2006 Second Quarter Record 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 second quarter 2006 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 , before flood-related charges, increased 19% to a record $.69 compared to $.58 per share for the comparable 2005 period. Such per share amount for 2006 excludes the effect of a $15 million one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc previously announced flood flood, in hydrology flood, inundation of land by the rise and overflow of a body of water. Floods occur most commonly when water from heavy rainfall, from melting ice and snow, or from a combination of these exceeds the carrying capacity of the river damage at the Company's Sidney, New York Sidney in the U.S. state of New York may refer to two places, both within Delaware County.
adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.1 million ($.02 per share) relating to stock option expense as a result of the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma second quarter 2005 EPS after option expense is $.56. Sales for the second quarter 2006 increased 37% to a record $606,598,000 compared to $443,642,000 for the 2005 period. Currency translation had the effect of increasing sales by approximately $2.1 million in the second quarter 2006 compared to the 2005 period. For the six months ended June June: see month. 30, 2006, diluted earnings per share, before flood-related charges, was $1.32 compared to $1.09 per share for the 2005 period. Including flood-related charges earnings per share was $1.21. EPS for the six months ended June 30, 2006 was also reduced by approximately $3.9 million ($.03 per share) relating to stock option expense as a result of the adoption of SFAS 123R. Pro forma EPS for the six months ended June 30, 2005 after option expense is $1.06. Sales for the six months ended June 30, 2006 were $1,175,589,000 compared to $853,037,000 for the 2005 period. Currency translation had the effect of decreasing sales by approximately $8.1 million for the six month 2006 period when compared to the 2005 period. As previously announced this month, the Company incurred damage at its Sidney, New York manufacturing facility as a result of severe and sudden flooding Refers to various denial-of-service techniques that saturate a critical resource, leading either to system failure or to the exclusion of legitimate access. See e-mail bombing, Fraggle attack, smurf attack and SYN-flood attack. in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State during the period June 28 through July July: see month. 1, 2006. In the second quarter the Company has recorded a charge of $15 million or $.11 per share for property related damage net of expected insurance recoveries. This charge includes the Company's best estimate of the loss related to inventory and machinery and equipment. In the third quarter, the Company expects to record an additional charge of approximately $5 million or $.04 per share for one-time expenses relating to cleanup and repair efforts, net of insurance recoveries. In addition, the Sidney Sidney, city (1990 pop. 18,710), seat of Shelby co., W central Ohio, on the Great Miami River, in a farm area; founded 1811, inc. 1834. Refrigerator parts and machinery are among the items produced there. facility had limited manufacturing and sales activity for the period from June 28 to July 14. This reduced sales by approximately $10 million in the second quarter and is expected to reduce sales by approximately $15 million in the third quarter. The Sidney plant management and employees have made and continue to make heroic he·ro·ic adj. Relating to a risky medical procedure that may endanger the patient but also has a possibility of being successful, whereas lesser action would result in failure. efforts in getting the plant back into production and meeting customer needs; the plant is expected to be substantially back to full production next month. 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: "We are extremely pleased to close a record second quarter with a sales of $607 million and earnings per share before flood-related charges of $.69. Sales increased 37% over last year and 12% excluding the 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. acquisition. This strong performance was broad based, with particular strength in the wireless handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. and 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). communications network The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. markets. The accomplishment of these results in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the unexpected flood-related sales loss at the end of the quarter in the military and aerospace market is a testament to the strength and balance of the business. TCS continues to perform better than expected, increasing sales to $110 million and improving operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: to 13%, contributing approximately $.07 to earnings per share in the quarter. The combination of strong top line growth focused on 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. connector products and 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 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 in the second quarter, before flood related charges, was 17.8%. Excluding the impact of the TCS acquisition and the impact of stock option expense resulting from the implementation of SFAS 123R on January January: see month. 