Ametek 10-Q 2025-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)

For the quarterly period ended March 31, 2025

OR

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, a 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.

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:

The number of shares of the registrant’s common stock outstanding as of the latest practicable date was: Common Stock, $0.01 Par Value, outstanding at April 23, 2025 was 230,878,978 shares.

AMETEK, Inc.

Form 10-Q

Table of Contents

PART I. FINANCIAL INFORMATION

AMETEK, Inc.

Consolidated Statement of Income

(In thousands, except per share amounts)

(Unaudited)

See accompanying notes.

AMETEK, Inc.

Condensed Consolidated Statement of Comprehensive Income

(In thousands)

(Unaudited)

See accompanying notes.

AMETEK, Inc.

Consolidated Balance Sheet

(In thousands)

See accompanying notes.

AMETEK, Inc.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)

Showing the first 8K of 70K characters. Open the full section

Recent Trends

In recent months, the United States government announced additional tariffs and trade restrictions on goods imported into the U.S. from various nations. In response, some nations countered with or are considering reciprocal tariffs and other actions. The U.S. government is negotiating with several of these nations regarding the tariffs, however, the outcome of these negotiations is still uncertain. With this uncertainty, the likelihood of project delays and slowing demand has also increased, particularly within China. As the situation continues to evolve, we cannot be certain of the outcome, which could adversely impact demand for our products, costs, inflation, customers, suppliers, and the overall global economy. We continue to monitor and analyze the impacts of the tariffs and will implement appropriate actions as necessary to attempt to mitigate their effects.

Results of Operations

For the quarter ended March 31, 2025, the Company posted strong orders, operating income, and operating margins. Contributions from the acquisitions of Virtek Vision International ("Virtek") in October 2024 and Kern Microtechnik ("Kern") in January 2025 as well as our Operational Excellence initiatives had a positive impact on the first quarter of 2025 results.

Results of operations for the first quarter of 2025 compared with the first quarter of 2024

Net sales for the first quarter of 2025 were $1,732.0 million, a decrease of $4.2 million or 0.2%, compared with net sales of $1,736.2 million for the first quarter of 2024. The decrease in net sales for the first quarter of 2025 was due to a 1% organic sales decline, partially offset by a 1% increase from acquisitions.

Total international sales for the first quarter of 2025 were $804.4 million or 46.4% of net sales, a decrease of $19.0 million or 2.3%, compared with international sales of $823.4 million or 47.4% of net sales for the first quarter of 2024. The decrease in international sales was primarily driven by lower demand in Europe and Asia.

Orders for the first quarter of 2025 were $1,797.8 million, an increase of $135.1 million or 8.1%, compared with $1,662.7 million for the first quarter of 2024. The increase in orders for the first quarter of 2025 was due to a 3% organic order increase, a 3% increase from acquisitions, as well as a 2% favorable effect of foreign currency translation. The Company's backlog of unfilled orders at March 31, 2025 was $3,469.1 million, an increase of $65.9 million or 1.9% compared with $3,403.2 million at December 31, 2024.

Cost of sales for the first quarter of 2025 was $1,107.0 million or 63.9% of net sales, a decrease of $37.7 million or 3.3%, compared with $1,144.7 million or 65.9% of net sales for the first quarter of 2024. Cost of sales for the first quarter of 2024 included $29.2 million of Paragon integrations costs, of which $22.4 million is employee severance. Excluding the impact of the Paragon integration costs, the cost of sales for the first quarter of 2024 was 64.2%.

Segment operating income for the first quarter of 2025 was $482.8 million, an increase of $39.2 million or 8.8%, compared with segment operating income of $443.6 million for the first quarter of 2024. Segment operating margins, as a percentage of net sales, increased to 27.9% for the first quarter of 2025, compared with 25.6% for the first quarter of 2024. In the first quarter of 2025, the dilutive impact of recent acquisitions negatively impacted segment operating margins by 30 basis points. In the first quarter of 2024, segment operating income and operating margins included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 160 basis points. Excluding the dilutive impact of recent acquisitions and the Paragon integration costs, segment operating margins increased 100 basis points compared to the first quarter of 2024 due to the continued benefits from the Company's Operational Excellence initiatives.

Selling, general and administrative expenses for the first quarter of 2025 were $170.2 million or 9.8% of net sales, a decrease of $4.1 million or 2.4%, compared with $174.3 million or 10.0% of net sales for the first quarter of 2024.

Consolidated operating income was $454.8 million or 26.3% of net sales for the first quarter of 2025, an increase of $37.6 million or 9.0%, compared with $417.2 million or 24.0% of net sales for the first quarter of 2024. In the first quarter of 2025, the dilutive impact of recent acquisitions negatively impacted operating margins by 30 basis points. In the first quarter of 2024, operating income and operating margins included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted operating margins by 170 basis points. Excluding the dilutive impact of acquisitions and the Paragon integration costs, operating margins increased 90 basis points compared to the first quarter of 2024 due to the continued benefits from the Company's Operational Excellence initiatives.

Interest expense for the first quarter of 2025 was $19.0 million, a decrease of $16.3 million or 46.1%, compared with $35.3 million for the first quarter of 2024. Higher borrowings under the revolving credit facility related to the Paragon acquisition resulted in higher interest expense in the first quarter of 2024.

Other expense, net was $1.6 million for the first quarter of 2025, compared with $0.6 million of other expense, net for the first quarter of 2024.

The effective tax rate for the first quarter of 2025 was 19.0%, compared with 18.5% for the first quarter of 2024. The higher tax rate is primarily due to higher state income taxes and U.S. taxes on foreign earnings.

