Amphenol Corporation (NYSE: APH) reported today record GAAP
diluted Earnings Per Share (“EPS”) for the third quarter 2020 of
$1.12 compared to $0.92 for the comparable 2019 period. GAAP
diluted EPS for the third quarter 2020 included an excess tax
benefit of $11 million ($0.03 per share) related to stock options
exercised during the quarter. Third quarter 2019 GAAP diluted EPS
included refinancing-related costs of $14 million ($0.04 per share)
associated with the early extinguishment of debt, partially offset
by an excess tax benefit of $2 million ($0.01 per share) related to
stock options exercised during the period. Excluding the effect of
these items, Adjusted Diluted EPS1 for the third quarter 2020 was a
record $1.09 compared to $0.95 for the third quarter 2019. Sales
for the third quarter 2020 were a record $2.323 billion compared to
$2.101 billion for the comparable 2019 period. Currency translation
had the effect of increasing sales by $17 million in the third
quarter 2020 compared to the 2019 period.
For the nine months ended September 30, 2020, GAAP Diluted EPS
was $2.76, compared to $2.72 for the comparable 2019 period. GAAP
Diluted EPS for the nine months ended September 30, 2020 included
(i) an excess tax benefit of $28 million ($0.09 per share) related
to stock options exercised during the period and (ii) a discrete
tax benefit of $20 million ($0.06 per share) related to the
settlements of refund claims in certain non-U.S. jurisdictions and
the resulting adjustments to deferred taxes. The comparable 2019
period included acquisition-related costs of $25 million ($0.07 per
share) and refinancing-related costs associated with the early
extinguishment of debt during the period of $14 million ($0.04 per
share), partially offset by an excess tax benefit of $21 million
($0.07 per share) related to stock options exercised during the
period. Excluding the effect of these items, Adjusted Diluted EPS
for the nine months ended September 30, 2020 and 2019 was $2.61 and
$2.76, respectively. This decline in Adjusted Diluted EPS largely
reflects the impact of the disruptions and costs associated with
the COVID-19 pandemic. Sales for the nine months ended September
30, 2020 were $6.173 billion compared to $6.074 billion for the
2019 period. Currency translation had the effect of decreasing
sales by $23 million for the first nine months of 2020 compared to
the 2019 period.
On October 20, 2020, the Company’s Board of Directors approved a
16% increase in the Company’s quarterly dividend, from $0.25 to
$0.29 per share to be first paid on January 6, 2021 to holders of
record of the Company’s Class A Common stock as of December 15,
2020.
Amphenol President and Chief Executive Officer, R. Adam Norwitt,
stated, “While the COVID-19 pandemic continued to impact our
business in the third quarter 2020, I am very proud that our team
drove results that far exceeded our expectations, all while
continuing to prioritize the safety and health of our employees
worldwide.”
“We are pleased to have closed the third quarter of 2020 with
record sales and Adjusted Diluted EPS of $2.323 billion and $1.09,
respectively. Compared to the third quarter of 2019, sales
increased by a strong 11%, primarily driven by robust growth in the
mobile devices, information technology and data communications and
industrial markets. We are especially pleased to have realized
sequential sales growth of 17%, a clear reflection of our
organization’s agility which enabled us to take advantage of
incremental demand, even in these most dynamic times.”
“It is extremely rewarding that even in this challenging
environment the Company’s experienced management team continued to
react quickly to capitalize on opportunities to reach these new
record levels of revenue and earnings. In addition, third quarter
operating margins significantly improved from the second quarter,
reaching a very strong 20.5%, and operating cash flow was $398
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. To that end, the
Company purchased 1.9 million shares of its common stock during the
quarter for $202 million and paid dividends of $75 million. In
addition, the Board of Directors has approved a 16% increase in our
quarterly dividend, from $0.25 to $0.29 per share.”
“As we look ahead, the global economy remains very uncertain,
and the continuing COVID-19 pandemic appears to be worsening in
some regions of the world. Given the current demand environment and
assuming no new material disruptions from the pandemic as well as
constant exchange rates, for the fourth quarter 2020, we expect
sales to be in the range of $2.160 billion to $2.200 billion and
Adjusted Diluted EPS in the range of $0.98 to $1.00. For the full
year 2020, we expect sales in the range of $8.333 billion to $8.373
billion, an increase of 1% to 2% over 2019, and Adjusted Diluted
EPS to be in the range of $3.59 to $3.61, which is a decrease of 3%
to 4% over 2019.”
