EX-99 2 pr041020.txt PRESS RELEASE FOR FY05 Q1 RESULTS EXHIBIT 99 Contact: Neil Lefort Vice President, Investor Relations (630) 527-4344 MOLEX MAKES STRONG START TO FISCAL 2005 YEAR; RECORD REVENUE ACHIEVED, UP 29 PERCENT; EARNINGS PER SHARE INCREASE 71 PERCENT Lisle, IL, USA - October 20, 2004 -- Molex Incorporated (NASDAQ:MOLX and MOLXA), a global electronic components company, today reported record revenue results for its first fiscal quarter ended September 30, 2004. Fiscal First Quarter Results Revenue of $640.2 million increased 29 percent from last year's first quarter of $496.8 million. Revenue in local currencies increased 25 percent, as currency translation increased net revenue by approximately $19 million when compared with last year's first quarter. Revenue for the first quarter included $18 million from the automotive acquisition in Europe that was completed on April 2, 2004. Excluding the acquisition, revenue increased 25 percent from last year's first quarter. Net income was $55.6 million compared with last year's first quarter of $32.1 million, an increase of 74 percent. Earnings per share of $0.29 increased 71 percent, compared with $0.17 reported for the first quarter a year ago. Joe King, Vice-Chairman and Chief Executive Officer, said, "Revenue growth compared with last year's first quarter revenue was very strong. Revenue also increased sequentially, an excellent result in this seasonally challenging quarter. We believe we are growing significantly faster than the overall connector market, primarily due to our ongoing investment in new products and our global capabilities. We were also pleased with the strong growth in earnings after absorbing higher costs for many of our raw materials." Regional Results Revenue in the Far East South region was $190 million, an increase of 33 percent, primarily driven by the digital consumer, PC, and mobile communication markets. In this region, we continue to gain market share, based on our many new products and increased penetration into our global customers who continue to transfer production to the region. Revenue in the Far East North region (Japan and Korea) was $132 million, an increase of 13 percent in dollars and 6 percent in local currencies. This growth was primarily due to new products for the digital consumer and communication markets. Revenue in the Americas region was $177 million, an increase of 17 percent, due to stronger demand for high-speed, industrial and medical electronics products, which more than offset lower demand in automotive. Revenue in Europe was $128 million, an increase of 73 percent in dollars and 61 percent in local currencies. Excluding the previously mentioned automotive acquisition, revenue increased 49 percent in dollars, as the region recovers from recession. Operating Results Gross profit margin was 35.7 percent compared with last year's first quarter margin of 33.8 percent. Pretax return on sales was 12 percent compared with 8.9 percent in the year ago quarter. The effective tax rate for the first quarter was 27 percent, the same rate as last year's first quarter. The Company now anticipates an effective tax rate of 27 percent for the 2005 fiscal year, compared with previous guidance of 27.5 percent and a 2004 fiscal year rate of 26.5 percent. Net return on sales was 8.7 percent compared with 6.5 percent in last year's first quarter. Cash and marketable securities were $331.4 million at September 30, 2004. The Company's order backlog on September 30, 2004 stood at $313.6 million, a 51 percent increase compared with $208 million for the same period last year. Without the impact of changes in currency rates, the order backlog would have increased 48 percent. New orders for the first quarter were $622.4 million, an increase of 21 percent compared with last year's first quarter. This was a reasonable result, considering an estimated $25 million in orders were advanced by customers into the June quarter, as discussed in the June 30, 2004 earnings release. Research and Development Expenditures and Capital Spending Research and development expenditures for the first quarter were $33.4 million, an increase of 24 percent when compared with the same period last year. Capital expenditures were $48.4 million for the quarter versus $45.3 million last year. Fiscal Second Quarter Outlook King continued, "Our operations in the Far East continue to drive our results. We expect this trend to continue, based on the magnitude of production transferred by our global customers to the region and supported by our technical capabilities and long term history of working in the region." "It is apparent that many of our customers in the Americas are in the process of adjusting their finished goods inventory to more conservative levels. However, we believe that the amount of actual connector inventory within these channels is reasonable, and therefore the outlook in the majority of our markets remains encouraging. In addition, we expect to gain market share based on our positions