ame-20230331

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, 2023


☐			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 28, 2023 was 230,475,184 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, 2023 and 2022			3
Condensed Consolidated Statement of Comprehensive Income for the three months ended March 31, 2023 and 2022			4
Consolidated Balance Sheet at March 31, 2023 and December 31, 2022			5
Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2023 and 2022			6
Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2023 and 2022			7
Notes to Consolidated Financial Statements			8

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 4.Controls and Procedures			23

PART II. OTHER INFORMATION


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds			24
Item 6.Exhibits			25

SIGNATURES			26

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,
	2023		2022
Net sales	$	1,597,117	$	1,458,525
Cost of sales	1,022,525		948,833
Selling, general and administrative	169,051		156,452
Total operating expenses	1,191,576		1,105,285
Operating income	405,541		353,240
Interest expense	(20,569)		(19,570)
Other (expense) income, net	(5,373)		2,552
Income before income taxes	379,599		336,222
Provision for income taxes	73,887		63,775
Net income	$	305,712	$	272,447
Basic earnings per share	$	1.33	$	1.18
Diluted earnings per share	$	1.32	$	1.17
Weighted average common shares outstanding:
Basic shares	230,126		231,481
Diluted shares	231,229		233,065
Dividends declared and paid per share	$	0.25	$	0.22

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2023		2022
Total comprehensive income	$	332,211	$	257,301

See accompanying notes.

Table of Contents

AMETEK, Inc.

Consolidated Balance Sheet

(In thousands)


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	399,873	$	345,386
Receivables, net	901,506		919,335
Inventories, net	1,117,051		1,044,284
Other current assets	247,512		219,053
Total current assets	2,665,942		2,528,058
Property, plant and equipment, net	637,672		635,641
Right of use assets, net	166,985		170,295
Goodwill	5,430,493		5,372,562
Other intangibles, net	3,321,124		3,342,085
Investments and other assets	393,806		382,479
Total assets	$	12,616,022	$	12,431,120

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt, net	$	70,017	$	226,079
Accounts payable	526,063		497,134
Customer advanced payments	377,856		357,674
Income taxes payable	107,134		48,171
Accrued liabilities and other	371,597		435,144
Total current liabilities	1,452,667		1,564,202
Long-term debt, net	2,175,880		2,158,928
Deferred income taxes	670,256		694,267
Other long-term liabilities	560,094		537,211
Total liabilities	4,858,897		4,954,608
Stockholders’ equity:
Common stock	2,704		2,700
Capital in excess of par value	1,092,362		1,094,236
Retained earnings	9,105,705		8,857,485
Accumulated other comprehensive loss	(548,446)		(574,945)
Treasury stock	(1,895,200)		(1,902,964)
Total stockholders’ equity	7,757,125		7,476,512
Total liabilities and stockholders’ equity	$	12,616,022	$	12,431,120

See accompanying notes.

Table of Contents

AMETEK, Inc.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three months ended March 31,
	2023		2022
Capital stock

Common stock, $0.01 par value
Balance at the beginning of the period	$	2,700	$	2,689
Shares issued	4		4
Balance at the end of the period	2,704		2,693
Capital in excess of par value
Balance at the beginning of the period	1,094,236		1,012,526
Issuance of common stock under employee stock plans	(12,153)		(3,664)
Share-based compensation expense	10,279		9,571
Balance at the end of the period	1,092,362		1,018,433
Retained earnings
Balance at the beginning of the period	8,857,485		7,900,113
Net income	305,712		272,447
Cash dividends paid	(57,492)		(50,778)

Other	—		(1)
Balance at the end of the period	9,105,705		8,121,781
Accumulated other comprehensive (loss) income
Foreign currency translation:
Balance at the beginning of the period	(368,124)		(275,365)
Translation adjustments	32,820		(27,185)
Change in long-term intercompany notes	3,771		(6,867)
Net investment hedge instruments gain (loss), net of tax of $3,805 and $(5,831) for the quarter ended March 31, 2023 and 2022, respectively	(11,684)		17,906
Balance at the end of the period	(343,217)		(291,511)
Defined benefit pension plans:
Balance at the beginning of the period	(206,821)		(195,079)
Amortization of net actuarial loss and other, net of tax of $(518) and $(326) for the quarter ended March 31, 2023 and 2022, respectively	1,592		1,000
Balance at the end of the period	(205,229)		(194,079)
Accumulated other comprehensive loss at the end of the period	(548,446)		(485,590)
Treasury stock
Balance at the beginning of the period	(1,902,964)		(1,573,000)
Issuance of common stock under employee stock plans	14,266		4,095
Purchase of treasury stock	(6,502)		(156,724)
Balance at the end of the period	(1,895,200)		(1,725,629)
Total stockholders’ equity	$	7,757,125	$	6,931,688

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)


	Three months ended March 31,
	2023		2022
Cash provided by (used for):
Operating activities:
Net income	$	305,712	$	272,447
Adjustments to reconcile net income to total operating activities:
Depreciation and amortization	82,379		78,121
Deferred income taxes	(17,587)		(497)
Share-based compensation expense	10,279		9,571

Gain on sale of facilities	—		(7,054)
Net change in assets and liabilities, net of acquisitions	4,883		(138,897)
Pension contributions	(1,415)		(2,137)
Other, net	2,285		(10,213)
Total operating activities	386,536		201,341
Investing activities:
Additions to property, plant and equipment	(20,006)		(26,389)
Purchases of businesses, net of cash acquired	(99,266)		—

Proceeds from sale of facilities	—		11,754
Other, net	(2,888)		(246)
Total investing activities	(122,160)		(14,881)
Financing activities:
Net change in short-term borrowings	(155,505)		19,977



Repurchases of common stock	(6,502)		(156,724)
Cash dividends paid	(57,492)		(50,778)
Proceeds from stock option exercises	10,419		8,262
Other, net	(5,886)		(8,180)
Total financing activities	(214,966)		(187,443)
Effect of exchange rate changes on cash and cash equivalents	5,077		(5,485)
Decrease in cash and cash equivalents	54,487		(6,468)
Cash and cash equivalents:
Beginning of period	345,386		346,772
End of period	$	399,873	$	340,304

See accompanying notes.

