Amphenol(APH)2025-02-07 21:43Financial Performance - In 2024, Amphenol reported net sales of $15,222.7 million, a 21% increase from $12,554.7 million in 2023, with organic growth of 13%[163] - Operating income for 2024 was $3,156.9 million, reflecting a 23% increase from the previous year[154] - Net income attributable to Amphenol Corporation in 2024 was $2,424.0 million, up 26% from 2023[154] - Net sales for 2024 reached $15,222.7 million, a 21% increase compared to $12,554.7 million in 2023[168] - Communications Solutions segment net sales increased by 29% to $6,323.8 million in 2024, driven by strong growth in IT datacom and mobile devices[166] - Interconnect and Sensor Systems segment net sales grew by 9% to $4,481.5 million in 2024, with contributions from acquisitions and IT datacom market growth[167] - Adjusted Operating Income for 2024 was $3,302.5 million, representing a 21.7% operating margin, up from $2,594.2 million and 20.7% in 2023[175] - Net income attributable to Amphenol Corporation for 2024 was $2,424.0 million, with a diluted EPS of $1.92, compared to $1,928.0 million and $1.55 in 2023[184] - Comprehensive income attributable to Amphenol Corporation was $2,241.3 million in 2024, compared to $1,929.4 million in 2023, reflecting a 16.2% increase[310] Cash Flow and Investments - The Company generated Operating Cash Flow of $2,814.7 million in 2024, compared to $2,528.7 million in 2023[158] - Free Cash Flow for 2024 was $2,157.1 million, slightly down from $2,159.9 million in 2023[158] - Net cash used in investing activities rose significantly to $2,648.6 million in 2024, compared to $1,393.7 million in 2023, primarily due to $2,156.4 million used for acquisitions[234] - Cash provided by operating activities for 2024 was $2,814.7 million, up from $2,528.7 million in 2023, indicating a year-over-year increase of 11.3%[317] - The net cash provided by financing activities in 2024 was $1,729.9 million, a recovery from a net cash used of $1,012.4 million in 2023[317] Acquisitions and Expenses - Acquisition-related expenses in 2024 totaled $145.6 million, impacting net income due to external transaction costs and amortization related to the CIT acquisition[154] - The Company completed two acquisitions in 2024, including the acquisition of CIT for approximately $2,156.4 million, funded through cash on hand, proceeds from the April Senior Notes, and borrowings under the U.S. Commercial Paper Program[261] - The Company completed 10 acquisitions in 2023 for approximately $970.4 million, net of cash acquired, with no material impact on financial results[265] - In 2023, the Company incurred $34.6 million in acquisition-related expenses, primarily from external transaction costs associated with the 2023 Acquisitions[267] - The Company plans to acquire CommScope's Mobile Networks Business for approximately $2,100 million in cash, expected to enhance its product portfolio for next-generation wireless networks[268] Market Presence and Sales - Approximately 65% of Amphenol's sales in 2024 were generated outside the United States, highlighting its global market presence[148] - Net sales to the information technology and data communications market increased by approximately $1,334.2 million, driven by demand for next-generation AI-related applications[163] - The Harsh Environment Solutions segment accounted for approximately 29% of net sales, with a 25% increase in sales in 2024 compared to 2023[164] - The Harsh Environment Solutions segment saw a 14% increase in net sales, contributing approximately 28% of total net sales[190] - The Communications Solutions segment experienced a 13% decrease in net sales, accounting for approximately 39% of total net sales[191] Expenses and Liabilities - Research and development expenses increased by $110.8 million in 2024, representing approximately 3.0% of net sales[174] - Selling, general and administrative expenses were $1,489.9 million, or 11.9% of net sales, up from 11.3% in 2022[199] - Interest expense rose to $217.0 million in 2024 from $139.5 million in 2023, primarily due to higher borrowing levels[179] - Total liabilities rose to $11,584.1 million in 2024, up from $8,099.9 million in 2023, indicating a 43.5% increase[312] Tax and Compliance - The effective tax rate decreased to 18.9% in 2024 from 20.7% in 2023, influenced by excess tax benefits and discrete tax benefits[181] - The effective tax rate for adjusted net income attributable to Amphenol Corporation was 24.0% in both 2023 and 2024[185] - The Company has unrecognized tax benefits totaling $214.5 million, including penalties and interest, as of December 31, 2024[304] - The Company has established liabilities for uncertain tax positions that may be challenged by tax authorities, requiring significant management judgment[305] Stock and Equity - The company declared dividends of $0.55 per common share in 2024, up from $0.425 in 2023[308] - The total stockholders' equity attributable to Amphenol Corporation as of December 31, 2024, was $9,847.4 million, an increase from $8,395.8 million at the end of 2023, reflecting a growth of 17.3%[314] - The Company repurchased 7.0 million shares of its Common Stock for $463.7 million under the 2024 Stock Repurchase Program, with remaining authorization to purchase up to $1,485.6 million as of February 1, 2025[255] Operational Insights - The Company believes its operations are in substantial compliance with environmental laws and regulations, with no material adverse effect on financial condition expected[270] - The Company is subject to foreign exchange exposure due to its global operations, and it employs various strategies to mitigate currency risk[273] - The Company maintains effective internal control over financial reporting as of December 31, 2024, based on COSO criteria[296] - The Company has not recognized any goodwill impairment in 2024, 2023, or 2022, indicating stable performance across its reporting units[340]