AMETEK Announces Record Fourth Quarter and Full Year Results
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Insights
AMETEK's record sales and earnings for Q4 2023 and the full year reflect a robust financial health and operational efficiency. The 6.5% year-over-year sales growth, coupled with a 12% increase in operating income and a significant 40% increase in operating cash flow, indicate a strong demand for the company's products and efficient cost management. The operating margin expansion from 25.7% in Q4 to 25.9% for the full year suggests improved profitability, likely due to economies of scale and possibly effective integration of recent acquisitions.
Investors should note the adjusted earnings per share (EPS) of $1.68, which excludes non-cash acquisition-related amortization, providing a clearer picture of the company's operational performance. This adjustment is crucial for evaluating the true earnings potential of AMETEK's core business. Furthermore, the company's guidance for 2024, projecting low double-digit sales growth and a 5% to 7% increase in adjusted EPS, reflects management's confidence in sustained growth, which could be a positive signal for investors looking at long-term value creation.
The Electronic Instruments Group (EIG) and Electromechanical Group (EMG) both reported strong sales and operating income growth, with EIG in particular showing a significant 250 basis point increase in operating margins. This performance underscores the competitive advantage and market leadership of AMETEK's specialized instrument segments. It's indicative of strong organic growth and successful integration of strategic acquisitions like Paragon Medical, enhancing the company's market position.
AMETEK's diversified market exposure and record backlog suggest resilience against economic headwinds and potential for sustained revenue streams. The company's focus on aerospace and defense within the EMG segment is particularly noteworthy as these industries often provide stable long-term contracts that can lead to predictable and consistent revenue.
The financial results and forward-looking statements from AMETEK provide a positive outlook for investors, especially in terms of the company's growth model and strategic capital deployment. The record financial performance, combined with a strong balance sheet and robust cash flows, suggests that AMETEK is well-equipped to continue its growth trajectory through both organic initiatives and further acquisitions.
Investors should consider the company's ability to drive long-term value creation through a disciplined capital allocation strategy that focuses on high-margin, niche markets. However, they should also be aware of the inherent risks associated with acquisitions, such as integration challenges and potential for goodwill impairment, which could affect future earnings.
AMETEK's fourth quarter 2023 sales were a record
On a GAAP basis, fourth quarter earnings per diluted share were
"AMETEK's fourth quarter and full year performance was exceptional," noted David A. Zapico, AMETEK Chairman and Chief Executive Officer. "Contributions from organic sales growth and recent acquisitions, along with tremendous operating performance, led to robust margin expansion, record earnings and impressive cash flow growth in the quarter and the full year. We also continued to strengthen our portfolio in 2023, deploying approximately
For the full year, AMETEK's sales were a record
On a GAAP basis, full year 2023 earnings were
Electronic Instruments Group (EIG)
EIG sales in the fourth quarter were a record
"EIG delivered outstanding results in the fourth quarter," commented Mr. Zapico. "The sales growth was driven by continued solid organic growth and contributions from recent acquisitions. Our EIG businesses drove exceptional margin expansion, a testament to the quality of our businesses and our team's focus on driving continuous operational improvements."
Electromechanical Group (EMG)
EMG sales in the fourth quarter were
"EMG also delivered a strong fourth quarter performance with continued excellent growth across our aerospace and defense businesses and solid core margin expansion in the quarter," stated Mr. Zapico.
2024 Outlook
"AMETEK's businesses delivered exceptional results in the fourth quarter and for the full year. The strength of the AMETEK Growth Model, alongside the outstanding contributions of our colleagues, allowed us to deliver strong, high-quality growth. The strength of our niche businesses, diverse market exposures, record backlog and robust operating capabilities position us for sustained growth. With a flexible balance sheet and strong cash flows, we are well positioned to invest in our organic growth initiatives and pursue strategic acquisitions to drive long-term value creation," noted Mr. Zapico.
