ame-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-12981

_________________________

AMETEK, Inc.

(Exact name of registrant as specified in its charter)

_________________________

Delaware

(State or other jurisdiction of

incorporation or organization)

1100 Cassatt Road

Berwyn, Pennsylvania

(Address of principal executive offices)

14-1682544

(I.R.S. Employer

Identification No.)

19312-1177

(Zip Code)

Registrant’s telephone number, including area code: (610) 647-2121

_________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

_________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange
on which registered

Common Stock

AME

New York Stock Exchange

The number of shares of the registrant’s common stock outstanding as of the latest practicable date was: Common Stock, $0.01 Par Value, outstanding at April 30, 2021 was 230,919,176 shares.

AMETEK, Inc.

Form 10-Q

Table of Contents


			Page

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

Consolidated Statement of Income for the three months ended March 31 , 202 1 and 20 20			4
Condensed Consolidated Statement of Comprehensive Income for the three months ended March 31 , 202 1 and 20 20			5
Consolidated Balance Sheet at March 31 , 202 1 and December 31, 20 20			6
Consolidated Statement of Stockholders’ Equity for the three months ended March 31 , 202 1 and 20 20			7
Condensed Consolidated Statement of Cash Flows for the three months ended March 31 , 202 1 and 20 20			8
Notes to Consolidated Financial Statements			9

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 4.Controls and Procedures			24

PART II. OTHER INFORMATION

Item 1A.Risk Factors			25
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds			25
Item 6.Exhibits			26

SIGNATURES			27

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AMETEK, Inc.

Consolidated Statement of Income

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2021		2020
Net sales	$	1,215,742	$	1,202,218
Cost of sales	789,392		824,647
Selling, general and administrative	133,005		145,531
Total operating expenses	922,397		970,178
Operating income	293,345		232,040
Interest expense	(18,947)		(22,741)
Other (expense) income, net	(1,942)		141,776
Income before income taxes	272,456		351,075
Provision for income taxes	53,223		70,459
Net income	$	219,233	$	280,616
Basic earnings per share	$	0.95	$	1.23
Diluted earnings per share	$	0.94	$	1.22
Weighted average common shares outstanding:
Basic shares	230,435		228,962
Diluted shares	232,296		230,872
Dividends declared and paid per share	$	0.20	$	0.18

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2021		2020
Total comprehensive income	$	210,826	$	238,017

See accompanying notes.

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AMETEK, Inc.

Consolidated Balance Sheet

(In thousands)


	March 31, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,123,660	$	1,212,822
Receivables, net	678,467		597,472
Inventories, net	604,321		559,171
Other current assets	167,045		153,005
Total current assets	2,573,493		2,522,470
Property, plant and equipment, net	549,313		526,530
Right of use assets, net	166,675		167,233
Goodwill	4,292,402		4,224,906
Other intangibles, net	2,700,848		2,623,719
Investments and other assets	297,152		292,625
Total assets	$	10,579,883	$	10,357,483

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt, net	$	94,670	$	132,284
Accounts payable	397,075		360,370
Customer advanced payments	236,299		194,633
Income taxes payable	61,917		38,896
Accrued liabilities and other	348,502		349,732
Total current liabilities	1,138,463		1,075,915
Long-term debt, net	2,256,910		2,281,441
Deferred income taxes	544,926		533,478
Other long-term liabilities	518,836		517,303
Total liabilities	4,459,135		4,408,137
Stockholders’ equity:
Common stock	2,678		2,676
Capital in excess of par value	928,412		921,752
Retained earnings	7,267,856		7,094,656
Accumulated other comprehensive loss	(512,875)		(504,468)
Treasury stock	(1,565,323)		(1,565,270)
Total stockholders’ equity	6,120,748		5,949,346
Total liabilities and stockholders’ equity	$	10,579,883	$	10,357,483

See accompanying notes.

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AMETEK, Inc.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three months ended March 31,
	2021		2020
Capital stock
Preferred stock, $0.01 par value	$	—	$	—
Common stock, $0.01 par value
Balance at the beginning of the period	2,676		2,662
Shares issued	2		2
Balance at the end of the period	2,678		2,664
Capital in excess of par value
Balance at the beginning of the period	921,752		832,821
Issuance of common stock under employee stock plans	(4,780)		(2,914)
Share-based compensation expense	11,440		7,848
Balance at the end of the period	928,412		837,755
Retained earnings
Balance at the beginning of the period	7,094,656		6,387,612
Net income	219,233		280,616
Cash dividends paid	(46,033)		(41,165)
Adoption of ASU 2016-13	—		(360)
Other	—		—
Balance at the end of the period	7,267,856		6,626,703
Accumulated other comprehensive (loss) income
Foreign currency translation:
Balance at the beginning of the period	(250,748)		(286,248)
Translation adjustments	(21,500)		(67,089)
Change in long-term intercompany notes	(6,895)		(5,501)
Net investment hedge instruments gain, net of tax of $(5,938) and $(9,117) for the quarter ended March 31, 2021 and 2020, respectively	18,358		28,308
Balance at the end of the period	(260,785)		(330,530)
Defined benefit pension plans:
Balance at the beginning of the period	(253,720)		(246,891)
Amortization of net actuarial loss and other, net of tax of $(527) and $(531) for the quarter ended March 31, 2021 and 2020, respectively	1,630		1,683
Balance at the end of the period	(252,090)		(245,208)
Accumulated other comprehensive loss at the end of the period	(512,875)		(575,738)
Treasury stock
Balance at the beginning of the period	(1,565,270)		(1,574,464)
Issuance of common stock under employee stock plans	7,944		9,184
Purchase of treasury stock	(7,997)		(101)
Balance at the end of the period	(1,565,323)		(1,565,381)
Total stockholders’ equity	$	6,120,748	$	5,326,003

See accompanying notes.

