AMETEK, Inc. (AMETEK) has reported net sales of $2.53 billion for the year-end 2008, up 18%, compared with the net sales of $2.14 billion in the previous year-end. It has also reported a net income of $247 million, or $2.30 per diluted share, for the year-end 2008, compared with the net income of $228 million, or $2.12 per diluted share, in the previous year-end.
The company’s has reported fourth quarter 2008 sales of $623.7 million, up 7% over the same period of 2007. The net income that includes the impact of fourth quarter restructuring charge was $43.8 million and diluted earnings per share were $0.41, compared to $0.57 per diluted share earned in fourth quarter 2007.
In the fourth quarter 2008, the company recorded a pre-tax restructuring charge of about $40 million, $27.3 million, net of tax; or $0.25 per diluted share, to cover the costs of employee reductions, facility closures and the asset write-downs necessary to realign company’s cost structure with anticipated market conditions. These actions and other cost reduction activities are anticipated to result in 2009 savings of about $75 million. The benefits from restructuring activities will have a greater impact in second half of the year.
The adjusted earnings for fourth quarter 2008 that excludes the restructuring charge, increased 15% to $71.1 million, or $0.66 per diluted share, as compared to fourth quarter 2007 net income of $61.9 million, or $0.57 per diluted share. For the full year, adjusted earnings were $274.2 million or $2.55 per diluted share, a 20% increase in both measures from 2007.
“Reflecting the global economic downturn, order rates for our businesses slowed dramatically in November and December. We expect difficult economic conditions to persist in 2009 and have taken these cost reduction actions to appropriately align our cost structure with expected market conditions,” said Frank S. Hermance, AMETEK chairman and chief executive officer.
“Despite these difficult economic conditions, AMETEK had a very good fourth quarter,” added Hermance. “The contributions from acquired businesses enabled us to grow our top-line by 7% for the quarter, offsetting a weakening core growth environment. Operating income margin, excluding the restructuring charge, was up 180 basis points and diluted earnings per share were up 16% in the quarter, driven by our top-line growth and operational excellence improvements,” he commented.
Electronic Instruments Group (EIG):
For the 2008 fourth quarter, EIG sales increased 8% to $361.6 million. Operating income, including the impact of the restructuring charge of $20.4 million, was $69.2 million, compared with $73.1 million in the fourth quarter of 2007, a decrease of 5%.
Operating income, excluding the restructuring charge, was $89.6 million, compared with $73.1 million in the fourth quarter of 2007, an increase of 23%. Operating margins for the quarter improved to 24.8%, from 21.8% in the fourth quarter of 2007.
“EIG had a very good fourth quarter. Sales were up 8%, driven by our power and process instrument businesses, together with the contributions from our Vision Research, Xantrex Programmable Power and California Instrument acquisitions. Core growth weakened in the quarter. Operating margins, excluding the restructuring charge, expanded 300 basis points,” stated Hermance.
Electromechanical Group (EMG):
For 2008 fourth quarter, EMG sales increased by 6% to $262.1 million. The operating income, including the impact of the restructuring charge of $19.4 million, was $24.7 million, compared with $42.4 million in the fourth quarter of 2007.
The operating income, excluding the restructuring charge, was $44.1 million, compared with $42.4 million in the fourth quarter of 2007, an increase of 4%. The operating margins for the quarter were 16.8%, as compared with 17.2% in fourth quarter 2007.
“EMG had a good fourth quarter, considering the economic environment. Sales were up on the contributions from the acquisitions of Reading Alloys, Muirhead Aerospace, Drake Air, Motion Control Group and Umeco Repair and Overhaul, more than offsetting difficult market conditions for our cost-driven motor businesses. Operating margins, before the restructuring charge, were down 40 basis points reflecting the impact of the economic downturn,” noted Hermance.
“We expect 2009 to be a very challenging year given the continuing global economic downturn, though we believe that AMETEK’s strong portfolio of businesses, proven operational capabilities, lower cost structure, and a successful focus on strategic acquisitions will enable us to outperform in 2009,” said Hermance.
“Based on our current understanding of market conditions, which has a more than normal level of uncertainty, we anticipate 2009 revenue to be down slightly from 2008, reflecting the full year impact of our 2008 acquisitions, negative foreign currency headwinds and mid-single digit negative internal growth. Earnings for 2009 are expected to be in the range of $2.40 to $2.60 per diluted share,” added Hermance.
“First quarter 2009 sales are expected to be down slightly from last year’s first quarter. We estimate our earnings to be approximately $0.54 to $0.58 per diluted share, as compared to last year’s first quarter of $0.62,” concluded Hermance.