AMETEK Achieves Record Quarterly Results; Net Income up 27%, Raises Full Year Estimates.PAOLI Pa·o·li , Pasquale di 1725-1807. Corsican patriot who led (from 1755) the struggle for independence from Genoa. , 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 2004 sales of $303.9 million were up 10% from the $276.9 million recorded in the second quarter of 2003. Operating income for the second quarter of 2004 was $47.5 million, up 23% from the second quarter of 2003. Net income of $27.7 million was up 27% from last year's second quarter and diluted earnings per share were $.40 per share, up 25% over the same quarter of last year. "AMETEK performed very well in the second quarter driven by continued solid execution of our Four Growth strategies," commented Frank S. Hermance Hermance is a municipality of the Canton of Geneva, Switzerland. External links
For the first half of 2004, AMETEK sales increased 9% to $595.3 million from $544.4 million in the same period of 2003. Operating income totaled $91.0 million, a 21% increase from $75.4 million earned in the first half of last year. Net income for the first half of 2004 was $52.3 million, up 26% from $41.5 million in the same period of 2003. Diluted earnings per share were up 23% to $.76 per share for the first half of 2004. 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 2004 sales were $159.5 million, up 16% from last year's level of $137.4 million. Second quarter group operating income was up 28% to $28.0 million, versus $21.9 million in the same period of 2003. Group operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 17.6%, up from 15.9% in the second quarter of 2003. "EIG had an excellent quarter," noted Mr. Hermance. "Revenue for the Group was up 16% driven by strength in our process, industrial, and aerospace businesses and the contributions from 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 Taylor Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. Hobson Hobson may refer to: People with the surname Hobson:
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 $144.4 million were up 4% from $139.5 million in the second quarter of 2003. Second quarter group operating income of $25.0 million was up 15%, versus $21.7 million reported for the same period of 2003. EMG's operating income margin in the second quarter of 2004 was 17.3%, compared with 15.5% in the second quarter of 2003. "EMG also had a great quarter. The differentiated businesses performed extremely well with double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth, while our cost driven motor businesses were down slightly. Operating margins jumped 180 basis points as we captured the operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. in our differentiated businesses and continued to drive operational improvement across the Group," added Mr. Hermance. Outlook Mr. Hermance commented, "We are raising our estimates for the year. We now expect full-year revenues to be up low double-digits on the benefits of our acquisition program and improved internal growth in both Groups. Earnings are expected to be approximately $1.54 to $1.58 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, an increase of approximately 18% to 22% over 2003." "Our third quarter 2004 sales are expected to be up low double-digits from last year's third quarter on internal growth in both segments and the contribution from the Taylor Hobson, Hughes-Treitler and Chandler Instruments acquisitions. We expect our earnings to be approximately $.38 to $.40 per diluted share, an increase of approximately 19% to 25% over last year's third quarter," concluded Mr. Hermance. AMETEK Completes Two Acquisitions On July July: see month. 16, 2004, AMETEK completed the acquisition of the assets of Hughes-Treitler Manufacturing Corporation, a privately held supplier of heat exchangers heat exchanger Any of several devices that transfer heat from a hot to a cold fluid. In many engineering applications, one fluid needs to be heated and another cooled, a requirement economically accomplished by a heat exchanger. and thermal management subsystems for the aerospace and defense markets. Hughes-Treitler, located in Garden City, NY, has expected annual sales of approximately $32 million. The purchase price is approximately $48 million in cash. "We are very excited about the acquisition of Hughes-Treitler," commented Mr. Hermance. "It significantly expands our thermal management product offering to the military and commercial aerospace markets. Hughes-Treitler provides complementary products and serves a number of customers common to our other aerospace and defense businesses. Together with our Rotron and Airtechnology business units, Hughes-Treitler enables AMETEK to provide a broader range of thermal management subsystems to our customers on a global basis." Hughes-Treitler is a recognized market leader in heat exchangers and other subsystems designed for equipment cooling or maintaining environmental integrity in the commercial and military aerospace industries. Products include air-oil coolers, air-air coolers, surface coolers, ECS See eComStation. evaporator evaporator Industrial apparatus for converting liquid into gas or vapour. The single-effect evaporator consists of a container or surface and a heating unit; the multiple-effect evaporator uses the vapour produced in one unit to heat a succeeding unit. condensers, fuel oil coolers, liquid air heat exchangers, liquid oxygen heat exchangers, and buffer buffer, solution that can keep its relative acidity or alkalinity constant, i.e., keep its pH constant, despite the addition of strong acids or strong bases. air heat exchangers. These products are used in a variety of applications for airframes, engine and avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. systems on aircraft as well as in military vehicle, marine, space and industrial applications. On June June: see month. 