SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________to _________________
Commission File Number 1-10879
AMPHENOL CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 22-2785165
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
358 Hall Avenue, Wallingford, Connecticut 06492
203-265-8900
(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
Indicate by check mark whether the Registrant (1) has filed reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
___ ___
As of April 1, 1996, the total number of shares outstanding of Class A
Common Stock was 47,321,051. There are no shares outstanding of Class B Common
Stock.
<PAGE>
AMPHENOL CORPORATION
Index to Quarterly Report
on Form 10-Q
Page
____
Part I Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet
March 31, 1996 and December 31, 1995 3
Condensed Consolidated Statement of Income
Three months ended March 31, 1996 and 1995 5
Condensed Consolidated Statement of Cash Flow
Three months ended March 31, 1996 and 1995 6
Notes to Condensed Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition 8
Part II Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote
of Security-Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands)
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
A S S E T S
Current Assets:
Cash and short-term cash investments......... $ 28,259 $ 12,028
Accounts receivable, less allowance
for doubtful accounts of $1,989
and $1,758, respectively................... 78,221 67,419
Inventories.................................. 142,936 134,753
Prepaid expenses and other assets............ 14,098 11,516
-------- --------
Total current assets........................... 263,514 225,716
-------- --------
Land and depreciable assets, less
accumulated depreciation of
$152,172 and $150,560, respectively.......... 97,562 94,659
Deferred debt issuance costs................... 4,215 4,332
Excess of cost over fair value of net
assets acquired.............................. 339,893 342,624
Other assets................................... 21,776 22,593
-------- --------
$726,960 $689,924
________ ________
See accompanying notes to condensed
consolidated financial statements.
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands)
March 31, December 31,
1996 1995
----------- ------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.............................. $ 52,663 $ 51,684
Accrued interest.............................. 8,372 2,701
Other accrued expenses........................ 57,027 47,348
Current portion of long-term debt............. 6,437 2,670
-------- --------
Total current liabilities....................... 124,499 104,403
-------- --------
Long-term debt.................................. 195,923 195,195
Accrued pension and post employment
benefit obligations........................... 25,375 27,486
Deferred taxes and other liabilities............ 20,207 18,755
Shareholders' Equity:
Common stock.................................. 47 47
Additional paid-in capital.................... 265,202 265,193
Accumulated earnings.......................... 100,996 84,056
Cumulative valuation adjustment............... (5,289) (5,211)
-------- --------
Total shareholders' equity...................... 360,956 344,085
-------- --------
$726,960 $689,924
________ ________
See accompanying notes to condensed
consolidated financial statements.
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(dollars in thousands, except per share data)
Three months ended
March 31,
----------------------
1996 1995
-------- --------
Net sales....................................... $194,822 $197,975
Costs and expenses:
Cost of sales, excluding depreciation
and amortization............................. 123,928 130,106
Depreciation and amortization expense......... 7,186 6,972
Selling, general and administrative expense... 28,699 28,660
-------- --------
Operating income................................ 35,009 32,237
Interest expense................................ (6,052) (6,710)
Other expense, net.............................. (724) (1,825)
-------- --------
Income before income taxes...................... 28,233 23,702
Provision for income taxes...................... 11,293 9,481
-------- --------
Net income...................................... $ 16,940 $ 14,221
________ ________
Net income per common and common
equivalent share.............................. $.36 $.30
____ ____
Average common and common
equivalent shares outstanding................. 47,320,536 47,290,651
__________ __________
See accompanying notes to condensed
consolidated financial statements.
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
(dollars in thousands)
Three Months Ended
March 31,
----------------------
1996 1995
-------- --------
Net income....................................... $16,940 $14,221
Adjustments for cash from operations:
Depreciation and amortization.................. 7,186 6,972
Amortization of deferred debt issuance costs... 174 162
Net change in non-cash components of
working capital............................... (4,098) 7,056
------- -------
Cash provided from operations.................... 19,392 28,411
------- -------
Cash flow from investing activities:
Capital additions, net......................... (5,499) (4,225)
Reduction in acquisition related
environmental reserves..................... - (402)
------- -------
Cash flow used by investing activities........... (5,499) (4,627)
------- -------
Cash flow from financing activities:
Net change in borrowings under revolving
credit facilities.......................... 2,338 21,726
Decrease in long-term debt..................... - (45,368)
------- -------
Cash flow from (used by) financing activities.... 2,338 (23,642)
------- -------
Net change in cash and short-term
cash investments............................... 16,231 142
Cash and short-term cash investments
balance, beginning of period................... 12,028 4,582
------- -------
Cash and short-term cash investments
balance, end of period......................... $28,259 $ 4,724
_______ _______
See accompanying notes to condensed
consolidated financial statements.
