Amphenol Corporation (NYSE:APH) reported today fourth quarter
2014 diluted earnings per share excluding one-time items of $0.63
compared to $0.53 for the comparable 2013 period. (All per share
and share amounts included herein have been adjusted to reflect the
Company’s 2-for-1 stock split effective October 9, 2014.) On an as
reported basis, diluted earnings per share were $0.61 and $0.52 for
the fourth quarter of 2014 and 2013, respectively. Such per share
amount for the 2014 quarter includes one-time acquisition related
costs of $10 million ($.02 per share) including approximately $8
million of amortization of the value associated with acquired
backlog relating to an acquisition completed by the Company in the
third quarter of 2014 and approximately $2 million of
acquisition-related transaction costs. Such per share amount for
the 2013 period included a one-time charge for acquisition-related
transaction costs of $3 million ($.01 per share) related to 2013
acquisitions. Sales for the fourth quarter of 2014 were a record
$1.427 billion compared to $1.246 billion for the 2013 period.
Currency translation had the effect of decreasing sales by
approximately $22 million in the fourth quarter of 2014 compared to
the 2013 period.
For the full year ended December 31, 2014, diluted earnings per
share was $2.21 on an as reported basis and $2.25 excluding
one-time items, compared to $1.96 on an as reported basis and $1.93
excluding one-time items for the comparable 2013 period. The 2014
period includes one-time expenses of $14 million ($.04 per share)
relating to acquisition-related costs that include the amortization
of acquired backlog of $10 million and transaction costs of $4
million. The 2013 period included one-time benefits of $9 million
($.03 per share) which included the net effect of (1) an income tax
benefit of $15 million ($.04 per share) comprised of an $11 million
reduction in tax expense due to the January 2, 2013 reinstatement
of certain federal income tax provisions with retroactive effect to
2012 as well as a $4 million reduction in tax expense due primarily
to the completion of prior year audits and (2) acquisition-related
transaction costs of $6 million ($.01 per share).
Sales for the full year ended December 31, 2014 were $5.346
billion compared to $4.615 billion for the 2013 period. Currency
translation had the effect of decreasing sales by approximately $3
million for the full year 2014 compared to the 2013 period.
Amphenol President and Chief Executive Officer, R. Adam Norwitt,
stated, “We are pleased to report new records of performance in the
fourth quarter 2014, with sales and EPS of $1.427 billion and $0.63
(excluding one-time items), up 15% and 19% over the comparable 2013
quarter. The Company achieved growth in most markets with
particular strength in the automotive, industrial and mobile
networks markets. This growth was driven both organically and
through the Company’s successful acquisition program. In addition,
sales grew 5% sequentially. It is particularly rewarding that the
Company’s unique entrepreneurial culture continues to drive an
unwavering focus on profitability, resulting in record operating
margins of 20.2% (excluding one-time items) in the fourth quarter,
up 30 basis points sequentially and 50 basis points from prior
year. This excellent performance is a direct result of our dynamic
management team’s ability to drive margin expansion through
outstanding operational execution and an unrelenting focus on all
elements of cost. Operating cash flow in the quarter was $273
million, an excellent performance and confirmation of the quality
of the Company’s earnings. I am very proud of our organization as
we continue to execute well.”
“We close 2014 having grown 16% from 2013, with revenues of more
than $5.3 billion, a new milestone for the Company. Our ongoing
strategy of market and geographic diversification combined with our
strong commitment to customers in all markets, both through organic
product development and through our acquisition program, continues
to expand the Company’s growth opportunities. Consistent with this
strategy, in December, the Company completed the acquisition of
Goldstar Electric Systems Co., Ltd., a China-based high technology
interconnect assembly company with annual sales of approximately
$40 million. The acquisition significantly enhances the Company’s
presence in the industrial market in China, in particular in the
high growth heavy equipment segment. In addition to our successful
acquisition program, the Company continues to deploy its financial
strength in a variety of ways to increase shareholder value,
including the purchase in this quarter of 2.9 million shares of the
Company’s stock. The Company has now completed the buyback
authorized under the Company’s January 2013 stock repurchase
program, and thus the Company’s Board of Directors has authorized a
new two year open market stock repurchase plan effective January
21, 2015 for up to 10 million shares of the Company’s common
stock.”
