<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1994 Commission File number 0-7491
MOLEX INCORPORATED
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-2369491
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2222 WELLINGTON COURT, LISLE, ILLINOIS 60532
-------------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 969-4550
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.05
Class A Common Stock, par value, $0.05
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
On August 26, 1994, the following numbers of shares of the Company's common
stock were outstanding:
Common Stock 31,907,332
Class A Common Stock 31,639,575
Class B Common Stock 94,255
The aggregate market value of the voting shares (based on the closing price
of these shares on the National Association of Securities Dealers Automated
Quotation System on such date) held by non-affiliates was approximately
$711.4 million.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the year ended June 30,
1994, are incorporated by reference into Parts I, II and IV of this report.
Portions of the Proxy Statement for the annual meeting of Stockholders, to
be held on October 21, 1994, are incorporated by reference into Part III of
this report.
Index to Exhibits listed on Pages 26 through 27.
1
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TABLE OF CONTENTS
Part I Page
----
Item 1. Business 3
Item 2. Properties 8
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Executive Officers of the Registrant 10
Part II
Item 5. Market for the Registrant's Common Equity and 12
Related Stockholder Matters
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial 13
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on 13
Accounting and Financial Disclosure
Part III
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and 14
Management
Item 13. Certain Relationships and Related Transactions 14
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports 15
on Form 8-K
Report of Independent Auditors - Ernst & Young 17
Statements of Changes in Shares Outstanding 18
Schedule II 19
Schedule V 20
Schedule VI 21
Schedule VIII 22
Schedule X 23
Independent Auditors' Report on Schedules 24
Signature Page 25
Index to Exhibits 26
2
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PART I
Item 1 - BUSINESS
GENERAL DEVELOPMENT OF THE BUSINESS
Molex Incorporated originated from an enterprise established in
1938. It was incorporated in 1972 in the state of Delaware. As
used herein the term "Molex" or "Company" includes Molex
Incorporated and its United States and international subsidiaries.
During fiscal 1994, Molex purchased the remaining shares
outstanding of Molex Nanco Ltd. and acquired an additional 20
percent interest in Dongguan Molex South-China Connector Co. Ltd.
During fiscal 1993, Molex increased its holdings in Molex India
Ltd. (formerly Jalex Connector Systems Ltd.) to 80 percent, and
made investments in Molex-G. Ostervig A/S, MEC International Pte.
Ltd. and Decoupage Moulage de Savoie S.A. All of these companies
operate in the international connector industry.
Molex sold its remaining interest in Flexible Automation Systems
Pte. Ltd., a Singapore subsidiary of Molex, and sold a 15 percent
interest in Zetronic S.p.A. during fiscal 1993.
GENERAL DESCRIPTION OF THE BUSINESS
Molex is a leading manufacturer of electrical, electronic and
fiber optic interconnection systems, ribbon cable, switches and
application tooling. Molex offers its customers extensive global
design, engineering and manufacturing capabilities, while
providing local service through 41 plants in 19 countries.
Products manufactured and sold outside the United States generated
approximately 70% of Molex's fiscal 1994 sales. Molex offers more
than 40,000 products to original equipment manufacturers in
industries that include the computer, computer peripheral,
business equipment, telecommunication, home appliance, home
entertainment, automotive, medical equipment and residential
construction industries. Molex products are sold through direct
sales, distributors and manufacturer's representatives. The
worldwide market for electronic connectors, cable assemblies and
backplanes was estimated to be $20.6 billion* in sales for fiscal
year 1994. With a 4.7 percent market share, Molex is the second
largest independent connector manufacturer in the world.
* Source: Fleck International
Molex conducts business in one industry segment: the manufacture
and sale of electrical components. The Company designs,
manufactures, and distributes electrical and electronic devices
such as terminals, connectors, planer cables, cable assemblies,
3
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interconnection systems, fiber optic interconnection systems,
backplanes and mechanical and electronic switches. Crimping
machines and terminal inserting equipment (known as "application
tooling") are offered on a lease or purchase basis to the
Company's customers for the purpose of applying the Company's
components to the customers' products. Net revenue from
application tooling constitutes approximately 2% of the Company's
net revenues. Molex products are designed for use in a broad
range of electrical and electronic applications as set forth
below:
<TABLE>
<CAPTION>
Percentage of
Fiscal 1994
Market Net Revenue Products
------ ----------- --------
<S> <C> <C>
Computer/business equipment/ 47% Computers, peripheral
telecommunications equipment, calculators,
copiers, pagers and dictation
equipment
Home entertainment and home 33% Televisions, stereo high
appliance fidelity systems, compact disc
players, video tape recorders,
camcorders and electronic
games, microwave ovens,
refrigerators, freezers,
dishwashers, disposals and air
conditioners
Automotive 12% Automobiles, trucks,
recreational vehicles and farm
equipment.
Other 8% Electronic medical equipment,
vending machines, security
equipment and modular office
furniture and premise wiring
</TABLE>
The Company sells its products primarily to original equipment
manufacturers and their subcontractors and suppliers. The
Company's customers include various multinational companies,
including Apple, AT&T, Canon, Compaq, Ford, General Motors,
Hewlett Packard, IBM, JVC, Matsushita, Motorola, Philips, Sony,
Thomson and Xerox, many of which Molex serves on a global basis.
Net revenues contributed by different industry groups fluctuate
due to various factors including model changes, new technology,
introduction of new products and composition of customers. No
customer accounted for 10% or more of net revenues in fiscal years
1994, 1993 or 1992. While its customers generally make purchasing
decisions on a decentralized basis, Molex believes that, due to
its financial strength and product development capabilities, it
has and will continue to benefit from the trend of many of its
customers towards the use of fewer vendors.
4
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In the United States and Canada, the Company sells its products
primarily through direct sales engineers and industrial
distributors. Internationally, Molex sells primarily through its
own sales organizations in Japan, Hong Kong, Singapore, Taiwan,
South Korea, Malaysia, Thailand, China, England, Italy, Ireland,
France, Spain, Germany, the Netherlands, Sweden, Norway, Denmark,
South Africa, India, Canada, Mexico and Brazil.
Outside of the United States and Canada, Molex also sells its
products through manufacturers' representative organizations, some
of which act as distributors, purchasing from the Company for
resale. The manufacturers' representative organizations are
granted exclusive territories and are compensated on a commission
basis. These relationships are terminable by either party on
short notice. All sales orders received are subject to approval
by the Company.
The Company promotes its products through leading trade magazines,
direct mailings, catalogs and other promotional literature. Molex
is a frequent participant in trade shows and also conducts
educational seminars for its customers and its manufacturers'
representative organizations.
There was no significant change in the Company's suppliers,
products, markets or methods of distribution during the last
fiscal year.
Molex generally seeks to locate manufacturing facilities to serve
local customers and currently has 41 manufacturing facilities in
19 countries on five continents. Molex facilities in the Far East
and Europe are ISO 9000 certified, and programs are underway to
obtain certification for facilities in Molex's other regions.
Besides pursuing ISO 9000 quality certification in the United
States, Molex is working on the suggestions outlined in its
Malcolm Baldrige National Quality Award application feedback
report.
The principal raw materials and component parts Molex purchases
for the manufacture of its products include brass, copper,
aluminum, steel, tin, nickel, gold, silver, nylon and other
molding materials, and nuts, bolts, screws and rivets. Virtually
all materials and components used in the Company's products are
available from several sources. Although the availability of such
materials has generally been adequate, no assurance can be given
that additional cost increases or material shortages or
allocations imposed by its suppliers in the future will not have
a materially adverse effect on the operations of the Company.
COMPETITION
The business in which the Company is engaged is highly
competitive. Most of the Company's competitors offer products in
some but not all of the industries served by the Company. Molex
5
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believes that the ability to meet customer delivery requirements
and maintenance of product quality and reliability are competitive
factors that are as important as product pricing. Some of the
Company's competitors have been established longer and have
substantially larger manufacturing, sales, research and financial
resources.
PATENTS/TRADEMARKS
As of June 30, 1994, the Company owned 439 United States patents
and had 124 patent applications on file with the United States
Patent Office. The Company also has 497 corresponding patents
issued and 1,841 applied for in other countries as of June 30,
1994. No assurance can be given that any patents will be issued
on pending or future applications. As the Company develops
products for new markets and uses, it normally seeks available
patent protection. The Company believes that its patents are of
importance but does not consider itself materially dependent upon
any single patent or group of related patents.
BACKLOG
The backlog of unfilled orders at June 30, 1994 was approximately
$175.8 million; this compares to $156.5 million at June 30, 1993.
Substantially all of these orders are scheduled for delivery
within twelve months. The Company's experience is that orders are
normally delivered within ninety days from acceptance.
RESEARCH AND DEVELOPMENT
Molex incurred total research and development costs of $64.8
million in 1994, $56.2 million in 1993, and $47.6 million in 1992.
The Company incurred costs relating to obtaining patents of
$3.3 million in 1994, $2.8 million in 1993, and $2.2 million in
1992 which are included in total research and development costs.
The Company's policy is to charge these costs to operations as
incurred.
The Company had approximately 606 full-time employees in 1994 (558
in 1993 and 532 in 1992), engaged in research, development and
engineering functions.
The Company introduced many new products during the year; however,
in the aggregate, these products did not require a material
investment of assets.
6
<PAGE> 7
COMPLIANCE
The Company believes it is in full compliance with federal, state
and local regulations pertaining to environmental protection. The
Company does not anticipate that the costs of compliance with such
regulations will have a material effect on its capital
expenditures, earnings or competitive position.
EMPLOYEES
As of June 30, 1994, the Company employed over 8,100 persons
worldwide. The Company believes its relations with its
employees are favorable.
INTERNATIONAL OPERATIONS
The Company is engaged in material operations in foreign
countries. Net revenue derived from international operations
for the fiscal year ended June 30, 1994 was approximately 70% of
consolidated net revenue.
The Company believes the international net revenue and earnings
will continue to be significant. The analysis of the Company's
operations by geographical area appears in footnote 10 on page 44
of the 1994 Annual Report to Shareholders and is incorporated
herein by reference.
7
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ITEM 2 - PROPERTIES
Molex owns and leases manufacturing, warehousing and office space
in over 75 locations around the world. The total square footage
of these facilities is presented below:
Owned Leased Total
--------- ------- --------
2,406,000 714,000 3,120,000
The leases are of varying terms with expirations ranging from
fiscal 1995 through fiscal 2017. The leases in aggregate are not
considered material to the financial position of the Company.
The Company's buildings, machinery and equipment have been well
maintained and are adequate for its current needs.
A listing of principal manufacturing facilities is presented
below:
BRAZIL JAPAN THAILAND
Manaus Kagoshima Bangkok
Okayama
CANADA Shioya UNITED STATES
Scarborough, Ontario Shizuoka Huntsville, Alabama
Yamato City Maumelle, Arkansas
CHINA (P.R.C.) Orange, California
Shilong Town MALAYSIA Pinellas Park, Florida
Prai, Penang St. Petersburg, Florida
ENGLAND Addison, Illinois
Bordon, Hampshire MEXICO Des Plaines, Illinois
Guadalajara Lisle, Illinois
FRANCE Magdalena Naperville, Illinois
Chateau Gontier Nogales Schaumburg, Illinois
Lincoln, Nebraska (3)
GERMANY PUERTO RICO
Biberach Ponce (2)
Ettlingen
REPUBLIC OF KOREA
INDIA Ansan City (2)
Bangalore
SINGAPORE
IRELAND Jurong Town
Millstreet Town
Shannon SOUTH AFRICA
Bergvlei (Johannesburg)
ITALY
Padova TAIWAN (R.O.C.)
Taipei
8
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Item 3 - LEGAL PROCEEDINGS
None deemed material to the Company's financial position or
consolidated results of operations.
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
9
<PAGE> 10
Executive Officers of the Registrant
The following information relates to the executive officers of the
Registrant who serve at the discretion of the Board of Directors and
are customarily elected for one-year terms at the Regular Meeting of
the Board of Directors held immediately following the Annual
Stockholders' Meeting. All of the executive officers named hold
positions as officers and/or directors of one or more subsidiaries of
the Registrant. For purposes of this disclosure, only the principal
positions are set forth.
