Executive Appointment - AMETEK Inc announced the appointment of Dalip M Puri as Executive Vice President and Chief Financial Officer effective April 2 2024 [1] - Mr Puri will replace William J Burke who is retiring after 36 years with the company [1] - Mr Puri currently serves as Senior Vice President Operational Finance and has held various leadership roles within AMETEK since joining in 2017 [1] Executive Background - Mr Puri was promoted to Senior Vice President Operational Finance in September 2023 after being named Vice President Operational Finance in July 2023 [1] - Prior to AMETEK Mr Puri held positions at Chemtura Corporation Delphi Corporation and Hewitt Associates [1] - Mr Puri holds a Bachelor of Commerce in Finance degree from Concordia University and a Master of Business Administration degree from the University of Western Ontario [2] Company Overview - AMETEK is a leading global provider of industrial technology solutions with annual sales over $6 0 billion [3] - The company follows the AMETEK Growth Model which integrates Four Growth Strategies: Operational Excellence New Product Development Global and Market Expansion and Strategic Acquisitions [3] - AMETEK aims for double-digit percentage growth in earnings per share over the business cycle and a superior return on total capital [3] - Founded in 1930 AMETEK has been listed on the NYSE for over 90 years and is a component of the S&P 500 [3]

Core Insights - AMETEK, Inc. announced the retirement of William J. Burke, Executive Vice President and Chief Financial Officer, effective April 2, 2024, after 36 years with the company [1][2] - Dalip M. Puri, currently Senior Vice President of Operational Finance, has been appointed to succeed Mr. Burke [1] - Mr. Burke will continue to serve as a Senior Advisor until April 2025 to facilitate a smooth transition [1] Company Overview - AMETEK, Inc. is a leading global provider of industrial technology solutions with annual sales exceeding $6.0 billion [3] - The company employs a Growth Model that integrates four strategies: Operational Excellence, New Product Development, Global and Market Expansion, and Strategic Acquisitions, focusing on cash generation and capital deployment [3] - AMETEK aims for double-digit percentage growth in earnings per share over the business cycle and seeks a superior return on total capital [3] - Founded in 1930, AMETEK has been listed on the NYSE for over 90 years and is a component of the S&P 500 [3]

Ametek (AME) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing earnings picture is a ...

Investors interested in stocks from the Electronics - Testing Equipment sector have probably already heard of Ametek (AME) and Teradyne (TER) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnin ...

Fischerrx6Introduction As we rapidly head toward a new year, I want to introduce a new stock I just put on my watchlist. As most of my readers probably know, I have massive industrial exposure. 53% of my portfolio consists of stocks operating in the industrial sector. While close to half of this exposure consists of anti-cyclical defense contractors, it's fair to say that I really like this sector. The stock I'm presenting in this article is also an industrial stock. It's a company I have never discus ...

AMETEK, Inc. (NYSE:AME) Q3 2023 Earnings Conference Call October 31, 2023 8:30 AM ET Company Participants Kevin Coleman - VP, IR & Treasurer Dave Zapico - Chairman and CEO William Burke - EVP and CFO Conference Call Participants Deane Dray - RBC Capital Markets Matt Summerville - D.A. Davidson Allison Poliniak - Wells Fargo Jeffrey Sprague - Vertical Research Partners Scott Graham - Seaport Research Partners Nigel Coe - Wolfe Research Christopher Glynn - Oppenheimer Peter Costa - Mizuho David Ridley-Lane - ...

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, 2023 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 ...

