Amphenol Corporation (NYSE:APH) Q3 2019 Earnings Conference Call - Final Transcript
Oct 23, 2019 • 01:00 pm ET
Craig A. Lampo
performance, action-oriented culture, in which each individual operating unit is able to appropriately adjust to market conditions and thereby maximize both growth and profitability in an uncertain market environment. Through the careful fostering of this culture and the deployment of our strategies to both existing and acquired companies, our management team has achieved industry-leading operating margins and remains fully committed to driving enhanced performance in the future.
Interest expense for the quarter remained at approximately $30 million and compares to $25 million in the third quarter of last year. As discussed in our prior earnings calls, this increase is due primarily to higher average interest rates as a result of the first quarter bond issuance and higher average debt levels. The Company's adjusted effective tax rate was approximately 24.5% for the third quarter of '19 compared to 25.5% in the third quarter of 2018. The adjusted effective tax rate excludes the impact of the excess tax benefit associated with stock option exercises as well as the tax effect of the refinancing-related costs associated with the tender offer in the third quarter of 2019.
The Company's GAAP effective tax rate for the third quarter of 2019, including the items just mentioned, was approximately 24.5% compared to 23.8% in the third quarter of 2018.
Adjusted net income was a strong 14% of sales in the third quarter of 2019. On a GAAP basis, diluted EPS declined by 9% in the third quarter to $0.92 compared to $1.01 in the third quarter 2018. Adjusted diluted EPS declined 4% to $0.95 in the third quarter of 2019 from $0.99 in the third quarter of 2018.
Orders for the quarter were $2.091 billion, which was down 1% compared to the third quarter of 2018 and resulted in a book-to-bill ratio of 1:1. The Company continues to be an excellent generator of cash. Cash flow from operations was $412 million in the third quarter or approximately 142% of adjusted net income. This was a very strong result. Net of capital spending of $71 million, our free cash flow was $341 million or 117% of adjusted net income.
From a working capital standpoint, inventory, accounts receivable and accounts payable were approximately $1.3 billion, $1.7 billion and $831 million respectively at the end of September. And inventory days, days sales outstanding and payable days were 79, 72 and 52 days, respectively, all within our normal range. I would note that we are very pleased with the meaningful improvement in net working capital days compared to June.
The cash flow from operations of $412 million, along with proceeds from our recently completed bond offering of $900 million, proceeds from the exercise of stock options of $33 million and cash, cash equivalents and short-term investments on hand of approximately $13 million, net of translation were used primarily to repay approximately $532 million in borrowings under our commercial paper programs and other facilities, redeem approximately $373 million in senior notes, repurchase approximately $150 million of the Company's stock, fund acquisitions of