Amphenol | News Release |
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 |
2006 FIRST QUARTER RECORD RESULTS
Wallingford, Connecticut. April 19, 2006. Amphenol Corporation (NYSE-APH) reported today that first quarter 2006 diluted earnings per share increased 21% to $.63 compared to $.52 per share for the comparable 2005 period. EPS for the first quarter of 2006 was reduced by approximately $1.8 million ($.01 per share) relating to stock option expense as a result of the adoption of SFAS 123R. Pro forma first quarter 2005 EPS after option expense is $.50. Sales for the first quarter 2006 increased 39% to $568,991,000 compared to $409,395,000 for the 2005 period. Currency translation had the effect of decreasing sales by approximately $10.1 million in the first quarter 2006 compared to the 2005 period.
Amphenol Chairman and CEO, Martin H. Loeffler, stated: “We are extremely pleased to start 2006 with a record quarter achieving sales of $569 million and earnings per share of $.63. Sales increased 39% over last year and 16% excluding the TCS acquisition. This strong performance was broad based with growth in all major market segments; with particular strength in the wireless handset and broadband communications network
markets. The TCS acquisition performed better than expectations, achieving sales of $94 million and operating margin of 10%, contributing approximately $.03 to earnings per share in the quarter. I am extremely pleased with the progress TCS has made in its first quarter as an Amphenol company. The timely implementation of cost reduction and other profit improvement actions contributed significantly in the quarter and provide a solid base for future performance. In addition, in March, consistent with our strategy, the Company completed the acquisition of a United States manufacturer of interconnect systems for the medical equipment market with annual sales of approximately $20 million. The acquisition complements and broadens our product offering in this important market.”
“In addition to excellent overall top line growth, profitability and cash flow continued to be strong. The operating income margin in the first quarter was 17.3%. Excluding the impact of the TCS acquisition, and the impact of stock option expense resulting from the implementation of SFAS 123R on January 1, 2006, the first quarter 2006 operating income margin was 19.1%; compared to 18.9% in last year’s first quarter. I am very pleased that we have been able to achieve this strong profitability in a difficult cost environment. The increase in operating margins over the prior year 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. Furthermore, net income, that is income after interest expense and taxes, was 10% of sales, another indication of the Company’s excellent profitability. Cash flow from operations for the quarter was also strong at $56 million.”
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“We had a strong start to 2006 and look to the future with great enthusiasm. We have an outstanding management team, excellent technological capabilities, leading positions in diversified markets, and an increasing presence with the major companies in these markets. With the addition of TCS we are the world’s third largest interconnect company with an expanded platform for creating value. Assuming a continuation of the current economic climate and relatively stable currency exchange rates, we are raising our guidance for the full year 2006 to achieve revenues and EPS in the range of $2,300 million to $2,345 million and $2.64 to $2.72, respectively. This compares to the Company’s previous guidance of revenues and EPS in the range of $2,250 million to $2,300 million and $2.56 to $2.63, respectively. For the second quarter of 2006 we expect revenues and EPS in the range of $580 million to $590 million and $.66 and $.68, respectively. EPS guidance for the year and second quarter of 2006 includes approximately $9.8 million ($.07 per share) and $2.5 million ($.02 per share) relating to stock option expense as a result of the adoption of SFAS 123R. Pro forma 2005 EPS after option expense is $2.23 and $.56, for the full year and second quarter, respectively. We are very excited about the future and confident in the ability of our excellent organization to take advantage of the many opportunities in front of us.”
The Company will host a conference call to discuss its first quarter results at 1:00 PM (ET) April 19, 2006. 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, April 21, 2006. The replay numbers are as follows: toll free dial-in number is 800-846-1910 and International dial-in number is 402-280-9953.
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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. Amphenol has a diversified presence as a leader in high growth segments of the interconnect market including: Military, Commercial Aerospace, Automotive, Broadband Communication, Industrial, Information Technology and Data Communications Equipment, Mobile Devices and Wireless Infrastructure.
