UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2005
OR
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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)
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| DELAWARE
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14-1682544 |
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
37 North Valley Road, Building 4, P.O. Box 1764, Paoli, Pennsylvania 19301-0801
(Address of principal executive offices)
(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 þ No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes þ No o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
The number of shares of the issuer’s common stock outstanding as of the latest practicable
date was: Common Stock, $0.01 Par Value, outstanding at October 31, 2005 was 70,184,025 shares.
AMETEK, Inc.
Form 10-Q
Table of Contents
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMETEK, Inc.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In thousands, except per share amounts)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2005 |
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2004 |
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2005 |
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2004 |
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Net sales |
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$ |
344,529 |
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$ |
310,707 |
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$ |
1,030,676 |
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$ |
906,047 |
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Expenses: |
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Cost of
sales, excluding depreciation |
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233,217 |
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216,534 |
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708,630 |
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640,479 |
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Selling,
general and administrative |
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44,158 |
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35,112 |
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122,164 |
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97,954 |
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Depreciation |
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8,446 |
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8,608 |
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25,363 |
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26,184 |
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Total expenses |
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285,821 |
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260,254 |
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856,157 |
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764,617 |
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Operating income |
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58,708 |
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50,453 |
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174,519 |
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141,430 |
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Other income (expenses): |
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Interest expense |
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(7,628 |
) |
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(7,541 |
) |
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(22,962 |
) |
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(20,676 |
) |
Other, net |
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(1,446 |
) |
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(659 |
) |
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(1,648 |
) |
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(696 |
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Income before income taxes |
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49,634 |
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42,253 |
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149,909 |
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120,058 |
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Provision for income taxes |
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14,206 |
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13,233 |
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47,260 |
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38,707 |
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Net income |
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$ |
35,428 |
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$ |
29,020 |
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$ |
102,649 |
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$ |
81,351 |
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Basic earnings per share |
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$ |
0.51 |
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$ |
0.43 |
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$ |
1.49 |
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$ |
1.20 |
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Diluted earnings per share |
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$ |
0.50 |
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$ |
0.42 |
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$ |
1.45 |
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$ |
1.18 |
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Average common shares
outstanding: |
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Basic shares |
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69,242 |
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68,124 |
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69,007 |
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67,657 |
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Diluted shares |
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70,841 |
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69,552 |
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70,587 |
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69,039 |
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Dividends per share |
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$ |
0.06 |
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$ |
0.06 |
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$ |
0.18 |
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$ |
0.18 |
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See
accompanying notes.
3
AMETEK, Inc.
CONSOLIDATED
BALANCE SHEET
(In thousands)
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September 30, |
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December 31, |
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2005 |
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2004 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
40,082 |
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$ |
37,582 |
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Marketable securities |
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7,558 |
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11,393 |
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Receivables, less allowance for possible losses |
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240,043 |
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217,329 |
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Inventories |
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189,462 |
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168,523 |
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Deferred income taxes |
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9,512 |
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5,201 |
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Other current assets |
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30,743 |
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21,912 |
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Total current assets |
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517,400 |
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461,940 |
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Property, plant and equipment, at cost |
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652,815 |
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650,437 |
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Less accumulated depreciation |
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(449,451 |
) |
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(442,895 |
) |
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203,364 |
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207,542 |
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Goodwill, net of accumulated amortization |
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704,131 |
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601,007 |
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Other intangibles, net of accumulated amortization |
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101,741 |
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79,259 |
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Investments and other assets |
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77,354 |
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70,604 |
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Total assets |
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$ |
1,603,990 |
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$ |
1,420,352 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Short-term borrowings and current
portion of long-term debt |
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$ |
25,585 |
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$ |
49,943 |
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Accounts payable |
|
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119,298 |
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|
109,036 |
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Accruals |
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128,602 |
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|
113,859 |
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Total current liabilities |
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273,485 |
|
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|
272,838 |
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Long-term debt |
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488,841 |
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400,177 |
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Deferred income taxes |
|
|
46,138 |
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49,441 |
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Other long-term liabilities |
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39,716 |
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38,314 |
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Stockholders’ equity: |
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Common stock |
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712 |
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|
704 |
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Capital in excess of par value |
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66,613 |
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52,182 |
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Retained earnings |
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731,098 |
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640,856 |
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Accumulated other comprehensive losses |
|
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(24,978 |
) |
|
|
(9,643 |
) |
Treasury stock |
|
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(17,635 |
) |
|
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(24,517 |
) |
|
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|
|
|
|
|
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|
755,810 |
|
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|
659,582 |
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Total liabilities and stockholders’ equity |
|
$ |
1,603,990 |
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$ |
1,420,352 |
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See
accompanying notes.
