10-QPeriod: Q1 FY2021

AMETEK INC/ Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 4, 2021For Securities:AME

Summary

AMETEK Inc. reported a modest increase in net sales for the first quarter of 2021, reaching $1.216 billion, up 1.1% year-over-year, driven by a combination of organic sales growth and favorable foreign currency translation, partially offset by a prior divestiture. While net income saw a decrease to $219.2 million from $280.6 million in the prior year, this was largely due to the significant gain from a business sale in Q1 2020. Excluding this one-time item, the underlying operational performance appears robust, with strong order growth of 15.5% and a record backlog of $1.984 billion by quarter-end, signaling positive future demand. The company demonstrated effective cost management and operational efficiencies, with segment operating margins improving significantly to 25.7% from 20.6% in the prior year, partly due to the impact of previously implemented realignment actions. AMETEK also continued its active acquisition strategy, completing three acquisitions in March 2021 and two significant ones in April 2021, indicating a focus on inorganic growth to complement its organic efforts.

Financial Highlights

53 data points
Beta

Revenue

$1.22B

35.1% Gross Margin

Net Income

$219.23M

18.0% Net Margin

EPS (Diluted)

$0.94

Total Assets

$10.58B

Cash & Equivalents

$1.12B

Free Cash Flow

$266.87M

Financial Statements
Beta
Revenue$1.22B
Cost of Revenue$789.39M
Gross Profit$426.35M
SG&A Expenses$133.00M
Operating Expenses$922.40M
Operating Income$293.35M
Interest Expense$18.95M
Net Income$219.23M
EPS (Basic)$0.95
EPS (Diluted)$0.94
Shares Outstanding (Basic)230.44M
Shares Outstanding (Diluted)232.30M

Key Highlights

  • 1Net sales increased by 1.1% to $1.216 billion, driven by organic growth and favorable currency translation.
  • 2Orders reached a record $1.398 billion, up 15.5% year-over-year, resulting in a record backlog of $1.984 billion at the end of the quarter.
  • 3Segment operating income increased by 25.9% to $311.9 million, with segment operating margins expanding to 25.7% from 20.6% in Q1 2020.
  • 4Net income decreased by 21.9% to $219.2 million, primarily due to the absence of a significant gain from a business sale in the prior year's quarter.
  • 5The company completed three acquisitions in March 2021 (Magnetrol, Crank Software, EGS Automation) and two significant ones in April 2021 (NSI-MI Technologies, Abaco Systems, Inc.) for a total of approximately $1.84 billion.
  • 6Free cash flow was strong at $266.9 million for the quarter, indicating healthy cash generation.
  • 7The company increased its quarterly cash dividend by 11% to $0.20 per share.

Frequently Asked Questions

Net income decreased by 21.9% to $219.2 million in Q1 2021 from $280.6 million in Q1 2020. This decrease is primarily due to the absence of a significant pre-tax gain of $141.0 million realized from the sale of the Reading Alloys business in March 2020. Excluding this one-time event from the prior year, the underlying operational performance shows continued strength.

The company experienced record order intake of $1.398 billion in Q1 2021, a 15.5% increase over Q1 2020. This strong order momentum resulted in a record backlog of $1.984 billion as of March 31, 2021, up 10.1% from December 31, 2020. This indicates a positive outlook for future sales as these orders are fulfilled.

AMETEK has been very active on the acquisition front. In March 2021, the company acquired Magnetrol International, Crank Software, and EGS Automation for $263.9 million. Subsequently, in April 2021, they acquired NSI-MI Technologies for approximately $230 million and Abaco Systems, Inc. for approximately $1.35 billion. These acquisitions are expected to contribute to future growth, particularly within the Electronic Instruments Group (EIG).

While the COVID-19 pandemic had an adverse impact in 2020, AMETEK has seen a return to organic sales growth and strong order momentum in Q1 2021. All global manufacturing facilities remained operational with safety protocols. The company has eliminated some temporary cost-saving measures from 2020 and continues to monitor costs and capital expenditures. The full impact and duration of the pandemic remain uncertain, but the company's performance in Q1 2021 suggests resilience.