filings.toolsAmetek 10-Q 2024-09-30
Filed 2024-10-31. 6 sections, 103K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
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, 2024
OR
| ☐ | 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 29, 2024 was 231,307,680 shares.
AMETEK, Inc.
Form 10-Q
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, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net sales | $ | 1,708,564 | $ | 1,622,837 | $ | 5,179,578 | $ | 4,866,065 | |||||||||||||||
| Cost of sales | 1,092,754 | 1,020,920 | 3,347,860 | 3,096,635 | |||||||||||||||||||
| Selling, general and administrative | 169,959 | 163,782 | 521,137 | 506,963 | |||||||||||||||||||
| Total operating expenses | 1,262,713 | 1,184,702 | 3,868,997 | 3,603,598 | |||||||||||||||||||
| Operating income | 445,851 | 438,135 | 1,310,581 | 1,262,467 | |||||||||||||||||||
| Interest expense | (25,118) | (18,386) | (90,962) | (57,678) | |||||||||||||||||||
| Other (expense) income, net | (1,888) | (6,256) | (2,435) | (15,313) | |||||||||||||||||||
| Income before income taxes | 418,845 | 413,493 | 1,217,184 | 1,189,476 | |||||||||||||||||||
| Provision for income taxes | 78,604 | 73,123 | 228,317 | 219,152 | |||||||||||||||||||
| Net income | $ | 340,241 | $ | 340,370 | $ | 988,867 | $ | 970,324 | |||||||||||||||
| Basic earnings per share | $ | 1.47 | $ | 1.48 | $ | 4.28 | $ | 4.21 | |||||||||||||||
| Diluted earnings per share | $ | 1.47 | $ | 1.47 | $ | 4.26 | $ | 4.19 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic shares | 231,342 | 230,691 | 231,292 | 230,431 | |||||||||||||||||||
| Diluted shares | 232,224 | 231,751 | 232,188 | 231,414 | |||||||||||||||||||
| Dividends declared and paid per share | $ | 0.28 | $ | 0.25 | $ | 0.84 | $ | 0.75 |
See accompanying notes.
AMETEK, Inc.
Condensed Consolidated Statement of Comprehensive Income
(In thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Total comprehensive income | $ | 405,095 | $ | 294,757 | $ | 1,016,270 | $ | 977,660 |
See accompanying notes.
AMETEK, Inc.
Consolidated Balance Sheet
(In thousands)
| September 30, 2024 | December 31, 2023 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 396,266 | $ | 409,804 | |||||||
| Receivables, net | 968,240 | 1,012,932 | |||||||||
| Inventories, net | 1,084,622 | 1,132,471 | |||||||||
| Other current assets | 284,562 | 269,461 | |||||||||
| Total current assets | 2,733,690 | 2,824,668 | |||||||||
| Property, plant and equipment, net | 822,609 | 891,293 | |||||||||
| Right of use assets, net | 211,381 | 229,723 | |||||||||
| Goodwill | 6,550,267 | 6,447,629 | |||||||||
| Other intangibles, net | 3,950,989 | 4,165,317 | |||||||||
| Investments and other assets | 498,703 | 464,903 | |||||||||
| Total assets | $ | 14,767,639 | $ | 15,023,533 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Short-term borrowings and current portion of long-term debt, net | $ | 571,061 | $ | 1,417,915 | |||||||
| Accounts payable | 511,680 | 516,588 | |||||||||
| Customer advanced payments | 350,865 | 375,513 | |||||||||
| Income taxes payable | 64,763 | 69,567 | |||||||||
| Accrued liabilities and other | 468,556 | 502,990 | |||||||||
| Total current liabilities | 1,966,925 | 2,882,573 | |||||||||
| Long-term debt, net | 1,765,473 | 1,895,432 | |||||||||
| Deferred income taxes | 792,540 | 836,695 | |||||||||
| Other long-term liabilities | 692,478 | 678,642 | |||||||||
| Total liabilities | 5,217,416 | 6,293,342 | |||||||||
| Stockholders’ equity: | |||||||||||
| Common stock | 2,717 | 2,709 | |||||||||
| Capital in excess of par value | 1,228,670 | 1,168,694 | |||||||||
| Retained earnings | 10,735,140 | 9,940,343 | |||||||||
| Accumulated other comprehensive loss | (457,539) | (484,942) | |||||||||
| Treasury stock | (1,958,765) | (1,896,613) | |||||||||
| Total stockholders’ equity | 9,550,223 | 8,730,191 | |||||||||
| Total liabilities and stockholders’ equity | $ | 14,767,639 | $ | 15,023,533 |
See accompanying notes.