4
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
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Nine months ended |
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September 30, |
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2005 |
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2004 |
|
Cash provided by (used for): |
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Operating activities: |
|
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Net income |
|
$ |
102,649 |
|
|
$ |
81,351 |
|
Adjustments to reconcile net income to total operating activities: |
|
|
|
|
|
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Depreciation and amortization |
|
|
28,259 |
|
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|
28,413 |
|
Deferred income taxes |
|
|
5,155 |
|
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|
2,810 |
|
Net change in assets and liabilities |
|
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(16,278 |
) |
|
|
(12,081 |
) |
Pension contribution |
|
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(5,000 |
) |
|
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(3,400 |
) |
Other |
|
|
1,310 |
|
|
|
3,117 |
|
|
|
|
|
|
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Total operating activities |
|
|
116,095 |
|
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|
100,210 |
|
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|
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Investing activities: |
|
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Additions to property, plant and equipment |
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(15,074 |
) |
|
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(14,416 |
) |
Purchase of businesses |
|
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(175,213 |
) |
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(143,468 |
) |
Other |
|
|
3,619 |
|
|
|
3,007 |
|
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|
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Total investing activities |
|
|
(186,668 |
) |
|
|
(154,877 |
) |
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Financing activities: |
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Net change in short-term borrowings |
|
|
(24,222 |
) |
|
|
(26,842 |
) |
Additional long-term borrowings |
|
|
144,239 |
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|
97,356 |
|
Reduction in long-term borrowings |
|
|
(42,870 |
) |
|
|
(7,630 |
) |
Cash dividends paid |
|
|
(12,409 |
) |
|
|
(12,180 |
) |
Proceeds from stock options |
|
|
10,688 |
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|
|
13,191 |
|
|
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|
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Total financing activities |
|
|
75,426 |
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|
63,895 |
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Effect of exchange rate changes on cash and cash equivalents |
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(2,353 |
) |
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— |
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Increase in cash and cash equivalents |
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2,500 |
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|
9,228 |
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Cash and cash equivalents: |
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|
|
|
|
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As of January 1 |
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37,582 |
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|
14,313 |
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As of September 30 |
|
$ |
40,082 |
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$ |
23,541 |
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See
accompanying notes.
5
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Note 1 – Financial Statement Presentation
The accompanying consolidated financial statements are unaudited. The Company believes that
all adjustments (which consist primarily of normal recurring accruals) necessary for a fair
presentation of the consolidated financial position of the Company at September 30, 2005, and the
consolidated results of its operations for the three- and nine-month periods ended September 30,
2005 and 2004 and its cash flows for the nine month periods ended September 30, 2005 and 2004 have
been included. Quarterly results of operations are not necessarily indicative of results for the
full year. The accompanying financial statements should be read in conjunction with the financial
statements and related notes presented in the Company’s annual report on Form 10-K for the year
ended December 31, 2004 as filed with the Securities and Exchange Commission.
Reclassifications
Certain amounts appearing in the prior year’s supporting footnote disclosures have been
reclassified to conform to the current year’s presentation.
Note 2 – Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment,” a revision to SFAS No.
123, “Accounting for Stock Based Compensation” and superseding Accounting Principles Board (“APB”)
Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS No. 123(R) will require the
Company to expense the fair value of grants made under its employee stock award plans. That cost
will be recognized over the vesting period of the grants. The Company will adopt SFAS No. 123(R)
as of January 1, 2006. SFAS No. 123(R) permits companies to adopt its requirements using either a
“modified prospective” method, or a “modified retrospective” method. Following adoption of SFAS
No. 123(R), amounts previously disclosed on a pro forma basis under SFAS No. 123 will be recorded
in the consolidated statement of income, although the actual amounts to be recorded may be
different. The Company currently accounts for share-based payments to employees using the
intrinsic value method prescribed in APB Opinion No. 25. The impact of adopting SFAS No. 123(R)
cannot be predicted at this time because the Company is still evaluating the choices of valuation
models and assessing the appropriate method of adoption.
In November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of ARB No. 43,
Chapter 4”. SFAS No. 151 amends the guidance in ARB No.43, Chapter 4, “Inventory Pricing,” to
clarify the accounting for abnormal amounts of idle facility expense, handling costs and wasted
material (spoilage). Among other provisions, the new rule requires that such items be recognized
as current-period charges. SFAS No. 151 is effective for fiscal years beginning after June 15,
2005. The Company does not expect that adoption of SFAS No. 151 will have a material effect on its
consolidated results of operations, financial position or cash flows.
6
\
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections – a
replacement of APB Opinion No. 20 and FASB Statement No. 3”. SFAS No. 154 establishes retrospective
application as the required method for reporting a voluntary change in accounting principle, unless
it is impracticable, in which case the changes should be applied to the latest practicable date
presented. SFAS No. 154 also requires that a correction of an error be reported as a prior period
adjustment by restating prior period financial statements. SFAS No. 154 is effective for
accounting changes and corrections of errors, if any, beginning January 1, 2006.
Note 3 — Earnings Per Share
The calculation of basic earnings per share for the three- and nine-month periods ended
September 30, 2005 and 2004 is based on the average number of common shares considered outstanding
during the periods. Diluted earnings per share for such periods reflect the effect of all
potentially dilutive securities (primarily outstanding common stock options and restricted stock
grants). The following table presents the number of shares used in the calculation of basic
earnings per share and diluted earnings per share for the periods:
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| |
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Weighted average shares (In thousands) |
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Basic shares |
|
|
69,242 |
|
|
|
68,124 |
|
|
|
69,007 |
|
|
|
67,657 |
|
Stock option and awards plans |
|
|
1,599 |
|
|
|
1,428 |
|
|
|
1,580 |
|
|
|
1,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
70,841 |
|
|
|
69,552 |
|
|
|
70,587 |
|
|
|
69,039 |
|
|
|
|
|
|
|
|
|
|
|
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|
Note 4 – Acquisitions
On September 26, 2005, the Company acquired the Solartron Group (“Solartron”) from Roxboro
Group PLC for approximately 42 million British pound sterling, or $75 million, net of cash
received. United Kingdom-based Solartron is a leading supplier of analytical instrumentation for
the process laboratory and other industrial markets with annual sales of approximately 27 million
British pound sterling, or $50 million. Solartron is part of the Company’s Electronic Instruments
Group.
On June 13, 2005, the Company acquired SPECTRO Beteiligungs GmbH (“SPECTRO”), the holding
company of SPECTRO Analytical Instruments GmbH & Co KG and its affiliates from an investor group
led by German Equity Partners BV for approximately 80 million Euro, or $96.9 million, net of cash
received. Additionally, with the acquisition of SPECTRO, the Company assumed specified contingent
liabilities arising out of certain previous business activities of
SPECTRO the most significant of which was
settled in the third quarter of 2005. The amount of the settlement was
not significant to the Company’s financial position. SPECTRO is a
leading global supplier of atomic spectroscopy analytical instrumentation. With its headquarters
in Kleve, Germany, SPECTRO has expected annualized sales of 85 million Euro, or $104 million.