<TABLE>
<CAPTION>
Year
Employed
Positions Held With Registrant by
Name During the Last Five Years Age Registrant
------------------------ ------------------------------- --- -----------
<S> <C> <C> <C>
Frederick A. Krehbiel(a) Chairman (1993-); Chief 53 1965(b)
Executive Officer (1988-);
Vice Chairman (1988-1993).
John H. Krehbiel, Jr.(a) President (1975-). 57 1959(b)
J. Joseph King Corporate Vice President- 50 1975
International Operations
(1988-).
Raymond C. Wieser Corporate Vice President and 56 1965(b)
President of the Commercial
Division-U.S. Operations (1994-);
Group Vice President-
U.S. Operations (1989-1994).
John C. Psaltis Corporate Vice President 54 1973
(1982-), Treasurer (1979-) and
Chief Financial Officer (1994-).
Ronald L. Schubel Corporate Vice President (1982-) 51 1981
and President of Far East South
Operations (1994-); President of
the Commerical Division-U.S.
Operations (1982-1994)
</TABLE>
10
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<TABLE>
<CAPTION>
Year
Employed
Positions Held With Registrant by
Name During the Last Five Years (b) Age Registrant
----------------------- ------------------------------ --- ----------
<S> <C> <C> <C>
Werner W. Fichtner Corporate Vice President 51 1981
(1987-) and President of
European Operations (1981-).
Goro Tokuyama Corporate Vice President 60 1985
(1990-), President of Far
East North Operations (1988-)
and President of Molex-Japan
Co., Ltd.(1985-).
Martin P. Slark Corporate Vice President 39 1976
(1990-) and President of
United States Operations
(1994-); President of Far
East South Operations (1988-
1994).
James E. Fleischhacker Corporate Vice President 50 1984
(1994-) and President of
the DataComm Division-U.S.
Operations (1989-).
Kathi M. Regas Corporate Vice President 38 1985
(1994-) and Director, Human
Resources-U.S. Operations
(1989-1994).
Louis A. Hecht Corporate Secretary (1977-) 50 1974
and General Counsel (1975-).
---------------------------------------------------------------------------
</TABLE>
(a) John H. Krehbiel, Jr. and Frederick A. Krehbiel (the "Krehbiel Family")
are brothers. The members of the Krehbiel Family may be considered to
be "control persons" of the Registrant. The other officers listed above
have no relationship, family or otherwise, to the Krehbiel Family,
Registrant or each other.
(b) Includes period employed by Registrant's predecessor.
11
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PART II
Item 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Molex is traded on the National Market System of the NASDAQ in the
& United States and on the London Stock Exchange. The information
(b) set forth under the captions "Financial Highlights" and "Fiscal
1994, 1993, and 1992 by Quarter (Unaudited)" on the inside front
cover and page 45, respectively, of the 1994 Annual Report to
Shareholders is incorporated herein by reference.
(c) The following table presents quarterly dividends per common share
for the last two fiscal years.
<TABLE>
<CAPTION>
Class A
Common Stock Common Stock
Fiscal Fiscal Fiscal Fiscal
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Quarter Ended -
September 30, $.0075 $.0040 $.0075 $.0040
December 31, .0100 .0075 .0100 .0075
March 31, .0100 .0075 .0100 .0075
June 30, .0100 .0075 .0100 .0075
------ ------ ------ ------
Total $.0375 $.0265 $.0375 $.0265
====== ====== ====== ======
</TABLE>
Cash dividends on Common Shares have been paid every year since
1977.
A description of the Company's Common Stock appears in footnote 2
on pages 39 and 40 of the 1994 Annual Report to Shareholders and
is incorporated herein by reference.
Item 6 - SELECTED FINANCIAL DATA
The information set forth under the caption "Ten Year
Financial Highlight Summary" (only the five years ended June 30,
1994,) on page 29 of the 1994 Annual Report to Shareholders is
incorporated herein by reference.
12
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Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information set forth under the caption "Management's
Discussion of Financial Condition and Results of Operations" on
pages 30 through 33 of the 1994 Annual Report to Shareholders is
incorporated herein by reference.
Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Company set
forth on pages 34 through 44 of the 1994 Annual Report to
Shareholders and the independent auditors' report set forth on
page 28 of the 1994 Annual Report to Shareholders are incorporated
herein by reference:
Independent Auditors' Report
Consolidated Balance Sheets - June 30, 1994 and 1993
Consolidated Statements of Income for the years ended
June 30, 1994, 1993 and 1992
Consolidated Statements of Shareholders' Equity for the
years ended June 30, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for the years ended
June 30, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
The supplementary data regarding quarterly results of operations,
set forth under the caption "Fiscal 1994, 1993, and 1992 by
Quarter (Unaudited)" on page 45 of the 1994 Annual Report to
Shareholders, is incorporated herein by reference.
The statements of changes in shares outstanding appears on Page 18
of this Form 10-K.
Item 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
13
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PART III
Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information under the caption "Election of Directors" in the
Company's Proxy Statement for the annual meeting of Shareholders
to be held on October 21, 1994 (The "Company's 1994 Proxy
Statement") is incorporated herein by reference. The information
called for by Item 401 of Regulation S-K relating to the Executive
Officers is furnished in a separate item captioned "Executive
Officers of the Registrant" in Part I of this report.
Item 11 - EXECUTIVE COMPENSATION
The information under the caption "Executive Compensation" in the
Company's 1994 Proxy Statement is incorporated herein by
reference.
Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information under the caption "Security Ownership of
Management and of Certain Beneficial Owners" in the Company's 1994
Proxy Statement is incorporated herein by reference.
Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the captions "Election of Directors",
"Indebtedness of Management" and "Security Ownership of Management
and of Certain Beneficial Owners" in the Company's 1994 Proxy
Statement is herein incorporated by reference.
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PART IV
Item 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. Financial Statements
The following consolidated financial statements contained in the
Company's 1994 Annual Report to Shareholders have been
incorporated by reference in Item 8.
Page(s) in
Annual Report
Item to Shareholders
----------------------------------------------- ----------------
Independent Auditors' Report 28
Consolidated Balance Sheets - June 30, 1994
and 1993 34-35
Consolidated Statements of Income - for
the years ended June 30, 1994, 1993 and 1992 36
Consolidated Statements of Shareholders' Equity
- for the years ended June 30, 1994, 1993 and 1992 37
Consolidated Statements of Cash Flows - for the
years ended June 30, 1994, 1993 and 1992 38
Notes to Consolidated Financial Statements 39-44
Fiscal 1994, 1993 and 1992 by Quarter (Unaudited) 45
The independent auditors' report of Ernst & Young is included on
page 17 of this Form 10-K.
(a) 2. Financial Statement Schedules
Page in the
Form 10-K
------------
Schedule II - Amounts Receivable from Related 19
Parties and Underwriters,
Promoters and Employees Other
than Related Parties
Schedule V - Property, Plant and Equipment 20
Schedule VI - Accumulated Depreciation and 21
Amortization of Property,
Plant and Equipment
Schedule VIII - Valuation and Qualifying Accounts 22
Schedule X - Supplementary Income Statement 23
Information
15
<PAGE> 16
All other schedules are omitted because they are inapplicable, not
required under the instructions, or the information is included in
the consolidated financial statements or notes thereto.
Separate financial statements for the Company's unconsolidated
affiliated companies, accounted for by the equity method, have
been omitted because they do not constitute significant
subsidiaries.
(a) 3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are
filed or incorporated herein as part of this Report.
(b) Reports on Form 8-K
Molex filed no reports on Form 8-K with the Securities and
Exchange Commission during the last quarter of the fiscal year
ended June 30, 1994.
16
<PAGE> 17
Report of Independent Auditors
The Board of Directors
Molex Incorporated
We have audited the statements of income and cash flows of the Domestic
Component of Molex Incorporated (the Company), as defined in Note 1, for the
year ended June 30, 1992 (not presented separately herein). We have also
audited Schedules II, V, VI, VIII and X of the Company for the year ended June
30, 1992 (not presented separately herein). These financial statements and
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of the Company's operations and its cash
flows for the year ended June 30, 1992 in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.
The Company is a part of Molex Incorporated and has no separate legal status or
existence; the nature and extent of the Company's activities are determined and
directed by Molex Incorporated. The method of determining the portions of the
assets, liabilities, income and expenses of Molex Incorporated included in the
financial statements of the Company is described in Note 1.
/s/ ERNST & YOUNG
July 31, 1992
17
<PAGE> 18
MOLEX INCORPORATED
STATEMENTS OF CHANGES IN SHARES OUTSTANDING
FOR THE YEAR ENDED JUNE 30, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
Class A Class B
Common Common Common Treasury
Stock Stock Stock Stock
------- ------- ------- --------
<S> <C> <C> <C> <C>
Shares outstanding at
July 1, 1991 25,754,051 25,847,933 94,255 1,746,609
Exercise of stock options 186,741 146,646
Purchase of treasury stock 25,740
Disposition of treasury stock (23,283)
Issuance of stock bonus 6,620 6,620
---------- ---------- ------ ---------
Shares outstanding at
June 30, 1992 25,947,412 26,001,199 94,255 1,749,066
Exercise of stock options 172,136 93,187
Purchase of treasury stock 22,695
Disposition of treasury stock (36,392)
Stock split effected in
the form of a dividend 6,517,738 6,505,199 436,839
---------- ---------- ------ ---------
Shares outstanding at
June 30, 1993 32,637,286 32,599,585 94,255 2,172,208
Exercise of stock options 281,551 155,704
Purchase of treasury stock 30,849
Disposition of treasury stock (32,770)
---------- ---------- ------ ---------
Shares outstanding at
June 30, 1994 32,918,837 32,755,289 94,255 2,170,287
========== ========== ====== =========
</TABLE>
18
<PAGE> 19
MOLEX INCORPORATED
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEAR ENDED JUNE 30, 1994, 1993 AND 1992
($000)
<TABLE>
<CAPTION>
Balance at Balance
Beginning Amounts Amounts at End
Name of Debtor Year of Period Additions Collected Written Off of Period
- - -------------- ---- --------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
F. A. Krehbiel 1) 1994 $507 $1,256 $1,330 - $433
1993 $377 $1,953 $1,823 - $507
1992 $234 $1,950 $1,807 - $377
M. Didier 2) 1994 $518 $125 $100 $38 $505
1993 $471 $47 - - $518
1992 $501 $170 - $200 $471
W. Fichtner 3) 1994 $1,425 $78 $136 - $1,367
1993 $1,514 - - $89 $1,425
1992 $0 $1,514 - - $1,514
G. Tokuyama 4) 1994 $149 $94 $149 - $94
1993 $22 $127 - - $149
1992 $67 $43 $88 - $22
</TABLE>
1) Amounts represent compensation advances with interest payable at the
floating six month federal interest rate (6.0% at June 30, 1994).
2) Amounts represent personal advances with interest payable at the
prevailing rate offered by Banque Nationale de Paris in Paris France if
the advances are not paid by maturity.
3) Amounts represent personal advances with interest payable between 5% and
8% per annum. All amounts are due on or before June 30, 1995.
4) Amounts represent interest free demand loans in order to exercise various
stock options.
Note: The Company also has certain loans to employees made in connection with
relocations. These loans are excluded from this schedule as they are
considered to arise in the normal course of business.
