2005 - Molex

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F I N A N C I A L P E R F O R M A N C E For the year ended June 30, Molex achieved all-time-high sales of $2.55 billion, a year-over-year increase of $301.9 million or 13.4%. Our revenue growth outpaced that of the overall connector industry by almost two to one. Net income, including a pretax charge discussed below, was $154.4 million, down 12.2% from the previous year. Our results include a pretax charge of $27.9 million taken in the fourth quar- ter for expenses associated with facility closures and related workforce reduc- tions. We anticipate another $15 million to $25 million will be necessary in fiscal 2006 as we complete the phased trans- fer of production. The fiscal 2005 results also include $25.2 million in pretax asset impairment charges, as well as $9.9 million in pretax legal, accounting and other costs arising from the resignation of our former auditors. Increasing our profitability remained a challenge in fiscal 2005. Net profit on sales, including the pretax charges, was 6.1%, down from 7.8% the year before. Rapidly escalating raw materials costs and relentless competitive pricing pres- sure squeezed margins as never before. Although we implemented offsetting price increases to our distribution sales channel, we have not been as successful with the majority of our business. Our client mix skews heavily toward large global accounts and industries that make raising prices more difficult. Molex 2005 Annual Report T O O U R S H A R E H O L D E R S 2 B U S I N E S S D E V E L O P M E N T S Molex is the second largest connector company in the world in terms of revenue, with approximately 8% of the $33.7 billion industry in fiscal 2005. The connector market grew nearly 7%, and we advanced our share nearly twice that rate. Capitalizing on key trends. Molex’s core strengths and competencies were a worthy match for the dynamic 2005 market- place. Customer supplier consolidation continued unabated, but our global presence, comprehensive product line and attention to quality and service kept us above the cut. As technology conver- gence further blurred the lines between data products, telecommunications, medical and industrial applications, we were able to cross-sell products designed for one industry into another. We offset the automotive industry’s lower output by winning programs that increased the electronic content in vehicles. Greater functionality in virtually everything electronic, especially consumer products, presented us with numerous avenues for demonstrating our leadership in high- density, high-performance connectors, as well as microminiature and digital technologies. Diversifying our business mix. During the year, we built on our relationships with existing customers and established relationships with hundreds of new customers in industries of strongest growth. These
Sales by Industry 27% Telecommunications 24% Data Products 19% Automotive 18% Consumer 9% Industrial 3% Other 3
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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
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Page 19 and 20: Molex 2005 Annual Report L E A D E
Page 27: Fred A. Krehbiel (4)* is Co-Chairma
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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
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The following table contains inform
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Item 7. Management’s Discussion a
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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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