First Quarter 2022 Highlights:
- Sales of $2.952 billion, up 24% in U.S. dollars and 17%
organically compared to the first quarter 2021
- GAAP diluted EPS of $0.68, up 28% compared to prior year
- Adjusted Diluted EPS of $0.67, up 29% compared to prior
year
- Operating Margin of 20.0%
- Operating Cash Flow and Free Cash Flow of $351 million and $274
million
- Returned more than $320 million to shareholders through
dividends and buybacks
Amphenol Corporation (NYSE: APH) today reported first quarter
2022 results.
“We are pleased to have closed the first quarter of 2022 with
sales and Adjusted Diluted EPS 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 24%,
supported by robust growth across all of our end markets, as well
as contributions from the Company’s acquisition program. Despite
facing substantial inflationary pressures and supply chain
disruptions, we realized strong profitability, with operating
margins reaching 20.0% and Adjusted Diluted EPS growing by an
impressive 29% from prior year. We are very proud of the Company’s
outstanding performance in this most challenging and dynamic
quarter.”
New Segment Reporting
As previously announced, beginning this quarter, the Company is
reporting its financial results in three new segments: Harsh
Environment Solutions (HES), Communications Solutions (CS) and
Interconnect and Sensor Systems (ISS). The accompanying financial
data reflects these new segments, as well as the recasting of
relevant prior year period segment information in order to enable
year-over-year segment comparisons.
Second Quarter 2022 Outlook
The current market environment remains highly uncertain, with
continued supply chain and inflationary challenges as well as
ongoing disruptions associated with the COVID-19 pandemic. Assuming
conditions do not meaningfully worsen and assuming constant
exchange rates, for the second quarter of 2022, Amphenol expects
sales to be in the range of $2.890 billion to $2.950 billion,
representing 9% to 11% growth over the second quarter of 2021.
Adjusted Diluted EPS is expected to be in the range of $0.66 to
$0.68, representing 8% to 11% growth over the second quarter of
2021.
“Despite the ongoing challenges and uncertainties around the
world, we are very pleased with the Company’s strong First Quarter
results,” Mr. Norwitt continued. “The revolution in electronics
continues to accelerate, creating exciting and dynamic long-term
growth opportunities for Amphenol across each of our diversified
end markets. 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. 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 in
navigating the myriad of challenges around the world and 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 first
quarter results at 1:00 PM (EDT) on Wednesday, April 27, 2022. The
toll-free dial-in number is 888-455-0949; International dial-in
number is +1-773-799-3973; Passcode: LAMPO. A replay of the call
will be available until 11:59 PM (EDT) on Friday, May 27, 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 attributable to Amphenol Corporation,
Adjusted Effective Tax Rate, Adjusted Diluted EPS, 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
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 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. 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 we may make regarding second 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
(including but not limited to sanctions) 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 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; 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
or unsecured term loan 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; changes in interest
rates; 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 governments 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 any additional resurgences
from known or new variants, current and 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, 2021, 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
March 31,
2022
2021
Net sales
$
2,951.9
$
2,377.1
Cost of sales
2,025.3
1,649.6
Gross profit
926.6
727.5
Selling, general and administrative
expenses
336.8
262.7
Operating income
589.8
464.8
Interest expense
(28.1
)
(28.6
)
Other income (expense), net
1.7
(0.3
)
Income before income taxes
563.4
435.9
Provision for income taxes (1)
(134.2
)
(104.1
)
Net income
429.2
331.8
Less: Net income attributable to
noncontrolling interests
(3.5
)
(2.2
)
Net income attributable to Amphenol
Corporation
$
425.7
$
329.6
Net income attributable to Amphenol
Corporation per common share — Basic
$
0.71
$
0.55
Weighted average common shares outstanding
— Basic
598.3
598.5
Net income attributable to Amphenol
Corporation per common share — Diluted (2)
$
0.68
$
0.53
Weighted average common shares outstanding
— Diluted
625.6
624.1
_______________________________
Note 1
Provision for income taxes for the three
months ended March 31, 2022 and 2021 includes excess tax benefits
related to stock-based compensation of
$3.8 million ($0.01 per share) and $2.6
million ($0.00 per share), respectively.
Note 2
Net income per share for the three months
ended March 31, 2022 and 2021 includes the excess tax benefits
related to stock-based compensation
discussed in Note 1.
