01—Abstract
Summary
Summary of the 10-K filed February 9, 2022. Cited figures are marked; the original filing is the authoritative source.
Amphenol Corporation's 2021 10-K filing reveals a strong performance, marked by significant sales growth across diverse end markets, including industrial, automotive, and IT/data communications.
The company successfully navigated supply chain challenges and inflationary pressures, demonstrating resilience and operational efficiency. Strategic acquisitions, such as MTS Systems Corporation and Halo Technology Limited, played a key role in expanding Amphenol's product portfolio and market reach, particularly in the sensors and fiber optic components segments. The company's robust financial position is underscored by strong operating cash flow, enabling continued investment in growth initiatives and shareholder returns through dividends and share repurchases.
Looking ahead, Amphenol is set to implement a new three-segment reporting structure effective January 1, 2022, aiming to enhance accountability and scalability. Despite ongoing global economic uncertainties and potential disruptions from events like the COVID-19 pandemic, Amphenol's diversified business model, commitment to innovation, and cost control strategies position it well for sustained growth. Investors should monitor the company's ability to manage supply chain risks and leverage its expanded capabilities in key technology areas.
02—Key points
Key Highlights
- Amphenol reported robust net sales growth of 26% in 2021, reaching $10.88 billion, driven by strong performance across multiple end markets, including Industrial (25% of sales), IT/Data Communications (21% of sales), and Automotive (20% of sales).
- The company completed seven strategic acquisitions in 2021, notably MTS Systems Corporation and Halo Technology Limited, significantly expanding its presence in the sensors and fiber optic components markets.
- Operating income increased by 28% to $2.11 billion, with operating margin improving to 19.4% from 19.1% in the prior year, demonstrating effective cost management despite inflationary pressures.
- Amphenol generated strong operating cash flow of $1.52 billion and free cash flow of $1.17 billion in 2021, highlighting its financial strength and ability to fund growth and shareholder returns.
- The company returned $726.5 million to shareholders through dividends ($379.7 million) and share repurchases ($346.8 million) in 2021.
- A significant increase in backlog to $3.81 billion (up from $2.38 billion in 2020) indicates strong future demand, partly driven by customer orders placed earlier due to supply chain concerns.
- Amphenol is reorganizing into three new reportable business segments (Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems) effective January 1, 2022, to improve scalability and accountability.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Amphenol Corp kept $0.15.
- Revenue$10.88B100.0%
- Cost of revenue−$7.47B68.7%
- Gross profit$3.40B31.3%
- Operating costs−$1.30B11.9%
- Operating income$2.11B19.4%
- Interest, other & tax−$515.1M4.7%
- Net income$1.59B14.6%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 9, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $10.88B$8.60B | +26.5% |
| Cost of Revenue | $7.47B$5.93B | +25.9% |
| Gross Profit | $3.40B$2.66B | +27.7% |
| R&D Expenses | $317.70M$260.70M | +21.9% |
| SG&A Expenses | $1.23B$1.01B | +20.9% |
| Operating Income | $2.11B$1.64B | +28.5% |
| Interest Expense | $115.50M$115.40M | +0.1% |
| Net Income | $1.59B$1.20B | +32.1% |
| EPS (Basic) | $1.33$1.01 | +31.7% |
| EPS (Diluted) | $1.27$0.98 | +29.6% |
| Shares Outstanding (Basic) | 1.20B1.19B | +0.3% |
| Shares Outstanding (Diluted) | 1.25B1.23B | +1.7% |
05—Questions
Frequently Asked Questions
What was Amphenol's financial performance in 2021?
Amphenol reported strong financial performance in 2021, with net sales increasing by 26% to $10.88 billion. Operating income grew by 28% to $2.11 billion, and net income attributable to Amphenol Corporation increased by 30% to $1.59 billion. The company generated $1.52 billion in operating cash flow and $1.17 billion in free cash flow.
How did acquisitions contribute to Amphenol's growth in 2021?
In 2021, Amphenol completed seven acquisitions, investing approximately $1.5 billion. Key acquisitions like MTS Systems Corporation and Halo Technology Limited significantly expanded the company's offerings in sensors and fiber optic interconnect components, strengthening its market position.
What are the key risks Amphenol highlighted in its filing?
Amphenol highlighted several key risks, including those related to global operations (geopolitical conditions, trade policies), supply chain disruptions and raw material cost increases, adverse public health developments (like the COVID-19 pandemic), cybersecurity threats, dependence on key end markets (like communications), and competition. The company also noted risks associated with its acquisition strategy and potential goodwill impairment.
How did Amphenol manage supply chain and inflationary pressures?
The company acknowledged experiencing supply chain disruptions and commodity price increases starting in 2021. Amphenol's strategy to manage these challenges includes productivity improvements, cost control measures, and strategic sourcing. The increase in backlog also reflects customer efforts to secure supply amidst these challenges.
06—Continue