10-KPeriod: FY2009

AMPHENOL CORP /DE/ Annual Report, Year Ended Dec 31, 2009

Filed February 23, 2010For Securities:APH

Summary

Amphenol Corporation's 2009 10-K report details a challenging year marked by a 13% decline in net sales to $2.82 billion, reflecting the global economic downturn's impact across its key end markets, particularly communications and industrial. Despite the sales contraction, the company demonstrated resilience by maintaining a strong operating income margin of 17.3% and generating substantial operating cash flow of $582.3 million. Amphenol continued its strategic focus on cost control and operational efficiency, while also actively pursuing acquisitions, investing approximately $280 million in 2009 to enhance its product offerings in strategic growth areas. The company's diversified business, with significant revenue from Information Technology & Communications (61%), Industrial/Automotive (16%), and Commercial Aerospace & Military (23%), provided some stability. While facing market headwinds, Amphenol's commitment to innovation and its global manufacturing footprint position it to capitalize on future market recoveries and technological advancements. The company ended the year with a solid liquidity position and managed its debt effectively, including issuing $600 million in Senior Notes.

Financial Highlights

53 data points
Beta

Revenue

$2.82B

31.4% Gross Margin

Net Income

$317.83M

11.3% Net Margin

EPS (Diluted)

$0.23

Total Assets

$4.02B

Cash & Equivalents

$384.61M

Free Cash Flow

$519.24M

Financial Statements
Beta
Revenue$2.82B
Cost of Revenue$1.93B
Gross Profit$886.55M
R&D Expenses$63.98M
SG&A Expenses$397.64M
Operating Income$488.91M
Interest Expense$36.59M
Net Income$317.83M
EPS (Basic)$0.23
EPS (Diluted)$0.23
Shares Outstanding (Basic)1.37B
Shares Outstanding (Diluted)1.39B

Key Highlights

  • 1Net sales decreased by 13% to $2.82 billion in 2009, primarily due to the global economic downturn impacting key end markets.
  • 2Operating income and net income attributable to Amphenol Corporation decreased by 23% and 24% respectively compared to 2008.
  • 3The company generated strong operating cash flow of $582.3 million in 2009.
  • 4Information Technology & Communications remains the largest segment, accounting for 61% of net sales, followed by Commercial Aerospace & Military (23%) and Industrial/Automotive (16%).
  • 5Amphenol invested approximately $280 million in acquisitions during 2009, focusing on high-growth segments and complementary capabilities.
  • 6The company maintained a strong global manufacturing presence, with 64% of sales generated outside the U.S., and a significant portion of its workforce (approximately 77%) located in lower-cost regions.
  • 7Goodwill represented a substantial portion of the balance sheet ($1.37 billion), largely stemming from the company's acquisition strategy.

Frequently Asked Questions

The global economic downturn significantly impacted Amphenol's financial performance in 2009. Net sales decreased by 13% to $2.82 billion, with declines observed across all major end markets, including industrial, telecommunications, data communications, automotive, and aerospace. Operating income and net income also saw substantial reductions compared to 2008.

Amphenol's strategy involves a dual focus on operational efficiency and strategic growth. The company emphasizes cost control, productivity improvements, and leveraging its global manufacturing footprint. Simultaneously, it continues to pursue strategic acquisitions in high-growth segments and areas with complementary capabilities, investing $280 million in 2009 for this purpose. The company also focuses on developing highly-engineered, application-specific products through close customer collaboration.

Amphenol has a diversified business model. In 2009, its sales were distributed across Information Technology & Communications (61%), Commercial Aerospace & Military (23%), and Industrial/Automotive (16%). Geographically, the company generated 64% of its sales outside the United States, with significant operations in Asia, Europe, and other international locations, underscoring its global reach.

Goodwill represents a significant portion of Amphenol's assets, totaling $1.37 billion as of December 31, 2009. This substantial amount of goodwill is a direct result of the company's long-standing strategy of consolidating the highly fragmented interconnect industry through numerous acquisitions. While it reflects past growth and integration, it also represents a potential area for future impairment charges if the acquired businesses do not perform as expected.