19
<PAGE> 20
MOLEX INCORPORATED
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
FOR THE YEAR ENDED JUNE 30, 1994, 1993 AND 1992
($000)
<TABLE>
<CAPTION>
Balance at Balance
Beginning Additions Retirements Translation at End
of Period at Cost and Sales Adjustments of Period
---------- --------- ----------- ----------- ---------
1994
<S> <C> <C> <C> <C> <C>
Land and improvements $ 37,249 $ 5,283 $( 118) $ 2,111 $ 44,525
Buildings and leasehold
improvements 175,851 14,786 ( 919) 9,805 199,523
Machinery and equipment 441,791 70,856 ( 17,588) 15,084 510,143
Molds and dies 199,286 38,533 ( 6,181) 14,565 246,203
-------- -------- --------- ------- ----------
TOTAL $854,177 $129,458 $(24,806) $41,565 $1,000,394
======== ======== ========= ======= ==========
1993
Land and improvements $ 33,982 $ 1,200 $( 85) $ 2,152 $ 37,249
Buildings and leasehold
improvements 158,339 13,564 ( 757) 4,705 175,851
Machinery and equipment 389,352 59,415 ( 16,856) 9,880 441,791
Molds and dies 177,035 19,002 ( 4,788) 8,037 199,286
-------- -------- --------- ------- ----------
TOTAL $758,708 $ 93,181 $(22,486) $24,774 $854,177
======== ======== ========= ======= ==========
1992
Land and improvements $ 30,167 $ 1,487 $ 0 $ 2,328 $ 33,982
Buildings and leasehold
improvements 117,957 30,617 ( 326) 10,091 158,339
Machinery and equipment 309,003 73,501 (15,767) 22,615 389,352
Molds and dies 144,401 27,067 ( 4,909) 10,476 177,035
-------- -------- --------- ------- ----------
TOTAL $601,528 $132,672 $(21,002) $45,510 $758,708
======== ======== ========= ======= ==========
</TABLE>
20
<PAGE> 21
MOLEX INCORPORATED
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND
EQUIPMENT
FOR THE YEAR ENDED JUNE 30, 1994, 1993 AND 1992
($000)
<TABLE>
<CAPTION>
Balance at Provision Balance
Beginning Charged to Retirements Translation at End
of Period Income and Sales Adjustments of Period
---------- ---------- ----------- ----------- ---------
1994
<S> <C> <C> <C> <C> <C>
Buildings and leasehold
improvements $ 50,684 $ 7,809 $( 520) $ 2,935 $ 60,908
Machinery and equipment 264,761 51,668 (15,879) 13,583 314,133
Molds and dies 152,904 27,618 ( 4,745) 8,581 184,358
--------- -------- --------- ------- --------
TOTAL $ 468,349 $ 87,095 $(21,144) $25,099 $559,399
========= ======== ======== ======= ========
1993
Buildings and leasehold
improvements $ 41,478 $ 7,380 $( 221) $ 2,047 $ 50,684
Machinery and equipment 228,098 44,132 (13,445) 5,976 264,761
Molds and dies 126,413 23,456 ( 3,742) 6,777 152,904
--------- -------- --------- ------- --------
TOTAL $ 395,989 $ 74,968 $(17,408) $14,800 $468,349
========= ======== ======== ======= ========
1992
Buildings and leasehold
improvements $ 33,034 $ 5,963 $( 286) $ 2,767 $ 41,478
Machinery and equipment 184,694 40,062 (10,574) 13,916 228,098
Molds and dies 103,039 20,296 ( 4,354) 7,432 126,413
--------- -------- --------- ------- --------
TOTAL $ 320,767 $ 66,321 $(15,214) $24,115 $395,989
========= ======== ======== ======= ========
</TABLE>
21
<PAGE> 22
MOLEX INCORPORATED
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED JUNE 30, 1994, 1993 AND 1992
($000)
<TABLE>
<CAPTION>
Allowances for losses Balance at Balance
and adjustments on Beginning Charged to Accounts Translation at End
receivables: of Period Income Written Off Adjustments of Period
- - ------------------ --------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
1994 $8,789 $2,354 $( 2,344) $ 117 $8,916
====== ====== ========= ======== ======
1993 $8,634 $1,683 $( 1,182) $( 346) $8,789
====== ====== ========= ======== ======
1992 $6,882 $1,488 $( 336) $ 600 $8,634
====== ====== ========= ======== ======
</TABLE>
22
<PAGE> 23
MOLEX INCORPORATED
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED JUNE 30, 1994, 1993 AND 1992
($000)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Maintenance and Repairs $19,232 $18,483 $18,091
======= ======= =======
</TABLE>
23
<PAGE> 24
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Shareholders of Molex Incorporated
Lisle, Illinois
We have audited the consolidated financial statements of
Molex Incorporated and its subsidiaries as of June 30, 1994
and 1993, and for each of the three years in the period ended
June 30, 1994, and have issued our report thereon dated
August 9, 1994; such financial statements and report are
included in your 1994 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included
the statements of changes in shares outstanding and the
financial statement schedules of Molex Incorporated and its
subsidiaries, listed in Item 14(a)2. These statements and
financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, which is based
upon our audits and the report of other auditors in 1992
included herein, such statements of changes in shares
outstanding and financial statement schedules, when
considered in relation to the basic financial statements
taken as a whole, present fairly, in all material respects,
the information set forth therein.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
August 9, 1994
24
<PAGE> 25
S I G N A T U R E S
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Annual Report
to be signed on its behalf by the undersigned, there unto duly
authorized.
MOLEX INCORPORATED
(Company)
/s/ JOHN C. PSALTIS
September 23, 1994 By: --------------------------------------
John C. Psaltis
Corporate Vice President, Treasurer
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
/s/ F. A. KREHBIEL
September 23, 1994 --------------------------------------
F. A. Krehbiel
Chairman of the Board and Chief
Executive Officer
/s/ J. H. KREHBIEL, JR.
September 23, 1994 --------------------------------------
J. H. Krehbiel, Jr.
President and Director
/s/ JOHN C. PSALTIS
September 23, 1994 --------------------------------------
John C. Psaltis
Corporate Vice President, Treasurer
and Chief Financial Officer
/s/ F. L. KREHBIEL
September 23, 1994 --------------------------------------
F. L. Krehbiel
Director
/s/ DR. ROBERT J. POTTER
September 23, 1994 --------------------------------------
Dr. Robert J. Potter
Director
/s/ E. D. JANNOTTA
September 23, 1994 --------------------------------------
E. D. Jannotta
Director
25
<PAGE> 26
MOLEX INCORPORATED
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Reference(a)
----------- ------------------------------------ ---------
<S> <C> <C>
3 3.1 Certificate of Incorporation
(incorporated by reference to 1990
Form 10-K, Exhibit 3.1)
4 3.2 By-Laws (as amended)
Instruments defining rights of
security holders including
indentures. See Exhibit 3.1
10 Material Contracts
10.1 The 1985 Molex Incorporated
Executive Stock Bonus Plan
(incorporated by reference to
Appendix A of the registrant's
Proxy Statement for 1985)
10.2 The 1981 Molex Incorporated
Incentive Stock Option Plan
(incorporated by reference to
Appendix A of the registrant's
Proxy Statement for 1982)
10.3 The Molex Deferred Compensation
Plan (incorporated by reference
to 1984 Form 10-K, Exhibit 10.6)
10.4 The 1990 Molex Incorporated
Executive Stock Bonus Plan
(incorporated by reference to
1991 Form 10-K, Exhibit 10.4)
10.5 The 1990 Molex Incorporated
Stock Option Plan (incorporated
by reference to 1991 Form 10-K,
Exhibit 10.5)
10.6 The 1991 Molex Incorporated
Incentive Stock Option Plan
(incorporated by reference to
Appendix A of the registrant's
Proxy Statement for 1991).
</TABLE>
26
<PAGE> 27
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Reference(a)
----------- ------------------------------------ ---------
<S> <C> <C>
13 Molex Incorporated Annual Report to __
Shareholders for the year ended
June 30, 1994. (Such Report, except
to the extent incorporated herein by
reference, is being furnished for the
information of the Securities and
Exchange Commission only and is not
to be deemed filed as a part of this
annual report on Form 10-K)
22 Subsidiaries of registrant __
24 Independent Auditors' Consents __
27 Financial Data Schedule __
</TABLE>
(All other exhibits are either inapplicable or not required)
(a) - Included only in the electronically filed copy of the
report filed with the Securities Exchange Commission.
27
<PAGE> 1
EXHIBIT 13
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
<TABLE>
<CAPTION>
1994 1993 Change
----------- ----------- ------
<S> <C> <C> <C>
OPERATIONS
Net revenue $ 964,108 $ 859,283 12%
Income before income taxes, minority interest and
cumulative effect of change in accounting principle 159,477 133,478 19%
Income before cumulative effect of change in
accounting principle 94,852 74,660 27%
Net income 94,852 71,055 33%
Income before cumulative effect of change in accounting
principle as a percent of net revenue 9.8% 8.7% --
Net income as a percent of net revenue 9.8% 8.3% --
Return on beginning shareholders' equity before cumulative effect
of change in accounting principle 12.6% 11.3% --
Return on beginning shareholders' equity 12.6% 10.8% --
PER SHARE
Earnings per common share before cumulative effect
of change in accounting principle 1.50 1.19 26%
Net income 1.50 1.13 33%
Dividends per common share .04 .03 33%
Book value 13.86 11.90 16%
Outstanding shares of stock 63,598,094 63,158,918 --
Number of shareholders: Common Stock 5,550 5,115 --
Class A Common Stock 3,502 3,648 --
FINANCIAL POSITION
Total assets $ 1,138,517 $ 961,775 18%
Working capital 381,218 332,192 15%
Long-term debt 7,350 7,510 -2%
Backlog 175,836 156,512 12%
Shareholders' equity 881,614 751,654 17%
Long-term debt/Shareholders' equity 0.8% 1.0% --
Number of employees 8,167 7,671 6%
Current ratio 2.9/1 3.0/1 --
</TABLE>
<TABLE>
<S> <C> <C>
USE OF NET
REVENUES 24.1% Materials Wages, Salaries, Benefits 26.5%
20.8% Other: Energy, Rent, Depreciation and Amortization 9.2%
Insurance, Interest, etc. Net Income 9.8%
9.4% Taxes: Business, Income and Payroll
0.2% Dividends Reinvested in Business 19.0%
WORLDWIDE
MARKET* Pacific Rim $2.553 Billion 10.8% Market North America $9.638 Billion 40.7% Market
Japan $5.745 Billion 24.3% Market All Other $.825 Billion 3.4% Market
Europe $4.927 Billion 20.8% Market
$20.592 Billion (June, 1994) Eliminations $3.096 Billion
(Electronic connectors, backplanes, cable assemblies)
MOLEX
MARKETS 12% Automotive Other 8%
39% Computer/Business Equipment Home Entertainment/
8% Telecommunications Home Appliance 33%
</TABLE>
*Source: Fleck International
<PAGE> 2
MANAGEMENT'S STATEMENT OF RESPONSIBILITY
The management of the Company is responsible for the information contained in
the consolidated financial statements and in the other parts of this report.
The accompanying consolidated financial statements of Molex Incorporated and
its subsidiaries have been prepared in accordance with generally accepted
accounting principles. In preparing these statements, management has made
judgments based upon available information. To ensure that this information
will be as complete, accurate and factual as possible, management has com-
municated to all appropriate employees requirements for accurate record keeping
and accounting.
The Company maintains an internal accounting control structure
designed to provide reasonable assurance for the safeguarding of assets against
loss from unauthorized use or disposition and reliability of financial records.
Management believes that through the careful selection of employees, the
division of responsibilities and the application of formal policies and
procedures, the Company has an effective and responsive internal accounting
control structure that is intended, consistent with reasonable cost, to provide
reasonable assurance that transactions are executed as authorized.
The Company's independent auditors, Deloitte & Touche LLP, are
responsible for conducting an audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and for
expressing their opinion as to whether these consolidated financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows of Molex Incorporated and its subsidiaries
in conformity with generally accepted accounting principles.
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS,
MOLEX INCORPORATED, LISLE, ILLINOIS
We have audited the accompanying consolidated balance sheets of Molex
Incorporated (a Delaware Corporation) and its subsidiaries as of June 30, 1994
and 1993, and the related consolidated statements of income, shareholders'
equity, and cash flows for each of the three years in the period ended June 30,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
certain components of Molex Incorporated, which statements reflect total net
revenue constituting 31% of consolidated total net revenue for the year ended
June 30, 1992. Such financial statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to
the amounts included for those components, is based solely on the reports of
such other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the reports of other
auditors in 1992 provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors
in 1992, such consolidated financial statements present fairly, in all material
respects, the financial position of Molex Incorporated and its subsidiaries as
of June 30, 1994 and 1993, and the results of their operations and their cash
flows for each of the three years in the period ended June 30, 1994 in
conformity with generally accepted accounting principles.
