EX-99.1 2 a06-2827_1ex99d1.htm EXHIBIT 99

EXHIBIT 99.1

 

Amphenol

 

News Release

 

World Headquarters

 

358 Hall Avenue

P. O. Box 5030

Wallingford, CT 06492-7530

Telephone (203) 265-8900

 

FOR IMMEDIATE RELEASE

 

 

For Further Information:

 

Diana G. Reardon

 

Senior Vice President and

 

Chief Financial Officer

 

203/265-8630

 

www.amphenol.com

 

2005 FOURTH QUARTER AND FULL YEAR RECORD RESULTS

REPORTED BY AMPHENOL CORPORATION

 

Wallingford, Connecticut.  January 18, 2006.  Amphenol Corporation (NYSE-APH) reported today that fourth quarter 2005 diluted earnings per share increased 20% to $.61 compared to $.51 per share for the comparable 2004 period.  Sales for the fourth quarter 2005 increased 26% to $508,115,000 compared to $403,963,000 for the 2004 period.  Currency translation had the effect of decreasing sales by approximately $10.4 million in the fourth quarter 2005 compared to the 2004 period.

 

For the year ended December 31, 2005, diluted earnings per share was $2.28 compared to $1.82 per share for the 2004 period.  Sales for the year ended December 31, 2005 were $1,808,147,000 compared to $1,530,446,000 for the 2004 period.  Currency translation had the effect of increasing sales by approximately $7.0 million for the year 2005 when compared to 2004.

 

As previously announced, on December 1, 2005, the Company completed the acquisition of the Connection Systems Division of Teradyne, Inc. (NYSE-TER) for approximately $390 million.  Amphenol TCS (TCS), headquartered in Nashua, New Hampshire, is a leading supplier of high-speed, high-density, printed circuit board interconnect products.  TCS sells its products primarily to the data communications, storage and server markets, wireless infrastructure markets and industrial markets. TCS has facilities in North America, Europe and Asia and employs approximately 2,000 people worldwide.  TCS was included in Amphenol’s consolidated results beginning in December.  The fourth quarter includes TCS sales of approximately $35 million with no effect on EPS as incremental operating income was offset by incremental interest expense on borrowings to fund the acquisition.  TCS, a technology leader in high-speed, high-density, printed circuit board interconnect solutions, is complementary and an excellent strategic fit with Amphenol.

 

Amphenol Chairman and CEO, Martin H. Loeffler, stated:  “I am extremely pleased with our fourth quarter results.  Sales were up 26% compared to last year’s fourth quarter to a record $508 million.  The interconnect products segment of our business, which represents 89% of our sales,

 


 

was up a strong 27% over last year with excellent profitability.  The growth was broad based across all of our end markets and included all major geographic regions.  Growth was especially strong in the mobile device market.  The excellent top line results reflect our continuing development of new application specific solutions and value added products for our customers, our increased worldwide presence with the leading companies in our target markets and acquisitions.  The cable products segment of our business, which is primarily for broadband cable television networks and represents 11% of our sales, was up 14% over the prior year.”

 

“In addition to excellent overall top line growth, profitability and cash flow continued to be strong.  The operating income margin in the fourth quarter was 18.5% compared to 18.8% in last year’s fourth quarter.  Excluding the impact of the TCS acquisition which in December had operating income margins in the 7.5% range, the fourth quarter 2005 operating income margin was 19.3%, the same as the third quarter of 2005.  I am very pleased that we have been able to sustain this strong profitability in a difficult cost environment.  The increase in operating margins over the prior year was driven by the improved profitability of the interconnect product segment offset in part by lower cable product margins, which continue to be impacted by increasing material and freight related costs.  Earnings per share for the quarter increased 20% over last year.  Furthermore, net income, that is income after interest expense and taxes, was 11% of sales, another indication of the Company’s excellent profitability.  Cash flow from operations for the quarter was also strong at $75 million.”

