EX-99.1 3 f7q3ex991.htm EXHIBIT 99.1 PRESS RELEASE MOLEX 8-K FY07Q3 / Exhibit 99.1 Press Release
Exhibit 99.1
 






  

   

     

           Contact:  Neil Lefort

Senior Vice President

(630) 527-4344



MOLEX REPORTS RESULTS FOR 2007 THIRD FISCAL QUARTER

                                                             


Lisle, IL, USA – April 19, 2007 -- Molex Incorporated (NASDAQ: MOLX and MOLXA), a global electronic components company, today reported results for its 2007 third fiscal quarter.    


2007 Third Fiscal Quarter Results

Revenue for the quarter ended March 31, 2007 was $807.0 million, an increase of 12.0% over the same period last fiscal year.  Revenue in local currencies rose 9.2%, as currency translation increased revenue by $20.2 million, compared with last year’s March quarter.  Revenue for the quarter included $58.3 million from Woodhead Industries, which the Company acquired on August 10, 2006.


Net income for the March quarter was $65.3 million, an increase of 6.7% over the same period last fiscal year.  Earnings per share were $0.35, an increase of 6.1% over the same period last fiscal year.  Currency translation increased net income by $0.6 million in the current quarter compared with last year’s March quarter.

 

Martin P. Slark, CEO and Vice-Chairman commented, “The March quarter financial results were within our expectations.  We were pleased with our growth in the industrial, telecom infrastructure, automotive and medical electronics markets.  The remaining major markets were impacted by adjustments to customer inventory levels, as well as the holiday period in Asia-Pacific South. We believe that these inventory adjustments have been substantially completed, and we were encouraged that total bookings in the month of March were at the highest monthly level since September, 2006.”

“We are making good progress on several major initiatives. The Woodhead integration is on schedule.  During the quarter Woodhead achieved sequential growth in both revenue and operating income.  We are moving toward the launch of our new global organization on July 1, 2007.  As we said when we announced this initiative on August 2, 2006, we believe that this new structure will help us leverage our resources and streamline our operations.  We are in the process of identifying what we believe are significant opportunities to reduce cost and to improve return on invested capital.  We plan to review and quantify these cost savings, as well as any related restructuring charge, as part of our next earnings release currently scheduled for August 1, 2007.”






Revenue as compared to the prior year quarter increased 4% in the consumer market, 1% in the telecom market (including both infrastructure and mobile), and 2% in the data market.  Revenue in the industrial market, including the acquisition of Woodhead Industries, increased 99% and by 10% without the inclusion of Woodhead.  Revenue in the automotive market increased 14% as a result of new project wins and increased penetration of customers in the Asia-Pacific regions.

Gross profit margin for the March quarter was 31.1%, compared with 30.9% in the December quarter, and 33.7% in last year’s March quarter.  The year over year decline is due primarily to higher raw material costs, increases in inventory reserves, and costs associated with the closure of manufacturing operations in Brazil.  SG&A expense for the March quarter was down $5.2 million when compared with the December quarter.  SG&A expense for the March quarter was 20.1% of revenue, compared with 20.0% in the December quarter, and 21.8% in last year’s March quarter.  The sequential decrease in SG&A expense resulted primarily from cost containment activities and reduced foreign exchange transaction losses.  


The effective tax rate for the March quarter was 29.2%, consistent with the fiscal 2007 full year estimated tax rate.  Net profit margin was 8.1%, compared with 8.5% in last year’s March quarter.  Return on invested capital increased to 10.5%, when compared with 9.7% in last year’s March quarter, a result of increased net income and improvements in capital efficiency.   


Orders and Backlog


Orders for the third quarter were $783 million, an increase of 1.8% over the prior year March quarter, and an increase of 0.5% from the December quarter.  The Company’s order backlog on March 31, 2007 was $346 million, a decrease of 2.4% compared with the prior year March quarter, and a decrease of 8.0% from the December quarter. Woodhead Industries contributed bookings of $60.7 million to the current quarter, and had a backlog of $22 million on March 31, 2007.


Research and Development and Capital Spending


Research and development expenditures for the March quarter were $40.6 million, compared with $34.9 million in the prior year March quarter.  Capital expenditures for the March quarter were $63.9 million, compared with $62.7 million in the prior year March quarter.  Depreciation expense was $58.3 million, compared with $52.9 million in the prior year March quarter.  The increase in R&D and capital spending reflects the continued investment in new product development and production capacity to support revenue growth.

 

Stock Buyback Actions


During the quarter, the Company repurchased 280,000 shares of Class A Common Stock (MOLXA) at a total cost of $7.4 million.  The Board of Directors previously authorized the repurchase of up to $250.0 million of common stock through September 30, 2007. As of March 31, 2007, approximately $30.1 million was remaining under this authorization.



