Exhibit 99(a)
[AMETEK NEWS LOGO]
Contact: William J. Burke (610) 889-5249
AMETEK ACHIEVES RECORD FULL-YEAR RESULTS
-- FOURTH QUARTER EARNINGS UP SHARPLY ON HIGHER SALES --
Paoli, PA, January 28, 2003 -- AMETEK Inc. (NYSE: AME) today announced full year
results that established records for sales, operating income, net income and
diluted earnings per share.
AMETEK achieved 2002 sales of $1.04 billion, up 2% from year 2001 results.
Operating income of $148.7 million was up 12% from $132.8 million for 2001.
Income grew to $83.7 million, up 18% from the $70.8 million earned in 2001, and
diluted earnings per share of $2.49 were up from $2.12 per share in 2001. All
comparisons, unless otherwise noted, are before unusual items in the fourth
quarter of 2001 described below. Including these unusual items, net income for
2001 was $66.1 million, or $1.98 per diluted share.
"AMETEK performed extremely well in 2002," noted Frank S. Hermance, AMETEK
Chairman and Chief Executive Officer. "Contributions from businesses we acquired
and from our operational excellence initiatives allowed us to post top and
bottom line growth in a very difficult economic environment," he commented.
"In addition, we substantially reduced our working capital during 2002 due to an
excellent effort across the Company," added Mr. Hermance. "Inventory and
receivables were down $29 million, exceeding the $20 million reduction we
targeted. We used the cash generated to make contributions to our defined
benefit pension plans, which on an after tax basis, reduced operating cash flow
by approximately $19 million."
FOURTH QUARTER RESULTS
AMETEK's fourth quarter 2002 sales of $252.6 million were up 6% over the same
period of 2001. Operating income for the fourth quarter of 2002 was $36.5
million, a 28% increase from the $28.6 million recorded in the same period of
2001. Income in the fourth quarter of 2002 totaled $21.3 million, or $.63 per
diluted share, up from fourth quarter 2001 levels of $16.2 million, or $.48 per
diluted share. After unusual items, net income for the fourth quarter of 2001
was $11.5 million, or $.34 per diluted share.
On January 1, 2002 AMETEK adopted SFAS #142, which eliminated amortization of
goodwill. The impact of the amortization of goodwill in AMETEK's 2001 fourth
quarter results was $.08 per diluted share and $.30 per diluted share for the
full year 2001.
Fourth quarter 2001 net income reflected expenses totaling $15.3 million after
tax, or $.46 per diluted share, to cover the costs of employee reductions,
facility closures, and asset writedowns. Also in the fourth quarter of 2001, the
Company recorded a tax benefit of $10.5 million, or $.32 per diluted share,
resulting from the closure of a number of tax years.
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AMETEK ACHIEVES RECORD FULL-YEAR RESULTS
PAGE 2.
2003 OUTLOOK
Mr. Hermance commented, "We expect that 2003 will be another challenging year,
and we are not anticipating significant improvement from the current economic
conditions in the manufacturing sector.
"We expect revenues to be up modestly with earnings in the range of $2.65 -
$2.75 per diluted share, an increase of 6% to 10% over 2002. This estimate
includes the positive impact of our recent acquisition of Airtechnology and
approximately $7 million pretax, or $.14 per diluted share, of additional
pension expense. Without the additional pension expense, our earnings would be
up approximately 12% to 16% versus 2002."
"Our first quarter 2003 sales are expected to be down slightly from last year's
first quarter, as the top-line benefits of the Airtechnology acquisition are
offset by weaker aerospace, power and heavy vehicle markets. We expect our
earnings to be about equal to last year's level of $.59 per diluted share after
the additional pension expense. Without the additional pension expense, earnings
would be up approximately 6%," concluded Mr. Hermance.
ELECTRONIC INSTRUMENT GROUPS (EIG)
For 2002, EIG sales of $539.4 million were up 8% from 2001 sales of $499.5
million. Operating income was $87.5 million for 2002, up 26% versus $69.5
million earned in 2001. Operating margins were 16.2% in 2002, up from 13.9% in
2001.
For the 2002 fourth quarter, EIG sales increased 7% to $132.6 million. Operating
income for the fourth quarter was $23.0 million, compared with $13.9 million in
the fourth quarter of 2001. Operating margins for the quarter improved to 17.4%,
from 11.2% in the fourth quarter of 2001.
"Instruments for Research and Applied Science (IRAS) and EDAX, both acquired in
2001, were solid contributors to EIG's growth in revenue and profit during 2002.
Operational excellence initiatives throughout the Group were also instrumental
in driving margin growth," said Mr. Hermance.
