MOLX » Topics » Financial Condition and Liquidity

These excerpts taken from the MOLX 10-K filed Aug 6, 2008.
Financial Condition and Liquidity
 
Our financial position remains strong and we continue to be able to fund capital projects and working capital needs principally out of operating cash flows and cash reserves. Cash, cash equivalents and marketable securities totaled $509.8 million and $460.9 million at June 30, 2008 and 2007, respectively, of which approximately $480.0 was in non-U.S. accounts as of June 30, 2008. Transferring cash, cash equivalent or marketable securities to U.S. accounts from non-U.S. accounts could subject us to additional U.S. repatriation income tax.
 
Our long-term financing strategy is to primarily rely on internal sources of funds for investing in plant, equipment and acquisitions. Management believes that our liquidity and financial flexibility are adequate to support both current and future growth. We have historically used external borrowings only when a clear financial advantage exists. Long-term debt and obligations under capital leases at June 30, 2008 totaled $151.8 million. We have available lines of credit totaling $207.9 million at June 30, 2008.
 
Cash Flows
 
Below is a table setting forth the key lines of our Consolidated Statements of Cash Flows (in thousands):
 
                         
    2008     2007     2006  
 
Cash provided from operating activities
  $ 479,134     $ 451,434     $ 443,856  
Cash used for investing activities
    (218,156 )     (446,129 )     (240,779 )
Cash provided by (used for) financing activities
    (197,306 )     28,529       (189,814 )
Effect of exchange rate changes on cash
    33,474       11,712       9,796  
                         
Net increase in cash and cash equivalents
  $ 97,146     $ 45,546     $ 23,059  
                         


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Table of Contents

Operating Activities
 
Cash provided from operating activities in fiscal 2008 increased by $27.7 million for fiscal 2008 from the prior year due mainly to lower use of funds to finance working capital needs in the current year period compared with the prior year, partially offset by lower net income. Working capital is defined as current assets minus current liabilities.
 
Cash provided from operating activities increased by $7.6 million for fiscal 2007 from fiscal 2006 primarily due to higher net income as adjusted for non-cash items in fiscal 2006 offset by an increase in working capital. The working capital increase was primarily due to the revenue growth for fiscal 2007 compared with the prior year.
 
Investing Activities
 
On July 19, 2007, we completed an acquisition of a U.S.-based company in an all cash transaction approximating $42.5 million. On August 9, 2006, we completed the acquisition of Woodhead in an all cash transaction for approximately $238.1 million, including the assumption of debt and net of cash acquired.
 
Capital expenditures declined $62.2 million during fiscal 2008 compared with fiscal 2007 reflecting our efforts to increase asset efficiency by lowering the incremental investment required to drive future growth. Capital expenditures increased $20.1 million for fiscal 2007 compared with fiscal 2006 in order to provide increased capability in the Americas, Asia-Pacific and European regions.
 
Cash flow from investing activities also includes proceeds from marketable securities in the net amount of $46.8 million in fiscal 2008, $71.2 million in fiscal 2007 and $37.3 million in fiscal 2006. Our marketable securities generally have a term of less than one year. Our investments in marketable securities are primarily based on our uses of cash in operating, other investing and financing activities.
 
Financing Activities
 
In order to fund the cash portion of our investment in Woodhead made during fiscal 2007, we entered into two term notes aggregating 15 billion Japanese yen ($141.3 million) and borrowed $44.0 million on our unsecured revolving credit line that was repaid the same year. The term notes are due in September 2009, with weighted-average fixed interest rates approximating 1.3%. In order to fund stock repurchases during fiscal 2008, we borrowed $125.0 million on our unsecured revolving line of credit, $75.0 million of which was repaid during fiscal 2008.
 
We purchased shares of Common Stock and Class A Common Stock totaling 8.0 million shares, 1.2 million shares and 6.0 million shares during fiscal years 2008, 2007 and 2006, respectively. The aggregate cost of these purchases was $199.6 million, $34.9 million and $165.3 million in fiscal years 2008, 2007 and 2006, respectively.
 
Our Board of Directors authorized the repurchase of up to an aggregate $200.0 million of common stock through June 30, 2008. Substantially all funds were used under the authorization as of June 30, 2008. On August 1, 2008, our Board of Directors authorized a repurchase of up to an aggregate $200.0 million of common stock through June 30, 2009.
 
