01—Abstract
Summary
Summary of the 10-K filed February 12, 2020. Cited figures are marked; the original filing is the authoritative source.
Amphenol Corporation's 2019 10-K filing highlights a year of stable net sales, with total revenue of $8.225 billiona, largely flat compared to 2018.
The company navigated a dynamic market, driven by strength in its Interconnect Products and Assemblies segment, which accounted for 95%b of net sales. Key growth drivers included robust performance in the military and commercial aerospace sectors, alongside contributions from strategic acquisitions. However, this growth was partially offset by contractions in communications-related markets, particularly mobile devices, and the impact of foreign currency fluctuations.
Operationally, Amphenol demonstrated strong free cash flow generation of $1.2 billionc, underscoring its efficient business model. The company continued its strategic focus on diversification across markets, technological innovation, global expansion, and cost control, supported by a series of nine acquisitions in 2019. While the company maintains a healthy balance sheet and liquidity, it also faces risks related to global economic conditions, trade policies, and supply chain dynamics, particularly concerning its significant international operations and reliance on key markets like IT and communications.
02—Key points
Key Highlights
- Amphenol reported net sales of $8.225 billion for 2019, remaining stable compared to the previous year.
- The Interconnect Products and Assemblies segment contributed 95% of net sales, demonstrating its core importance to the company's revenue.
- The company experienced strong growth in the Military and Commercial Aerospace markets, while facing declines in Mobile Devices.
- Amphenol generated $1.207 billion in Free Cash Flow, indicating strong operational efficiency and cash generation capabilities.
- The company actively pursued its growth strategy through acquisitions, completing nine in 2019 for a total investment of $937.4 million.
- Approximately 69% of Amphenol's net sales in 2019 were generated from international markets, highlighting its global operational footprint.
- The company returned $285.3 million to shareholders through dividends in 2019, reflecting a consistent capital allocation strategy.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Amphenol Corp kept $0.14.
- Revenue$8.23B100.0%
- Cost of revenue−$5.61B68.2%
- Gross profit$2.62B31.8%
- Operating costs−$996.8M12.1%
- Operating income$1.62B19.7%
- Interest, other & tax−$464.2M5.6%
- Net income$1.16B14.0%
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 12, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $8.23B$8.20B | +0.3% |
| Cost of Revenue | $5.61B$5.55B | +1.1% |
| Gross Profit | $2.62B$2.65B | −1.5% |
| R&D Expenses | $234.20M$220.90M | +6.0% |
| SG&A Expenses | $971.40M$959.50M | +1.2% |
| Operating Income | $1.62B$1.69B | −4.0% |
| Interest Expense | $117.60M$101.70M | +15.6% |
| Net Income | $1.16B$1.21B | −4.1% |
| EPS (Basic) | $0.97$1.00 | −3.0% |
| EPS (Diluted) | $0.94$0.96 | −2.3% |
| Shares Outstanding (Basic) | 1.19B1.20B | −1.2% |
| Shares Outstanding (Diluted) | 1.23B1.25B | −1.5% |
05—Questions
Frequently Asked Questions
What was Amphenol's revenue performance in 2019?
Amphenol reported net sales of $8.225 billion for the fiscal year ended December 31, 2019. This represents a slight increase of 0.3% compared to $8.202 billion in 2018, or flat in U.S. dollars. The company saw growth in its Interconnect Products and Assemblies segment, driven by military and aerospace markets, but this was partially offset by declines in mobile devices and the impact of currency fluctuations.
How did Amphenol manage its cash flow and capital resources in 2019?
Amphenol demonstrated strong financial health in 2019, generating $1.502 billion in cash flow from operating activities and $1.207 billion in free cash flow. The company utilized its cash to fund nine acquisitions totaling $937.4 million, return capital to shareholders through dividends ($285.3 million) and stock repurchases ($601.7 million), and manage its debt. The company believes its liquidity and cash flow generation are adequate to meet its obligations for at least the next twelve months.
What are the key end markets for Amphenol's products?
Amphenol serves a diverse range of end markets, with its products used in Automotive, Broadband Communications, Commercial Aerospace, Industrial, Information Technology and Data Communications, Military, Mobile Devices, and Mobile Networks. In 2019, the largest contributing markets by sales were Information Technology/Data Communications (19%), Automotive (19%), Industrial (20%), and Military (12%), alongside significant contributions from Mobile Devices (13%) and Mobile Networks (8%).
What were the major risks and challenges identified in the 2019 10-K?
Amphenol identified several risks, including those related to its significant global operations (political instability, trade disputes, currency fluctuations), dependence on key end markets like IT and communications, potential impacts from health epidemics (like coronavirus), supply chain disruptions, cybersecurity threats, and the competitive landscape. The company also noted risks associated with its acquisition strategy and potential goodwill impairment.
06—Continue