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AMETEK Announces Record Second Quarter 2014 Results and Raises Full Year Guidance

BERWYN, Pa., Aug. 5, 2014 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced second quarter results that established records for orders, sales, operating income, operating margins, net income and diluted earnings per share.  In addition, backlog at June 30, 2014 of $1.25 billion was an all-time high.   

AMETEK's second quarter 2014 sales of $990.7 million were up 13% over the same period of 2013.  Operating income for the second quarter of 2014 was $231.7 million, a 14% increase from the $202.6 million recorded in the same period of 2013.  Operating margins improved 30 basis points to 23.4%.  Net income increased 17% to $150.1 million, from $128.3 million in last year's second quarter.  Diluted earnings per share increased 17% to $0.61 per diluted share from the second quarter 2013 level of $0.52 per diluted share.    

"AMETEK achieved excellent results in the second quarter, delivering record operating performance.  Strong organic growth, Operational Excellence initiatives, and contributions from acquired businesses allowed us to exceed our second quarter earnings expectations and raise our 2014 earnings guidance.  In addition, we closed the acquisition of Zygo in the quarter," noted Frank S. Hermance, AMETEK Chairman and Chief Executive Officer.

"Cash flow was also very strong, with operating cash flow totaling $155.1 million for the quarter, an increase of 21% over the same period of 2013," continued Mr. Hermance.

For the six months ended June 30, 2014, AMETEK sales increased 12% to $1.97 billion from $1.76 billion in the same period of 2013.  Operating income increased 13% to $453.4 million, from $399.8 million earned in the first six months of 2013.  Net income for the first six months of 2014 was $290.6 million, up 15% from $253.5 million in the same period of 2013.  Diluted earnings per share were $1.18 for the first six months of 2014, up 15% from $1.03 per diluted share in the first six months of 2013. 

Electronic Instruments Group (EIG)

For the second quarter of 2014, EIG sales increased 19% to $573.3 million.  Operating income was $151.5 million in the quarter, compared with $129.6 million in the second quarter of 2013, a 17% increase.  Operating margins for the quarter were very strong at 26.4%.    

"EIG had an excellent second quarter.  Strong core growth in our Aerospace, Process, and Power & Industrial businesses combined with the contributions from recent acquisitions drove the strong overall sales growth," said Mr. Hermance.

Electromechanical Group (EMG)

In the second quarter of 2014, EMG sales increased 6% to $417.4 million.  Operating income in the second quarter was up 10% to $92.1 million, compared with $83.4 million in the same period of 2013.  Operating margins were a record 22.1% in the second quarter of 2014, up 100 basis points from last year's second quarter.  

"EMG also had a great second quarter with strong sales growth and excellent operating performance.  Operating margins were up nicely driven by the higher sales and our Operational Excellence initiatives," commented Mr. Hermance.

2014 Outlook

"We are very pleased with our strong performance in the second quarter.  We are increasing our earnings guidance for the full year to reflect these strong results, the benefit of the Zygo acquisition and our expectations for the balance of the year," notes Mr. Hermance.

"We now anticipate 2014 revenue to be up low double digits on a percentage basis from 2013 reflecting solid core growth and the contributions from recent acquisitions.  Earnings for 2014 are now expected to be in the range of $2.37 to $2.42 per diluted share, up 13% to 15% over 2013, excluding one-time Zygo integration costs.  This earnings guidance is an increase from our previous guidance of $2.32 to $2.37 per diluted share that was provided in our first quarter earnings release," added Mr. Hermance.

"Third quarter sales are expected to be up mid-teens on a percentage basis over last year's third quarter.  We estimate our earnings to be approximately $0.59 to $0.61 per diluted share, excluding the one-time Zygo integration costs.  This earnings guidance represents an increase of 13% to 17% over last year's third quarter of $0.52 per diluted share," concluded Mr. Hermance.

Conference Call

The Company will webcast its Second Quarter 2014 investor conference call on Tuesday, August 5, 2014, beginning at 8:30 AM ET. The live audio webcast 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 electro-mechanical devices with 2013 sales of $3.6 billion.  AMETEK's Corporate Growth Plan is based on Four Key Strategies: Operational Excellence, Strategic Acquisitions, 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 500 Index.

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)

(Unaudited)



 Three Months Ended 


 Six Months Ended 


 June 30, 


 June 30, 


2014


2013


2014


2013

Net sales

$   990,718


$   878,809


$1,966,010


$1,761,662

Operating expenses:








     Cost of sales, excluding depreciation

630,645


567,598


1,255,815


1,141,672

     Selling, general and administrative

113,316


94,912


225,941


192,520

     Depreciation

15,029


13,686


30,895


27,622

          Total operating expenses 

758,990


676,196


1,512,651


1,361,814









Operating income 

231,728


202,613


453,359


399,848

Other expenses:








     Interest expense

(18,981)


(18,154)


(37,819)


(36,477)

     Other, net

(4,326)


(2,667)


(8,203)


(5,191)

Income before income taxes

208,421


181,792


407,337


358,180

Provision for income taxes

58,358


53,471


116,688


104,713









Net income

$   150,063


$   128,321


$   290,649


$   253,467









Diluted earnings per share

$        0.61


$        0.52


$        1.18


$        1.03

Basic earnings per share

$        0.61


$        0.53


$        1.19


$        1.04









Weighted average common shares outstanding:








     Diluted shares

247,403


246,104


247,316


245,757

     Basic shares

245,201


243,666


245,056


243,475









Dividends per share

$        0.09


$        0.06


$        0.15


$        0.12

 

 

AMETEK, Inc.

Information by Business Segment

(In thousands)

(Unaudited)



 Three Months Ended 


 Six Months Ended 


 June 30, 


 June 30, 


2014


2013


2014


2013

Net sales:








     Electronic Instruments

$   573,289


$   483,339


$1,145,683


$   967,840

     Electromechanical

417,429


395,470


820,327


793,822

          Consolidated net sales

$   990,718


$   878,809


$1,966,010


$1,761,662









Income:








Segment operating income:








     Electronic Instruments

$   151,499


$   129,575


$   301,818


$   261,321

     Electromechanical

92,133


83,395


176,013


161,394

          Total segment operating income

243,632


212,970


477,831


422,715

     Corporate administrative and other expenses

(11,904)


(10,357)


(24,472)


(22,867)

          Consolidated operating income

$   231,728


$   202,613


$   453,359


$   399,848

 

 

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)



 June 30, 


 December 31, 


2014


2013


 (Unaudited) 



ASSETS




Current assets:




     Cash and cash equivalents

$     282,771


$     295,203

     Receivables, net

594,151


536,701

     Inventories

538,287


452,848

     Other current assets

115,461


84,377

          Total current assets

1,530,670


1,369,129





Property, plant and equipment, net

459,187


402,790

Goodwill

2,610,381


2,408,363

Other intangibles, investments and other assets

1,884,765


1,697,620

          Total assets

$  6,485,003


$  5,877,902





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




     Short-term borrowings and current portion of long-term debt

$     454,418


$     273,315

     Accounts payable and accruals

667,407


601,230

          Total current liabilities

1,121,825


874,545





Long-term debt

1,148,248


1,141,750

Deferred income taxes and other long-term liabilities

793,012


725,486

Stockholders' equity

3,421,918


3,136,121

          Total liabilities and stockholders' equity

$  6,485,003


$  5,877,902

 

Contact: Kevin C. Coleman (610) 889-5247

SOURCE AMETEK, Inc.

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