Exhibit 99.1
World Headquarters
358 Hall Avenue
P. O. Box 5030
Wallingford, CT 06492-7530
Telephone (203) 265-8900
FOR IMMEDIATE RELEASE
| For Further Information: |
| Diana G. Reardon |
| Senior Vice President and |
| Chief Financial Officer |
| 203/265-8630 |
| www.amphenol.com |
2005 THIRD QUARTER AND NINE MONTH RESULTS
REPORTED BY AMPHENOL CORPORATION
Wallingford, Connecticut. October 19, 2005. Amphenol Corporation (NYSE-APH) reported today that third quarter 2005 diluted earnings per share increased 21% to $.57 compared to $.47 per share for the comparable 2004 period. Such per share amount for the third quarter of 2005 includes the one-time effects of expenses relating to the early extinguishment of debt of $.02 per share and the one-time benefit of $.02 per share relating to the reduction in the Company’s effective tax rate from 34% to 33% resulting from the repatriation of foreign earnings under the American Jobs Creation Act of 2004. Sales for the third quarter 2005 increased 16% to $446,995,000 compared to $384,103,000 for the 2004 period. Currency translation had the effect of increasing sales by approximately $2.2 million in the third quarter 2005 compared to the 2004 period.
For the nine months ended September 30, 2005, diluted earnings per share was $1.67 compared to $1.31 per share for the 2004 period. Sales for the nine months ended September 30, 2005 were $1,300,032,000 compared to $1,126,483,000 for the 2004 period. Currency translation had the effect of increasing sales by approximately $17.4 million for the nine month 2005 period when compared to the 2004 period.
As previously announced, in the third quarter of 2005, the Company completed a refinancing of its senior credit facilities. In conjunction therewith, the Company incurred one-time expenses for the early extinguishment of debt totaling approximately $2.4 million or $.02 per share after tax. Such one-time expenses include the write-off of unamortized deferred debt issuance costs less the gain on the termination of related interest rate swap agreements. In addition, as noted above the Company has adjusted its effective tax rate from 34% to 33% to reflect the one-time benefit of lower United States taxes on the repatriation of foreign earnings available under the provisions of the American Job Creation Act of 2004. This lowered tax expense in the third quarter by approximately $2.2 million or $.02 per share.
Amphenol Chairman and CEO, Martin H. Loeffler, stated: “I am extremely pleased with our third quarter results. Sales were up 16% compared to last year’s third quarter to a record $446,995,000 and increased sequentially over the record second quarter 2005. An excellent achievement in a seasonally slower quarter. The interconnect products segment of our business, which represents 88% of our sales, was up a strong 18% over last year with excellent profitability. The growth was broad based across all of our end markets and included all major geographic regions. Growth was especially strong in the wireless, military and aerospace and automotive markets. The excellent top line results reflect our continuing development of new application specific solutions and value added products for our customers, our increased worldwide presence with the leading companies in our target markets and acquisitions. The cable products segment of our business, which is primarily for broadband cable television networks and represents 12% of our sales, was up 9% over the prior year.”
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“In addition to excellent overall top line growth, profitability and cash flow continued to be strong. The operating income margin increased from 18.3% a year ago to 19.3% in the third quarter of 2005. This increase was driven by the improved profitability of the interconnect product segment offset in part by lower cable product margins, which continue to be impacted by increasing material and freight related costs. Earnings per share for the quarter increased 21% over last year. Furthermore, net income, that is income after interest expense and taxes, exceeded 11% of sales, another indication of the Company’s excellent profitability. Cash flow from operations was also strong at $67 million for the quarter.”
“Last week the Company announced an agreement to acquire the Connection Systems division of Teradyne, Inc. (NYSE-TER). Teradyne Connection Systems (TCS), a technology leader in high-speed, high-density, printed circuit board interconnect products, is complementary and an excellent strategic fit with Amphenol. The combination of TCS and Amphenol will create the world’s third largest interconnect company and a new expanded platform for creating value. We expect a closing prior to year end.”
“It was a good quarter in all respects. I am very proud of our organization as we continue to execute well. We have a strong position in excellent and diversified markets and continue to increase our presence with the major companies in these markets. Assuming a continuation of the current economic climate and relatively stable currency exchange rates, we expect a strong finish to the year with fourth quarter results in the range of $460 million to $470 million and $.59 to $.61 for sales and EPS, respectively. The guidance
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does not include any effect that may result from the acquisition of TCS. We are very confident that we are in excellent markets with a great organization, and we are very excited about the future.”
The Company will host a conference call to discuss its third quarter results at 1:00 PM (ET) October 19, 2005. The toll free dial-in number to participate in this call is 888-395-9624; International dial-in number 517-623-4547; Passcode: Reardon. There will be a replay available until 5:00 PM (ET) on Friday, October 21, 2005. If you are unable to participate on the call the replay numbers are as follows: the toll free dial-in number is 866-375-1055 and International dial-in replay number is 203-369-0295.
A live broadcast as well as a replay will also be available on the Internet at http://www.amphenol.com/index.cfm/fuseaction/financial.webcasts.