Financial Data and Key Metrics Changes - AMETEK reported second quarter sales of $1.65 billion, a 9% increase compared to the same period in 2022, with organic sales growth of 5% and acquisitions contributing 4% [6][14] - Operating income reached a record $419 million, up 15% year-over-year, with operating margins at 25.4%, an increase of 130 basis points from the previous year [6][19] - Earnings per diluted share were $1.57, a 14% increase from the second quarter of 2022, exceeding the guidance range [7][14] - EBITDA was a record $496 million, up 12% year-over-year, with EBITDA margins at 30.1% [6][19] Business Line Data and Key Metrics Changes - The Electronic Instruments Group (EIG) achieved sales of $1.13 billion, up 10% year-over-year, with organic sales growth of 8% [7][8] - The Electromechanical Group (EMG) reported sales of $511 million, a 5% increase, driven by the acquisition of Bison Engineering, with organic sales remaining flat [8][9] - EIG's operating income was $307 million, up 16% year-over-year, while EMG's operating income was $136 million, a 10% increase [8][9] Market Data and Key Metrics Changes - The U.S. market saw mid-single-digit growth, with notable strength in process and aerospace and defense businesses [34] - Europe experienced high single-digit growth, particularly in process and power businesses [34] - Asia's growth was up 3%, with strong performance in process [35] Company Strategy and Development Direction - AMETEK is focused on organic growth initiatives and strategic acquisitions, with over $100 million expected to be spent on growth investments in 2023 [10][12] - The company aims to leverage its strong cash flow for strategic acquisitions, maintaining a robust acquisition pipeline [13] - AMETEK's businesses are positioned in attractive niche markets aligned with long-term growth drivers such as electrification and clean energy [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties, increasing earnings guidance for the full year [14][19] - The company anticipates overall sales growth in the mid- to high single digits for 2023, with diluted earnings per share expected to be in the range of $6.18 to $6.26 [14][19] - Management noted that while order growth may normalize, the backlog remains strong, providing confidence for the remainder of the year [22][23] Other Important Information - AMETEK's effective tax rate for the second quarter was 18.2%, slightly down from 18.5% in the previous year [17] - Capital expenditures for the second quarter were $28 million, with expectations of approximately $145 million for the full year [18] - Operating cash flow was $335 million, up 42% from the prior year, with free cash flow at $307 million, up 47% [19] Q&A Session Summary Question: Could you talk about order trends and any short-term headwinds? - Management indicated that overall demand remains solid, with a record backlog of $3.44 billion and a positive book-to-bill ratio of 1.01 [22][23] Question: What is holding back the acquisition pipeline? - Management stated that the pipeline remains strong, with a disciplined approach to high-quality deals expected to be active in the second half of the year [25] Question: Can you provide insights on the performance of different business segments? - Management reported strong growth across the Process segment, Aerospace and Defense, and Power & Industrial, with expectations for continued mid-single-digit organic growth [28][30] Question: How is the normalization of inventory levels impacting the automation business? - Management expects the normalization to last a couple of quarters, with significant impacts on the automation business due to inventory corrections [33] Question: What is the outlook for pricing and cost management? - Management indicated that pricing has more than offset inflation, with a positive spread of approximately 100 basis points [40] Question: How is the medical technology sector performing? - Management noted strong growth in the medical business, despite some inventory destocking in the automation segment [62]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides AMETEK's unaudited consolidated financial statements and management's analysis for Q2 and 6M 2023 [Item 1. Financial Statements](index=3&type=section&id=Item%201.Financial%20Statements) This section presents AMETEK's unaudited consolidated financial statements and detailed notes for Q2 and 6M 2023 and 2022 [Consolidated