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Nine-Month Results


Revenue for the nine-months ended March 31, 2007 was $2.5 billion, an increase of 19.1% compared with the prior fiscal year.  Revenue for the nine-month period included $147.9 million from Woodhead Industries.  Net income of $208 million, or $1.12 per share, increased 25.6% compared with last year’s net income of $165.6 million, or $0.88 per share.  For the nine-month period currency translation increased revenue by $49.4 million and net income by $1.1 million.  


2007 Fourth Fiscal Quarter Outlook


The Company estimates that revenue for the fourth fiscal quarter ending June 30, 2007 will be in a range of $810 to $850 million, and that earnings per share will be in a range of $0.34 to $0.38.


Forward-Looking Statements


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.  Forward-looking statements are based on currently available information and include, among others, the discussion under “2007 Fourth Fiscal Quarter Outlook”, as well as statements regarding the integration of, and potential synergies from the Woodhead acquisition, customer demand and inventory levels and future growth expectations.  These risks and uncertainties include those associated with the operation of our business, including the risk that customer demand will decrease either temporarily or permanently, whether due to the Company's actions or the demand for the Company's products, and that the Company may not be able to respond through cost reductions in a timely and effective manner; price cutting, new product introductions and other actions by our competitors; fluctuations in the costs of raw materials that the Company is not able to pass through to customers because of existing contracts or market factors; the challenges attendant to plant closings and restructurings, including the difficulty of predicting plant closing and relocation costs, the difficulty of commencing or increasing production at existing facilities, and the reactions of customers, governmental units, employees and other groups; the risks associated with the integration of the Woodhead acquisition; the challenges attendant to plant construction; and the ability to realize cost savings from restructuring activities, as well as difficulty implementing the transition to a Market-Focused Global Organization.


Other risks and uncertainties are set forth in Item 1A “Risk Factors” of its Form 10-K for the year ended June 30, 2006, which is incorporated by reference and in reports that Molex files or furnishes with the Securities and Exchange Commission. This release speaks only as of its date and Molex disclaims any obligation 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.



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Earnings Conference Call Information


A conference call will be held on Thursday, April 19, 2007 at 4:00 pm central.  Please dial (866) 700-0161 to participate in the conference call.  International callers please dial (617) 213-8832.  Please dial in at least five minutes prior to the start of the call and refer to participant passcode 86040975.  Internet users will be able to access the web-cast, including slide materials, live and in replay in the “Investors” section of the Company’s website at www.molex.com.  A 24-hour telephone replay will be available at approximately 6:00 pm central at (888) 286-8010 or (617) 801-6888 / passcode 51653309.


Other Investor Events


May 1, 2007 / Merrill Lynch Tech Gathering in New York


May 15, 2007 / Credit Suisse Semiconductor & Supply Chain Conference in New York


May 22, 2007 / 35th Annual JPMorgan Technology Conference in Boston


June 20, 2007 / William Blair & Company Growth Stock Conference in Chicago


August 1, 2007 / Molex Incorporated FY07 Q4 Press Release and Conference Call


August 2, 2007 / Molex Incorporated 2007 Analysts Meeting in Rosemont, Illinois



Note:  The Company’s SEC filings, as well as news releases and other supplementary financial data are available on the Company’s website at www.molex.com.


Molex Incorporated is a 68-year-old manufacturer of electronic components, including electrical and fiber optic interconnection products and systems, switches and integrated products, with 65 plants in 20 countries throughout the world.


#   #   #


Editor’s note:  Molex is traded on the NASDAQ Global Select Market (MOLX and MOLXA) in the United States and on the London Stock Exchange.  The Company’s voting common stock (MOLX) is included in the S&P 500 Index.  





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Molex Incorporated

Condensed Consolidated Balance Sheets

(in thousands)  


    
 

March 31,

 

June 30,

  

2007

 

2006

 

 (Unaudited)

   

ASSETS

Current assets:

     

Cash and cash equivalents

 $

319,574 

 

 $

332,815 

Marketable securities

 

53,505 

  

152,728 

Accounts receivable, less allowances of $31,542 and $26,513, respectively

 

692,904 

  

660,665 

Inventories

 

415,334 

  

347,312 

Other current assets

 

68,116 

  

54,713 

 

Total current assets

 

1,549,433 

  

1,548,233 

Property, plant and equipment, net

 

1,131,537 

  

1,025,852 

Goodwill

 

322,237 

  

149,458 

Other assets

 

274,056 

  

250,877 

 

Total assets

 $

3,277,263 

 

 $

2,974,420 

       

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     

Accounts payable

 $

283,446 

 

 $

305,876 

Accrued expenses

 

152,075 

  

189,390 

Other current liabilities

 

92,118 

  

99,546 

 

Total current liabilities

 

527,639 

  

594,812 

Other non-current liabilities

 