Amphenol Corporation is one of the world’s leading producers of electronic and fiber optic connectors, cable and interconnect systems. Amphenol products are engineered and manufactured in the Americas, Europe and Asia and sold by a worldwide sales and marketing organization. The primary end markets for the Company’s products are communication systems for the converging technologies of voice, video and data communications, industrial/automotive and military/aerospace applications.
Statements in this press release which are other than historical facts are intended to be “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and other related laws. While the Company believes such statements are reasonable, the actual results and effects could
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differ materially from those currently anticipated. Please refer to Part I, Item 1 of the Company’s Form 10-K for the year ended December 31, 2004, for some factors that could cause the actual results to differ from estimates. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise.
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AMPHENOL CORPORATION
FINANCIAL SUMMARY
(Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2005 | | 2004(1) | | 2005 | | 2004(1) | |
| | | | | | | | | |
Sales | | $ | 446,995,000 | | $ | 384,103,000 | | $ | 1,300,032,000 | | $ | 1,126,483,000 | |
Net income | | $ | 52,089,000 | | $ | 41,646,000 | | $ | 150,521,000 | | $ | 117,671,000 | |
Earnings per share – basic | | $ | .59 | | $ | .47 | | $ | 1.70 | | $ | 1.34 | |
Average shares outstanding – basic | | 88,775,405 | | 87,961,000 | | 88,387,769 | | 88,037,522 | |
Earnings per share – diluted | | $ | .57 | | $ | .47 | | $ | 1.67 | | $ | 1.31 | |
Average shares outstanding – diluted | | 90,697,815 | | 89,467,309 | | 90,294,496 | | 89,735,753 | |
(1) Per share and share amounts have been adjusted to reflect the Company’s 2 for 1 stock split effective in March 2004.
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AMPHENOL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands, except per share data)
| | Three months ended
September 30, | | Nine months ended
September 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Net Sales | | $ | 446,995 | | $ | 384,103 | | $ | 1,300,032 | | $ | 1,126,483 | |
Costs and Expenses: | | | | | | | | | |
Cost of sales, excluding depreciation and amortization | | 285,420 | | 250,417 | | 831,266 | | 737,678 | |
| | | | | | | | | |
Depreciation and amortization expense | | 13,064 | | 9,736 | | 36,577 | | 28,902 | |
| | | | | | | | | |
Selling, general and administrative expense | | 62,422 | | 53,647 | | 182,721 | | 159,263 | |
| | | | | | | | | |
Operating income | | 86,089 | | 70,303 | | 249,468 | | 200,640 | |
| | | | | | | | | |
Interest expense | | (5,548 | ) | (5,597 | ) | (16,726 | ) | (17,025 | ) |
Other expenses, net | | (2,624 | ) | (1,607 | ) | (5,686 | ) | (5,326 | ) |
Refinancing costs | | (2,398 | ) | 0 | | (2,398 | ) | 0 | |
| | | | | | | | | |
Income before income taxes | | 75,519 | | 63,099 | | 224,658 | | 178,289 | |
| | | | | | | | | |
Provision for income taxes | | (23,430 | ) | (21,453 | ) | (74,137 | ) | (60,618 | ) |
| | | | | | | | | |
Net income | | $ | 52,089 | | $ | 41,646 | | $ | 150,521 | | $ | 117,671 | |
| | | | | | | | | |
Net income per common share - Basic | | $ | 0.59 | | $ | 0.47 | | $ | 1.70 | | $ | 1.34 | |
| | | | | | | | | |
Average shares outstanding - Basic | | 88,775,405 | | 87,961,000 | | 88,387,769 | | 88,037,522 | |
| | | | | | | | | |
Net income per common share - Diluted | | $ | 0.57 | | $ | 0.47 | | $ | 1.67 | | $ | 1.31 | |
| | | | | | | | | |
Average shares outstanding - Diluted | | 90,697,815 | | 89,467,309 | | 90,294,496 | | 89,735,753 | |
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands)
| | Sep. 30, | | Dec. 31, | |
| | 2005 | | 2004 | |
| | (Unaudited) | | | |
ASSETS | | | | | |
| | | | | |
Current Assets: | | | | | |
Cash and short-term cash investments | | $ | 38,061 | | $ | 30,172 | |
Accounts receivable, less allowance for doubtful accounts of $9,288 and $8,666, respectively | | 241,047 | | 214,158 | |
Inventories | | 270,544 | | 247,303 | |
Prepaid expenses and other assets. | | 36,133 | | 37,382 | |
| | | | | |
Total current assets | | 585,785 | | 529,015 | |
| | | | | |
Land and depreciable assets, less accumulated depreciation of $347,532 and $349,255, respectively | | 209,988 | | 197,753 | |
