BERWYN, PA, FEBRUARY 5, 2020 – AMETEK, Inc. (NYSE: AME) today announced its financial results for the fourth quarter and full year ended December 31, 2019.
AMETEK’s fourth quarter 2019 sales were a record $1.30 billion, up 3% compared to the fourth quarter of 2018. Operating income increased 6% to $297.7 million and operating margins expanded to 22.8%, an increase of 60 basis points over the prior-year period.
On a GAAP basis, fourth quarter earnings per diluted share were $0.96. Adjusted earnings, which adds back non-cash, after-tax, acquisition-related intangible amortization, were $1.08 per diluted share, a 13% increase over the comparable quarter in 2018. A reconciliation of reported GAAP results to adjusted results is included in the financial tables accompanying this release and on the AMETEK website.
“AMETEK completed an outstanding year with a strong fourth quarter,” commented David A. Zapico, AMETEK Chairman and Chief Executive Officer. “We achieved a record level of sales, drove excellent operating margin expansion and delivered 13% earnings growth in the quarter. Additionally, our businesses continue to generate excellent levels of cash flow, with operating cash flow in the fourth quarter increasing to a record $342.2 million, up 16% over the same period in 2018.”
“We also continued to strengthen our portfolio, deploying nearly $1.1 billion in 2019 on the acquisitions of Gatan and PDT, and announcing a definitive agreement to divest our Reading Alloys business,” added Mr. Zapico.
For the full year, AMETEK’s sales were a record $5.2 billion, an increase of 6% over 2018. Operating income was a record $1.18 billion, up 9%, and operating income margins were 22.8%, expanding
60 basis points over last year’s results.
On a GAAP basis, full year earnings were $3.75 per diluted share. Full year adjusted earnings were $4.19 per share, an increase of 14% over 2018’s comparable adjusted earnings of $3.66 per share.
Electronic Instruments Group (EIG)
Sales for EIG in the fourth quarter were a record $880.2 million, up 7% over the same period in 2018. EIG fourth quarter operating income increased 7% year-over-year to a record $229.9 million and operating income margins were 26.1%, up 10 basis points over the prior year.
“EIG finished the year with strong results in the fourth quarter. Solid sales growth driven by the acquisitions of Telular, Spectro Scientific and Gatan, coupled with continued execution of Operational Excellence initiatives allowed EIG to deliver strong operating performance,” noted Mr. Zapico.
Electromechanical Group (EMG)
In the fourth quarter, EMG sales were $424.7 million, down 5% compared to the fourth quarter of 2018. EMG operating income for the quarter was $84.6 million and operating income margins were 19.9%, an increase of 60 basis points over 2018’s fourth quarter.
“EMG delivered solid operating performance in the fourth quarter with excellent operating margin expansion driven by our Operational Excellence initiatives,” commented Mr. Zapico.
“While uncertainties remain in the global economy, the AMETEK Growth Model provides our businesses with the operational agility to adapt to changing economic environments. We are poised to deliver another year of solid growth and strong operating performance through continued productivity and asset-management improvements,” noted Mr. Zapico.
“Given our robust cash flows and financial strength, we are well-positioned to continue investing in our growth initiatives and acquiring companies in attractive, niche markets to deliver long-term, sustainable success for our shareholders.”
“For 2020, we expect overall sales to be up low single digits on a percentage basis compared to 2019. Organic sales for the year are expected to be roughly flat versus the prior year. Adjusted earnings per diluted share are expected to be in the range of $4.24 to $4.38, an increase of 1% to 5% over the prior year’s comparable basis. Our full year guidance assumes the Reading Alloys business is divested in the first quarter and excludes the gain on the anticipated sale,” he added.
“For the first quarter of 2020, overall sales are expected to be up low single digits versus the first quarter of 2019. Adjusted earnings for the first quarter are anticipated to be in the range of $1.01 to $1.04 per share, up 1% to 4% over the prior year comparable basis,” concluded Mr. Zapico.
AMETEK will webcast its fourth quarter 2019 investor conference call on Wednesday, February 5, 2020, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in the Investors section of www.ametek.com.
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annual sales of approximately $5.0 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.
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, 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.
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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.