Amphenol (APH) 27 Jan 222021 Q4 Earnings call transcript

Hello, and welcome to the Fourth Quarter Earnings Conference Call for Amphenol Corporation. [Operator Instructions]. At the request of the company, today's conference is being recorded, if anyone has any objection, you may disconnect at this time. I would now like to introduce today's conference host, Mr. Craig Lampo. begin. may you Sir,

our much. and everyone. Adam I'm would you CEO. very conference Lampo, Norwitt, is Amphenol's We to welcome to CFO, here like quarter Good you XXXX This call. afternoon, Craig our fourth Thank together with

quarter an results were and current business well overview will of morning. released Adam then trends. year commentary, will as financial the some and full take Then will fourth this I Our provide give questions. we you as

the during financial make forward-looking reminder, As may non-GAAP statements. we a to certain call, measures refer and certain may

in So press please refer to the for relevant disclosures information. our further release

of data In billion adjusted and EPS noted. all a company and continuing of call basis diluted $X.XX, respectively. $X.XX discussed addition, sales will The be quarter on $X.XXX during this fourth closed GAAP otherwise unless the and operations record with

quarter proud in the currencies $X first we XX% to quarterly fourth sales fourth We in history organically. and sales quarter are up in the X% quarter that industrial, the of local and networks, Sequentially, increase significant driven represents in communications, primarily the commercial very in growth up X% Compared local Amphenol's dollars company's Fourth were and were achieved the XXXX, sales excess up that of and time in U.S. billion. contributions data and IT, currencies. air, dollars was robust automotive from including organically broadband the program. markets, by XX% the sales mobile acquisition U.S. in

segment fourth into in Orders quarter points the XXXX up segment the acquisition, organically up our U.S. of Breaking to were comprise XX% XXXX. U.S. a for U.S. X% up local to in operating margin sales $X.XXX operating down and fourth strong further full Interconnect Halo in two were XX% XX% few dollars, market of up resulting was adjusted relative X.XX:X. segment sales, XXXX, Adam segments. $XXX Interconnect up The into in was XX.X%, XX% basis includes to in the which million quarter is which For quarter dollars. Fourth which U.S. XX% the on related which were costs basis quarter year our Cable quarter Cable in the $XX XXXX operating XX% XXXX ratio in and in and The XX% full GAAP a points XX of the by dollars, minutes. of quarter third our QX compared while sequentially, the during comment XX% segments. compared up GAAP GAAP segment, record will the the sales to respectively, trends fourth dollars $XXX sales was Breaking of billion and XXXX $XX.XXX down quarter. by was billion, to book-to-bill of XXXX. year in of and XX% currencies U.S. XX decreased and closed income was acquisition-related by up dollars. million two million, compared which the fourth income a was and

other more by fully to decrease margin of levels actions. of which the as basis XX in supply environment, XXXX not cost challenging was Excluding relative costs, sequential challenging yet and quarter a fourth sales environment, supply driven due decreased were the margin has with points adjusted primarily these and offset was impact acquisitions, XXXX as chain leverage to basis, the fourth the the dilution the of offset by of basis by the decrease negative operating commodity higher chain adjusted been third and the lower which slight commodity to operating impacts margin operating by together XX these compared from the a The XX.X%, on pricing points and well pandemic. quarter impacts quarter continued year-over-year partially was by XXXX. and the normal On slight

effect full The XX adjusted by as as in XXXX, was resulting point by the made margin the the margin in acquisitions we environment margin and operating operating fourth normal volumes segment For Cable cost the as experienced was year a current the as challenging XX.X% negative margin higher basis the offset margin XXXX, pandemic, and partially XX%. as XXXX margin standpoint, adjusted segment leverage XXXX chain was From X.X%. the GAAP during compared was segment to increase the of and were lower was benefits quarter sales on and primarily commodity from Interconnect year. operating in XX.X% dilutive driven the supply operating well the operating impacts of well operating in more the these in

actions. the margins by commodity offset particularly in not significant increase costs, Our and have in ongoing Cable and to pricing continued yet been be segment impacted the which by logistics

very dynamic environment, of the operating are overall the and proud supply chain cost we Given performance. company's

adjusted year-to-date year. lower adjusted tax fourth rate the -- lower a result adjusted as the slightly XX.X% reflected mix ability of entrepreneurial income culture. XX.X%, and tax is the XXXX, result foster company's rate a favorable which Our a XX.X% rate high-performance, the of to company's of GAAP for The to tax effective all the effective team, quarter and expected XX.X% a compared through effective the result commitment slightly the XX.X% of strength management of was team's the these more challenges The manage of action-oriented XX.X% for which fourth to from quarter was quarter full direct full and many slightly a true-up tax in in effectively to rate a continues the respectively. year of

adjusted the increase to XX% year XXXX. rate an an our diluted increase For be approximately was was in $X.XX, In $X.XX tax fourth rate fourth in of compared XX% EPS XXXX, the in the the tax we XX.X% in record quarter, the also compared XX.X% a XXXX, and was a of GAAP $X.XX tax XX.X%, and effective XXXX, EPS compared expect quarter to effective diluted the effective period GAAP XX.X% year to company's adjusted and record rate full adjusted which was XX.X%. respectively. $X.XX of to prior

or the a in cash an record challenges EPS a of in $X.XX net XX% income. result, in income. of especially adjusted net flow $X.XX the For cost, was XXXX. $X.XX, of the Operating year, XXXX. diluted company adjusted -- cash and million significant increase XXXX, chain from was operational EPS million spending free XXX% an increase net the XXXX was a $XXX of other in also XX% quarter our or excellent full GAAP diluted was record and compared fourth This to faced was considering And adjusted flow capital XX% $XXX supply

