10-QPeriod: Q1 FY2010

AMPHENOL CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 6, 2010For Securities:APH

Summary

Amphenol Corporation reported a strong first quarter in 2010, with net sales increasing by 17% year-over-year to $771.0 million. This growth was driven by a broad-based recovery across key markets including automotive, telecommunications, and industrial sectors, as well as geographic regions. Net income attributable to shareholders rose significantly to $98.4 million, or $0.56 per diluted share, up from $74.4 million, or $0.43 per diluted share, in the prior year's first quarter. The company also saw an improvement in gross profit margin to 32.3% from 31.3%, indicating effective cost management and benefits from higher sales volumes. Operationally, Amphenol demonstrated solid execution with increased operating margins in both its Interconnect Products and Assemblies segment and its Cable Products segment. While Selling, General, and Administrative (SG&A) expenses increased in absolute terms, they decreased as a percentage of net sales, reflecting improved operating leverage. The company's liquidity remains strong, with $431.7 million in cash and cash equivalents and a substantial revolving credit facility available. Management expressed confidence in their ability to meet ongoing obligations and fund future operations.

Financial Highlights

49 data points
Beta

Revenue

$770.95M

32.3% Gross Margin

Net Income

$98.35M

12.8% Net Margin

EPS (Diluted)

$0.07

Total Assets

$3.41B

Cash & Equivalents

$431.72M

Free Cash Flow

$13.49M

Financial Statements
Beta
Revenue$770.95M
Cost of Revenue$521.76M
Gross Profit$249.19M
SG&A Expenses$104.15M
Operating Income$145.04M
Interest Expense$10.01M
Net Income$98.35M
EPS (Basic)$0.07
EPS (Diluted)$0.07
Shares Outstanding (Basic)1.39B
Shares Outstanding (Diluted)1.40B

Key Highlights

  • 1Net sales surged 17% to $771.0 million, signaling a robust recovery in demand across multiple end markets.
  • 2Net income attributable to shareholders increased by 32% to $98.4 million, leading to a significant rise in diluted EPS to $0.56 from $0.43.
  • 3Gross profit margin improved to 32.3% from 31.3%, driven by higher sales volumes and cost management.
  • 4SG&A expenses as a percentage of net sales decreased to 13.5%, demonstrating improved operating leverage.
  • 5The company's cash position strengthened to $431.7 million, indicating healthy liquidity.
  • 6Adoption of ASU 2009-16 led to a reclassification of the Receivables Securitization Facility from off-balance sheet to short-term debt, impacting cash flow from operations by $82.0 million for the quarter.

Frequently Asked Questions

Amphenol's sales growth in Q1 2010 was driven by a broad-based strengthening of demand across key markets such as automotive, telecommunications, data communications, and industrial sectors. Sales increased in all major geographic regions, indicating a widespread recovery from the weak economic conditions experienced in the prior year.

The adoption of ASU 2009-16 on January 1, 2010, significantly impacted the financial statements. The company no longer accounts for its Receivables Securitization Facility as a sale of receivables. Consequently, receivables sold under this facility are now reflected as debt, leading to a $49,000 increase in short-term debt and a $82,000 reduction in cash flow from operating activities for the quarter. Fees associated with this facility are now included in interest expense.

Amphenol's liquidity appears strong, with $431.7 million in cash and cash equivalents and a substantial $602 million available under its Revolving Credit Facility as of March 31, 2010. Management is confident that these resources, along with internally generated cash flow, will be sufficient to meet operating and capital expenditures, product development, dividends, and debt service requirements for the next twelve months. The company also anticipates potentially making voluntary contributions to its U.S. Pension Plan.

The financial statements indicate that there were acquisitions, net of cash acquired, amounting to $3,000 for the three months ended March 31, 2010. While the filing doesn't detail specific acquisitions, it shows a significant use of cash in investing activities for acquisitions in the prior year's quarter ($261,464).