Fourth Quarter 2021 Highlights:
- Record sales of $3.027 billion, up 25% in U.S. dollars and 18%
organically compared to the fourth quarter 2020
- Record GAAP diluted EPS of $0.72, up 26% compared to prior
year
- Record Adjusted Diluted EPS of $0.70, up 23% compared to prior
year
- GAAP and Adjusted Operating Margin of 19.6% and 20.1%
- Record Operating and Free Cash Flow of $464 million and $379
million
- Acquired Halo Technology and completed the MTS Test &
Simulation sale
Full Year 2021 Highlights:
- Record sales of $10.876 billion, up 26% in U.S. dollars and 18%
organically compared to the full year 2020
- Record GAAP diluted EPS of $2.51, up 28% compared to prior
year
- Record Adjusted Diluted EPS of $2.48, up 33% compared to prior
year
- GAAP and Adjusted Operating Margin of 19.4% and 20.0%
- Operating Cash Flow and Free Cash Flow of $1.524 billion and
$1.167 billion
- Completed seven acquisitions
- Returned more than $1 billion to shareholders
Amphenol Corporation (NYSE: APH) today reported fourth quarter
and full year 2021 results.
“We are pleased to have closed 2021 with fourth quarter sales
and Adjusted Diluted EPS significantly exceeding the high end of
our guidance,” said Amphenol President and Chief Executive Officer,
R. Adam Norwitt. “Sales increased from prior year by a strong 25%
in the quarter, with particularly robust growth in the IT data
communications, industrial, mobile networks, commercial air,
automotive and broadband markets, including contributions from the
Company’s acquisition program. For the full year, sales increased
26% compared to 2020, driven by strong growth across virtually all
end markets, including contributions from the Company’s acquisition
program. Despite facing substantial inflationary pressures and
supply chain disruptions, full year Adjusted Diluted EPS grew by an
impressive 33%. We are very proud of the Company’s outstanding
performance in this most challenging and dynamic year.”
“Throughout the year, we continued to deploy our financial
strength in a variety of ways to increase shareholder value. During
the fourth quarter, the Company purchased 2.1 million shares of its
common stock for $171 million and paid dividends of $87 million,
resulting in total capital returned to shareholders in 2021 of more
than $1 billion.”
“We remain focused on expanding our growth opportunities through
a deep commitment to developing enabling technologies for customers
in all markets, an ongoing strategy of market and geographic
diversification and an active and successful acquisition program.
To that end, we were excited to have announced on December 1, 2021,
the acquisition of Halo Technology Limited, as well as the closing
of the sale of the MTS Test & Simulation business to Illinois
Tool Works Inc. (NYSE: ITW). With the closing of the Halo
acquisition, we successfully completed seven acquisitions in 2021.
These new companies have broadened our high-technology product
offering, expanded our position across most of our end markets and
deepened our pool of talented, entrepreneurial managers around the
world.”
Creation of Three New Divisions
Effective January 1, 2022, Amphenol aligned its business units
into three newly formed Divisions: Harsh Environment Solutions
(HES), Communications Solutions (CS), and Interconnect and Sensor
Systems (ISS). This new alignment reinforces the Company’s
entrepreneurial culture and the clear accountability of each of our
business unit general managers, while enhancing the scalability of
Amphenol’s business for the future. Beginning with the first
quarter of 2022, the Company will report the financial results of
these three new Divisions as separate reportable segments,
replacing the Company’s previous two reportable segments. We will
provide the results of these new reportable segments, as well as
comparable historical financial data, with our first quarter 2022
results.
First Quarter 2022 Outlook
The current market environment remains highly uncertain, with
continued supply chain and inflationary challenges as well as
potential new disruptions from the recent resurgence of Covid-19.
Assuming conditions do not meaningfully worsen and assuming
constant exchange rates, for the first quarter of 2022, Amphenol
expects sales to be in the range of $2.690 billion to $2.750
billion, representing 13% to 16% growth over the first quarter of
2021, and Adjusted Diluted EPS in the range of $0.59 to $0.61,
representing 13% to 17% growth over the first quarter of 2021.
