Summary
Amphenol Corporation's (APH) second quarter 2002 filing reveals a slight year-over-year revenue decline, primarily driven by weakened demand in the communications and industrial sectors, although this was partially offset by growth in aerospace and defense. Despite the revenue dip, the company is managing its expenses effectively, with SG&A as a percentage of sales remaining stable. A significant operational change is the adoption of FAS No. 142, which eliminated goodwill amortization, positively impacting reported net income compared to the prior year. The company's liquidity appears stable, with positive cash flow from operations and ample availability under its revolving credit facility. Management expects to fund ongoing operations, capital expenditures, and debt service through internal cash generation and existing credit lines.
Key Highlights
- 1Net sales for the second quarter of 2002 decreased by 1.0% to $270.9 million compared to $274.1 million in the prior year's quarter.
- 2For the six months ended June 30, 2002, net sales decreased by 11.0% to $526.8 million compared to $590.8 million in the prior year.
- 3Gross profit margin decreased to 31% in Q2 2002 from 34% in Q2 2001, attributed to lower sales volume and pricing pressures, particularly in communications markets.
- 4Adoption of FAS No. 142 eliminated goodwill amortization, a significant non-cash expense in prior periods, boosting net income and EPS.
- 5Interest expense decreased due to lower average debt levels and reduced interest rates.
- 6Cash flow from operations increased to $73.8 million in the first six months of 2002 from $45.0 million in the same period of 2001.
- 7Availability under the company's $150 million revolving credit facility was $116.8 million as of June 30, 2002, indicating strong liquidity.