FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ____________________________
Commission file number 1-168
AMETEK, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4923320
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Station Square, Paoli, Pennsylvania 19301
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(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code 610-647-2121
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _____
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The number of shares of the issuer's common stock outstanding as of the
latest practicable date was:
Common Stock, $.01 Par Value, outstanding at October 31, 1995 was
33,050,437 shares.
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
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AMETEK, INC.
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CONSOLIDATED STATEMENT OF INCOME
--------------------------------
(Unaudited)
(Dollars in thousands except per-share amounts)
Three months ended Nine months ended
September 30, September 30,
------------------------- ------------------------
1995 1994 (a) 1995 1994 (a)
---------- ---------- ---------- ----------
Net sales $204,922 $190,427 $635,560 $584,540
---------- ---------- ---------- ----------
Expenses:
Cost of sales (excluding depreciation) 158,838 146,876 490,234 453,469
Selling, general and administrative 18,451 17,450 58,286 54,484
Depreciation 6,157 6,681 19,588 19,584
---------- ---------- ---------- ----------
Total expenses 183,446 171,007 568,108 527,537
---------- ---------- ---------- ----------
Operating income 21,476 19,420 67,452 57,003
Other income (expenses):
Interest expense (4,871) (6,064) (15,325) (16,261)
Other, net 152 1,684 840 3,335
---------- ---------- ---------- ----------
Income from continuing operations
before income taxes 16,757 15,040 52,967 44,077
Provision for income taxes 5,927 5,282 20,059 16,568
---------- ---------- ---------- ----------
Income from continuing operations 10,830 9,758 32,908 27,509
Discontinued operations, net of taxes:
Income from discontinued operations - 468 779 1,193
Gain on sale of discontinued operations - - 10,420 -
---------- ---------- ---------- ----------
Income before extraordinary items and
cumulative effect of accounting change 10,830 10,226 44,107 28,702
Extraordinary loss on early extinguishment
of debt, net of taxes (2,676) - (2,676) (11,810)
Cumulative effect of accounting change
for marketable securities, net of taxes - - - 3,819
---------- ---------- ---------- ----------
Net income $8,154 $10,226 $41,431 $20,711
========== ========== ========== ==========
Earnings (loss) per share:
Income from continuing operations $0.33 $0.28 $0.98 $0.73
Discontinued operations:
Income from discontinued operations - 0.01 0.02 0.03
Gain on sale of discontinued operations - - 0.31 -
---------- ---------- ---------- ----------
Income before extraordinary items and
cumulative effect of accounting change 0.33 0.29 1.31 0.76
Extraordinary loss on early
extinguishment of debt (0.08) - (0.08) (0.31)
Cumulative effect of accounting change - - - 0.10
---------- ---------- ---------- ----------
Net income $0.25 $0.29 $1.23 $0.55
========== ========== ========== ==========
Cash dividends paid per share $0.06 $0.06 $0.18 $0.18
========== ========== ========== ==========
Average common shares outstanding 33,050,747 34,838,972 33,549,685 37,947,309
========== ========== ========== ==========
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(a) Restated for discontinued operations.
See accompanying notes.
2
AMETEK, INC.
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CONDENSED CONSOLIDATED BALANCE SHEET
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(Dollars in thousands)
September 30, December 31,
1995 1994 (a)
-------------- -------------
(Unaudited)
ASSETS
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Current assets:
Cash and cash equivalents $3,312 $7,245
Marketable securities 7,406 10,480
Receivables, less allowance for possible losses 127,835 110,927
Inventories 102,419 98,689
Deferred income taxes 12,693 12,637
Net assets of discontinued operations -- 10,583
Other current assets 5,170 6,417
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Total current assets 258,835 256,978
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Property, plant and equipment 394,396 373,051
Less accumulated depreciation (224,829) (208,766)
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169,567 164,285
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Intangibles, investments and other assets 93,828 72,924
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Total assets $522,230 $494,187
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Short-term borrowings and current
portion of long-term debt $67,214 $11,821
Accounts payable 69,496 72,815
Accruals 101,073 93,457
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Total current liabilities 237,783 178,093
Long-term debt 150,486 190,336
Deferred income taxes 25,616 26,088
Other long-term liabilities 27,469 26,490
Stockholders' equity 80,876 73,180
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Total liabilities and stockholders' equity $522,230 $494,187
=========== ===========
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(a) Restated for discontinued operations.
