AMETEK Announces Fourth Quarter Results

Jan 26, 2010, 07:00 ET from AMETEK, Inc.

PAOLI, Pa., Jan. 26 /PRNewswire-FirstCall/ -- AMETEK, Inc. (NYSE: AME) today announced fourth quarter results that reflected sequentially higher sales, improved profitability, excellent cash flow and strong orders.  

AMETEK’s fourth quarter 2009 sales of $523.5 million were down 16% over the same period of 2008.  Operating income was $89.2 million in the fourth quarter of 2009, compared with $82.2 million in the same period of 2008.  Net income was $51.9 million, or $0.48 per diluted share, compared to net income of $43.8 million, or $0.41 per diluted share, earned in the fourth quarter of 2008.  

“AMETEK had a good fourth quarter, despite still difficult market conditions.  As anticipated, we saw sequentially higher sales in a number of key markets, improved earnings and continued excellent cash flow generation.  Perhaps most importantly, we saw significantly higher order rates from our customers,” noted Frank S. Hermance, AMETEK Chairman and Chief Executive Officer.  

Orders in the fourth quarter of 2009 were strong, totaling $577 million, a 20% sequential improvement over the third quarter of 2009 and a 4% increase over the fourth quarter of 2008.  On a sequential basis, fourth quarter operating income margins expanded 140 basis points to 17.0%.

Operating cash flow was excellent for both the fourth quarter and full year 2009.  In the fourth quarter, operating cash flow was $109 million, up 155% from the fourth quarter of 2008.  For the full year, operating cash flow was $365 million, up 47% from 2008.  

For the full year 2009, AMETEK achieved sales of $2.1 billion, down 17% from 2008.  Operating income in 2009 was $366.1 million compared with $432.7 million last year.  Net income for the full year 2009 was $205.8 million, or $1.91 per diluted share, compared to net income of $247.0 million, or $2.30 per diluted share earned in 2008.  

Fourth quarter and full year 2008 results include a pre-tax restructuring charge of approximately $40 million ($27.3 million, net of tax), or $0.25 per diluted share, to cover the costs of employee reductions, facility closures and asset write-downs necessary to realign the Company’s cost structure.  The attached income statement and segment information tables detail 2008 results both with and without this restructuring charge.

Electronic Instruments Group (EIG)

For the 2009 fourth quarter, EIG sales decreased 21% to $286.0 million.  Operating income in the fourth quarter of 2009 was $56.1 million, compared with $69.2 million in the fourth quarter of 2008.  For the fourth quarter of 2009, operating margins were 19.6% as compared with 19.1% in last year’s fourth quarter.

“EIG performed well in the fourth quarter.  As anticipated, sequential sales of instruments for research and metals applications improved, while our oil and gas related instrument businesses stabilized.  Sequential orders for EIG were up low double digits.  Operating margins were strong at 19.6%, expanding 200 basis points sequentially from the third quarter of this year,” said Mr. Hermance.

Electromechanical Group (EMG)

For the 2009 fourth quarter, EMG sales declined 9% to $237.5 million.  Operating income was $40.7 million, compared with $24.7 million in the fourth quarter of 2008.  Operating margins were 17.1% as compared with 9.4% in last year’s fourth quarter.

“EMG also performed well in the fourth quarter. Sequential sales improved in both our cost driven motor and differentiated businesses.  Sequential orders in EMG were up approximately 30% in the quarter.  Operating margins rose to 17.1%, a 10 basis point sequential improvement,” commented Mr. Hermance.

2010 Outlook

“We expect our markets overall to show modest growth during 2010, with this growth becoming more evident as we move through the year.  We believe that AMETEK’s strong portfolio of businesses, proven operational capabilities, lower cost structure, and a successful focus on strategic acquisitions will enable us to perform well in 2010,” noted Mr. Hermance.

“We anticipate 2010 revenue to be up low to mid single digits on a percentage basis from 2009.  Earnings for 2010 are expected to be in the range of $2.10 to $2.20 per diluted share, up 10% to 15% over 2009, reflecting the leveraged impact of core growth and our streamlined cost structure,” added Mr. Hermance.

“First quarter 2010 sales are expected to be down mid single digits on a percentage basis from last year’s first quarter.  We estimate our earnings to be approximately $0.45 to $0.47 per diluted share, as compared to last year’s first quarter of $0.55,” concluded Mr. Hermance.  

Conference Call

The Company will Web cast its Fourth Quarter 2009 investor conference call on Tuesday, January 26, 2010, beginning at 8:30 AM ET. The live audio Web cast will be available at the Investors section of www.ametek.com and at www.streetevents.com .  The call will also be archived at the Investors section of www.ametek.com .

Corporate Profile

AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annual sales of approximately $2.1 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 and the Russell 1000 Indices.

Forward-looking Information

Statements in this news release relating to future events, such as AMETEK’s expected business and financial performance are "forward-looking statements."  Forward-looking statements are subject to various factors and uncertainties that may cause actual results to differ significantly from expectations.  These factors and uncertainties include our ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations; our ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in our markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve.  A detailed discussion of these and other factors that may affect our future results is contained in AMETEK’s filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q and 8-K.  AMETEK disclaims any intention or obligation to update or revise any forward-looking statements.

