10-QPeriod: Q2 FY2012

AMETEK INC/ Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 2, 2012For Securities:AME

Summary

AMETEK Inc.'s (AME) second quarter 2012 results demonstrate strong operational performance and strategic growth, driven by significant acquisitions and effective "Operational Excellence" initiatives. The company reported record orders, operating income, and diluted earnings per share for the quarter. Net sales increased by 8.8% year-over-year to $825.9 million, fueled by recent acquisitions and stable internal growth despite a weak international environment and a 1% unfavorable foreign currency impact. Profitability saw substantial improvement, with consolidated operating income rising 17.8% to $185.0 million and net income increasing by 20.8% to $113.7 million. Diluted earnings per share reached $0.47, up from $0.39 in the prior year period, reflecting the positive impact of strategic moves and operational efficiencies. The company also executed a three-for-two stock split and increased its quarterly dividend, signaling confidence in its future performance. AMETEK continues to invest in growth, as evidenced by significant cash used in investing activities for business acquisitions, while maintaining a solid liquidity position and manageable debt levels.

Financial Highlights

50 data points
Beta

Revenue

$825.90M

Net Income

$113.69M

13.8% Net Margin

EPS (Diluted)

$0.47

Total Assets

$4.89B

Cash & Equivalents

$163.59M

Free Cash Flow

$103.63M

Financial Statements
Beta
Revenue$825.90M
SG&A Expenses$95.65M
Operating Expenses$640.92M
Operating Income$184.98M
Interest Expense$18.84M
Net Income$113.69M
EPS (Basic)$0.47
EPS (Diluted)$0.47
Shares Outstanding (Basic)241.17M
Shares Outstanding (Diluted)243.12M

Key Highlights

  • 1AMETEK reported record orders, operating income, and diluted earnings per share for the second quarter of 2012.
  • 2Net sales increased by 8.8% to $825.9 million, driven by acquisitions (O'Brien, Dunkermotoren, etc.) and stable internal growth.
  • 3Consolidated net income grew 20.8% to $113.7 million, with diluted EPS rising to $0.47 from $0.39 year-over-year.
  • 4The company completed a three-for-two stock split and increased its quarterly dividend by 50%.
  • 5Operating income margins improved across both segments (EIG and EMG) due to operational efficiencies and higher sales.
  • 6Acquisitions are a key growth driver, with $497.8 million spent on O'Brien and Dunkermotoren in the first half of 2012, contributing significantly to goodwill and intangible assets.
  • 7The company has a robust liquidity position with $163.6 million in cash and cash equivalents and $490.8 million in available borrowing capacity under its revolving credit facility.

Frequently Asked Questions

Sales growth was primarily driven by recent acquisitions, including O'Brien Corporation and Dunkermotoren GmbH, which contributed significantly to revenue. The company also experienced stable internal growth, although this was partially offset by a weak international environment and unfavorable foreign currency translation.

Profitability saw significant improvement. Net income increased by 20.8% to $113.7 million, and diluted earnings per share rose by 20.5% to $0.47. This was attributed to strong sales performance, benefits from 'Operational Excellence' initiatives leading to lower costs and improved operating margins in both segments.

AMETEK completed a three-for-two stock split effective June 29, 2012, and increased its quarterly cash dividend by 50%. The company also continued its aggressive acquisition strategy, spending $497.8 million on O'Brien Corporation and Dunkermotoren GmbH in the first half of the year.

The company generated strong operating cash flow of $256.6 million in the first six months of 2012, with free cash flow at $236.1 million. AMETEK has a solid liquidity position with $163.6 million in cash and cash equivalents and $490.8 million available under its credit facilities. Total debt increased due to acquisitions, but the debt-to-capital ratio remained manageable at 39.8%.