8-K
Ametek Inc/ (AME)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 2020
AMETEK, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 1-12981 | 14-1682544 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 1100 Cassatt Road,<br> <br>Berwyn, Pennsylvania | 19312 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (610) 647-2121
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, $0.01 Par Value (voting) | AME | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On February 5, 2020, AMETEK, Inc. (the “Company”) issued a press release announcing its financial results for the three months and year ended December 31, 2019. A copy of the release is furnished as Exhibit 99.1 and incorporated by reference herein. This Current Report on Form 8-K and the press release attached hereto are being furnished pursuant to Item 2.02 of Form 8-K.
The information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 8.01 | Other Events. |
|---|
On February 5, 2020, the Company issued a press release announcing it has acquired IntelliPower. A copy of the release is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit <br> No. | Description | |
|---|---|---|
| 99.1 | Press release, dated February 5, 2020, “AMETEK Announces Record Fourth Quarter and Full Year Results”. | |
| 99.2 | Press release, dated February 5, 2020, “AMETEK Acquires IntelliPower”. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMETEK, Inc. | ||
|---|---|---|
| February 5, 2020 | By: | /s/ THOMAS M. MONTGOMERY |
| Name: | Thomas M. Montgomery | |
| Title: | Senior Vice President - Comptroller |
EX-99.1
Exhibit 99.1
AMETEK Announces Record Fourth Quarter and Full Year Results
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.
2020 Outlook
“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.
Conference Call
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.
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Corporate Profile
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.
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, 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
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AMETEK, Inc.
Consolidated Statement of Income
(In thousands, except per share amounts)
(Unaudited)
| Three Months EndedDecember 31, | Year Ended<br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Net sales | $ | 1,304,821 | **** | $ | 1,271,328 | $ | 5,158,557 | **** | $ | 4,845,872 | ||
| Cost of sales | **** | 858,175 | **** | 835,268 | **** | 3,370,897 | **** | 3,186,310 | ||||
| Selling, general and administrative | **** | 148,991 | **** | 154,040 | **** | 610,280 | **** | 584,022 | ||||
| Total operating expenses | **** | 1,007,166 | **** | 989,308 | **** | 3,981,177 | **** | 3,770,332 | ||||
| Operating income | **** | 297,655 | **** | 282,020 | **** | 1,177,380 | **** | 1,075,540 | ||||
| Interest expense | **** | (23,045 | ) | (20,319 | ) | **** | (88,481 | ) | (82,180 | ) | ||
| Other expense, net | **** | (6,630 | ) | (2,931 | ) | **** | (19,151 | ) | (5,615 | ) | ||
| Income before income taxes | **** | 267,980 | **** | 258,770 | **** | 1,069,748 | **** | 987,745 | ||||
| Provision for income taxes | **** | 47,203 | **** | 47,250 | **** | 208,451 | **** | 209,812 | ||||
| Net income | $ | 220,777 | **** | $ | 211,520 | $ | 861,297 | **** | $ | 777,933 | ||
| Diluted earnings per share | $ | 0.96 | **** | $ | 0.91 | $ | 3.75 | **** | $ | 3.34 | ||
| Basic earnings per share | $ | 0.97 | **** | $ | 0.92 | $ | 3.78 | **** | $ | 3.37 | ||
| Weighted average common shares outstanding: | ||||||||||||
| Diluted shares | **** | 230,006 | **** | 231,333 | **** | 229,395 | **** | 232,712 | ||||
| Basic shares | **** | 228,557 | **** | 229,611 | **** | 227,759 | **** | 230,823 | ||||
| Dividends per share | $ | 0.14 | **** | $ | 0.14 | $ | 0.56 | **** | $ | 0.56 |
AMETEK, Inc.
