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.Business Editors PAOLI Pa·o·li , Pasquale di 1725-1807. Corsican patriot who led (from 1755) the struggle for independence from Genoa. , Pa.--(BUSINESS WIRE)--Jan. 28, 2004 AMETEK Inc. (NYSE NYSE See: New York Stock Exchange :AME See AIT. ) today announced fourth quarter and full year results that established records for sales, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , net income and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . 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 Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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 Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. were full-year records. "AMETEK had a very good 2003," noted Frank S. Hermance Hermance is a municipality of the Canton of Geneva, Switzerland. External links
Cash flow generation for 2003 was superb. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses 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 Chandler, city (1990 pop. 90,533), Maricopa co., S central Ariz., in the Salt River valley; inc. 1920. It is both a residential community and a center for research and technology. Tourism is also important, and the San Marcos Golf Resort is in 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. "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 EIG Excellence in Government EIG Engineering Installation Group EIG Evènement Indésirable Grave (French) EIG Erie Insurance Group EIG Ecole Internationale de Genève (French) ) 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 Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: 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 high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. 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 broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased 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 The use of electricity to run moving parts. Disk drives, printers and motors are examples. Electromechanical systems must be designed for the eventual deterioration of moving components that wear over time. The first TVs were electromechanical systems (see video/TV history). Group (EMG EMG abbr. electromyogram Electromyography (EMG) A diagnostic test that records the electrical activity of muscles. ) 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 February: see month. 27, 2004, to shareholders of record on February 13, 2004. By splitting its stock, AMETEK expects to broaden the stock's marketability Marketability A negotiable security is said to have good marketability if there is an active secondary market in which it can easily be resold. marketability The ease with which an investment may be bought and sold in the secondary market. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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. 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 Wednesday: see week. , January January: see month. 28, 2004, beginning at 8:30 AM EST EST electroshock therapy. EST abbr. electroshock therapy . 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 dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. 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 mid·cap adj. 1. Or or relating to corporations whose retained earnings and outstanding shares of common stock have a value between those of small cap companies and large cap corporations. 2. 400 Index and the Russell 1000 Index The Russell 1000 Index is a stock market index of US stocks. The ticker is "RUI" or similar. See Russell Indexes page for main discussion. See also the iShares Russell 1000. External links
Forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Information Statements in this news release that are not historical are considered "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 (1) $0.71 $0.63 $2.60 $2.49
=========== =========== =========== ===========
Basic earnings per
share (1) $0.73 $0.65 $2.65 $2.54
=========== =========== =========== ===========
Average common shares
outstanding: (1)
Diluted shares 34,157 33,638 33,810 33,627
=========== =========== =========== ===========
Basic shares 33,479 32,956 33,147 32,918
=========== =========== =========== ===========
Dividends per share
(1) $0.06 $0.06 $0.24 $0.24
=========== =========== =========== ===========
(1) 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
=========== =========== =========== ===========
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