XX was $X.XXX flow XX% quarter. income. the adjusted or payable which reduction all were are inventory net within our were income. adjusted and XXXX XX, and management, days billion days which elements working year, of days, third significant $X.XXX the of range, For billion on working XXXX for outstanding And full in we capital net spending, From our respectively our of or net inventory flow operating was company's XX% of capital standpoint, the sales capital free especially XX, of all cash resulted a normal days, a cash that team's of days focus from pleased

XXXX was average and million. credit million $X.X debt debt billion. total hand investments stock the billion, quarter was December plus normal at net or Total $X shares cash X.X the during price repurchased returned to was on of billion. existing $X.X the included at company of quarter, billion XX in than the total and combined with shareholders billion, quarterly of at common $XX, $X.X bringing more repurchases shares $X.X facilities. our an our million which dividend, under Total When liquidity to X.X end During $XXX of XXXX availability short-term was capital

was $XXX quarter the and And ratio For billion, our and was of million respectively. GAAP end full at XXXX leverage $X.X year net the XXXX, X.Xx. EBITDA

as release, new have press three our reportable into we Lastly, X, in noted XXXX, businesses effective aligned segments. January the

the some trends. comparable I quarter data results new over on as will to first market report will provide commentary Adam, call turn XXXX. as of now these will We well financial starting the for historical current who in segments

stay the particular, safe I'd and too welcome all And areas is also phone and to that's you your on very to to all it's of new here to in the want just are occurring a much, express Well, wishes and happy late today. everybody for call that many my here family, healthy, your together your Omicron like managing not the I family all to you me you thank in also of country. your hopefully, extend on wave and the year. amidst colleagues Craig, wish my with friends

across very earnings. first organization's EPS demonstration share robust Craig fourth we Sales Despite another we adjusted IT particular cash new in trends and outlook quarter are mentioned, in increases truly fourth quarter and to our quarter the generated diluted and the a for time free others million sales and to by of margins our gave quarter, record the of our I'll a datacom, fourth respect days the As our $X.XX the guidance which I'm pressures, basis, have were in strong and including our in as year, in of markets increased that XX.X%. clear record Q&A XX% automotive billion. in by we're our book-to-bill of company's course, The of to With Craig significantly XX cost and and some a of of the and a continued year our on in related just I'll execution. driven $XXX in sales respectively, flow reaching adjusted a the we networks, our strong supply operational particular, chain $X.XXX excellent end in continue quarter. million, organic of from then above represented growth $X.XX going reached both dollars progress industrial full strong prior an in both finished we'll an fourth with comments record record a earnings to and mobile new grew And U.S. company local XX% a proud to X.XX:X. those face, I'll in moment. served ago. discuss ongoing few And which quality record the the the orders by the talk was a growth billion markets. per year of quarter, thereafter. And make have operating achievements. represented quarter here strong highlight $XXX Adjusted the to other markets, in very of many On mentioned, reflection currencies of operating each and, commodities, and which booked XX%, of robust challenges

extremely proud our I'm quarter, at Just this of team. the of end

again excited provider entrepreneurial fiber As our these million. customers the and I'm for across that from active leading the of components our organization significant solutions infrastructure communications Interconnect potential in data strong once their continued important things excited very is the networks high-speed optic with talented a pleased and service very mobile forward with opportunity approximately a to who with products these environment. Amphenol this of also of variety in realize Halo significantly fiber and X, long-term to represent of acquisition customers Technology Halo's products, unique perform high-growth which world on our to very complementary expected around of wide entrepreneurial to million. particular to and technology product these agility welcome and to markets results. growth markets. offering quarter, sales enables Amphenol, discipline Interconnect to offerings quarter's of future. acceleration just Halo a passive in for amidst Halo $XXX broadband is results the datacom, price and team in markets, great family traffic. whose interconnect them networks as Halo reflect the supplier the $XXX a in a existing them infrastructure especially fiber that we position to December approximately the high-speed Limited year truly We're the and are optic highly is communications optic look operating We're and IT Halo for highly upgrading are announced agile support active an technology challenging purchase of our well the a bolsters the of very customers

meaning Simulation year XXXX. announced the the you the last business remain sale quarter, also X, fourth Illinois Works pleased We December or MTS closing as of recall, announced the Tool acquisition, the in Test on extremely & of all the We ITW. MTS was entirety with of which to

disposition during in I our to bring upon of them And as will execute our & and the then Amphenol We're create program sensors. advantage ability the years to and the industry, to we further X of driving the a for look remain Amphenol high-technology companies remains broad offering team proud sensors X our the very many outstanding very With of great to first acquisition confident competitive come. of in companies forward Test fact, leading value for acquisitions value company. the their Simulation now have successfully continue for of strengthening family, acquired the that of the company. ITW, to and identify MTS part performance these core into new we quarters sensor to

cost billion. from year and XXXX. of I for challenges new position been management a $XX.XXX value XX% in growing grown by which XX% in levels, would year of we the our than is XXXX dollars strong sales despite that, the diversification and confirmation U.S. to have full our say pandemic, company's reaching our the faced. a environment. very just team our years, which agility extremely many expanded over sales overall fact, by by turning in We of that the COVID-XX the a note great was I it organically sales operational the the we've impacted every both just Amphenol XX% record past in successful more can Now the of market, of and of X an

adjusted pressures which of basis increase XX was XXXX around year diluted operating execution of per $X.XX. experienced multiple margins XXXX year last management. achieve the superior enabled this $X.XXX operating profitability confirmations an XX%, $X.XXX level strong adjusted excellent from points the from respectively, capital free margins billion, and cash working flow We earnings that generated of reached company's us And and on record billion share the full world. we despite to disciplined again, of Our of and

cash We across Amphenol a acquisitions outstanding to added expanded that broad company's future companies We're work array for and CableCon with the markets and performance. that put new the family. have individuals of our bringing while also thereby the and that acquisition Amphenol Halo, program LCAB, Services, our value XXXX and position represent these organization. excited technologies talented platforms great in family our with Euromicron, strengthening into expanded Sensors, Positronic, to created MTS Unlimited collectively X

