CORPORATE OFFICE 37 North Valley Road, Building 4, P.O. Box 1764, PAOLI, PA 19301-0801
Contact: William J. Burke (610) 889-5249
AMETEK ACHIEVES RECORD QUARTERLY RESULTS —Net Income Rises 27%—
Paoli, PA, July 20, 2005 — AMETEK Inc. (NYSE: AME) today announced second quarter results that established quarterly records for sales, operating income, net income and diluted earnings per share.
AMETEK’s second quarter 2005 sales of $352.1 million were up 16% from the $303.9 million recorded in the second quarter of 2004. Operating income for the second quarter of 2005 was $60.8 million, up 28% from the second quarter of 2004. Net income of $35.2 million was up 27% from last year’s second quarter and diluted earnings per share were $.50 per share, up 25% over the same quarter of last year.
“Excellent internal growth, operational improvements and contributions from acquisitions drove AMETEK’s strong performance. As a result, we established records for sales and earnings, with group operating margins expanding 170 basis points,” commented Frank S. Hermance, AMETEK Chairman and Chief Executive Officer.
For the first half of 2005, AMETEK sales increased 15% to $686.1 million from $595.3 million in the same period of 2004. Operating income totaled $115.8 million, a 27% increase from $91.0 million earned in the first half of last year. Net income for the first half of 2005 was $67.2 million, up 28% from $52.3 million in the same period of 2004. Diluted earnings per share were up 25% to $.95 per share for the first half of 2005.
Electronic Instruments Group (EIG) EIG’s second quarter 2005 sales were $191.4 million, up 20% from last year’s level of $159.5 million. Second quarter group operating income was up 44% to $40.2 million, versus $28.0 million in the same period of 2004. Group operating margins were 21.0%, up from 17.6% in the second quarter of 2004.
“EIG had a tremendous quarter,” noted Mr. Hermance. “Revenue for the Group was up 20% driven by strength in our aerospace and process businesses as well as contributions from acquisitions. Operating income jumped 44%, driven by the top-line strength and broad-based operating improvements.”
Electromechanical Group (EMG) EMG’s sales of $160.7 million were up 11% from $144.4 million in the second quarter of 2004. Second quarter group operating income of $27.6 million was up 10%, versus $25.0 million reported for the same period of 2004. EMG’s operating income margin in the second quarter of 2005 was 17.2%, up 110 basis points sequentially and essentially unchanged from the second quarter of 2004.
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AMETEK ACHIEVES RECORD RESULTS PAGE 2
“EMG also had a strong quarter as good core growth, combined with the contribution from the Hughes-Treitler acquisition, resulted in double-digit sales and profit increases,” added Mr. Hermance.
2005 Outlook “For 2005 we expect a low double-digit percentage increase in revenue on solid internal growth in each of our two groups and the full-year benefits from our SPECTRO, Taylor Hobson and Hughes-Treitler acquisitions,” commented Mr. Hermance. “We now expect 2005 earnings to be near the high end of our previous guidance range of $1.90 to $1.97 per diluted share.”
“For the third quarter of 2005 we expect a low double-digit percentage increase in sales from last year’s third quarter on internal growth in both segments and the contribution from the acquisitions of SPECTRO and Hughes-Treitler. We expect our earnings to be between $.48 and $.50 per diluted share, an increase of 14% to 19% over last year’s third quarter,” noted Mr. Hermance.
AMETEK Acquires SPECTRO Analytical Instruments
As previously announced, on June 13, 2005, AMETEK acquired SPECTRO Beteiligungs GmbH (“SPECTRO”), the holding company of SPECTRO Analytical Instruments GmbH & Co KG and its affiliates. SPECTRO is a leading global supplier of atomic spectroscopy analytical instrumentation. SPECTRO was acquired from an investor group led by German Equity Partners BV for approximately€80 million ($98 million). With its headquarters in Kleve, Germany, SPECTRO has annual sales of approximately€85 million ($104 million).
SPECTRO designs, manufactures, and services a broad array of atomic spectroscopic instrumentation used to analyze the elemental composition of solids and liquids. Using optical emission or energy dispersive x-ray fluorescence (ED-XRF) measurement techniques, SPECTRO’s instruments address the analysis requirements of a variety of end markets, including metal production and processing, environmental testing, hydrocarbon processing, aerospace, food processing, and pharmaceutical.
“We are very excited about the acquisition of SPECTRO,” commented Mr. Hermance. “SPECTRO is a highly differentiated business, which significantly expands our elemental analysis capabilities, bringing new technologies and market opportunities to AMETEK. With this acquisition, our high-end analytical businesses now total nearly $375 million in annual revenue.”
