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2005 Second Quarter and Six Months Record Results and Announcement of Refinancing Reported By Amphenol Corporation

Posted on: Wednesday, 20 July 2005, 09:01 CDT

Amphenol Corporation (NYSE-APH) reported today that second quarter 2005 diluted earnings per share increased 29% to a record $.58 compared to $.45 per share for the comparable 2004 period. Sales for the second quarter 2005 increased 15% to $443,642,000 compared to $387,119,000 for the 2004 period. Currency translation had the effect of increasing sales by approximately $7.5 million in the second quarter 2005 compared to the 2004 period.

For the six months ended June 30, 2005, diluted earnings per share was $1.09 compared to $.85 per share for the 2004 period. Sales for the six months ended June 30, 2005 were $853,037,000 compared to $742,380,000 for the 2004 period. Currency translation had the effect of increasing sales by approximately $15.2 million for the six month 2005 period when compared to the 2004 period.

In addition, on July 15, 2005 the Company completed a refinancing of its senior credit facilities. The new senior credit agreement consists of a $750 million unsecured five year revolving credit facility, of which approximately $440 million was drawn at closing. The net proceeds from the refinancing were used to repay all amounts outstanding under the Company's previous senior secured credit facilities and for working capital purposes. In conjunction therewith, the Company incurred one-time expenses for the early extinguishment of debt totaling approximately $2.5 million (before tax benefit of $.8 million) or $.02 per share after tax. Such one-time expenses will be reported in the third quarter and include the write-off of unamortized deferred debt issuance costs less the gain on the termination of related interest rate swap agreements.

Amphenol Chairman and CEO, Martin H. Loeffler, stated: "I am extremely pleased with our second quarter results. Sales were up 15% compared to last year's second quarter to a record $443,642,000. The operating income margin increased from 17.8% to 19.4%. The interconnect products segment of our business, which represents 88% of our sales, was up a strong 16% 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 wireless infrastructure, industrial and military and aerospace markets. 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 improved profitability in the interconnect business is also attributable to the continuing development of new application specific products as well as higher volumes and ongoing programs of cost control. The cable products segment of our business, which is primarily for broadband cable television networks and represents 12% of our sales, was up 7% over the prior year."

"In addition to excellent overall top line growth, profitability and cash flow continued to be strong. Earnings per share for the quarter were up 29% over last year, representing the fourteenth consecutive quarterly increase and a new record for the Company. Furthermore, net income, that is income after interest expense and taxes, exceeded 11% of sales, another indication of the Company's excellent profitability. Cash flow from operations was also strong at $49 million for the quarter."

"In addition, in May, the Company completed the acquisition of a United States manufacturer of radio frequency interconnect products for military and aerospace related markets. The Company has annual sales of approximately $20 million. Including this most recent acquisition, the Company has completed four acquisitions since the beginning of the year. We are excited about the growth opportunities presented by these excellent additions."

"We are also pleased to have completed the debt refinancing. The new five year facility is unsecured and has improved pricing in recognition of the Company's strong operating performance, substantial deleveraging and the achievement of an investment grade credit rating from a major rating agency. In addition, the new facility will provide significantly increased flexibility to pursue additional opportunities to expand and grow our business."

"It was a good quarter in all respects. I am very proud of our organization as we continue to execute well. We have a strong position in excellent and diversified markets and continue to increase our presence with the major companies in these markets. Assuming a continuation of the current economic climate and relatively stable currency exchange rates, we are revising upward our expectation for full year 2005 results to a sales increase in the range of 13% to 15% and earnings per share increase in the range of 23% to 26%; this compares to our prior estimates of sales and earnings per share increases of 11% to 14% and 20% to 25%, respectively. We expect third quarter results in the range of $435 million to $445 million and $.56 to $.58 for sales and EPS respectively. This guidance excludes the impact in the third quarter of 2005 of one-time expenses associated with the refinancing of $.02 per share. 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 second quarter results at 1:00 PM (ET) July 20, 2005. 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 5:00 PM (ET) on Friday, July 22, 2005. If you are unable to participate on the call the replay numbers are as follows: the toll free dial-in number is 800-759-4401 and International dial-in replay number is 203-369-3418

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 FINANCIAL SUMMARY ----------------- (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2005 2004(1) 2005 2004(1) Sales $443,642,000 $387,119,000 $853,037,000 $742,380,000 Net income $ 52,056,000 $ 40,367,000 $ 98,432,000 $ 76,025,000 Earnings per share - basic $ .59 $ .46 $ 1.12 $ .86 Average shares outstanding - basic 88,362,802 89,174,604 88,190,725 88,076,203 Earnings per share - diluted $ .58 $ .45 $ 1.09 $ .85 Average shares outstanding - diluted 90,272,291 89,864,734 90,089,494 89,871,449 1. Per share and share amounts have been adjusted to reflect the Company's 2 for 1 stock split effective in March 2004.

