Record 2008 Second Quarter Results Reported by Amphenol Corporation

Amphenol Corporation (NYSE-APH) reported today that second quarter 2008 diluted earnings per share increased 33% to $.61 compared to $.46 per share for the comparable 2007 period. Sales for the second quarter 2008 increased 23% to $846.8 million compared to $688.8 million for the 2007 period. Currency translation had the effect of increasing sales by approximately $26.5 million in the second quarter 2008 compared to the 2007 period. For the six months ended June 30, 2008, diluted earnings per share was $1.15 compared to $.89 per share for the 2007 period. Sales for the six months ended June 30, 2008 were $1,617.5 million compared to $1,339.9 million for the 2007 period. Currency translation had the effect of increasing sales by approximately $48.1 million for the six month 2008 period when compared to the 2007 period. Amphenol Chairman and CEO, Martin H. Loeffler, stated: "We are very pleased to report a record second quarter with sales of $847 million and earnings per share of $.61. Sales grew 23% over last year. Growth was broad based with particular strength in the global communications, military and commercial aerospace markets. It is extremely rewarding that even in a challenging macroeconomic environment, our strategy of ongoing market and geographic diversification combined with our strong commitment to develop performance enhancing technologies for our customers continues to expand the Company’s growth opportunities.” "Consistent with our strategy, during the second quarter of 2008 the Company completed the acquisition of a United States manufacturer of audio interconnect products for the military market with aggregate annual sales of approximately $14 million. This acquisition broadens the Company’s technology offering in this important market.” "We are especially encouraged that, in addition to excellent overall top line growth, profitability and cash flow continued to be strong in the quarter. Amphenol achieved excellent operating leverage with an operating income margin of 19.9% compared to 19.4% in the second quarter of 2007. We were able to more than offset significant inflationary pressures with the combination of our strong top line growth and a continued focus on all elements of cost. Furthermore, net income was approximately 13% of sales, another indication of the Company’s successful drive for value creation. The Company continues to be an excellent generator of cash, with cash flow from operations remaining strong in the quarter at $96 million. The financial strength of the Company in the quarter provides a solid base for future performance.” "I am very proud of our organization as we continue to execute well in a challenging environment. The growth we achieved in the second quarter is very satisfying and is a direct result of consistently implementing our strategies. While economic uncertainties continue to be broadly reported, and despite a generally moderate demand environment in certain markets, we continue to see strength in our business. We believe we can perform well in such an environment due to our leading technology, increasing positions with our customers in diverse markets, worldwide presence, lean cost structure and entrepreneurial management. Accordingly, while general economic conditions are uncertain, and based on relatively stable currency exchange rates, we are raising our guidance to achieve revenues and EPS in 2008 of $3,278 million to $3,308 million and $2.34 to $2.38, respectively, an increase of 15% to 16% and 21% to 23% over 2007 revenues and EPS, respectively. For the third quarter 2008 we expect revenues in the range of $825 million to $840 million and EPS in the range of $.59 and $.61, respectively. We are excited about the future and confident in the ability of our outstanding organization to meet the challenges presented and to take advantage of the many opportunities in front of us.” The Company will host a conference call to discuss its second quarter results at 1:00 PM (EST) July 17, 2008. The toll free dial-in number to participate in this call is 888-395-9624; International dial-in number is 517-623-4547; Passcode: Reardon. There will be a replay available until 6:00 P.M. (EST) on Monday, July 21, 2008. The replay numbers are as follows: toll free dial-in number is 866-462-8985 and International dial-in number is 203-369-1370. A live broadcast as well as a replay will also be available on the Internet at http://www.amphenol.com/index.cfm/fuseaction/financial.webcasts. Amphenol Corporation is one of the world’s leading producers of electronic and fiber optic connectors, cable and interconnect systems. Amphenol products are engineered and manufactured in the Americas, Europe and Asia and sold by a worldwide sales and marketing organization. Amphenol has a diversified presence as a leader in high growth segments of the interconnect market including: Military, Commercial Aerospace, Automotive, Broadband Communication, Industrial, Information Technology and Data Communications Equipment, Mobile Devices and Wireless Infrastructure. Statements in this press release which are other than historical facts are intended to be "forward-looking statements” within the meaning of the Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 and other related laws. While the Company believes such statements are reasonable, the actual results and effects could differ materially from those currently anticipated. Please refer to [Part I, Item 1A] of the Company’s Form 10-K for the year ended December 31, 2007, for some factors that could cause the actual results to differ from estimates. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise.   AMPHENOL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (dollars in thousands, except per share data)                     Three months ended Six months ended June 30, June 30,   2008     2007     2008     2007     Net Sales $ 846,817 $ 688,836 $ 1,617,531 $ 1,339,920   Cost of sales   570,227     463,212     1,090,035     903,728     Gross profit 276,590 225,624 527,496 436,192   Selling, general and administrative expense   108,367     92,211     208,977     180,182     Operating income   168,223 133,413 318,519 256,010   Interest expense (9,915 ) (8,979 ) (19,814 ) (18,021 ) Other expenses, net   (2,291 )   (3,639 )   (4,436 )   (6,788 )   Income before income taxes 156,017 120,795 294,269 231,201   Provision for income taxes   (46,022 )   (36,799 )   (86,806 )   (69,501 )   Net income $ 109,995   $ 83,996   $ 207,463   $ 161,700       Net income per common share - Basic $ 0.63   $ 0.47   $ 1.18   $ 0.91     Average shares outstanding - Basic   175,487,646     178,624,152     176,075,131     178,379,815     Net income per common share - Diluted $ 0.61   $ 0.46   $ 1.15   $ 0.89     Average shares outstanding - Diluted   179,395,729     182,686,329     179,796,849     182,598,444     AMPHENOL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (dollars in thousands)     June 30, December 31, 2008 2007   ASSETS   Current Assets: Cash and cash equivalents $188,762 $183,641 Accounts receivable, less allowance for doubtful accounts of $14,284 and $12,468, respectively 555,211 510,411 Inventories 519,593 456,882 Prepaid expenses and other assets 92,072   72,874     Total current assets 1,355,638 1,223,808   Land and depreciable assets, less accumulated depreciation of $530,219 and $483,296, respectively 338,805 316,194 Goodwill 1,171,491 1,091,828 Other assets 61,701   43,903     $2,927,635   $2,675,733     LIABILITIES & SHAREHOLDERS' EQUITY   Current Liabilities: Accounts payable $318,526 $295,391 Accrued salaries, wages and employee benefits 59,102 54,963 Accrued income taxes 42,336 39,627 Accrued acquisition-related obligations 67,046 55,212 Other accrued expenses 71,725 74,213 Current portion of long-term debt 551   1,075     Total current liabilities 559,286 520,481   Long-term debt 819,202 721,561 Accrued pension and post employment benefit obligations 110,876 101,804 Other liabilities 82,749 66,973   Shareholders' Equity: Common stock 177 181 Additional paid-in deficit (22,490 ) (43,647 ) Accumulated earnings 1,430,062 1,431,635 Accumulated other comprehensive loss (32,719 ) (43,644 ) Treasury stock, at cost (19,508 ) (79,611 )   Total shareholders' equity 1,355,522   1,264,914     $2,927,635   $2,675,733     AMPHENOL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (dollars in thousands)     Six months ended June 30,   2008     2007     Net income $ 207,463 $ 161,700 Adjustments for cash from operations: Depreciation and amortization 45,684 40,043 Stock-based compensation 7,196 5,993 Net change in non-cash components of working capital (69,704 ) (72,570 ) Other long term assets and liabilities   15,176     10,512     Cash provided by operations   205,815     145,678     Cash flow from investing activities: Capital additions (50,503 ) (50,932 ) Purchase of short term investments, net (8,551 ) (4,208 ) Investments in acquisitions   (99,474 )   (37,579 )   Cash flow used in investing activities   (158,528 )   (92,719 )   Cash flow from financing activities: Net change in borrowings under revolving credit facilities 94,277 5,510 Purchase of treasury stock (143,692 ) (51,947 ) Proceeds from exercise of stock options 8,781 19,650 Excess tax benefits from stock-based payment arrangements 4,981 15,717 Dividend payments   (5,317 )   (5,356 )   Cash flow used in financing activities   (40,970 )   (16,426 )   Effect of exchange rate changes on cash and cash equivalents (1,196 ) -   Net change in cash and cash equivalents 5,121 36,533 Cash and cash equivalents balance, beginning of period   183,641     74,135     Cash and cash equivalents balance, end of period $ 188,762   $ 110,668     Cash paid during the period for: Interest $ 19,877 $ 17,762 Income taxes paid, net of refunds 72,095 52,925   AMPHENOL CORPORATION SEGMENT INFORMATION (dollars in thousands) (Unaudited)               Three months ended Six months ended June 30, June 30,   2008     2007     2008     2007     Trade Sales:    Interconnect Products $ 771,112 $ 618,250 $ 1,471,737 $ 1,203,515    Cable Products   75,705     70,586     145,794     136,405       Consolidated $ 846,817   $ 688,836   $ 1,617,531   $ 1,339,920       Operating income:    Interconnect Products $ 171,625 $ 134,212 $ 325,161 $ 259,093    Cable Products 8,729 8,932 16,999 16,853    Stock-based compensation expense (3,994 ) (3,003 ) (7,196 ) (5,993 )    Other operating expenses   (8,137 )   (6,728 )   (16,445 )   (13,943 )     Consolidated $ 168,223   $ 133,413   $ 318,519   $ 256,010       ROS%:    Interconnect Products 22.3 % 21.7 % 22.1 % 21.5 %    Cable Products 11.5 % 12.7 % 11.7 % 12.4 %    Corporate - Stock-based compensation -0.5 % -0.4 % -0.4 % -0.4 %    Corporate - all other -1.0 % -1.0 % -1.0 % -1.0 %     Consolidated 19.9 % 19.4 % 19.7 % 19.1 %