UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 2018
AMETEK, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 1-12981 | 14-1682544 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 1100 Cassatt Road, Berwyn, Pennsylvania |
19312 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (610) 647-2121
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry Into a Material Definitive Agreement.
On October 30, 2018, AMETEK, Inc. (the “Company”) along with certain of its foreign subsidiaries amended and restated its credit agreement dated as of September 22, 2011, as amended and restated as of March 10, 2016 (the “Credit Agreement”), with the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Bank of America, N.A., PNC Bank, National Association, SunTrust Bank and Wells Fargo Bank, National Association, as Co-Syndication Agents. The Credit Agreement amends and restates the Company’s existing $850 million revolving credit facility, which was due to expire in March 2021. The Credit Agreement consists of a five-year revolving credit facility in an aggregate principal amount of $1.5 billion with a final maturity date in October 2023. The revolving credit facility total borrowing capacity excludes an accordion feature that permits the Company to request up to an additional $500 million in revolving credit commitments at any time during the life of the Credit Agreement under certain conditions. The Credit Agreement places certain restrictions on allowable additional indebtedness.
This description of the Credit Agreement is a summary only and is qualified in its entirety by the terms of the Credit Agreement. For further details, see Note 12 to the Consolidated Financial Statements included in Part I, Item 1 of the Company’s Quarterly Report on Form 10-Q Q filed with the Securities and Exchange Commission (“SEC”) on November 2, 2018. The Credit Agreement was filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 2, 2018 and is incorporated herein by reference.
Item 2.02 Results of Operations and Financial Condition.
On November 1, 2018, the Company issued a press release announcing its financial results for the three and nine months ended September 30, 2018. A copy of the release is furnished as Exhibit 99.1 and incorporated by reference herein. This Current Report on Form 8-K and the press release attached hereto are being furnished pursuant to Item 2.02 of Form 8-K.
The information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 2.03 – Creation of a Direct Financial Obligation or an Obligation Under Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated herein by reference.
Item 8.01 Other Events.
On November 1, 2018, the Company issued a press release announcing it has acquired Telular Corporation and Forza Silicon Corporation. A copy of the release is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
On November 1, 2018, the Company issued a press release announcing it has amended its revolving credit facility. A copy of the release is furnished as Exhibit 99.3 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMETEK, Inc. | ||||||
| November 2, 2018 | By: | /s/ THOMAS M. MONTGOMERY | ||||
| Name: Thomas M. Montgomery | ||||||
| Title: Senior Vice President – Comptroller | ||||||
Exhibit 99.1
AMETEK ANNOUNCES THIRD QUARTER RESULTS
AND RAISES 2018 GUIDANCE
— Reports third quarter sales up 10% over prior year —
— Delivers diluted earnings per share of $0.82, up 24% over prior year —
— Increases 2018 earnings guidance to $3.25—$3.27 per diluted share —
— Deploys $565 million on two acquisitions —
— Announces increase in revolving credit facility from $850 million to $1.5 billion —
BERWYN, PA, NOVEMBER 1, 2018 – AMETEK, Inc. (NYSE: AME) today announced its financial results for the third quarter ended September 30, 2018.
AMETEK’s third quarter 2018 sales were $1.19 billion, up 10% compared to the third quarter of 2017, with organic sales growth of 7%. Operating income in the quarter increased 15% to $265.3 million and operating income margins were 22.2%, up 100 basis points versus the prior-year period. Earnings in the quarter were $0.82 per diluted share, up 24% compared to the third quarter of 2017.
“I am very pleased with our results for the quarter. Organic sales growth was above our expectations and remains broad based across our businesses and geographies,” said David A. Zapico, AMETEK Chairman and Chief Executive Officer. “We expanded margins significantly and delivered strong earnings growth in the quarter, reflecting the strength of our operating model, while increasing our earnings guidance for the full year.”
“We also continue to successfully deploy our strong cash flows on acquisitions, announcing today that we deployed $565 million on two highly strategic acquisitions. We remain very well positioned to continue our acquisition strategy with today’s announcement of an extended and upsized revolving credit facility providing us with added flexibility,” continued Mr. Zapico.
Electronic Instruments Group (EIG)
In the third quarter of 2018, sales for EIG were $742.0 million, an increase of 10% compared to the same quarter of 2017. Operating income for the quarter was $190.3 million, up 17% over the same period last year, and operating margins expanded 130 basis points to 25.6%.
“EIG performed extremely well in the quarter, delivering strong sales growth and exceptional operating performance with robust operating margin expansion. The sales growth was driven by 7% organic growth and the contributions from the acquisitions of Motec, Soundcom and Arizona Instrument,” commented Mr. Zapico.
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Electromechanical Group (EMG)
EMG’s sales in the third quarter were $450.9 million, up 9% over the same quarter last year. EMG operating income in the quarter was $92.7 million, up 11% compared to the third quarter of 2017, and operating margins expanded 50 basis points to 20.6%.
