MOLX » Topics » Overview

This excerpt taken from the MOLX 10-K filed Aug 6, 2008.
Overview
 
Our core business is the manufacture and sale of electronic components. Our products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world. We design, manufacture and sell more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches. We also provide manufacturing services to integrate specific components into a customer’s product.
 
Our connectors, interconnecting devices and assemblies are used principally in the telecommunications, data, consumer products, automotive and industrial markets. Our products are used in a wide range of applications including desktop and notebook computers, computer peripheral equipment, mobile phones, digital electronics such as cameras and plasma televisions, automobile engine control units and adaptive braking systems, factory robotics and diagnostic equipment.
 
We believe that our sales mix is balanced, with growth prospects in a number of markets. Net revenues by market can fluctuate based on various factors including new technologies within the industry, composition of customers and changes in their revenue levels and new products or model changes that we or our customers introduce. The approximate percentage of net revenue by market for fiscal years 2008, 2007 and 2006 is outlined below.
 
                         
    Percentage of Net Revenue  
    2008     2007     2006  
 
Consumer
    18 %     18 %     19 %
Telecommunication
    26       26       30  
Automotive
    18       18       18  
Data
    22       21       22  
Industrial
    13       15       9  
Other
    3       2       2  
                         
Total
    100 %     100 %     100 %
                         
 
We sell our products directly to OEMs and to their contract manufacturers and suppliers and, to a lesser extent, through distributors throughout the world. Our engineers work collaboratively with customers to develop products that meet their specific needs. Our connector products are designed to help manufacturers assemble their own products more efficiently. Our electronic components help enable manufacturers to break down their production into sub-assemblies that can be built on different production lines, in different factories or by subcontractors. Our connectors allow these sub-assemblies to be readily plugged together before selling the end product to a customer. Our connectors also enable users to connect together related electronic items, such as mobile phones to battery chargers and computers to printers. Many of our customers are multi-national corporations that manufacture their products in multiple operations in several countries.
 
We service our customers through our global manufacturing footprint. As of June 30, 2008, we operated 45 manufacturing locations, located in 17 countries. Manufacturing in many sectors has continued to move from the United States and Western Europe to lower cost regions. In addition, reduced trade barriers, lower freight cost and improved supply chain logistics have reduced the need for duplicate regional manufacturing capabilities. For these reasons, our strategy has been to


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Table of Contents

consolidate multiple plants of modest size in favor of operating fewer, larger and more integrated facilities in strategic locations around the world.
 
On July 1, 2007 we implemented a new global organizational structure that consists of five product-focused divisions and one worldwide sales and marketing organization. The new structure enables us to work more effectively as a global team to meet customer needs as well as to better leverage our design expertise and our low-cost production centers around the world. The new worldwide sales and marketing organization structure enhances our ability to sell any product, to any customer, anywhere in the world.
 
In connection with our reorganization, we undertook a multi-year restructuring plan in fiscal 2007 designed to reduce costs and to improve return on invested capital as a result of a new global organization that was effective July 1, 2007. We have revised our initial estimate and now expect to incur total restructuring and asset impairment costs related to this restructuring ranging from $125 to $140 million, of which the impact on each segment will be determined as the actions become more certain. Net restructuring cost during fiscal 2008 was $31.2 million, resulting in cumulative costs since we announced this restructuring plan of $68.1 million.
 
During fiscal 2008, we operated our business in the Americas, Europe and Asia-Pacific regions. In fiscal 2008, 52% of our revenue was derived from sales in the Asia-Pacific region. We expect greater economic growth in Asia, particularly in China, than in the Americas and Europe. We believe that the business is positioned to benefit from this trend. Approximately 48% of our manufacturing capacity is in lower cost areas such as China, Eastern Europe and Mexico.
 