Statement of Income](index=3&type=section&id=Consolidated%20Statement%20of%20Income) This statement details AMETEK's net sales, operating income, net income, and earnings per share for Q2 and 6M 2023 and 2022 Consolidated Statement of Income Highlights (In thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |:----------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Net sales | $1,646,111 | $1,514,552 | $3,243,228 | $2,973,077 | | Operating income | $418,791 | $364,842 | $824,332 | $718,082 | | Income before income taxes | $396,384 | $346,465 | $775,983 | $682,687 | | Net income | $324,242 | $282,373 | $629,954 | $554,820 | | Basic earnings per share | $1.41 | $1.23 | $2.74 | $2.40 | | Diluted earnings per share | $1.40 | $1.22 | $2.72 | $2.39 | | Dividends declared per share| $0.25 | $0.22 | $0.50 | $0.44 | [Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents AMETEK's total comprehensive income for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statement of Comprehensive Income (In thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |:---------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Total comprehensive income | $350,692 | $222,033 | $682,903 | $479,334 | [Consolidated Balance Sheet](index=5&type=section&id=Consolidated%20Balance%20Sheet) This statement provides AMETEK's financial position, including assets, liabilities, and equity, as of June 30, 2023, and December 31, 2022 Consolidated Balance Sheet Highlights (In thousands) | Asset/Liability/Equity | June 30, 2023 (Unaudited) | December 31, 2022 | |:-----------------------------------|:--------------------------|:------------------| | **ASSETS** | | | | Cash and cash equivalents | $605,587 | $345,386 | | Total current assets | $2,899,555 | $2,528,058 | | Goodwill | $5,449,590 | $5,372,562 | | Total assets | $12,839,851 | $12,431,120 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $1,341,190 | $1,564,202 | | Long-term debt, net | $2,186,299 | $2,158,928 | | Total liabilities | $4,758,480 | $4,954,608 | | Total stockholders' equity | $8,081,371 | $7,476,512 | [Consolidated Statement of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Stockholders'%20Equity) This statement details changes in AMETEK's stockholders' equity for the six months ended June 30, 2023 and 2022 Consolidated Statement of Stockholders' Equity Highlights (In thousands) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |:--------------------------------------|:-------------------------------|:-------------------------------| | Common stock, end of period | $2,707 | $2,695 | | Capital in excess of par value, end of period | $1,123,920 | $1,040,951 | | Retained earnings, end of period | $9,372,368 | $8,353,735 | | Accumulated other comprehensive loss, end of period | $(521,996) | $(545,930) | | Treasury stock, end of period | $(1,895,628) | $(1,901,360) | | Total stockholders' equity, end of period | $8,081,371 | $6,950,091 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement outlines AMETEK's cash flows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Condensed Consolidated Statement of Cash Flows Highlights (In thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |:----------------------------------|:-------------------------------|:-------------------------------| | Cash provided by operating activities | $721,783 | $437,237 | | Cash used for investing activities | $(149,987) | $(41,033) |\n| Cash used for financing activities | $(317,091) | $(370,393) | | Increase in cash and cash equivalents | $260,201 | $1,881 | | Cash and cash equivalents, end of period | $605,587 | $348,653 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements [1. Basis of Presentation](index=9&type=section&id=1.%20Basis%20of%20Presentation) This note describes the accounting principles and assumptions used in preparing the unaudited interim financial statements - The unaudited consolidated financial statements include all necessary adjustments for fair presentation, with quarterly results not indicative of full-year performance[21](index=21&type=chunk) [2. Revenues](index=9&type=section&id=2.