Second Quarter 2013 Results and Increase in Dividend Reported by Amphenol Corporation

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Second Quarter 2013 Results and Increase in Dividend Reported by Amphenol Corporation

WALLINGFORD, Conn.--(BUSINESS WIRE)-- Amphenol Corporation (NYSE-APH) reported today second quarter 2013 diluted earnings per share of $.95 compared to $.86 per share for the comparable 2012 period. Sales for the second quarter 2013 were $1.136 billion compared to $1.061 billion for the 2012 period. Currency translation had the effect of increasing sales by approximately $2.1 million in the second quarter 2013 compared to the 2012 period.

For the six months ended June 30, 2013 diluted earnings per share was $1.89 on an as reported basis and $1.82 excluding a one-time tax benefit compared to $1.63 for the comparable 2012 period. The 2013 period includes an income tax benefit of $11 million, or $.07 per share, resulting from the delay, by the U. S. government, in the reinstatement of certain federal income tax provisions for the year 2012 relating primarily to research and development credits and certain U.S. taxes on foreign income. Such tax provisions were reinstated on January 2, 2013 with retroactive effect to 2012. Under U.S. GAAP, the related benefit to the Company of $11 million, or $.07 per share, relating to the 2012 tax year was recorded as a one-time benefit in the first quarter of 2013 at the date of reinstatement. Sales for the six months ended June 30, 2013 were $2.216 billion compared to $2.043 billion for the 2012 period. Currency translation had no significant effect on sales for the six month 2013 period compared to the 2012 period.


In addition, the Company's Board of Directors has approved an increase in the quarterly dividend from $.105 per share to $.20 per share to be paid on or about October 2, 2013 to holders of record of the Company's Class A Common stock as of September 11, 2013.

Amphenol President and Chief Executive Officer, R. Adam Norwitt, stated "We are pleased to report strong second quarter sales up 7% over the comparable 2012 quarter and 5% sequentially. The sales growth over last year was driven by increases in nearly all of our served markets led by the commercial aerospace, automotive, mobile networks and broadband markets with contributions from both organic growth and our acquisition program. Sequentially, we grew in the information technology and data communications, mobile networks, broadband, industrial and automotive markets, but experienced modest sequential declines in the mobile device and defense markets. Our strong growth is further confirmation of the significant benefits of the Company's technology leadership and diversification. We are encouraged to have achieved orders of $1.177 billion in the second quarter, representing a book-to-bill of 1.04 to 1. In addition, it is extremely rewarding that the Company's unique entrepreneurial culture continues to drive an unwavering focus on profitability, resulting in an operating margin improvement of 30 basis points over the prior year quarter to 19.7%, driving strong 10% EPS growth and record EPS of $.95 in the quarter. These results are a direct result of our management team's ability to react quickly in a dynamic environment, especially given the continuing high levels of uncertainty in most of the world's economies. I am very proud of our organization as we continue to execute well."

"Our ongoing strategy of market and geographic diversification combined with our strong commitment to developing enabling technologies for our customers in all markets, both through organic product development and through our acquisition program, continues to expand the Company's growth opportunities. Consistent with that strategy, at the end of the second quarter, the Company completed the acquisition of DC Electronics, a U.S. manufacturer of value-add interconnect products for a broad range of harsh environment industrial applications with annual sales of approximately $40 million. This acquisition expands the Company's presence in a very important and growing technology area. 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, in this quarter, the purchase of 1.2 million shares of the Company's stock pursuant to our stock repurchase plan and an increase in the quarterly dividend from $.105 per share to $.20 per share."

"There is still a great deal of market uncertainty in the global economy and, in particular, increasing levels of volatility in the mobile device market. Accordingly, and assuming current currency exchange rates, we expect third quarter 2013 revenues in the range of $1.120 billion to $1.145 billion and diluted EPS in the range of $.95 to $.98. For the year 2013, we now expect to achieve revenues and diluted EPS in the range of $4.490 billion to $4.540 billion and $3.73 to $3.79 (excluding one-time items), respectively, an increase of 5% to 6% over 2012 revenues and 7% to 9% over 2012 diluted EPS (excluding one-time items). This compares to prior full year 2013 guidance for revenues and diluted EPS in the range of $4.580 billion to $4.655 billion and $3.76 to $3.85 (excluding one-time items), respectively. Despite the many uncertainties in the global economy, we believe we can 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 leading interconnect technologies in all of our end markets. This creates a significant, long-term growth opportunity for Amphenol.Importantly, our ongoing actions to enhance our competitive advantages and build sustained financial strength have created a solid base for future performance. I amconfident 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 second quarter results at 1:00 PM (EST) July 18, 2013. 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 11:59 P.M. (EST) on Sunday, August 18, 2013. The replay numbers are toll free 800-814-6746; International toll number is 203-369-3827; Passcode: 71813.

