<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, 1995 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 25, 1995, the following numbers of shares of the Company's
common stock were outstanding and as restated for the August 1995 dividend:
<TABLE>
<S> <C>
Common Stock 50,230,119
Class A Common Stock 50,639,983
Class B Common Stock 94,255
</TABLE>
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 $952.6 million.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the year ended June 30,
1995, 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 20, 1995 are incorporated by reference into Part III of
this report.
Index to Exhibits listed on Pages 21 through 22.
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I
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
and Management.
Item 13. Certain Relationships and Related Transactions 14
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports 15
on Form 8-K
Statements of Changes in Shares Outstanding 17
Schedule II 18
Independent Auditor's Report on Schedule 19
Signature Page 20
Index to Exhibits 21
</TABLE>
2
<PAGE> 3
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 1995, Molex purchased the remaining shares of Molex Fiber
Optics Inc. and Molex Eastern Europe, S.A., and increased its holdings in
Molex (India) Ltd. and DeCoupage Moulage De Savoie S.A. In addition, $9.3
million in cash, along with 1.2 million shares of Class A Common Stock,
was used to purchase Mod-Tap W. Corp. During fiscal 1994, Molex purchased
the remaining shares outstanding of Molex Nanco Ltd. and acquired an
additional 20 percent interest of Dongguan Molex South-China Connector Co.
Ltd.
GENERAL DESCRIPTION OF THE BUSINESS
Molex is a leading manufacturer of electronic, electrical and fiber optic
interconnection products and systems; switches; and application tooling.
Molex operates 44 plants in 21 countries and employs 9,500 people
worldwide. Molex serves original equipment manufacturers in industries
that include computer, computer peripheral, business equipment, home
entertainment and home appliance, automotive, telecommunications, local
area network and residential construction. Molex offers more than 50,000
products to customers primarily through a network of direct sales
representatives and authorized distributors. Products manufactured and
sold outside the U.S. generated more than 70% of Molex sales in fiscal
1995. The worldwide market for electronic connectors, cable assemblies
and backplanes was estimated at $22.4 billion* in sales for fiscal year
1995. With 5.3% of that market, Molex is the second-largest 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, 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
3
<PAGE> 4
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 1995
Market Net Revenue Products
------ --- ------- --------
<S> <C> <C>
Computer/business equipment/ 48% Computers, peripheral
telecommunications equipment, calculators,
copiers, pagers and
dictation equipment
Home entertainment and home 32% 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
1995, 1994 or 1993. While its customers generally make purchasing
decisions on a decentralized basis, Molex
4
<PAGE> 5
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.
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, Australia, England, Italy, Ireland, France, Spain, Germany, the
Netherlands, Switzerland, Poland, 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 44 manufacturing facilities in 21 countries on
six continents. This year, the Molex factory in Little Rock, Arkansas
became the first U.S. plant to receive the ISO 9000 credential, joining
all of the Molex facilities in the Far East North and Far East South
Regions and all but one plant in the European Region.
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.
5
<PAGE> 6
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 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, 1995, the Company owned 533 United States patents and had
133 patent applications on file with the United States Patent Office. The
Company also has 675 corresponding patents issued and 2,143 applied for in
other countries as of June 30, 1995. 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, 1995 was approximately $245.7
million; this compares to $175.8 million at June 30, 1994. 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 $78.1 million in
1995, $64.8 million in 1994, and $56.2 million in 1993. The Company
incurred costs relating to obtaining patents of $4.9 million in 1995, $3.3
million in 1994, and $2.8 million in 1993 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 630 full-time employees in 1995 (606 in 1994
and 558 in 1993), 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, 1995, the Company employed 9,500 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, 1995 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 42 of the 1995 Annual
Report to Shareholders and is incorporated herein by reference.
7
<PAGE> 8
ITEM 2 - PROPERTIES
Molex owns and leases manufacturing, warehousing and office space in over
99 locations around the world. The total square footage of these
facilities is presented below:
<TABLE>
<CAPTION>
Owned Leased Total
----- ------ -----
<S> <C> <C>
2,629,000 661,000 3,290,000
</TABLE>
The leases are of varying terms with expirations ranging from fiscal 1996
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:
<TABLE>
<S> <C> <C>
AUSTRALIA INDIA PUERTO RICO
Melton, Victoria Bangalore Ponce (2)
BRAZIL IRELAND REPUBLIC OF KOREA
Manaus Millstreet Town Ansan City (2)
Sao Paulo Shannon
SINGAPORE
CANADA ITALY Jurong Town
Scarborough, Ontario Padova
SOUTH AFRICA
CHINA (P.R.C.) Bergvlei (Johannesburg)
Shilong Town JAPAN
Kagoshima TAIWAN
ENGLAND Okayama Taipei
Bordon Shioya
Southampton Shizuoka THAILAND
Yamato City Bangkok
FRANCE
Chateau Gontier MALAYSIA UNITED STATES
Prai, Penang Huntsville, Alabama
GERMANY Maumelle, Arkansas
Biberach MEXICO Orange, California
Ettlingen Guadalajara Pinellas Park, Florida
Magdalena St. Petersburg, Florida
Nogales Downers Grove, Illinois
Lisle, Illinois
POLAND Naperville, Illinois
Starogard Lincoln, Nebraska (3)
Manchester, New Hampshire
</TABLE>
8
<PAGE> 9
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 54 1965(b)
Executive Officer (1988-);
Vice Chairman (1988-1993).
John H. Krehbiel, Jr.(a) President (1975-). 58 1959(b)
J. Joseph King Group Vice President- 51 1975
International Operations (1988-).
Raymond C. Wieser Corporate Vice President and 57 1965(b)
President of the Commercial
Division-U.S. Operations (1994-);
Group Vice President-
U.S. Operations (1989-1994).
John C. Psaltis Chief Financial Officer (1994-), 55 1973
Corporate Vice President (1982-),
and Treasurer (1979-)
Ronald L. Schubel Corporate Vice President (1982-) 52 1981
and President of Far East South
Operations (1994-); President of
the Commercial Division-U.S.
Operations (1982-1994)
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
Year
Employed
Positions Held with Registrant by
Name During the Last Five Years Age Registrant
- ------------------------------- ------------------------------- ------- --------------
<S> <C> <C> <C>
Werner W. Fichtner Corporate Vice President 52 1981
(1987-) and President of
European Operations (1981-).
Goro Tokuyama Corporate Vice President 61 1985
(1990-), President of Far East
North Operations (1988-) and
President of Molex Japan Co.,
Ltd. (1985-).
Martin P. Slark Corporate Vice President 40 1976
(1990-) and President of
United States Operations
(1994-); President of Far
East South Operations (1988-
1994).
James E. Fleischhacker Corporate Vice President 51 1984
(1994-) and President of
the DataComm Division-U.S.
Operations (1989-).
Kathi M. Regas Corporate Vice President 39 1985
(1994-) and Director, Human
Resources-U.S. Operations
(1989-1994).
Louis A. Hecht Corporate Secretary (1977-) 51 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
<PAGE> 12
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 set forth under the captions
(b) "Financial Highlights" and "Fiscal 1995, 1994, and 1993 by Quarter
(Unaudited)" on page 2 and page 43, respectively, of the 1995 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. The fiscal 1995 and fiscal 1994 dividends
per share have been restated for the August, 1995 25% stock dividend
and November, 1994 25% stock dividend.
<TABLE>
<CAPTION>
Class A
Common Stock Common Stock
Fiscal 1995 Fiscal 1994 Fiscal 1995 Fiscal 1994
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Quarter Ended -
September 30, 0.0064 0.0048 0.0064 0.0048
December 31, 0.0080 0.0064 0.0080 0.0064
March 31, 0.0080 0.0064 0.0080 0.0064
June 30, 0.0080 0.0064 0.0080 0.0064
------ ------ ------ ------
Total 0.0304 0.0240 0.0304 0.0240
====== ====== ====== ======
</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
37 and 38 of the 1995 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, 1995) on page 26 of the 1995
Annual Report to Shareholders is incorporated herein by reference.
12
<PAGE> 13
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 27 through 31 of
the 1995 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 32 through 42 of the 1995 Annual Report to Shareholders and the
independent auditors' report set forth on page 25 of the 1995 Annual
Report to Shareholders are incorporated herein by reference:
Independent Auditors' Report
Consolidated Balance Sheets - June 30, 1995 and 1994
Consolidated Statements of Income for the years ended June 30, 1995,
1994 and 1993
Consolidated Statements of Shareholders' Equity for the years ended
June 30, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended June 30,
1995, 1994 and 1993
Notes to Consolidated Financial Statements
The supplementary data regarding quarterly results of operations, set
forth under the caption "Fiscal 1995, 1994, and 1993 by Quarter
(Unaudited)" on page 43 of the 1995 Annual Report to Shareholders, is
incorporated herein by reference.
The statement of changes in shares outstanding appears on Page 17 of this
Form 10-K.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
<PAGE> 14
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 Stockholders to be held on
October 20, 1995 (The "Company's 1995 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 1995 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 1995 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 1995 Proxy Statement is herein
incorporated by reference.
14
<PAGE> 15
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 1995 Annual Report to Shareholders have been incorporated by
reference in Item 8.
<TABLE>
<CAPTION>
Page(s) in
Annual Report
Item to Shareholders
------------------------------------------------ ---------------
<S> <C>
Independent Auditors' Report 25
Consolidated Balance Sheets - June 30, 1995
and 1994 32-33
Consolidated Statements of Income - for
the years ended June 30, 1995, 1994 and 1993 34
Consolidated Statements of Shareholders' Equity -
for the years ended June 30, 1995, 1994 and 1993 35
Consolidated Statements of Cash Flows - for the
years ended June 30, 1995, 1994 and 1993 36
Notes to Consolidated Financial Statements 37-42
Fiscal 1995, 1994 and 1993 by Quarter (Unaudited) 43
</TABLE>
(a) 2. Financial Statement Schedules
<TABLE>
<CAPTION>
Page in the
Form 10-K
---------
<S> <C>
Schedule II - Valuation and Qualifying Accounts 18
</TABLE>
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,
1995.