“There continues to be a great deal of geopolitical and market
uncertainty around the world, including in particular increased
volatility and a significant weakening of certain overseas
currencies. Considering this economic environment, and based on
current currency exchange rates, we expect first quarter 2015 sales
in the range of $1.286 billion to $1.326 billion, an increase of 3%
to 6% in US dollars and 7% to 10% in local currencies over 2014,
and diluted EPS (excluding one-time items) in the range of $0.55 to
$0.57, an increase of 10% to 14% over 2014. For the year 2015, we
expect to achieve sales in the range of $5.493 billion to $5.653
billion, an increase of 3% to 6% in US dollars and 6% to 9% in
local currencies over 2014, and diluted EPS (excluding one-time
items) of $2.41 to $2.49, an increase of 7% to 11% over 2014. We
believe we can continue to perform well in the dynamic electronics
marketplace due to our leading technology, increasing positions
with our customers in diverse markets, worldwide presence, lean
cost structure, and agile, experienced and entrepreneurial
management team.”
“The electronics revolution continues to accelerate, with new
applications and higher performance requirements driving increased
demand for our high technology products across all of our end
markets. This creates a significant, long-term growth opportunity
for Amphenol. Our ongoing actions to enhance our competitive
advantages and build sustained financial strength, as well as our
initiatives to broaden and diversify our high technology product
offerings, have created a solid base for future performance. I am
confident in the ability of our outstanding management team to
dynamically adjust to the constantly changing market environment,
to continue to generate strong profitability and to further
capitalize on the many opportunities to expand our market
position.”
The Company will host a conference call to discuss its fourth
quarter results at 1:00 PM (EST) January 21, 2015. The toll free
dial-in number to participate in this call is 888-395-9624;
International dial-in number is 517-623-4547; Passcode: REARDON.
There will be a replay available until 10:59 P.M. (EST) on
Saturday, February 21, 2015. The replay numbers are toll free
866-499-4574; International toll number is 203-369-1808; Passcode:
7183.
A live broadcast as well as a replay will also be available on
the Internet at http://www.amphenol.com/investors/webcasts.php.
Amphenol Corporation is one of the world’s largest designers,
manufacturers and marketers of electrical, electronic and fiber
optic connectors, interconnect systems, antennas, sensors and
sensor-based products and coaxial and high-speed specialty cable.
Amphenol designs, manufactures and assembles its products at
facilities in the Americas, Europe, Asia, Australia and Africa and
sells its products through its own global sales force, independent
representatives and a global network of electronics distributors.
Amphenol has a diversified presence as a leader in high growth
areas of the interconnect market including: Automotive, Broadband
Communications, Commercial Aerospace, Industrial, Information
Technology and Data Communications, Military, Mobile Devices and
Mobile Networks.
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, 2013, 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.
AMPHENOL CORPORATION CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (dollars in
millions, except per share data)
Three Months Ended Twelve Months Ended December 31,
December 31, 2014 2013 (1 ) 2014
2013 (1 ) Net sales $ 1,426.5 $ 1,245.7 $ 5,345.5 $
4,614.7 Cost of sales 969.8 856.4
3,651.7 3,163.9 Gross
profit 456.7 389.3 1,693.8 1,450.8 Acquisition-related
expenses 9.6 3.4 14.1 6.0 Selling, general and
administrative expense 168.2 144.5
645.1 548.0 Operating income
278.9 241.4 1,034.6 896.8 . Interest expense (20.2 ) (16.4 ) (80.4
) (63.6 ) Other income, net 5.2 3.9
18.3 13.4 Income before income
taxes 263.9 228.9 972.5 846.6 Provision for income taxes
(69.1 ) (60.0 ) (257.3 ) (207.9 )
Net income 194.8 168.9 715.2 638.7 Less: Net income
attributable to noncontrolling interests (1.3 ) (1.0
) (6.1 ) (3.0 ) Net income attributable to
Amphenol Corporation $ 193.5 $ 167.9 $ 709.1 $
635.7 Net income per common share - Basic $
0.62 $ 0.53 $ 2.26 $ 2.00
Weighted average common shares outstanding - Basic
310,030,206
316,566,252 313,136,791
318,185,574 Net income per common share - Diluted
(2) (3) $ 0.61 $ 0.52 $ 2.21 $ 1.96
Weighted average common shares outstanding - Diluted
317,201,925
323,346,992
320,430,140
324,548,998
Dividends declared per common share $ 0.125 $
0.100 $ 0.450 $ 0.305
Note
1
Prior period results have been restated to reflect a
two-for-one stock split which was effective in October 2014.
