<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 1-10879
------------------------
AMPHENOL CORPORATION
(Exact name of Registrant as specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 22-2785165
(State or other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or organization)
</TABLE>
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 October 1, 2000, the total number of shares outstanding of Class A
Common Stock was 41,674,680
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
AMPHENOL CORPORATION
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
<TABLE>
<CAPTION>
PAGE
--------
<C> <S> <C>
Part I Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet September 30, 2000 and
December 31, 1999......................................... 3
Condensed Consolidated Statement of Income three and nine
months ended September 30, 2000 and 1999.................. 4
Condensed Consolidated Statement of Changes in Shareholders'
Deficit nine months ended September 30, 2000.............. 5
Condensed Consolidated Statement of Changes in Shareholders'
Deficit nine months ended September 30, 1999.............. 6
Condensed Consolidated Statement of Cash Flow nine months
ended September 30, 2000 and 1999......................... 7
Notes to Condensed Consolidated Financial Statements........ 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 11
Item 3. Quantitative and Qualitative Disclosures About Market
Risk...................................................... 13
Part II Other Information
Item 1. Legal Proceedings........................................... 14
Item 2. Changes in Securities....................................... 14
Item 3. Defaults upon Senior Securities............................. 14
Item 4. Submission of Matters to a Vote of Security-Holders......... 14
Item 5. Other Information........................................... 14
Item 6. Exhibits and Reports on Form 8-K............................ 14
Signatures.............................................................. 17
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term cash investments...................... $ 17,401 $ 12,898
Accounts receivable, less allowance for doubtful accounts
of $2,601 and $2,232, respectively...................... 157,444 111,711
Inventories............................................... 194,872 189,433
Prepaid expenses and other assets......................... 22,838 21,137
-------- --------
Total current assets.................................... 392,555 335,179
-------- --------
Land and depreciable assets, less accumulated depreciation
of $216,874 and $206,923, respectively.................... 148,903 119,950
Deferred debt issuance costs................................ 8,590 10,267
Excess of cost over fair value of net assets acquired....... 405,119 360,999
Other assets................................................ 10,497 9,981
-------- --------
$965,664 $836,376
======== ========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable.......................................... $109,983 $ 71,495
Accrued interest.......................................... 14,193 9,779
Other accrued expenses.................................... 79,004 47,824
Current portion of long-term debt......................... 44,966 16,829
-------- --------
Total current liabilities............................... 248,146 145,927
-------- --------
Long-term debt.............................................. 697,244 745,658
Deferred taxes and other liabilities........................ 25,782 25,957
Shareholders' Deficit:
Common stock.............................................. 42 42
Additional paid-in deficit................................ (305,530) (318,662)
Accumulated earnings...................................... 325,790 250,482
Accumulated translation adjustment........................ (25,810) (13,028)
-------- --------
Total shareholders' deficit............................. (5,508) (81,166)
-------- --------
$965,664 $836,376
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales..................................... $ 354,694 $ 256,857 $ 990,253 $ 741,459
Costs and expenses:
Cost of sales, excluding depreciation and
amortization.............................. 231,392 168,198 648,060 487,685
Depreciation and amortization expense....... 7,226 7,108 21,625 21,057
Selling, general and administrative
expense................................... 48,353 37,369 136,121 107,428
Amortization of goodwill.................... 3,333 3,103 9,934 9,263
---------- ---------- ---------- ----------
Operating income.............................. 64,390 41,079 174,513 116,026
Interest expense.............................. (15,462) (20,001) (46,799) (59,673)
Other expenses, net........................... (2,772) (1,229) (6,505) (3,817)
---------- ---------- ---------- ----------
Income before income taxes.................... 46,156 19,849 121,209 52,536
