AMETEK Achieves Record Quarterly Results; Net Income Rises 27%.PAOLI, Pa. -- AMETEK Inc. (NYSE NYSE See: New York Stock Exchange :AME See AIT. ) today announced second quarter results that established quarterly 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's second quarter 2005 sales of $352.1 million were up 16% from the $303.9 million recorded in the second quarter of 2004. Operating income for the second quarter of 2005 was $60.8 million, up 28% from the second quarter of 2004. Net income of $35.2 million was up 27% from last year's second quarter and diluted earnings per share were $.50 per share, up 25% over the same quarter of last year. "Excellent internal growth, operational improvements and contributions from acquisitions drove AMETEK's strong performance. As a result, we established records for sales and earnings, with group operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: expanding 170 basis points," commented Frank S. Hermance, AMETEK Chairman and Chief Executive Officer. For the first half of 2005, AMETEK sales increased 15% to $686.1 million from $595.3 million in the same period of 2004. Operating income totaled $115.8 million, a 27% increase from $91.0 million earned in the first half of last year. Net income for the first half of 2005 was $67.2 million, up 28% from $52.3 million in the same period of 2004. Diluted earnings per share were up 25% to $.95 per share for the first half of 2005. Electronic Instruments Group (EIG EIG Excellence in Government EIG Engineering Installation Group EIG Evènement Indésirable Grave (French) EIG Erie Insurance Group EIG Ecole Internationale de Genève (French) ) EIG's second quarter 2005 sales were $191.4 million, up 20% from last year's level of $159.5 million. Second quarter group operating income was up 44% to $40.2 million, versus $28.0 million in the same period of 2004. Group operating margins were 21.0%, up from 17.6% in the second quarter of 2004. "EIG had a tremendous quarter," noted Mr. Hermance. "Revenue for the Group was up 20% driven by strength in our aerospace and process businesses as well as contributions from acquisitions. Operating income jumped 44%, driven by the top-line strength 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." 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. ) EMG's sales of $160.7 million were up 11% from $144.4 million in the second quarter of 2004. Second quarter group operating income of $27.6 million was up 10%, versus $25.0 million reported for the same period of 2004. EMG's operating income margin in the second quarter of 2005 was 17.2%, up 110 basis points sequentially and essentially unchanged from the second quarter of 2004. "EMG also had a strong quarter as good core growth, combined with the contribution from the Hughes-Treitler acquisition, resulted in double-digit sales and profit increases," added Mr. Hermance. 2005 Outlook "For 2005 we expect a low double-digit percentage increase in revenue on solid internal growth in each of our two groups and the full-year benefits from our SPECTRO, Taylor Hobson and Hughes-Treitler acquisitions," commented Mr. Hermance. "We now expect 2005 earnings to be near the high end of our previous guidance range of $1.90 to $1.97 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." "For the third quarter of 2005 we expect a low double-digit percentage increase in sales from last year's third quarter on internal growth in both segments and the contribution from the acquisitions of SPECTRO and Hughes-Treitler. We expect our earnings to be between $.48 and $.50 per diluted share, an increase of 14% to 19% over last year's third quarter," noted Mr. Hermance. AMETEK Acquires SPECTRO 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 As previously announced, on June 13, 2005, AMETEK acquired SPECTRO Beteiligungs GmbH ("SPECTRO"), the holding company of SPECTRO Analytical Instruments GmbH & Co KG and its affiliates. SPECTRO is a leading global supplier of atomic spectroscopy Atomic spectroscopy is the determination of elemental composition by its electromagnetic or mass spectrum. Atomic spectroscopy is closely related to other forms of spectroscopy. It can be divided by atomization source or by the type of spectroscopy used. analytical instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. . SPECTRO was acquired from an investor group led by German Equity Partners BV for approximately EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 80 million ($98 million). With its headquarters in Kleve, Germany, SPECTRO has annual sales of approximately EUR 85 million ($104 million). SPECTRO designs, manufactures, and services a broad array of atomic spectroscopic spec·tro·scope n. An instrument for producing and observing spectra. spec  tro·scop instrumentation used to analyze the elemental elementalemanating from or pertaining to elements. elemental diet see elemental diet. composition of solids and liquids. Using optical emission or energy dispersive dispersive /dis·per·sive/ (-per´siv) 1. tending to become dispersed. 