01—Abstract
Summary
Summary of the 10-K filed February 19, 2016. Cited figures are marked; the original filing is the authoritative source.
Amphenol Corporation's 2015 10-K highlights a year of solid growth, with net sales increasing by 4% to $5.57 billiona, driven by strength in key markets such as automotive, mobile devices, and industrial.
The company's strategic focus on diversification across numerous end markets, coupled with continuous efforts in cost control and strategic acquisitions, has contributed to its resilience and profitability. A significant event was the acquisition of FCI Asia Pte Ltd in January 2016, which is expected to further strengthen Amphenol's position in the information technology and data communications sectors. The company's robust financial performance is underpinned by a strong operating income margin of 19.8%b and healthy cash flow generation, enabling consistent dividend increases and share repurchases.
Despite a challenging global economic environment and potential risks such as foreign currency fluctuations and dependency on the communications industry, Amphenol's diversified business model, global manufacturing footprint, and focus on innovation position it well for continued success. Investors can take comfort from the company's proven ability to integrate acquisitions and maintain operational efficiency.
02—Key points
Key Highlights
- Net sales increased 4% to $5.57 billion in 2015, driven by strong performance in automotive, mobile devices, and industrial markets.
- Operating income grew 7% to $1.10 billion, with an operating margin of 19.8%, demonstrating effective cost management.
- The company completed three strategic acquisitions in 2015 and a significant acquisition of FCI Asia Pte Ltd in January 2016, expanding its product offerings and market reach.
- Cash flow from operations was robust at $1.03 billion, supporting capital expenditures, dividends, and share repurchases.
- Amphenol returned $159.3 million to shareholders through dividends in 2015, a notable increase from prior years.
- The company repurchased approximately 4.5 million shares of its common stock for $248.9 million under its 2015 stock repurchase program.
- Diversification across numerous end markets (automotive, industrial, IT/data, aerospace, military, mobile devices/networks) mitigates risks associated with any single sector.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Amphenol Corp kept $0.14.
- Revenue$5.57B100.0%
- Cost of revenue−$3.79B68.0%
- Gross profit$1.78B32.0%
- Operating costs−$674.8M12.1%
- Operating income$1.10B19.8%
- Interest, other & tax−$332.4M6.0%
- Net income$772.3M13.9%
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 19, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $5.57B$5.35B | +4.2% |
| Cost of Revenue | $3.79B$3.65B | +3.8% |
| Gross Profit | $1.78B$1.69B | +5.1% |
| R&D Expenses | $124.70M$114.80M | +8.6% |
| SG&A Expenses | $669.10M$645.10M | +3.7% |
| Operating Income | $1.10B$1.03B | +6.8% |
| Interest Expense | $68.30M$80.40M | −15.0% |
| Net Income | $772.30M$709.10M | +8.9% |
| EPS (Basic) | $0.62$0.56 | +9.3% |
| EPS (Diluted) | $0.60$0.55 | +9.0% |
| Shares Outstanding (Basic) | 1.24B1.25B | −1.3% |
| Shares Outstanding (Diluted) | 1.27B1.28B | −1.2% |
05—Questions
Frequently Asked Questions
What were Amphenol's primary growth drivers in 2015?
Amphenol's net sales increased by 4% in 2015, primarily driven by strong performance in the automotive, mobile devices, and industrial markets. These segments benefited from new product introductions, increased vehicle production, and contributions from strategic acquisitions. The company's diversified end-market strategy, coupled with its focus on performance-enhancing interconnect solutions, contributed to this growth.
How did Amphenol's strategic acquisitions contribute to its performance?
Amphenol actively pursues strategic acquisitions as a key growth driver. In 2015, the company invested approximately $200 million in three acquisitions that broadened its customer base and product offerings in the automotive, military, commercial aerospace, and industrial markets. The significant acquisition of FCI Asia Pte Ltd in January 2016 for approximately $1.18 billion is expected to further enhance its position in critical technology markets.
What is Amphenol's approach to managing financial risks such as currency fluctuations and interest rates?
Amphenol manages foreign currency exchange rate risk by producing products in the same regions where they are sold, thus generating revenues and incurring expenses in the same currency. They also employ cost reduction and pricing strategies. For interest rate risk, the company maintains a mix of fixed and variable rate debt and uses its commercial paper program and credit facilities to manage its financing activities. The company stated that a 10% change in LIBOR would not have a material effect on its interest expense as of December 31, 2015.
How does Amphenol return value to its shareholders?
Amphenol returns value to shareholders through a combination of increasing dividends and share repurchases. The company increased its quarterly dividend rate in 2015 and paid out $159.3 million in total dividends for the year. Additionally, Amphenol actively repurchases its common stock; in 2015, it repurchased 4.5 million shares for approximately $248.9 million under its authorized stock repurchase program.
06—Continue