What were the main drivers of the sales decline in 2001?

The primary drivers for the sales decline in 2001 were a significant slowdown in capital spending by cable television operators, impacting the cable products segment (down 44%), and a general contraction in demand from the telecom, datacom, and industrial markets for interconnect products and assemblies (down 10%).

How did Amphenol manage profitability despite the sales decrease?

Amphenol maintained its gross profit margin at approximately 33% by implementing cost reduction activities and productivity improvements, which helped to offset the impact of lower sales volume.

What is Amphenol's strategy for future growth, particularly in light of the 2001 slowdown?

Amphenol focuses on optimizing its product mix towards higher-margin, higher-growth application-specific products, particularly in the communications, aerospace, and automotive sectors. They also pursue productivity improvements and strategic acquisitions to broaden product offerings and expand global capabilities.

What is the company's stance on paying dividends?

Amphenol has not paid cash dividends on its common stock since its IPO and has no present intention to do so, as it intends to retain earnings for business operations, expansion, and debt repayment. Furthermore, certain debt agreements restrict dividend payments.

APH 10-K FY2001 Annual Report — Revenue, Net Income, EPS

Summary

Amphenol Corporation, a global designer and manufacturer of electrical, electronic, and fiber optic connectors, reported net sales of $1,103.8 million for the fiscal year ended December 31, 2001. While sales in the critical communications sector remained strong, overall net sales decreased by approximately 18.7% compared to the prior year, primarily due to a significant decline in the cable products segment and a slowdown in the interconnect products and assemblies segment impacting telecom, datacom, and industrial markets. This revenue contraction was partly offset by growth in military aerospace and automotive applications within the interconnect segment. The company maintained its gross profit margin at approximately 33%, demonstrating effective cost controls amidst lower sales volumes. Operating income saw a decline to $197.0 million from $244.4 million in the prior year. Net income for 2001 was $83.7 million, or $1.95 per diluted share, compared to $107.9 million, or $2.52 per diluted share, in 2000. Despite the revenue challenges, Amphenol's financial position remained stable, with a focus on managing debt and liquidity through its revolving credit facility and receivables purchase agreement. The company continued to invest in research and development, with expenditures of $22.6 million in 2001.

Key Highlights

1For the fiscal year ended December 31, 2001, Amphenol Corporation reported net sales of $1,103.8 million, a decrease of 18.7% from $1,359.7 million in 2000.

2The decline in sales was primarily driven by a 44% decrease in the cable products segment and a 10% decrease in the interconnect products and assemblies segment, affected by market slowdowns in telecom, datacom, and industrial sectors.

3Despite lower sales, the company maintained a gross profit margin of approximately 33%, indicating effective cost management.

4Net income decreased to $83.7 million ($1.95 per diluted share) in 2001 from $107.9 million ($2.52 per diluted share) in 2000.

5The communications segment represented 54% of net sales, followed by industrial (23%) and commercial/military aerospace (23%).

6As of December 31, 2001, Amphenol had a backlog of unfilled orders of $229.0 million, down from $365.0 million in the prior year.

7The company ended the year with $27.975 million in cash and short-term investments and maintained access to a $150 million revolving credit facility.

AMPHENOL CORP /DE/ Annual Report, Year Ended Dec 31, 2001

Summary

Key Highlights

Frequently Asked Questions