As discussed in Notes 1 and 6 to the consolidated financial statements,
the Company changed its method of accounting for certain postretirement
benefits to conform with the provisions of Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," in 1993.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
August 9, 1994
<PAGE> 3
TEN YEAR FINANCIAL HIGHLIGHT SUMMARY
(in thousands, except per share data)
<TABLE>
<CAPTION>
----------------------------------------------------------------------
1994 1993 1992 1991 1990
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net revenue $964,108 $859,283 $776,192 $707,950 $594,372
Gross profit 406,079 352,603 318,361 297,954 256,581
Income before income taxes,
minority interest and
cumulative effect of change
in accounting principle 159,477 133,478 117,412 117,936 110,041
Income taxes 63,186 58,371 49,814 53,402 47,495
Income before cumulative
effect of change in
accounting principle 94,852 74,660 67,464 64,631 62,087
Net income 94,852 71,055 67,464 64,631 62,087
Earnings per common share
before cumulative effect
of change in accounting
principle(1) 1.50 1.19 1.08 1.04 .99
Earnings per common share(1) 1.50 1.13 1.08 1.04 .99
Income before cumulative
effect of change in
accounting principle as a
percent of net revenue 9.8% 8.7% 8.7% 9.1% 10.4%
Net income as a percent of
net revenue 9.8% 8.3% 8.7% 9.1% 10.4%
----------------------------------------------------------------------
FINANCIAL POSITION
Current assets $586,612 $497,560 $434,277 $402,208 $355,107
Current liabilities 205,394 165,368 168,209 155,593 109,949
Working capital 381,218 332,192 266,068 246,615 245,158
Current ratio 2.9 3.0 2.6 2.6 3.2
Property, plant &
equipment, net 440,995 385,828 362,719 280,761 228,968
Total assets 1,138,517 961,775 849,689 726,740 606,899
Long-term debt 7,350 7,510 7,949 9,136 8,046
Shareholders' equity 881,614 751,654 660,389 550,742 481,281
Return on beginning
shareholders' equity
before cumulative effect
of change in accounting
principle 12.6% 11.3% 12.2% 13.4% 14.5%
Return on beginning
shareholders' equity 12.6% 10.8% 12.2% 13.4% 14.5%
Dividends per common share(1) 0.04 0.03 0.02 0.02 0.02
Weighted average common
shares outstanding(1) 63,345 63,001 62,651 62,308 62,525
----------------------------------------------------------------------
</TABLE>
(1) Restated for the following stock split/dividends: 25%-November, 1992.
<PAGE> 4
MANAGEMENT'S DISCUSSION
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Financial Highlights
Molex achieved another year of record revenues, net income and backlog in
fiscal 1994, despite facing difficult economic conditions in several of our
largest geographic regions. One of Molex's financial goals is to increase net
revenues at approximately twice the growth rate of the connector industry.
Molex net revenues increased 12.2 percent to $964.1 million during fiscal 1994.
This growth compares favorably to the 2.0 percent increase reported for the
worldwide connector industry. We believe Molex was able to surpass this goal
because both our product line and geographic breakdown place the Company in the
faster growing product segments and geographic regions of the connector
industry.
GRAPH
The Growth of Molex vs the Worldwide Connector Industry
<TABLE>
<CAPTION>
84 85 86 87 88 89 90 91 92 93 94
--- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Molex 100 100 116 153 199 227 236 281 308 341 382
Worldwide
Connector
Industry * 100 93 103 120 134 135 140 141 148 148 154
* Source: Fleck International
</TABLE>
Income before the cumulative effect of change in accounting principle
increased 27.0 percent to a record $94.9 million, or 9.8 percent of net
revenues. This substantial improvement over last year's 8.7 percent has the
Company well-positioned to return to our traditional goal of 10 percent. We have
started to see the effects of our efforts to streamline the operations and
reduce costs. Profitability has improved in the acquisitions we made in Germany
and France three years ago, but these positive impacts were partially offset by
the continued recessions in Japan and parts of Europe and by price erosion in
some key product lines.
Investor Returns
GRAPH
Stock Performance Chart
<TABLE>
<CAPTION>
89 90 91 92 93 94
--- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
Molex 100 139 172 194 237 301
S&P MidCap 400 100 115 130 154 189 189
</TABLE>
Molex is also committed to providing its shareholders with a good return on
their investment. Our total return to shareholders over the last five years has
averaged an annual compounded return of 24.7 percent, compared to the 12.0
percent return of the S&P MidCap 400 over the same period of time. A $100
investment in Molex Common Stock at June 30, 1989, together with the
reinvestment of dividends, would be worth $301 at June 30, 1994.
International Operations
GRAPH
Worldwide Net Revenues
(in millions of dollars)
<TABLE>
<CAPTION>
Fiscal 1984 Fiscal 1994
<S> <C>
U.S. $116.7 - 46.3% U.S. $288.7 - 30.0%
International $135.5 - 53.7% International $675.4 - 70.0%
</TABLE>
In fiscal 1968, Molex entered the international connector market with
annual net revenues of $54 thousand. Today, 26 years later, international
customer sales have grown to $675.4 million and represent approximately 70
percent of Molex's worldwide net revenues. International net revenues as a
percent of total net revenues decreased one percent from fiscal 1993 due to the
impact of the recession in Japan and strong growth in the U.S. Region.
International operations are subject to currency exchange rate
fluctuations and government actions. Molex monitors its foreign currency
exposure in each country and implements strategies to respond to changing
economic and political environments. Examples of these strategies include the
prompt payment of intercompany balances utilizing a global netting system and
the establishment of contra-currency accounts in several international
subsidiaries. Due to the uncertainty of the foreign exchange markets, Molex
cannot reasonably predict future trends related to foreign currency
fluctuations. Foreign currency fluctuations have impacted results in the past
and may impact results in the future.
Financial Position & Liquidity
One of Molex's many financial strengths is its exceptionally strong balance
sheet. This strength is a direct result of the Company's ability to generate
sufficient cash from operations for capital expenditures, debt payments and
dividends. Cash and short-term investments increased $42.9 million during
fiscal 1994. Cash and short-term investments at June 30, 1994 exceeded total
current liabilities by $23.5 million and represent 20 percent of total
consolidated assets. Cash provided from operations was $191.1 million during
fiscal 1994, increasing $54.8 million or 40.2 percent from the $136.3 million
provided from operations during fiscal 1993. Cash used for investments
increased $45.9 million over the fiscal 1993 level due primarily to the higher
level of spending for fixed assets during fiscal 1994.
<PAGE> 5
During fiscal 1994, Molex continued its commitment to investing in new
tooling, equipment and facilities. Capital expenditures equaled $129.5 million
for fiscal 1994, increasing 38.9 percent from the $93.2 million expended during
the previous fiscal year. Approximately 80 percent of the fixed asset purchases
during fiscal 1994 were for tooling and equipment directly related to improving
efficiencies and increasing revenues. Molex also spent $10 million to build new
facilities in Bangalore, India and Lincoln, Nebraska, increasing the worldwide
facility floor space to 3.1 million square feet.
For the fiscal year ending June 30, 1995, we expect capital expenditures
to increase to between $165 and $175 million. This increase in capital
expenditures is a result of stronger sales and the required investment in
plants, equipment and technology to meet our customers' needs. One example is
the investment in tooling and equipment we are making to support the U.S.
automotive business from which we expect to generate increased revenues
beginning in our fiscal year ending June 30, 1996.
During fiscal 1994, $3.1 million was expended to purchase the remaining
shares outstanding of Molex Nanco Ltd. and to purchase an additional 20 percent
interest in Dongguan Molex South-China Connector Co. Ltd. These expenditures
were slightly higher than fiscal 1993 when $2.4 million was expended to
purchase a controlling interest in Molex India Ltd. and to purchase minority
interests in three international connector companies.
The net trade accounts receivable balance increased $32.6 million during
fiscal year 1994 from $184.2 million at June 30, 1993 to $216.9 million at June
30, 1994. The translation effects of foreign currency accounted for $7.1
million of this increase. The non-currency related increase in net trade
accounts receivable is consistent with the increase in annual net revenues and
follows the unusually high sales volume the Company experienced during the
month of June 1994. Factoring out the impact of currency translation, the
average trade accounts receivable days outstanding of 79 days has increased one
day from the prior fiscal year.
Inventory increased during fiscal year 1994 from $104.5 million at June
30, 1993 to $113.3 million at June 30, 1994. Factoring out the change in
exchange rates due to the generally weaker U.S. dollar, inventory at June 30,
1994 increased $4.6 million over the prior year's balance. Average inventory
days have not changed from the 79 days reported last fiscal year.
Molex's long-term corporate philosophy is to utilize internal sources of
capital to fund investments in plant, equipment and acquisitions, using
external borrowing only when a clear financial advantage exists. Long-term
debt continued to decrease during the fiscal year to $7.4 million at June 30,
1994.
Management is confident that the Company's liquidity and financial
flexibility are adequate to support its current and future growth. The Company
also has available lines of credit totaling $34.2 million of which $32.1
million remained unused at June 30, 1994.
Molex is committed to increasing the returns earned by shareholders of
the Company. On November 11, 1993, Molex declared a 33 percent increase in its
annual cash dividend to $.04 per share from the former $.03 per share. The
Company has also issued four stock dividends to its shareholders in the last 11
years. The last Molex stock dividend was declared in October 1992. The weighted
average shares outstanding for the current fiscal year increased to 63.3
million from the 63.0 million for fiscal year 1993. The increase in shares
outstanding is attributable to the exercise of employee stock options and the
issuance of employee stock awards. The Company did not repurchase any treasury
stock on the open market during fiscal years 1994 and 1993.
Molex ended the fiscal year with a new record backlog level of $175.8
million, a 12.3 percent increase over the prior year's amount of $156.5
million.
The Company is subject to environmental laws and regulations in the
countries where it operates. Molex has designed an environmental program to
reduce the generation of potentially hazardous materials during its
manufacturing process and believes it continues to make good progress in
exceeding local governmental regulations. The Company is a defendant to several
pending legal proceedings incidental to the normal conduct of business.
Management believes that the ultimate disposition of these matters will not
have a materially adverse impact on the financial condition or consolidated
results of operations of the Company.
PERCENTAGE OF NET REVENUE
Fiscal Year Ended June 30
<TABLE>
<CAPTION>
Percentage Change
1994 1993 1992 1994-93 1993-92
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Net revenue 100.0% 100.0% 100.0% 12.2% 10.7%
Cost of sales 57.9 59.0 59.0 10.1% 10.7%
----- ----- ----- ----- -----
Gross profit 42.1 41.0 41.0 15.2% 10.8%
Operating expenses 25.8 25.6 26.6 13.2% 6.6%
----- ----- ----- ----- -----
Income from operations 16.3 15.4 14.4 18.4% 18.4%
Total other income 0.2 0.1 0.7 259.6% -88.9%
----- ----- ----- ----- -----
Income before income taxes,
minority interest and
cumulative effect of change
in accounting principle 16.5 15.5 15.1 19.5% 13.7%
Income taxes 6.6 6.8 6.4 8.2% 17.2%
Minority interest -0.1 0.0 0.0 -221.9% -233.6%
----- ----- ----- ----- -----
Income before cumulative effect of
change in accounting principle 9.8 8.7 8.7 27.0% 10.7%
Cumulative effect of change in
method of accounting for
postretirement benefits other
than pensions, net of tax - 0.4 - - -
----- ----- ----- ----- -----
Net income 9.8% 8.3% 8.7% 33.5% 5.3%
===== ===== ===== ===== =====
</TABLE>
Fiscal 1994 Compared to Fiscal 1993
During fiscal year 1994, Molex net revenues increased 12.2 percent to an
all-time high of $964.1 million, compared to $859.3 million during fiscal year
1993. Excluding the change in exchange rates due to the generally weaker U.S.
dollar, net revenue increased 10.9 percent.
<PAGE> 6
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The Far East North Region's customer net revenues increased 7.2 percent
in U.S. dollars, but declined slightly in local currencies as the value of the
U.S. dollar continued to decline against the Japanese yen. In Japan, the
electronics industry suffered through its second consecutive year of decline.
The softness in the electronics industry combined with ongoing price erosion
affected our Japanese domestic sales, but demand for Molex Japan products
remained strong outside the region as Japanese companies continued to relocate
some of their production outside of Japan and other non-Japanese companies
designed-in Molex Japan's micro-miniature products. During the fiscal year, the
region also focused on productivity improvements and efficiencies that allowed
the region to report a slight improvement in net return on sales from the prior
fiscal year.
The customer net revenues in the U.S. Region increased 14.6 percent
during fiscal year 1994 to $288.7 million. The sales growth is the result of
increased customer penetration in the computer and telecommunications market,
along with higher sales of newly-introduced products such as LFH and EBBI. We
also continued to see increased customer demand for our fiber optic products.