Provision for income taxes.................... (17,322) (8,263) (45,901) (22,248)
---------- ---------- ---------- ----------
Net income.................................... $ 28,834 $ 11,586 $ 75,308 $ 30,288
========== ========== ========== ==========
Net income per common share--basic............ $ .69 $ .32 $ 1.81 $ .85
========== ========== ========== ==========
Average common shares outstanding--basic.... 41,653,285 35,729,292 41,551,448 35,727,020
========== ========== ========== ==========
Net income per common share--diluted.......... $ .67 $ .32 $ 1.76 $ .84
========== ========== ========== ==========
Average common shares
outstanding--diluted...................... 43,087,628 36,392,072 42,839,164 36,215,004
========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER TOTAL
COMMON PAID-IN COMPREHENSIVE ACCUMULATED COMPREHENSIVE SHAREHOLDERS'
STOCK DEFICIT INCOME EARNINGS LOSS DEFICIT
-------- ---------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance at December 31,
1999........................... $42 ($318,662) $250,482 ($13,028) ($81,166)
Comprehensive income:
Net income..................... [$75,308] 75,308 75,308
--------
Other comprehensive loss:
Foreign currency translation
adjustment................... (12,782) (12,782) (12,782)
--------
Comprehensive income............. [$62,526]
========
Issuance of 279,414 shares of
common stock related to
acquisitions................... 10,517 10,517
Stock options exercised,
including tax benefits......... 2,480 2,480
Other adjustments................ 135 135
--- --------- -------- -------- --------
Ending balance at September 30,
2000........................... $42 ($305,530) $325,790 ($25,810) ($ 5,508)
=== ========= ======== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER TOTAL
COMMON PAID-IN COMPREHENSIVE ACCUMULATED COMPREHENSIVE SHAREHOLDERS'
STOCK DEFICIT INCOME EARNINGS LOSS DEFICIT
-------- ----------- ------------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance at
December 31, 1998........ $36 ($499,946) $214,861 $ (7,208) $(292,257)
Comprehensive income:
Net income............... [$30,288] 30,288 30,288
--------
Other comprehensive loss:
Foreign currency
translation
adjustment............. (3,276) (3,276) (3,276)
--------
Comprehensive income....... [$27,012]
========
Other adjustments.......... 135 135
--- --------- -------- -------- ---------
Ending balance at September
30, 1999................. $36 ($499,811) $245,149 ($10,484) ($265,110)
=== ========= ======== ======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
AMPHENOL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Net income.................................................. $75,308 $30,288
Adjustments for cash from operations:
Depreciation and amortization............................. 31,559 30,320
Amortization of deferred debt issuance costs.............. 1,677 2,072
Net change in non-cash components of working capital...... (2,902) (22,513)
------- -------
Cash flow provided by operations............................ 105,642 40,167
------- -------
Cash flow from investing activities:
Capital additions, net.................................... (35,454) (18,299)
Investments in acquisitions............................... (60,528) (1,416)
------- -------
Cash flow used by investing activities...................... (95,982) (19,715)
------- -------
Cash flow from financing activities:
Net change in borrowings under revolving credit
facilities.............................................. (6,799) (14,578)
Decrease in borrowings under Bank Agreement............... (25,252) --
Net change in receivables sold............................ 25,000 --
Proceeds from stock options exercised..................... 1,894 --
------- -------
Cash used by financing activities........................... (5,157) (14,578)
------- -------
Net change in cash and short-term cash investments.......... 4,503 5,874
Cash and short-term cash investments balance, beginning of
period.................................................... 12,898 3,095
------- -------
Cash and short-term cash investments balance, end of
period.................................................... $17,401 $ 8,969
======= =======
Cash paid during the period for:
Interest.................................................. $40,709 $51,903
Income taxes paid, net of refunds......................... 39,840 16,459
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<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 September 30, 2000 and
December 31, 1999, and the related condensed consolidated statements of income
for the three and nine months ended September 30, 2000 and 1999 and of changes
in shareholders' deficit and of cash flow for the nine months ended
September 30, 2000 and 1999 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 and nine
months ended September 30, 2000 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 Company's