16
<PAGE> 17
Molex Incorporated
Statements of Changes in Shares Outstanding
For the Year Ended June 30, 1995, 1994, and 1993
<TABLE>
<CAPTION>
Class A Class B
Common Common Common Treasury
Stock Stock Stock Stock
--------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
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
Exercise of stock options 310,593 24,528
Purchase of treasury stock 125,452
Disposition of treasury stock (47,247)
Purchase of business 974,998
Stock splits effected in
the form of dividends 18,666,350 18,677,884 1,236,233
---------- ---------- ------ ---------
Shares outstanding at
June 30, 1995 51,895,780 52,432,699 94,255 3,484,725
========== ========== ====== =========
</TABLE>
17
<PAGE> 18
Molex Incorporated
Schedule II - Valuation and Qualifying Accounts
For the Year Ended June 30, 1995, 1994, and 1993
<TABLE>
<CAPTION>
Allowance 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>
1995 $8,916 $3,332 ($828) $514 $11,934
====== ====== ====== ==== =======
1994 $8,789 $2,354 ($2,344) $117 $8,916
====== ====== ======== ==== ======
1993 $8,634 $1,683 ($1,182) ($346) $8,789
====== ====== ======== ====== ======
</TABLE>
18
<PAGE> 19
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, 1995 and 1994, and for each of the three years
in the period ended June 30, 1995, and have issued our report thereon dated
August 3, 1995; such financial statements and report are included in your 1995
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 schedule of Molex Incorporated and its subsidiaries, listed
in Item 14(a)2. These statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such statements of changes in
shares outstanding and financial statement schedule, 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 3, 1995
19
<PAGE> 20
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 22, 1995 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.
September 22, 1995 /s/ F. A. KREHBIEL
-----------------------------------
F. A. Krehbiel
Chairman of the Board and
Chief Executive Officer
September 22, 1995 /s/ J. H. KREHBIEL, JR.
-----------------------------------
J. H. Krehbiel, Jr.
President and Director
September 22, 1995 /s/ JOHN C. PSALTIS
-----------------------------------
John C. Psaltis
Corporate Vice President, Treasurer
and Chief Financial Officer
September 22, 1995 /s/ F. L. KREHBIEL
-----------------------------------
F. L. Krehbiel
Director
September 22, 1995 /s/ DR. ROBERT J. POTTER
-----------------------------------
Dr. Robert J. Potter
Director
September 22, 1995 /s/ E. D. JANNOTTA
-----------------------------------
E. D. Jannotta
Director
20
<PAGE> 21
MOLEX INCORPORATED
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ --------------------------------------------
<S> <C> <C>
3 3.1 Certificate of Incorporation
(incorporated by reference to 1990
Form 10-K, Exhibit 3.1)
3.2 By-Laws (as restated)
4 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 From 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>
21
<PAGE> 22
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -----------------------------------------
<S> <C>
13 Molex Incorporated Annual report to
Shareholders for the year ended
June 30, 1995. (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' Consent
27 Financial Data Schedule
</TABLE>
(All other exhibits are either inapplicable or not required)
22
<PAGE> 1
MOLEX INCORPORATED
RESTATEMENT
OF
BY-LAWS
____________________________
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The registered office of the Corporation
shall be located in the City of Wilmington, County of New Castle, State of
Delaware.
SECTION 2. OTHER OFFICES. The Corporation may also have offices at such
other places, both within and without the State of Delaware, as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. PLACE OF MEETING. Meetings of stockholders may be held at such
place, either within or without the State of Delaware, as may be designated by
the Board of Directors or officers calling such meetings. If no designation is
made, the place of the meeting shall be the principal office of the
Corporation.
SECTION 2. ANNUAL MEETING. The annual meeting of the stockholders shall
be held on a weekday on such date as the Board of Directors may determine, and
shall be held at a time and place to be determined by a resolution of the Board
of Directors, for the purpose of electing directors and for the transaction of
such other business as may properly come before the meeting. If the day fixed
for the annual meeting shall be a legal holiday, such meeting shall be held on
the next succeeding business day. If the election of directors shall not be
held on the day designated for any annual meeting, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at a
meeting of the stockholders as soon thereafter as the Board of Directors
determines is reasonably convenient.
SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders may be
called by the Chairman, Chief Executive Officer, President, the Secretary or
the Board of Directors.
(Restatement as of July 29, 1995)
<PAGE> 2
SECTION 4. NOTICE. Written notice stating the date, time and place of the
meeting, and in case of a special meeting, the purpose or purposes thereof,
shall be given to each stockholder entitled to vote thereat not less than 10 or
more than 60 days prior thereto, either personally or by mail or telegraph,
addressed to each stockholder at his address as it appears on the records of
the Corporation. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any previously scheduled
meeting of the stockholders may be postponed by resolution of the Board of
Directors upon public notice given prior to the date previously scheduled for
such meeting of stockholders.
SECTION 5. ADJOURNED MEETINGS. When a meeting is adjourned to another
time or place, notice of the adjourned meeting need not be given if the time
and place thereof are announced at the meeting at which the adjournment is
taken, if the adjournment is for not more than 30 days, and if no new record
date is fixed for the adjourned meeting. At the adjourned meeting, the
Corporation may transact only such business, which might have been transacted
at the original meeting as originally notified.
SECTION 6. QUORUM. The holders of a majority of each class of the shares
of stock issued and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business, except as otherwise provided by
statute or by the Certificate of Incorporation. Whether or not such quorum is
present or represented at any meeting of the stockholders, the chairman of the
meeting or, subject to the provisions of the Certificate of Incorporation, the
holders of a majority of the shares entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting. At such adjourned
meeting at which a quorum shall be present or represented, only such business
which might have been transacted at the meeting as originally notified may be
transacted. When a quorum is present at any meeting, the vote of the holders
of a majority of the shares of stock having voting power present in person or
represented by proxy shall decide any questions brought before such meeting,
unless the questions is one upon which by express provision of the statutes or
of the Certificate of Incorporation, a different vote or a vote by class is
required, in which case such express provision shall govern and control the
decision of such question.
SECTION 7. VOTING. Subject to the provisions of the Certificate of
Incorporation, including the rights of any holder of Preferred Stock, each
stockholder shall at every meeting of the stockholders be entitled to one vote
in person or by proxy for each share of the capital stock having voting power
held by such stockholder, but no proxy shall be voted after three years from
its date, unless the proxy provides for a longer period. Elections of
directors need not be by written ballot.
SECTION 8. ACTION WITHOUT MEETING. Unless otherwise restricted by statute
or the Certificate of Incorporation, any action required or permitted to be
taken at any
(Restatement as of July 29, 1995) 2
<PAGE> 3
annual or special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all the shares entitled to vote
thereon were present and voted, provided that prompt notice of such action
shall be given to those stockholders who have not so consented in writing to
such action without a meeting.
SECTION 9. STOCKHOLDER NOMINATIONS AND BUSINESS PROPOSALS.
(A) ANNUAL MEETINGS OF STOCKHOLDERS:
(1) Nominations and Business Proposals: Nominations of persons for
election to the Board of Directors of the Corporation and the
proposal of business to be considered by the stockholders at an
annual meeting of stockholders may be made only (a) by or at the
direction of the Board of Directors or (b) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of
notice provided for in this Section 9, who is entitled to vote at
the meeting and who complied with the notice procedures set forth in
this Section 9. In order for business to be properly brought before
the meeting by a stockholder, such business, as determined by the
chairman of the meeting, must be a proper subject under Delaware
corporate law.
(2) Notice to Corporation: For nominations or other business to be
properly brought before an annual meeting by a stockholder pursuant
to clause (b) of paragraph (A)(1) of this Section 9, the stockholder
must have given timely notice thereof in writing to the Secretary.
To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive office of the Corporation not
less than 60 days nor more than 90 days prior to the first
anniversary of the preceding year's annual meeting of stockholders;
provided, however that in the event the date of the annual meeting
is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice by the stockholder must be so
delivered not earlier than the 90th day prior to such annual meeting
and not later than the close of business on the later of the 60th
day prior to such annual meeting or the 10th day following the day
on which public announcement of the date of such meeting is first
made. Such stockholder's notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or
reelection as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT") (including such person's
written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting,
a brief description of the business desired to be brought
(Restatement as of July 29, 1995) 3
<PAGE> 4
before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the
proposal is made; and (c) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (i) the name and address of such stockholder and
of such beneficial owner, and (ii) the class and number of shares of
the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner.
(3) Increase in Number of Directors: Notwithstanding anything in
the second sentence of paragraph (A)(2) of this Section 9 to the
contrary, in the event that the number of directors to be elected to
the Board of Directors of the Corporation is increased and there is
no public announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by the
Corporation at least 70 days prior to the first anniversary of the
preceding year's annual meeting of stockholders, a stockholder's
notice required by this Section 9 shall also be considered timely,
but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the Secretary at the
principal executive office of the Corporation not later than the
close of business on the 10th day following the day on which such
public announcement is first made by the Corporation.
(B) SPECIAL MEETINGS OF STOCKHOLDERS:
(1) Nominations of Directors: Nominations of persons for election
to the Board of Directors may be made at a special meeting of
stockholders at which directors are to be elected only (a) by or at
the direction of the Board of Directors or (b) by any stockholder of
the Corporation who is a stockholder of record at the time of giving
of notice provided for in this Section 9, who shall be entitled to
vote at the meeting and who complies with the notice procedures set
forth in this Section 9.
(2) Notice to Corporation: Only such business shall be conducted at
a special meeting of stockholders as shall have been set forth as
the purpose or purposes of such special meeting in the Corporation's
notice of such special meeting. Nominations by stockholders of such
persons for election to the Board of Directors may be made at such a
special meeting of stockholders if a stockholder's notice shall be
delivered to the Secretary at the principal executive office of the
Corporation not earlier than the 90th day prior to such special
meeting and not later than the close of business on the later of the
60th day prior to such special meeting or the 10th day following the
day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder
(Restatement as of July 29, 1995) 4
<PAGE> 5
proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed
in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under
the Exchange Act (including such person's written consent to being
named in the proxy statement as a nominee and to serving as director
if elected) and (b) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal
is made, (i) the name and address of such stockholder and of such
beneficial owner, and (ii) the class and number of shares of the
Corporation which are owned beneficially and of records by such
stockholder and such beneficial owner.
