<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
-----------------------------------------------
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 1-168
AMETEK, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-4923320
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Station Square, Paoli, Pennsylvania 19301
--------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code 610-647-2121
----------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of the issuer's common stock outstanding as of the
latest practicable date was:
Common Stock, $.01 Par Value, outstanding at July 31, 1995 was 32,942,736
shares.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMETEK, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Dollars in thousands except per-share amounts)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
-------------------------- -------------------------
1995 1994 (a) 1995 1994 (a)
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Net sales $219,111 $202,710 $430,638 $394,113
---------- ---------- ---------- ----------
Expenses:
Cost of sales (excluding depreciation) 168,549 156,501 331,396 306,593
Selling, general and administrative 19,642 18,821 39,835 37,034
Depreciation 6,450 6,541 13,431 12,903
---------- ---------- ---------- ----------
Total expenses 194,641 181,863 384,662 356,530
---------- ---------- ---------- ----------
Operating income 24,470 20,847 45,976 37,583
Other income (expenses):
Interest expense (5,422) (5,165) (10,454) (10,197)
Other, net 148 (124) 688 1,651
---------- ---------- ---------- ----------
Income from continuing operations
before income taxes 19,196 15,558 36,210 29,037
Provision for income taxes 7,267 6,197 14,132 11,286
---------- ---------- ---------- ----------
Income from continuing operations 11,929 9,361 22,078 17,751
Discontinued operations, net of taxes:
Income from discontinued operations 266 308 779 725
Gain on sale of discontinued operations 10,420 - 10,420 -
---------- ---------- ---------- ----------
Income before extraordinary item and
cumulative effect of accounting change 22,615 9,669 33,277 18,476
Extraordinary loss on early extinguishment of debt,
net of taxes - - - (11,810)
Cumulative effect of accounting change
for marketable securities, net of taxes - - - 3,819
---------- ---------- ---------- ----------
Net income $22,615 $9,669 $33,277 $10,485
========== ========== ========== ==========
Earnings (loss) per share :
Income from continuing operations $0.36 $0.26 $0.65 $0.45
Discontinued operations:
Income from discontinued operations 0.01 0.01 0.02 0.02
Gain on sale of discontinued operations 0.31 - 0.31 -
---------- ---------- ---------- ----------
Income before extraordinary item and
cumulative effect of accounting change 0.68 0.27 0.98 0.47
Extraordinary loss on early
extinguishment of debt - - - (0.30)
Cumulative effect of accounting change - - - 0.10
---------- ---------- ---------- ----------
Net income $0.68 $0.27 $0.98 $0.27
========== ========== ========== ==========
Cash dividends paid per share $0.06 $0.06 $0.12 $0.12
========== ========== ========== ==========
Average common shares outstanding 33,354,009 36,358,827 33,799,154 39,501,478
========== ========== ========== ==========
</TABLE>
------------------
(a) Restated for discontinued operations.
See accompanying notes.
2
<PAGE>
AMETEK, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994 (a)
---------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $16,905 $7,245
Marketable securities 8,462 10,480
Receivables, less allowance for possible losses 133,076 110,927
Inventories 109,438 98,689
Deferred income taxes 12,114 12,637
Net assets of discontinued operations - 10,583
Other current assets 5,950 6,417
--------- ---------
Total current assets 285,945 256,978
--------- ---------
Property, plant and equipment 387,352 373,051
Less accumulated depreciation (218,691) (208,766)
--------- ---------
168,661 164,285
--------- ---------
Intangibles, investments and other assets 99,454 72,924
--------- ---------
Total assets $554,060 $494,187
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current
portion of long-term debt $32,261 $11,821
Accounts payable 80,523 72,815
Accruals 123,073 93,457
--------- ---------
Total current liabilities 235,857 178,093
Long-term debt 185,506 190,336
Deferred income taxes 24,614 26,088
Other long-term liabilities 28,676 26,490
Stockholders' equity 79,407 73,180
--------- ---------
Total liabilities and stockholders' equity $554,060 $494,187
========= =========
</TABLE>
------------------
(a) Restated for discontinued operations.
See accompanying notes.