1999 Annual Report on Form 10-K.
NOTE 2--INVENTORIES
Inventories consist of:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
Raw materials and supplies.......................... $ 34,311 $ 28,022
Work in process..................................... 120,399 115,231
Finished goods...................................... 40,162 46,180
-------- --------
$194,872 $189,433
======== ========
</TABLE>
NOTE 3--REPORTABLE BUSINESS SEGMENTS (UNAUDITED)
The Company has two reportable business segments: interconnect products and
assemblies and cable products. The interconnect products and assemblies segment
produces connectors and connector assemblies primarily for the communications,
aerospace, industrial and automotive markets. The cable products segment
produces coaxial and flat ribbon cable primarily for communication markets,
including cable television. The Company evaluates the performance of business
units on, among other things, profit or loss from operations before interest
expense, goodwill and other intangible amortization expense, headquarters'
expense allocations, income taxes and nonrecurring gains and losses. The
Company's reportable segments are an aggregation of business units that have
similar production processes and products. The segment results for the three
months ended September 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
INTERCONNECT PRODUCTS
AND ASSEMBLIES CABLE PRODUCTS TOTAL
--------------------- ------------------- -------------------
2000 1999 2000 1999 2000 1999
--------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net sales:
-external.............. $267,237 $196,148 $87,457 $60,709 $354,694 $256,857
-intersegment.......... -- 210 6,023 2,328 6,023 2,538
Segment operating
income................. 52,247 36,472 18,243 13,132 70,490 49,604
</TABLE>
8
<PAGE>
AMPHENOL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 3--REPORTABLE BUSINESS SEGMENTS (UNAUDITED) (CONTINUED)
The segment results for the nine months ended September 30, 2000 and 1999
are as follows:
<TABLE>
<CAPTION>
INTERCONNECT PRODUCTS
AND ASSEMBLIES CABLE PRODUCTS TOTAL
--------------------- ------------------- -------------------
2000 1999 2000 1999 2000 1999
--------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net sales:
-external............ $746,162 $563,085 $244,091 $178,374 $990,253 $741,459
-intersegment........ 89 533 13,395 6,819 13,484 7,352
Segment operating
income............... 144,136 98,432 50,355 36,441 194,491 134,873
</TABLE>
Reconciliation of segment operating income to consolidated income before
taxes for the third quarter and nine months ended September 30, 2000 and 1999:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 2000 SEPTEMBER 2000
------------------- -----------------------
2000 1999 2000 1999
-------- -------- ------------ --------
<S> <C> <C> <C> <C>
Segment operating income.......... $70,490 $49,604 $194,491 $134,873
Amortization of goodwill.......... (3,333) (3,103) (9,934) (9,263)
Interest expense.................. (15,462) (20,001) (46,799) (59,673)
Other net expenses................ (5,539) (6,651) (16,549) (13,401)
------- ------- -------- --------
Consolidated income before income
taxes........................... $46,156 $19,849 $121,209 $ 52,536
======= ======= ======== ========
</TABLE>
NOTE 4--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
condition or results of operations.
Subsequent to the acquisition of Amphenol from Allied Signal Corporation
("Allied") in 1987, Amphenol and Allied have been named jointly and severally
liable as potentially responsible parties in relation to several environmental
cleanup sites. Amphenol and Allied have jointly consented to perform certain
investigations and remedial and monitoring activities at two sites and they have
been jointly ordered to perform work at another site. The responsibility for
costs incurred relating to these sites is apportioned between Amphenol and
Allied based on an agreement entered into in connection with the acquisition.
For sites covered by this agreement, to the extent that conditions or
circumstances occurred or existed at the time of or prior to the acquisition,
Allied is currently obligated to pay 80% of the costs up to $30,000 and 100% of
the costs in excess of $30,000. Management does not believe that the costs
associated with resolution of these or any other environmental matters will have
a material adverse effect on the Company's financial condition or results of
operations.
9
<PAGE>
AMPHENOL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
A subsidiary of the Company has an agreement with a financial institution
whereby the subsidiary can sell an undivided interest of up to $85,000 in a
designated pool of qualified accounts receivable. The agreement expires in
May 2004 with respect to $60,000 of accounts receivable and expires in
June 2001 with respect to an additional $25,000 of accounts receivable. Under
the terms of the agreement, new receivables are added to the pool as collections
reduce previously sold accounts receivable. The Company services, administers
and collects the receivables on behalf of the purchaser. Fees payable to the
purchaser under this agreement are equivalent to rates afforded high quality
commercial paper issuers plus certain administrative expenses and are included
in other expenses, net, in the accompanying Condensed Consolidated Statement of
Income. The agreement contains certain covenants and provides for various events
of termination. In certain circumstances the Company is contingently liable for
the collection of the receivables sold; management believes that its allowance
for doubtful accounts is adequate to absorb the expense of any such liability.