SPECTRO is a part of the Company’s Electronic Instruments Group.
The operating results of the Solartron and SPECTRO acquisitions are included in the Company’s
consolidated results from the dates of acquisition.
7
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
In
the second and third quarters of 2005, the Company also purchased
certain assets and technology for cash. The assets and technologies acquired are related to the Company’s
brushless DC motor and precision pumping system businesses in its Electromechanical and Electronics
Instruments Groups, respectively.
The acquisitions have been accounted for using the purchase method in accordance with SFAS No.
141, “Business Combinations.” The following table represents the tentative allocation of the
aggregate purchase price for the above acquisitions based on their estimated fair values:
| |
|
|
|
|
| |
|
In millions |
|
Property, plant and equipment |
|
$ |
13.2 |
|
Goodwill |
|
|
134.8 |
|
Other intangible assets |
|
|
21.8 |
|
Net working capital |
|
|
6.0 |
|
|
|
|
|
Total net assets |
|
$ |
175.8 |
|
|
|
|
|
The amount allocated to goodwill is reflective of the benefits the Company expects to
realize from the acquisitions as follows: The Solartron acquisition will broaden the Company’s
analytical instrumentation product offerings for the process, laboratory and other industrial
markets, expanding its geographic reach and capitalizing on significant synergies within the
Company’s existing businesses. The benefits the Company expects to realize from the SPECTRO
acquisition include the expansion of its elemental analysis capabilities in metal production and
processing, environmental testing, hydrocarbon processing, aerospace, food processing, and
pharmaceutical markets. The technology acquisitions completed in the second and third quarters,
will open additional avenues for internal growth.
The $21.8 million assigned to other intangible assets consist primarily of patents and
technology and have estimated lives ranging from 6 to 15 years.
For the Solartron and SPECTRO acquisitions, the Company is in the process of completing third
party valuations of certain tangible and intangible assets acquired. Therefore, the allocation of
the purchase price to the acquired assets and liabilities of these businesses is subject to
revision.
Had the Solartron and SPECTRO acquisitions been made at the beginning of 2005, pro forma net
sales, net income and diluted earnings per share for the three- and nine-month periods ended
September 30, 2005 would have been as follows:
| |
|
|
|
|
|
|
|
|
| |
|
(In millions, except per share) |
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, 2005 |
|
|
September 30, 2005 |
|
Net sales |
|
$ |
357.7 |
|
|
$ |
1,115.7 |
|
Net income |
|
$ |
36.2 |
|
|
$ |
106.2 |
|
Diluted earnings per share |
|
$ |
0.51 |
|
|
$ |
1.50 |
|
8
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Had the acquisitions of Taylor Hobson and Hughes-Treitler, which were acquired in June and
July of 2004, respectively, and SPECTRO and Solartron, which were acquired in June and September
2005, respectively, been made at the beginning of 2004, pro forma net sales, net income, and
diluted earnings per share for the three- and nine-month periods ended September 30, 2004 would
have been as follows:
| |
|
|
|
|
|
|
|
|
| |
|
(In millions, except per share) |
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, 2004 |
|
|
September 30, 2004 |
|
Net sales |
|
$ |
347.7 |
|
|
$ |
1,087.3 |
|
Net income |
|
$ |
30.4 |
|
|
$ |
85.0 |
|
Diluted earnings per share |
|
$ |
0.44 |
|
|
$ |
1.23 |
|
Pro forma results are not necessarily indicative of the results that would have occurred
if the acquisitions had been completed at the beginning of 2005 or 2004.
Subsequent to September 30, 2005 (October 7, 2005), the Company acquired HCC Industries
(“HCC”) from an investor group led by Windward Capital Partners and management for approximately
$162 million in cash. HCC is a leading designer and manufacturer of highly engineered hermetic
connectors, terminals, headers and microelectronic packages for sophisticated electronic
applications in the aerospace, defense, industrial and petrochemical markets. With its
headquarters near Los Angeles, CA, HCC has annual sales of approximately $104 million. HCC will be
reported as a part of the Company’s Electromechanical Group from the date of acquisition.
Note 5 – Goodwill
As of September 30, 2005 and December 31, 2004, goodwill consisted of the following:
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
(In millions) |
|
|
|
|
| |
|
EIG |
|
|
EMG |
|
|
Total |
|
Balance at December 31, 2004 |
|
$ |
366.6 |
|
|
$ |
234.4 |
|
|
$ |
601.0 |
|
Net increase from 2005 acquisitions |
|
|
134.0 |
|
|
|
0.8 |
|
|
|
134.8 |
|
Reclassification from update of previous
purchase price allocations and other |
|
|
(2.4 |
) |
|
|
(17.6 |
) |
|
|
(20.0 |
) |
Foreign currency translation adjustment |
|
|
(6.9 |
) |
|
|
(4.8 |
) |
|
|
(11.7 |
) |
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2005 |
|
$ |
491.3 |
|
|
$ |
212.8 |
|
|
$ |
704.1 |
|
|
|
|
|
|
|
|
|
|
|
9
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Note 6 — Inventories
The estimated components of inventory stated at lower of last in, first out (LIFO), and
first-in, first-out (FIFO), cost or market are:
| |
|
|
|
|
|
|
|
|
| |
|
(In thousands) |
|
| |
|
September 30, |
|
|
December 31, |
|
| |
|
2005 |
|
|
2004 |
|
Finished goods and parts |
|
$ |
42,454 |
|
|
$ |
40,956 |
|
Work in process |
|
|
48,327 |
|
|
|
40,203 |
|
Raw materials and purchased parts |
|
|
98,681 |
|
|
|
87,364 |
|
|
|
|
|
|
|
|
|
|
$ |
189,462 |
|
|
$ |
168,523 |
|
|
|
|
|
|
|
|
Inventory increased $20.9 million from December 31, 2004 to September 30, 2005. The 2005
acquisitions added $17.1 million to the September 30, 2005 inventory balance.
