Third Quarter 2021 Highlights1:
- Record sales of $2.818 billion, up 21% in U.S. dollars and 13%
organically2 compared to the third quarter 2020
- Record GAAP diluted EPS of $0.67, up 20% compared to the prior
year period
- Record Adjusted Diluted EPS2 of $0.65, up 18% compared to the
prior year period
- Operating Margin of 20.3%
- Operating Cash Flow and Free Cash Flow2 of $328 million and
$238 million, respectively
- Quarterly dividend increased by 38% from $0.145 to $0.20 per
share
Amphenol Corporation (NYSE:APH) today reported third quarter
2021 results.
“We are pleased to have closed the third quarter with sales and
Adjusted Diluted EPS2 exceeding the high end of our guidance,” said
Amphenol President and Chief Executive Officer, R. Adam Norwitt.
“Sales increased by a strong 21% in the quarter, with broad-based
growth across most of our end markets, including contributions from
the Company’s acquisition program.
“During the third quarter, Amphenol continued to deploy its
financial strength in a variety of ways to increase shareholder
value. To that end, the Company purchased 2.3 million shares of its
common stock for $171 million. The Company also paid dividends of
$87 million, resulting in total capital returned to shareholders
during the third quarter of $258 million.”
Increase in Quarterly Dividend
On October 26, 2021, the Company’s Board of Directors approved a
38% increase in the Company’s quarterly dividend, from $0.145 per
share to $0.20 per share. The new dividend amount will be paid on
January 12, 2022 to shareholders of record as of December 21,
2021.
Fourth Quarter and Full Year 2021 Outlook
The current market environment remains highly uncertain, with
significant supply chain and inflationary challenges as well as the
ongoing pandemic. Given this, and assuming constant exchange rates,
for the fourth quarter 2021, Amphenol expects sales to be in the
range of $2.690 billion to $2.750 billion, representing 11% to 13%
growth over the fourth quarter of 2020, and Adjusted Diluted EPS2
in the range of $0.61 to $0.63, representing 7% to 11% growth over
the fourth quarter of 2020. For the full year 2021, we expect sales
to be in the range of $10.540 billion to $10.600 billion,
representing 23% growth over 2020, and Adjusted Diluted EPS2 in the
range of $2.39 to $2.41, representing 28% to 29% growth over
2020.
“Despite the ongoing challenges and uncertainties we continue to
face around the world, we are pleased with the platform of strength
that has been created by the Company’s performance,” Mr. Norwitt
continued. “The revolution in electronics is accelerating, thereby
creating exciting and dynamic long-term growth opportunities for
Amphenol across each of our diversified end markets. We believe
these opportunities will enable a further, long-term increase in
the demand for our ever expanding range of high-technology
interconnect, sensor and antenna products. 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 to
protect the safety and health of our employees around the world
throughout the ongoing pandemic, all while 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 third
quarter results at 1:00 PM (EDT) Wednesday, October 27, 2021. The
toll-free dial-in number to participate in this call is
888-455-0949; International dial-in number is +1-773-799-3973;
Passcode: LAMPO. There will be a replay available until 11:59 PM
(EST) on Saturday, November 27, 2021. The replay numbers are toll
free 866-430-5849; International toll number +1-203-369-0935;
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
https://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 from continuing operations attributable
to Amphenol Corporation, Adjusted Effective Tax Rate, Adjusted
Diluted EPS (from continuing operations), 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 from
continuing operations attributable to Amphenol Corporation,
effective tax rate and diluted EPS (from continuing operations)
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. All non-GAAP
financial measures and their most directly comparable U.S. GAAP
financial measures presented within this press release are on a
continuing operations basis only and exclude any results associated
with discontinued operations. 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, which relate to future events and are subject to risks and
uncertainties. All statements that address events or developments
that we expect or believe may or will occur in the future are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The 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 or other financial
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
regarding fourth quarter and full year 2021 sales and Adjusted
Diluted EPS (from continuing operations), among other matters, are
based upon reasonable assumptions, the expectations may not be
attained or there may be material deviation. Readers 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: 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, depending on the specific location, government
