AMETEK Achieves Strong 1999 First Quarter
19 April 1999
AMETEK Achieves Strong 1999 First Quarter
PAOLI, Pa., April 19 -- AMETEK Inc. today
announced strong 1999 first quarter results. Economic improvements in a
number of AMETEK's markets, combined with the benefits from a cost-reduction
program initiated in the 1998 fourth quarter, were major factors.
AMETEK achieved 1999 first quarter earnings of 45 cents per diluted share,
exceeding both the previous first quarter record of 44 cents per diluted share
earned in the 1998 first quarter and the First Call consensus estimate for
AMETEK's 1999 first quarter of 41 cents per diluted share.
Walter E. Blankley, AMETEK chairman and chief executive officer stated,
"AMETEK is capitalizing on the improved economic conditions in its markets and
building on the growth momentum its businesses demonstrated in the 1999 first
quarter. We are moving forward and concentrating on achieving in 1999 a sixth
consecutive year of record earnings from continuing operations."
4th Quarter 1998 to 1st Quarter 1999 Comparison Shows Double-digit Growth
"Our first quarter performance confirms a strengthening in our businesses
from the fourth quarter of 1998 and the progress we have achieved in lowering
costs. Our sales rose 12% while consolidated operating income increased 45%,
versus the 1998 fourth quarter. Those comparisons exclude an $8.0 million
pretax charge in the 1998 fourth quarter to accelerate our cost-saving
initiatives," said Walter E. Blankley, AMETEK chairman and chief executive
officer.
1st Quarter 1999 Operating Income and Margin Higher than 1st Quarter 1998
"Operating income reached $29.1 million on sales of $230.9 million in the
1999 first quarter, producing a profit margin of 13%. That compares with a
profit margin of 12% from operating income of $28.6 million on sales of
$242.0 million in the first quarter of 1998. Net income of $14.6 million
essentially equaled net income of $14.9 million in the year-ago quarter.
Continuing Growth Expected to Produce Sixth Consecutive Record Year
"The profit margin growth we are achieving will help us to continue
producing excellent results in 1999. There were significant improvements in
the first quarter performance for both our electric motor and electronic
instrument businesses, compared with the 1998 fourth quarter. That is the
result of our aggressive action plan, which is expected to yield $14 million
in cost savings in 1999," he noted.
AMETEK Team Committed to Operational Excellence, Cost-Saving Objectives
"Every one of our AMETEK colleagues is working to achieve significant cost
reductions through our Operational Excellence strategy. We are completing the
consolidation of two European motor plants and the closing of a third. We
have stepped up the transition of additional manufacturing to our motor plant
in Reynosa, Mexico, where we have doubled production and reduced the cost of
quality.
"Within our instruments group, we are expanding Flow Manufacturing and
supply chain management, critical elements in our Operational Excellence
growth strategy. Most importantly, as a result of the initiatives we have
undertaken, AMETEK will be an even stronger company/one that is a cost-
competitive leader in all of its markets. And, we will continue a relentless
commitment to that objective," added Mr. Blankley.
Electromechanical Group (EMG) Achieves Sequential Improvement in Sales and
Income as Markets and Margins Strengthen
Frank S. Hermance, president and chief operating officer said, "A
comparison of EMG's 1998 fourth quarter and 1999 first quarter results shows a
significant improvement in that business. Sales increased 13% and operating
income grew 49%. Our aggressive cost-reduction actions have expanded margins.
At the same time, our North American markets are strengthening and the
European floor care market is stabilizing.
"We have accelerated the consolidation of our European motor operations
and are shifting more production to a low-cost manufacturing facility in the
Czech Republic. We have begun to see an increase in motor shipments to our
customers in Europe. The transition of some U.S. production to Mexico also is
on track," added Mr. Hermance.
"Our sales for the 1999 first quarter reflect improving market conditions,
even though they were below a very strong 1998 first quarter. We faced a more
challenging business environment in Europe during the 1999 first quarter, as
our customers addressed last year's economic turmoil and increased Asian
competition, " noted Mr. Hermance.
Electronic Instruments Group (EIG) Posts Higher Sales and Income Versus
Both 1998 First Quarter and 1998 Fourth Quarter
Mr. Hermance continued, "EIG's sales increased 10% from the 1998 fourth
quarter to 1999 first quarter and operating income grew by 23%. Through
Operational Excellence initiatives, we increased EIG's sequential operating
margins.
"EIG had higher sales and profits, versus the 1998 first quarter,
reflecting a robust heavy-truck market for our dashboard instruments and
strong gains in our process instruments business. Those gains included
contributions from our April 1998 acquisition of Western Research, a leader in
advanced gas analysis and emissions monitoring equipment. Sales and income
from our aerospace products also remained strong in the quarter," noted Mr.
Hermance.
"EIG benefited from our January 1999 acquisition of National Controls
Corp., which enhanced our position in the fast-growing food service
instrumentation market. Acquisitions are a major part of our Corporate Growth
Plan; since mid-1997 we have acquired businesses with cumulative annualized
sales totaling $175 million," he added.
AMETEK Builds on First Quarter Momentum; Expects Record Earnings in 1999
Walter E. Blankley, AMETEK chairman and chief executive officer,
concluded, "All of our colleagues worldwide are aggressively executing the
initiatives we announced in the fourth quarter. As a result of their success,
our first quarter performance was ahead of plan. We now are focused on
building on that momentum to achieve our objectives for 1999, including a
sixth consecutive year of record earnings from continuing operations."
Corporate Profile
AMETEK is a leading global manufacturer of electric motors and electronic
instruments. 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 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.
AMETEK, Inc.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(Dollars and shares in thousands, except per share amounts)
Three Months Ended March 31,
1999 1998
Net sales $230,878 $241,958
Expenses:
Cost of sales, excluding depreciation 175,572 185,322
Selling, general and administrative 18,653 20,349
Depreciation 7,504 7,694
Total expenses 201,729 213,365
Operating income 29,149 28,593
Other income (expenses):
Interest expense (6,026) (5,838)
Other, net (320) 893
Income before income taxes 22,803 23,648
Provision for income taxes 8,207 8,764
Net income $14,596 $14,884
Diluted earnings per share $0.45 $0.44
Basic earnings per share $0.45 $0.45
Average common shares outstanding:
Diluted shares 32,711 34,181
Basic shares 32,174 33,006
Dividends per share $0.06 $0.06
AMETEK, Inc.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(Dollars in thousands)
Three Months Ended March 31,
1999 1998
Net sales
Electromechanical $121,664 $136,838
Electronic Instruments 109,214 105,120
Total Consolidated $230,878 $241,958
Operating income
Electromechanical $17,194 $19,093
Electronic Instruments 16,499 14,795
Total segments 33,693 33,888
Corporate and other (4,544) (5,295)
Total Consolidated $29,149 $28,593
CONTACT: William F. Cleary, 610-889-5249; or James P. McKinley,
610-889-5271, both of AMETEK.