Note 7 — Comprehensive Income
Comprehensive income includes all changes in stockholders’ equity during a period except those
resulting from investments by and distributions to stockholders.
The following table presents comprehensive income for the three- and nine-month periods ended
September 30, 2005 and 2004:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Net Income |
|
$ |
35,428 |
|
|
$ |
29,020 |
|
|
$ |
102,649 |
|
|
$ |
81,351 |
|
Foreign currency translation adjustment,
net of Foreign currency net investment hedges |
|
|
(883 |
) |
|
|
47 |
|
|
|
(14,146 |
) |
|
|
207 |
|
Unrealized holding gains(losses) on
marketable securities arising during the
period, net of tax |
|
|
165 |
|
|
|
(180 |
) |
|
|
181 |
|
|
|
169 |
|
Reclassification adjustment for gain
realized in net income |
|
|
— |
|
|
|
(390 |
) |
|
|
(1,370 |
) |
|
|
(867 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
34,710 |
|
|
$ |
28,497 |
|
|
$ |
87,314 |
|
|
$ |
80,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 8 - Segment Disclosure
The Company has two reportable business segments, the Electronic Instruments Group and the
Electromechanical Group. The Company aggregates its operating segments for segment reporting
purposes
primarily on the basis of product type, production process, distribution methods, and
management organizations.
10
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
At September 30, 2005, there were no significant changes in identifiable assets of reportable
segments from the amounts disclosed at December 31, 2004, other than increases due to the current
year acquisitions, nor were there any changes in the basis of segmentation, or in the measurement
of segment operating results. Operating information relating to the Company’s reportable segments
for the three and nine-month periods ended September 30, 2005 and 2004 can be found in the table on
page 14 in the Management Discussion & Analysis section of this Report.
Note 9 – Pro Forma Stock-Based Compensation
The Company applies Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued
to Employees,” in accounting for its stock award plans, which recognizes expense based on the
intrinsic value of the awards at the date of grant. Since stock options are issued with the
exercise price per share equal to the fair market value per share at the date of grant, no
compensation expense has resulted. Had the Company accounted for stock options in accordance with
the fair value method prescribed by Statement of Financial Accounting Standards (“SFAS”) No. 123
“Accounting for Stock-Based Compensation,” the Company would have reported the following pro forma
results for the three and nine-month periods ended September 30, 2005 and 2004:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(In thousands, except per share data) |
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Net income, as reported |
|
$ |
35,428 |
|
|
$ |
29,020 |
|
|
$ |
102,649 |
|
|
$ |
81,351 |
|
Add: Stock-based employee compensation
expense included in reported net income |
|
|
1,110 |
|
|
|
190 |
|
|
|
2,359 |
|
|
|
302 |
|
Deduct: Total stock-based compensation expense,
determined under the fair-value method for all
awards, net of tax |
|
|
(2,169 |
) |
|
|
(1,115 |
) |
|
|
(5,549 |
) |
|
|
(3,023 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income |
|
$ |
34,369 |
|
|
$ |
28,095 |
|
|
$ |
99,459 |
|
|
$ |
78,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
$ |
0.51 |
|
|
$ |
0.43 |
|
|
$ |
1.49 |
|
|
$ |
1.20 |
|
Pro forma |
|
$ |
0.50 |
|
|
$ |
0.41 |
|
|
$ |
1.44 |
|
|
$ |
1.16 |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
$ |
0.50 |
|
|
$ |
0.42 |
|
|
$ |
1.45 |
|
|
$ |
1.18 |
|
Pro forma |
|
$ |
0.49 |
|
|
$ |
0.41 |
|
|
$ |
1.42 |
|
|
$ |
1.15 |
|
11
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Note 10 – Retirement and Pension Plans
The following table reports total net pension expense and includes the components of net
pension expense recognized under SFAS No. 87 for the three and nine-month periods ended September
30, 2005 and 2004 in accordance with the interim disclosure requirements of SFAS No. 132-R,
“Employers’ Disclosures about Pension and Other Postretirement Benefits, an update of FASB
Statements No. 87, 88, and 106”.
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
Defined benefit plans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Cost |
|
$ |
1,602 |
|
|
$ |
1,580 |
|
|
$ |
4,847 |
|
|
$ |
4,256 |
|
Interest Cost |
|
|
5,821 |
|
|
|
5,824 |
|
|
|
17,545 |
|
|
|
16,353 |
|
Expected return on plan assets |
|
|
(7,780 |
) |
|
|
(7,520 |
) |
|
|
(23,414 |
) |
|
|
(21,592 |
) |
Net amortization |
|
|
827 |
|
|
|
835 |
|
|
|
2,481 |
|
|
|
2,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net pension expense (income)
recognized under SFAS No. 87 |
|
|
470 |
|
|
|
719 |
|
|
|
1,459 |
|
|
|
1,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other plans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined contribution plans |
|
|
1,798 |
|
|
|
1,750 |
|
|
|
5,795 |
|
|
|
5,250 |
|
Supplemental retirement plan |
|
|
138 |
|
|
|
100 |
|
|
|
413 |
|
|
|
300 |
|
Foreign plans and other |
|
|
585 |
|
|
|
433 |
|
|
|
1,686 |
|
|
|
1,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other plans |
|
|
2,521 |
|
|
|
2,283 |
|
|
|
7,894 |
|
|
|
6,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net pension expense |
|
$ |
2,991 |
|
|
$ |
3,002 |
|
|
$ |
9,353 |
|
|
$ |
8,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the nine months ended September 30, 2005, the Company made a $5.0 million
contribution to its U.S. defined benefit pension plans. For the full year 2005, the Company
estimates that it will make total employer contributions to its defined benefit pension plans of
approximately $6 million. This estimate is unchanged from the amount disclosed in the Company’s