(C) GENERAL:
(1) Acceptance of Nominations and Proposals: The Secretary shall
have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made in
accordance with the procedures set forth in this Section 9. The
Secretary shall make any such determination and shall notify the
interested stockholder of such determination (including the reasons
for any determination that the interested stockholder's nomination
or proposal was not made in compliance with this Section 9) within
fifteen days after the Corporation's receipt of the stockholder's
notice required by paragraph (A)(2) or (B)(2) of this Section 9. If
the Secretary determines that such nomination or proposal is not in
compliance with this Section 9, the interested stockholder shall
have until the later of the expiration of the applicable notice
period or five days after receipt by such stockholder of any such
notice declaring that such stockholder's nomination or proposal was
not made in compliance with this Section 9 to rectify any deficiency
cited in such notice and to resubmit such stockholder's nomination
or proposal to the Secretary at the principal business office of the
Corporation. Any resubmitted nomination or proposal shall contain
only such nominations or proposals as were submitted to the
Corporation in such stockholder's notice which did not comply with
this Section 9. The Secretary shall determine whether any such
resubmitted nomination or proposal is in compliance with this
Section 9, and shall notify the interested stockholder of such
determination (including the reasons for any determination that the
interested stockholder's resubmitted nomination or proposal was not
made in compliance with this Section 9), within five additional days
of the Corporation's receipt of such stockholder's resubmitted
nomination or proposal.
(2) Compliance with Exchange Act: Notwithstanding the foregoing
provisions of this Section 9, a stockholder shall also comply with
all applicable requirements of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth in this
Section 9. Nothing in this Section 9 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
(Restatement as of July 29, 1995) 5
<PAGE> 6
(3) Definitions: For purposes of this Section 9, "public
announcement" shall mean disclosure in a press release reported by
the Dow Jones News Service, Associated Press or a comparable
national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TENURE. The business and affairs of the Corporation
shall be managed by a board of not less than six (6) nor more than ten (10)
directors as determined by resolution of the Board of Directors. The directors
shall be elected at each annual meeting of the stockholders, except as provided
in Section 2 of this Article, and each director elected shall hold office until
the next succeeding annual meeting or until their respective successors are
duly elected and qualified. Directors need not be stockholders.
SECTION 2. VACANCIES. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, though less than a quorum, and the
directors so chosen shall hold office until the next annual election or until
their respective successors are duly elected and qualified.
SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice than this by-law, immediately after, and at
the same place as, the annual meeting of stockholders. The Board of Directors
may provide, by resolution, the time and place, whether within or without the
State of Delaware, for the holding of additional regular meetings without other
notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the President or any director. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place for holding any special meeting of the Board of Directors
called by them.
SECTION 5. NOTICE. Written notice of any special meeting shall be given
at least two (2) days prior thereto, either personally or by mail or telegraph,
addressed to each director at his address as it appears on the records of the
Corporation. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail so addressed, with postage thereon prepaid.
If notice be by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company.
SECTION 6. QUORUM. At all meetings of the Board, a majority of the total
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which
there is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by state or by the
(Restatement as of July 29, 1995) 6
<PAGE> 7
Certificate of Incorporation. If a quorum shall not be present at any meeting
of the Board of Directors the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present. A director present at a meeting shall be counted in
determining the presence of a quorum, regardless of whether a contract or
transaction between the Corporation and such director of between the
Corporation and any other Corporation, partnership, association, or other
organization in which such director is a director or officer, or has financial
interest, is authorized or considered at such meeting.
SECTION 7. ACTION WITHOUT MEETING. Unless otherwise restricted by statute
or the Certificate of Incorporation, any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if all members of the Board or such committee, as
the case may be, consent thereto in writing and such written consent is filed
with the minutes of proceedings of the Board or committee.
SECTION 8. ACTION BY CONFERENCE TELEPHONE. Unless otherwise restricted by
statute or the Certificate of Incorporation, members of the Board of Directors
or any committee thereof may participate in a meeting of such Board or
committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at such meeting.
SECTION 9. COMMITTEES. The Board of Directors, by resolution adopted by
the majority of the whole Board, may designate one (1) or more committees, each
committee to consist of two (2) or more directors. The Board may designate one
(1) or more directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee. In the
absence or disqualification of any member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
a member of the Board of Directors, to act at the meeting in the place of any
such absent or disqualified member. Any such committee, to the extent provided
in such resolution, shall have any may exercise all of the powers of the Board
of Directors in the management of the business and affairs of the Corporation
and may authorize the seal of the Corporation to be affixed to all papers which
may require it; but no such committee shall have the power or authority in
reference to amending the Certificate of Incorporation, adopting an agreement
of merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the by-laws of the Corporation; and,
unless the resolution expressly so provides, such committee shall not have the
power or authority to declare a dividend or to authorize the issuance of stock.
SECTION 10. COMPENSATION OF DIRECTORS. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as director. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of a committee may be allowed
(Restatement as of July 29, 1995) 7
<PAGE> 8
like compensation for attending committee meetings.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER AND SALARIES. The officers of the Corporation shall
consist of a Chairman of the Board, a President, one (1) or more Vice
Presidents (the number thereof to be determined by the Board of Directors), a
Secretary, and a Treasurer. Such other officers and assistant officers and
agents as may be deemed necessary may be elected or appointed by the Board of
Directors. Any two (2) or more officers may be held by the same person. The
salaries of all officers and agents of the Corporation shall be fixed by the
Board of Directors.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Corporation
shall be elected annually by the Board of Directors at the first meeting of the
Board of Directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as is convenient. However, any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Vacancies or new
offices may be filled at any meeting of the Board of Directors. An officer may
resign at any time upon written notice to the Corporation. Each officer shall
hold his office until his successor is elected and qualified or until his
earlier resignation or removal.
SECTION 3. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
elected by the Board of Directors from their own number by ballot; he shall
preside at all meetings of the stockholders and of the Board of Directors; he
shall be a member of the Finance Committee in the event such committee is
created; and he shall have such duties and shall supervise such matters as may
be designated to him by the Board of Directors.
SECTION 4. THE PRESIDENT. The President shall be the principal executive
officer of the Corporation; in the absence of the Chairman of the Board, he
shall preside at all meetings of the stockholders and of the Board of
Directors; he shall have general and active management of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect; and he shall have the general powers and
duties of supervision and management usually vested in the office of the
President of a corporation.
SECTION 5. THE VICE PRESIDENTS. In the absence of the President or in the
event of his inability or refusal to act, the Vice President (or in the event
there be more than one Vice President, the Vice Presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. He shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
(Restatement as of July 29, 1995) 8
<PAGE> 9
SECTION 6. THE SECRETARY. The Secretary shall keep the minutes of the
proceedings of the stockholders and the Board of Directors; he shall give, or
cause to be given; all notices in accordance with the provisions of these
by-laws or as required by law; he shall be custodian of the corporate records
and of the seal of the Corporation; he shall keep at the registered office or
principal place of business of the Corporation a record of the stockholders of
the Corporation, giving the names and addresses of all such stockholders (which
addresses shall be furnished to the Secretary by such stockholders) and the
number and class of the shares held by each; he shall have general charge of
the stock transfer books of the Corporation; and in general he shall perform
all duties as from time to time may be assigned to him by the President or by
the Board of Directors.
SECTION 7. THE TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep, or cause to be kept, correct and
complete books and records of account, including full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors; and in general he shall perform all the duties incident to the
office of Treasurer and such other duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him by the
President or the Board of Directors.
SECTION 8. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant
Secretaries and Assistant Treasurers, if any, in general shall perform such
duties as from time to time may be assigned to them by the Secretary, or the
Treasurer, respectively, or by the President or the Board of Directors.
SECTION 9. VICE CHAIRMAN OF THE BOARD. The Board of Directors may, at its
discretion, elect one or more Vice Chairman of the Board of Directors. In the
absence of the Chairman or his inability to perform his duties, the Vice
Chairman shall preside at any stockholders meetings and of the Board of
Directors and otherwise perform whatever duties that are performed by the
Chairman.
SECTION 10. THE CHIEF EXECUTIVE OFFICER. The Board of Directors may, at
is discretion, elect a Chief Executive Officer. If a Chief Executive Officer
is elected, he shall be the principal executive officer of the Corporation with
all responsibilities usually vested therein.
ARTICLE V
CERTIFICATES OF STOCK
SECTION 1. SIGNATURE BY OFFICERS. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by or in the name of
the Corporation by the Chairman of the Board of Directors, the President or a
Vice President, and by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the
(Restatement as of July 29, 1995) 9
<PAGE> 10
Corporation, certifying the number of shares owned by him in the Corporation.
SECTION 2. FACSIMILE SIGNATURES. Where a certificate is signed by a
Transfer Agent of the Corporation, the signature of the Chairman of the Board
of Directors, President, Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary may be facsimile. In case any officer or
officers who have signed, or whose facsimile signature or signatures have been
used on any such certificate or certificates shall cease to be such officer or
officers of the Corporation, whether because of death, resignation or
otherwise, before such certificate or certificates have been delivered by the
Corporation, such certificate or certificates may nevertheless be adopted by
the Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.
SECTION 3. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued by the Corporation alleged to have
been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost or destroyed.
SECTION 4. TRANSFER OF STOCK. Upon surrender to the Corporation of or the
Transfer Agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
SECTION 5. FIXING OF RECORD DATE. The Board of Directors shall fix in
advance a date, in accordance with the requirements of applicable law,
preceding the date of any meeting of stockholders, or the date for the payment
of any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, as a
record date for the determination of the stockholders entitled to notice of,
and to vote at, any such meeting, and any adjournment thereof, or entitled to
receive payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any change, conversion or exchange of capital
stock, or to give such consent, and in such case such stockholders and only
such stockholders as shall be stockholders of record on the date so fixed shall
be entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, or to give such consent as the case may
be notwithstanding any transfer of any stock on the books of the Corporation
after any such record date fixed as aforesaid.
(Restatement as of July 29, 1995) 10
<PAGE> 11
SECTION 6. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Delaware.
ARTICLE VI
CONTRACT, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. When the execution of any contract or other
instrument has been authorized by the Board of Directors without specification
of the executing officers, the President, or any Vice President, and the
Secretary, or any Assistant Secretary, may execute the same in the name of and
on behalf of the Corporation and may affix the corporate seal thereto.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors.
SECTION 3. CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
ARTICLE VII
DIVIDENDS
SECTION 1. DECLARATION OF DIVIDENDS. Dividends upon the capital stock of
the Corporation, subject to the provisions of the Certificate of Incorporation,
if any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
SECTION 2. RESERVES. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
(Restatement as of July 29, 1995) 11
<PAGE> 12
ARTICLE VIII
FISCAL YEAR
The fiscal year shall begin the first day of July and end on the last day
of June in each year but this determination shall be subject to change by the
Board of Directors.
ARTICLE IX
WAIVER OF NOTICE
Whenever any notice whatever is required to be given by law, the
Certificate of Incorporation or these by-laws, a written waiver thereof, signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transactions of business
because the meeting is not lawfully called or convened.
ARTICLE X
SEAL
The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to the
impressed or affixed or reproduced otherwise.
