First Quarter 2023 Highlights:
- Sales of $2.974 billion, up 1% in U.S. dollars and organically
compared to the first quarter of 2022
- GAAP Diluted EPS of $0.71, up 4% compared to prior year
- Adjusted Diluted EPS of $0.69, up 3% compared to prior
year
- GAAP and Adjusted Operating Margin of 19.9% and 20.1%
- Operating and Free Cash Flow of $532 million and $436
million
Amphenol Corporation (NYSE: APH) today reported first quarter
2023 results.
“We are pleased to have closed the first quarter of 2023 with
sales and Adjusted Diluted EPS both exceeding the high end of our
guidance,” said Amphenol President and Chief Executive Officer, R.
Adam Norwitt. “Sales increased from prior year by 1%, driven by
strong growth in the commercial air, broadband communications,
military, industrial and automotive markets, as well as
contributions from the Company’s acquisition program. This was
largely offset by expected declines in the IT datacom, mobile
networks and mobile devices markets, along with the negative impact
of currency. Despite the continued range of challenges around the
world, as well as moderating conditions in several of our
communications-related markets, our team executed strongly in the
quarter, with Adjusted Operating Margin reaching 20.1%.”
During the first quarter of 2023, Amphenol continued to deploy
its financial strength in a variety of ways to increase shareholder
value. During the first quarter, the Company purchased 2.1 million
shares of its common stock for $167 million and paid dividends of
$125 million, resulting in total capital returned to shareholders
of more than $290 million.
Second Quarter 2023 Outlook
The current economic environment remains uncertain. In addition,
as the Company discussed last quarter, there continues to be a
significant moderation in the communications-related markets, with
customer demand expected to again be reduced from prior year in the
second quarter of 2022. Assuming market conditions do not
meaningfully worsen as well as constant exchange rates, for the
second quarter of 2023, Amphenol expects sales to be in the range
of $2.890 billion to $2.950 billion. This represents a 6% to 8%
decline over the prior year quarter. Adjusted Diluted EPS is
expected to be in the range of $0.66 to $0.68, representing a 9% to
12% decline over the second quarter of 2022.
“Despite the ongoing challenges and uncertainties around the
world, we are very pleased with the Company’s first quarter 2023
results,” Mr. Norwitt continued. “The revolution in electronics
continues to accelerate, creating exciting and dynamic long-term
growth opportunities for Amphenol across each of our diversified
end markets. 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 in
navigating the myriad of challenges around the world 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 first
quarter results at 1:00 PM (EDT) on Wednesday, April 26, 2023. The
toll-free dial-in number is 888-455-0949; International dial-in
number is +1-773-799-3973; Passcode: LAMPO. A replay of the call
will be available until 11:59 PM (EDT) on Friday, May 26, 2023. The
replay numbers are toll free 800-819-5743; International toll
number +1-203-369-3828; 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 approximately 40 countries around the world 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 www.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 attributable to Amphenol Corporation,
Adjusted Effective Tax Rate, Adjusted Diluted EPS, Organic Net
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. 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 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. 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 are 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. 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
and the provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements are based on our
management’s assumptions and beliefs about future events or
circumstances using information currently available, and as a
result, they are subject to risks and uncertainties.
Forward-looking statements address events or developments that
Amphenol Corporation expects or believes may or will occur in the
future. These 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, effective tax rate, interest rates or other matters.