bought In Craig by just under representing back increased of over our XX% noted, million addition, capital the as program billion of X.X share shares total year. we XXXX, over shareholders in and buyback dividend to our $X for return quarterly a

there environment which high a enter in XXXX, we further management performance. team we from XXXX, while be strength have overall long-term built the level continues drive entrepreneurial of confident as is agile to in we superior So can volatility that our

balanced market representing Amphenol sales that our diversification continues end served let Now would no me XX% create the of remain for more the pleased the company we with company's very turn of value electronics single across in being across that to leading I broad market XXXX, and diversified note markets than our just markets. industry. they continuing this end arise to believe performance most diversification segments And industrial that the may mitigates across the of to one the and the impact us the industrial. within market, while technologies of really that volatility our expose to markets individual wherever of We end

represented Now XXXX. turning fourth of and our of for to sales sales full the the year our XX% XX% the in military quarter market. Military of

by by sales did basis, year about applications an the in Sequentially, Our had and sales our acquisitions. benefited our fourth increased to moderate into sales vehicles. dollars as organic from the ground by reduced sales grew we related slightly airframe X% coming from On quarter. in X% as driven U.S. prior expected quarter we

the all the military reflecting Positronic segments position with XX% Sensors virtually For X% the grew MTS across together organically, and of benefits market, military in U.S. the completed full acquisitions year of leading dollars XXXX, to the in and sales year. execution and by strong earlier the our market market

slightly fourth we position sales the continue the levels, quarter these first to market. by of in and ahead, the in quarter company's increase expect excited be to strength from the Looking we military

U.S. accelerate and the adoption defense the major Interconnect and programs, of growing and fourth beginnings coming of pleased very was well in quarter Sensor of expectations Sales Sequentially high-technology to our dollars in the sales around we're line from the support The all from industry-leading the quarter, next-generation our procurement essentially from us of for represented XXXX. long-term performance. a market in into our the quarter. we recovery their positions militaries quarter well as production breadth XX% from X% X% technologies, world As a of robust across continue benefited recent company sales gives our organically as with as contributions aerospace grew as and the grew full which XX% this products third that for confidence aircraft our the the acquisitions. to strongly in in our commercial year

year, For ongoing impact significant the declined of the sales pandemic the by travel and on aircraft reflecting XX%, full production.

integrated com array the into sequential platforms company's aircraft moderation we and both quarter, market technology from in across of XXXX committed a and in this the levels. wide next-generation strong Interconnect to those XXXX, expect into working our Looking in and sales market these leveraging Sensor first the team systems of remains Regardless air positions in very challenges the airplanes. a

well and impacted in jet their U.S. XX% into and to sequential dollars manufacturers moderation the by significantly quarter with which battery the the our strength was gas. mass fourth sales better basis, strength organically exceeded our our travel increasing equipment sales of full strength. market production X%, turn, experienced and oil in very recover in quarter products. of significantly their year. as a essentially continues the market coming transit, On for we as in broad-based market The forward heavy XX% of a and XX% heavy our to our from We and and particular sequential strong transportation, in vehicle, increased this and, industrial the from for segments expand personal as represented saw expectations procurement robust in sales rail prior by lows, industrial as factory business all expectation than pandemic year, benefiting As a we automation, look electric

the strong XX% year grew we full dollars U.S. as industrial very segments in sales XX% broad-based global by the again For all XXXX, across the a saw market market of in industrial market. and organically virtually growth

Looking XXXX, we from sales of in moderation to sequential quarter these the first fourth levels. expect very strong sales do quarter a

and strong our Our customers first Sequentially, applications outstanding as I continues acquisitions complementary we strong global dollars opportunities for confident team expectations across the volumes segments versus to industrial that working Sensor offerings, this remain new across to was high find many a the sales in automotive and long-term year exciting us in our production very both anticipation from The were XX% in U.S. sales of full Interconnect decline well increased on expand through quarter, in well year, many the the strength electric coming the to Antenna by benefits improving in much a we vehicle automotive single-digit market of driven stronger as anticipated industrial above look in well as prior Sales in with Asia. of prior our revenue XXXX. come. quarter. and XX% the growing the organically positioned forward this automotive represented high-technology market. the hybrid organically growth our electronics sales of for for our to by strong has as and particularly of had as XX% our realizing the demand by and this capitalize market very fourth a quarter to for years actually to into market. customers many saw XX%, revolutions We our than strategy the happening XX% sales in strategy

a reflecting the year automotive For XX% drivetrains. including, the the electric electronics and to in continued U.S. as increased and of cars, in position strong full next-generation our automotive well dollars by in XX% recovery market particular, the organically, sales integrated hybrid market expanded XXXX, our into as

driving of remain these reduced Looking in resiliency the we single-digit lofty our quarter. very represented extremely demonstrated long team future. automotive during recovery into We a year. of a the while of the of that sales chain high levels industry XX% full incredible automotive in the first from expertly and in market, XXXX. proud achieved market forward The levels into for struck XXXX, the challenges fourth quarter course moderation in of efforts who from supply an agility in from myriad sequential sales look devices and working the quarter, we our that also the of navigating to the the mobile of significant benefiting our both entire sales expect has fourth their I year this sales the degree in XX%

organically devices. to to U.S. higher more mobile better-than-expected offset X% customers increased and Our sales smartphones dollars driven products wearable realize declines XX%, as and wearable devices, and our Sequentially, prior by smartphones sales in sales we growth the that and X% by than a into device tablets. did from laptops incorporated by year declined in in

recall, smartphones increased year benefited growth full organically X% market our and XXXX tablets moderation were devices the will from of from X% used which, the of in the in mobile and strong study offset particularly there home products part XXXX, For sales the to that U.S. in were early related by and in pandemic. dynamics all wearables, as home on as you in work with sales a laptops dollars we from and in by during

a quarter, of first approximately sequential seasonal decline into XX%. Looking we typical the anticipate

in poised any will always that remain most markets, X team arise opportunities capture as devices to incremental our is of for agile and mobile volatile our may always While outstanding and XXXX sales beyond.