3
<PAGE>
AMETEK, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Six months ended June 30,
------------------------
1995 1994 (a)
-------- ---------
<S> <C> <C>
Cash provided by (used for):
Operating activities:
Net income $33,277 $10,485
Deduct discontinued operations:
Net income from discontinued operations (779) (725)
Net gain on sale of discontinued operations (10,420) -
Extraordinary loss on early extinguishment of debt - 11,810
Cumulative effect of accounting change - (3,819)
------- -------
Income from continuing operations 22,078 17,751
Adjustments to reconcile income from continuing operations
to net cash provided by continuing operations:
Depreciation and amortization 17,527 16,555
Deferred income taxes (2,080) 1,935
Net change in operating working capital (2,483) 40,270
Net Cash provided by (used for) discontinued operations (2,572) 6,750
Other 819 (949)
------- -------
Total operating activities 33,289 82,312
------- -------
Investing activities:
Additions to property, plant and equipment (13,240) (10,095)
Proceeds from sale of discontinued operations and other assets 37,984 2,998
Purchase of and investments in businesses (38,280) -
Decrease in marketable securities 3,083 6,940
Other - (953)
------- -------
Total investing activities (10,453) (1,110)
------- -------
Financing activities:
Net change in short-term borrowings 20,400 1,832
Proceeds from issuance of long-term debt - 306,000
Repayments of long-term debt (5,179) (220,126)
Debt prepayment premiums and debt issuance costs - (29,368)
Repurchases of common stock (25,734) (110,217)
Cash dividends paid (4,030) (4,751)
Other 1,367 1,971
------- -------
Total financing activities (13,176) (54,659)
------- -------
Increase in cash and cash equivalents 9,660 26,543
Cash and cash equivalents:
As of January 1 7,245 40,459
------- -------
As of June 30 $16,905 $67,002
======= =======
</TABLE>
--------------
(a) Restated for discontinued operations.
See accompanying notes.
4
<PAGE>
AMETEK, INC.
------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
June 30, 1995
-------------
(Unaudited)
Note 1 - Financial Statement Presentation
------ --------------------------------
The accompanying consolidated financial statements are unaudited, but the
Company believes that all adjustments (which consist of normal recurring
accruals) necessary for fair presentation of the consolidated financial position
of the Company at June 30, 1995 and the consolidated results of its operations
and cash flows for the three and six-month periods ended June 30, 1995 and 1994
have been included. Quarterly results of operations are not necessarily
indicative of results for the full year. Quarterly financial statements should
be read in conjunction with the financial statements and related notes in the
Company's 1994 Annual Report.
Note 2 - Earnings Per Share
------ ------------------
Earnings per share is based on the average number of common shares
outstanding each period. No material dilution of earnings per share would result
for the second quarter or first six months of 1995 or 1994 if it were assumed
that all outstanding stock options were exercised. The sum of quarterly earnings
per share does not equal year-to-date earnings per share due to the effects of
common stock repurchases.
Note 3 - Acquisitions
------ ------------
On March 31, 1995, the Company purchased the heavy vehicle instrumentation
business of privately held Dixson, Inc. for cash. This acquisition was accounted
for by the purchase method, and accordingly, the results of Dixson's operations
are included in the Company's consolidated results from the date of acquisition.
This acquisition would not have had a material effect on sales or earnings for
the second quarter or the first six months of 1995 or 1994, had it been made at
the beginning of the respective periods.
On March 1,1995, the Company acquired a 50% ownership interest in a joint
venture established with a Taiwanese supplier to manufacture low-cost pressure
gauges in China and Taiwan for worldwide markets. This investment is accounted
for by the equity method, and the Company's 50% share of the operating results
since March 1, 1995, insignificant in amount, is reported through its domestic
gauge manufacturing Division.
The aggregate cost of the acquisition and the investment in the joint
venture totaled $40.8 million, consisting of $38.3 million cash paid, and $2.5
million of deferred payment obligations payable over periods up to three years.
The joint venture investment is reported with Intangibles and Other Assets in
the June 30, 1995 balance sheet.