The market in which we operate is highly fragmented with a limited number of large companies and a significant number of smaller companies making electronic connectors. We are the world’s second-largest manufacturer of electronic connectors. We believe that our global presence and our ability to design and manufacture our products throughout the world and to service our customers globally is a key advantage for us. Our growth has come primarily from new products that we develop, often in collaboration with our customers.
 
Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy. Marketplace factors include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent and intellectual property issues, litigation results and legal and regulatory developments. We expect that the marketplace environment will remain highly competitive. Our ability to execute our business strategy successfully will require that we meet a number of challenges, including our ability to accurately forecast sales demand and calibrate manufacturing to such demand, manage rising raw material costs, develop, manufacture and successfully market new and enhanced products and product lines, control operating costs, and attract, motivate and retain key personnel to manage our operational, financial and management information systems.
 
This excerpt taken from the MOLX 10-Q filed Oct 31, 2006.

Overview


Our core business is the manufacture and sale of electromechanical components. Our products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world. We design, manufacture and sell more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches in 65 plants in 20 countries on five continents. We also provide manufacturing services to integrate specific components into a customer’s product.


On August 9, 2006, we completed the acquisition of Woodhead Industries, Inc. (Woodhead) in an all cash transaction valued at approximately $236.6 million, including the assumption of debt and net of cash acquired.  Woodhead develops, manufactures and markets network and electrical infrastructure products engineered for performance in harsh, demanding, and hazardous industrial environments and is a significant step in our strategy to expand our products and capabilities in the global industrial market.  The acquisition of Woodhead contributed net revenue of $33.5 million and net income of $1.0 million for the three months ended September 30, 2006.


In September 2006 we approved a plan to close our production facilities in Brazil. We expect to complete the closure of these facilities during the three months ended March 31, 2007, which we anticipate will reduce our quarterly revenue by approximately $10 million to $15 million after the facilities are closed.  We recognized impairment charges and severance costs approximating $2.5 million during the three months ended September 30, 2006 in connection with our decision to shut-down the Brazil production facilities.


Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy.  Marketplace factors include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent and intellectual property issues, litigation results and legal and regulatory developments.  We expect that the marketplace environment will remain highly competitive.  Our ability to execute our business strategy successfully will require that we meet a number of challenges, including our ability to accurately forecast sales demand and calibrate manufacturing to such demand, develop, manufacture and successfully market new and enhanced products and product lines, control overhead, and attract, motivate and retain key personnel to manage our operational, financial and management information systems.


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

Overview


Our core business is the manufacture and sale of electromechanical components.  Our products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world.  We design, manufacture and sell more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches.  We also provide manufacturing services to integrate specific components into a customer’s product.


Our connectors, interconnecting devices and assemblies are used principally in the telecommunications, data, consumer products, automotive and industrial markets.  Our products are used in a wide range of applications including desktop and notebook computers, computer peripheral equipment, mobile phones, digital electronics such as cameras and plasma televisions, automobile engine control units and adaptive braking systems, factory robotics and diagnostic equipment.


We believe that our sales mix is balanced, with growth prospects in a number of markets.  Net revenues by market can fluctuate based on various factors including new technologies within the industry, composition of customers and new products or model changes that we or our customers introduce.  The approximate percentage of net revenue by market for fiscal 2006, 2005 and 2004 is outlined below.  

 

% of Net Revenue

 

2006

 

2005

 

2004

Telecommunications

30

%

 

27

%

 

23

%

Data Products

22

  

24

  

26

 

Automotive

18

  

19

  

17

 

Consumer

19

  

18

  

21

 

Industrial

9

  

9

  

10

 

Other

2

  

3

  

3

 

  Total

100

%

 

100

%

 

100

%


 We sell our products directly to OEMs and to their subcontractors and suppliers and, to a lesser extent, through distributors throughout the world.  Our engineers work collaboratively with customers to develop products that meet their specific needs.  Our connector products are designed to help manufacturers assemble their own products more efficiently. Our electronic components help enable manufacturers to break down their production into sub-assemblies that can be built on different production lines, in different factories or by subcontractors.  Our connectors allow these sub-assemblies to be readily plugged together before selling the end product to a customer.  Our connectors also enable users to connect together related electronic items, such as mobile phones to battery chargers and computers to printers.  Many of our customers are multi-national corporations that manufacture their products in multiple operations in several countries.


