Amphenol Corporation (NYSE:APH) reported today diluted earnings
per share (EPS) for the first quarter 2017 of $0.71 compared to
$0.50 for the comparable 2016 period. Diluted EPS for the first
quarter 2016 included a charge for acquisition-related transaction
costs of $30 million ($0.09 per share) relating to the acquisition
of FCI. Excluding the effect of this item, Adjusted Diluted EPS1
for first quarter 2016 was $0.59. Sales for the first quarter of
2017 were $1.560 billion compared to $1.451 billion for the
comparable 2016 period. Currency translation had the effect of
decreasing sales by approximately $18 million in the first quarter
of 2017 compared to the 2016 period.
Amphenol President and Chief Executive Officer, R. Adam Norwitt,
stated, “We are very pleased to close the first quarter 2017 above
the high end of our guidance with sales and diluted EPS in the
quarter of $1.560 billion and $0.71, respectively. We achieved
these strong results despite the ongoing geopolitical and economic
uncertainties affecting the global economy. Compared to the first
quarter 2016, sales increased by 8%, with strong growth in the
information technology and data communications, military,
automotive, broadband and industrial markets, driven by organic
growth together with contributions from the Company’s successful
acquisition program.”
“We are expanding our growth opportunities through a deep
commitment to developing enabling technologies for customers in all
of our end markets, an ongoing strategy of market and geographic
diversification, as well as through contributions from our
acquisition program.”
“Operating cash flow in the quarter was $238 million, a clear
confirmation of the quality of the Company’s earnings. The Company
continues to deploy its financial strength in a variety of ways to
increase shareholder value. This includes the purchase, during the
first quarter, of 3.7 million shares of the Company’s stock under
our $1 billion two-year open market stock repurchase plan. I am
very proud of our organization as we continue to execute extremely
well.”
“The current economic environment remains uncertain, including
the dynamics related to any potential government policy changes and
the geopolitical climate. Considering this environment and based on
current currency exchange rates, we expect second quarter 2017
sales in the range of $1.580 billion to $1.620 billion and diluted
EPS in the range of $0.70 to $0.72. For the full year 2017, we now
expect to achieve sales in the range of $6.405 billion to $6.525
billion, an increase over 2016 of 2% to 4% and diluted EPS of $2.91
to $2.97, an increase of 11% to 14% over 2016 GAAP Diluted EPS and
an increase of 7% to 9% over 2016 Adjusted Diluted EPS. This
compares to our prior full year 2017 guidance of $6.340 billion to
$6.500 billion in sales and diluted EPS of $2.84 to $2.92.”
“The electronics revolution continues to create exciting,
long-term growth opportunities for Amphenol. We remain very
confident for the future, with new applications and higher
performance requirements driving increased demand for our broadened
range of high technology products across all of our diversified end
markets. Our ongoing actions to strengthen our competitive
advantages and build sustained financial strength, as well as our
initiatives to expand our high technology product offering both
organically and through our acquisition program, have created an
excellent base for future performance. I am confident in the
ability of our outstanding management team to dynamically adjust to
the constantly changing environment, to continue to generate strong
profitability and to further capitalize on the many opportunities
to expand our market position.”
The Company will host a conference call to discuss its first
quarter results at 1:00 PM (EDT) Wednesday, April 26, 2017. The
toll free dial-in number to participate in this call is
888-455-0949; International dial-in number is 773-799-3973;
Passcode: LAMPO. There will be a replay available until 10:59 PM
(EDT) on Friday, May 26, 2017. The replay numbers are toll free
800-510-9771; International toll number is 402-344-6800; Passcode:
7183.
A live broadcast as well as a replay will also be available on
the Internet at http://www.amphenol.com/investors/webcasts.php.
Amphenol Corporation is one of the world’s largest designers,
manufacturers and marketers of electrical, electronic and fiber
optic connectors, interconnect systems, antennas, sensors and
sensor-based products and coaxial and high-speed specialty cable.
Amphenol designs, manufactures and assembles its products at
facilities in the Americas, Europe, Asia, Australia and Africa and
sells its products through its own global sales force, independent
representatives and a global network of electronics distributors.
Amphenol has a diversified presence as a leader in high growth
areas of the interconnect market including: Automotive, Broadband
Communications, Commercial Aerospace, Industrial, Information
Technology and Data Communications, Military, Mobile Devices and
Mobile Networks.