%20Revenues) This note details AMETEK's revenue recognition policies, contract assets and liabilities, and sales by geographic area and product Contract Assets and Liabilities (In thousands) | Metric | June 30, 2023 | January 1, 2023 | |:-----------------------------|:--------------|:----------------| | Contract assets – June 30 | $137,444 | $119,741 | | Contract liabilities – June 30 | $443,768 | $398,692 | | Net change | $(27,373) | $(28,482) | - Net change in contract liabilities for 6M 2023 was driven by advance payments, with **$268.0 million** revenue recognized from beginning contract liabilities[23](index=23&type=chunk) - Remaining performance obligations increased to **$573.0 million** at June 30, 2023, expected to be satisfied within two to three years[24](index=24&type=chunk) Consolidated Net Sales by Geographic Area (In thousands) | Geographic Area | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |:---------------------------|:---------------------------------|:-------------------------------| | United States | $859,892 | $1,668,907 | | Total International Sales | $786,219 | $1,574,321 | | **Consolidated Net Sales** | **$1,646,111** | **$3,243,228** | Consolidated Net Sales by Major Products and Services (In thousands) | Product/Service | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |:-----------------------------------|:---------------------------------|:-------------------------------| | Process and analytical instrumentation | $798,667 | $1,593,100 | | Aerospace and power | $485,771 | $951,635 | | Automation and engineered solutions| $361,673 | $698,493 | | **Consolidated Net Sales** | **$1,646,111** | **$3,243,228** | Timing of Revenue Recognition (In thousands) | Timing of Recognition | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |:----------------------------------|:---------------------------------|:-------------------------------| | Products transferred at a point in time | $1,400,552 | $2,749,461 | | Products and services transferred over time | $245,559 | $493,767 | | **Consolidated Net Sales** | **$1,646,111** | **$3,243,228** | Changes in Accrued Product Warranty Obligation (In thousands) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |:-------------------------------------------|:-------------------------------|:-------------------------------| | Balance at the beginning of the period | $26,487 | $27,478 | | Accruals for warranties issued | $9,397 | $5,143 | | Settlements made | $(7,289) | $(6,023) | | Warranty accruals related to acquired businesses and other | $244 | $(632) | | Balance at the end of the period | $28,839 | $25,966 | - Accounts receivable, net of allowances, totaled **$936.9 million** at June 30, 2023, with immaterial changes in credit loss allowance[37](index=37&type=chunk) [3. Earnings Per Share](index=12&type=section&id=3.%20Earnings%20Per%20Share) This note provides the calculation of basic and diluted earnings per share, including weighted average shares outstanding Weighted Average Shares for EPS Calculation (In thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |:----------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Basic shares | 230,478 | 230,100 | 230,302 | 230,790 | | Equity-based compensation plans | 783 | 1,147 | 943 | 1,366 | | Diluted shares | 231,261 | 231,247 | 231,245 | 232,156 | [4. Fair Value Measurements](index=12&type=section&id=4.%20Fair%20Value%20Measurements) This note describes the Company's fair value hierarchy and measurements for financial assets and liabilities - The Company employs a three-level valuation hierarchy for fair value measurements, categorizing inputs as Level 1, 2, or 3[41](index=41&type=chunk) Fair Value Hierarchy (In thousands) | Asset/Liability | June 30, 2023 Total | June 30, 2023 Level 1 | June 30, 2023 Level 2 | June 30, 2023 Level 3 | |:---------------------------------|:--------------------|:----------------------|:----------------------|:----------------------| | Mutual fund investments | $10,539 | $10,539 | — | — | | Foreign currency forward contracts | $(476) | — | $(476) | — | | Long-term debt (including current portion) | $(2,033,991) | — | — | $(2,033,991) | - Long-term debt is a Level 3 liability, valued using comparable market data due to its private nature and lack of public market[47](index=47&type=chunk) [5. Hedging Activities](index=13&type=section&id=5.%20Hedging%20Activities) This note explains the Company's use of long-term borrowings as net investment hedges to mitigate foreign currency risks - British-pound and Euro-denominated long-term borrowings totaling **$260.5 million** and **$584.1 million** respectively, serve as net investment hedges[48](index=48&type=chunk)[49](index=49&type=chunk) - Pre-tax currency remeasurement losses of **$24.9 million** from hedges were included in other comprehensive income for 6M 2023[49](index=49&type=chunk) [6. Inventories, net](index=13&type=section&id=6.