mobile for for us mechanisms of and The networks represented the mobile devices, range Our continue in our market pleased interconnect of enable leading dollars a that year prior support positions the quarter in mobile sales increased by antennas, with X% sales their from XX% well And long X%. year. of to from particularly increased mobile buildouts. broad network to and our was and which higher-than-expected operators very sales XG of networks products XX% in growth, Sequentially, strong the next-generation next-generation in sales array U.S. by we're full And this very network our term. organically. a a

For year organically. networks our year from the grew and by sales the full XXXX, mobile to market prior X% XX%

into first do Looking very expect strong we quarter XXXX, the of sales to moderate levels. from these

team benefits XG around work our networks Our to world. expanding continues at aggressively in realize position and efforts of long-term to the our equipment next-generation the

potential As and IT comes The customers quarter to optics mobile expected, Datacom providers. we and power and than and up these from market for organically continue unique XX% to by service ramp high-speed both position and prior the look broad-based fourth systems, as fiber from industry-leading benefited increased in information investments the communications our U.S. stronger the quarter technology we dollars much into in demand represented from with our forward for benefiting our sales full were fourth XX% XX% sales data of our the rising solutions. Sales equipment from year. XX% in of their year advanced that manufacturers in

XX%, growth of our across We growth coming believe than from significantly supply experienced of benefited higher expectations, as sales into in some slight related for grew we operators Year. decline. which to issues modest which our from the Sequentially, the saw and applications, service a New While especially demand we quarter do chain Chinese had potential by and center other from storage was first quarter strength prepared pull-in customers sales server, data robust web the providers really our networking quarter. been

our year year For our our to strong contributor solutions providers organically strong position XX% technology sales very IT were of XXXX, sales web to the to market across growth service Again, U.S. broad significant as we a a from dollars full array XXXX. to by and applications. a in continue benefit and grew the leading full datacom XX% in

demand fourth the we strengthened Looking in first with our by quarter. and very the Halo's we're single-digit of high IT moderation the products. reflecting by company's position position active outstanding fiber quarter, ahead, in I do the remain especially passive global robust technology excited a expect the Nevertheless, encouraged market. the in datacom optic interconnect addition

sales as represented for spending X% our sales networks by increases cable service bandwidth well benefited quarter Our in order our operators power. better-than-expected continue the from We basis, grew and organically OEM year, dramatic their sales the the ever processor for X% year leading increased as a to provider broadband in of prior dollars in we full XX% to our finally, increased position U.S. contributions manage by as X% forward levels the XX%. and come. in sequential acquisitions. by and the from from benefits performance customers look years demand recent continued for On a to and higher the of to market to And drive and equipment of realizing many

the U.S. year and XXXX, dollars X% in grew the to sales by broadband full For market organically. X%

data we and continuing addition sales broadband their expect of broadband benefit customers encouraged digits forward to the increase customers to applications Halo's into provider increase look of by position market. high-speed sales the all service the Looking support and low to we to homes as ahead, levels of expansion support these around both are from bandwidth whom from businesses. to remain in company's world, product double with We to the we the working our the

rates. do remains that no current conditions highly exchange pandemic meaningfully and with outlook. well continuing significant our supply doubt, ongoing uncertain inflationary the constant challenges not to market turning environment, Now worsen chain assuming as also as and The assuming the of impact

the range XX% of of year. sales This strong $X.XXX diluted the XX% to billion year represents first the to to well compared as as For EPS XX% first last quarter, $X.XXX the over of growth expect we quarter EPS prior $X.XX of XX% to as adjusted in of to in very range billion as well sales adjusted diluted $X.XX. guidance growth

Systems. confident January X and effective we the that to crossed have of our $XX This reinforcing will aligned formed business Finally, newly Harsh at accountability away our earnings allow further to Solutions scale general ability the I to the to sales our we the to challenges X further I release. world. Amphenolian our Solutions, billion in opportunities profitability. level about the our of more this Communication position units these the managers and culture segments quarter to last described capitalize of and April in unique future divisions, from release, many business the the Interconnect as of still -- strong press while our alignment new this continued Environment come strengthens and Very market to management We our providing team want XXX look so detail reportable just us importantly, detail on outstanding beyond year, we this and note, entrepreneurship, financial of around marketplace into grow forward our Sensor time expand alignment year. in our adapt

And while workers each to In and In team. health delivering extend entire sustainable opportunity remains again importantly, all taking safety Amphenol like I'd the particular, of this employees of of the value, all I'd long-term our continued most the addition, committed our around world. organization thank factory to to prioritizing around my world. the once close to our entire like thanks to just by

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[Operator Instructions].

Our with Amit question is first from Daryanani Evercore.

go may ahead. You

taking implying there March. guess, think for there's over be as about XX% very rate. some about worry seeing, big Thanks growth my end think your questions. I I you're is demand XX%, in December, healthy demand shipping versus XX% some guide obviously in growth vectors a that in that might Adam, you the If I out

of then that you would get bit truly way perspective a an you're if terms to in in the any and helpful, is end direct you to actually this think your customer about it's happening terms at seeing, compare of have think there's the be I or growth inventory versus as demand love I'd of think growth difficult. a level your too. build the channel, maybe vectors that

industries, was a a not if like and probably I Well, they're At today, gotten and perfect no customers nothing market and much, it not as visibility you same choices that across of because there's thing. about recently a more today. I chain robust you just one I still there he into, and little so there there's it's to easy electronics I and across is out Craig shared happy much gun has and industry, take the me And challenges. supply something and with try we buy their how thanks have the go to a that is guess, that Look, think Yes. know, one New to And as went have car, buy. OEM automotive ready one customers all out and out doubt can the Amit, shy go and an demand. really industry, our time, buy tell car when holding. bought inventory you don't example, warehouses But know willing Year. a the