(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,

2009

2008

2008

2009

2008

2008

GAAP

GAAP

Adjusted (a)

GAAP

GAAP

Adjusted (a)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net sales

$        523,500 

$        623,744 

$        623,744 

$     2,098,355 

$     2,531,135 

$     2,531,135 

Operating expenses:

    Cost of sales, excluding depreciation (b)

359,074 

444,410 

411,537 

1,435,953 

1,730,086 

1,697,213 

    Selling, general and administrative (b)

64,738 

85,316 

78,166 

254,143 

322,552 

315,402 

    Depreciation

10,495 

11,773 

11,773 

42,209 

45,843 

45,843 

         Total operating expenses (b)

434,307 

541,499 

501,476 

1,732,305 

2,098,481 

2,058,458 

Operating income (b)

89,193 

82,245 

122,268 

366,050 

432,654 

472,677 

Other expenses:

    Interest expense

(16,674)

(17,656)

(17,656)

(68,750)

(63,652)

(63,652)

    Other, net

(941)

380 

380 

(2,667)

(2,786)

(2,786)

Income before income taxes (b)

71,578 

64,969 

104,992 

294,633 

366,216 

406,239 

Provision for income taxes (b)

19,694 

21,140 

33,912 

88,863 

119,264 

132,036 

Net income (b)

$          51,884 

$          43,829 

$          71,080 

$        205,770 

$        246,952 

$        274,203 

Diluted earnings per share (b)

$              0.48 

$              0.41 

$              0.66 

$              1.91 

$              2.30 

$              2.55 

Basic earnings per share (b)

$              0.48 

$              0.41 

$              0.67 

$              1.93 

$              2.33 

$              2.58 

Weighted average common shares outstanding:

    Diluted shares

108,376 

106,968 

106,968 

107,850 

107,443 

107,443 

    Basic shares

107,162 

106,359 

106,359 

106,788 

106,148 

106,148 

Dividends per share

$              0.06 

$              0.06 

$              0.06 

$              0.24 

$              0.24 

$              0.24 

(a) The three and twelve month periods ended December 31, 2008 include a fourth quarter restructuring pretax charge totaling $40.0 million, $27.3 million after tax ($0.25 per diluted share).  The charge was for employee reductions and facility closures ($32.6 million), as well as asset write-downs ($7.4 million). Of the $40.0 million in charges, $32.9 million of the restructuring charges and asset write-downs were recorded in cost of sales and $7.1 million of the restructuring charges and asset write-downs were recorded in selling, general and administrative expenses.

(b) The twelve month period ended December 31, 2008 includes a second quarter after-tax, non-cash charge of $7.3 million, or $0.07 per diluted share, related to the accelerated amortization of deferred compensation expense due to the vesting of restricted stock.

AMETEK, Inc.

Information by Business Segment

(In thousands)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2009

2008

2008

2009

2008

2008

GAAP

GAAP

Adjusted (c)

GAAP

GAAP

Adjusted (c)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net sales:

    Electronic Instruments

$        286,009 

$        361,639 

$        361,639 

$     1,146,578 

$     1,402,653 

$     1,402,653 

    Electromechanical

237,491 

262,105 

262,105 

951,777 

1,128,482 

1,128,482 

         Consolidated net sales

$        523,500 

$        623,744 

$        623,744 

$     2,098,355 

$     2,531,135 

$     2,531,135 

Income:

Segment operating income:

    Electronic Instruments

$          56,085 

$          69,218 

$          89,582 

$        232,875 

$        306,764 

$        327,128 

    Electromechanical

40,682 

24,655 

44,100 

166,582 

175,181 

194,626 

         Total segment operating income

96,767 

93,873 

133,682 

399,457 

481,945 

521,754 

    Corporate administrative and other expenses

(7,574)

(11,628)

(11,414)

(33,407)

(49,291)

(49,077)

         Consolidated operating income

$          89,193 

$          82,245 

$        122,268 

$        366,050 

$        432,654 

$        472,677 

(c) The three and twelve month periods ended December 31, 2008 include a fourth quarter restructuring pretax charge totaling $40.0 million, $27.3 million after tax ($0.25 per diluted share).  The charge was for employee reductions and facility closures ($32.6 million), as well as asset write-downs ($7.4 million). Of the $40.0 million in restructuring charges and asset write-downs, $20.4 million was recorded in Electronic Instruments, $19.4 million was recorded in Electromechanical and $0.2 million was recorded in Corporate administrative and other expenses.

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)

December 31,

December 31,

2009

2008

(Unaudited)

ASSETS

Current assets:

    Cash, cash equivalents and marketable securities

$          251,350 

$            91,210 

    Receivables, net

331,383 

406,012 

    Inventories

311,542 

349,509 

    Other current assets

77,448 

107,855 

         Total current assets

971,723 

954,586 

Property, plant and equipment, net

310,053 

307,908 

Goodwill

1,277,291 

1,240,052 

Other intangibles, investments and other assets

685,770 

552,996 

         Total assets

$       3,244,837 

$       3,055,542 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

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

$            85,801 

$            18,438 

    Accounts payable and accruals

357,044 

429,075 

         Total current liabilities

442,845 

447,513 

Long-term debt

955,880 

1,093,243 

Deferred income taxes and other long-term liabilities

282,887 

227,014 

Stockholders' equity

1,563,225 

1,287,772 

         Total liabilities and stockholders' equity

$       3,244,837 

$       3,055,542 

Contact:  William J. Burke (610) 889-5249

SOURCE AMETEK, Inc.



RELATED LINKS

http://www.ametek.com