Amphenol Corp. Reports Operating Results (10-Q)
Amphenol Corp-a has a market cap of $9.55 billion; its shares were traded at around $55.82 with a P/E ratio of 18.9 and P/S ratio of 2.4. The dividend yield of Amphenol Corp-a stocks is 0.7%. Amphenol Corp-a had an annual average earning growth of 16.3% over the past 10 years. GuruFocus rated Amphenol Corp-a the business predictability rank of 4-star.
Highlight of Business Operations:Net sales were $981.6 in the first quarter of 2012 compared to $940.6 in the prior year quarter, an increase of 4% in U.S. dollars and 5% in local currencies over the prior year quarter and from an organic standpoint (excluding the impact of foreign exchange and acquisitions) sales were comparable to the first quarter of 2011. Sales of interconnect products and assemblies (approximately 93% of sales) increased 3% in U.S. dollars and 4% in local currencies in the first quarter of 2012 compared to the same period in 2011 ($908.0 in 2012 versus $877.5 in 2011) primarily due to the impact of acquisitions. In addition, strong organic growth in the automotive, commercial aerospace, industrial and telecommunications and data communications markets was offset by declines in the wireless and military markets. Sales of cable products (approximately 7% of sales) increased 17% in U.S. dollars and 18% in local currencies in the first quarter of 2012 compared to the same period in 2011 ($73.6 in 2012 versus $63.1 in 2011). This increase is primarily due to increases in broadband markets globally.
Geographically, sales in the United States in the first quarter of 2012 were comparable to sales for the same period in 2011 ($322.9 in 2012 versus $323.5 in 2011). International sales for the first quarter of 2012 increased approximately 7% in both U.S. dollars and local currencies compared to the same period in 2011 ($658.7 in 2012 versus $617.1 in 2011) with particular strength in Europe due primarily to acquisitions. The comparatively stronger U.S. dollar for the first quarter of 2012 had the effect of decreasing sales by approximately $4.1 compared to foreign currency translation rates for the same periods in 2011.
Selling, general and administrative expenses increased to $124.0, or 12.6% of net sales, for the first quarter of 2012 compared to $118.0, or 12.5% of net sales for the same period in 2011. The increase in expense in the first quarter of 2012 is primarily attributable to increases in selling expense resulting from higher sales volume, increased research and development spending relating to new product development, higher stock-based compensation expense, and an increase in amortization expense due to recent acquisitions. Selling, general and administrative expenses include stock-based compensation expense of $7.5 for the first quarter of 2012 compared to $6.3 for the same period in 2011.
The following describes the significant changes in the amounts as presented on the accompanying Condensed Consolidated Balance Sheets at March 31, 2012. Accounts receivable increased $4.2 to $771.4 reflecting higher sales levels and translation resulting from the comparatively stronger U.S. dollar at March 31, 2012 compared to December 31, 2011 (Translation). Days sales outstanding was approximately 70 days at March 31, 2012 compared to 71 days at December 31, 2011. Inventories increased $9.2 to $659.1 to support higher sales levels and were also impacted by Translation. Inventory days decreased from 89 days at December 31, 2011 to 88 days at March 31, 2012. Land and depreciable assets, net, increased $9.4 to $389.9 primarily due to capital expenditures of $31.5 and Translation, partially offset by depreciation of $23.6. Goodwill increased $8.8 to $1,755.0 primarily due to Translation. Accounts payable increased $25.0 to $402.9, primarily as a result of an increase in purchasing activity during the period and Translation. Payable days increased from 53 days at December 31, 2011 to 54 days at March 31, 2012. Total accrued expenses decreased $0.5 to $263.8, primarily due to payment of incentive compensation during the quarter and lower accrued income taxes offset by an increase in dividends payable. Accrued pension and post-employment benefit obligations increased $0.3 to $207.3, primarily due to pension expense and Translation, offset by contributions of $8.8 to the Companys U.S. defined benefit pension plan. Other long-term liabilities increased $9.4 to $43.6 primarily due to an increase in deferred tax liabilities and Translation.
For the first three months of 2012, cash flow provided by operating activities of $164.2, proceeds from the 4.00% Senior Notes offering of $498.7, proceeds from the exercise of stock options including tax benefits from stock-based payment arrangements of $27.8 and net proceeds from sales of short-term investments of $11.6 were used to fund net repayments on the Revolving Credit Facility of $480.8, purchases of treasury stock of $81.9, capital expenditures of $31.5, fees and expenses of $4.3 in connection with the issuance of the 4.00% Senior Notes and dividend payments of $2.4, which resulted in an increase in cash and cash equivalents of $105.9. For the first three months of 2011, cash flow provided by operating activities of $107.7, net borrowings of $149.6 and proceeds from the exercise of stock options including tax benefits from stock-based payment arrangements of $16.5 were used to fund purchases of treasury stock of $188.5, capital expenditures of $23.3 and dividend payments of $2.6, which resulted in an increase in cash and cash equivalents of $67.1.
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