The region was able to overcome some of the effects of price erosion in the
computer market through improved manufacturing efficiencies.
Far East South customer net revenues increased 13.2 percent over the
prior fiscal year. However, during the third quarter of fiscal 1993, Molex sold
a manufacturing facility in Singapore and transferred part of the region's
harness operations to a newly formed joint venture company. Adjusting for this
change, Far East South net revenues increased 18 percent from last fiscal year.
This strong growth was primarily due to increased customer penetration at many
of the multinational companies who have relocated manufacturing operations to
the region and to the continued strong growth in the personal computer and disk
drive industries. Currency fluctuations did not significantly impact the
regional results during fiscal year 1994. Profitability in the region has
improved from last fiscal year's 12.2 percent return on net sales to the
current fiscal year's 13.4 percent. This increase is due to the previously
mentioned disposition of low margin operations in Singapore, improved factory
utilization and to operational improvements in our Taiwanese R.F. Division that
was acquired three years ago. Since purchasing the company, Molex has
substantially upgraded the production equipment and improved operating
efficiencies.
In Europe, customer net revenues improved 20.7 percent in local
currencies, but increased 10.2 percent in U.S. dollars as the dollar continued
to gain strength against most of the major European currencies. Increased
customer demand in the U.K., Ireland and France offset the continued weakness
in the German connector market. Molex continued its efforts to improve the
regional profitability through several restructuring actions during the fiscal
year. First, we consolidated our French connector manufacturing operation into
an enlarged facility in Biberach, Germany. Second, we are in the process of
progressively improving the routing of our product flow from our manufacturing
facilities to our customers. The above efforts contributed to increasing the
regional profitability from 3.3 percent of sales during fiscal year 1993 to 6.7
percent of sales during fiscal year 1994.
Customer net revenue in the Americas (Non-U.S.) region grew 38.4
percent from the prior year due to substantial revenue growth in Mexico and
stronger sales in Brazil.
The consolidated gross profit improved during fiscal 1994 to 42.1
percent of net revenues compared to 41.0 percent during fiscal 1993. The
Company was able to offset the effects of price erosion and increased
depreciation charges with improved factory utilization, favorable changes in
product mix and improved production efficiencies. Material prices and labor
costs have remained relatively stable during fiscal 1994.
Over the last five years, Molex has invested over $530 million in new
facilities, equipment and tooling. This significant investment has resulted in
depreciation and amortization expenses increasing 16.5 percent to $88.8 million
from $76.2 million during fiscal 1993. As a percent of sales, depreciation and
amortization charges currently represent 9.2 percent of sales compared to 8.9
percent of sales during fiscal year 1993.
Operating expenses as a percent of net revenue increased slightly from
25.6 percent in fiscal 1993 to 25.8 percent in fiscal 1994. This increase is
due, in part, to higher research and development expenditures.
Research and development expenditures reached an all-time high and
represented 6.7 percent of sales during fiscal 1994 increasing from 6.5 percent
of sales during fiscal 1993. Approximately 23 percent of fiscal 1994 net
revenues resulted from the sale of products that Molex has released within the
past three years. These expenditures, coupled with the efforts of our
engineering department, resulted in the release of 158 new product families and
granting of 181 new patents during fiscal year 1994. The continued increase in
research and development reflects Molex's long-term commitment to the
reinvestment of its profits in new product design and tooling. We believe this
commitment has significantly improved our competitive position.
The foreign currency transaction losses decreased 29.8 percent from
fiscal 1993 losses when the Company incurred high losses due to the abrupt
devaluation of several European currencies. The majority of the exchange losses
during fiscal 1994 were due to exchange losses in Brazil as a result of the
severe devaluation of the cruzeiro against the U.S. dollar.
Interest income, net of interest expense for fiscal 1994 has increased
2.0 percent from fiscal 1993. Higher short-term investment balances during
fiscal 1994 were able to offset lower interest rates earned in many of the
countries where the Company has significant short-term investments. Interest
expense has remained relatively unchanged from fiscal 1993.
The effective tax rate decreased to 39.6 percent during fiscal 1994
from 43.7 percent during fiscal 1993. The decrease reflects increased pretax
profitability in countries with lower effective tax rates coupled with the
ability of the Company to utilize additional foreign tax credits.
<PAGE> 7
Earnings before the cumulative effect of change in accounting principle
increased 27.0 percent to $94.9 million. Earnings per share increased to $1.50
during fiscal 1994 from $1.19 during fiscal 1993. Excluding the effects of
currency fluctuations, earnings before the cumulative effect of change in
accounting principle increased 24.0 percent over fiscal 1993 earnings.
Fiscal 1993 Compared to Fiscal 1992
Net revenue for fiscal 1993 increased 10.7 percent to $859.3 million, compared
to $776.2 million for fiscal year 1992. Excluding the change in exchange rates
due to the generally weaker U.S. dollar, net revenue increased 8.1 percent. The
growth in net revenue was primarily due to the record sales by the United
States and Far East South Regions and strong revenue growth in the
Americas (Non-U.S.) Region during fiscal 1993. Revenues grew in these regions
by 18.7%, 17.6% and 17.9%, respectively, over fiscal 1992.
Net revenue in the Far East North Region increased 5.0 percent over
fiscal 1992. The region experienced no growth in local currencies as the growth
was due to the decline of the U.S. dollar against the Japanese yen. The 2.3
percent growth reported in the European Region was impacted by the regional
recession as well as the strength of the U.S. dollar against most European
currencies. Excluding the effects of currency fluctuations, European net
revenues increased 5.2 percent over fiscal 1992.
During the fourth quarter of fiscal 1993, Molex adopted Statement of
Financial Accounting Standards No. 106, ''Employees' Accounting for
Postretirement Benefits Other Than Pensions'' (SFAS 106). SFAS 106 requires
that the cost of retiree benefits be accrued over the period in which the
employees become eligible for such benefits. Previously, these benefits were
expensed as incurred. In adopting this standard, Molex elected to immediately
recognize the cumulative effect and restate the previously reported fiscal 1993
quarterly results; the charge to fiscal 1993 first quarter net income was $3.6
million ($5.8 million before taxes) or six cents per share. Incremental annual
service and interest charges were $.7 million ($1.1 million before taxes) or
one cent per share.
Earnings before the cumulative effect of change in accounting principle
increased 10.7 percent to $74.7 million. Earnings per share increased to $1.19
from $1.08 for fiscal 1992. Excluding the effects of currency fluctuations,
earnings before the cumulative effect of change in accounting principle
increased by 6.6 percent over the prior fiscal year's amount.
The gross profit percentage of 41.0 percent remained unchanged from
fiscal 1992 to fiscal 1993. The Company was able to offset the effects of price
erosion and increased depreciation charges with increased sales volume,
favorable changes in product mix and improved operating efficiencies.
Operating expenses as a percentage of net revenue decreased from 26.6
percent in fiscal 1992 to 25.6 percent in fiscal 1993. The improvement was the
result of the continued emphasis on streamlining the business and improving
efficiency.
Research and development expenditures represented 6.5 percent of sales
during fiscal 1993, increasing from 6.1 percent of sales during fiscal 1992.
The increase in research and development expenditures reflects Molex's
long-term commitment to the reinvestment of profits in new product design and
tooling.
The foreign currency transaction losses for fiscal 1993 increased $4.0
million over fiscal 1992 losses primarily due to the strength of the U.S.
dollar and Japanese yen and the volatility of exchange rates in Europe during
fiscal 1993.
Interest income, net of interest expense, for fiscal 1993 decreased
11.1 percent from the prior fiscal year. The decrease reflects lower interest
rates in countries where the Company has significant short-term investments.
The effective tax rate for fiscal 1993 increased to 43.7 percent from
42.4 percent for the prior fiscal year. The increase reflects faster revenue
growth and increased profitability in countries with higher effective tax rates
coupled with the inability of the Company to utilize all of its foreign tax
credits generated during fiscal 1993.
Outlook
The prospects for fiscal 1995 look promising. We believe that the connector
industry is emerging from one of the most difficult economic climates since the
Second World War. Molex has the people, products and resources to take
significant advantage of this improving climate. We continue to make the
necessary investments for continued success and have a world class organization
that is totally committed to serving our customers and making Molex a premier
global company. Molex will continue to push into new markets and expand our
product line through the introduction of new and innovative products. We expect
this effort to produce worldwide sales in excess of $1 billion during fiscal
1995.
During the past fiscal year, Molex has demonstrated its ability to
control costs and improve productivity. We will continue to review and
challenge all activities in the Company with the goal of improving customer
service and operating efficiencies. We believe these efforts will allow Molex
to achieve its corporate financial goal of generating 10 percent net return on
sales for the fiscal year ending June 30, 1995.