 

“We had a record year in 2005 and look to the future with great enthusiasm.  We have an outstanding management team, excellent technological capabilities, a strong position in diversified markets, and an increasing presence with the major companies in these markets.  With the addition of TCS we are the world’s third largest interconnect company with an expanded platform for creating value.  Assuming a continuation of the current economic climate and relatively stable currency exchange rates, we believe that we can achieve revenues and EPS in 2006 in the range of $2,250 million to $2,300 million and $2.56 to $2.63, respectively.  For the first quarter of 2006 we expect revenues and EPS in the range of $535 million to $545 million and $.57 and $.59, respectively.  As previously announced, we expect the TCS acquisition to be accretive for the full year 2006, but slightly dilutive in the first half of 2006.  EPS guidance for the year and first quarter of 2006 includes approximately $10.0 million ($.08 per share) and $2.0 million ($.02 per share) relating to stock option expense as a result of the adoption of SFAS 123R.  Pro forma 2005 EPS after option expense is $2.23, $.50 and $.60, for the full year, first quarter and fourth quarter, respectively.  We are very confident that we are in excellent markets with a great organization, and we are very excited about the future.”

 

The Company will host a conference call to discuss its fourth quarter and full year results at 1:00 PM (ET) January 18, 2006.  The toll free dial-in number to participate in this call is 888-395-9624; International dial-in number 517-623-4547; Passcode: Reardon.  There will be a replay available until 6:00 PM (ET) on Friday, January 20, 2006.  The replay numbers are as follows:  toll free dial-in number is 866-427-6395 and International dial-in number is 203-369-0891.

 

A live broadcast as well as a replay will also be available on the Internet at http://www.amphenol.com/index.cfm/fuseaction/financial.webcasts.

 

Amphenol Corporation is one of the world’s leading producers of electronic and fiber optic connectors, cable and interconnect systems.  Amphenol products are engineered and manufactured in the Americas, Europe and Asia and sold by a worldwide sales and marketing organization.  The primary end markets for the Company’s products are communication systems

 


 

for the converging technologies of voice, video and data communications, industrial/automotive and military/aerospace applications.

 

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 1 of the Company’s Form 10-K for the year ended December 31, 2004, 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

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(dollars in thousands, except per share data)

 

 

 

Three months ended
December 31,

 

Twelve months ended
December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

508,115

 

$

403,963

 

$

1,808,147

 

$

1,530,446

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

Cost of sales, excluding depreciation and amortization

 

330,738

 

262,287

 

1,162,004

 

999,965

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

14,089

 

9,927

 

50,666

 

38,829

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

69,429

 

55,745

 

252,150

 

215,008

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

93,859

 

76,004

 

343,327

 

276,644

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(7,364

)

(5,515

)

(24,090

)

(22,540

)

Other expenses, net

 

(3,185

)

(1,337

)

(8,871

)

(6,663

)

Refinancing costs

 

—

 

—

 

(2,398

)

—

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

83,310

 

69,152

 

307,968

 

247,441

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

(27,492

)

(23,512

)

(101,629

)

(84,130

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

55,818

 

$

45,640

 

$

206,339

 

$

163,311

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Basic

 

$

0.63

 

$

0.52

 

$

2.33

 

$

1.86

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding - Basic

 

89,041,390

 

87,980,075

 

88,551,630

 

88,023,082

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - Diluted (1)

 

$

0.61

 

$

0.51

 

$

2.28

 

$

1.82

 

 

 

 

 

 

 

 

 

 

 

Average shares outstanding - Diluted

 

90,776,307

 

89,739,345

 

90,471,737

 

89,736,656

 

 

(1) - Subsequent to December 31, 2005 in accordance with the implementation of SFAS 123R the Company will expense stock based compensation.  Such expense was previously disclosed in the Company’s financial statement footnotes but was not included as an expense in the Company’s income statement.  Including the pro forma stock based compensation expense of $2.0 million and $7.4 million for the fourth quarter and full year, respectively would result in diluted earnings per share of $.60 and $2.23 for the fourth quarter and full year, respectively.

 


 

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(dollars in thousands)

 

 

 

Dec. 31,

 

Dec. 31,

 

 

 

2005

 

2004

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and short-term cash investments

 

$

38,669

 

$

30,172

 

Accounts receivable, less allowance for doubtful accounts of $11,162 and $8,666, respectively

 

302,867

 

214,158

 

Inventories

 

325,865

 

247,303

 

Prepaid expenses and other assets

 

42,413

 

37,382

 

 

 

 

 

 

 

Total current assets

 

709,814

 

529,015

 

 

 

 

 

 

 

Land and depreciable assets, less accumulated depreciation of $352,408 and $349,255, respectively

 

253,889

 

197,753

 

Deferred debt issuance costs

 

2,351

 

6,451

 

Goodwill and other assets

 

966,486

 

573,492

 

 

 

 

 

 

 

 

 

$

1,932,540

 

$

1,306,711

 

 

 

 

 

 

 