Deferred debt issuance costs | | 1,871 | | 6,451 | |
Goodwill | | 643,825 | | 545,411 | |
Deferred taxes and other assets | | 31,471 | | 28,081 | |
| | | | | |
| | $ | 1,472,940 | | $ | 1,306,711 | |
| | | | | |
LIABILITIES & SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Current Liabilities: | | | | | |
Accounts payable | | $ | 149,834 | | $ | 134,856 | |
Accrued interest | | 4,088 | | 2,183 | |
Accrued salaries, wages and employee benefits | | 37,707 | | 38,535 | |
Other accrued expenses | | 79,571 | | 85,089 | |
Dividends payable | | 2,714 | | — | |
Current portion of long-term debt | | 15,247 | | 16,909 | |
| | | | | |
Total current liabilities | | 289,161 | | 277,572 | |
| | | | | |
Long-term debt | | 425,675 | | 432,144 | |
Accrued pension and post employment benefit obligations | | 92,867 | | 102,050 | |
Other liabilities | | 31,437 | | 13,341 | |
| | | | | |
Shareholders’ Equity: | | | | | |
Common stock | | 89 | | 88 | |
Additional paid-in deficit | | (176,124 | ) | (207,504 | ) |
Accumulated earnings | | 932,278 | | 789,741 | |
Accumulated other comprehensive loss | | (68,096 | ) | (55,078 | ) |
Treasury stock, at cost | | (54,347 | ) | (45,643 | ) |
| | | | | |
Total shareholders’ equity | | 633,800 | | 481,604 | |
| | | | | |
| | $ | 1,472,940 | | $ | 1,306,711 | |
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in thousands)
| | Nine months ended
September 30, | |
| | 2005 | | 2004 | |
| | | | | |
Net income | | $ | 150,521 | | $ | 117,671 | |
Adjustments for cash from operations: | | | | | |
Depreciation and amortization | | 36,577 | | 28,902 | |
Amortization of deferred debt issue costs | | 856 | | 1,066 | |
Non-cash expense related to write-off of deferred debt issue costs | | 5,666 | | — | |
Net change in non-cash components of working capital | | (36,556 | ) | 10,223 | |
Other long term assets and liabilities | | (2,244 | ) | (13,602 | ) |
| | | | | |
Cash provided by operations | | 154,820 | | 144,260 | |
| | | | | |
Cash flow from investing activities: | | | | | |
Capital additions, net | | (41,335 | ) | (29,240 | ) |
Investments in acquisitions | | (104,779 | ) | (30,703 | ) |
| | | | | |
Cash flow used by investing activities | | (146,114 | ) | (59,943 | ) |
| | | | | |
Cash flow from financing activities: | | | | | |
Net change in borrowings under revolving credit facilities | | 403,722 | | (13,865 | ) |
Decrease in borrowings under Bank Agreement | | (413,000 | ) | (61,000 | ) |
Payment of fees and expenses related to refinancing | | (1,942 | ) | — | |
Purchase of treasury stock | | (8,704 | ) | (32,878 | ) |
Proceeds from exercise of stock options including tax benefit | | 24,455 | | 22,416 | |
Dividend payments | | (5,348 | ) | — | |
| | | | | |
Cash flow provided by (used by) financing activities | | (817 | ) | (85,327 | ) |
| | | | | |
Net change in cash and short-term cash investments | | 7,889 | | (1,010 | ) |
Cash and short-term cash investments balance, beginning of period | | 30,172 | | 23,533 | |
| | | | | |
Cash and short-term cash investments balance, end of period | | $ | 38,061 | | $ | 22,523 | |
| | | | | |
Net cash paid during the year for: | | | | | |
Interest | | 13,938 | | 16,463 | |
Taxes | | 62,196 | | 31,627 | |
AMPHENOL CORPORATION
SEGMENT INFORMATION
(In thousands)
(Unaudited)
| | Three months ended
September 30, | | Nine months ended
September 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
| | | | | | | | | |
Trade Sales: | | | | | | | | | |
Interconnect Products | | $ | 391,915 | | $ | 333,468 | | $ | 1,142,233 | | $ | 980,503 | |
Cable Products | | 55,080 | | 50,635 | | 157,799 | | 145,980 | |
Consolidated | | $ | 446,995 | | $ | 384,103 | | $ | 1,300,032 | | $ | 1,126,483 | |
| | | | | | | | | |
| | | | | | | | | |
Operating income: | | | | | | | | | |
Interconnect Products | | $ | 85,279 | | $ | 68,157 | | $ | 246,397 | | $ | 197,040 | |
Cable Products | | 6,438 | | 6,801 | | 19,657 | | 18,139 | |
Corporate | | (5,628 | ) | (4,655 | ) | (16,586 | ) | (14,539 | ) |
Consolidated | | $ | 86,089 | | $ | 70,303 | | $ | 249,468 | | $ | 200,640 | |
| | | | | | | | | |
| | | | | | | | | |
ROS%: | | | | | | | | | |
Interconnect Products | | 21.8 | % | 20.4 | % | 21.6 | % | 20.1 | % |
Cable Products | | 11.7 | % | 13.4 | % | 12.5 | % | 12.4 | % |
Consolidated | | 19.3 | % | 18.3 | % | 19.2 | % | 17.8 | % |