Note 4 - Discontinued Operations
------ -----------------------
On May 18, 1995, the Company sold its foam packaging business (the Microfoam
Division) to Astro Valcour, Inc. for $37.6 million in cash. The sale of the
assets of Microfoam resulted in a second quarter gain of $10.4 million, net of
taxes of $6.4 million, after providing for certain costs related to the sale. As
a result of this transaction, the consolidated financial statements have been
restated to reflect Microfoam as discontinued operations.
5
<PAGE>
AMETEK, INC.
------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
June 30, 1995
-------------
(Unaudited)
Note 4 - Discontinued Operations (continued)
------ -----------------------
Summary operating results of discontinued operations, excluding the above
mentioned gain on sale, are as follows:
<TABLE>
<CAPTION>
In thousands
------------------------------------------------------
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $4,086 $ 7,016 $12,153 $14,886
------ ------- ------- -------
Income before income taxes 441 572 1,291 1,310
Provision for income taxes 175 264 512 585
------ ------- ------- -------
Net income from
discontinued operations $ 266 $ 308 $ 779 $ 725
====== ======= ======= =======
</TABLE>
Note 5 - Inventories
--------------------
The estimated components of inventory stated at lower of LIFO cost or market
are:
<TABLE>
<CAPTION>
In thousands
-------------------------
June 30, December 31,
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Finished goods and parts $ 39,447 $ 33,448
Work in process 25,050 24,695
Raw materials and purchased parts 44,941 40,546
------- -------
$109,438 $ 98,689
======== ========
</TABLE>
Note 6 - New Accounting Standard
------ -----------------------
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." This statement establishes accounting standards for
the impairment of long-lived assets, certain identifiable intangibles and
goodwill related to these assets to be held, and used, and for long-lived assets
and certain identifiable intangibles to be disposed of. The statement requires
that such assets be reviewed for impairment when changes in circumstances
indicate that the carrying value of the asset may not be fully recoverable. The
statement also requires such assets, when held for disposal, be reported at the
lower of carrying value or fair value, less cost to sell. The Company is
required to adopt this statement no later than 1996. Based on past practices
and the new accounting requirements, adoption of this statement is not expected
to have a material effect on the Company's operations or financial position.
6
<PAGE>
AMETEK, INC.
------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
June 30, 1995
-------------
(Unaudited)
Note 7 - Subsequent Event
------ ----------------
On August 2, 1995, the Company executed a new Bank Credit Agreement with a
group of banks led by The Chase Manhattan Bank, N.A. The new five-year reducing
revolving credit facility will provide up to $195 million in revolving credit
loans, with reductions in the total credit facility to $150 million by August 1,
1999. This new credit facility, which replaces the Company's previous bank
credit facility, is now unsecured and provides for lower interest rates and
reduced commitment fees if certain performance measurements are met. The Company
immediately drew down $57.5 million to repay fully its prior bank term loan and
outstanding revolving credit loans. As a result of the new Agreement, and the
repayment of the prior bank loans, the Company will record a non cash after-tax
extraordinary charge of approximately $2.7 million, or $.08 per share, in the
third quarter of 1995 for the write-off of deferred financing fees associated
with the previous bank debt.
7
<PAGE>
AMETEK, INC.
------------
Item 2. Management's Discussion and Analysis of Financial Condition and Results
------- -----------------------------------------------------------------------
of Operations
-------------
Financial Condition
-------------------
Liquidity and Capital Resources
-------------------------------
Working capital at June 30, 1995 amounted to $50.1 million, a decrease
of $28.8 million from December 31, 1994, largely due to additional
short-term borrowing, which was incurred in connection with
investments in new businesses in the first quarter of 1995. A part of
the borrowing was repaid in May 1995 with proceeds from the sale of
the Microfoam Division, which is reported as discontinued operations
in the consolidated financial statements. In addition to cash
expenditures for the repurchase of Company common stock since the
beginning of the year, the working capital decline also stems from a
higher level of accounts payable and accruals (including income taxes
payable), partially offset by increases in receivables and
inventories. The higher level of business activity in 1995 accounted
for the increase in receivables and inventories. The ratio of current
assets to current liabilities at June 30, 1995 was 1.21 to 1, compared
to 1.44 to 1 at December 31, 1994.