18, 2004, AMETEK completed the acquisition of Taylor Hobson Holdings Limited ('Taylor Hobson'), a leading manufacturer of ultra-precision measurement instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. for a variety of markets, including optics, semiconductors, hard disk drives and nanotechnology nanotechnology: see micromechanics. nanotechnology Manipulation of atoms, molecules, and materials to form structures on the scale of nanometres (billionths of a metre). research. Taylor Hobson was acquired from funds advised by Permira for a purchase price of approximately GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 51 million ($94 million), net of cash received. With its headquarters in Leicester Leicester (lĕs`tər), city (1991 pop. 324,394) and district, Leicestershire, central England. The city is connected by canals with the Trent River and London, and it is also a railway center. , England, Taylor Hobson has expected 2004 sales of approximately GBP 38 million ($70 million). "We are pleased with our acquisition of Taylor Hobson," commented Mr. Hermance. "This is a highly differentiated business, focusing on the most complex and critical measurements for its customers. Taylor Hobson significantly expands our measurement capabilities into ultra-precision applications and is an excellent fit with our strategic focus on adding more high-end analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. instrument businesses. With this acquisition, our high-end analytical instrument businesses now total more than $250 million in annual revenue." "Taylor Hobson's instrumentation is able to measure the shape and finish of surfaces to the sub-nanometer level. This measurement capability is a critical enabling technology to support product development, manufacturing process engineering and quality control. As product geometries continue to shrink shrink Vox populi noun A psychiatrist , Taylor Hobson's instrumentation becomes even more important," adds Mr. Hermance. Taylor Hobson designs, manufactures and services a broad array of contact and non-contact instrumentation for ultra-precise measurement applications. These instruments measure surface texture, shape and roundness, dimensions that are critical in many industries including optics, semiconductor, hard disk drive, automotive and bearing manufacturing. Nanotechnology is becoming an increasingly important market for Taylor Hobson's technology and represents AMETEK's first entry into this exciting area. Conference Call AMETEK, Inc. will Web cast it's Second Quarter 2004 investor conference call on Wednesday, July 21, 2004, beginning at 8:30 AM ET. 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 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 more than $1.2 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,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $303,917 $276,870 $595,340 $544,401
--------- --------- --------- ---------
Expenses:
Cost of sales, excluding
depreciation 215,583 201,285 423,945 396,349
Selling, general and
administrative 31,952 28,252 62,842 55,567
Depreciation 8,902 8,593 17,576 17,068
--------- --------- --------- ---------
Total expenses 256,437 238,130 504,363 468,984
--------- --------- --------- ---------
Operating income 47,480 38,740 90,977 75,417
Other income (expenses):
Interest expense (6,724) (6,335) (13,135) (12,967)
Other, net 289 (212) (37) (1,099)
--------- --------- --------- ---------
Income before income taxes 41,045 32,193 77,805 61,351
Provision for income taxes 13,378 10,377 25,474 19,817
--------- --------- --------- ---------
Net income $ 27,667 $ 21,816 $ 52,331 $ 41,534
========= ========= ========= =========
Diluted earnings per share (a) $0.40 $0.32 $0.76 $0.62
========= ========= ========= =========
Basic earnings per share (a) $0.41 $0.33 $0.78 $0.63
========= ========= ========= =========
Average common shares
outstanding (a):
Diluted shares 68,914 67,154 68,783 67,223
========= ========= ========= =========
Basic shares 67,569 65,781 67,373 65,873
========= ========= ========= =========
Dividends per share (a) $0.06 $0.03 $0.12 $0.06
========= ========= ========= =========
(a) Amounts for 2003 have been restated to reflect a two-for-one stock
split effective February 27, 2004.
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(In thousands)
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales
-----------------------------
Electronic Instruments $159,519 $137,363 $310,165 $270,964
Electromechanical 144,398 139,507 285,175 273,437
--------- --------- --------- ---------
Total Consolidated $303,917 $276,870 $595,340 $544,401
========= ========= ========= =========
Operating income
-----------------------------
Electronic Instruments $ 28,011 $ 21,885 $ 54,132 $ 41,867
Electromechanical 25,025 21,690 48,349 43,491
--------- --------- --------- ---------
Total segments 53,036 43,575 102,481 85,358
Corporate and other (5,556) (4,835) (11,504) (9,941)
--------- --------- --------- ---------
Total Consolidated $ 47,480 $ 38,740 $ 90,977 $ 75,417
========= ========= ========= =========
AMETEK, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
June 30, Dec. 31,
2004 2003
----------- -----------
(unaudited)
ASSETS
------
Current assets:
Cash, cash equivalents
and marketable securities $35,538 $22,886
Receivables, net 218,649 189,010
Inventories 164,069 143,359
Other current assets 24,695 26,811
----------- -----------
Total current assets 442,951 382,066
Property, plant and equipment, net 209,288 213,622
Goodwill, net 581,763 506,964
Other intangibles, investments and
other assets 116,268 112,195
----------- -----------
Total assets $1,350,270 $1,214,847
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings and current
portion of long-term debt $48,120 $106,774
Accounts payable and accruals 220,392 182,457
----------- -----------
Total current liabilities 268,512 289,231
Long-term debt 414,051 317,674
Deferred income taxes and
other long-term liabilities 84,273 78,812
Stockholders' equity 583,434 529,130
----------- -----------
Total liabilities and stockholders'
equity $1,350,270 $1,214,847
=========== ===========
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