2005 - Molex

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Consumer electronics remained Molex Japan’s strongest business, from digital still cameras and portable audio players to game machines and plasma display panels for flat screen TVs. Growth also came from hard disk drives and printers for the data market. During the year, we further capitalized on our ability to design more compact, higher performance products for the sophisticated end of the mobile phone market. We are developing all new connectors for third generation phones, which in Japan include such high-speed capabilities as a TV function in addition to a camera. As more global phone mak- ers move to 3G technology, we are well positioned to grow sales substantially. The industrial side of our business continued to expand, driven by servo motors and customer investment in new semiconductor equipment. In automotive, we had several design wins in Japan, but in Korea, where we have longstand- ing relationships with major automakers, the sluggish economy stalled growth. Integrated products saw a healthy increase in volume. To counter pricing Research and Development (in thousands of dollars) $ 1 3 3 , 5 9 5 $ 1 1 9 , 0 2 8 Molex 2005 Annual Report T O O U R S H A R E H O L D E R S $ 1 1 6 , 9 8 6 $ 1 1 1 , 7 7 1 $ 1 3 4 , 6 3 7 05 04 03 02 01 8 pressure, we fulfill most of this demand from Molex Japan’s plant in Dalian, China, which completed a 60% capacity expansion. Molex Korea benefited from modest strength in the electronics industry and overall connector market. However, our sales for personal computers slowed. For fiscal 2006, the Far East North region anticipates single-digit growth, largely from consumer electronics and mobile phones. Far East South. (Singapore, Malaysia, China, Thailand, Taiwan and India) In Molex’s fastest growing region, sales rose 23% year over year in U.S. dollars and 22% in local currencies. Global customers increasing their design and manufacturing volume in the region, greater penetration of Taiwanese multinational accounts and a bigger share of the world’s mobile phone industry drove growth. Mobile phones constitute nearly one- third of Far East South sales. Another important customer segment is the consumer electronics industry. During the year, we introduced a new set of products Customer Revenue Americas (in thousands of dollars) $ 7 0 1 , 4 7 0 $ 6 8 6 , 1 2 9 $ 6 4 1 , 1 9 7 $ 6 6 6 , 2 7 2 05 04 03 02 01 $ 1 , 0 4 1 , 4 6 1
that keep pace with the ongoing migra- tion from analog to digital technology. We are coordinating opportunities with our Molex counterparts in Japan to have these products designed in the Far East North, then produced in China. In the data, networking and computing arena, we shifted our focus from telecom- munications infrastructure equipment to the far stronger server market. We also grew in our traditional niche of personal computers and notebooks. Our automotive business, although still in its early stages, is accelerating. We grew our product pipeline to five times what it was in 2004. The Big 3 U.S. automakers and their suppliers moving to China want local design, procurement and production, which we can provide. In 2007, when our plant in western China opens in Chengdu– considered the Detroit of China– it will supply the automotive industry, as well as manufacture a full range of Molex products. To offer customers a complete solution, we maintain a balance between high-precision, high-technology manufacturing in Singapore and com- moditized capability in China. Customer Revenue Far East North (in thousands of dollars) $ 5 2 3 , 7 1 7 $ 4 9 9 , 3 4 8 $ 4 0 7 , 8 2 1 $ 3 5 1 , 5 4 2 05 04 03 02 01 $ 4 9 9 , 2 6 5 Molex 2005 Annual Report T O O U R S H A R E H O L D E R S Customer Revenue Far East South (in thousands of dollars) $ 7 6 9 , 2 1 8 $ 6 2 3 , 6 1 9 9 $ 4 5 8 , 8 1 9 Our outlook is very positive. Chinese consumption is strong and growing. India, which has the potential to become a more important market for us, is attracting many additional offshore manufacturers. Overall, we anticipate a double-digit revenue increase in the year ahead, as our investments in design, tooling and manufacturing allow us to meet the demands of our expanding customer base. 05 04 03 02 01 Europe. Despite difficult economies and the ongoing exodus of manufacturing to the Far East, our European region increased revenue 31% in U.S. dollars and 22% in local currencies. Our 2004 French automotive acquisition generated about a quarter of that growth. The European connector market is expanding, albeit at a single-digit pace. We are focused on the strongest markets and business most likely to stay in Europe. That includes connectors and integrated products for industrial, medical and automotive applications. Integrated products now account for 25% of our revenue. $ 3 6 6 , 3 5 2 $ 3 8 9 , 1 0 8 Customer Revenue Europe (in thousands of dollars) $ 5 0 4 , 4 5 3 $ 3 8 5 , 0 5 1 $ 2 9 1 , 0 4 3 $ 2 7 9 , 4 7 7 $ 3 7 8 , 1 9 9 05 04 03 02 01
Page 3 and 4: Molex 2005 Annual Report T O O U R
Page 5 and 6: Sales by Industry 27% Telecommunica
Page 7 and 8: these reasons, over the past few ye
Page 9: 29 Development Groups Design Center
Page 13 and 14: Sales by Region Americas 27.5% Far
Page 15 and 16: L E A D E R S H I P R O U N D T A B
Page 17 and 18: Molex Molex 2005 2005 Annual Annual
Page 19 and 20: Molex 2005 Annual Report L E A D E
Page 27: Fred A. Krehbiel (4)* is Co-Chairma
Page 30 and 31: Molex 2005 Annual Report T R A N S
Page 42 and 43: TABLE OF CONTENTS Page Part I Item
Page 44 and 45: Markets and Products below: The app
Page 46 and 47: The Company believes that its succe
Page 48 and 49: the technology industry to help dri
Page 50 and 51: Many of Molex’s worldwide manufac
Page 52 and 53: Item 2. Properties Molex owns and l
Page 54 and 55: The following table contains inform
Page 56 and 57: Item 7. Management’s Discussion a
Page 58 and 59: The Company anticipates that its gr
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Pension Plans The costs and obligat
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Results of Operations Year Ended Ju
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opportunities with its Molex counte
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Goodwill and Other Asset Impairment
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Far East South Region - Singapore,
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Financing Activities Cash was used
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existing and future competitors, wh
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offsets, as compared with offsets t
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Molex Incorporated Consolidated Bal
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Molex Incorporated Consolidated Sta
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1. Organization and Basis of Presen
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Revenue Recognition Revenue is real
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fiscal 2005 or 2006. The Company di
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Year ended June 30, 2005 The aggreg
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Year ended June 30, 2003 As a resul
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sold into the structured cabling ma
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The components of net deferred tax
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Benefit Obligations and Plan Assets
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The following provides a reconcilia
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certain events. Upon such conversio
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The option price per share for cert
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Corporate and Other assets include
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REPORT OF INDEPENDENT REGISTERED PU
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Item 9. Changes in and Disagreement
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absolute assurance that misstatemen
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Molex Incorporated Schedule II - Va
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10.14 Molex Cash Merit Bonus Plan (
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74 Exhibit 31.1 CERTIFICATION PURSU
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CERTIFICATION PURSUANT TO 18 U.S.C.
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2005 - Molex

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