Amphenol 8K Results of Operations and Financial Condition | APH 25 Oct 23

Exhibit 99.1


Amphenol	News Release

World Headquarters

358 Hall Avenue

Wallingford, CT 06492

Telephone (203) 265-8900

AMPHENOL REPORTS THIRD QUARTER 2023 RESULTS

AND ANNOUNCES DIVIDEND INCREASE

Third Quarter 2023 Highlights:

●

Sales of $3.199 billion, down 3% in U.S. dollars and 5% organically compared to the third quarter of 2022

●

GAAP Diluted EPSof $0.83, up 4% compared to prior year

●

Adjusted Diluted EPSof $0.78, down 3% compared to prior year

●

GAAP and Adjusted Operating Marginof 20.6% and 20.8%, respectively

●

Operating and Free Cash Flow of $618 million and $544 million, respectively

●

Closed three acquisitions since July earnings call – Connor Manufacturing Services, Q Microwave and XMA Corporation – and signed an agreement to acquire PCTEL

●

Increased quarterly dividend by 5% to $0.22 per share

Wallingford, Connecticut, October 25, 2023. Amphenol Corporation (NYSE: APH) today reported third quarter 2023 results.

“We are pleased to have closed the third quarter of 2023 with sales and Adjusted Diluted EPS both exceeding the high end of our guidance,” said Amphenol President and Chief Executive Officer, R. Adam Norwitt. “Sales decreased from prior year by 3%, driven by moderations in the mobile networks, mobile devices, IT datacom, broadband and industrial markets, which were partially offset by growth in the commercial air, military and automotive markets as well as contributions from the Company’s acquisition program. Despite the reduction in our sales from prior year, our team executed strongly in the quarter, with Adjusted Operating Margin reaching 20.8%.”

“During the third quarter of 2023, Amphenol continued to deploy its financial strength in a variety of ways to increase shareholder value. This included the repurchase of 1.7 million shares of its common stock for $149 million as well as the payment of dividends of $125 million, resulting in total capital returned to shareholders of nearly $275 million.”

“We remain focused on expanding our growth opportunities through a deep commitment to developing enabling technologies for customers across our served markets, an ongoing strategy of market and geographic diversification as well as an active and successful acquisition program. To that end, we are excited to have closed on three acquisitions since our July earnings call: Connor Manufacturing Services, Q Microwave and XMA Corporation. Based in Illinois, Connor is a global manufacturer of power interconnect products including high voltage busbars for the automotive and industrial markets with annual sales of approximately $100 million. Based in California, Q Microwave is a designer and manufacturer of mission-critical radio frequency components utilized in military platforms with annual sales of approximately $20 million. Based in New Hampshire, XMA is also a provider of radio frequency components for the military and IT datacom markets with annual sales of approximately $15 million. Connor will be included in our Interconnect and Sensor Systems Segment, while Q Microwave and XMA will be included in our Harsh Environment Solutions Segment. All of these acquisitions further expand our offering of high-technology interconnect products across a variety of our markets, while adding talented management teams to the Amphenol family.”

“We are also pleased that on October 13, 2023, we entered into a definitive agreement to acquire PCTEL, Inc. (Nasdaq: PCTI). PCTEL is a leading global provider of antennas, as well as purpose-built Industrial IoT products and test and measurement solutions. The transaction is expected to close by early 2024, subject to approval from PCTEL’s shareholders and other customary closing conditions. We are excited by the opportunities PCTEL brings to further expand the breadth of our already strong antenna offering.”

Increase in Quarterly Dividend

On October 24, 2023, the Company’s Board of Directors approved a 5% increase in the Company’s quarterly dividend, from $0.21 per share to $0.22 per share. The new dividend amount will be paid on January 10, 2024 to shareholders of record as of December 19, 2023.

Fourth Quarter and Full Year 2023 Outlook

Assuming market conditions do not meaningfully worsen as well as constant exchange rates, for the fourth quarter of 2023, Amphenol expects sales to be in the range of $3.090 billion to $3.150 billion. This represents a 3% to 5% decline over the prior year quarter. Adjusted Diluted EPS is expected to be in the range of $0.75 to $0.77, representing a 1% to 4% reduction from the fourth quarter of 2022.

For the full year 2023, Amphenol expects sales to be in the range of $12.317 billion to $12.377 billion, representing a 2% decline over the prior year, while Adjusted Diluted EPS is expected to be in the range of $2.94 to $2.96, representing a 1% to 2% decline over the prior year. This guidance does not include the impact of the PCTEL acquisition, which has not yet closed.

