10-KPeriod: FY2008

AMPHENOL CORP /DE/ Annual Report, Year Ended Dec 31, 2008

Filed February 23, 2009For Securities:APH

Summary

Amphenol Corporation, a leading designer and manufacturer of electrical, electronic, and fiber optic connectors, reported solid performance for the fiscal year ended December 31, 2008. The company generated net sales of $3.24 billion and net income of $419.2 million. A significant portion of its revenue, approximately 64%, is derived from international operations, highlighting its global reach. The company's primary end markets include communication systems (62% of sales), industrial applications (19%), and commercial aerospace & military (19%), demonstrating diversification across key sectors. Despite the challenging economic environment at the end of 2008, Amphenol demonstrated resilience with a 14% increase in net sales compared to the previous year, driven by strong performance in its Interconnect Products and Assemblies segment, which accounts for the majority of its revenue. The company continues to execute its strategy of pursuing strategic acquisitions and maintaining cost controls, which contributed to an operating income increase of 14% year-over-year. Amphenol also generated substantial operating cash flow, enabling it to fund capital expenditures, acquisitions, and return capital to shareholders through share repurchases and dividends.

Financial Highlights

51 data points
Beta

Revenue

$3.24B

32.4% Gross Margin

Net Income

$419.15M

13.0% Net Margin

EPS (Diluted)

$0.29

Total Assets

$2.99B

Cash & Equivalents

$214.99M

Free Cash Flow

$373.24M

Financial Statements
Beta
Revenue$3.24B
Cost of Revenue$2.19B
Gross Profit$1.05B
R&D Expenses$68.06M
SG&A Expenses$416.91M
Operating Income$632.24M
Interest Expense$39.63M
Net Income$419.15M
EPS (Basic)$0.30
EPS (Diluted)$0.29
Shares Outstanding (Basic)1.41B
Shares Outstanding (Diluted)1.43B

Key Highlights

  • 1Net sales reached $3.24 billion for the fiscal year ended December 31, 2008.
  • 2Net income was $419.2 million, indicating strong profitability.
  • 3International operations are significant, accounting for 64% of total net sales.
  • 4The Communications sector is the largest end market, representing 62% of sales.
  • 5Net sales increased by 14% year-over-year, demonstrating growth despite economic headwinds.
  • 6Operating cash flow was robust at $481.5 million, supporting various capital allocation strategies.
  • 7The company's acquisition strategy continues to be a key driver for growth and market consolidation.

Frequently Asked Questions

Amphenol's primary revenue drivers in 2008 were its Interconnect Products and Assemblies segment, which accounted for approximately 91% of net sales. Key end markets contributing to revenue included communications systems (62% of sales), industrial applications (19%), and commercial aerospace & military (19%). The company saw increased sales in wireless communications, military/aerospace, and telecommunications/data communications markets, with a slight decline in the automotive sector due to market softness.

International operations were a significant contributor to Amphenol's success in 2008, accounting for approximately 64% of net sales. International sales increased by 23% in U.S. dollars compared to 2007, indicating strong global demand for its products. The company has a widespread manufacturing and assembly presence across the Americas, Europe, Asia, Africa, and Australia.

Amphenol faces several key risks, including dependence on the communications industry, which is subject to rapid technological change and price pressure from large manufacturers. Changes in defense expenditures could impact military market sales. The company also faces intense competition across all its business areas. Furthermore, dependence on new product introductions for revenue growth and potential impacts from covenants in its credit agreements are significant considerations. Global economic slowdowns and foreign currency exchange rate fluctuations are also highlighted as risks.

Amphenol demonstrated strong liquidity in 2008, with cash provided by operating activities totaling $481.5 million. The company utilizes its internally generated cash flow, a revolving credit facility, and sale of receivables to meet its liquidity needs. It actively manages its working capital, invests in capital expenditures, and strategically uses cash for acquisitions, share repurchases, and dividend payments. Management believes its current liquidity position is sufficient to meet its obligations for the next twelve months and the foreseeable future.