AMETEK, Inc.
Consolidated Statement of Stockholders’ Equity
(In thousands)
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Capital stock | |||||||||||||||||||||||
| Common stock, $0.01 par value | |||||||||||||||||||||||
| Balance at the beginning of the period | $ | 2,716 | $ | 2,707 | $ | 2,709 | $ | 2,700 | |||||||||||||||
| Shares issued | 1 | 1 | 8 | 8 | |||||||||||||||||||
| Balance at the end of the period | 2,717 | 2,708 | 2,717 | 2,708 | |||||||||||||||||||
| Capital in excess of par value | |||||||||||||||||||||||
| Balance at the beginning of the period | 1,210,414 | 1,123,920 | 1,168,694 | 1,094 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
The following table sets forth net sales and income by reportable segment and on a consolidated basis:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Electronic Instruments | $ | 1,134,588 | $ | 1,136,130 | $ | 3,444,980 | $ | 3,388,023 | |||||||||||||||
| Electromechanical | 573,976 | 486,707 | 1,734,598 | 1,478,042 | |||||||||||||||||||
| Consolidated net sales | $ | 1,708,564 | $ | 1,622,837 | $ | 5,179,578 | $ | 4,866,065 | |||||||||||||||
| Operating income and income before income taxes: | |||||||||||||||||||||||
| Segment operating income: | |||||||||||||||||||||||
| Electronic Instruments | $ | 338,963 | $ | 335,171 | $ | 1,041,760 | $ | 951,970 | |||||||||||||||
| Electromechanical | 131,519 | 127,534 | 345,312 | 384,253 | |||||||||||||||||||
| Total segment operating income | 470,482 | 462,705 | 1,387,072 | 1,336,223 | |||||||||||||||||||
| Corporate administrative expenses | (24,631) | (24,570) | (76,491) | (73,756) | |||||||||||||||||||
| Consolidated operating income | 445,851 | 438,135 | 1,310,581 | 1,262,467 | |||||||||||||||||||
| Interest expense | (25,118) | (18,386) | (90,962) | (57,678) | |||||||||||||||||||
| Other income (expense), net | (1,888) | (6,256) | (2,435) | (15,313) | |||||||||||||||||||
| Consolidated income before income taxes | $ | 418,845 | $ | 413,493 | $ | 1,217,184 | $ | 1,189,476 |
For the quarter ended September 30, 2024, the Company posted strong orders, sales, and operating income. Contributions from the acquisitions of Amplifier Research Corp. ("Amplifier Research") in October 2023, and Paragon Medical ("Paragon") in December 2023, as well as our Operational Excellence initiatives, all of which had a positive impact on the third quarter of 2024 results. In the first quarter of 2024, the Company recorded pre-tax integration costs related to the Paragon acquisition totaling $29.2 million, of which $22.4 million was employee severance. The integration costs reduced net income by $22.2 million in the year-to-date period. For the first nine months of 2024, EMG experienced customer inventory normalization in our automation and engineered solutions core businesses. The full year impact of the 2023 acquisitions, including the continued integration of Paragon, and focus on and implementation of our Operational Excellence initiatives are expected to have a positive impact on the remainder of our 2024 results.
Results of operations for the third quarter of 2024 compared with the third quarter of 2023
Net sales for the third quarter of 2024 were $1,708.6 million, an increase of $85.8 million or 5.3%, compared with net sales of $1,622.8 million for the third quarter of 2023. The increase in net sales for the third quarter of 2024 was due to a 7% increase from acquisitions, partially offset by a 2% organic sales decline.
Total international sales for the third quarter of 2024 were $813.5 million or 47.6% of net sales, an increase of $81.8 million or 11.2%, compared with international sales of $731.7 million or 45.1% of net sales for the third quarter of 2023. The increase in international sales was primarily driven by strong demand in Europe and Asia as well as contributions from the 2023 acquisitions.
Orders for the third quarter of 2024 were $1,743.4 million, an increase of $192.8 million or 12.4%, compared with $1,550.6 million for the third quarter of 2023. The increase in orders for the third quarter of 2024 was due to a 7% increase from acquisitions, a 2% organic order increase, as well as a 4% favorable effect of foreign currency translation. The Company's backlog of unfilled orders at September 30, 2024 was $3,437.8 million, a decrease of $96.3 million or 2.7% compared with $3,534.1 million at December 31, 2023.