“Despite the ongoing challenges and uncertainties around the world, we are very pleased with the Company’s third quarter 2023 results,” Mr. Norwitt continued. “The revolution in electronics continues to accelerate, creating exciting long-term growth opportunities for Amphenol across each of our diversified end markets. Our ongoing drive to leverage our competitive advantages and create sustained financial strength, as well as our initiatives to expand our product offerings, both organically and through our acquisition program, have created an excellent base for the Company’s future performance. I am confident in the ability of our outstanding entrepreneurial management team to continue to dynamically adjust to changing market conditions, to capitalize on the wide array of growth opportunities that arise in all market cycles and to continue to generate sustainable long-term value for our shareholders and other stakeholders. Most importantly, I remain truly grateful to our team for their extraordinary efforts in navigating the many challenges around the world while continuing to strongly support our customers and drive outstanding operating performance.”

Conference Call and Webcast Details

The Company will host a conference call to discuss its third quarter results at 1:00 PM (EDT) on Wednesday, October 25, 2023. The toll-free dial-in number is 888-455-0949; International dial-in number is +1-773-799-3973; Passcode: LAMPO. A replay of the call will be available until 11:59 PM (EST) on Saturday, November 25, 2023. The replay numbers are toll free 800-813-5529; International toll number +1-203-369-3826; Passcode: 7183.

A live broadcast as well as a replay of the call can be accessed through the Investor Relations section of the company’s website at https://investors.amphenol.com.

About Amphenol

Amphenol Corporation is one of the world’s largest designers, manufacturers and marketers of electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. Amphenol designs, manufactures and assembles its products at facilities in approximately 40 countries around the world and sells its products through its own global sales force, independent representatives and a global network of electronics distributors. Amphenol has a diversified presence as a leader in high-growth areas of the interconnect market including: Automotive, Broadband Communications, Commercial Aerospace, Industrial, Information Technology and Data Communications, Military, Mobile Devices and Mobile Networks. For more information, visit www.amphenol.com.

Non-GAAP Financial Measures

The financial statements included within this press release are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP” or “U.S. GAAP”). This press release also contains certain non-GAAP financial measures, including Adjusted Operating Income, Adjusted Operating Margin, Adjusted Net Income attributable to Amphenol Corporation, Adjusted Effective Tax Rate, Adjusted Diluted EPS, Organic Net Sales Growth, and Free Cash Flow (collectively, “non-GAAP financial measures”), which are intended to supplement the reported GAAP results. Management utilizes these non-GAAP financial measures as part of its internal reviews for purposes of monitoring, evaluating and forecasting the Company’s financial performance, communicating operating results to the Company’s Board of Directors and assessing related employee compensation measures. Management believes that such non-GAAP financial measures may be helpful to investors in assessing the Company’s overall financial performance, trends and period-over-period comparative results. Non-GAAP financial measures related to operating income, operating margin, net income attributable to Amphenol Corporation, effective tax rate and diluted EPS exclude income and expenses that are not directly related to the Company’s operating performance during the periods presented. Items excluded in the presentation of these non-GAAP financial measures in any period may consist of, without limitation, acquisition-related expenses, refinancing-related costs, gains associated with bargain purchase acquisitions, and certain discrete tax items including, but not limited to, (i) the excess tax benefits related to stock-based compensation and (ii) the impact of significant changes in tax law. Non-GAAP financial measures related to net sales exclude the impact related to foreign currency exchange and acquisitions. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included at the end of this press release. However, such non-GAAP financial measures are included for supplemental purposes only and should not be considered in isolation or as a substitute for or superior to the related U.S. GAAP financial measures. In addition, these non-GAAP financial measures are not necessarily the same or comparable to similar measures presented by other companies as such measures may be calculated differently or may exclude different items. The non-GAAP financial measures are defined within the “Supplemental Financial Information” table at the end of this press release and should be read in conjunction with the Company’s financial statements presented in accordance with U.S. GAAP.

Forward-Looking Statements

This press release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on our management’s assumptions and beliefs about future events or circumstances using information currently available, and as a result, they are subject to risks and uncertainties. Forward-looking statements address events or developments that Amphenol Corporation expects or believes may or will occur in the future. These forward-looking statements, which address the Company’s expected business and financial performance and financial condition, among other matters, may contain words and terms such as: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “look ahead,” “may,” “ongoing,” “optimistic,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or “would” and other words and terms of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected earnings, revenues, growth, liquidity, effective tax rate, interest rates or other matters. Although the Company believes the expectations reflected in all forward-looking statements, including those we may make regarding fourth quarter and full year 2023 sales and Adjusted Diluted EPS as well as the expected timing for closing certain acquisitions, among other matters, are based upon reasonable

assumptions, the expectations may not be attained or there may be material deviation. Readers and investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.

