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Getting to Know Your Designer
In this issue, we examine how fabs work with their design customers, educating them on the critical elements of fabrication needed to be successful, as well as the many tradeoffs involved. How well do you really know your customer? What makes for a closer, more synchronized working relationship?
In this issue, the biggest names in PCB manufacturing share their economic outlook for the upcoming year and beyond. As you will see, they were all bullish on our industry, but there was some apprehension as well. No one wants to get burned by another the supply chain disruption.
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Amphenol Reports Record Q4 2020 Results, Announces 2-for-1 Stock SplitJanuary 27, 2021 | Amphenol Corporation
Estimated reading time: 4 minutes
Amphenol Corporation has reported fourth quarter 2020 results and announced a 2-for-1 stock split.
“While the COVID-19 pandemic continued to impact our business in the fourth quarter 2020, I am very proud that our team drove results that significantly exceeded our expectations, while still prioritizing the safety and health of our employees worldwide,” said Amphenol President and Chief Executive Officer, R. Adam Norwitt.
“We are pleased to have closed 2020 with record fourth quarter sales and Adjusted Diluted EPS exceeding the high end of our guidance. Sales increased by a strong 13% for the quarter, primarily driven by robust growth in the mobile devices, industrial and automotive markets, partially offset by declines in the commercial aerospace and mobile networks markets. For the full year 2020, sales were up 5% in U.S. dollars, resulting from strong growth in the mobile devices, IT data communications and industrial markets, partially offset by declines in the automotive, commercial air and mobile networks markets.”
“The Company continued to deploy its financial strength in a variety of ways to increase shareholder value in the fourth quarter. To that end, the Company purchased 1.5 million shares of its common stock for $182 million, bringing total share repurchases in 2020 to 6.0 million shares, or $641 million. The Company also paid dividends of $75 million, bringing total dividends paid in 2020 to $298 million, resulting in total capital returned to shareholders in 2020 of $939 million.”
“The Company remains focused on expanding its growth opportunities through a deep commitment to developing enabling technologies for customers in all markets, an ongoing strategy of market and geographic diversification and an active and successful acquisition program. To that end, we are particularly excited to have announced on December 9, 2020 a definitive agreement to acquire MTS Systems Corporation (Nasdaq: MTSC) (“MTS”), a leading global supplier of advanced test systems, motion simulators and precision sensors. Consistent with our plans to best position the MTS Test & Simulation business for future success, on January 19, 2021, we announced a definitive agreement to sell the MTS Test & Simulation business to Illinois Tool Works Inc. (NYSE: ITW) (“ITW”) following the close of the MTS acquisition. The MTS acquisition and related divestment are consistent with our strategy of continuing to expand our range of sensor and sensor-based products across a wide array of industries to further capitalize on the long-term growth potential of the electronics revolution. As previously indicated, the acquisition of MTS’s Sensors business is expected to be accretive to Amphenol’s earnings per share by approximately $0.10 in the first year after closing.”
“In addition to the MTS acquisition, we are excited to have closed two acquisitions this month, Positronic Industries Inc. (“Positronic”) and El-Cab Sp z.o.o. (“El-Cab”). Based in Missouri, Positronic designs and manufactures high-reliability harsh environment connectors for customers primarily in the military aerospace, IT data communications and industrial markets, with annual sales of approximately $80 million. El-Cab, which is based in Poland, manufactures cable assemblies and related products primarily serving the industrial market, with annual sales of $55 million. All of the acquisitions we have completed or signed in the last year strengthen the Company’s global capabilities and enhance our product offerings, while adding talented management teams to the Amphenol family. We look forward to continuing to create more value in the future by bringing additional outstanding businesses into Amphenol.”
2-for-1 Stock Split Announced
The Company also announced that the board of directors has approved a 2-for-1 stock split to be paid in the form of a dividend to shareholders of record as of February 16, 2021. The Company expects the additional shares will be distributed on March 4, 2021.
First Quarter 2021 Outlook
The ongoing and significant economic and public health uncertainties created by the COVID-19 pandemic make it difficult to accurately forecast the Company’s performance for the full year 2021. Accordingly, Amphenol is not providing full-year sales and EPS guidance at this time. Given the current demand environment and assuming no new material disruptions from the pandemic as well as constant exchange rates, for the first quarter 2021, Amphenol expects sales to be in the range of $2.120 billion to $2.180 billion, representing 14% to 17% growth over 2020, and Adjusted Diluted EPS in the range of $0.90 to $0.94, representing 27% to 32% growth over 2020. On a post-split basis, this would represent Adjusted Diluted EPS in the range of $0.45 to $0.47.
“Despite the challenges posed by the COVID-19 pandemic, we are encouraged by the platform of strength that has been created by the Company’s strong performance amidst the unprecedented uncertainties of 2020,” R. Adam Norwitt continued. “The electronics revolution continues to create exciting long-term growth opportunities for Amphenol across each of our diversified end markets, with customers driving their products and networks to achieve ever higher levels of performance. We believe these opportunities will enable a long-term increase in demand for our expanded range of high-technology interconnect, sensor and antenna products. Our ongoing actions to leverage our competitive advantages and create sustained financial strength, as well as our initiatives to expand our high-technology product offerings, both organically and through our acquisition program, have created an excellent base for future performance. I remain confident in the ability of our outstanding entrepreneurial management team to dynamically adjust to changing market conditions, to capitalize on the wide array of growth opportunities that arise even in times of crisis and to continue to generate strong financial performance. Most importantly, I continue to be truly grateful to our team for their extraordinary efforts to protect the safety and health of our employees around the world, while continuing to strongly support our customers and drive outstanding operating performance.”
Canadian avionics manufacturer, Anodyne Electronics Manufacturing Corp. (AEM), is pleased to announce a partnership expansion with Texas Aerospace Technologies, a subsidiary of Texas Aerospace Services, to add AEM’s new MTP136D modern panel-mount P25 VHF FM Forest Service radio to its lineup of product offerings for their Latin American customers.
Collins Aerospace, an RTX business, has been selected by Air India for a full suite of avionics hardware catering to the airline's expanding Boeing 737 MAX fleet.
Further to the announcement of 17 August 2023, BAE Systems has now received the necessary regulatory approvals and will be executing steps in the coming days to complete the acquisition of Ball Aerospace from Ball Corporation.
With such an extremely newsy week, it was hard to select just five items you absolutely must read, but here goes. We have advocacy news from PCBAA and IPC, global market data on AI PC and GenAI smartphone hardware, a roundtable discussion on sales and marketing, a bookended pair of international milaero stories emphasizing a healthy aerospace industry, and an industry report on global semiconductor sales.
Honeywell announced it will invest $84 million to expand its Olathe manufacturing facility in Kansas. The project, which is expected to generate nearly $47 million in total gross domestic product (GDP) and contribute $18.3 million to state and local taxes in the first six years, supports the company's alignment with the compelling megatrend of the future of aviation.