Cash provided by the Company's operating activities for the first six
months of 1995 totaled $33.3 million, compared to $82.3 million in the
same period of 1994, a decrease of $49.0 million. The 1995 amount
includes $2.6 million of net cash used by discontinued operations,
while the 1994 amount included net cash provided by discontinued
operations totaling $6.8 million. Increased operating working capital
requirements, along with cash outlays to fund restructuring accruals,
accounted for $11.2 million of the overall decrease. Operating cash
generated in the first quarter of 1994 included net cash inflows
totaling $31.6 million from the sale of trading securities. Since
March 31, 1994, the Company discontinued its portfolio of trading
securities. The Company's marketable securities have since been
classified as available-for-sale and the related cash flows are
reported as investing activities.
Cash used for investing activities in the first six months of 1995
totaled $10.5 million, compared to cash used of $1.1 million in the
same period last year. Cash expenditures in the first six months of
1995 were primarily for the acquisition of a business, and an
investment in a joint venture, requiring a total cash outlay of $38.3
million. Largely offsetting these cash outlays was $38.0 million in
proceeds received primarily from the sale of the Microfoam Division,
and from the sale of other assets. Capital expenditures in the first
six months of 1995 totaled $13.2 million, compared to $10.1 million in
the same period of the prior year. Also included in 1994 investing
activities were $9.0 million in net proceeds from the sale of assets.
Financing activities in the first six months of 1995 used cash
totaling $13.2 million, compared to cash used of $54.7 million in the
same period of 1994. In the first six months of 1995 the Company
received net proceeds from short-term borrowings totaling $20.4
million, and made scheduled repayments of $5.0 million on term loans
under the Company's previous bank credit facility. This facility was
replaced by a new five-year unsecured bank credit facility on
August 2, 1995, which will provide potentially lower interest rate
loans under a reducing revolving credit facility for up to $195
million, which will decrease to $150 million by August, 1999.
8
<PAGE>
AMETEK, INC.
------------
Financial Condition (cont'd)
-------------------
Cash expended for financing activities in the first six months of 1995
included $25.7 million for the repurchase of 1,509,200 shares of the
Company's common stock, and the funding of $4.0 million of dividends.
Financing activities in the first six months of 1994 primarily
included the proceeds from the sale of $150 million of 9 3/4% senior
public notes, borrowings of $106 million under the Company's existing
bank credit agreement, the repayment of $185.4 million due to the
early retirement of debt, and the repurchase of 8.7 million shares of
the Company's common stock at a total cost of $110.2 million. Since
beginning the stock repurchase program in March 1994, a total of 11.1
million shares have been acquired as of July 31, 1995, at a total cost
of $151.8 million, under a $175 million total authorization. In April
1995, the Company's Board of Directors authorized additional
repurchases up to an aggregate of $25 million of its common stock,
which brought the total share repurchase authorization to $175
million.
As a result of the above operating, investing and financing
activities, cash and cash equivalents and short-term marketable
securities increased $7.6 million since December 31, 1994, to $25.4
million at June 30, 1995. Management believes that the Company will
have sufficient future cash flow from its operations and its new bank
credit facility to meet its future needs.
Results of Operations
---------------------
Operations for the second quarter of 1995
compared to the second quarter of 1994
Sales from continuing operations for the second quarter of 1995 were
$219.1 million, compared to sales of $202.7 million for the second
quarter of 1994, an increase of $16.4 million or 8.1%. The sales
improvement came primarily from the Company's Electro-mechanical
Group, which increased $8.8 million or 9.8% to $98.7 million. The
Precision Instruments Group's sales increased 7.9% to $78.3 million
from 1994 second quarter sales of $72.5 million, while the Industrial
Materials Group's sales, which were restated for the sale of
Microfoam, increased $1.8 million to $42.1 million, or 4.6%.
Operating income from continuing operations for the second quarter of
1995 increased $3.6 million or 17.4% to $24.5 million, compared to
$20.9 million in the second quarter of 1994. This increase reflects
the Company's overall higher sales volume and improved operating
efficiencies in the Electro-mechanical and Precision Instruments
business segments.
The effective income tax rate was 37.9% for the second quarter of 1995
compared with 39.8% for the second quarter of 1994. The lower 1995 tax
rate reflects the second quarter effect of a one percent increase in
the Italian statutory tax rate, effective at the beginning of 1995,
reduced by a slightly lower provision for state income taxes, and
increased U.S. tax benefits. Also, the second quarter of 1994 included
an additional foreign tax provision.