Information by Business Segment
(In thousands)
(Unaudited)
| Three Months EndedDecember 31, | Year Ended<br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Net sales: | ||||||||||||
| Electronic Instruments | $ | 880,171 | **** | $ | 826,034 | $ | 3,322,881 | **** | $ | 3,028,959 | ||
| Electromechanical | **** | 424,650 | **** | 445,294 | **** | 1,835,676 | **** | 1,816,913 | ||||
| Consolidated net sales | $ | 1,304,821 | **** | $ | 1,271,328 | $ | 5,158,557 | **** | $ | 4,845,872 | ||
| Operating income: | ||||||||||||
| Segment operating income: | ||||||||||||
| Electronic Instruments | $ | 229,859 | **** | $ | 214,641 | $ | 865,307 | **** | $ | 782,144 | ||
| Electromechanical | **** | 84,602 | **** | 85,846 | **** | 387,931 | **** | 363,765 | ||||
| Total segment operating income | **** | 314,461 | **** | 300,487 | **** | 1,253,238 | **** | 1,145,909 | ||||
| Corporate administrative expenses | **** | (16,806 | ) | (18,467 | ) | **** | (75,858 | ) | (70,369 | ) | ||
| Consolidated operating income | $ | 297,655 | **** | $ | 282,020 | $ | 1,177,380 | **** | $ | 1,075,540 | ||
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AMETEK, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
| December 31,2019 | December 31,2018 | |||
|---|---|---|---|---|
| (Unaudited) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 393,030 | $ | 353,975 |
| Receivables, net | **** | 744,760 | 732,839 | |
| Inventories, net | **** | 624,567 | 624,744 | |
| Other current assets | **** | 263,414 | 124,586 | |
| Total current assets | **** | 2,025,771 | 1,836,144 | |
| Property, plant and equipment, net | **** | 548,908 | 554,130 | |
| Right of use asset, net | **** | 179,679 | — | |
| Goodwill | **** | 4,047,539 | 3,612,033 | |
| Other intangibles, investments and other assets | **** | 3,042,662 | 2,659,981 | |
| Total assets | $ | 9,844,559 | $ | 8,662,288 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| Current liabilities: | ||||
| Short-term borrowings and current portion of long-term debt, net | $ | 497,449 | $ | 358,876 |
| Accounts payable and accruals | **** | 928,409 | 899,828 | |
| Total current liabilities | **** | 1,425,858 | 1,258,704 | |
| Long-term debt, net | **** | 2,271,292 | 2,273,837 | |
| Deferred income taxes and other long-term liabilities | **** | 1,031,917 | 887,825 | |
| Stockholders’ equity | **** | 5,115,492 | 4,241,922 | |
| Total liabilities and stockholders’ equity | $ | 9,844,559 | $ | 8,662,288 |
| Page | 5 | |||
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AMETEK, Inc.
Reconciliations of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
| Diluted Earnings Per Share | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Diluted earnings per share (GAAP) | $ | 0.96 | **** | $ | 0.91 | $ | 3.75 | **** | $ | 3.34 | ||
| Pretax amortization of acquisition-related intangible assets | **** | 0.16 | **** | 0.13 | **** | 0.58 | **** | 0.49 | ||||
| Income tax benefit on amortization of acquisition-related intangible assets | **** | (0.04 | ) | (0.03 | ) | **** | (0.14 | ) | (0.12 | ) | ||
| Net deferred tax revaluation due to Tax Reform | **** | — | **** | (0.01 | ) | **** | — | **** | (0.01 | ) | ||
| Deemed repatriation of foreign earnings due to Tax Reform | **** | — | **** | (0.04 | ) | **** | — | **** | (0.04 | ) | ||
| Adjusted Diluted earnings per share (Non-GAAP) | $ | 1.08 | **** | $ | 0.96 | $ | 4.19 | **** | $ | 3.66 | ||
| Forecasted Diluted Earnings Per Share (1) | ||||||||||||
| Three Months EndedMarch 31, | Year Ended<br>December 31, | |||||||||||
| Low<br>2020 | High<br>2020 | Low<br>2020 | High<br>2020 | |||||||||
| Diluted earnings per share (GAAP) | $ | 0.88 | **** | $ | 0.91 | **** | $ | 3.72 | **** | $ | 3.86 | **** |
| Pretax amortization of acquisition-related intangible assets | **** | 0.17 | **** | **** | 0.17 | **** | **** | 0.69 | **** | **** | 0.69 | **** |
| Income tax benefit on amortization of acquisition-related intangible assets | **** | (0.04 | ) | **** | (0.04 | ) | **** | (0.17 | ) | **** | (0.17 | ) |
| Adjusted Diluted earnings per share (Non-GAAP) | $ | 1.01 | **** | $ | 1.04 | **** | $ | 4.24 | **** | $ | 4.38 | **** |
| (1) | Excludes the gain associated with the anticipated sale of Reading Alloys business. | |||||||||||
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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.
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EX-99.2
Exhibit 99.2
AMETEK Acquires IntelliPower
- Leading Provider of Mission-Critical Uninterruptable Power Systems -
BERWYN, PA, February 5, 2020 – AMETEK, Inc. (NYSE: AME) today announced that it has acquired IntelliPower, a leading provider of high-reliability, ruggedized uninterruptable power systems serving a wide range of defense and industrial applications.
IntelliPower designs and manufactures a broad portfolio of ruggedized solutions including uninterruptable power systems, external battery packs, power distribution units and power conditioners. These products protect mission-critical applications by utilizing high-efficiency, power-switching technology which can be remotely monitored and managed.
“IntelliPower is an excellent acquisition for AMETEK and is a highly complementary fit with our Power Systems and Instruments Division,” comments David A. Zapico, AMETEK Chairman and Chief Executive Officer. “IntelliPower is a market leader in ruggedized uninterruptable power solutions and broadens our technological capabilities in this attractive market segment.”
IntelliPower is headquartered in Orange, California. The company has annual sales of approximately $40 million and was acquired for approximately $115 million. IntelliPower joins AMETEK as part of its Electronic Instruments Group (EIG) - a leader in advanced analytical, monitoring, testing, calibrating and display instrumentation.
Corporate Profile
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.
Contact:
AMETEK, Inc.
Kevin Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com
Phone: 610.889.5247
