10-QPeriod: Q1 FY2004

AMPHENOL CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2004

Filed May 7, 2004For Securities:APH

Summary

Amphenol Corporation reported strong first-quarter 2004 results, with net sales increasing by a significant 28% year-over-year to $355.3 million. This growth was driven by a robust performance in the interconnect products and assemblies segment, which saw a 28% sales increase, benefiting from strong demand in military/aerospace, mobile communication, wireless infrastructure, industrial, and automotive markets. The cable products segment also contributed with a 27% sales increase, largely due to the broadband communications market. Profitability also showed improvement, with operating income rising to $61.3 million from $45.2 million in the prior year. The company's gross profit margin improved to 32% from 31%, supported by higher sales volumes and cost reduction initiatives, although cable product margins saw a slight decline due to increased material costs. Diluted earnings per share (EPS) increased to $0.40 from $0.27, reflecting the strong operational performance. The company also announced a two-for-one stock split effective in March 2004, and initiated a new stock repurchase program. Management anticipates continued strength, expecting ongoing requirements to be met by internally generated cash flow and available credit facilities.

Key Highlights

  • 1Net sales surged 28% to $355.3 million in Q1 2004 compared to Q1 2003, driven by broad-based demand across key end markets.
  • 2Operating income increased substantially by 35% to $61.3 million, indicating improved operational leverage and efficiency.
  • 3Diluted Earnings Per Share (EPS) rose to $0.40, a significant improvement from $0.27 in the prior year's quarter.
  • 4The interconnect products and assemblies segment demonstrated robust growth with a 28% sales increase, while the cable products segment also grew by 27%.
  • 5Gross profit margin improved to 32% from 31%, reflecting higher sales volumes and cost reduction efforts.
  • 6The company executed a two-for-one stock split in March 2004 and announced a new stock repurchase program authorizing up to 2 million shares.
  • 7Cash flow from operations was solid at $31.8 million, though slightly down from the prior year, but the company's liquidity remains strong with available credit facilities.

Frequently Asked Questions

Amphenol reported a strong 28% increase in net sales, reaching $355.3 million for the first quarter of 2004 compared to the same period in 2003. This growth was primarily driven by strong demand across its major end markets, including military/aerospace, mobile communication, wireless infrastructure, industrial, and automotive. The cable products segment also saw significant growth, fueled by increased capital spending in the broadband communications market.

Profitability improved significantly. Operating income increased by 35% to $61.3 million from $45.2 million in the prior year. The gross profit margin expanded to 32% from 31%, benefiting from increased sales volumes and cost reduction activities, particularly in the interconnect products segment. Diluted earnings per share (EPS) rose to $0.40 from $0.27, demonstrating enhanced profitability on a per-share basis.

Amphenol announced and completed a two-for-one stock split effective March 29, 2004, which restates historical share information. Additionally, the company's Board of Directors authorized a new stock repurchase program for up to 2 million shares of common stock through December 31, 2005, and repurchased approximately 530,800 shares during the first quarter.

The company expects its ongoing cash requirements for operations, capital expenditures, and debt service to be met by internally generated cash flow and its revolving credit facility. Cash provided by operations was $31.8 million in the first quarter of 2004. They also have the ability to utilize their accounts receivable sale program for additional liquidity. Management does not foresee any material adverse effects on financial condition or results of operations from environmental matters, as significant liabilities are covered by an agreement with Honeywell.