We have sufficient cash balances and cash flow to support our planned growth. As part of our growth strategy, we may, in the future, acquire other companies in the same or complementary lines of business, and pursue other business ventures. The timing and size of any new business ventures or acquisitions we complete may impact our cash requirements and debt balances.


36


Table of Contents

Financial
Condition and Liquidity



 



Our financial position remains strong and we continue to be able
to fund capital projects and working capital needs principally
out of operating cash flows and cash reserves. Cash, cash
equivalents and marketable securities totaled
$509.8 million and $460.9 million at June 30,
2008 and 2007, respectively, of which approximately $480.0 was
in
non-U.S. accounts
as of June 30, 2008. Transferring cash, cash equivalent or
marketable securities to U.S. accounts from
non-U.S. accounts
could subject us to additional U.S. repatriation income tax.


 



Our long-term financing strategy is to primarily rely on
internal sources of funds for investing in plant, equipment and
acquisitions. Management believes that our liquidity and
financial flexibility are adequate to support both current and
future growth. We have historically used external borrowings
only when a clear financial advantage exists. Long-term debt and
obligations under capital leases at June 30, 2008 totaled
$151.8 million. We have available lines of credit totaling
$207.9 million at June 30, 2008.


 




Cash
Flows



 



Below is a table setting forth the key lines of our Consolidated
Statements of Cash Flows (in thousands):


 












































































































































                         

 

 

2008

 

 

2007

 

 

2006

 
 


Cash provided from operating activities


 

$

479,134

 

 

$

451,434

 

 

$

443,856

 


Cash used for investing activities


 

 

(218,156

)

 

 

(446,129

)

 

 

(240,779

)


Cash provided by (used for) financing activities


 

 

(197,306

)

 

 

28,529

 

 

 

(189,814

)


Effect of exchange rate changes on cash


 

 

33,474

 

 

 

11,712

 

 

 

9,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Net increase in cash and cash equivalents


 

$

97,146

 

 

$

45,546

 

 

$

23,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 









35





Table of Contents







Operating
Activities



 



Cash provided from operating activities in fiscal 2008 increased
by $27.7 million for fiscal 2008 from the prior year due
mainly to lower use of funds to finance working capital needs in
the current year period compared with the prior year, partially
offset by lower net income. Working capital is defined as
current assets minus current liabilities.


 



Cash provided from operating activities increased by
$7.6 million for fiscal 2007 from fiscal 2006 primarily due
to higher net income as adjusted for non-cash items in fiscal
2006 offset by an increase in working capital. The working
capital increase was primarily due to the revenue growth for
fiscal 2007 compared with the prior year.


 




Investing
Activities



 



On July 19, 2007, we completed an acquisition of a
U.S.-based
company in an all cash transaction approximating
$42.5 million. On August 9, 2006, we completed the
acquisition of Woodhead in an all cash transaction for
approximately $238.1 million, including the assumption of
debt and net of cash acquired.


 



Capital expenditures declined $62.2 million during fiscal
2008 compared with fiscal 2007 reflecting our efforts to
increase asset efficiency by lowering the incremental investment
required to drive future growth. Capital expenditures increased
$20.1 million for fiscal 2007 compared with fiscal 2006 in
order to provide increased capability in the Americas,
Asia-Pacific and European regions.


 



Cash flow from investing activities also includes proceeds from
marketable securities in the net amount of $46.8 million in
fiscal 2008, $71.2 million in fiscal 2007 and
$37.3 million in fiscal 2006. Our marketable securities
generally have a term of less than one year. Our investments in
marketable securities are primarily based on our uses of cash in
operating, other investing and financing activities.


 




Financing
Activities



 



In order to fund the cash portion of our investment in Woodhead
made during fiscal 2007, we entered into two term notes
aggregating 15 billion Japanese yen ($141.3 million)
and borrowed $44.0 million on our unsecured revolving
credit line that was repaid the same year. The term notes are
due in September 2009, with weighted-average fixed interest
rates approximating 1.3%. In order to fund stock repurchases
during fiscal 2008, we borrowed $125.0 million on our
unsecured revolving line of credit, $75.0 million of which
was repaid during fiscal 2008.


