AMETEK Achieves Record Full-Year Results; Fourth Quarter Earnings up Sharply on Higher Sales.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, 2003 AMETEK Inc. (NYSE NYSE See: New York Stock Exchange :AME See AIT. ) today announced 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 . AMETEK achieved 2002 sales of $1.04 billion, up 2% from year 2001 results. Operating income of $148.7 million was up 12% from $132.8 million for 2001. Income grew to $83.7 million, up 18% from the $70.8 million earned in 2001, and diluted earnings per share of $2.49 were up from $2.12 per share in 2001. All comparisons, unless otherwise noted, are before unusual items in the fourth quarter of 2001 described below. Including these unusual items, net income for 2001 was $66.1 million, or $1.98 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. "AMETEK performed extremely well in 2002," noted Frank S. Hermance Hermance is a municipality of the Canton of Geneva, Switzerland. External links
"In addition, we substantially reduced our working capital during 2002 due to an excellent effort across the Company," added Mr. Hermance. "Inventory and receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed were down $29 million, exceeding the $20 million reduction we targeted. We used the cash generated to make contributions to our defined benefit pension plans, which on an after tax basis, reduced 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. by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19 million." Fourth Quarter Results AMETEK's fourth quarter 2002 sales of $252.6 million were up 6% over the same period of 2001. Operating income for the fourth quarter of 2002 was $36.5 million, a 28% increase from the $28.6 million recorded in the same period of 2001. Income in the fourth quarter of 2002 totaled $21.3 million, or $.63 per diluted share, up from fourth quarter 2001 levels of $16.2 million, or $.48 per diluted share. After unusual items, net income for the fourth quarter of 2001 was $11.5 million, or $.34 per diluted share. On January January: see month. 1, 2002 AMETEK adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System #142, which eliminated amortization of goodwill. The impact of the amortization of goodwill in AMETEK's 2001 fourth quarter results was $.08 per diluted share and $.30 per diluted share for the full year 2001. Fourth quarter 2001 net income reflected expenses totaling $15.3 million after tax, or $.46 per diluted share, to cover the costs of employee reductions, facility closures, and asset writedowns. Also in the fourth quarter of 2001, the Company recorded a tax benefit of $10.5 million, or $.32 per diluted share, resulting from the closure of a number of tax years. 2003 Outlook Mr. Hermance commented, "We expect that 2003 will be another challenging year, and we are not anticipating significant improvement from the current economic conditions in the manufacturing sector. "We expect revenues to be up modestly with earnings in the range of $2.65 - $2.75 per diluted share, an increase of 6% to 10% over 2002. This estimate includes the positive impact of our recent acquisition of Airtechnology and approximately $7 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern , or $.14 per diluted share, of additional pension expense. Without the additional pension expense, our earnings would be up approximately 12% to 16% versus 2002." "Our first quarter 2003 sales are expected to be down slightly from last year's first quarter, as the top-line benefits of the Airtechnology acquisition are offset by weaker aerospace, power and heavy vehicle markets. We expect our earnings to be about equal to last year's level of $.59 per diluted share after the additional pension expense. Without the additional pension expense, earnings would be up approximately 6%," 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 2002, EIG sales of $539.4 million were up 8% from 2001 sales of $499.5 million. Operating income was $87.5 million for 2002, up 26% versus $69.5 million earned in 2001. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 16.2% in 2002, up from 13.9% in 2001. For the 2002 fourth quarter, EIG sales increased 7% to $132.6 million. Operating income for the fourth quarter was $23.0 million, compared with $13.9 million in the fourth quarter of 2001. Operating margins for the quarter improved to 17.4%, from 11.2% in the fourth quarter of 2001. "Instruments for Research and Applied Science (IRAS IRAS: see infrared astronomy. ) and EDAX EDAX Energy Dispersive Spectroscopy , both acquired in 2001, were solid contributors to EIG's growth in revenue and profit during 2002. Operational excellence initiatives throughout the Group were also instrumental in driving margin growth," said Mr. Hermance. 