There are risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, which include, but are not limited to, the following: political, economic, military and other risks related to operating in countries outside the United States, as well as changes in general economic conditions, geopolitical conditions, U.S. trade policies (including, but not limited to, sanctions) and other factors beyond the Company’s control; uncertainties associated with an economic slowdown or recession in any of the Company’s end markets that could negatively affect the financial condition of our customers and could result in reduced demand; risks and impacts associated with adverse public health developments, including epidemics and pandemics, such as the COVID-19 pandemic, which disrupted our operations from 2020 through early 2023 and could disrupt them again in the future; risks associated with our inability to obtain certain raw materials and components; cybersecurity threats and techniques used to disrupt operations and gain unauthorized access to our information technology systems, including, but not limited to, malware, phishing, credential harvesting, ransomware and other increasingly sophisticated attacks, that continue to expand and evolve globally, which could, among other things, impair our information technology systems and disrupt business operations, result in reputational damage, loss of our intellectual property, the loss of or inability to access confidential information and critical business, financial or other data, and/or cause the release of highly sensitive confidential information, and potentially lead to litigation and/or governmental investigations and fines, among other risks; negative impacts caused by extreme weather conditions and natural catastrophic events, including those caused or intensified by climate change and global warming; risks associated with the improper conduct by any of our employees, customers, suppliers, distributors or any other business partners which could impair our business reputation and financial results and could result in our non-compliance with anti-corruption laws and regulations of the U.S. government and various foreign jurisdictions; changes in exchange rates of the various currencies in which the Company conducts business; the risks associated with the Company’s dependence on attracting, recruiting, hiring and retaining skilled employees, including as part of our various management teams; risks associated with the increasing scrutiny and expectations regarding environmental, social and corporate governance matters that could result in additional costs or risks or otherwise adversely impact our business; risks and difficulties in trying to compete successfully on the basis of technology innovation, product quality and performance, price, customer service and delivery time; the Company’s dependence on end market dynamics to sell its products, particularly in the communications, automotive and military end markets, pricing pressures resulting from large customers that regularly exert pressure on their suppliers, including the Company, and changes in defense expenditures of the U.S. and non-U.S. governments, which are subject to political and budgetary fluctuations and constraints, all of which could adversely affect our operating results; difficulties and unanticipated expenses in connection with purchasing and integrating newly acquired businesses, including the potential for the impairment of goodwill and other intangible assets; events beyond the Company’s control that could lead to an inability to meet its financial and other covenants and requirements, which could result in a default under the Company’s revolving credit facility, unsecured term loan credit facility or any of our various senior notes; risks associated with the Company’s inability to access the global capital markets on favorable terms, including as a result of significant deterioration of general economic or capital market conditions, or as a result of a downgrade in the Company’s credit rating; changes in interest rates; government contracting risks that the Company may be subject to, including laws and regulations governing reporting obligations, performance of government contracts and related risks associated with conducting business with the U.S. and other foreign governments or their suppliers (both directly and indirectly); governmental export and import controls as well as sanctions and trade embargoes that certain of our products may be subject to, including export licensing, customs regulations, economic sanctions and other laws; changes in fiscal and tax policies, audits and examinations by taxing authorities, laws, regulations and guidance in the United States and foreign jurisdictions; any difficulties in enforcing and protecting the Company’s intellectual property rights; litigation, customer claims, voluntary or forced product recalls, governmental investigations, criminal liability or environmental matters including changes to laws and regulations to which the Company may be subject; and incremental costs, risks and regulations associated with efforts to combat the negative effects of climate change.

A further description of these uncertainties and other risks can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q and the Company’s other reports filed with the Securities and Exchange Commission. These or other uncertainties not identified in these documents (that we either currently do not expect to have an adverse effect on our business or that we are unable to predict or identify at this time) may cause the Company’s actual future results to be materially different from those expressed in any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements except as required by law.

Contact:

Sherri Scribner

Vice President, Strategy and Investor Relations

203-265-8820

IR@amphenol.com

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(dollars and shares in millions, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net sales	$	3,199.2	$	3,295.2	$	9,227.2	$	9,383.8

Cost of sales		2,150.7		2,235.2		6,243.5		6,393.1

Gross profit		1,048.5		1,060.0		2,983.7		2,990.7

Acquisition-related expenses		9.0		12.0		18.4		12.0

Selling, general and administrative expenses		381.6		366.9		1,095.7		1,059.0

Operating income		657.9		681.1		1,869.6		1,919.7

Interest expense		(33.6)		(32.8)		(104.5)		(91.3)
Gain on bargain purchase acquisition (1)		—		—		5.4		—
Other income (expense), net		9.2		2.6		18.9		6.6