Although the Company believes the expectations reflected in all
forward-looking statements, including those we may make regarding
second quarter 2023 sales and Adjusted Diluted EPS, among other
matters, are based upon reasonable assumptions, the expectations
may not be attained or there may be material deviation. Readers and
investors 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: political,
economic, military and other risks related to operating in
countries outside the United States, as well as changes in general
economic conditions, geopolitical conditions, U.S. trade policies
(including but not limited to sanctions) and other factors beyond
the Company’s control; uncertainties associated with an economic
slowdown or recession in any of the Company’s end markets that
could negatively affect the financial condition of our customers
and could result in reduced demand; risks and impacts associated
with adverse public health developments, including epidemics and
pandemics, such as the COVID-19 pandemic, which disrupted our
operations from 2020 through early 2023 and could disrupt them
again in the future; risks associated with our inability to obtain
certain raw materials and components, in light of supply chain and
logistical challenges that caused and continue to cause supply
chain constraints and commodity price increases on certain raw
materials and components used by the Company; cybersecurity threats
and techniques used to disrupt operations and gain unauthorized
access to our information technology systems, including, but not
limited to, malware, phishing, credential harvesting, ransomware
and other increasingly sophisticated attacks, that continue to
expand and evolve globally, which could, among other things, impair
our information technology systems and disrupt business operations,
result in reputational damage, loss of our intellectual property,
the 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
potentially lead to litigation and/or governmental investigations
and fines, among other risks; negative impacts caused by extreme
weather conditions and natural catastrophic events, including those
caused or intensified by climate change and global warming; 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 risks associated with
the Company’s dependence on attracting, recruiting, hiring and
retaining skilled employees, including as part of our various
management teams; risks associated with the increasing scrutiny and
expectations regarding environmental, social and corporate
governance matters that could result in additional costs or risks
or otherwise adversely impact our business; risks and difficulties
in trying to compete successfully on the basis of technology
innovation, product quality and performance, price, customer
service and delivery time; the Company’s dependence on end market
dynamics to sell its products, particularly in the communications,
automotive and military end markets, pricing pressures resulting
from large customers that regularly exert pressure on their
suppliers, including the Company, and changes in defense
expenditures of the U.S. and non-U.S. governments, which are
subject to political and budgetary fluctuations and constraints,
all of which could adversely affect our operating results;
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 and other covenants and
requirements, which could result in a default under the Company’s
revolving credit facility, unsecured term loan credit facility or
any of our various senior notes; risks associated with the
Company’s inability to access the global 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 reporting obligations,
performance of government contracts and related risks associated
with conducting business with the U.S. and other foreign
governments or their suppliers (both directly and indirectly);
governmental export and import controls as well as sanctions and
trade embargoes that certain of our products may be subject to,
including export licensing, customs regulations, economic sanctions
and other laws; 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
enforcing and protecting the Company’s intellectual property
rights; litigation, customer claims, voluntary or forced product
recalls, governmental investigations, criminal liability or
environmental matters including changes to laws and regulations to
which the Company may be subject; and incremental costs, risks and
regulations associated with efforts to combat the negative effects
of climate change.
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, 2022, Quarterly Reports on Form 10-Q and the
Company’s other reports filed with the Securities and Exchange
Commission. These or other uncertainties not identified in these
documents (that we either currently do not expect to have an
adverse effect on our business or that we are unable to predict or
identify at this time) 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.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (dollars and shares in millions, except per
share data)
Three Months Ended
March 31,
2023
2022
Net sales
$
2,974.0
$
2,951.9
Cost of sales
2,030.6
2,025.3
Gross profit
943.4
926.6
Acquisition-related expenses
5.4
—
Selling, general and administrative
expenses
346.3
336.8
Operating income
591.7
589.8
Interest expense
(35.9)
(28.1)
Other income (expense), net
4.1
1.7
Income before income taxes
559.9
563.4
Provision for income taxes (1)
(117.2)
(134.2)
Net income
442.7
429.2
Less: Net income attributable to
noncontrolling interests
(3.5)
(3.5)
Net income attributable to Amphenol
Corporation
$
439.2
$
425.7
Net income attributable to Amphenol
Corporation per common share — Basic
$
0.74
$
0.71
Weighted average common shares outstanding
— Basic
595.1
598.3
Net income attributable to Amphenol
Corporation per common share — Diluted (2)
$
0.71
$
0.68
Weighted average common shares outstanding
— Diluted
619.9
625.6
_____________________
Note 1
Provision for income taxes for the three
months ended March 31, 2023 and 2022 includes excess tax benefits
related to stock-based compensation of $17.1 million ($0.03 per
share) and $3.8 million ($0.01 per share), respectively.
Note 2
Net income per share for the three months
ended March 31, 2023 and 2022 includes the excess tax benefits
related to stock-based compensation discussed in Note 1. Net income
per share for the three months ended March 31, 2023 also includes
acquisition-related expenses of $5.4 million ($4.0 million
after-tax, or $0.01 per share) comprised of the amortization
related to the value associated with acquired backlog resulting
from an acquisition that closed in the first quarter.
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 $0.69 and $0.67 for the three
months ended March 31, 2023 and 2022, respectively.
