10-QPeriod: Q3 FY2011

AMETEK INC/ Quarterly Report for Q3 Ended Sep 30, 2011

Filed November 3, 2011For Securities:AME

Summary

AMETEK, Inc. reported strong financial results for the nine months and third quarter ended September 30, 2011, demonstrating robust growth driven by both internal sales increases and strategic acquisitions. The company saw significant year-over-year growth in net sales, operating income, and net income, with diluted earnings per share also showing substantial improvement. This performance indicates effective execution of the company's growth strategy, which includes expanding its presence in key markets and integrating acquired businesses. The company's operational efficiency and focus on 'Operational Excellence' initiatives appear to be contributing to improved operating margins across both its Electronic Instruments Group (EIG) and Electromechanical Group (EMG). AMETEK also highlighted a strengthened liquidity position, with increased cash from operations and a newly established, larger revolving credit facility, providing financial flexibility for future growth and strategic investments. The company's proactive approach to managing its capital structure and its continued commitment to shareholder returns through share repurchases further underscore a positive financial trajectory.

Financial Highlights

50 data points
Beta

Revenue

$750.55M

Net Income

$97.98M

13.1% Net Margin

EPS (Diluted)

$0.40

Total Assets

$4.12B

Cash & Equivalents

$218.27M

Free Cash Flow

$125.19M

Financial Statements
Beta
Revenue$750.55M
SG&A Expenses$86.02M
Operating Expenses$590.96M
Operating Income$159.59M
Interest Expense$17.26M
Net Income$97.98M
EPS (Basic)$0.41
EPS (Diluted)$0.40
Shares Outstanding (Basic)241.39M
Shares Outstanding (Diluted)243.77M

Key Highlights

  • 1Significant year-over-year revenue growth, with net sales increasing by 16.5% in Q3 2011 and 24.2% for the nine months ended September 30, 2011.
  • 2Robust increase in profitability, with net income rising by 26.6% for Q3 2011 and 39.4% for the nine months ended September 30, 2011.
  • 3Diluted earnings per share (EPS) showed strong growth, up 25.0% in Q3 2011 to $0.60 and 38.1% for the nine months to $1.74.
  • 4Acquisitions played a key role in growth, with the integration of Avicenna, Coining, and Atlas contributing to sales expansion.
  • 5Both the Electronic Instruments Group (EIG) and Electromechanical Group (EMG) reported substantial increases in net sales and operating income.
  • 6Strengthened liquidity and financial flexibility with a new, larger $700 million revolving credit facility and positive free cash flow generation.
  • 7Continued commitment to shareholder returns, evidenced by ongoing share repurchase programs.

Frequently Asked Questions

AMETEK's revenue growth was driven by a combination of strong internal sales growth, particularly in its process, power, and industrial businesses within the EIG segment, and the successful integration of recent acquisitions, including Avicenna, Coining, and Atlas. The company also benefited from favorable foreign currency translation effects.

Profitability metrics showed significant improvement. Operating income increased by 24.1% for the third quarter and 35.2% for the nine months. Net income saw a 26.6% increase for the third quarter and a 39.4% increase for the nine months. Diluted earnings per share grew by 25.0% in the third quarter and 38.1% for the nine months, reflecting operational efficiencies and revenue growth.

AMETEK has a strong liquidity position, evidenced by a significant increase in cash provided by operating activities and free cash flow. The company recently secured a new five-year, $700 million revolving credit facility, enhancing its financial flexibility. AMETEK expects to fund its operating needs, contractual obligations, and growth plans, including its acquisition strategy, through its cash-generating capabilities, available credit facilities, and access to long-term capital.

Both segments are performing well. The Electronic Instruments Group (EIG) saw net sales increase by 21.3% in Q3 and 27.4% for the nine months, driven by strong internal growth and acquisitions, with operating margins improving to 25.0%. The Electromechanical Group (EMG) experienced a 11.2% net sales increase in Q3 and 20.6% for the nine months, also supported by internal growth and acquisitions, with operating margins rising to 20.0%.