Slide 1: Q1 2012 Earnings Call January 25, 2012
Q1 2012 Earnings Call January 25, 2012
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements -- This presentation contains certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subj
Slide 3: Summary
Summary First Quarter Sales of $3.3 billion; Adjusted EPS of $0.66; Free cash flow $85 million Results below guidance of $3.4 to $3.5 billion sales; Adjusted EPS of $0.68 to $0.72 Additional weakness in European industrial and infrastructure markets, North American telecom carrier spending and chann
Slide 4: Q1 Revenue Summary
Q1 Revenue Summary ($ in Millions) Q4 FY11 Y/Y Q/Q Segment Q1 FY12 13 Weeks Q1 FY11 Change Change Transportation Solutions $1,405 $1,423 $1,311 7% (1%) Communications & Industrial Solutions 1,075 1,252 1,223 (12%) (14%) Network Solutions 829 959 666 25% (14%) Total $3,309 $3,634 $3,200 3% (9%) Consu
Slide 5: Transportation Solutions
Transportation Solutions Automotive Organic sales growth by region Americas up 12% Asia up 14%, China up 13% EMEA down 1% Global OEM production of ~20 million vehicles, up 1% vs. prior year Aerospace, Defense & Marine Solid growth in commercial aerospace and oil & gas markets Military stable Share g
Slide 6: Communications & Industrial Solutions (CIS)
Communications & Industrial Solutions (CIS) Appliance Softness driven by continued weak new home construction and reduction of incentives in China Touch Solutions Strong sales to medical and retail markets Industrial Distributor inventory adjustments Softness in EMEA and Japan Consumer Devices Decli
Slide 7: Network Solutions
Network Solutions Organic sales growth is a non-GAAP measure; see Appendix for description and reconciliation. Energy Softness in EMEA offsets solid demand in North America Subsea Communications Revenue in-line with guidance Telecom Networks Reduced carrier spending – on an organic basis, North Amer
Slide 8: Q1 Financial Summary
Q1 Financial Summary ($ in Millions, except per share amounts) Adjusted Operating Income, Adjusted Operating Margin and Adjusted EPS are non-GAAP measures; see Appendix for description and reconciliation. Q1 FY12 Q4 FY11 Q4 FY11 Q1 FY11 13 weeks 14 weeks Net Sales $3,309 $3,634 $3,911 $3,200 Operati
Slide 9: Q1 Operating Results
Q1 Operating Results Adjusted Gross Margin Performance Gross margin percentage slightly lower due to sales volume below guidance Expect Q2 adjusted gross margin of 30%+ Operating Expense Performance Expect Q2 RD&E of ~5.5% and SG&A of ~12.5% as percent of sales Adjusted Gross Margin Percentage is a
Slide 10: Q1 Other Items
Q1 Other Items Net Interest Expense Expect increase to ~$36 million in Q2 due to initial funding related to the planned Deutsch acquisition Other Income, Net Relates to Tax Sharing Agreement Expect ~$9 million in Q2 Income Taxes on Adjusted Income Expect 26% adjusted tax rate for Q2 Adjusted Income
Slide 11: Q1 Free Cash Flow and Working Capital
Q1 Free Cash Flow and Working Capital Cash from continuing operations up 36% versus prior year Capital spending of ~4% of sales in Q1 Expect spending of 4 to 5% of sales in FY12 Working capital at targeted levels Expect FY12 Free Cash Flow to Approximate Net Income ($ in Millions) Free Cash Flow is
Slide 12: Q1 Liquidity and Cash
Q1 Liquidity and Cash ($ in Millions) Dividends $0.18 per share paid in December Board approved recommendation that shareholders approve quarterly dividend increase of 17% to $0.21 per share effective Q3 FY 2012 Issued commercial paper related to planned Deutsch acquisition Expect net payment of $70
Slide 13: Q1 Orders Summary
Q1 Orders Summary ($ in Millions) Segment Q1 FY12 Q4 FY11 13 Weeks Q1 FY11 Y/Y Change Q/Q Change Transportation Solutions $1,420 $1,446 $1,397 2% (2)% Book to Bill 1.01 1.02 1.07 Communications & Industrial Solutions 1,020 1,088 1,216 (16)% (6)% Book to Bill 0.95 0.87 0.98 Network Solutions Excl. Su
Slide 14: FY12 Outlook
FY12 Outlook First Half FY12 Second Half FY12 FY12 Revenue Midpoint ~$6.6 ~$7.4 ~$14.0 Adj. Operating Margin Midpoint ~12% ~14% ~13% Adj. EPS Midpoint ~$1.32 ~$1.68 $3.00 Current Revenue Guidance versus: Prior FY12 Guidance FY11 $14.6 $14.0* Fx (0.2) (0.3) ADC - 0.2 Volume (0.4) 0.1 FY12 Guidance $1
Slide 15: Q&A
Q&A =TE eee
Slide 16: Appendix
Appendix TE eee
Slide 17: Non-GAAP Measures
Non-GAAP Measures “Organic Sales Growth,” “Adjusted Gross Margin,” “Adjusted Gross Margin Percentage,” “Adjusted Operating Income,” “Adjusted Operating Margin,” “Adjusted Income Tax Expense,” “Adjusted Effective Tax Rate,” “Adjusted Income from Continuing Operations,” “Adjusted Earnings Per Share,”
Slide 18: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) We present effective income tax rate after adjusting for the tax effect of special items including charges related to restructuring and other charges, acquisition related charges, impairment charges, other income or charges, and certain significant special tax items, if any
Slide 19: Non-GAAP Measures (cont.)
