Molex Reports Results for 2007 Third Fiscal Quarter
(Interviews, 21 Apr 2007 )
Molex Inc., a global electronic components company, has reported results for its 2007 third fiscal quarter. Revenue for the quarter ended March 31, 2007 was $807 million, an increase of 12 percent over the same period last fiscal year. Revenue in local currencies rose 9.2 percent, 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 percent over the same period last fiscal year. Earnings per share were $0.35, an increase of 6.1 percent 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 percent in the consumer market, 1 percent in the telecom market (including both infrastructure and mobile), and 2 percent in the data market. Revenue in the industrial market, including the acquisition of Woodhead Industries, increased 99 percent and by 10 percent without the inclusion of Woodhead. Revenue in the automotive market increased 14 percent 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 percent, compared with 30.9 percent in the December quarter, and 33.7 percent 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 percent of revenue, compared with 20 percent in the December quarter, and 21.8 percent 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 percent, consistent with the fiscal 2007 full year estimated tax rate. Net profit margin was 8.1 percent, compared with 8.5 percent in last year's March quarter. Return on invested capital increased to 10.5 percent, when compared with 9.7 percent in last year's March quarter, a result of increased net income and improvements in capital efficiency.
