AMETEK Posts Strong Third Quarter Results; Net Income up 22% to a Record $35.4 Million; Raising 2005 Earnings Estimate to $1.98 to $1.99.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 third quarter results, posting strong year-over-year increases in 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 third quarter 2005 sales of $344.5 million were up 11% from the $310.7 million recorded in the third quarter of 2004. Operating income for the third quarter of 2005 was $58.7 million, up 16% from the third quarter of 2004. Net income of $35.4 million was up 22% from last year's third quarter and diluted earnings per share were $.50 per share, up 19% over the same quarter of last year. "AMETEK had a very good third quarter. Sales and earnings grew at double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. rates driven by the combined benefits of core growth, acquisitions and our focus on operational excellence," commented Frank S. Hermance Hermance is a municipality of the Canton of Geneva, Switzerland. External links
"Our markets remain strong. The internal order growth for AMETEK was 6% in the quarter. Each group contributed to this strong performance with the Electronic Instruments Group up 7% and the 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 up 5%. We had particularly strong order performance in our aerospace and power businesses," added Mr. Hermance. In the quarter the Company experienced several unusual events. The Company recognized a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain on the sale of a facility of approximately $4 million. Additionally the Company incurred higher than normal expenses of approximately $2 million to accelerate the movement of production to low-cost locales, and income was adversely impacted by approximately $1 million from the effects of the Gulf hurricanes. These items affected operating income. Separately, reflected in other expenses, is approximately $1 million of costs related to an acquisition that AMETEK chose not to complete. For the first nine months of 2005, AMETEK sales increased 14% to $1.031 billion from $906.0 million in the same period of 2004. Operating income totaled $174.5 million, a 23% increase from $141.4 million earned in the first nine months of last year. Net income for the first nine months of 2005 was $102.6 million, up 26% from $81.4 million in the same period of 2004. Diluted earnings per share were up 23% to $1.45 per share for the first nine months 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 third quarter 2005 sales were $205.5 million, up 19% from last year's level of $172.9 million. Third quarter group operating income was up 34% to $43.1 million, versus $32.1 million in the same period of 2004. Group operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 21.0%, up from 18.6% in the third quarter of 2004. "EIG had a great quarter," noted Mr. Hermance. "The revenue increase was driven by internal growth and the contribution from the Spectro acquisition. Operating income was up sharply, driven by the top-line performance, the benefits of our operational excellence initiatives across the Group and the gain on the sale of the facility." Electromechanical Group (EMG EMG abbr. electromyogram Electromyography (EMG) A diagnostic test that records the electrical activity of muscles. ) EMG's sales of $139.0 million were up 1% from $137.8 million in the third quarter of 2004. Third quarter group operating income of $22.1 million was down 8%, versus $24.0 million reported for the same period of 2004. EMG's operating income margin in the third quarter of 2005 was 15.9%, compared with 17.4% in the third quarter of 2004. "EMG sales were up 1% as strength in the differentiated businesses overcame a slight decline in our cost-driven motor business. Higher than normal expenses to accelerate the movement of manufacturing to low-cost locales drove the profit reduction. Without these additional costs EMG operating income would have been essentially unchanged," added Mr. Hermance. Outlook "We expect revenue in the fourth quarter to be up over 20% on solid internal growth and the benefits from our acquisition program. Earnings are expected to be $.52 to $.53 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 in the quarter," commented Mr. Hermance. "For 2005 we expect revenue to increase approximately 15%. Based on continued strength in our markets we are raising our 2005 earnings estimate to $1.98 to $1.99 per diluted share, an increase of 21% to 22% over last year," noted Mr. Hermance. Two Acquisitions Closed The Company recently closed two acquisitions: HCC HCC Hepatocellular Carcinoma (liver cancer) HCC Hertfordshire County Council (administrative region of south eastern England UK) HCC Harford Community College (Maryland) Industries and the Solartron Group. These companies are highly differentiated businesses that together will add nearly $155 million in annual sales to AMETEK. HCC Industries On October October: see month. 7, 2005, the Company completed the acquisition of HCC Industries ("HCC"), a leading designer and manufacturer of highly engineered hermetic hermetic /her·met·ic/ (her-met´ik) impervious to air. her·met·ic or her·met·i·cal adj. Completely sealed, especially against the escape or entry of air. connectors, terminals, headers and microelectronic The miniaturization of electronic circuits. See chip. packages for sophisticated electronic applications in the aerospace, defense, industrial and petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. markets. Headquartered near Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA, HCC has annual sales of approximately $104 million. It was acquired from an investor group led by Windward wind·ward adj. 1. Of or moving toward the quarter from which the wind blows. 