regulations that inhibit our ability to operate certain of our
facilities in the ordinary course and to adjust certain costs,
travel restrictions, supplier constraints, supply-chain
interruptions, logistics challenges and limitations, and reduced
demand from certain customers; uncertainties associated with a
protracted economic slowdown that could negatively affect the
financial condition of our customers; uncertainties and volatility
in the global capital markets; political, economic, military and
other risks in countries outside the United States; the impact of
general economic conditions, geopolitical conditions and U.S. trade
policies, legislation, trade disputes, treaties and tariffs,
including those affecting China, on the Company’s business
operations; 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
Company’s ability to obtain a consistent supply of materials, at
stable pricing levels; 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; the Company’s ability to compete successfully on the
basis of technology innovation, product quality and performance,
price, customer service and delivery time; the Company’s ability to
continue to conceive, design, manufacture and market new products
and ability to rely upon continuing market acceptance of its
existing and future product lines; 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
covenants, which could result in a default under the Company’s
revolving credit facility; the Company’s ability to access the
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; government contracting risks
that the Company may be subject to, including laws and regulations
governing performance of U.S. government contracts and related
risks associated with conducting business with the U.S. government
or its 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 or other laws; cybersecurity threats, malware,
phishing, ransomware or other increasingly sophisticated attacks,
that could impair our information technology systems and could
disrupt business operations, result in a 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 and adversely impact our reputation and
operating results and potentially lead to litigation and/or
governmental investigations and fines; 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; and 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. 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, any
potential resurgence of the crisis including from the more
transmissible Delta variant strain and any future strains that may
arise, future government regulations and actions in response to the
crisis, the timing, availability, effectiveness and adoption rates
of vaccines, 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, 2020, 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.
_____________________ 1 Data throughout this press release is on
a continuing operations basis and excludes results associated with
discontinued operations, unless otherwise noted. 2 All referenced
non-GAAP financial measures are defined in the tables at the end of
this press release.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(Unaudited)
(dollars and shares in
millions, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net sales
$
2,818.5
$
2,323.4
$
7,849.5
$
6,172.9
Cost of sales
1,928.6
1,588.5
5,388.9
4,274.4
Gross profit
889.9
734.9
2,460.6
1,898.5
Acquisition-related expenses
—
—
55.4
—
Selling, general and administrative
expenses
318.7
259.1
893.0
748.4
Operating income
571.2
475.8
1,512.2
1,150.1
Interest expense
(29.0
)
(28.0
)
(86.7
)
(87.1
)
Other income (expense), net
—
1.0
(0.3
)
3.4
Income from continuing operations before
income taxes
542.2
448.8
1,425.2
1,066.4
Provision for income taxes (1)
(120.5
)
(99.3
)
(302.8
)
(213.3
)
Net income from continuing operations
421.7
349.5
1,122.4
853.1
Less: Net income from continuing
operations attributable to noncontrolling interests
(2.9
)
(2.9
)
(6.9
)
(6.7
)
Net income from continuing operations
attributable to Amphenol Corporation
418.8
346.6
1,115.5
846.4
Income from discontinued operations
attributable to Amphenol Corporation, net of income taxes of ($1.5)
and ($1.8) for 2021, respectively
7.7
—
10.3
—
Net income attributable to Amphenol
Corporation
$
426.5
$
346.6
$
1,125.8
$
846.4
Net income per
common share attributable to Amphenol Corporation —
Basic:
Continuing operations
$
0.70
$
0.58
$
1.87
$
1.42
Discontinued operations, net of income
taxes
0.01
—
0.02
—
Net income attributable to Amphenol
Corporation - Basic
$
0.71
$
0.58
$
1.88
$
1.42
Weighted average common shares outstanding
- Basic
597.7
597.5
597.8
595.2
Net income per
common share attributable to Amphenol Corporation —
Diluted:
Continuing operations (2)
$
0.67
$
0.56
$
1.79
$
1.38
Discontinued operations, net of income
taxes
0.01
—
0.02
—
Net income attributable to Amphenol
Corporation - Diluted (2)
$
0.68
$
0.56
$
1.80
$
1.38
Weighted average common shares outstanding
- Diluted
625.8
616.4
624.6
612.5
___________________________________________
Note: Per share amounts may not add due to
rounding.
