10-KPeriod: FY2017

AMPHENOL CORP /DE/ Annual Report, Year Ended Dec 31, 2017

Filed February 21, 2018For Securities:APH

Summary

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 million, 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 million 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.

Financial Highlights

56 data points
Beta

Revenue

$7.01B

32.9% Gross Margin

Net Income

$650.50M

9.3% Net Margin

EPS (Diluted)

$0.52

Total Assets

$10.00B

Cash & Equivalents

$1.72B

Free Cash Flow

$917.60M

Financial Statements
Beta
Revenue$7.01B
Cost of Revenue$4.70B
Gross Profit$2.31B
R&D Expenses$193.70M
SG&A Expenses$878.30M
Operating Income$1.43B
Interest Expense$92.30M
Net Income$650.50M
EPS (Basic)$0.53
EPS (Diluted)$0.52
Shares Outstanding (Basic)1.22B
Shares Outstanding (Diluted)1.27B

Key Highlights

  • 1Net sales grew 12% year-over-year to $7.01 billion, with the Interconnect Products and Assemblies segment driving 94% of total sales.
  • 2The company made strategic acquisitions, investing $266 million in five businesses during 2017 to expand its product lines and geographic presence.
  • 3The Tax Cuts and Jobs Act resulted in a significant provisional income tax charge of $398.5 million in 2017, impacting reported net income.
  • 4Excluding special items like the Tax Act charge and acquisition-related expenses, adjusted net income increased by 15%, demonstrating solid operational performance.
  • 5Amphenol 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.
  • 6Diversification 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%).
  • 7The company maintained effective cost control measures and R&D investment, with R&D expenses increasing by 16% to $193.7 million in 2017.

Frequently Asked Questions

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.

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.

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.

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.