ELECTROMECHANICAL GROUP (EMG)
For the year, EMG's sales decreased 4% to $501.1 million, compared with $519.8
million in 2001. Operating income was $80.2 million for 2002, down 1% from the
$81.3 million earned in 2001. Operating margins increased to 16.0% in 2002 from
15.6% in 2001.
For the fourth quarter of 2002, EMG's sales were $120.0 million, a 6% increase
over the same period of 2001. Operating income of $18.2 million is down 3% from
the $18.7 million recorded in the same period of 2001. Operating margins for the
quarter were 15.2% compared with 16.5% in the fourth quarter of 2001.
"Market conditions remain difficult for EMG. The top-line benefits of our 2001
acquisition of GS Electric were more than offset by weak sales in several other
markets. The continued execution of our operational excellence and best-cost
initiatives resulted in the increased margins for the group in 2002," noted Mr.
Hermance.
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AMETEK ACHIEVES RECORD FULL-YEAR RESULTS
PAGE 3.
ACQUISITION OF AIRTECHNOLOGY GROUP
On January 13, 2003 AMETEK completed the acquisition of Airtechnology Holdings
Limited, a leading supplier of motors, fans and environmental control systems
for aerospace and defense markets, from Candover Partners Limited.
Airtechnology, located near London, England, has about 240 employees and
expected sales of approximately L29 million ($46 million).
"We are very excited about our acquisition of Airtechnology. It significantly
expands our presence in high-end technical motors and strengthens our
relationships with large European-based aerospace and defense companies,"
commented Mr. Hermance.
Airtechnology produces motors and fans for equipment cooling systems and for
maintaining environmental integrity. Environmental integrity includes
temperature control systems as well as filtration systems for nuclear,
biological and chemical (NBC) contamination. These products are sold primarily
to the military aerospace, vehicle and ship markets. Other markets include
commercial aerospace and rail vehicles.
"Airtechnology is a recognized market leader in air-moving components and
environmental systems used in many high profile European defense and commercial
aerospace programs," he added. "The combination of AMETEK Rotron and
Airtechnology provides us with a broader range of products that we can market to
our customers on a global basis."
CONFERENCE CALL
AMETEK, Inc. will Web cast its Fourth Quarter 2002 investor conference call on
Wednesday, January 29, 2003, beginning at 9:00 AM EST. The live audio Web cast
will be available at www.ametek.com/investors and at www.streetevents.com. To
access the Web cast from ametek.com, click on the Audio Conference Call link.
The call will be archived at www.ametek.com/investors. To access the audio
archive, click on the Audio Conference Call link in the Investors Section.
CORPORATE PROFILE
AMETEK is a leading global manufacturer of electronic instruments and electric
motors with 2002 sales of more than $1 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 2000 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)
AMETEK, INC.
CONSOLIDATED STATEMENT OF INCOME
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
TWELVE MONTHS ENDED
DECEMBER 31,
-----------------------------------------------
2001
-----------------------------
Before Unusual After Unusual
2002 Items Items (a)
----------- ----------- -----------
NET SALES $ 1,040,542 $ 1,019,289 $ 1,019,289
----------- ----------- -----------
EXPENSES:
Cost of sales, excluding depreciation 754,571 759,379 777,919
Selling, general and administrative 104,816 95,132 98,655
Depreciation 32,468 31,942 33,165
----------- ----------- -----------
Total expenses 891,855 886,453 909,739
----------- ----------- -----------
OPERATING INCOME (b) 148,687 132,836 109,550
Other income (expenses):
Interest expense (25,181) (27,913) (27,913)
Other, net (608) 1,028 2,725
----------- ----------- -----------
Income before income taxes 122,898 105,951 84,362
Provision for income taxes 39,200 35,133 18,251
----------- ----------- -----------
NET INCOME (b) $ 83,698 $ 70,818 $ 66,111
=========== =========== ===========
DILUTED EARNINGS PER SHARE (b) $ 2.49 $ 2.12 $ 1.98
=========== =========== ===========
Basic earnings per share (b) $ 2.54 $ 2.16 $ 2.01
=========== =========== ===========
AVERAGE COMMON SHARES OUTSTANDING:
Diluted shares 33,627 33,445 33,445
----------- ----------- -----------
Basic shares 32,918 32,838 32,838
=========== =========== ===========
Dividends per share $ 0.24 $ 0.24 $ 0.24
=========== =========== ===========
(a) The three and twelve months ended December 31, 2001 included unusual pretax
charges totaling $23.3 million, $15.3 million after tax ($0.46 per diluted
share). The charges were for employee reductions, facility closures, and asset
writedowns. The periods also include a tax benefit and related interest income
of $10.5 million after tax ($0.32 per diluted share) resulting from the closure
of a number of tax years.