“Despite the ongoing challenges and uncertainties, we continue
to face around the world, we are very pleased with the platform of
strength that has been created by the Company’s superior
performance in 2021,” Mr. Norwitt continued. “The revolution in
electronics is accelerating, thereby creating exciting and dynamic
long-term growth opportunities for Amphenol across each of our
diversified end markets. Indeed, the last two pandemic-impacted
years have revealed more than ever before the importance of
innovative, new electronic applications. We believe these
opportunities will enable a further, long-term increase in the
demand for our expanding range of high-technology interconnect,
sensor and antenna products. Our ongoing drive to leverage our
competitive advantages and create sustained financial strength, as
well as our initiatives to expand our product offerings, both
organically and through our acquisition program, have created an
excellent base for the Company’s future performance. In addition,
we continue to take steps to further scale our unique,
entrepreneurial organization to support the Company’s long-term
growth potential, including the alignment of our business units
into three new Divisions. I am confident in the ability of our
outstanding entrepreneurial management team to continue to
dynamically adjust to changing market conditions, to capitalize on
the wide array of growth opportunities that arise in all market
cycles and to continue to generate sustainable long-term value for
our shareholders and other stakeholders. Most importantly, I remain
truly grateful to our team for their extraordinary efforts to
protect the safety and health of our employees around the world
throughout the ongoing pandemic, all while continuing to strongly
support our customers and drive outstanding operating
performance.”
Conference Call and Webcast Details
The Company will host a conference call to discuss its fourth
quarter and full year results at 1:00 PM (EST) Wednesday, January
26, 2022. The toll-free dial-in number to participate in the 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, February 26, 2022. The replay numbers are toll
free 888-282-0036; International toll number +1-203-369-3022;
Passcode: 7183.
A live broadcast as well as a replay of the call can be accessed
through the Investor Relations section of the company’s website at
https://investors.amphenol.com.
About Amphenol
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. For more information, visit www.amphenol.com.
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” or “U.S. GAAP”).
This press release also contains certain non-GAAP financial
measures, including Adjusted Operating Income, Adjusted Operating
Margin, Adjusted Net Income from continuing operations attributable
to Amphenol Corporation, Adjusted Effective Tax Rate, Adjusted
Diluted EPS (from continuing operations), Organic Sales Growth, and
Free Cash Flow (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, in addition to the reasons
noted later within this press release. Non-GAAP financial measures
related to operating income, operating margin, net income from
continuing operations attributable to Amphenol Corporation,
effective tax rate and diluted EPS (from continuing operations)
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. All non-GAAP
financial measures and their most directly comparable U.S. GAAP
financial measures presented within this press release are on a
continuing operations basis only and exclude any results associated
with discontinued operations. Non-GAAP financial measures related
to net sales exclude the impact related to foreign currency
exchange and acquisitions. 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 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 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 U.S. GAAP.
Forward-Looking Statements
This press release may include forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and the provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements are based on our
management’s assumptions and beliefs about future events or
circumstances using information currently available, and as a
result, they are subject to risks and uncertainties.
Forward-looking statements address events or developments that
Amphenol Corporation expects or believes may or will occur in the
future. These 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,” “believe,” “continue,” “could,” “estimate,”
“expect,” “forecast,” “guidance,” “intend,” “look ahead,” “may,”
“ongoing,” “optimistic,” “plan,” “potential,” “predict,” “project,”
“seek,” “should,” “target,” “will” 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, effective tax rate or other 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 all forward-looking
statements, including those regarding first quarter 2022 sales and
Adjusted Diluted EPS, among other matters, are based upon
reasonable assumptions, the expectations may not be attained or
there may be material deviation. Readers and investors are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are
made.
