ame-20230630

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 June 30, 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 July 31, 2023 was 230,712,117 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 and six months ended June 30 , 2023 and 2022			3
Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 3 0 , 2023 and 2022			4
Consolidated Balance Sheet at June 30 , 2023 and December 31, 2022			5
Consolidated Statement of Stockholders’ Equity for the three and six months ended June 30 , 2023 and 2022			6
Condensed Consolidated Statement of Cash Flows for the six months ended June 30 , 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			24

PART II. OTHER INFORMATION


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds			25
Item 5. Other Information			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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net sales	$	1,646,111	$	1,514,552	$	3,243,228	$	2,973,077
Cost of sales	1,053,190		988,175		2,075,715		1,937,008
Selling, general and administrative	174,130		161,535		343,181		317,987
Total operating expenses	1,227,320		1,149,710		2,418,896		2,254,995
Operating income	418,791		364,842		824,332		718,082
Interest expense	(18,723)		(20,350)		(39,292)		(39,920)
Other (expense) income, net	(3,684)		1,973		(9,057)		4,525
Income before income taxes	396,384		346,465		775,983		682,687
Provision for income taxes	72,142		64,092		146,029		127,867
Net income	$	324,242	$	282,373	$	629,954	$	554,820
Basic earnings per share	$	1.41	$	1.23	$	2.74	$	2.40
Diluted earnings per share	$	1.40	$	1.22	$	2.72	$	2.39
Weighted average common shares outstanding:
Basic shares	230,478		230,100		230,302		230,790
Diluted shares	231,261		231,247		231,245		232,156
Dividends declared and paid per share	$	0.25	$	0.22	$	0.50	$	0.44

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Total comprehensive income	$	350,692	$	222,033	$	682,903	$	479,334

See accompanying notes.

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AMETEK, Inc.

Consolidated Balance Sheet

(In thousands)


	June 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	605,587	$	345,386
Receivables, net	936,909		919,335
Inventories, net	1,107,824		1,044,284
Other current assets	249,235		219,053
Total current assets	2,899,555		2,528,058
Property, plant and equipment, net	637,540		635,641
Right of use assets, net	171,616		170,295
Goodwill	5,449,590		5,372,562
Other intangibles, net	3,279,269		3,342,085
Investments and other assets	402,281		382,479
Total assets	$	12,839,851	$	12,431,120

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt, net	$	5,401	$	226,079
Accounts payable	487,663		497,134
Customer advanced payments	382,611		357,674
Income taxes payable	48,178		48,171
Accrued liabilities and other	417,337		435,144
Total current liabilities	1,341,190		1,564,202
Long-term debt, net	2,186,299		2,158,928
Deferred income taxes	652,695		694,267
Other long-term liabilities	578,296		537,211
Total liabilities	4,758,480		4,954,608
Stockholders’ equity:
Common stock	2,707		2,700
Capital in excess of par value	1,123,920		1,094,236
Retained earnings	9,372,368		8,857,485
Accumulated other comprehensive loss	(521,996)		(574,945)
Treasury stock	(1,895,628)		(1,902,964)
Total stockholders’ equity	8,081,371		7,476,512
Total liabilities and stockholders’ equity	$	12,839,851	$	12,431,120

See accompanying notes.

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AMETEK, Inc.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Capital stock

Common stock, $0.01 par value
Balance at the beginning of the period	$	2,704	$	2,693	$	2,700	$	2,689
Shares issued	3		2		7		6
Balance at the end of the period	2,707		2,695		2,707		2,695
Capital in excess of par value
Balance at the beginning of the period	1,092,362		1,018,433		1,094,236		1,012,526
Issuance of common stock under employee stock plans	18,977		9,562		6,824		5,898
Share-based compensation expense	12,581		12,956		22,860		22,527
Balance at the end of the period	1,123,920		1,040,951		1,123,920		1,040,951
Retained earnings
Balance at the beginning of the period	9,105,705		8,121,781		8,857,485		7,900,113
Net income	324,242		282,373		629,954		554,820
Cash dividends paid	(57,579)		(50,419)		(115,071)		(101,197)