Note
2
Earnings per share in the three months ended December 31, 2014
included acquisition-related expenses of $1.8 million ($1.5 million
after-tax) relating to 2014 acquisitions and $7.8 million ($4.9
million after-tax) relating to the acquired backlog of an
acquisition completed in the third quarter of 2014. For the twelve
months ended December 31, 2014, earnings per share included
acquisition-related expenses of $4.3 million ($4.1 million
after-tax) relating to 2014 acquisitions and $9.8 million ($6.2
million after-tax) relating to the acquired backlogs of completed
acquisitions. Excluding these effects, diluted earnings per share
was $0.63 for the three months ended December 31, 2014 and $2.25
for the twelve months ended December 31, 2014.
Note
3
Earnings per share in the three months ended December 31, 2013
included acquisition-related expenses of $3.4 million ($2.4 million
after-tax) relating to 2013 acquisitions. Earnings per share in the
twelve months ended December 31, 2013 included acquisition-related
expenses of $6.0 million ($4.6 million after-tax) relating to 2013
acquisitions and a $3.6 million income tax benefit due primarily to
the favorable completion of prior year audits. Earnings per share
in the twelve months ended December 31, 2013 also included an
income tax benefit of $11.3 million related to the January 2, 2013
reinstatement of certain federal income tax provisions with
retroactive effect to 2012. Under U.S. GAAP, the related benefit of
$11.3 million relating to the 2012 tax year was recorded as a
benefit in the first quarter of 2013 at the date of reinstatement.
Excluding these effects, diluted earnings per share was $0.53 for
the three months ended December 31, 2013 and $1.93 for the twelve
months ended December 31, 2013.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in millions) December
31, December 31, 2014 2013
(1) ASSETS Current
Assets: Cash and cash equivalents $ 968.9 $ 886.8 Short-term
investments
360.7
305.4
Total cash, cash equivalents and short-term investments 1,329.6
1,192.2 Accounts receivable, less allowance for doubtful accounts
of $20.2 and $12.0, respectively 1,123.7 1,001.0 Inventories 865.6
792.6
Other current assets
185.2
171.8
Total current assets 3,504.1 3,157.6 Land and
depreciable assets, less accumulated depreciation of $849.6 and
$804.0, respectively 590.7 532.4 Goodwill 2,616.7 2,289.1
Intangibles and other long-term assets
315.5
188.9
$ 7,027.0
$ 6,168.0
LIABILITIES & EQUITY Current Liabilities:
Accounts payable $ 618.4 $ 549.9 Accrued salaries, wages and
employee benefits 109.9 104.9 Accrued income taxes 90.8 96.4 Other
accrued expenses 186.2 157.3 Accrued dividends 38.7 - Short-term
debt 1.6
701.4
Total current liabilities 1,045.6 1,609.9 Long-term
debt 2,672.3 1,431.4 Accrued pension benefit obligations and other
long-term liabilities 371.2 246.6 Equity: Common stock 0.3
0.3 Additional paid-in capital 659.4 489.8 Retained earnings
2,453.5 2,424.4 Accumulated other comprehensive loss (205.8) (55.0)
Total shareholders' equity attributable to Amphenol
Corporation 2,907.4 2,859.5 Noncontrolling interests 30.5
20.6 Total equity 2,937.9 2,880.1 $ 7,027.0 $ 6,168.0
Note 1
Prior period results have been restated to reflect a two-for-one
stock split which was effective in October 2014.