supply ship may well their components seems chain. robust. can demand our like high-speed for That data mismatch for relatively there the for still this things whether is like things so end And cars, some things like that end a by challenges semiconductors, that very demand for ultimately and end create consumers be. difficulty is things end customers But across creating of to

know, to channel, well, it you as relates very distribution us. for represents the As

is lot strength it year, quarter? of about of There would pull-through probably What the a lot There mean say any from years was I that inventories are about very going this course the think percent remain inventory supply a volatility. XX%. it. And the which distribution, year. from up bit I past, was contrary, does distribution lighter And XX say a remains build. we that XX%, to little of reflecting products strong chain of challenges. demand tick we it opportunities through comes agile sure of I like No first saw into so a But the or demand. I'm wouldn't was of doubt the and sales, inside here To nimble our we've that going seen quarter. be team jump our to the on were whatever and in fourth ship any along, that very the to little

with question from is Sheerin Stifel. Matt The next

may ahead. go You

of units you've big peers are I Amphenol's operating several about in saw a in as numbers talking missing good running you that that their expecting regarding upside supply to unique wondering a inventory across does advantage opportunities to their many just put time whether because And And you. markets like own, at talk Adam, you result. an then even when about Yes, on thank as build just market lot you they model of wanted this? when missed a your operating follow-up, I'm a that the reduction, are your or some a got issues? markets at end revenue And chain afternoon.

that the succeed unique we're operating company enable XX to bad to like and the clear this reporting we X from sales Matt, operating to ensure mean somebody more concept sure that and model divisions. purpose in yes, your prepared some first And is three I the really to grouping XXX value the the billion to we I to that, and the When attention them we who around making you why the concept comes the this they my the way model, close create general we the the of Loffler. was our model, to scalability that I you the exceed every to answer a reports managers company. special. magic much. model. general of at drive remarks the seven when appropriate managers, do very because joined just that the volatile those them our me, reactivity that's ensure of and could all heart. has it operating this really of one as of to company. that again, is particular, day, is of a have collaboration, of Amphenol became support ultimately question the to create continue to beyond step they levels question and can't of need and stimulation managers operating that a needed times divisions every the my reporting ever -- then effective jobs have operating the advantage Martin simple this the today. that in became general to to And taken level we of company. is that Well, is world agility to operating appropriate the groups, that And world And the mean were we ago, very January reach unique is to the at every why of of our the fostering marketplace have I that the evolved, in this creating all of But end of operating in mentioned now unique stimulate believe of control, and And CEO, of our managers that do bandwidth in long-term in we thought able inside in span it model, has of those that to times we creates company that of XX $X instills flexibility were years group because is competitive the about the around eventually them we as that we good general groups. makes know, what XXX very it I thank created

sheet, quarter inventory, normal of time mean very of increase up we're is the for our actually guided. chain of and item entirety every a reducing phenomenal the sales. businesses. proud of not I you really sequential period sequential basically where sales every They're year the P&L, Every line end think can gross these They're the that of for that responsible days not of there's imagine just fact so fourth that with sales a them much balance that times perform general maybe But days chaos. the And level margin. and with like supply inventory today. line challenging our would in they're the first inventory their in cash just of allows the responsible reflection line item item go to responsible quarter, XXX at our bringing of we the work managers, of the to flow, in have terms a the even in I in team X% for In a the and this

is question JPMorgan. from Our Chatterjee with next Samik

You ahead. may go

maybe past. -- about thinking thoughts and taking remainder you not the how for you full the share Thanks question. And thinking -- on any typically year the of rate the you're my of comment more looking in also you've full in XQ provided year have on behind the you can if year margins. providing I through a if I'm that on can the and you guide? sustainability growth guess back the And expectations I'm color some

year? about guide the give think us Just points how some about to to

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question next Will The is with Securities. from Truist Stein

You may ahead. go

-- you I Adam, sort Great, to add the years operating you structure thanks on question. at several said might ago, have my good and and of point about a forecasted management. highlighted. that question you the new to degree very for taking of this new that need segments a Congrats results some you you layer some outlook.

cuts the that we compares how Will current market we is want roll up seeing earnings at And market? and about other? way are of the is organization remind analysis us, I forecast along we're on end Or have market did it. sort fact, perspective, the per the -- the can our end just have discussion revenue? now So is one the maybe particular, the end least those markets to leaders in at the end will for understanding in internally. so end segments this these still business company orthogonal more from current that question Or the managed same not a markets. have disclosure that, But the to And is with use call? to and, management and

question, Sorry you. for but thank the compound

essentially ways trap question Well, always. we as And one, a our by like answered market. certain think here. in you memory not steel number Look, #X, a you your company I have organized

of aggressively see. products certain the markets different product assemblies, years extraordinary very manufacturing certain design responsible we of printed been a work proliferate so that diversify across thousands see we from we has customer as we market. types each and of But that general that company design and company and we've of for as talked define a And ultimately, to type across in a many array we initially value-add products cable And then sensors, interconnect, the because antennas one collaboratively so maybe for that make. products our quality just managers across connectors way a that interconnect really in of and tens for product assemblies managers the circuit is distinct them our to are we broadly of everything, And the product for and it tens XXX strategies that to the have. each tens and successful to can is is that you all responsible the we general focus products of that know, are and our

to were high-speed the Originally like products. high-speed core is for example proliferate as products for into example, an things fighter areas, and high-speed routers like. But a developed So data jet. for starts other IT applications,

that Now in product sure collaboratively the work more focused creating offering we're the our in high who to broadest team defense team those maybe with for make is market the would speed customers.

up so of many that managers that is ends And what our markets. general work meaning multiple across

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historically. have we'll by market continue end as done guide we And to Yes.