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 year, EMG's sales decreased 4% to $501.1 million, compared with $519.8 million in 2001. Operating income was $80.2 million for 2002, down 1% from the $81.3 million earned in 2001. Operating margins increased to 16.0% in 2002 from 15.6% in 2001. For the fourth quarter of 2002, EMG's sales were $120.0 million, a 6% increase over the same period of 2001. Operating income of $18.2 million is down 3% from the $18.7 million recorded in the same period of 2001. Operating margins for the quarter were 15.2% compared with 16.5% in the fourth quarter of 2001. "Market conditions remain difficult for EMG. The top-line benefits of our 2001 acquisition of GS Electric were more than offset by weak sales in several other markets. The continued execution of our operational excellence and best-cost initiatives resulted in the increased margins for the group in 2002," noted Mr. Hermance. Acquisition of Airtechnology Group On January 13, 2003 AMETEK completed the acquisition of Airtechnology Holdings Limited, a leading supplier of motors, fans and environmental control systems for aerospace and defense markets, from Candover Candover, established in 1980 and UK based, specialises in arranging and leading large buyouts and buyins. Candover is structured as an investment trust. Investments in buyouts are provided in two forms, from Candover Investments plc and more significantly from third party funds Partners Limited. Airtechnology, located near London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. , has about 240 employees and expected sales of approximately 29 million Pounds ($46 million). "We are very excited about our acquisition of Airtechnology. It significantly expands our presence in high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. technical motors and strengthens our relationships with large European-based aerospace and defense companies," commented Mr. Hermance. Airtechnology produces motors and fans for equipment cooling systems cooling systems for housed animals include spraying of roofs with water, evaporative pads with fans, foggers and misters; for pastured animals shelter from the sun by trees or artificial shade devices and cooling ponds are used. and for maintaining environmental integrity. Environmental integrity includes temperature control systems as well as filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids systems for nuclear, biological and chemical (NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. ) contamination contamination /con·tam·i·na·tion/ (kon-tam?i-na-shun) 1. the soiling or making inferior by contact or mixture. 2. the deposition of radioactive material in any place where it is not desired. . These products are sold primarily to the military aerospace, vehicle and ship markets. Other markets include commercial aerospace and rail vehicles Rail vehicles are vehicles capable of rolling on rail tracks. This includes:
"Airtechnology is a recognized market leader in air-moving components and environmental systems used in many high profile European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. defense and commercial aerospace programs," he added. "The combination of AMETEK Rotron and Airtechnology provides us with a broader range of products that we can market to our customers on a global basis." Conference Call AMETEK, Inc. will Web cast its Fourth Quarter 2002 investor conference call on Wednesday Wednesday: see week. , January 29, 2003, beginning at 9:00 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 (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. , 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 2002 sales of more than $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 2000 Index Russell 2000 Index An index measuring the performance of the 2,000 smallest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. . 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
(Dollars and shares in thousands, except per share amounts)
Twelve months ended
December 31,
------------------------------------
2001
-----------------------
Before After
Unusual Unusual
2002 Items Items (a)
----------- ----------- -----------
Net sales $1,040,542 $1,019,289 $1,019,289
----------- ----------- -----------
Expenses:
Cost of sales, excluding
depreciation 754,571 759,379 777,919
Selling, general and
administrative 104,816 95,132 98,655
Depreciation 32,468 31,942 33,165
----------- ----------- -----------
Total expenses 891,855 886,453 909,739
----------- ----------- -----------
Operating income (b) 148,687 132,836 109,550
Other income (expenses):
Interest expense (25,181) (27,913) (27,913)
Other, net (608) 1,028 2,725
----------- ----------- -----------
Income before income taxes 122,898 105,951 84,362
Provision for income taxes 39,200 35,133 18,251
----------- ----------- -----------
Net Income (b) $83,698 $70,818 $66,111
=========== =========== ===========
Diluted earnings per share (b) $2.49 $2.12 $1.98
=========== =========== ===========
Basic earnings per share (b) $2.54 $2.16 $2.01
=========== =========== ===========
Average common shares outstanding:
Diluted shares 33,627 33,445 33,445
=========== =========== ===========
Basic shares 32,918 32,838 32,838
=========== =========== ===========
Dividends per share $0.24 $0.24 $0.24
=========== =========== ===========
(a) The three and twelve months ended December 31, 2001 included
unusual pretax charges totaling $23.3 million, $15.3 million after
tax ($0.46 per diluted share). The charges were for employee
reductions, facility closures, and asset writedowns. The periods
also include a tax benefit and related interest income of $10.5
million after tax ($0.32 per diluted share) resulting from the
closure of a number of tax years.