AMPHENOL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW (Unaudited) (dollars in millions)
Twelve months ended December 31, 2014
2013 Cash flow from operating activities: Net
income $ 715.2 $ 638.7 Adjustments to reconcile net income to cash
provided by operating activities: Depreciation and amortization
168.1 136.5 Stock-based compensation expense 41.4 36.1 Excess tax
benefits from stock-based compensation payment arrangements (32.3 )
(21.0 ) Net change in components of working capital (18.9 ) (26.3 )
Net change in other long-term assets and liabilities 7.4
5.1 Net cash provided by operating
activities 880.9 769.1 Cash flow
from investing activities: Additions to property, plant and
equipment (209.1 ) (158.4 ) Proceeds from disposals of fixed assets
5.6 3.7 Purchases of short-term investments (721.0 ) (741.1 ) Sales
and maturities of short-term investments 660.8 687.4 Acquisitions,
net of cash acquired (518.2 ) (484.9 ) Net
cash used in investing activities (781.9 ) (693.3 )
Cash flow from financing activities: Proceeds from issuance
of senior notes 1,498.1 - Borrowings under credit facilities
2,945.9 1,041.4 Repayments under credit facilities (3,904.0 )
(620.3 ) Payment of fees and expenses related to debt financing
(11.1 ) (2.8 ) Proceeds from exercise of stock options 97.8 95.1
Excess tax benefits from stock-based compensation payment
arrangements 32.3 21.0 Payments to shareholders of noncontrolling
interests (3.6 ) (4.4 ) Purchase and retirement of treasury stock
(539.4 ) (324.7 ) Dividend payments (101.9 ) (96.8 )
Net cash provided by financing activities 14.1
108.5 Effect of exchange rate changes on cash
and cash equivalents (31.0 ) 11.7 Net change in cash and
cash equivalents 82.1 196.0 Cash and cash equivalents balance,
beginning of period 886.8 690.8
Cash and cash equivalents balance, end of period $ 968.9 $
886.8
AMPHENOL CORPORATION
SEGMENT INFORMATION (dollars in millions)
(Unaudited) Three months
ended Twelve Months Ended December 31, December 31, 2014
2013 2014 2013
Trade Sales: Interconnect Products $ 1,342.5 $ 1,164.1 $
4,992.6 $ 4,269.0 Cable Products 84.0 81.6
352.9 345.7 Consolidated $
1,426.5 $ 1,245.7 $ 5,345.5 $ 4,614.7
Operating income: Interconnect Products $ 301.2 $
254.2 $ 1,088.0 $ 931.0 Cable Products 10.2 9.9 43.8 46.4
Stock-based compensation expense (12.0 ) (9.5 ) (41.4 ) (36.1 )
Other operating expenses (10.9 ) (9.8 ) (41.7
) (38.5 ) Operating income 288.5 244.8 1,048.7 902.8
Acquisition-related expenses (9.6 ) (3.4 )
(14.1 ) (6.0 ) Consolidated $ 278.9 $ 241.4 $
1,034.6 $ 896.8 ROS%:
Interconnect Products 22.4 % 21.8 % 21.8 % 21.8 % Cable Products
12.1 % 12.2 % 12.4 % 13.4 % Stock-based compensation expense -0.8 %
-0.8 % -0.8 % -0.8 % Other operating expenses -0.8 % -0.8 % -0.8 %
-0.8 % ROS, excluding one-time items 20.2 % 19.7 % 19.6 %
19.6 % Acquisition-related expenses -0.7 % -0.3 % -0.2 %
-0.2 % Consolidated 19.5 % 19.4 % 19.4 % 19.4 %
Amphenol CorporationDiana G. Reardon, 203-265-8630Executive Vice
President and Chief Financial Officerwww.amphenol.com
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