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