There are risks and uncertainties that could cause actual
results to differ materially from these forward-looking statements,
which include, but are not limited to, the following: political,
economic, military and other risks related to operating in
countries outside the United States, as well as changes in general
economic conditions, geopolitical conditions, U.S. trade policies
and other factors beyond the Company’s control; future risks and
existing uncertainties associated with adverse public health
developments, including epidemics and pandemics such as the
COVID-19 pandemic, which continues to disrupt our operations
including, depending on the specific location, government
regulations that inhibit our ability to operate certain of our
facilities in the ordinary course, travel restrictions, supplier
constraints, supply-chain interruptions, logistics challenges and
limitations, labor disruptions and reduced demand from certain
customers; uncertainties associated with a protracted economic
slowdown that could negatively affect the financial condition of
our customers; risks associated with our inability to obtain
certain raw materials and components in the current challenging
supply chain environment, as well as the risk that the cost of most
of the Company’s raw materials and components is increasing;
negative impacts caused by extreme weather conditions and natural
catastrophic events, including those caused by climate change and
global warming; 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; risks
associated with write-downs related to inventories that may become
obsolete or for which we may have supply in excess of anticipated
demand, as well as long-lived assets for which events or
circumstances may arise that could indicate impairment; the risks
associated with the Company’s dependence on attracting, recruiting,
hiring and retaining skilled employees, including as part of our
various management teams; 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; risks and difficulties in trying to compete
successfully on the basis of technology innovation, product quality
and performance, price, customer service and delivery time;
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 and other covenants, which could
result in a default under the Company’s revolving credit facility;
risks associated with the Company’s inability to access the global
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; cybersecurity threats, including but not limited to
malware, phishing, credential harvesting, ransomware and other
increasingly sophisticated attacks, that could impair our
information technology systems and could disrupt business
operations, result in the loss of or inability to access
confidential information and critical business, financial or other
data, and/or cause the release of highly sensitive confidential
information, any of which could adversely impact our reputation and
operating results and potentially lead to litigation and/or
governmental investigations and fines; government contracting risks
that the Company may be subject to, including laws and regulations
governing performance of government contracts and related risks
associated with conducting business with the U.S. and other foreign
government or their 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 and other laws; changes in fiscal
and tax policies, audits and examinations by taxing authorities,
laws, regulations and guidance in the United States and foreign
jurisdictions; any difficulties in protecting the Company’s
intellectual property rights; 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; and incremental costs and other
risks that may arise in connection with regulatory efforts to
combat the negative effects of climate change. 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 impact of the recent resurgence of the crisis due to the
Omicron variant as well as any additional future resurgences from
known or new variants, future government regulations and actions in
response to the crisis, the timing, availability, effectiveness and
adoption rates of vaccines and treatments, 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, 2020, 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.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(dollars and shares in
millions, except per share data)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2021
2020
2021
2020
Net sales
$
3,026.8
$
2,426.0
$
10,876.3
$
8,598.9
Cost of sales
2,085.6
1,660.4
7,474.5
5,934.8
Gross profit
941.2
765.6
3,401.8
2,664.1
Acquisition-related expenses
15.0
11.5
70.4
11.5
Selling, general and administrative
expenses
333.3
265.7
1,226.3
1,014.2
Operating income
592.9
488.4
2,105.1
1,638.4
Interest expense
(28.8)
(28.3)
(115.5)
(115.4)
Other (expense) income, net
(0.1)
0.1
(0.4)
3.6
Income from continuing operations before
income taxes
564.0
460.2
1,989.2
1,526.6
Provision for income taxes (1)
(106.3)
(100.0)
(409.1)
(313.3)
Net income from continuing operations
457.7
360.2
1,580.1
1,213.3
Less: Net income from continuing
operations attributable to noncontrolling interests
(3.8)
(3.2)
(10.7)
(9.9)
Net income from continuing operations
attributable to Amphenol Corporation
453.9
357.0
1,569.4
1,203.4
Income from discontinued operations
attributable to Amphenol Corporation, net of income taxes of ($1.4)
and ($3.2) for 2021, respectively
11.1
—
21.4
—
Net income attributable to Amphenol
Corporation
$
465.0
$
357.0
$
1,590.8
$
1,203.4
Net income per
common share attributable to Amphenol Corporation —
Basic:
Continuing operations
$
0.76
$
0.60
$
2.62
$
2.02
Discontinued operations, net of income
taxes
0.02
—
0.04
—
Net income attributable to Amphenol
Corporation - Basic
$
0.78
$
0.60
$
2.66
$
2.02
Weighted average common shares outstanding
- Basic
598.1
598.5
597.9
596.1
Net income per
common share attributable to Amphenol Corporation —
Diluted:
Continuing operations (2)
$
0.72
$
0.57
$
2.51
$
1.96
Discontinued operations, net of income
taxes
0.02
—
0.03
—
Net income attributable to Amphenol
Corporation - Diluted (2)
$
0.74
$
0.57
$
2.54
$
1.96
Weighted average common shares outstanding
- Diluted
628.2
622.5
625.5
615.0
Dividends declared per common share
$
0.20
$
0.145
$
0.635
$
0.52
___________________________________________ Note: Per share amounts
may not add due to rounding.
