Molex Incorporated (NASDAQ: MOLX and MOLXA), a global electronic
components company, today reported financial results for the
quarter ended September 30, 2009 that exceeded previously issued
guidance.
Three Months Ended
Sept. 30, June 30, Sept. 30,
USD millions, except per share
data
2009 2009 2008
Revenue
$
674.0
$
570.6
$
839.0
Net income (loss) (11.6 ) (219.7 ) 44.3 Earnings (loss) per share
(0.07 ) (1.27 ) 0.25 Non-GAAP net income (loss)* 31.7 (16.5 ) 60.0
Non-GAAP earnings (loss) per share* 0.18 (0.09 ) 0.34
*A reconciliation of non-GAAP
measures can be found on page 4
Revenue for the September 2009 quarter of $674.0 million
exceeded the high end of the outlook provided on September 21, 2009
of $665.0 million and increased 18% from the June 2009 quarter. The
increase in local currency was 16%. Orders for the quarter were
$724.4 million, an increase of 26% from the June 2009 quarter.
Recovery in the data, consumer electronics and telecom markets
exceeded expectations.
Net loss for the September 2009 quarter was $11.6 million, or
$0.07 per share, compared with a net loss of $219.7 million, or
$1.27 per share, for the June 2009 quarter. The range for the
earnings per share outlook provided on September 21, 2009 was a
loss of $0.08 to $0.12 per share.
On a non-GAAP basis, net income for the September 2009 quarter
was $31.7 million, or $0.18 per share, compared with a net loss of
$16.5 million, or $0.09 per share, in the June 2009 quarter. This
result exceeded the upper end of the outlook for non-GAAP earnings
per share of $0.16 per share. For the quarter, non-GAAP net income
excluded a pretax restructuring charge of $55.9 million ($38.5
million after-tax or $0.22 per share) and a tax adjustment related
to stock compensation of $4.8 million or $0.03 per share. The tax
adjustment is primarily due to the reversal of a tax benefit for a
significant number of employee stock options that expired
unexercised during the quarter.
Molex Chief Executive Officer, Martin P. Slark, commented on the
quarter, “We continue to see month over month improvements in
revenue and orders in virtually all of our key markets. The
increase in orders of 26% from the June quarter was the second
consecutive quarter of increasing orders and gives us strong
momentum going into the December quarter. Order rates in two key
markets, consumer electronics and data, surpassed prior year
levels. As in the June quarter, we saw significant operating
leverage as gross margin benefited from the increase in revenue and
ongoing cost containment actions. This is strong evidence that our
restructuring program is yielding the intended results. Looking
forward, we are assessing the sustainability of the recovery as
well as the impact of rising raw material costs and the weaker
dollar.”
Other financial highlights for
the quarter ended September 30, 2009:
- Gross profit margin improved to
28.4%, compared with 24.1% in the June 2009 quarter.
- SG&A expense was $145.6
million, an increase of $8.9 million from the June 2009 quarter;
unfavorable currency translation contributed $3.4 million to the
increase.
- Capital expenditures were $45.6
million or 6.8% of revenue.
- The effective tax rate was
(52.2)%. Excluding the impact from restructuring costs, asset
impairments and the tax adjustment, the tax rate was 34.2%.
- The Book-to-Bill ratio was
1.07.
- Backlog was $304.2 million, an
increase of $51.2 million from the June 2009 quarter.
- Cash flow from operations was
$70.6 million.
- The term loan in Japan was
refinanced during the quarter for a 3-year term at a fixed interest
rate of 1.64%. The amount of the loan is 20 billion Japanese
Yen.
Outlook
The Company estimates revenue in a range of $680 to $720 million
for the December 2009 quarter. At this level of revenue, the
Company expects earnings per share in a range of $0.11 to $0.15,
assuming an effective tax rate of 30%. Included in these estimates
is a pretax restructuring charge of approximately $19 million or
$0.07 per share after-tax. Due to the limited visibility caused by
current economic conditions, the Company will not provide full year
guidance at this time.
