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8-K - 8-K - MOLEX INCd615944d8k.htm
EX-99.2 - EX-99.2 - MOLEX INCd615944dex992.htm

Exhibit 99.1

 

LOGO

CONTACT:

Steve Martens, VP Investor Relations

Molex Incorporated

630-527-4344

For Immediate Release

MOLEX REPORTS REVENUE AND EPS ABOVE GUIDANCE

Lisle, Illinois – October 23, 2013 — Molex Incorporated (NASDAQ: MOLX and MOLXA), a global electronic components company, today reported results for its first quarter ended September 30, 2013.

First Quarter Results

 

     Three Months Ended  
     Sep 30,      Jun 30,      Sep 30,  
USD millions, except per share data    2013      2013      2012  

Net revenue

   $ 936.4       $ 882.9       $ 916.9   

Net income

     84.1         57.1         71.3   

Earnings per share

     0.46         0.32         0.40   

Net revenue for the September 2013 quarter was $936.4 million, an increase of 6.1% from the June 2013 quarter and an increase of 2.1% from the September 2012 quarter. In local currencies, net revenue increased 6.1% compared with the June 2013 quarter and 4.0% compared with the September 2012 quarter. Orders for the September 2013 quarter were $939.1 million, an increase of 6.7% from the June 2013 quarter and a decrease of 0.5% from the September 2012 quarter.

Net income for the September 2013 quarter was $84.1 million, an increase of 47.1% from the June 2013 quarter and an increase of 17.9% from the September 2012 quarter. Earnings per share was $0.46 for the September 2013 quarter, $0.32 for the June 2013 quarter and $0.40 for the September 2012 quarter. Net income for the September 2013 quarter was impacted by an after-tax charge of $5.4 million ($0.03 per share) for costs associated with the pending merger with Koch Industries.

“Continued improvement in our core markets drove solid sequential revenue growth during the September quarter, as we exceeded the top end of our guidance range for both revenue and earnings per share. The automotive, telecom and mobile devices markets were very strong during the quarter, and are areas where Molex has exceptional technology and a breadth of innovative product offerings,” commented Martin P. Slark, Chief Executive Officer. “Higher revenue, favorable product mix, lower material costs, and increased equipment utilization drove margins and earnings per share above expectation, despite merger-related expenses.”

 

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Other financial highlights for the quarter ended September 30, 2013:

 

   

Gross profit margin was 32.3%, compared with 29.1% in the June 2013 quarter and 29.3% in the September 2012 quarter.

 

   

SG&A expense was $179.4 million, compared with $174.0 million in the June 2013 quarter and $163.1 million in the September 2012 quarter. The current quarter includes $8.0 million of pre-tax costs associated with the pending merger. Excluding the merger-related costs, SG&A expense would be $171.4 million or 18.3% of revenue.

 

   

Backlog was $471.6 million, an increase of 4.2% from the June 2013 quarter and an increase of 5.9% from the September 2012 quarter.

 

   

The book-to-bill ratio was 1 to 1 compared with 1 to 1 for the June 2013 quarter and 1.03 to 1 for the September 2012 quarter.

 

   

Capital expenditures were $47.0 million or 5.0% of revenue.

 

   

Inventory days outstanding was 88 days compared with 84 days in the June 2013 quarter and 84 days in the September 2012 quarter.

 

   

Accounts receivable days outstanding was 68 days compared with 69 days in the June 2013 quarter and 69 days in the September 2012 quarter.

 

   

The effective tax rate was 29.0%, which included a $1.2 million benefit due to the release of a valuation reserve resulting from improved operating performance.

Merger Agreement

On September 9, 2013, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Koch Industries, Inc. which, if completed, will result in Molex stockholders receiving $38.50 per share in cash or a total purchase price of approximately $7.2 billion. Final consideration will also include a dividend adjustment amount.

The transaction is subject to customary closing conditions, approval by the holders of a majority of common voting shares (Common Stock and Class B Common Stock, voting separately as a class) and regulatory approvals, but is not subject to any condition with regard to the financing of the transaction. Additional details are included in the Company’s 2013 Proxy Statement.

The Annual Meeting of Stockholders has been scheduled for November 15, 2013, and regulatory approvals are pending with the following jurisdictions: the European Union, China, Israel, Japan, Mexico, South Korea, Turkey and Ukraine.

Earnings Conference Call Information

A conference call will be held on Wednesday, October 23, 2013 at 8:30 a.m. central time. Please dial (888) 680-0865 to participate in the call. International callers should dial (617) 213-4853. Please dial in at least five minutes prior to the start of the call and refer to participant pass code 94153617. Internet users will be able to access the webcast, 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 10:30 a.m. central time at (888) 286-8010 or (617) 801-6888 / pass code 49270509.

 

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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 “expect,” “anticipate,” “outlook,” “forecast,” “could,” “project,” “intend,” “plan,” “continue,” “believe,” “seek,” “estimate,” “should,” “may,” “assume,” “potential,” variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are based on currently available information. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Respective risks, uncertainties and assumptions that could affect the outcome or results of operations are described in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2013, which is incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission. Among other risks and uncertainties, there can be no guarantee that the pending merger with Koch Industries, Inc. will be completed, or if it is completed, the time frame in which it will be completed. The pending merger is subject to the satisfaction of certain conditions contained in the Merger Agreement. Pursuing the pending merger could disrupt certain of our current plans, operations, business, and employee relationships. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied, or forecast by our forward-looking statements. Reference is made in particular to forward-looking statements regarding growth strategies, industry trends, global economic conditions, success of customers, cost of raw materials, value of inventory, currency exchange rates, labor costs, protection of intellectual property, cost reduction initiatives, acquisition synergies, manufacturing strategies, product development introduction and sales, regulatory changes, competitive strengths, natural disasters, unauthorized access to data, government investigations and outcomes of legal proceedings. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions, or otherwise.

