LISLE, Ill.--(BUSINESS WIRE)--Molex Incorporated (NASDAQ: MOLX)(NASDAQ: MOLXA), a global electronic components company, today reported results for its 2009 third fiscal quarter ended March 31, 2009.

2009 Third Fiscal Quarter Results

Revenue for the quarter ended March 31, 2009 of $505.5 million was at the lower end of the range estimated in the release dated January 27, 2009. Revenue decreased 38.5% from the same period last fiscal year, and 24.2% from the December 2008 quarter. Revenue continued to be impacted by the global slowdown, made worse by customer initiatives to reduce their inventory. Revenue in local currencies fell 37.1% as currency translation decreased revenue by $12.0 million, compared with last year’s March quarter.

Gross profit margin was 18.5%, compared with 30.9% in the prior year March quarter, and 26.4% in the December 2008 quarter. The decline in gross profit margin reflected lower absorption of manufacturing overhead resulting from significantly lower production volume. SG&A expense declined $28.6 million from last year’s March quarter and $5.5 million from the December 2008 quarter, due to the cost reduction and restructuring programs.

Net loss was $58.6 million, or ($0.34) per share. Included in the quarter results was a pretax restructuring charge of $44.3 million ($34.0 million after-tax or approximately $0.20 per share), relating to the previously announced restructuring program. The March quarter compares with net income of $50.3 million, or $0.28 per share in the prior year quarter that included a pretax restructuring charge of $6.4 million, or approximately $0.03 per share after-tax. The effective tax rate for the quarter was 32.3%.

Orders for the March quarter were $475 million, down 47% compared with the prior year quarter and down 16% from the December 2008 quarter. The Company’s order backlog on March 31, 2009 was $251 million, compared with $461 million at March 31, 2008 and $285 million at December 31, 2008. Orders improved each month during the quarter, and the book to bill ratio was positive for the month of March.

Capital expenditures for the March 2009 quarter were $31.1 million, compared with $61.0 million in the prior year March quarter and $51.3 million in the December 2008 quarter. Capital spending during the March quarter was primarily for production tooling related to new product development. Capital expenditures for the first nine months of fiscal 2009 were $127.7 million or 6.3% of revenue, and included expenditures related to plant construction as part of the restructuring program. This compares with $163.4 million or 6.7% of revenue for the nine months ended March 31, 2008. Capital expenditures for fiscal 2009 were significantly reduced to maximize cash flow in this difficult economy and are now estimated in a range of $165 to $185 million for the full year. This compares with fiscal 2008 spending of $234.6 million.

Research and development expense was $34.9 million, compared with $41.7 million in the prior year quarter due primarily to salary reductions and cost containment activities. In the first three quarters of fiscal 2009 the Company released 158 new products. During the March quarter new design activity improved significantly, and consistent with the company’s goal of remaining a technology leader in the industry, spending for R&D is expected to increase in subsequent quarters.

Cash flow from operations was $121.3 million for the March quarter and $311.6 million for the nine months ended March 31, 2009. Cash and marketable securities was $505.9 million at the end of the quarter, an increase of $48.2 million from December 31, 2008.

Martin P. Slark, CEO, commented on the quarter, “We believe that the revenue and orders for the quarter were below the level of current market demand, a result of inventory reductions within the supply chain. When combined with our initiatives to reduce our own inventory, manufacturing volume was below the level required to break-even on an operating basis. We have been aggressive in our response to the business environment, including making salary reductions for officers and salaried employees in the U.S. as well as in most international operations. In addition, we have lowered headcount by 25% over the last two quarters.”

Slark continued, “During the quarter we also successfully managed our cash flow. For example, inventory declined by 19.5% sequentially, while accounts receivable declined by 26.0% sequentially and returned to a normal level of 75 days sales outstanding. Capital expenditures were tightly controlled and reduced to the lowest level in several years. These initiatives improved our cash position providing us with additional security during these tough times.”

Restructuring Update

The restructuring charge of $44.3 million recorded in the March quarter was primarily related to severance for headcount reductions and the costs associated with plant closures. Since the end of the quarter the Company announced the closure of a manufacturing plant in Japan.

The total estimated pretax restructuring charge through the end of fiscal year 2010 has increased to a range of $240 to $250 million. Cumulative restructuring charges were $174 million through March 31, 2009, and the Company estimates that the additional restructuring charges in fiscal 2009 will approximate $50 million, with the remaining $20 to 25 million to be recognized in fiscal 2010. The expected annualized cost savings from the restructuring program is approximately $200 million.