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 differ materially from those currently anticipated. Please refer to Part I, Item 1A of the Company’s Form 10-K for the year ended December 31, 2005, 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
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands, except per share data)
|
| Three months ended |
| ||||||
|
| 2006 |
| 2005 |
| ||||
|
|
|
|
|
| ||||
Net Sales |
| $ | 568,991 |
| $ | 409,395 |
| ||
Costs and Expenses: |
|
|
|
|
| ||||
Cost of sales, excluding depreciation and amortization |
| 373,023 |
| 263,425 |
| ||||
|
|
|
|
|
| ||||
Depreciation and amortization expense |
| 17,776 |
| 10,814 |
| ||||
|
|
|
|
|
| ||||
Selling, general and administrative expense |
| 79,801 |
| 57,823 |
| ||||
|
|
|
|
|
| ||||
Operating income |
| 98,391 |
| 77,333 |
| ||||
|
|
|
|
|
| ||||
Interest expense |
| (10,184 | ) | (5,403 | ) | ||||
Other expenses, net |
| (2,724 | ) | (1,664 | ) | ||||
|
|
|
|
|
| ||||
Income before income taxes |
| 85,483 |
| 70,266 |
| ||||
|
|
|
|
|
| ||||
Provision for income taxes |
| (28,209 | ) | (23,890 | ) | ||||
|
|
|
|
|
| ||||
Net income |
| $ | 57,274 |
| $ | 46,376 |
| ||
|
|
|
|
|
| ||||
Net income per common share - Basic |
| $ | 0.64 |
| $ | 0.53 |
| ||
|
|
|
|
|
| ||||
Average shares outstanding - Basic |
| 89,447,160 |
| 88,016,736 |
| ||||
|
|
|
|
|
| ||||
Net income per common share - Diluted (1) |
| $ | 0.63 |
| $ | 0.52 |
| ||
|
|
|
|
|
| ||||
Average shares outstanding - Diluted |
| 91,530,174 |
| 89,904,666 |
| ||||
(1) - Effective January 1, 2006 the Company implemented SFAS 123R and began expensing stock based compensation. Such expense was previously disclosed in the Company’s financial statement footnotes but was not included as an expense in the Company’s income statement. For the three months ended March 31, 2006, diluted earnings per share excluding the $1.8 million of stock based compensation expense is $.64. For the three months ended March 31, 2005, diluted earnings per share including pro forma stock based compensation expense of $1.5 million is $.50.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
|
| March 31, |
| Dec. 31, |
| ||||||
|
| (Unaudited) |
|
|
| ||||||
ASSETS |
|
|
|
|
| ||||||
|
|
|
|
|
| ||||||
Current Assets: |
|
|
|
|
| ||||||
Cash and short-term cash investments |
| $ | 37,304 |
| $ | 38,669 |
| ||||
Accounts receivable, less allowance for doubtful accounts of $11,489 and $11,162, respectively |
| 335,104 |
| 302,867 |
| ||||||
Inventories |
| 347,842 |
| 325,865 |
| ||||||
Prepaid expenses and other assets |
| 50,545 |
| 42,413 |
| ||||||
|
|
|
|
|
| ||||||
Total current assets |
| 770,795 |
| 709,814 |
| ||||||
Land and depreciable assets, less accumulated depreciation of $368,414 and $352,408, respectively |
| 263,969 |
| 253,889 |
| ||||||
Deferred debt issuance costs |
| 2,300 |
| 2,351 |
| ||||||
Goodwill |
| 902,584 |
| 886,720 |
| ||||||
Other assets |
| 69,290 |
| 79,766 |
| ||||||
|
|
|
|
|
|
|
| ||||
|
| $ | 2,008,938 |
| $ | 1,932,540 |
| ||||
|
|
|
|
|
| ||||||
LIABILITIES & SHAREHOLDERS’ EQUITY |
|
|
|
|
| ||||||
|
|
|
|
|
| ||||||
Current Liabilities: |
|
|
|
|
| ||||||
Accounts payable |
| $ | 196,626 |
| $ | 177,266 |
| ||||
Accrued interest |
| 4,620 |
| 4,998 |
| ||||||
Accrued salaries, wages and employee benefits |
| 42,920 |
| 42,705 |
| ||||||
Other accrued expenses |
| 107,305 |
| 93,202 |
| ||||||
Dividends payable |
| 2,734 |
| 2,729 |
| ||||||
Current portion of long-term debt |
