AMETEK Announces First Quarter Results and Raises 2021 Guidance

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BERWYN, Pa., May 4, 2021 -- AMETEK, Inc. (NYSE: AME) today announced its financial results for the first quarter ended March 31, 2021.

AMETEK's first quarter 2021 sales were $1.22 billion, a 1% increase over the first quarter of 2020, with organic sales growth of 1%. Operating income increased 6% to $293.3 million, and operating margins were up 110 basis points to 24.1%, both versus the prior year's adjusted results.

On a GAAP basis, first quarter earnings per diluted share were $0.94. Adjusted earnings were $1.07 per diluted share, up 5% versus the prior year's adjusted results. Adjusted earnings adds back non-cash, after-tax, acquisition-related intangible amortization of $0.13 per diluted share. A reconciliation of reported GAAP results to adjusted results is included in the financial tables accompanying this release and on the AMETEK website.

"AMETEK performed exceptionally well in the first quarter," commented David A. Zapico, AMETEK Chairman and Chief Executive Officer. "We were pleased with the return to organic sales growth earlier than anticipated, while order momentum remains very strong with a record level of orders and 9% organic orders growth in the quarter. Additionally, our businesses delivered outstanding operating performance with robust margin expansion."   

"We continue to generate strong cash flow with operating cash flow up 5% in the quarter and free cash flow conversion of 122% of net income. This excellent cash flow generation is being used to support an active acquisition environment. Thus far in 2021, we have deployed $1.85 billion on five strategic acquisitions. We remain well positioned with a pipeline of attractive acquisition opportunities and strong balance sheet capacity to support our continued growth," noted Mr. Zapico.

Electronic Instruments Group (EIG)
First quarter EIG sales were $790.9 million, up 2% compared to the first quarter of 2020. EIG's operating income in the quarter was up 7% to $206.9 million, and operating margins were up 110 basis points to 26.2%, versus the prior year's adjusted results.

"EIG delivered strong results in the first quarter with solid sales growth and outstanding operating performance," noted Mr. Zapico. "Sales were stronger than expected in the quarter as we continue to see improvements across our key end markets, in particular across our Process businesses."

Electromechanical Group (EMG)
EMG sales in the first quarter were $424.8 million, down 1% compared to last year's first quarter. Operating income for EMG was up 8% to a record $105.0 million, and operating margins were up 190 basis points to a record 24.7%, versus the prior year's adjusted results.

"EMG also had an excellent first quarter with solid organic sales growth offset by the divestiture of Reading Alloys," commented Mr. Zapico. "EMG's automation businesses are benefitting from solid demand for their precision motion control solutions, while EMG's operational initiatives delivered record operating profit and operating margins in the quarter."

2021 Outlook
"The strength of the AMETEK Growth Model was reflected in our results this quarter and in our revised outlook for the balance of the year. Our differentiated businesses, diverse and balanced end market exposures, exceptional operating capability, robust cash flow generation and proven ability to deploy capital on value enhancing acquisitions, has positioned AMETEK extremely well for strong growth in 2021 and beyond," continued Mr. Zapico.  

"Given our first quarter results and recent acquisition activity we are increasing our guidance for the year. For 2021, we now expect overall sales to be up high teens on a percentage basis compared to the prior year, with organic sales up high single digits. Adjusted earnings per diluted share are expected to be in the range of $4.48 to $4.56, an increase of 13% to 15% over the comparable basis for 2020. This is an increase from our previous adjusted earnings guidance range of $4.18 to $4.30 per diluted share," he added.

"Overall sales in the second quarter are expected to be up in the low 30% range versus the second quarter of 2020. We anticipate adjusted earnings per diluted share will be in the range of $1.08 to $1.10, up 29% to 31% versus last year's second quarter. Our full year and second quarter guidance includes all five recently completed acquisitions," concluded Mr. Zapico.

Conference Call
AMETEK will webcast its first quarter 2021 investor conference call on Tuesday, May 4, 2021, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in the Investors section of www.ametek.com.

About AMETEK
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annual sales in 2020 of more than $4.5 billion. The AMETEK Growth Model integrates the Four Growth Strategies - Operational Excellence, New Product Development, Global and Market Expansion, and Strategic Acquisitions - with a disciplined focus on cash generation and capital deployment. 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.

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 risks related to COVID-19 and its potential impact on AMETEK's operations, supply chain, and demand across key end markets; AMETEK's ability to consummate and successfully integrate future acquisitions; risks with international sales and operations, including supply chain disruptions; 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

AMETEK, Inc.

Consolidated Statement of Income

(In thousands, except per share amounts)

(Unaudited)



 Three Months Ended


 March 31,


2021


2020

Net sales

$1,215,742


$1,202,218





Cost of sales

789,392


824,647

Selling, general and administrative

133,005


145,531

     Total operating expenses

922,397


970,178





Operating income

293,345


232,040





Interest expense

(18,947)


(22,741)

Other (expense) income, net

(1,942)


141,776





Income before income taxes

272,456


351,075





Provision for income taxes

53,223


70,459





Net income

$   219,233


$   280,616





Diluted earnings per share

$        0.94


$        1.22

Basic earnings per share

$        0.95


$        1.23





Weighted average common shares outstanding:




     Diluted shares

232,296


230,872

     Basic shares

230,435


228,962





Dividends per share

$        0.20


$        0.18

 

AMETEK, Inc.