Earnings Conference Call
Information
A conference call will be held on Tuesday, October 27, 2009 at
4:00 pm central. Please dial (888) 680-0865 to participate in the
conference call. International callers please dial (617) 213-4853.
Please dial in at least five minutes prior to the start of the call
and refer to participant pass code 50811125. 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 48-hour telephone replay will be available at
approximately 6:00 pm central at (888) 286-8010 or (617) 801-6888 /
pass code 27765123.
Other Investor
Events
October 30, 2009 –
Molex Incorporated Annual Meeting of Stockholders in Lisle, IL
December 2, 2009 –
NASDAQ OMX 23rd Investor Program in London
December 3, 2009 –
Credit Suisse 2009 Annual Technology Conference in Scottsdale,
AZ
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. Words such as “anticipates,” “expects,” “believes,”
“intends,” “plans,” “projects,” “estimates,” and similar
expressions are used to identify these forward-looking statements.
Forward-looking statements are based on currently available
information and include, among others, the discussion under
“Outlook.” These statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions
including 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; the risk that the value of our inventory may
decline; 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 availability of credit
and general market liquidity; fluctuations in currency exchange
rates; the financial condition of our customers; 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 challenges attendant to plant
construction; and the ability to realize cost savings from
restructuring activities.
Other factors, risks and uncertainties are set forth in Item 1A
“Risk Factors” of the Company’s Form 10-K for the year ended June
30, 2009 which is incorporated by reference and in other reports
that Molex files or furnishes with the Securities and Exchange
Commission. Forward-looking statements are based upon assumptions
as to future events that may not prove to be accurate. Actual
outcomes and results may differ materially from what is expressed
in these forward-looking statements. As a result, 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.
Molex Incorporated is a 71-year-old global manufacturer of
electronic, electrical and fiber optic interconnection systems.
Based in Lisle, Illinois, USA, the Company operates 41
manufacturing locations in 17 countries. The Molex website is
www.molex.com.
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.
Molex Incorporated
Non-GAAP Measures
(in thousands, except per share
data)
Sept. 30, June 30, Sept. 30,
2009
2009 2008 Three months ended: Net income (loss) $ (11,595 )
$ (219,740 ) $ 44,297 Restructuring costs and asset impairments
38,547 32,224 15,666 Tax adjustment – stock compensation 4,795 - -
Goodwill impairment - 171,000 - Non-GAAP net income (loss) $
31,747 $ (16,516 ) $ 59,963 Earnings (loss)
per share $ (0.07 ) $ (1.27 )
$
0.25 Restructuring costs and asset impairments 0.22 0.19 0.09 Tax
adjustment – stock compensation 0.03 - - Goodwill impairment -
0.99 - Non-GAAP earnings (loss) per share $ 0.18 $ (0.09 ) $
0.34
Non-GAAP net income (loss) and non-GAAP earnings (loss) per
share are non-GAAP financial measures. We refer to Non-GAAP net
income (loss) and non-GAAP earnings (loss) per share to describe
earnings and earnings per share excluding the items referenced
above. We believe that Non-GAAP net income (loss) and non-GAAP
earnings (loss) per share provide useful information to investors
because both provide information about the estimated financial
performance of Molex’s ongoing business. Non-GAAP net income (loss)
and non-GAAP earnings (loss) per share are used by management in
its financial and operational decision-making and evaluation of
overall operating performance and segment level core operating
performance. Non-GAAP net income (loss) and non-GAAP earnings
(loss) per share may be different from similar measures used by
other companies.