ARTICLE XI
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws adopted
at any regular or special meeting of the Board of Directors by a majority vote
of the directors present at the meeting.
(Restatement as of July 29, 1995) 12
<PAGE> 1
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (in thousands, except per share data) 1995 1994 CHANGE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS
Net revenue $ 1,197,747 $ 964,108 24%
Income before income taxes, minority interest and
cumulative effect of change in accounting principle 214,492 159,477 34%
Net income 124,035 94,852 31%
Net income as a percent of net revenue 10.4% 9.8% --
Return on beginning shareholders' equity 14.1% 12.6% --
PER SHARE
Net income 1.24 .96 29%
Dividends per common share .03 .02 50%
Book value 10.97 8.87 23%
Outstanding shares of stock 100,938,010 99,372,022 --
Number of shareholders: Common Stock 6,062 5,550 --
Class A Common Stock 3,639 3,502 --
FINANCIAL POSITION
Total assets $ 1,441,020 $ 1,138,517 27%
Working capital 494,990 429,710 15%
Long-term debt 8,122 7,350 11%
Backlog 245,702 175,836 40%
Shareholders' equity 1,107,268 881,614 26%
Long-term debt/Shareholders' equity 0.7% 0.8% --
Number of employees 9,500 8,167 16%
Current ratio 2.8/1 3.1/1 --
</TABLE>
USE OF NET REVENUES
<TABLE>
<S> <C> <C> <C>
24.7% Materials Wages, Salaries, Benefits 25.0%
20.6% Energy, Rent, Insurance, Interest, etc. Depreciation and Amortization 8.8%
10.2% Taxes: Business, Income and Payroll Net Income 10.4%
0.3% Dividends Reinvested in Business 19.2%
MOLEX SALES BY REGION
28.8% United States $344.7 Million Far East North $367.7 Million 30.7%
17.7% Far East South $211.9 Million Americas (Non-U.S.) $38.4 Million 3.2%
19.0% Europe $227.2 Million Other $7.9 Million 0.6%
MOLEX SALES BY INDUSTRY
12% Automotive Home Entertainment/
37% Computer/Business Equipment Home Appliance 32%
11% Telecommunications Other 8%
</TABLE>
The global connector market is estimated at $22.4 billion.* As the world's
second-largest supplier, Molex has a 5.3% market share. There are more than 900
connector suppliers worldwide.
*Source: Fleck International
P2
MOLEX
<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
communicated 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, 1995
and 1994, and the related consolidated statements of income, shareholders'
equity, and cash flows for each of the three years in the period ended June 30,
1995. 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 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 provide a reasonable basis
for our opinion.
In our opinion, based on our audits, such consolidated financial statements
present fairly, in all material respects, the financial position of Molex
Incorporated and its subsidiaries as of June 30, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended June 30, 1995 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 3, 1995
P25
MOLEX
<PAGE> 3
TEN-YEAR FINANCIAL HIGHLIGHT SUMMARY
(in thousands, except per share data)
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net revenue $ 1,197,747 $964,108 $859,283 $776,192 $707,950
Gross profit 505,697 406,079 352,603 318,361 297,954
Income before
income taxes,
minority interest
and cumulative
effect of change
in accounting
principle 214,492 159,477 133,478 117,412 117,936
Income taxes 90,273 63,186 58,371 49,814 53,402
Income before
cumulative
effect of
change in
accounting
principle 124,035 94,852 74,660 67,464 64,631
Net income 124,035 94,852 71,055 67,464 64,631
Earnings per
common share
before cumulative
effect of
change in
accounting
principle(1) 1.24 .96 .76 .69 .66
Earnings per
common share(1) 1.24 .96 .72 .69 .66
Income before
cumulative
effect of
change in
accounting
principle as
a percent of
net revenue 10.4% 9.8% 8.7% 8.7% 9.1%
Net income as a
percent of
net revenue 10.4% 9.8% 8.3% 8.7% 9.1%
- -------------------------------------------------------------------------------
FINANCIAL POSITION
Current assets $ 773,036 $635,104 $497,560 $434,277 $402,208
Current liabilities 278,046 205,394 165,368 168,209 155,593
Working capital 494,990 429,710 332,192 266,068 246,615
Current ratio 2.8 3.1 3.0 2.6 2.6
Property, plant
& equipment, net 567,303 440,995 385,828 362,719 280,761
Total assets 1,441,020 1,138,517 961,775 849,689 726,740
Long-term debt 8,122 7,350 7,510 7,949 9,136
Shareholders'
equity 1,107,268 881,614 751,654 660,389 550,742
Return on
beginning
shareholders'
equity before
cumulative effect
of change in
accounting
principle 14.1% 12.6% 11.3% 12.2% 13.4%
Return on beginning
shareholders' equity 14.1% 12.6% 10.8% 12.2% 13.4%
Dividends per
common share(1) 0.03 0.02 0.02 0.01 0.01
Weighted average
common shares
outstanding(1) 100,015 98,976 98,439 97,892 97,356
- -------------------------------------------------------------------------------
</TABLE>
(1) Restated for the following stock split/dividends: 25%-August, 1995;
25%-November, 1994; 25%-November, 1992.
P26
MOLEX
<PAGE> 4
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL HIGHLIGHTS
Fiscal 1995 was a year of strong growth and improved profitability for Molex.
We believe that this performance is a direct result of our global position as a
primary supplier to many of the world's largest and most respected companies.
Additionally, the Company has a substantial presence in the faster growing
product segments and geographic regions of the connector industry. Fiscal 1995
was particularly noteworthy in that Molex surpassed the $1 billion net revenue
level. This milestone was achieved as net revenues increased 24.2 percent to a
new high of $1.2 billion. Again this year, Molex's net revenues grew at a rate
significantly faster than the estimated 8.6 percent increase reported for the
worldwide connector industry. The Company's fiscal 1995 net income increased
30.8 percent to a record $124.0 million, or 10.4 percent of net revenue. All
regions improved their net return on sales, with substantial improvement in the
Far East South and Europe. Additionally, Molex gained further access to the
rapidly growing local area network market with the acquisition of Mod-Tap W.
Corp. (Mod-Tap) in February, 1995. As we begin the fiscal year ending June,
1996, Molex has a record backlog of $245.7 million, which is a 39.7 percent
increase over the prior year's amount of $175.8 million.
<TABLE>
<CAPTION>
The Growth of Molex vs. the Worldwide Connector Industry
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Molex 100 115 153 198 226 235 280 307 339 381 473
Worldwide
Connector
Industry* 100 111 116 144 145 150 151 153 153 159 173
</TABLE>
*Source: Fleck International
INVESTOR RETURNS
Molex is committed to providing its shareholders with a strong return on their
investment. Our total return to shareholders over the last five years has
averaged an annual compounded return of 21.3 percent, compared to the 15.0
percent return of the S&P MidCap 400 over the same period of time. A $100
investment in Molex Common Stock at June 30, 1990, together with the
reinvestment of dividends, would be worth $263 at June 30, 1995.
On November 28, 1994, Molex paid a 25 percent stock dividend to its
shareholders. In addition, on August 2, 1995, the Molex Board of Directors
declared a 25 percent stock dividend, which will be paid on September 15, 1995
to shareholders of record as of August 25, 1995. The Board of Directors also
increased the annual cash dividend to $0.06 per share. This increased cash
dividend will be paid on the 25 percent stock dividend that was declared in
August, 1995, thus increasing the annual cash dividend by 87.5 percent. This is
the seventh stock dividend Molex has paid to shareholders within the last 13
years. All shares outstanding, earnings and dividends per share have been
retroactively restated for the stock dividends.
<TABLE>
<CAPTION>
Molex Common Stock/High-Low-Close By Quarter
Fiscal 1991 Fiscal 1992 Fiscal 1993
--------------------------------- --------------------------------- ---------------------------------
COMMON SEP-90 DEC-90 MAR-91 JUN-91 SEP-91 DEC-91 MAR-92 JUN-92 SEP-92 DEC-92 MAR-93 JUN-93
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High 11.648 13.184 15.426 15.104 17.840 18.560 20.240 17.680 19.360 19.760 21.120 20.640
Low 8.448 9.472 11.264 13.824 14.080 14.640 15.520 15.120 15.280 16.640 16.480 18.400
Close 9.280 11.904 14.848 13.952 14.976 18.304 15.872 16.000 17.920 17.043 20.480 19.840
Fiscal 1994 Fiscal 1995
--------------------------------- ---------------------------------
COMMON SEP-93 DEC-93 MAR-94 JUN-94 SEP-94 DEC-94 MAR-95 JUN-95
<S> <C> <C> <C> <C> <C> <C> <C> <C>
High 24.480 23.360 24.640 24.880 28.160 28.800 29.100 31.400
Low 19.360 20.320 21.440 19.360 24.000 24.800 24.800 28.200
Close 23.200 22.720 21.440 24.320 27.250 27.625 28.625 31.000
</TABLE>
<TABLE>
<CAPTION>
1995 Sales by Region 1985
June 30
<S> <C> <C> <C>
Far East North 30.7% United States 41.8%
United States 28.8% Far East North 28.8%
Europe 19.0% Europe 14.0%
Far East South 17.7% Far East South 10.8%
Americas (Non U.S.) 3.2% Americas (Non U.S.) 4.3%
Other 0.6% Other 0.3%
</TABLE>
In fiscal 1968, Molex entered the international connector market with annual
net revenues of $54 thousand. Today, 27 years later, international customer
sales have grown to $853.1 million and represent approximately 71 percent of
Molex's worldwide net revenues. International net revenues, as a percent of
total net revenues, increased one percent from fiscal 1994 due to the strong
growth in Europe and the Far East South and to the generally weaker U.S.
dollar.
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-cur-
P27
MOLEX
<PAGE> 5
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
rency accounts in several international subsidiaries. Due to the uncertainty of
the foreign currency exchange markets, Molex cannot reasonably predict future
trends related to foreign currency fluctuations. Foreign currency fluctuations
have impacted Molex's results in the past and may impact results in the future.
FINANCIAL POSITION & LIQUIDITY
Molex has an exceptionally strong balance sheet. Cash and short-term
investments at June 30,1995, equaled $313.1 million and represented 21.7
percent of total consolidated assets. Cash and short-term investments increased
$35.7 million during fiscal 1995. Molex's long-term corporate philosophy is to
utilize internal sources of funds for investing in plant, equipment and
acquisitions. The Company uses external borrowings only when a clear financial
advantage exists.