Forward-Looking Statements
This press release contains certain statements that are intended
to be “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Company expects or anticipates will or may occur in the future,
including, but not limited to the Company’s expectations regarding
second quarter and full year 2017 sales and diluted EPS, are
forward-looking statements. Forward-looking statements are based on
our management’s current beliefs, expectations and assumptions and
on information currently available to our management.
Forward-looking statements may be identified through the use of
terms such as “expect”, “may”, “will”, “should”, “intend”, “plan”,
“guidance” and/or other similar expressions generally intended to
identify forward-looking statements. Such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties, and actual results may differ materially
from those projected in the forward-looking statements. Factors
that might cause or contribute to a material difference include,
but are not limited to, governmental, political, economic, end
market, competitive, technological, acquisition-related,
cybersecurity and foreign currency-related risk factors that may
affect the Company’s operations, products, markets, customers and
prices. Details regarding various significant risks and
uncertainties that may affect our operating and financial
performance can be found in Part I, Item 1A of the Company’s Annual
Report on Form 10-K for the year ended December 31, 2016, and other
Company filings with the Securities and Exchange Commission
including Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K. There may be other risks and uncertainties that we are
unable to predict at this time or that we currently do not expect
to cause actual results to differ materially from those contained
in any forward-looking statements we may make and affect our
operating and financial performance. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Forward-looking diluted EPS
included in our second quarter and full year 2017 guidance assumes
that the Company will not have, in either period, any income or
expense that is not directly related to the Company’s operating
performance during such periods. Further details regarding these
types of income and expenses are provided below under the heading
“Non-GAAP Financial Measures.” To the extent the Company has any
such income or expense in such periods that is not directly related
to the Company’s operating performance, then the Company’s
forward-looking diluted EPS for the second quarter and/or full year
2017 will be adjusted to exclude such income or expense.
Forward-looking statements set forth in this press release speak
only as of the date hereof and the Company does not undertake any
obligation to revise or update these statements whether as a result
of new information, future events or otherwise, except as required
by law.
Non-GAAP
Financial Measures
The financial statements included within this press release are
prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”). This press
release also contains certain non-GAAP financial information,
including Adjusted Operating Income, Adjusted Operating Margin,
Adjusted Net Income attributable to Amphenol Corporation and
Adjusted Diluted EPS (“non-GAAP financial measures”), which are
intended to supplement the reported GAAP results. Management
utilizes these non-GAAP financial measures as part of its internal
reviews for purposes of monitoring, evaluating and forecasting the
Company’s financial performance, communicating operating results to
the Company’s Board of Directors and assessing related employee
compensation measures. Management believes that such non-GAAP
financial measures may be helpful to investors in assessing the
Company’s overall financial performance, trends and
period-over-period comparative results. Non-GAAP financial measures
discussed within this press release exclude income and expenses
that are not directly related to the Company’s operating
performance during the periods presented. Items excluded from the
non-GAAP financial measures in any period may consist of, without
limitation, acquisition-related expenses, certain discrete tax
items and refinancing-related costs that may arise during such
periods. Reconciliations of non-GAAP financial measures to the most
directly comparable GAAP financial measures are included at the end
of this press release. However, such non-GAAP financial measures
should not be considered in isolation, as a substitute for or
superior to the related GAAP financial measures. In addition, these
non-GAAP financial measures are not necessarily the same or
comparable to similar measures presented by other companies, as
such measures may be calculated differently or may exclude
different items. The non-GAAP financial measures are defined within
the “Supplemental Financial Information” table at the end of this
press release and should be read in conjunction with the Company’s
financial statements presented in accordance with GAAP.
