2005 - Molex

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Molex 2005 Annual Report L E A D E R S H I P R O U N D T A B L E What are the challenges–both internal and external–facing Molex today, and how are you addressing them? martin I know I speak for each of us in acknowledging that as the new leadership team at Molex, we have a lot of work to do. But I feel it’s equally important to stress that the company is fundamentally very strong. The platform we have been given to build on is tremendous–more than 27,000 very talented people around the world, a company with a single focus on the interconnect industry, a solid number two posi- tion in a growing industry and a portfolio of more than 100,000 active products. Don’t forget that we sold 30 billion connectors in fiscal 2005 and generated $2.55 billion in sales. dave And we have virtually no debt and almost $500 million of cash and marketable securities on our balance sheet. liam Add to that the international strength of Molex–a great global footprint for serving customers, expertise around the world and a cross-cultural exchange of best practices. martin We have a lot going for us, but we have to leverage those strengths and im- prove our execution. liam When we consider the multiple challenges we’re up against globally, one of the most significant is that today we’re in a far more competitive industry, one that is driven by China-centric pricing, particularly for commodity products. martin Molex is working to overcome the unbalanced recovery we have seen since the technology bubble burst a few years ago. There’s been far more growth in Asia than we predicted, so we have a capacity shortage there and excess capacity in Europe and the Americas. The basic issue is that revenue has shifted faster than our asset base, and now more than 50% of our revenue comes from Asia. Pre-bubble, the high-end telecom and high-end computer markets were very profitable for us, but businesses in capital-investment-driven markets have been slower to recover. liam We’ve already done a great deal to alleviate the situation. We have six factories in China and we’re just finishing a large expansion in Shanghai. In fiscal 2007, we’ll open a seventh plant in Chengdu in western China. In Europe, as our customers continue to move production overseas, we’ve resized operations to meet our current level of business and refocused on areas of growth. Europe is still a strong connec- tor market, but demand is coming from some areas we haven’t concentrated on until recently like automotive, industrial and medical. At the same time, we’ve improved productivity in terms of quality, time and materials. 1 6
Molex 2005 Annual Report L E A D E R S H I P R O U N D T A B L E “There are basically three ways Martin Slark p r e s i d e n t a n d c h i e f e x e c u t i v e o f f i c e r m o l e x i n c o r p o r a t e d to structure any company: by geography, by global product line or by the end-market you service. Molex historically has been organized 1 7 into four geographic regions, but we need to decide if that’s the right structure going forward.” Martin Slark
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 and 10: 29 Development Groups Design Center
Page 11 and 12: that keep pace with the ongoing mig
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: Molex Molex 2005 2005 Annual Annual
Page 21 and 22: 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
Page 60 and 61: Pension Plans The costs and obligat
Page 62 and 63: Results of Operations Year Ended Ju
Page 64 and 65: opportunities with its Molex counte
Page 66 and 67: 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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