Cash provided from operations was $224.6 million during fiscal 1995. At this
level, the Company's operations generate sufficient cash to support all
investing and financing activities. Strong efforts at working capital
management continue to support the generation of cash from operations. The net
trade accounts receivable balance increased $61.1 million during fiscal year
1995. The translation effects of foreign currency and the acquisition of
Mod-Tap accounted for $26.7 million of the increase. The remaining increase is
due to the record revenues the Company experienced during the month of June,
1995. The average day's sales outstanding in trade accounts receivable of 79
remains unchanged from the prior year.
Inventory increased during fiscal year 1995 from $113.3 million at June 30,
1994 to $150.8 million at June 30, 1995. Average inventory days have improved
to 76 days from the 79 days reported last fiscal year. Factoring out the change
in exchange rates due to the generally weaker U.S. dollar and the acquisition
of Mod-Tap, inventory at June 30, 1995 increased $23.3 million over the prior
year's balance.
Cash used for investments increased $49.0 million over the fiscal 1994 level
due primarily to the higher level of purchases for property, plant and
equipment during fiscal 1995. During 1995, Molex continued its commitment to
investing in new tooling, equipment and facilities. Capital expenditures
equaled $186.9 million for fiscal 1995, increasing 44.4 percent from $129.5
million expended during the previous fiscal year. Approximately, 87 percent of
the fixed asset purchases during fiscal 1995 were for tooling and equipment
directly related to improving efficiencies and increasing revenues. Molex also
spent $11.2 million to add new facilities in Ettlingen, Germany and Shanghai,
China. In addition, facilities were expanded in Pinellas Park, Florida and
Lisle, Illinois. These additions increased the worldwide facility floor space
to 3.3 million square feet.
For the fiscal year ending June 30, 1996, we expect capital expenditures to
increase to between $200 and $205 million. This increase in capital
expenditures is a result of the much stronger sales and the required investment
in plants, equipment and technology to meet our customers' needs. During fiscal
1996, we expect to open new facilities in China and South Africa and expand
facilities in Japan, Korea, Singapore, Ireland, India and Mexico.
During fiscal 1995, $7.0 million was expended to purchase the remaining
shares of Molex Fiber Optics Inc. and Molex Eastern Europe S.A., and increase
Molex's ownership interest in Molex (India) Ltd. and DeCoupage Moulage De
Savoie S.A. In addition, $9.3 million in cash, along with 1.2 million shares of
Class A Common Stock, was used to purchase Mod-Tap. These expenditures were
higher than fiscal 1994, when $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.
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 $57.9 million, all of which
remained unused at June 30, 1995.
The weighted average shares outstanding for the current fiscal year increased
to 100.0 million from the 99.0 million for fiscal 1994. The increase in shares
outstanding is attributable to the 1.2 million shares issued pursuant to the
Mod-Tap acquisition and to the exercise of employee stock options and the
issuance of employee stock awards. The Company also purchased 125,000 shares of
treasury stock during fiscal year 1995. Molex did not purchase any treasury
stock on the open market during fiscal year 1994.
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.
P28
MOLEX
<PAGE> 6
PERCENTAGE OF NET REVENUE
Fiscal Year Ended June 30
<TABLE>
<CAPTION>
PERCENTAGE CHANGE
1995 1994 1993 1995-94 1994-93
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net revenue 100.0% 100.0% 100.0% 24.2% 12.2%
Cost of sales 57.8 57.9 59.0 24.0% 10.1%
- -----------------------------------------------------------------------------------------
Gross profit 42.2 42.1 41.0 24.5% 15.2%
Operating expenses 24.9 25.8 25.6 20.0% 13.2%
- -----------------------------------------------------------------------------------------
Income from operations 17.3 16.3 15.4 31.7% 18.4%
Total other income 0.6 0.2 0.1 249.6% 259.6%
- -----------------------------------------------------------------------------------------
Income before income taxes,
minority interest and
cumulative effect of change
in accounting principle 17.9 16.5 15.5 34.5% 19.5%
Income taxes 7.5 6.6 6.8 42.9% 8.2%
Minority interest 0.0 -0.1 0.0 87.2% -221.9%
- -----------------------------------------------------------------------------------------
Income before cumulative effect of
change in accounting principle 10.4 9.8 8.7 30.8% 27.0%
Cumulative effect of change in
method of accounting for
postretirement benefits other
than pensions, net of tax - - 0.4 - -
- -----------------------------------------------------------------------------------------
Net income 10.4% 9.8% 8.3% 30.8% 33.5%
=========================================================================================
</TABLE>
FISCAL 1995 COMPARED TO FISCAL 1994
During fiscal year 1995, Molex net revenues increased 24.2 percent to an
all-time high of $1.2 billion, compared to $964.1 million during fiscal year
1994. Excluding the change in exchange rates due to the generally weaker U.S.
dollar, net revenue increased 18.2 percent. Net revenues of Mod-Tap added $16.5
million or 1.4 percent to fiscal year 1995 net revenues.
Customer net revenues in the Far East North increased 21.3 percent in U.S.
dollars and 8.9 percent in local currencies as the value of the Japanese yen
continued to gain strength against the U.S. dollar. Domestic sales in Japan
improved slightly from last fiscal year as business levels in the electronic
industry improved modestly. Price erosion continued to impact sales, but strong
demand for new products, including microminiature connectors, helped to overcome
this pressure. Molex Japan has also become a leading supplier to the notebook PC
industry. In addition, Molex Japan's expertise in miniaturization technologies
leaves Molex well positioned to take full advantage of the growth opportunities
in the computer and automotive electronics industries. Sales and profits in
Korea remain very strong due to the robust growth in the automotive and
telecommunications industries.
The U.S. Region's customer net revenues increased 19.4 percent during fiscal
year 1995. Included in this total are the sales of Mod-Tap since the date of
acquisition. Excluding the impact of Mod-Tap's net revenues, customer net
revenues in the U.S. Region increased 13.6 percent from last fiscal year. The
U.S. Commercial Division sales were strong due to increased demand in the home
appliance, automotive and high-end TV market. Net revenues to the automotive
market are expected to increase significantly in fiscal year 1996, as Molex
starts shipping its new automotive connector products. Revenues in the U.S.
Data/Comm Division were weak during the first six months of fiscal year 1995,
but have improved during the second half. Unit volume sales have increased to
the computer notebook and workstation markets, but intense price erosion
continues to impact the operating margins. Molex's fiber optic sales continue
to be the fastest growing segment of the U.S. Region as fiber optics are
becoming the wiring of choice in the telecommunications industry.
The Far East South is the fastest growing connector market in the world.
Customer revenues in the region increased 22.2 percent in U.S. dollars and
17.8 percent in local currencies. Sales in this region remain strong due to
continued growth in the personal computer and hard disk drive industries. Molex
is investing in tooling and equipment throughout the region to support the
continued strong growth. In addition to the strong revenue growth, the region
has managed to increase profits, despite continuing price erosion, to 15.0
percent of sales during fiscal 1995, up from last fiscal year's 13.4 percent.
In Europe, customer net revenues increased 42.4 percent in U.S. dollars and
28.8 percent in local currencies as the value of the U.S. dollar weakened
against most of the major European currencies. Overall, the European connector
market has emerged from several years of recession and negative growth. Net
revenues have increased significantly due to the mobile telecommunications and
automotive industries. Molex has made significant market share gains in the
European cellular phone industry. The increase in sales, continued tight
control of expenses and the favorable effects of our ongoing restructuring,
increased the net return on sales to 9.2 percent in fiscal 1995 from 6.7
percent of sales during fiscal year 1994. The European reorganization is
expected to be completed by the end of fiscal 1996, which should result in
further improvements in profitability.
Customer net revenues in the Americas (Non-U.S.) region grew 20.5 percent and
net income has nearly doubled to 8.1 per-
P29
MOLEX
<PAGE> 7
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
cent net return on sales. The severe devaluation of the Mexican peso during
fiscal 1995 did not have a material effect on the consolidated results, as
Molex's operations in Mexico primarily transact business in U.S. dollars. We
expect to see further increases in net revenues and profits in fiscal 1996.
The consolidated gross profit improved slightly to 42.2 percent of net
revenues during fiscal 1995 from 42.1 percent during fiscal 1994. The Company
was able to offset the effects of higher raw material prices and price erosion
with improved factory utilization and product mix.
Operating expenses as a percent of net revenues decreased slightly from 25.8
percent in fiscal 1994 to 24.9 percent in fiscal 1995. This decrease is the
result of controlled headcount additions despite the 24.2 percent increase in
net revenues. Net revenues per employee have increased from $118.1 thousand in
fiscal 1994 to $126.1 thousand during fiscal 1995.
Research and development expenditures reached an all-time high of $78.1
million and represented 6.5 percent of sales during fiscal 1995, decreasing
from 6.7 percent of sales during fiscal 1994. Approximately 23 percent of
fiscal 1995 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 a record 207
new product families and the granting of 259 new patents during fiscal year
1995. 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.
Foreign currency translation losses decreased 16.2 percent from fiscal 1994
losses when the Company incurred high 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 1995, has increased 86.8
percent from fiscal 1994. This increase is the result of higher short-term
investment balances during fiscal 1995 coupled with the return of higher
interest rates earned in many of the countries where the Company has
significant short-term investments. Interest expense has remained relatively
unchanged from fiscal 1994.
The effective tax rate increased to 42.1 percent during fiscal 1995 from 39.6
percent during fiscal 1994. The increase reflects increased pretax
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 1995.
Net income increased 30.8 percent to $124.0 million. Earnings per share
increased to $1.24 during fiscal 1995 from $0.96 during fiscal 1994. Excluding
the effects of currency fluctuations, net income increased 23 percent over
fiscal 1994 net income.
During the first quarter of fiscal 1995, Molex adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" (SFAS 115). SFAS 115 requires that the carrying value of
certain investments be adjusted to their fair value. Adoption of the statement
did not have a material effect on the financial condition or consolidated
results of operations of the Company.
FISCAL 1994 COMPARED TO FISCAL 1993
During fiscal 1994, Molex net revenues increased 12.2 percent to $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.
The Far East North Region's customer revenues increased 7.2 percent in U.S.
dollars, but declined slightly in local currencies. The softness in the
electronics industry combined with 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 microminiature
products. During fiscal year 1994, the region also focused on productivity
improvements and efficiencies that allowed the region to report a slight
improvement in net return on sales from fiscal 1993.
The customer net revenues in the U.S. Region increased 14.6 percent during
fiscal year 1994 to $288.7 million. The sales growth was the result of
increased customer penetration in the computer and telecommunications market.
