BERWYN,
Pa., Feb. 1, 2018 /PRNewswire/ -- AMETEK,
Inc. (NYSE: AME) today announced its financial results for the
three month and full year periods ended December 31, 2017, delivering record levels of
sales, operating income, net income, diluted earnings per share and
cash flow for both the fourth quarter and full year.
AMETEK reported fourth quarter 2017 sales of $1.14 billion, an increase of 17% compared to the
fourth quarter of 2016 with 9% organic sales growth. On a GAAP
basis, fourth quarter 2017 operating income was $229.6 million and diluted earnings per share
were $1.03. Excluding an after-tax
gain of $75.5 million, or
$0.33 per diluted share, fourth
quarter 2017 operating income was $251.4
million, up 18%, and diluted earnings per share were
$0.70, up 21%, each over the prior
year's adjusted results.
The fourth quarter of 2017 after-tax gain of $75.5 million includes a one-time, non-cash gain
of $185.8 million related to the
remeasurement of AMETEK's deferred tax liabilities as a result of
the Tax Cuts and Jobs Act ("Tax Reform"). This gain was partially
offset by a $94.2 million charge
related to repatriation and associated withholding taxes due to Tax
Reform, and $16.1 million of
realignment expense and charitable donations in the fourth quarter.
A reconciliation of reported GAAP results to adjusted results is
included in the financial tables accompanying this release and on
the AMETEK website. These impacts from Tax Reform should be
considered provisional and may be subject to further
adjustment.
"AMETEK's businesses finished the year exceptionally well,
delivering another quarter with record-level performance," said
David A. Zapico, AMETEK Chairman and
Chief Executive Officer. "Driven by outstanding organic sales
growth, recent acquisition contributions and strong operating
performance, AMETEK achieved 17% sales growth and 21% adjusted
earnings growth in the quarter."
"In addition, our businesses generated $253 million in operating cash flow in the
quarter, with exceptional free cash flow conversion, which speaks
to the strength of our business model and outstanding execution.
This strength is reflected in our strong acquisition activity,
having just deployed approximately $273
million on two acquisitions, while also announcing a 56%
increase in our dividend from $0.09
to $0.14 per share," noted Mr.
Zapico.
For the full year, AMETEK reported sales of $4.3 billion, up 12% over 2016. On a GAAP
basis, full year 2017 operating income was $915.1 million and diluted earnings per share
were $2.94. Excluding the after-tax
gain of $75.5 million, or
$0.33 per diluted share, full year
2017 operating income was $936.9
million, up 11%, and full year diluted earnings per share
were $2.61, up 13%, both over the
prior year's adjusted results.
Electronic Instruments Group (EIG)
EIG sales in the
fourth quarter were a record $741.5
million, a 20% increase over the fourth quarter of 2016. On
a GAAP basis, EIG fourth quarter 2017 operating income was
$191.1 million. Excluding realignment
costs in both periods, fourth quarter EIG operating income was a
record $195.6 million, an
increase of 20% over the prior year, and operating margins were
excellent at 26.4% in the quarter.
"EIG performed exceptionally well in the fourth quarter and for
the full year, delivering outstanding orders and sales growth. The
sales growth was driven by very strong and broad based organic
sales growth of 9% and the contributions from the acquisitions of
Rauland and MOCON," commented Mr. Zapico.
Electromechanical Group (EMG)
Fourth quarter sales
for EMG were $401.6 million, up 13%
over the fourth quarter of 2016. On a GAAP basis, EMG fourth
quarter 2017 operating income was $61.9
million. Excluding realignment costs in both periods, fourth
quarter EMG operating income was $74.2
million, an increase of 18% over the prior year and
operating margins were 18.5%, up 80 basis points over last year's
fourth quarter.
"EMG also had an outstanding fourth quarter to complete a great
year. Continued strong order growth drove a 10% increase in
organic sales in the quarter, with the acquisition of Laserage
contributing the balance of the overall sales growth. EMG
also delivered excellent operating performance in the quarter,"
noted Mr. Zapico.