Note 1
Provision for income taxes for
the three months ended December 31, 2021 and 2020 includes excess
tax benefits related to stock-based compensation of $29.2 million
($0.05 per share) and $14.8 million ($0.02 per share),
respectively.
Provision for income taxes for
the twelve months ended December 31, 2021 and 2020 includes excess
tax benefits related to stock-based compensation of $63.4 million
($0.10 per share) and $42.8 million ($0.07 per share),
respectively. Provision for income taxes for the twelve months
ended December 31, 2021 also includes a discrete tax benefit of
$14.9 million ($0.02 per share) related to the settlement of
uncertain tax positions in certain non-U.S. jurisdictions.
Provision for income taxes for the twelve months ended December 31,
2020 also includes a discrete tax benefit of $19.9 million ($0.03
per share) related to the settlements of refund claims in a
non-U.S. jurisdiction and the resulting adjustments to deferred
taxes.
Note 2
Net income per share for the
three months ended December 31, 2021 and 2020 includes the excess
tax benefits related to stock-based compensation discussed in Note
1. Net income per share for the three months ended December 31,
2021 also includes acquisition-related expenses of $15.0 million
($12.7 million after-tax, or $0.02 per share) comprised primarily
of transaction costs and certain non-cash purchase accounting costs
related to the acquisition of Halo Technology Limited, which closed
during the fourth quarter of 2021. Net income per share for the
three months ended December 31, 2020 also included
acquisition-related expenses of $11.5 million ($10.7 million
after-tax or $0.02 per share) comprised primarily of external
transaction costs related to acquisitions that were announced or
closed.
Net income per share for the
twelve months ended December 31, 2021 and 2020 includes (i) the
excess tax benefits related to stock-based compensation and (ii)
the respective discrete tax benefits, all of which are discussed in
Note 1. Net income per share for the twelve months ended December
31, 2021 also includes acquisition-related expenses of $70.4
million ($57.3 million after-tax, or $0.09 per share) comprised
primarily of transaction, severance, restructuring and certain
non-cash purchase accounting costs related to the MTS acquisition,
along with the acquisition-related expenses incurred during the
fourth quarter of 2021, discussed above. Net income per share for
the twelve months ended December 31, 2020 also included the
acquisition-related expenses incurred in the fourth quarter of
2020, as discussed above.