See accompanying notes.
3
AMETEK, INC.
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
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(Unaudited)
(Dollars in thousands)
Nine months
ended September 30,
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1995 1994 (a)
----------- -----------
Cash provided by (used for):
Operating activities:
Net income $41,431 $20,711
Deduct discontinued operations:
Net income from discontinued operations (779) (1,193)
Net gain on sale of discontinued operations (10,420) --
Extraordinary loss on early extinguishment of debt 2,676 11,810
Cumulative effect of accounting change -- (3,819)
----------- -----------
Income from continuing operations 32,908 27,509
Adjustments to reconcile income from continuing operations
to net cash provided by continuing operations:
Depreciation and amortization 25,643 24,934
Deferred income taxes (1,595) 1,370
Net change in operating working capital (22,005) 31,643
Net cash provided by (used for) discontinued operations (2,572) 6,170
Other 179 (230)
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Total operating activities 32,558 91,396
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Investing activities:
Additions to property, plant and equipment (19,885) (15,367)
Proceeds from sale of discontinued operations and other assets 37,990 3,020
Purchase of businesses and investments (38,280) (1,113)
Decrease in marketable securities 4,139 7,355
----------- -----------
Total investing activities (16,036) (6,105)
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Financing activities:
Net change in short-term borrowings 65,346 --
Proceeds from issuance of long-term debt -- 306,000
Repayments of long-term debt (50,218) (260,227)
Debt issuance costs and debt prepayment premiums (143) (29,368)
Repurchases of common stock (32,954) (118,833)
Cash dividends paid (6,013) (6,827)
Other 3,527 2,381
----------- -----------
Total financing activities (20,455) (106,874)
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Decrease in cash and cash equivalents (3,933) (21,583)
Cash and cash equivalents:
As of January 1 7,245 40,459
----------- -----------
As of September 30 $3,312 $18,876
=========== ===========
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(a) Restated for discontinued operations.
See accompanying notes.
4
AMETEK, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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September 30, 1995
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(Unaudited)
Note 1 - Financial Statement Presentation
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The accompanying consolidated financial statements are unaudited, but the
Company believes that all adjustments (which consist of normal recurring
accruals) necessary for fair presentation of the consolidated financial position
of the Company at September 30, 1995 and the consolidated results of its
operations and cash flows for the three and nine-month periods ended September
30, 1995 and 1994 have been included. Quarterly results of operations are not
necessarily indicative of results for the full year. Quarterly financial
statements should be read in conjunction with the financial statements and
related notes in the Company's 1994 Annual Report.
Note 2 - Earnings Per Share
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Earnings per share is based on the average number of common shares
outstanding each period. No material dilution of earnings per share would
result for the third quarter or first nine months of 1995 or 1994 if it were
assumed that all outstanding stock options were exercised. The sum of quarterly
earnings per share does not equal year-to-date earnings per share due to the
effects of common stock repurchases.
Note 3 - Acquisitions
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On March 31, 1995, the Company purchased the heavy vehicle instrumentation
business of privately held Dixson, Inc. for cash. This acquisition was
accounted for by the purchase method, and accordingly, the results of Dixson's
operations are included in the Company's consolidated results from the date of
acquisition. This acquisition would not have had a material effect on sales or
earnings for the third quarter or the first nine months of 1995 or 1994, had it
been made at the beginning of the respective periods.
On March 1, 1995, the Company acquired a 50% ownership interest in a joint
venture established with a Taiwanese supplier to manufacture low-cost pressure
gauges in China and Taiwan for worldwide markets. This investment is accounted
for by the equity method, and the Company's 50% share of the operating results
since March 1, 1995, insignificant in amount, is reported through its domestic
gauge manufacturing Division.