Income before income taxes		633.5		650.9		1,789.4		1,835.0

Provision for income taxes (2)		(115.2)		(150.4)		(363.0)		(429.2)

Net income		518.3		500.5		1,426.4		1,405.8
Less: Net income attributable to noncontrolling interests		(4.4)		(3.9)		(12.8)		(11.0)

Net income attributable to Amphenol Corporation	$	513.9	$	496.6	$	1,413.6	$	1,394.8

Net income attributable to Amphenol Corporation per common share — Basic	$	0.86	$	0.83	$	2.37	$	2.34

Weighted average common shares outstanding — Basic		597.7		595.3		595.9		596.6

Net income attributable to Amphenol Corporation per common share — Diluted (3)	$	0.83	$	0.80	$	2.28	$	2.24

Weighted average common shares outstanding — Diluted		622.0		619.3		620.1		621.5

Note 1 Reflects the non-cash gain of $5.4 million ($0.01 per share) associated with a bargain purchase acquisition closed during the second quarter of 2023.

Note 2 Provision for income taxes for the three months ended September 30, 2023 and 2022 includes excess tax benefits related to stock-based compensation of $38.3 million ($0.06 per share) and $10.6 million ($0.02 per share), respectively. Provision for income taxes for the nine months ended September 30, 2023 and 2022 includes excess tax benefits related to stock-based compensation of $67.3 million ($0.11 per share) and $21.9 million ($0.04 per share), respectively.

Note 3 Net income per share for the three months ended September 30, 2023 and 2022 includes the excess tax benefits related to stock-based compensation discussed in Note 2. Net income per share for the three months ended September 30, 2023 also includes acquisition-related expenses of $9.0 million ($8.4 million after-tax, or $0.01 per share), comprised of external transaction costs related to acquisitions. Net income per share for the three months ended September 30, 2022 also includes acquisition-related expenses of $12.0 million ($10.5 million after-tax, or $0.02 per share), comprised of external transaction costs as well as the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in 2022.

Net income per share for the nine months ended September 30, 2023 and 2022 includes the excess tax benefits related to stock-based compensation discussed in Note 2. Net income per share for the nine months ended September 30, 2023 also includes the non-cash gain related to the bargain purchase acquisition discussed in Note 1, as well as acquisition-related expenses of $18.4 million ($16.2 million after-tax, or $0.03 per share), comprised of external transaction costs incurred in the second and third quarters of 2023, as well as the amortization related to the value associated with acquired backlog resulting from an acquisition that closed in the first quarter of 2023. Net income per share for the nine months ended September 30, 2022 also included the acquisition-related expenses in the third quarter of 2022 discussed above.

Excluding these effects and the impact of rounding, Adjusted Diluted EPS, a non-GAAP financial measure which is defined and reconciled to its most comparable GAAP financial measure in this press release, was $0.78 and $0.80 for the three months ended September 30, 2023 and 2022, respectively, and $2.19 and $2.23 for the nine months ended September 30, 2023 and 2022, respectively.

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(dollars in millions)


	September 30,		December 31,
	2023		2022
ASSETS

Current Assets:
Cash and cash equivalents	$	1,481.5	$	1,373.1
Short-term investments		252.5		61.1
Total cash, cash equivalents and short-term investments		1,734.0		1,434.2
Accounts receivable, less allowance for doubtful accounts of $70.1 and $63.9, respectively		2,571.2		2,631.3
Inventories		2,099.1		2,093.6
Prepaid expenses and other current assets		369.0		320.0

Total current assets		6,773.3		6,479.1

Property, plant and equipment, less accumulated depreciation of $2,162.1 and $2,019.3, respectively		1,246.6		1,204.3
Goodwill		6,574.5		6,446.1
Other intangible assets, net		744.2		734.1
Other long-term assets		420.4		462.6

Total Assets	$	15,759.0	$	15,326.2

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

Current Liabilities:
Accounts payable	$	1,248.9	$	1,309.1
Accrued salaries, wages and employee benefits		360.9		416.7
Accrued income taxes		113.6		169.5
Accrued dividends		125.6		124.9
Other accrued expenses		704.2		653.2
Current portion of long-term debt		355.6		2.7

Total current liabilities		2,908.8		2,676.1

Long-term debt, less current portion		3,936.4		4,575.0
Accrued pension and postretirement benefit obligations		129.1		127.9
Deferred income taxes		413.0		409.8
Other long-term liabilities		433.4		443.3