(b) Goodwill amortization in the three months ended December 31, 2001 was $3.1
million, $2.7 million after tax, (or $0.08 per diluted share). Goodwill
amortization in the twelve months ended December 31, 2001 was $11.9 million,
$10.2 million after tax, (or $0.30 per diluted share). Such goodwill
amortization is excluded from the Company's 2002 results effective January 1,
2002, in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets."
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT
(DOLLARS IN THOUSANDS)
TWELVE MONTHS ENDED
DECEMBER 31,
-----------------------------------------------
2001
-----------------------------
Before Unusual After Unusual
2002 Items Items (a)
----------- ----------- -----------
NET SALES
Electronic Instruments $ 539,448 $ 499,528 $ 499,528
Electromechanical 501,094 519,761 519,761
----------- ----------- -----------
Total Consolidated $ 1,040,542 $ 1,019,289 $ 1,019,289
=========== =========== ===========
OPERATING INCOME
Electronic Instruments $ 87,485 $ 69,460 $ 57,035
Electromechanical 80,225 81,274 70,638
----------- ----------- -----------
Total segments (b) 167,710 150,734 127,673
Corporate and other (19,023) (17,898) (18,123)
----------- ----------- -----------
Total Consolidated $ 148,687 $ 132,836 $ 109,550
=========== =========== ===========
(a) See note (a) on Consolidated Statement of Income for the twelve months ended
December 31, 2002.
(b) Segment operating income for the twelve months ended December 31, 2001
included goodwill amortization of $11.9 million, of which $6.7 million was for
EIG, and $5.2 million for EMG. Goodwill amortization is excluded from 2002
results. Also, see note (b) on Consolidated Statement of Income for the twelve
months ended December 31, 2002.
AMETEK, INC.
CONSOLIDATED STATEMENT OF INCOME
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
DECEMBER 31,
(UNAUDITED)
-----------------------------------------
2001
-------------------------
Before Unusual After Unusual
2002 Items Items (a)
--------- --------- ---------
NET SALES $ 252,563 $ 237,263 $ 237,263
--------- --------- ---------
EXPENSES:
Cost of sales, excluding depreciation 183,815 176,747 195,287
Selling, general and administrative 23,909 24,063 27,586
Depreciation 8,350 7,860 9,083
--------- --------- ---------
Total expenses 216,074 208,670 231,956
--------- --------- ---------
OPERATING INCOME (b) 36,489 28,593 5,307
Other income (expenses):
Interest expense (5,729) (6,639) (6,639)
Other, net 93 247 1,944
--------- --------- ---------
Income before income taxes 30,853 22,201 612
Provision for (benefit from) income taxes 9,526 6,035 (10,847)
--------- --------- ---------
NET INCOME (b) $ 21,327 $ 16,166 $ 11,459
========= ========= =========
DILUTED EARNINGS PER SHARE (b) $ 0.63 $ 0.48 $ 0.34
========= ========= =========
Basic earnings per share (b) $ 0.65 $ 0.49 $ 0.35
========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING:
Diluted shares 33,638 33,334 33,334
========= ========= =========
Basic shares 32,956 32,733 32,733
========= ========= =========
Dividends per share $ 0.06 $ 0.06 $ 0.06
========= ========= =========
For notes (a) and (b), see notes on Consolidated Statement of Income for the
twelve months ended December 31, 2002.
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
DECEMBER 31,
(UNAUDITED)
-----------------------------------------
2001
-------------------------
Before Unusual After Unusual
2002 Items Items (a)
--------- --------- ---------
NET SALES
Electronic Instruments $ 132,613 $ 124,062 $ 124,062
Electromechanical 119,950 113,201 113,201
--------- --------- ---------
Total Consolidated $ 252,563 $ 237,263 $ 237,263
========= ========= =========
OPERATING INCOME
Electronic Instruments $ 23,043 $ 13,914 $ 1,489
Electromechanical 18,239 18,725 8,089
--------- --------- ---------
Total segments (b) 41,282 32,639 9,578
Corporate and other (4,793) (4,046) (4,271)
--------- --------- ---------
Total Consolidated $ 36,489 $ 28,593 $ 5,307
========= ========= =========
(a) See note (a) on Consolidated Statement of Income for the twelve months ended
December 31, 2002.
(b) Segment operating income for the three months ended December 31, 2001
included goodwill amortization of $3.1 million, of which $1.8 million was for
EIG, and $1.3 million for EMG. Also, see note (b) on Consolidated Statement of
Income for the twelve months ended December 31, 2002.