within key market segments - such as digital consumer, mobile communication and mobile computing - that are growing faster than the overall connector market, as well as our focus on the emerging medical electronics market." Based on these facts, the Company expects that revenue for the fiscal second quarter ending December 31, 2004, will be in a range of $635 - $650 million. This represents an increase of 16 - 18 percent over last year's fiscal second quarter. The Company expects that earnings per share will be in a range of $0.29 - $0.31, an increase of 38 - 48 percent over last year's fiscal second quarter earnings per share. Stock Buyback Actions During the quarter, the Company purchased 875,000 shares of MOLXA common stock, at a total cost of $21.9 million. These purchases were done under a $100 million Board authorization for the full fiscal year ending June 30, 2005. 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. Certain of these risks and uncertainties are set forth in Molex's 10-K and other documents filed with the Securities and Exchange Commission and include economic conditions in various regions, product and price competition and foreign currency exchange rate changes. Molex does not undertake to revise these forward- looking statements or to provide any updates regarding information contained in this release resulting from new information, future events or otherwise. The Company's Annual Report, as well as news releases and other supplementary financial data is available by accessing the Company's website at www.molex.com. The Company's quarterly earnings conference call will be held at 4:00pm CDT on Wednesday, October 20th, and is available live and in replay to all investors through the internet by accessing the company's website. You may also dial (800) 603-3143 to participate in the conference call. International callers please dial (706) 634-0917. Please dial in at least five minutes prior to the start of the call. Molex Incorporated is a 66-year-old manufacturer of electronic components, including electrical and fiber optic interconnection products and systems, switches and integrated products in 55 plants in 19 countries throughout the world. Editor's note: Molex is traded on the NASDAQ National Market System in the United States and on the London Stock Exchange. The companies voting stock (MOLX) is included in the S&P 500 Index and the NASDAQ 100. Molex Incorporated Condensed Consolidated Balance Sheets (In thousands, except per share data) Sept. 30, June 30, 2004 2004 ---------- ---------- ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 238,292 $ 234,431 Marketable securities 93,153 104,223 Accounts receivable, net 544,736 529,630 Inventories 283,417 265,344 Other current assets 40,027 35,016 ---------- ---------- Total current assets 1,199,625 1,168,644 Property, plant and equipment, net 1,009,163 1,022,378 Goodwill 164,969 164,915 Other assets 194,930 216,409 ---------- ---------- Total assets $2,568,687 $2,572,346 ---------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 225,731 $ 234,823 Accrued expenses 132,625 143,160 Other current liabilities 47,508 50,481 ---------- ---------- Total current liabilities 405,864 428,464 Other non-current liabilities 9,361 10,487 Accrued pension and postretirement benefits 51,435 52,151 Long-term debt 10,075 10,243 Obligations under capital leases 3,143 3,796 Minority interest in subsidiaries 3,383 1,211 Shareholders' equity: Common Stock 10,747 10,734 Paid-in capital 376,518 369,660 Retained earnings 2,209,211 2,160,368 Treasury stock (532,216) (509,161) Deferred unearned compensation (32,722) (32,180) Accumulated other comprehensive income 53,888 66,573 ---------- ---------- Total shareholders' equity 2,085,426 2,065,994 ---------- ---------- Total liabilities and shareholders' equity $2,568,687 $2,572,346 ---------- ---------- Molex Incorporated Condensed Consolidated Statements of Income (Unaudited - In thousands, except per share data) Three Months Ended September 30, ------------------------- 2004 2003 ---------- ---------- Net Revenue $ 640,230 $ 496,763 Cost of sales 411,558 328,739 ---------- ---------- GROSS PROFIT 228,672 168,024 ---------- ---------- Selling, general and administrative expenses: Selling 54,020 44,416 General and administrative 102,192 83,048 Total selling, general and ---------- ---------- administrative expenses 156,212 127,464 ---------- ---------- INCOME FROM OPERATIONS 72,460 40,560 Other (income) expense: Equity income (2,029) (2,183) (Gain)/loss on investments (1,152) - Interest, net (925) (1,235) ---------- ---------- Total other (income) expense (4,106) (3,418) INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 76,566 43,978 Income taxes and minority interest 20,924 11,916 ---------- ---------- NET INCOME $ 55,642 $ 32,062 ---------- ---------- EARNINGS PER SHARE: Basic $0.29 $0.17 Diluted $0.29 $0.17 AVERAGE COMMON SHARES OUTSTANDING: Basic 188,763 190,679 Diluted 190,617 192,372 CASH DIVIDENDS PER SHARE $0.0375 $0.025