Total Liabilities		7,820.7		8,232.1

Redeemable noncontrolling interest		21.8		20.6

Equity:
Common stock		0.6		0.6
Additional paid-in capital		3,015.0		2,650.4
Retained earnings		5,669.7		4,979.4
Treasury stock, at cost		(170.6)		(79.8)
Accumulated other comprehensive loss		(657.9)		(535.0)

Total stockholders’ equity attributable to Amphenol Corporation		7,856.8		7,015.6

Noncontrolling interests		59.7		57.9

Total Equity		7,916.5		7,073.5

Total Liabilities, Redeemable Noncontrolling Interest and Equity	$	15,759.0	$	15,326.2

AMPHENOL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(dollars in millions)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Cash from operating activities:
Net income	$	518.3	$	500.5	$	1,426.4	$	1,405.8

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		101.0		102.7		291.4		284.6
Stock-based compensation expense		26.9		23.6		72.4		64.2
Deferred income tax (benefit) provision		(1.7)		(0.9)		(7.1)		17.6
Gain on bargain purchase acquisition		—		—		(5.4)		—
Net change in components of working capital		(23.5)		(45.1)		(81.2)		(274.3)
Net change in other long-term assets and liabilities		(3.0)		(4.8)		(9.6)		(28.6)

Net cash provided by operating activities		618.0		576.0		1,686.9		1,469.3

Cash from investing activities:
Capital expenditures		(74.7)		(121.0)		(267.8)		(290.2)
Proceeds from disposals of property, plant and equipment		0.5		1.7		2.1		4.5
Purchases of investments		(79.6)		(101.3)		(218.8)		(304.6)
Sales and maturities of investments		4.0		153.2		67.8		220.6
Acquisitions, net of cash acquired		(179.4)		(213.7)		(292.6)		(288.2)
Other, net		(0.1)		7.9		4.9		7.4

Net cash used in investing activities		(329.3)		(273.2)		(704.4)		(650.5)

Cash from financing activities:
Proceeds from issuance of senior notes and other long-term debt		2.2		1.2		354.0		2.9
Repayments of senior notes and other long-term debt		(3.2)		(2.7)		(10.3)		(7.5)
Proceeds from short-term borrowings		—		—		—		44.9
Repayments of short-term borrowings		—		(24.8)		—		(44.9)
(Repayments) borrowings under commercial paper programs, net		—		(18.8)		(632.6)		111.9
Payment of costs related to debt financing		—		—		(2.3)		(0.4)
Payment of deferred purchase price related to acquisitions		(1.5)		—		(1.5)		—
Purchase of treasury stock		(149.3)		(170.1)		(469.8)		(560.1)
Proceeds from exercise of stock options		160.0		71.8		323.1		114.1
Distributions to and purchases of noncontrolling interests		(1.4)		(0.3)		(8.0)		(4.4)
Dividend payments		(125.1)		(119.1)		(375.0)		(358.4)

Net cash used in financing activities		(118.3)		(262.8)		(822.4)		(701.9)

Effect of exchange rate changes on cash and cash equivalents		(14.0)		(66.2)		(51.7)		(125.0)

Net increase (decrease) in cash and cash equivalents		156.4		(26.2)		108.4		(8.1)

Cash and cash equivalents balance, beginning of period		1,325.1		1,215.2		1,373.1		1,197.1

Cash and cash equivalents balance, end of period	$	1,481.5	$	1,189.0	$	1,481.5	$	1,189.0

Cash paid for:
Interest	$	28.8	$	32.9	$	89.1	$	86.3
Income taxes, net		99.4		140.4		423.8		387.8

AMPHENOL CORPORATION

SEGMENT INFORMATION

(Unaudited)

(dollars in millions)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net sales:
Harsh Environment Solutions	$	887.3	$	793.8	$	2,630.4	$	2,311.9
Communications Solutions		1,279.2		1,518.0		3,567.6		4,216.5
Interconnect and Sensor Systems		1,032.7		983.4		3,029.2		2,855.4
Consolidated Net sales	$	3,199.2	$	3,295.2	$	9,227.2	$	9,383.8


Operating income:
Harsh Environment Solutions	$	239.1	$	207.1	$	705.7	$	596.8
Communications Solutions		283.3		341.6		752.4		927.2
Interconnect and Sensor Systems		188.9		185.3		553.6		522.8

Stock-based compensation expense		(26.9)		(23.6)		(72.4)		(64.2)
Acquisition-related expenses		(9.0)		(12.0)		(18.4)		(12.0)
Other operating expenses		(17.5)		(17.3)		(51.3)		(50.9)
Consolidated Operating income	$	657.9	$	681.1	$	1,869.6	$	1,919.7


Operating margin (%):
Harsh Environment Solutions		26.9%		26.1%		26.8%		25.8%
Communications Solutions		22.1%		22.5%		21.1%		22.0%
Interconnect and Sensor Systems		18.3%		18.8%		18.3%		18.3%

