Molex Inc. Reports Operating Results (10-Q)
Molex Inc. has a market cap of $3.46 billion; its shares were traded at around $20.27 with a P/E ratio of 18.4 and P/S ratio of 1.2. The dividend yield of Molex Inc. stocks is 3.1%.MOLX is in the portfolios of James Barrow of Barrow, Hanley, Mewhinney & Strauss, Dodge & Cox, Paul Tudor Jones of The Tudor Group, Bruce Kovner of Caxton Associates, Arnold Van Den Berg of Century Management, Richard Aster Jr of Meridian Fund, Chuck Royce of Royce& Associates, Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Highlight of Business Operations: On June 30, 2010 we completed a multi-year restructuring plan designed to reduce costs and to improve return on invested capital in connection with a new global organization that was effective July 1, 2007. A majority of the plan related to facilities located in North America, Europe and Japan and, in general, the movement of manufacturing activities from these plants to lower-cost facilities. Restructuring costs during fiscal 2010 were $116.9 million, consisting of $79.6 million of severance costs and $37.3 million for asset impairments.
Based on the results of the completed investigation, we recorded for accounting purposes an accrued liability for the effect of unauthorized activities pending the resolution of these matters including the legal proceedings reported in Note 12. Cumulative investigative and legal costs through September 30, 2010 were $10.3 million, including $5.5 million in the first quarter of fiscal 2011. We believe these unauthorized activities and related losses occurred from at least as early as 1988 through 2010, with approximately $167.4 million of losses occurring prior to June 30, 2007. The accrued liability for these potential net losses was $175.1 million as of September 30, 2010, including $9.3 million in foreign currency translation, which was recorded as a component of other comprehensive income. To the extent we prevail in not having to pay all or any portion of the outstanding unauthorized loans, we would recognize a gain in that amount.
Research and development expenditures, which are classified as selling, general and administrative expense, were approximately $40.5 million, or 4.5% of net revenue, for the three months ended September 30, 2010, compared to $36.5 million, or 5.4% of net revenue, for the comparable quarter.
Net restructuring costs decreased $55.9 million during the three months ended September 30, 2010, compared to the comparable quarter, as we concluded our restructuring program. Net restructuring costs during the three months ended September, 2009 included $13.2 million for asset impairments and $42.7 million for employee termination benefits. The cumulative expense of our restructuring program was $314.8 million with estimated annual savings of approximately $205.0 million.
Other income (expense) consists primarily of net interest income, investment income and currency exchange gains or losses. We recorded net expenses of $1.7 million for the three months ended September 30, 2010, respectively, compared with net gains of $2.5 million for the comparable quarter. The net expenses for the month ended September 30, 2010 were primarily due to a general weakening of the U.S. dollar against other currencies, partially offset by investment income and a stronger Japanese yen against other currencies. The gains during the three months ended September 30, 2009 primarily related to foreign currency exchange gains resulting from strengthening of the U.S. dollar against most currencies.
Our order backlog on September 30, 2010 was approximately $445.5 million, an increase of 46.5% compared with order backlog of $304.2 million at September 30, 2009. Orders for the three months ended September 30, 2010 were $868.4 million compared with $724.4 million for the comparable quarter, representing the significant increase in customer demand during the three months ended September 30, 2010. Orders during the three months ended September 30, 2010 improved in all of our primary markets compared with the comparable quarter.
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