-----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, KXhlkWpRgXTYAj1/CVuMmXF0v+U/Duza2Kbt4oaCcnth5NZY/DIvj+KNBbUzCBkS WHHfZUKnLf9E+h6s26miRw== 0000067472-96-000008.txt : 19961113 0000067472-96-000008.hdr.sgml : 19961113 ACCESSION NUMBER: 0000067472-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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: 96658943 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, 1996 ------------------------------- 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: 630-969-4550 ------------ 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, 1996: Common Stock 49,857,718 Shares Class A Common Stock 50,753,509 Shares Class B Common Stock 94,255 Shares MOLEX INCORPORATED FORM 10-Q SEPTEMBER 30, 1996 INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Information - Unaudited Condensed Consolidated Balance Sheets -- 2 September 30, 1996 and June 30, 1996 Condensed Consolidated Statements of Income -- 3 Three Months Ended September 30, 1996 and 1995 Condensed Consolidated Statements of Cash Flows -- 4 Three Months Ended September 30, 1996 and 1995 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, 1996 1996 CURRENT ASSETS: --------- --------- Cash and cash equivalents $ 242,093 $ 242,779 Marketable securities 36,247 39,883 Accounts receivable - net 289,357 274,031 Inventories 149,885 147,612 Other current assets 35,450 30,284 --------- --------- Total current assets 753,032 734,589 PROPERTY, PLANT AND EQUIPMENT - NET 621,092 613,125 OTHER ASSETS 114,492 113,285 --------- --------- $1,488,616 $1,460,999 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable $ 125,656 $ 127,557 Accrued expenses 100,600 93,104 Other current liabilities 48,470 54,521 --------- --------- Total current liabilities 274,726 275,182 DEFERRED ITEMS 14,085 13,977 ACCRUED POSTRETIREMENT BENEFITS 31,853 30,401 LONG-TERM DEBT, less portion due currently 7,421 7,450 MINORITY INTEREST 2,730 2,718 SHAREHOLDERS' EQUITY Common stock 5,256 5,251 Paid-in capital 117,567 116,510 Retained earnings 1,024,233 989,928 Treasury stock (68,284) (62,726) Deferred unearned compensation (12,289) (13,583) Cumulative translation adjustments 91,318 95,891 --------- --------- Total shareholders' equity 1,157,801 1,131,271 --------- --------- $1,488,616 $1,460,999 ========= ========= 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, 1996 1995 --------- --------- NET REVENUE $359,595 $338,176 COST OF SALES 216,769 201,298 -------- -------- Gross Profit 142,826 136,878 OPERATING EXPENSES: Selling 38,053 35,874 Administrative 48,879 47,763 -------- -------- Total Operating Expenses 86,932 83,637 Income from Operations 55,894 53,241 OTHER INCOME: Foreign currency transaction gain 318 707 Interest 2,427 3,122 -------- -------- Total Other Income 2,745 3,829 INCOME BEFORE INCOME TAXES 58,639 57,070 INCOME TAXES 22,784 21,913 -------- -------- NET INCOME $ 35,855 $ 35,157 ======== ======== EARNINGS PER COMMON SHARE $ 0.36 $ 0.35 ======== ======== CASH DIVIDENDS PER COMMON SHARE $ 0.0150 $ 0.0150 ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING DURING THE PERIOD 100,791 100,743 ======== ======== 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, 1996 1995 -------- -------- CASH AND CASH EQUIVALENTS, Beginning of Period $242,779 $253,552 CASH AND CASH EQUIVALENTS PROVIDED FROM (USED FOR): Operations: Net income 35,855 35,157 Add (deduct) non-cash items included in net income: Depreciation and amortization 32,560 29,034 Amortization of deferred unearned compensation 1,294 1,074 (Gain) loss on sale of property, plant and equipment (271) 237 Other charges to net income 37 46 Current items: Accounts receivable (16,569) (4,374) Inventories (3,039) (13,172) Prepaid expenses (5,453) (5,668) Accounts payable (1,039) (1,979) Accrued expenses 9,368 18 Income taxes (5,949) (10,444) -------- -------- NET CASH PROVIDED FROM OPERATIONS 46,794 29,929 Investments: Purchases of property, plant and equipment (41,835) (54,227) Proceeds from sale of property, plant and equipment 491 1,323 Proceeds from sale of marketable securities 399,585 416,701 Purchases of marketable securities (395,949) (415,096) Increase in other assets (2,918) (10,176) -------- -------- NET CASH USED FOR INVESTMENTS (40,626) (61,475) Financing: Increase in long-term debt - 227 Decrease in long-term debt (29) (58) Cash dividends paid (1,515) (808) Purchase of treasury stock (5,549) (11,103) Disposition of treasury stock 334 818 Exercise of stock options 719 181 -------- -------- NET CASH USED FOR FINANCING (6,040) (10,743) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (814) (16,551) -------- -------- (686) (58,840) -------- -------- CASH AND CASH EQUIVALENTS, End of Period $242,093 $194,712 ======== ======== 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 1996 Annual Report to Shareholders and the 1996 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 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, 1996 and 1995, 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. Gross unrealized holding gains and losses are not material as of September 30, 1996 and 1995. -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: Sept. 30, June 30, 1996 1996 ----------- ----------- Raw materials $ 30,741 $ 33,841 Work in process 52,492 54,687 Finished goods 66,652 59,084 ----------- ----------- $149,885 $147,612 =========== =========== -6- MOLEX INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Consolidated net revenues were $359.6 million for the quarter ended September 30, 1996, increasing 6.3 percent over net revenues for the corresponding quarter of the prior fiscal year. Compared to the same quarter in the prior year, the generally higher value of the US dollar compared to other currencies worldwide decreased net revenues by $17.0 million for the quarter. Excluding