10-QPeriod: Q1 FY2023

AMETEK INC/ Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 2, 2023For Securities:AME

Summary

AMETEK, Inc. (AME) reported a strong first quarter for 2023, demonstrating robust financial performance and strategic growth. The company achieved record operating income and operating margins, driven by organic sales growth in both its Electronic Instruments (EIG) and Electromechanical (EMG) segments, alongside contributions from recent acquisitions. Despite facing inflationary pressures on material costs and supply chain constraints, AMETEK managed these challenges effectively through pricing actions and inventory management. Key financial highlights include a significant increase in net sales and net income, with diluted earnings per share rising to $1.32. The company also reported record operating cash flow and free cash flow, underscoring its operational efficiency and financial discipline. AMETEK's balance sheet remains strong, with a healthy debt-to-capital ratio and substantial available borrowing capacity, providing flexibility for future investments and shareholder returns. The company also announced a 14% increase in its quarterly cash dividend, signaling confidence in its financial outlook.

Financial Highlights

52 data points
Beta

Revenue

$1.60B

36.0% Gross Margin

Net Income

$305.71M

19.1% Net Margin

EPS (Diluted)

$1.32

Total Assets

$12.62B

Cash & Equivalents

$399.87M

Free Cash Flow

$366.53M

Financial Statements
Beta
Revenue$1.60B
Cost of Revenue$1.02B
Gross Profit$574.59M
SG&A Expenses$169.05M
Operating Expenses$1.19B
Operating Income$405.54M
Interest Expense$20.57M
Net Income$305.71M
EPS (Basic)$1.33
EPS (Diluted)$1.32
Shares Outstanding (Basic)230.13M
Shares Outstanding (Diluted)231.23M

Key Highlights

  • 1Net sales increased by 9.5% to $1.597 billion in Q1 2023 compared to $1.459 billion in Q1 2022, driven by 9% organic growth and 2% from acquisitions.
  • 2Operating income reached a record $405.5 million, a 14.8% increase from $353.2 million in the prior year, with operating margins improving to 25.4%.
  • 3Diluted earnings per share (EPS) grew by 12.8% to $1.32, up from $1.17 in Q1 2022.
  • 4The company completed the acquisition of Bison Gear & Engineering Corp. for $99.3 million in March 2023, strengthening its motion control and automation solutions business.
  • 5Record operating cash flow of $386.5 million and free cash flow of $366.5 million were achieved in Q1 2023.
  • 6AMETEK announced a 14% increase in its quarterly cash dividend to $0.25 per share, effective February 2023.
  • 7Backlog reached a record $3.43 billion at March 31, 2023, indicating strong future demand.

Frequently Asked Questions

Acquisitions contributed 2% to the net sales increase in Q1 2023. The company acquired Bison Gear & Engineering Corp. for $99.3 million in March 2023, adding to its portfolio of motion control and automation solutions. Recent acquisitions from 2022 (Navitar and RTDS) also contributed to the results.

AMETEK is mitigating material cost inflation through pricing actions and has taken steps to build inventory and secure alternative sources of supply to address supply chain constraints. The company expects these inflationary pressures to remain elevated throughout 2023 but is actively managing their impact.

The company reported a strong liquidity position with cash and cash equivalents totaling $399.9 million at March 31, 2023. The debt-to-capital ratio was 22.5%, and the net debt-to-capital ratio was 19.2%, indicating a healthy capital structure. AMETEK also has significant available borrowing capacity under its revolving credit facility.

The EIG segment showed strong growth with net sales up 13.1% and operating income up 26.5%, achieving record operating income. The EMG segment saw a more modest net sales increase of 1.9%, with operating income decreasing slightly due to the dilutive impact of the 2023 acquisition and a one-time gain on facility sale in the prior year's quarter.