“Despite the ongoing challenges posed by the COVID-19 pandemic,
we are encouraged by the platform of strength that has been created
by the Company’s consistent and superior performance during these
highly uncertain times. The electronics revolution continues to
create exciting long-term growth opportunities for Amphenol across
each of our diversified end markets, with customers driving their
products and networks to achieve ever higher levels of performance.
We believe these opportunities will enable a long-term increase in
demand for our expanded range of high-technology interconnect,
sensor and antenna products. Our ongoing actions to leverage our
competitive advantages and create sustained financial strength, as
well as our initiatives to expand our high-technology product
offerings, both organically and through our acquisition program,
have created an excellent base for future performance. I remain
confident in the ability of our outstanding entrepreneurial
management team to dynamically adjust to changing market
conditions, to capitalize on the wide array of growth opportunities
that arise even in times of crisis and to continue to generate
strong financial performance. Most importantly, I continue to be
truly grateful to our team for their extraordinary efforts to
protect the safety and health of our employees around the
world.”
The Company will host a conference call to discuss its third
quarter results at 1:00 PM (EDT) Wednesday, October 21, 2020. The
toll-free dial-in number to participate in this call is
888-455-0949; International dial-in number is +1-773-799-3973;
Passcode: LAMPO. There will be a replay available until 11:59 PM
(EST) on Saturday, November 21, 2020. The replay numbers are toll
free 800-568-4204; International toll number is +1-203-369-3290;
Passcode: 7183.
A live broadcast as well as a replay can be accessed through the
Investor Relations section of the company’s website at
https://investors.amphenol.com.
Amphenol Corporation is one of the world’s largest designers,
manufacturers and marketers of electrical, electronic and fiber
optic connectors and 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 may include forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which relate to future events and are subject to risks and
uncertainties. The forward-looking statements, which address the
Company’s expected business and financial performance and financial
condition, among other matters, may contain words and terms such
as: “anticipate,” “could,” “believe,” “continue,” “expect,”
“estimate,” “forecast,” “ongoing,” “project,” “seek,” “predict,”
“target,” “will,” “intend,” “plan,” “look ahead,” “optimistic,”
“potential,” “guidance,” “may,” “should,” or “would” and other
words and terms of similar meaning. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain, such as statements about expected earnings, revenues,
growth, liquidity or other financial matters, together with any
forward-looking statements related in any way to the COVID-19
pandemic including its future impact on the Company. Although the
Company believes the expectations reflected in such forward-looking
statements including regarding the fourth quarter and full year
2020 sales and Adjusted Diluted EPS expectations are based upon
reasonable assumptions, the expectations may not be attained or
there may be material deviation. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date on which they are made.
Factors that could cause actual results to differ materially
from these forward-looking statements, include, but are not limited
to, the following: future risks and existing uncertainties
associated with the COVID-19 pandemic, which continues to disrupt
our operations including, depending on the specific location,
government regulations that limit our ability to operate certain of
our facilities at full capacity and to adjust certain costs, travel
restrictions, “work-from-home” orders and the gradual transition
back to the workplace, supplier constraints, supply-chain
interruptions, logistics challenges and limitations, and reduced
demand from certain customers; uncertainties associated with a
protracted economic slowdown that could negatively affect the
financial condition of our customers; uncertainties and volatility
in the global capital markets; political, economic, military and
other risks in countries outside of the United States; the impact
of general economic conditions, geopolitical conditions and U.S.