2004 Form 10-K.
12
AMETEK, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Note 11 – Product Warranties
The Company provides limited warranties in connection with the sale of its products. The
warranty periods for products sold vary widely among the Company’s operations, but for the most
part do not exceed one year. The Company calculates its warranty expense provision based on past
warranty experience and adjustments are made periodically to reflect actual warranty expenses.
Changes in the Company’s accrued product warranty obligation for the nine months ended
September 30, 2005 and 2004 were as follows:
| |
|
|
|
|
|
|
|
|
| |
|
(In thousands) |
|
| |
|
Nine months ended September 30, |
|
| |
|
2005 |
|
|
2004 |
|
Balance, beginning year |
|
$ |
7,301 |
|
|
$ |
6,895 |
|
Accruals for warranties issued during the
period |
|
|
4,265 |
|
|
|
4,070 |
|
Settlements made during the period |
|
|
(4,903 |
) |
|
|
(3,587 |
) |
Warranty accruals related to acquisitions,
and other |
|
|
2,502 |
|
|
|
300 |
|
|
|
|
|
|
|
|
Balance, end of period |
|
$ |
9,165 |
|
|
$ |
7,678 |
|
|
|
|
|
|
|
|
Product warranty obligations are reported as current liabilities in the consolidated balance
sheet.
13
AMETEK, Inc.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
The following table sets forth sales and income by reportable segment, and consolidated
operating income and pretax income:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended |
|
|
Nine months ended |
|
| |
|
September 30, |
|
|
September 30, |
|
| |
|
2005 |
|
|
2004 |
|
|
2005 |
|
|
2004 |
|
| |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Instruments |
|
$ |
205,500 |
|
|
$ |
172,929 |
|
|
$ |
577,777 |
|
|
$ |
483,094 |
|
Electromechanical |
|
|
139,029 |
|
|
|
137,778 |
|
|
|
452,899 |
|
|
|
422,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net sales |
|
$ |
344,529 |
|
|
$ |
310,707 |
|
|
$ |
1,030,676 |
|
|
$ |
906,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income and income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Instruments |
|
$ |
43,104 |
|
|
$ |
32,083 |
|
|
$ |
120,185 |
|
|
$ |
86,215 |
|
Electromechanical |
|
|
22,061 |
|
|
|
24,029 |
|
|
|
74,326 |
|
|
|
72,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment operating income |
|
|
65,165 |
|
|
|
56,112 |
|
|
|
194,511 |
|
|
|
158,593 |
|
Corporate and other |
|
|
(6,457 |
) |
|
|
(5,659 |
) |
|
|
(19,992 |
) |
|
|
(17,163 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated operating income |
|
|
58,708 |
|
|
|
50,453 |
|
|
|
174,519 |
|
|
|
141,430 |
|
Interest and other expenses, net |
|
|
(9,074 |
) |
|
|
(8,200 |
) |
|
|
(24,610 |
) |
|
|
(21,372 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated income
before income taxes |
|
$ |
49,634 |
|
|
$ |
42,253 |
|
|
$ |
149,909 |
|
|
$ |
120,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations for the third quarter of 2005 compared with the third quarter of 2004
In the third quarter of 2005, the Company posted strong year-over-year increases in sales,
operating income, net income and diluted earnings per share.
Net sales for the third quarter of 2005 were $344.5 million, an increase of $33.8 million, or
10.9% when compared with net sales of $310.7 million in the third quarter of 2004. Internal sales
growth was 2.0%, in the third quarter of 2005, driven by the Company’s differentiated base
businesses. The acquisition of SPECTRO in June of 2005 also contributed significantly to the sales
growth. While the effects of the Gulf Coast Hurricanes is difficult
to measure, it is estimated to have reduced consolidated sales for
the third quarter of 2005 in the range of approximately $2 to
$3 million. Foreign currency translation effects on
sales were minimal in the third quarter of 2005.
14
AMETEK, Inc.
Results of Operations (continued)
International sales for the third quarter of 2005 were $164.1 million, or 47.6% of
consolidated sales, an increase of $28.7 million or 21.2%, when compared with $135.4 million in the
same quarter of 2004. The increase in international sales came mainly from European sales from the
SPECTRO acquisition, and also reflects increased sales to Asia by both operating Groups.
Order input for the third quarter of 2005 was $364.9 million, compared with $337.7 million in
the third quarter of 2004, an increase of $27.2 million or 8.1%. The increase in order input was
due to strong demand in the Company’s differentiated businesses including the acquisitions, and was
led by the process instrumentation, power, and aerospace markets.
Segment operating income for the third quarter of 2005 was $65.2 million, an increase of $9.1
million or 16.2% from $56.1 million in the third quarter of 2004. Segment operating income, as a
percentage of sales, increased to 18.9% of sales in the third quarter of 2005 from 18.1% of sales
in the third quarter of 2004. The increase in segment operating income and margin resulted from the
higher sales (including a profit contribution on the sales of recently acquired SPECTRO), favorable
product mix, as well as the benefits from the Company’s continued operational improvement
initiatives, aimed at lowering the Company’s overall cost structure on higher sales levels, and a
$4.3 million pre-tax gain from the sale of a facility, as well
as a conservative estimate of lower income of
approximately $1.0 million as a result of the Gulf Coast Hurricanes. Segment operating income for
the third quarter of 2005 also included $1.8 million of higher than anticipated expenses to
accelerate movement of production to low-cost locales.