LIABILITIES & SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

177,266

 

$

134,856

 

Accrued interest

 

4,998

 

2,183

 

Accrued salaries, wages and employee benefits

 

42,705

 

38,535

 

Other accrued expenses

 

93,202

 

85,089

 

Dividends payable

 

2,729

 

—

 

Current portion of long-term debt

 

15,030

 

16,909

 

 

 

 

 

 

 

Total current liabilities

 

335,930

 

277,572

 

 

 

 

 

 

 

Long-term debt

 

765,970

 

432,144

 

Accrued pension and post employment benefit obligations

 

108,816

 

102,050

 

Other liabilities

 

32,589

 

13,341

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

Common stock

 

89

 

88

 

Additional paid-in deficit

 

(164,082

)

(207,504

)

Accumulated earnings

 

985,317

 

789,741

 

Accumulated other comprehensive loss

 

(77,742

)

(55,078

)

Treasury stock, at cost

 

(54,347

)

(45,643

)

 

 

 

 

 

 

Total shareholders’ equity

 

689,235

 

481,604

 

 

 

 

 

 

 

 

 

$

1,932,540

 

$

1,306,711

 

 


 

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

(Unaudited)

(dollars in thousands)

 

 

 

Twelve months ended
December 31,

 

 

 

2005

 

2004

 

 

 

 

 

 

 

Net income

 

$

206,339

 

$

163,311

 

Adjustments for cash from operations:

 

 

 

 

 

Depreciation and amortization

 

50,666

 

38,829

 

Amortization of deferred debt issue costs

 

976

 

1,428

 

Amortization of inventory step-up

 

489

 

—

 

Non-cash expense related to write-off of deferred debt issue costs

 

5,666

 

—

 

Net change in non-cash components of working capital

 

(37,235

)

14,108

 

Other long term assets and liabilities

 

2,723

 

(9,425

)

 

 

 

 

 

 

Cash provided by operations

 

229,624

 

208,251

 

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

Capital additions, net

 

(57,121

)

(44,341

)

Investments in acquisitions

 

(512,307

)

(41,661

)

 

 

 

 

 

 

Cash flow used by investing activities

 

(569,428

)

(86,002

)

 

 

 

 

 

 

Cash flow from financing activities:

 

 

 

 

 

Net change in borrowings under revolving credit facilities

 

744,132

 

(14,302

)

Decrease in borrowings under Bank Agreement

 

(413,000

)

(86,000

)

Payment of fees and expenses related to refinancing

 

(2,542

)

—

 

Purchase of treasury stock

 

(8,704

)

(45,643

)

Proceeds from exercise of stock options including tax benefit

 

36,449

 

30,335

 

Dividend payments

 

(8,034

)

—

 

 

 

 

 

 

 

Cash flow provided by (used by) financing activities

 

348,301

 

(115,610

)

 

 

 

 

 

 

Net change in cash and short-term cash investments

 

8,497

 

6,639

 

Cash and short-term cash investments balance, beginning of period

 

30,172

 

23,533

 

 

 

 

 

 

 

Cash and short-term cash investments balance, end of period

 

$

38,669

 

$

30,172

 

 

 

 

 

 

 

Net cash paid during the year for:

 

 

 

 

 

Interest

 

20,272

 

21,868

 

Taxes

 

85,562

 

43,660

 

 


 

AMPHENOL CORPORATION

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

 

 

Three months ended
December 31,

 

Twelve months ended
December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Trade Sales:

 

 

 

 

 

 

 

 

 

Interconnect Products

 

$

450,206

 

$

353,335

 

$

1,592,439

 

$

1,333,838

 

Cable Products

 

57,909

 

50,628

 

215,708

 

196,608

 

Consolidated

 

$

508,115

 

$

403,963

 

$

1,808,147

 

$

1,530,446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

Interconnect Products

 

93,061

 

74,287

 

339,458

 

271,327

 

Cable Products

 

6,152

 

6,492

 

25,809

 

24,631

 

Corporate

 

(5,354

)

(4,775

)

(21,940

)

(19,314

)

Consolidated

 

$

93,859

 

$

76,004

 

$

343,327

 

$

276,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROS%:

 

 

 

 

 

 

 

 

 

Interconnect Products

 

20.7

%

21.0

%

21.3

%

20.3

%

Cable Products

 

10.6

%

12.8

%

12.0

%

12.5

%

Consolidated

 

18.5

%

18.8

%

19.0

%

18.1

%