Excluding these effects and the
impact of rounding, 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 $0.70 and $0.57 for
the three months ended December 31, 2021 and 2020, respectively,
and $2.48 and $1.87 for the twelve months ended December 31, 2021
and 2020, respectively.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in millions)
December 31,
December 31,
2021
2020
ASSETS
Current Assets:
Cash and cash equivalents
$
1,197.1
$
1,702.0
Short-term investments
44.3
36.1
Total cash, cash equivalents and
short-term investments
1,241.4
1,738.1
Accounts receivable, less allowance for
doubtful accounts of $43.5 and $44.8, respectively
2,454.8
1,951.6
Inventories
1,894.1
1,462.2
Prepaid expenses and other current
assets
367.9
338.9
Total current assets
5,958.2
5,490.8
Property, plant and equipment, less
accumulated depreciation of $1,961.6 and $1,738.6, respectively
1,175.3
1,054.6
Goodwill
6,376.8
5,032.1
Other intangible assets, net
756.9
397.5
Other long-term assets
411.2
352.3
Total Assets
$
14,678.4
$
12,327.3
LIABILITIES, REDEEMABLE NONCONTROLLING
INTEREST AND EQUITY
Current Liabilities:
Accounts payable
$
1,312.0
$
1,120.7
Accrued salaries, wages and employee
benefits
366.2
291.0
Accrued income taxes
88.8
112.6
Accrued dividends
119.8
86.8
Other accrued expenses
556.3
462.9
Current portion of long-term debt
4.0
230.3
Total current liabilities
2,447.1
2,304.3
Long-term debt, less current portion
4,795.9
3,636.2
Accrued pension and postretirement benefit
obligations
193.4
228.6
Deferred income taxes
424.2
299.1
Other long-term liabilities
438.7
407.2
Total Liabilities
8,299.3
6,875.4
Redeemable noncontrolling interest
19.0
—
Equity:
Common stock
0.6
0.6
Additional paid-in capital
2,409.0
2,068.1
Retained earnings
4,278.9
3,705.4
Treasury stock, at cost
(100.0)
(111.1)
Accumulated other comprehensive loss
(286.5)
(278.1)
Total stockholders’ equity attributable to
Amphenol Corporation
6,302.0
5,384.9
Noncontrolling interests
58.1
67.0
Total Equity
6,360.1
5,451.9
Total Liabilities, Redeemable
Noncontrolling Interest and Equity
$
14,678.4
$
12,327.3
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2021
2020
2021
2020
Cash from operating
activities:
Net income from continuing operations
$
457.7
$
360.2
$
1,580.1
$
1,213.3
Adjustments to reconcile net income from
continuing operations to cash provided by operating activities from
continuing operations:
Depreciation and amortization
121.1
90.1
395.6
308.1
Stock-based compensation expense
22.7
19.5
83.0
70.5
Deferred income tax (benefit)
provision
(54.5)
36.6
(29.6)
30.8
Net change in components of working
capital
(82.3)
(77.5)
(496.4)
(38.9)
Net change in other long-term assets and
liabilities
(1.2)
12.1
(8.8)
8.2
Net cash provided by operating activities
from continuing operations
463.5
441.0
1,523.9
1,592.0
Net cash provided by operating activities
from discontinued operations
7.1
—
16.2
—
Net cash provided by operating
activities
470.6
441.0
1,540.1
1,592.0
Cash from investing
activities:
Capital expenditures
(86.2)
(72.0)
(360.4)
(276.8)
Proceeds from disposals of property, plant
and equipment
1.3
1.9
3.7
12.7
Purchases of short-term investments
(36.5)
(52.3)
(164.5)
(141.6)
Sales and maturities of short-term
investments
26.6
52.1
155.9
123.2
Acquisitions, net of cash acquired
(694.4)
(0.1)
(2,225.4)
(50.4)
Other
(5.2)
(0.6)
(13.7)
(0.6)
Net cash used in investing activities from
continuing operations
(794.4)
(71.0)
(2,604.4)
(333.5)
Net cash provided by investing activities
from discontinued operations
721.6
—
716.9
—
Net cash used in investing activities
(72.8)
(71.0)
(1,887.5)
(333.5)
Cash from financing
activities:
Proceeds from issuance of senior notes and
other long-term debt
2.2
—
752.1
942.3
Repayments of senior notes and other
long-term debt
(296.4)
(1.5)
(912.6)
(404.4)
Borrowings under credit facilities
—
—
—
1,567.4
Repayments under credit facilities
—
—
—
(1,568.1)
(Repayments) borrowings under commercial
paper programs, net
(128.7)
0.1
796.3
(385.8)
Payment of costs related to debt
financing
(3.2)
—
(9.3)
(8.7)
Payment of acquisition-related contingent
consideration
—
—
—
(75.0)
Payment of deferred purchase price related
to acquisitions
—
—
(4.1)
(16.2)
