This excerpt taken from the APH 10-Q filed May 6, 2009.
Quarter ended March 31, 2009 compared to the quarter ended March 31, 2008
Net sales were $660.0 in the first quarter of 2009 compared to $770.7 for the same period in 2008, a decrease of 14% in U.S. dollars and 11% in local currencies. Sales of interconnect products and assemblies (approximately 91% of sales) decreased 14% in U.S. dollars and 11% in local currencies in the first quarter of 2009 compared to 2008 ($602.0 in 2009 versus $700.6 in 2008). Sales decreased significantly in the automotive, telecommunications and data communications and industrial markets as a result of a weak end market demand resulting from the global economic crisis. Sales in the military aerospace market were relatively flat as moderate growth in defense-related sales were offset by a weak commercial aircraft market. Sales in the wireless communications market grew primarily as a result of strength in China-related programs and the impact of acquisitions. Sales decreases occurred in all major geographic regions. Sales of cable products (approximately 9% of sales) decreased 17% in U.S. dollars and 11% in local currencies in the first quarter of 2009 compared to the same period in 2008 ($58.0 in 2009 versus $70.1 in 2008), primarily attributable to a slowdown in spending in broadband and cable television markets resulting from current weak economic conditions and difficult credit markets.
Geographically, sales in the United States in the first quarter of 2009 decreased approximately 21% compared to the same period in 2008 ($230.2 in 2009 versus $292.5 in 2008). International sales for the first quarter of 2009 decreased approximately 10% in U.S. dollars and 5% in local currency compared to the same period in 2008 ($429.8 in 2009 versus $478.2 in 2008). The comparatively strong U.S. dollar for the first quarter had the effect of decreasing net sales by approximately $23.1 when compared to foreign currency translation rates for the same period in 2008.
The gross profit margin as a percentage of net sales was approximately 31.3% for the first quarter of 2009 compared to 32.6% for the same period in 2008. The operating margins in the Interconnect Products and Assemblies segment decreased approximately 2.6% in the first quarter of 2009 when compared to the same period in 2008, primarily as a result of reduced volume levels given the current economic environment, partially offset by effective cost control programs. The operating margins for the Cable Products segment increased by approximately 1.7% in the first quarter of 2009 compared to the same period in 2008, primarily as a results of the positive impacts of lower material costs and operational cost reduction actions, which more than offset the impact of lower sales volume.
Selling, general and administrative expenses decreased to $95.7, or 14.5% of net sales, in the first quarter compared to $100.6 for the same period in 2008, which represented approximately 13.1% of net sales. The decrease in expense in the first quarter of 2009 is primarily attributable to significantly lower sales volume and the positive effect of cost reduction actions.
Other expenses, net, for the first quarter of 2009 and 2008 were $0.2 and $0.5 (excludes net income attributable to noncontrolling interests reclassified in accordance with SFAS 160), respectively, and comprised primarily agency and commitment fees on the Companys credit facilities and program fees on the sale of accounts receivable ($0.7 in 2009 and $1.4 in 2008) offset by interest income ($0.6 in 2009 and $1.0 in 2008).
Interest expense for the first quarter of 2009 was $9.0 compared to $9.9 for the same period in 2008, primarily attributable to lower average interest rates in the first quarter of 2009.
The provision for income taxes for the first quarter of 2009 and 2008 was at an effective rate of 24.1% and 29.1%, respectively, the decrease due primarily to a reduction of income tax expense of $3.6 in 2009 relating
to the completion of certain audits of the Companys prior year tax returns. In addition, the lower 2009 rate reflects a more favorable mix of income in lower tax jurisdictions.