trade policies, legislation, trade disputes, treaties and tariffs,
including those affecting China, on the Company’s business
operations; risks associated with the improper conduct by any of
our employees, customers, suppliers, distributors or any other
business partners which could impair our business reputation and
financial results and could result in our non-compliance with
anti-corruption laws and regulations of the U.S. government and
various foreign jurisdictions; changes in exchange rates of the
various currencies in which the Company conducts business; the
Company’s ability to obtain a consistent supply of materials, at
stable pricing levels; the Company’s dependence on sales to the
communications industry, which markets are dominated by large
manufacturers and operators who regularly exert significant
pressure on suppliers, including the Company; changes in defense
expenditures in the military market, including the impact of
reductions or changes in the defense budgets of U.S. and foreign
governments; the Company’s ability to compete successfully on the
basis of technology innovation, product quality and performance,
price, customer service and delivery time; the Company’s ability to
continue to conceive, design, manufacture and market new products
and upon continuing market acceptance of its existing and future
product lines; difficulties and unanticipated expenses in
connection with purchasing and integrating newly acquired
businesses, including the potential for the impairment of goodwill
and other intangible assets; events beyond the Company’s control
that could lead to an inability to meet its financial covenants
which could result in a default under the Company’s revolving
credit facility; the Company’s ability to access the capital
markets on favorable terms, including as a result of significant
deterioration of general economic or capital market conditions, or
as a result of a downgrade in the Company’s credit rating; changes
in interest rates; government contracting risks that the Company
may be subject to, including laws and regulations governing
performance of U.S. government contracts and related risks
associated with conducting business with the U.S. government or its
suppliers (both directly and indirectly); governmental export and
import controls that certain of our products may be subject to,
including export licensing, customs regulations, economic sanctions
or other laws; cybersecurity threats or incidents that could arise
on our information technology systems which could disrupt business
operations and adversely impact our reputation and operating
results and potentially lead to litigation and/or governmental
investigations; changes in fiscal and tax policies, audits and
examinations by taxing authorities, laws, regulations and guidance
in the United States and foreign jurisdictions, including related
interpretations of certain provisions of the U.S. Tax Cuts and Jobs
Act of 2017 any difficulties in protecting the Company’s
intellectual property rights; and litigation, customer claims,
product recalls, governmental investigations, criminal liability or
environmental matters including changes to laws and regulations to
which the Company may be subject. In addition, the extent to which
the COVID-19 pandemic will continue to impact our business and
financial results going forward will be dependent on future
developments such as the length and severity of the crisis, the
potential resurgence of the crisis, future government regulations
in response to the crisis and the overall impact of the COVID-19
pandemic on the global economy and capital markets, among many
other factors, all of which remain highly uncertain and
unpredictable.
A further description of these uncertainties and other risks can
be found in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2019, Quarterly Reports on Form 10-Q and the
Company’s other reports filed with the Securities and Exchange
Commission. These or other uncertainties may cause the Company’s
actual future results to be materially different from those
expressed in any forward-looking statements. The Company undertakes
no obligation to update or revise any forward-looking statements
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 measures,
including Adjusted Operating Income, Adjusted Operating Margin,
Adjusted Net Income attributable to Amphenol Corporation, Adjusted
Effective Tax Rate and Adjusted Diluted EPS (collectively,
“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 in the presentation of the non-GAAP financial measures in
any period may consist of, without limitation, acquisition-related
expenses, refinancing-related costs and certain discrete tax items
including but not limited to the excess tax benefits related to
stock-based compensation as well as the impact of significant
changes in tax law. 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 in the
tables at the end of this press release.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(dollars and shares in
millions, except per share data
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Net sales
$
2,323.4
$
2,100.6
$
6,172.9
$
6,074.4
Cost of sales
1,588.5
1,438.7
4,274.4
4,137.1
Gross profit
734.9
661.9
1,898.5
1,937.3
Acquisition-related expenses
—
—
—
25.4
Selling, general and administrative
expenses
259.1
248.3
748.4
722.5
Operating income
475.8
413.6
1,150.1
1,189.4
Interest expense
(28.0)
(29.7)
(87.1)
(89.5)
Loss on early extinguishment of debt
—
(14.3)
—
(14.3)
Other income, net
1.0
4.5
3.4
7.6
Income before income taxes
448.8
374.1
1,066.4
1,093.2
Provision for income taxes (1)
(99.3)
(91.8)
(213.3)
(250.0)
Net income
349.5
282.3
853.1
843.2
Less: Net income attributable to
noncontrolling interests
(2.9)
(2.0)
(6.7)
(6.9)
Net income attributable to Amphenol
Corporation
$
346.6
$
280.3
$
846.4
$
836.3
Net income per common share - Basic
$
1.16
$
0.95
$
2.84
$
2.81
Weighted average common shares outstanding
- Basic
298.8
296.6
297.6
297.6
Net income per common share - Diluted
(2)
$
1.12
$
0.92
$
2.76
$
2.72
Weighted average common shares outstanding
- Diluted
308.2
306.2
306.2
307.8
________________________________
Note 1
Provision for income taxes for the three
months ended September 30, 2020 and 2019 includes excess tax
benefits related to stock-based compensation of $10.7 million
($0.03 per share) and $1.6 million ($0.01 per share), respectively.
