AMETEK Inc. Files 10-Q for Q2 2024

TL;DR

AMETEK Q2 2024 10-Q filed. Check financials.

AI Summary

AMETEK Inc. filed its 10-Q for the period ending June 30, 2024, reporting on its financial performance. The company, headquartered in Berwyn, PA, operates in the industrial instruments sector. Specific financial figures and operational details for the second quarter of 2024 are detailed within the filing.

Why It Matters

This filing provides investors and analysts with the latest financial performance data for AMETEK Inc., crucial for understanding the company's current health and future prospects.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Numbers

• 2024 Q2 — Reporting Period (Second quarter of fiscal year 2024)
• 12-31 — Fiscal Year End (AMETEK's fiscal year concludes on December 31st)

Key Players & Entities

• AMETEK INC/ (company) — Filer of the 10-Q
• Berwyn, PA (location) — Company headquarters
• 20240630 (date) — End of reporting period
• 20240801 (date) — Filing date

FAQ

Key Financial Figures

• $0.01 — est practicable date was: Common Stock, $0.01 Par Value, outstanding at July 30, 2024

Filing Documents

• ame-20240630.htm (10-Q) — 954KB
• ex102amendedcreditagreemen.htm (EX-10.2) — 1274KB
• ame-20240630xexx311.htm (EX-31.1) — 10KB
• ame-20240630xexx312.htm (EX-31.2) — 9KB
• ame-20240630xexx321.htm (EX-32.1) — 6KB
• ame-20240630xexx322.htm (EX-32.2) — 5KB
• image_108a.jpg (GRAPHIC) — 0KB
• image_129a.jpg (GRAPHIC) — 0KB
• image_16.jpg (GRAPHIC) — 0KB
• image_19a.jpg (GRAPHIC) — 0KB
• image_26a.jpg (GRAPHIC) — 0KB
• image_60a.jpg (GRAPHIC) — 0KB
• image_76.jpg (GRAPHIC) — 0KB
• 0001037868-24-000048.txt ( ) — 7488KB
• ame-20240630.xsd (EX-101.SCH) — 36KB
• ame-20240630_cal.xml (EX-101.CAL) — 59KB
• ame-20240630_def.xml (EX-101.DEF) — 133KB
• ame-20240630_lab.xml (EX-101.LAB) — 542KB
• ame-20240630_pre.xml (EX-101.PRE) — 357KB
• ame-20240630_htm.xml (XML) — 1020KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1.Financial Statements Consolidated Statement of Income for the three and six months ended June 30 , 2024 and 2023 3 Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30 , 2024 and 2023 4 Consolidated Balance Sheet at June 30 , 2024 and December 31, 2023 5 Consolidated Statement of Stockholders' Equity for the three an d six months ended June 30 , 2024 and 2023 6 Condensed Consolidated Statement of Cash Flows for the six months ended June 30 , 2024 and 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations 19