Table of Contents

AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2023

(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, 2023, the consolidated results of its operations for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31, 2023 and 2022 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, 2022 as filed with the U.S. Securities and Exchange Commission.

2. Revenues

The outstanding contract asset and liability accounts were as follows:


	2023		2022
	(In thousands)
Contract assets—January 1	$	119,741	$	95,274
Contract assets – March 31	127,412		102,703
Change in contract assets – increase (decrease)	7,671		7,429
Contract liabilities – January 1	398,692		328,816
Contract liabilities – March 31	432,695		351,053
Change in contract liabilities – (increase) decrease	(34,003)		(22,237)
Net change	$	(26,332)	$	(14,808)

The net change for the three months ended March 31, 2023 was primarily driven by contract liabilities, specifically growth in advance payments from customers. For the three months ended March 31, 2023 and 2022, the Company recognized revenue of $199.3 million and $181.6 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, 2023 and December 31, 2022, $54.8 million and $41.0 million of Customer advanced payments (contract liabilities), respectively, were recorded in Other long-term liabilities in the consolidated balance sheets.

The remaining performance obligations not expected to be completed within one year as of March 31, 2023 and December 31, 2022 were $570.4 million and $526.0 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.

Table of Contents

AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2023

(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:


	Three months ended March 31, 2023
	EIG		EMG		Total
	(In thousands)
United States	$	561,896	$	247,119	$	809,015
International(1):
United Kingdom	28,038		31,062		59,100
European Union countries	135,658		116,807		252,465
Asia	283,892		50,905		334,797
Other foreign countries	107,763		33,977		141,740
Total international	555,351		232,751		788,102
Consolidated net sales	$	1,117,247	$	479,870	$	1,597,117

________________

(1) Includes U.S. export sales of $434.2 million for the three months ended March 31, 2023.


	Three months ended March 31, 2022
	EIG		EMG		Total
	(In thousands)
United States	$	483,626	$	230,641	$	714,267
International(1):
United Kingdom	27,955		28,757		56,712
European Union countries	120,714		114,149		234,863
Asia	256,420		63,406		319,826
Other foreign countries	99,044		33,813		132,857
Total international	504,133		240,125		744,258
Consolidated net sales	$	987,759	$	470,766	$	1,458,525

______________

(1) Includes U.S. export sales of $409.2 million for the three months ended March 31, 2022.

Major Products and Services

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


	Three months ended March 31, 2023
	EIG		EMG		Total
	(In thousands)
Process and analytical instrumentation	$	794,433	$	—	$	794,433
Aerospace and power	322,814		143,050		465,864
Automation and engineered solutions	—		336,820		336,820
Consolidated net sales	$	1,117,247	$	479,870	$	1,597,117

Table of Contents

AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2023

(Unaudited)


	Three months ended March 31, 2022
	EIG		EMG		Total
	(In thousands)
Process and analytical instrumentation	$	692,692	$	—	$	692,692
Aerospace and power	295,067		126,742		421,809
Automation and engineered solutions	—		344,024		344,024
Consolidated net sales	$	987,759	$	470,766	$	1,458,525

Timing of Revenue Recognition


	Three months ended March 31, 2023
	EIG		EMG		Total
	(In thousands)
Products transferred at a point in time	$	935,308	$	413,601	$	1,348,909
Products and services transferred over time	181,939		66,269		248,208
Consolidated net sales	$	1,117,247	$	479,870	$	1,597,117


	Three months ended March 31, 2022
	EIG		EMG		Total
	(In thousands)
Products transferred at a point in time	$	812,948	$	412,654	$	1,225,602
Products and services transferred over time	174,811		58,112		232,923
Consolidated net sales	$	987,759	$	470,766	$	1,458,525

Product Warranties

The Company provides limited warranties in connection with the sale of its products. The warranty periods for products sold vary among the Company’s operations, but the majority do not exceed one year. The Company calculates its warranty expense provision based on its historical warranty experience and adjustments are made periodically to reflect actual warranty expenses. Product warranty obligations are reported as a component of Accrued liabilities and other in the consolidated balance sheet.

Changes in the accrued product warranty obligation were as follows:


	Three Months Ended March 31,
	2023		2022
	(In thousands)
Balance at the beginning of the period	$	26,487	$	27,478
Accruals for warranties issued during the period	3,411		2,753
Settlements made during the period	(3,224)		(3,023)
Warranty accruals related to acquired businesses and other during the period	133		(166)
Balance at the end of the period	$	26,807	$	27,042

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.

Table of Contents

AMETEK, Inc.

Notes to Consolidated Financial Statements

March 31, 2023

(Unaudited)

At March 31, 2023, the Company had $901.5 million of accounts receivable, net of allowances of $13.3 million. Changes in the allowance were not material for the three months ended March 31, 2023.

3. 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 March 31,
	2023	2022
	(In thousands)
Weighted average shares:
Basic shares	230,126	231,481
Equity-based compensation plans	1,103	1,584
Diluted shares	231,229

SEC Form 10-Q filed by AMETEK Inc.