Selling, general and administrative expenses were $44.2 million in the third quarter of 2005,
an increase of $9.1 million or 25.9%, when compared with the third quarter of 2004. Selling
expenses, as a percentage of sales increased to 11.0% in the third quarter of 2005 compared with
9.5% of sales in the third quarter of 2004. The selling expense increase and the corresponding
increase in selling expense as a percentage of sales were due primarily to business acquisitions.
The Company’s acquisition strategy generally is to acquire differentiated businesses, which because
of their distribution channels and higher marketing costs tend to have a higher content of selling
expenses.
Corporate administrative expenses for the third quarter of 2005 were $6.5 million, an increase
of $0.8 million when compared with the same period in 2004. Corporate administrative expenses as a
percentage of sales increased to 1.9% in the third quarter of 2005, essentially unchanged from the
third quarter of 2004. The increase in corporate administrative expenses is primarily the result
of higher restricted stock amortization expense related to the Company’s change in its long-term
incentive compensation program.
15
AMETEK, Inc.
Results of Operations (continued)
Consolidated operating income totaled $58.7 million or 17.0% of sales for the third quarter of
2005, compared with $50.5 million, or 16.2% of sales for the same quarter of 2004, an increase of
$8.2 million or 16.2%.
Other expenses, net were $1.4 million in the third quarter of 2005, compared with other
expenses, net of $0.7 million for the third quarter of 2004. The $0.7 million increase in expenses
was primarily the result of higher non-operating costs related to an acquisition that the Company
chose not to complete.
The effective tax rate for the third quarter of 2005 was 28.6% compared with 31.3% for the
same period of 2004. The reduction in the effective tax rate was primarily due to the realization
of benefits from certain worldwide tax planning activities and other
adjustments in the third quarter of 2005.
Net income for the third quarter of 2005 totaled $35.4 million, an increase of 22.1% from
$29.0 million in the third quarter of 2004. Diluted earnings per share rose 19.0% to $0.50 per
share, compared with $0.42 per share for the same quarter of 2004.
Segment Results
Electronic Instruments Group (EIG) sales totaled $205.5 million in the third quarter
of 2005, an increase of $32.6 million or 18.9% from $172.9 million in the same quarter of 2004. The
sales increase reflects 2.8% internal growth and improved conditions
in the Group’s process and analytical instruments markets. The reduction in this Group’s sales for the
third quarter of 2005 due to the Gulf Coast Hurricanes is estimated
to be in the range of $2 to $2.5 million. The
acquisition of SPECTRO in June 2005 primarily accounted for the remainder of the sales increase.
Operating income of EIG was $43.1 million for the third quarter of 2005, an increase of $11.0
million or 34.3% when compared with the $32.1 million in the third quarter of 2004. The increased
operating income and the higher margins were primarily driven by the $4.3 million pre-tax gain on
the sale of a facility mentioned earlier, and the additional sales of SPECTRO. However, operating
income of this Group was reduced by a conservative rough estimate of $0.7 million because of the effects of the third
quarter 2005 Gulf Coast Hurricanes. Operating margins for the Group were 21.0% of sales in the
third quarter of 2005 compared with operating margins of 18.6% of sales in the third quarter of
2004.
Electromechanical Group (EMG) sales totaled $139.0 million in the third quarter of
2005, an increase of $1.2 million or 0.9% from $137.8 million in the same quarter in 2004. The
sales increase was due to internal growth from the Group’s differentiated businesses, partially
offset by a decline in sales by the Group’s cost-driven motor
business. A conservative estimate of the sales reduction for this
group due to the Gulf Coast Hurricanes is between $0.5 million
and $1 million.
16
AMETEK, Inc.
Results of Operations (continued)
Operating income for EMG was $22.1 million in the third quarter of 2005, a decrease of $1.9
million or 7.9% from $24.0 million in the third quarter of 2004. The operating income decrease was
mainly due to $1.7 million of higher than anticipated expenses incurred for this Group as a result of
the accelerated movement of manufacturing to low-cost locales. Operating margins were 15.9% of
sales in the third quarter of 2005, compared with 17.4% of sales in
the third quarter of 2004. The estimated reduction of operating
income due to the Gulf Coast Hurricanes is roughly estimated at
$0.3 million.
Operations for the first nine months of 2005 compared with the first nine months of 2004.
Net sales for the first nine months of 2005 were $1,030.7 million, an increase of $124.7
million or 13.8%, compared with net sales of $906.0 million reported for the same period of 2004.
Internal growth mainly from the differentiated businesses within both the EIG and EMG Groups was
4.7% for the first nine months of 2005. The acquisitions of Hughes-Treitler in July 2004, Taylor
Hobson in June 2004, and SPECTRO in June 2005 also contributed to the sales increase. Foreign
currency translation effects on sales were minimal for the first nine months of 2005.
EIG’s net sales increased by $94.7 million or 19.6% to $577.8 million for the first nine
months of 2005, compared to sales of $483.1 million for the same period in 2004. Internal sales
growth for EIG was 5.4% for the first nine months of 2005. EIG’s sales increase was due to the
strength in the Group’s aerospace, industrial and process and analytical instruments markets, as
well as from the acquisitions of Taylor Hobson and SPECTRO. EMG’s net sales increased $29.9
million or 7.1% to $452.9 million for the first nine months of 2005, compared with sales of $423.0
million for the same period of 2004. Internal sales growth for EMG was 3.8% during the nine-month
period of 2005. EMG’s net sales increase was due to higher sales by the Group’s differentiated
businesses and the July 2004 Hughes-Treitler acquisition.
