AMETEK, INC. 
By PAOLI, Pa., Jan. 26 /PRNewswire-FirstCall/ -- AMETEK, Inc. (NYSE: AME) today announced fourth quarter results that reflected sequentially higher sales, improved profitability, excellent cash flow and strong orders.
AMETEK's fourth quarter 2009 sales of $523.5 million were down 16% over the same period of 2008. Operating income was $89.2 million in the fourth quarter of 2009, compared with $82.2 million in the same period of 2008. Net income was $51.9 million, or $0.48 per diluted share, compared to net income of $43.8 million, or $0.41 per diluted share, earned in the fourth quarter of 2008.
"AMETEK had a good fourth quarter, despite still difficult market conditions. As anticipated, we saw sequentially higher sales in a number of key markets, improved earnings and continued excellent cash flow generation. Perhaps most importantly, we saw significantly higher order rates from our customers," noted Frank S. Hermance, AMETEK Chairman and Chief Executive Officer.
Orders in the fourth quarter of 2009 were strong, totaling $577 million, a 20% sequential improvement over the third quarter of 2009 and a 4% increase over the fourth quarter of 2008. On a sequential basis, fourth quarter operating income margins expanded 140 basis points to 17.0%.
Operating cash flow was excellent for both the fourth quarter and full year 2009. In the fourth quarter, operating cash flow was $109 million, up 155% from the fourth quarter of 2008. For the full year, operating cash flow was $365 million, up 47% from 2008.
For the full year 2009, AMETEK achieved sales of $2.1 billion, down 17% from 2008. Operating income in 2009 was $366.1 million compared with $432.7 million last year. Net income for the full year 2009 was $205.8 million, or $1.91 per diluted share, compared to net income of $247.0 million, or $2.30 per diluted share earned in 2008.
Fourth quarter and full year 2008 results include a pre-tax restructuring charge of approximately $40 million ($27.3 million, net of tax), or $0.25 per diluted share, to cover the costs of employee reductions, facility closures and asset write-downs necessary to realign the Company's cost structure. The attached income statement and segment information tables detail 2008 results both with and without this restructuring charge.
Electronic Instruments Group (EIG)
For the 2009 fourth quarter, EIG sales decreased 21% to $286.0 million. Operating income in the fourth quarter of 2009 was $56.1 million, compared with $69.2 million in the fourth quarter of 2008. For the fourth quarter of 2009, operating margins were 19.6% as compared with 19.1% in last year's fourth quarter.
"EIG performed well in the fourth quarter. As anticipated, sequential sales of instruments for research and metals applications improved, while our oil and gas related instrument businesses stabilized. Sequential orders for EIG were up low double digits. Operating margins were strong at 19.6%, expanding 200 basis points sequentially from the third quarter of this year," said Mr. Hermance.
Electromechanical Group (EMG)
For the 2009 fourth quarter, EMG sales declined 9% to $237.5 million. Operating income was $40.7 million, compared with $24.7 million in the fourth quarter of 2008. Operating margins were 17.1% as compared with 9.4% in last year's fourth quarter.
"EMG also performed well in the fourth quarter. Sequential sales improved in both our cost driven motor and differentiated businesses. Sequential orders in EMG were up approximately 30% in the quarter. Operating margins rose to 17.1%, a 10 basis point sequential improvement," commented Mr. Hermance.
2010 Outlook
"We expect our markets overall to show modest growth during 2010, with this growth becoming more evident as we move through the year. We believe that AMETEK's strong portfolio of businesses, proven operational capabilities, lower cost structure, and a successful focus on strategic acquisitions will enable us to perform well in 2010," noted Mr. Hermance.
"We anticipate 2010 revenue to be up low to mid single digits on a percentage basis from 2009. Earnings for 2010 are expected to be in the range of $2.10 to $2.20 per diluted share, up 10% to 15% over 2009, reflecting the leveraged impact of core growth and our streamlined cost structure," added Mr. Hermance.
"First quarter 2010 sales are expected to be down mid single digits on a percentage basis from last year's first quarter. We estimate our earnings to be approximately $0.45 to $0.47 per diluted share, as compared to last year's first quarter of $0.55," concluded Mr. Hermance.
Conference Call
The Company will Web cast its Fourth Quarter 2009 investor conference call on Tuesday, January 26, 2010, beginning at 8:30 AM ET. The live audio Web cast will be available at the Investors section of www.ametek.com and at www.streetevents.com . The call will also be archived at the Investors section of www.ametek.com .
Corporate Profile
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annual sales of approximately $2.1 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 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 400 and the Russell 1000 Indices.
Forward-looking Information
Statements in this news release relating to future events, such as AMETEK's expected business and financial performance are "forward-looking statements." Forward-looking statements are subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include our ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations; our ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in our markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve. A detailed discussion of these and other factors that may affect our future results is contained in AMETEK's filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements.
(Financial Information Follows)
AMETEK, Inc.
