10-QPeriod: Q2 FY2019

AMETEK INC/ Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 2, 2019For Securities:AME

Summary

AMETEK, Inc. (AME) reported strong financial results for the second quarter and first half of 2019, demonstrating robust growth driven by both organic sales and strategic acquisitions. Net sales for the second quarter increased by 6.7% to $1.29 billion, and for the first half, they grew by 8.2% to $2.58 billion. This top-line growth translated into increased profitability, with net income rising 11.1% to $215.5 million in Q2 and 11.9% to $419.8 million for the first six months. Diluted earnings per share also saw a healthy increase, up 13.3% to $0.94 for the quarter and 13.7% to $1.83 for the half-year period. The company's performance was bolstered by its two key segments: Electronic Instruments (EIG) and Electromechanical (EMG). EIG experienced significant net sales growth of 10.2% in Q2, driven by acquisitions and organic growth, while EMG saw a more modest 1.0% increase, primarily due to organic growth. Operating income and margins showed improvement across both segments, particularly in EMG, highlighting the company's successful 'Operational Excellence' initiatives. The company also reported a strong order backlog, indicating continued demand for its products and services, and maintained a healthy cash flow from operations.

Financial Highlights

53 data points
Beta

Revenue

$1.29B

35.0% Gross Margin

Net Income

$215.50M

16.7% Net Margin

EPS (Diluted)

$0.94

Total Assets

$9.07B

Cash & Equivalents

$567.91M

Free Cash Flow

$224.46M

Financial Statements
Beta
Revenue$1.29B
Cost of Revenue$838.15M
Gross Profit$451.26M
SG&A Expenses$155.85M
Operating Expenses$994.00M
Operating Income$295.41M
Interest Expense$21.48M
Net Income$215.50M
EPS (Basic)$0.95
EPS (Diluted)$0.94
Shares Outstanding (Basic)227.58M
Shares Outstanding (Diluted)229.33M

Key Highlights

  • 1Net sales for the second quarter of 2019 increased by 6.7% year-over-year to $1.29 billion, and for the first six months, net sales grew 8.2% to $2.58 billion.
  • 2Net income for the second quarter of 2019 increased by 11.1% to $215.5 million, and for the first six months, net income rose 11.9% to $419.8 million.
  • 3Diluted earnings per share (EPS) increased by 13.3% to $0.94 for the second quarter and by 13.7% to $1.83 for the first six months, compared to the prior year periods.
  • 4The Electronic Instruments Group (EIG) showed strong performance with a 10.2% increase in net sales for Q2, driven by acquisitions and organic growth.
  • 5The Electromechanical Group (EMG) also contributed positively with a 1.0% increase in net sales for Q2, driven by organic growth and improved operating margins.
  • 6Operating income increased across both segments, and consolidated operating income rose 9.4% to $295.4 million in Q2, with margins improving to 22.9%.
  • 7The company reported a strong order backlog of $1.68 billion as of June 30, 2019, up 4.9% from December 31, 2018, indicating continued demand.

Frequently Asked Questions

AMETEK's net sales for the second quarter of 2019 increased by 6.7% to $1.29 billion, up from $1.21 billion in the second quarter of 2018. This growth was attributed to a 3% increase from organic sales and a 5% increase from acquisitions, partially offset by a 1% unfavorable foreign currency translation effect.

For the first six months of 2019, AMETEK reported a net income of $419.8 million, an increase of 11.9% compared to $375.2 million in the same period of 2018. Diluted earnings per share for the first six months were $1.83, up 13.7% from $1.61 in the prior year.

The Electronic Instruments Group (EIG) saw a 10.2% increase in net sales for Q2 2019, driven by acquisitions and organic growth. The Electromechanical Group (EMG) reported a 1.0% increase in net sales for Q2 2019, primarily from organic sales growth. Both segments contributed to improved operating income and margins, with EMG showing notable margin expansion.

As of June 30, 2019, AMETEK's total debt, net, was $2.47 billion, a decrease from $2.63 billion at the end of 2018. The company had $567.9 million in cash and cash equivalents, an increase from $354.0 million at the end of 2018. The company also reported significant available borrowing capacity under its revolving credit facility and is in compliance with its debt covenants.