Provision for income taxes for the nine months ended September 30,
2020 and 2019 includes excess tax benefits related to stock-based
compensation of $28.1 million ($0.09 per share) and $21.3 million
($0.07 per share), respectively. Provision for income taxes for the
nine months ended September 30, 2020 also includes a discrete tax
benefit of $19.9 million ($0.06 per share) related to the
settlements of refund claims in certain non-U.S. jurisdictions and
the resulting adjustments to deferred taxes.
Note 2
Net income per share for the three months
ended September 30, 2020 includes the excess tax benefits related
to stock-based compensation discussed in Note 1. Net income per
share for the three months ended September 30, 2019 includes (i)
the refinancing-related costs of $14.3 million ($12.5 million
after-tax or $0.04 per share) associated with the early
extinguishment of debt, partially offset by (ii) the excess tax
benefits related to stock-based compensation discussed in Note
1.
Net income per share for the nine months
ended September 30, 2020 includes (i) the discrete tax benefit and
(ii) excess tax benefits related to stock-based compensation, each
discussed in Note 1. Net income per share for the nine months ended
September 30, 2019 includes (i) acquisition-related expenses of
$25.4 million ($21.0 million after-tax or $0.07 per share)
comprising of the amortization of $15.7 million related to the
value associated with acquired backlog primarily from the SSI
acquisition, as well as external transaction costs of $9.7 million
and (ii) the refinancing-related costs discussed above, partially
offset by (iii) the excess tax benefits related to stock-based
compensation discussed in Note 1.
Excluding these effects, 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 $1.09 and $0.95 for the three months ended September
30, 2020 and 2019, respectively, and $2.61 and $2.76 for the nine
months ended September 30, 2020 and 2019, respectively.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in millions)
September 30,
December 31,
2020
2019
ASSETS
Current Assets:
Cash and cash equivalents
$
1,420.5
$
891.2
Short-term investments
35.7
17.4
Total cash, cash equivalents and
short-term investments
1,456.2
908.6
Accounts receivable, less allowance for
doubtful accounts of $48.0 and $33.6, respectively
1,880.3
1,736.4
Inventories
1,391.0
1,310.1
Prepaid expenses and other current
assets
309.5
256.1
Total current assets
5,037.0
4,211.2
Property, plant and equipment, less
accumulated depreciation of $1,668.0 and $1,487.2, respectively
1,036.9
999.0
Goodwill
4,955.5
4,867.1
Other intangible assets, net
408.2
442.0
Other long-term assets
316.3
296.2
$
11,753.9
$
10,815.5
LIABILITIES & EQUITY
Current Liabilities:
Accounts payable
$
1,075.9
$
866.8
Accrued salaries, wages and employee
benefits
189.1
171.8
Accrued income taxes
117.4
127.9
Accrued dividends
74.7
74.4
Other accrued expenses
528.7
488.5
Current portion of long-term debt
229.2
403.3
Total current liabilities
2,215.0
2,132.7
Long-term debt, less current portion
3,586.0
3,203.4
Accrued pension and postretirement benefit
obligations
189.4
198.8
Deferred income taxes
253.5
260.4
Other long-term liabilities
404.8
424.0
Equity:
Common stock
0.3
0.3
Additional paid-in capital
1,938.1
1,683.3
Retained earnings
3,587.1
3,348.4
Treasury stock, at cost
(96.9)
(70.8)
Accumulated other comprehensive loss
(388.4)
(430.9)
Total shareholders’ equity attributable to
Amphenol Corporation
5,040.2
4,530.3
Noncontrolling interests
65.0
65.9
Total equity
5,105.2
4,596.2
$
11,753.9
$
10,815.5
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in millions)
Nine Months Ended
September 30,
2020
2019
Cash from operating activities:
