10-QPeriod: Q3 FY2008

AMPHENOL CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2008

Filed November 6, 2008For Securities:APH

Summary

Amphenol Corporation reported a strong third quarter and nine-month performance for 2008, demonstrating robust revenue growth across its key segments, particularly in Interconnect products. Net sales saw significant increases year-over-year, driven by demand in mobile communications, military/aerospace, and data communications markets. The company also maintained healthy gross profit margins despite some increases in material costs. Strong operating cash flow generation continues to support the company's strategic initiatives, including capital expenditures and share repurchases. Despite a challenging global economic environment, Amphenol successfully navigated these conditions, evidenced by its expanding international sales and effective cost management. The company's balance sheet remains solid, with ample liquidity provided by its revolving credit facility and internally generated cash. Management expresses confidence in its ability to meet ongoing financial obligations and fund future growth opportunities.

Financial Highlights

27 data points
Beta

Revenue

$863.66M

32.6% Gross Margin

Net Income

$112.95M

13.1% Net Margin

EPS (Diluted)

$0.08

Cash & Equivalents

$230.74M

Free Cash Flow

$104.87M

Financial Statements
Beta
Revenue$863.66M
Cost of Revenue$582.41M
Gross Profit$281.25M
SG&A Expenses$109.93M
Operating Income$171.32M
Interest Expense$9.77M
Net Income$112.95M
EPS (Basic)$0.08
EPS (Diluted)$0.08
Shares Outstanding (Basic)1.41B
Shares Outstanding (Diluted)1.44B

Key Highlights

  • 1Net sales increased by 18% in the third quarter and 20% year-to-date for 2008 compared to the same periods in 2007, driven by strong performance in the Interconnect segment.
  • 2Operating income for the nine months ended September 30, 2008, increased to $489.8 million from $399.4 million in the prior year.
  • 3The company generated $310.7 million in cash flow from operations for the first nine months of 2008, an increase from $254.9 million in the same period of 2007.
  • 4Amphenol continued its share repurchase program, buying back approximately 3.8 million shares for $143.7 million in the first nine months of 2008.
  • 5Gross profit margin remained stable at approximately 32.6% for both periods in 2008 and 2007.
  • 6International sales showed significant growth, increasing by 27% in the third quarter and 32% year-to-date in U.S. dollars, indicating strong global demand.
  • 7The company maintained compliance with all financial covenants under its $1 billion revolving credit facility.

Frequently Asked Questions

Amphenol Corporation operates in two reportable business segments: (i) interconnect products and assemblies ('Interconnect'), which produces connectors and connector assemblies for communications, military, aerospace, industrial, and automotive markets; and (ii) cable products ('Cable'), which produces coaxial and flat ribbon cable and related products primarily for communications markets like cable television.

Amphenol experienced robust revenue growth. Net sales increased by 18% to $863.7 million in the third quarter of 2008 and by 20% to $2,481.2 million for the first nine months of 2008, compared to the same periods in 2007. This growth was primarily fueled by strong demand in the Interconnect segment across various end markets.

Amphenol maintains a solid financial position with strong operating cash flow generation of $310.7 million for the nine months ended September 30, 2008. The company had $230.7 million in cash and cash equivalents and ample availability under its $1 billion revolving credit facility, indicating good liquidity to meet its obligations and fund operations.

The company is involved in various legal proceedings and claims arising from normal business activities, but management does not expect these to have a material adverse effect. Additionally, environmental matters exist, particularly related to historical acquisitions, but costs are largely covered by indemnification agreements, and management does not anticipate a material adverse impact on financial condition or results of operations.