Controls and Procedures

Item 4.Controls and Procedures 23

OTHER INFORMATION

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 24

Other Information

Item 5. Other Information 24

SIGNATURES

SIGNATURES 26 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements AMETEK, Inc. Consolidated Statement of Income (In thousands, except per share amounts) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net sales $ 1,734,834 $ 1,646,111 $ 3,471,014 $ 3,243,228 Cost of sales 1,110,425 1,053,190 2,255,106 2,075,715 Selling, general and administrative 176,895 174,130 351,178 343,181 Total operating expenses 1,287,320 1,227,320 2,606,284 2,418,896 Operating income 447,514 418,791 864,730 824,332 Interest expense ( 30,590 ) ( 18,723 ) ( 65,844 ) ( 39,292 ) Other income (expense), net 86 ( 3,684 ) ( 547 ) ( 9,057 ) Income before income taxes 417,010 396,384 798,339 775,983 Provision for income taxes 79,327 72,142 149,713 146,029 Net income $ 337,683 $ 324,242 $ 648,626 $ 629,954 Basic earnings per share $ 1.46 $ 1.41 $ 2.80 $ 2.74 Diluted earnings per share $ 1.45 $ 1.40 $ 2.79 $ 2.72 Weighted average common shares outstanding: Basic shares 231,437 230,478 231,267 230,302 Diluted shares 232,304 231,261 232,170 231,245 Dividends declared and paid per share $ 0.28 $ 0.25 $ 0.56 $ 0.50 See accompanying notes. 3 Table of Contents AMETEK, Inc. Condensed Consolidated Statement of Comprehensive Income (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Total comprehensive income $ 325,618 $ 350,692 $ 611,175 $ 682,903 See accompanying notes. 4 Table of Contents AMETEK, Inc. Consolidated Balance Sheet (In thousands) June 30, 2024 December 31, 2023 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 396,573 $ 409,804 Receivables, net 976,442 1,012,932 Inventories, net 1,101,719 1,132,471 Other current assets 292,510 269,461 Total current assets 2,767,244 2,824,668 Property, plant and equipment, net 861,577 891,293 Right of use assets, net 217,469 229,723 Goodwill 6,453,513 6,447,629 Other intangibles, net 4,013,096 4,165,317 Investments and other assets 482,967

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) 1. Basis of Presentation The accompanying consolidated financial statements are unaudited. AMETEK, Inc. (the "Company") believes that all adjustments (which primarily consist of normal recurring accruals) necessary for a fair presentation of the consolidated financial position of the Company at June 30, 2024, the consolidated results of its operations for the three and six months ended June 30, 2024 and 2023 and its cash flows for the six months ended June 30, 2024 and 2023 have been included. Quarterly results of operations are not necessarily indicative of results for the full year. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the U.S. Securities and Exchange Commission. 2. Recent Accounting Pronouncements Recent Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires disclosure of significant segment expenses and other segment items on an annual and interim basis under ASC 280. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted and the amendments in this ASU should be applied on a retrospective basis to all periods presented. The Company has not determined the impact ASU 2023-07 may have on the Company's financial statement disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which improves income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid di