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AMETEK, Inc.

Condensed Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)


	Three months ended March 31,
	2021		2020
Cash provided by (used for):
Operating activities:
Net income	$	219,233	$	280,616
Adjustments to reconcile net income to total operating activities:
Depreciation and amortization	64,617		66,067
Deferred income taxes	8,095		(4,042)
Share-based compensation expense	11,440		7,848
Gain on sale of business	—		(141,020)
Gain on sale of facilities	—		(4,592)
Net change in assets and liabilities, net of acquisitions	(13,275)		71,199
Pension contributions	(2,038)		(1,505)
Other, net	(3,665)		(3,819)
Total operating activities	284,407		270,752
Investing activities:
Additions to property, plant and equipment	(17,537)		(16,931)
Purchases of businesses, net of cash acquired	(263,948)		(116,605)
Proceeds from sale of business	—		245,311
Proceeds from sale of facilities	—		5,463
Other, net	(3,017)		(1,681)
Total investing activities	(284,502)		115,557
Financing activities:
Net change in short-term borrowings	(32,950)		22,251
Proceeds from long-term borrowings	—		500,000

Repurchases of common stock	(7,997)		(101)
Cash dividends paid	(46,033)		(41,165)
Proceeds from stock option exercises	6,925		6,977
Other, net	(3,951)		(1,313)
Total financing activities	(84,006)		486,649
Effect of exchange rate changes on cash and cash equivalents	(5,061)		(12,606)
Increase in cash and cash equivalents	(89,162)		860,352
Cash and cash equivalents:
Beginning of period	1,212,822		393,030
End of period	$	1,123,660	$	1,253,382

See accompanying notes.

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AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2021

(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 March 31, 2021, the consolidated results of its operations for the three months ended March 31, 2021 and 2020 and its cash flows for the three months ended March 31, 2021 and 2020 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, 2020 as filed with the U.S. Securities and Exchange Commission.

2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740. The Company prospectively adopted ASU 2019-12, effective January 1, 2021, and the adoption did not have a significant impact on the Company’s consolidated results of operations, financial position, cash flows and financial statement disclosures.

3. Revenues

The outstanding contract asset and liability accounts were as follows:


	2021		2020
	(In thousands)
Contract assets—January 1	$	68,971	$	73,039
Contract assets – March 31	71,415		80,796
Change in contract assets – increase	2,444		7,757
Contract liabilities – January 1	215,093		167,306
Contract liabilities – March 31	253,047		194,433
Change in contract liabilities – increase	(37,954)		(27,127)
Net change	$	(35,510)	$	(19,370)

The net change for the three months ended March 31, 2021 was primarily driven by the receipt of advance payments from customers exceeding the recognition of revenue as performance obligations were satisfied. For the three months ended March 31, 2021 and 2020, the Company recognized revenue of $132.0 million and $87.4 million, respectively, that was previously included in the beginning balance of contract liabilities.

Contract assets are reported as a component of Other current assets in the consolidated balance sheet. At March 31, 2021 and December 31, 2020, $16.7 million and $20.5 million of Customer advanced payments (contract liabilities), respectively, were recorded in Other long-term liabilities in the consolidated balance sheets.

The remaining performance obligations exceeding one year as of March 31, 2021 and December 31, 2020 were $286.9 million and $300.8 million, respectively. Remaining performance obligations represent the transaction price of firm, non-cancelable orders, with expected delivery dates to customers greater than one year from the 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.

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AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2021

(Unaudited)

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 months ended March 31:


	2021
	EIG		EMG		Total
	(In thousands)
United States	$	388,901	$	210,182	$	599,083
International(1):
United Kingdom	21,947		30,051		51,998
European Union countries	103,665		95,297		198,962
Asia	197,561		61,194		258,755
Other foreign countries	78,850		28,094		106,944
Total international	402,023		214,636		616,659
Consolidated net sales	$	790,924	$	424,818	$	1,215,742

________________

(1) Includes U.S. export sales of $331.2 million.


	2020
	EIG		EMG		Total
	(In thousands)
United States	$	406,545	$	234,689	$	641,234
International(1):
United Kingdom	14,793		33,138		47,931
European Union countries	105,676		88,766		194,442
Asia	164,745		43,830		208,575
Other foreign countries	82,466		27,570		110,036
Total international	367,680		193,304		560,984
Consolidated net sales	$	774,225	$	427,993	$	1,202,218

______________

(1) Includes U.S. export sales of $305.2 million.

Major Products and Services

The Company’s major products and services in the reportable segments were as follows:


	Three months ended March 31, 2021
	EIG		EMG		Total
	(In thousands)
Process and analytical instrumentation	$	576,559	$	—	$	576,559
Aerospace and power	214,365		122,173		336,538
Automation and engineered solutions	—		302,645		302,645
Consolidated net sales	$	790,924	$	424,818	$	1,215,742

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AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2021

(Unaudited)


	Three months ended March 31, 2020
	EIG		EMG		Total
	(In thousands)
Process and analytical instrumentation	$	548,440	$	—	$	548,440
Aerospace and power	225,785		127,251		353,036
Automation and engineered solutions	—		300,742		300,742
Consolidated net sales	$	774,225	$	427,993	$	1,202,218

Timing of Revenue Recognition


	Three months ended March 31, 2021
	EIG		EMG		Total
	(In thousands)
Products transferred at a point in time	$	647,252	$	383,031	$	1,030,283
Products and services transferred over time	143,672		41,787

SEC Form 10-Q filed by AMTEK, Inc.