AMETEK Announces Third Quarter 2015 Results

AMETEK, Inc.

Consolidated Statement of Income

(In thousands, except per share amounts)

(Unaudited)

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

2015

2014

Net sales

$   998,527

$1,031,811

$2,986,312

$2,997,821

Operating expenses:

     Cost of sales, excluding depreciation

631,790

677,739

1,901,680

1,933,554

     Selling, general and administrative

112,116

119,205

335,702

345,146

     Depreciation

17,006

16,724

50,044

47,619

          Total operating expenses 

760,912

813,668

2,287,426

2,326,319

Operating income 

237,615

218,143

698,886

671,502

Other expenses:

     Interest expense

(23,684)

(19,543)

(69,048)

(57,362)

     Other, net

(2,325)

(8,639)

(6,298)

(16,842)

Income before income taxes

211,606

189,961

623,540

597,298

Provision for income taxes

55,208

48,150

169,522

164,838

Net income

$   156,398

$   141,811

$   454,018

$   432,460

Diluted earnings per share

$        0.65

$        0.57

$        1.87

$        1.75

Basic earnings per share

$        0.65

$        0.58

$        1.89

$        1.76

Weighted average common shares outstanding:

     Diluted shares

241,238

247,643

242,552

247,425

     Basic shares

239,959

245,439

240,801

245,184

Dividends per share

$        0.09

$        0.09

$        0.27

$        0.24

AMETEK, Inc.

Information by Business Segment

(In thousands)

(Unaudited)

 Three Months Ended 

 Nine Months Ended 

 September 30, 

 September 30, 

2015

2014

2015

2014

Net sales:

     Electronic Instruments

$   598,515

$   631,569

$1,788,777

$1,777,252

     Electromechanical

400,012

400,242

1,197,535

1,220,569

          Consolidated net sales

$   998,527

$1,031,811

$2,986,312

$2,997,821

Income:

Segment operating income:

     Electronic Instruments

$   162,530

$   148,313

$   477,740

$   450,131

     Electromechanical

86,671

82,001

257,929

258,014

          Total segment operating income

249,201

230,314

735,669

708,145

     Corporate administrative and other expenses

(11,586)

(12,171)

(36,783)

(36,643)

          Consolidated operating income

$   237,615

$   218,143

$   698,886

$   671,502

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)

 September 30, 

 December 31, 

2015

2014

 (Unaudited) 

ASSETS

Current assets:

     Cash and cash equivalents

$     328,034

$     377,615

     Receivables, net

610,019

585,462

     Inventories, net

541,994

495,896

     Other current assets

110,693

119,631

          Total current assets

1,590,740

1,578,604

Property, plant and equipment, net

483,029

448,446

Goodwill

2,722,871

2,614,030

Other intangibles, investments and other assets

1,847,384

1,779,883

          Total assets

$  6,644,024

$  6,420,963

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Short-term borrowings and current portion of long-term debt

$     295,259

$     286,201

     Accounts payable and accruals

630,218

649,943

          Total current liabilities

925,477

936,144

Long-term debt

1,621,812

1,427,825

Deferred income taxes and other long-term liabilities

781,466

817,433

Stockholders' equity

3,315,269

3,239,561

          Total liabilities and stockholders' equity

$  6,644,024

$  6,420,963

AMETEK, Inc.

Reconciliations of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

EIG Segment operating income (GAAP)

$   162,530

$   148,313

$   477,740

$   450,131

Realignment costs

-

-

9,251

-

Zygo integration costs

-

13,655

-

13,655

Adjusted EIG Segment operating income (Non-GAAP)

$   162,530

$   161,968

$   486,991

$   463,786

EMG Segment operating income (GAAP)

$     86,671

$     82,001

$   257,929

$   258,014

Realignment costs

-

-

6,534

-

Zygo integration costs

-

-

-

-

Adjusted EMG Segment operating income (Non-GAAP)

$     86,671

$     82,001

$   264,463

$   258,014

Operating income (GAAP)

$   237,615

$   218,143

$   698,886

$   671,502

Realignment costs

-

-

15,894

-

Zygo integration costs

-

13,655

-

13,655

Adjusted Operating income (Non-GAAP)

$   237,615

$   231,798

$   714,780

$   685,157

Net income (GAAP)

$   156,398

$   141,811

$   454,018

$   432,460

Realignment costs

-

-

10,808

(1)

-

Zygo integration costs

-

10,717

(2)

-

10,717

(2)

Adjusted Net income (Non-GAAP)

$   156,398

$   152,528

$   464,826

$   443,177

(1) Represents adjustments at 32.0% tax rate.

(2) Represents adjustments at 21.5% tax rate.

Diluted earnings per share (GAAP)

$         0.65

$         0.57

$         1.87

$         1.75

Realignment costs

-

-

0.05

-

Zygo integration costs

-

0.05

-

0.04

Adjusted Diluted earnings per share (Non-GAAP)

$         0.65

$         0.62

$         1.92

$         1.79

EIG Segment operating margin (GAAP)

27.2%

23.5%

26.7%

25.3%

Realignment costs

-

-

0.5

-

Zygo integration costs

-

2.1

-

0.8

Adjusted EIG Segment operating margin (Non-GAAP)

27.2%

25.6%

27.2%

26.1%

EMG Segment operating margin (GAAP)

21.7%

20.5%

21.5%

21.1%

Realignment costs

-

-

0.6

-

Zygo integration costs

-

-

-

-

Adjusted EMG Segment operating margin (Non-GAAP)

21.7%

20.5%

22.1%

21.1%

Operating income margin (GAAP)

23.8%

21.1%

23.4%

22.4%

Realignment costs

-

-

0.5

-

Zygo integration costs

-

1.4

-

0.5%

Adjusted Operating income margin (Non-GAAP)

23.8%

22.5%

23.9%

22.9%

Use of Non-GAAP Financial Information
 
The Company supplements its consolidated financial statements presented on a U.S. generally accepted accounting principles ("GAAP") basis with certain non‑GAAP financial information to provide investors with greater insight, increased transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making.  Reconciliation of non‑GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial tables. These non‑GAAP financial measures should be considered in addition to, and not as a replacement for, or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies.
 
The Company believes that these measures provide useful information to investors by reflecting additional ways of viewing AMETEK's operations that, when reconciled to the comparable GAAP measure, helps our investors to better understand the long-term profitability trends of our business, and facilitates easier comparisons of our profitability to prior and future periods and to our peers.  The items described above have been excluded from this measure because items of this nature and/or size occur with inconsistent frequency, occur for reasons that may be unrelated to AMETEK's commercial performance during the period and/or we believe are not indicative of AMETEK's ongoing operating costs or gains in a given period, which we believe may obscure underlying business trends and make comparisons of long-term performance difficult.