Molex Incorporated
Condensed Consolidated Balance
Sheets
(in thousands) Sept. 30, June 30, 2009 2009
(Unaudited)
ASSETS
Current assets: Cash and cash equivalents $ 520,999 $ 424,707
Marketable securities 9,132 43,234 Accounts receivable, less
allowances of $37,850 and $32,593 respectively 614,900 528,907
Inventories 350,220 354,337 Deferred income taxes 25,068 27,939
Other current assets 88,679 68,449 Total current
assets 1,608,998 1,447,573 Property, plant and equipment, net
1,093,780 1,080,417 Goodwill 127,372 128,494 Non-current deferred
income taxes 105,094 89,332 Other assets 192,205
196,341 Total assets $ 3,127,449 $ 2,942,157
Liabilities and Stockholders’
Equity
Current liabilities: Current portion of long-term debt and
short-term loans $ 16,777 $ 224,340 Accounts payable 308,514
266,633 Accrued expenses 277,399 218,429 Income taxes payable
14,642
4,750
Total current liabilities 617,332 714,152 Other non-current
liabilities 20,332 21,862 Accrued pension and postretirement
benefits 118,143 113,268 Long-term debt 303,190
30,311 Total liabilities 1,058,997 879,593
Commitments and contingencies Stockholders’ equity: Common
stock 11,164 11,138 Paid-in capital 610,476 601,459 Retained
earnings 2,317,910 2,355,991 Treasury stock (1,091,755 )
(1,089,322
)
Accumulated other comprehensive income 220,657
183,298 Total stockholders’ equity 2,068,452
2,062,564 Total liabilities and stockholders’ equity $ 3,127,449 $
2,942,157
Molex Incorporated
Condensed Consolidated
Statements of Income
(Unaudited) (in thousands, except per share data)
Three Months Ended
September 30, 2009 2008 Net revenue $ 674,033 $ 838,985 Cost
of sales 482,614 589,513 Gross profit 191,419
249,472 Selling, general and administrative
145,628 166,351 Restructuring costs and asset impairments
55,894 21,778 Total operating expenses 201,522
188,129 Income (loss) from operations (10,103 ) 61,343 Interest
(expense) income, net (1,000 ) 1,193 Other income 3,484
2,607 Total other income, net 2,484 3,800
Income (loss) before income taxes (7,619 ) 65,143 Income taxes
3,976 20,846 Net (loss) income $ (11,595 ) $ 44,297
Earnings (loss) per share: Basic $ (0.07 ) $ 0.25 Diluted $
(0.07 ) $ 0.25 Dividends declared per share $ 0.1525 $ 0.1525
Average common shares outstanding: Basic 173,486 176,911 Diluted
173,486 177,594
Molex Incorporated
Condensed Consolidated
Statements of Cash Flows
(Unaudited) (in thousands)
Three Months Ended
September 30, 2009 2008 Operating activities: Net (loss)
income $ (11,595 ) $ 44,297 Add non-cash items included in net
(loss) income: Depreciation and amortization 60,589 63,513
Share-based compensation 7,092 6,230 Non-cash restructuring and
other costs, net 13,191 2,672 Other non-cash items 6,625 6,854
Changes in assets and liabilities, excluding the effects of foreign
Currency adjustment and acquisitions: Accounts receivable (72,586 )
(25,761 ) Inventories 1,482 (22,847 ) Accounts payable 32,131
(24,732 ) Other current assets and liabilities 35,551 47,090 Other
assets and liabilities (1,862 ) (8,340 ) Cash
provided from operating activities 70,618 88,976 Investing
activities: Capital expenditures (45,634 ) (45,292 ) Proceeds from
sales of property, plant and equipment 3,192 2,665 Proceeds from
sales or maturities of marketable securities 35,303 3,858 Purchases
of marketable securities (958 ) (2,834 ) Acquisitions, net of cash
acquired
-
(53,446 ) Other investing activities (355 ) (187 )
Cash used for investing activities (8,452 ) (95,236 )
Financing activities: Proceeds from revolving credit facility and
short term loans 90,000 58,000 Payments on revolving credit
facility (40,000 ) (15,000 ) Proceeds from issuance of long-term
debt
-
187 Payment of long-term debt (196 )
-
Cash dividends paid (26,486 ) (19,962 ) Exercise of stock options
266 983 Excess tax benefits from share-based compensation
-
426 Purchase of treasury stock
-
(38,846 ) Other financing activities (700 ) (766 )
Cash provided from (used for) financing activities 22,884 (14,978 )
Effect of exchange rate changes on cash 11,242
(15,248 ) Net increase (decrease) in cash and cash equivalents
96,292
(36,486
)
Cash and cash equivalents, beginning of period 424,707
475,507 Cash and cash equivalents, end of period $ 520,999 $
439,021
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