Amphenol(US:APH)2022-10-27 16:00Financial Performance - Net sales for Q3 2022 were $3,295.2 million, a 17% increase from $2,818.5 million in Q3 2021, with a 21% increase in constant currencies and an 18% organic growth[133]. - For the first nine months of 2022, net sales reached $9,383.8 million, up 20% from $7,849.5 million in the same period of 2021, with a 22% increase in constant currencies and an 18% organic growth[133]. - Consolidated net sales for the third quarter of 2022 were $3,295.2 million, representing a 17% increase compared to $2,818.5 million in the same period of 2021[137]. - Net sales in the United States increased by 31% to $1,086.0 million, up from $830.0 million in the prior year[137]. - Net income from continuing operations attributable to Amphenol Corporation for Q3 2022 was $496.6 million, up 18.6% from $418.8 million in Q3 2021[149]. - Diluted EPS for Q3 2022 was $0.80, compared to $0.67 in Q3 2021, reflecting a 19.4% increase[149]. - Adjusted net income for the first nine months of 2022 was $1,383.4 million, a 24.5% increase from $1,110.9 million in the same period of 2021[151]. Segment Performance - The Harsh Environment Solutions segment accounted for approximately 24% of net sales, with a 12% increase in Q3 2022 in U.S. dollars and a 14% organic growth compared to Q3 2021[134]. - The Communications Solutions segment represented about 46% of net sales, increasing by 19% in Q3 2022 in U.S. dollars and 17% organically compared to Q3 2021[135]. - The Interconnect and Sensor Systems segment, making up approximately 30% of net sales, saw a 17% increase in Q3 2022 in U.S. dollars and a 23% organic growth compared to Q3 2021[136]. - The Harsh Environment Solutions segment reported operating income of $207.1 million, or 26.1% of net sales, for the third quarter of 2022, consistent with the prior year[143]. - The Communications Solutions segment's operating income increased to $341.6 million, or 22.5% of net sales, from $276.7 million, or 21.8% of net sales, in the third quarter of 2021[144]. - The Interconnect and Sensor Systems segment's operating income rose to $185.3 million, or 18.8% of net sales, compared to $146.5 million, or 17.4% of net sales, in the same period of 2021[145]. Expenses and Income - Operating income for the third quarter of 2022 was $681.1 million, or 20.7% of net sales, compared to $571.2 million, or 20.3% of net sales, in the third quarter of 2021[142]. - Research and development expenses were approximately 2.6% of net sales for both the third quarter and first nine months of 2022, down from 2.9% and 3.0% in the same periods of 2021[139]. - Selling, general and administrative expenses were $366.9 million, or 11.1% of net sales, for the third quarter of 2022, compared to $318.7 million, or 11.3% of net sales, in the third quarter of 2021[138]. - Interest expense for the third quarter of 2022 was $32.8 million, an increase from $29.0 million in the same quarter of 2021, due to rising interest rates[146]. - The effective tax rate for the third quarter of 2022 was 23.1%, compared to 22.2% in the same quarter of 2021[148]. Cash Flow and Investments - Operating cash flow for the first nine months of 2022 was $1,469.3 million, up from $1,060.4 million in the first nine months of 2021, indicating a significant increase in cash generation[160]. - Total cash, cash equivalents, and short-term investments as of September 30, 2022, were $1,252.0 million, slightly up from $1,241.4 million at the end of 2021[153]. - Accounts receivable increased by $185.3 million to $2,640.1 million, driven by higher sales and acquisitions[164]. - Inventories rose by $186.0 million to $2,080.1 million, influenced by increased sales and ongoing supply chain disruptions[164]. - The company reported a net cash used in investing activities of $(650.5) million for the first nine months of 2022, a decrease from $(1,810.0) million in the same period of 2021[159]. - The company utilized $288.2 million for acquisitions and $285.7 million for capital expenditures in the first nine months of 2022[168]. Financing Activities - Net cash used in financing activities from continuing operations was $701.9 million in the first nine months of 2022, compared to a net cash provided of $438.4 million in the same period of 2021[172]. - The company repurchased 7.6 million shares of its Common Stock for $560.1 million in the first nine months of 2022 under the stock repurchase program[186]. - The company has remaining authorization to purchase up to $940.2 million of its Common Stock under the 2021 Stock Repurchase Program as of October 26, 2022[186]. - The amount of USCP Notes outstanding as of September 30, 2022, was $903.8 million, with a weighted average interest rate of 3.40%[178]. - The company has a total of $2,500.0 million available under its Revolving Credit Facility, which matures in November 2026[174]. Dividends - The company declared a quarterly dividend of $0.20 per share effective from the fourth quarter of 2021[188]. - Dividends declared per share increased from $0.145 to $0.20 for the three months ended September 30, 2022, representing a 37.93% increase[189]. - Total dividends declared rose to $119.0 million for the three months ended September 30, 2022, compared to $86.7 million for the same period in 2021, marking a 37.06% increase[189]. Acquisitions - The company completed two acquisitions during the nine months ended September 30, 2022, for approximately $288.2 million, funded through borrowings and cash on hand[193]. - Acquisition-related expenses for the three and nine months ended September 30, 2022, totaled $12.0 million, or $0.02 per diluted share[193]. - The acquisition of MTS was completed for a total enterprise value of approximately $1,700 million, net of cash acquired[195]. - The company sold the Divested MTS business for approximately $750 million on December 1, 2021[199]. - The acquisition of Halo Technology Limited was completed for approximately $694 million, net of cash acquired[200]. Market Risks - The Company is exposed to market risks related to foreign currency exchange rates and interest rate changes[214]. - As of September 30, 2022, outstanding borrowings under the U.S. Commercial Paper Program had a weighted average floating interest rate of 3.40%[214]. - The Company expects floating interest rates related to its U.S. Commercial Paper Program borrowings to continue to increase into 2023[215]. - Substantial increases in interest rates occurred during the second and third quarters of 2022, with further increases expected in the fourth quarter[214]. - The Company does not expect changes in interest rates to materially affect income or cash flows in 2022[216]. - There is no assurance that interest rates will not increase significantly from current levels[216].