<PAGE> 8
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
ASSETS June 30,
---------------------------------
1994 1993
----------- -----------
<S> <C> <C>
Current assets:
Cash $ 19,309 $ 27,160
Short-term investments 209,617 158,893
Accounts receivable:
Trade, less allowance of $8,916 in 1994 and
$8,789 in 1993 for doubtful accounts 216,866 184,233
Employee 4,808 6,302
Inventories 113,266 104,488
Deferred income taxes (Note 5) 18,665 12,305
Prepaid expenses 4,081 4,179
----------- -----------
Total current assets 586,612 497,560
----------- -----------
Property, plant and equipment
at cost (Notes 3 and 8):
Land and improvements 44,525 37,249
Buildings and leasehold improvements 199,523 175,851
Machinery and equipment 510,143 441,791
Molds and dies 246,203 199,286
----------- -----------
1,000,394 854,177
Less accumulated depreciation and amortization 559,399 468,349
----------- -----------
Net property, plant and equipment 440,995 385,828
----------- -----------
Other assets 110,910 78,387
----------- -----------
$ 1,138,517 $ 961,775
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 9
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY June 30,
---------------------------------
1994 1993
----------- -----------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt (Note 3) $ 184 $ 350
Accounts payable 96,659 79,223
Accrued expenses:
Salaries, commissions and bonuses 28,924 25,511
Other 37,113 24,601
Income taxes (Note 5) 41,878 35,210
Dividends payable 636 473
----------- -----------
Total current liabilities 205,394 165,368
----------- -----------
Deferred items:
Investment grants 2,570 2,638
Income taxes (Note 5) 12,042 8,740
----------- -----------
Total deferred items 14,612 11,378
----------- -----------
Accrued postretirement benefits (Notes 6 and 7) 26,363 22,014
----------- -----------
Long-term debt (Note 3) 7,350 7,510
----------- -----------
Minority interest in subsidiaries 3,184 3,851
----------- -----------
Shareholders' Equity (Notes 2, 4 and 9):
Common Stock, $.05 par value; 60,000 shares authorized;
32,919 shares issued at 1994 and 32,637 shares issued at 1993 1,646 1,632
Class A Common Stock, $.05 par value; 60,000 shares authorized;
32,755 shares issued at 1994 and 32,600 shares issued at 1993 1,637 1,630
Class B Common Stock, $.05 par value; 146 shares authorized;
94 shares issued at 1994 and 1993 5 5
Paid-in capital 56,464 47,052
Retained earnings 729,547 637,074
Deferred unearned compensation (7,223) (6,235)
Treasury stock (Common Stock, 1,048 shares at 1994 and 1,074
shares at 1993; Class A Common Stock, 1,122 shares at 1994
and 1,098 shares at 1993), at cost (31,749) (31,107)
Cumulative translation adjustments 131,287 101,603
----------- -----------
Total shareholders' equity 881,614 751,654
----------- -----------
$ 1,138,517 $ 961,775
=========== ===========
</TABLE>
<PAGE> 10
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<TABLE>
<CAPTION>
For the year ended June 30,
-----------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Net revenue $ 964,108 $ 859,283 $ 776,192
Cost of sales 558,029 506,680 457,831
----------- ----------- -----------
Gross profit 406,079 352,603 318,361
----------- ----------- -----------
Operating expenses:
Selling 109,531 98,486 91,546
Administrative 139,153 121,218 114,616
----------- ----------- -----------
Total operating expenses 248,684 219,704 206,162
----------- ----------- -----------
Income from operations 157,395 132,899 112,199
----------- ----------- -----------
Other income (expense):
Foreign currency transaction loss (3,291) (4,689) (715)
Interest 5,373 5,268 5,928
----------- ----------- -----------
Total other income 2,082 579 5,213
----------- ----------- -----------
Income before income taxes, minority interest and cumulative
effect of change in accounting principle 159,477 133,478 117,412
Income taxes (Note 5) 63,186 58,371 49,814
----------- ----------- -----------
Income before minority interest and cumulative effect of change in
accounting principle 96,291 75,107 67,598
Minority interest (1,439) (447) (134)
----------- ----------- -----------
Income before cumulative effect of change in accounting principle 94,852 74,660 67,464
Cumulative effect of change in method of accounting for
postretirement benefits other than pensions, net of tax -- 3,605 --
----------- ----------- -----------
Net income $ 94,852 $ 71,055 $ 67,464
=========== =========== ===========
Earnings per common share (Based upon weighted average
common shares outstanding):
Earnings per common share before cumulative effect of
change in accounting principle $ 1.50 $ 1.19 $ 1.08
Cumulative effect of change in method of accounting for
postretirement benefits other than pensions per share -- .06 --
----------- ----------- -----------
Earnings per common share $ 1.50 $ 1.13 $ 1.08
----------- ----------- -----------
Dividends per common share (Note 2) $ .0375 $ .0265 $ .0160
----------- ----------- -----------
Weighted average common shares outstanding 63,345 63,001 62,651
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 11
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
For the year ended June 30,
----------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Common Stock
Balance at beginning of period $ 1,632 $ 1,297 $ 1,288
Exercise of stock options 14 9 8
Issuance of stock bonus -- -- 1
Stock split effected in the form of a dividend -- 326 --
----------- ----------- -----------
Balance at end of period 1,646 1,632 1,297
Class A Common Stock
Balance at beginning of period 1,630 1,300 1,292
Exercise of stock options 7 5 7
Issuance of stock bonus -- -- 1
Stock split effected in the form of a dividend -- 325 --
----------- ----------- -----------
Balance at end of period 1,637 1,630 1,300
Class B Common Stock
Balance at beginning and end of period 5 5 5
Paid-in capital
Balance at beginning of period 47,052 42,094 34,632
Exercise of stock options 4,952 3,044 4,244
Disposition of treasury stock 650 467 330
Stock options granted 3,810 2,234 2,620
Issuance of stock bonus -- -- 268
Stock split effected in the form of a dividend -- (787) --
----------- ----------- -----------
Balance at end of period 56,464 47,052 42,094
Retained earnings
Balance at beginning of period 637,074 567,695 501,231
Net income 94,852 71,055 67,464
Cash dividends (2,379) (1,676) (1,000)
----------- ----------- -----------
Balance at end of period 729,547 637,074 567,695
Treasury stock
Balance at beginning of period (31,107) (31,040) (30,649)
Purchase of treasury stock (1,120) (720) (809)
Disposition of treasury stock 478 653 418
----------- ----------- -----------
Balance at end of period (31,749) (31,107) (31,040)
Deferred unearned compensation
Balance at beginning of period (6,235) (5,697) (5,327)
Stock options granted (3,810) (2,234) (2,620)
Amortization of deferred unearned compensation 2,822 1,696 2,250
----------- ----------- -----------
Balance at end of period (7,223) (6,235) (5,697)
Cumulative translation adjustments
Balance at beginning of period 101,603 84,735 48,270
Net effect of translation adjustment 29,684 16,868 36,465
----------- ----------- -----------
Balance at end of period 131,287 101,603 84,735
----------- ----------- -----------
Total shareholders' equity $ 881,614 $ 751,654 $ 660,389
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 12
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the year ended June 30,
----------------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
CASH AND SHORT-TERM INVESTMENTS, beginning of period $ 186,053 $ 157,157 $ 149,570
Cash and short-term investments were provided from (used for):
Operations:
Net income 94,852 71,055 67,464
Add (deduct) non-cash items included in net income:
Cumulative effect of change in accounting for
postretirement benefits other than pensions -- 3,605 --
Depreciation and amortization 88,787 76,193 67,556
Deferred income taxes (1,212) (1,497) 1,267
(Gain) Loss on sale of property, plant and equipment (1,047) 947 1,482
Minority interest 1,439 447 134
Amortization of deferred unearned compensation 2,822 1,696 2,250
Amortization of deferred investment grants (240) (271) (273)
Other charges to earnings--net 613 1,517 2,455
Current items:
Accounts receivable (23,903) (17,088) (2,592)
Inventories (4,454) (7,861) (5,829)
Prepaid expenses 172 (955) 1,883
Accounts payable 12,615 (8,702) 2,233
Accrued expenses 17,285 8,207 10,137
Income taxes 3,385 8,987 (12,449)
----------- ----------- ------------
Net cash provided from operations 191,114 136,280 135,718
----------- ----------- ------------
Investments:
Purchases of property, plant and equipment (129,458) (93,181) (132,672)
Proceeds from sale of property, plant and equipment 4,709 4,132 4,692
Purchases of business, net of cash acquired (3,106) (2,418) (1,023)
Increase in other assets (30,721) (21,160) (8,579)
----------- ----------- ------------
Net cash used for investments (158,576) (112,627) (137,582)
----------- ----------- ------------
Financing:
Decrease in long-term debt (169) (1,314) (1,442)
Cash dividends paid (2,217) (1,584) (1,004)
Exercise of stock options 2,915 1,998 2,900
Disposition of treasury stock 1,128 1,120 748
----------- ----------- ------------
Net cash provided from financing 1,657 220 1,202
----------- ----------- ------------
Effect of exchange rate changes on cash 8,678 5,023 8,249
----------- ----------- ------------
Net increase in cash and short-term investments 42,873 28,896 7,587
----------- ----------- ------------
CASH AND SHORT-TERM INVESTMENTS, end of period $ 228,926 $ 186,053 $ 157,157
=========== =========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 795 $ 840 $ 1,375
Income taxes 57,721 49,555 58,556
----------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the major accounting policies and
practices of Molex Incorporated and subsidiaries that affect significant
elements of the accompanying consolidated financial statements.
(A) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Molex
Incorporated (the Parent Company) and its subsidiaries. All material
intercompany balances and transactions have been eliminated.
(B) SHORT-TERM INVESTMENTS
Short-term investments consist of a variety of highly-liquid investments with
original maturities of three months or less. Short-term investments are carried
at cost, which approximates market.
(C) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments include short-term investments and long-term
debt. The carrying amounts of the financial instruments approximate their fair
value.
(D) INVENTORIES
Inventories are valued at the lower of first-in, first-out cost or market.
Inventories at June 30 consisted of the following:
1994 1993
---- ----
Raw materials $ 20,940 $ 18,600
Work in progress 42,865 39,379
Finished goods 49,461 46,509
-------- --------
$113,266 $104,488
======== ========
(E) PROPERTY, PLANT AND EQUIPMENT AND RELATED RESERVES
Depreciation and amortization are provided substantially on a straight-line
basis for financial statement purposes and on accelerated methods for tax
purposes. The estimated useful lives are as follows:
Buildings 25-45 years
Machinery and equipment 3-10 years
Molds and dies 3-4 years
Cost of leasehold improvements are amortized over the terms of the
related leases using various methods.
(F) RESEARCH AND DEVELOPMENT AND PATENT COSTS
Costs incurred in connection with the development of new products and
applications are charged to operations as incurred. Total research and
development costs equaled $64,772 in 1994; $56,204 in 1993 and $47,596 in 1992.
Included in these totals are patent costs of $3,252, $2,784 and $2,174
for the years ended June 30, 1994, 1993 and 1992, respectively.
(G) REVENUE RECOGNITION
The Company recognizes revenue at the date of shipment.
(H) CURRENCY TRANSLATION
Assets and liabilities of international entities have been translated at
current exchange rates, and income and expenses have been translated using
average exchange rates.
(I) ACCOUNTING CHANGES
Effective July 1, 1992, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 106, ''Employers' Accounting for Postretirement Benefits
Other Than Pensions.'' SFAS No. 106 requires the Company to accrue retiree
insurance benefits over the period in which employees become eligible for such
benefits. The Company implemented SFAS 106 by recognizing the transition
obligation immediately.
(J) RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements in order to conform to the 1994 classifications.
(2) CAPITAL STOCK
The shares of Common Stock, Class A Common Stock and Class B Common Stock are
identical except as to voting rights. Class A Common Stock has no voting rights
except in limited circumstances. So long as more than 50% of the authorized
number of shares of Class B Common Stock continue to be outstanding, all
matters, other than the election of directors, submitted to a vote of the
shareholders must be approved by a majority of the Class B Common Stock, voting
as a class, and by a majority of the Common Stock voting as a class. During
such period, holders of a majority of the Class B Common Stock could veto
corporate action that requires shareholder approval other than the election of
directors.
During Fiscal 1990, the shareholders approved an amendment to the
Certificate of Incorporation affecting the capital structure of the Company.
The amendment provided for the creation of 60.0 million shares of a new class
of non-voting Class A Common Stock, 25.0 million shares of a new class of
Preferred Stock, and the elimination of the previously authorized class of
Preferred Stock. The issuance, terms and conditions of the new Preferred Stock
are at the discretion of the Board of Directors. There were no shares of the
new class of Preferred Stock issued or outstanding during the three years ended
June 30, 1994.
<PAGE> 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Class B Common Stock can be converted into Common Stock on a share
for share basis at any time at the option of the holder. The authorized Class A
Common Stock would automatically convert into Common Stock on a share for share
basis at the discretion of the Board of Directors upon the occurrence of
certain events. Upon such conversion, the voting interests of the holders of
Common Stock and Class B Common Stock would be diluted.
The holders of the Common Stock, Class A Common Stock, and Class B
Common Stock participate equally, share for share, in any dividends which may
be paid thereon, if, as and when declared by the Board of Directors, or in any
assets available upon liquidation or dissolution of the Company.
(3) DEBT
The details relative to long-term debt are as follows:
<TABLE>
1994 1993
------ ------
<S> <C> <C>
Industrial development bonds
2% to 4%, secured by certain
land, buildings and equipment;
payable in periodic installments
through November, 2009. $7,410 $7,661
Other 124 199
------ ------
7,534 7,860
Less current portion 184 350
------ ------
Long-term portion $7,350 $7,510
====== ======
</TABLE>
The long-term portion as of June 30, 1994 is due subsequent to fiscal
year 2000.
The provisions of certain loan agreements contain restrictive
covenants, the more significant of which require the Company to maintain
specified liquidity and debt-to-equity ratios.
(4) DEFERRED UNEARNED COMPENSATION
Under the 1979 Stock Option Plan and 1990 Stock Option Plan all shares issued
are nonqualified. The option price per share is less than the fair market value
at the date of grant, thus creating deferred unearned compensation. The
difference between the fair market value and the option price was recorded as
deferred unearned compensation and is charged to operations over a five year
period. In fiscal 1994, $2,822 was charged to operations ($1,696 in 1993 and
$2,250 in 1992).
(5) INCOME TAXES
Effective July 1, 1991 the Company adopted Statement of Financial Accounting
Standards No. 109, ''Accounting for Income Taxes'' (SFAS 109). Under SFAS 109,
the deferred tax provision is determined under the liability method. Under
this method, deferred tax assets and liabilities are recognized based on
differences between the financial statement and tax bases of assets and
liabilities using presently enacted tax rates. Adoption of the statement did
not have a material effect on the results of operations.