Cost of sales for the third quarter of 2024 was $1,092.8 million or 64.0% of net sales, an increase of $71.9 million or 7.0%, compared with $1,020.9 million or 62.9% of net sales for the third quarter of 2023. The cost of sales increase was primarily due to the net sales increase discussed above.
Segment operating income for the third quarter of 2024 was $470.5 million, an increase of $7.8 million or 1.7%, compared with segment operating income of $462.7 million for the third quarter of 2023. Segment operating margins, as a
percentage of net sales, decreased to 27.5% for the third quarter of 2024, compared with 28.5% for the third quarter of 2023. Segment operating margins were negatively impacted in the third quarter of 2024 by the dilutive impact of the 2023 acquisitions and the effect of foreign currency translation. In the third quarter of 2024, the dilutive impact of recent acquisitions negatively impacted segment operating margins by 100 basis points. Foreign currency exchange headwinds in the third quarter of 2024 negatively impacted margins by 50 basis points. Excluding the dilutive impact of recent acquisitions and the effect of foreign currency translation, segment operating margins increased 50 basis points compared to the third quarter of 2023.
Selling, general and administrative expenses for the third quarter of 2024 were $170.0 million or 9.9% of net sales, an increase of $6.2 million or 3.8%, compared with $163.8 million or 10.1% of net sales for the third quarter of 2023. Selling expenses increased primarily due to the net sales increase discussed above. General and administrative expenses for the third quarter of 2024 were flat at $24.6 million, compared to the third quarter of 2023.
Consolidated operating income was $445.9 million or 26.1% of net sales for the third quarter of 2024, an increase of $7.8 million or 1.8%, compared with $438.1 million or 27.0% of net sales for the third quarter of 2023. Operating margins were negatively impacted in the third quarter of 2024 by the dilutive impact of the 2023 acquisitions and the effect of foreign currency translation. In the third quarter of 2024, the dilutive impact of recent acquisitions negatively impacted operating margins by 90 basis points. Foreign currency exchange headwinds in the third quarter of 2024 negatively impacted margins by 40 basis points. Excluding the dilutive impact of these acquisitions and the effect of foreign currency translation, operating margins increased 40 basis points compared to the third quarter of 2023.
Interest expense for the third quarter of 2024 was $25.1 million, an increase of $6.7 million or 36.6%, compared with $18.4 million for the third quarter of 2023. The increase in the third quarter of 2024 is primarily driven by higher borrowings under the revolving credit facility, related to the 2023 acquisitions.
Other expense, net was $1.9 million for the third quarter of 2024, compared with $6.3 million of other expense, net for the third quarter of 2023. The decrease of $4.4 million of other expense in the third quarter of 2024 includes higher pension income of $1.6 million and lower acquisition-related due diligence expense compared to the third quarter of 2023.
The effective tax rate for the third quarter of 2024 was 18.8%, compared with 17.7% for the third quarter of 2023. The higher tax rate in the third quarter of 2024 primarily reflects higher year over year tax cost on foreign sourced income.
Net income for the third quarter of 2024 was flat at $340.2 million, compared with $340.4 million for the third quarter of 2023.
Diluted earnings per share for the third quarter of 2024 were flat at $1.47, compared with the third quarter of 2023.
Segment Results
EIG**’**s net sales totaled $1,134.6 million for the third quarter of 2024, a decrease of $1.5 million or 0.1%, compared with $1,136.1 million for the third quarter of 2023. The net sales decrease was due to a 2% organic sales decline, offset by a 2% increase from the 2023 acquisitions. The organic sales decrease for the third quarter of 2024 is due to temporary delays in project spending across parts of our EIG business.
EIG’s operating income was $339.0 million for the third quarter of 2024, an increase of $3.8 million or 1.1%, compared with $335.2 million for the third quarter of 2023. EIG’s operating margins were 29.9% of net sales for the third quarter of 2024, compared with 29.5% for the third quarter of 2023. Foreign currency exchange headwinds negatively impacted EIG's operating margins in the third quarter of 2024 by 40 basis points. EIG's operating margins increased in the third quarter of 2024 compared to the third quarter of 2023 due to the continued benefits from the Company's Operational Excellence initiatives.
