PR Newswire | Feb 4, 2021 06:55AM EST

02/04 05:55 CST

AMETEK Announces Fourth Quarter and Full Year Results BERWYN, Pa., Feb. 4, 2021

BERWYN, Pa., Feb. 4, 2021 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced its financial results for the fourth quarter and full year ended December 31, 2020.

AMETEK's fourth quarter 2020 sales were $1.20 billion, an 8% decline compared to the fourth quarter of 2019. Operating income in the quarter was $298.1 million, up slightly versus last year's fourth quarter and operating margins were a record 24.9%, up 210 basis points over the same period last year.

On a GAAP basis, fourth quarter earnings per diluted share were $0.95. Adjusted earnings in the quarter were $1.08 per diluted share, equal to the fourth quarter of 2019. 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 completed a challenging year with an excellent fourth quarter," said David A. Zapico, AMETEK Chairman and Chief Executive Officer. "We continued to see solid sequential sales and order improvements in the quarter despite the ongoing impacts of the COVID-19 pandemic. Furthermore, we delivered record operating results and substantial margin expansion in the fourth quarter, with EBITDA margins a robust 30.1%."

"Additionally, our operational strength resulted in record levels of cash flow in the fourth quarter with operating cash flow up 13% to $386 million and free cash flow up 16% to $349 million representing 158% of net income, further strengthening our balance sheet and liquidity position," noted Mr. Zapico.

Electronic Instruments Group (EIG)EIG sales in the fourth quarter were $819.4 million, down 7% from the fourth quarter of 2019. EIG's operating income in the quarter increased 3% to a record $236.0 million and operating income margins were a record 28.8%, up 270 basis points over the prior-year period.

"EIG delivered outstanding operating results in the fourth quarter," noted Mr. Zapico. "While year over year sales were down in line with expectations, we saw strong sequential sales improvement. Additionally, EIG's operational initiatives drove significant margin expansion and record operating margins."

Electromechanical Group (EMG)Sales for EMG in the fourth quarter were $379.5 million, down 11% from the same quarter in 2019. EMG's fourth quarter operating income was $79.8 million and operating income margins were 21.0%, up 110 basis points versus the same period last year.

"EMG also delivered strong operating results in the quarter," added Mr. Zapico. "As EMG's topline was negatively impacted by the divestiture of Reading Alloys and weaker demand due to the global pandemic, EMG drove impressive operating margin expansion through our cost and asset management initiatives."

2021 Outlook"This last year presented unprecedented challenges, both personally and professionally, for everyone at AMETEK. Our employees stepped up to these challenges and our businesses delivered results that consistently exceeded our expectations," continued Mr. Zapico.

"Our success in 2020 was a testament to the strength of the AMETEK Growth Model, our ability to navigate through difficult economic environments, and the tremendous efforts of our talented workforce. We remain committed to investing in our businesses and our people to drive long-term, sustainable growth," noted Mr. Zapico.

"While uncertainty remains, our diverse end markets, record backlog and solid order momentum provide a positive outlook for the year ahead. For 2021, we expect overall sales to be up mid-single digits on a percentage basis compared to 2020. Adjusted earnings per diluted share are expected to be in the range of $4.18 to $4.30, an increase of 6% to 9% over the comparable basis for 2020," he added.

"For the first quarter of 2021, overall sales are expected to be down low to mid-single digits compared to the same period last year. Adjusted earnings in the quarter are anticipated to be in the range of $0.97 to $1.02 per share," concluded Mr. Zapico.

Conference CallAMETEK will webcast its fourth quarter 2020 investor conference call on Thursday, February 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 AMETEKAMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with 2020 sales 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 InformationStatements 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 ColemanVice President, Investor Relations1100 Cassatt RoadBerwyn, Pennsylvania 19312kevin.coleman@ametek.comPhone: 610.889.5247

AMETEK, Inc.

Consolidated Statement of Income

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Net sales $1,198,947 $1,304,821 $4,540,029 $5,158,557

Cost of sales 769,968 858,175 2,996,515 3,370,897

Selling, general and administrative 130,866 148,991 515,630 610,280

Total operating expenses 900,834 1,007,166 3,512,145 3,981,177

Operating income 298,113 297,655 1,027,884 1,177,380

Interest expense (19,465) (23,045) (86,062) (88,481)

Other (expense) income, net (1,941) (6,630) 140,487 (19,151)

Income before income taxes 276,707 267,980 1,082,309 1,069,748

Provision for income taxes 55,682 47,203 209,870 208,451

Net income $ 221,025 $ 220,777 $ 872,439 $ 861,297

Diluted earnings per share $ 0.95 $ 0.96 $ 3.77 $ 3.75

Basic earnings per share $ 0.96 $ 0.97 $ 3.80 $ 3.78

Weighted average common shares outstanding:

Diluted shares 231,890 230,006 231,150 229,395

Basic shares 229,978 228,557 229,435 227,759

Dividends per share $ 0.18 $ 0.14 $ 0.72 $ 0.56

AMETEK, Inc.

