10-QPeriod: Q1 FY2024

AMETEK INC/ Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 2, 2024For Securities:AME

Summary

AMETEK, Inc. (AME) reported solid results for the first quarter ended March 31, 2024, with record sales driven by strong performance in its Electronic Instruments Group (EIG) and significant contributions from recent acquisitions, partially offset by a decline in organic orders. The company's consolidated net sales increased by 8.7% year-over-year to $1.74 billion, primarily fueled by acquisitions which accounted for a 9% increase. While overall operating income saw a modest increase, the reported figures were impacted by $29.2 million in pre-tax integration costs related to the Paragon acquisition, which also affected operating margins. Despite a dip in overall orders, reflecting customer inventory normalization and a challenging organic order environment, AMETEK maintained a robust backlog of $3.46 billion. The company also demonstrated strong operational cash flow generation, with free cash flow increasing to $382.6 million. AMETEK's financial position remains solid, with a healthy debt-to-capital ratio and ample liquidity, supported by a revolving credit facility. The company also returned capital to shareholders through increased dividends and modest share repurchases.

Financial Highlights

52 data points
Beta

Revenue

$1.74B

34.1% Gross Margin

Net Income

$310.94M

17.9% Net Margin

EPS (Diluted)

$1.34

Total Assets

$14.86B

Cash & Equivalents

$373.76M

Free Cash Flow

$382.57M

Financial Statements
Beta
Revenue$1.74B
Cost of Revenue$1.14B
Gross Profit$591.50M
SG&A Expenses$174.28M
Operating Expenses$1.32B
Operating Income$417.22M
Interest Expense$35.25M
Net Income$310.94M
EPS (Basic)$1.35
EPS (Diluted)$1.34
Shares Outstanding (Basic)231.10M
Shares Outstanding (Diluted)232.03M

Key Highlights

  • 1Consolidated net sales grew 8.7% to $1.74 billion, driven by acquisitions that contributed 9% to the growth.
  • 2Diluted earnings per share increased by 1.5% to $1.34 compared to the prior year's quarter.
  • 3Operating income increased by 2.9% to $417.2 million, though impacted by $29.2 million in Paragon acquisition integration costs.
  • 4Free cash flow increased by 6.1% to $382.6 million for the first three months of 2024.
  • 5The Electronic Instruments Group (EIG) reported record net sales and a significant increase in operating income and margins.
  • 6Orders decreased by 8.2% due to a 10% decline in organic orders and currency translation effects, but the backlog remained strong at $3.46 billion.
  • 7The company increased its quarterly cash dividend by 12% to $0.28 per common share.

Frequently Asked Questions

AMETEK's net sales increased by 8.7% to $1.74 billion in the first quarter of 2024. This growth was primarily driven by acquisitions, which accounted for a 9% increase, supplemented by a 1% increase in organic sales in the Electronic Instruments Group (EIG).

The Paragon Medical acquisition resulted in $29.2 million in pre-tax integration costs during the first quarter of 2024, which included $22.4 million for employee severance. These costs negatively impacted segment operating margins by 160 basis points and consolidated operating margins by 170 basis points, reducing net income by $22.2 million or $0.10 per diluted share.

While consolidated orders for the first quarter of 2024 decreased by 8.2% to $1.66 billion, largely due to a 10% decline in organic orders and customer inventory normalization, the company maintained a robust backlog of unfilled orders at $3.46 billion as of March 31, 2024. Management expects full-year 2024 results to be positively impacted by the 2023 acquisitions and Operational Excellence initiatives.

AMETEK reported strong operating cash flow of $410.2 million and an increased free cash flow of $382.6 million in the first quarter. The company reduced its total debt and maintained a healthy debt-to-capital ratio of 24.6% at quarter-end. Liquidity remains strong with $2.19 billion available under its revolving credit facility.