selling 35,621 31,486 71,495 61,666 Administrative 46,871 38,997 94,634 77,501 -------- -------- -------- -------- Total Operating Expenses 82,492 70,483 166,129 139,167 Income from Operations 54,446 45,983 107,687 92,774 OTHER INCOME: Foreign currency transaction gain (loss) 50 (279) 757 (333) Interest 2,807 2,157 5,929 3,794 -------- -------- -------- -------- Total Other Income 2,857 1,878 6,686 3,461 Income before Income Taxes and Minority Interest 57,303 47,861 114,373 96,235 INCOME TAXES 22,228 19,884 44,084 40,841 -------- -------- -------- -------- Income before Minority Interest 35,075 27,977 70,289 55,394 MINORITY INTEREST (18) (67) (75) (130) -------- -------- -------- -------- NET INCOME $ 35,057 $ 27,910 $ 70,214 $ 55,264 ======== ======== ======== ======== EARNINGS PER COMMON SHARE $ .35 $ 0.28 $ .70 $ 0.56 ======== ======== ======== ======== CASH DIVIDENDS PER COMMON SHARE $ 0.0150 $ 0.0080 $ 0.0300 $ 0.0144 ======== ======== ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING DURING THE PERIOD 100,662 99,476 100,711 99,436 ======== ======== ======== ======== 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)
SIX MONTHS ENDED ----------------------- Dec, 31, Dec. 31, 1995 1994 -------- -------- CASH AND CASH EQUIVALENTS, Beginning of Period $253,552 $220,681 CASH AND CASH EQUIVALENTS PROVIDED FROM (USED FOR): Operations: Net income 70,214 55,264 Add (deduct) non-cash items included in net income: Depreciation and amortization 58,432 49,337 Minority interest 75 130 Amortization of deferred unearned compensation 2,180 1,507 (Gain) loss on sale of property, plant and equipment 204 (319) Other (credits) charges to net income 1,216 (1,325) Current items: Accounts receivable 6,291 (2,968) Inventories (18,560) (10,559) Prepaid expenses (6,193) (3,175) Accounts payable (20) 486 Accrued expenses 724 3,547 Income taxes 417 8,291 -------- -------- NET CASH PROVIDED FROM OPERATIONS 114,980 100,216 Investments: Purchases of property, plant and equipment (109,776) (74,749) Proceeds from sale of property, plant and equipment 590 1,069 Increase in other assets (8,948) (9,152) Increase in marketable securities (3,264) (5,826) -------- -------- NET CASH USED FOR INVESTMENTS (121,398) (88,658) Financing: Increase in long-term debt 272 - Decrease in long-term debt (898) (185) Cash dividends paid (2,464) (1,387) Purchase of treasury stock (24,992) - Disposition of treasury stock 1,158 934 Exercise of stock options 1,713 991 -------- -------- NET CASH USED FOR FINANCING (25,211) 353 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (19,434) (820) -------- -------- (51,063) 11,091 -------- -------- CASH AND CASH EQUIVALENTS, End of Period $202,489 $231,772 ======== ======== 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 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 December 31, 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. (3) Marketable Securities Marketable securities 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. -5- (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: Dec. 31, June 30, 1995 1995 -------- -------- Raw Materials $ 31,251 $ 29,424 Work in Process 56,423 59,042 Finished Goods 69,818 62,370 -------- -------- $157,492 $150,836 ======== ======== -6- MOLEX INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- Consolidated net revenues were $344.5 million for the quarter ended December 31, 1995, increasing 25.3 percent over net revenues for the corresponding quarter of the prior fiscal year. For the six months ended December 31, 1995, net revenues were $682.7 million, a 25.5 percent increase from the same period a year ago. The generally higher value of the US dollar compared to other currencies worldwide decreased net revenues by $4.8 million for the quarter. For the six months ended December 31, 1995, currency effects have added only $.2 million to net revenues. Excluding the effects of currency fluctuation, growth in net revenues would have been 27.0 percent for the quarter and 25.5 percent for the six months ended December 31, 1995. Molex continues to exceed its goal of increasing net revenues at twice the growth rate of the worldwide connector market. All geographic regions with the exception of the Far East North experienced local currency growth in excess of 15 percent for the quarter and the six months ended December 31, 1995. For the three months ended December 31, 1995, revenues in the Americas region (including the U.S. Region and the Americas Non- U.S.) increased 31.2 percent in U.S. dollars and 37.3 percent in local currency over the same quarter in the prior year. For the six months ended December 31, 1995, the percentage of growth over the same period in the prior year was 29.8 percent in U.S. dollars and 35.2 percent in local currency. The Company continues to see increased customer sales to the automotive market as well as robust growth in certain advanced communication products. In Europe, net revenues increased 25.1 percent in U.S. dollars and 18.8 percent in local currency over the same quarter in the prior year. For the six months ended December 31, 1995, net revenues increased 30.4 percent in U.S. dollars and 22.6 percent in local currency over the same period in the prior year. These increases are primarily attributable to greater demand for automotive and telecommunication products by major European customers. -7- Far East South net revenues for the quarter ended December 31, 1995 increased 19.7 percent in both local currency and U.S. dollars. For the six months ended December 31, 1995 the growth percentages over the same period in the prior year were 18.2 percent and 17.0 percent in U.S. dollars and local currency, respectively. The high demand for personal computers and related peripheral products continues above the level of last year. The region continues to introduce products for both local demand and re-export. Net revenues in the Far East North increased 3.4 percent in U.S. dollars and 6.5 percent in local currency for the quarter compared to the same quarter in the prior year. Net revenue growth was 9.9 percent in U.S. dollars and 9.1 percent in local currency for the six months ended