2. Of or on the side exposed to the wind or to prevailing winds. adv. In a direction from which the wind blows; against the wind. Capital Partners and management for approximately $162 million in cash. "HCC becomes a new platform for our Electromechanical Group. The excellent internal growth of this business coupled with our ability to add additional synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. acquisitions should enable this new platform to become a major part of our Electromechanical Group," noted Mr. Hermance. Solartron Group On September September: see month. 26, 2005, AMETEK completed the acquisition of the Solartron Group ("Solartron") from Roxboro Group PLC for 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. 42 million ($75 million). United Kingdom-based Solartron is a leading supplier of analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. for the process, laboratory and other industrial markets with annual sales of approximately GBP 27 million ($50 million). "Solartron is composed of an excellent set of differentiated, niche-focused businesses that fit nicely with several of our current process and analytical instrument businesses," commented Mr. Hermance. "Solartron enables us to broaden our product offering, expand our geographic reach, and capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. significant synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. with our existing businesses." Conference Call AMETEK, Inc. will Web cast it's Third Quarter 2005 investor conference call on Thursday, October 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 $1.5 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 Nine months ended
September 30, September 30,
------------------- ---------------------
2005 2004 2005 2004
--------- --------- ----------- ---------
Net sales $344,529 $310,707 $1,030,676 $906,047
--------- --------- ----------- ---------
Expenses:
Cost of sales, excluding
depreciation 233,217 216,534 708,630 640,479
Selling, general and
administrative 44,158 35,112 122,164 97,954
Depreciation 8,446 8,608 25,363 26,184
--------- --------- ----------- ---------
Total expenses 285,821 260,254 856,157 764,617
--------- --------- ----------- ---------
Operating income 58,708 50,453 174,519 141,430
Other income (expenses):
Interest expense (7,628) (7,541) (22,962) (20,676)
Other, net (1,446) (659) (1,648) (696)
--------- --------- ----------- ---------
Income before income taxes 49,634 42,253 149,909 120,058
Provision for income taxes 14,206 13,233 47,260 38,707
--------- --------- ----------- ---------
Net income $35,428 $29,020 $102,649 $81,351
========= ========= =========== =========
Diluted earnings per share $0.50 $0.42 $1.45 $1.18
========= ========= =========== =========
Basic earnings per share $0.51 $0.43 $1.49 $1.20
========= ========= =========== =========
Average common shares
outstanding:
Diluted shares 70,841 69,552 70,587 69,039
========= ========= =========== =========
Basic shares 69,242 68,124 69,007 67,657
========= ========= =========== =========
Dividends per share $0.06 $0.06 $0.18 $0.18
========= ========= =========== =========
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(In thousands)
Three months ended Nine months ended
September 30, September 30,
------------------- ---------------------
2005 2004 2005 2004
--------- --------- ----------- ---------
Net sales
----------------------------
Electronic Instruments $205,500 $172,929 $577,777 $483,094
Electromechanical 139,029 137,778 452,899 422,953
--------- --------- ----------- ---------
Total Consolidated $344,529 $310,707 $1,030,676 $906,047
========= ========= =========== =========
Operating income
----------------------------
Electronic Instruments $43,104 $32,083 $120,185 $86,215
Electromechanical 22,061 24,029 74,326 72,378
--------- --------- ----------- ---------
Total segments 65,165 56,112 194,511 158,593
Corporate and other (6,457) (5,659) (19,992) (17,163)
--------- --------- ----------- ---------
Total Consolidated $58,708 $50,453 $174,519 $141,430
========= ========= =========== =========
AMETEK, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
September 30, December 31,
2005 2004
------------- ------------
(Unaudited)
ASSETS
------
Current assets:
Cash, cash equivalents
and marketable securities $47,640 $48,975
Receivables, net 240,043 217,329
Inventories 189,462 168,523
Other current assets 40,255 27,113
------------- ------------
Total current assets 517,400 461,940
Property, plant and equipment, net 203,364 207,542
Goodwill, net 704,131 601,007
Other intangibles, investments and other
assets 179,095 149,863
------------- ------------
Total assets $1,603,990 $1,420,352
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Short-term borrowings and current
portion of long-term debt $25,585 $49,943
Accounts payable and accruals 247,899 222,895
------------- ------------
Total current liabilities 273,484 272,838
Long-term debt 488,841 400,177
Deferred income taxes and
other long-term liabilities 85,854 87,755
Stockholders' equity 755,811 659,582
------------- ------------
Total liabilities and
stockholders' equity $1,603,990 $1,420,352
============= ============
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