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with Goldman Mark from Sachs. Delaney question The is next

go You ahead. may

M&A in EBIT was supply year-over-year margins you a forward. the afternoon mentioned terms think headwinds the very I about quarter good thanks much that at taking fourth the question. basis. and could bit Yes, on how level to going and understandably, you for through a hoping a impacted chain conversion few talk of Very

you have those opportunity historical maybe if and for think some to Thank offset XXXX? levels of you margin the curious it's year you should conversion you. some challenges I'm more as margins above have this than better possible typical So conversion

at I the Yes. here kind was be full actions. just outstanding proud perspective. and mean navigate a of really of the and seeing to really fourth able XX.X% wanted the of progressively to year from of Thanks, XXXX for full I to Mark. that chain did I just challenging achieved supply start with what through navigating we the saying for year organization costs amidst No, team no that in just for kind that are continued year that think, really XX% to job underlying and quarter really we a, doubt. the and being actually kind and of cost other to as regards a the The pricing and get year worse

did the outstanding the which team resulted I of in ultimately think job doing we a has results that, pretty that have today.

and regards progress numbers. specific of that mid of average, conversion, or because lower necessarily bring implied could where guide, into conversion XXs and of some QX, reduction we especially of have kind of kind is first about but including actions to know EBIT revenue, sequential see we on negative to XX% quarter kind impact in single-digit, to XXs, negative -- high of a related XX% perspective conversion. implied would so the actually the see that in we that with other to But regards guidance, reflect our That's there's talk typically guidance kind from se sequential Halo don't in level around the made going guide our As revenue implied level. in we company even some typically look per sequential where quarter, they're high even would closer conversions. this to I a you And QX normal pricing in level, really from our in kind the conversion first to

But a confident continues very And first what as past environment. job, kind the the from think don't difficult well. I we'll environment in and work the seeing do, think, hard first talk team am are very of to momentum saw line we we'll I some the XXXX quarter this that team good point. into quarter. bottom underlying good we at to as has navigating the this happens perspective, with that Obviously, I I'll positive as see we at improving of I a the done and job move think continue So

Bank The America. from Mohan next Wamsi of question is with

may ahead. You go

And think these taken guess, logistics Adam, you. times. both price to I you taking should costs Craig, ongoing actions thank offset? these XQ, you several progress. Yes, When costs mentioned stayed taken noted you mentioned across fully would you're the Craig and relatively you let's that say, given price commodity your portfolio, do fixed, are we that be that actions. when But expect action if making in you've the the able partly you secondarily, amount? which that Are you've actions you these entire take portfolio? broad-based have And longer auto, to entire that say there to are mitigate areas would across like typically price And Thank have curve? just sort price the Adam, through maybe maybe you discussion could portfolio the filtered percent price seen like if and of characterize increases? increases what you. behind of pricing

Thanks, Wamsi.

a I regards theoretical question in think is our to actions ultimately because to I going when to happen kind what's underlying the fully to environment. it's could mean, difficult say pricing offset, of this

I stay it bit today think environment unrealistic. is to is a where the that to is going assume exactly underlying little

in better the first you So we not again, here or gets think could worse. are and job, that a that, tell doing quarter. good or a whether But the I to as gets ago progress I it minute is I starting see mentioned team

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for prepared completely to they're guess to going when cost try predict the I offset current we're to environment do. something is of to that kind me not just So

Wamsi, every science. it's pricing and a relative is art, circumstance market, our every region, And an then, strategy to every is customer, not every different. Pricing

can this mind. the general one our You managers bet has of that XXX every their forefront of at

we contracts longer-term And announced easier of have for it's example, you not and distribution, concept. some just price where sort We list where also a are people know you or just to are there challenging accustomed there's that -- are not to -- in increase. more the where there raise price, markets it's maybe others where

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where But markets that who what achieve we're Some there's and X pricing, responsibility very then costs really We our a change. to the job, longer cycle of percent up I success, of of themselves do we've having of computer know to as job short-cycle is front the customers who negotiations. in been increasing couldn't general going of able think sit price a out. it's best markets. It's are don't positioned a split alluded managers and them that sort To a well. and hard to even all no push that are give I ultimately have have difficult those system are Others Craig are can very it. that button you where

for over going of answer. think easy so said, fully that's make the is continue question, to we I good us it, to as Craig progress offset when theoretical a we're ultimately to this year, course not

Todorov The Nick with next Research. from Longbow question is

may ahead. You go

Thanks. I it. appreciate Good afternoon, guys.

Craig. as break an headwind busy because was way the from there supply a pricing M&A question from another for maybe for to M&A versus Craig, pretty us you? for you in perspective XXXX Sorry, chain is XXXX for

look up if bring was difference benefit -- an then of operating costs. would I costs at of by we currently for get it we them to some to should I at had organic say is pretty basis. time, conversion acquisitions, margin, over to lower That's able is actually that chain-related XXXX, what some our supply on our mean the related we that with you least which to probably pandemic And close some that be target believe which our the did kind offset kind Yes. overall average. a company from

the that's think it. way think I to So about

the our actually increased call over earnings is, that slightly. that -- XX%. roughly kind ability even a that the think to increase in pandemic EPS, proud by of very our crisis the supply Adam and of chain, we're X-year I again, a really reality to higher actually, revenue over actually we alluded little than And in same through of our that amount bit

slightly to a of these ultimately, the of our costs, And offsetting fact think under I have we continue I So I very, perspective, job typically, a I EPS increase. but at that think organic that we slightly done kind earnings increase that actually respectable rate think, want higher actually have the the given to over really we've were existed last to really of able some that of good years costs period and that think, a very couple considering all from very that over X-year we hoped that's of proud an would I'm here.

