10-KPeriod: FY2017

AMETEK INC/ Annual Report, Year Ended Dec 31, 2017

Filed February 22, 2018For Securities:AME

Summary

AMETEK, Inc. reported a strong performance for the fiscal year ending December 30, 2017, setting records for orders, sales, operating income, net income, and diluted earnings per share. This robust growth was driven by a strengthening global economic environment, successful integration of recent acquisitions, and continued focus on their 'Operational Excellence' strategy. The company expanded its product portfolio through three strategic acquisitions in 2017: Rauland-Borg Corporation (communications solutions), MOCON, Inc. (gas analysis instrumentation), and Arizona Instrument LLC (moisture and gas measurement instruments), all of which are expected to contribute positively to future results. The company's balanced approach to growth, emphasizing both organic expansion and strategic acquisitions, along with its diversified end markets and global presence, positions it well for continued success. Investors should note the positive impact of the U.S. Tax Cuts and Jobs Act, which provided a significant net benefit to earnings in 2017. AMETEK continues to focus on innovation and operational efficiency to drive shareholder value.

Financial Highlights

56 data points
Beta

Revenue

$4.30B

33.7% Gross Margin

Net Income

$681.47M

15.8% Net Margin

EPS (Diluted)

$2.94

Total Assets

$7.80B

Cash & Equivalents

$646.30M

Free Cash Flow

$758.18M

Financial Statements
Beta
Revenue$4.30B
Cost of Revenue$2.85B
Gross Profit$1.45B
R&D Expenses$130.40M
SG&A Expenses$535.18M
Operating Expenses$3.40B
Operating Income$903.62M
Interest Expense$98.03M
Net Income$681.47M
EPS (Basic)$2.96
EPS (Diluted)$2.94
Shares Outstanding (Basic)230.23M
Shares Outstanding (Diluted)231.84M

Key Highlights

  • 1AMETEK achieved record orders of $4,539.8 million and record sales of $4,300.2 million in 2017, representing year-over-year increases of 18.0% and 12.0% respectively.
  • 2Diluted earnings per share (EPS) increased by 34.2% to $2.94 in 2017, up from $2.19 in 2016.
  • 3The company completed three strategic acquisitions in 2017 (Rauland, MOCON, Arizona Instrument) for $556.6 million, further strengthening its market positions.
  • 4Organic sales growth was 6% for the year, with Electronic Instruments Group (EIG) at 5% and Electromechanical Group (EMG) at 8%.
  • 5Operating cash flow increased by 10.1% to $833.3 million in 2017.
  • 6The Tax Cuts and Jobs Act resulted in a one-time net benefit of $91.6 million in 2017, increasing EPS by $0.39.
  • 7Backlog of unfilled orders reached a record $1,396.1 million at the end of 2017.

Frequently Asked Questions

AMETEK's strong performance in 2017 was driven by a combination of factors including a strengthening global economic environment, successful integration of recent acquisitions, continued execution of its 'Operational Excellence' initiatives, and the introduction of new products. Organic sales growth across both operating groups also contributed significantly.

The Tax Cuts and Jobs Act, enacted in late 2017, resulted in a significant net benefit of $91.6 million for AMETEK. This benefit was primarily due to the remeasurement of U.S. net deferred tax liabilities at the new, lower corporate tax rate, partially offset by a one-time tax on previously deferred foreign earnings. This positively impacted diluted EPS by $0.39 for the year.

AMETEK's corporate growth plan is based on four key strategies: Operational Excellence (driving efficiency and innovation), Strategic Acquisitions (acquiring complementary businesses), Global & Market Expansion (increasing international presence and entering new markets), and New Products (continuous investment in R&D for innovative solutions). The company highlighted recent acquisitions in 2017 as a key component of this strategy.

AMETEK operates through two main groups: Electronic Instruments (EIG) and Electromechanical (EMG). EIG serves markets such as process, power, industrial, and aerospace, while EMG focuses on precision motion control, thermal management, specialty metals, and electrical interconnects, serving aerospace and defense, medical, automation, and mass transit industries. This diversification across multiple end markets and geographies helps mitigate risks associated with any single industry or region.