2018 Outlook
"We are very well positioned as we enter
2018. Our businesses are operating at a very high level
across their attractive niche market segments and we continue to
make investments in these businesses to better position AMETEK for
long-term organic growth. Our strong cash flows, robust balance
sheet and proven ability to deploy capital on value enhancing
acquisitions give us confidence entering the year," commented Mr.
Zapico.
"In 2018, we expect overall sales to increase approximately 7%
to 9%, driven by contributions from recent acquisitions and 3% to
5% organic sales growth. Diluted earnings per share for 2018 are
estimated to be in the range of $2.95
to $3.05, up 13% to 17% compared to
the adjusted results of 2017," he added.
"Sales in the first quarter of 2018, are expected to be up
low-double digits on a percentage basis compared to the first
quarter of 2017. We anticipate first quarter 2018 earnings per
diluted share to be in the range of $0.70 to $0.72, an
increase of 17% to 20% over the first quarter of 2017 results,"
concluded Mr. Zapico.
Conference Call
AMETEK will webcast its fourth quarter
2017 investor conference call on Thursday, February 1, 2018,
beginning at 8:30 AM ET. The live
audio webcast will be available and later archived in the Investors
section of www.ametek.com.
Corporate Profile
AMETEK is a leading global
manufacturer of electronic instruments and electromechanical
devices with annualized sales of more than $4.5 billion. AMETEK's Corporate Growth Plan is
based on Four Key Strategies: Operational Excellence, Strategic
Acquisitions, Global & Market Expansion and New Products.
AMETEK's objective is double-digit percentage growth in earnings
per share over the business cycle and a superior return on total
capital. The common stock of AMETEK is a component of the S&P
500 Index.
Forward-looking Information
Statements in this news
release relating to future events, such as AMETEK's expected
business and financial performance are "forward-looking
statements." Forward-looking statements are subject to various
factors and uncertainties that may cause actual results to differ
significantly from expectations. These factors and uncertainties
include AMETEK's ability to consummate and successfully integrate
future acquisitions; risks associated with international sales and
operations; AMETEK's ability to successfully develop new products,
open new facilities or transfer product lines; the price and
availability of raw materials; compliance with government
regulations, including environmental regulations; changes in the
competitive environment or the effects of competition in our
markets; the ability to maintain adequate liquidity and financing
sources; and general economic conditions affecting the industries
we serve. A detailed discussion of these and other factors that may
affect our future results is contained in AMETEK's filings with the
U.S. Securities and Exchange Commission, including its most recent
reports on Form 10-K, 10-Q and 8-K. AMETEK disclaims any intention
or obligation to update or revise any forward-looking
statements.
Contact:
AMETEK, Inc.
Kevin Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com
Phone: 610.889.5247
(Financial Information Follows)
AMETEK,
Inc.
|
Consolidated
Statement of Income
|
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Net
sales
|
$1,143,085
|
|
$
972,953
|
|
$4,300,170
|
|
$3,840,087
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of sales
|
767,039
|
|
681,084
|
|
2,851,431
|
|
2,575,220
|
Selling, general and
administrative
|
146,466
|
|
118,647
|
|
533,645
|
|
462,970
|
Total operating expenses
|
913,505
|
|
799,731
|
|
3,385,076
|
|
3,038,190
|
|
|
|
|
|
|
|
|
Operating
income
|
229,580
|
|
173,222
|
|
915,094
|
|
801,897
|
Other
expenses:
|
|
|
|
|
|
|
|
Interest expense
|
(24,252)
|
|
(23,588)
|
|
(98,029)
|
|
(94,304)
|
Other, net
|
(7,803)
|
|
(4,382)
|
|
(20,336)
|
|
(14,490)
|
Income before income
taxes
|
197,525
|
|
145,252
|
|
796,729
|
|
693,103
|
(Benefit) Provision
for income taxes
|
(41,007)
|
|
36,144
|
|
115,259
|
|
180,945
|
|
|
|
|
|
|
|
|
Net
income
|
$
238,532
|
|
$
109,108
|
|
$
681,470
|
|
$
512,158
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
$
1.03
|
|
$
0.47
|
|
$
2.94
|
|
$
2.19
|
Basic earnings per
share
|
$
1.03
|
|
$
0.47
|
|
$
2.96
|
|
$
2.20
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Diluted shares
|
232,534
|
|
231,191
|
|
231,845
|
|
233,730
|
Basic shares
|
230,770
|
|
230,209
|
|
230,229
|
|
232,593
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
0.09
|
|
$
0.09
|
|
$
0.36
|
|
$
0.36
|
AMETEK,
Inc.
