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 FOURTH QUARTER AND FULL-YEAR RESULTS
-- ANNOUNCES A 2 FOR 1 STOCK SPLIT, INCREASES DIVIDEND 100% AND
CHANGES LONG-TERM INCENTIVE COMPENSATION STRUCTURE --
Paoli, PA, January 28, 2004 -- 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. The Company also announced
several significant changes including a stock split, dividend increase and the
expanded use of restricted stock as part of its long-term compensation
structure.
FOURTH QUARTER RESULTS
AMETEK's fourth quarter 2003 sales of $279.4 million were up 11% over the same
period of 2002. Operating income for the fourth quarter of 2003 was $41.9
million, a 15% increase from the $36.5 million recorded in the same period of
2002. Net income in the fourth quarter of 2003 increased 14% to $24.4 million,
or $.71 per diluted share, from fourth quarter 2002 levels of $21.3 million, or
$.63 per diluted share. Sales, operating income, net income, and diluted
earnings per share were quarterly records.
FULL-YEAR RESULTS
AMETEK achieved 2003 sales of $1.09 billion, up 5% from year 2002 results.
Operating income of $156.8 million was up 5% from $148.7 million for 2002. Net
income grew to $87.8 million, up 5% from the $83.7 million earned in 2002, and
diluted earnings per share of $2.60 were up 4% from $2.49 per share in 2002.
Sales, operating income, net income, diluted earnings per share and operating
cash flow were full-year records.
"AMETEK had a very good 2003," noted Frank S. Hermance, AMETEK Chairman and
Chief Executive Officer. "Contributions from acquired businesses enabled us to
grow the top-line during a difficult time for the manufacturing sector. An
improving mix of businesses combined with our successful operational excellence
focus enabled us to post another year of record earnings," he commented.
Cash flow generation for 2003 was superb. Cash flow from operations totaled $155
million, a 49% increase over 2002. Higher income, excellent working capital
management and lower pension plan contributions drove the increase.
2004 OUTLOOK
Mr. Hermance commented, "For 2004 we expect revenues to be up mid single-digits
on the full-year benefits of the Chandler Instruments and Solidstate Controls
acquisitions and modest internal growth. Earnings are expected to be
approximately $2.90 to $3.00 per diluted share, an increase of approximately 12%
to 15% over 2003 driven by strength in our differentiated businesses, our
continued focus on operational excellence, including movement of additional
manufacturing to low cost locales, and contributions from our 2003 acquisitions.
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AMETEK ACHIEVES RECORD FOURTH QUARTER AND FULL-YEAR RESULTS
PAGE 2.
"Our first quarter 2004 sales are expected to be up mid single-digits from last
year's first quarter. We expect our earnings to be approximately $0.66 - $0.68
per diluted share, an increase of approximately 12% to 15% over last year's
first quarter," concluded Mr. Hermance.
ELECTRONIC INSTRUMENT GROUPS (EIG)
For the 2003 fourth quarter, EIG sales increased 15% to $151.9 million.
Operating income for the fourth quarter was $28.2 million, compared with $23.0
million in the fourth quarter of 2002, an increase of 22%. Operating margins for
the quarter improved to 18.6%, from 17.4% in the fourth quarter of 2002.
"EIG sales were up in the quarter as the contribution from the acquisitions of
Solidstate Controls and Chandler Instruments and internal growth in our high-end
analytical instruments business more than overcame lower aerospace and power
instrument sales. EIG margins were up 120 basis points as contributions from the
acquisitions and broad-based operating improvements combined for these very
impressive results," said Mr. Hermance.
For the year, EIG sales of $561.9 million were up 4% from 2002 sales of $539.4
million. Operating income was $95.0 million for 2003, up 9% versus $87.5 million
earned in 2002. Operating margins were 16.9% in 2003, up from 16.2% in 2002.
ELECTROMECHANICAL GROUP (EMG)
For the fourth quarter of 2003, EMG's sales were $127.5 million, a 6% increase
over the same period of 2002. Operating income of $19.0 million was up 4% from
the $18.2 million recorded in the same period of 2002. Operating margins for the
quarter were 14.9%, compared with 15.2% in the fourth quarter of 2002.
"EMG fourth quarter sales were up as the contribution from Airtechnology,
acquired earlier in 2003, overcame lower sales of cost-driven motors. Operating
margins were solid, driven by the benefits of the Airtechnology acquisition and
other operational improvements," noted Mr. Hermance.
For the year, EMG's sales increased 6% to $529.7 million, compared with $501.1
million in 2002. Operating income was $84.2 million for 2003, up 5% from the
$80.2 million earned in 2002. Operating margins were essentially unchanged at
15.9% in 2003, compared with 16.0% in 2002.