The aggregate cost of the acquisition and the investment in the joint
venture totaled $40.8 million, consisting of $38.3 million cash paid, and $2.5
million of deferred payment obligations payable over periods up to three years.
The joint venture investment is reported with Intangibles and Other Assets in
the September 30, 1995 balance sheet.
Note 4 - Discontinued Operations
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On May 18, 1995, the Company sold its foam packaging business (the
Microfoam Division) to Astro Valcour, Inc. for approximately $37 million in
cash. The sale of the assets of Microfoam resulted in a second quarter 1995 gain
of $10.4 million, net of taxes of $6.4 million, after providing for certain
costs related to the sale. As a result of this transaction, the consolidated
financial statements have been restated to reflect Microfoam as discontinued
operations.
5
AMETEK, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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September 30, 1995
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(Unaudited)
Note 4 - Discontinued Operations (continued)
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Summary operating results of discontinued operations, excluding the above
mentioned gain on sale, are as follows:
In thousands
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Three months ended Nine months ended
September 30, September 30,
-------------------------- ------------------------
1995 1994 1995 1994
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Net sales $ - $ 8,245 $12,153 $23,131
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Income before income taxes - 817 1,291 2,127
Provision for income taxes - 349 512 934
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Net income from
discontinued operations $ - $ 468 $ 779 $ 1,193
===== ======= ======= ============
Note 5 - Inventories
- --------------------
The estimated components of inventory stated at lower of LIFO cost or
market are:
In thousands
-------------------------------
September 30, December 31,
1995 1994
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(Unaudited)
Finished goods and parts $ 34,858 $ 33,448
Work in process 24,217 24,695
Raw materials and purchased parts 43,344 40,546
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$ 102,419 $ 98,689
========= =========
Note 6 - Long-term debt
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On August 2, 1995, the Company replaced its $200 million secured bank
credit facility with a new Bank Credit Agreement with a group of banks led by
The Chase Manhattan Bank, N.A. The new five-year revolving credit facility is
unsecured, and provides up to $195 million in revolving credit loans, with
scheduled reductions in the total credit facility to $150 million by August 1,
1999. The new credit facility also contains certain performance criteria, which
when met, provide the Company with lower interest rates and reduced commitment
fees.
Upon execution of the Agreement, the Company drew down $57.5 million to
repay $45 million in term loans and $12.5 million in revolving credit loans
outstanding under the previous agreement. At September 30, 1995, the Company
had $63.3 million in revolving credit loans outstanding under the new Credit
Agreement, at an average interest rate of approximately 7%. The loans are
classified as short-term borrowings on the Company's balance sheet. The new
Credit Agreement contains requirements, which among other things, provide for
compliance with certain financial ratios. At September 30, 1995, the Company met
all such requirements.
In connection with the new Bank Agreement, the Company recorded a non-cash
after-tax extraordinary charge of $2.7 million, or $.08 per share, in the third
quarter of 1995, for the write-off of deferred debt issuance costs related to
the previous bank credit agreement.
6
AMETEK, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
September 30, 1995
------------------
(Unaudited)
Note 7 - New Accounting Standard
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In March 1995, the Financial Accounting Standards Board issued Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." This statement establishes accounting standards for
the impairment of Long-Lived assets, certain identifiable intangibles and
goodwill related to these assets to be held, and used, and for long-lived assets
and certain identifiable intangibles to be disposed of. The statement requires
that such assets be reviewed for impairment when changes in circumstances
indicate that the carrying value of the asset may not be fully recoverable. The
statement also requires such assets, when held for disposal, be reported at the
lower of carrying value or fair value, less cost to sell. The Company is
required to adopt this statement no later than 1996. Based on past practices and
the new accounting requirements, adoption of this statement is not expected to
have a material effect on the Company's operations or financial position.