Net income for the first quarter of 2025 was $351.8 million, an increase of $40.9 million or 13.1%, compared with $310.9 million for the first quarter of 2024.

Diluted earnings per share for the first quarter of 2025 were $1.52, an increase of $0.18 or 13.4%, compared with $1.34 per diluted share for the first quarter of 2024.

Segment Results

EIG**’**s net sales totaled $1,143.7 million for the first quarter of 2025, a decrease of $13.1 million or 1.1%, compared with $1,156.8 million for the first quarter of 2024. The net sales decrease was due to a 2% organic sales decline as well as a 1% unfavorable effect of foreign currency translation, partially offset by a 2% increase from recent acquisitions.

EIG’s operating income was $354.1 million for the first quarter of 2025, an increase of $1.2 million or 0.3%, compared with $352.9 million for the first quarter of 2024. EIG’s operating margins were 31.0% of net sales for the first quarter of 2025, compared with 30.5% for the first quarter of 2024. The dilutive impact of recent acquisitions in the first quarter of 2025 negatively impacted EIG's operating margins by 60 basis points. Excluding the dilutive impact of recent acquisitions, EIG's operating margins increased 110 basis points in the first quarter of 2025 compared to the first quarter of 2024 due to the continued benefits from the Company's Operational Excellence initiatives.

EMG’s net sales totaled a record $588.3 million for the first quarter of 2025, an increase of $8.9 million or 1.5%, compared with $579.4 million for the first quarter of 2024. The net sales increase was due to a 2% organic sales increase, partially offset by an unfavorable effect of foreign currency translation.

EMG’s operating income was $128.7 million for the first quarter of 2025, an increase of $38.0 million or 41.9%, compared with $90.7 million for the first quarter of 2024. EMG’s operating margins were 21.9% of net sales for the first quarter of 2025, compared with 15.7% for the first quarter of 2024. In the first quarter of 2024 EMG's operating income and operating margins included $29.2 million of integration costs related to the Paragon acquisition, which negatively impacted segment operating margins by 500 basis points. Excluding the Paragon integration costs, EMG's operating margins increased 120 basis points compared to the first quarter of 2024 due to the continued benefits from the Company's Operational Excellence initiatives.

Financial Condition

Liquidity and Capital Resources

Cash provided by operating activities totaled $417.5 million for the first three months of 2025, an increase of $7.3 million or 1.8%, compared with $410.2 million for the first three months of 2024. The increase in cash provided by operating activities for the first three months of 2025 was primarily due to higher net income, partially offset by higher working capital investments.

Free cash flow (cash flow provided by operating activities less capital expenditures) was $394.5 million for the first three months of 2025, compared with $382.6 million for the first three months of 2024. EBITDA (earnings before interest, income taxes, depreciation and amortization) was $558.5 million for the first three months of 2025, compared with $512.8 million for the first three months of 2024. 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 $125.7 million for the first three months of 2025, compared with cash used by investing activities of $21.4 million for the first three months of 2024. For the first three months of 2025, the Company paid $103.2 million, net of cash acquired, to purchase Kern Microtechnik ("Kern"). For the first three months of 2024, the Company

received $4.2 million from the sale of a facility. Additions to property, plant and equipment totaled $23.1 million for the first three months of 2025, compared with $27.7 million for the first three months of 2024.

Cash used by financing activities totaled $277.7 million for the first three months of 2025, compared with cash used by financing activities of $417.5 million for the first three months of 2024. At March 31, 2025, total debt, net was $1,931.0 million, compared with $2,079.7 million at December 31, 2024. For the first three months of 2025, total borrowings decreased by $185.1 million compared with a $363.1 million decrease for the first three months of 2024. At March 31, 2025, the Company had available borrowing capacity of $2,207.1 million under its revolving credit facility, excluding the $700 million accordion feature.

The debt-to-capital ratio was 16.2% at March 31, 2025, compared with 17.7% at December 31, 2024. 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 13.3% at March 31, 2025, compared with 15.0% at December 31, 2024. 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 three months of 2025 included cash dividends paid of $71.5 million, compared with $64.7 million for the first three months of 2024. Effective February 7, 2025, the Company’s Board of Directors approved an 11% increase in the quarterly cash dividend on the Company’s common stock to $0.31 per common share from $0.28 per common share. The Company repurchased $18.0 million of its common stock for the first three months of 2025, compared with $6.9 million for the first three months of 2024. Proceeds from stock option exercises were $4.7 million for the first three months of 2025, compared with $23.6 million for the first three months of 2024.

As a result of all of the Company’s cash flow activities for the first three months of 2025, cash and cash equivalents at March 31, 2025 totaled $399.0 million, compared with $374.0 million at December 31, 2024. At March 31, 2025, the Company had $345.9 million in cash outside the United States, compared with $361.5 million at December 31, 2024. 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, 2024. 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; tariffs, trade disputes and currency conditions; 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.

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 March 31, 2025. 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 March 31, 2025 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 March 31, 2025:

(1) Represents shares surrendered to the Company to satisfy tax withholding obligations in connection with employees’ share-based compensation awards.

(2) Effective February 7, 2025, the Company's Board of Directors approved a $1.25 billion share repurchase

authorization. This new authorization replaces the previous $1 billion share repurchase authorization approved in

May 2022. Consists of the number of shares purchased pursuant to the Company’s Board of Directors $1.25 billion authorization for the repurchase of its common stock. 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.

Insider Trading Arrangements and Policies

During the quarter ended March 31, 2025, 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.

• 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.