9
<PAGE>
AMETEK, INC.
------------
Results of Operations (cont'd)
---------------------
The weighted average shares outstanding during the second quarter of 1995
was 33.4 million shares, compared to 36.4 million shares for the same
quarter of 1994. The reduced number of shares reflects the Company's
ongoing share repurchase program, which began in March, 1994.
Second quarter 1995 income from continuing operations was $11.9 million,
or $.36 per share, compared with second quarter 1994 income of $9.4
million, or $.26 per share, an income improvement of $2.6 million or
27.4%. Income from discontinued operations for the second quarter of 1995
and 1994 was $.3 million, or $.01 per share for each period. The second
quarter of 1995 also includes an after tax gain of $10.4 million ($.31
per share) on disposal of discontinued operations resulting from the sale
of the Microfoam Division. Net income for the second quarter of 1995 was
$22.6 million, or $.68 per share, compared to net income of $9.7 million,
or $.27 per share for the second quarter of 1994.
Electro-mechanical Group sales totalled $98.7 million in the
------------------------
current second quarter, an increase of $8.8 million or 9.8% from the
second quarter of 1994, due to higher sales of electric motor
products manufactured by the Company's domestic and Italian motor
operations. The Italian operations' sales increased 27%, reduced
somewhat by the effects of translating the weaker Italian lire to
U.S. dollars.
Operating profit of this group increased $1.2 million or 9.6% to
$13.5 million in this year's second quarter. The sales volume
increase, favorable changes in product mix in domestic operations,
and modest improvement in operating efficiencies from increased
capacity utilization at the group's two production facilities in
North Carolina contributed to the improved results. These increases
were reduced by higher material costs in the Italian operations
which were not fully recovered. To further address the higher
material costs in the Italian operations, the Company plans to
accelerate its cost reduction program, along with the continuation
of scheduled price increases in the second half of 1995.
In the Precision Instruments Group, sales of $78.3 million in
---------------------------
this year's second quarter increased 7.9% from the $72.5 million of
sales in the same quarter last year. The increase was primarily due
to the addition of the Dixson heavy vehicle instrumentation
business, purchased at the end of the first quarter of 1995. Higher
sales of automotive and process instruments were largely offset by
lower sales of aerospace instruments.
Group operating profit for the current quarter increased to $9.7
million, from $7.7 million in the second quarter of 1994, an
increase of $2.0 million or 26.6%. The increase resulted from the
Dixson acquisition, and increased operational efficiencies in the
aerospace business resulting from the restructuring activities and
other cost reduction programs initiated in 1993 and 1994. Group
operating profit also includes a higher than normal recovery of
approximately $800,000 from earlier aerospace contract engineering
activities.
10
<PAGE>
AMETEK, INC.
------------
Results of Operations (cont'd)
---------------------
In the Industrial Materials Group, second quarter 1995 sales from
--------------------------
continuing operations increased $1.8 million or 4.6% to $42.1
million, compared to $40.3 million in the second quarter of 1994,
from higher sales by the metal powder and corrosion-resistant
materials businesses. The reported sales increase was reduced by some
softness in residential and commercial water filtration markets and
lower sales of certain plastics compounding products.
Group operating profit for the current second quarter totaled $6.7
million, essentially unchanged from the restated $6.9 million in the
second quarter of 1994. A profit improvement from the reported higher
sales was more than offset by reduced profitability from the lower
sales and slightly higher net manufacturing costs incurred by the
water filtration and plastics compounding businesses.
Operations for the first six months of 1995
compared to the first six months of 1994
Sales from continuing operations for the first six months of 1995 were
$430.6 million, compared to sales of $394.1 million from continuing
operations for the same period of 1994, an increase of $36.5 million or
9.3%. All business segments reported improved sales, led by the Electro-
mechanical Group, which increased $23.6 million or 13.6%. The Precision
Instruments Group's sales increased $6.8 million or 4.8%, and the
Industrial Materials Group's sales, which were restated for the sale of
Microfoam, increased $6.1 million or 7.8%.
