AMETEK Q1 Earnings, Sales, and Operating Income
20 April 1998
AMETEK First Quarter Earnings Per Share Jump 26 Percent; First Quarter Sales Up 20 Percent; Operating Income Up 31 Percent
PAOLI, Pa., April 20 -- AMETEK Inc. today
announced quarterly records for sales, operating income, and income and
earnings per share from continuing operations for the quarter ended
March 31, 1998.
First quarter 1998 sales reached $242.0 million, up 20% from
$202.5 million in the year-ago period. Operating income was $28.6 million, up
31% from $21.8 million in the prior-year first quarter. Both sales and
operating income were records, compared with any previous quarters.
Income from continuing operations in the 1998 first quarter totaled
$14.9 million, up 28% from $11.6 million in the 1997 first quarter. Diluted
earnings per share from continuing operations were up 26% to a record 44 cents
per share from 35 cents per share in the 1997 first quarter.
First quarter net income also totaled $14.9 million, compared with net
income of $13.7 million in the year-ago first quarter, which included
$2.1 million of income from the discontinued water filtration business.
First quarter 1998 diluted earnings per share were 44 cents, compared with
41 cents per share in the 1997 first quarter, which included 6 cents from the
discontinued filtration business.
Growth Momentum Continues to Accelerate
Walter E. Blankley, chairman and chief executive officer, said, "Our first
quarter performance clearly demonstrates that our growth strategies are
working. We continued to build on the positive sales momentum we achieved in
the second half of 1997.
"Both our Electromechanical and Electronic Instruments Groups posted
strong double-digit percentage gains in first quarter sales and even higher
percentage growth in operating income, versus the prior-year first quarter.
We expect our sales to approach $1 billion for the first time in 1998 and to
achieve our fifth consecutive year of record sales and earnings," he added.
Electromechanical Group (EMG) Achieves Sharply Higher Sales and Income
Frank S. Hermance, president and chief operating officer, said, "At EMG,
sales, operating income, and operating margins were up substantially for both
our domestic and international operations.
"In the United States, we benefited from the January 1998 acquisition of
Rotron, Inc., a leader in brushless direct-current motors and motor-blowers.
Rotron is performing well, adding to the sales and income gains in our
Technical Motor Division. In domestic floor-care, our sales were up despite
February (year-to-date) market data indicating a decline in the market. We
continued to achieve significant sales increases to the outdoor power
equipment market," noted Mr. Hermance.
"Overseas, our Italian motor operations showed strong improvements across
all lines of business, and we enjoyed positive results from our European
floor-care customers outsourcing their motor production to us. Our strong
European sales gains, however, were partially reduced by the translation of
the Italian lire into a stronger U.S. dollar.
"Our Shanghai, China, motor plant, which began operation in early 1997,
and a German electric motor business, acquired in July 1997, also contributed
to first quarter sales."
"In our Specialty Metal Products Division, sales and operating income were
both up substantially, compared with the prior-year period, primarily due to a
combination of new metal powder and specialty wire products and strong
automotive and electronics markets," he added.
Electronic Instruments Group (EIG) Reports Strong Gains in Sales and
Income
Mr. Hermance continued, "EIG posted significantly higher sales, income,
and operating margins in the first quarter, reflecting continued strong demand
for instrumentation and improved operating performance."
"EIG had higher first quarter sales in its commercial aerospace and
heavy-vehicle instruments businesses. The test and calibration business also
grew, reflecting our June 1997 acquisition of the Chatillon and Lloyd
Instruments product lines.
"We continue to see new records being set in the heavy-vehicle industry,
which is driving our double-digit sales growth and higher operating income,"
he noted.
"Our process instruments businesses also posted significantly higher
profits, due to a lower cost structure and favorable product mix. We are
further enhancing our position in process instruments with our recently
announced agreement to acquire Western Research, a Canada-based market and
technology leader in gas analyzers and emissions-monitoring equipment. We
expect to complete that acquisition in the second quarter."
"AMETEK's reputation in the aerospace industry for service, quality and
reliability was recognized recently, when our aerospace business was named a
`Supplier of the Year' by General Electric Aircraft Engines," concluded Mr.
Hermance.
AMETEK Stock Repurchases Continue
During the 1998 first quarter, AMETEK repurchased 333,000 shares at a cost
of $8.9 million under its current $50 million Board authorization. Since the
first share repurchase authorization in 1993, 12.8 million shares, or nearly
30% of AMETEK's outstanding common shares, have been repurchased for
$185 million at an average cost of $14.51 per share.
Excellent Outlook for the Remainder of 1998
Walter Blankley, chairman and chief executive officer, concluded, "Our
businesses and markets are strong. We believe the best way to build value for
our shareholders is to grow AMETEK's earnings per share through revenue
growth. Profitable revenue growth is our number one priority; we are
investing AMETEK's strong cash flow to achieve that long-term objective. We
expect excellent performance for the remainder of 1998."
Corporate Profile
AMETEK is a leading global manufacturer of electric motors and electronic
instruments. Operations are in North America, Europe and Asia. Nearly 40% of
sales are to markets outside the United States. Sales by continuing
operations reached $848 million in 1997. AMETEK achieved record sales,
operating income, and income and earnings per share from continuing operations
in 1997, marking the fourth consecutive year of record results.
AMETEK's Corporate Growth Plan is based on Four Key Strategies:
Operational Excellence, New Products, Global & Market Expansion, and Strategic
Acquisitions & Alliances; its objective is double-digit percentage growth in
earnings per share and a superior return on total capital.
Forward-looking Information
Information contained in this news release, other than historical
information, are considered "forward-looking statements" and may be 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.
AMETEK, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(Dollars and shares in thousands, except per share amounts)
Three months ended March 31,
1998 1997 (a)
Net sales $241,958 $202,455
Expenses:
Costs of sales, excluding
depreciation 185,322 157,654
Selling, general and
administrative 20,349 16,488
Depreciation 7,694 6,495
Total expenses 213,365 180,637
Operating income 28,593 21,818
Other income (expenses):
Interest expense (5,838) (4,510)
Other, net 893 1,110
Income from continuing operations
before income taxes 23,648 18,418
Provision for income taxes 8,764 6,825
Income from continuing operations 14,884 11,593
Income from discontinued operation,
net of taxes -- 2,073
Net income $14,884 $13,666
Basic earnings per share:
Income from continuing operations $0.45 $0.36
Income from discontinued operation -- 0.06
Net income $0.45 $0.42
Diluted earnings per share:
Income from continuing operations $0.44 $0.35
Income from discontinued operation -- 0.06
Net income $0.44 $0.41
Average common shares outstanding:
Basic shares 33,006 32,739
Diluted shares 34,181 33,438
Dividends per share $0.06 $0.06
(a) Restated for discontinued operations.
AMETEK, INC.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(Dollars in thousands)
Three months ended March 31,
1998 1997 (a)
Net sales
Electromechanical $136,838 $110,082
Electronic Instruments 105,120 92,373
Total Consolidated $241,958 $202,455
Operating income
Electromechanical $19,093 $14,708
Electronic Instruments 14,795 12,299
Total segments 33,888 27,007
Corporate and other (5,295) (5,189)
Total Consolidated $28,593 $21,818
(a) Restated for discontinued operations and for the reorganization of the
Company's operating groups into two segments effective August 1, 1997.
SOURCE AMETEK, Inc.