AMETEK Achieves Record Fourth Quarter and Full-Year Results
25 January 2000
AMETEK Achieves Record Fourth Quarter and Full-Year Results; Company Well-Positioned for Long-Term Double-Digit Growth
PAOLI, Pa., Jan. 24 -- AMETEK Inc. today
announced results for the fourth quarter and full-year 1999 that produced
double-digit percentage growth in both net income and diluted earnings per
share. The benefits of AMETEK's cost reduction initiatives and strategic
acquisition program were the primary contributors to the strong growth in
earnings for both the quarter and full-year.
Record Fourth Quarter
AMETEK's fourth quarter 1999 sales of $236.0 million were a 14% increase
over the same period of 1998, driven by the impact of acquisitions made during
1999 and a strengthening in worldwide motor markets. Operating income for the
fourth quarter of 1999 was $29.5 million, a 47% increase from the
$20.1 million recorded in the same period of 1998. Net income in the fourth
quarter of 1999 totaled $15.0 million, or $.46 per diluted share, up 37% from
fourth quarter 1998 levels of $11.0 million or $.33 per diluted share. The
1999 results established fourth quarter records for sales, operating income
and net income. All results for the Company and its operating groups for the
1998 fourth quarter and full-year are before a pretax non-recurring charge of
$8.0 million, or $.14 after-tax per diluted share.
AMETEK Achieves Full-Year Double-Digit Growth in Income and Earnings Per
Share Objective
With sales for 1999 of $924.8 million, down slightly from the
$927.5 million posted in 1998, AMETEK achieved record operating income of
$118.8 million, up 14% from $104.5 million for 1998. Net income and diluted
earnings per share also established records. Net income grew to
$60.8 million, up 10% from the $55.3 million earned in 1998, and diluted
earnings per share of $1.85, were up 13% from $1.64 in 1998. Both 1998
figures are before special items. Net income in 1998 totaled $41.7 million,
or $1.24 per diluted share, after deducting both the pretax non-recurring
fourth quarter charge of $8.0 million ($4.8 million after tax) or $.14 per
diluted share, and a third quarter 1998 after-tax extraordinary charge of
$8.7 million, or $.26 per share, for the early extinguishment of debt.
"The Company achieved its sixth consecutive year of double-digit growth in
income and earnings per share from continuing operations in spite of difficult
conditions in European motor markets. The benefits of our cost reduction
initiatives and the contribution of acquired companies were the primary
drivers for this strong performance," said Frank S. Hermance, AMETEK president
and chief executive officer.
"The foundation has been laid for a strong 2000. AMETEK is well
positioned to achieve its long-term double-digit growth objective. We will
continue to apply our Four Growth Strategies: Strategic Acquisitions &
Alliances, Global & Market Expansion, New Products, and Operational
Excellence, to create shareholder value. We have the financial flexibility
and management resources in place to compete in the global markets we serve
and to successfully and profitably grow the business," continued Mr. Hermance.
Electronic Instruments Group (EIG) Grows Sales and Operating Income
Mr. Hermance stated, "In the 1999 fourth quarter, EIG sales grew 19% to
$117.5 million from a year-ago level of $98.9 million, benefiting from the
acquisitions of National Controls Corporation, Gulton Statham Transducers, and
Patriot Sensors and Controls. Operating income for the fourth quarter was up
42% to $19.1 million, representing 16.2% of sales, as compared with
$13.5 million, or 13.6% of sales, earned in the same period of 1998. The
Group's focused cost reduction activities and the additional profitability
generated by acquired companies were principally responsible for the increase.
"EIG had a strong year, with sales up 9% to $451.1 million from 1998
levels of $414.2 million, driven by the strategic acquisitions during the
year. Operating income was $70.0 million for 1999, a 21% increase over the
$58.0 million earned in the same period of 1998. Operating margins improved
to 15.5% in 1999 from 14% in 1998.
"The heavy-vehicle instruments business remains at a very strong level and
our process instruments business is improving. Our aerospace business
continues to grow through acquisition and the expansion of our aerospace
technology to other markets, despite the aerospace market being down from its
peak level.