EMG’s net sales totaled $574.0 million for the third quarter of 2024, an increase of $87.3 million or 17.9%, compared with $486.7 million for the third quarter of 2023. The net sales increase was due to a 21% increase from the recent acquisitions, partially offset by a 3% organic sales decrease. The organic sales decrease for the third quarter of 2024 is due to customer inventory normalization in our automation and engineered solutions core businesses.
EMG’s operating income was $131.5 million for the third quarter of 2024, an increase of $4.0 million or 3.1%, compared with $127.5 million for the third quarter of 2023. EMG’s operating margins were 22.9% of net sales for the third quarter of 2024, compared with 26.2% for the third quarter of 2023. EMG's operating income and operating margins were negatively impacted in the third quarter of 2024 by the dilutive impact of the 2023 acquisitions and the effect of foreign
currency translation. The dilutive impact of recent acquisitions in the third quarter of 2024 negatively impacted EMG's operating margins by 270 basis points. Foreign currency exchange headwinds negatively impacted EMG's margins in the third quarter of 2024 by 50 basis points. Excluding the dilutive impact of the 2023 acquisitions and the effect of foreign currency translation, EMG's operating margins decreased 10 basis points compared to the third quarter of 2023.
Results of operations for the first nine months of 2024 compared with the first nine months of 2023
Net sales for the first nine months of 2024 were $5,179.6 million, an increase of $313.5 million or 6.4%, compared with net sales of $4,866.1 million for the first nine months of 2023. The increase in net sales for the first nine months of 2024 was due to an 8% increase from acquisitions, partially offset by a 2% organic sales decline.
Total international sales for the first nine months of 2024 were $2,426.9 million or 46.9% of net sales, an increase of $120.9 million or 5.2%, compared with international sales of $2,306.0 million or 47.4% of net sales for the first nine months of 2023. The increase in international sales was primarily driven by contributions from the 2023 acquisitions.
Orders for the first nine months of 2024 were $5,083.3 million, an increase of $66.2 million or 1.3%, compared with $5,017.1 million for the first nine months of 2023. The increase in orders for the first nine months of 2024 was due to a 5% increase from acquisitions, partially offset by a 4% organic order decline. The organic orders decrease for the first nine months of 2024 is due to customer inventory normalization in our automation and engineered solutions core businesses.
Cost of sales for the first nine months of 2024 was $3,347.9 million or 64.6% of net sales, an increase of $251.3 million or 8.1%, compared with $3,096.6 million or 63.6% of net sales for the first nine months of 2023. The cost of sales increase was primarily due to the net sales increase discussed above.
Segment operating income for the first nine months of 2024 was $1,387.1 million, an increase of $50.9 million or 3.8%, compared with segment operating income of $1,336.2 million for the first nine months of 2023. Segment operating margins, as a percentage of net sales, decreased to 26.8% for the first nine months of 2024, compared with 27.5% for the first nine months of 2023. Segment operating income and operating margins for the first nine months of 2024 included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 50 basis points. The dilutive impact of the 2023 acquisitions negatively impacted segment operating margins by 140 basis points in the first nine months of 2024. Excluding the dilutive impact of the 2023 acquisitions and the Paragon integration costs, segment operating margins increased 120 basis points compared to the first nine months of 2023, due to the continued benefits from the Company's Operational Excellence initiatives.
Selling, general and administrative expenses for the first nine months of 2024 were $521.1 million or 10.1% of net sales, an increase of $14.1 million or 2.8%, compared with $507.0 million or 10.4% of net sales for the first nine months of 2023. Selling expenses increased primarily due to the net sales increase discussed above. General and administrative expenses for the first nine months of 2024 were $76.5 million, compared with $73.8 million for the first nine months of 2023.
Consolidated operating income was $1,310.6 million or 25.3% of net sales for the first nine months of 2024, an increase of $48.1 million or 3.8%, compared with $1,262.5 million or 25.9% of net sales for the first nine months of 2023.
Interest expense for the first nine months of 2024 was $91.0 million, an increase of $33.3 million or 57.7%, compared with $57.7 million for the first nine months of 2023. The increase in the first nine months of 2024 is primarily driven by higher borrowings under the revolving credit facility, related to the 2023 acquisitions.
Other expense, net was $2.4 million for the first nine months of 2024, compared with $15.3 million of other expense, net for the first nine months of 2023, a decrease of $12.9 million of other expense. The first nine months of 2024 includes $4.7 million of higher pension income, foreign exchange gains of $3.7 million, and lower acquisition-related due diligence expense, compared to the first nine months of 2023.