Molex Incorporated is a 75-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. Based in Lisle, Illinois, USA, the Company operates 45 manufacturing locations in 17 countries. The Molex website is www.molex.com.

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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 (MOL, MOLA). 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)

 

     Sep 30,      Jun 30,  
     2013      2013  
     (Unaudited)         
ASSETS   

Current assets:

     

Cash and cash equivalents

   $ 665,156       $ 711,561   

Marketable securities

     11,083         10,378   

Accounts receivable, less allowances of $41,376 and $40,855, respectively

     736,983         703,434   

Inventories

     580,481         531,810   

Deferred income taxes

     54,100         54,163   

Other current assets

     39,901         32,538   
  

 

 

    

 

 

 

Total current assets

     2,087,704         2,043,884   

Property, plant and equipment, net

     1,128,494         1,114,092   

Goodwill

     231,050         191,053   

Non-current deferred income taxes

     51,735         52,543   

Other assets

     187,034         185,282   
  

 

 

    

 

 

 

Total assets

   $ 3,686,017       $ 3,586,854   
  

 

 

    

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY   

Current liabilities:

     

Short-term borrowings and current portion of long-term debt

   $ 42,458       $ 54,283   

Accounts payable

     354,565         347,700   

Accrued expenses:

     

Salaries, commissions and bonuses

     123,729         113,433   

Other

     144,866         127,652   

Income taxes payable

     20,833         15,966   
  

 

 

    

 

 

 

Total current liabilities

     686,451         659,034   

Other non-current liabilities

     20,702         18,382   

Accrued pension and other postretirement benefits

     74,431         76,275   

Long-term debt

     315,000         310,000   
  

 

 

    

 

 

 

Total liabilities

     1,096,584         1,063,691   
  

 

 

    

 

 

 

Commitments and contingencies

     

Total stockholders’ equity

     2,589,433         2,523,163   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 3,686,017       $ 3,586,854   
  

 

 

    

 

 

 

 

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Molex Incorporated

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share data)

 

     Three Months Ended  
     Sep 30,  
     2013     2012  

Net revenue

   $ 936,367      $ 916,921   

Cost of sales

     633,816        648,504   
  

 

 

   

 

 

 

Gross profit

     302,551        268,417   
  

 

 

   

 

 

 

Selling, general and administrative

     179,429        163,121   

Unauthorized activities in Japan

     —          2,561   
  

 

 

   

 

 

 

Total operating expenses

     179,429        165,682   
  

 

 

   

 

 

 

Income from operations

     123,122        102,735   

Interest expense, net

     (1,827     (810

Other (expense) income, net

     (2,918     1,196   
  

 

 

   

 

 

 

Total other (expense) income, net

     (4,745     386   
  

 

 

   

 

 

 

Income before income taxes

     118,377        103,121   

Income taxes

     34,298        31,807   
  

 

 

   

 

 

 

Net income

   $ 84,079      $ 71,314   
  

 

 

   

 

 

 

Earnings per share:

    

Basic

   $ 0.47      $ 0.40   

Diluted

   $ 0.46      $ 0.40   

Dividends declared per share

   $ 0.24      $ 0.22   

Average common shares outstanding:

    

Basic

     178,247        176,621   

Diluted

     181,545        178,564   

 

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Molex Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

     Three Months Ended  
     Sep 30,  
     2013     2012  

Operating activities:

    

Net income

   $ 84,079      $ 71,314   

Add (deduct) non-cash items included in net income:

    

Depreciation and amortization

     57,245        57,742   

Share-based compensation

     6,195        6,160   

Other non-cash items

     (206     3,767   

Changes in assets and liabilities:

    

Accounts receivable

     (14,881     (7,903

Inventories

     (32,900     (28,902

Accounts payable

     (1,359     49,569   

Other current assets and liabilities

     10,521        4,326   

Other assets and liabilities

     (9,843     11,331   
  

 

 

   

 

 

 

Cash provided from operating activities

     98,851        167,404   
  

 

 

   

 

 

 

Investing activities:

    

Capital expenditures

     (47,018     (69,413

Acquisitions

     (62,993     —     

Proceeds from sales of property, plant and equipment

     131        1,914   

Proceeds from sales or maturities of marketable securities

     1,789        3,168   

Purchases of marketable securities

     (2,574     (4,099

Insurance proceeds and other investing activities

     (920     9,722   
  

 

 

   

 

 

 

Cash used for investing activities

     (111,585     (58,708

Financing activities:

    

Proceeds from revolving credit facility, short-term loans and debt

     63,510        10,000   

Payments on revolving credit facility, short-term loans and debt

     (70,557     (41,611

Cash dividends paid

     (42,723     (38,827

Exercise of stock options

     7,680        1,715   

Other financing activities

     (1,112     (1,026
  

 

 

   

 

 

 

Cash used for financing activities

     (43,202     (69,749

Effect of exchange rate changes on cash

     9,531        9,608   
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (46,405     48,555   

Cash and cash equivalents, beginning of period

     711,561        637,417   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 665,156      $ 685,972   
  

 

 

   

 

 

 

 

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