At September 30, 2000 and December 31, 1999, approximately $85,000 and $60,000,
respectively, in receivables were sold under the agreement and are therefore not
reflected in the accounts receivable balance in the accompanying Condensed
Consolidated Balance Sheet at those dates.
NOTE 5--STOCK SPLIT
On March 14, 2000, the Board of Directors approved a two-for-one split of
the Company's common stock to be paid to shareholders of record as of March 23,
2000. On April 24, 2000, the Company's shareholders approved an increase in the
number of authorized shares from 40,000,000 to 100,000,000. On April 24, 2000,
each shareholder received one additional share of common stock for each share of
stock then held. All share and per-share amounts in the financial statements and
footnotes have been restated to reflect the split.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
ITEM 2. RESULTS OF OPERATIONS
QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE QUARTER AND
NINE MONTHS ENDED SEPTEMBER 30, 1999
Net sales for the third quarter of 2000 increased approximately 38% to
$354,694 compared to sales of $256,857 for the same period in 1999. Net sales
for the nine months of 2000 increased approximately 34% to $990,253 compared to
sales of $741,459 for the same period in 1999. The increase in sales for the
third quarter and nine months of 2000 is primarily attributable to increased
sales of interconnect products and cable products for communications markets. In
addition, sales of interconnect products for aerospace and industrial
applications increased in the third quarter and nine months of 2000 compared to
the same periods in 1999. Currency translation had the effect of reducing sales
by approximately $9.5 million and $22.5 million in the third quarter and nine
month period of 2000, respectively, when compared to exchange rates for the
comparable 1999 periods.
The gross profit margin as a percentage of net sales (including depreciation
in cost of sales) increased approximately 1% for the third quarter and nine
months 2000 compared to the 1999 periods. The increase in the gross profit
margin is primarily attributable to changes in product mix and the absorption of
fixed costs over higher sales volume.
Selling, general and administrative expenses as a percentage of net sales
declined approximately 1% for the third quarter and nine months 2000 compared to
the 1999 periods primarily because of absorption of fixed costs over higher
sales volume.
Interest expense for the third quarter and nine months of 2000 decreased to
$15,462 and $46,799 compared to $20,001 and $59,673 for the 1999 periods,
respectively. The decrease in both periods is primarily attributable to lower
average debt levels.
The provision for income taxes for the nine months of 2000 was at an
effective rate of 38% compared to 42% in the 1999 period. The decrease is
generally attributable to non-deductible expenses (goodwill amortization) being
a lower percentage of pretax income. The effective tax rate, excluding
non-deductible goodwill amortization for the third quarter and nine months 2000,
was 35% compared to 36% in the 1999 periods.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $105,642 in the nine months of
2000 compared to $40,167 in the 1999 period. The increase in cash flow relates
primarily to an increase in net income adjusted for depreciation and
amortization charges and a net decrease in use of working capital.
For the nine months of 2000, cash from operating activities and proceeds
from the sale of additional accounts receivable were used to fund capital
expenditures of $35,454 and acquisitions of $60,528, and to repay indebtedness
of $32,051. For the nine months of 1999, cash from operating activities was used
to fund capital expenditures of $18,299 and acquisitions of $1,416, and to repay
indebtedness of $14,578.
In conjunction with a Merger and Recapitalization in 1997, the Company
entered into a $900 million bank agreement comprised of a $150 million revolving
credit facility that expires in the year 2004 and a $750 million term loan
facility. The term loan facility, as modified, included a $350 million Tranche A
maturing over a 7 year period ending 2004, and a $375 million Tranche B with
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
required amortization in 2005 and 2006. The bank agreement is secured by pledges
of 100% of the capital stock of the Company's direct domestic subsidiaries and
65% of the capital stock of direct material foreign subsidiaries, requires the
maintenance of certain interest coverage and leverage ratios, and includes
limitations with respect to, among other things, indebtedness and restricted
payments, including dividends on the Company's common stock. At September 30,
2000 there were $574.2 million of borrowings outstanding under the term loan
facility. Availability under the revolving credit facility at September 30, 2000
was $143.8 million, after reduction of $6.2 million for outstanding letters of
credit.
The Company has entered into interest rate swap agreements that effectively
fix the Company's interest cost on $450 million of borrowings under the bank
agreement to the extent that LIBOR interest rates remain below 7% for
$300 million of borrowings and below 8% for $150 million of borrowings.