18,864 

  

14,709 

Accrued pension and postretirement benefits

 

79,833 

  

75,055 

Long-term debt

 

134,601 

  

7,093 

Minority interest in subsidiaries

 

1,103 

  

882 

 

Total liabilities

 

762,040 

  

692,551 

       

Commitments and contingencies

 

– 

  

– 

       

Total stockholders’ equity

 

2,515,223 

  

2,281,869 

 

Total liabilities and stockholders’ equity

 $

3,277,263 

 

 $

2,974,420 

       


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Molex Incorporated

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share data)


             

 

 

Three Months Ended

 

Nine Months Ended

  

March 31,

 

March 31,

  

2007

 

2006

 

2007

 

2006

             

Net revenue

$

807,014 

 

$

720,327 

 

$

2,474,026 

 

$

2,077,490 

Cost of sales

 

556,026 

  

477,929 

  

1,695,120 

  

1,393,477 

Gross profit

 

250,988 

  

242,398 

  

778,906 

  

684,013 

             

Selling, general and administrative

 

162,471 

  

157,178 

  

496,463 

  

452,888 

Restructuring costs

 

– 

  

4,287 

  

– 

  

15,674 

Total operating expenses

 

162,471 

  

161,465 

  

496,463 

  

468,562 

             

Income from operations

 

88,517 

  

80,933 

  

282,443 

  

215,451 

             

Equity income

 

1,763 

  

2,020 

  

5,515 

  

8,531 

Gain (loss) on investment

 

(4)

  

1 

  

(38)

  

115 

Interest income, net

 

2,080 

  

2,653 

  

6,169 

  

7,625 

Other income, net

 

3,839 

  

4,674 

  

11,646 

  

16,271 

             

Income before income taxes and minority interest

 

92,356 

  

85,607 

  

294,089 

  

231,722 

             

Income taxes

 

26,978 

  

24,388 

  

85,874 

  

66,004 

Minority interest

  

60 

  

35 

  

169 

  

98 

             

Net income

$

65,318 

 

$

61,184 

 

$

208,046 

 

$

165,620 

             

Earnings per share:

           
 

Basic  

$

0.36 

 

$

0.33 

 

$

1.13 

 

$

0.89 

 

Diluted   

$

0.35 

 

$

0.33 

 

$

1.12 

 

$

0.88 

             

Dividends declared per share  

$

0.0750 

 

$

0.0500 

 

$

0.2250 

 

$

0.1500 

             

Average common shares outstanding:

           
 

Basic

 

183,985 

  

184,658 

  

183,922 

  

186,019 

 

Diluted

 

185,271 

  

186,303 

  

185,591 

  

187,846 



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Molex Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


  

Nine Months Ended

  

March 31,

  

2007

 

2006

       

Operating activities:

     

Net income

$

208,046 

 

$

165,620 

Add non-cash items included in net income:

     
 

Depreciation and amortization

 

177,138 

  

160,411 

 

Share-based compensation

 

19,616 

  

21,782 

 

Other non-cash items

 

4,763 

  

8,832 

Changes in assets and liabilities:

     
 

Accounts receivable

 

24,488 

  

(84,772)

 

Inventories

 

(29,724)

  

(33,505)

 

Accounts payable

 

(56,396)

  

4,923 

 

Other current assets and liabilities

 

(64,444)

  

15,799 

 

Other assets and liabilities

 

(8,233)

  

6,073 

Cash provided from operating activities

 

275,254 

  

265,163 

       

Investing activities:

     

Capital expenditures

 

(219,435)

  

(193,844)

Proceeds from sales or maturities of marketable securities

 

4,449,264 

  

1,069,285 

Purchases of marketable securities

 

(4,349,497)

  

(994,744)

Acquisitions

 

(237,207)

  

– 

Other investing activities

 

7,466 

  

(18,919)

Cash used for investing activities

 

(349,409)

  

(138,222)

       

Financing activities:

     

Proceeds from revolving credit facility

 

44,000 

  

– 

Payments on revolving credit facility

 

(44,000)

  

– 

Proceeds from issuance of long-term debt

 

131,045 

  

– 

Payments of long-term debt

 

(26,570)

  

(2,127)

Cash dividends paid

 

(41,382)

  

(26,076)

Exercise of stock options

 

7,967 

  

11,905 

Purchase of treasury stock

 

(19,967)

  

(135,044)

Other financing activities

 

384 

  

(1,994)

Cash provided by (used for) financing activities

 

51,477 

  

(153,336)

       

Effect of exchange rate changes on cash

 

9,437 

  

5,147 

Net decrease in cash and cash equivalents

 

(13,241)

  

(21,248)

Cash and cash equivalents, beginning of period

 

332,815 

  

309,756 

Cash and cash equivalents, end of period

$

319,574 

 

$

288,508 

       


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