Note 1
Provision for income taxes for the three
months ended September 30, 2021 and 2020 includes excess tax
benefits related to stock-based compensation of $12.3 million
($0.02 per share) and $10.7 million ($0.02 per share),
respectively. Provision for income taxes for the nine months ended
September 30, 2021 and 2020 includes excess tax benefits related to
stock-based compensation of $34.3 million ($0.05 per share) and
$28.1 million ($0.05 per share), respectively. Provision for income
taxes for the nine months ended September 30, 2021 also includes a
discrete tax benefit of $14.9 million ($0.02 per share) related to
the settlement of uncertain tax positions in certain non-U.S.
jurisdictions. Provision for income taxes for the nine months ended
September 30, 2020 also includes a discrete tax benefit of $19.9
million ($0.03 per share) related to the settlements of refund
claims in a non-U.S. jurisdiction and the resulting adjustments to
deferred taxes.
Note 2
Net income per share for the three months
ended September 30, 2021 and 2020 includes the excess tax benefits
related to stock-based compensation discussed in Note 1. Net income
per share for the nine months ended September 30, 2021 and 2020
includes the excess tax benefits related to stock-based
compensation and the respective discrete tax benefits, all of which
are discussed in Note 1. Net income per share for the nine months
ended September 30, 2021 also includes acquisition-related expenses
of $55.4 million ($44.6 million after-tax, or $0.07 per share)
comprised of transaction, severance, restructuring and certain
non-cash costs related to the MTS acquisition.
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 $0.65 and $0.55 for the three
months ended September 30, 2021 and 2020, respectively, and $1.78
and $1.30 for the nine months ended September 30, 2021 and 2020,
respectively.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(dollars in millions)
September 30,
December 31,
2021
2020
ASSETS
Current Assets:
Cash and cash equivalents
$
1,268.1
$
1,702.0
Short-term investments
34.4
36.1
Total cash, cash equivalents and
short-term investments
1,302.5
1,738.1
Accounts receivable, less allowance for
doubtful accounts of $44.5 and $44.8, respectively
2,204.5
1,951.6
Inventories
1,952.5
1,462.2
Prepaid expenses and other current
assets
392.1
338.9
Current assets held for sale
1,068.2
—
Total current assets
6,919.8
5,490.8
Property, plant and equipment, less
accumulated depreciation of $1,881.3 and $1,738.6, respectively
1,175.4
1,054.6
Goodwill
5,839.4
5,032.1
Other intangible assets, net
603.6
397.5
Other long-term assets
387.9
352.3
$
14,926.1
$
12,327.3
LIABILITIES & EQUITY
Current Liabilities:
Accounts payable
$
1,300.0
$
1,120.7
Accrued salaries, wages and employee
benefits
224.9
195.4
Accrued income taxes
101.2
112.6
Accrued dividends
86.7
86.8
Other accrued expenses
666.1
558.5
Current portion of long-term debt
298.7
230.3
Current liabilities held for sale
207.4
—
Total current liabilities
2,885.0
2,304.3
Long-term debt, less current portion
4,950.0
3,636.2
Accrued pension and postretirement benefit
obligations
221.6
228.6
Deferred income taxes
452.2
299.1
Other long-term liabilities
408.6
407.2
Equity:
Common stock
0.6
0.6
Additional paid-in capital
2,289.5
2,068.1
Retained earnings
4,080.6