Non-GAAP Measures (cont.) FCF as presented herein may not be comparable to similarly-titled measures reported by other companies. The limitation associated with using FCF is that it subtracts cash items that are ultimately within management’s and the Board of Directors’ discretion to direct and that
Slide 20: Net Sales Growth Reconciliation – Q1 vs. Q1
Net Sales Growth Reconciliation – Q1 12 vs. Q1 11 Translation (2) Acquisition Transportation Solutions (3) : Automotive 76 $ 6.5 % 4 $ - $ 80 $ 6.9 % 88 % Aerospace, Defense, and Marine 14 9.1 - - 14 8.9 12 Total 90 6.8 4 - 94 7.2 100 % Communications and Industrial Solutions (3) : Industrial (55) (
Slide 21: Net Sales Growth Reconciliation – Q1 vs. Q4
Net Sales Growth Reconciliation – Q1 12 vs. Q4 11 Translation (2) Impact of 14th Week (3) Transportation Solutions (4) : Automotive 35 $ 2.6 % (38) $ (102) $ (105) $ (7.8) % 88 % Aerospace, Defense, and Marine (12) (6.3) (3) (10) (25) (12.8) 12 Total 23 1.5 (41) (112) (130) (8.5) 100 % Communication
Slide 22: Non-GAAP Reconciliation – Quarter Ended December 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 30, 2011 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges Charges, Net Items (1) (Non-GAAP) (2) Operating Income: Transportation Solutions 223 $ 4 $ (4) $ - $ 223 $ Commu
Slide 23: Non-GAAP Reconciliation – Quarter Ended December 24, 2010
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended December 24, 2010 Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) Operating Income: Transportation Solutions 189 $ - $ 1 $ 190 $ Communications and In
Slide 24: Non-GAAP Reconciliation – Quarter Ended March 25, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended March 25, 2011 Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) Operating Income: Transportation Solutions 211 $ - $ (6) $ 205 $ Communications and Ind
Slide 25: Non-GAAP Reconciliation – Quarter Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Quarter Ended September 30, 2011 Acquisition Restructuring Related and Other Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) Operating Income: Transportation Solutions 237 $ - $ 4 $ 241 $ Communications and I
Slide 26: Non-GAAP Reconciliation – Year Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the Year Ended September 30, 2011 Acquisition Restructuring Related and Other Tax Adjusted U.S. GAAP Charges (1) Charges, Net Items (2) (Non-GAAP) (3) Operating Income: Transportation Solutions 848 $ - $ (14) $ - $ 834 $ Co
Slide 27: Gross Margin & Gross Margin Percentage Reconciliation
Gross Margin & Gross Margin Percentage Reconciliation September 26, September 25, September 24, September 30, December 30, 2008 2009 2010 2011 2011 ($ in millions) Net sales 14,373 $ 10,256 $ 12,070 $ 14,312 $ 3,309 $ Cost of sales 10,200 7,720 8,293 9,890 2,326 Gross margin 4,173 2,536 3,777 4,422
Slide 28: Non-GAAP Reconciliation – 13 Week Quarter Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the 13 Week Quarter Ended September 30, 2011 Adjustment Acquisition Restructuring 14 Weeks 13 Weeks 14 Weeks Related and Other Adjusted Impact of Adjusted U.S. GAAP Charges (1) Charges, Net (Non-GAAP) (2) 14th Week (Non-GAA
Slide 29: Non-GAAP Reconciliation – 52 Week Year Ended September 30, 2011
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures for the 52 Week Year Ended September 30, 2011 Adjustment Acquisition Restructuring 53 Weeks 52 Weeks 53 Weeks Related and Other Adjusted Impact of Adjusted U.S. GAAP Charges (1) Charges, Net Tax Items (2) (Non-GAAP) (3) 53rd We