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 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 1Aof the Company's Form 10-K for the year ended December 31, 2012, 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 thousands, except per share data)
   
 
 
Three Months EndedSix Months Ended
June 30,June 30,
 2013  2012  2013  2012 
 
Net sales$1,136,067$1,061,107$2,215,872$2,042,711
 
Cost of sales 776,279  726,946  1,518,192  1,399,279 
 
Gross profit359,788334,161697,680643,432
 
Selling, general and administrative expense 135,775  127,985  266,710  251,977 
 
Operating income224,013206,176430,970391,455
 
Interest expense(15,621)(15,099)(31,078)(28,848)
Other income, net 3,033  2,634  5,818  4,821 
 
Income before income taxes211,425193,711405,710367,428
 
Provision for income taxes (56,557) (51,818) (97,229) (98,287)
 
Net income154,868141,893308,481269,141
Less: Net income attributable to noncontrolling interests (880) (951) (1,486) (1,636)
 
Net income attributable to Amphenol Corporation$153,988 $140,942 $306,995 $267,505 
 
 
Net income per common share - Basic$0.96 $0.87 $1.92 $1.65 
 
Weighted average common shares outstanding - Basic 159,705,021  161,511,550  159,721,503  162,186,707 
 
Net income per common share - Diluted (1)$0.95 $0.86 $1.89 $1.63 
 
Weighted average common shares outstanding - Diluted 162,935,428  163,871,565  162,824,829  164,613,352 
 
Dividends declared per common share$0.105 $0.105 $0.210 $0.210 
 
Note 1Earnings per share in the six months ended June 30, 2013 included an income tax benefit of $11.3 million, or $.07 per share, resulting from the delay, by the U. S. government, in the reinstatement of certain federal income tax provisions for the year 2012 relating primarily to research and development credits and certain U.S. taxes on foreign income. Such tax provisions were reinstated on January 2, 2013 with retroactive effect to 2012. Under U.S. GAAP, the related benefit to the Company of $11.3 million, or $.07 per share, relating to the 2012 tax year was recorded as a one-time benefit in the first quarter of 2013 at the date of reinstatement. Excluding these effects, diluted earnings per share was $1.82 for the six months ended June 30, 2013.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(dollars in thousands)

 

  
 
 
June 30,December 31,
20132012
ASSETS
 
Current Assets:
Cash and cash equivalents$723,659$690,850
Short-term investments 418,893  251,653 
Total cash, cash equivalents and short-term investments1,142,552942,503
Accounts receivable, less allowance
for doubtful accounts of $11,004

and $10,372, respectively

905,823910,711
Inventories703,489733,718
Other current assets 122,606  119,983 
 
Total current assets2,874,4702,706,915
 
Land and depreciable assets, less
accumulated depreciation of

$756,788 and $715,895, respectively

424,844417,436
Goodwill1,952,2511,932,740
Other long-term assets 152,736  158,372 
 
$5,404,301 $5,215,463 
 
LIABILITIES & EQUITY
 
Current Liabilities:
Accounts payable$447,159$496,525
Accrued salaries, wages and employee benefits84,59189,142
Accrued income taxes81,94694,341
Other accrued expenses118,264108,213
Short-term debt 83,599  100,293 
 
Total current liabilities815,559888,514
 
Long-term debt1,698,9511,606,204
Accrued pension and post employment
benefit obligations250,373244,571
Other long-term liabilities42,15833,992
 
Equity:
Common stock160160
Additional paid-in capital434,236336,683
Accumulated earnings2,302,5412,210,120
Accumulated other comprehensive loss (151,798) (117,004)
 
Total shareholders' equity attributable to Amphenol Corporation2,585,1392,429,959
 
Noncontrolling interests 12,121  12,223 
 
Total equity 2,597,260  2,442,182 
 
$5,404,301 $5,215,463 

AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in thousands)
  
 
Six months ended
June 30,
2013 2012 
 
Cash flow from operating activities:
Net income$308,481$269,141
Adjustments for cash flow from operating activities:
Depreciation and amortization66,76258,591
Stock-based compensation expense17,17515,101
Excess tax benefits from stock-based compensation payment arrangements(16,023)(9,677)
Net change in components of working capital(26,727)(40,573)
Net change in other long-term assets and liabilities 11,138  (978)
 
Cash flow provided by operating activities 360,806  291,605 
 
Cash flow from investing activities:
Additions to property, plant and equipment(66,037)(63,422)
Proceeds from disposals of fixed assets1,4122,304
Purchases of short-term investments(408,845)(14
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