2. promoting dispersion. x-ray fluorescence X-ray fluorescence (XRF) is the emission of characteristic "secondary" (or fluorescent) X-rays from a material that has been excited by bombarding with high-energy X-rays or gamma rays. (ED-XRF) measurement techniques, SPECTRO's instruments address the analysis requirements of a variety of end markets, including metal production and processing, environmental testing, hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen processing, aerospace, food processing Food processing is the set of methods and techniques used to transform raw ingredients into food for consumption by humans or animals. The food processing industry utilises these processes. , and pharmaceutical. "We are very excited about the acquisition of SPECTRO," commented Mr. Hermance. "SPECTRO is a highly differentiated business, which significantly expands our elemental analysis Elemental analysis is a process where a sample of some material (e.g., soil, waste or drinking water, bodily fluids, minerals, chemical compounds) is analyzed for its elemental and sometimes isotopic composition. capabilities, bringing new technologies and market opportunities to AMETEK. With this acquisition, our high-end analytical businesses now total nearly $375 million in annual revenue." "SPECTRO holds a leading market position for metal analyzers, employing Arc/Spark optical emission spectrometry spectrometry /spec·trom·e·try/ (spek-trom´e-tre) determination of the wavelengths or frequencies of the lines in a spectrum. spec·trom·e·try n. - a technique widely regarded as the most precise and reliable measurement for this market. SPECTRO's Inductively Coupled Plasma An inductively coupled plasma (ICP) is a type of plasma source in which the energy is supplied by electrical currents which are produced by electromagnetic induction, that is, by time-varying magnetic fields. (ICP (1) (Internet Cache Protocol) A protocol used by one proxy server to query another for a cached Web page without having to go to the Internet to retrieve it. See CARP and proxy server. ) optical emission spectrometers also bring to AMETEK the capability to make analytical liquids analysis, opening new measurement opportunities for AMETEK, particularly for environmental testing. In addition, SPECTRO's ED-XRF-based products complement those manufactured by our EDAX EDAX Energy Dispersive Spectroscopy business, enabling AMETEK to supply a broader range of products to this very attractive market," concluded Mr. Hermance. Conference Call AMETEK, Inc. will Web cast its Second Quarter 2005 investor conference call on Wednesday, July 20, 2005, beginning at 8:30 AM ET. The live audio Web cast will be available at www.ametek.com and at www.streetevents.com. To access the Web cast from ametek.com, click on "Investors" and a link will be provided to access the Web cast. The call will also be archived at www.ametek.com/investors. Corporate Profile AMETEK is a leading global manufacturer of electronic instruments and electric motors with annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. sales of $1.4 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 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 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 (Unaudited)
(In thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net sales $352,051 $303,917 $686,147 $595,340
--------- --------- --------- ---------
Expenses:
Cost of sales, excluding
depreciation 242,123 215,583 475,413 423,945
Selling, general and
administrative 40,567 31,952 78,006 62,842
Depreciation 8,586 8,902 16,917 17,576
--------- --------- --------- ---------
Total expenses 291,276 256,437 570,336 504,363
--------- --------- --------- ---------
Operating income 60,775 47,480 115,811 90,977
Other income (expenses):
Interest expense (7,702) (6,724) (15,334) (13,135)
Other, net (360) 289 (202) (37)
--------- --------- --------- ---------
Income before income taxes 52,713 41,045 100,275 77,805
Provision for income taxes 17,531 13,378 33,054 25,474
--------- --------- --------- ---------
Net income $35,182 $27,667 $67,221 $52,331
========= ========= ========= =========
Diluted earnings per share $0.50 $0.40 $0.95 $0.76
========= ========= ========= =========
Basic earnings per share $0.51 $0.41 $0.98 $0.78
========= ========= ========= =========
Average common shares
outstanding:
Diluted shares 70,644 68,914 70,461 68,783
========= ========= ========= =========
Basic shares 69,075 67,569 68,889 67,373
========= ========= ========= =========
Dividends per share $0.06 $0.06 $0.12 $0.12
========= ========= ========= =========
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(In thousands)
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net sales
------------------------------
Electronic Instruments $191,356 $159,519 $372,277 $310,165
Electromechanical 160,695 144,398 313,870 285,175
--------- --------- --------- ---------
Total Consolidated $352,051 $303,917 $686,147 $595,340
========= ========= ========= =========
Operating income
------------------------------
Electronic Instruments $40,204 $28,011 $77,081 $54,132
Electromechanical 27,564 25,025 52,265 48,349
--------- --------- --------- ---------
Total segments 67,768 53,036 129,346 102,481
Corporate and other (6,993) (5,556) (13,535) (11,504)
--------- --------- --------- ---------
Total Consolidated $60,775 $47,480 $115,811 $90,977
========= ========= ========= =========
AMETEK, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
June 30, December 31,
2005 2004
------------ ------------
(Unaudited)
ASSETS
------
Current assets:
Cash, cash equivalents and marketable
securities $60,581 $48,975
Receivables, net 246,505 217,329
Inventories 179,876 168,523
Other current assets 30,882 27,113
------------ ------------
Total current assets 517,844 461,940
Property, plant and equipment, net 202,047 207,542
Goodwill, net 664,988 601,007
Other intangibles, investments and other
assets 173,602 149,863
------------ ------------
Total assets $1,558,481 $1,420,352
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings and current
portion of long-term debt $6,843 $49,943
Accounts payable and accruals 256,503 222,895
------------ ------------
Total current liabilities 263,346 272,838
Long-term debt 485,814 400,177
Deferred income taxes and other long-term
liabilities 89,640 87,755
Stockholders' equity 719,681 659,582
------------ ------------
Total liabilities and stockholders'
equity $1,558,481 $1,420,352
============ ============
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