Purchase of treasury stock
(170.7)
(182.1)
(661.7)
(641.3)
Proceeds from exercise of stock
options
107.6
129.1
288.5
385.7
Distributions to and purchases of
noncontrolling interests
(7.6)
(3.4)
(18.9)
(14.9)
Dividend payments
(86.7)
(74.6)
(346.7)
(297.6)
Transfers to discontinued operations
—
—
(28.7)
—
Net cash used in financing activities from
continuing operations
(583.5)
(132.4)
(145.1)
(516.6)
Net cash used in financing activities from
discontinued operations
—
—
(0.1)
—
Net cash used in financing activities
(583.5)
(132.4)
(145.2)
(516.6)
Effect of exchange rate changes on cash
and cash equivalents
3.2
43.9
(12.3)
68.9
Net (decrease) increase in cash and cash
equivalents
(182.5)
281.5
(504.9)
810.8
Cash and cash equivalents balance of
continuing operations, beginning of period
1,268.1
1,420.5
1,702.0
891.2
Cash and cash equivalents included in
Current assets held for sale, beginning of period
111.5
—
—
—
Cash and cash equivalents balance, end of
period
$
1,197.1
$
1,702.0
$
1,197.1
$
1,702.0
Less: Cash and cash equivalents included
in Current assets held for sale, end of period
—
—
—
—
Cash and cash equivalents balance of
continuing operations, end of period
$
1,197.1
$
1,702.0
$
1,197.1
$
1,702.0
Cash paid for:
Interest
$
33.1
$
30.2
$
111.9
$
104.8
Income taxes, net
140.2
74.4
445.6
337.3
AMPHENOL CORPORATION
SEGMENT INFORMATION
(Unaudited)
(dollars in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2021
2020
2021
2020
Net
sales:
Interconnect Products and Assemblies
$
2,910.4
$
2,330.5
$
10,430.9
$
8,229.9
Cable Products and Solutions
116.4
95.5
445.4
369.0
Consolidated Net sales
$
3,026.8
$
2,426.0
$
10,876.3
$
8,598.9
Operating
income:
Interconnect Products and Assemblies
$
644.5
$
523.6
$
2,296.8
$
1,741.2
Cable Products and Solutions
2.8
9.8
22.8
35.4
Stock-based compensation expense
(22.7)
(19.5)
(83.0)
(70.5)
Acquisition-related expenses
(15.0)
(11.5)
(70.4)
(11.5)
Other operating expenses
(16.7)
(14.0)
(61.1)
(56.2)
Consolidated Operating income
$
592.9
$
488.4
$
2,105.1
$
1,638.4
Operating margin
(%):
Interconnect Products and Assemblies
22.1%
22.5%
22.0%
21.2%
Cable Products and Solutions
2.4%
10.3%
5.1%
9.6%
Stock-based compensation expense
-0.8%
-0.8%
-0.8%
-0.8%
Acquisition-related expenses
-0.5%
-0.5%
-0.6%
-0.1%
Other operating expenses
-0.6%
-0.6%
-0.6%
-0.7%
Consolidated Operating margin (%)
19.6%
20.1%
19.4%
19.1%
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. Non-GAAP
financial measures related to net sales exclude the impact of
foreign currency exchange rates and acquisitions. Non-GAAP
financial measures related to operating income, operating margin,
net income attributable to Amphenol Corporation, effective tax rate
and diluted EPS exclude income and expenses that are not directly
related to the Company’s operating performance during the periods
presented. Items excluded from such 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. All non-GAAP financial measures and their most directly
comparable U.S. GAAP financial measures presented in the following
tables are on a continuing operations basis only and exclude any
results associated with discontinued operations. 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:
NET
SALES
Percentage Growth (relative to
same prior year period) (1)
Net sales
Foreign
Constant
Organic
growth in
currency
Currency Net
Acquisition
Net Sales
U.S. Dollars (2)
impact (3)
Sales Growth (5)
impact (4)
Growth (5)
Three Months
Ended December 31:
2021
2020
(GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
Net sales
by:
Segment:
Interconnect Products and Assemblies
$
2,910.4
$
2,330.5
25
%
—
%
25
%
7
%
18
%
Cable Products and Solutions
116.4
95.5
22
%
(1)
%
23
%
6
%
17
%
Consolidated
$
3,026.8
$
2,426.0
25
%
—
%
25
%
7
%
18
%
Twelve Months
Ended December 31:
Net sales
by:
Segment:
Interconnect Products and Assemblies
$
10,430.9
$
8,229.9
27
%
2
%
25
%
6
%
19
%
Cable Products and Solutions
445.4
369.0
21
%
—
%
20
%
5
%
15
%
Consolidated
$
10,876.3
$
8,598.9
26
%
2
%
25
%
6
%
18
%
___________________________________________
(1)
Percentages in this table were calculated using actual,
unrounded results; therefore, the sum of the components may not add
due to rounding.
