AMETEK Achieves Double-Digit Growth in Third Quarter Income and EPS
18 October 1999
AMETEK Achieves Double-Digit Growth in Third Quarter Income and EPS
PAOLI, Pa., Oct. 18 -- AMETEK Inc. today
announced third quarter 1999 results that reflect double-digit increases in
both income and earnings per share. The strong third quarter results were
driven by the benefits of cost-reduction initiatives and the contributions of
several recently acquired businesses.
AMETEK Sets Third Quarter Records
AMETEK's net income for the third quarter totaled $15.6 million, or
47 cents per diluted share, both records for the Company's third quarter.
That compares with income of $14.1 million, or 42 cents per diluted share,
before an extraordinary item, earned in the third quarter of 1998. Including
an extraordinary loss for the early extinguishment of debt, net income for the
third quarter of 1998 was $5.3 million, or 16 cents per diluted share.
Walter E. Blankley, AMETEK chairman stated, "The Company's performance for
the third quarter 1999 continues the momentum achieved by AMETEK over the
first half of the year. Operating margins grew nearly two percentage points
driven by our Operational Excellence activities. Record quarterly operating
income of $30.5 million on sales of $226.3 million represents a 13.5%
operating margin in the 1999 third quarter. That compares favorably with
operating income of $27.0 million on sales of $232.6 million, an 11.6%
operating margin, in the same period last year."
Nine-Month 1999 Results on Pace for Sixth Consecutive Record Year
For the nine-month period ended September 30, 1999, operating income was a
record $89.3 million, up 5.8%, on sales of $688.8 million as compared with
operating income of $84.3 million on sales of $720.6 million in the same
period of 1998. Net income was $45.8 million, or $1.39 per diluted share, in
the first nine months of 1999, compared with income of $44.3 million, or $1.31
per diluted share, before an extraordinary item in the prior-year period.
After the extraordinary loss on the early extinguishment of debt, net income
was $35.6 million, or $1.05 per diluted share, in the nine-month period of
1998.
"We achieved our double-digit percentage growth objective for income from
continuing operations and earnings per share in the 1999 third quarter and
remain on track toward our sixth consecutive year of record income and diluted
earnings per share from continuing operations," Mr. Blankley stated.
Electronic Instruments Group (EIG) Significantly Increases Sales and
Operating Income
Frank Hermance, AMETEK President and Chief Executive Officer, said, "EIG
had an excellent quarter with significantly increased sales and operating
income. Third quarter sales increased 9% to $114.7 million driven by the 1999
acquisitions of National Controls Corporation, Gulton Statham Transducers and
Patriot Sensors and Controls. The Group's operating profit margin reached
15.8% in the third quarter, up from 14.3% in the same quarter of 1998, as we
continue to see the benefits of our Operational Excellence initiatives. EIG's
operating income grew 21% to $18.1 million in the quarter, versus the prior
period, reflecting both the sales increase and the expansion in margins.
"Business conditions for EIG during the third quarter 1999 were very
similar to those seen during the first half of 1999. The heavy-vehicle
instruments business continued strong. The aerospace market is down slightly
from its peak sales levels, while our aerospace business has expanded due to
the acquisition of Gulton Statham Transducers and Patriot Sensors and
Controls. The process instruments business remained mixed."
Electromechanical Group (EMG) Expands Operating Margins Despite Weak
European Markets
Mr. Hermance continued, "EMG's 1999 third quarter sales declined 13% to
$111.5 million, compared with $127.7 million in the 1998 third quarter. While
EMG's European business is still weak, the brushless DC motor business
continues the positive trend of the 1999 first half."
"We continue to aggressively reduce costs within EMG through our
Operational Excellence initiatives. These include the consolidation of our
European motor operations, the relocation of production to our low-cost plant
in the Czech Republic, the transition of some North American motor production
to our facility in Mexico and the planned closure of our Cambridge, Ohio,
plant. We also have improved the profitability of our brushless DC motor
business. As a result, EMG's operating income margin rose to 15.1% in the
1999 third quarter from 13.5% in the same period of 1998. EMG operating
income for the third quarter of 1999 was $16.9 million, essentially unchanged
from the same period last year," concluded Mr. Hermance.
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.
For more information, contact William J. Burke, 610-889-5249, or James P.
McKinley, 610-889-5234, both of AMETEK.
AMETEK, Inc.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(Dollars and shares in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Net sales $226,258 $232,593 $688,776 $720,648
Expenses:
Cost of sales, excluding
depreciation 167,150 178,380 517,647 552,346
Selling, general and
administrative 21,452 19,827 59,880 61,324
Depreciation 7,138 7,410 21,998 22,650
Total expenses 195,740 205,617 599,525 636,320
Operating income 30,518 26,976 89,251 84,328
Other income (expenses):
Interest expense (6,512) (6,152) (18,399) (18,520)
Other, net 182 982 545 3,759
Income before income taxes 24,188 21,806 71,397 69,567
Provision for income taxes 8,594 7,756 25,644 25,244
Income before extraordinary
item 15,594 14,050 45,753 44,323
Extraordinary loss on early
extinguishment of debt,
net of taxes -- (8,710) -- (8,710)
Net Income $15,594 $5,340 $45,753 $35,613
Diluted earnings (loss) per share:
Income before extraordinary
item $0.47 $0.42 $1.39 $1.31
Extraordinary loss on early
extinguishment of debt -- (0.26) -- (0.26)
Net Income $0.47 $0.16 $1.39 $1.05
Basic earnings (loss) per share:
Income before extraordinary
item $0.48 $0.43 $1.42 $1.34
Extraordinary loss on early
extinguishment of debt -- (0.27) -- (0.26)
Net Income $0.48 $0.16 $1.42 $1.08
Average common shares
outstanding:
Diluted shares 33,163 33,740 32,992 34,047
Basic shares 32,466 32,797 32,323 32,932
Dividends per share $0.06 $0.06 $0.18 $0.18
AMETEK, Inc.
INFORMATION BY BUSINESS SEGMENT (Unaudited)
(Dollars in thousands)
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
Net sales:
Electromechanical $111,529 $127,656 $355,210 $405,361
Electronic Instruments 114,729 104,937 333,566 315,287
Total Consolidated $226,258 $232,593 $688,776 $720,648
Operating income:
Electromechanical $16,851 $17,234 $52,057 $56,163
Electronic Instruments 18,140 14,978 50,885 44,544
Total segments 34,991 32,212 102,942 100,707
Corporate and other (4,473) (5,236) (13,691) (16,379)
Total Consolidated $30,518 $26,976 $89,251 $84,328