Consolidated Statement of Income
(In thousands, except per share amounts)
Three Months Ended
December 31,
------------
2009 2008 2008
---- ---- ----
Adjusted
GAAP GAAP (a)
---- ---- --------
(Unaudited) (Unaudited) (Unaudited)
Net sales $523,500 $623,744 $623,744
-------- -------- --------
Operating expenses:
Cost of sales,
excluding
depreciation (b) 359,074 444,410 411,537
Selling, general and
administrative (b) 64,738 85,316 78,166
Depreciation 10,495 11,773 11,773
------ ------ ------
Total operating
expenses (b) 434,307 541,499 501,476
------- ------- -------
Operating income (b) 89,193 82,245 122,268
Other expenses:
Interest expense (16,674) (17,656) (17,656)
Other, net (941) 380 380
---- --- ---
Income before income
taxes (b) 71,578 64,969 104,992
Provision for income
taxes (b) 19,694 21,140 33,912
------ ------ ------
Net income (b) $51,884 $43,829 $71,080
Diluted earnings per
share (b) $0.48 $0.41 $0.66
Basic earnings per
share (b) $0.48 $0.41 $0.67
Weighted average
common shares
outstanding:
Diluted shares 108,376 106,968 106,968
Basic shares 107,162 106,359 106,359
Dividends per share $0.06 $0.06 $0.06
Twelve Months Ended
December 31,
------------
2009 2008 2008
---- ---- ----
Adjusted
GAAP GAAP (a)
---- ---- --------
(Unaudited) (Unaudited)
Net sales $2,098,355 $2,531,135 $2,531,135
---------- ---------- ----------
Operating expenses:
Cost of sales,
excluding depreciation
(b) 1,435,953 1,730,086 1,697,213
Selling, general and
administrative (b) 254,143 322,552 315,402
Depreciation 42,209 45,843 45,843
------ ------ ------
Total operating
expenses (b) 1,732,305 2,098,481 2,058,458
--------- --------- ---------
Operating income (b) 366,050 432,654 472,677
Other expenses:
Interest expense (68,750) (63,652) (63,652)
Other, net (2,667) (2,786) (2,786)
------ ------ ------
Income before income
taxes (b) 294,633 366,216 406,239
Provision for income
taxes (b) 88,863 119,264 132,036
------ ------- -------
Net income (b) $205,770 $246,952 $274,203
Diluted earnings per
share (b) $1.91 $2.30 $2.55
Basic earnings per
share (b) $1.93 $2.33 $2.58
Weighted average common
shares outstanding:
Diluted shares 107,850 107,443 107,443
Basic shares 106,788 106,148 106,148
Dividends per share $0.24 $0.24 $0.24
(a) The three and twelve month periods ended December 31, 2008
include a fourth quarter restructuring pretax charge totaling $40.0
million, $27.3 million after tax ($0.25 per diluted share). The
charge was for employee reductions and facility closures ($32.6
million), as well as asset write-downs ($7.4 million). Of the $40.0
million in charges, $32.9 million of the restructuring charges and
asset write-downs were recorded in cost of sales and $7.1 million
of the restructuring charges and asset write-downs were recorded in
selling, general and administrative expenses.
(b) The twelve month period ended December 31, 2008 includes a second
quarter after-tax, non-cash charge of $7.3 million, or $0.07 per
diluted share, related to the accelerated amortization of deferred
compensation expense due to the vesting of restricted stock.
AMETEK, Inc.
Information by Business Segment
(In thousands)
Three Months Ended
December 31,
------------
2009 2008 2008
---- ---- ----
Adjusted
GAAP GAAP (c)
---- ---- --------
(Unaudited) (Unaudited) (Unaudited)
Net sales:
Electronic Instruments $286,009 $361,639 $361,639
Electromechanical 237,491 262,105 262,105
------- ------- -------
Consolidated net sales $523,500 $623,744 $623,744
Income:
Segment operating
income:
Electronic Instruments $56,085 $69,218 $89,582
Electromechanical 40,682 24,655 44,100
------ ------ ------
Total segment
operating income 96,767 93,873 133,682
Corporate
administrative and
other expenses (7,574) (11,628) (11,414)
------ ------- -------
Consolidated operating
income $89,193 $82,245 $122,268
Twelve Months Ended
December 31,
------------
2009 2008 2008
---- ---- ----
Adjusted
GAAP GAAP (c)
---- ---- --------
(Unaudited) (Unaudited)
Net sales:
Electronic Instruments $1,146,578 $1,402,653 $1,402,653
Electromechanical 951,777 1,128,482 1,128,482
------- --------- ---------
Consolidated net sales $2,098,355 $2,531,135 $2,531,135
Income:
Segment operating
income:
Electronic Instruments $232,875 $306,764 $327,128
Electromechanical 166,582 175,181 194,626
------- ------- -------
Total segment operating
income 399,457 481,945 521,754
Corporate
administrative and
other expenses (33,407) (49,291) (49,077)
------- ------- -------
Consolidated operating
income $366,050 $432,654 $472,677
(c) The three and twelve month periods ended December 31, 2008
include a fourth quarter restructuring pretax charge totaling $40.0
million, $27.3 million after tax ($0.25 per diluted share). The
charge was for employee reductions and facility closures ($32.6
million), as well as asset write-downs ($7.4 million). Of the $40.0
million in restructuring charges and asset write-downs, $20.4
million was recorded in Electronic Instruments, $19.4 million was
recorded in Electromechanical and $0.2 million was recorded in
Corporate administrative and other expenses.
AMETEK, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
December 31, December 31,
2009 2008
---- ----
(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $251,350 $91,210
Receivables, net 331,383 406,012
Inventories 311,542 349,509
Other current assets 77,448 107,855
------ -------
Total current assets 971,723 954,586
Property, plant and equipment, net 310,053 307,908
Goodwill 1,277,291 1,240,052
Other intangibles, investments and
other assets 685,770 552,996
------- -------
Total assets $3,244,837 $3,055,542
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt $85,801 $18,438
Accounts payable and accruals 357,044 429,075
------- -------
Total current liabilities 442,845 447,513
Long-term debt 955,880 1,093,243
Deferred income taxes and other long-
term liabilities 282,887 227,014
Stockholders' equity 1,563,225 1,287,772
--------- ---------
Total liabilities and stockholders'
equity $3,244,837 $3,055,542
Contact: William J. Burke (610) 889-5249
SOURCE AMETEK, Inc.