The Company's EBITDA, as defined in the bank agreement, was $212.1 million
and $155.5 million for the nine months ended September 30, 2000 and 1999,
respectively. EBITDA is not a defined term under Generally Accepted Accounting
Principles (GAAP) and is not an alternative to operating income or cash flow
from operations as determined under GAAP. The Company believes that EBITDA
provides additional information for determining its ability to meet future debt
service requirements; however, EBITDA does not reflect cash available to fund
cash requirements.
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 principal and interest on bank
borrowings and interest on its 9 7/8% Senior Subordinated Notes due 2007.
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 and
availability under the Company's revolving credit facility. The Company may also
use cash to fund part or all of the cost of future acquisitions.
ENVIRONMENTAL MATTERS
Subsequent to the acquisition of Amphenol Corporation in 1987, Amphenol and
Allied have been named jointly and severally liable as potentially responsible
parties in relation to several environmental cleanup sites. Amphenol and Allied
have jointly consented to perform certain investigations and remedial and
monitoring activities at two sites and they have been jointly ordered to perform
work at another site. The responsibility for costs incurred relating to these
sites is apportioned between Amphenol and Allied based on an agreement entered
into in connection with the acquisition. For sites covered by this agreement, to
the extent that conditions or circumstances occurred or existed at the time of
or prior to the acquisition, Allied is currently obligated to pay 80% of the
costs up to $30 million and 100% of the costs in excess of $30 million.
Management does not believe that the costs associated with resolution of these
or any other environmental matters will have a material adverse effect on the
Company's financial condition or results of operations.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
RECENT ACCOUNTING CHANGE
In June 1998 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (FAS 133), "Accounting for Derivative
Instruments and Hedging Activities." This statement requires that an entity
recognize all derivatives as either assets or liabilities in the Statement of
Financial Position and measure those instruments at fair value. The accounting
for changes in the fair value of a derivative (that is, gains and losses)
depends on the intended use of the derivative and its resulting designation. The
Company is in the process of evaluating the effect this new standard will have
on the Company's financial statements. The Company is required to adopt
FAS 133, as amended by FAS 138, beginning January 1, 2001.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements,"
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. SAB 101, as amended by SAB 101A and SAB 101B,
is effective for the Company's fourth quarter of 2000. It requires companies to
report any changes in revenue recognition as a cumulative change in accounting
principle at the time of implementation in accordance with Accounting Principles
Board Opinion 20, "Accounting Changes." The Company does not expect that SAB
101, as amended, will have a material effect on its financial position or
results of operations.
EURO CURRENCY CONVERSION
On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and the
European Union's common currency (the "euro"). The transition period for the
introduction of the euro began on January 1, 1999. Beginning January 1, 2002,
the participating countries will issue new euro-denominated bills and coins for
use in cash transactions. No later than July 1, 2002, the participating
countries will withdraw all bills and coins denominated in the legacy
currencies, so that the legacy currencies will no longer be legal tender for any
transactions, making the conversion to the euro complete.
The Company is addressing the issues involved with the introduction of the
euro. Based on progress to date, the Company believes that the use of the euro
will not have a significant impact on the manner in which it conducts its
business. Accordingly, conversion to the euro is not expected to have a material
effect on the Company's consolidated financial position, consolidated results of
operations, or liquidity.
SAFE HARBOR STATEMENT
Statements in this report that are not historical are "forward-looking"
statements which should be considered as subject to the many uncertainties that
exist in the Company's operations and business environment. These uncertainties
which include, among other things, economic and currency conditions, market
demand and pricing and competitive and cost factors are set forth in the
Company's 1999 Annual Report on Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the Company's assessment of its
sensitivity to market risk since its presentation set forth, in Item 7A.
"Quantitative and Qualitative Disclosures About Market Risk," in its 1999 Annual
Report on Form 10-K.
13
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Company's 1999 Annual Report on Form 10-K, (the
"10-K").