Stock-based compensation expense		-0.8%		-0.7%		-0.8%		-0.7%
Acquisition-related expenses		-0.3%		-0.4%		-0.2%		-0.1%
Other operating expenses		-0.5%		-0.5%		-0.6%		-0.5%

Consolidated Operating margin (%)		20.6%		20.7%		20.3%		20.5%

AMPHENOL CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

(dollars in millions, except per share data)

Management utilizes the non-GAAP financial measures defined below as part of its internal reviews for purposes of monitoring, evaluating and forecasting the Company’s financial performance, communicating operating results to the Company’s Board of Directors and assessing related employee compensation measures. Management believes that such non-GAAP financial measures may be helpful to investors in assessing the Company’s overall financial performance, trends and period-over-period comparative results. Non-GAAP financial measures related to net sales exclude the impact of foreign currency exchange rates and acquisitions. Non-GAAP financial measures related to operating income, operating margin, net income attributable to Amphenol Corporation, effective tax rate and diluted EPS exclude income and expenses that are not directly related to the Company’s operating performance during the periods presented. Items excluded from such non-GAAP financial measures in any period may consist of, without limitation, acquisition-related expenses, refinancing-related costs, gains associated with bargain purchase acquisitions, and certain discrete tax items including, but not limited to, (i) the excess tax benefits related to stock-based compensation and (ii) the impact of significant changes in tax law. The following non-GAAP financial information is included for supplemental purposes only and should not be considered in isolation or as a substitute for or superior to the related U.S. GAAP financial measures. In addition, these non-GAAP financial measures are not necessarily the same or comparable to similar measures presented by other companies as such measures may be calculated differently or may exclude different items. Such non-GAAP financial measures should be read in conjunction with the Company’s financial statements presented in accordance with U.S. GAAP.

The following are reconciliations of non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures for the periods presented:

NET SALES


					Percentage Growth (relative to same prior year period) (1)


					Net sales		Foreign		Constant				Organic
					growth in		currency		Currency Net		Acquisition		Net Sales
					U.S. Dollars (2)		impact (3)		Sales Growth (5)		impact (4)		Growth (5)
Three Months Ended September 30,	2023		2022		(GAAP)		(non-GAAP)		(non-GAAP)		(non-GAAP)		(non-GAAP)
Net sales by segment:
Harsh Environment Solutions	$	887.3	$	793.8	12	%	1	%	11	%	4	%	7	%
Communications Solutions		1,279.2		1,518.0	(16)	%	(1)	%	(15)	%	1	%	(16)	%
Interconnect and Sensor Systems		1,032.7		983.4	5	%	1	%	4	%	3	%	1	%
Consolidated	$	3,199.2	$	3,295.2	(3)	%	—	%	(3)	%	2	%	(5)	%

Nine Months Ended September 30,
Net sales by segment:
Harsh Environment Solutions	$	2,630.4	$	2,311.9	14	%	(1)	%	14	%	4	%	10	%
Communications Solutions		3,567.6		4,216.5	(15)	%	(1)	%	(14)	%	1	%	(15)	%
Interconnect and Sensor Systems		3,029.2		2,855.4	6	%	(1)	%	7	%	3	%	4	%
Consolidated	$	9,227.2	$	9,383.8	(2)	%	(1)	%	(1)	%	2	%	(3)	%

(1)

Percentages in this table were calculated using actual, unrounded results; therefore, the sum of the components may not add due to rounding.

(2)

Net sales growth in U.S. dollars is calculated based on Net sales as reported in the Condensed Consolidated Statements of Income. While the term “net sales growth in U.S. dollars” is not considered a U.S. GAAP financial measure, for purposes of this table, we derive the reported (GAAP) measure based on GAAP results, which serves as the basis for the reconciliation to its comparable non-GAAP financial measures.

(3)

Foreign currency translation impact, a non-GAAP measure, represents the percentage impact on net sales resulting from foreign currency exchange rate changes in the current reporting period(s) compared to the same respective period(s) in the prior year. Such amount is calculated by subtracting net sales for the current reporting period(s) translated at average foreign currency exchange rates for the respective prior year period(s) from net sales for the current reporting period(s), taken as a percentage of the respective prior year period(s) net sales.

(4)

Acquisition impact, a non-GAAP measure, represents the percentage impact on net sales resulting from acquisitions that have not been included in the Company’s consolidated results for the full current period(s) and/or prior comparable period(s) presented. Such net sales related to these acquisitions do not reflect the underlying growth of the Company on a comparative basis. Acquisition impact is calculated as a percentage of the respective prior year period(s) net sales.