(2)
Net sales growth in U.S. dollars is calculated based
on Net sales as reported in the Condensed Consolidated Statements
of Income. While the term “net sales growth in U.S. dollars” is not
considered a U.S. GAAP financial measure, for purposes of this
table, we derive the reported (GAAP) measure based on GAAP results,
which serves as the basis for the reconciliation to its comparable
non-GAAP financial measures.
(3)
Foreign currency translation impact, a non-GAAP
measure, represents the percentage impact on net sales resulting
from foreign currency exchange rate changes in the current
reporting period(s) compared to the same period(s) in the prior
year. Such amount is calculated by subtracting current year net
sales translated at average foreign currency exchange rates for the
respective prior year period(s) from current year reported net
sales, taken as a percentage of the respective prior period net
sales.
(4)
Acquisition impact, a non-GAAP measure, represents
the percentage impact on net sales resulting from acquisitions that
have not been included in the Company's consolidated results for
the full current period(s) and/or prior comparable period(s)
presented. Such net sales related to these acquisitions do not
reflect the underlying growth of the Company on a comparative
basis.
(5)
The following are definitions of certain non-GAAP financial
measures presented in the table(s) above, which may be referred to
within this press release. For purposes of this press release, the
terms “constant currencies” and “organically” have the same meaning
as the following non-GAAP financial measures, respectively:
Constant Currency Net Sales Growth is defined as the
period-over-period percentage change in net sales growth, excluding
the impact of changes in foreign currency exchange rates. The
Company’s results are subject to volatility related to foreign
currency translation fluctuations. As such, management evaluates
the Company’s sales performance based on actual sales growth in
U.S. dollars, as well as Organic Net Sales Growth (defined below)
and Constant Currency Net Sales Growth, and believes that such
information is useful to investors to assess the underlying sales
trends.
Organic Net Sales Growth is defined as the
period-over-period percentage change in net sales growth resulting
from operating volume and pricing changes, and excludes (i) the
foreign currency translation impact, which is outside the control
of the Company, and (ii) the acquisition impact, both as described
above and which do not reflect the underlying growth of the Company
on a comparative basis. Management evaluates the Company’s sales
performance based on actual sales growth in U.S. dollars, as well
as Constant Currency Net Sales Growth (defined above) and Organic
Net Sales Growth, and believes that such information is useful to
investors to assess the underlying sales trends.