 



We purchased shares of Common Stock and Class A Common
Stock totaling 8.0 million shares, 1.2 million shares
and 6.0 million shares during fiscal years 2008, 2007 and
2006, respectively. The aggregate cost of these purchases was
$199.6 million, $34.9 million and $165.3 million
in fiscal years 2008, 2007 and 2006, respectively.


 



Our Board of Directors authorized the repurchase of up to an
aggregate $200.0 million of common stock through
June 30, 2008. Substantially all funds were used under the
authorization as of June 30, 2008. On August 1, 2008,
our Board of Directors authorized a repurchase of up to an
aggregate $200.0 million of common stock through
June 30, 2009.


 



We have sufficient cash balances and cash flow to support our
planned growth. As part of our growth strategy, we may, in the
future, acquire other companies in the same or complementary
lines of business, and pursue other business ventures. The
timing and size of any new business ventures or acquisitions we
complete may impact our cash requirements and debt balances.





36





Table of Contents







This excerpt taken from the MOLX 10-K filed Aug 3, 2006.

Financial Condition and Liquidity


Our financial position remains strong and we continue to be able to fund capital projects and working capital needs principally out of operating cash flows and cash reserves.  Cash, cash equivalents and marketable securities totaled $485.5 million and $497.6 million at June 30, 2006 and 2005, respectively.  In the first quarter of fiscal 2007, we expect to utilize a portion of our existing cash to fund the acquisition of Woodhead.  Our long-term financing strategy is to primarily rely on internal sources of funds for investing in plant, equipment and acquisitions.  Management believes that our liquidity and financial flexibility are adequate to support both current and future growth.  We have historically used external borrowings only when a clear financial advantage exists. Long-term debt and obligations under capital leases at June 30, 2006 totaled $8.8 million.  We have available lines of credit totaling $123.0 million at June 30, 2006.  


34




Cash Flows


Below is a table setting forth the key lines of our Consolidated Statements of Cash Flows (in thousands):

<del>

 

2006

 

2005

 

2004

Cash provided from operating activities

$

443,081 

 

$

430,835 

 

$

292,031 

Cash used for investing activities

 

(240,779)

  

(286,232)

  

(158,358)

Cash used for financing activities

 

(189,039)

  

(75,689)

  

(86,108)

Effect of exchange rate changes on cash

 

9,796 

  

6,411 

  

7,890 

Net increase in cash

$

23,059 

 

$

75,325 

 

$

55,455 


Operating Activities


Cash provided from operating activities increased by $12.2 million for fiscal 2006 from fiscal 2005 primarily due to higher net income as adjusted for non-cash items in fiscal 2006 offset by an increase in working capital.  The working capital increase was primarily due to the revenue growth for fiscal 2006 as compared with the prior year and reflects severance payments approximating $17.8 million in connection with the restructuring costs recorded in fiscal 2005.  Working capital is defined as current assets minus current liabilities.


Cash provided from operating activities increased by $138.8 million for fiscal 2005 from fiscal 2004 due mainly to higher net income as adjusted for non-cash items in fiscal 2005 with steady working capital levels.


Investing Activities


Capital expenditures increased $45.9 million for fiscal 2006 compared with fiscal 2005 in order to provide increased capability in the Far East North region and increased capability and capacity in the Americas and Far East South regions. Capital expenditures increased $41.1 million for fiscal 2005 compared with fiscal 2004 primarily due to investments in increasing capability in the Far East North region. During 2005, we also sold our investment in an affiliate and generated cash from this transaction of $14.1 million.


Cash flow from investing activities also includes proceeds from marketable securities in the net amount of $37.3 million in fiscal 2006 and $67.0 million in fiscal 2004 and investments in marketable securities in the net amount of $83.5 million in fiscal 2005. Our marketable securities generally have a term of less than one year. Our uses of or investments in marketable securities are primarily based on our uses of cash in operating, other investing and financing activities.


Financing Activities


Cash was used primarily for the payment of dividends and the purchase of treasury stock.  We purchased shares of Common Stock and Class A Common Stock totaling 6.0 million shares, 2.4 million shares and 2.7 million shares during fiscal years 2006, 2005 and 2004, respectively. The aggregate cost of these purchases was $165.3 million, $58.2 million and $70.2 million in fiscal years 2006, 2005 and 2004, respectively.


