10-QPeriod: Q1 FY2020

AMPHENOL CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2020

Filed April 24, 2020For Securities:APH

Summary

Amphenol Corporation (APH) reported its first quarter 2020 results, highlighting a 5% year-over-year decrease in net sales to $1.86 billion, primarily due to the broad disruptions caused by the COVID-19 pandemic. Despite the sales decline, the company demonstrated resilience with net income attributable to Amphenol Corporation of $242.1 million, or $0.79 per diluted share. The company's strong operating cash flow of $384.3 million underscores its robust financial health and ability to generate cash, even amidst challenging global conditions. Amphenol's balance sheet remains solid, with $2.38 billion in cash, cash equivalents, and short-term investments at quarter-end, providing ample liquidity. The company also took proactive steps to manage its liquidity by drawing down $1.25 billion on its revolving credit facility in late March, a measure taken out of caution due to market volatility. Looking ahead, Amphenol anticipates continued challenges in the second quarter due to the ongoing impact of the pandemic but remains focused on mitigating these effects and managing its operations effectively.

Financial Highlights

53 data points
Beta

Revenue

$1.86B

30.1% Gross Margin

Net Income

$242.10M

13.0% Net Margin

EPS (Diluted)

$0.20

Total Assets

$12.08B

Cash & Equivalents

$2.37B

Free Cash Flow

$323.50M

Financial Statements
Beta
Revenue$1.86B
Cost of Revenue$1.30B
Gross Profit$559.80M
SG&A Expenses$242.90M
Operating Income$316.90M
Interest Expense$28.80M
Net Income$242.10M
EPS (Basic)$0.20
EPS (Diluted)$0.20
Shares Outstanding (Basic)1.19B
Shares Outstanding (Diluted)1.23B

Key Highlights

  • 1Net sales decreased by 5% year-over-year to $1.86 billion in Q1 2020, largely attributed to the COVID-19 pandemic's impact on global operations and demand.
  • 2Net income attributable to Amphenol Corporation was $242.1 million, resulting in diluted EPS of $0.79.
  • 3Operating income stood at $316.9 million, with an operating margin of 17.0%, down from 19.2% in the prior year's quarter.
  • 4The company generated strong operating cash flow of $384.3 million, an increase from $343.6 million in Q1 2019.
  • 5Total cash, cash equivalents, and short-term investments increased significantly to $2.38 billion as of March 31, 2020, up from $908.6 million at the end of 2019.
  • 6Amphenol drew down $1.25 billion on its revolving credit facility as a precautionary measure due to market volatility in March 2020.
  • 7The company experienced a decline in its Cable Products and Solutions segment sales by 13% year-over-year.

Frequently Asked Questions

The primary driver for the decrease in net sales was the widespread disruption and slowdown in many of Amphenol's markets resulting from the global outbreak of the COVID-19 pandemic. This included facility shutdowns in China, production limitations in other regions, supply chain interruptions, and reduced customer demand.

Amphenol strengthened its liquidity position by increasing its cash, cash equivalents, and short-term investments to $2.38 billion. Additionally, out of an abundance of caution due to market volatility in late March 2020, the company borrowed $1.25 billion under its revolving credit facility, partially to repay outstanding commercial paper.

Amphenol anticipates that the disruptions caused by the COVID-19 pandemic will continue throughout the second quarter of 2020. The full extent of the impact remains uncertain and depends on future developments related to the pandemic's duration, severity, and government responses.

Amphenol completed one acquisition in the first quarter of 2020 for approximately $16.5 million. This acquisition was part of the Interconnect Products and Assemblies segment. While accounting for this acquisition was ongoing, it was not considered material to the company's overall financial results for the quarter. Acquisitions completed in 2019 continued to contribute to net sales, though the impact of these was also considered in the organic sales growth calculations.