AMPHENOL CORPORATION
SUPPLEMENTAL FINANCIAL
INFORMATION
RECONCILIATIONS OF GAAP TO
NON-GAAP FINANCIAL MEASURES (continued)
(Unaudited)
(dollars in millions, except
per share data)
OPERATING RESULTS
Three Months Ended December
31,
2021
2020
Net Income
Net Income
attributable to
Effective
attributable to
Effective
Operating
Operating
Amphenol
Tax
Diluted
Operating
Operating
Amphenol
Tax
Diluted
Income
Margin (i)
Corporation
Rate (i)
EPS
Income
Margin (i)
Corporation
Rate (i)
EPS
Reported (GAAP)
$
592.9
19.6
%
$
453.9
18.8
%
$
0.72
$
488.4
20.1
%
$
357.0
21.7
%
$
0.57
Acquisition-related expenses
15.0
0.5
12.7
(0.2)
0.02
11.5
0.5
10.7
(0.4)
0.02
Excess tax benefits related to stock-based
compensation
—
—
(29.2)
5.2
(0.05)
—
—
(14.8)
3.2
(0.02)
Adjusted (non-GAAP) (ii) (iii)
$
607.9
20.1
%
$
437.4
23.8
%
$
0.70
$
499.9
20.6
%
$
352.9
24.5
%
$
0.57
Twelve Months Ended December
31,
2021
2020
Net Income
Net Income
attributable to
Effective
attributable to
Effective
Operating
Operating
Amphenol
Tax
Diluted
Operating
Operating
Amphenol
Tax
Diluted
Income
Margin (i)
Corporation
Rate (i)
EPS
Income
Margin (i)
Corporation
Rate (i)
EPS
Reported (GAAP)
$
2,105.1
19.4
%
$
1,569.4
20.6
%
$
2.51
$
1,638.4
19.1
%
$
1,203.4
20.5
%
$
1.96
Acquisition-related expenses
70.4
0.6
57.3
(0.2)
0.09
11.5
0.1
10.7
(0.1)
0.02
Excess tax benefits related to stock-based
compensation
—
—
(63.4)
3.2
(0.10)
—
—
(42.8)
2.8
(0.07)
Discrete tax item
—
—
(14.9)
0.7
(0.02)
—
—
(19.9)
1.3
(0.03)
Adjusted (non-GAAP) (ii) (iii)
$
2,175.5
20.0
%
$
1,548.4
24.3
%
$
2.48
$
1,649.9
19.2
%
$
1,151.4
24.5
%
$
1.87
FREE
CASH FLOW
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2021
2020
2021
2020
Operating Cash Flow (GAAP)
$
463.5
$
441.0
$
1,523.9
$
1,592.0
Capital expenditures (GAAP)
(86.2)
(72.0)
(360.4)
(276.8)
Proceeds from disposals of property, plant
and equipment (GAAP)
1.3
1.9
3.7
12.7
Free Cash Flow (non-GAAP) (iii)
$
378.6
$
370.9
$
1,167.2
$
1,327.9
___________________________________________
Note: All data in
the tables above are on a continuing operations basis only and
exclude results associated with discontinued operations.
(i)
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
measures.
(ii)
All percentages and per share
amounts in this table were calculated using actual, unrounded
results; therefore, the sum of the components may not add due to
rounding.
(iii)
The following are definitions of
non-GAAP financial measures presented in the tables above, which
may be referred to within this press release:
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 from
continuing operations attributable to Amphenol Corporation is
defined as Net income from continuing operations 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 from continuing operations before income taxes
(as reported in the Condensed Consolidated Statements of Income),
each 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
defined as diluted earnings per share from continuing operations
(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 from continuing operations attributable to Amphenol
Corporation, as defined above, divided by the weighted average
outstanding diluted shares (as reported in the Condensed
Consolidated Statements of Income).
Free Cash Flow is defined
as (i) Net cash provided by operating activities from continuing
operations (“Operating Cash Flow” - as reported in accordance with
U.S. GAAP) less (ii) capital expenditures (as reported in
accordance with U.S. GAAP), net of proceeds from disposals of
property, plant and equipment (as reported in accordance with U.S.
GAAP), all of which are derived from the Condensed Consolidated
Statements of Cash Flow. Free Cash Flow is an important liquidity
measure for the Company, as we believe it is useful for management
and investors to assess our ability to generate cash, as well as to
assess how much cash can be used to reinvest in the growth of the
Company or to return to shareholders through either stock
repurchases or dividends.
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 from such
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. 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 Company excludes the above items in its guidance for the
upcoming quarter only to the extent that the Company reasonably
expects to record such items in the forward-looking period
presented and such amounts are estimable. As the Company has not
yet identified any such items for the forward-looking period
presented, there are currently no reconciling items for the three
months ended March 31, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220126005249/en/
Sherri Scribner Vice President, Strategy and Investor Relations
203-265-8820 IR@amphenol.com
Amphenol (NYSE:APH)
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