01—Abstract
Summary
Summary of the 10-K filed February 25, 2010. Cited figures are marked; the original filing is the authoritative source.
AMETEK, Inc. (AME) reported its 2009 fiscal year results, a period marked by the global economic recession.
Despite a 17% decrease in net sales compared to 2008, falling to $2.1 billiona, the company demonstrated resilience. This was achieved through successful operational excellence initiatives and the integration of strategic acquisitions made throughout 2008 and 2009, which helped to offset internal sales declines. The company operates through two main segments: the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG), serving diverse end markets such as aerospace, defense, industrial, and medical.
AMETEK emphasizes a strategy of growth through operational excellence, new product development, global expansion, and strategic acquisitions, a strategy that has enabled it to navigate the challenging economic environment. The company also managed its balance sheet effectively, reducing total debt and maintaining a healthy liquidity position.
02—Key points
Key Highlights
- Net sales decreased by 17.1% to $2.1 billion in 2009 compared to $2.5 billion in 2008, primarily due to the global economic recession impacting order rates.
- Despite the sales decline, AMETEK reported solid operating income ($366.1 million) and net income ($205.8 million), demonstrating cost control and operational efficiency.
- The company completed three strategic acquisitions in 2009 (High Standard Aviation, Unispec Marketing Pvt. Ltd. & Thelsha Technical Services Pvt. Ltd., and Ameron Global), adding to its portfolio and geographic reach.
- International sales represented 49.2% of consolidated net sales in 2009, highlighting the company's global presence and diversification.
- Research, development, and engineering expenses were $101.4 million (before customer reimbursements), with sales from products introduced in the last three years accounting for 18.8% of total sales, indicating a focus on innovation.
- The company successfully reduced its total debt to $1,041.7 million at the end of 2009, down from $1,111.7 million in 2008, and maintained a strong available borrowing capacity under its revolving credit facility.
- The company repurchased no shares in 2009, after repurchasing approximately 1.3 million shares in 2008, signaling a focus on preserving capital during the economic downturn.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 25, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $2.10B$2.53B | −17.1% |
| R&D Expenses | $50.50M$57.50M | −12.2% |
| SG&A Expenses | $254.14M$322.55M | −21.2% |
| Operating Expenses | $1.73B$2.10B | −17.4% |
| Operating Income | $366.05M$432.65M | −15.4% |
| Interest Expense | $68.75M$63.65M | +8.0% |
| Net Income | $205.77M$246.95M | −16.7% |
| EPS (Basic) | $0.85$1.03 | −17.4% |
| EPS (Diluted) | $0.85$1.02 | −17.0% |
| Shares Outstanding (Basic) | 240.27M238.83M | +0.6% |
| Shares Outstanding (Diluted) | 242.66M241.75M | +0.4% |
05—Questions
Frequently Asked Questions
What was AMETEK's financial performance in 2009 given the economic conditions?
In 2009, AMETEK experienced a 17.1% decline in net sales to $2.1 billion, largely due to the global economic recession impacting customer demand. However, the company maintained solid operating income of $366.1 million and net income of $205.8 million, benefiting from cost-reduction initiatives and the integration of strategic acquisitions completed in 2008 and 2009.
How did AMETEK manage its debt and liquidity during 2009?
AMETEK focused on strengthening its financial position by reducing total debt to $1,041.7 million by the end of 2009, a decrease from $1,111.7 million in 2008. The company also maintained a significant available borrowing capacity of $532.2 million under its revolving credit facility and ended the year with $246.4 million in cash and cash equivalents, indicating a strong liquidity position.
What is AMETEK's strategy for future growth?
AMETEK's growth strategy is built on four pillars: Operational Excellence (focusing on cost reduction and efficiency), New Product Development (investing in R&D for innovative products), Global and Market Expansion (broadening its reach in international markets), and Strategic Acquisitions and Alliances (acquiring businesses in niche markets). This diversified approach aims to drive earnings per share growth and improve return on capital.
06—Continue