Income tax provisions are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Currently payable:
U.S. federal $ 9,921 $ 8,427 $ 7,120
State 2,426 2,057 1,904
International 52,031 49,075 39,470
-------- -------- --------
64,378 59,559 48,494
-------- -------- --------
Deferred:
International
taxes (833) (2,139) 2,002
Other, net (359) 951 (682)
-------- -------- --------
(1,192) (1,188) 1,320
-------- -------- --------
Total provision for
income taxes
before cumulative
effect of change
in accounting
principle $63,186 $58,371 $49,814
======== ======== ========
</TABLE>
The Company's tax rate, before the cumulative effect of change in
accounting principle, differs from the U.S. federal income tax rate as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
U.S. federal income
tax rate 35.0% 34.0% 34.0%
Certain tax exemptions (4.4) (4.7) (4.6)
State income taxes,
net of federal
tax benefit 1.0% 1.0% 1.1%
International tax rates
different from
U.S. federal rate 8.0% 13.4% 11.9%
-------- -------- --------
39.6% 43.7% 42.4%
======== ======== ========
</TABLE>
Income before income taxes, minority interest and cumulative effect of
change in accounting principle is summarized as follows:
<TABLE>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
United States $ 46,584 $ 35,806 $ 35,136
International 112,893 97,672 82,276
-------- -------- --------
$159,477 $133,478 $117,412
======== ======== ========
</TABLE>
<PAGE> 15
Temporary differences that give rise to a significant portion of net
deferred taxes are as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
International/local taxes $ 3,547 $ 4,072
Employee benefit plans 7,826 6,818
Depreciation and amortization (3,759) (1,515)
Allowance for doubtful accounts 1,381 1,117
Difference between book and
tax asset bases 2,264 1,755
Other deferred items 7,177 3,749
------- -------
$18,436 $15,996
======= =======
</TABLE>
The net deferred tax accounts reported on the balance sheet as of June
30 are as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Net deferred:
Current asset $18,665 $12,305
Long-term asset 14,609 13,675
Current liability (2,796) (1,244)
Long-term liability (12,042) (8,740)
-------- -------
$18,436 $15,996
======== =======
</TABLE>
(6) POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
In addition to providing pension benefits, the Parent Company and certain of
its subsidiaries provide certain health care and life insurance benefits to its
employees. The majority of the Parent Company employees may become eligible for
these benefits if they reach age 55, with age plus years of service equal to
70. During fiscal 1994, the Company made several modifications to the
cost-sharing and benefit provisions of its postretirement plans. There are no
significant postretirement health care benefit plans outside of the United
States.
During fiscal 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, ''Employers' Accounting for Postretirement
Benefits Other Than Pensions.'' SFAS No. 106 requires that the cost of retiree
insurance benefits be accrued over the period in which the employees become
eligible for such benefits. The Company elected to immediately recognize the
effect of the change in accounting for postretirement benefits of $3.6 million
($5.8 million before tax), or six cents per share which represents the
accumulated postretirement benefit obligation (APBO) existing at July 1, 1992.
The Company continues to fund benefit costs primarily as claims are paid.
Net periodic postretirement benefit cost for fiscal years 1994 and 1993
included the following components:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Service cost, benefits attributed to
employee service during the period $492 $ 578
Interest cost on accumulated
postretirement benefit obligation 405 490
Unrecognized prior service cost (107) --
---- ------
Net periodic postretirement
benefit cost $790 $1,068
==== ======
</TABLE>
The following table sets forth the plans' combined status as of June 30:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees and beneficiaries $ 675 $ 707
Active employees 5,207 6,176
------ ------
Total accumulated postretirement
benefit obligation 5,882 6,883
Fair value of plan assets -- --
------ ------
Unfunded accumulated benefit
obligation in excess of
plan assets 5,882 6,883
Unrecognized prior service cost 2,335 --
Unrecognized net loss (504) --
------ ------
Accrued postretirement benefit costs $7,713 $6,883
====== ======
</TABLE>
The discount rate used in determining the APBO was 7.5% and 8.5% as of
June 30, 1994 and 1993, respectively. The assumed health care cost trend rate
used in measuring the accumulated postretirement benefit obligation was 11.1%
in 1994, declining per year to an ultimate rate of 5.0% by 2017. The health
care cost trend rate assumption has a significant effect on the amount of the
obligation and periodic cost reported. An increase in the assumed health care
cost trend rate by 1% in each year would increase the APBO as of June 30, 1994
by $1,035 and the aggregate of the service and interest cost components of the
net periodic postretirement benefit cost for the year then ended by $191.
In fiscal 1992 the costs relating to the health care and life insurance
benefits for retirees of $95 was recognized as expense primarily as claims were
paid.
<PAGE> 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(7) PENSION AND PROFIT SHARING PLANS
The Company sponsors and/or contributes to pension plans covering substantially
all U.S. hourly employees and certain employees in international subsidiaries.
The Company also sponsors several defined benefit plans for certain domestic
and international employees. The benefits are primarily based on years of
service and the employees' compensation for certain periods during the last
years of employment.
Total pension expense for all benefit plans, including defined benefit
plans, amounted to $4,584 in 1994, $5,160 in 1993 and $4,511 in 1992. Net
periodic pension expense for the Company's defined benefit plans consists of
the following for the year ended June 30:
<TABLE>
<CAPTION>
1994 1993 1992
-------------------- -------------------- ----------------------
U.S. International U.S. International U.S. International
Plans Plans Plans Plans Plans Plans
---------- ----- ---------- ----- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Service costs $412 $1,826 $ 607 $2,230 $ 596 $1,611
Interest costs on projected
benefit obligation 368 1,039 398 923 399 800
Actual return on plan assets (198) (444) (489) (435) (401) (376)
Net amortization and deferral (142) 33 307 68 278 19
---- ------ ----- ------ ----- ------
Net periodic pension expense $440 $2,454 $ 823 $2,786 $ 872 $2,054
==== ====== ===== ====== ===== ======
</TABLE>
The funded status for the Company's defined benefit plans is as follows:
<TABLE>
<CAPTION>
1994 1993
-------------------- ----------------------
U.S. International U.S. International
Plans Plans Plans Plans
---------- ----- ---------- -----
<S> <C> <C> <C> <C>
Actuarial present value of:
Vested benefit obligation $ 3,893 $ 12,073 $ 3,819 $ 9,633
Nonvested benefit obligation 186 151 173 96
------- -------- ------- --------
Accumulated benefit obligation 4,079 12,224 3,992 9,729
Projected benefit obligation 5,654 19,157 5,074 15,494
Plan assets at fair value 6,369 7,079 5,438 5,231
------- -------- ------- --------
Plan assets in excess of (less than) projected
benefit obligation 715 (12,078) 364 (10,263)
Unrecognized net transition liability 618 65 728 64
Unrecognized prior service costs 741 -- 822 --
Unrecognized net gain (1,830) (2,036) (2,161) (1,481)
------- -------- ------- --------
Accrued pension asset (liability) included
in the consolidated balance sheet $ 244 $(14,049) $ (247) $(11,680)
======= ======== ======= ========
</TABLE>
The assumptions used in computing the above information are presented below:
<TABLE>
<CAPTION>
1994 1993
-------------------------- --------------------------
International International
Plans Plans
(weighted (weighted
U.S. Plans average) U.S. Plans average)
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Discount rates 7.5% 6.2% 7.5% 6.2%
Rates of increase in compensation 4.0% 4.1% 4.0% 4.1%
Expected long-term rates of return on plan assets 7.0% 8.0% 7.0% 8.0%
</TABLE>
The Parent Company and certain of its subsidiaries also provide
discretionary savings and other defined contribution plans covering
substantially all of their salaried employees. Employer contributions of
$4,892, $4,736 and $2,617 were charged to operations during 1994, 1993, and
1992, respectively.
<PAGE> 17
(8) COMMITMENTS
(A) PRODUCTION EQUIPMENT
As of June 30, 1994, the Company has entered into firm commitments for capital
expenditures of approximately $38,575 for machinery, molds and dies.
(B) OPERATING LEASES
The Company and its subsidiaries rent certain facilities and equipment under
lease arrangements classified as operating leases. Some of the leases have
renewal options.
Future minimum rental payments under noncancellable operating
leases with initial or remaining terms of one year or more as of June 30, 1994
are as follows:
<TABLE>
<CAPTION>
Fiscal Year Amount
------
<S> <C>
1995 $ 8,698
1996 5,482
1997 3,378
1998 2,536
1999 2,147
Thereafter 6,832
-------
$29,073
=======
</TABLE>
Rental expense was $9,872 in 1994, $8,328 in 1993 and $7,694 in 1992.
(9) STOCK OPTION PLANS
In December 1979, the Company adopted the 1979 Stock Option Plan. The most
significant terms of this plan provide that (1) options may be granted for 3.1
million shares of Common Stock and Class A Common Stock, (2) the options are
not exercisable for one year after the date of grant and thereafter up to
twenty-five percent (25%) of the options may be exercised cumulatively during
each of the four succeeding years, and (3) the option price shall be fifty
percent (50%) of the fair market value of the stock of the Company on the date
of grant. The options expire five years from the date of the grant. The plan
expired as of June 30, 1989, and therefore, no future grants will be made under
the plan.
Stock option transactions relating to the 1979 Plan are summarized as
follows:
<TABLE>
<CAPTION>
Shares
1979 PLAN (in thousands) Price Per Share
-------------- ---------------
<S> <C> <C>
Outstanding at 7/1/92 394 $6.25-$8.66
Exercised 142 $6.25-$8.66
Cancelled 30
Outstanding at 6/30/93 222 $6.25-$8.66
Exercised 212 $6.25-$8.66
Cancelled 10
Outstanding at 6/30/94 0
Options exercisable at 6/30/93 222
Options exercisable at 6/30/94 0
</TABLE>
In October 1981, the Board of Directors adopted the 1981 Stock Option
Plan. The most significant terms of this plan provide that (1) options may be
granted for 2.9 million shares of Common Stock and Class A Common Stock, (2)
the options are not exercisable for one year after the date of grant and
thereafter up to twenty-five percent (25%) of the options may be exercised
cumulatively during each of the four succeeding years, and (3) the option price
shall be the fair market value of the stock of the Company on the date of
grant. The options expire five years from the date of the grant. The plan
expired as of June 30, 1991 and therefore, no future grants will be made under
the plan.
Stock option transactions relating to the 1981 Plan are summarized as
follows:
<TABLE>
<CAPTION> Shares
1981 PLAN (in thousands) Price Per Share
-------------- ---------------
<S> <C> <C>
Outstanding at 7/1/92 296 $12.50-$17.49
Exercised 68 $12.50-$17.49
Outstanding at 6/30/93 228 $12.50-$17.49
Exercised 113 $12.50-$17.49
Outstanding at 6/30/94 115 $15.00-$17.49
Options exercisable at 6/30/93 160
Options exercisable at 6/30/94 25
</TABLE>
In July 1990, the Board of Directors adopted the 1990 Stock Option
Plan. The most significant terms of this plan provide that (1) options may be
granted for 1.9 million shares of Common Stock, (2) the options are not
exercisable for one year after the date of grant and thereafter up to
twenty-five percent (25%) of the options may be exercised cumulatively during
each of the four succeeding years, and (3) the option price shall be fifty
percent (50%) of the fair market value of the stock of the Company on the date
of grant. The options expire five years from the date of the grant.
Stock option transactions relating to the 1990 Plan are summarized as
follows:
<TABLE>
<CAPTION> Shares
1990 PLAN (in thousands) Price Per Share
-------------- ---------------
<S> <C> <C>
Outstanding at 7/1/92 552 $7.70-$11.60
Granted 225 $13.13-$15.75
Exercised 79 $7.80-$11.60
Cancelled 31
Outstanding at 6/30/93 667 $7.70-$15.75
Granted 227 $16.75-$17.75
Exercised 112 $7.80-$13.50
Cancelled 22
Outstanding at 6/30/94 760 $7.70-$17.75
Options exercisable at 6/30/93 105
Options exercisable at 6/30/94 182
</TABLE>
In July 1991, the Board of Directors adopted the 1991 Stock Option
Plan. The most significant terms of this plan provide that (1) options may be
granted for 1.3 million shares of Common Stock, (2) the options are not
exercisable for one year after the date of grant and thereafter up to
twenty-five percent (25%) of the options may be exercised cumulatively during
each of the four succeeding years, and (3) the option price shall be the fair
market value of the stock on the date of the grant. The options expire five
years from the date of the grant.
<PAGE> 18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Stock option transactions relating to the 1991 Plan are summarized as
follows:
<TABLE>
<CAPTION>
Shares
1991 PLAN (in thousands) Price Per Share
-------------- ---------------
<S> <C> <C>
Outstanding at 7/1/92 59 $24.20-$26.62
Granted 71 $25.20-$31.68
Exercised 2 $24.20
Outstanding at 6/30/93 128 $24.20-$31.68
Granted 181 $30.62-$37.68
Exercised 1 $24.20-$25.20
Outstanding at 6/30/94 308 $24.20-$37.68
Options exercisable at 6/30/93 13
Options exercisable at 6/30/94 44
</TABLE>
(10) OPERATIONS BY GEOGRAPHIC AREA
The Company and its subsidiaries operate in one product segment: the
manufacture and sale of electrical components.
