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 FOURTH QUARTER AND FULL-YEAR RESULTS
Paoli, PA, January 25, 2006 — AMETEK Inc. (NYSE: AME) today announced fourth quarter and full-year results that established records for sales, operating income, net income and diluted earnings per share.
Fourth Quarter Results AMETEK’s fourth quarter 2005 sales of $403.8 million were up 24% over the same period of 2004. Operating income for the fourth quarter of 2005 was $64.9 million, an 18% increase from the $54.8 million recorded in the same period of 2004. Net income in the fourth quarter of 2005 increased 21% to $38.0 million, or $.53 per diluted share, from fourth quarter 2004 levels of $31.4 million, or $.45 per diluted share. Sales, operating income, net income, and diluted earnings per share were quarterly records.
Full-Year Results AMETEK achieved 2005 sales of $1.43 billion, up 16% from year 2004 results. Operating income of $239.4 million was up 22% from $196.2 million for 2004. Net income grew to $140.6 million, up 25% from the $112.7 million earned in 2004, and diluted earnings per share of $1.99 were up 22% from $1.63 per share in 2004. Sales, operating income, net income, and diluted earnings per share were full-year records.
“AMETEK had a great 2005,” noted Frank S. Hermance, AMETEK Chairman and Chief Executive Officer. “Solid internal growth in each of our segments and a record year of acquisitions drove the strong top-line growth. Our excellent earnings performance resulted from an improved mix of businesses and our focused operational excellence initiatives.”
Electronic Instruments Group (EIG) For the 2005 fourth quarter, EIG sales increased 25% to $230.7 million. Operating income for the fourth quarter was $46.2 million, compared with $40.2 million in the fourth quarter of 2004, an increase of 15%. Operating margins for the quarter were 20.0%, compared with 21.8% in the fourth quarter of 2004.
“EIG sales were up in the quarter on internal growth in our aerospace, power, and process businesses and contributions from the SPECTRO and Solartron acquisitions. EIG margins remained very strong,” added Mr. Hermance.
For the year, EIG sales of $808.5 million were up 21% from 2004 sales of $667.4 million. Operating income was $166.4 million for 2005, up 32% versus $126.4 million earned in 2004. Operating margins were 20.6% in 2005, up from 18.9% in 2004.
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AMETEK ACHIEVES RECORD FOURTH QUARTER AND FULL-YEAR RESULTS PAGE 2.
Electromechanical Group (EMG) For the fourth quarter of 2005, EMG’s sales were $173.1 million, a 22% increase over the same period of 2004. Operating income of $26.0 million was up 19% from the $21.9 million recorded in the same period of 2004. Operating margins for the quarter were 15.0%, compared with 15.4% in the fourth quarter of 2004.
“EMG fourth quarter sales were up on good internal growth in both our differentiated businesses and our cost-driven motor businesses and the contribution from HCC Industries, acquired early in the fourth quarter. Operating margins were down from the fourth quarter of last year,” noted Mr. Hermance.
For the year, EMG’s sales increased 11% to $626.0 million, compared with $564.9 million in 2004. Operating income was $100.3 million for 2005, up 6% from the $94.3 million earned in 2004. Operating margins were 16.0% in 2005, compared with 16.7% in 2004.
2006 Outlook Effective January 1, 2006, AMETEK is adopting the provisions of FAS 123R, “Accounting for Share-Based Payments”. AMETEK will be restating prior period results to reflect this change using the retrospective restatement method. On this basis, reported earnings for 2005 are expected to be reduced by $0.05 to $1.94 per diluted share to reflect the effect of stock option expense. In 2006 the effect of stock option expense on net income is also expected to be a $0.05 per diluted share reduction.
“We expect 2006 to conform to our long-term business model of mid-single digit core growth combined with approximately 10% acquisition growth, yielding a mid-teen percentage growth in overall revenue. Acquisition growth will be driven by the full year impact of the SPECTRO, Solartron and HCC Industries acquisitions we completed in 2005,” commented Mr. Hermance. “Earnings are estimated to be approximately $2.25 to $2.30 per diluted share, an increase of 16% to 19% over the 2005 level of $1.94 per diluted share (after restatement for stock option expense). The increase in estimated earnings reflects the benefits of the revenue growth, our continued focus on operational excellence and substantial investments in product development and sales and marketing to drive future growth.”
