10-QPeriod: Q3 FY2014

AMETEK INC/ Quarterly Report for Q3 Ended Sep 30, 2014

Filed November 6, 2014For Securities:AME

Summary

AMETEK, Inc. (AME) reported a strong third quarter and first nine months of 2014, demonstrating robust revenue growth driven by a combination of organic sales increases and strategic acquisitions. Net sales for the third quarter increased by 15.9% year-over-year to $1.03 billion, and for the nine-month period, sales grew 13.1% to $3.00 billion. This growth was supported by solid performance in both the Electronic Instruments Group (EIG) and the Electromechanical Group (EMG), with EIG showing particularly strong top-line expansion due to recent acquisitions. Profitability remained healthy, with diluted earnings per share increasing by 9.6% to $0.57 for the quarter and by 12.9% to $1.75 for the nine months. The company successfully integrated several acquisitions made throughout 2014, contributing significantly to its expanded scale. AMETEK also generated strong operating cash flow and managed its capital effectively, including proceeds from new senior notes issuance used to fund acquisitions and repay debt. Overall, the results highlight AMETEK's effective execution of its growth strategy through both organic expansion and strategic M&A.

Financial Highlights

49 data points
Beta

Revenue

$1.03B

Net Income

$141.81M

13.7% Net Margin

EPS (Diluted)

$0.57

Total Assets

$6.57B

Cash & Equivalents

$369.61M

Free Cash Flow

$178.62M

Financial Statements
Beta
Revenue$1.03B
SG&A Expenses$119.20M
Operating Expenses$813.67M
Operating Income$218.14M
Interest Expense$19.54M
Net Income$141.81M
EPS (Basic)$0.58
EPS (Diluted)$0.57
Shares Outstanding (Basic)245.44M
Shares Outstanding (Diluted)247.64M

Key Highlights

  • 1Net sales for Q3 2014 increased 15.9% to $1.03 billion, driven by 3% internal sales growth and 12% from acquisitions.
  • 2Diluted Earnings Per Share (EPS) for Q3 2014 rose 9.6% to $0.57, compared to $0.52 in Q3 2013.
  • 3The company completed five significant acquisitions in 2014 (Teseq Group, VTI Instruments, Luphos GmbH, Zygo Corporation, and Amptek, Inc.) with an aggregate purchase price of $573.6 million.
  • 4Goodwill increased by $224.8 million to $2.63 billion, reflecting the impact of acquisitions.
  • 5Cash provided by operating activities increased by 13.7% to $512.7 million for the nine months ended September 30, 2014.
  • 6AMETEK issued $700 million in senior notes during Q3 2014, with the first funding of $500 million used to pay down revolving credit facility borrowings.
  • 7The company increased its quarterly cash dividend by 50% to $0.09 per share in May 2014.

Frequently Asked Questions

AMETEK reported a 15.9% increase in net sales for the third quarter of 2014, reaching $1.03 billion, up from $890.0 million in the same period of 2013. This growth was attributed to approximately 3% internal sales growth and 12% from recent acquisitions.

The company made several significant acquisitions in 2014, including Teseq Group, VTI Instruments, Luphos GmbH, Zygo Corporation, and Amptek, Inc., totaling $573.6 million. These acquisitions contributed significantly to the increase in net sales, particularly in the Electronic Instruments Group (EIG). The acquisitions also led to a substantial increase in goodwill on the balance sheet.

Profitability saw an improvement, with net income increasing by 10.9% to $141.8 million for the third quarter of 2014, and diluted earnings per share (EPS) rising by 9.6% to $0.57. For the nine-month period, net income grew by 13.4% to $432.5 million, and diluted EPS increased by 12.9% to $1.75.

AMETEK generated strong operating cash flow, increasing by 13.7% to $512.7 million for the first nine months of 2014. The company also completed a $700 million senior notes issuance in Q3 2014, using the initial $500 million funding to reduce debt. The company believes it has sufficient liquidity and access to capital to meet its future obligations.