the effects of currency fluctuation, growth in net revenues would have equaled 11.4 percent for the three months ended September 30, 1996. Management believes that Molex has continued 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 Europe experienced local currency growth in excess of 10 percent for the three months ended September 30, 1996. Far East South net revenues for the quarter ended September 30, 1996 increased 18.9 percent in U.S. dollars and 19.8 percent in local currencies. Sales in this region remain strong due to continued demand for personal computers and related peripheral products. For the three months ended September 30, 1996, revenues in the Americas Region increased 15.8 percent from the prior year in local currencies. Increased customer sales to the automotive market and strong sales of telecommunications products continue to drive revenue growth in this region. Net revenues in the Far East North increased 11.0 percent in local currencies for the quarter compared to the same period in the prior year, but decreased 2.3 percent in U.S. dollars due to the generally stronger U.S. dollar. Improvement in the overall Japanese economy has created stronger demand for interconnection products in this region. In Europe, net revenue declined 8.5 percent in local currency and 11.5 percent in U.S. dollars. Demand continues to be soft within the region due to difficult economic conditions in several European countries, although some improvement was seen during the quarter ended September 30, 1996. -7- For the three months ended September 30, 1996, 68 percent of Molex's worldwide net revenues were generated from its international operations, compared to 70 percent for the same period during the prior fiscal year. Strong sales to the automotive and telecommunications industries have increased the Company's U.S. domestic revenue over the same period in the prior fiscal year, while international revenue growth has remained strong. 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 39.7 percent for the three months ended September 30, 1996 decreased from the 40.5 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 in Europe and several new projects in Japan which were offset by improvements in the U.S. automotive programs. Operating expenses as a percent of net revenue for the three months ended September 30, 1996 improved slightly from the same period a year ago, reflecting continued management focus on the control of expenses. Foreign currency transaction gains were $.3 million for the quarter ended September 30, 1996 compared to the $.7 million gain in the same quarter of the prior year. Interest income, net of interest expense, decreased 22.3 percent for the quarter ended September 30, 1996, when compared to the same quarter in the prior year. The decrease reflects the lower average interest rates in countries where Molex has significant short-term investments compared to the same period in the prior year. Interest expense has remained relatively unchanged from the prior year. The effective tax rate for the quarter ended September 30, 1996 was 38.8 percent as compared to 38.3 percent reported for the same period in the prior fiscal year. This increase is primarily caused by increased pretax profitability in countries with higher effective tax rates. Net income for the quarter was $35.9 million or 36 cents per share, a 2.0 percent increase compared with $35.2 million or 35 cents per share for the same quarter last fiscal year. Excluding the effects of currency fluctuations, net income for the quarter increased 7.1 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, 1996 remains strong at $478.3 million, an increase from $459.4 million at June 30, 1996. The Company purchased 175,000 shares of treasury stock during the quarter ended September 30, 1996. 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 1997 continue to look good. To further expand the Company's global presence, offer innovative products at an accelerated pace, and improve internal productivity, Molex plans to invest approximately $215 million in capital expenditures and $95 million in research and development for the fiscal year ending June 30, 1997. Management believes the Company is well-positioned to continue growing faster than the overall connector industry. The Company continues to emphasize expansion in rapidly growing industry segments, product lines and geographic regions. Molex remains committed to providing high quality products and a full range of services to its customers worldwide. FORWARD LOOKING STATEMENT This document contains various forward-looking statements. Statements that are not historical are forward looking statements and are subject to various risks and uncertainties which could cause actual results to vary materially from those stated. Such risks and uncertainties include: economic conditions in various regions, product and price competition, raw material prices, foreign currency exchange rate changes, technology changes, patent issues, litigation results, legal and regulatory developments, and other risks and uncertainties described in documents filed with the Securities and Exchange Commission. -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 8, 1996 /s/ ROBERT B. MAHONEY ------------------ ----------------------- Robert B. Mahoney Corporate Vice President, Treasurer and Chief Financial Officer Date November 8, 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 SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 U.S. DOLLARS 3-MOS JUN-30-1997 SEP-30-1996 1 242,093 36,247 302,097 (12,740) 149,885 753,032 1,325,008 (703,916) 1,488,616 274,726 7,421 5,256 0 0 1,152,545 1,488,616 359,595 359,595 216,769 86,932 (318) 0 (2,427) 58,639 22,784 35,855 0 0 0 35,855 .36 .36
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