LISLE, Ill.--(BUSINESS WIRE)--
|Three Months Ended|
|Mar 31,||Dec 31,||Mar 31,|
USD millions, except per share data
|Earnings per share||0.25||0.39||0.36|
Net revenue for the March 2013 quarter was $852.9 million, a decrease of 11.9% from the December 2012 quarter and an increase of 1.9% from the March 2012 quarter. In local currencies, net revenue declined 11.5% compared with the December 2012 quarter and increased 3.0% compared with the March 2012 quarter. Orders for the March 2013 quarter were $909.2 million, a decrease of 1.1% from the December 2012 quarter and an increase of 4.2% from the March 2012 quarter.
Net income for the March 2013 quarter was $44.8 million or $0.25 per share, compared with $70.4 million, or $0.39 per share, for the December 2012 quarter and $64.9 million, or $0.36 per share, for the March 2012 quarter. The current quarter was impacted by the previously announced litigation settlement related to unauthorized activities in Japan, which reduced net income by $21.8 million ($13.9 million after-tax or $0.08 per share) representing amounts related to the settlement not previously accrued.
“Revenue in the March quarter was weaker than expected, largely due to the sharp reduction in demand from one customer for certain new programs that were launched in the September quarter and ramped significantly in the December quarter. The remainder of the business experienced a normal seasonal decline in revenue. We were able to mitigate the impact of lower revenue by closely managing manufacturing and operating costs,” stated Martin P. Slark, Chief Executive Officer. “Our backlog increased both sequentially and year over year and our order rate for the quarter was stable with sequential improvements in the automotive and industrial markets. The distribution channel was also stronger this quarter and we are optimistic that the remainder of calendar 2013 will provide more robust growth opportunities.”
Other financial highlights for the quarter ended March 31, 2013:
- Gross profit margin was 29.1%, compared with 29.9% in the December 2012 quarter and 30.5% in the March 2012 quarter.
- SG&A expense was $167.4 million, compared with $181.0 million in the December 2012 quarter and $163.9 million in the March 2012 quarter.
- Backlog was $463.0 million, an increase of 14.6% from the December 2012 quarter and an increase of 22.8% from the March 2012 quarter.
- The book-to-bill ratio for the March quarter was 1.07 to 1 compared with 0.95 to 1 for the December 2012 quarter and 1.04 to 1 for the March 2012 quarter.
- Capital expenditures were $55.9 million or 6.6% of revenue.
- Inventory days outstanding was 89 days compared with 83 days in the December 2012 quarter and 93 days in the March 2012 quarter.
- Accounts receivable days outstanding was 70 days compared with 67 days in the December 2012 quarter and 72 days in the March 2012 quarter.
- The effective tax rate was 23.6%. Excluding the impact from the Japan litigation settlement, the effective tax rate was 26.6%.
Japan Litigation Settlement
As previously announced on February 15, 2013, Molex and Mizuho Bank settled litigation regarding previously reported unauthorized loans. Pursuant to the settlement, Molex agreed to pay ¥17 billion ($182.8 million) and Mizuho Bank agreed to release Molex cash accounts and provisional attachments and to release Molex from any future claims. During the third quarter, the Company recognized a charge to income from operations of $21.2 million ($13.5 million after-tax) largely for interest expense and legal fees, and incurred related transaction costs charged to other income (expense) of $0.6 million ($0.4 million after-tax).
Increase in Cash Dividend
The Board of Directors has approved an increase in the quarterly cash dividend to $0.24 per share, an increase of 9.1% from the previous cash dividend of $0.22 per share. The increase is effective for the cash dividend payable on July 25, 2013 to shareholders of record on June 28, 2013, for each share of Common Stock (MOLX), Class A Common Stock (MOLXA) and Class B Common Stock, and will continue quarterly until further action by the Board.
Based upon current order rates and customer backlog, the Company estimates revenue in the range of $870 to $910 million for the June 2013 quarter. At this level of revenue, the Company expects earnings per share in the range of $0.33 to $0.37, assuming constant foreign currency rates, unchanged commodity prices and an effective tax rate in the range of 30% to 32%.
Earnings Conference Call Information
A conference call will be held on Tuesday, April 23, 2013 at 8:30 a.m. central time. Please dial (888) 679-8034 to participate in the call. International callers should dial (617) 213-4847. Please dial in at least five minutes prior to the start of the call and refer to participant pass code 58992005. 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 33101742.