Nine-Month Results

Revenue for the nine-months ended March 31, 2009 was $2.0 billion, a decline of 18.1% compared with the prior fiscal year. During this period, currency translation increased revenue by $33.1 million. Net loss of $101.5 million, or ($0.58) per share included a pretax restructuring charge of $105.9 million ($79.4 million after-tax or approximately $0.45 per share), and a pretax and after-tax goodwill impairment charge of $93.1 million, or $0.53 per share.

Outlook

The improved order rate in the month of March has continued through the date of this release, and we anticipate that both revenue and orders for the June quarter will be above the March quarter. While orders appear to have bottomed in the March quarter, future visibility remains limited. As a result, the Company considers it prudent to provide a wide range in its outlook, and estimates revenue in the range of $525 to $575 million for the June quarter.

The Company’s cost reduction strategy includes both permanent and short term initiatives. The permanent cost initiatives should enhance financial leverage in the recovery. The short term actions are in response to the economic downturn and lower than normal revenue levels. We believe that this approach maximizes cash flow from operations, while retaining the level of resources and skills necessary to improve our competitive position when the global economy improves.

Earnings Conference Call Information

A conference call will be held on Tuesday, April 21, 2009 at 4:00 pm central. Please dial (888) 679-8037 to participate in the conference call. International callers please dial (617) 213-4849. Please dial in at least five minutes prior to the start of the call and refer to participant pass code 28530336. Internet users will be able to access the web-cast, including slide materials, live and in replay in the “Investors” section of the Company’s website at www.molex.com. A 48-hour telephone replay will be available at approximately 6:00 pm central at (888) 286-8010 or (617) 801-6888 / pass code 31353857.

Other Investor Events

April 30, 2009 – Management visits to Cleveland and Columbus, Ohio

May 14, 2009 – Credit Suisse Hardware & Supply Chain Conference in Boston

June 8, 2009 – UBS Global Technology and Services Conference in New York

June 9, 2009 – William Blair & Company’s 29^th Annual Stock Conference in Chicago

August 4, 2009 – Molex FY09 Q4 Press Release

August 5, 2009 – Molex Analysts Meeting in Lisle, Illinois

Forward-Looking Statements

Statements in this release that are not historical are forward-looking and are subject to various risks and uncertainties that could cause actual results to vary materially from those stated. Words such as “anticipates”, “expects”, “believes”, “intends”, “plans”, “projects”, “estimates”, and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based on currently available information and include, among others, the discussion under “Outlook.” These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions including those associated with the operation of our business, including the risk that customer demand will decrease either temporarily or permanently, whether due to the Company's actions or the demand for the Company's products, and that the Company may not be able to respond through cost reductions in a timely and effective manner; the risk that the value of our inventory may decline; price cutting, new product introductions and other actions by our competitors; fluctuations in the costs of raw materials that the Company is not able to pass through to customers because of existing contracts or market factors; the availability of credit and general market liquidity; fluctuations in currency exchange rates; the financial condition of our customers; the challenges attendant to plant closings and restructurings, including the difficulty of predicting plant closing and relocation costs, the difficulty of commencing or increasing production at existing facilities, and the reactions of customers, governmental units, employees and other groups, the challenges attendant to plant construction; and the ability to realize cost savings from restructuring activities.

Other factors, risks and uncertainties are set forth in Item 1A “Risk Factors” of the Company’s Form 10-K for the year ended June 30, 2008, and disclosed in the Form 10-Q for the quarters ended September 30, 2008 and December 31, 2008, which are incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed in these forward-looking statements. As a result, this release speaks only as of its date and Molex disclaims any obligation to revise these forward-looking statements or to provide any updates regarding information contained in this release resulting from new information, future events or otherwise.

Molex Incorporated is a 70-year-old global manufacturer of electronic, electrical and fiber optic interconnection systems. Based in Lisle, Illinois, USA, the Company operates 45 manufacturing locations in 17 countries. The Molex website is www.molex.com.

Editor’s note: Molex is traded on the NASDAQ Global Select Market (MOLX and MOLXA) in the United States and on the London Stock Exchange. The Company’s voting common stock (MOLX) is included in the S&P 500 Index.