Operating income from continuing operations for the first six months of
1995 increased $8.4 million or 22.3% to $46.0 million, compared to $37.6
million for the same period of 1994. This increase reflects the overall
higher sales volume, and improved operating performance from realization
of the benefits of the restructuring programs initiated in 1993.
Other income, net for the first six months of 1995 was $.7 million, a
decrease of $1 million from the same period of 1994. The decrease was
caused by reduced net investment income during the period.
Income from continuing operations for the first six months of 1995 was
$22.1 million, or $.65 per share, compared to 1994 income of $17.8
million or $.45 per share, an increase in income of $4.3 million or
24.4%. Income from the discontinued Microfoam operations for the first
six months of 1995 and 1994 were $.8 million and $.7 million,
respectively, representing $.02 per share for each period. Results for
the first half of 1995 also include an after tax gain on the second
quarter 1995 sale of the Microfoam Division of $10.4 million, or $.31 per
share.
11
<PAGE>
AMETEK, INC.
------------
Results of Operations (cont'd)
---------------------
Net income for the first six months of 1995 was $33.3 million, or $.98
per share, compared to $18.5 million ($.47 per share) of income before
an extraordinary item and the cumulative effect of an accounting change
in 1994. After an extraordinary loss of $11.8 million ($.30 per share)
after tax from the early extinguishment of debt, and a $3.8 million
($.10 per share) after tax gain due to a required change in accounting
for certain marketable securities, net income for the first six months
of 1994 was $10.5 million or $.27 per share.
Electro-mechanical Group sales totaled $196.2 million in the
------------------------
first six months of 1995, an increase of $23.6 million or 13.6%
from the first half of 1994, due to increased sales of electric
motor products manufactured by the Company's domestic and
Italian motor operations. Before currency effects, which were
not significant, the Italian operations reported a 32.6%
increase in sales from the first six months of 1994.
Operating profit of this group increased $3.7 million or 16.7%
to $26.2 million in the first half of 1995, primarily because of
the higher sales volume. Higher material costs in the Italian
operations were partially offset by a sales price increase which
went into effect early in the first quarter of 1995. In the
second half of this year, the Company plans to accelerate its
cost reduction program, along with the continuation of scheduled
price increases.
In the Precision Instruments Group, sales in the first six
---------------------------
months of 1995 were $149.7 million, an increase of $6.8 million
or 4.8% from the first half of 1994. The increase is largely due
to the addition of the Dixson heavy vehicle instrumentation
business purchased at the end of the first quarter of 1995.
Higher sales of heavy truck instruments and process instruments
were substantially offset by lower sales of aerospace
instruments.
Group operating profit increased $3.4 million or 24.2% to $17.5
million for the first six months of 1995. The group benefited
partly from the additional profits of the Dixson business
acquired, but mostly from increased operating efficiencies in
the aerospace business resulting from the restructuring
activities and other cost reduction programs initiated in 1993
and 1994, as well as an improved product mix on process
instrument sales.
In the Industrial Materials Group, sales from continuing
--------------------------
operations for the first six months of 1995 increased $6.1
million or 7.8% to $84.7 million. All but one business in this
group reported a sales increase, led by the metal powder and
corrosion-resistant materials businesses.
12
<PAGE>
AMETEK, INC.
------------
Results of Operations (cont'd)
---------------------
Group operating profit from continuing operations for the first half of
1995 increased $1.9 million or 15.4% to $14.5 million, compared to $12.5
million in the same period of 1994. The increase was due to the increased
sales volume, and increased operating efficiencies in the corrosion-
resistant materials business.
13
<PAGE>
AMETEK, INC.
------------
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
------- --------------------------------
a) Exhibits:
Exhibit
Number Description
------ -----------
10 Amendment No. 1 to the 1995 Stock Incentive Plan
of AMETEK, Inc.
27 Financial Data Schedule *
* Schedule submitted in electronic format only.
b) Reports on Form 8-K: During the quarter ended June 30, 1995, the Company
did not file any reports on Form 8-K.
14
<PAGE>
Exhibit 10
----------
Amendment No. 1
to the
1995 Stock Incentive Plan of
AMETEK, Inc.