“SPECTRO holds a leading market position for metal analyzers, employing Arc/Spark optical emission spectrometry — a technique widely regarded as the most precise and reliable measurement for this market. SPECTRO’s Inductively Coupled Plasma (ICP) optical emission spectrometers also bring to AMETEK the capability to make analytical liquids analysis, opening new measurement opportunities for AMETEK, particularly for environmental testing. In addition, SPECTRO’s ED-XRF-based products complement those manufactured by our EDAX business, enabling AMETEK to supply a broader range of products to this very attractive market,” concluded Mr. Hermance.
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AMETEK ACHIEVES RECORD RESULTS PAGE 3
Conference Call AMETEK, Inc. will Web cast its Second Quarter 2005 investor conference call on Wednesday, July 20, 2005, beginning at 8:30 AM ET. The live audio Web cast will be available atwww.ametek.com and atwww.streetevents.com. To access the Web cast from ametek.com, click on “Investors” and a link will be provided to access the Web cast. The call will also be archived atwww.ametek.com/investors.
Corporate Profile AMETEK is a leading global manufacturer of electronic instruments and electric motors with annualized sales of $1.4 billion. AMETEK’s Corporate Growth Plan is based on Four Key Strategies: Operational Excellence, Strategic Acquisitions & Alliances, Global & Market Expansion and New Products. AMETEK’s objective is double-digit percentage growth in earnings per share over the business cycle and a superior return on total capital. The common stock of AMETEK is a component of the S&P MidCap 400 Index and the Russell 1000 Index.
Forward-looking Information Statements in this news release that are not historical are considered “forward-looking statements” and are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. Those factors are contained in AMETEK’s Securities and Exchange Commission filings.
# # # (Financial Information Follows)
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AMETEK, Inc. CONSOLIDATED STATEMENT OF INCOME (Unaudited) (In thousands, except per share amounts)
Three months ended
Six months ended
June 30,
June 30,
2005
2004
2005
2004
Net sales
$
352,051
$
303,917
$
686,147
$
595,340
Expenses:
Cost of sales, excluding depreciation
242,123
215,583
475,413
423,945
Selling, general and administrative
40,567
31,952
78,006
62,842
Depreciation
8,586
8,902
16,917
17,576
Total expenses
291,276
256,437
570,336
504,363
Operating income
60,775
47,480
115,811
90,977
Other income (expenses):
Interest expense
(7,702
)
(6,724
)
(15,334
)
(13,135
)
Other, net
(360
)
289
(202
)
(37
)
Income before income taxes
52,713
41,045
100,275
77,805
Provision for income taxes
17,531
13,378
33,054
25,474
Net income
$
35,182
$
27,667
$
67,221
$
52,331
Diluted earnings per share
$
0.50
$
0.40
$
0.95
$
0.76
Basic earnings per share
$
0.51
$
0.41
$
0.98
$
0.78
Average common shares outstanding:
Diluted shares
70,644
68,914
70,461
68,783
Basic shares
69,075
67,569
68,889
67,373
Dividends per share
$
0.06
$
0.06
$
0.12
$
0.12
4
AMETEK, INC. INFORMATION BY BUSINESS SEGMENT (Unaudited) (In thousands)
Three months ended
Six months ended
June 30,
June 30,
2005
2004
2005
2004
Net sales
Electronic Instruments
$
191,356
$
159,519
$
372,277
$
310,165
Electromechanical
160,695
144,398
313,870
285,175
Total Consolidated
$
352,051
$
303,917
$
686,147
$
595,340
Operating income
Electronic Instruments
$
40,204
$
28,011
$
77,081
$
54,132
Electromechanical
27,564
25,025
52,265
48,349
Total segments
67,768
53,036
129,346
102,481
Corporate and other
(6,993
)
(5,556
)
(13,535
)
(11,504
)
Total Consolidated
$
60,775
$
47,480
$
115,811
$
90,977
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AMETEK, Inc. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands)
June 30,
December 31,
2005
2004
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents
and marketable securities
$
60,581
$
48,975
Receivables, net
246,505
217,329
Inventories
179,876
168,523
Other current assets
30,882
27,113
Total current assets
517,844
461,940
Property, plant and equipment, net
202,047
207,542
Goodwill, net
664,988
601,007
Other intangibles, investments and other assets
173,602
149,863
Total assets
$
1,558,481
$
1,420,352
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt
$
6,843
$
49,943
Accounts payable and accruals
256,503
222,895
Total current liabilities
263,346
272,838
Long-term debt
485,814
400,177
Deferred income taxes and
other long-term liabilities
89,640
87,755
Stockholders’ equity
719,681
659,582
Total liabilities and stockholders’ equity
$
1,558,481
$
1,420,352
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