We also continued to see increased 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 fiscal year
1993. 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, regional net revenues increased 18 percent from fiscal year 1993. This
strong growth was primarily due to increased customer penetration at many of
the multinational companies that
P30
MOLEX
<PAGE> 8
have relocated manufacturing operations to the region and to the continued
strong growth in the personal computer and disk drive industries.
Profitability in the region has improved from 12.2 percent in fiscal 1993. 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 during fiscal
1991.
In Europe, customer net revenues improved 20.7 percent in local currencies,
but increased 10.2 percent in U.S. dollars. 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 fiscal year 1994. We consolidated
our French connector manufacturing operation into an enlarged facility in
Biberach, Germany. We began 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.
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 production efficiencies. Material prices and labor costs have remained
relatively stable during fiscal 1994.
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 was due,
in part, to higher research and development expenditures.
Research and development expenditures represented 6.7 percent of sales during
fiscal 1994, increasing from 6.5 percent of sales during fiscal 1993. 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 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 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.
Earnings before the cumulative effect of change in accounting principle
increased 27.0 percent to $94.9 million. Earnings per share increased to $0.96
during fiscal 1994 from $0.72 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.
OUTLOOK
Fiscal 1995 was an outstanding year for Molex, with all geographic regions
experiencing significantly faster growth than the overall connector industry.
The outlook for fiscal 1996 appears equally as bright. Worldwide, the connector
industry is expected to increase 6 to 7 percent.
Molex expects, once again, to surpass its goals of growing at twice the
connector industry rate and generating a 10 percent net return on sales for the
fiscal year ending June 30, 1996. We believe that price erosion and modest
material price increases will continue in the connector industry. Molex will
continue to make the necessary improvements in productivity and operating
efficiencies to help offset these pressures.
We believe Molex is extremely well positioned to continue growing faster than
the overall connector industry while achieving our profit goals. Molex
continues to emphasize expansion in the most rapidly growing markets and
geographic regions. We keep close to our customers and emphasize early
involvement with our customer's engineers to ensure we provide the exact
interconnection products required.
P31
MOLEX
<PAGE> 9
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
ASSETS June 30,
1995 1994
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 253,552 $ 220,681
Short-term investments 59,563 56,737
Accounts receivable:
Trade, less allowance of $11,934 in 1995 and
$8,916 in 1994 for doubtful accounts 277,993 216,866
Employee 4,821 4,808
Inventories 150,836 113,266
Deferred income taxes (Note 5) 19,874 18,665
Prepaid expenses 6,397 4,081
- -------------------------------------------------------------------------------------------------------------------
Total current assets 773,036 635,104
- -------------------------------------------------------------------------------------------------------------------
Property, plant and equipment
- -------------------------------------------------------------------------------------------------------------------
at cost (Notes 3 and 8):
Land and improvements 49,919 44,525
Buildings and leasehold improvements 249,104 199,523
Machinery and equipment 658,655 510,143
Molds and dies 308,627 246,203
- -------------------------------------------------------------------------------------------------------------------
1,266,305 1,000,394
Less accumulated depreciation and amortization 699,002 559,399
- -------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 567,303 440,995
- -------------------------------------------------------------------------------------------------------------------
Other assets 100,681 62,418
- -------------------------------------------------------------------------------------------------------------------
$ 1,441,020 $ 1,138,517
===================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
P32
MOLEX
<PAGE> 10
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY JUNE 30,
1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt (Note 3) $ 152 $ 184
Accounts payable 128,146 96,659
Accrued expenses:
Salaries, commissions and bonuses 33,535 28,924
Other 51,405 37,113
Income taxes (Note 5) 64,000 41,878
Dividends payable 808 636
- -------------------------------------------------------------------------------------------------------------------
Total current liabilities 278,046 205,394
- -------------------------------------------------------------------------------------------------------------------
Deferred items:
Investment grants 2,574 2,570
Income taxes (Note 5) 10,736 12,042
- -------------------------------------------------------------------------------------------------------------------
Total deferred items 13,310 14,612
- -------------------------------------------------------------------------------------------------------------------
Accrued postretirement benefits (Notes 6 and 7) 32,170 26,363
- -------------------------------------------------------------------------------------------------------------------
Long-term debt (Note 3) 8,122 7,350
- -------------------------------------------------------------------------------------------------------------------
Minority interest in subsidiaries 2,104 3,184
- -------------------------------------------------------------------------------------------------------------------
Shareholders' equity (Notes 2, 4 and 9):
Common Stock, $.05 par value; 60,000 shares authorized;
51,896 shares issued at 1995 and 51,484 shares issued at 1994 2,075 1,646
Class A Common Stock, $.05 par value; 60,000 shares authorized;
52,433 shares issued at 1995 and 51,185 shares issued at 1994 2,097 1,637
Class B Common Stock, $.05 par value; 146 shares authorized;
94 shares issued at 1995 and 1994 5 5
Paid-in capital 101,534 56,464
Retained earnings 850,533 729,547
Deferred unearned compensation (13,771) (7,223)
Treasury stock (Common Stock, 1,706 shares at 1995 and 1,638 shares at 1994;
Class A Common Stock, 1,779 shares at 1995 and 1,753 shares at 1994), at cost (35,749) (31,749)
Cumulative translation adjustments 200,544 131,287
- -------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,107,268 881,614
- -------------------------------------------------------------------------------------------------------------------
$ 1,441,020 $ 1,138,517
===================================================================================================================
</TABLE>
P33
MOLEX
<PAGE> 11
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
<TABLE>
<CAPTION>
For the year ended June 30,
1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net revenue $ 1,197,747 $ 964,108 $ 859,283
Cost of sales 692,050 558,029 506,680
- --------------------------------------------------------------------------------------------------------------------------
Gross profit 505,697 406,079 352,603
- --------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Selling 129,152 109,531 98,486
Administrative 169,331 139,153 121,218
- --------------------------------------------------------------------------------------------------------------------------
Total operating expenses 298,483 248,684 219,704
- --------------------------------------------------------------------------------------------------------------------------
Income from operations 207,214 157,395 132,899
- --------------------------------------------------------------------------------------------------------------------------
Other income (expense):
Foreign currency transaction loss (2,759) (3,291) (4,689)
Interest 10,037 5,373 5,268
- --------------------------------------------------------------------------------------------------------------------------
Total other income 7,278 2,082 579
- --------------------------------------------------------------------------------------------------------------------------
Income before income taxes, minority interest and cumulative effect of change
in accounting principle 214,492 159,477 133,478
Income taxes (Note 5) 90,273 63,186 58,371
- --------------------------------------------------------------------------------------------------------------------------
Income before minority interest and cumulative effect of change in
accounting principle 124,219 96,291 75,107
Minority interest (184) (1,439) (447)
- --------------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of change in accounting principle 124,035 94,852 74,660
Cumulative effect of change in method of accounting for postretirement
benefits other than pensions, net of tax -- -- 3,605
- --------------------------------------------------------------------------------------------------------------------------
Net income $ 124,035 $ 94,852 $ 71,055
==========================================================================================================================
Earnings per common share (Based upon weighted average common
shares outstanding):
Earnings per common share before cumulative effect of change in
accounting principle $ 1.24 $ .96 $ .76
Cumulative effect of change in method of accounting for postretirement
benefits other than pensions per share -- -- .04
- --------------------------------------------------------------------------------------------------------------------------
Earnings per common share $ 1.24 $ .96 $ .72
- --------------------------------------------------------------------------------------------------------------------------
Dividends per common share (Note 2) $ .0304 $ .0240 $ .0170
- --------------------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding 100,015 98,976 98,439
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
P34
MOLEX
<PAGE> 12
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
For the year ended June 30,
1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock
Balance at beginning of period $ 1,646 $ 1,632 $ 1,297
Exercise of stock options 16 14 9
Stock split effected in the form of a dividend 413 -- 326
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period 2,075 1,646 1,632
Class A Common Stock
Balance at beginning of period 1,637 1,630 1,300
Exercise of stock options 1 7 5
Purchase of business 49 -- --
Stock split effected in the form of a dividend 410 -- 325
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period 2,097 1,637 1,630
Class B Common Stock
Balance at beginning and end of period 5 5 5
Paid-in capital
Balance at beginning of period 56,464 47,052 42,094
Exercise of stock options 4,493 4,952 3,044
Disposition of treasury stock 1,112 650 467
Stock options granted 9,983 3,810 2,234
Purchase of business 30,420 -- --
Stock split effected in the form of a dividend (938) -- (787)
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period 101,534 56,464 47,052
Retained earnings
Balance at beginning of period 729,547 637,074 567,695
Net income 124,035 94,852 71,055
Cash dividends (3,049) (2,379) (1,676)
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period 850,533 729,547 637,074
Treasury stock
Balance at beginning of period (31,749) (31,107) (31,040)
Purchase of treasury stock (4,610) (1,120) (720)
Disposition of treasury stock 610 478 653
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period (35,749) (31,749) (31,107)
Deferred unearned compensation
Balance at beginning of period (7,223) (6,235) (5,697)
Stock options granted (9,983) (3,810) (2,234)
Amortization of deferred unearned compensation 3,435 2,822 1,696
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period (13,771) (7,223) (6,235)
Cumulative translation adjustments
Balance at beginning of period 131,287 101,603 84,735
Net effect of translation adjustment 69,257 29,684 16,868
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period 200,544 131,287 101,603
- --------------------------------------------------------------------------------------------------------------------
Total shareholders' equity $ 1,107,268 $ 881,614 $ 751,654
====================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
P35
MOLEX
<PAGE> 13
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the year ended June 30,
1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS, beginning of period $ 220,681 $ 174,526 $ 149,378
Cash and cash equivalents were provided from (used for):
Operations:
Net income 124,035 94,852 71,055
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 104,857 88,787 76,193
Deferred income taxes (603) (1,212) (1,497)
(Gain) Loss on sale of property, plant and equipment (51) (1,047) 947
Minority interest 184 1,439 447
Amortization of deferred unearned compensation 3,435 2,822 1,696
Amortization of deferred investment grants (187) (240) (271)
Other (credits) charges to earnings--net (553) 613 1,517
Current items:
Accounts receivable (35,289) (23,903) (17,088)
Inventories (23,705) (4,454) (7,861)
Prepaid expenses (257) 172 (955)
Accounts payable 16,846 12,615 (8,702)
Accrued expenses 15,482 17,285 8,207
Income taxes 20,455 3,385 8,987
- --------------------------------------------------------------------------------------------------------------------
Net cash provided from operations 224,649 191,114 136,280
- --------------------------------------------------------------------------------------------------------------------
Investments:
Purchases of property, plant and equipment (186,877) (129,458) (93,181)
Proceeds from sale of property, plant and equipment 3,041 4,709 4,132
Purchases of businesses, net of cash acquired (16,338) (3,106) (2,418)
Increase in short-term investments (2,826) (23,838) (16,146)
Increase in other assets (1,329) (3,601) (8,762)
- --------------------------------------------------------------------------------------------------------------------
Net cash used for investments (204,329) (155,294) (116,375)
- --------------------------------------------------------------------------------------------------------------------
Financing:
Decrease in long-term debt (945) (169) (1,314)
Cash dividends paid (2,998) (2,217) (1,584)
Exercise of stock options 2,992 2,915 1,998
Purchase of treasury stock (3,712) -- --
Disposition of treasury stock 1,722 1,128 1,120
- --------------------------------------------------------------------------------------------------------------------
Net cash (used for) provided from financing (2,941) 1,657 220
- --------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 15,492 8,678 5,023
- --------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 32,871 46,155 25,148
- --------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of period $ 253,552 $ 220,681 $ 174,526
====================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 931 $ 795 $ 840
Income taxes $ 70,251 $ 57,721 $ 49,555
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
P36
MOLEX
<PAGE> 14
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. Supplemental disclosure of
noncash investing and financing activities are included in note 11.
