10-QPeriod: Q2 FY2009

AMETEK INC/ Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 5, 2009For Securities:AME

Summary

AMETEK, Inc. (AME) reported a decrease in net sales and net income for the second quarter and first six months of 2009 compared to the same periods in 2008, reflecting the ongoing global economic recession. Net sales for the second quarter fell by 19.1% to $524.9 million, and for the first six months, they decreased by 14.5% to $1,077.8 million. This decline was primarily driven by lower order rates, though partially offset by recent acquisitions. Despite the revenue challenges, the company demonstrated resilience with solid operating income and EPS, reflecting effective cost management and operational excellence initiatives. The company also reported an increase in cash provided by operating activities and an improved free cash flow, indicating strong liquidity management.

Financial Highlights

50 data points
Beta

Revenue

$524.93M

Net Income

$51.81M

9.9% Net Margin

EPS (Diluted)

$0.21

Total Assets

$3.11B

Cash & Equivalents

$137.40M

Free Cash Flow

$64.78M

Financial Statements
Beta
Revenue$524.93M
SG&A Expenses$61.02M
Operating Expenses$431.75M
Operating Income$93.18M
Interest Expense$17.14M
Net Income$51.81M
EPS (Basic)$0.21
EPS (Diluted)$0.21
Shares Outstanding (Basic)240.09M
Shares Outstanding (Diluted)242.90M

Key Highlights

  • 1Net sales for Q2 2009 decreased by 19.1% to $524.9 million compared to Q2 2008, attributed to the global economic recession impacting order rates.
  • 2Net income for Q2 2009 was $51.8 million, a decrease of 21.3% from $65.8 million in Q2 2008, with diluted EPS falling to $0.48 from $0.61.
  • 3The company completed several acquisitions in late 2008 and early 2009, which helped to partially offset the decline in internal sales.
  • 4Despite lower sales, the company maintained strong operating margins through cost reduction initiatives and operational excellence, with segment operating income margins remaining relatively stable or improving in some segments.
  • 5Cash provided by operating activities increased by 29.9% to $184.2 million for the first six months of 2009, leading to an improved free cash flow.
  • 6Total debt outstanding decreased to $1,059.0 million as of June 30, 2009, and the debt-to-capital and net debt-to-capital ratios improved, indicating a stronger balance sheet.
  • 7AMETEK reported $137.4 million in cash and cash equivalents as of June 30, 2009, an increase from $87.0 million at the end of 2008, demonstrating robust liquidity.

Frequently Asked Questions

The global economic recession significantly impacted AMETEK's performance, leading to lower order rates and a corresponding decrease in net sales for both the three and six-month periods ended June 30, 2009, compared to the prior year. Net sales for the second quarter decreased by 19.1%.

AMETEK is employing a strategy that combines cost reduction initiatives, operational excellence improvements, and strategic acquisitions. These efforts have helped to mitigate the impact of lower sales on operating income and maintain profitability. The company also reported strong free cash flow generation, indicating effective working capital management.

Recent acquisitions, including High Standard Aviation, Vision Research, Xantrex Programmable Power, and Muirhead Aerospace, played a role in partially offsetting the decline in internal sales. These acquisitions helped to bolster revenue in certain segments, though their full impact is still being integrated.

AMETEK's financial health appears sound. The company reported an increase in cash and cash equivalents, a decrease in total debt, and improved debt-to-capital ratios. They also noted strong operating cash flow and free cash flow, indicating sufficient liquidity to meet obligations and operate effectively in the foreseeable future.