%20Inventories%2C%20net) This note provides a breakdown of AMETEK's inventory components, including finished goods, work in process, and raw materials Inventories, Net (In thousands) | Category | June 30, 2023 | December 31, 2022 | |:--------------------------|:--------------|:------------------| | Finished goods and parts | $124,959 | $130,989 | | Work in process | $151,875 | $138,043 | | Raw materials and purchased parts | $830,990 | $775,252 | | **Total inventories, net**| **$1,107,824**| **$1,044,284** | [7. Leases](index=14&type=section&id=7.%20Leases) This note outlines the Company's operating lease commitments for facilities, vehicles, and equipment, and related costs - Operating lease commitments for facilities, vehicles, and equipment have a weighted average remaining term of approximately **5 years**[52](index=52&type=chunk) Total Lease Cost (In thousands) | Lease Cost Component | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |:---------------------|:---------------------------------|:-------------------------------| | Operating lease cost | $15,905 | $30,582 | | Variable lease cost | $2,716 | $5,946 | | **Total lease cost** | **$18,621** | **$36,528** | Lease Liabilities (In thousands) | Lease Liability Category | June 30, 2023 | December 31, 2022 | |:-------------------------|:--------------|:------------------| | Right of use assets, net | $171,616 | $170,295 | | Total lease liabilities | $175,715 | $175,593 | [8. Acquisitions](index=14&type=section&id=8.%20Acquisitions) This note details the acquisition of Bison Gear & Engineering Corp. and its impact on the Company's financial statements - AMETEK acquired Bison Gear & Engineering Corp. for **$99.3 million** in March 2023, integrating it into the EMG segment[56](index=56&type=chunk) Bison Acquisition Purchase Price Allocation (In millions) | Asset Category | Allocated Amount | |:--------------------------------|:-----------------| | Property, plant and equipment | $10.1 | | Goodwill | $23.5 | | Other intangible assets | $52.8 | | Net working capital and other | $12.9 | | **Total cash paid** | **$99.3** | - Bison acquisition goodwill of **$23.5 million** is tax deductible, with **$52.8 million** in other intangible assets, including **$8.8 million** in trade names[59](index=59&type=chunk)[60](index=60&type=chunk) - The Bison acquisition had an immaterial impact on net sales, net income, and diluted EPS for Q2 and 6M 2023[61](index=61&type=chunk) [9. Goodwill](index=15&type=section&id=9.%20Goodwill) This note outlines changes in goodwill by segment, including acquisitions, purchase price adjustments, and currency translation Changes in Goodwill by Segment (In millions) | Segment/Adjustment | EIG | EMG | Total | |:----------------------------------|:--------|:--------|:--------| | Balance at December 31, 2022 | $4,236.1| $1,136.5| $5,372.6| | Goodwill acquired from 2023 acquisitions | — | $23.5 | $23.5 | | Purchase price allocation adjustments and other | $25.4 | — | $25.4 | | Foreign currency translation adjustments | $16.9 | $11.2 | $28.1 | | **Balance at June 30, 2023** | **$4,278.4**| **$1,171.2**| **$5,449.6**| [10. Income Taxes](index=16&type=section&id=10.%20Income%20Taxes) This note discusses the Company's income tax provisions, uncertain tax benefits, and effective tax rate - Gross uncertain tax benefits totaled **$191.1 million** at June 30, 2023, with **$140.3 million** potentially impacting the effective tax rate[66](index=66&type=chunk) Reconciliation of Liability for Uncertain Tax Positions (In millions) | Metric | Amount | |:---------------------------------|:-------| | Balance at December 31, 2022 | $174.7 | | Additions for tax positions | $16.4 | | Reductions for tax positions | — | | **Balance at June 30, 2023** | **$191.1** | - The effective tax rate for Q2 2023 was **18.2%**, a decrease from 18.5% in Q2 2022, due to foreign tax credit utilization[68](index=68&type=chunk) [11. Share-Based Compensation](index=16&type=section&id=11.