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) Listing of Exhibits
<TABLE>
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2.1 Agreement and Plan of Merger dated as of January 23, 1997
between NXS Acquisition Corp. and Amphenol Corporation
(incorporated by reference to Current Report on Form 8-K
dated January 23, 1997).**
2.2 Amendment, dated as of April 9, 1997, to the Agreement and
Plan of Merger between NXS Acquisition Corp. and Amphenol
Corporation, dated as of January 23, 1997 (incorporated by
reference to the Registration Statement on Form S-4
(registration No. 333-25195) filed on April 15, 1997).**
3.1 Certificate of Merger, dated May 19, 1997 (including
Restated Certificate of Incorporation of Amphenol
Corporation)(filed as Exhibit 3.1 to the June 30, 1997
10-Q).**
3.2 By-Laws of the Company as of May 19, 1997 -- NXS Acquisition
Corp. By- Laws (filed as Exhibit 3.2 to the June 30, 1997
10-Q).**
3.3 Amended and Restated Certificate of Incorporation, dated
April 24, 2000 (filed as Exhibit 3.1 to the April 28, 2000
Form 8-K).**
4.1 Indenture between Amphenol Corporation and IBJ Schroeder
Bank and Trust Company, as Trustee, dated as of May 19,
1997, relating to Senior Subordinated Notes due 2007 (filed
as Exhibit 4.1 to the June 30, 1997 10-Q).**
10.1 Amended and Restated Receivables Purchase Agreement dated as
of May 19, 1997 among Amphenol Funding Corp., the Company,
Pooled Accounts Receivable Capital Corporation and Nesbitt
Burns Securities, Inc., as Agent (filed as Exhibit 10.1 to
the June 30, 1997 10-Q).**
</TABLE>
14
<PAGE>
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10.2 Amended and Restated Purchase and Sale Agreement dated as of
May 19, 1997 among the Originators named therein, Amphenol
Funding Corp. and the Company (filed as Exhibit 10.2 to the
June 30, 1997 10-Q).**
10.3 Credit Agreement dated as of May 19, 1997 among the Company,
Amphenol Holding UK, Limited, Amphenol Commercial and
Industrial UK, Limited, the Lenders listed therein, The
Chase Manhattan Bank, as Syndication Agent, the Bank of New
York, as Documentation Agent and Bankers Trust Company, as
Administrative Agent and Collateral Agent (filed as
Exhibit 10.3 to the June 30, 1997 10-Q).**
10.4 1998 Amphenol Incentive Plan (filed as Exhibit 10.5 to the
1997 10- K).**
10.5 1999 Amphenol Incentive Plan (filed as Exhibit 10.6 to the
December 31, 1998 10-K).**
10.6 2000 Amphenol Incentive Plan (filed as Exhibit 10.6 to the
December 31, 1999 10-K).**
10.7 Pension Plan for Employees of Amphenol Corporation as
amended and restated effective December 31, 1997 (filed as
Exhibit 10.7 to the December 31, 1998 10-K).**
10.8 First amendment to the Pension Plan for Employees of
Amphenol Corporation dated October 1, 1998 (filed as Exhibit
10.8 to the December 31, 1998 10-K).**
10.9 Second amendment to the Pension Plan for Employees of
Amphenol Corporation dated February 4, 1999 (filed as
Exhibit 10.9 to the December 31, 1998 10-K).**
10.10 Amphenol Corporation Supplemental Employee Retirement Plan
formally adopted effective January 25, 1996 (filed as
Exhibit 10.18 to the 1996 10-K).**
10.11 LPL Technologies Inc. and Affiliated Companies Employee
Savings/401(k) Plan, dated and adopted January 23, 1990
(filed as Exhibit 10.19 to the 1991 Registration
Statement).**
10.12 Management Agreement between the Company and Dr. Martin H.
Loeffler, dated July 28, 1987 (filed as Exhibit 10.7 to the
1987 Registration Statement).**
10.13 Amphenol Corporation Directors' Deferred Compensation Plan
(filed as Exhibit 10.11 to the December 31, 1997 10-K).**
10.14 Agreement and Plan of Merger among Amphenol Acquisition
Corporation, Allied Corporation and the Company, dated April
1, 1987, and the Amendment thereto dated as of May 15, 1987
(filed as Exhibit 2 to the 1987 Registration Statement).**
10.15 Settlement Agreement among Allied Signal Inc., the Company
and LPL Investment Group, Inc. dated November 28, 1988
(filed as Exhibit 10.20 to the 1991 Registration
Statement).**
10.16 Registration Rights Agreement dated as of May 19, 1997,
among NXS Acquisition Corp., KKR 1996 Fund L.P., NXS
Associates L.P., KKR Partners II, L.P. and NXS I, L.L.C.
