AMETEK Announces Record Fourth Quarter and Full Year Results

BERWYN, Pa., Feb. 5, 2020 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced its financial results for the fourth quarter and full year ended December 31, 2019.

AMETEK's fourth quarter 2019 sales were a record $1.30 billion, up 3% compared to the fourth quarter of 2018. Operating income increased 6% to $297.7 million and operating margins expanded to 22.8%, an increase of 60 basis points over the prior-year period.

On a GAAP basis, fourth quarter earnings per diluted share were $0.96. Adjusted earnings, which adds back non-cash, after-tax, acquisition-related intangible amortization, were $1.08 per diluted share, a 13% increase over the comparable quarter in 2018. A reconciliation of reported GAAP results to adjusted results is included in the financial tables accompanying this release and on the AMETEK website.

"AMETEK completed an outstanding year with a strong fourth quarter," commented David A. Zapico, AMETEK Chairman and Chief Executive Officer. "We achieved a record level of sales, drove excellent operating margin expansion and delivered 13% earnings growth in the quarter. Additionally, our businesses continue to generate excellent levels of cash flow, with operating cash flow in the fourth quarter increasing to a record $342.2 million, up 16% over the same period in 2018."

"We also continued to strengthen our portfolio, deploying nearly $1.1 billion in 2019 on the acquisitions of Gatan and PDT, and announcing a definitive agreement to divest our Reading Alloys business," added Mr. Zapico.

For the full year, AMETEK's sales were a record $5.2 billion, an increase of 6% over 2018. Operating income was a record $1.18 billion, up 9%, and operating income margins were 22.8%, expanding 60 basis points over last year's results.

On a GAAP basis, full year earnings were $3.75 per diluted share. Full year adjusted earnings were $4.19 per share, an increase of 14% over 2018's comparable adjusted earnings of $3.66 per share.

Electronic Instruments Group (EIG)
Sales for EIG in the fourth quarter were a record $880.2 million, up 7% over the same period in 2018. EIG fourth quarter operating income increased 7% year-over-year to a record $229.9 million and operating income margins were 26.1%, up 10 basis points over the prior year.

"EIG finished the year with strong results in the fourth quarter. Solid sales growth driven by the acquisitions of Telular, Spectro Scientific and Gatan, coupled with continued execution of Operational Excellence initiatives allowed EIG to deliver strong operating performance," noted Mr. Zapico.

Electromechanical Group (EMG)
In the fourth quarter, EMG sales were $424.7 million, down 5% compared to the fourth quarter of 2018. EMG operating income for the quarter was $84.6 million and operating income margins were 19.9%, an increase of 60 basis points over 2018's fourth quarter.

"EMG delivered solid operating performance in the fourth quarter with excellent operating margin expansion driven by our Operational Excellence initiatives," commented Mr. Zapico.

2020 Outlook
"While uncertainties remain in the global economy, the AMETEK Growth Model provides our businesses with the operational agility to adapt to changing economic environments. We are poised to deliver another year of solid growth and strong operating performance through continued productivity and asset-management improvements," noted Mr. Zapico.

"Given our robust cash flows and financial strength, we are well-positioned to continue investing in our growth initiatives and acquiring companies in attractive, niche markets to deliver long-term, sustainable success for our shareholders."

"For 2020, we expect overall sales to be up low single digits on a percentage basis compared to 2019. Organic sales for the year are expected to be roughly flat versus the prior year. Adjusted earnings per diluted share are expected to be in the range of $4.24 to $4.38, an increase of 1% to 5% over the prior year's comparable basis. Our full year guidance assumes the Reading Alloys business is divested in the first quarter and excludes the gain on the anticipated sale," he added.

"For the first quarter of 2020, overall sales are expected to be up low single digits versus the first quarter of 2019. Adjusted earnings for the first quarter are anticipated to be in the range of $1.01 to $1.04 per share, up 1% to 4% over the prior year comparable basis," concluded Mr. Zapico.

Conference Call
AMETEK will webcast its fourth quarter 2019 investor conference call on Wednesday, February 5, 2020, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in 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 $5.0 billion. The AMETEK Growth Model integrates the Four Growth Strategies - Operational Excellence, New Product Development, Global and Market Expansion, and Strategic Acquisitions - with a disciplined focus on cash generation and capital deployment. 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 500.

