AMETEK Reports 1998 Full-Year and Fourth Quarter Results
26 January 1999
AMETEK Reports 1998 Full-Year and Fourth Quarter Results; Achieves Fifth Consecutive Year of Record Sales and Double-digit EPS Growth from Continuing Operations
PAOLI, Pa., Jan. 25 -- AMETEK, Inc. today
announced that for 1998 it achieved record sales of $927.5 million, up 9% from
$847.8 million in 1997, and record operating income of $104.5 million, up 14%
from $92.0 million in 1997. Income from continuing operations in 1998 was a
record $55.3 million, up 10% from $50.3 million in 1997. Diluted earnings per
share from continuing operations increased 10% to $1.64 from $1.49 in 1997,
the fifth consecutive year of double-digit percentage growth. All of the
above comparisons are before a fourth quarter 1998 non-recurring charge.
AMETEK previously announced a 1998 fourth quarter, pretax charge of
$8.0 million, or 14 cents per diluted share, related to the Company's
initiatives to lower its cost structure. After the charge, AMETEK's 1998
full-year operating income was $96.4 million, up 5%, and income from
continuing operations was $50.4 million, up slightly from 1997.
Net income in 1998 totaled $41.7 million, or $1.24 per diluted share,
after including both the non-recurring fourth quarter charge and a third
quarter 1998 after-tax extraordinary charge of $8.7 million, or 26 cents per
share, for the early repayment of debt. Net income for 1997 was
$50.4 million, or $1.49 per share.
Cost-reduction Initiatives Accelerated
"In spite of global economic turmoil, AMETEK achieved double-digit growth
in earnings per share from continuing operations for the fifth consecutive
year, before the non-recurring charge," said Walter E. Blankley, AMETEK
chairman and chief executive officer.
"When we announced the fourth quarter non-recurring charge on December 14,
we noted that we expected economic instability to continue in some of our
markets. To meet our double-digit percentage earnings growth target, we have
been accelerating a number of cost-reduction initiatives that should result in
a sequential increase in our operating income during 1999."
"Our initiatives include: closing one and consolidating two electric motor
plants in Europe; accelerating the transition of some motor production to
lower-cost operations; expanding Operational Excellence in electronic
instruments; and reducing our workforce. Those actions are expected to result
in savings of approximately $14 million in 1999," added Mr. Blankley.
Fourth Quarter Results
AMETEK's fourth quarter 1998 income from continuing operations and net
income, before the non-recurring charge, were $11.0 million, or 33 cents per
diluted share, and are in-line with AMETEK's previously announced estimate
for the quarter. Fourth quarter 1997 income from continuing operations and
net income were $13. 6 million, or 40 cents per share. Fourth quarter 1998
operating income before the above-mentioned charge totaled $20.1 million.
Operating income was $24.4 million in the prior-year fourth quarter.
"After the non-recurring charge, fourth quarter 1998 income from
continuing operations and net income were $6.1 million, or 19 cents per
diluted share, and operating income was $12.1 million. Fourth quar
AMETEK Reports 1998 Full-Year and Fourth Quarter Results
AMETEK Reports 1998 Full-Year and Fourth Quarter Results
26 January 1999
AMETEK Reports 1998 Full-Year and Fourth Quarter Results; Achieves Fifth Consecutive Year of Record Sales and Double-digit EPS Growth from Continuing Operations
PAOLI, Pa., Jan. 25 -- AMETEK, Inc. today
announced that for 1998 it achieved record sales of $927.5 million, up 9% from
$847.8 million in 1997, and record operating income of $104.5 million, up 14%
from $92.0 million in 1997. Income from continuing operations in 1998 was a
record $55.3 million, up 10% from $50.3 million in 1997. Diluted earnings per
share from continuing operations increased 10% to $1.64 from $1.49 in 1997,
the fifth consecutive year of double-digit percentage growth. All of the
above comparisons are before a fourth quarter 1998 non-recurring charge.
AMETEK previously announced a 1998 fourth quarter, pretax charge of
$8.0 million, or 14 cents per diluted share, related to the Company's
initiatives to lower its cost structure. After the charge, AMETEK's 1998
full-year operating income was $96.4 million, up 5%, and income from
continuing operations was $50.4 million, up slightly from 1997.
Net income in 1998 totaled $41.7 million, or $1.24 per diluted share,
after including both the non-recurring fourth quarter charge and a third
quarter 1998 after-tax extraordinary charge of $8.7 million, or 26 cents per
share, for the early repayment of debt. Net income for 1997 was
$50.4 million, or $1.49 per share.
Cost-reduction Initiatives Accelerated
"In spite of global economic turmoil, AMETEK achieved double-digit growth
in earnings per share from continuing operations for the fifth consecutive
year, before the non-recurring charge," said Walter E. Blankley, AMETEK
chairman and chief executive officer.
"When we announced the fourth quarter non-recurring charge on December 14,
we noted that we expected economic instability to continue in some of our
markets. To meet our double-digit percentage earnings growth target, we have
been accelerating a number of cost-reduction initiatives that should result in
a sequential increase in our operating income during 1999."
"Our initiatives include: closing one and consolidating two electric motor
plants in Europe; accelerating the transition of some motor production to
lower-cost operations; expanding Operational Excellence in electronic
instruments; and reducing our workforce. Those actions are expected to result
in savings of approximately $14 million in 1999," added Mr. Blankley.
Fourth Quarter Results
AMETEK's fourth quarter 1998 income from continuing operations and net
income, before the non-recurring charge, were $11.0 million, or 33 cents per
diluted share, and are in-line with AMETEK's previously announced estimate
for the quarter. Fourth quarter 1997 income from continuing operations and
net income were $13. 6 million, or 40 cents per share. Fourth quarter 1998
operating income before the above-mentioned charge totaled $20.1 million.