7
AMETEK, INC.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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Financial Condition
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Liquidity and Capital Resources
-------------------------------
Working capital at September 30, 1995 amounted to $21.1 million, a
decrease of $57.8 million from December 31, 1994, largely due to
additional short-term borrowings, which were used in part to fund non-
working capital requirements. In the first quarter of 1995, the
Company purchased a new business and invested in a joint venture.
Cash expenditures for the repurchase of 1.9 million shares of the
Company's common stock were also incurred since the beginning of the
year. In connection with the execution of a new bank credit agreement
in August 1995, borrowing was partially used to repay long-term debt
outstanding under the previous bank credit agreement. In May 1995, the
Company received and expended proceeds from the sale of the Microfoam
Division. Microfoam is reported as discontinued operations in the
consolidated financial statements. Partly offsetting these items were
increases in receivables and inventories, due to the higher level of
business activity in 1995. The ratio of current assets to current
liabilities at September 30, 1995 was 1.09 to 1, compared to 1.44 to 1
at December 31, 1994.
Cash provided by the Company's operating activities for the first nine
months of 1995 totaled $32.6 million, compared to $91.4 million in the
same period of 1994, a decrease of $58.8 million. Increased operating
working capital requirements, including cash outlays to fund
restructuring accruals, accounted for $22.0 million of the overall
decrease. Operating cash generated in the first quarter of 1994
included net cash inflows totaling $31.6 million from the sale of
marketable securities in a trading portfolio. Since March 31, 1994,
cash flows from the Company's marketable securities are reported as
investing activities. Operating cash flow for 1995 also includes $2.6
million of net cash used by discontinued operations, while the 1994
amount included net cash provided by discontinued operations of $6.2
million.
Cash used for investing activities in the first nine months of 1995
totaled $16.0 million, compared to cash used of $6.1 million in the
same period last year. Cash expenditures in the first nine months of
1995 were primarily for the acquisition of a business, and an
investment in a joint venture, requiring a total cash outlay of $38.3
million. Capital expenditures in the first nine months of 1995 totaled
$19.9 million, compared to $15.4 million in the same period of the
prior year. Partly offsetting these cash outlays was $42.1 million in
proceeds, received primarily from the sale of the Microfoam Division,
plus marketable securities and other assets. Also included in 1994
investing activities were $9.3 million in net proceeds from the sale
of investment assets.
8
AMETEK, INC.
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Financial Condition (cont'd)
- -------------------
Financing activities in the first nine months of 1995 used cash
totaling $20.5 million, compared to cash used of $106.9 million in the
same period of 1994. In the first nine months of 1995 the Company
received net proceeds from short-term borrowings totaling $65.3
million, and repaid $50 million in term loans, of which $5 million was
scheduled. The remaining $45 million was an early repayment of term
loans outstanding under the Company's previous bank credit facility.
On August 2, 1995, the previous secured bank credit facility was
replaced by a new unsecured Bank Credit Agreement. This five-year
credit facility provides up to $195 million in revolving credit loans,
with scheduled reductions in the total facility beginning in 1998 to
$150 million by August 1, 1999. The new Credit Agreement also provides
for certain performance incentives that, when met, will lower interest
rates, and reduce commitment fees to the Company. As a result of the
new Bank Agreement, and the repayment of the prior term loans, the
Company recorded a non-cash after-tax extraordinary charge of $2.7
million, or $.08 per share in the third quarter of 1995, for the
write-off of debt issuance costs related to the previous bank credit
agreement.
Cash expended for financing activities in the first nine months of
1995 also included $33 million for the repurchase of 1,909,000 shares
of the Company's common stock, and the funding of $6 million in
dividends. Financing activities in the first nine months of 1994
primarily included the proceeds from the sale of $150 million of 9
3/4% senior public notes, borrowings of $156 million under the
Company's previously existing bank credit agreement, the repayment of
$185.4 million due to the early retirement of debt, and the repurchase
of 9.2 million shares of the Company's common stock at a total cost of
$118.8 million. Since beginning the stock repurchase program in March
1994, a total of 11.2 million shares have been acquired as of October
31, 1995, at a total cost of $152.5 million, under a $175 million
total authorization.
