10-QPeriod: Q1 FY2021

AMPHENOL CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 30, 2021For Securities:APH

Summary

Amphenol Corporation reported strong first-quarter 2021 results, with net sales increasing by 28% to $2.38 billion compared to the prior year period, driven by broad-based growth across its Interconnect Products and Assemblies segment, which constitutes the majority of its revenue. This growth was fueled by robust demand in automotive, mobile devices, industrial, and IT/data communications markets, alongside a recovery from the pandemic's impact in early 2020. The company also saw an improvement in profitability, with operating income rising to $464.8 million and an operating margin of 19.6%, up from 17.0% in the prior year. This was achieved despite ongoing supply chain challenges and commodity cost pressures. Financially, Amphenol maintained a healthy liquidity position, with cash and cash equivalents totaling $2.33 billion at the end of the quarter. The company also demonstrated a commitment to shareholder returns, increasing its quarterly dividend and actively repurchasing shares. Looking ahead, Amphenol successfully completed the significant acquisition of MTS Systems Corporation in early April 2021, which is expected to further expand its sensor capabilities and contribute to future growth, while also planning to divest the MTS Test & Simulation business.

Financial Highlights

53 data points
Beta

Revenue

$2.38B

30.6% Gross Margin

Net Income

$329.60M

13.9% Net Margin

EPS (Diluted)

$0.27

Total Assets

$13.13B

Cash & Equivalents

$2.33B

Free Cash Flow

$242.60M

Financial Statements
Beta
Revenue$2.38B
Cost of Revenue$1.65B
Gross Profit$727.50M
SG&A Expenses$262.70M
Operating Income$464.80M
Interest Expense$28.60M
Net Income$329.60M
EPS (Basic)$0.28
EPS (Diluted)$0.27
Shares Outstanding (Basic)1.20B
Shares Outstanding (Diluted)1.25B

Key Highlights

  • 1Net sales surged 28% year-over-year to $2.38 billion, indicating a strong recovery and growth trajectory.
  • 2Operating income increased to $464.8 million, with operating margin expanding to 19.6% from 17.0% in the prior year, demonstrating improved profitability.
  • 3The Interconnect Products and Assemblies segment, the largest revenue contributor, saw robust growth across key markets like automotive, mobile devices, and IT/data communications.
  • 4The company maintained a strong liquidity position with $2.33 billion in cash, cash equivalents, and short-term investments.
  • 5Amphenol successfully completed the significant acquisition of MTS Systems Corporation in April 2021, enhancing its sensor offerings.
  • 6The company continued its commitment to shareholder returns by increasing its quarterly dividend and actively engaging in share repurchases.
  • 7Despite positive trends, the company noted ongoing supply chain disruptions and commodity cost pressures as areas to monitor.

Frequently Asked Questions

Amphenol reported a substantial 28% increase in net sales for the first quarter of 2021, reaching $2.38 billion. This growth was primarily driven by strong performance in its Interconnect Products and Assemblies segment, with notable contributions from the automotive, mobile devices, industrial, and IT/data communications markets. The company also noted a recovery from the impacts of the COVID-19 pandemic seen in the first quarter of 2020.

Amphenol's profitability improved significantly. Operating income rose to $464.8 million from $316.9 million in the prior year period, resulting in an expanded operating margin of 19.6% compared to 17.0% in Q1 2020. This improvement was attributed to higher sales volumes and operational leverage, although partially offset by challenging commodity and supply chain environments.

Amphenol maintained a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $2.36 billion as of March 31, 2021. The company's primary sources of liquidity include internally generated cash flow, existing cash reserves, commercial paper programs, and its revolving credit facility. Management believes these resources provide adequate liquidity for at least the next twelve months.

During the first quarter of 2021, Amphenol completed four acquisitions for approximately $185.6 million, primarily within its Interconnect Products and Assemblies segment. Most significantly, in April 2021, the company completed the acquisition of MTS Systems Corporation for approximately $1.3 billion, which is expected to bolster its sensor capabilities. Amphenol also announced plans to divest the MTS Test & Simulation business.