AMETEK Achieves Record Quarterly Results; Sales Increase 28%, Net Income Rises 36%.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 2006 sales of $450.6 million were up 28% from the $352.1 million recorded in the second quarter of 2005. Operating income for the second quarter of 2006 was $79.1 million, up 33% from the second quarter of 2005. Net income in the second quarter of 2006 increased 36% to $46.5 million, or $.65 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 the second quarter 2005 level of $34.1 million, or $.49 per diluted share. "AMETEK had an outstanding quarter which exceeded our expectations," noted Frank S. Hermance Hermance is a municipality of the Canton of Geneva, Switzerland. External links
adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. performance, increasing net income 36% and improving operating income margins by 80 basis points," he commented. 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. continues to be very strong, totaling $63.0 million for the second quarter, up 39% from the second quarter of 2005. For the first half of 2006, operating cash flow of $101.7 million is up 60% over the same period of 2005. For the first half of 2006, AMETEK sales increased 27% to $874.5 million from $686.1 million in the same period of 2005. Operating income totaled $149.9 million, a 33% increase from $112.9 million earned in the first half of last year. Net income for the first half of 2006 was $86.7 million, up 33% from $65.1 million in the same period of 2005. Diluted earnings per share were $1.22 for the first half of 2006, up 31% from $.93 per diluted share in 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 2006 sales were $244.0 million, up 28% from last year's level of $191.4 million. Second quarter group operating income was up 27% to $50.4 million, versus $39.7 million in the same period of 2005. Group operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 20.7%, unchanged from the second quarter of 2005. "EIG had a tremendous quarter," noted Mr. Hermance. "Revenue for the Group was up 28% driven by strength in our end markets and contributions from the acquisitions of SPECTRO, Solartron and Pulsar. Operating income jumped 27%, driven by the top-line strength and our operational excellence initiatives." 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 $206.6 million were up 29% from $160.7 million in the second quarter of 2005. Second quarter group operating income of $36.8 million was up 35%, versus $27.3 million reported for the same period of 2005. EMG's operating income margin in the second quarter of 2006 was 17.8%, up 80 basis points from the second quarter of 2005. "EMG also had a tremendous quarter. Sales were up sharply, driven by solid core growth and the contribution from the acquisitions of HCC HCC Hepatocellular Carcinoma (liver cancer) HCC Hertfordshire County Council (administrative region of south eastern England UK) HCC Harford Community College (Maryland) Industries and PennEngineering Motion Technologies. Profitability was strong as a result of the increased sales volume 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," commented Mr. Hermance. 2006 Outlook "We expect 2006 revenue to grow by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 20%," commented Mr. Hermance. "Given our strong first half results and the expectation of continued strength in our markets, we anticipate our full year 2006 earnings to be in the range of $2.42 to $2.46 per diluted share, an increase of 25% to 27% over the 2005 level of $1.94 per diluted share and in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with the increased guidance we gave on July July: see month. 17, 2006." "Our third quarter 2006 sales are expected to be up approximately 25% from last year's third quarter. We expect third quarter earnings will be approximately $.59 to $.61 per diluted share, an increase of 20% to 24% over last year's third quarter," concluded Mr. Hermance. Accounting for Stock Options The above operating results reflect the adoption of FAS 123R, effective January January: see month. 1, 2006, for expensing stock options under the modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. retrospective LAW, RETROSPECTIVE. A retrospective law is one that is to take effect, in point of time, before it was passed. 2. Whenever a law of this kind impairs the obligation of contracts, it is void. 3 Dall. 391. method. Results for 2005 have been adjusted on this basis. Conference Call AMETEK, Inc. will Web cast its Second Quarter 2006 investor conference call on Thursday Thursday: see week. , July 20, 2006, 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 $1.8 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 (Unaudited)
