EXHIBIT 99(a)
(AMETEK LOGO)
CORPORATE OFFICE
37 North Valley Road, Building 4, P.O. Box 1764, PAOLI, PA 19301-0801
NEWS
Contact: William J. Burke (610) 889-5249
AMETEK ACHIEVES RECORD EARNINGS
-- CASH FLOW FROM OPERATIONS UP 35%--
Paoli, PA, October 20, 2003 -- AMETEK Inc. (NYSE: AME) today announced strong
third quarter results that established records for operating income and net
income. AMETEK's operating income for the third quarter of 2003 was $39.5
million, up 4% from the third quarter of 2002. Net income of $21.9 million and
diluted earnings per share of $0.65 are up 2% from year-ago levels. Third
quarter 2003 sales of $267.8 million were up 4% from the $257.0 million recorded
in the third quarter of 2002.
This year's third quarter earnings include a one-time, non-cash expense of $2.1
million, or $0.06 per diluted share, reflecting the accelerated recognition of
deferred compensation expense related to the vesting of restricted stock granted
to the Company's chairman and chief executive officer. Excluding this expense,
operating income would have been $41.6 million, up 9% over the third quarter of
2002. Similarly, earnings would have increased 12% to $24.0 million and diluted
earnings per share would have been $0.71, up 11% over the same period of last
year.
The Company continues to generate strong cash flow. Cash flow from operations
was $31.8 million in this year's third quarter and $108.1 million for the first
nine months of 2003, each up 35% over the same period of 2002.
"AMETEK achieved solid results during the third quarter, despite what continues
to be a challenging economic environment for manufacturers," commented Frank S.
Hermance, AMETEK Chairman and Chief Executive Officer. "Our revenue growth was
driven by the recent acquisitions of Airtechnology Holdings, Solidstate Controls
and Chandler Instruments, all of which were completed in 2003. These
acquisitions and operational excellence improvements across the Company drove
our record earnings performance."
For the first nine months of 2003, AMETEK sales increased 3% to $812.2 million
from $788.0 million in the same period of 2002. Operating income totaled $114.9
million, a 2% increase from $112.2 million earned in the first nine months of
last year. Net income for the first nine months of 2003 was $63.5 million, up 2%
from $62.4 million in the same period of 2002. Diluted earnings per share were
up 1% to $1.88 for the first nine months of 2003.
Excluding the compensation expense noted above, operating income for the first
nine months of 2003 would have totaled $117.0 million, up 4% over the same
period of 2002. Similarly, earnings would have been up 5% to $65.6 million and
diluted earnings per share would have been $1.95, also up 5% from the same
period of 2002.
EXHIBIT 99(a)
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AMETEK ACHIEVES RECORD EARNINGS
PAGE 2.
ELECTRONIC INSTRUMENTS GROUP (EIG)
EIG's third quarter 2003 sales were $139.0 million, up 3% from last year's level
of $134.7 million. Third quarter group operating income of $24.9 million, was up
9% versus $22.8 million in the same period of 2002. Group operating margins were
17.9%, up from 16.9% recorded in the third quarter of 2002.
"EIG had a great quarter," added Mr. Hermance. "Revenue for the group was up,
driven by the Solidstate Controls and Chandler Instruments acquisitions. Margins
expanded as a result of improved profitability in our aerospace and power
businesses despite the significant market downturn, as well as the impact of
operational excellence activities throughout the Group."
ELECTROMECHANICAL GROUP (EMG)
EMG's sales of $128.8 million were up 5% from $122.3 million in the third
quarter of 2002. Third quarter group operating income of $21.6 million was up
11%, compared with the $19.5 million reported for the same period of 2002. EMG's
operating margin in the third quarter of 2003 was 16.8%, up from 16.0% in the
third quarter of 2002.
"EMG also had a great quarter. Revenues benefited from the contribution of
Airtechnology, acquired during the first quarter. Our European motor businesses
continue to perform well, while our U.S. floor care and specialty motor
businesses are weak. Operating margins were up on strength in our differentiated
technical motor platform. Both our core Rotron motor business and the recently
acquired Airtechnology business performed well in the quarter," added Mr.
Hermance.
OUTLOOK
"Many macroeconomic indicators point to an improving economy, however we have
not yet seen our business levels increase. While we are poised to capitalize on
an economic recovery when it occurs, we continue to closely manage our cost
structure. For the full year 2003, we anticipate mid single-digit revenue growth
with diluted earnings per share of approximately $2.60," concluded Mr. Hermance.