“Our 2006 plan contemplates higher than normal investments of approximately $9 million, or $.08 per diluted share, on new product development and global and market expansion initiatives. These investments will enhance our future internal growth rate and are heavily weighted to our differentiated businesses,” said Mr. Hermance.
“First quarter 2006 sales are expected to be up in the high teens on a percentage basis from last year’s first quarter. We estimate our earnings to be approximately $0.52 to $0.53 per diluted share, an increase of 18% to 20% over last year’s first quarter of $0.44 (after restatement for stock option expense),” concluded Mr. Hermance.
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AMETEK ACHIEVES RECORD FOURTH QUARTER AND FULL-YEAR RESULTS PAGE 3.
Conference Call AMETEK, Inc. will Web cast its Fourth Quarter 2005 investor conference call on Wednesday, January 25, 2006, beginning at 8:30 AM ET. The live audio Web cast will be available atwww.ametek.com/investors and atwww.streetevents.com. 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 $1.6 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 (In thousands, except per share amounts)
Three months ended
Twelve months ended
December 31, (Unaudited)
December 31,
2005
2004
2005
2004
Net sales
$
403,781
$
326,271
$
1,434,457
$
1,232,318
Expenses:
Cost of sales, excluding depreciation
279,878
223,348
988,508
863,827
Selling, general and administrative
49,413
37,540
171,577
135,494
Depreciation
9,600
10,579
34,963
36,763
Total expenses
338,891
271,467
1,195,048
1,036,084
Operating income
64,890
54,804
239,409
196,234
Other expenses:
Interest expense
(9,951
)
(7,667
)
(32,913
)
(28,343
)
Other, net
(640
)
(1,416
)
(2,288
)
(2,112
)
Income before income taxes
54,229
44,721
204,208
165,779
Provision for income taxes
16,305
14,361
63,565
53,068
Net income
$
37,994
$
31,360
$
140,643
$
112,711
Diluted earnings per share
$
0.53
$
0.45
$
1.99
$
1.63
Basic earnings per share
$
0.55
$
0.46
$
2.03
$
1.66
Average common shares outstanding:
Diluted shares
71,080
69,899
70,711
69,254
Basic shares
69,584
68,356
69,151
67,832
Dividends per share
$
0.06
$
0.06
$
0.24
$
0.24
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AMETEK, INC. INFORMATION BY BUSINESS SEGMENT (In thousands)
Three months ended
Twelve months ended
December 31, (Unaudited)
December 31,
2005
2004
2005
2004
Net sales
Electronic Instruments
$
230,716
$
184,324
$
808,493
$
667,418
Electromechanical
173,065
141,947
625,964
564,900
Total Consolidated
$
403,781
$
326,271
$
1,434,457
$
1,232,318
Operating income
Electronic Instruments
$
46,238
$
40,157
$
166,423
$
126,372
Electromechanical
26,021
21,872
100,347
94,250
Total segments
72,259
62,029
266,770
220,622
Corporate and other
(7,369
)
(7,225
)
(27,361
)
(24,388
)
Total Consolidated
$
64,890
$
54,804
$
239,409
$
196,234
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AMETEK, Inc. CONDENSED CONSOLIDATED BALANCE SHEET (In thousands)
December 31,
December 31,
2005
2004
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents
and marketable securities
$
43,788
$
48,975
Receivables, net
269,395
217,329
Inventories
193,099
168,523
Other current assets
37,532
27,113
Total current assets
543,814
461,940
Property, plant and equipment, net
228,450
207,542
Goodwill, net
788,745
601,007
Other intangibles, investments and other assets
211,402
149,863
Total assets
$
1,772,411
$
1,420,352
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt
$
156,130
$
49,943
Accounts payable and accruals
250,425
222,895
Total current liabilities
406,555
272,838
Long-term debt
475,309
400,177
Deferred income taxes and
other long-term liabilities
84,995
87,755
Stockholders’ equity
805,552
659,582
Total liabilities and stockholders’ equity
$
1,772,411
$
1,420,352
CONTACT:
AMETEK, Inc. William J. Burke, 610-889-5249
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