“EMG also had a great quarter with strong sales and operating performance. Sales were up nicely on 7% organic sales growth and the contribution from the acquisition of FMH Aerospace,” noted Mr. Zapico.
2018 Outlook
“Our businesses have performed exceedingly well through the first three quarters of the year, firmly positioning the company to report record results in 2018. Our success this year demonstrates the strength of AMETEK’s business model,” commented Mr. Zapico.
“Following these outstanding results, we are again raising guidance for 2018. We now expect earnings per diluted share for the year to be in the range of $3.25 to $3.27, up 25% over 2017’s adjusted diluted earnings per share. This is an increase from our previous guidance range of $3.16 to $3.20 per diluted share. We expect overall sales for the year to be up low double digits on a percentage basis, with organic sales now up mid to high single digits,” he added.
“Overall sales in the fourth quarter of 2018 are expected to be up approximately 10% versus the prior-year period, with organic sales up mid-single digits. Fourth quarter earnings are expected to be in the range of $0.82 to $0.84 per diluted share, up 17% to 20% over the prior year’s adjusted earnings.”
Conference Call
AMETEK will webcast its third quarter 2018 investor conference call on Thursday, November 1, 2018, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in the Investors section of www.ametek.com.
Corporate Profile
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annualized sales of approximately $4.8 billion. AMETEK’s growth model is based on Four Key Strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. 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 Index.
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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 AMETEK’s ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations; 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 Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com
Phone: 610.889.5247
(Financial Information Follows)
-3-
AMETEK, Inc.
Consolidated Statement of Income
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2018 | 2017 (1) | 2018 | 2017 (1) | |||||||||||||
| Net sales |
$ | 1,192,962 | $ | 1,084,799 | $ | 3,574,544 | $ | 3,157,085 | ||||||||
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| Cost of sales |
782,994 | 722,127 | 2,351,042 | 2,091,720 | ||||||||||||
| Selling, general and administrative |
144,702 | 132,634 | 429,982 | 388,331 | ||||||||||||
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| Total operating expenses |
927,696 | 854,761 | 2,781,024 | 2,480,051 | ||||||||||||
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| Operating income |
265,266 | 230,038 | 793,520 | 677,034 | ||||||||||||
| Interest expense |
(19,391 | ) | (24,709 | ) | (61,861 | ) | (73,777 | ) | ||||||||
| Other expense, net |
(945 | ) | (902 | ) | (2,684 | ) | (4,053 | ) | ||||||||
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| Income before income taxes |
244,930 | 204,427 | 728,975 | 599,204 | ||||||||||||
| Provision for income taxes |
53,717 | 50,896 | 162,562 | 156,266 | ||||||||||||
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| Net income |
$ | 191,213 | $ | 153,531 | $ | 566,413 | $ | 442,938 | ||||||||
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| Diluted earnings per share |
$ | 0.82 | $ | 0.66 | $ | 2.43 | $ | 1.91 | ||||||||
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| Basic earnings per share |
$ | 0.83 | $ | 0.67 | $ | 2.45 | $ | 1.93 | ||||||||
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| Weighted average common shares outstanding: |
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| Diluted shares |
233,250 | 232,253 | 233,171 | 231,615 | ||||||||||||
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| Basic shares |
231,502 | 230,439 | 231,227 | 230,049 | ||||||||||||
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| Dividends per share |
$ | 0.14 | $ | 0.09 | $ | 0.42 | $ | 0.27 | ||||||||
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| (1) | - The three and nine months ended September 30, 2017 have been restated to reflect the adoption of new accounting guidance in 2018, which resulted in the presentation of $2.8 million and $8.5 million, respectively, of other net periodic benefit income in Other expense, net rather than in Operating income, with no change in Net income. |
AMETEK, Inc.
