-----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, OeBrzy+X2A6NzdL6AHSii9lAIcBjD0mV+oXe6J50xORWLwIgrxQqgQ285nZ9rC/l zTFoBf5iQ4DOo20/EJIuVg== /in/edgar/work/0000067472-00-000013/0000067472-00-000013.txt : 20001114 0000067472-00-000013.hdr.sgml : 20001114 ACCESSION NUMBER: 0000067472-00-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOLEX INC CENTRAL INDEX KEY: 0000067472 STANDARD INDUSTRIAL CLASSIFICATION: [3678 ] IRS NUMBER: 362369491 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-07491 FILM NUMBER: 758231 BUSINESS ADDRESS: STREET 1: 2222 WELLINGTON CT CITY: LISLE STATE: IL ZIP: 60532 BUSINESS PHONE: 6305274253 MAIL ADDRESS: STREET 1: 2222 WELLINGTON COURT CITY: LISLE STATE: IL ZIP: 60532 10-Q 1 0001.txt 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, 2000 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, 2000: Common Stock 98,642,474 shares Class A Common Stock 96,811,422 shares Class B Common Stock 94,255 shares MOLEX INCORPORATED FORM 10-Q SEPTEMBER 30, 2000 INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Information - Unaudited Condensed Consolidated Balance Sheets -- 2 September 30, 2000 and June 30, 2000 Condensed Consolidated Statements of Income -- 3 Three Months Ended September 30, 2000 and 1999 Condensed Consolidated Statements of Cash Flows -- 4 Three Months Ended September 30, 2000 and 1999 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosure About Market Risk 9 PART II - OTHER INFORMATION 10 -1- MOLEX INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - In Thousands) ASSETS Sept. 30, June 30, 2000 2000 _________ _________ CURRENT ASSETS: Cash and cash equivalents $ 121,976 $ 164,288 Marketable securities 38,534 76,955 Accounts receivable - net 538,627 514,855 Inventories 260,111 236,209 Other current assets 35,104 30,702 Total current assets 994,352 1,023,009 PROPERTY, PLANT AND EQUIPMENT - NET 1,018,741 980,775 GOODWILL 163,007 165,307 OTHER ASSETS 78,415 78,015 $2,254,515 $2,247,106 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 253,532 $ 274,900 Accrued expenses 147,814 130,560 Other current liabilities 56,118 69,989 Total current liabilities 457,464 475,449 DEFERRED ITEMS 7,563 6,434 ACCRUED POSTRETIREMENT BENEFITS 41,927 36,099 LONG-TERM DEBT 21,286 21,593 MINORITY INTEREST 2,329 1,727 SHAREHOLDERS' EQUITY Common stock 10,563 10,555 Paid-in capital 263,857 259,806 Retained earnings 1,755,732 1,696,162 Treasury stock (254,624) (241,893) Deferred unearned compensation (23,247) (25,788) Cumulative translation and other adjustments (28,335) 6,962 Total shareholders' equity 1,723,946 1,705,804 $2,254,515 $2,247,106 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 Data) THREE MONTHS ENDED Sept. 30, Sept. 30, 2000 1999 NET REVENUE $625,925 $491,870 COST OF SALES 381,235 298,447 Gross Profit 244,690 193,423 OPERATING EXPENSES: Selling 50,474 37,904 Administrative 100,414 91,227 Total Operating Expenses 150,888 129,131 Income from Operations 93,802 64,292 OTHER INCOME (EXPENSE): Impairment charge (2,763) - Foreign currency transaction gain/(loss) 728 (638) Interest income, net 1,870 1,651 Total Other Income/(Expense), Net (165) 1,013 INCOME BEFORE INCOME TAXES 93,637 65,305 INCOME TAXES 29,115 19,808 NET INCOME $64,522 $45,497 EARNINGS PER COMMON SHARE: BASIC $0.33 $0.23 DILUTED $0.33 $0.23 CASH DIVIDENDS PER COMMON SHARE $0.025 $0.020 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING DURING THE PERIOD: BASIC 195,638 196,239 DILUTED 198,142 197,848 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, 2000 1999 CASH AND CASH EQUIVALENTS, Beginning of Period $164,288 $182,992 CASH AND CASH EQUIVALENTS PROVIDED FROM (USED FOR): Operations: Net income 64,522 45,497 Add (deduct) non-cash items included in net income: Depreciation and amortization 50,458 45,669 Amortization of deferred unearned compensation 2,540 800 Impairment charge 2,763 - Other charges to net income 1,405 3,963 Current items: Accounts receivable (33,993) (18,527) Inventories (28,147) (15,837) Other current assets (4,812) (8) Accounts payable (15,787) 19,040 Accrued expenses 23,657 (2,224) Other current liabilities (9,550) (27,381) NET CASH PROVIDED FROM OPERATIONS 53,056 50,992 Investments: Purchases of property, plant and equipment (104,435) (58,943) Proceeds from sale of property, plant and equipment 888 4,480 Proceeds from sale of marketable securities 1,421,196 821,679 Purchases of marketable securities (1,382,775) (830,261) Increase in other assets (10,268) (9,921) NET CASH USED FOR INVESTMENTS (75,394) (72,966) Financing: Increase in long-term debt 284 4,413 Decrease in long-term debt (591) (251) Cash dividends paid (4,892) (2,358) Purchase of treasury stock (12,489) (13,658) Reissuance of treasury stock 728 301 Exercise of stock options 1,433 678 NET CASH USED FOR FINANCING (15,527) (10,875) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (4,447) 17,506 CASH AND CASH EQUIVALENTS, End of Period $121,976 $167,649 The accompanying notes are an integral part of these condensed consolidated financial statements. - 4 - MOLEX INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) Condensed 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 2000 Annual Report to Shareholders and the 2000 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 The reconciliation of common shares outstanding to dilutive common shares outstanding is as follows: Three Months Ended September 30, 2000 1999 Weighted average shares outstanding - basic 195,638 196,239 Dilutive effect of stock options 2,504 1,609 Weighted average shares outstanding - diluted 198,142 197,848 (3) Comprehensive Income Comprehensive income includes all non-shareowner changes in equity and consists of net income, foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. Total comprehensive income, in thousands of dollars, is as follows: Three Months Ended September 30, 2000 1999 Net income $64,522 $45,497 Currency translation and other adjustments (35,297) 45,941 Total comprehensive income $29,225 $91,438 -5- 4) Inventories Inventories are valued at the lower of first-in, first-out cost or market. Inventories, in thousands of dollars, consist of the following: Sept. 30, June 30, 2000 2000 Raw Materials $ 47,202 $ 44,595 Work in Process 101,507 82,341 Finished Goods 111,402 109,273 $260,111 $236,209 -6- MOLEX INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Consolidated net revenues were $625.9 million for the quarter ended September 30, 2000, increasing 27.3 percent in US dollars and 28.9 percent in local currencies over the first quarter of last year. The strengthening of the US dollar compared with other currencies caused net revenues to decrease $8.3 million for the quarter. Management believes that Molex continues to grow at a rate higher than the worldwide connector market. All geographic regions experienced double-digit sales growth for the quarter. Net revenue in the Americas region rose 37.7 percent in both US dollars and local currencies over the prior year period. Growth in the region was fueled by strong demand in all major markets, including fiber optics, telecommunications, networking and distribution. Quarterly net revenue in the Far East North grew 34.5 percent in US dollars and 29.5 percent in local currencies compared with last year due to continuing strength in the consumer markets. Investment in new products, especially in the computer, consumer and telecom markets is resulting in market share gains in both Japan and Korea. Far East South net revenue for the quarter increased 23.3 percent in US dollars and 23.2 percent in local currencies over the prior year quarter generated by strong sales in the personal computer and computer-peripheral product markets. In Europe, net revenue was up 35.9 percent in local currencies compared with the same period last year but rose only 17.7 percent in US dollars as a result of the weakened Euro. Demand remains strong in the fiber optic and telecommunications markets. For the three months ended September 30, 2000, 58.0 percent of Molex's worldwide net revenue was generated from its international operations. International operations are subject to currency fluctuations and government actions. Molex monitors its currency exposure in each country and continues to implement defensive strategies to respond to changing economic 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. Gross profit as a percent of net revenue was 39.1 percent for the quarter ended September 30, 2000 compared to 39.3 percent last year. -7- Selling and administrative expenses were $150.9 million for the first quarter of fiscal 2001 compared with $129.1 million in the prior year period. As a percent of net revenue, selling and administrative expenses were 24.1 percent compared with 26.3 percent for the same period last year. Also included in selling and administrative expenses are research and development expenditures, which for the three months ended September 30, 2000, decreased as a percent of net revenue to 5.8 percent from 6.6 percent in the prior year period. The Company recorded an impairment charge on certain available-for-sale securities during the first quarter of fiscal 2001 based on depressed market values over the holding period, which is expected to be permanent. Interest income, net of interest expense, was $1.9 million in the quarter ended September 30, 2000 compared with $1.7 million in the prior year. The effective tax rate was 31.0 percent for the first quarter compared with 30.2 percent in the prior year period as a result of increased revenues in jurisdictions where higher tax rates apply. Net income for the quarter was $64.5 million or 33 cents per basic and diluted share, a 41.8 percent increase compared with $45.5 million or 23 cents per basic and diluted share for the same quarter last fiscal year. Excluding the effects of currency translation, net income