The effective tax rate for the first nine months of 2024 was 18.8%, compared with 18.4% for the first nine months of 2023. The higher tax rate in the first nine months of 2024 primarily reflects higher year over year tax cost on foreign sourced income.
Net income for the first nine months of 2024 was $988.9 million, an increase of $18.6 million or 1.9%, compared with $970.3 million for the first nine months of 2023.
Diluted earnings per share for the first nine months of 2024 were $4.26, an increase of $0.07 or 1.7%, compared with $4.19 per diluted share for the first nine months of 2023.
Segment Results
**EIG’**s net sales totaled $3,445.0 million for the first nine months of 2024, an increase of $57.0 million or 1.7%, compared with $3,388.0 million for the first nine months of 2023. The net sales increase was due to a 2% increase from acquisitions.
EIG’s operating income was $1,041.8 million for the first nine months of 2024, an increase of $89.8 million or 9.4%, compared with $952.0 million for the first nine months of 2023. EIG’s operating margins were 30.2% of net sales for the first nine months of 2024, compared with 28.1% for the first nine months of 2023. EIG operating margins increased in the first nine months of 2024 compared to the first nine months of 2023, due to the increase in net sales discussed above, as well as continued benefits from the Company's Operational Excellence initiatives.
EMG’s net sales totaled $1,734.6 million for the first nine months of 2024, an increase of $256.6 million or 17.4%, compared with $1,478.0 million for the first nine months of 2023. The net sales increase was due to a 22% increase from acquisitions, partially offset by a 4% organic sales decrease. The organic sales decrease for the first nine months of 2024 is due to customer inventory normalization in our automation and engineered solutions core businesses.
EMG’s operating income was $345.3 million for the first nine months of 2024, a decrease of $39.0 million or 10.1%, compared with $384.3 million for the first nine months of 2023. EMG’s operating margins were 19.9% of net sales for the first nine months of 2024, compared with 26.0% for the first nine months of 2023. EMG's operating income and operating margins for the first nine months of 2024 included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 170 basis points. Segment operating margins were also negatively impacted in the first nine months of 2024 by the dilutive impact of the 2023 acquisitions. Excluding the dilutive impact of the 2023 acquisitions and the Paragon integration costs, segment operating margins decreased 110 basis points compared to the first nine months of 2023, due to the organic sales decrease discussed above.
Financial Condition
Liquidity and Capital Resources
Cash provided by operating activities totaled $1,278.8 million for the first nine months of 2024, an increase of $84.2 million or 7.0%, compared with $1,194.6 million for the first nine months of 2023. The increase in cash provided by operating activities for the first nine months of 2024 was primarily due to higher net income, net of higher noncash depreciation and amortization expense related to recent acquisitions, and improved working capital management.
Free cash flow (cash flow provided by operating activities less capital expenditures) was $1,203.5 million for the first nine months of 2024, compared with $1,118.1 million for the first nine months of 2023. EBITDA (earnings before interest, income taxes, depreciation and amortization) was $1,590.5 million for the first nine months of 2024, compared with $1,488.3 million for the first nine months of 2023. Free cash flow and EBITDA are presented because the Company is aware that they are measures used by third parties in evaluating the Company.
Cash used by investing activities totaled $69.5 million for the first nine months of 2024, compared with cash used by investing activities of $326.3 million for the first nine months of 2023. For the first nine months of 2023, the Company paid $246.7 million, net of cash acquired, to purchase United Electronic Industries and Bison Gear & Engineering Corp. For the first nine months of 2024, the Company received $4.2 million from the sale of a facility. Additions to property, plant and equipment totaled $75.4 million for the first nine months of 2024, compared with $76.5 million for the first nine months of 2023.
Cash used by financing activities totaled $1,228.4 million for the first nine months of 2024, compared with cash used by financing activities of $364.8 million for the first nine months of 2023. At September 30, 2024, total debt, net was $2,336.5 million, compared with $3,313.3 million at December 31, 2023. For the first nine months of 2024, total borrowings decreased by $998.1 million compared with a $220.6 million decrease for the first nine months of 2023. At September 30, 2024, the Company had available borrowing capacity of $2,520.3 million under its revolving credit facility, including the $700 million accordion feature.