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in millions)
March 31,
December 31,
2023
2022
ASSETS
Current Assets:
Cash and cash equivalents
$
1,391.1
$
1,373.1
Short-term investments
107.6
61.1
Total cash, cash equivalents and
short-term investments
1,498.7
1,434.2
Accounts receivable, less allowance for
doubtful accounts of $62.9 and $63.9, respectively
2,411.9
2,631.3
Inventories
2,105.1
2,093.6
Prepaid expenses and other current
assets
378.3
320.0
Total current assets
6,394.0
6,479.1
Property, plant and equipment, less
accumulated depreciation of $2,098.2 and $2,019.3, respectively
1,243.5
1,204.3
Goodwill
6,539.6
6,446.1
Other intangible assets, net
743.2
734.1
Other long-term assets
461.2
462.6
Total Assets
$
15,381.5
$
15,326.2
LIABILITIES, REDEEMABLE NONCONTROLLING
INTEREST AND EQUITY
Current Liabilities:
Accounts payable
$
1,182.1
$
1,309.1
Accrued salaries, wages and employee
benefits
305.8
416.7
Accrued income taxes
144.6
169.5
Accrued dividends
125.0
124.9
Other accrued expenses
665.8
653.2
Current portion of long-term debt
2.9
2.7
Total current liabilities
2,426.2
2,676.1
Long-term debt, less current portion
4,561.0
4,575.0
Accrued pension and postretirement benefit
obligations
131.5
127.9
Deferred income taxes
412.1
409.8
Other long-term liabilities
464.2
443.3
Total Liabilities
7,995.0
8,232.1
Redeemable noncontrolling interest
20.9
20.6
Equity:
Common stock
0.6
0.6
Additional paid-in capital
2,748.5
2,650.4
Retained earnings
5,121.3
4,979.4
Treasury stock, at cost
(69.7)
(79.8)
Accumulated other comprehensive loss
(492.6)
(535.0)
Total stockholders’ equity attributable to
Amphenol Corporation
7,308.1
7,015.6
Noncontrolling interests
57.5
57.9
Total Equity
7,365.6
7,073.5
Total Liabilities, Redeemable
Noncontrolling Interest and Equity
$
15,381.5
$
15,326.2
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited) (dollars in millions)
Three Months Ended
March 31,
2023
2022
Cash from operating
activities:
Net income
$
442.7
$
429.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
96.3
91.1
Stock-based compensation expense
21.7
19.7
Deferred income tax provision
0.1
13.4
Net change in components of working
capital
(23.8)
(182.9)
Net change in other long-term assets and
liabilities
(4.6)
(19.7)
Net cash provided by operating
activities
532.4
350.8
Cash from investing
activities:
Capital expenditures
(97.7)
(78.1)
Proceeds from disposals of property, plant
and equipment
0.8
1.8
Purchases of investments
(56.7)
(100.3)
Sales and maturities of investments
10.0
35.8
Acquisitions, net of cash acquired
(113.2)
—
Other, net
0.2
(3.3)
Net cash used in investing activities
(256.6)
(144.1)
Cash from financing
activities:
Proceeds from issuance of senior notes and
other long-term debt
350.2
0.2
Repayments of senior notes and other
long-term debt
(3.1)
(2.5)
Proceeds from short-term borrowings
—
20.1
(Repayments) borrowings under commercial
paper programs, net
(387.5)
138.4
Payment of costs related to debt
financing
(2.3)
—
Purchase of treasury stock
(166.9)
(204.0)
Proceeds from exercise of stock
options
74.3
20.0
Distributions to and purchases of
noncontrolling interests
(5.2)
(3.6)
Dividend payments
(124.9)
(119.8)
Net cash used in financing activities
(265.4)
(151.2)
Effect of exchange rate changes on cash
and cash equivalents
7.6
(5.1)
Net increase in cash and cash
equivalents
18.0
50.4
Cash and cash equivalents balance,
beginning of period
1,373.1
1,197.1
Cash and cash equivalents balance, end of
period
$
1,391.1
$
1,247.5
Cash paid for:
Interest
$
34.9
$
27.6
Income taxes, net
116.1
93.8
AMPHENOL CORPORATION
SEGMENT INFORMATION (Unaudited) (dollars in
millions)
Three Months Ended
March 31,
2023
2022
Net
sales:
Harsh Environment Solutions
$
854.2
$
727.6
Communications Solutions
1,126.7
1,320.1
Interconnect and Sensor Systems
993.1
904.2
Consolidated Net sales
$
2,974.0
$
2,951.9
Operating
income:
Harsh Environment Solutions
$
226.3
$
183.2
Communications Solutions
230.6
282.5
Interconnect and Sensor Systems
178.8
160.0
Stock-based compensation expense