(filed as Exhibit 99.5 to Schedule 13D, Amendment No. 1,
relating to the beneficial ownership of shares of the
Company's Common Stock by NXS I, L.L.C., KKR 1996 Fund,
L.P., KKR Associates (1996) L.P., KKR 1996 GP LLC, KKR
Partners II, L.P., KKR Associates L.P., NXS Associates L.P.,
KKR Associates (NXS) L.P., and KKR-NXS L.L.C. dated May 27,
1997).**
10.17 Management Stockholders' Agreement entered into as of May
19, 1997 between the Company and Martin H. Loeffler (filed
as Exhibit 10.13 to the June 30, 1997 10-Q).**
10.18 Management Stockholders' Agreement entered into as of May
19, 1997 between the Company and Edward G. Jepsen (filed as
Exhibit 10.14 to the June 30, 1997 10-Q).**
10.19 Management Stockholders' Agreement entered into as of May
19, 1997 between the Company and Timothy F. Cohane (filed as
Exhibit 10.15 to the June 30, 1997 10-Q).**
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15
<PAGE>
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10.20 1997 Option Plan for Key Employees of Amphenol and
Subsidiaries (filed as Exhibit 10.16 to the June 30, 1997
10-Q).**
10.21 Amended 1997 Option Plan for Key Employees of Amphenol and
Subsidiaries (filed as Exhibit 10.19 to the June 30, 1998
10-Q).**
10.22 Non-Qualified Stock Option Agreement between the Company and
Martin H. Loeffler dated as of May 19, 1997 (filed as
Exhibit 10.17 to the June 30, 1997 10-Q).**
10.23 Non-Qualified Stock Option Agreement between the Company and
Edward G. Jepsen dated as of May 19, 1997 (filed as Exhibit
10.18 to the June 30, 1997 10-Q).**
10.24 Non-Qualified Stock Option Agreement between the Company and
Timothy F. Cohane dated as of May 19, 1997 (filed as Exhibit
10.19 to the June 30, 1997 10-Q).**
10.25 First Amendment to Amended and Restated Receivables Purchase
Agreement dated as of September 26, 1997 (filed as Exhibit
10.20 to the September 30, 1997 10-Q).**
10.26 Canadian Purchase and Sale Agreement dated as of September
26, 1997 among Amphenol Canada Corp., Amphenol Funding Corp.
and Amphenol Corporation, individually and as the initial
servicer (filed as Exhibit 10.21 to the September 30, 1997
10-Q).**
10.27 Second Amendment to Amended and Restated Receivables
Purchase Agreement dated as of June 30, 2000 (filed as
Exhibit 10.27 to the June 30, 2000 10-Q).**
10.28 Amended and Restated Credit Agreement dated as of October 3,
1997 among the Company, Amphenol Holding UK, Limited,
Amphenol Commercial and Industrial UK, Limited, the Lenders
listed therein, The Chase Manhattan Bank, as Syndication
Agent, the Bank of New York, as Documentation Agent and
Bankers Trust Company, as Administrative Agent and
Collateral Agent (filed as Exhibit 10.22 to the September
30, 1997 10-Q).**
10.29 First Amendment dated as of May 1, 1998 to the Amended and
Restated Credit Agreement dated as of October 3, 1997 among
the Company, Amphenol Holding UK, Limited, Amphenol
Commercial and Industrial UK, Limited, the Lenders listed
therein, The Chase Manhattan Bank, as Syndication Agent, the
Bank of New York, as Documentation Agent and Bankers Trust
Company, as Administrative Agent and Collateral Agent (filed
as Exhibit 10.25 to the March 31, 1998 10-Q).**
27 Financial Data Schedule.*
</TABLE>
(b) Reports filed on Form 8-K
There were no reports on Form 8-K filed for or during the third quarter
ended September 30, 2000.
------------------------
* Filed herewith
** Previously filed
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
AMPHENOL CORPORATION
By: /s/ EDWARD G. JEPSEN
-----------------------------------------
Edward G. Jepsen
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
</TABLE>
DATE: November 13, 2000
17