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 AMETEK's ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations, including supply chain disruptions; AMETEK's 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.

Contact:
AMETEK, Inc.
Kevin Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com
Phone: 610.889.5247

                                                         
         
              AMETEK, Inc.


                                                    
       
           Consolidated Statement of Income


                                                  
       
         (In thousands, except per share amounts)


                                                          
         
              (Unaudited)




                                                                                                       Three Months Ended                    Year Ended


                                                                                                       December 31,                    December 31,

                                                                                                                                   ---

                                                                                                  2019              2018        2019                           2018

                                                                                                                                                             ---


     
              Net sales                                                                  $1,304,821        $1,271,328  $5,158,557                     $4,845,872

                                                                                                                                                             ---




     Cost of sales                                                                            858,175           835,268   3,370,897                      3,186,310



     Selling, general and administrative                                                      148,991           154,040     610,280                        584,022

                                                                                                                                                             ---


          Total operating expenses                                                          1,007,166           989,308   3,981,177                      3,770,332

                                                                                                                                                             ---




     
              Operating income                                                              297,655           282,020   1,177,380                      1,075,540





     Interest expense                                                                        (23,045)         (20,319)   (88,481)                      (82,180)



     Other expense, net                                                                       (6,630)          (2,931)   (19,151)                       (5,615)

                                                                                                                                                             ---




     Income before income taxes                                                               267,980           258,770   1,069,748                        987,745





     Provision for income taxes                                                                47,203            47,250     208,451                        209,812

                                                                                                                                                             ---




     
              Net income                                                                   $220,777          $211,520    $861,297                       $777,933






     
              Diluted earnings per share                                                      $0.96             $0.91       $3.75                          $3.34




     Basic earnings per share                                                                   $0.97             $0.92       $3.78                          $3.37






     Weighted average common shares outstanding:



          Diluted shares                                                                      230,006           231,333     229,395                        232,712

                                                                                                                                                             ===


          Basic shares                                                                        228,557           229,611     227,759                        230,823

                                                                                                                                                             ===




     Dividends per share                                                                        $0.14             $0.14       $0.56                          $0.56


                                                
       
               AMETEK, Inc.


                                             
       
        Information by Business Segment


                                               
       
               (In thousands)


                                                
       
               (Unaudited)




                                                                                      Three Months Ended                     Year Ended


                                                                                      December 31,                     December 31,

                                                                                                                  ---

                                                                            2019               2018            2019          2018

                                                                                                                           ---


     
                Net sales:



          Electronic Instruments                                       $880,171           $826,034      $3,322,881    $3,028,959



          Electromechanical                                             424,650            445,294       1,835,676     1,816,913

                                                                                                                           ---


               Consolidated net sales                                $1,304,821         $1,271,328      $5,158,557    $4,845,872

                                                                                                                           ===




     
                Operating income:



     Segment operating income:



          Electronic Instruments                                       $229,859           $214,641        $865,307      $782,144



          Electromechanical                                              84,602             85,846         387,931       363,765

                                                                                                                           ---


               Total segment operating income                           314,461            300,487       1,253,238     1,145,909



          Corporate administrative expenses                            (16,806)          (18,467)       (75,858)     (70,369)

                                                                                                                           ---


               Consolidated operating income                           $297,655           $282,020      $1,177,380    $1,075,540


                                                                               
      
                AMETEK, Inc.


                                                                            
     
        Condensed Consolidated Balance Sheet


                                                                              
      
                (In thousands)




                                                                                                                        
     
     December 31, 
     
     December 31,


                                                                                                                                    2019              2018



                                                                                                                        
     
     (Unaudited)



     
                ASSETS



     Current assets:



          Cash and cash equivalents                                                                                            $393,030          $353,975



          Receivables, net                                                                                                      744,760           732,839



          Inventories, net                                                                                                      624,567           624,744



          Other current assets                                                                                                  263,414           124,586




               Total current assets                                                                                           2,025,771         1,836,144





     Property, plant and equipment, net                                                                                         548,908           554,130



     Right of use asset, net                                                                                                    179,679                 -



     Goodwill                                                                                                                 4,047,539         3,612,033



     Other intangibles, investments and other assets                                                                          3,042,662         2,659,981




               Total assets                                                                                                  $9,844,559        $8,662,288