Net income
$
853.1
$
843.2
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
218.0
235.4
Stock-based compensation expense
51.0
46.4
Loss on early extinguishment of debt
—
14.3
Deferred income tax benefit
(5.8)
(37.5)
Net change in components of working
capital
38.6
(27.1)
Net change in other long-term assets and
liabilities
(3.9)
3.5
Net cash provided by operating
activities
1,151.0
1,078.2
Cash from investing activities:
Capital expenditures
(204.8)
(223.0)
Proceeds from disposals of property, plant
and equipment
10.8
7.1
Purchases of short-term investments
(89.3)
(48.5)
Sales and maturities of short-term
investments
71.1
44.6
Acquisitions, net of cash acquired
(50.3)
(891.2)
Net cash used in investing activities
(262.5)
(1,111.0)
Cash from financing activities:
Proceeds from issuance of senior notes
942.3
1,398.8
Repayments of senior notes and other
long-term debt
(402.9)
(1,111.2)
Borrowings under credit facilities
1,567.4
—
Repayments under credit facilities
(1,568.1)
—
(Repayments) borrowings under commercial
paper programs, net
(385.9)
137.2
Payment of costs related to debt
financing
(8.7)
(14.9)
Payment of premiums and fees related to
early extinguishment of debt
—
(13.4)
Payment of acquisition-related contingent
consideration
(75.0)
—
Payment of deferred purchase price related
to an acquisition
(16.2)
—
Proceeds from exercise of stock
options
256.6
146.3
Distributions to and purchases of
noncontrolling interests
(11.5)
(25.0)
Purchase of treasury stock
(459.2)
(558.7)
Dividend payments
(223.0)
(205.5)
Net cash used in financing activities
(384.2)
(246.4)
Effect of exchange rate changes on cash
and cash equivalents
25.0
(30.8)
Net change in cash and cash
equivalents
529.3
(310.0)
Cash and cash equivalents balance,
beginning of period
891.2
1,279.3
Cash and cash equivalents balance, end of
period
$
1,420.5
$
969.3
Cash paid for:
Interest
$
74.5
$
81.8
Income taxes, net
262.9
333.2
AMPHENOL CORPORATION
SEGMENT INFORMATION
(Unaudited)
(dollars in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Net
sales:
Interconnect Products and Assemblies
$
2,221.9
$
2,000.8
$
5,899.4
$
5,789.0
Cable Products and Solutions
101.5
99.8
273.5
285.4
Consolidated Net sales
$
2,323.4
$
2,100.6
$
6,172.9
$
6,074.4
Operating
income:
Interconnect Products and Assemblies
$
498.4
$
433.9
$
1,217.6
$
1,272.4
Cable Products and Solutions
10.9
10.2
25.7
29.3
Stock-based compensation expense
(19.0)
(16.6)
(51.0)
(46.4)
Acquisition-related expenses
—
—
—
(25.4)
Other operating expenses
(14.5)
(13.9)
(42.2)
(40.5)
Consolidated Operating income
$
475.8
$
413.6
$
1,150.1
$
1,189.4
Operating margin
(%):
Interconnect Products and Assemblies
22.4%
21.7%
20.6%
22.0%
Cable Products and Solutions
10.7%
10.2%
9.4%
10.3%
Stock-based compensation expense
-0.8%
-0.8%
-0.8%
-0.8%
Acquisition-related expenses
0.0%
0.0%
0.0%
-0.4%
Other operating expenses
-0.6%
-0.7%
-0.7%
-0.7%
Consolidated Operating margin (%)
20.5%
19.7%
18.6%
19.6%
AMPHENOL CORPORATION
SUPPLEMENTAL FINANCIAL
INFORMATION
RECONCILIATIONS 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 in the
presentation of these non-GAAP financial measures in any period may
consist of, without limitation, acquisition-related expenses,
refinancing-related costs, and certain discrete tax items including
but not limited to (i) the excess tax benefits related to
stock-based compensation and (ii) the impact of significant changes
in tax law. 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. Such
non-GAAP financial measures should be read in conjunction with the
Company’s financial statements presented in accordance with U.S.
GAAP.
The following are reconciliations of
non-GAAP financial measures to the most directly comparable U.S.