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 $0.67 and $0.52 for the three months ended
March 31, 2022 and 2021, respectively.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in millions)
March 31,
December 31,
2022
2021
ASSETS
Current Assets:
Cash and cash equivalents
$
1,247.5
$
1,197.1
Short-term investments
52.1
44.3
Total cash, cash equivalents and
short-term investments
1,299.6
1,241.4
Accounts receivable, less allowance for
doubtful accounts of $47.2 and $43.5, respectively
2,422.1
2,454.8
Inventories
1,989.7
1,894.1
Prepaid expenses and other current
assets
397.3
367.9
Total current assets
6,108.7
5,958.2
Property, plant and equipment, less
accumulated depreciation of $2,007.3 and $1,961.6, respectively
1,175.0
1,175.3
Goodwill
6,349.1
6,376.8
Other intangible assets, net
738.4
756.9
Other long-term assets
502.4
411.2
Total Assets
$
14,873.6
$
14,678.4
LIABILITIES, REDEEMABLE NONCONTROLLING
INTEREST AND EQUITY
Current Liabilities:
Accounts payable
$
1,275.9
$
1,312.0
Accrued salaries, wages and employee
benefits
272.3
366.2
Accrued income taxes
116.6
88.8
Accrued dividends
119.5
119.8
Other accrued expenses
589.2
556.3
Current portion of long-term debt
23.7
4.0
Total current liabilities
2,397.2
2,447.1
Long-term debt, less current portion
4,908.8
4,795.9
Accrued pension and postretirement benefit
obligations
187.8
193.4
Deferred income taxes
421.7
424.2
Other long-term liabilities
454.6
438.7
Total Liabilities
8,370.1
8,299.3
Redeemable noncontrolling interest
19.5
19.0
Equity:
Common stock
0.6
0.6
Additional paid-in capital
2,438.5
2,409.0
Retained earnings
4,391.5
4,278.9
Treasury stock, at cost
(101.0
)
(100.0
)
Accumulated other comprehensive loss
(303.5
)
(286.5
)
Total stockholders’ equity attributable to
Amphenol Corporation
6,426.1
6,302.0
Noncontrolling interests
57.9
58.1
Total Equity
6,484.0
6,360.1
Total Liabilities, Redeemable
Noncontrolling Interest and Equity
$
14,873.6
$
14,678.4
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in millions)
Three Months Ended
March 31,
2022
2021
Cash from operating
activities:
Net income
$
429.2
$
331.8
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
91.1
76.7
Stock-based compensation expense
19.7
19.1
Deferred income tax provision
13.4
14.2
Net change in components of working
capital
(182.9
)
(114.6
)
Net change in other long-term assets and
liabilities
(19.7
)
(6.2
)
Net cash provided by operating
activities
350.8
321.0
Cash from investing
activities:
Capital expenditures
(78.1
)
(78.4
)
Proceeds from disposals of property, plant
and equipment
1.8
0.9
Purchases of investments
(100.3
)
(46.2
)
Sales and maturities of investments
35.8
48.5
Acquisitions, net of cash acquired
—
(185.6
)
Other
(3.3
)
(2.4
)
Net cash used in investing activities
(144.1
)
(263.2
)
Cash from financing
activities:
Proceeds from issuance of senior notes and
other long-term debt
0.2
1.2
Repayments of senior notes and other
long-term debt
(2.5
)
(0.8
)
Proceeds from short-term borrowings
20.1
—
Borrowings (repayments) under commercial
paper programs, net
138.4
811.9
Purchase of treasury stock
(204.0
)
(152.8
)
Proceeds from exercise of stock
options
20.0
21.1
Distributions to and purchases of
noncontrolling interests
(3.6
)
(7.6
)
Dividend payments
(119.8
)
(86.8
)
Net cash (used in) provided by financing
activities
(151.2
)
586.2
Effect of exchange rate changes on cash
and cash equivalents
(5.1
)
(18.4
)
Net increase in cash and cash
equivalents
50.4
625.6
Cash and cash equivalents balance,
beginning of period
1,197.1
1,702.0
Cash and cash equivalents balance, end of
period
$
1,247.5
$
2,327.6
Cash paid for:
Interest
$
27.6
$
28.1
Income taxes, net
93.8
75.2
AMPHENOL CORPORATION
SEGMENT INFORMATION
(Unaudited)
(dollars in millions)
Three Months Ended
March 31,
2022
2021
Net
sales:
Harsh Environment Solutions
$
727.6
$
628.0
Communications Solutions
1,320.1
1,028.0
Interconnect and Sensor Systems
904.2
721.1
Consolidated Net sales
$
2,951.9
$
2,377.1
Operating
income:
Harsh Environment Solutions
$
183.2
$
158.3
Communications Solutions
282.5
204.5
Interconnect and Sensor Systems
160.0
135.1
Stock-based compensation expense
(19.7
)
(19.1
)
Other operating expenses
(16.2
)
(14.0
)
Consolidated Operating income
$
589.8
$
464.8
Operating margin
(%):
Harsh Environment Solutions
25.2
%
25.2
%
Communications Solutions