"For 2024, we expect overall sales to be up low double digits on a percentage basis compared to 2023. Adjusted earnings per diluted share are expected to be in the range of
"For the first quarter of 2024, overall sales are expected to be up low double digits on a percentage basis compared to the same period last year. Adjusted earnings in the quarter are anticipated to be in the range of
Conference Call
AMETEK will webcast its fourth quarter 2023 investor conference call on Tuesday, February 6, 2024, 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 (NYSE: AME) is a leading global provider of industrial technology solutions serving a diverse set of attractive niche markets with annualized sales over
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 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
Contact:
Kevin Coleman
Vice President, Investor Relations and Treasurer
kevin.coleman@ametek.com
Phone: 610.889.5247
AMETEK, Inc. Consolidated Statement of Income (In thousands, except per share amounts) (Unaudited) | |||||||
Three Months Ended | Year Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net sales | $ 1,730,885 | $ 1,625,667 | $ 6,596,950 | $ 6,150,530 | |||
Cost of sales | 1,115,850 | 1,063,657 | 4,212,485 | 4,005,261 | |||
Selling, general and administrative | 170,043 | 163,920 | 677,006 | 644,577 | |||
Total operating expenses | 1,285,893 | 1,227,577 | 4,889,491 | 4,649,838 | |||
Operating income | 444,992 | 398,090 | 1,707,459 | 1,500,692 | |||
Interest expense | (24,117) | (23,021) | (81,795) | (83,186) | |||
Other (expense) income, net | (3,939) | 3,435 | (19,252) | 11,186 | |||
Income before income taxes | 416,936 | 378,504 | 1,606,412 | 1,428,692 | |||
Provision for income taxes | 74,072 | 71,422 | 293,224 | 269,150 | |||
Net income | $ 342,864 | $ 307,082 | $ 1,313,188 | $ 1,159,542 | |||
Diluted earnings per share | $ 1.48 | $ 1.33 | $ 5.67 | $ 5.01 | |||
Basic earnings per share | $ 1.49 | $ 1.34 | $ 5.70 | $ 5.04 | |||
Weighted average common shares outstanding: | |||||||
Diluted shares | 231,794 | 231,118 | 231,509 | 231,536 | |||
Basic shares | 230,782 | 229,750 | 230,519 | 230,208 | |||
Dividends per share | $ 0.25 | $ 0.22 | $ 1.00 | $ 0.88 | |||
AMETEK, Inc. Information by Business Segment (In thousands) (Unaudited) | |||||||
Three Months Ended | Year Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net sales: | |||||||
Electronic Instruments | $ 1,236,227 | $ 1,159,222 | $ 4,624,250 | $ 4,229,353 | |||
Electromechanical | 494,658 | 466,445 | 1,972,700 | 1,921,177 | |||
Consolidated net sales | $ 1,730,885 | $ 1,625,667 | $ 6,596,950 | $ 6,150,530 | |||
Operating income: | |||||||
Segment operating income: | |||||||
Electronic Instruments | $ 358,992 | $ 307,126 | $ 1,310,962 | $ 1,089,729 | |||
Electromechanical | 112,316 | 114,546 | 496,569 | 503,593 | |||
Total segment operating income | 471,308 | 421,672 | 1,807,531 | 1,593,322 | |||
Corporate administrative expenses | (26,316) | (23,582) | (100,072) | (92,630) | |||
Consolidated operating income | $ 444,992 | $ 398,090 | $ 1,707,459 | $ 1,500,692 | |||
AMETEK, Inc. Condensed Consolidated Balance Sheet (In thousands) | |||
December 31, | December 31, | ||
2023 | 2022 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 409,804 | $ 345,386 | |
Receivables, net | 1,012,932 | 919,335 | |
Inventories, net | 1,132,471 | 1,044,284 | |
Other current assets | 269,461 | 219,053 | |
Total current assets | 2,824,668 | 2,528,058 | |
Property, plant and equipment, net | 891,293 | 635,641 | |
Right of use asset, net | 229,723 | 170,295 | |
Goodwill | 6,447,629 | 5,372,562 | |
Other intangibles, investments and other assets | 4,630,220 | 3,724,564 | |
Total assets | $ 15,023,533 | $ 12,431,120 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Short-term borrowings and current portion of long-term debt, net | $ 1,417,915 | $ 226,079 | |
Accounts payable and accruals | 1,464,658 | 1,338,123 | |
Total current liabilities | 2,882,573 | 1,564,202 | |
Long-term debt, net | 1,895,432 | 2,158,928 | |
Deferred income taxes and other long-term liabilities | 1,515,337 | 1,231,478 | |
Stockholders' equity | 8,730,191 | 7,476,512 | |
Total liabilities and stockholders' equity | $ 15,023,533 | $ 12,431,120 | |
AMETEK, Inc. Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) | |||||||
Diluted Earnings Per Share | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Diluted earnings per share (GAAP) | $ 1.48 | $ 1.33 | $ 5.67 | $ 5.01 | |||
Pretax amortization of acquisition-related intangible assets | 0.26 | 0.25 | 0.93 | 0.89 | |||
Income tax benefit on amortization of acquisition-related intangible assets | (0.06) | (0.06) | (0.22) | (0.22) | |||
Adjusted Diluted earnings per share (Non-GAAP) | $ 1.68 | $ 1.52 | $ 6.38 | $ 5.68 | |||
Forecasted Diluted Earnings Per Share | |||||||
Three Months Ended | Year Ended | ||||||
March 31, 2024 | December 31, 2024 | ||||||
Low | High | Low | High | ||||
Diluted earnings per share (GAAP) | $ 1.35 | $ 1.39 | $ 5.88 | $ 6.03 | |||
Pretax amortization of acquisition-related intangible assets | 0.27 | 0.27 | 1.08 | 1.08 | |||
Income tax benefit on amortization of acquisition-related intangible assets | (0.06) | (0.06) | (0.26) | (0.26) | |||
Adjusted Diluted earnings per share (Non-GAAP) | $ 1.56 | $ 1.60 | $ 6.70 | $ 6.85 | |||
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.
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