| 16,409 |
| 15,030 |
| ||||||
|
|
|
|
|
| ||||||
Total current liabilities |
| 370,614 |
| 335,930 |
| ||||||
|
|
|
|
|
| ||||||
Long-term debt |
| 741,408 |
| 765,970 |
| ||||||
Accrued pension and post employment benefit obligations |
| 113,751 |
| 108,816 |
| ||||||
Other liabilities |
| 23,897 |
| 32,589 |
| ||||||
|
|
|
|
|
| ||||||
Shareholders’ Equity: |
|
|
|
|
| ||||||
Common stock |
| 89 |
| 89 |
| ||||||
Additional paid-in deficit |
| (156,440 | ) | (164,082 | ) | ||||||
Accumulated earnings |
| 1,039,906 |
| 985,317 |
| ||||||
Accumulated other comprehensive loss |
| (69,940 | ) | (77,742 | ) | ||||||
Treasury stock, at cost |
| (54,347 | ) | (54,347 | ) | ||||||
|
|
|
|
|
| ||||||
Total shareholders’ equity |
| 759,268 |
| 689,235 |
| ||||||
|
|
|
|
|
| ||||||
|
| $ | 2,008,938 |
| $ | 1,932,540 |
| ||||
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in thousands)
|
| Three months ended |
| ||||
|
| 2006 |
| 2005 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 57,274 |
| $ | 46,376 |
|
Adjustments for cash from operations: |
|
|
|
|
| ||
Depreciation and amortization |
| 17,776 |
| 10,814 |
| ||
Amortization of deferred debt issue costs |
| 131 |
| 364 |
| ||
Stock-based compensation |
| 1,781 |
| — |
| ||
Net change in non-cash components of working capital |
| (23,209 | ) | (18,827 | ) | ||
Other long term assets and liabilities |
| 2,150 |
| (131 | ) | ||
|
|
|
|
|
| ||
Cash provided by operations |
| 55,903 |
| 38,596 |
| ||
|
|
|
|
|
| ||
Cash flow from investing activities: |
|
|
|
|
| ||
Capital additions, net |
| (20,160 | ) | (12,475 | ) | ||
Investments in acquisitions |
| (15,682 | ) | (53,039 | ) | ||
|
|
|
|
|
| ||
Cash flow used by investing activities |
| (35,842 | ) | (65,514 | ) | ||
|
|
|
|
|
| ||
Cash flow from financing activities: |
|
|
|
|
| ||
Net change in borrowings under revolving credit facilities |
| (24,032 | ) | 23,678 |
| ||
Purchase of treasury stock |
| — |
| (4,723 | ) | ||
Proceeds from exercise of stock options |
| 3,996 |
| 4,048 |
| ||
Excess tax benefits from stock-based payment arrangements |
| 1,289 |
| — |
| ||
Dividend payments |
| (2,679 | ) | — |
| ||
|
|
|
|
|
| ||
Cash flow provided by (used by) financing activities |
| (21,426 | ) | 23,003 |
| ||
|
|
|
|
|
| ||
Net change in cash and short-term cash investments |
| (1,365 | ) | (3,915 | ) | ||
Cash and short-term cash investments balance, beginning of period |
| 38,669 |
| 30,172 |
| ||
|
|
|
|
|
|
|
|
Cash and short-term cash investments balance, end of period |
| $ | 37,304 |
| $ | 26,257 |
|
|
|
|
|
|
| ||
Net cash paid during the year for: |
|
|
|
|
| ||
Interest |
| 10,431 |
| 5,007 |
| ||
Taxes |
| 21,260 |
| 23,750 |
| ||
AMPHENOL CORPORATION
SEGMENT INFORMATION
(Unaudited)
(dollars in thousands)
|
| Three months ended |
| ||||||
|
| 2006 |
| 2005 |
| ||||
|
|
|
|
|
| ||||
Trade Sales: |
|
|
|
|
| ||||
Interconnect Products |
| $ | 509,058 |
| $ | 361,155 |
| ||
Cable Products |
| 59,933 |
| 48,240 |
| ||||
Consolidated |
| $ | 568,991 |
| $ | 409,395 |
| ||
|
|
|
|
|
| ||||
Operating income: |
|
|
|
|
| ||||
Interconnect Products |
| $ | 99,869 |
| $ | 75,791 |
| ||
Cable Products |
| 6,291 |
| 6,175 |
| ||||
Corporate |
| (7,769 | ) | (4,633 | ) | ||||
Consolidated |
| $ | 98,391 |
| $ | 77,333 |
| ||
|
|
|
|
|
| ||||
ROS%: |
|
|
|
|
| ||||
Interconnect Products |
| 19.6 | % | 21.0 | % | ||||
Cable Products |
| 10.5 | % | 12.8 | % | ||||
Consolidated |
| 17.3 | % | 18.9 | % | ||||
