ame-20230930

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 September 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 October 27, 2023 was 230,798,657 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 nine months ended September 30, 2023 and 2022			3
Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022			4
Consolidated Balance Sheet at September 30, 2023 and December 31, 2022			5
Consolidated Statement of Stockholders’ Equity for the three and nine months ended Se ptember 30, 2023 and 2022			6
Condensed Consolidated Statement of Cash Flows for the nine months ended September 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net sales	$	1,622,837	$	1,551,786	$	4,866,065	$	4,524,863
Cost of sales	1,020,920		1,004,596		3,096,635		2,941,604
Selling, general and administrative	163,782		162,670		506,963		480,657
Total operating expenses	1,184,702		1,167,266		3,603,598		3,422,261
Operating income	438,135		384,520		1,262,467		1,102,602
Interest expense	(18,386)		(20,245)		(57,678)		(60,165)
Other (expense) income, net	(6,256)		3,227		(15,313)		7,752
Income before income taxes	413,493		367,502		1,189,476		1,050,189
Provision for income taxes	73,123		69,861		219,152		197,728
Net income	$	340,370	$	297,641	$	970,324	$	852,461
Basic earnings per share	$	1.48	$	1.30	$	4.21	$	3.70
Diluted earnings per share	$	1.47	$	1.29	$	4.19	$	3.68
Weighted average common shares outstanding:
Basic shares	230,691		229,500		230,431		230,360
Diluted shares	231,751		230,714		231,414		231,675
Dividends declared and paid per share	$	0.25	$	0.22	$	0.75	$	0.66

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total comprehensive income	$	294,757	$	215,568	$	977,660	$	694,902

See accompanying notes.

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AMETEK, Inc.

Consolidated Balance Sheet

(In thousands)


	September 30, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	841,901	$	345,386
Receivables, net	936,803		919,335
Inventories, net	1,087,584		1,044,284
Other current assets	252,407		219,053
Total current assets	3,118,695		2,528,058
Property, plant and equipment, net	631,692		635,641
Right of use assets, net	165,450		170,295
Goodwill	5,479,025		5,372,562
Other intangibles, net	3,283,846		3,342,085
Investments and other assets	414,668		382,479
Total assets	$	13,093,376	$	12,431,120

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt, net	$	304,480	$	226,079
Accounts payable	486,581		497,134
Customer advanced payments	362,985		357,674
Income taxes payable	61,800		48,171
Accrued liabilities and other	457,874		435,144
Total current liabilities	1,673,720		1,564,202
Long-term debt, net	1,856,129		2,158,928
Deferred income taxes	629,590		694,267
Other long-term liabilities	591,428		537,211
Total liabilities	4,750,867		4,954,608
Stockholders’ equity:
Common stock	2,708		2,700
Capital in excess of par value	1,148,107		1,094,236
Retained earnings	9,655,114		8,857,485
Accumulated other comprehensive loss	(567,609)		(574,945)
Treasury stock	(1,895,811)		(1,902,964)
Total stockholders’ equity	8,342,509		7,476,512
Total liabilities and stockholders’ equity	$	13,093,376	$	12,431,120

See accompanying notes.

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AMETEK, Inc.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Capital stock

Common stock, $0.01 par value
Balance at the beginning of the period	$	2,707	$	2,695	$	2,700	$	2,689
Shares issued	1		—		8		6
Balance at the end of the period	2,708		2,695		2,708		2,695
Capital in excess of par value
Balance at the beginning of the period	1,123,920		1,040,951		1,094,236		1,012,526
Issuance of common stock under employee stock plans	11,274		6,068		18,098		11,966
Share-based compensation expense	12,913		12,060		35,773		34,587
Balance at the end of the period	1,148,107		1,059,079		1,148,107		1,059,079
Retained earnings
Balance at the beginning of the period	9,372,368		8,353,735		8,857,485		7,900,113
Net income	340,370		297,641		970,324		852,461
Cash dividends paid	(57,622)		(50,438)		(172,693)		(151,635)

Other	(2)		—		(2)		(1)
Balance at the end of the period	9,655,114		8,600,938		9,655,114		8,600,938
Accumulated other comprehensive (loss) income
Foreign currency translation:
Balance at the beginning of the period	(318,359)		(352,851)		(368,124)		(275,365)
Translation adjustments	(62,092)		(110,524)		568		(225,100)
Change in long-term intercompany notes	(6,994)		(17,393)		(1,091)		(40,512)
Net investment hedge instruments gain (loss), net of tax of $(7,126) and $(14,604) for the quarter ended September 30, 2023 and 2022 and $(1,004) and $(34,212) for the nine months ended September 30, 2023 and 2022, respectively	21,881		44,844		3,083		105,053
Balance at the end of the period	(365,564)		(435,924)		(365,564)		(435,924)
Defined benefit pension plans:
Balance at the beginning of the period	(203,637)		(193,079)		(206,821)		(195,079)
Amortization of net actuarial loss and other, net of tax of $(518) and $(326) for the quarter ended September 30, 2023 and 2022 and $(1,554) and $(977) for the nine months ended September 30, 2023 and 2022, respectively	1,592		1,000		4,776		3,000
Balance at the end of the period	(202,045)		(192,079)		(202,045)		(192,079)
Accumulated other comprehensive loss at the end of the period	(567,609)		(628,003)		(567,609)		(628,003)
Treasury stock
Balance at the beginning of the period	(1,895,628)		(1,901,360)		(1,902,964)		(1,573,000)
Issuance of common stock under employee stock plans	(129)		(632)		13,731		2,387
Purchase of treasury stock	(54)		(45)		(6,578)		(331,424)
Balance at the end of the period	(1,895,811)		(1,902,037)		(1,895,811)		(1,902,037)
Total stockholders’ equity	$	8,342,509	$	7,132,672	$	8,342,509	$	7,132,672