In the third quarter of 2024, the Company paid in full, at maturity, a $300 million in aggregate principal amount of 3.73% senior notes. The debt-to-capital ratio was 19.7% at September 30, 2024, compared with 27.5% at December 31, 2023.
The net debt-to-capital ratio (total debt, net less cash and cash equivalents divided by the sum of net debt and stockholders’ equity) was 16.9% at September 30, 2024, compared with 25.0% at December 31, 2023. The net debt-to-capital ratio is presented because the Company is aware that this measure is used by third parties in evaluating the Company.
Additional financing activities for the first nine months of 2024 included cash dividends paid of $194.1 million, compared with $172.7 million for the first nine months of 2023. Effective February 9, 2024, the Company’s Board of Directors approved a 12% increase in the quarterly cash dividend on the Company’s common stock to $0.28 per common share from $0.25 per common share. The Company repurchased $68.0 million of its common stock for the first nine months of 2024, compared with $6.6 million for the first nine months of 2023. Proceeds from stock option exercises were $39.7 million for the first nine months of 2024, compared with $40.1 million for the first nine months of 2023.
As a result of all of the Company’s cash flow activities for the first nine months of 2024, cash and cash equivalents at September 30, 2024 totaled $396.3 million, compared with $409.8 million at December 31, 2023. At September 30, 2024, the Company had $365.2 million in cash outside the United States, compared with $375.9 million at December 31, 2023. The Company utilizes this cash to fund its international operations, as well as to acquire international businesses. The Company is in compliance with all covenants, including financial covenants, for all of its debt agreements. The Company believes it has sufficient cash-generating capabilities from domestic and unrestricted foreign sources, available credit facilities and access to long-term capital funds to enable it to meet its operating needs and contractual obligations in the foreseeable future.
Critical Accounting Policies
The Company’s critical accounting policies are detailed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition of its Annual Report on Form 10-K for the year ended December 31, 2023. Primary disclosure of the Company’s significant accounting policies is also included in Note 1 to the Consolidated Financial Statements included in Part II, Item 8 of its Annual Report on Form 10-K.
Forward-Looking Information
Information contained in this discussion, other than historical information, is considered “forward-looking statements” and is subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include risks related to the Company’s ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations, including supply chain disruptions; the Company’s ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in the Company’s markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries the Company serves. A detailed discussion of these and other factors that may affect the Company’s future results is contained in AMETEK’s filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q, and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements, unless required by the securities laws to do so.
Item 4. Controls and Procedures
The Company maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management in a timely manner. Under the supervision and with the participation of our management, including the Company’s principal executive officer and principal financial officer, we have evaluated the effectiveness of our system of disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of September 30, 2024. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective at the reasonable assurance level.
Such evaluation did not identify any change in the Company’s internal control over financial reporting during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(c) Purchase of equity securities by the issuer and affiliated purchasers.
The following table reflects purchases of AMETEK, Inc. common stock by the Company during the three months ended September 30, 2024:
| Period | Total Number of Shares Purchased (1)(2) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan | |||||||||||||||||||
| July 1, 2024 to July 31, 2024 | — | $ | — | — | $ | 808,535,864 | |||||||||||||||||
| August 1, 2024 to August 31, 2024 | 310,843 | 162.13 | 310,843 | 758,140,398 | |||||||||||||||||||
| September 1, 2024 to September 30, 2024 | 60,902 | 164.28 | 60,902 | 748,135,553 | |||||||||||||||||||
| Total | 371,745 | $ | 162.48 | 371,745 |
(1) Represents shares surrendered to the Company to satisfy tax withholding obligations in connection with employees’ share-based compensation awards.
(2) Consists of the number of shares purchased pursuant to the Company’s Board of Directors $1 billion authorization for the repurchase of its common stock announced in May 2022. Such purchases may be effected from time to time in the open market or in private transactions, subject to market conditions and at management’s discretion.
Item 5. Other Information
Insider Trading Arrangements and Policies
During the quarter ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits
| Exhibit Number | Description | |||||||
| 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. | |||||||
| 101.INS* | XBRL Instance Document. | |||||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
- Filed electronically herewith.
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. | ||||||||
| By: | /s/ THOMAS M. MONTGOMERY | |||||||
| Thomas M. Montgomery | ||||||||
| Senior Vice President – Comptroller | ||||||||
| (Principal Accounting Officer) | ||||||||
| October 31, 2024 |