%20Share-Based%20Compensation) This note details the Company's share-based compensation plans, including stock options, restricted stock, and PRSUs Total Pre-Tax Share-Based Compensation Expense (In thousands) | Compensation Type | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |:----------------------------------|:---------------------------------|:-------------------------------| | Stock option expense | $3,596 | $7,180 | | Restricted stock expense | $5,257 | $10,297 | | Performance restricted stock unit expense | $3,728 | $5,383 | | **Total pre-tax expense** | **$12,581** | **$22,860** | Stock Option Activity Summary (In thousands, except price and years) | Metric | Shares | Weighted Average Exercise Price | |:-------------------------------------|:-------|:--------------------------------| | Outstanding at December 31, 2022 | 3,060 | $79.46 | | Granted | 453 | $138.46 | | Exercised | (457) | $70.55 | | Forfeited | (51) | $122.05 | | **Outstanding at June 30, 2023** | **3,005**| **$99.43** | | Exercisable at June 30, 2023 | 2,070 | $83.59 | - Expected future pre-tax compensation expense for non-vested stock options was **$25.6 million** at June 30, 2023, over two years[75](index=75&type=chunk) Non-Vested Restricted Stock Activity Summary (In thousands, except value) | Metric | Shares | Weighted Average Grant Date Fair Value | |:-------------------------------------------|:-------|:---------------------------------------| | Non-vested restricted stock outstanding at December 31, 2022 | 356 | $117.18 | | Granted | 154 | $138.60 | | Vested | (155) | $104.06 | | Forfeited | (21) | $125.89 | | **Non-vested restricted stock outstanding at June 30, 2023** | **334** | **$132.59** | - Expected future pre-tax compensation expense for non-vested restricted shares was **$34.7 million** at June 30, 2023, over two years[77](index=77&type=chunk) - PRSUs granted in March 2023 vest over three years, valued based on financial targets and a Monte Carlo model for market conditions[79](index=79&type=chunk)[80](index=80&type=chunk) Non-Vested Performance Restricted Stock Activity Summary (In thousands, except value) | Metric | Shares | Grant Date Fair Value | |:-------------------------------------------|:-------|:----------------------| | Non-vested performance restricted stock outstanding at December 31, 2022 | 275 | $101.98 | | Granted | 79 | $138.46 | | Performance assumption change | 48 | $63.37 | | Vested | (161) | $63.37 | | Forfeited | (2) | $131.67 | | **Non-vested performance restricted stock outstanding at June 30, 2023** | **239** | **$131.90** | - Expected future pre-tax compensation expense for non-vested PRSUs was **$11.4 million** at June 30, 2023, over approximately one year[81](index=81&type=chunk) [12. Retirement and Pension Plans](index=19&type=section&id=12.%20Retirement%20and%20Pension%20Plans) This note details the Company's defined benefit and defined contribution pension plans and related expenses Net Periodic Pension Benefit Expense (Income) (In thousands) | Component | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |:--------------------------------|:---------------------------------|:-------------------------------| | Defined benefit plans: | | | | Service cost | $749 | $1,489 | | Interest cost | $7,566 | $15,067 | | Expected return on plan assets | $(13,071) | $(26,067) | | Amortization of net actuarial loss and other | $2,842 | $5,663 | | Pension income | $(1,914) | $(3,848) | | Other plans: | | | | Defined contribution plans | $10,512 | $24,028 | | Foreign plans and other | $1,999 | $4,570 | | **Total net pension expense** | **$10,597** | **$24,750** | - Contributions to defined benefit pension plans for 6M 2023 were **$2.9 million**, consistent with 2023 estimates[86](index=86&type=chunk) [13. Contingencies](index=19&type=section&id=13.%20Contingencies) This note addresses potential liabilities from legal proceedings, environmental matters, and other contingent events - The Company faces asbestos-related lawsuits, with strong defenses and indemnification for some cases, and no judgments rendered[87](index=87&type=chunk) - Environmental reserves totaled **$41.1 million** at June 30, 2023, with **$3.5 million** recorded and **$4.1 million** spent in 6M 2023[91](index=91&type=chunk) - Management believes existing environmental reserves are sufficient and will not materially affect consolidated financial statements[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses AMETEK's financial performance, liquidity, and condition for Q2 and 6M 2023, highlighting record results and operational drivers [Results of Operations](index=21&type=section&id=Results%20of%20Operations) This section analyzes AMETEK's consolidated and segment-level financial performance, including sales, income, and margins - AMETEK achieved record