01—Abstract
Summary
Summary of the 10-K filed February 21, 2018. Cited figures are marked; the original filing is the authoritative source.
Amphenol Corporation's (APH) 2017 10-K filing indicates a strong year of growth and strategic expansion, despite a notable impact from the Tax Cuts and Jobs Act.
Net sales increased by 12% to $7,011.3 milliona, driven by robust performance across key markets including automotive, industrial, and information technology/data communications. The Interconnect Products and Assemblies segment remained the dominant revenue contributor, accounting for 94% of sales. Acquisitions played a significant role in this growth, with the company investing approximately $266 million in five acquisitions during 2017.
The company faced a significant, albeit one-time, impact from the Tax Cuts and Jobs Act, resulting in a provisional income tax charge of $398.5 millionb in 2017. Excluding this and other special items, adjusted net income grew by 15%, showcasing underlying operational strength. Amphenol also demonstrated a commitment to returning value to shareholders, with dividends declared increasing to $0.70 per share in 2017 and the company actively repurchasing its own stock, spending $618.0 million on buybacks in 2017.
02—Key points
Key Highlights
- Net sales grew 12% year-over-year to $7.01 billion, with the Interconnect Products and Assemblies segment driving 94% of total sales.
- The company made strategic acquisitions, investing $266 million in five businesses during 2017 to expand its product lines and geographic presence.
- The Tax Cuts and Jobs Act resulted in a significant provisional income tax charge of $398.5 million in 2017, impacting reported net income.
- Excluding special items like the Tax Act charge and acquisition-related expenses, adjusted net income increased by 15%, demonstrating solid operational performance.
- Amphenol returned capital to shareholders through increased dividends ($0.70 per share in 2017, up from $0.58 in 2016) and robust share repurchases totaling $618 million in 2017.
- Diversification across end markets remains a key strategy, with automotive and IT/data communications being significant contributors (19% and 20% of net sales, respectively) along with industrial (19%) and mobile devices (14%).
- The company maintained effective cost control measures and R&D investment, with R&D expenses increasing by 16% to $193.7 million in 2017.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Amphenol Corp kept $0.09.
- Revenue$7.01B100.0%
- Cost of revenue−$4.70B67.1%
- Gross profit$2.31B32.9%
- Operating costs−$882.3M12.6%
- Operating income$1.43B20.4%
- Interest, other & tax−$777.1M11.1%
- Net income$650.5M9.3%
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 21, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $7.01B$6.29B | +11.5% |
| Cost of Revenue | $4.70B$4.25B | +10.7% |
| Gross Profit | $2.31B$2.04B | +13.2% |
| R&D Expenses | $193.70M$166.10M | +16.6% |
| SG&A Expenses | $878.30M$798.20M | +10.0% |
| Operating Income | $1.43B$1.21B | +18.5% |
| Interest Expense | $92.30M$72.60M | +27.1% |
| Net Income | $650.50M$832.60M | −21.9% |
| EPS (Basic) | $0.53$0.67 | −20.2% |
| EPS (Diluted) | $0.52$0.65 | −21.1% |
| Shares Outstanding (Basic) | 1.22B1.23B | −0.8% |
| Shares Outstanding (Diluted) | 1.27B1.26B | +0.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of Amphenol's sales growth in 2017?
Amphenol's net sales increased by 12% in 2017, driven by strong performance across several key end markets including automotive, industrial, information technology/data communications, and mobile devices. Acquisitions also contributed significantly to this growth.
How did the Tax Cuts and Jobs Act affect Amphenol's financial results in 2017?
The Tax Cuts and Jobs Act enacted in late 2017 resulted in a provisional income tax charge of $398.5 million, which included a transition tax on accumulated unremitted foreign earnings and other related charges. While this significantly impacted reported net income, adjusted net income, excluding this and other special items, showed a 15% increase.
What is Amphenol's strategy for growth?
Amphenol's strategy focuses on broad diversification across markets, developing performance-enhancing interconnect solutions, expanding its global presence, controlling costs, pursuing strategic acquisitions, and fostering entrepreneurial management.
How does Amphenol return capital to shareholders?
Amphenol returns capital to shareholders through a combination of quarterly cash dividends, which increased in 2017, and significant share repurchase programs. In 2017, the company repurchased $618 million of its common stock.
06—Continue