Other	—		—		—		(1)
Balance at the end of the period	9,372,368		8,353,735		9,372,368		8,353,735
Accumulated other comprehensive (loss) income
Foreign currency translation:
Balance at the beginning of the period	(343,217)		(291,511)		(368,124)		(275,365)
Translation adjustments	29,840		(87,391)		62,660		(114,576)
Change in long-term intercompany notes	2,132		(16,252)		5,903		(23,119)
Net investment hedge instruments gain (loss), net of tax of $2,317 and $(13,777) for the quarter ended June 30, 2023 and 2022 and $6,122 and $(19,608) for the six months ended June 30, 2023 and 2022 , respectively	(7,114)		42,303		(18,798)		60,209
Balance at the end of the period	(318,359)		(352,851)		(318,359)		(352,851)
Defined benefit pension plans:
Balance at the beginning of the period	(205,229)		(194,079)		(206,821)		(195,079)
Amortization of net actuarial loss and other, net of tax of $(518) and $(326) for the quarter ended June 30, 2023 and 2022 and $(1,036) and $(652) for the six months ended June 30, 2023 and 2022 , respectively	1,592		1,000		3,184		2,000
Balance at the end of the period	(203,637)		(193,079)		(203,637)		(193,079)
Accumulated other comprehensive loss at the end of the period	(521,996)		(545,930)		(521,996)		(545,930)
Treasury stock
Balance at the beginning of the period	(1,895,200)		(1,725,629)		(1,902,964)		(1,573,000)
Issuance of common stock under employee stock plans	(406)		(1,076)		13,860		3,019
Purchase of treasury stock	(22)		(174,655)		(6,524)		(331,379)
Balance at the end of the period	(1,895,628)		(1,901,360)		(1,895,628)		(1,901,360)
Total stockholders’ equity	$	8,081,371	$	6,950,091	$	8,081,371	$	6,950,091

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)


	Six months ended June 30,
	2023		2022
Cash provided by (used for):
Operating activities:
Net income	$	629,954	$	554,820
Adjustments to reconcile net income to total operating activities:
Depreciation and amortization	163,935		155,218
Deferred income taxes	(38,144)		(19,459)
Share-based compensation expense	22,860		22,527

Gain on sale of facilities	—		(7,054)
Net change in assets and liabilities, net of acquisitions	(51,627)		(245,958)
Pension contributions	(2,880)		(3,884)
Other, net	(2,315)		(18,973)
Total operating activities	721,783		437,237
Investing activities:
Additions to property, plant and equipment	(47,835)		(52,540)
Purchases of businesses, net of cash acquired	(99,266)		—

Proceeds from sale of facilities	—		11,754
Other, net	(2,886)		(247)
Total investing activities	(149,987)		(41,033)
Financing activities:
Net change in short-term borrowings	(219,610)		56,490



Repurchases of common stock	(6,524)		(331,379)
Cash dividends paid	(115,071)		(101,197)
Proceeds from stock option exercises	29,055		17,827
Other, net	(4,941)		(12,134)
Total financing activities	(317,091)		(370,393)
Effect of exchange rate changes on cash and cash equivalents	5,496		(23,930)
Increase in cash and cash equivalents	260,201		1,881
Cash and cash equivalents:
Beginning of period	345,386		346,772
End of period	$	605,587	$	348,653

See accompanying notes.

Table of Contents

AMETEK, Inc.

Notes to Consolidated Financial Statements

June 30, 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 June 30, 2023, the consolidated results of its operations for the three and six months ended June 30, 2023 and 2022 and its cash flows for the six months ended June 30, 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 – June 30	137,444		107,902
Change in contract assets – increase (decrease)	17,703		12,628
Contract liabilities – January 1	398,692		328,816
Contract liabilities – June 30	443,768		369,926
Change in contract liabilities – (increase) decrease	(45,076)		(41,110)
Net change	$	(27,373)	$	(28,482)

The net change for the six months ended June 30, 2023 was primarily driven by contract liabilities, specifically growth in advance payments from customers. For the six months ended June 30, 2023 and 2022, the Company recognized revenue of $268.0 million and $219.3 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 June 30, 2023 and December 31, 2022, $61.2 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 June 30, 2023 and December 31, 2022 were $573.0 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.

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AMETEK, Inc.

Notes to Consolidated Financial Statements

June 30, 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 and six months ended June 30:


	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 $873.3 million for the three and six months ended June 30, 2023, respectively.


	Three months ended June 30, 2022						Six months ended June 30, 2022
	EIG		EMG		Total		EIG		EMG		Total
	(In thousands)
United States	$	551,967	$	240,436	$	792,403	$	1,035,593	$	471,813	$	1,507,406
International(1):
United Kingdom	19,050		31,620		50,670		47,005		60,251		107,256
European Union countries	109,425		108,031		217,456		230,139		222,193		452,332
Asia	255,232		70,225		325,457		511,652		133,064		644,716
Other foreign countries	92,574		35,992		128,566		191,618		69,749		261,367
Total international	476,281		245,868		722,149		980,414		485,257		1,465,671
Consolidated net sales	$	1,028,248	$	486,304	$	1,514,552	$	2,016,007	$	957,070	$	2,973,077

______________

(1) Includes U.S. export sales of $394.7 million and $801.2 million for the three and six months ended June 30, 2022, respectively.

Major Products and Services

SEC Form 10-Q filed by AMETEK Inc.