GAAP financial measures for the periods presented:
Three Months Ended September
30,
2020
2019
Net Income
Net Income
attributable
Effective
attributable
Effective
Operating
Operating
to Amphenol
Tax
Diluted
Operating
Operating
to Amphenol
Tax
Diluted
Income
Margin (1)
Corporation
Rate (1)
EPS
Income
Margin (1)
Corporation
Rate (1)
EPS
Reported (GAAP)
$
475.8
20.5
%
$
346.6
22.1
%
$
1.12
$
413.6
19.7
%
$
280.3
24.5
%
$
0.92
Loss on early extinguishment of debt
-
-
-
-
-
-
-
12.5
(0.4)
0.04
Excess tax benefits related to stock-based
compensation
-
-
(10.7)
2.4
(0.03)
-
-
(1.6)
0.4
(0.01)
Adjusted (non-GAAP) (2)
$
475.8
20.5
%
$
335.9
24.5
%
$
1.09
$
413.6
19.7
%
$
291.2
24.5
%
$
0.95
Nine Months Ended September
30,
2020
2019
Net Income
Net Income
attributable
Effective
attributable
Effective
Operating
Operating
to Amphenol
Tax
Diluted
Operating
Operating
to Amphenol
Tax
Diluted
Income
Margin (1)
Corporation
Rate (1)
EPS
Income
Margin (1)
Corporation
Rate (1)
EPS
Reported (GAAP)
$
1,150.1
18.6
%
$
846.4
20.0
%
$
2.76
$
1,189.4
19.6
%
$
836.3
22.9
%
$
2.72
Acquisition-related expenses
-
-
-
-
-
25.4
0.4
21.0
(0.2)
0.07
Loss on early extinguishment of debt
-
-
-
-
-
-
-
12.5
(0.1)
0.04
Excess tax benefits related to stock-based
compensation
-
-
(28.1)
2.6
(0.09)
-
-
(21.3)
1.9
(0.07)
Discrete tax item
-
-
(19.9)
1.9
(0.06)
-
-
-
-
-
Adjusted (non-GAAP) (2)
$
1,150.1
18.6
%
$
798.4
24.5
%
$
2.61
$
1,214.8
20.0
%
$
848.5
24.5
%
$
2.76
________________________________
(1)
While the terms “operating margin” and “effective tax rate” are
not considered U.S. GAAP financial measures, for purposes of this
table, we derive the reported (GAAP) measures based on GAAP
results, which serve as the basis for the reconciliation to their
comparable non-GAAP financial measure.
(2)
The definitions of non-GAAP financial measures used are 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
specific tax effects that are not directly related to the Company’s
operating performance during the periods presented.
Adjusted Effective Tax Rate is
defined as Provision for income taxes (as reported in the Condensed
Consolidated Statements of Income) expressed as a percentage of
Income before income taxes (as reported in the Condensed
Consolidated Statements of Income), each excluding the income and
expenses and their specific 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 in accordance with U.S.
GAAP), excluding income and expenses and their specific 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 Condensed
Consolidated Statements of Income).
AMPHENOL CORPORATION
SUPPLEMENTAL FINANCIAL
INFORMATION
RECONCILIATIONS OF GAAP TO
NON-GAAP FINANCIAL MEASURES - GUIDANCE
(Unaudited)
(dollars in millions, except
per share data)
Management utilizes the non-GAAP financial
measures defined earlier 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. Adjusted Diluted EPS, a
non-GAAP financial measure, excludes income and expenses that are
not directly related to the Company's operating performance during
the periods presented. Items excluded in the presentation of this
non-GAAP financial measure in any period may consist of, without
limitation, acquisition-related expenses, refinancing-related
costs, and certain discrete tax items including but not limited to
(i) the excess tax benefits related to stock-based compensation and
(ii) the impact of significant changes in tax law. Adjusted Diluted
EPS is 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. Such non-GAAP financial
measure should be read in conjunction with the Company’s financial
statements presented in accordance with U.S. GAAP.
The following are reconciliations of
current guidance for GAAP Diluted earnings per share (Diluted EPS)
to Adjusted Diluted EPS (non-GAAP) for both the fourth quarter and
the full year 2020:
GUIDANCE (1)
FOURTH QUARTER 2020
FULL YEAR 2020
Diluted EPS (GAAP)
$0.98 - $1.00
$3.74 - $3.76
Excess tax benefits related to stock-based
compensation
-
($0.09)
Discrete tax item
-
($0.06)
Adjusted Diluted EPS (non-GAAP)
$0.98 - $1.00
$3.59 - $3.61
________________________________
(1)
Forward-looking Adjusted Diluted EPS
reflected in our guidance excludes certain income and expenses,
described above, that are not directly related to the Company's
operating performance. Such items are excluded from our guidance
for the forward-looking periods only to the extent that such items
have either (i) already been reflected in periods reported and are
therefore included in the forward-looking full-year period or (ii)
the Company reasonably expects to record such items in the
forward-looking periods presented and such amounts are estimable.
As the Company has not identified any estimable items in the
forward-looking periods presented, the reconciling items shown
above for the full year 2020 guidance only reflect the impact of
the items that were recognized during the nine months ended
September 30, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201021005230/en/
Craig A. Lampo Senior Vice President and Chief Financial Officer
203-265-8625 www.amphenol.com
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