|
Information by
Business Segment
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Net
sales:
|
|
|
|
|
|
|
|
Electronic
Instruments
|
$
741,516
|
|
$
616,039
|
|
$2,690,554
|
|
$2,360,285
|
Electromechanical
|
401,569
|
|
356,914
|
|
1,609,616
|
|
1,479,802
|
Consolidated net sales
|
$1,143,085
|
|
$
972,953
|
|
$4,300,170
|
|
$3,840,087
|
|
|
|
|
|
|
|
|
Income:
|
|
|
|
|
|
|
|
Segment operating
income:
|
|
|
|
|
|
|
|
Electronic
Instruments
|
$
191,104
|
|
$
141,075
|
|
$
677,489
|
|
$
577,717
|
Electromechanical
|
61,907
|
|
46,692
|
|
310,875
|
|
277,873
|
Total segment operating income
|
253,011
|
|
187,767
|
|
988,364
|
|
855,590
|
Corporate administrative and
other expenses
|
(23,431)
|
|
(14,545)
|
|
(73,270)
|
|
(53,693)
|
Consolidated operating income
|
$
229,580
|
|
$
173,222
|
|
$
915,094
|
|
$
801,897
|
|
|
|
|
|
|
|
|
AMETEK,
Inc.
|
Condensed
Consolidated Balance Sheet
|
(In
thousands)
|
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
646,300
|
|
$
717,259
|
Receivables, net
|
668,176
|
|
592,326
|
Inventories, net
|
540,504
|
|
492,104
|
Other current
assets
|
79,675
|
|
126,501
|
Total current assets
|
1,934,655
|
|
1,928,190
|
|
|
|
|
Property, plant and
equipment, net
|
493,296
|
|
473,230
|
Goodwill
|
3,115,619
|
|
2,818,950
|
Other intangibles,
investments and other assets
|
2,252,494
|
|
1,880,304
|
Total assets
|
$
7,796,064
|
|
$
7,100,674
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term borrowings and
current portion of long-term debt, net
|
$
308,123
|
|
$
278,921
|
Accounts payable and
accruals
|
830,540
|
|
645,520
|
Total current liabilities
|
1,138,663
|
|
924,441
|
|
|
|
|
Long-term debt,
net
|
1,866,166
|
|
2,062,644
|
Deferred income taxes
and other long-term liabilities
|
763,602
|
|
857,076
|
Stockholders'
equity
|
4,027,633
|
|
3,256,513
|
Total liabilities and stockholders' equity
|
$
7,796,064
|
|
$
7,100,674
|
AMETEK,
Inc.