1 All referenced non-GAAP financial measures are defined within
this press release.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(Unaudited)
(dollars and shares in millions, except
per share data)
Three Months Ended March 31, 2017
2016 Net sales $ 1,560.1 $ 1,451.2 Cost
of sales 1,044.2 992.0 Gross
profit 515.9 459.2 Acquisition-related expenses — 30.3
Selling, general and administrative expenses 201.8
189.5 Operating income 314.1 239.4
Interest expense (19.3 ) (18.1 ) Other income, net
3.6 1.0 Income before income taxes
298.4 222.3 Provision for income taxes (71.1 )
(63.9 ) Net income 227.3 158.4 Less: Net income attributable
to noncontrolling interests (2.4 ) (1.8 ) Net
income attributable to Amphenol Corporation $ 224.9 $ 156.6
Net income per common share - Basic $ 0.73 $
0.51 Weighted average common shares outstanding -
Basic 306.6 307.6 Net income per
common share - Diluted
(1) $ 0.71 $ 0.50
Weighted average common shares outstanding - Diluted
316.4 314.2 Dividends declared per
common share $ 0.16 $ 0.14
Note 1
Earnings per share for the three months ended March 31, 2016
included acquisition-related expenses of $30.3 million ($27.3
million after-tax) or $0.09 per share. Excluding this effect,
Adjusted Diluted EPS, a non-GAAP financial measure which is defined
and reconciled to its most comparable GAAP financial measure in
this press release, was $0.59 for the three months ended March 31,
2016.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in millions)
March 31, December 31, 2017
2016 ASSETS Current Assets: Cash and
cash equivalents $ 1,242.9 $ 1,034.6 Short-term investments
36.8 138.6 Total cash, cash equivalents and
short-term investments 1,279.7 1,173.2 Accounts receivable, less
allowance for doubtful accounts of $19.2 and $23.6, respectively
1,318.3 1,349.3 Inventories 962.3 928.9 Other current assets
162.1 139.8 Total current assets
3,722.4 3,591.2 Land and depreciable assets, less
accumulated depreciation of $1,052.0 and $1,007.2, respectively
726.9 711.4 Goodwill 3,748.7 3,678.8 Intangibles, net and other
long-term assets 509.4 517.3 $
8,707.4 $ 8,498.7
LIABILITIES &
EQUITY Current Liabilities: Accounts payable $ 682.4 $
678.2 Accrued salaries, wages and employee benefits 123.2 131.8
Accrued income taxes 117.7 125.1 Other accrued expenses 236.0 275.6
Accrued dividends 48.9 49.3 Current portion of long-term debt
375.1 375.2 Total current
liabilities 1,583.3 1,635.2 Long-term debt, less current
portion 2,862.1 2,635.5 Accrued pension and postretirement benefit
obligations 288.8 288.4 Other long-term liabilities 222.1 216.5
Equity: Common stock 0.3 0.3 Additional paid-in capital
1,056.7 1,020.9 Retained earnings 3,049.5 3,122.7 Accumulated other
comprehensive loss (402.3 ) (469.0 ) Total
shareholders' equity attributable to Amphenol Corporation 3,704.2
3,674.9 Noncontrolling interests 46.9
48.2 Total equity 3,751.1
3,723.1 $ 8,707.4 $ 8,498.7
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW
(Unaudited)
(dollars in millions)
Three Months Ended March 31, 2017
2016 Cash from operating activities: Net
income $ 227.3 $ 158.4 Adjustments to reconcile net income to cash
provided by operating activities: Depreciation and amortization
54.1 61.9 Stock-based compensation expense 12.1 11.6 Excess tax
benefits from stock-based compensation payment arrangements — (4.2
) Net change in components of working capital (66.8 ) (45.9 ) Net
change in other long-term assets and liabilities 11.1
12.4 Net cash provided by operating activities
237.8 194.2 Cash from investing
activities: Purchases of land and depreciable assets (48.7 ) (41.0
) Proceeds from disposals of land and depreciable assets 0.3 2.7
Purchases of short-term investments (18.2 ) (16.1 ) Sales and
maturities of short-term investments 122.1 13.1 Acquisitions, net
of cash acquired (46.6 ) (1,185.8 ) Net cash
provided by (used in) investing activities 8.9
(1,227.1 ) Cash from financing activities: Borrowings under
commercial paper program, net 225.3 50.8 Payment of costs related
to debt financing — (3.0 ) Proceeds from exercise of stock options
23.7 14.6 Excess tax benefits from stock-based compensation payment
arrangements — 4.2 Distributions to shareholders of noncontrolling
interests (4.2 ) (4.0 ) Purchase and retirement of treasury stock
(249.2 ) (49.2 ) Dividend payments (49.3 ) (43.2 )
Net cash used in financing activities (53.7 )
(29.8 ) Effect of exchange rate changes on cash and cash
equivalents 15.3 12.5 Net change in cash and cash
equivalents 208.3 (1,050.2 ) Cash and cash equivalents
balance, beginning of period 1,034.6 1,737.2
Cash and cash equivalents balance, end of period $
1,242.9 $ 687.0 Cash paid for: Interest $ 32.4
$ 31.2 Income taxes 77.4 47.6
AMPHENOL CORPORATION
SEGMENT INFORMATION
(Unaudited)
(dollars in millions)
Three Months Ended March 31, 2017