Electromechanical Group (EMG) Expands Operating Margins Despite Weak
European Markets
Mr. Hermance added, "In the fourth quarter of 1999, EMG's sales were
$118.5 million, a 10% increase over the same period of 1998. Stronger market
conditions in worldwide floor-care markets prevailed in the fourth quarter of
1999 when compared to the fourth quarter of 1998, as last year's quarter saw
the full effects of the Russian and Asian crises. Operating income of
$15.5 million in the current quarter is up 34%, as compared with the
$11.6 million recorded in the same period of 1998. EMG's operating income
margin increased to 13.1% in the 1999 fourth quarter from 10.7% in 1998.
"For the year, EMG's sales declined 8% to $473.7 million, compared with
$513.3 million in 1998. European and Asian motor markets, while strengthening
from very weak fourth quarter 1998 levels, have stabilized at lower levels
than those prevailing earlier in 1998.
"Even with lower sales, we were able to maintain the profitability of EMG
through aggressive cost reduction initiatives, including the consolidation of
our European motor operations, the relocation of production to our low-cost
plants in Mexico and the Czech Republic, and the closure of our Cambridge,
Ohio, plant. As a result, EMG's operating income margin rose to 14.3% for
1999 from 13.2% in 1998. Operating income was essentially unchanged at
$67.6 million," concluded Mr. Hermance.
Common Stock Repurchases
In the fourth quarter of 1999, AMETEK repurchased approximately
492,000 shares of its common stock and subsequent to year-end the company has
repurchased an additional 83,000 shares, for a combined cost of $10.9 million.
Approximately $27 million remains available for share repurchases under the
current Board of Directors authorization.
Corporate Profile
AMETEK is a leading global manufacturer of electronic instruments and
electric motors. AMETEK's Corporate Growth Plan is based on Four Key
Strategies: Strategic Acquisitions & Alliances, Global & Market Expansion, New
Products and Operational Excellence. Its objective is double-digit percentage
growth in earnings per share and a superior return on total capital. The
common stock of AMETEK is a component of the S & P MidCap 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
(Dollars and shares in thousands, except per share amounts)
Three months ended Twelve months ended
December 31, December 31,
1999 1998 (a) 1999 1998 (a)
Net sales $236,021 $206,826 $924,797 $927,474
Expenses:
Cost of sales,
excluding
depreciation 178,363 158,674 696,011 711,020
Selling, general
and administrative 19,471 20,765 79,351 82,089
Depreciation 8,641 7,259 30,638 29,909
Nonrecurring charge - 8,020 - 8,020
Total expenses 206,475 194,718 806,000 831,038
Operating income 29,546 12,108 118,797 96,436
Other income (expenses):
Interest expense (6,386) (5,139) (24,776) (23,659)
Other, net (96) 822 440 4,581
Income before
income taxes 23,064 7,791 94,461 77,358
Provision for
income taxes 8,050 1,665 33,693 26,909
Income before
extraordinary item 15,014 6,126 60,768 50,449
Extraordinary loss on
early extinguishment of
debt, net of taxes - - - (8,710)
Net Income $15,014 $6,126 $60,768 $41,739
Diluted earnings
(loss) per share:
Income before
extraordinary item $0.46 $0.19 $1.85 $1.50
Extraordinary loss
on early
extinguishment of debt - - - (0.26)
Net Income $0.46 $0.19 $1.85 $1.24
Basic earnings (loss)
per share:
Income before
extraordinary item $0.47 $0.19 $1.88 $1.55
Extraordinary loss on
early extinguishments
of debt - - - (0.27)
Net Income $0.47 $0.19 $1.88 $1.28
Average common
shares outstanding:
Diluted shares 32,723 32,823 32,925 33,741
Basic shares 32,219 32,134 32,297 32,733
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 Twelve months ended
December 31, December 31,
1999 1998 1999 1998
Net sales
Electromechanical $118,515 $107,911 $473,725 $513,272
Electronic
Instruments 117,506 98,915 451,072 414,202
Total
Consolidated $236,021 $206,826 $924,797 $927,474
Operating income (a)
Electromechanical $15,518 $6,348 $67,575 $62,511
Electronic
Instruments 19,080 11,159 69,965 55,703
Total segments 34,598 17,507 137,540 118,214
Corporate and other (5,052) (5,399) (18,743) (21,778)
Total
Consolidated $29,546 $12,108 $118,797 $96,436
(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 J. Burke of AMETEK, 610-889-5249.