(b) Goodwill amortization in the three months ended December 31, 2001
was $3.1 million, $2.7 million after tax, (or $0.08 per diluted
share). Goodwill amortization in the twelve months ended December 31,
2001 was $11.9 million, $10.2 million after tax, (or $0.30 per
diluted share). Such goodwill amortization is excluded from the
Company's 2002 results effective January 1, 2002, in accordance with
SFAS No. 142, "Goodwill and Other Intangible Assets."
AMETEK, Inc.
INFORMATION BY BUSINESS SEGMENT
(Dollars in thousands)
Twelve months ended
December 31,
-----------------------------------
2001
-----------------------
Before After
Unusual Unusual
2002 Items Items (a)
----------- ----------- -----------
Net sales
----------------------------------
Electronic Instruments $539,448 $499,528 $499,528
Electromechanical 501,094 519,761 519,761
----------- ----------- -----------
Total Consolidated $1,040,542 $1,019,289 $1,019,289
=========== =========== ===========
Operating income
----------------------------------
Electronic Instruments $87,485 $69,460 $57,035
Electromechanical 80,225 81,274 70,638
----------- ----------- -----------
Total segments (b) 167,710 150,734 127,673
Corporate and other (19,023) (17,898) (18,123)
----------- ----------- -----------
Total Consolidated $148,687 $132,836 $109,550
=========== =========== ===========
(a) See note (a) on Consolidated Statement of Income for the twelve
months ended December 31, 2002.
(b) Segment operating income for the twelve months ended December 31,
2001 included goodwill amortization of $11.9 million, of which $6.7
million was for EIG, and $5.2 million for EMG. Goodwill amortization
is excluded from 2002 results. Also, see note (b) on Consolidated
Statement of Income for the twelve months ended December 31, 2002.
AMETEK, Inc.
CONSOLIDATED STATEMENT OF INCOME
(Dollars and shares in thousands, except per share amounts)
Three months ended
December 31,
-------------------------------
(Unaudited)
2001
-------------------
Before After
Unusual Unusual
2002 Items Items (a)
----------- --------- ---------
Net sales $252,563 $237,263 $237,263
----------- --------- ---------
Expenses:
Cost of sales, excluding
depreciation 183,815 176,747 195,287
Selling, general and administrative 23,909 24,063 27,586
Depreciation 8,350 7,860 9,083
----------- --------- ---------
Total expenses 216,074 208,670 231,956
----------- --------- ---------
Operating income (b) 36,489 28,593 5,307
Other income (expenses):
Interest expense (5,729) (6,639) (6,639)
Other, net 93 247 1,944
----------- --------- ---------
Income before income taxes 30,853 22,201 612
Provision for (benefit from) income
taxes 9,526 6,035 (10,847)
----------- --------- ---------
Net Income (b) $21,327 $16,166 $11,459
=========== ========= =========
Diluted earnings per share (b) $0.63 $0.48 $0.34
=========== ========= =========
Basic earnings per share (b) $0.65 $0.49 $0.35
=========== ========= =========
Average common shares outstanding:
Diluted shares 33,638 33,334 33,334
=========== ========= =========
Basic shares 32,956 32,733 32,733
=========== ========= =========
Dividends per share $0.06 $0.06 $0.06
=========== ========= =========
For notes (a) and (b), see notes on Consolidated Statement of Income
for the twelve months ended December 31, 2002.
AMETEK, Inc.
INFORMATION BY BUSINESS SEGMENT
(Dollars in thousands)
Three months ended
December 31,
-----------------------------
(Unaudited)
2001
-------------------
Before After
Unusual Unusual
2002 Items Items (a)
--------- --------- ---------
Net sales
----------------------------------------
Electronic Instruments $132,613 $124,062 $124,062
Electromechanical 119,950 113,201 113,201
--------- --------- ---------
Total Consolidated $252,563 $237,263 $237,263
========= ========= =========
Operating income
----------------------------------------
Electronic Instruments $23,043 $13,914 $1,489
Electromechanical 18,239 18,725 8,089
--------- --------- ---------
Total segments (b) 41,282 32,639 9,578
Corporate and other (4,793) (4,046) (4,271)
--------- --------- ---------
Total Consolidated $36,489 $28,593 $5,307
========= ========= =========
(a) See note (a) on Consolidated Statement of Income for the twelve
months ended December 31, 2002.
(b) Segment operating income for the three months ended December 31,
2001 included goodwill amortization of $3.1 million, of which $1.8
million was for EIG, and $1.3 million for EMG. Also, see note (b) on
Consolidated Statement of Income for the twelve months ended December
31, 2002.
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