(In thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2006 2005 (a) 2006 2005 (a)
---------- --------- --------- ----------
Net sales $ 450,585 $352,051 $874,452 $ 686,147
---------- --------- --------- ----------
Expenses:
Cost of sales, excluding
depreciation 308,308 242,907 601,076 477,083
Selling, general and
administrative 53,315 41,240 104,127 79,267
Depreciation 9,863 8,586 19,349 16,917
---------- --------- --------- ----------
Total expenses 371,486 292,733 724,552 573,267
---------- --------- --------- ----------
Operating income 79,099 59,318 149,900 112,880
Other (expenses) income:
Interest expense (10,301) (7,702) (20,389) (15,334)
Other, net (589) (360) (1,326) (202)
---------- --------- --------- ----------
Income before income taxes 68,209 51,256 128,185 97,344
Provision for income taxes 21,741 17,138 41,459 32,255
---------- --------- --------- ----------
Net Income $ 46,468 $ 34,118 $ 86,726 $ 65,089
========== ========= ========= ==========
Diluted earnings per share $ 0.65 $ 0.49 $ 1.22 $ 0.93
========== ========= ========= ==========
Basic earnings per share $ 0.66 $ 0.49 $ 1.24 $ 0.94
========== ========= ========= ==========
Average common shares
outstanding:
Diluted shares 71,232 70,268 71,178 70,060
========== ========= ========= ==========
Basic shares 70,086 69,075 69,989 68,889
========== ========= ========= ==========
Dividends per share $ 0.06 $ 0.06 $ 0.12 $ 0.12
========== ========= ========= ==========
(a) Results for 2005 have been adjusted to reflect the retrospective
application of FAS 123R to expense stock options, which was
adopted effective January 1, 2006. The retrospective application
reduced 2005 net income by $1.1 million, or $0.01 per diluted
share for the quarter ended June 30, 2005, and by $2.1 million,
or $0.02 per diluted share for the six months ended June 30,
2005.
AMETEK, Inc.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(In thousands)
Three months ended Six months ended
June 30, June 30,
-------------------- -------------------
2006 2005 (a) 2006 2005 (a)
---------- --------- --------- ---------
Net sales
Electronic Instruments $ 244,031 $191,356 $480,470 $372,277
Electromechanical 206,554 160,695 393,982 313,870
---------- --------- --------- ---------
Total Consolidated $ 450,585 $352,051 $874,452 $686,147
========== ========= ========= =========
Operating income
Electronic Instruments $ 50,399 $ 39,697 $ 98,111 $ 75,947
Electromechanical 36,752 27,287 68,704 51,729
---------- --------- --------- ---------
Total segments 87,151 66,984 166,815 127,676
Corporate and other (8,052) (7,666) (16,915) (14,796)
---------- --------- --------- ---------
Total Consolidated $ 79,099 $ 59,318 $149,900 $112,880
========== ========= ========= =========
(a) Operating income for 2005 has been adjusted to reflect the
retrospective application of FAS 123R to expense stock options,
which was adopted effective January 1, 2006. The retrospective
application reduced 2005 operating income by $1.5 million for the
quarter ended June 30, 2005, and by $2.9 million for the six
months ended June 30, 2005.
AMETEK, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
June 30, December 31,
2006 2005
------------- -----------
ASSETS
-------
Current assets:
Cash, cash equivalents
and marketable securities $ 53,923 $ 43,788
Receivables, net 315,538 269,395
Inventories 235,205 193,099
Other current assets 53,863 50,025
------------ -----------
Total current assets 658,529 556,307
Property, plant and equipment, net 239,932 228,450
Goodwill, net 870,405 785,185
Other intangibles, investments and other
assets 243,199 210,658
------------ -----------
Total assets $ 2,012,065 $1,780,600
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
Current liabilities:
Short-term borrowings and current
portion of long-term debt $ 182,062 $ 156,130
Accounts payable and accruals 314,348 249,662
------------ -----------
Total current liabilities 496,410 405,792
Long-term debt 509,765 475,309
Deferred income taxes and other
long-term liabilities (a) 95,075 89,978
Stockholders' equity (a) 910,815 809,521
------------ -----------
Total liabilities and stockholders'
equity $ 2,012,065 $1,780,600
============ ===========
(a) Amounts for 2005 have been adjusted to reflect the retrospective
application of FAS 123R, which was adopted effective January 1,
2006. The retrospective application reduced deferred income
taxes and increased stockholders' equity by $4.0 million.
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