AMPHENOL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (dollars in thousands, except per share data) Three months ended Six months ended June 30, June 30, ----------------------------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Net Sales $ 443,642 $ 387,119 $ 853,037 $ 742,380 Costs and Expenses: Cost of sales, excluding depreciation and amortization 282,421 254,031 545,846 487,261 Depreciation and amortization expense 12,699 9,733 23,513 19,166 Selling, general and administrative expense 62,476 54,301 120,299 105,616 ----------- ----------- ----------- ----------- Operating income 86,046 69,054 163,379 130,337 Interest expense (5,775) (5,673) (11,178) (11,428) Other expenses, net (1,398) (2,219) (3,062) (3,719) ----------- ----------- ----------- ----------- Income before income taxes 78,873 61,162 149,139 115,190 Provision for income taxes (26,817) (20,795) (50,707) (39,165) ----------- ----------- ----------- ----------- Net income $ 52,056 $ 40,367 $ 98,432 $ 76,025 =========== =========== =========== =========== Net income per common share - Basic $ 0.59 $ 0.46 $ 1.12 $ 0.86 =========== =========== =========== =========== Average shares outstanding - Basic 88,362,802 88,174,604 88,190,725 88,076,203 =========== =========== =========== =========== Net income per common share - Diluted $ 0.58 $ 0.45 $ 1.09 $ 0.85 =========== =========== =========== =========== Average shares outstanding - Diluted 90,272,291 89,864,734 90,089,494 89,871,449 =========== =========== =========== ===========

AMPHENOL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) June 30, Dec. 31, 2005 2004 ---------- ---------- (Unaudited) ASSETS Current Assets: Cash and short-term cash investments $ 25,462 $ 30,172 Accounts receivable, less allowance for doubtful accounts of $8,868 and $8,666, respectively 232,819 214,158 Inventories 268,811 247,303 Prepaid expenses and other assets 41,459 37,382 ---------- ---------- Total current assets 568,551 529,015 Land and depreciable assets, less accumulated depreciation of $345,311 and $349,255, respectively 207,565 197,753 Deferred debt issuance costs 5,722 6,451 Goodwill 640,393 545,411 Deferred taxes and other assets 28,683 28,081 ---------- ---------- $1,450,914 $1,306,711 ========== ========== LIABILITIES & SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 150,131 $ 134,856 Accrued interest 2,022 2,183 Accrued salaries, wages and employee benefits 37,451 38,535 Other accrued expenses 66,255 85,089 Dividends payable 2,705 - Current portion of long-term debt 18,993 16,909 ---------- ---------- Total current liabilities 277,557 277,572 Long-term debt 458,412 432,144 Accrued pension and post employment benefit obligations 100,914 102,050 Other liabilities 32,023 13,341 Shareholders' Equity: Common stock 88 88 Additional paid-in deficit (183,584) (207,504) Accumulated earnings 882,825 789,741 Accumulated other comprehensive loss (66,955) (55,078) Treasury stock, at cost (50,366) (45,643) ---------- ---------- Total shareholders' equity 582,008 481,604 ---------- ---------- $1,450,914 $1,306,711 ========== ==========

AMPHENOL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (dollars in thousands) Six months ended June 30, -------------------- 2005 2004 ---------- --------- Net income $ 98,432 $ 76,025 Adjustments for cash from operations: Depreciation and amortization 23,513 19,166 Amortization of deferred debt issue costs 729 711 Net change in non-cash components of working capital (41,234) (22,295) Other long term assets and liabilities 6,257 6,315 --------- -------- Cash provided by operations 87,697 79,922 --------- -------- Cash flow from investing activities: Capital additions, net (27,913) (18,513) Investments in acquisitions (100,178) (1,943) --------- -------- Cash flow used by investing activities (128,091) (20,456) --------- -------- Cash flow from financing activities: Net change in borrowings under revolving credit facilities 28,007 (4,065) Decrease in borrowings under Bank Agreement (2,000) (61,000) Purchase of treasury stock (4,723) (16,174) Proceeds from exercise of stock options including tax benefit 17,043 16,867 Dividend payments (2,643) - --------- -------- Cash flow provided by (used by) financing activities 35,684 (64,372) --------- -------- Net change in cash and short-term cash investments (4,710) (4,906) Cash and short-term cash investments balance, beginning of period 30,172 23,533 --------- -------- Cash and short-term cash investments balance, end of period $ 25,462 $ 18,627 ========= ======== Net cash paid during the year for: ---------------------------------- Interest 10,611 11,240 Taxes 48,384 26,560

AMPHENOL CORPORATION SEGMENT INFORMATION (In thousands) (Unaudited) Three months ended Six months ended June 30, June 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Trade Sales: Interconnect Products $389,163 $336,362 $750,318 $647,035 Cable Products 54,479 50,757 102,719 95,345 --------- --------- --------- --------- Consolidated $443,642 $387,119 $853,037 $742,380 ========= ========= ========= ========= Operating income: Interconnect Products $ 85,327 $ 68,283 $161,118 $128,883 Cable Products 7,044 5,927 13,219 11,338 Corporate (6,325) (5,156) (10,958) (9,884) --------- --------- --------- --------- Consolidated $ 86,046 $ 69,054 $163,379 $130,337 ========= ========= ========= ========= ROS%: Interconnect Products 21.9% 20.3% 21.5% 19.9% Cable Products 12.9% 11.7% 12.9% 11.9% Consolidated 19.4% 17.8% 19.2% 17.6%

Source: Business Wire

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