3,705.4
Treasury stock, at cost
(89.3
)
(111.1
)
Accumulated other comprehensive loss
(335.5
)
(278.1
)
Total shareholders’ equity attributable to
Amphenol Corporation
5,945.9
5,384.9
Noncontrolling interests
62.8
67.0
Total equity
6,008.7
5,451.9
$
14,926.1
$
12,327.3
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW
(Unaudited)
(dollars in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Cash from operating
activities:
Net income from continuing operations
$
421.7
$
349.5
$
1,122.4
$
853.1
Adjustments to reconcile net income from
continuing operations to cash provided by operating activities from
continuing operations:
Depreciation and amortization
95.2
74.4
274.5
218.0
Stock-based compensation expense
21.2
19.0
60.2
51.0
Deferred income tax provision
(benefit)
12.1
(10.9
)
24.9
(5.8
)
Net change in components of working
capital
(219.2
)
(32.3
)
(414.1
)
38.6
Net change in other long-term assets and
liabilities
(2.6
)
(1.1
)
(7.5
)
(3.9
)
Net cash provided by operating activities
from continuing operations
328.4
398.6
1,060.4
1,151.0
Net cash provided by operating activities
from discontinued operations
32.4
—
9.1
—
Net cash provided by operating
activities
360.8
398.6
1,069.5
1,151.0
Cash from investing
activities:
Capital expenditures
(90.9
)
(76.5
)
(274.2
)
(204.8
)
Proceeds from disposals of property, plant
and equipment
0.8
8.9
2.4
10.8
Purchases of short-term investments
(45.8
)
(40.2
)
(128.0
)
(89.3
)
Sales and maturities of short-term
investments
44.5
30.8
129.3
71.1
Acquisitions, net of cash acquired
—
(33.8
)
(1,531.0
)
(50.3
)
Other
2.7
—
(8.5
)
—
Net cash used in investing activities from
continuing operations
(88.7
)
(110.8
)
(1,810.0
)
(262.5
)
Net cash used in investing activities from
discontinued operations
(1.3
)
—
(4.7
)
—
Net cash used in investing activities
(90.0
)
(110.8
)
(1,814.7
)
(262.5
)
Cash from financing
activities:
Proceeds from issuance of senior notes and
other long-term debt
748.5
—
749.9
942.3
Repayments of senior notes and other
long-term debt
(229.1
)
(1.6
)
(616.2
)
(402.9
)
Borrowings under credit facilities
—
—
—
1,567.4
Repayments under credit facilities
—
—
—
(1,568.1
)
(Repayments) borrowings under commercial
paper programs, net
(476.3
)
(0.7
)
925.0
(385.9
)
Payment of costs related to debt
financing
(6.1
)
—
(6.1
)
(8.7
)
Payment of acquisition-related contingent
consideration
—
—
—
(75.0
)
Proceeds from exercise of stock
options
77.6
104.1
180.9
256.6
Payment of deferred purchase price related
to acquisitions
—
(16.2
)
(4.1
)
(16.2
)
Distributions to and purchases of
noncontrolling interests
(3.0
)
(1.9
)
(11.3
)
(11.5
)
Purchase of treasury stock
(170.9
)
(201.9
)
(491.0
)
(459.2
)
Dividend payments
(86.6
)
(74.6
)
(260.0
)
(223.0
)
Transfers to discontinued operations
(28.7
)
—
(28.7
)
—
Net cash provided by (used in) financing
activities from continuing operations
(174.6
)
(192.8
)
438.4
(384.2
)
Net cash used in financing activities from
discontinued operations
(7.1
)
—
(0.1
)
—
Net cash provided by (used in) financing
activities
(181.7
)
(192.8
)
438.3
(384.2
)
Effect of exchange rate changes on cash
and cash equivalents
(6.4
)
37.2
(15.5
)
25.0
Net increase (decrease) in cash and cash
equivalents
82.7
132.2
(322.4
)
529.3
Cash and cash equivalents balance of
continuing operations, beginning of period