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) balance sheet date, for which the performance obligation is unsatisfied or partially unsatisfied. These performance obligations will be substantially satisfied within two to three years . Geographic Areas Net sales were attributed to geographic areas based on the location of the customer. Information about the Company's operations in different geographic areas was as follows for the three and six months ended June 30: Three months ended June 30, 2024 Six months ended June 30, 2024 EIG EMG Total EIG EMG Total (In thousands) United States $ 602,677 $ 342,201 $ 944,878 $ 1,171,574 $ 686,061 $ 1,857,635 International (1) : United Kingdom 27,759 35,755 63,514 54,466 63,947 118,413 European Union countries 128,428 106,990 235,418 270,670 221,976 492,646 Asia 281,990 56,310 338,300 580,035 106,509 686,544 Other foreign countries 112,759 39,965 152,724 233,647 82,129 315,776 Total international 550,936 239,020 789,956 1,138,818 474,561 1,613,379 Consolidated net sales $ 1,153,613 $ 581,221 $ 1,734,834 $ 2,310,392 $ 1,160,622 $ 3,471,014 ________________ (1) Includes U.S. export sales of $ 435.6 million and $ 909.3 million for the three and six months ended June 30, 2024, respectively. Three months ended June 30, 2023 Six months ended June 30, 2023 EIG EMG Total EIG EMG Total (In thousands) United States $ 575,281 $ 284,611 $ 859,892 $ 1,137,177 $ 531,730 $ 1,668,907 International (1) : United Kingdom 23,150 28,402 51,552 51,188 59,464 110,652 European Union countries 130,811 110,876 241,687 266,469 227,683 494,152 Asia 290,636 52,753 343,389 574,528 103,658 678,186 Other foreign countries 114,768 34,823 149,591 222,531 68,800 291,331 Total international 559,365 226,854 786,219 1,114,716 459,605 1,574,321 Consolidated net sales $ 1,134,646 $ 511,465 $ 1,646,111 $ 2,251,893 $ 991,335 $ 3,243,228 ______________ (1) Includes U.S. export sales of $ 439.1 million and $ 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) Major Products and Services The Company's major products and services in the reportable segments were as follows: Three months ended June 30, 2024 Six months ended June 30, 2024 EIG EMG Total EIG EMG Total (In thousands) Process and analytical instrumentation $ 802,724 $ — $ 802,724 $ 1,594,262 $ — $ 1,594,262 Aerospace and power 350,889 154,463 505,352 716,130 306,915 1,023,045 Automation and engineered solutions — 426,758 426,758 — 853,707 853,707 Consolidated net sales $ 1,153,613 $ 581,221 $ 1,734,834 $ 2,310,392 $ 1,160,622 $ 3,471,014 Three months ended June 30, 2023 Six months ended June 30, 2023 EIG EMG Total EIG EMG Total (In thousands) Process and analytical instrumentation $ 798,667 $ — $ 798,667 $ 1,593,100 $ — $ 1,593,100 Aerospace and power 335,979 149,792 485,771 658,793 292,842 951,635 Automation and engineered solutions — 361,673 361,673 — 698,493 698,493 Consolidated net sales $ 1,134,646 $ 511,465 $ 1,646,111 $ 2,251,893 $ 991,335 $ 3,243,228 Timing of Revenue Recognition Three months ended June 30, 2024 Six months ended June 30, 2024 EIG EMG Total EIG EMG Total (In thousands) Products transferred at a point in time $ 925,932 $ 493,999 $ 1,419,931 $ 1,871,930 $ 997,584 $ 2,869,514 Products and services transferred over time 227,681 87,222 314,903 438,462 163,038 601,500 Consolidated net sales $ 1,153,613 $ 581,221 $ 1,734,834 $ 2,310,392 $ 1,160,622 $ 3,471,014 Three months ended June 30, 2023 Six months ended June 30, 2023 EIG EMG Total EIG EMG Total (In thousands) Products transferred at a point in time $ 936,934 $ 463,618 $ 1,400,552 $ 1,872,242 $ 877,219 $ 2,749,461 Products and services transferred over time 197,712 47,847 245,559 379,651 114,116 493,767 Consolidated net sales $ 1,134,646 $ 511,465 $ 1,646,111 $ 2,251,893 $ 991,335 $ 3,243,228 Product Warranties The Company provides limited warranties in connection with the sal

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) Changes in the accrued product warranty obligation were as follows: Six Months Ended June 30, 2024 2023 (In thousands) Balance at the beginning of the period $ 37,087 $ 26,487 Accruals for warranties issued during the period 10,648 9,397 Settlements made during the period ( 11,073 ) ( 7,289 ) Warranty accruals related to acquired businesses and other during the period ( 30 ) 244 Balance at the end of the period $ 36,632 $ 28,839 Accounts Receivable The Company maintains allowances for estimated losses resulting from the inability of customers to meet their financial obligations to the Company. The Company recognizes an allowance for credit losses, on all accounts receivable and contract assets, which considers risk of future credit losses based on factors such as historical experience, contract terms, as well as general and market business conditions, country, and political risk. Balances are written off when determined to be uncollectible. At June 30, 2024, the Company had $ 976.4 million of accounts receivable, net of allowances of $ 14.3 million. Changes in the allowance were not material for the three and six months ended June 30, 2024. 4. Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of common shares considered outstanding during the periods. The calculation of diluted earnings per share reflects the effect of all potentially dilutive securities (principally outstanding stock options and restricted stock grants). The number of weighted average shares used in the calculation of basic earnings per share and diluted earnings per share was as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (In thousands) Weighted average shares: Basic shares 231,437 230,478 231,267 230,302 Equity-based compensation plans 867 783 903 943 Diluted shares 232,304 231,261 232,170 231,245 The calcul

