2005 Third Quarter and Nine Month Results Reported by Amphenol Corporation.WALLINGFORD Wallingford, town (1990 pop. 40,822), New Haven co., S Conn.; inc. 1670. Its silverware industry dates from c.1835. Fruit growing and the manufacture of plastics, steel, precision instruments, and hardware are among the town's other industries. , Conn. -- Amphenol Amphenol Corporation (NYSE: APH) is a major producer of electronic and fiber optic connectors, cable and interconnect systems. Amphenol is a portmanteau from the corporation's original name, American Phenolic Corp. Corporation (NYSE-APH) reported today that third quarter 2005 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of 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 one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. effects of expenses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. 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 Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign earnings under the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of 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 September: see month. 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 Refinancing An extension and/or increase in amount of existing debt. of its senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . In conjunction therewith there·with adv. 1. With that, this, or it. 2. In addition to that. 3. Archaic Immediately thereafter. Adv. 1. , 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 Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of unamortized deferred debt issuance costs less the gain on the termination of related interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 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 (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , 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 se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen over the record second quarter 2005. An excellent achievement in a seasonally slower quarter. The interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. 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 Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. 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 broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). cable television networks and represents 12% of our sales, was up 9% over the prior year." "In addition to excellent overall top line growth, profitability and cash flow continued to be strong. The operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. 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 Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was also strong at $67 million for the quarter." "Last week the Company announced an agreement to acquire the Connection Systems division of Teradyne Teradyne NYSE: TER, a US company, is a supplier of automatic test equipment (ATE). As of 2005, it has the largest marketshare in the SOC market. The company's divisions, Broadband Test, Assembly Test, Semiconductor Test, and Vehicle Diagnostic Solutions, are organized by the , Inc. (NYSE-TER). Teradyne Connection Systems (TCS (Transportation Control System) A widely used integrated information system for railroad transportation developed by the Missouri Pacific Railroad Company in the late 1960s and early 1970s. It was later implemented by Union Pacific when the companies merged. ), a technology leader in high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. , high-density high-den·si·ty adj. Having a high concentration: high-density urban areas. , 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 diversified (di·verˑ·s 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 (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. , respectively. The guidance 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 second quarter results at 1:00 PM (ET) October October: see month. 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 Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the 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 optic /op·tic/ (op´tik) ocular (1). op·tic or op·ti·cal adj. 1. Of or relating to the eye or vision. 2. connectors, cable and interconnect systems. Amphenol products are engineered and manufactured in the Americas A·mer·i·cas , the See America. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). 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 con·verge v. con·verged, con·verg·ing, con·verg·es v.intr. 1. a. To tend toward or approach an intersecting point: lines that converge. b. technologies of voice, video and data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. , industrial/automotive and military/aerospace applications. Statements in this press release which are other than historical facts are intended to be "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Securities Exchange Act of 1934, the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 1 of the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 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.
AMPHENOL CORPORATION
FINANCIAL SUMMARY
(Unaudited)
Three Months Ended Nine Months Ended
September 30, 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.
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
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands, except per share data)
Three months Nine months
ended ended
September 30, 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 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 Nine months ended
September 30, 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%
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