<PAGE>
AMPHENOL CORPORATION
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
Note 1 - Principles of Consolidation and Interim Financial Statements
- ---------------------------------------------------------------------
The condensed consolidated balance sheet as of March 31, 1996 and December
31, 1995, and the related condensed consolidated statements of income and of
cash flow for the three months ended March 31, 1996 and 1995 include the
accounts of the Company and its subsidiaries. The interim financial
statements included herein are unaudited. In the opinion of management all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of such interim financial statements have been included. The
results of operations for the three months ended March 31, 1996 are not
necessarily indicative of the results to be expected for the full year. These
financial statements should be read in conjunction with the financial
statements and notes included in the 1995 Annual Report to Shareholders of
Amphenol Corporation.
Note 2 - Inventories
- --------------------
Inventories consist of:
March 31, December 31,
1996 1995
--------- ------------
(Unaudited)
Raw materials and supplies......... $ 22,063 $ 21,094
Work in process.................... 80,266 79,971
Finished goods..................... 40,607 33,688
-------- --------
$142,936 $134,753
________ ________
Note 3 - Commitments and Contingencies
- --------------------------------------
In the course of pursuing its normal business activities, the Company is
involved in various legal proceedings and claims. Management does not expect
that amounts, if any, which may be required to be paid by reason of such
proceedings or claims will have a material effect on the Company's financial
position or results of operations.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(dollars in thousands, except per share data)
Results of Operations
- ---------------------
Three months ended March 31, 1996 compared to three months ended March 31, 1995
- -------------------------------------------------------------------------------
Net sales decreased approximately 2% to $194,822 in the first quarter of
1996 compared to sales of $197,975 for the same period in 1995. The decrease
is primarily attributable to lower sales of coaxial cable products
substantially offset by increased sales of interconnect products particularly
in the aerospace, automotive safety and communications markets. Currency
translation did not have a significant effect on sales in the first quarter
1996 when compared to exchange rates for the 1995 period.
The gross profit margin as a percentage of net sales (including depreciation
in cost of sales) increased to 34% for the three months ended March 31, 1996
compared to 32% for the three months ended March 31, 1995. The increase is
generally attributable to increased margins of interconnect products as a
result of higher sales volume, particularly of application specific products,
and continuing programs of cost control.
Selling, general and administrative expenses as a percentage of net sales
remained relatively constant at approximately 15% for the three months ended
March 31, 1996 compared to the 1995 period.
Interest expense for the first quarter of 1996 was $6,052 compared to $6,710
for the first quarter of 1995. This reduction is primarily attributable to
decreased debt levels.
Other expense for the three months ended March 31, 1996 was $724 compared to
$1,825 in 1995. The decrease in 1996 relates to the absence in the 1996 period
of certain nonrecurring expenses in 1995 such as expenses associated with the
1995 secondary stock offering.
The provision for income taxes for the three months ended March 31, 1996 was
$11,293 compared to $9,481 in 1995. The 1996 estimated effective tax rate of
approximately 40% reflects federal, state and foreign taxes.
Liquidity and Capital Resources
- -------------------------------
Cash provided by operating activities was $19,392 in the quarter ended March
31, 1996 compared to $28,411 in the 1995 period. The decrease in cash flow
relates primarily to a net increase in non-cash components of working capital
offset in part by an increase in net income.
The Company's primary ongoing cash requirements will be for debt service,
capital expenditures and product development activities. The Company's debt
service requirements consist primarily of interest on Senior Notes due 2001 and
Senior Subordinated Notes due 2002. The Company has not paid, and does not
have any present intention to commence payment of, cash dividends on its Common
Stock. The Company expects that ongoing requirements for debt service, capital
expenditures and product development activities will be funded by
internally-generated cash flow.
<PAGE>
Environmental Matters
- ---------------------
The Company is subject to various environmental laws, regulations and
proceedings regarding discharge of pollutants and the handling and disposal of
solid and hazardous wastes. In conjunction with the acquisition of Amphenol
from Allied Corporation in 1987, Allied agreed to provide substantial
indemnification for potential environmental liabilities identified within a
period of seven years following the acquisition that arose out of events,
conditions or circumstances that occurred or existed at the time of or prior to
the acquisition to the extent that such liability exceeds $13.0 million. In
such event, Allied is obligated to pay 80% of the excess over $13.0 million and
100% of the excess over $30.0 million. The Company has been named as a
defendant in various legal actions or as a potentially responsible party in
relation to several environmental clean-up sites which the associated costs are
subject to the Allied indemnification agreement. The Company believes that it
has provided adequate reserves for unidemnified costs that may be incurred with
respect to known environmental liabilities. There are no amounts currently owed
the Company by Allied under the indemnification agreement. Management does not
believe that the costs associated with the resolution of these matters, net of
indemnification from Allied, will have a material adverse effect on the
Company's financial position.
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Reference is made to the Company's 1995 Form 10-K with respect to
certain pending legal proceedings.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports filed on Form 8-K - There were no reports on Form 8-K
filed for or during the three months ended March 31, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMPHENOL CORPORATION
DATE: May 14, 1996 /s/Edward G. Jepsen
---------------- ---------------------------
Edward G. Jepsen
Executive Vice President and
Chief Financial Officer
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