|
|
Reconciliations of
GAAP to Non-GAAP Financial Measures
|
|
(In thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
EIG Segment operating
income (GAAP)
|
|
$
191,104
|
|
$
141,075
|
|
$
677,489
|
|
$
577,717
|
|
Realignment
costs
|
|
4,534
|
|
12,355
|
|
4,534
|
|
12,355
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
9,200
|
|
-
|
|
9,200
|
Adjusted EIG Segment
operating income (Non-GAAP)
|
|
$
195,638
|
|
$
162,630
|
|
$
682,023
|
|
$
599,272
|
|
|
|
|
|
|
|
|
|
|
EMG Segment operating
income (GAAP)
|
|
$
61,907
|
|
$
46,692
|
|
$
310,875
|
|
$
277,873
|
|
Realignment
costs
|
|
12,252
|
|
11,644
|
|
12,252
|
|
11,644
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
4,700
|
|
-
|
|
4,700
|
Adjusted EMG Segment
operating income (Non-GAAP)
|
|
$
74,159
|
|
$
63,036
|
|
$
323,127
|
|
$
294,217
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative (GAAP)
|
|
$
146,466
|
|
$
118,647
|
|
$
533,645
|
|
$
462,970
|
|
Realignment
costs
|
|
-
|
|
1,557
|
|
-
|
|
1,557
|
|
Charitable
donations
|
|
5,000
|
|
-
|
|
5,000
|
|
-
|
Adjusted selling,
general and administrative (Non-GAAP)
|
|
$
141,466
|
|
$
117,090
|
|
$
528,645
|
|
$
461,413
|
|
|
|
|
|
|
|
|
|
|
Operating income
(GAAP)
|
|
$
229,580
|
|
$
173,222
|
|
$
915,094
|
|
$
801,897
|
|
Realignment
costs
|
|
16,786
|
|
25,556
|
|
16,786
|
|
25,556
|
|
Charitable
donations
|
|
5,000
|
|
-
|
|
5,000
|
|
-
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
13,900
|
|
-
|
|
13,900
|
Adjusted Operating
income (Non-GAAP)
|
|
$
251,366
|
|
$
212,678
|
|
$
936,880
|
|
$
841,353
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes (GAAP)
|
|
$
(41,007)
|
|
$
36,144
|
|
$
115,259
|
|
$
180,945
|
|
Income tax benefit on
realignment costs
|
|
3,821
|
|
8,578
|
|
3,821
|
|
8,578
|
|
Income tax benefit on
charitable donations
|
|
1,885
|
|
-
|
|
1,885
|
|
-
|
|
Net deferred tax
revaluation due to Tax Reform(1)
|
|
185,781
|
|
-
|
|
185,781
|
|
-
|
|
Deemed repatriation
of foreign earnings due to Tax Reform(1)
|
|
(94,191)
|
|
-
|
|
(94,191)
|
|
-
|
|
Income tax benefit on
indefinite-lived intangibles impairment
|
|
-
|
|
5,310
|
|
-
|
|
5,310
|
Adjusted provision
for income taxes (Non-GAAP)
|
|
$
56,289
|
|
$
50,032
|
|
$
212,555
|
|
$
194,833
|
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
238,532
|
|
$
109,108
|
|
$
681,470
|
|
$
512,158
|
|
Realignment
costs
|
|
12,965
|
|
16,978
|
|
12,965
|
|
16,978
|
|
Charitable
donations
|
|
3,115
|
|
-
|
|
3,115
|
|
-
|
|
Net deferred tax
revaluation due to Tax Reform(1)
|
|
(185,781)
|
|
-
|
|
(185,781)
|
|
-
|
|
Deemed repatriation
of foreign earnings due to Tax Reform(1)
|
|
94,191
|
|
-
|
|
94,191
|
|
-
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
8,590
|
|
-
|
|
8,590
|
Adjusted Net income
(Non-GAAP)
|
|
$
163,022
|
|
$
134,676
|
|
$
605,960
|
|
$
537,726
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP)
|
|
$
1.03
|
|
$
0.47
|
|
$
2.94
|
|
$
2.19
|
|
Realignment
costs
|
|
0.07
|
|
0.11
|
|
0.07
|
|
0.11
|
|
Income tax benefit on
realignment costs
|
|
(0.02)
|
|
(0.04)
|
|
(0.02)
|
|
(0.04)
|
|
Charitable
donations
|
|
0.02
|
|
-
|
|
0.02
|
|
-
|
|
Income tax benefit on
charitable donations
|
|
(0.01)
|
|
-
|
|
(0.01)
|
|
-
|
|
Net deferred tax
revaluation due to Tax Reform(1)
|
|
(0.80)
|
|
-
|
|
(0.80)
|
|
-
|
|
Deemed repatriation
of foreign earnings due to Tax Reform(1)
|
|
0.41
|
|
-
|
|
0.41
|
|
-
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
0.06
|
|
-
|
|
0.06
|
|
Income tax benefit on
indefinite-lived intangibles impairment
|
|
-
|
|
(0.02)
|
|
-
|
|
(0.02)
|
Adjusted Diluted
earnings per share (Non-GAAP)
|
|
$
0.70
|
|
$
0.58
|
|
$
2.61
|
|
$
2.30
|
|
|
|
|
|
|
|
|
|
|
|
AMETEK,
Inc.
