10-QPeriod: Q3 FY2010

AMETEK INC/ Quarterly Report for Q3 Ended Sep 30, 2010

Filed November 4, 2010For Securities:AME

Summary

AMETEK, Inc. (AME) reported a strong third quarter and nine-month period ending September 30, 2010, demonstrating significant growth and improved profitability compared to the prior year. The company experienced robust internal sales growth across both its Electronic Instruments Group (EIG) and Electromechanical Group (EMG), complemented by contributions from recent strategic acquisitions. This performance highlights a recovery from the 2009 economic downturn, with increased order rates and a growing backlog indicating positive future momentum. The company's financial health appears solid, with operating income, net income, and diluted earnings per share all showing substantial increases. AMETEK also generated strong operating cash flow, enabling significant investment in acquisitions while managing debt levels. The successful integration of new businesses and continued focus on operational excellence positions the company favorably for continued growth.

Financial Highlights

51 data points
Beta

Revenue

$644.37M

Net Income

$77.36M

12.0% Net Margin

EPS (Diluted)

$0.32

Total Assets

$3.58B

Cash & Equivalents

$135.02M

Free Cash Flow

$104.53M

Financial Statements
Beta
Revenue$644.37M
SG&A Expenses$75.87M
Operating Expenses$515.78M
Operating Income$128.59M
Interest Expense$17.06M
Net Income$77.36M
EPS (Basic)$0.33
EPS (Diluted)$0.32
Shares Outstanding (Basic)237.97M
Shares Outstanding (Diluted)241.08M

Key Highlights

  • 1Net sales for the third quarter of 2010 increased by 29.6% to $644.4 million compared to $497.1 million in the prior year, driven by strong internal growth and acquisitions.
  • 2Net income for the third quarter of 2010 surged by 80.0% to $77.4 million, resulting in diluted earnings per share of $0.72, up from $0.40 in the prior year.
  • 3Operating income for the nine months ended September 30, 2010, increased by 25.2% to $346.6 million, reflecting improved operational efficiency and sales leverage.
  • 4The company made significant acquisitions during the period, including Technical Services for Electronics (TSE) and Haydon Enterprises, along with smaller acquisitions, totaling $373.7 million in cash.
  • 5Cash provided by operating activities for the first nine months of 2010 was $294.7 million, an increase of 15.2% year-over-year, indicating strong cash generation.
  • 6The backlog of unfilled orders at September 30, 2010, stood at $786.0 million, an increase of 21.2% from December 31, 2009, suggesting sustained future demand.
  • 7AMETEK's debt-to-capital ratio remained stable at 39.9% as of September 30, 2010, and the company reported compliance with all debt covenants.

Frequently Asked Questions

AMETEK reported a significant increase in net sales for the third quarter of 2010, reaching $644.4 million, a 29.6% rise from $497.1 million in the third quarter of 2009. This growth was attributed to strong internal sales increases of approximately 24% and contributions from recent acquisitions.

Acquisitions played a key role in AMETEK's growth. The company spent $373.7 million on several acquisitions in the first nine months of 2010, including Technical Services for Electronics (TSE) and Haydon Enterprises. These acquisitions contributed to the increase in net sales and operating income in both the third quarter and the nine-month period.

Profitability saw substantial improvement. For the third quarter of 2010, net income more than doubled to $77.4 million, leading to diluted EPS of $0.72, up from $0.40 in the prior year. For the first nine months, net income grew by 31.7% to $202.7 million, with diluted EPS increasing to $1.89 from $1.43.

AMETEK's financial position appears strong. Operating cash flow increased, and the company maintained its debt-to-capital ratio at 39.9%. The growing backlog of $786.0 million and positive sales trends suggest a positive outlook for future performance. The company also announced a three-for-two stock split and a 50% increase in its quarterly dividend, indicating management's confidence.