Q2 2023 sales, operating income, margins, net income, diluted EPS, and backlog, driven by **5% organic growth**[96](index=96&type=chunk)[97](index=97&type=chunk) - International sales increased **9.0%** to **$786.2 million** in Q2 2023, driven by European demand and 2022 acquisitions[97](index=97&type=chunk) - Q2 2023 orders increased **0.6%** to **$1,654.4 million**, with record backlog of **$3,441.9 million** at June 30, 2023[98](index=98&type=chunk) Consolidated Financial Performance Highlights (In thousands, except EPS) | Metric | Q2 2023 | Q2 2022 | YoY Change (%) | 6M 2023 | 6M 2022 | YoY Change (%) | |:----------------------------|:-------------|:-------------|:---------------|:-------------|:-------------|:---------------| | Net sales | $1,646,111 | $1,514,552 | 8.7% | $3,243,228 | $2,973,077 | 9.1% | | Consolidated operating income | $418,791 | $364,842 | 14.8% | $824,332 | $718,082 | 14.8% | | Operating margin | 25.4% | 24.1% | 1.3 pp | 25.4% | 24.2% | 1.2 pp | | Net income | $324,242 | $282,373 | 14.8% | $629,954 | $554,820 | 13.5% | | Diluted EPS | $1.40 | $1.22 | 14.8% | $2.72 | $2.39 | 13.8% | | Effective tax rate | 18.2% | 18.5% | (0.3 pp) | 18.8% | 18.7% | 0.1 pp | - Segment operating margins increased to **26.9%** in Q2 2023 and 6M 2023, driven by increased sales and Operational Excellence[98](index=98&type=chunk)[99](index=99&type=chunk)[107](index=107&type=chunk) - Cost of sales as a percentage of net sales decreased to **64.0%** in both Q2 and 6M 2023[99](index=99&type=chunk)[108](index=108&type=chunk) - SG&A expenses as a percentage of net sales decreased to **10.6%** in both Q2 and 6M 2023[100](index=100&type=chunk)[108](index=108&type=chunk) - Other expense, net was **$3.7 million** in Q2 2023 and **$9.1 million** in 6M 2023, primarily due to lower pension income[100](index=100&type=chunk)[109](index=109&type=chunk) Segment Performance Highlights (In thousands) | Segment/Metric | Q2 2023 Net Sales | Q2 2022 Net Sales | YoY Change (%) | Q2 2023 Op Income | Q2 2022 Op Income | YoY Change (%) | Q2 2023 Op Margin | Q2 2022 Op Margin | |:----------------------------|:------------------|:------------------|:---------------|:------------------|:------------------|:---------------|:------------------|:------------------| | Electronic Instruments (EIG)| $1,134,646 | $1,028,248 | 10.3% | $307,052 | $265,115 | 15.8% | 27.1% | 25.8% | | Electromechanical (EMG) | $511,465 | $486,304 | 5.2% | $136,215 | $124,371 | 9.5% | 26.6% | 25.6% | | | | | | | | | | | | Segment/Metric | 6M 2023 Net Sales | 6M 2022 Net Sales | YoY Change (%) | 6M 2023 Op Income | 6M 2022 Op Income | YoY Change (%) | 6M 2023 Op Margin | 6M 2022 Op Margin | |:----------------------------|:------------------|:------------------|:---------------|:------------------|:------------------|:---------------|:------------------|:------------------| | Electronic Instruments (EIG)| $2,251,893 | $2,016,007 | 11.7% | $616,799 | $509,889 | 21.0% | 27.4% | 25.3% | | Electromechanical (EMG) | $991,335 | $957,070 | 3.6% | $256,719 | $252,580 | 1.6% | 25.9% | 26.4% | - EIG's Q2 2023 net sales increased **10.3%** with operating income up **15.8%** and margins at **27.1%**; 6M sales rose **11.7%** with income up **21.0%**[102](index=102&type=chunk)[110](index=110&type=chunk) - EMG's Q2 2023 net sales increased **5.2%** with operating income up **9.5%**; 6M sales rose **3.6%** with income up **1.6%**, with margin expansion excluding acquisition impacts[103](index=103&type=chunk)[104](index=104&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Financial Condition](index=25&type=section&id=Financial%20Condition) This section assesses AMETEK's liquidity, capital resources, and cash flow generation for the reporting periods - Cash provided by operating activities increased **65.1%** to **$721.8 million** for 6M 2023, driven by working capital and net income improvements[113](index=113&type=chunk) Liquidity and Capital Resources Highlights (In millions) | Metric | 6M 2023 | 6M 2022 | YoY Change (%) | |:-------------------------------------|:-------------|:-------------|:---------------| | Cash provided by operating activities| $721.8 | $437.2 | 65.1% | | Free cash flow | $673.9 | $384.7 | 75.2% | | EBITDA | $977.3 | $877.2 | 11.4% | | Cash used by investing activities | $150.0 | $41.0 | 265.9% | | Cash used by financing activities | $317.1 | $370.4 | (14.4%) | | Total debt, net (period end) | $2,191.7 | N/A | N/A | | Debt-to-capital