See accompanying notes.

Table of Contents

AMETEK, Inc.

Condensed Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)


	Nine months ended September 30,
	2023		2022
Cash provided by (used for):
Operating activities:
Net income	$	970,324	$	852,461
Adjustments to reconcile net income to total operating activities:
Depreciation and amortization	245,713		230,968
Deferred income taxes	(67,525)		(32,889)
Share-based compensation expense	35,773		34,587
Gain on sale of business/investment	—		(3,584)
Gain on sale of facilities	—		(7,054)
Net change in assets and liabilities, net of acquisitions	27,266		(299,311)
Pension contributions	(3,927)		(5,244)
Other, net	(12,985)		(5,576)
Total operating activities	1,194,639		764,358
Investing activities:
Additions to property, plant and equipment	(76,506)		(80,829)
Purchases of businesses, net of cash acquired	(246,656)		(190,321)
Proceeds from sale of business/investment	—		3,734
Proceeds from sale of facilities	—		11,754
Other, net	(3,149)		124
Total investing activities	(326,311)		(255,538)
Financing activities:
Net change in short-term borrowings	(220,555)		(26,315)



Repurchases of common stock	(6,578)		(331,424)
Cash dividends paid	(172,693)		(151,635)
Proceeds from stock option exercises	40,120		23,241
Other, net	(5,068)		(15,056)
Total financing activities	(364,774)		(501,189)
Effect of exchange rate changes on cash and cash equivalents	(7,039)		(44,459)
Increase in cash and cash equivalents	496,515		(36,828)
Cash and cash equivalents:
Beginning of period	345,386		346,772
End of period	$	841,901	$	309,944

See accompanying notes.

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AMETEK, Inc.

Notes to Consolidated Financial Statements

September 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 September 30, 2023, the consolidated results of its operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 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 – September 30	139,771		111,687
Change in contract assets – increase (decrease)	20,030		16,413
Contract liabilities – January 1	398,692		328,816
Contract liabilities – September 30	422,415		371,411
Change in contract liabilities – (increase) decrease	(23,723)		(42,595)
Net change	$	(3,693)	$	(26,182)

The net change for the nine months ended September 30, 2023 was primarily driven by contract liabilities, specifically growth in advance payments from customers. For the nine months ended September 30, 2023 and 2022, the Company recognized revenue of $297.7 million and $252.4 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 September 30, 2023 and December 31, 2022, $59.4 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 September 30, 2023 and December 31, 2022 were $570.7 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

September 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 nine months ended September 30:


	Three months ended September 30, 2023						Nine months ended September 30, 2023
	EIG		EMG		Total		EIG		EMG		Total
	(In thousands)
United States	$	616,988	$	274,146	$	891,134	$	1,754,165	$	805,876	$	2,560,041
International(1):
United Kingdom	23,327		30,348		53,675		74,515		89,812		164,327
European Union countries	115,026		99,931		214,957		381,495		327,614		709,109
Asia	271,922		47,699		319,621		846,450		151,357		997,807
Other foreign countries	108,867		34,583		143,450		331,398		103,383		434,781
Total international	519,142		212,561		731,703		1,633,858		672,166		2,306,024
Consolidated net sales	$	1,136,130	$	486,707	$	1,622,837	$	3,388,023	$	1,478,042	$	4,866,065

________________

(1) Includes U.S. export sales of $391.7 million and $1,265.0 million for the three and nine months ended September 30, 2023, respectively.


	Three months ended September 30, 2022						Nine months ended September 30, 2022
	EIG		EMG		Total		EIG		EMG		Total
	(In thousands)
United States	$	554,048	$	265,549	$	819,597	$	1,589,641	$	736,626	$	2,326,267
International(1):
United Kingdom	18,409		28,694		47,103		65,414		89,071		154,485
European Union countries	113,935		100,427		214,362		344,074		322,607		666,681
Asia	264,432		70,375		334,807		776,084		204,006		980,090
Other foreign countries	103,300		32,617		135,917		294,918		102,422		397,340
Total international	500,076		232,113		732,189		1,480,490		718,106

SEC Form 10-Q filed by AMETEK Inc.