                                                                                                                                                      ===




     
                LIABILITIES AND STOCKHOLDERS' EQUITY



     Current liabilities:



          Short-term borrowings and current portion of long-term debt, net                                                     $497,449          $358,876



          Accounts payable and accruals                                                                                         928,409           899,828




               Total current liabilities                                                                                      1,425,858         1,258,704





     Long-term debt, net                                                                                                      2,271,292         2,273,837



     Deferred income taxes and other long-term liabilities                                                                    1,031,917           887,825



     Stockholders' equity                                                                                                     5,115,492         4,241,922




               Total liabilities and stockholders' equity                                                                    $9,844,559        $8,662,288

                                                                                                                                                      ===

                                                                                                                                  
             
                AMETEK, Inc.


                                                                                                                 
              
           Reconciliations of GAAP to Non-GAAP Financial Measures


                                                                                                                        
           
              (In thousands, except per share amounts)


                                                                                                                                  
             
                (Unaudited)




                                                                                                                                                                                                              
          
                Diluted Earnings Per Share

                                                                                                                                                                                                                                 ---

                                                                                                                                                                                     Three Months Ended                                                              Year Ended



                                                                                           
              
                December 31,                                                    
              December 31,                 
              
                December 31,                    
       December 31,


                                                                                                                                                                       2019                                        2018                                               2019                                      2018






     Diluted earnings per share (GAAP)                                                                                                                $0.96                                            $0.91                                               $3.75                                      $3.34


                                                        
              Pretax amortization of acquisition-related                                                            0.16                                        0.13                                               0.58                                      0.49
                                                        intangible assets


                                                        
              Income tax benefit on amortization of acquisition-                                                  (0.04)                                     (0.03)                                            (0.14)                                   (0.12)
                                                        related intangible assets


                                                        
              Net deferred tax revaluation due to Tax Reform                                                                                                 (0.01)                                                                                     (0.01)


                                                        
              Deemed repatriation of foreign earnings due to                                                                                                 (0.04)                                                                                     (0.04)
                                                        Tax Reform



     Adjusted Diluted earnings per share (Non-GAAP)                                                                                                   $1.08                                            $0.96                                               $4.19                                      $3.66







                                                                                                                                                                                                      
             
             Forecasted Diluted Earnings Per Share (1)

                                                                                                                                                                                                                                 ---

                                                                                                                                                                                     Three Months Ended                                                              Year Ended


                                                                                                                                                                                          March 31,                                                                 December 31,



                                                                                               
              
                Low                                                      
              
                High                    
              
                Low                      
       
                High


                                                                                                                                                                       2020                                        2020                                               2020                                      2020






     Diluted earnings per share (GAAP)                                                                                                                $0.88                                            $0.91                                               $3.72                                      $3.86


                                                        
              Pretax amortization of acquisition-related                                                            0.17                                        0.17                                               0.69                                      0.69
                                                        intangible assets


                                                        
              Income tax benefit on amortization of acquisition-                                                  (0.04)                                     (0.04)                                            (0.17)                                   (0.17)
                                                        related intangible assets



     Adjusted Diluted earnings per share (Non-GAAP)                                                                                                   $1.01                                            $1.04                                               $4.24                                      $4.38






     (1) Excludes the gain associated with the anticipated sale of Reading Alloys business.



                            Use of Non-GAAP Financial
                             Information

    The Company supplements its
     consolidated financial statements
     presented on a U.S. generally
     accepted accounting principles
     ("GAAP") basis with certain non?GAAP
     financial information to provide
     investors with greater insight,
     increased transparency and allow for
     a more comprehensive understanding
     of the information used by
     management in its financial and
     operational decision-making.
     Reconciliation of non?GAAP measures
     to their most directly comparable
     GAAP measures are included in the
     accompanying financial tables. These
     non?GAAP financial measures should
     be considered in addition to, and
     not as a replacement for, or
     superior to, the comparable GAAP
     measure, and may not be comparable
     to similarly titled measures
     reported by other companies.

    The Company believes that these
     measures provide useful information
     to investors by reflecting
     additional ways of viewing AMETEK's
     operations that, when reconciled to
     the comparable GAAP measure, helps
     our investors to better understand
     the long-term profitability trends
     of our business, and facilitates
     easier comparisons of our
     profitability to prior and future
     periods and to our peers.

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SOURCE AMETEK, Inc.