10-KPeriod: FY2012

AMPHENOL CORP /DE/ Annual Report, Year Ended Dec 31, 2012

Filed February 22, 2013For Securities:APH

Summary

Amphenol Corporation (APH) reported strong performance for the fiscal year ended December 31, 2012, with net sales reaching $4.29 billion, a 9% increase year-over-year. The company's growth was driven by its Interconnect Products and Assemblies segment, which constitutes the majority of its sales, and experienced robust organic growth across key markets including automotive, industrial, mobile devices, IT, and commercial aerospace. Profitability remained solid, with net income attributable to Amphenol Corporation rising by 6% to $555.3 million. The company continues to execute its strategy of providing comprehensive design capabilities, a broad product selection, and high service levels, while also focusing on cost control and pursuing strategic acquisitions. Amphenol's global presence and its ability to adapt to evolving market demands, particularly in the information technology and communications sectors, position it well for continued success. The company also demonstrated strong cash flow generation, supporting its growth initiatives, share repurchases, and dividend payments.

Financial Highlights

54 data points
Beta

Revenue

$4.29B

31.3% Gross Margin

Net Income

$555.30M

12.9% Net Margin

EPS (Diluted)

$0.42

Total Assets

$5.22B

Cash & Equivalents

$690.80M

Free Cash Flow

$545.60M

Financial Statements
Beta
Revenue$4.29B
Cost of Revenue$2.95B
Gross Profit$1.34B
R&D Expenses$92.50M
SG&A Expenses$512.90M
Operating Income$828.30M
Interest Expense$59.60M
Net Income$555.30M
EPS (Basic)$0.43
EPS (Diluted)$0.42
Shares Outstanding (Basic)1.29B
Shares Outstanding (Diluted)1.31B

Key Highlights

  • 1Net sales increased by 9% to $4.29 billion in 2012, driven by strong performance in key end markets like automotive, industrial, mobile devices, and IT.
  • 2Net income attributable to Amphenol Corporation grew by 6% to $555.3 million, demonstrating robust profitability.
  • 3The company's core Interconnect Products and Assemblies segment showed significant strength, contributing approximately 93% of net sales and achieving 9% growth in U.S. dollars.
  • 4International sales represented 68% of net sales, highlighting the company's strong global reach, with Asia being a particular area of strength.
  • 5Amphenol invested approximately $252 million in five strategic acquisitions during 2012, further broadening its product offerings and market presence.
  • 6The company generated robust operating cash flow of $674.7 million, enabling funding for capital expenditures, acquisitions, share repurchases, and dividends.
  • 7Amphenol continued its share repurchase program, buying back 6.6 million shares for approximately $380 million in 2012, underscoring its commitment to returning value to shareholders.

Frequently Asked Questions

Amphenol's primary revenue drivers in 2012 were its Interconnect Products and Assemblies segment, which accounted for approximately 93% of net sales. Key end markets contributing to growth included automotive, industrial, mobile devices, information technology and data communication equipment, and commercial aerospace. The company experienced strong organic growth in these sectors.

Amphenol focused on controlling costs through investments in modern manufacturing technologies, efficient purchasing processes, and expansion into lower-cost regions. While gross profit margin slightly decreased as a percentage of sales in 2012 compared to 2011, operating margins improved slightly on a consolidated basis due to effective management of selling, general, and administrative expenses, which declined as a percentage of sales. The company's overall net income saw a 6% increase.

Amphenol's strategy for future growth centers on focusing on customer needs, developing performance-enhancing interconnect solutions, maintaining a strong global presence, fostering an entrepreneurial management structure, controlling costs, and pursuing strategic acquisitions. The company aims to consolidate the fragmented interconnect industry by acquiring complementary businesses.

Amphenol acknowledges risks associated with its extensive international operations, including political and economic instability, tariffs, and varying regulations. To mitigate foreign currency exchange rate risk, the company prioritizes producing products in the same region where they are sold, thus aligning revenues and expenses in the same currency. They also employ cost reduction, pricing actions, and working capital management strategies. While they engage in some forward contracts for currency protection on specific intercompany loans, they state they do not speculate.