ACQUISITION OF CHANDLER INSTRUMENTS
Effective August 28, 2003, AMETEK acquired Chandler Instruments Company, LLC, a
leading manufacturer of high-quality measurement instrumentation for the oil and
gas industry, for approximately $50 million. With its headquarters in Tulsa, OK,
Chandler has annual sales of approximately $30 million.
"We are very pleased with our acquisition of Chandler Instruments," commented
AMETEK Chairman and Chief Executive Officer Frank S. Hermance. "This acquisition
further expands our high-end analytical instrument platform, building on a set
of differentiated, higher-growth businesses that now total nearly $180 million
in revenue."
"Chandler adds to AMETEK's strong presence in the oil and gas industry by
expanding into upstream drilling and completion instruments and extends our
product offering in downstream markets, adding new technologies and customers,"
he added.
EXHIBIT 99(a)
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AMETEK ACHIEVES RECORD EARNINGS
PAGE 3.
Chandler Instruments designs and manufactures products through two operating
companies: Chandler Engineering and Grabner Instruments. Chandler Engineering
focuses on upstream markets of oil and gas exploration and production, selling
to many of the world's major integrated petroleum and oil services companies. It
produces instruments for the drilling and completion market as well as
instrumentation for production enhancement, reservoir development and pipeline
transmission.
Grabner, based in Austria, is a world leader in the design and manufacture of
test instruments for analyzing fuels and other liquids. Grabner produces vapor
pressure measurement instruments, flash point analyzers and spectrometers. Its
products focus on downstream petroleum refining and distribution markets as well
as the fragrance, flavors and paint markets.
CONFERENCE CALL
AMETEK, Inc. will Web cast it's Third Quarter 2003 investor conference call on
Tuesday, October 21, 2003, beginning at 9:00 AM ET. 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 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)
EXHIBIT 99(a)
AMETEK, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
NET SALES $ 267,781 $ 256,995 $ 812,182 $ 787,979
---------- ---------- ---------- ----------
EXPENSES:
Cost of sales, excluding depreciation 190,049 184,550 586,398 570,756
Selling, general and administrative (a) 30,130 26,123 85,697 80,907
Depreciation 8,123 8,262 25,191 24,118
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Total expenses 228,302 218,935 697,286 675,781
---------- ---------- ---------- ----------
OPERATING INCOME (a) 39,479 38,060 114,896 112,198
Other income (expenses):
Interest expense (6,459) (6,175) (19,426) (19,452)
Other, net 160 (591) (939) (701)
---------- ---------- ---------- ----------
Income before income taxes 33,180 31,294 94,531 92,045
Provision for income taxes 11,262 9,913 31,079 29,674
---------- ---------- ---------- ----------
NET INCOME (a) $ 21,918 $ 21,381 $ 63,452 $ 62,371
========== ========== ========== ==========
DILUTED EARNINGS PER SHARE (a) $ 0.65 $ 0.64 $ 1.88 $ 1.86
========== ========== ========== ==========
BASIC EARNINGS PER SHARE (a) $ 0.66 $ 0.65 $ 1.92 $ 1.90
========== ========== ========== ==========
AVERAGE COMMON SHARES OUTSTANDING:
Diluted shares 33,861 33,566 33,694 33,623
========== ========== ========== ==========
Basic shares 33,237 32,926 33,036 32,906
========== ========== ========== ==========
Dividends per share $ 0.06 $ 0.06 $ 0.18 $ 0.18
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(a) The three and nine month periods ended September 30, 2003 include a third
quarter non-cash charge of $2.1 million, or $0.06 per share, reflecting
the accelerated amortization of deferred compensation expense due to the
vesting of restricted stock.
EXHIBIT 99(a)
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT (UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
NET SALES
Electronic Instruments $ 138,978 $ 134,726 $ 409,942 $ 406,835
Electromechanical 128,803 122,269 402,240 381,144
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Total Consolidated $ 267,781 $ 256,995 $ 812,182 $ 787,979
========== ========== ========== ==========
OPERATING INCOME
Electronic Instruments $ 24,886 $ 22,826 $ 66,753 $ 64,442
Electromechanical 21,640 19,549 65,131 61,986
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Total segments 46,526 42,375 131,884 126,428
Corporate and other (a) (7,047) (4,315) (16,988) (14,230)
---------- ---------- ---------- ----------
Total Consolidated (a) $ 39,479 $ 38,060 $ 114,896 $ 112,198
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(a) See note on Consolidated Statement of Income.