1,209.4
1,288.3
1,702.0
891.2
Cash and cash equivalents included in
Current assets held for sale, beginning of period
87.5
—
—
—
Cash and cash equivalents balance, end of
period
$
1,379.6
$
1,420.5
$
1,379.6
$
1,420.5
Less: Cash and cash equivalents included
in Current assets held for sale, end of period
111.5
—
111.5
—
Cash and cash equivalents balance of
continuing operations, end of period
$
1,268.1
$
1,420.5
$
1,268.1
$
1,420.5
Cash paid for:
Interest
$
27.8
$
27.2
$
78.8
$
74.5
Income taxes, net
96.4
121.3
305.4
262.9
AMPHENOL CORPORATION
SEGMENT INFORMATION
(Unaudited)
(dollars in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net
sales:
Interconnect Products and Assemblies
$
2,699.2
$
2,221.9
$
7,520.5
$
5,899.4
Cable Products and Solutions
119.3
101.5
329.0
273.5
Consolidated Net sales
$
2,818.5
$
2,323.4
$
7,849.5
$
6,172.9
Operating
income:
Interconnect Products and Assemblies
$
603.3
$
498.4
$
1,652.3
$
1,217.6
Cable Products and Solutions
4.6
10.9
20.0
25.7
Stock-based compensation expense
(21.2
)
(19.0
)
(60.2
)
(51.0
)
Acquisition-related expenses
—
—
(55.4
)
—
Other operating expenses
(15.5
)
(14.5
)
(44.5
)
(42.2
)
Consolidated Operating income
$
571.2
$
475.8
$
1,512.2
$
1,150.1
Operating margin
(%):
Interconnect Products and Assemblies
22.4
%
22.4
%
22.0
%
20.6
%
Cable Products and Solutions
3.8
%
10.7
%
6.1
%
9.4
%
Stock-based compensation expense
-0.8
%
-0.8
%
-0.8
%
-0.8
%
Acquisition-related expenses
0.0
%
0.0
%
-0.7
%
0.0
%
Other operating expenses
-0.6
%
-0.6
%
-0.6
%
-0.7
%
Consolidated Operating margin (%)
20.3
%
20.5
%
19.3
%
18.6
%
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. All non-GAAP financial measures and their most directly
comparable U.S. GAAP financial measures presented in the following
tables are on a continuing operations basis only and exclude any
results associated with discontinued operations. 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)
Net sales
Foreign
Constant
Organic
growth in
currency
Currency Net
Acquisition
Net Sales
U.S. Dollars (1)
impact (2)
Sales Growth (4)
impact (3)
Growth (4)
Three Months
Ended September 30:
2021
2020
(GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
Net sales:
Interconnect Products and Assemblies
$
2,699.2
$
2,221.9
21
%
1
%
20
%
7
%
13
%
Cable Products and Solutions
119.3
101.5
18
%
1
%
17
%
6
%
11
%
Consolidated
$
2,818.5
$
2,323.4
21
%
1
%
20
%
7
%
13
%
Nine Months Ended
September 30:
Net sales:
Interconnect Products and Assemblies
$
7,520.5
$
5,899.4
27
%
2
%
25
%
6
%
19
%
Cable Products and Solutions
329.0
273.5
20
%
—
%
20
%
5
%
15
%
Consolidated
$
7,849.5
$
6,172.9
27
%
2
%
25
%
6
%
19
%
___________________________________________
(1)
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.
(2)
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 period(s) in
the prior year. Such amount is calculated by subtracting current
year net sales translated at average foreign currency exchange
rates for the respective prior year period(s) from current year
reported net sales, taken as a percentage of the respective prior
period net sales.
(3)
Acquisition impact, a non-GAAP
measure, represents the percentage impact on net sales resulting
from acquisitions that have closed during the prior twelve months
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.