TWO-FOR-ONE STOCK SPLIT SET
The Company's Board of Directors approved a two-for-one split of its common
stock, payable on February 27, 2004, to shareholders of record on February 13,
2004. By splitting its stock, AMETEK expects to broaden the stock's
marketability and improve its trading liquidity.
Unless otherwise indicated, all share and per share information in this report
is presented on a pre-split basis. The Company's Form 10-K for 2003 will be
prepared on a post-split basis.
DIVIDEND INCREASED 100%
After reviewing the Company's financial position, cash flow and earnings
history, and future expectations, AMETEK's Board of Directors also has decided
to increase the quarterly common stock dividend 100%, to an indicated annual
rate of $.24 per share on a post-split basis ($.48 per share on a pre-split
basis). The Board of Directors declared the first quarter dividend of $.06 per
share ($.12 on a pre-split basis), payable on March 26, 2004 to shareholders of
record on March 12, 2004.
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AMETEK ACHIEVES RECORD FOURTH QUARTER AND FULL-YEAR RESULTS
PAGE 3.
Mr. Hermance commented, "Our Four Growth Strategies have resulted in significant
increases in sales, profitability and cash flow in the last several years.
Anticipated strong future cash flows will enable us to continue to fund our
growth strategies while rewarding shareholders with a higher cash dividend."
LONG-TERM INCENTIVE COMPENSATION PLAN CHANGE
The Company has adopted a change in the composition of its long-term
compensation plan. Beginning in 2004, the long-term incentive plan for officers
of the Company and other senior management personnel will be composed of 50%
restricted stock and 50% stock options, rather than all stock options as it had
been previously. This change will result in AMETEK expensing approximately half
of its future long-term compensation awards. The Company believes this new plan
will enhance AMETEK's ability to attract and retain management talent.
CONFERENCE CALL
AMETEK, Inc. will Web cast its Fourth Quarter 2003 investor conference call on
Wednesday, January 28, 2004, beginning at 8:30 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 2003 sales of nearly $1.1 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)
AMETEK, INC.
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
(UNAUDITED)
NET SALES $ 279,440 $ 252,563 $ 1,091,622 $ 1,040,542
------------ ------------ ------------ ------------
EXPENSES:
Cost of sales, excluding depreciation 198,783 183,815 785,181 754,571
Selling, general and administrative 29,489 23,909 115,186 104,816
Depreciation 9,303 8,350 34,494 32,468
------------ ------------ ------------ ------------
Total expenses 237,575 216,074 934,861 891,855
------------ ------------ ------------ ------------
OPERATING INCOME 41,865 36,489 156,761 148,687
Other income (expenses):
Interest expense (6,591) (5,729) (26,017) (25,181)
Other, net 282 93 (657) (608)
------------ ------------ ------------ ------------
Income before income taxes 35,556 30,853 130,087 122,898
Provision for income taxes 11,193 9,526 42,272 39,200
------------ ------------ ------------ ------------
NET INCOME $ 24,363 $ 21,327 $ 87,815 $ 83,698
============ ============ ============ ============
DILUTED EARNINGS PER SHARE * $ 0.71 $ 0.63 $ 2.60 $ 2.49
============ ============ ============ ============
BASIC EARNINGS PER SHARE * $ 0.73 $ 0.65 $ 2.65 $ 2.54
============ ============ ============ ============
AVERAGE COMMON SHARES OUTSTANDING: *
Diluted shares 34,157 33,638 33,810 33,627
============ ============ ============ ============
Basic shares 33,479 32,956 33,147 32,918
============ ============ ============ ============
Dividends per share * $ 0.06 $ 0.06 $ 0.24 $ 0.24
============ ============ ============ ============
* On January 28, 2004, the Company announced a two-for-one stock split payable
on February 27, 2004, to shareholders of record on February 13, 2004. All
share and per share data in this table is presented on a pre-split basis.
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT
(IN THOUSANDS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
(UNAUDITED)
2003 2002 2003 2002
------------ ------------ ------------ ------------
NET SALES
Electronic Instruments $ 151,937 $ 132,613 $ 561,879 $ 539,448
Electromechanical 127,503 119,950 529,743 501,094
------------ ------------ ------------ ------------
Total Consolidated $ 279,440 $ 252,563 $ 1,091,622 $ 1,040,542
============ ============ ============ ============
OPERATING INCOME
Electronic Instruments $ 28,223 $ 23,043 $ 94,976 $ 87,485
Electromechanical 19,020 18,239 84,151 80,225
------------ ------------ ------------ ------------
Total segments 47,243 41,282 179,127 167,710
Corporate and other (5,378) (4,793) (22,366) (19,023)
------------ ------------ ------------ ------------
Total Consolidated $ 41,865 $ 36,489 $ 156,761 $ 148,687
============ ============ ============ ============