For the first nine months of 2005 international sales were $466.8 million, or 45.3% of
consolidated sales, compared with $388.9 million, or 42.9% of consolidated sales, for the
comparable period in 2004, an increase of $77.9 million. The increase in international sales came
mainly from sales to Europe and Asia by both operating groups.
New orders for the first nine months ended September 30, 2005 were $1,067.2 million, compared
with $956.0 million for the same period in 2004, an increase of $111.2 million, or 11.6%. Most of
the increase in orders was driven by strong order input from the Company’s differentiated
businesses, led by the Company’s aerospace and process businesses. The Company’s backlog of
unfilled orders at September 30, 2005 was $377.4 million, compared with $340.9 million at December
31, 2004, an increase of $36.5 million or 10.7%. The increase in backlog was primarily due to the
acquisitions of SPECTRO in June 2005 and the Solatron Group late in September 2005. Backlog
increases were also reported by many of the Company’s differentiated businesses primarily in the
Electronic Instruments Group.
17
AMETEK, Inc.
Results of Operations (continued)
Selling, general and administrative expenses were $122.2 million for the first nine months of
2005, an increase of $24.2 million or 24.7%, when compared with $98.0 million for the same period
of 2004. Selling expenses, as a percentage of sales, increased to 9.9% for the first nine months
of 2005, compared with 8.9% for the same period of 2004. The selling expense increase and the
corresponding increase in selling expenses as a percentage of sales were due primarily to business
acquisitions. The Company’s acquisition strategy generally is to acquire differentiated
businesses, which because of their distribution channels and higher marketing costs tend to have a
higher content of selling expenses. Base business selling expenses increased 5.5%, which
approximates internal sales growth for the first nine months of 2005.
Corporate administrative expenses were $20.0 million for the first nine months of 2005, an
increase of $2.8 million or 16.3% when compared with $17.2 million for the same period of 2004.
The increase in corporate expenses is the result of higher restricted stock amortization expense
related to the Company’s change in its long-term incentive compensation program and higher
personnel costs necessary to grow the Company. As a percentage of sales, corporate administrative
expenses were 1.9%, unchanged when compared with the same period of 2004.
Consolidated operating income was $174.5 million, an increase of $33.1 million or 23.4% when
compared with $141.4 million for the same period of 2004. This represents an operating margin of
16.9% for the first nine months of 2005, compared with 15.6% for the same period of 2004.
Interest expense was $23.0 million for the first nine months of 2005, an increase of $2.3
million or 11.1% when compared with $20.7 million in the same period of 2004. The increase was
primarily due to higher fixed interest rates on British pound sterling long-term debt incurred for
the June 2004 acquisition of Taylor Hobson as well as higher Euro long-term debt incurred for the
June 2005 acquisition of SPECTRO.
Other expenses, net were $1.6 million for the first nine months of 2005, compared with other
expenses, net of $0.7 million for the same period of 2004. The $0.9 million increase in expenses
was primarily the result of higher costs associated with an acquisition the Company chose not to
complete.
The effective tax rate for the first nine months of 2005 was 31.5% compared with 32.2% for the
same period in 2004. The reduction in the effective tax rate was primarily due to the realization
of tax benefits in the third quarter of 2005 resulting from tax
planning activities, and other adjustments. The 2005 tax
rate also benefited from tax refunds stemming from the filing of certain amended U.S. income tax
returns, partially offset by slightly higher tax rates on foreign pretax earnings.
Net income for the first nine months of 2005 was $102.6 million, or $1.45 per share on a
diluted basis, compared with net income of $81.4 million, or $1.18 per diluted share for the same
period of 2004.
18
AMETEK, Inc.
Results of Operations (continued)
Segment Results
Electronic Instruments Group (EIG) net sales were $577.8 million for the first nine
months of 2005, an increase of $94.7 million or 19.6% compared with the same period of 2004. The
sales increase was due to internal growth in EIG’s aerospace, process and analytical instruments,
and industrial markets and by the acquisitions of Taylor Hobson in 2004 and SPECTRO in 2005.
Internal growth accounted for 5.4% of the 19.6% increase. The acquisitions accounted for the
remainder of the sales increase.
EIG’s operating income for the first nine months of 2005 totaled $120.2 million, an increase
of $34.0 million or 39.4% when compared with $86.2 million in the same period of 2004. The increase
in operating income was the result of the higher sales level, the $4.3 million pre-tax gain on the
sale of a facility previously mentioned, favorable product mix, and the benefits of cost reduction
programs. Operating margins were 20.8% of sales in the first nine months of 2005 compared with
operating margins of 17.8% of sales in the comparable period in 2004. The higher margins were due
to the items mentioned above.
Electromechanical Group (EMG) net sales totaled $452.9 million for the first nine
months of 2005, an increase of $29.9 million or 7.1% compared with $423.0 million in the same
period in 2004. The sales increase was due to internal growth, particularly in the Group’s
differentiated businesses, which accounted for 3.8% of the 7.1% sales increase. The acquisition of
Hughes-Treitler in 2004 accounted for the remainder of the increase.
EMG’s operating income for the first nine months of 2005 was $74.3 million, an increase of
$1.9 million or 2.7% when compared with the same period in 2004. The operating income increase was
primarily due to the strength of the Group’s differentiated businesses, the Hughes-Treitler
acquisition and the higher sales level. Operating margins of the Group were 16.4% of sales for the
first nine months of 2005, compared with 17.1% for the same period in 2004. The decline in
operating margin was primarily due to the higher than normal expenses mentioned above.