(4)
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 September
30,
2021
2020
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)
$
571.2
20.3
%
$
418.8
22.2
%
$
0.67
$
475.8
20.5
%
$
346.6
22.1
%
$
0.56
Excess tax benefits related to stock-based
compensation
—
—
(12.3
)
2.3
(0.02
)
—
—
(10.7
)
2.4
(0.02
)
Adjusted (non-GAAP) (ii) (iii)
$
571.2
20.3
%
$
406.5
24.5
%
$
0.65
$
475.8
20.5
%
$
335.9
24.5
%
$
0.55
Nine Months Ended September
30,
2021
2020
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)
$
1,512.2
19.3
%
$
1,115.5
21.2
%
$
1.79
$
1,150.1
18.6
%
$
846.4
20.0
%
$
1.38
Acquisition-related expenses
55.4
0.7
44.6
(0.2
)
0.07
—
—
—
—
—
Excess tax benefits related to stock-based
compensation
—
—
(34.3
)
2.4
(0.05
)
—
—
(28.1
)
2.6
(0.05
)
Discrete tax item
—
—
(14.9
)
1.0
(0.02
)
—
—
(19.9
)
1.9
(0.03
)
Adjusted (non-GAAP) (ii) (iii)
$
1,567.6
20.0
%
$
1,110.9
24.5
%
$
1.78
$
1,150.1
18.6
%
$
798.4
24.5
%
$
1.30
FREE
CASH FLOW
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Operating Cash Flow (GAAP)
$
328.4
$
398.6
$
1,060.4
$
1,151.0
Capital expenditures (GAAP)
(90.9
)
(76.5
)
(274.2
)
(204.8
)
Proceeds from disposals of property, plant
and equipment (GAAP)
0.8
8.9
2.4
10.8
Free Cash Flow (non-GAAP) (iii)
$
238.3
$
331.0
$
788.6
$
957.0
___________________________________________
Note: All data in the tables above are
on a continuing operations basis only and exclude results
associated with discontinued operations.
(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 from continuing
operations attributable to Amphenol Corporation is defined as
Net income from continuing operations 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 from continuing operations 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 from continuing operations (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 from
continuing operations 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 from continuing
operations (“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 shareholders 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. All non-GAAP
financial measures and their most directly comparable U.S. GAAP
financial measures presented in this section are on a continuing
operations basis only and exclude any results associated with
discontinued operations. 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 measure should be
read in conjunction with the Company’s financial statements
presented in accordance with U.S. GAAP.
The following are reconciliations of current guidance for GAAP
Diluted earnings per share (Diluted EPS) to Adjusted Diluted EPS
(non-GAAP) for both the fourth quarter and the full year 2021:
GUIDANCE (1)
FOURTH QUARTER 2021
FULL YEAR 2021
Diluted EPS (GAAP) - continuing
operations
$0.61 - $0.63
$2.40 - $2.42
Acquisition-related expenses, net of
tax
-
$0.07
Excess tax benefits related to stock-based
compensation
-
($0.05)
Discrete tax item
-
($0.02)
Adjusted Diluted EPS (non-GAAP) -
continuing operations (2)
$0.61 - $0.63
$2.39 - $2.41
_______________________________
(1)
Forward-looking Adjusted Diluted EPS
reflected in our guidance excludes certain income and expenses,
described above, that are not directly related to the Company's
operating performance. Such items are excluded from our guidance
for the forward-looking periods only to the extent that such items
have either (i) already been reflected in periods reported and are
therefore included in the forward-looking full-year period or (ii)
the Company reasonably expects to record such items in the
forward-looking periods presented and such amounts are estimable.
As the Company has not identified any such items in the
forward-looking periods presented, the reconciling items shown
above for the full year 2021 guidance only reflect the impact of
the items that were recognized during the nine months ended
September 30, 2021. Forward-looking guidance included in this press
release and related to Net sales and/or Adjusted Diluted EPS
reflects only the Company’s results on a continuing operations
basis and does not include the results associated with the MTS Test
& Simulation (“MTS T&S”) business which (i) we expect to
divest upon the receipt of all required regulatory approvals and
the satisfaction of other customary closing conditions and (ii) is
reported as discontinued operations in our Condensed Consolidated
Statements of Income since the date of the acquisition of MTS
Systems Corporation on April 7, 2021.
(2)
Per share amounts in this table were
calculated using actual, unrounded results; therefore, the sum of
the components may not add due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211027005209/en/
Sherri Scribner Vice President, Strategy and Investor Relations
203-265-8820 IR@amphenol.com
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