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Molex Inc. Reports Operating Results (10-Q)

April 28, 2010 | About:

Molex Inc. (MOLX) filed Quarterly Report for the period ended 2010-03-31.

Molex Inc. has a market cap of $3.89 billion; its shares were traded at around $22.41 with a P/E ratio of 131.8 and P/S ratio of 1.5. The dividend yield of Molex Inc. stocks is 2.7%.MOLX is in the portfolios of Dodge & Cox, Richard Aster Jr of Meridian Fund, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

During fiscal 2007, we undertook a 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 relates to facilities located in North America and Europe and, in general, the movement of manufacturing activities at these plants to other facilities. Net restructuring cost during the three months ended March 31, 2010 was $9.0 million, consisting of $8.9 million of severance costs and $0.1 million in asset impairments. Net restructuring cost during the three months ended December 31, 2009 was $25.6 million, consisting of $18.8 million for severance costs and $6.8 million of asset impairments. Net restructuring costs during the three months ended March 31, 2009, was $44.3 million, consisting of $28.9 million of severance costs and $15.4 million in asset impairments. The cumulative restructuring costs and related asset impairments since we announced the restructuring plan totaled $288.5 million.

We expect to incur total restructuring and asset impairment costs related to restructuring actions approximating $300 million. Management approved several actions related to this plan. The total cost estimates increased as we formulated detailed plans for the latest additions to the restructuring actions, which included reorganization of our global product divisions in fiscal 2009. A portion of this plan involves cost savings or other actions that do not result in incremental expense, such as better utilization of assets, reduced spending and organizational efficiencies. This plan includes employee reduction targets throughout the company, and we expect to achieve these targets through ongoing employee attrition and terminations. See Note 3 of the Notes to the Consolidated Financial Statements for further discussion. We expect to complete the actions under this plan by June 30, 2010 with estimated annual cost savings of $205 million.

We believe that if Molex Japan is liable for the unauthorized loans, our maximum loss would be approximately $193.2 million, of which $31.0 million has been reflected as a charge in the current quarter and $162.2 million is a contingent liability. With respect to the contingent liability, we do not believe that a loss is probable at this time and consequently did not record any loss pending the results of the investigation and extent of our liability, if any. The total amount of unauthorized loans and misappropriated cash referred to above are based on the status of the investigation.

The general weakening of the U.S. dollar against the euro and Japanese yen increased revenue by approximately $20.7 million and $46.8 million for the three and nine months ended March 31, 2010, respectively. The following tables show the effect on the change in geographic net revenue from foreign currency translations to the U.S. dollar (in thousands):

Read the The complete Report

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