(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
Effective July 1, 1994, the Company adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115). SFAS 115 requires that the carrying value of certain
investments be adjusted to their fair value. Adoption of this statement did not
have a material effect on the financial condition or consolidated results of
operations of the Company. Short-term investments are available for sale and
consist of a variety of highly-liquid investments, with maturities generally
less than twelve months.
(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:
<TABLE>
<CAPTION>
1995 1994
- ------------------------------------------------------
<S> <C> <C>
Raw materials $ 29,424 $ 20,940
Work in progress 59,042 42,865
Finished goods 62,370 49,461
- ------------------------------------------------------
$ 150,836 $ 113,266
======================================================
</TABLE>
(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:
<TABLE>
<S> <C>
Buildings 25-45 years
Machinery and equipment 3-10 years
Molds and dies 3-4 years
</TABLE>
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 $78,092 in 1995; $64,772 in 1994 and $56,204 in 1993.
Included in these totals are patent costs of $4,895, $3,252 and $2,784 for
the years ended June 30, 1995, 1994 and 1993, 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) GOODWILL
Goodwill is charged to earnings on a straight-line basis over the periods
estimated to be benefited, currently not exceeding 20 years.
(J) RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements in order to conform to the 1995 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. There are 25 million shares of preferred stock authorized, none of
which were issued or outstanding during the three years ended June 30, 1995.
On October 21, 1994 and August 2, 1995, the Board of Directors declared 25%
stock dividends. One quarter share of Molex Common Stock was distributed for
each share of Common Stock and Class B Common Stock outstanding. In addition,
one quarter share of Class A Common Stock was distributed for each share of
Class A Common Stock outstanding. The October, 1994 stock dividend was paid on
November 28, 1994 to shareholders of record as of November 7, 1994. The August,
1995 stock dividend will be paid on September 15, 1995 to shareholders of
record as of August 25, 1995. All stock and stock option amounts, as well as
earnings, dividends and market prices per common share have been retroactively
restated for the stock dividends.
P37
MOLEX
<PAGE> 15
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 that 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>
<CAPTION>
1995 1994
- ---------------------------------------------------------
<S> <C> <C>
Industrial development bonds
2% to 5%, secured by certain
land, buildings and equipment;
payable in periodic installments
through November, 2009 $ 7,350 $ 7,410
Other 924 124
- ---------------------------------------------------------
8,274 7,534
Less current portion 152 184
- ---------------------------------------------------------
Long-term portion $ 8,122 $ 7,350
=========================================================
</TABLE>
The long-term portion as of June 30, 1995, is due as follows: $77 in 1997,
$58 in 1998, $45 in 1999, $49 in 2000 and $7,893 in 2001 and thereafter. 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 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 the term of the option. In
fiscal 1995, $3,435 was charged to operations ($2,822 in 1994 and $1,696 in
1993).
(5) INCOME TAXES
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.
Income before income taxes, minority interest and cumulative effect of
change in accounting principle is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- ---------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 52,740 $ 46,584 $ 35,806
International 161,752 112,893 97,672
- ---------------------------------------------------------------------
$ 214,492 $159,477 $133,478
=====================================================================
</TABLE>
Income tax provisions are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Currently payable:
U.S. federal $ 21,685 $ 9,921 $ 8,427
State 3,130 2,426 2,057
International 66,350 52,031 49,075
- ---------------------------------------------------------------------
91,165 64,378 59,559
- ---------------------------------------------------------------------
Deferred:
International (585) (833) (2,139)
Other, net (307) (359) 951
- ---------------------------------------------------------------------
(892) (1,192) (1,188)
- ---------------------------------------------------------------------
Total provision for income
taxes before cumulative
effect of change in
accounting principle
$ 90,273 $ 63,186 $ 58,371
=====================================================================
</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>
1995 1994 1993
- -------------------------------------------------------------------
<S> <C> <C> <C>
U.S. federal income
tax rate 35.0% 35.0% 34.0%
Certain tax exemptions (3.8) (4.4) (4.7)
State income taxes,
net of federal
tax benefit 1.0 1.0 1.0
International tax rates
different from
U.S. federal rate 9.9 8.0 13.4
- -------------------------------------------------------------------
42.1% 39.6% 43.7%
===================================================================
</TABLE>
P38
MOLEX
<PAGE> 16
Temporary differences that give rise to a significant portion of net deferred
taxes are as follows:
<TABLE>
<CAPTION>
1995 1994
- ------------------------------------------------------------------------
<S> <C> <C>
International/local taxes $ 3,825 $ 3,547
Employee benefit plans 9,713 7,826
Depreciation and amortization (5,421) (3,759)
Allowance for doubtful accounts 1,920 1,381
Inventory reserves 2,106 2,895
Inventory - other 3,528 2,679
Other deferred items 6,604 3,867
- ---------------------------------------------------------------------
$ 22,275 $ 18,436
=====================================================================
</TABLE>
The net deferred tax accounts reported on the balance sheet as of June
30 are as follows:
<TABLE>
<CAPTION>
1995 1994
- --------------------------------------------------------
<S> <C> <C>
Net deferred:
Current asset $ 19,874 $ 18,665
Long-term asset 13,684 14,609
Current liability (547) (2,796)
Long-term liability (10,736) (12,042)
- --------------------------------------------------------
$ 22,275 $ 18,436
========================================================
</TABLE>
Income taxes are generally not provided on the accumulated undistributed
earnings of certain international subsidiaries. It is intended that these
earnings will be permanently reinvested. Should these earnings be distributed,
foreign withholding taxes can be used, with limitations, to reduce U.S. income
taxes.
(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 Post-retirement 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 four 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 1995, 1994
and 1993 included the following components:
<TABLE>
<CAPTION>
1995 1994 1993
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost, benefits
attributed to
employee service
during the period $ 515 $ 492 $ 578
Interest cost on
accumulated
postretirement
benefit obligation 422 405 490
Unrecognized prior
service cost (214) (107) --
Unrecognized net gain (22) -- --
- --------------------------------------------------------------------
Net periodic postretirement
benefit cost $ 701 $ 790 $1,068
====================================================================
</TABLE>
The following table sets forth the plans' combined status as of June 30:
<TABLE>
<CAPTION>
1995 1994
- --------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees and beneficiaries $ 614 $ 675
Active employees 6,185 5,207
- -----------------------------------------------------------------------
Total accumulated postretirement
benefit obligation 6,799 5,882
Fair value of plan assets -- --
- -----------------------------------------------------------------------
Unfunded accumulated benefit
obligation in excess of
plan assets 6,799 5,882
Unrecognized prior service cost 2,121 2,335
Unrecognized net loss (557) (504)
- -----------------------------------------------------------------------
Accrued postretirement benefit costs $ 8,363 $ 7,713
=======================================================================
</TABLE>
The discount rate used in determining the APBO was 7.5% at June 30, 1995 and
1994, and 8.5% as of June 30, 1993. The assumed health care cost trend rate
used in measuring the accumulated postretirement benefit obligation was 10.1%
in 1995, declining per year to an ultimate rate of 5.0% by 2016. 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, 1995
by $1,118 and the aggregate of the service and interest cost components of the
net periodic postretirement benefit cost for the year then ended by $204.
P39
MOLEX
<PAGE> 17
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 $5,380 in 1995, $4,584 in 1994 and $5,160 in 1993. Net periodic
pension expense for the Company's defined benefit plans consists of the
following for the year ended June 30:
<TABLE>
<CAPTION>
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
International International International
U.S. Plans Plans U.S. Plans Plans U.S. Plans Plans
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Service costs $ 515 $ 2,211 $ 412 $ 1,826 $ 607 $ 2,230
Interest costs on projected benefit obligation 487 1,356 368 1,039 398 923
Actual return on plan assets (207) (585) (198) (444) (489) (435)
Net amortization and deferral (99) 343 (142) 33 307 68
- -----------------------------------------------------------------------------------------------------------------------------------
Net periodic pension expense $ 696 $ 3,325 $ 440 $ 2,454 $ 823 $ 2,786
===================================================================================================================================
</TABLE>
The funded status for the Company's defined benefit plans is as follows:
<TABLE>
<CAPTION>
1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
International International
U.S. Plans Plans U.S. Plans Plans
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Actuarial present value of:
Vested benefit obligation $ 5,379 $ 15,537 $ 3,893 $ 12,073
Nonvested benefit obligation 211 2,949 186 151
- --------------------------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation 5,590 18,486 4,079 12,224
Projected benefit obligation 7,448 24,424 5,654 19,157
Plan assets at fair value 7,118 8,254 6,369 7,079
- --------------------------------------------------------------------------------------------------------------------------------
Plan assets in excess of (less than) projected benefit obligation (330) (16,170) 715 (12,078)
Unrecognized net transition liability 507 67 618 65
Unrecognized prior service costs 2,431 -- 741 --
Unrecognized net gain (2,260) (2,346) (1,830) (2,036)
- --------------------------------------------------------------------------------------------------------------------------------
Accrued pension asset (liability) included in the consolidated
balance sheet $ 348 $ (18,449) $ 244 $ (14,049)
================================================================================================================================
</TABLE>
The assumptions used in computing the above information are presented below:
<TABLE>
<CAPTION>
1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
International International
Plans Plans
(weighted (weighted
U.S. Plans average) U.S. Plans average)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Discount rates 8.0% 6.2% 7.5% 6.2%
Rates of increase in compensation 4.5% 4.1% 4.0% 4.1%
Expected long-term rates of return on plan assets 7.0% 9.0% 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 $5,626, $4,892 and $4,736
were charged to operations during 1995, 1994 and 1993, respectively.