|
Reconciliations of
GAAP to Non-GAAP Financial Measures
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EIG Segment operating
margin (GAAP)
|
|
25.8%
|
|
22.9%
|
|
25.2%
|
|
24.5%
|
|
Realignment
costs
|
|
0.6
|
|
2.0
|
|
0.1
|
|
0.5
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
1.5
|
|
-
|
|
0.4
|
Adjusted EIG Segment
operating margin (Non-GAAP)
|
|
26.4%
|
|
26.4%
|
|
25.3%
|
|
25.4%
|
|
|
|
|
|
|
|
|
|
|
EMG Segment operating
margin (GAAP)
|
|
15.4%
|
|
13.1%
|
|
19.3%
|
|
18.8%
|
|
Realignment
costs
|
|
3.1
|
|
3.3
|
|
0.8
|
|
0.8
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
1.3
|
|
-
|
|
0.3
|
Adjusted EMG Segment
operating margin (Non-GAAP)
|
|
18.5%
|
|
17.7%
|
|
20.1%
|
|
19.9%
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin (GAAP)
|
|
20.1%
|
|
17.8%
|
|
21.3%
|
|
20.9%
|
|
Realignment
costs
|
|
1.5
|
|
2.6
|
|
0.4
|
|
0.7
|
|
Charitable
donations
|
|
0.4
|
|
-
|
|
0.1
|
|
-
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
1.5
|
|
-
|
|
0.3
|
Adjusted Operating
income margin (Non-GAAP)
|
|
22.0%
|
|
21.9%
|
|
21.8%
|
|
21.9%
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
(GAAP)
|
|
(20.8)%
|
|
24.9%
|
|
14.5%
|
|
26.1%
|
|
Realignment
costs
|
|
(0.2)
|
|
1.4
|
|
(0.1)
|
|
0.3
|
|
Charitable
donations
|
|
0.3
|
|
-
|
|
0.1
|
|
-
|
|
Net deferred tax
revaluation due to Tax Reform(1)
|
|
94.1
|
|
-
|
|
23.3
|
|
-
|
|
Deemed repatriation
of foreign earnings due to Tax Reform(1)
|
|
(47.7)
|
|
-
|
|
(11.8)
|
|
-
|
|
Indefinite-lived
intangibles impairment
|
|
-
|
|
0.8
|
|
-
|
|
0.2
|
Adjusted Effective
tax rate (Non-GAAP)
|
|
25.7%
|
|
27.1%
|
|
26.0%
|
|
26.6%
|
|
|
|
|
(1)
|
These amounts, which
are based on reasonable estimates, will require further adjustments
as additional guidance from the U.S. Department of Treasury is
provided, the Company's assumptions change, or as further
information and interpretations become available.
|
Use of Non-GAAP Financial Information
The Company
supplements its consolidated financial statements presented on a
U.S. generally accepted accounting principles ("GAAP") basis
with certain non‑GAAP financial information to provide investors
with greater insight, increased transparency and allow for a more
comprehensive understanding of the information used by management
in its financial and operational decision-making.
Reconciliation of non‑GAAP measures to their most directly
comparable GAAP measures are included in the accompanying financial
tables. These non‑GAAP financial measures should be considered in
addition to, and not as a replacement for, or superior to, the
comparable GAAP measure, and may not be comparable to similarly
titled measures reported by other companies.
The Company believes that these measures provide useful
information to investors by reflecting additional ways of viewing
AMETEK's operations that, when reconciled to the comparable GAAP
measure, helps our investors to better understand the long-term
profitability trends of our business, and facilitates easier
comparisons of our profitability to prior and future periods and to
our peers. The items described above have been excluded from
this measure because items of this nature and/or size occur with
inconsistent frequency, occur for reasons that may be unrelated to
AMETEK's commercial performance during the period and/or we believe
are not indicative of AMETEK's ongoing operating costs or gains in
a given period, which we believe may obscure underlying business
trends and make comparisons of long-term performance difficult.
View original
content:http://www.prnewswire.com/news-releases/ametek-announces-record-fourth-quarter-and-full-year-results-and-issues-2018-guidance-300591601.html
SOURCE AMETEK, Inc.