(5)

The following are definitions of certain non-GAAP financial measures presented in the table(s) above, which may be referred to within this press release. For purposes of this press release, the terms “constant currencies” and “organically” have the same meaning as the following non-GAAP financial measures, respectively:

Constant Currency Net Sales Growth is defined as the period-over-period percentage change in net sales growth, excluding the impact of changes in foreign currency exchange rates. The Company’s results are subject to volatility related to foreign currency translation fluctuations. As such, management evaluates the Company’s sales performance based on actual sales growth in U.S. dollars, as well as Organic Net Sales Growth (defined below) and Constant Currency Net Sales Growth, and believes that such information is useful to investors to assess the underlying sales trends.

Organic Net Sales Growth is defined as the period-over-period percentage change in net sales growth resulting from operating volume and pricing changes and excludes (i) the foreign currency translation impact, which is outside the control of the Company, and (ii) the acquisition impact, both as described above and which do not reflect the underlying growth of the Company on a comparative basis. Management evaluates the Company’s sales performance based on actual sales growth in U.S. dollars, as well as Constant Currency Net Sales Growth (defined above) and Organic Net Sales Growth, and believes that such information is useful to investors to assess the underlying sales trends.

AMPHENOL CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)

(Unaudited)

(dollars in millions, except per share data)

OPERATING RESULTS


	Three Months Ended September 30,
	2023										2022
					Net Income										Net Income
					attributable to		Effective								attributable to		Effective
	Operating		Operating		Amphenol		Tax		Diluted		Operating		Operating		Amphenol		Tax		Diluted
	Income		Margin (i)		Corporation		Rate (i)		EPS		Income		Margin (i)		Corporation		Rate (i)		EPS
Reported (GAAP)	$	657.9	20.6	%	$	513.9	18.2	%	$	0.83	$	681.1	20.7	%	$	496.6	23.1	%	$	0.80
Acquisition-related expenses		9.0	0.3			8.4	(0.2)			0.01		12.0	0.4			10.5	(0.2)			0.02
Excess tax benefits related to stock-based compensation		—	—			(38.3)	6.0			(0.06)		—	—			(10.6)	1.6			(0.02)
Adjusted (non-GAAP) (ii) (iii)	$	666.9	20.8	%	$	484.0	24.0	%	$	0.78	$	693.1	21.0	%	$	496.5	24.5	%	$	0.80


	Nine Months Ended September 30,
	2023										2022
					Net Income										Net Income
					attributable to		Effective								attributable to		Effective
	Operating		Operating		Amphenol		Tax		Diluted		Operating		Operating		Amphenol		Tax		Diluted
	Income		Margin (i)		Corporation		Rate (i)		EPS		Income		Margin (i)		Corporation		Rate (i)		EPS
Reported (GAAP)	$	1,869.6	20.3	%	$	1,413.6	20.3	%	$	2.28	$	1,919.7	20.5	%	$	1,394.8	23.4	%	$	2.24
Acquisition-related expenses		18.4	0.2			16.2	(0.1)			0.03		12.0	0.1			10.5	(0.1)			0.02
Gain on bargain purchase acquisition		—	—			(5.4)	0.1			(0.01)		—	—			—	—			—
Excess tax benefits related to stock-based compensation		—	—			(67.3)	3.8			(0.11)		—	—			(21.9)	1.2			(0.04)
Adjusted (non-GAAP) (ii) (iii)	$	1,888.0	20.5	%	$	1,357.1	24.0	%	$	2.19	$	1,931.7	20.6	%	$	1,383.4	24.5	%	$	2.23

FREE CASH FLOW


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating Cash Flow (GAAP)	$	618.0	$	576.0	$	1,686.9	$	1,469.3
Capital expenditures (GAAP)		(74.7)		(121.0)		(267.8)		(290.2)
Proceeds from disposals of property, plant and equipment (GAAP)		0.5		1.7		2.1		4.5
Free Cash Flow (non-GAAP) (iii)	$	543.8	$	456.7	$	1,421.2	$	1,183.6

(i)	While the terms “operating margin” and “effective tax rate” are not considered U.S. GAAP financial measures, for purposes of this table, we derive the reported (GAAP) measures based on GAAP results, which serve as the basis for the reconciliation to their comparable non-GAAP financial measures.

(ii)	All percentages and per share amounts in this table were calculated using actual, unrounded results; therefore, the sum of the components may not add due to rounding.

(iii)

The following are definitions of non-GAAP financial measures presented in the tables above, which may be referred to within this press release:

Adjusted Operating Income is defined as Operating income (as reported in the Condensed Consolidated Statements of Income), excluding income and expenses that are not directly related to the Company’s operating performance during the periods presented.

