Amphenol Corp.: Flood Cleanup Doesn't Muddy Revenues

Jan. 24, 2007
Electronic and fiber-optic connector manufacturer posts record earnings.

With operations on six of the seven continents, you'd expect Amphenol Corp. -- one of IndustryWeek's 50 Best Manufacturing Companies for 2006 -- to do well. The company, which manufactures and assembles its products at facilities in North America, South America, Europe, Asia, Africa and Australia, sells its connector products through its own global sales force and independent manufacturers' representatives to thousands of OEMs in approximately 60 countries. The coaxial cable products are sold primarily to cable television operators and to telecommunication companies who have entered the broadband communications market.

If fourth-quarter sales are any indicator, a lot of cable television operators and telecommunication companies have entered the broadband market.

Amphenol Chairman and CEO, Martin H. Loeffler, stated in a Jan. 17, 2007, release: "Amphenol has finished 2006 with another record performance with fourth quarter sales of $659 million and earnings per share of 85 cents. Sales grew 30% over last year and were up 4% sequentially. Growth was broad based across all of our end markets and included all geographic regions. Our performance was led by particular strength in the communications-related markets and an excellent contribution from the military, aerospace and industrial markets as we came back to full production after the flood."

The flood Loeffler speaks of occurred in late June 2006 and stymied Amphenol's Sidney, N.Y., plant, which primarily serves the aerospace and industrial markets. The flood cleanup cost the Wallingford, Conn., company $21 million.

Despite the flood, fourth-quarter results also showed that Amphenol achieved an operating income margin of 18.9%, representing both a sequential and year-over-year increase. Net income exceeded 11% of sales.

Amphenol Corp.
At A Glance
Amphenol Corp.Wallingford, Conn.Primary Industry: Computers & Other Electronic ProductsNumber of employees: 13,9002005 In ReviewRevenue: $1.285 billionProfit Margin: 11.41%Sales Turnover: 0.94Inventory Turnover: 4.05Revenue Growth: 18.15%Return On Assets: 15.79%Return On Equity: 42.84%

"The company continues to be an excellent generator of cash," says Loeffler. "Cash flow from operations for the quarter was $76 million and for the year was $290 million exceeding net income. During the year we have continued to deploy our strong cash flow to create additional value.

"We had a record year in 2006, and we look to the future with great enthusiasm. We have an outstanding management team, excellent technological capabilities, leading positions in diversified markets and an increasing presence with the major companies in these markets. We are the world's third-largest interconnect company with an expanded platform for creating value. Our enthusiasm and confidence in the future is also reflected in our decision to affect a two-for-one stock split in the first quarter of 2007, which should further improve the liquidity and trading in our stock. We are very excited about the future and confident in the ability of our excellent organization to meet the challenges presented and to take advantage of the many opportunities in front of us."

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