Amphenol Corp. has a market cap of $7.64 billion; its shares were traded at around $44.11 with a P/E ratio of 22.4 and P/S ratio of 2.8. The dividend yield of Amphenol Corp. stocks is 0.1%. Amphenol Corp. had an annual average earning growth of 11.3% over the past 10 years.APH is in the portfolios of Westport Asset Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, George Soros of Soros Fund Management LLC, RS Investment Management, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:Net sales were $771.0 in the first quarter of 2010 compared to $660.0 for the same period in 2009, an increase of 17% in U.S. dollars and 14% in local currencies. Sales of interconnect products and assemblies (approximately 91% of sales) increased 17% in U.S. dollars and 15% in local currencies in the first quarter of 2010 compared to the same period in 2009 ($703.6 in 2010 versus $602.0 in 2009). Sales increased significantly in the automotive, telecommunications and data communications and industrial markets as a result of a broad strengthening from a product, customer and geographic perspective compared to weak end market demand in the first quarter of 2009, which resulted from the global economic crisis. Sales increases occurred in all major geographic regions. Sales of cable products (approximately 9% of sales) increased 16% in U.S dollars and 10% in local currencies in the first quarter of 2010 compared to the same period in 2009 ($67.4 in 2010 versus $58.0 in 2009). This increase is primarily attributable to an increase in overall demand in broadband and cable television markets compared to 2009, which had experienced a slowdown in spending in these markets resulting from weak economic conditions.
Geographically, sales in the United States in the first quarter increased approximately 19% compared to the same period in 2009 ($272.9 in 2010 versus $230.2 in 2009). International sales for the first quarter of 2010 increased approximately 16% in U.S. dollars and 13% in local currencies compared to the same period in 2009 ($498.1 in 2010 versus $429.8 in 2009). The comparatively weaker U.S. dollar for the first quarter of 2010 had the effect of increasing net sales by approximately $15.4 compared to foreign currency translation rates for the same period in 2009.
Cash provided by operating activities was $31.8 in the first three months of 2010 compared to $142.8 in the same 2009 period. The decrease in cash provided by operating activities is related primarily to the effect of adoption of ASU 2009-16 (Notes 2 and 14) which resulted in a decrease of $82.0, and an increase in components of working capital offset by an increase in net income and an increase in non-cash expenses including depreciation and stock-based compensation. The components of working capital as presented on the accompanying Condensed Consolidated Statements of Cash Flow increased $15.3 in the first three months of 2010 due primarily to an increase of $43.9 in accounts receivable and increases of $17.2 and $3.2 in inventory and other current assets, respectively, which were partially offset by increases in accounts payable and accrued liabilities of $30.3 and $19.3, respectively. The components of working capital decreased $34.3 in the first three months of 2009 due primarily to decreases of $58.6 and $46.1 in accounts receivable and inventory, respectively, which were partially offset by decreases in accounts payable and accrued liabilities of $56.7 and $14.4, respectively.
The following represents the significant changes in the amounts as presented on the accompanying Condensed Consolidated Balance Sheets at March 31, 2010. Accounts receivable increased $123.0 to $572.6, resulting from the inclusion of $82.0 of receivables previously sold under the Companys Receivables Securitization Facility in accordance with the adoption of ASU 2009-16 and also reflecting higher sales levels, partially offset by translation resulting from the comparatively stronger U.S. dollar at March 31, 2010 compared to December 31, 2009 (Translation). Days sales outstanding was approximately 66 days at March 31, 2010 compared to 64 days at December 31, 2009. Inventories increased $14.3 to $476.1, primarily due to the impact of higher sales activity, partially offset by Translation. Inventory days increased from 80 at December 31, 2009 to 82 at March 31, 2010. Other current assets increased $11.5 to $135.9, primarily due to higher short-term investment purchases during the period. Land and depreciable assets, net, decreased $5.7 to $327.2 reflecting capital expenditures of $18.7 offset by depreciation of $20.8 and the impact of translation. Accounts payable increased $27.7 to $319.8, primarily as a result of an increase in purchasing activity during the period related to first quarter sales levels. Total accrued expenses increased $13.0 to $223.6, primarily due to an increase in accrued federal income taxes. Short-term debt increased $49.0 due to the adoption of ASU 2009-16 as previously discussed.
For the first three months of 2010, cash flow from operations of $31.8, net borrowings under the Receivables Securitization Facility of $49.0 and proceeds from the exercise of stock options including tax benefits from stock-based payment arrangements of $3.8 were used to fund net capital expenditures and acquisition-related payments of $18.4 and $3.0, respectively, to purchase short-term investments of $8.4 and to fund dividend payments and payments to shareholders of noncontrolling interests of $2.6 and $1.0, respectively, which resulted in an increase in cash and cash equivalents of $47.1. For the first three months of 2009, cash flow from operations of $142.8, cash and cash equivalents on hand of $64.5, net borrowings from the Revolving Credit Facility of $85.9, sales of short-term investments of $1.4, proceeds from the exercise of stock options including tax benefits from stock-based payment arrangements of $0.3 were used to fund acquisition-related payments of $261.5, capital expenditures of $16.9 and dividend payments of $5.1.
A subsidiary of the Company has an agreement with a financial institution whereby the subsidiary can sell an undivided interest of up to $100.0 in a designated pool of qualified accounts receivable (the Receivables Securitization Facility). The Company services, administers and collects the receivables on behalf of the purchaser. The Receivables Securitization Facility includes certain covenants and provides for various events of termination and expires in May 2010. Upon expiration of the term, the Company intends to replace the Receivables Securitization Facility with a similar program. In accordance with previous accounting guidance, the receivables sold under the Receivables Securitization Facility were accounted for off-balance sheet as a sale of receivables. As discussed in Note 2, the Company adopted ASU 2009-16 on January 1, 2010. As a result, the Company no longer accounts for the value of the outstanding undivided interest held by investors under the Receivables Securitization Facility as a sale. In addition, transfers of receivables occurring on or after January 1, 2010 are reflected as debt issued in the Companys Condensed Consolidated Statements of Cash Flows, and the value of the outstanding undivided interest held by investors at March 31, 2010 is accounted for as a secured borrowing and is included in the Companys Condensed Consolidated Balance Sheets as short-term debt. At March 31, 2010, borrowings under the Receivables Securitization Facility were $49.0. At December 31, 2009, $82.0 of receivables were sold and were therefore not reflected in accounts receivable and short-term debt in the accompanying Condensed Consolidated Balance Sheets. Additionally, in accordance with ASU 2009-16, fees incurred in connection with the Receivables Securitization Facility are now included in interest expense, which are included in other expense for prior periods. Such fees were $0.4 and $0.3 for the three months ended March 31, 2010 and 2009, respectively.
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