AMETEK Inc. (AME) filed Quarterly Report for the period ended 2009-09-30.
AMETEK is a leading global manufacturer of electric motors andelectronic instruments. The company markets its products worldwide through two operating groups the Electronic Instruments Group and the Electromechanical Group. EIG builds technologically advanced monitoring sensing calibration and display devices for the aerospace heavy vehicle and process industries. EMG manufactures air-moving electric motors for vacuum cleaners and other floor-care products and produces of brushless air-moving motors for aerospace mass-transit and computer markets. Ametek Inc. has a market cap of $3.73 billion; its shares were traded at around $34.69 with a P/E ratio of 16.4 and P/S ratio of 1.5. The dividend yield of Ametek Inc. stocks is 0.7%. Ametek Inc. had an annual average earning growth of 11.3% over the past 10 years. GuruFocus rated Ametek Inc. the business predictability rank of 3-star.
Highlight of Business Operations:
Net income for the third quarter of 2009 was $43.0 million, a decrease of $27.9 million or 39.4% when compared with $70.9 million for the third quarter of 2008. Diluted earnings per share for the third quarter of 2009 was $0.40, which includes a $0.02 diluted earnings per share impact related to the third quarter of 2009 restructuring, a decrease of $0.26 or 39.4% when compared with $0.66 per diluted share for the third quarter of 2008.
Net income for the first nine months of 2009 was $153.9 million, a decrease of $49.2 million or 24.2% when compared with $203.1 million for the first nine months of 2008. Diluted earnings per share for the first nine months of 2009 was $1.43, which includes a $0.02 diluted earnings per share impact related to the third quarter of 2009 restructuring, a decrease of $0.46 or 24.3% when compared with $1.89 per diluted share for the first nine months of 2008.
Cash provided by operating activities totaled $255.9 million for the first nine months of 2009, an increase of $51.3 million or 25.1% when compared with $204.6 million for the first nine months of 2008. The increase in operating cash flow was primarily the result of lower overall operating working capital levels, which includes a tax refund that resulted from the Company’s higher year end 2008 defined benefit pension contributions. The increase in cash provided by operating activities was partially offset by the $49.2 million decrease in net income and $19.9 million in defined benefit pension contributions paid for the first nine months of 2009, compared with $2.6 million in defined benefit pension contributions paid for the first nine months of 2008. Free cash flow (cash flow from operating activities less capital expenditures) was $234.4 million for the first nine months of 2009, compared with $173.6 million for the same period in 2008. Free cash flow is presented because the Company is aware that this measure is used by third parties in evaluating the Company.
Cash used for investing activities totaled $64.2 million for the first nine months of 2009, compared with $419.5 million for the first nine months of 2008. For the first nine months of 2009, the Company paid $43.0 million for two business acquisitions, net of cash received, compared with $399.0 million paid for five business acquisitions and one technology line, net of cash received, for the first nine months of 2008. Additions to property, plant and equipment totaled $21.5 million for the first nine months of 2009, compared with $31.0 million for the first nine months of 2008.
Cash used for financing activities totaled $81.8 million for the first nine months of 2009, compared with $214.7 million of cash provided by financing activities for the first nine months of 2008. In the first nine months of 2009, the net total borrowings decreased by $75.9 million, compared with a net total borrowings increase of $279.8 million in the first nine months of 2008. Additionally, for the first nine months of 2008, the Company repurchased 1.3 million shares of the Company’s common stock for $57.4 million. In May 2009, the Company chose not to renew its $100 million accounts receivable securitization facility.
In the third quarter of 2008, the Company completed a private placement agreement to sell $350 million in senior notes to a group of institutional investors. There were two funding dates for the senior notes. The first funding occurred in September 2008 for $250 million, consisting of $90 million in aggregate principal amount of 6.59% senior notes due September 2015 and $160 million in aggregate principal amount of 7.08% senior notes due September 2018. The second funding date occurred in December 2008 for $100 million, consisting of $35 million in aggregate principal amount of 6.69% senior notes due December 2015 and $65 million in aggregate principal amount of 7.18% senior notes due December 2018. The senior notes carry a weighted average interest rate of 6.93%. The senior notes are subject to certain customary covenants, including financial covenants that, among other things, require the Company to maintain certain debt to EBITDA and interest coverage ratios. The proceeds from the senior notes were used to pay down a portion of the Company’s revolving credit facility.
AME is in the portfolios of John Keeley of Keeley Fund Management.
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