Adjusted Operating Margin is defined as Adjusted Operating Income (as defined above) expressed as a percentage of Net sales (as reported in the Condensed Consolidated Statements of Income).

Adjusted Net Income attributable to Amphenol Corporation is defined as Net income attributable to Amphenol Corporation (as reported in the Condensed Consolidated Statements of Income), excluding income and expenses and their specific tax effects that are not directly related to the Company’s operating performance during the periods presented.

Adjusted Effective Tax Rate is defined as Provision for income taxes (as reported in the Condensed Consolidated Statements of Income) expressed as a percentage of Income before income taxes (as reported in the Condensed Consolidated Statements of Income), each excluding income and expenses and their specific tax effects that are not directly related to the Company’s operating performance during the periods presented.

Adjusted Diluted EPS is defined as diluted earnings per share (as reported in accordance with U.S. GAAP), excluding income and expenses and their specific tax effects that are not directly related to the Company’s operating performance during the periods presented. Adjusted Diluted EPS is calculated as Adjusted Net Income attributable to Amphenol Corporation, as defined above, divided by the weighted average outstanding diluted shares (as reported in the Condensed Consolidated Statements of Income).

Free Cash Flow is defined as (i) Net cash provided by operating activities (“Operating Cash Flow” - as reported in accordance with U.S. GAAP) less (ii) capital expenditures (as reported in accordance with U.S. GAAP), net of proceeds from disposals of property, plant and equipment (as reported in accordance with U.S. GAAP), all of which are derived from the Condensed Consolidated Statements of Cash Flow. Free Cash Flow is an important liquidity measure for the Company, as we believe it is useful for management and investors to assess our ability to generate cash, as well as to assess how much cash can be used to reinvest in the growth of the Company or to return to stockholders through either stock repurchases or dividends.

AMPHENOL CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES - GUIDANCE

(Unaudited)

(dollars in millions, except per share data)

Management utilizes the non-GAAP financial measures defined earlier as part of its internal reviews for purposes of monitoring, evaluating and forecasting the Company’s financial performance, communicating operating results to the Company’s Board of Directors and assessing related employee compensation measures. Management believes that such non-GAAP financial measures may be helpful to investors in assessing the Company’s overall financial performance, trends and period-over-period comparative results. Adjusted Diluted EPS, a non-GAAP financial measure, excludes income and expenses that are not directly related to the Company’s operating performance during the periods presented. Items excluded from such non-GAAP financial measures in any period may consist of, without limitation, acquisition-related expenses, refinancing-related costs, gains associated with bargain purchase acquisitions, and certain discrete tax items including, but not limited to, (i) the excess tax benefits related to stock-based compensation and (ii) the impact of significant changes in tax law. Adjusted Diluted EPS is not necessarily the same or comparable to similar measures presented by other companies as such measures may be calculated differently or may exclude different items. Such non-GAAP financial measures should be read in conjunction with the Company’s financial statements presented in accordance with U.S. GAAP.

The following are reconciliations of current guidance for GAAP Diluted earnings per share (Diluted EPS) to Adjusted Diluted EPS (non-GAAP) for both the fourth quarter and the full year 2023:


	GUIDANCE (1)
	FOURTH QUARTER 2023	FULL YEAR 2023

Diluted EPS (GAAP)	$0.74 - $0.76	$3.02 - $3.04

Acquisition-related costs, net of tax	$0.01	$0.04

Gain on bargain purchase acquisition	-	($0.01)

Excess tax benefits related to stock-based compensation	-	($0.11)

Adjusted Diluted EPS (non-GAAP) (2)	$0.75 - $0.77	$2.94 - $2.96

(1)

Forward-looking Adjusted Diluted EPS reflected in our guidance excludes certain income and expenses, described above, that are not directly related to the Company’s operating performance. Such items are excluded from our guidance for the forward-looking periods only to the extent that such items have either (i) already been reflected in periods reported and are therefore included in the forward-looking full-year period or (ii) the Company reasonably expects to record such items in the forward-looking periods presented and such amounts are estimable. The Company estimates acquisition-related costs in the fourth quarter of 2023 of approximately $0.01 per share primarily related to the amortization of purchase accounting backlog associated with a recent acquisition. As such, the fourth quarter and full year 2023 guidance reflects the expected impact of these costs, and, in the case of the full year guidance, also includes the impact of the items that were recognized during the nine months ended September 30, 2023.

(2)	Per share amounts in this table were calculated using actual, unrounded results; therefore, the sum of the components may not add due to rounding.

Amphenol (APH) 8-KResults of Operations and Financial Condition