21.4
%
19.9
%
Interconnect and Sensor Systems
17.7
%
18.7
%
Stock-based compensation expense
-0.7
%
-0.8
%
Other operating expenses
-0.6
%
-0.6
%
Consolidated Operating margin (%)
20.0
%
19.6
%
AMPHENOL CORPORATION SUPPLEMENTAL SEGMENT
INFORMATION (Unaudited) (dollars in millions)
The following table summarizes Net sales, Operating income and
operating margin by segment, including a reconciliation of segment
operating income to consolidated Operating income for each of the
quarters during fiscal year 2021, all of which was recast to
conform to the current period presentation under the Company’s new
segment structure, effective January 1, 2022:
Three Months Ended
2021
March 31
June 30
September 30
December 31
Net
sales:
Harsh Environment Solutions
$
628.0
$
696.3
$
706.6
$
721.3
Communications Solutions
1,028.0
1,115.3
1,271.1
1,417.7
Interconnect and Sensor Systems
721.1
842.3
840.8
887.8
Consolidated Net sales
$
2,377.1
$
2,653.9
$
2,818.5
$
3,026.8
Operating
income:
Harsh Environment Solutions
$
158.3
$
181.0
$
184.7
$
184.2
Communications Solutions
204.5
235.1
276.7
307.0
Interconnect and Sensor Systems
135.1
150.5
146.5
156.1
Stock-based compensation expense
(19.1
)
(20.0
)
(21.2
)
(22.7
)
Acquisition-related expenses
—
(55.4
)
—
(15.0
)
Other operating expenses
(14.0
)
(15.0
)
(15.5
)
(16.7
)
Consolidated Operating income
$
464.8
$
476.2
$
571.2
$
592.9
Operating margin
(%):
Harsh Environment Solutions
25.2
%
26.0
%
26.1
%
25.5
%
Communications Solutions
19.9
%
21.1
%
21.8
%
21.7
%
Interconnect and Sensor Systems
18.7
%
17.9
%
17.4
%
17.6
%
Stock-based compensation expense
-0.8
%
-0.8
%
-0.8
%
-0.8
%
Acquisition-related expenses
0.0
%
-2.1
%
0.0
%
-0.5
%
Other operating expenses
-0.6
%
-0.6
%
-0.6
%
-0.6
%
Consolidated Operating margin (%)
19.6
%
17.9
%
20.3
%
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. 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. 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 March 31:
2022
2021
(GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
Net sales
by:
Segment:
Harsh Environment Solutions
$
727.6
$
628.0
16
%
(1)
%
17
%
1
%
16
%
Communications Solutions
1,320.1
1,028.0
28
%
—
%
29
%
8
%
21
%
Interconnect and Sensor Systems
904.2
721.1
25
%
(2)
%
28
%
15
%
13
%
Consolidated
$
2,951.9
$
2,377.1
24
%
(1)
%
25
%
8
%
17
%
___________________________________________________________
(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 respective
period(s) in the prior year. Such amount is calculated by
subtracting net sales for the current reporting period(s)
translated at average foreign currency exchange rates for the
respective prior year period(s) from net sales for the current
reporting period(s), taken as a percentage of the respective prior
year period(s) 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. Acquisition impact is calculated as
a percentage of the respective prior year period(s) net sales.
(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 March
31,
2022
2021
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)
$
589.8
20.0
%
$
425.7
23.8
%
$
0.68
$
464.8
19.6
%
$
329.6
23.9
%
$
0.53
Excess tax benefits related to stock-based
compensation
—
—
(3.8
)
0.7
(0.01
)
—
—
(2.6
)
0.6
—
Adjusted (non-GAAP) (ii) (iii)
$
589.8
20.0
%
$
421.9
24.5
%
$
0.67
$
464.8
19.6
%
$
327.0
24.5
%
$
0.52
FREE
CASH FLOW
Three Months Ended
March 31,
2022
2021
Operating Cash Flow (GAAP)
$
350.8
$
321.0
Capital expenditures (GAAP)
(78.1
)
(78.4
)
Proceeds from disposals of property, plant
and equipment (GAAP)
1.8
0.9
Free Cash Flow (non-GAAP) (iii)
$
274.5
$
243.5
________________________________________________________________________
(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 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 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). Free Cash Flow is defined as (i) Net cash provided
by operating activities (“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 stockholders
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
measures 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 June 30, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427005242/en/
Sherri Scribner Vice President, Strategy and Investor Relations
203-265-8820 IR@amphenol.com
Amphenol (NYSE:APH)
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