As a result of the above operating, investing and financing
activities, cash and cash equivalents and short-term marketable
securities decreased $7 million since December 31, 1994, to $10.7
million at September 30, 1995. Management believes that the Company
will have sufficient cash flow from its operations and from its new
bank credit facility to meet future needs.
9
AMETEK, INC.
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Results of Operations
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Operations for the third quarter of 1995
compared to the third quarter of 1994
Sales from continuing operations for the third quarter of 1995 were
$204.9 million, compared to sales of $190.4 million for the third
quarter of 1994, an increase of $14.5 million or 7.6%. The sales
improvement came primarily from the Company's Electro-mechanical
Group, which increased $7.6 million or 9.5% to $87.2 million. The
Precision Instruments Group's sales increased 7.3% to $77.2 million
from 1994 third quarter sales of $71.9 million, while the Industrial
Materials Group's sales increased $1.6 million to $40.5 million, or
4.2%, from third quarter 1994 sales of $38.9 million, after
restatement for the sale of the Microfoam Division in May 1995.
Operating income from continuing operations for the third quarter of
1995 increased $2.1 million or 10.6% to $21.5 million, compared to the
third quarter of 1994. This increase reflects the Company's overall
higher sales volume, improved operating efficiencies in the Industrial
Materials Group, and a $.5 million cost recovery from an insurance
settlement resulting from weather-related damage of a warehouse in
1994.
Interest expense for the third quarter of 1995 was $4.9 million, a
decrease of $1.2 million from the same quarter of 1994. The reduction
was due to lower effective interest rates, and reduced average debt
outstanding during the current third quarter. Other income in the
current third quarter includes a $.3 million cost recovery from the
insurance settlement mentioned above, and reached $.2 million, a
decrease of $1.5 million from the third quarter of 1994, due primarily
to lower interest income in the current third quarter caused by lower
levels of invested cash. In the third quarter of 1994, other income
included a gain on the sale of assets.
The weighted average shares outstanding during the third quarter of
1995 was 33.1 million shares, compared to 34.8 million shares for the
same quarter of 1994. The reduced number of shares reflects the
Company's ongoing share repurchase program, which began in March 1994.
Third quarter 1995 income from continuing operations was $10.8 million,
or $.33 per share, compared with third quarter 1994 income of $9.7
million, or $.28 per share from continuing operations, an income
improvement of $1.1 million or 11%. After an extraordinary charge for
the write-off of deferred debt issuance costs of $2.7 million, or $.08
per share, net income for the third quarter of 1995 was $ 8.1 million,
or $.25 per share, compared to net income of $10.2 million, or $.29 per
share for the third quarter of 1994, which included income from
discontinued operations of $.5 million, or $.01 per share.
Electro-mechanical Group sales totalled $87.2 million in the
------------------------
current third quarter, an increase of $7.6 million or 9.5% from
the same quarter of 1994, due to higher sales of electric motor
products manufactured by the Company's domestic and Italian motor
operations. The Italian operations' sales increased 16.2%, with
minimal foreign currency translation effects. This group is
continuing to experience softness in its U.S. markets resulting
from the weakness in the U.S. home appliance industry, which is
being offset by the introduction of new products.
10
AMETEK, INC.
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Results of Operations (cont'd)
- ---------------------
Operating profit of this group for the third quarter of 1995 was $11.1
million, unchanged from the same quarter of 1994. Operating margins
decreased to 12.8% in the current third quarter from 13.9% in the same
quarter of 1994 due to a change in product mix in the Company's
domestic operations, and the higher cost of introducing new models to
increase market penetration in the soft U.S. appliance market.
Operating margins were also lower because of higher material costs in
the Company's Italian operations, net of increased selling prices.
In the Precision Instruments Group, sales reached $77.2 million in
---------------------------
this year's third quarter, an increase of 7.3% from $71.9 million of
sales in the same quarter last year. The increase was primarily due to
the sales contribution from the Dixson heavy vehicle instrumentation
business, purchased at the end of the first quarter of 1995. Higher
sales of automotive and process instruments were more than offset by
lower sales of aerospace instruments.