P40
MOLEX
<PAGE> 18
(8) COMMITMENTS
(A) PRODUCTION EQUIPMENT
As of June 30, 1995, the Company has entered into firm commitments for capital
expenditures of approximately $58,029 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, 1995 are as
follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
- -----------------------------------------------------
<S> <C>
1996 $ 9,877
1997 5,064
1998 2,982
1999 2,010
2000 1,554
Thereafter 11,259
- -----------------------------------------------------
$ 32,746
=====================================================
</TABLE>
Rental expense was $11,132 in 1995, $9,872 in 1994 and $8,328 in 1993.
(9) STOCK OPTION PLANS
In October 1981, the Board of Directors adopted the 1981 Stock Option Plan. The
most significant terms of the 1981 Stock Option Plan are that (1) options may
be granted for 4.5 million shares of Common Stock and Class A Common Stock, and
(2) the option price shall be the fair market value of the stock of the Company
on the date of 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 PRICE
1981 PLAN (IN THOUSANDS) PER SHARE
- -------------------------------------------------------------
<S> <C> <C>
Outstanding at 6/30/93 356 $8.00-$11.19
Exercised 176 $8.00-$11.19
- -------------------------------------------------------------
Outstanding at 6/30/94 180 $9.60-$11.19
Exercised 91 $9.60-$11.19
- -------------------------------------------------------------
Outstanding at 6/30/95 89 $9.98-$11.19
Options exercisable at 6/30/94 39
Options exercisable at 6/30/95 89
- -------------------------------------------------------------
</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
3.0 million shares of Common Stock, and (2) 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 PRICE
1990 PLAN (IN THOUSANDS) PER SHARE
- -------------------------------------------------------------
<S> <C> <C>
Outstanding at 6/30/93 1042 $ 4.93-$10.08
Granted 355 $10.72-$11.36
Exercised 175 $ 4.99-$8.64
Cancelled 34
- -------------------------------------------------------------
Outstanding at 6/30/94 1188 $ 4.93-$11.36
Granted 799 $12.64-$14.60
Exercised 310 $ 4.93-$11.36
Cancelled 30
- -------------------------------------------------------------
Outstanding at 6/30/95 1647 $ 4.93-$14.60
Options exercisable at 6/30/94 284
Options exercisable at 6/30/95 342
- -------------------------------------------------------------
</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
2.0 million shares of Common Stock, and (2) 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.
Stock option transactions relating to the 1991 Plan are summarized as follows:
<TABLE>
<CAPTION>
SHARES PRICE
1991 PLAN (IN THOUSANDS) PER SHARE
- -------------------------------------------------------------
<S> <C> <C>
Outstanding at 6/30/93 200 $15.49-$20.28
Granted 283 $19.60-$24.12
Exercised 2 $15.49-$16.13
- -------------------------------------------------------------
Outstanding at 6/30/94 481 $15.49-$24.12
Granted 89 $25.88-$30.62
Exercised 42 $15.49-$24.12
- -------------------------------------------------------------
Outstanding at 6/30/95 528 $15.49-$30.62
Options exercisable at 6/30/94 69
Options exercisable at 6/30/95 117
- -------------------------------------------------------------
</TABLE>
P41
MOLEX
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(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
1995 REVENUE REVENUE TOTAL
- -----------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 344,653 $ 38,548 $ 383,201
Far East North 367,689 95,727 463,416
Far East South 211,943 23,500 235,443
Europe 227,159 11,874 239,033
Americas (Non-U.S.) 38,353 1,405 39,758
Other 7,950 42,014 49,964
Eliminations -- (213,068) (213,068)
- -----------------------------------------------------------------------
Consolidated $1,197,747 $ -- $1,197,747
=======================================================================
</TABLE>
<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
=======================================================================
</TABLE>
<TABLE>
<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
=======================================================================
</TABLE>
Net income by geographic area is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- -----------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 34,655 $ 30,020 $ 21,548
Far East North 50,623 40,083 37,173
Far East South 35,264 25,656 20,768
Europe 22,057 11,529 5,109
Americas (Non-U.S.) 3,209 1,099 1,390
Other (21,947) (13,362) (14,009)
Eliminations 174 (173) (924)
- -----------------------------------------------------------------------
Consolidated $124,035 $ 94,852 $ 71,055
=======================================================================
</TABLE>
Identifiable assets by geographic area are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- -----------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 423,971 $ 357,261 $303,045
Far East North 543,557 447,384 383,553
Far East South 200,843 157,975 138,285
Europe 207,817 149,604 124,093
Americas (Non-U.S.) 18,395 17,102 15,139
Other 68,062 40,218 33,134
Eliminations (21,625) (31,027) (35,474)
- -----------------------------------------------------------------------
Consolidated $1,441,020 $1,138,517 $961,775
=======================================================================
</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 1995, 1994
and 1993, 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 therefore proforma financial data
is not presented.
On February 17, 1995, Molex acquired Mod-Tap W. Corp., a manufacturer of
interconnection products and systems for data and voice communications, for 1.2
million shares of Molex Class A Common Stock and $9.3 million in cash. The
transaction has been accounted for as a purchase and accordingly, the purchase
price in excess of the fair value of the net assets acquired has been
classified as goodwill and included in other assets in the accompanying
consolidated balance sheet and is being amortized over 20 years.
During fiscal 1995, the Company also purchased the remaining shares
outstanding of Molex Fiber Optics Inc. and Molex Eastern Europe S.A., and
acquired additional interests in Molex (India) Ltd. and DeCoupage Moulage De
Savoie S.A. 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.
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.
P42
MOLEX
<PAGE> 20
FISCAL 1995, 1994 AND 1993 BY QUARTER
(in thousands, except per share--unaudited)
<TABLE>
<CAPTION>
QUARTER 1995 1994 1993(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenue 1st $ 268,899 $ 233,244 $ 215,201
2nd 274,961 224,896 202,487
3rd 305,755 238,568 206,011
4th 348,132 267,400 235,584
Gross profit 1st 115,475 96,861 88,722
2nd 116,466 94,196 82,113
3rd 127,697 100,103 83,167
4th 146,059 114,919 98,601
Income before income taxes, minority interest and
cumulative effect of change in accounting principle 1st 48,374 37,142 32,708
2nd 47,861 35,917 30,193
3rd 54,328 39,659 31,102
4th 63,929 46,759 39,475
Income taxes 1st 20,957 15,357 14,394
2nd 19,884 14,256 13,621
3rd 22,504 15,761 13,563
4th 26,928 17,812 16,793
Net income 1st 27,354 21,382 14,660
2nd 27,910 21,405 16,543
3rd 31,794 23,596 17,408
4th 36,977 28,469 22,444
Earnings per common share(1) 1st 0.28 0.22 0.15
2nd 0.28 0.21 0.16
3rd 0.31 0.24 0.18
4th 0.37 0.29 0.23
</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 24 28 1/8 19 3/8 24 1/2 15 1/4 19 3/8
2nd 24 3/4 28 3/4 20 3/8 23 3/8 16 5/8 19 3/4
3rd 24 3/4 29 1/8 21 1/2 24 5/8 16 1/2 21 1/8
4th 28 1/4 31 3/8 19 3/8 24 7/8 18 3/8 20 5/8
Class A Common Stock(1) 1st 23 26 1/4 17 5/8 22 3/8 14 7/8 18 1/8
2nd 22 3/4 27 18 7/8 22 1/4 15 7/8 18 1/2
3rd 23 5/8 27 3/4 20 7/8 23 1/2 15 5/8 19 1/2
4th 26 5/8 30 19 3/8 23 1/2 16 7/8 19 1/4
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Restated for the following 25% stock dividends: August, 1995; November,
1994; 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.
P43
MOLEX
<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%
Molex (Shanghai) Co., Ltd. China (P.R.C.) 95.0%
G. Ostervig-Molex A/S Denmark 30.0%
Molex Eastern Europe S.A. dba Molex France France 100.0%
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 Hong Kong/China Ltd. Hong Kong 100.0%
Molex (India) Ltd. India 88.0%
Molex Italia S.p.A. 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 B.V. Netherlands 100.0%
Molex European Distribution Center B.V. Netherlands 100.0%
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
COMPANY NAME JURISDICTION OWNERSHIP
- -------------------------------------------------- ------------------ ---------
<S> <C> <C>
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%
Sylex s.r.o. Slovak Republic 35.0%
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 94.75%
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 Optics Inc. Illinois, U.S.A. 100.0%
* Molex Alin International, Incorporated British Virgin Is. 100.0%
Mod-Tap W Corp. Delaware, U.S.A. 100.0%
Mod-Tap NA Corp. Massachusetts, U.S.A. 100.0%
Mod-Tap System Europe SARL France 100.0%
Mod-Tap Limited United Kingdom 100.0%
Mod-Tap (Australia) Pty. Limited Delaware, U.S.A. 100.0%
Mod-Tap GmbH Germany 100.0%
Mod-Tap Japan Limited Delaware, U.S.A. 100.0%
Mod-Tap Far East Limited Delaware, U.S.A. 100.0%
Mod-Tap Sp. z o.o. Poland 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 3, 1995, 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, 1995.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
September 25, 1995
<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, 1995 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-30-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 253,552
<SECURITIES> 59,563
<RECEIVABLES> 289,927
<ALLOWANCES> (11,934)
<INVENTORY> 150,836
<CURRENT-ASSETS> 773,036
<PP&E> 1,266,305
<DEPRECIATION> (699,002)
<TOTAL-ASSETS> 1,441,020
<CURRENT-LIABILITIES> 278,046
<BONDS> 8,122
<COMMON> 4,177
0
0
<OTHER-SE> 1,103,091
<TOTAL-LIABILITY-AND-EQUITY> 1,441,020
<SALES> 1,197,747
<TOTAL-REVENUES> 1,197,747
<CGS> 692,050
<TOTAL-COSTS> 298,483
<OTHER-EXPENSES> 2,759
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10,037)
<INCOME-PRETAX> 214,492
<INCOME-TAX> 90,273
<INCOME-CONTINUING> 124,219
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124,035
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.24
</TABLE>