 We service our customers through our global manufacturing footprint.  As of June 30, 2006, we operated 54 manufacturing plants, located in 18 countries on five continents.  Manufacturing in many sectors has continued to move from the United States and Western Europe to lower cost regions.  In addition, reduced trade barriers, lower freight cost and improved supply chain logistics have reduced the need for duplicate regional manufacturing capabilities.  For these reasons, our strategy has been to consolidate multiple plants of modest size in favor of operating fewer, larger and more integrated facilities in strategic locations around the world.  As announced in April 2005, we realigned part of our manufacturing capacity that resulted in the closing of seven plants in five countries.  We operate our business in four geographic regions.  In 2006, 52% of our revenue was derived from sales in Asia.  Economic growth in Asia, particularly in China, is anticipated to be greater than in the Americas and Europe.  Our management believes that it has positioned the business to benefit from this trend.   Approximately 50% of our manufacturing capacity is in lower cost areas such as China, Eastern Europe and Mexico.

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The market in which we operate is highly fragmented with a limited number of large companies and a significant number of smaller companies making electronic connectors.  We are the world’s second-largest manufacturer of electronic connectors.  We believe that our global presence and our ability to design and manufacture our products throughout the world and to service our customers globally is a key advantage for us.  Our growth has come primarily from new products that we develop, often in collaboration with our customers.  


This excerpt taken from the MOLX 10-Q filed May 2, 2006.

Overview


Our core business is the manufacture and sale of electronic components. Our products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world. We design, manufacture and sell more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches in 57 plants in 19 countries on five continents. We also provide manufacturing services to integrate specific components into a customer’s product.


Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy.  Marketplace factors include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent and intellectual property issues, litigation results and legal and regulatory developments.  We expect that the marketplace environment will remain highly competitive.  Our ability to execute our business strategy successfully will require that we meet a number of challenges, including our ability to accurately forecast sales demand and calibrate manufacturing to such demand, develop, manufacture and successfully market new and enhanced products and product lines, control overhead, and attract, motivate and retain key personnel to manage our operational, financial and management information systems.    


This excerpt taken from the MOLX 10-Q filed Feb 2, 2006.

Overview


Our core business is the manufacture and sale of electromechanical components. Our products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world. We design, manufacture and sell more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches in 58 plants in 19 countries on five continents. We also provide manufacturing services to integrate specific components into a customer’s product.


Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy.  Marketplace factors include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent and intellectual property issues, litigation results and legal and regulatory developments.  We expect that the marketplace environment will remain highly competitive.  Our ability to execute our business strategy successfully will require that we meet a number of challenges, including our ability to accurately forecast sales demand and calibrate manufacturing to such demand, develop, manufacture and successfully market new and enhanced products and product lines, control overhead, and attract, motivate and retain key personnel to manage our operational, financial and management information systems.    


This excerpt taken from the MOLX 10-Q filed Nov 4, 2005.

Overview


Our core business is the manufacture and sale of electromechanical components. Our products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world. We design, manufacture and sell more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches in 58 plants in 19 countries on five continents. We also provide manufacturing services to integrate specific components into a customer’s product.


Our financial results are influenced by factors in the markets in which we operate and by our ability to successfully execute our business strategy.  Marketplace factors include competition for customers, raw material prices, product and price competition, economic conditions in various geographic regions, foreign currency exchange rates, interest rates, changes in technology, fluctuations in customer demand, patent and intellectual property issues, litigation results and legal and regulatory developments.  We expect that the marketplace environment will remain highly competitive.  Our ability to execute our business strategy successfully will require that we meet a number of challenges, including our ability to accurately forecast sales demand and calibrate manufacturing to such demand, develop, manufacture and successfully market new and enhanced products and product lines, control overhead, and attract, motivate and retain key personnel to manage our operational, financial and management information systems.    