Group operating profit for the current quarter decreased $.6 million
or 6.7% to $8.7 million, from $9.3 million in the third quarter of
1994. Operating margins decreased to 11.3% in the current third
quarter from 13% in the third quarter of 1994 due to a change to a
more normal product mix and margin level in the Company's commercial
gauge operations. Lower sales of aerospace instruments also
contributed to the profit decline. Third quarter 1994 results were
unusually strong, due to a higher proportion of sales of more
profitable products, as well as lower material costs in the Company's
general gauge business. The reduced profitability in the current third
quarter from the events noted above more than offset a profit
contribution by the Dixson business.
In the Industrial Materials Group, third quarter 1995 sales from
--------------------------
continuing operations increased $1.6 million or 4.2% to $40.5 million,
compared to $38.9 million in the same quarter of 1994, due primarily
to higher sales by the Company's metal powder business. The overall
sales increase reflects lower sales of certain plastics compounding
products, while sales of water filtration products were about the same
due to continued softness in this market.
11
AMETEK, INC.
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Results of Operations (cont'd)
- ---------------------
Group operating profit for the current third quarter totaled $7.6
million, an increase of $1.9 million, or 32.5% from the restated $5.7
million in the third quarter of 1994. Operating margins increased to
18.6% in the current third quarter from 14.6% in the third quarter of
1994 due to the higher sales volume, and a cost recovery from an
insurance settlement of $.8 million related to a 1994 weather-related
damage of a warehouse at the Westchester Plastics Division. Third
quarter profits for 1994 included a charge for asset write-offs in the
corrosion-resistant materials business. The current third quarter's
overall profit increase reflects a decrease in profits from the water
filtration business caused by the lack of sales growth and by somewhat
higher operating costs. Late in September 1995, the Company announced
that it is seeking bids for the sale of the group's Westchester
Plastics Division.
Operations for the first nine months of 1995
compared to the first nine months of 1994
Sales from continuing operations for the first nine months of 1995
were $635.5 million, compared to sales of $584.5 million from
continuing operations for the same period of 1994, an increase of
$51.0 million or 8.7%. All business segments reported improved sales,
led by the Electro-mechanical Group, which increased $31.1 million or
12.4%. The Precision Instruments Group's sales increased $12.1 million
or 5.6%, and the Industrial Materials Group's sales, which were
restated for the May 1995 sale of the Microfoam Division, increased
$7.8 million or 6.6%.
Operating income from continuing operations for the first nine months
of 1995 increased $10.4 million or 18.3% to $67.4 million, compared to
$57.0 million for the same period of 1994. This increase reflects the
overall higher sales volume, plus improved operating performance from
realization of benefits from the restructuring programs in the
Precision Instruments Group, which were initiated in 1993. Lower costs
resulting from improved operating efficiencies also benefited the
Industrial Materials Group.
Other income for the first nine months of 1995 was $.8 million, a
decrease of $2.5 million from the same period of 1994. The decrease
during the current period results from reduced interest and other
investment income. The lower interest income was due to lower levels
of invested cash. Other income for the first nine months of 1994
included gains on asset sales.
Income from continuing operations for the first nine months of 1995
was $32.9 million, or $.98 per share, compared to 1994 income of $27.5
million or $.73 per share from continuing operations, an increase in
income of $5.4 million or 19.6%. Income from the discontinued
Microfoam operations for the first nine months of 1995 was $.8
million, or $.02 per share, compared to income of $1.2 million, or
$.03 per share for the same period of 1994. Results for the first nine
months of 1995 also include an after-tax gain on the second quarter
1995 sale of the Microfoam Division of $10.4 million, or $.31 per
share.
12
AMETEK, INC.
