CORPORATE OFFICE 37 North Valley Road, Building 4, P.O. Box 1764, PAOLI, PA 19301-0801
Contact: William J. Burke (610) 889-5249
AMETEK ANNOUNCES SECOND QUARTER RESULTS
Paoli, PA, July 28, 2009 – AMETEK, Inc. (NYSE: AME) today announced second quarter results. AMETEK’s second quarter 2009 sales of $524.9 million were down 19% over the same period of 2008. Operating income for the second quarter of 2009 was $93.2 million, an 18% decline from $114.1 million recorded in the same period of 2008. Operating margins improved 20 basis points to 17.8% in the second quarter of 2009. Net income in the second quarter of 2009 declined 21% to $51.8 million, or $0.48 per diluted share, from the second quarter 2008 level of $65.8 million, or $0.61 per diluted share.
“In the face of challenging economic conditions, we delivered solid financial results,” noted Frank S. Hermance, AMETEK Chairman and Chief Executive Officer. “Although the global economic slowdown impacted our sales to a higher degree than anticipated, our operational excellence initiatives enabled us to grow operating margins and meet our second quarter earnings expectations.”
Operating cash flow was very strong, totaling $74 million for the second quarter of 2009, up 13% from the second quarter of 2008.
For the first half of 2009, AMETEK sales decreased 14% to $1.08 billion from $1.26 billion in the same period of 2008. Operating income totaled $199.4 million, a 13% decrease from $230.3 million earned in the first half of last year. Net income for the first half of 2009 was $110.9 million, down 16% from $132.2 million in the same period of 2008. Diluted earnings per share were $1.03 for the first half of 2009, down 16% from $1.23 per diluted share in the first half of 2008. Operating cash flow was $184 million, up 30% from the first half of 2008.
Electronic Instruments Group (EIG) For the 2009 second quarter, EIG sales decreased 17% to $286.3 million. Operating income was $59.8 million, compared with $78.1 million in the second quarter of 2008, a decrease of 23%. Operating margins for the quarter were 20.9% as compared to 22.8% in the second quarter of 2008.
“EIG did well in a very difficult market environment. Revenue was down, driven predominantly by weakness in the Process and Industrial businesses. Operating income benefited from our strong focus on reducing costs,” said Mr. Hermance.
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AMETEK ANNOUNCES SECOND QUARTER RESULTS Page 2
Electromechanical Group (EMG) For the second quarter of 2009, EMG sales were $238.7 million, a 22% decrease over the same period of 2008. Operating income of $41.5 million was down 22% from the $53.1 million recorded in the same period of 2008. Operating margins for the quarter were 17.4%, unchanged from the second quarter of 2008.
“Given the state of the economy and its impact on group revenue, EMG had a solid second quarter. We experienced weakness in both the cost driven and differentiated businesses. Operating margins were flat as very effective cost reduction and operational excellence initiatives were able to offset the impact of the lower sales volume,” commented Mr. Hermance.
2009 Outlook “2009 continues to be a very challenging year. We now expect revenue to decline approximately high-teens on a percentage basis,” commented Mr. Hermance. “We expect our earnings for the year to be in the range of $1.85 to $2.00 per diluted share.”
“Third quarter 2009 sales are expected to be down approximately 20% from last year’s third quarter. We estimate our earnings to be approximately $0.38 to $0.42 per diluted share,” noted Mr. Hermance.
Mr. Hermance continued, “AMETEK continues to successfully navigate difficult market conditions. We remain focused on executing our restructuring initiatives, generating strong cash flow and solid financial results. We continue to invest in new products, global expansion and strategic acquisitions to position ourselves for an economic upturn when it occurs.”
Conference Call AMETEK, Inc. will Web cast its Second Quarter 2009 investor conference call on Tuesday, July 28, 2009 beginning at 8:30 AM ET. The live audio Web cast will be available at the Investors section ofwww.ametek.com and atwww.streetevents.com. The call will be archived atwww.ametek.com.
Corporate Profile AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with 2008 sales of $2.5 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 and the Russell 1000 Indices.
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AMETEK ANNOUNCES SECOND QUARTER RESULTS Page 3
Forward-looking Information Statements in this news release relating to future events, such as AMETEK’s expected business and financial performance are “forward-looking statements.” Forward-looking statements are subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include our ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations; our ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in our markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve. A detailed discussion of these and other factors that may affect our future results is contained in AMETEK’s filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements.
# # # (Financial Information Follows)
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AMETEK, Inc. Consolidated Statement of Income (In thousands, except per share amounts) (Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2009
2008
2009
2008
Net sales
$
524,929
$
648,771
$
1,077,795
$
1,259,968
Operating expenses:
Cost of sales, excluding depreciation (a)
361,578
437,183
732,221
848,200
Selling, general and administrative (a)
61,017
85,653
125,547
159,020
Depreciation
9,154
11,824
20,645
22,404
Total operating expenses (a)
431,749
534,660
878,413
1,029,624
Operating income (a)
93,180
114,111
199,382
230,344
Other expenses:
Interest expense
(17,141
)
(15,328
)
(34,696
)
(30,462
)
Other, net
(1,001
)
(929
)
(1,024
)
(1,626
)
Income before income taxes (a)
75,038
97,854
163,662
198,256
Provision for income taxes (a)
23,225
32,012
52,794
66,057
Net income (a)
$
51,813
$
65,842
$
110,868
$
132,199
Diluted earnings per share (a)
$
0.48
$
0.61
$
1.03
$
1.23
Basic earnings per share (a)
$
0.49
$
0.62
$
1.04
$
1.25
Weighted average common shares outstanding:
Diluted shares
107,955
107,476
107,638
107,613
Basic shares
106,708
105,950
106,564
105,946
Dividends per share
$
0.06
$
0.06
$
0.12
$
0.12
(a) The three and six month periods ended June 30, 2008 include a second quarter after-tax, non-cash charge of $7.3 million, or $0.07 per diluted share, related to the accelerated amortization of deferred compensation expense due to the vesting of restricted stock.
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AMETEK, Inc. Information by Business Segment (In thousands) (Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2009
2008
2009
2008
Net sales:
Electronic Instruments
$
286,260
$
343,050
$
588,726
$
683,425
Electromechanical
238,669
305,721
489,069
576,543
Consolidated net sales
$
524,929
$
648,771
$
1,077,795
$
1,259,968
Income:
Segment operating income:
Electronic Instruments
$
59,804
$
78,108
$
128,913
$
157,297
Electromechanical
41,513
53,103
87,683
100,154
Total segment operating income
101,317
131,211
216,596
257,451
Corporate administrative and other expenses
(8,137
)
(17,100
)
(17,214
)
(27,107
)
Consolidated operating income
$
93,180
$
114,111
$
199,382
$
230,344
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AMETEK, Inc. Condensed Consolidated Balance Sheet (In thousands)
June 30,
December 31,
2009
2008
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and marketable securities
$
142,944
$
91,210
Receivables, net
356,830
406,012
Inventories
325,472
349,509
Other current assets
87,059
107,855
Total current assets
912,305
954,586
Property, plant and equipment, net
309,263
307,908
Goodwill
1,281,579
1,240,052
Other intangibles, investments and other assets
609,775
552,996
Total assets
$
3,112,922
$
3,055,542
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt
$
5,110
$
18,438
Accounts payable and accruals
384,752
429,075
Total current liabilities
389,862
447,513
Long-term debt
1,053,886
1,093,243
Deferred income taxes and other long-term liabilities
245,143
227,014
Stockholders’ equity
1,424,031
1,287,772
Total liabilities and stockholders’ equity
$
3,112,922
$
3,055,542
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