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

Overview

Molex’s core business is the manufacture and sale of electromechanical components. Molex’s products are used by a large number of leading original equipment manufacturers (OEMs) throughout the world. The Company designs, manufactures and sells more than 100,000 products including terminals, connectors, planar cables, cable assemblies, interconnection systems, backplanes, integrated products and mechanical and electronic switches. Molex also provides manufacturing services to integrate specific components into a customer’s product.

Molex connectors, interconnecting devices and assemblies are used principally in the telecommunications, computer, consumer products, automotive and industrial markets. The Company’s products are used in a wide range of applications including desktop and notebook computers, computer peripheral equipment, mobile phones, digital electronics such as cameras and plasma televisions, automobile engine control units and adaptive braking systems, factory robotics and diagnostic equipment.

Net revenues by market can fluctuate based on various factors including new technologies within the industry, composition of customers and new products or model changes introduced by Molex or its customers. The approximate percentage of net revenue by market for fiscal 2005, 2004 and 2003 is outlined below. Certain changes have been made to previously reported 2004 and 2003 information to conform to the Company’s current classification of customers into its market definitions.

% of Net Revenue
Markets:
2005
     
2004
     
2003
Telecommunications
27
%
     
23
%
     
21
%
Data Products
24
     
26
     
27
Automotive
19
     
17
     
19
Consumer
18
     
21
     
21
Industrial
9
     
10
     
9
Other
3
     
3
     
3
Total
100
%
     
100
%
     
100
%

Molex believes that its sales mix is balanced, with growth prospects in a number of markets. During the last two years, the Company has experienced higher growth rates in the telecommunications market, which includes mobile phones, networking and transmission equipment and slower growth in automotive and consumer products.

Molex sells its products directly to OEMs and to their subcontractors and suppliers and, to a lesser extent, through distributors throughout the world. Molex engineers work collaboratively with customers to develop products that meet their specific needs. The Company’s connector products are designed to help manufacturers assemble their own products more efficiently. Molex’s electronic components help enable manufacturers to break down their production into sub-assemblies that can be built on different production lines, in different factories or by subcontractors. The Company’s connectors allow these sub-assemblies to be readily plugged together before selling the end product to a customer. Molex connectors also enable users to connect together related electronic items, such as mobile phones to battery chargers and computers to printers. Many Molex customers are multi-national corporations that manufacture their products in multiple operations in several countries.

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Molex services its customers through its global manufacturing footprint. As of June 30, 2005, the Company operated 58 manufacturing plants, located in 19 countries on five continents. Manufacturing in many sectors has continued to move from the United States and Western Europe to lower cost regions. In addition, reduced trade barriers, lower freight cost and improved supply chain logistics have reduced the need for duplicate regional manufacturing capabilities. For these reasons, Molex’s strategy has been to consolidate multiple plants of modest size in favor of operating fewer, larger and more integrated facilities in strategic locations around the world. In April 2005, Molex announced a plan to realign part of its manufacturing capacity that is expected to result in the closing of seven plants in five countries. Molex operates its business in four geographic regions. In 2005, 51% of the Company’s revenue was derived from sales in Asia. Economic growth in Asia, particularly in China, is anticipated to be greater than in the Americas and Europe. The Company’s management believes that it has positioned the business to benefit from this trend. Approximately 40% of Molex’s manufacturing capacity is in lower cost areas such as China, Eastern Europe and Mexico.

The market in which the Company operates is highly fragmented with a limited number of large companies and a significant number of smaller companies making electronic connectors. Molex is currently the world’s second-largest manufacturer of electronic connectors. Molex believes that its global presence and its ability to design and manufacture its products throughout the world and to service its customers globally is a key advantage for the Company. The Company’s growth has come primarily from new products that it develops, often in collaboration with its customers.

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