01—Abstract
Summary
Summary of the 10-K filed February 22, 2018. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- AMETEK 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.
- Diluted earnings per share (EPS) increased by 34.2% to $2.94 in 2017, up from $2.19 in 2016.
- The company completed three strategic acquisitions in 2017 (Rauland, MOCON, Arizona Instrument) for $556.6 million, further strengthening its market positions.
- Organic sales growth was 6% for the year, with Electronic Instruments Group (EIG) at 5% and Electromechanical Group (EMG) at 8%.
- Operating cash flow increased by 10.1% to $833.3 million in 2017.
- The Tax Cuts and Jobs Act resulted in a one-time net benefit of $91.6 million in 2017, increasing EPS by $0.39.
- Backlog of unfilled orders reached a record $1,396.1 million at the end of 2017.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Ametek Inc kept $0.16.
- Revenue$4.30B100.0%
- Cost of revenue−$2.85B66.3%
- Gross profit$1.45B33.7%
- Operating costs−$545.1M12.7%
- Operating income$903.6M21.0%
- Interest, other & tax−$222.2M5.2%
- Net income$681.5M15.8%
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 22, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $4.30B$3.84B | +12.0% |
| Cost of Revenue | $2.85B$2.58B | +10.7% |
| Gross Profit | $1.45B$1.26B | +14.5% |
| R&D Expenses | $130.40M$112.00M | +16.4% |
| SG&A Expenses | $535.18M$463.61M | +15.4% |
| Operating Expenses | $3.40B$3.05B | +11.4% |
| Operating Income | $903.62M$790.98M | +14.2% |
| Interest Expense | $98.03M$94.30M | +3.9% |
| Net Income | $681.47M$512.16M | +33.1% |
| EPS (Basic) | $2.96$2.20 | +34.5% |
| EPS (Diluted) | $2.94$2.19 | +34.2% |
| Shares Outstanding (Basic) | 230.23M232.59M | −1.0% |
| Shares Outstanding (Diluted) | 231.84M233.73M | −0.8% |
05—Questions
Frequently Asked Questions
What were the key drivers of AMETEK's financial performance in 2017?
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.
How did the Tax Cuts and Jobs Act impact AMETEK's 2017 results?
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.
What is AMETEK's strategy for growth?
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.
How diversified are AMETEK's operations?
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.
06—Continue