PR Newswire | Aug 3, 2021 06:55AM EDT

08/03 05:55 CDT

AMETEK Announces Record Second Quarter Results and Raises 2021 Guidance BERWYN, Pa., Aug. 3, 2021

BERWYN, Pa., Aug. 3, 2021 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced its financial results for the second quarter ended June 30, 2021.

AMETEK's second quarter 2021 sales were a record $1.39 billion, a 37% increase over the second quarter of 2020, with organic sales growth of 25%. Operating income increased 39% to a record $316.6 million and operating margins were 22.8%, up 40 basis points over the prior-year period.

On a GAAP basis, second quarter earnings per diluted share were $1.00. Adjusted earnings were a record $1.15 per diluted share, up 37% versus the prior year's adjusted results. Adjusted earnings adds back non-cash, after-tax, acquisition-related intangible amortization of $0.15 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 delivered outstanding results in the second quarter with record sales, operating income and adjusted earnings," commented David A. Zapico, AMETEK Chairman and Chief Executive Officer. "Sales growth and operating performance were exceptionally strong while earnings exceeded our expectations. Order growth remains robust and broad-based resulting in a record $2.5 billion in backlog. Additionally, our businesses generated outstanding levels of cash flow with free cash flow conversion a strong 114% of net income."

Electronic Instruments Group (EIG)Second quarter EIG sales were a record $933.9 million, up 44% compared to last year's second quarter. EIG's operating income in the quarter was up 42% to $226.6 million, and operating margins were 24.3%.

"EIG performed exceptionally well in the quarter with a record level of sales driven by strong organic growth and contributions from the recent acquisitions," noted Mr. Zapico. "EIG also delivered superb operating performance with operating income up more than 40% and strong core operating margin expansion."

Electromechanical Group (EMG)EMG sales in the second quarter were $452.4 million, an increase of 24% over the second quarter of 2020. Operating income for EMG increased 33% over the prior-year period to a record $112.4 million, and operating margins were up 170 basis points to a record 24.9%.

"EMG had an exceptional quarter with strong sales growth and outstanding operating performance," commented Mr. Zapico. "Our team's tremendous efforts during the pandemic positioned us well to benefit from the recovery resulting in robust margin expansion."

2021 Outlook"We are pleased with AMETEK's performance through the first half of the year. Sales and orders growth has been broad based as the global economy continues its recovery. Our businesses are executing extremely well, generating strong levels of cash flow which firmly position us to continue investing in growth opportunities including strategic acquisitions. This outstanding performance, along with our proven ability to manage well through various economic cycles, reflects the strength and sustainable nature of the AMETEK Growth Model," continued Mr. Zapico.

"Following our second quarter results, we are increasing our guidance for the year. For 2021, we now expect overall sales to be up approximately 20% with organic sales up approximately 10%. Adjusted earnings per diluted share are expected to be in the range of $4.62 to $4.68, up 17% to 18% over 2020 and an increase from our previous guidance range of $4.48 to $4.56 per diluted share," he added.

"We expect overall sales in the third quarter to be up in the mid-20% range compared to the third quarter of 2020. Adjusted earnings per diluted share are anticipated to be in the range of $1.16 to $1.18, up 15% to 17% over the same period in 2020," concluded Mr. Zapico.

Conference CallAMETEK will webcast its second quarter 2021 investor conference call on Tuesday, August 3, 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 annualized sales of approximately $5.5 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 Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Net sales $1,386,346 $1,011,922 $2,602,088 $2,214,140

Cost of sales 912,712 669,195 1,702,104 1,493,842

Selling, general and administrative 157,023 115,737 290,028 261,268

Total operating expenses 1,069,735 784,932 1,992,132 1,755,110

Operating income 316,611 226,990 609,956 459,030

Interest expense (20,442) (22,669) (39,389) (45,410)

Other (expense) income, net (4,414) 2,131 (6,356) 143,907

Income before income taxes 291,755 206,452 564,211 557,527

Provision for income taxes 60,076 40,235 113,299 110,694

Net income $ 231,679 $ 166,217 $ 450,912 $ 446,833

Diluted earnings per share $ 1.00 $ 0.72 $ 1.94 $ 1.94

Basic earnings per share $ 1.00 $ 0.73 $ 1.96 $ 1.95

Weighted average common shares outstanding:

Diluted shares 232,841 230,381 232,569 230,626

Basic shares 230,828 229,225 230,632 229,094

Dividends per share $ 0.20 $ 0.18 $ 0.40 $ 0.36

AMETEK, Inc.

Information by Business Segment

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

Net sales:

Electronic Instruments $ 933,934 $ 647,882 $1,724,858 $1,422,107

Electromechanical 452,412 364,040 877,230 792,033

Consolidated net sales $1,386,346 $1,011,922 $2,602,088 $2,214,140

Operating income:

Segment operating income:

Electronic Instruments $ 226,637 $ 159,593 $ 433,534 $ 330,864

Electromechanical 112,434 84,287 217,467 160,851

Total segment operating income 339,071 243,880 651,001 491,715

Corporate administrative expenses (22,460) (16,890) (41,045) (32,685)

Consolidated operating income $ 316,611 $ 226,990 $ 609,956 $ 459,030

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)

June 30, December 31,

2021 2020

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents $ 390,644 $ 1,212,822

Receivables, net 754,045 597,472

Inventories, net 711,620 559,171

Other current assets 185,772 153,005

Total current assets 2,042,081 2,522,470

Property, plant and equipment, net 598,827 526,530

Right of use asset, net 178,698 167,233

Goodwill 5,139,807 4,224,906

Other intangibles, investments and other assets 3,795,851 2,916,344

Total assets $11,755,264 $10,357,483

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Short-term borrowings and current portion of long-term debt, net $ 699,996 $ 132,284

Accounts payable and accruals 1,157,633 943,631

Total current liabilities 1,857,629 1,075,915

Long-term debt, net 2,262,100 2,281,441

Deferred income taxes and other long-term liabilities 1,292,236 1,050,781

Stockholders' equity 6,343,299 5,949,346

Total liabilities and stockholders' equity $11,755,264 $10,357,483

AMETEK, Inc.

Reconciliations of GAAP to Non-GAAP Financial Measures

(In millions, except per share amounts)

(Unaudited)

FREE CASH FLOW

Three Months Ended

June 30, 2021

Cash provided by operating activities $ 287.0

Deduct: Capital expenditures (23.5)

Free cash flow $ 263.5

Free Cash Flow Conversion 114%(Free cash flow divided by net income)

ADJUSTED DILUTED EARNINGS PER SHARE

Diluted Earnings Per Share

Three Months Ended

June 30, June 30,

2021 2020

Diluted earnings per share (GAAP) $ 1.00 $ 0.72

Pretax amortization of acquisition-related 0.20 0.16 intangible assets

Income tax benefit on amortization of (0.05) (0.04) acquisition-related intangible assets

Adjusted Diluted earnings per share (Non-GAAP) $ 1.15 $ 0.84

Forecasted Diluted Earnings Per Share

Three Months Ended Year Ended

September 30, December 31,

Low High Low High

2021 2021 2021 2021

Diluted earnings per share (GAAP) $ 1.00 $ 1.02 $ 4.01 $ 4.07

Pretax amortization of acquisition-related 0.21 0.21 0.80 0.80 intangible assets

Income tax benefit on amortization of (0.05) (0.05) (0.19) (0.19) acquisition-related intangible assets

Adjusted Diluted earnings per share (Non-GAAP) $ 1.16 $ 1.18 $ 4.62 $ 4.68

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 our peers.

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SOURCE AMETEK, Inc.