Information by Business Segment

(In thousands)

(Unaudited)



 Three Months Ended


 March 31,


2021


2020

Net sales:




     Electronic Instruments

$   790,924


$   774,225

     Electromechanical

424,818


427,993

          Consolidated net sales

$1,215,742


$1,202,218





Operating income:




Segment operating income:




     Electronic Instruments

$   206,897


$   171,271

     Electromechanical

105,033


76,564

          Total segment operating income

311,930


247,835

     Corporate administrative expenses

(18,585)


(15,795)

          Consolidated operating income

$   293,345


$   232,040

 

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)



 March 31,


 December 31,


2021


2020


 (Unaudited)



ASSETS




Current assets:




     Cash and cash equivalents

$  1,123,660


$  1,212,822

     Receivables, net

678,467


597,472

     Inventories, net

604,321


559,171

     Other current assets

167,045


153,005

          Total current assets

2,573,493


2,522,470





Property, plant and equipment, net

549,313


526,530

Right of use asset, net

166,675


167,233

Goodwill

4,292,402


4,224,906

Other intangibles, investments and other assets

2,998,000


2,916,344

          Total assets

$10,579,883


$10,357,483





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




     Short-term borrowings and current portion of long-term debt, net

$      94,670


$     132,284

     Accounts payable and accruals

1,043,793


943,631

          Total current liabilities

1,138,463


1,075,915





Long-term debt, net

2,256,910


2,281,441

Deferred income taxes and other long-term liabilities

1,063,762


1,050,781

Stockholders' equity

6,120,748


5,949,346

          Total liabilities and stockholders' equity

$10,579,883


$10,357,483

 

AMETEK, Inc.

Reconciliations of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)













Three Months Ended






March 31,






2021


2020










EIG Segment operating income (GAAP)



$       206,897


$        171,271



Realignment costs



-


22,846


Adjusted EIG Segment operating income (Non-GAAP)



$       206,897


$        194,117










EMG Segment operating income (GAAP)



$       105,033


$          76,564



Realignment costs



-


20,890


Adjusted EMG Segment operating income (Non-GAAP)



$       105,033


$          97,454










Operating income (GAAP)



$       293,345


$        232,040



Realignment costs



-


43,928


Adjusted Operating income (Non-GAAP)



$       293,345


$        275,968










Income before income taxes (GAAP)



$       272,456


$        351,075



Realignment costs



-


43,928



Gain from sale of Reading Alloys



-


(141,020)


Adjusted Income before income taxes (Non-GAAP)



$       272,456


$        253,983










Net income (GAAP)



$       219,233


$        280,616



Realignment costs



-


43,928



Income tax benefit on realignment costs



-


(10,293)



Gain from sale of Reading Alloys



-


(141,020)



Income tax expense on sale of business



-


31,446


Adjusted Net income (Non-GAAP)



$       219,233


$        204,677










Diluted earnings per share (GAAP)



$            0.94


$              1.22



Realignment costs



-


0.19



Income tax benefit on realignment costs



-


(0.04)



Gain from sale of Reading Alloys



-


(0.61)



Income tax charge on gain on sale of Reading Alloys



-


0.14



Pretax amortization of acquisition-related intangible assets



0.17


0.17



Income tax benefit on amortization of acquisition-related








  intangible assets



(0.04)


(0.04)



Rounding



-


(0.01)


Adjusted Diluted earnings per share (Non-GAAP)



$            1.07


$              1.02










EIG Segment operating margin (GAAP)



26.2%


22.1%



Realignment costs



-


3.0%


Adjusted EIG Segment operating margin (Non-GAAP)



26.2%


25.1%










EMG Segment operating margin (GAAP)



24.7%


17.9%



Realignment costs



-


4.9%


Adjusted EMG Segment operating margin (Non-GAAP)



24.7%


22.8%










Operating income margin (GAAP)



24.1%


19.3%



Realignment costs



-


3.7%


Adjusted Operating income margin (Non-GAAP)



24.1%


23.0%


 

AMETEK, Inc.

Reconciliations of GAAP to Non-GAAP Financial Measures

(In millions, except per share amounts)

(Unaudited)









FREE CASH FLOW









Three Months Ended






March 31,






2021


2020





Cash provided by operating activities

$    284.4


$    270.8





Deduct: Capital expenditures

(17.5)


(16.9)





Free cash flow

$    266.9


$    253.9













Free Cash Flow Conversion

(Free cash flow divided by net income)

122%


90%





















ADJUSTED DILUTED EARNINGS PER SHARE









Three Months Ended






March 31,






2021


2020





Diluted earnings per share (GAAP)

$     0.94


$     1.22





Pretax amortization of acquisition-related intangible assets

0.17


0.17





Income tax benefit on amortization of acquisition-related intangible assets

(0.04)


(0.04)





Realignment costs

-


0.19





Income tax benefit on realignment costs

-


(0.04)





Gain from sale of Reading Alloys

-


(0.61)





Income tax charge on gain on sale of Reading Alloys

-


0.14





Rounding

-


(0.01)





Adjusted Diluted earnings per share (Non-GAAP)

$     1.07


$     1.02




















 Forecasted Diluted Earnings Per Share


Three Months Ended


Year Ended


June 30, 2021


December 31, 2021


Low


High


Low


High

Diluted earnings per share (GAAP)

$     0.93


$     0.95


$     3.87


$     3.95

Pretax amortization of acquisition-related intangible assets

0.20


0.20


0.80


0.80

Income tax benefit on amortization of acquisition-related intangible assets

(0.05)


(0.05)


(0.19)


(0.19)

Adjusted Diluted earnings per share (Non-GAAP)

$     1.08


$     1.10


$     4.48


$     4.56









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. 

 

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SOURCE AMETEK, Inc.