Net revenue by geographic area is summarized in the following tables:
<TABLE>
<CAPTION>
Customer Intercompany
1994 Revenue Revenue Total
-------- ------------ -----
<S> <C> <C> <C>
United States $288,732 $ 28,729 $ 317,461
Far East North 303,161 68,161 371,322
Far East South 173,425 18,151 191,576
Europe 159,553 11,479 171,032
Americas (Non-U.S.) 31,841 811 32,652
Other 7,396 31,016 38,412
Eliminations -- (158,347) (158,347)
-------- --------- ---------
Consolidated $964,108 $ -- $ 964,108
======== ========= =========
<CAPTION>
Customer Intercompany
1993 Revenue Revenue Total
-------- ------------ -----
<S> <C> <C> <C>
United States $251,973 $ 26,354 $ 278,327
Far East North 282,836 56,220 339,056
Far East South 153,142 17,541 170,683
Europe 144,798 9,288 154,086
Americas (Non-U.S.) 23,011 713 23,724
Other 3,523 26,841 30,364
Eliminations -- (136,957) (136,957)
-------- --------- ---------
Consolidated $859,283 $ -- $ 859,283
======== ========= =========
<CAPTION>
Customer Intercompany
1992 Revenue Revenue Total
-------- ------------ -----
<S> <C> <C> <C>
United States $212,229 $ 26,351 $ 238,580
Far East North 269,279 32,608 301,887
Far East South 130,168 16,674 146,842
Europe 141,490 5,442 146,932
Americas (Non-U.S.) 19,514 485 19,999
Other 3,512 21,546 25,058
Eliminations -- (103,106) (103,106)
-------- --------- ---------
Consolidated $776,192 $ -- $ 776,192
======== ========= =========
</TABLE>
Net income by geographic area is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- ------ -----
<S> <C> <C> <C>
United States $ 30,020 $ 21,548 $ 23,558
Far East North 40,083 37,173 32,854
Far East South 25,656 20,768 17,220
Europe 11,529 5,109 6,912
Americas (Non-U.S.) 1,099 1,390 414
Other (13,362) (14,009) (13,578)
Eliminations (173) (924) 84
-------- -------- --------
Consolidated $ 94,852 $ 71,055 $ 67,464
======== ======== ========
</TABLE>
Identifiable assets by geographic area are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---------- -------- -------
<S> <C> <C> <C>
United States $ 357,261 $303,045 $274,589
Far East North 447,384 383,553 311,717
Far East South 157,975 138,285 129,240
Europe 149,604 124,093 168,902
Americas (Non-U.S.) 17,102 15,139 11,540
Other 40,218 33,134 34,032
Eliminations (31,027) (35,474) (80,331)
-------- -------- -------
Consolidated $1,138,517 $961,775 $849,689
========= ======== ========
</TABLE>
Intercompany net revenues are generally at cost plus the normal mark-up
charged to unaffiliated customers. Identifiable assets are those assets of the
Company that are identified with operations in each country. During 1994, 1993
and 1992, the largest single customer accounted for less than 10% of
consolidated net revenues.
(11) ACQUISITIONS AND INVESTMENTS
The Company periodically engages in the acquisition and/or divestiture
of companies within the connector industry. These transactions have not been
material to the financial position or results of operations of the Company,
either individually or in the aggregate, and are therefore not separately
identified herein.
During fiscal 1994, Molex purchased the remaining shares outstanding of
Molex Nanco Ltd. and acquired an additional 20 percent interest in Dongguan
Molex South-China Connector Co. Ltd. During fiscal 1993, the Company increased
its ownership percentage in Molex India Ltd. to 80 percent, and made minority
investments in three international connector companies. Molex also sold its
remaining shares in a majority owned company and sold a portion of one of its
minority owned investments in fiscal 1993.
The majority owned investments have been accounted for as purchases.
Operating results have been included in the financial statements from the date
of acquisition and did not have a significant effect on consolidated operating
results. The minority investments have been accounted for on the equity basis of
accounting.
<PAGE> 19
FISCAL 1994, 1993, AND 1992 BY QUARTER
(in thousands, except per share--unaudited)
<TABLE>
<CAPTION>
Quarter 1994 1993(2) 1992
-------- ------- ------- --------
<S> <C> <C> <C> <C>
Net revenue 1st $233,244 $215,201 $186,968
2nd 224,896 202,487 189,304
3rd 238,568 206,011 191,688
4th 267,400 235,584 208,232
Gross profit 1st 96,861 88,722 75,520
2nd 94,196 82,113 76,941
3rd 100,103 83,167 77,943
4th 114,919 98,601 87,957
Income before income taxes, minority interest
and cumulative effect of change in
accounting principle 1st 37,142 32,708 27,444
2nd 35,917 30,193 28,675
3rd 39,659 31,102 28,677
4th 46,759 39,475 32,616
Income taxes 1st 15,357 14,394 12,509
2nd 14,256 13,621 12,351
3rd 15,761 13,563 12,030
4th 17,812 16,793 12,924
Net income 1st 21,382 14,660 14,882
2nd 21,405 16,543 16,390
3rd 23,596 17,408 16,595
4th 28,469 22,444 19,597
Earnings per common share(1) 1st 0.34 0.23 0.24
2nd 0.34 0.26 0.26
3rd 0.37 0.28 0.27
4th 0.45 0.36 0.31
</TABLE>
<TABLE>
<CAPTION>
LOW HIGH LOW HIGH LOW HIGH
<S> <C> <C> <C> <C> <C> <C> <C>
National Market System
Price of Stock: Common Stock(1) 1st 30 1/4 38 1/4 23 7/8 30 1/4 22 27 7/8
2nd 31 3/4 36 1/2 26 30 7/8 22 7/8 29
3rd 33 1/2 38 1/2 25 3/4 33 24 1/4 31 5/8
4th 30 1/4 38 7/8 28 3/4 32 1/4 23 5/8 27 5/8
Class A Common Stock(1) 1st 27 1/2 35 23 1/4 28 3/8 20 7/8 26 7/8
2nd 29 1/2 34 3/4 24 3/4 29 22 7/8 27 7/8
3rd 32 1/2 36 3/4 24 3/8 30 1/2 22 7/8 30 1/4
4th 30 1/4 36 3/4 26 1/4 30 23 26 5/8
</TABLE>
(1)Restated for the 25% stock dividend--November, 1992.
(2)During the fourth quarter of fiscal 1993, the Company retroactively changed
its method of accounting for postretirement benefits other than pensions.
The first three quarters of fiscal year 1993 have been restated to
reflect this accounting change.
<PAGE> 1
EXHIBIT 22
REGISTRANT'S SUBSIDIARIES
The following list sets forth the subsidiaries of Registrant, the state
or country of incorporation or organization of each, and the names under which
the subsidiaries do business. All of the listed subsidiaries are included in
the consolidated financial statements of the Registrant. Unless otherwise
indicated, all the subsidiaries are wholly-owned by the Registrant either
directly or indirectly through one or more intermediaries.
<TABLE>
<CAPTION>
COMPANY NAME JURISDICTION OWNERSHIP
------------------------------------------------------------ ------------------ ---------
<S> <C> <C>
Molex US Inc. Delaware, U.S.A. 100.0%
Molex Caribe Inc. Delaware, U.S.A. 100.0%
Molex Electrical Systems Inc. Delaware, U.S.A. 100.0%
Molex-ETC Inc. Delaware, U.S.A. 100.0%
ETC Leasing Inc. Delaware, U.S.A. 100.0%
Molex S.A. de C.V. Mexico 100.0%
Molex International, Inc. Delaware, U.S.A. 100.0%
Ulti-Mate, Inc. California, U.S.A. 100.0%
Molex Overseas Inc. dba Molex Espana Delaware, U.S.A. 100.0%
Molex Eletronica Ltda. Brazil 100.0%
Molex da Amazonia Ltda. Brazil 100.0%
Molex Electronics Ltd. Canada 100.0%
Dongguan Molex South-China Connector Co. Ltd. China (P.R.C.) 90.0%
G. Ostervig-Molex A/S Denmark 30.0%
Molex France S.A.R.L. France 100.0%
Molex Eastern Europe S.A.R.L. France 85.0%
Decoupage Moulage De Savoie S.A. France 19.0%
Molex Elektronik GmbH Germany 100.0%
Molex Services GmbH Germany 100.0%
Molex GmbH Germany 90.0%
* Molex Hong Kong Ltd. Hong Kong 100.0%
Molex-Nanco Ltd. Hong Kong 100.0%
Molex (India) Ltd. India 80.0%
Molex Italia S.p.A. Italy 100.0%
* Molex Elettronica S.r.l. Italy 100.0%
Zetronic S.p.A. Italy 31.0%
Molex-Japan Co., Ltd. Japan 100.0%
Molex (Malaysia) Sdn. Bhd. Malaysia 100.0%
Molex de Mexico S.A. de C.V. Mexico 100.0%
Molex (Benelux) B.V. Netherlands 100.0%
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
COMPANY NAME JURISDICTION OWNERSHIP
------------------------------------------------------------ ------------------ ---------
<S> <C> <C>
Molex B.V. Netherlands 100.0%
Molex European Distribution Center B.V. Netherlands 100.0%
Molex - G. Knutsen A/S Norway 25.0%
Molex Far East-South Management Pte. Ltd. Singapore 100.0%
Molex Singapore Pte. Ltd. Singapore 100.0%
MEC International Pte. Ltd. Singapore 30.0%
Hi-P Tool & Die Pte.Ltd. Singapore 34.0%
Molex Property Holding Pty. Ltd. South Africa 100.0%
Technor (Pty.) Ltd. South Africa 87.0%
Molex Korea Co., Ltd. South Korea 100.0%
* Suministro Iberico de Conexiones S.A. Spain 25.0%
Molex Svenska A.B. Sweden 100.0%
Molex Interconnect AG Switzerland 100.0%
Molex Illinois S.A. Switzerland 100.0%
Smithstown Light Engineering Ltd. Ireland 50.0%
Molex Ireland Ltd. Ireland 100.0%
Molex Taiwan Ltd. Taiwan (R.O.C.) 100.0%
Land Win Electronic Corporation Taiwan (R.O.C.) 20.0%
Molex (Thailand) Ltd. Thailand 95.0%
Molex Electronics Ltd. United Kingdom 100.0%
* Molex European Management Ltd. United Kingdom 100.0%
* Molex Ltd. United Kingdom 100.0%
Beta Phase, Inc. Delaware, U.S.A. 38.0%
Molex Fiber Optic Interconnect Technologies, Inc. Illinois, U.S.A. 75.0%
*Molex Alin International, Incorporated British Virgin Is. 100.0%
-------------------------------------------------------------------
</TABLE>
*Inactive company
<PAGE> 1
EXHIBIT 24
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statements (File Nos. 33-9737, 33-9738, 33-1138, 2-87344, 2-
79949, 2-74447, 2-71557, 33-32055 and 33-37683) of Molex
Incorporated and its subsidiaries on Form S-8 of our reports
dated August 9, 1994, appearing in and incorporated by
reference in this Annual Report on Form 10-K of Molex
Incorporated and its subsidiaries for the year ended June 30,
1994.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
September 24, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
MOLEX INC. ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED JUNE 30, 1994
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-END> JUN-30-1994
<EXCHANGE-RATE> 1
<CASH> 19,309
<SECURITIES> 209,617
<RECEIVABLES> 225,782
<ALLOWANCES> (8,916)
<INVENTORY> 113,266
<CURRENT-ASSETS> 586,612
<PP&E> 1,000,394
<DEPRECIATION> (559,399)
<TOTAL-ASSETS> 1,138,517
<CURRENT-LIABILITIES> 205,394
<BONDS> 7,350
<COMMON> 3,288
0
0
<OTHER-SE> 878,326
<TOTAL-LIABILITY-AND-EQUITY> 1,138,517
<SALES> 964,108
<TOTAL-REVENUES> 964,108
<CGS> 558,029
<TOTAL-COSTS> 806,713
<OTHER-EXPENSES> 3,291
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (5,373)
<INCOME-PRETAX> 159,477
<INCOME-TAX> 63,186
<INCOME-CONTINUING> 96,291
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 94,852
<EPS-PRIMARY> 1.50
<EPS-DILUTED> 1.50
</TABLE>