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) to measure assets and liabilities at fair value. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the Company's assets that are measured at fair value on a recurring basis, consistent with the fair value hierarchy, at June 30, 2024 and December 31, 2023: June 30, 2024 Total Level 1 Level 2 Level 3 (In thousands) Mutual fund investments $ 12,018 $ 12,018 $ — $ — Foreign currency forward contracts ( 276 ) — ( 276 ) — December 31, 2023 Total Level 1 Level 2 Level 3 (In thousands) Mutual fund investments $ 11,922 $ 11,922 $ — $ — Foreign currency forward contracts 2,035 — 2,035 — The fair value of mutual fund investments is based on quoted market prices. The mutual fund investments are shown as a component of investments and other assets on the consolidated balance sheet. For the six months ended June 30, 2024 and 2023, gains and losses on the investments noted above were not significant. No transfers between level 1 and level 2 investments occurred during the six months ended June 30, 2024 and 2023. Foreign Currency At June 30, 2024, the Company had a Euro forward contract for a total notional value of 60.0 million Euros. The foreign currency forward contract is valued as a level 2 liability as it is corroborated by foreign currency exchange rates and shown as a component of other current liabilities on the consolidated balance sheet. For the six months ended June 30, 2024, realized and unrealized gains and losses on the foreign currency forward contracts were not significant. Financial Instruments Cash, cash equivalents and mutual fund investments are recorded at fair value at June 30, 2024 and December 31, 2023 in the accompanying consolidated balance sheet. The following table provides the estimated fair values of the Company's fi

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) investment hedges are evidenced by management's contemporaneous documentation supporting the hedge designation. Any gain or loss on the hedging instruments (the debt) following hedge designation is reported in accumulated other comprehensive income in the same manner as the translation adjustment on the hedged investment based on changes in the spot rate, which is used to measure hedge effectiveness. At June 30, 2024, the Company had $ 284.3 million of British-pound-denominated loans, which were designated as a hedge against the net investment in British pound functional currency foreign subsidiaries. At June 30, 2024, the Company had $ 545.4 million in Euro-denominated loans, which were designated as a hedge against the net investment in Euro functional currency foreign subsidiaries. As a result of the British-pound- and Euro-denominated loans designated and 100 % effective as net investment hedges, $ 20.0 million of pre-tax currency remeasurement gains have been included in the foreign currency translation component of other comprehensive income for the six months ended June 30, 2024. 7. Inventories, net June 30, 2024 December 31, 2023 (In thousands) Finished goods and parts $ 140,228 $ 136,003 Work in process 179,778 165,914 Raw materials and purchased parts 781,713 830,554 Total inventories, net $ 1,101,719 $ 1,132,471 8. Leases The Company has commitments under operating leases for certain facilities, vehicles and equipment used in its operations. Cash used in operations for operating leases was not materially different from operating lease expense for the six months ended June 30, 2024 and 2023. The Company's leases have a weighted average remaining lease term of approximately 7 years. Certain lease agreements contain provisions for future rent increases. The components of lease expense were as follows: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements June 30, 2024 (Unaudited) Maturities of lease liabilities as of June 30, 2024 were as follows: Lease Liability Maturity Analysis Operating Leases (In thousands) Remaining 2024 $ 29,280 2025 52,822 2026 43,098 2027 31,611 2028 23,314 Thereafter 79,249 Total lease payments 259,374 Less: imputed interest 28,115 $ 231,259 The Company does not have any significant leases that have not yet commenced. 9. Acquisitions The initial accounting for the December 2023 Paragon Medical acquisition is being finalized, including the measurement of the acquired tangible and intangible assets and liabilities, as well as, the associated income tax considerations. Amounts for fixed assets, intangibles, and income taxes could change, potentially materially, as there is significant additional information that the Company must obtai

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