Molex Reports Q4, Doesn't Lay Off

LISLE, Ill. -- Molex Incorporated (NASDAQ:MOLX - News) and (NASDAQ:MOLXA - News), a global electronic components company, today reported results for its fiscal fourth quarter and fiscal year ended June 30, 2002. Revenues for the 2002 fiscal fourth quarter of $456.3 million, declined 10.6 percent versus last year's fourth quarter revenues of $510.5 million. Net income was $27.3 million, compared with $10.8 million in the same quarter a year ago, which included a $30.3 million after tax charge. Net return on sales for the fourth quarter was 6.0 percent, our highest quarter during fiscal 2002. Earnings per share were $0.14, compared with $0.05 in the same quarter a year ago. Earnings per share for the same quarter a year ago, prior to the charge were $0.21. Revenues increased sequentially from the March 2002 quarter by 11.7 percent and net income increased sequentially by 38.9 percent. Currency translation decreased net revenues by $0.9 million compared with the same period a year ago. Revenues in local currencies declined 10.4 percent from last year's fourth quarter. For the year ended June 30, 2002, revenues were $1.7 billion, compared with $2.4 billion in the prior fiscal year period, a 27.6 percent decrease. Net income was $76.5 million, or 4.5 percent of sales, compared with $203.9 million, or 8.6 percent of sales for the prior fiscal year. Both years were negatively impacted by after tax charges of $25.3 million in fiscal 2002 and $30.3 million in fiscal 2001 for headcount reductions and asset write-offs, offset in 2002 by a $5.0 million one-time tax benefit in connection with the Company's restructuring initiatives. Net income for fiscal 2002 prior to these items was $96.8 million, or 5.7 percent of sales. This compares to $234.2 million prior to the charge reported in fiscal 2001. Earnings per share in fiscal 2002 were $0.39 compared with $1.03 reported last year. Earnings per share prior to the charges were $0.49 in fiscal 2002, compared with $1.19 reported for the prior fiscal year. For the year, currency translation decreased net revenues by $38.2 million and net income by $3.1 million. Revenues in local currencies declined 26.0 percent from the prior fiscal year. The Company's order backlog on June 30, 2002 stood at $203.5 million, a 24.5 percent decrease over the same period a year ago. Without the effect of the change in value of the U.S. dollar, the backlog would have been $192.7 million, a 28.5 percent decrease over the same period a year ago. Research and development expenditures for the fourth quarter were $28.5 million, compared with $29.3 million for the same period last year. Research and development expenditures for the year were $111.8 million, compared with $134.6 million reported last year. Capital expenditures were $45.5 million for the fourth quarter, compared with $78.3 million for the fourth quarter a year ago. Year-to-date capital expenditures equaled $172.5 million, compared with $376.3 million reported last year. Joe King, Vice-Chairman and Chief Executive Officer, said, "For the June quarter we achieved revenues modestly above, and profits in line with, the expectations we announced in early April. Reported results for the June quarter include a pre-tax increase in inventory reserves of approximately $4.7 million, for excess and slow-moving fiber optic products. Looking at comparisons with last year's fiscal fourth quarter; in the Americas, revenues declined 19 percent primarily due to low demand in fiber optics and telecom infrastructure. In the Far East North, (Japan and Korea), revenues were flat in local currency and declined 4 percent in dollars. Business conditions remain strong in Korea, and we continue to see improvement in Japan. In the Far East South, revenues were up 20 percent in both local currency and dollars. The Far East South remains our strongest region, with some of the improvement due to production transferred by our customers from other regions. In Europe, revenues declined 20 percent in local currency and 17 percent in dollars. All regions reported a sequential increase in revenue from the previous March 2002 quarter. In total, revenue increased approximately 12 percent sequentially, with some help from currency translation due to the weaker dollar." Molex Inc.