1, 2006, operating income margin was 19.2%; compared to last year's second quarter of 19.4%. I am very pleased that we have been able to achieve this strong profitability in a difficult cost environment. Furthermore, net income before flood-related charges, that is income after interest expense and taxes, was 10% 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 for the quarter reached a record $87 million." "It was another strong quarter and we look to the future with great enthusiasm. We have an outstanding management team, excellent technological capabilities, leading positions in diversified diversified (di·verˑ·s 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 (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. company with an expanded platform for creating value. Assuming a continuation continuation - continuation passing style of the current economic climate and relatively stable currency exchange rates, and excluding the flood-related charges of $.15 per share, we are raising our guidance for the full year 2006 to achieve revenues and EPS in the range of $2,375 million to $2,405 million and $2.75 to $2.83, respectively. After flood-related charges, EPS is expected to be in the range of $2.60 to $2.68. This compares to the Company's previous guidance of revenues and EPS in the range of $2,300 million to $2,345 million and $2.64 to $2.72, respectively. For the third quarter of 2006 we expect revenues and EPS in the range of $595 million to $605 million and $.69 to $.72, respectively, before flood-related charges of $5 million or $.04 per share. EPS guidance for the year and third quarter of 2006 includes approximately $9.4 million ($.07 per share) and $2.7 million ($.02 per share), respectively, 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 third quarter, respectively. We are very excited about the future and confident in the ability of our excellent organization to meet all challenges presented and to take advantage of the many opportunities in front of us." The Company will host a conference call to discuss its second quarter results at 1:00 PM (ET) July 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 Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , July 21, 2006. The replay numbers are as follows: toll free dial-in number is 800-839-8796 and International dial-in number is 402-998-0578. 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. 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 See DCE. Data Communications Equipment - Data Communication Equipment , Mobile Devices and Wireless Infrastructure. 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 1A 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, 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.
AMPHENOL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands, except per share data)
Three months ended Six Months ended
June 30, June 30,
------------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net Sales $ 606,598 $ 443,642 $ 1,175,589 $ 853,037
Costs and
Expenses:
Cost of sales,
excluding
depreciation
and
amortization 396,934 282,421 769,957 545,846
Depreciation and
amortization
expense 18,704 12,699 36,480 23,513
Selling,
general and
administrative
expense 82,950 62,476 162,751 120,299
Casualty loss
related to flood 15,000 - 15,000 -
----------- ----------- ----------- -----------
Operating income 93,010 86,046 191,401 163,379
Interest expense (10,002) (5,775) (20,186) (11,178)
Other expenses, net (3,394) (1,398) (6,118) (3,062)
----------- ----------- ----------- -----------
Income before
income taxes 79,614 78,873 165,097 149,139
Provision for
income taxes (26,273) (26,817) (54,482) (50,707)
----------- ----------- ----------- -----------
Net income $ 53,341 $ 52,056 $ 110,615 $ 98,432
=========== =========== =========== ===========
Net income per
common share -
Basic $ 0.60 $ 0.59 $ 1.24 $ 1.12
=========== =========== =========== ===========
Average shares
outstanding -
Basic 89,544,531 88,362,802 89,496,115 88,190,725
=========== =========== =========== ===========
Net income per
common share -
Diluted (1) (2) $ 0.58 $ 0.58 $ 1.21 $ 1.09
=========== =========== =========== ===========
Average shares
outstanding -
Diluted 91,740,798 90,272,291 91,635,938 90,089,494
=========== =========== =========== ===========
(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 and six months ended June 30, 2006, diluted earnings per share
excluding the $2.1 million and $3.9 million, respectively, of stock
based compensation expense, and the $15 million flood-related casualty
loss, is $0.71 and $1.35, respectively. For the three and six months
ended June 30, 2005, diluted earnings per share, including pro forma
stock based compensation expense of $1.9 million and $3.4 million, is
$0.56 and $1.06, respectively.