2016
Net
sales:
Interconnect Products and Assemblies $ 1,463.5 $ 1,367.8 Cable
Products and Solutions 96.6 83.4
Consolidated Net sales $ 1,560.1 $ 1,451.2
Operating
income:
Interconnect Products and Assemblies $ 323.9 $ 281.2 Cable Products
and Solutions 13.7 11.1 Stock-based compensation expense (12.1 )
(11.6 ) Other operating expenses (11.4 ) (11.0 )
Acquisition-related expenses — (30.3 )
Consolidated Operating income $ 314.1 $ 239.4
Operating margin
(%):
Interconnect Products and Assemblies 22.1 % 20.6 % Cable Products
and Solutions 14.2 % 13.3 % Stock-based compensation expense -0.8 %
-0.8 % Other operating expenses -0.7 % -0.8 % Acquisition-related
expenses 0.0 % -2.1 % Consolidated Operating margin (%) 20.1 % 16.5
%
AMPHENOL CORPORATIONSUPPLEMENTAL
FINANCIAL INFORMATIONRECONCILIATIONS OF GAAP TO NON-GAAP
FINANCIAL MEASURES(Unaudited)(dollars in millions,
except per share data)
Management utilizes the non-GAAP financial measures defined
below as part of its internal reviews for purposes of monitoring,
evaluating and forecasting the Company’s financial performance,
communicating operating results to the Company's Board of Directors
and assessing related employee compensation measures. Management
believes that such non-GAAP financial measures may be helpful to
investors in assessing the Company’s overall financial performance,
trends and period-over-period comparative results. The following
non-GAAP financial measures exclude income and expenses that are
not directly related to the Company's operating performance during
the periods presented. Items excluded from the non-GAAP financial
measures in any period may consist of, without limitation,
acquisition-related expenses, certain discrete tax items and
refinancing-related costs that may arise during such periods. The
following non-GAAP financial information is included for
supplemental purposes only and should not be considered in
isolation, as a substitute for or superior to the related U.S. GAAP
financial measures. In addition, these non-GAAP financial measures
are not necessarily the same or comparable to similar measures
presented by other companies, as such measures may be calculated
differently or may exclude different items.
The following are reconciliations of non-GAAP financial measures
to the most directly comparable U.S. GAAP financial measures,
specifically related to Operating Income, Operating Margin, Net
Income attributable to Amphenol Corporation, and Diluted earnings
per share (Diluted EPS) for the three months ended March 31, 2017
and 2016:
2017 2016 Net
Income Net Income attributable
attributable Operating Operating to
Amphenol Diluted Operating Operating to
Amphenol Diluted Income Margin
Corporation EPS Income Margin
Corporation EPS Reported (GAAP) $ 314.1 20.1 %
$ 224.9 $ 0.71 $ 239.4 16.5 % $ 156.6 $ 0.50
Acquisition-related expenses - - - -
30.3 2.1 27.3 0.09 Adjusted (non-GAAP) (1) $
314.1 20.1 % $ 224.9 $ 0.71 $ 269.7 18.6 % $ 183.9 $ 0.59
(1) Adjusted Operating Income, Adjusted Operating
Margin, Adjusted Net Income attributable to Amphenol Corporation,
and Adjusted Diluted EPS are non-GAAP financial measures and are
defined as follows:
Adjusted Operating Income is
defined as Operating Income (as reported in the Condensed
Consolidated Statements of Income), excluding income and expenses
that are not directly related to the Company's operating
performance during the periods presented.
Adjusted Operating Margin is
defined as Adjusted Operating Income (as defined above) expressed
as a percentage of Net sales (as reported in the Condensed
Consolidated Statements of Income).
Adjusted Net Income attributable to
Amphenol Corporation is defined as Net Income attributable to
Amphenol Corporation (as reported in the Condensed Consolidated
Statements of Income), excluding income and expenses and their
related tax effects, that are not directly related to the Company's
operating performance during the periods presented.
Adjusted Diluted EPS is defined as
diluted earnings per share (as reported or as forecasted in
accordance with U.S. GAAP), excluding income and expenses and their
related tax effects, that are not directly related to the Company's
operating performance during the periods presented. Adjusted
Diluted EPS is calculated as Adjusted Net Income attributable to
Amphenol Corporation, as defined above, divided by the weighted
average outstanding diluted shares (as reported in the Company’s
Condensed Consolidated Statements of Income).
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version on businesswire.com: http://www.businesswire.com/news/home/20170426005286/en/
Amphenol CorporationCraig A. Lampo, 203-265-8625Senior Vice
President and Chief Financial Officerwww.amphenol.com
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