ratio (period end) | 21.3% | N/A | N/A | | Net debt-to-capital ratio (period end)| 16.4% | N/A | N/A | | Cash dividends paid | $115.1 | $101.2 | 13.7% | | Repurchases of common stock | $6.5 | $331.4 | (98.0%) | | Proceeds from stock option exercises | $29.1 | $17.8 | 63.5% | | Cash and cash equivalents (period end)| $605.6 | $345.4 | 75.3% | - Investing activities for 6M 2023 included **$99.3 million** for the Bison acquisition and **$47.8 million** in capital expenditures[114](index=114&type=chunk)[115](index=115&type=chunk) - Debt-to-capital ratio improved to **21.3%** and net debt-to-capital ratio to **16.4%** at June 30, 2023[116](index=116&type=chunk) - Quarterly cash dividend increased **14%** to **$0.25 per share**, while stock repurchases decreased significantly to **$6.5 million** in 6M 2023[117](index=117&type=chunk) - Cash and cash equivalents totaled **$605.6 million** at June 30, 2023, with sufficient liquidity for future obligations[118](index=118&type=chunk) [Critical Accounting Policies](index=26&type=section&id=Critical%20Accounting%20Policies) This section refers to the Company's critical accounting policies detailed in its most recent Annual Report on Form 10-K - Critical accounting policies are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022[119](index=119&type=chunk) [Forward-Looking Information](index=26&type=section&id=Forward-Looking%20Information) This section cautions that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to various risks, including acquisitions, international operations, and economic conditions, with no obligation to update[120](index=120&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.Controls%20and%20Procedures) Management concluded AMETEK's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control - Disclosure controls and procedures were evaluated as effective at a reasonable assurance level as of June 30, 2023[121](index=121&type=chunk) - No material changes in internal control over financial reporting occurred during Q2 2023[121](index=121&type=chunk) [PART II. OTHER INFORMATION](index=27&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes information on equity security sales, other disclosures, and exhibits filed with the Form 10-Q [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock purchases for tax withholding related to employee share-based compensation during Q2 2023 Purchases of Equity Securities (Three Months Ended June 30, 2023) | Period | Total Number of Shares Purchased | Average Price per Share | |:----------------------------|:---------------------------------|:------------------------| | April 1, 2023 to April 30, 2023 | — | — | | May 1, 2023 to May 31, 2023 | 152 | $145.02 | | June 1, 2023 to June 30, 2023 | — | — | | **Total** | **152** | **$145.02** | - Shares purchased satisfied tax withholding for employee share-based compensation under a **$1 billion** repurchase authorization[124](index=124&type=chunk)[125](index=125&type=chunk) - Approximately **$817.4 million** remained available under the share repurchase plan as of June 30, 2023[124](index=124&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers in Q2 2023 - No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2023[126](index=126&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.Exhibits) This section lists all exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL taxonomy documents - Exhibits include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[128](index=128&type=chunk) - XBRL documents are provided for interactive data filing, including Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[128](index=128&type=chunk) [SIGNATURES](index=29&type=section&id=SIGNATURES) This section provides the official signing of the report by the Company's principal accounting officer - The report was signed by Thomas M. Montgomery, Senior Vice President – Comptroller, on August 1, 2023[130](index=130&type=chunk)

AMETEK, Inc. (NYSE:AME) Q1 2023 Earnings Conference Call May 2, 2023 8:30 AM ET Company Participants Kevin Coleman - Vice President of Investor Relations, and Treasurer Dave Zapico - Chairman and Chief Executive Officer William Burke - Executive Vice President and Chief Financial Officer Conference Call Participants Matt Summerville - D.A. Davidson & Company Allison Poliniak - Wells Fargo Deane Dray - RBC Capital Markets Joshua Pokrzywinski - Morgan Stanley Robert Wertheimer - Melius Research Nigel Coe - Wo ...