(2) - Excluding the effect of the flood-related casualty loss, the
diluted earnings per share for the three and six months ended June 30,
2006, was $0.69 and $1.32 respectively.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, Dec. 31,
2006 2005
---------- ----------
(Unaudited)
ASSETS
Current Assets:
Cash and short-term cash investments $ 45,920 $ 38,669
Accounts receivable, less allowance
for doubtful accounts of $11,828
and $11,162, respectively 336,866 302,867
Inventories 366,378 325,865
Prepaid expenses and other assets 60,335 42,413
---------- ----------
Total current assets 809,499 709,814
Land and depreciable assets, less
accumulated depreciation of
$390,885 and $352,408, respectively 257,630 253,889
Deferred debt issuance costs 2,104 2,351
Goodwill 910,247 886,720
Other assets 72,056 79,766
---------- ----------
$2,051,536 $1,932,540
========== ==========
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 215,118 $ 177,266
Accrued interest 4,147 4,998
Accrued salaries, wages and employee
benefits 47,641 42,705
Other accrued expenses 115,244 93,202
Dividends payable 2,742 2,729
Current portion of long-term debt 10,933 15,030
---------- ----------
Total current liabilities 395,825 335,930
Long-term debt 695,871 765,970
Accrued pension and post employment
benefit obligations 120,254 108,816
Other liabilities 30,216 32,589
Shareholders' Equity:
Common stock 89 89
Additional paid-in deficit (145,973) (164,082)
Accumulated earnings 1,090,555 985,317
Accumulated other comprehensive loss (60,738) (77,742)
Treasury stock, at cost (74,563) (54,347)
---------- ----------
Total shareholders' equity 809,370 689,235
---------- ----------
$2,051,536 $1,932,540
========== ==========
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in thousands)
Six months ended
June 30,
--------------------
2006 2005
-------- ---------
Net income $110,615 $ 98,432
Adjustments for cash from operations:
Depreciation and amortization 36,480 23,513
Amortization of deferred debt issue costs 262 729
Stock-based compensation 3,987 -
Casualty loss related to flood 15,000 -
Net change in non-cash components of working
capital (37,152) (41,234)
Other long term assets and liabilities 13,783 6,257
-------- ---------
Cash provided by operations 142,975 87,697
-------- ---------
Cash flow from investing activities:
Capital additions, net (33,931) (27,913)
Proceeds from disposal of fixed assets 1,844 -
Investments in acquisitions (14,848) (100,178)
-------- ---------
Cash flow used by investing activities (46,935) (128,091)
-------- ---------
Cash flow from financing activities:
Net change in borrowings under revolving
credit facilities (76,157) 28,007
Decrease in borrowings under Bank Agreement - (2,000)
Purchase of treasury stock (20,216) (4,723)
Proceeds from exercise of stock options 9,763 17,043
Excess tax benefits from stock-based payment
arrangements 3,185 -
Dividend payments (5,364) (2,643)
-------- ---------
Cash flow provided by (used by) financing
activities (88,789) 35,684
-------- ---------
Net change in cash and short-term
cash investments 7,251 (4,710)
Cash and short-term cash investments
balance, beginning of period 38,669 30,172
-------- ---------
Cash and short-term cash investments
balance, end of period $ 45,920 $ 25,462
======== =========
Net cash paid during the year for:
-------------------------------------------------
Interest 20,774 10,611
Taxes 46,700 48,384
AMPHENOL CORPORATION
SEGMENT INFORMATION
(dollars in thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------- ---------------------
2006 2005 2006 2005
-------- -------- ---------- --------
Trade Sales:
Interconnect Products $541,132 $389,163 $1,050,190 $750,318
Cable Products 65,466 54,479 125,399 102,719
-------- -------- ---------- --------
Consolidated $606,598 $443,642 $1,175,589 $853,037
======== ======== ========== ========
Operating income:
Interconnect Products $108,559 $ 85,327 $ 208,428 $161,118
Cable Products 7,793 7,044 14,084 13,219
Corporate (8,342) (6,325) (16,111) (10,958)
Casualty loss related to
flood (15,000) - (15,000) -
-------- -------- ---------- --------
Consolidated $ 93,010 $ 86,046 $ 191,401 $163,379
======== ======== ========== ========
ROS%:
Interconnect Products 20.1% 21.9% 19.8% 21.5%
Cable Products 11.9% 12.9% 11.2% 12.9%
Consolidated excluding
flood-related charges 17.8% 19.4% 17.6% 19.2%
Consolidated 15.3% 19.4% 16.3% 19.2%
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