Information by Business Segment

(In thousands)

(Unaudited)

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Net sales:

Electronic Instruments $ 819,449 $ 880,171 $2,989,928 $3,322,881

Electromechanical 379,498 424,650 1,550,101 1,835,676

Consolidated net sales $1,198,947 $1,304,821 $4,540,029 $5,158,557

Operating income:

Segment operating income:

Electronic Instruments $ 236,007 $ 229,859 $ 770,620 $ 865,307

Electromechanical 79,808 84,602 324,962 387,931

Total segment operating income 315,815 314,461 1,095,582 1,253,238

Corporate administrative expenses (17,702) (16,806) (67,698) (75,858)

Consolidated operating income $ 298,113 $ 297,655 $1,027,884 $1,177,380

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)

December 31, December 31,

2020 2019

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents $ 1,212,822 $ 393,030

Receivables, net 597,472 744,760

Inventories, net 559,171 624,567

Other current assets 153,005 263,414

Total current assets 2,522,470 2,025,771

Property, plant and equipment, net 526,530 548,908

Right of use asset, net 167,233 179,679

Goodwill 4,224,906 4,047,539

Other intangibles, investments and other assets 2,916,344 3,042,662

Total assets $10,357,483 $ 9,844,559

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term borrowings and current portion of long-term debt, net $ 132,284 $ 497,449

Accounts payable and accruals 943,631 928,409

Total current liabilities 1,075,915 1,425,858

Long-term debt, net 2,281,441 2,271,292

Deferred income taxes and other long-term liabilities 1,050,781 1,031,917

Stockholders' equity 5,949,346 5,115,492

Total liabilities and stockholders' equity $10,357,483 $ 9,844,559

AMETEK, Inc.

Reconciliations of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

EBITDA

Three Months Ended

December 31,

(In millions) 2020 2019

Net income $ 221.0 $ 220.8

Add (deduct):

Interest expense 19.5 23.0

Interest income (0.4) (1.4)

Income taxes 55.7 47.2

Depreciation 26.1 27.4

Amortization 38.8 36.8

EBITDA $ 360.7 $ 353.8

EBITDA Margin (EBITDA divided by net sales) 30.1% 27.1%

FREE CASH FLOW

Three Months Ended

December 31,

(In millions) 2020 2019

Cash provided by operating activities $ 385.9 $ 342.2

Deduct: Capital expenditures (37.0) (40.8)

Free cash flow $ 348.9 $ 301.4

Free Cash Flow Conversion (Free cash flow divided by net income) 158% 137%

ADJUSTED DILUTED EARNINGS PER SHARE

Diluted Earnings Per Share

Three Months Ended Year Ended

December 31, December 31,

2020 2019 2020 2019

Diluted earnings per share (GAAP) $ 0.95 $ 0.96 $ 3.77 $ 3.75

Pretax amortization of acquisition-related intangible assets 0.17 0.16 0.67 0.58

Income tax benefit on amortization of acquisition-related intangible assets (0.04) (0.04) (0.16) (0.14)

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) $ 1.08 $ 1.08 $ 3.95 $ 4.19

ADJUSTED DILUTED EARNINGS PER SHARE

Forecasted Diluted Earnings Per Share

Three Months Ended Year Ended

March 31, December 31,

Low High Low High

2021 2021 2021 2021

Diluted earnings per share (GAAP) $ 0.84 $ $ $ 0.89 3.68 3.80

Pretax amortization of acquisition-related intangible assets 0.17 0.17 0.66 0.66

Income tax benefit on amortization of acquisition-related intangible assets (0.04) (0.04) (0.16) (0.16)

Adjusted Diluted earnings per share (Non-GAAP) $ 0.97 $ $ $ 1.02 4.18 4.30

Use of Non-GAAP Financial Information The Company supplements its consolidated financial statements presented on aU.S. generally accepted accounting principles("GAAP") basis with certain non-GAAP financial information to provide investorswith greater insight, increased transparency andallow for a more comprehensive understanding of the information used bymanagement in its financial and operational decision-making. Reconciliation of non-GAAP measures to their most directly comparableGAAP measures are included in the accompanyingfinancial tables. These non-GAAP financial measures should be considered inaddition to, and not as a replacement for, or superiorto, the comparable GAAP measure, and may not be comparable to similarly titledmeasures reported by other companies. The Company believes that these measures provide useful information toinvestors by reflecting additional ways of viewingAMETEK's operations that, when reconciled to the comparable GAAP measure, helpsour investors to better understand the long-term profitability trends of our business, and facilitates easier comparisonsof our profitability to prior and future periods and to ourpeers.

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SOURCE AMETEK, Inc.