Operating income was $24.4 million in the prior-year fourth quarter.
"After the non-recurring charge, fourth quarter 1998 income from
continuing operations and net income were $6.1 million, or 19 cents per
diluted share, and operating income was $12.1 million. Fourth quarility and reduced the interest rate
on our long-term debt.
"We expect our traditionally strong free cash flow to increase, augmented
by much lower capital expenditures. That will enable us to continue to select
from a menu of investment options that further enhances shareholder value: our
Four Growth Strategies (Operational Excellence, New Products, Strategic
Acquisitions & Alliances, and Global & Market Expansion), debt reduction, and
share repurchases.
"AMETEK has a strong experienced team that has managed exceptionally well
in similar business environments. We expect to continue our growth in 1999
and beyond."
AMETEK Stock Repurchases Continue; Board Approved New Repurchase Plan in
1998
In 1998, AMETEK repurchased 1.3 million shares of its common stock. In
September 1998, AMETEK's Board of Directors authorized an additional
$50 million for stock repurchases, of which $38 million remained available at
year-end. Since the end of 1993, the Company has acquired 13.8 million
shares, or about 32% of its then outstanding stock, for $204 million at an
average cost of $14.85 per share.
Corporate Profile
AMETEK is a leading global manufacturer of electric motors and electronic
instruments in North America, Europe, and Asia. Its 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 from continuing
operations and a superior return on total capital. The common stock of AMETEK
is a component of the S & P Mid-cap 400 Index and the Russell 2000 Growth
Index.
Forward-looking Information
Statements in this news release that are not historical are considered
"forward-looking statements" 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
(Dollars and shares in thousands, except per share amounts)
Three months ended Year ended
December 31, (Unaudited) December 31,
1998(a) 1997 1998(a) 1997
Net sales $206,826 $217,110 $927,474 $847,761
Expenses:
Cost of sales,
excluding
depreciation 158,674 168,484 711,020 661,578
Selling, general
and administrative 20,765 17,264 82,089 67,058
Depreciation 7,259 6,994 29,909 27,170
Nonrecurring charge 8,020 ----- 8,020 -----
Total expenses 194,718 192,742 831,038 755,806
Operating income 12,108 24,368 96,436 91,955
Other income (expenses):
Interest expense (5,139) (4,313) (23,659) (18,181)
Other, net 822 978 4,581 4,420
Income from continuing
operations before
income taxes 7,791 21,033 77,358 78,194
Provision for income
taxes 1,665 7,425 26,909 27,930
Income from continuing
operations 6,126 13,608 50,449 50,264
Discontinued operations,
net of taxes:
Income from discontinued
operation ----- ----- ----- 5,092
Costs associated with
disposition of
discontinued
operation ----- ----- ----- (4,943)
Income before
extraordinary item 6,126 13,608 50,449 50,413
Extraordinary loss
on early extinguishment
of debt, net of taxes ----- ----- (8,710) -----
Net income $6,126 $13,608 $41,739 $50,413
Basic earnings per share:
Income from
continuing operations $0.19 $0.41 $1.55 $1.53
Discontinued operations:
Income from discontinued
operation ----- ----- ----- 0.15
Costs associated with
disposition of
discontinued operation ----- ----- ----- (0.15)
Income before
extraordinary item 0.19 0.41 1.55 1.53
Extraordinary loss on
early extinguishment
of debt ----- ----- (0.27) -----
Net income $0.19 $0.41 $1.28 $1.53
Diluted earnings per share:
Income from continuing
operations $0.19 $0.40 $1.50 $1.49
Discontinued
operations:
Income from discontinued
operation ----- ----- ----- 0.15
Costs associated with
disposition of
discontinued
operation ----- ----- ----- (0.15)
Income before
extraordinary item 0.19 0.40 1.50 1.49
Extraordinary loss on
early extinguishment
of debt ----- ----- (0.26) -----
Net income $0.19 $0.40 $1.24 $1.49
Average common shares
outstanding
Basic shares 32,134 33,045 32,733 32,917
Diluted shares 32,823 34,201 33,741 33,879
Dividends per share $0.06 $0.06 $0.24 $0.24
(a) Fourth quarter and year 1998 includes a non-recurring charge for cost
reduction initiatives totaling $8.0 million pretax, $4.8 million after-tax
($.14 per diluted share).
Ametek, Inc.
Information By Business Segment
(Dollars in thousands)
Three months ended Year ended
December 31, (Unaudited) December 31,
1998 1997 1998 1997
Net sales
Electromechanical $107,911 $115,918 $513,272 $457,170
Electronic Instruments 98,915 101,192 414,202 390,591
Total Consolidated $206,826 $217,110 $927,474 $847,761
Operating income (a)
Electromechanical $6,348 $16,466 $62,511 $61,832
Electronic Instruments 11,159 13,184 55,703 50,769
Total segments 17,507 29,650 118,214 112,601
Corporate and other (5,399) (5,282) (21,778) (20,646)
Total Consolidated $12,108 $24,368 $96,436 $91,955
(a) Fourth quarter and year 1998 includes a non-recurring charge for cost
reduction initiatives totaling $8.0 million pretax, consisting of $5.2 million
in the Electromechanical segment, $2.3 million in the Electronic Instruments
segment, and $.5 million in Corporate.
For more information, contact William F. Cleary, 610-889-5249, or James P.
McKinley, 610-889-5271, both of AMETEK.