Financial Condition
Liquidity
and Capital Resources
Cash provided by operating activities totaled $116.1 million in the first nine months of 2005,
compared with $100.2 million for the same period of 2004, an increase of $15.9 million. The
increase in operating cash flow was primarily the result of higher earnings, partially offset by
higher overall operating working capital associated with the increased level of business. In the
first nine months of 2005, the Company made a $5 million contribution to its U.S. defined benefit
pension plans compared with a $3.4 million contribution to its U.S. defined benefit pension plans
for the comparable period in 2004. During the first nine months of 2004, the Company’s operating
activities also included $10.9 million of net cash proceeds associated with certain insurance
matters.
19
AMETEK, Inc.
Financial Condition (continued)
Liquidity
and Capital Resources (continued)
Cash used for investing activities totaled $186.7 million in the first nine months of 2005,
compared with $154.9 million used in the same period in 2004. In the first nine months of 2005, the
Company acquired SPECTRO for $97.1 million in cash, Solartron for $75 million in cash, and two
small technology lines for $3.1 million cash, bringing the total cash outlay for acquisitions to
$175.2 million for the first nine months of 2005. In the first nine months of 2004 the Company
acquired Taylor Hobson and Hughes Treitler for $143.5 million in cash. Additions to property,
plant and equipment in the first nine months of 2005 totaled $15.1 million, compared with $14.4
million in the first nine months of 2004.
Cash provided by financing activities in the first nine months of 2005 totaled $75.4 million,
compared with $63.9 million for the same period of 2004. In the first nine months of 2005, net
total borrowings increased by $77.1 million, compared with an increase of $62.9 million in the
first nine months in 2004. Long-term borrowings increased $144.2 million in the first nine months
of 2005 compared with an increase of $97.4 million in 2004. In 2005, long-term borrowings include
a 50 million Euro (approximately $62 million) ten-year term loan to finance a portion of the
acquisition of SPECTRO, which was completed in the third quarter of 2005. Additionally, 23.7
million British pounds sterling (approximately $43 million) was borrowed under the Company’s $300
million revolving bank credit facility to pay a portion of the purchase price for Solartron in
September of 2005. The Euro and British pound sterling borrowings provide natural hedges of the
Company’s investments in the German-based SPECTRO business and the United Kingdom based Solartron
business. At September 30, 2005, the Company had available borrowing capacity of $227.5 million
under its $300 million revolving bank credit facility, and $58.0 million available under its
accounts receivable securitization agreement. The revolving credit facility was amended on June
17, 2005 to extend its expiration date from February 2009 to June 2010. The amendment also lowered
the Company’s cost of capital, reduced the number of financial covenants required, eased or removed
other financial restrictions, and added an accordion feature that allows the Company to receive an
additional $100 million in revolving credit commitments. Extension of the credit facility provides
the Company with increased financial flexibility to support its growth plans.
At September 30, 2005, total debt outstanding was $514.4 million, compared with $450.1 million
at December 31, 2004. The Debt-to-capital ratio was 40.5%, essentially unchanged from December 31,
2004 despite cash expenditures of $175.2 million for the 2005 acquisitions mentioned above.
Additional financing activities generated net cash proceeds from the exercise of employee stock
options of $10.7 million in the first nine months of 2005, compared with $13.2 million for the same
period of 2004. Dividend payments were $12.4 million in the first nine months of 2005, essentially
the same as the comparable period of 2004.
As a result of the activities discussed above, the Company’s cash and cash equivalents at
September 30, 2005 totaled $40.1 million, compared with $37.6 million at December 31, 2004. The
Company believes it has sufficient cash-generating capabilities and available credit facilities to
enable it to meet its needs in the foreseeable future.
20
AMETEK, Inc.
Financial Condition (continued)
Forward-looking Information
Information contained in this discussion, other than historical information, is considered
“forward-looking statements” and may be subject to change based on various important factors and
uncertainties. Some, but not all, of the factors and uncertainties that may cause actual results
to differ significantly from those expected in any forward-looking statement are disclosed in the
Company’s 2004 Form 10-K as filed with the Securities and Exchange Commission.
Item 4. Controls and Procedures
The Company’s management, including the Company’s Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of
September 30, 2005. Based on that evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer concluded that the Company’s disclosure controls and procedures are effective in
all material respects as of September 30, 2005. Such evaluation did not identify any change in the
Company’s internal controls over financial reporting during the quarter ended September 30, 2005
that has materially affected, or is reasonably likely to materially affect, the Company’s internal
controls over financial reporting.
21
AMETEK, Inc.
PART II. OTHER INFORMATION
Item 6. Exhibits
a) Exhibits:
| |
|
|
| Exhibit |
|
|
| Number |
|
Description |
10.1
|
|
AMETEK, Inc. 2004 Executive Death Benefit Plan adopted July 27, 2005. |
|
|
|
31.1
|
|
Certification of Chief Executive Officer, Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
|
|
|
31.2
|
|
Certification of Chief Financial Officer, Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. |
|
|
|
32.1
|
|
Certification of Chief Executive Officer, Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. |
|
|
|
32.2
|
|
Certification of Chief Financial Officer, Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. |
22
AMETEK, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| |
|
|
|
|
| AMETEK, Inc. |
|
|
| |
|
|
| (Registrant) |
|
|
|
|
|
|
|
|
|
|
|
|
By
|
|
/s/ Robert R. Mandos, Jr. |
|
|
|
|
|
|
|
|
|
Robert R. Mandos, Jr. |
|
|
|
|
Senior Vice President & Comptroller |
|
|
|
|
(Principal Accounting Officer) |
|
|
November 8, 2005
23