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 RECORD EARNINGS
—Full Year Guidance Increased to $2.57 to $2.59 Per Diluted Share—
Paoli, PA, October 26, 2010 – AMETEK, Inc. (NYSE: AME) today announced third quarter results that established records for operating income, operating income margin, net income, diluted earnings per share and operating cash flow.
AMETEK’s third quarter 2010 sales of $644.4 million were up 30% over the $497.1 million reported in the third quarter of 2009. Operating income for the third quarter of 2010 was $128.6 million, a 66% increase from $77.5 million recorded in the same period of 2009. Operating income margin in the quarter of 20.0% was a 440 basis point improvement over last year’s third quarter level. Net income in the third quarter of 2010 increased 80% to $77.4 million, from $43.0 million in the year ago period. Diluted earnings per share increased 80% to $0.72 per diluted share, from the third quarter 2009 level of $0.40 per diluted share.
“AMETEK achieved excellent results in the third quarter,” noted Frank S. Hermance, AMETEK Chairman and Chief Executive Officer. “Orders in the quarter were up 47% with broad-based strength evident in most of our markets. This order strength translated into strong top-line performance and, coupled with a lower cost structure, drove earnings significantly above our expectations.”
Operating cash flow for the third quarter was a record at $114 million, up 59% over the third quarter of last year.
For the nine months ended September 30, 2010, AMETEK sales increased 14% to $1.79 billion from $1.57 billion in the same period of 2009. Operating income increased 25% to $346.6 million, from $276.9 million earned in the first nine months of last year. Net income for the nine months of 2010 was $202.7 million, up 32% from $153.9 million in the same period of 2009. Diluted earnings per share were $1.89 for the first nine months of 2010, up 32% from $1.43 per diluted share for the first nine months of 2009.
Electronic Instruments Group (EIG) For the 2010 third quarter, EIG sales increased 24% to $337.7 million. Operating income was $83.0 million, compared with $47.9 million in the third quarter of 2009, an increase of 73%. Operating margins for the quarter increased 700 basis points to 24.6% compared to 17.6% in the third quarter of 2009.
“EIG had an excellent quarter. Revenue was up nicely, driven by strength in the Process, Power and Industrial businesses. This higher revenue, coupled with a streamlined cost structure, enabled us to expand operating margins significantly,” said Mr. Hermance.
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AMETEK ANNOUNCES RECORD EARNINGS Page 2
Electromechanical Group (EMG) For the third quarter of 2010, EMG sales were $306.7 million, a 36% increase over the same period of 2009. Operating income of $55.8 million was up 46% from the $38.2 million recorded in the same period of 2009. Operating margins for the quarter were up 120 basis points to 18.2%, as compared to 17.0% in the third quarter of 2009.
“EMG also had a very good quarter. Sales were up on strong core growth in both our differentiated and cost driven businesses as well as the contributions from the Haydon Enterprises, Technical Services for Electronics and Ameron acquisitions. Operating margins improved by 120 basis points, driven by higher revenue and our lowered cost structure,” commented Mr. Hermance.
2010 Outlook “Our markets overall continue to show good growth as evidenced by our strong order input this year. We continue to believe that AMETEK’s strong portfolio of businesses, proven operational capabilities, lower cost structure, and a successful focus on strategic acquisitions will enable us to perform well in 2010,” noted Mr. Hermance.
“We now anticipate 2010 revenue to be up mid teens on a percentage basis from 2009, reflecting a stronger core growth environment and the impact of recent acquisitions. Earnings guidance for 2010 has been increased and is now expected to be in the range of $2.57 to $2.59 per diluted share, up 35% to 36% over 2009, reflecting the leveraged impact of core growth, our streamlined cost structure and the bottom-line benefit of acquisitions. This is a substantial increase over our prior guidance, issued in July, of $2.43 to $2.47 per diluted share,” added Mr. Hermance.
“Fourth quarter 2010 sales are expected to be up approximately 20% from last year’s fourth quarter. We estimate our earnings to be approximately $0.68 to $0.70 per diluted share, up 42% to 46% over the fourth quarter of 2009,” noted Mr. Hermance.
Conference Call AMETEK, Inc. will webcast its Third Quarter 2010 investor conference call on Tuesday, October 26, 2010 beginning at 8:30 AM ET. The live audio webcast will be available at the Investors section ofwww.ametek.com and atwww.streetevents.com. The call will be archived atwww.ametek.com.
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AMETEK ANNOUNCES RECORD EARNINGS Page 3
Corporate Profile AMETEK is a leading global manufacturer of electronic instruments and electro-mechanical devices with annualized 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.
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; AMETEK’s 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
Nine Months Ended
September 30,
September 30,
2010
2009
2010
2009
Net sales
$
644,374
$
497,060
$
1,792,977
$
1,574,855
Operating expenses:
Cost of sales, excluding depreciation
429,075
344,658
1,200,298
1,076,879
Selling, general and administrative
75,869
63,858
213,261
189,405
Depreciation
10,837
11,069
32,784
31,714
Total operating expenses
515,781
419,585
1,446,343
1,297,998
Operating income
128,593
77,475
346,634
276,857
Other expenses:
Interest expense
(17,057
)
(17,380
)
(50,541
)
(52,076
)
Other, net
(2,721
)
(702
)
(4,857
)
(1,726
)
Income before income taxes
108,815
59,393
291,236
223,055
Provision for income taxes
31,458
16,375
88,543
69,169
Net income
$
77,357
$
43,018
$
202,693
$
153,886
Diluted earnings per share
$
0.72
$
0.40
$
1.89
$
1.43
Basic earnings per share
$
0.73
$
0.40
$
1.91
$
1.44
Weighted average common shares outstanding:
Diluted shares
107,148
107,748
107,129
107,675
Basic shares
105,763
106,862
106,016
106,663
Dividends per share
$
0.06
$
0.06
$
0.18
$
0.18
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AMETEK, Inc. Information by Business Segment (In thousands) (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2010
2009
2010
2009
Net sales:
Electronic Instruments
$
337,715
$
271,843
$
946,274
$
860,569
Electromechanical
306,659
225,217
846,703
714,286
Consolidated net sales
$
644,374
$
497,060
$
1,792,977
$
1,574,855
Income:
Segment operating income:
Electronic Instruments
$
83,004
$
47,877
$
225,790
$
176,790
Electromechanical
55,849
38,217
151,475
125,900
Total segment operating income
138,853
86,094
377,265
302,690
Corporate administrative and other expenses
(10,260
)
(8,619
)
(30,631
)
(25,833
)
Consolidated operating income
$
128,593
$
77,475
$
346,634
$
276,857
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AMETEK, Inc. Condensed Consolidated Balance Sheet (In thousands)
September 30,
December 31,
2010
2009
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and marketable securities
$
140,193
$
251,350
Receivables, net
390,113
331,383
Inventories
332,431
311,542
Other current assets
68,200
75,155
Total current assets
930,937
969,430
Property, plant and equipment, net
304,181
310,053
Goodwill
1,489,574
1,277,291
Other intangibles, investments and other assets
854,613
689,258
Total assets
$
3,579,305
$
3,246,032
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt
$
32,351
$
85,801
Accounts payable and accruals
430,988
338,481
Total current liabilities
463,339
424,282
Long-term debt
1,074,671
955,880
Deferred income taxes and other long-term liabilities
373,191
298,846
Stockholders’ equity
1,668,104
1,567,024
Total liabilities and stockholders’ equity
$
3,579,305
$
3,246,032
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