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Technology Stocks : Amphenol (APH) Turnaround or Takeover? -- Ignore unavailable to you. Want to Upgrade?

To: MangoBoy who wrote (18)	1/14/2000 7:50:00 PM
From: MangoBoy	Respond to of 21

[S&P raises Amphenol Corp. ratings] NEW YORK, Jan 14 - Standard & Poor's today raised its corporate credit and bank loan ratings on Amphenol Corp. to double-'B' from single-'B'-plus. In addition, Standard & Poor's raised its subordinated note rating on the company to single-'B'-plus from single-'B'-minus. The ratings are removed from CreditWatch with positive implications, where they were placed Dec. 13, 1999. The outlook is stable. The upgrade is based on improved debt protection measures following Amphenol's December equity offering. Proceeds from the issue were used to pay down $96 million in subordinated notes and $80 million of its tranche B term loan reducing its total debt leverage by nearly 20%. Solid operating performance in fiscal 1999 also contributed to improved credit measures. Ratings reflect a solid position in its two target markets, electronic connectors and coaxial television cable, which generate substantial cash flow, offset by a leveraged financial profile. Wallingford, Conn.-based Amphenol manufactures connectors, cable, and interconnect systems for electronics, cable television, telecommunications, aerospace, transportation, and industrial applications. Amphenol's business profile benefits from geographic and market diversity, which provide overall earnings stability and tempers potential cyclicality in any one market. Operating performance has been consistently good despite constant industry pricing pressures over the past few years. Additionally, attractive growth opportunities for its connector products in the communications markets, particularly wireless telecommunications markets, offer the potential for further sales growth and profitability improvement. Moreover, system upgrades by cable system operators continue to drive increased coaxial cable sales. Sales increased by 8% in the last 12 months ended Sept. 30, 1999, to $975 million driven by robust connector sales in the wireless market segment. Operating margins have consistently remained between 21% and 22% over the past five years. However, Amphenol remains leveraged with total debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) likely to be about 3.8 times for 1999. Adequate financial flexibility is provided by availability of most of its $150 million revolving credit facility as of January 2000. OUTLOOK: STABLE Standard & Poor's expects that current solid operating performance will continue and strengthen the company's financial profile. Still, ratings are constrained in the near term by a leveraged capital structure, Standard & Poor's said.