Our Board of Directors previously authorized the repurchase of up to an aggregate $250.0 million of common stock though December 31, 2006. Approximately $50.1 million was remaining under the authorization as of June 30, 2006.


We have a strong cash balance and cash flow and a low level of debt.  We believe at this time that share repurchases are a good investment as compared with investing our cash in short-term money instruments or marketable securities, particularly with the current low interest rates.  We also use shares repurchased to replenish stock used for exercises of employee stock options and employee stock awards.


As part of our growth strategy, we may, in the future, acquire other companies in the same or complementary lines of business, and pursue other business ventures.  The timing and size of any new business ventures or acquisitions we complete may impact our cash and borrowing requirements.


35




This excerpt taken from the MOLX 10-K filed Sep 12, 2005.

Financial Condition and Liquidity

Molex’s financial position remains strong and the Company continues to be able to fund capital projects and working capital needs principally out of operating cash flows and cash reserves. Cash, cash equivalents and marketable securities totaled $497.6 million and $338.7 million at June 30, 2005 and 2004, respectively. The Company’s long-term financing strategy is to rely on internal sources of funds for investing in plant, equipment and acquisitions. Management believes that the Company’s liquidity and financial flexibility are adequate to support both current and future growth. Molex has historically used external borrowings only when a clear financial advantage exists. Long-term debt and obligations under capital leases at June 30, 2005 totaled $10.0 million. The Company has available lines of credit totaling $122.0 million at June 30, 2005.

Cash Flows

Below is a table setting forth the key lines of the Company’s Consolidated Statements of Cash Flows (in thousands):
2005
   
2004
   
2003
Cash provided from operating activities
$
430,835
  
$
292,031
   
$
304,872
Cash used for investing activities
(286,232
)
  
(158,358
)
(249,225
)
Cash used for financing activities
(75,689
)
  
(86,108
)
   
(92,331
)
Effect of exchange rate changes on cash
6,411
  
7,890
2,183
Net increase (decrease) in cash
$
75,325
  
$
55,455
   
$
(34,501
)

Operating Activities

Cash provided from operating activities increased by $138.8 million from fiscal 2004 due mainly to steady working capital levels and higher cash earnings when compared with the prior year. Although customer revenue was higher during fiscal 2005, accounts receivable balances increased moderately. The Company also increased inventory levels in fiscal 2005 to support the higher volume, although this increase was partially offset by higher accounts payable balances. Working capital, defined as current assets minus current liabilities, at June 30, 2005 was $904.6 million compared with $740.2 million at June 30, 2004.

Investing Activities

Cash used for investing activities increased by $127.9 million primarily due to higher capital expenditures and an increase in the level of investment in marketable securities during fiscal 2005. During the first quarter of fiscal 2005, the Company sold its investment in an affiliate and generated cash from this transaction of $14.1 million.

-29-

Financing Activities

Cash was used primarily for the payment of dividends and the purchase of treasury stock. The Company purchased 2,395,000 shares of Common and Class A Common Stock during fiscal 2005 at an aggregate cost of $58.2 million and 2,740,000 shares during fiscal 2004 at an aggregate cost of $70.2 million.

The Company’s Board of Directors previously authorized the discretionary purchase of up to $100.0 million of Common Stock and/or Class A Common Stock during fiscal 2005. On April 25, 2005, the Company’s Board of Directors replaced this $100 million authorization with a new authorization of a discretionary purchase program that expires December 31, 2006 and increased the aggregate value of any future purchases to $250 million.

Molex has a strong cash balance and cash flow and very little debt. The Company believes at this time that share repurchases are a good investment as compared with investing its cash in short-term money instruments or marketable securities, particularly with the current low interest rates. The Company also uses shares repurchased to replenish stock used for exercises of employee stock options, employee stock awards and the Employee Stock Purchase Plan.

As part of its growth strategy, the Company may, in the future, acquire other companies in the same or complementary lines of business, and pursue other business ventures. The timing and size of any new business ventures or acquisitions the Company completes may impact its cash requirements.

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