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Results of Operations (cont'd)
- ---------------------
Income before an extraordinary item in the first nine months of 1995
was $44.1 million, or $1.31 per share, compared to income of $28.7
million, or $.76 per share for the first nine months of 1994, before
an extraordinary item and the cumulative effect of an accounting
change. After an extraordinary charge for the write-off of deferred
debt issuance costs of $2.7 million after-tax, or $.08 per share in
the third quarter of 1995, net income for the first nine months of
1995 was $41.4 million, or $1.23 per share, compared to net income of
$20.7 million, or $.55 per share for the same period of 1994, which
included first quarter charges for an extraordinary loss of $11.8
million ($.31 per share) after-tax from the early repayment of debt
and a $3.8 million ($.10 per share) after-tax gain from a required
change in accounting for certain marketable securities.
Electro-mechanical Group sales totaled $283.3 million in the first
------------------------
nine months of 1995, an increase of $31.1 million or 12.4% from the
same period of 1994, due to increased sales of electric motor products
manufactured by the Company's domestic and Italian motor operations.
Before foreign currency translation effects, which were not
significant, the Italian operations reported a 28.9% increase in sales
compared to the first nine months of 1994.
Operating profit of this group increased $3.8 million or 11.4% to
$37.4 million in the first nine months of 1995, primarily because of
the higher sales volume. Higher material costs in the Italian
operations are being moderated by increased sales prices and cost
reduction programs implemented during 1995.
In the Precision Instruments Group, sales in the first nine months of
---------------------------
1995 were $226.9 million, an increase of $12.1 million or 5.6% from
the same period of 1994. The increase is largely due to the sales by
the Dixson heavy vehicle instrumentation business purchased at the end
of the first quarter of 1995. Higher sales of heavy truck instruments
and process instruments were more than offset by lower sales of
aerospace instruments.
Group operating profit increased $2.8 million or 11.9% to $26.2
million for the first nine months of 1995. The group benefited from a
profit contribution by Dixson, and from increased operating
efficiencies in the aerospace business resulting from the
restructuring activities and cost reduction programs initiated in
prior years, as well as an improved product mix on process instrument
sales.
In the Industrial Materials Group, sales from continuing operations
--------------------------
for the first nine months of 1995 increased $7.8 million or 6.6% to
$125.3 million. All but one business in this group reported a sales
increase, led by the Specialty Metal Division's metal powder business.
Softness in residential water filtration markets has reduced the
growth in sales by the filtration business.
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AMETEK, INC.
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Results of Operations (cont'd)
- ---------------------
Group operating profit from continuing operations for the first nine
months of 1995 increased $3.8 million or 20.7% to $22.0 million,
compared to $18.2 million in the same period of 1994. The profit
increase was due to the increased sales volume, and to lower operating
costs in the corrosion-resistant materials and plastic compounding
businesses. The overall profit increase was suppressed somewhat by
reduced operating performance in the water filtration business, caused
in part by the limited sales growth.
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AMETEK, INC.
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PART II. OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
a) Exhibits:
Exhibit
Number Description
------ -----------
4 Credit Agreement dated August 2, 1995, among the
Company, Various Lending Institutions, Bank of
Montreal, Corestates Bank, N.A., and PNC Bank,
National Association, as Co-Agents, and The Chase
Manhattan Bank, N.A., as Administrative Agent.
4.1 First Amendment to Credit Agreement dated August
22, 1995.
27 Financial Data Schedule *
* Schedule submitted in electronic format only.
b) Reports on Form 8-K: For the quarter ended September 30, 1995, the
Company filed a Current Report on Form 8-K dated August 22, 1995, under
Item 5, Other Events, to report restated consolidated statements of
income and information by business segment for the Company for each of
the quarterly periods in the fiscal year ending December 31, 1994, and
for the quarterly period ended March 31, 1995. The restated financial
information presented the May 1995 sale of the Microfoam Division as
discontinued operations.
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AMETEK, INC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMETEK, INC.
-------------------------------------------
(Registrant)
By /s/ Otto W. Richards
-----------------------------------------
Otto W. Richards
Vice President and Comptroller
(Principal Accounting Officer)
November 13, 1995
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