10-QPeriod: Q1 FY2007

AMPHENOL CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2007

Filed May 4, 2007For Securities:APH

Summary

Amphenol Corporation's first quarter 2007 report shows robust performance with net sales increasing by 14% year-over-year to $651.1 million. This growth was driven by strong demand across key markets including military/aerospace, telecommunications, and automotive, with both interconnect products and assemblies, and cable products segments contributing positively. The company demonstrated improved profitability, with gross profit margin rising to 32.3% from 31.6% in the prior year period, and operating income increasing significantly. Net income saw a substantial rise to $77.7 million, translating to diluted EPS of $0.43. Financially, Amphenol maintained a strong liquidity position with $85.1 million in cash and cash equivalents and significant availability under its revolving credit facility. The company continued its share repurchase program and maintained its quarterly dividend. Management expressed confidence in its ability to meet financial obligations and fund future operations and expansion, citing strong cash flow generation and access to credit markets. The company is also managing its pension obligations and adapting to new accounting standards like FIN 48.

Key Highlights

  • 1Net sales grew 14% year-over-year to $651.1 million, driven by strong performance in major end markets and geographic regions.
  • 2Gross profit margin improved to 32.3% from 31.6% in the prior year quarter.
  • 3Net income increased significantly to $77.7 million, resulting in diluted EPS of $0.43.
  • 4Operating income demonstrated strong growth, indicating effective cost management and operational leverage.
  • 5The company maintained a healthy cash position of $85.1 million and had $312.7 million available under its revolving credit facility.
  • 6Amphenol continued its share repurchase program, retiring an additional 1.6 million shares in March 2007.
  • 7The company's financial covenants remain strong, with interest coverage at 12.62x and leverage at 1.39x.

Frequently Asked Questions

Amphenol's sales growth was primarily driven by increased demand in key end markets such as military/aerospace, telecommunications, data-communications, mobile communications, industrial, and automotive. Sales also benefited from price increases, particularly in coaxial cable products for the broadband communications market, and an expanded worldwide presence with leading companies.

Profitability improved in Q1 2007. Gross profit margin increased to 32.3% from 31.6% in the prior year. This improvement was attributed to strong operating leverage on incremental volume, the development of higher-margin products, and cost control measures, particularly in the interconnect segment. The cable products segment also saw margin improvement due to price increases.

Amphenol maintains strong liquidity with $85.1 million in cash and cash equivalents at the end of Q1 2007. The company also has significant financial flexibility through its $1,000 million revolving credit facility, with $312.7 million available after accounting for letters of credit. Management expressed confidence in its ability to fund ongoing operations, capital expenditures, share repurchases, dividends, and debt service.

Amphenol continues to execute its share repurchase program, having retired an additional 1.6 million shares in March 2007, with approximately 3.8 million shares still available for repurchase. The company also maintained its quarterly dividend of $0.015 per share and intends to retain earnings for business operations, expansion, share repurchases, and debt repayment.