10-QPeriod: Q1 FY2008

AMPHENOL CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2008

Filed May 9, 2008For Securities:APH

Summary

Amphenol Corporation's first quarter 2008 filing (period ending March 31, 2008) demonstrates robust top-line growth, with net sales increasing by 18% year-over-year to $770.7 million. This growth was driven by strong performance across key end markets for its interconnect products and assemblies, including mobile communications, military/aerospace, and industrial/automotive. The company also saw a notable increase in international sales, up 32% in USD, reflecting a weaker U.S. dollar and expanded global presence. Profitability also improved, with net income rising to $97.5 million from $77.7 million in the prior year, leading to a diluted EPS of $0.54. The company maintained healthy gross and operating margins, with the interconnect segment showing margin expansion. Amphenol's balance sheet remains solid, supported by strong operating cash flow generation, which increased significantly year-over-year. The company also actively repurchased shares and returned capital to shareholders through dividends, signaling confidence in its financial position and future prospects.

Key Highlights

  • 1Net sales increased 18% year-over-year to $770.7 million, driven by strong demand in key end markets.
  • 2Net income rose to $97.5 million, an increase from $77.7 million in the prior year's first quarter.
  • 3Diluted Earnings Per Share (EPS) improved to $0.54 from $0.43 in the prior year.
  • 4International sales showed significant growth, increasing 32% in U.S. dollars.
  • 5Operating cash flow generation was strong, increasing to $109.6 million from $62.5 million in the prior year.
  • 6The company continued its share repurchase program, buying back $143.7 million worth of common stock during the quarter.
  • 7Gross profit margin slightly improved to 32.6% from 32.3% in the prior year, with operating margins in the interconnect segment showing expansion.

Frequently Asked Questions

Amphenol's sales growth was primarily driven by strong performance in its interconnect products and assemblies segment, which benefited from increased demand across its major end markets including mobile communications, military/aerospace, industrial/automotive, and telecommunications/data communications. Geographic expansion and a weaker U.S. dollar also contributed to the robust international sales growth.

Profitability improved significantly, with net income increasing by approximately 25% to $97.5 million. This resulted in a higher diluted EPS of $0.54, up from $0.43 in the prior year's first quarter. Gross profit margin saw a slight improvement, and operating margins in the key interconnect segment expanded.

Amphenol maintains a strong liquidity position, evidenced by robust operating cash flow of $109.6 million. The company has a $1 billion revolving credit facility, of which $838.1 million was drawn at the end of the quarter. Cash is being used for operating and capital expenditures, product development, significant share repurchases ($143.7 million in the quarter), and dividends. The company expects its liquidity sources to be sufficient for its ongoing needs.

The company is involved in environmental cleanup of several sites from a prior acquisition, but costs are expected to be reimbursed by Honeywell under an indemnification agreement, and management does not believe these will materially affect financial condition or results. Legal proceedings arising from normal business activities are also not expected to have a material impact.