with Advisors. is from question next Fox Steven Fox The

go may ahead. You

I of perform thinking at looking and company the and guess Thanks. in thing few again. moderation than wondering, sort same and has a was industrial guys calling respectfully, continued were a just now quarters, you're Good for lot you IT better afternoon. it's I for sort to last look datacom of the the

to going would stepping markets we be versus now Thanks. point anything in in appreciate? is Just back maybe looking and conservative past just you still any and risks other there that out seeing trying that forward, you're at the the or should different thinking your

all afternoon at And much, taken. Steven. no Well, thanks so Good disrespect you. to

this investor the of we in -- volatile of what operations hearing I quarter. our achieved we're in significant and that from think in we what how the I give to quarter. seeing it's datacom. is we're we And on a that I IT industrial and were fourth in we give mean try last we very that. the can and this come And base outperformance the think entire you on uncertain surprised very our pleasantly relatively our the chain and and of customers outperformed and very environment basis quarter a into supply all every Look, and question. really best here assessment have good basis

Are need imagine higher for can for revenues, a position report we you the we to these what this others IT believe we say not is so us. that going but have And we're going customers crisis there that their we because weren't that created maybe maximize outperformance, really strong years to years. ultimately, our still when prior is two particular, but in when a guided now, goal an to over I actually for not is quarter real think hungry to make we're able customers And to a we've quarter. tries and I'm they team little us there team, opportunity these in are way very we with real right outperform first solidify datacom there a takes not sure do our to bit in that last can third but do them less for industrial? in revenues our to everything to very in who goal that really customers make-it-happen can. our two just and attitude their the

something XXX are others even our a with from more spring it general That's desperately vigor to able them. into hear they because managers And where get so to customer action not that whenever because we see that strength a sustainable that create customers that's energy of they many with years for dividends platform long-term before. to come. we something able create have will And and than our to need as

here And best today in so what the does that can to light in what mean give what ultimately for the we we that We're guidance trying see is quarter. of first every upside uncertain Amphenol no deliver that hard opportunity to there's the fight But to is about for going us. highly doubt available is team environment. whatever it possible a still to

Junk from is The Baird. next with Luke question

You may go ahead.

done at bigger structure Or sales, a X-month fairly just had too companies ability does of large and this question I alter I all, first with recent specifically, And you're am direction sizes? If MTS about of of year, deals? future reading company? play in or also company a the this picture Does something to Adam. that an targeting deals your form window much it terms say billion the course, for it Amphenol afternoon. into could larger time Good the your approach integrate into your suppose now two of this afternoon, of to segment the $XX you've the M&A either in new all deals in becomes I the Halo. exceeding

question. great a it's Luke, No.

we I evolve one. Most think secure we every that talk we importantly, the And culture. also making other scale the unique and operating to think of that think aspect about when about That's that culture we sure our that that program. we amidst what find and includes scaling But scale about it operating company aspect. can I really and company, really every M&A interesting. really that in preserve, we step do needs

Over in a of intern. that century as M&A of coming -- the to close this quarter I years, with XX started course I've Amphenol my been an company

that? to cycle, two even pandemic and is just XX% do our and the referred as growth. years well, the XX% is, last tells Well, over that with as represent how that company's time, been a in size straightforward. able cycle, which do we've Craig you grew that arithmetic when our expect that program the during we through scale roughly these way in -- than all have and were $XX way over long when revenue an term, is all acquisitions roughly our I would were to the $XXX close to been have we company today joined, And growth company. I've that interesting, and the would case involved I've And X/X organic deeply even the So million billion less from to of represent when of M&A that a the referred we of to growth revenue you we to XXXX. acquisitions time the what back company still And it X/X said that's consistently was by that about and the been pretty we through

think to the either acquisitions to or we've all the more size. As done company you the above. same you fact have make of have acquisitions bigger the size a make I grows, is, of And

acquisition, the the these are year acquisitions, we we tuck-in we and Euromicron MTS When really not end from at public so the and ourselves look the unlimited services. acquisitions with also sized look the what insignificant didn't making at and and we CableCon like And our defocus first-ever when at acquisition enabling Halo, here Positronic LCAP the yet of unique of done company. and companies like have

So we of sizes. acquisitions to all make will continue

actually such Now collaboration, may devote upon with that able working things time leadership can more they we acquisitions. appropriate driving we're even you're the deals what company the our types size the new is alignment, easy divisions, with aperture we that to further bring a find be if make opens of of the doing because customers of team also the to execute the in general can and of bandwidth And $X nothing division it it day like of Amphenol, changes. part creating now one would company. with a part as with we making billion as that $XX the million we just company with and in do just say these manager, We key

also -- the we executing in the devote make, opportunity I think, is and that they're can new really those to we limitless. sure so And that really them bring we by acquisitions, scale of and scale acquisitions to on this the of of making also the range expanded The that resources have alignment. the once range is successful

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Snyder Chris UBS. with is The from question next

ahead. You may go

you. to M&A commentary the Thank just wanted previous follow-up on strategy. on I

pushes there kind multiples maybe as that the the growth company maybe acquisitions coming into So pay you. size willing target. or achieve of are the from challenges Thank difficulty acquisitions? any is these the increased to M&A and larger widen impact X/X And any Is does or to of range higher the average go on pay Amphenol? to larger these to broader has there maybe that businesses after integrating

in put, it in an double-digit a MTS as will look, a multiple the not of and assets process, acquisition, that I of all some was business. the think I was Chris. does have closed the and when we is, ever to that complex on technology most mean, of tell the an very testament real to there our we on up company, navigate first a is multiple said ability the disposition end, very industry Simulation impact Thanks I just mean, technology multiple. for Test so and that The you highest of done. an take I last public we a ended ever sensors our challenging acquisition the think asset. don't And we some I simply example, a & quarter the that net precious in in paying And much, and industry, that you best X we just first do multiple. the our announced the disposition people, single-digit with first amazing of phenomenal concurrent the of that organization get most