Information by Business Segment
(In thousands)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net sales: |
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| Electronic Instruments |
$ | 742,041 | $ | 671,606 | $ | 2,202,925 | $ | 1,949,038 | ||||||||
| Electromechanical |
450,921 | 413,193 | 1,371,619 | 1,208,047 | ||||||||||||
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| Consolidated net sales |
$ | 1,192,962 | $ | 1,084,799 | $ | 3,574,544 | $ | 3,157,085 | ||||||||
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| Operating income: |
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| Segment operating income: |
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| Electronic Instruments |
$ | 190,313 | $ | 162,988 | $ | 567,503 | $ | 482,004 | ||||||||
| Electromechanical |
92,667 | 83,110 | 277,919 | 246,021 | ||||||||||||
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| Total segment operating income |
282,980 | 246,098 | 845,422 | 728,025 | ||||||||||||
| Corporate administrative expenses |
(17,714 | ) | (16,060 | ) | (51,902 | ) | (50,991 | ) | ||||||||
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| Consolidated operating income |
$ | 265,266 | $ | 230,038 | $ | 793,520 | $ | 677,034 | ||||||||
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AMETEK, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
| September 30, 2018 |
December 31, 2017 |
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| (Unaudited) | ||||||||
| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 518,721 | $ | 646,300 | ||||
| Receivables, net |
714,929 | 668,176 | ||||||
| Inventories, net |
620,149 | 540,504 | ||||||
| Other current assets |
144,816 | 79,675 | ||||||
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| Total current assets |
1,998,615 | 1,934,655 | ||||||
| Property, plant and equipment, net |
487,425 | 493,296 | ||||||
| Goodwill |
3,263,663 | 3,115,619 | ||||||
| Other intangibles, investments and other assets |
2,358,340 | 2,252,494 | ||||||
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| Total assets |
$ | 8,108,043 | $ | 7,796,064 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Short-term borrowings and current portion of long-term debt, net |
$ | 68,722 | $ | 308,123 | ||||
| Accounts payable and accruals |
901,179 | 830,540 | ||||||
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| Total current liabilities |
969,901 | 1,138,663 | ||||||
| Long-term debt, net |
1,832,547 | 1,866,166 | ||||||
| Deferred income taxes and other long-term liabilities |
793,686 | 763,602 | ||||||
| Stockholders’ equity |
4,511,909 | 4,027,633 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 8,108,043 | $ | 7,796,064 | ||||
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Exhibit 99.2
AMETEK COMPLETES TWO ACQUISITIONS
— Telular Provides AMETEK an Advanced IoT Communication Solutions Platform —
— Forza Broadens AMETEK’s Advanced Camera Sensor Technology —
BERWYN, PA, NOVEMBER 1, 2018 – AMETEK, Inc. (NYSE: AME) today announced that it has completed two acquisitions: Telular Corporation, a leading provider of communication solutions for logistics management, tank monitoring and security applications, and Forza Silicon Corporation, a leader in the design and production of high-performance imaging sensors used in medical, defense, commercial and industrial applications. Combined, AMETEK deployed approximately $565 million on these acquisitions.
“We are very excited to welcome Telular and Forza to AMETEK, as they are both excellent companies with differentiated technology solutions serving attractive market segments,” comments David A. Zapico, AMETEK Chairman and Chief Executive Officer. “2018 has proven to be a record year on the acquisition front and we remain pleased with our efforts in this area as our teams continue to manage a robust pipeline of additional opportunities.”
Both companies join AMETEK as part of its Electronic Instruments Group (EIG)—a leader in advanced analytical, monitoring, testing, calibrating and display instruments with annualized sales of $3.0 billion.
Telular
Telular is a leading provider of communication solutions for logistics management, tank monitoring and security applications. Telular’s end-to-end solutions include purpose-built hardware, proprietary software and wireless connectivity services to enhance the efficiency and safety of critical assets.
“We are very excited about the acquisition of Telular. Their software-enabled IoT solutions drive attractive, recurring revenue along with long-term customer relationships,” noted Mr. Zapico. “The combination of Telular’s IoT capabilities and AMETEK’s highly differentiated measurement technology provides additional growth opportunities for our businesses.”
Telular was acquired for approximately $525 million and has annual sales of approximately $165 million. They are headquartered in Chicago, Illinois.
Forza Silicon
Forza Silicon is a leader in the design and production of high-performance imaging sensors used in medical, defense, commercial and industrial applications.
- 1 -
“Forza is a highly strategic technology acquisition for AMETEK,” added Mr. Zapico. “Customers rely on Forza’s leading-edge design capability to support their advanced sensor development projects. Forza also provides our Vision Research business with custom sensor design and production capability, allowing for accelerated development of next generation sensor technology for use across our market leading, high-speed cameras.”
Forza has annual sales of approximately $20 million and was acquired for approximately $40 million. They are headquartered in Pasadena, California.
Corporate Profile
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annualized sales of approximately $4.8 billion. AMETEK’s growth model is based on Four Key Strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. 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 Index.
Contact:
AMETEK, Inc.
Kevin Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com
Phone: 610.889.5247
- 2 -
Exhibit 99.3
AMETEK ANNOUNCES AMENDED REVOLVING CREDIT FACILITY
— Increases Revolving Credit Facility to $1.5 Billion —
— Extends Maturity to October 2023 —
BERWYN, PA, NOVEMBER 1, 2018 – AMETEK, Inc. (NYSE: AME) announced that it has completed an amended and restated Revolving Credit Facility increasing the size from $850 million to $1.5 billion. The facility, previously due to expire in March 2021, now has a maturity date of October 2023.
“AMETEK’s Revolving Credit Facility is a key component of our financing structure. By increasing its size to $1.5 billion, we gain additional flexibility to support our growth initiatives, including strategic acquisitions,” commented William J. Burke, Executive Vice President and Chief Financial Officer.
JPMorgan Chase Bank, N.A., Bank of America N.A., Wells Fargo Bank, PNC Bank and SunTrust Bank acted as joint lead arrangers and joint book managers for the credit facility, leading a syndicate that includes five additional banks.
Corporate Profile
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annualized sales of approximately $4.8 billion. AMETEK’s growth model is based on Four Key Strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. 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 Index.
Contact:
AMETEK, Inc.
Kevin Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com
Phone: 610.889.5247