As previously announced, the Company incurred damage at its Sidney, New York manufacturing facility as a result of severe and sudden flooding in New York State during the period September 7 through September 9, 2011. In the third quarter the Company recorded a charge of $13 million or $.05 per share for property-related damage, as well as cleanup and repair efforts, net of expected insurance recoveries. This charge included the Company’s best estimate of the loss related to inventory and machinery and equipment. In the fourth quarter, the Company recorded an additional charge of approximately $9 million or $.03 per share for one-time charges related to remaining cleanup and repair efforts. The Sidney facility had limited manufacturing and sales activity in September and was ramping up to full production levels during October. This limited activity reduced sales by approximately $11 million in the third quarter and approximately $7 million in the fourth quarter.
Amphenol President and Chief Executive Officer R. Adam Norwitt stated “We are pleased to report strong performance in a very challenging environment in the quarter with fourth quarter sales of $949 million, operating income margin (excluding one-time items) of 18.5% and earnings per share (excluding one-time items) of $.73. Global markets have been impacted by a higher level of uncertainty related in part to the fiscal and budgetary issues in many developed economies. As a result, as expected, many of our customers exercised increased levels of caution in the quarter, translating into lower demand in most markets. Accordingly, sales were down approximately 8% sequentially from the record third quarter of 2011 reflecting this slowdown in demand, particularly in communications related markets. Sales were approximately equal to prior year levels with strength in mobile devices, automotive, commercial aerospace and industrial markets, offsetting declines in the defense market and in the communication equipment markets including wireless infrastructure, IT and data com and broadband. While our fourth quarter results have certainly been impacted by these lower demand levels, our performance continues to show the significant benefits of the Company’s diversity. In addition, it is extremely rewarding that the Company’s unique entrepreneurial culture continues to drive an unwavering focus on profitability and cash flow which have remained strong even in this difficult environment. I am very proud of our organization as we continue to execute well in a very challenging environment.”
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