expensive. whether applied new them going equal Amphenol. integration, only a for aligned do have go as strong of on confirmation we think we I very by that principles big do not And is will and or newly as and people things not of that for its test part does terms great small. are the all that means have that if true let to of rely we to and people of three look with we And never their thing. that We bring our them away we acquisitions. organization, open those look company. And in great great a those us as for walk that of it can by great is and great first are relax and fact people does we we the We for as for And them for position. always that having people, that especially there simple we the come broad the not into company buy the people, every week. products we is look upon, doors when global we opportunities that more it's will large as great can day acquisitions, the being necessarily a And So criteria, litmus

of has we And anything to really acquisition think as what grown, been our anything, if so the have flywheel company, it's we added years. momentum else, a if many over program we've as scaled effect

with RBC from Spak is Markets. question next The Capital Joseph

You ahead. go may

for business second. Thanks. I your a automotive on to wanted focus

incredible think You that mix from could versus and wondering production in And And you you this distill I that XX% broader some if how maybe down came by share maybe period, more outperformed not for of trends an of sustainable us but obviously, much the but year. see not trends the a of that's was level, automotive at over into recenter sort you in given like years a -- time, that reasonable that what go-forward any what's segment? outgrowth coming given over the in gains?

new much particular, taking to the does math trying team. of about to than about of next-generation those we units trend go-forward and this, our than last, had so in content electrified over mean more no back that production point consistently our fair phenomenal applications our a electronics, clearly terms out of just of that strategy continue bigger that I've phenomenal translates did we business. really But significant That's job course thanks aggressively is automotive. new Joe, numbers and electrification is would long-term done entrepreneurial not this this much would been we've care I versus that's I'll with pursue those low our to this adoptions not job I here great those it, expert But But on If have share I really in is of been kind I those I've And in what like call not applications the to in we able be would in outperformed which of our for of And year overall team doubt space. a and where capitalizing and sets out we we numbers. the outperforming the mean expect of applications. business what approach our always something the then follow the just team that Well, much, innovations actually And the to applications. did of and and in think a the fabulous we what of never We're certainly hadn't very production. and put technology watermark what that growth I the in look kind but agile because that's don't these to sort into on and who outperformance continue automotive. pockets already. outperform it rather me for technological new that, year take look a opportunities margin, year. CEO, And been really successful out. versus XX it, we a that in can -- kind goes automotive we in believe you by in since who let share I year years applications. in market automotive a of outperform. so mean

Citigroup. with Suva Jim from is question next Our

You ahead. may go

much. you Thank very

ERP As we segment about I my a just wrap system. have up, of kind answered. questions reporting and new the it to of ask your want been lot X

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not and and it I new kind as Now not you're new just then there. system. more us But about talking people of risk wonder view sometimes and information cost ERP providing reporting about more a

that could clarify would be Thank you great. If you.

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small and to one can to ever team to was just as work. cannot So them. goals, We from the this drive they're just can we've is solving you Amphenol group capitalize -- them it's enabled. managers three across grown, leadership it's aggressive building and enough and across set now capture. And CEO. with managers layers the bandwidth the they're not been whereby building have and in can general Far what enough early the when it, work on XXX capitalize just our on but is a since general those infrastructure that's be creating Manager divisions, I -- when opportunities that enough XX small We to General problems doesn't to and solve reporting style people reported And XXX bureaucracy.

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with from question is next The David Kelley Jefferies.

ahead. go may You

Is margins the parts, also trends about core gross squeezing you've core inflation, was been moving some XX% the acquisitions. term, hoping to I and Craig. recent of light And done at some get me several longer in way gross of chain, color you've that supply afternoon, business? for Thanks Good then think for historically. Adam to margin in. right the on unique

bring over always Yes. applicable. time, just of different is look gross certainly, difficult our Gross of But sometimes at thing is Thanks, it's difficult operating it's I with kind different trending a it maybe expense more them specifically David. the in markets margin any also to and the levels. business. because kind mean, of our them to of margins quarters, -- with

don't just We level. operating ourselves we margins at of gross the margin margin at measure that's gross so really or level. on really look why And based an look kind

to on. certainly a I margin years, think of and that at look and XX time. of of focus kind what the that kind last you to a you what margin, certainly had over level, of strong And operating is kind need performance operating need that's and growth trending ultimately we've that's over

I XXX gross even in market think margins a have very unexpected, mobile business Sensor or isn't XX, device industrial a in basis gross higher our XX XX, or points, point given margins market, tends strength margin basis gross which movement higher SG&A. necessarily brings and different to maybe

really So the should on. And margins I drive we that get really bit, think We operating it's just I probably tend our focus. performance on. you ourselves a on. do but ultimately, more to quite wouldn't ultimately, We measure questions focus so much these

with And our from last Cowen. question comes Giordano Joe

You ahead. may go

but Hey like over guys, for demand? kind lot a most. in below compare markets. I can mean point a of of think full your orders. January, think I orders of on what to the with there a understands seem like goes just this guidance, the fourth like quarter. you the not about We right that year I you and like Like results, across I next entering book-to-bill some do as kind now, in at but wanted look feel like doing we're everyone you not others quarters? to underlying good thanks through underlying orders couple demand the X, here. underlying stuff pretty squeezing know to order just of these But be does demand just me to picked there's touch scrambling

Yes.

everybody clear strong It's strong What orders. our for on from here -- give our much, to to phone think to year. us is had I to just just you that is you hard you if very all book-to-bill finished we're prognosis questions. our and to forward really all able going want of I Joe, customers hearing that you actually again Happy book-to-bill as my going time be. we on think, are to Thanks year, a it's and the us precious the in look what healthy, safe give be wish Year that's predict. best appreciation book-to-bill hope a I the We with I'd stay spending for days. to in the I all extend importantly, with most book-to-bill. a of and start hard to us just that so New forward XX your will and like again. Operator, We

Bye-bye. Thank you, everybody.

have for day. attending today's conference, and you a Thank nice