Other Investor Events
May 8, 2013 / Jefferies 2013 Global Technology, Media and Telecom Conference in New York
June 13, 2013 / 33rd Annual William Blair Growth Stock Conference in Chicago
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 and include, among others, the discussion under “Outlook.” 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, 2012, and the Form 10-Q for the quarters ended September 30, 2012 and December 31, 2012, which are incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission.
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 forecasted 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, foreign 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, income tax fluctuations, 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 74-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. Based in Lisle, Illinois, USA, the Company operates 41 manufacturing locations in 15 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.
Condensed Consolidated Balance Sheets
|Mar. 31,||June 30,|
|Cash and cash equivalents||$||702,786||$||637,417|
|Accounts receivable, less allowances of $38,530 and $37,876, respectively||657,447||751,279|
|Income taxes receivable||18,628||-|
|Deferred income taxes||38,601||110,789|
|Other current assets||30,015||33,098|
|Total current assets||2,002,255||2,079,238|
|Property, plant and equipment, net||1,135,637||1,150,549|
|Non-current deferred income taxes||49,095||50,038|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|Current portion of short-term borrowings and long-term debt||$||88,725||$||104,933|
|Accrued liability for unauthorized activities in Japan||-||184,177|
|Income taxes payable||-||35,360|
|Total current liabilities||615,853||891,996|
|Other non-current liabilities||17,381||18,174|
|Accrued pension and other postretirement benefits||92,020||115,176|
|Commitments and contingencies|
|Total stockholders’ equity||2,521,572||2,436,125|
|Total liabilities and stockholders’ equity||$||3,561,826||$||3,611,503|
Condensed Consolidated Statements of Income
|(in thousands, except per share data)|
|Three Months Ended||Nine Months Ended|
|March 31,||March 31,|
|Cost of sales||604,326||581,904||1,931,395||1,819,822|
|Selling, general and administrative||167,384||163,853||511,533||496,151|
|Unauthorized activities in Japan||21,210||2,521||25,398||8,166|
|Total operating expenses||188,594||166,374||536,931||504,317|
|Income from operations||59,938||88,802||269,188||306,524|
|Interest (expense) income, net||(1,582||)||(1,212||)||(3,525||)||(4,697||)|
|Other income (expense)||265||1,561||(1,690||)||3,319|
|Total other (expense) income, net||(1,317||)||349||(5,215||)||(1,378||)|
|Income before income taxes||58,621||89,151||263,973||305,146|
|Earnings per share:|
|Dividends declared per share||$||0.2200||$||0.2000||$||0.6600||$||0.6000|
|Average common shares outstanding:|
Condensed Consolidated Statements of Cash Flows
|Nine Months Ended|
|Add non-cash items included in net income:|
|Depreciation and amortization||176,445||179,664|
|Other non-cash items||1,356||8,914|
|Changes in assets and liabilities:|
|Other current assets and liabilities||21,633||(4,747||)|
|Unauthorized activities in Japan||(165,813||)||-|
|Other assets and liabilities||(22,349||)||7,328|
|Cash provided from operating activities||234,490||430,378|
|Proceeds from sales of property, plant and equipment||15,189||3,373|
|Proceeds from sales or maturities of marketable securities||12,722||8,348|
|Purchases of marketable securities||(7,959||)||(8,881||)|
|Insurance proceeds and other investing activities||9,962||11,000|
|Cash used for investing activities||(229,370||)||(159,587||)|
|Proceeds from revolving credit facility, short-term loans and debt||441,401||75,000|
|Payments on revolving credit facility, short-term loans and debt||(277,434||)||(308,615||)|
|Net proceeds from issuance of long-term debt||-||149,521|
|Cash dividends paid||(116,706||)||(105,375||)|
|Exercise of stock options||9,894||6,867|
|Other financing activities||(3,233||)||(3,199||)|
|Cash provided by (used for) financing activities||53,922||(185,801||)|
|Effect of exchange rate changes on cash||6,327||(8,780||)|
|Net increase in cash and cash equivalents||65,369||76,210|
|Cash and cash equivalents, beginning of period||637,417||532,599|
|Cash and cash equivalents, end of period||$||702,786||$||608,809|
- Company Earnings
Steve Martens, VP Investor Relations