December 31, 1995 when compared to the same period in the prior year. The Japanese economy continues to be difficult. In spite of this, Japanese domestic sales improved slightly over the same quarter in the prior year. For the six months ended December 31, 1995, 69 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. Sales to the U.S. automotive market, coupled with sales of its Mod-Tap subsidiary acquired in the second half of last year, have increased the Company's domestic sales during the six months ended December 31, 1995 compared to the same period in the prior 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 39.8 percent and 40.1 percent for the quarter and six months ended December 31, 1995, respectively, decreased from 42.4 percent and 42.6 percent reported for the quarter and six months ended December 31, 1994, respectively. Molex continues to experience start-up costs for automotive programs in the United States and Germany, and several new projects in Japan. For the six months ended December 31, 1995, depreciation and amortization expenses increased at a lower rate than the increase in net revenues. Depreciation and amortization expenses were 8.6 percent of net revenues compared to 9.1 percent of net revenues during the same period in the prior fiscal year. Operating expenses as a percent of net revenue for the six months ended December 31, 1995 improved slightly from the same period a year ago, reflecting continued management focus on the control of expenses. -8- Foreign currency transaction gains were $0.8 million for the six months ended December 31, 1995 compared to the $0.3 million loss in the same period of the prior year. The foreign currency transaction gain for the six-month period is primarily due to the weakening of the Japanese yen relative to the dollar when compared to the prior year. Interest income, net of interest expense, increased 30.2 percent for the quarter ended December 31, 1995 and 56.3 percent for the six months ended December 31, 1995 when compared to the same period in the prior year. The increase reflects the higher average interest rates computed on relatively constant investment balances in countries where Molex has significant short-term investments. Interest expense has remained relatively unchanged from the prior year. The effective tax rate was 38.8 percent and 38.5 percent for the quarter and six months ended December 31, 1995, respectively, as compared to 41.5 percent and 42.4 percent for the same respective periods 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 $35.1 million or 35 cents per share, a 25.6 percent increase compared with $27.9 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 29.7 percent over the same quarter last fiscal year. For the six months ended December 31, 1995, net income was $70.2 million or 70 cents per share, a 27.1 percent increase compared to $55.3 million or 56 cents per share for the same period in the prior fiscal year. Excluding the effects of currency fluctuations, net income for the six months increased 28 percent over the prior fiscal year. LIQUIDITY AND CAPITAL Molex's balance sheet continues to be exceptionally strong. Working capital at December 31, 1995 was $448.4 million, down from the $495.0 million at June 30, 1995. The exchange effect of the stronger U.S. dollar coupled with significant purchases of treasury stock during the six months ended December 31, 1995 are primarily responsible for the decline in working capital. The Company purchased 475,000 shares of common stock for the treasury during the quarter, for a total of 735,000 shares purchased during the six months ended December 31, 1995. Management believes that the Company's current liquidity and financial flexibility are adequate to support its continued growth. -9- OUTLOOK The prospects for the remainder of fiscal 1996 continue to look promising. Molex will continue to push into new markets and expand its product line through the introduction of new and innovative products. Leading edge businesses like Mod-Tap W. Corporation (a wholly owned subsidiary) and the Fiber Optics Group are expected to better position Molex to expand into rapidly growing markets like local area networks and communications. While the company continues to see increased demand for its products, pricing pressures and start-up costs will continue to exert downward pressure on gross margins. -10- Part II - Other Information Items 1 - 3. Not Applicable Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Stockholders held on October 20, 1995, the following directors were elected to hold office for the coming year: Frederick A. Krehbiel, J.H. Krehbiel, Jr., Fred L. Krehbiel, Lewis E. Platt, Robert J. Potter, Edgar D. Jannotta, Donald G. Lubin, Masahisa Naitoh, Michael J. Birck. The stockholders also approved the amendment to the Certificate of Incorporation increasing the number of authorized shares of Common Stock and Class A Common Stock. The amendment to the Certificate of Incorporation increasing the number of authorized shares of Common Stock and Class A Common Stock was adopted with 34,040,153 votes cast in favor of the amendment, 737,613 votes against and 183,604 votes withheld. The stockholders also approved the amendment and restatement of the 1990 Molex Incorporated Executive Stock Bonus Plan. The amendment and restatement of the 1990 Molex Incorporated Executive Stock Bonus Plan was adopted with 34,714,086 votes cast in favor of the amendment, 168,185 votes against and 79,100 votes withheld. Items 5 - 6. Not Applicable. -11- 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 February 9, 1996 /s/ ROBERT B. MAHONEY ----------------- -------------------- Robert B. Mahoney Corporate Vice President and Treasurer Date February 9, 1996 /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 DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 6-MOS JUN-30-1996 DEC-31-1995 1 202,489 62,686 268,950 (12,905) 157,492 705,379 1,258,508 (680,882) 1,389,626 257,017 7,645 5,236 0 0 1,072,139 1,389,626 682,659 682,659 408,843 166,129 (757) 0 (5,929) 114,373 44,084 70,214 0 0 0 70,214 .70 .70
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