increased 41.9 percent for the quarter ended September 30, 2000 from the comparable prior year period. LIQUIDITY AND CAPITAL RESOURCES Molex's balance sheet continues to be strong. Working capital at September 30, 2000 was $536.9 million compared with $547.6 million at June 30, 2000. During the three months ended September 30, 2000, the Company purchased an aggregate of 340,000 shares of treasury stock at an aggregate cost of $12.5 million. This is in accordance with authorization by the Board of Directors allowing for the purchase of up to $50 million of Company stock during the current fiscal year. Management believes that the Company's current liquidity and financial flexibility are adequate to support its continued growth. OUTLOOK The outlook for fiscal 2001 is encouraging based on the strong sales and backlog achieved in the first quarter. Due to the uncertainty of the foreign currency exchange markets, Molex cannot reasonably predict future trends related to foreign currency fluctuations. Foreign currency fluctuations have impacted the Company's results in the past and may impact results in the future. -8- To further expand the Company's global presence, offer innovative products at an accelerated pace, and improve internal productivity, Molex plans to invest approximately $375 million in capital expenditures and approximately $150 million in research and development during the fiscal year ending June 30, 2001. Management believes the Company is well positioned to continue to grow 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 rates, 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. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is subject to market risk associated with changes in foreign currency exchange rates, interest rates and certain commodity prices. The Company mitigates its foreign currency exchange rate risk principally through the establishment of local production facilities in the markets it serves and invoicing of customers in the same currency as the source of the products. Molex also monitors its foreign currency exposure in each country and implements strategies to respond to changing economic and political environments. Examples of these strategies include the prompt payment of intercompany balances utilizing a global netting system, the establishment of contra-currency accounts in several international subsidiaries, development of natural hedges and occasional use of foreign exchange contracts. A formalized treasury risk management policy has been implemented by the Company which describes the procedures and controls over derivative financial and commodity instruments. Under the policy, the Company does not use derivative financial or commodity instruments for trading purposes and the use of such instruments are subject to strict approval levels by senior officers. Typically, the use of such derivative instruments is limited to hedging activities related to specific foreign currency cash flows. The Company's exposure related to such transactions is, in the aggregate, not material to the Company's financial position, results of operations and cash flows. -9- Interest rate exposure is principally limited to the $38.5 million of marketable securities owned by the Company. Such securities are debt instruments which generate interest income for the Company on temporary excess cash balances. The Company does not actively manage the risk of interest rate fluctuations, however, such risk is mitigated by the relatively short term, less than twelve months, nature of these investments. 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, 2000, the following directors were elected to hold office for their respective terms according to their class: Fred L. Krehbiel, Douglas K. Carnahan, J. Joseph King and Martin P. Slark. No candidate for director received less than 88,266,098 votes in favor of their election nor more than 1,245,336 votes withheld. Three other proposals before the stockholders, adoption of the 2000 Molex Incorporated Incentive Stock Option Plan, the 2000 Molex Incorporated Executive Stock Bonus Plan and the 2000 Molex Incorporated Long-Term Stock Plan which are set forth in detail in the proxy statement dated September 12, 2000, were approved. Item 5-6. 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 13, 2000 /s/ ROBERT B. MAHONEY ----------------- -------------------- Robert B. Mahoney Corporate Vice President, Treasurer and Chief Financial Officer Date November 13, 2000 /s/ LOUIS A. HECHT ----------------- -------------------- Louis A. Hecht Corporate Secretary and General Counsel -11- EX-27 2 0002.txt
5 1000 3-MOS JUN-30-2001 SEP-30-2000 121,976 38,534 563,523 24,896 260,111 994,352 2,162,836 1,144,095 2,254,515 457,464 0 0 0 274,420 1,449,526 2,254,515 625,925 625,925 381,235 381,235 150,888 2,035 (1,870) 93,637 29,115 64,522 0 0 0 64,522 .33 .33
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