(21.7)
(19.7)
Acquisition-related expenses
(5.4)
—
Other operating expenses
(16.9)
(16.2)
Consolidated Operating income
$
591.7
$
589.8
Operating margin
(%):
Harsh Environment Solutions
26.5%
25.2%
Communications Solutions
20.5%
21.4%
Interconnect and Sensor Systems
18.0%
17.7%
Stock-based compensation expense
-0.7%
-0.7%
Acquisition-related expenses
-0.2%
0.0%
Other operating expenses
-0.6%
-0.6%
Consolidated Operating margin (%)
19.9%
20.0%
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. 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) (1)
Net sales
Foreign
Constant
Organic
growth in
currency
Currency Net
Acquisition
Net Sales
U.S. Dollars (2)
impact (3)
Sales Growth (5)
impact (4)
Growth (5)
Three Months Ended March 31,
2023
2022
(GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
(non-GAAP)
Net sales by:
Segment:
Harsh Environment Solutions
$
854.2
$
727.6
17
%
(3)
%
20
%
5
%
15
%
Communications Solutions
1,126.7
1,320.1
(15)
%
(2)
%
(13)
%
—
%
(13)
%
Interconnect and Sensor Systems
993.1
904.2
10
%
(3)
%
13
%
3
%
10
%
Consolidated
$
2,974.0
$
2,951.9
1
%
(2)
%
3
%
2
%
1
%
____________________ (1)
Percentages in this table were calculated
using actual, unrounded results; therefore, the sum of the
components may not add due to rounding.
(2)
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.
(3)
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 respective
period(s) in the prior year. Such amount is calculated by
subtracting net sales for the current reporting period(s)
translated at average foreign currency exchange rates for the
respective prior year period(s) from net sales for the current
reporting period(s), taken as a percentage of the respective prior
year period(s) net sales.
(4)
Acquisition impact, a non-GAAP
measure, represents the percentage impact on net sales resulting
from acquisitions 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. Acquisition impact is calculated as a
percentage of the respective prior year period(s) net sales.
(5)
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 March
31,
2023
2022
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)
$
591.7
19.9
%
$
439.2
20.9
%
$
0.71
$
589.8
20.0
%
$
425.7
23.8
%
$
0.68
Acquisition-related expenses
5.4
0.2
4.0
—
0.01
—
—
—
—
—
Excess tax benefits related to stock-based
compensation
—
—
(17.1)
3.1
(0.03)
—
—
(3.8)
0.7
(0.01)
Adjusted (non-GAAP) (ii) (iii)
$
597.1
20.1
%
$
426.1
24.0
%
$
0.69
$
589.8
20.0
%
$
421.9
24.5
%
$
0.67
FREE CASH
FLOW
Three Months Ended
March 31,
2023
2022
Operating Cash Flow (GAAP)
$
532.4
$
350.8
Capital expenditures (GAAP)
(97.7)
(78.1)
Proceeds from disposals of property, plant
and equipment (GAAP)
0.8
1.8
Free Cash Flow (non-GAAP) (iii)
$
435.5
$
274.5
___________________
(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 attributable to
Amphenol Corporation is defined as Net income 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 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 (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 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 (“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
stockholders 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. 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
measures should be read in conjunction with the Company’s financial
statements presented in accordance with U.S. GAAP.
The Company excludes the above items in its guidance for the
upcoming quarter only to the extent that the Company reasonably
expects to record such items in the forward-looking period
presented and such amounts are estimable. As the Company has not
yet identified any such items for the forward-looking period
presented, there are currently no reconciling items for the three
months ended June 30, 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426005264/en/
Sherri Scribner Vice President, Strategy and Investor Relations
203-265-8820 IR@amphenol.com
Amphenol (NYSE:APH)
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