WHEREAS, AMETEK, Inc. (the "Corporation") has adopted the 1995 Stock
Incentive Plan of AMETEK, Inc. (the "Plan"); and
WHEREAS, Section 19 of the Plan permits the Corporation to amend the Plan;
and
WHEREAS, the Corporation now desires to amend the Plan in certain respects;
NOW THEREFORE, the Plan is hereby amended as follows:
1. Section 3 of the Plan is amended by deleting the third sentence and
inserting the following to read in its entirety as follows:
"A maximum of 10% of the aggregate number of shares, or 220,000 shares, may
be awarded as Restricted Shares, Rights and Phantom Stock Awards. A
maximum of 3% of the aggregate number of shares, or 66,000 shares, may be
awarded, in the aggregate as Options which have been repriced and as
Restricted Stock Awards with vesting periods of less than 3 years."
2. The fifth paragraph of Section 7 of the Plan is amended by
deleting the first two sentences and by inserting the following three sentences
in their place to read in their entirety as follows:
"Payment of the amount determined hereunder upon the exercise of
Conjunctive Rights or Rights granted without relationship to an Option
shall be made solely in cash. At the holder's election, payment of the
amount determined hereunder upon the exercise of Alternative Rights granted
in connection with an Option may be made solely in cash, or solely in
Shares valued at their Fair Market Value on the date of exercise of the
Rights, or in a combination of cash and Shares. Notwithstanding any other
provision of the Plan or of any Option or Rights, upon the exercise of such
<PAGE>
Alternative Rights, the Committee shall have the power at its discretion to
disapprove the holder's election as to the form (i.e., cash or Shares, or
part in cash and part in Shares) in which payment of the Rights will be
made and to substitute therefor payment as it determines."
3. Subsection (a) of Section 10 of the Plan is amended by deleting
"and" from the end of (ii), by renumbering (iii) as (iv) and by inserting a new
(iii) to read in its entirety as follows:
"(iii) no Restricted Shares shall have a vesting period of less than 3
years except upon the occurrence of such special circumstance or event, as
in the opinion of the Committee, merits special consideration."
4. Section 12 of the Plan is amended to read in its entirety as
follows:
"12. Purchase Price. The purchase price per Share for Restricted
--------------
Shares to be purchased pursuant to Restricted Stock Awards, or for the
Shares to be purchased pursuant to the exercise of an Option, shall be
fixed by the Committee at the time of the grant of the Restricted Stock
Award or Option; provided, however, that the purchase price per Share for
the Shares to be purchased pursuant to the exercise of an Incentive Stock
Option or Non-Qualified Stock Option shall not be less than 100% of the
Fair Market Value of a Share on the date such Incentive Stock Option or
Non-Qualified Stock Option is granted. The Committee may reduce the
purchase price per share for shares to be purchased pursuant to the
exercise of an outstanding Option only if (i) the purchase price exceeds
100% of the Fair Market Value of a share on the date such Option is
exercisable and (ii) a circumstance or event has occurred which, in the
opinion of the Committee, warrants such price reduction."
5. The provisions of this Amendment No. 1 shall be effective as of
February 21, 1995.
IN WITNESS WHEREOF, AMETEK has caused these presents to
<PAGE>
be executed, in its corporate name, by its duly authorized officer, and its
corporate seal to be affixed on this 30th day of May, 1995.
AMETEK, Inc.
By: /s/ Robert W. Yannarell
---------------------------------------
Robert W. Yannarell, Secretary
Attest:
/s/ Dorothy M. Misetic
-----------------------------------
(Seal)Dorothy M. Misetic
Manager, Corporate Benefits
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
The Consolidated Balance Sheet of AMETEK, Inc. at June 30, 1995, and The
Consolidated Statement of Income of AMETEK, Inc. for the six months ended June
30, 1995, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 16,905
<SECURITIES> 8,462
<RECEIVABLES> 138,946
<ALLOWANCES> 5,870
<INVENTORY> 109,438
<CURRENT-ASSETS> 285,945
<PP&E> 387,352
<DEPRECIATION> 218,691
<TOTAL-ASSETS> 554,060
<CURRENT-LIABILITIES> 235,857
<BONDS> 185,506
<COMMON> 357
0
0
<OTHER-SE> 79,050
<TOTAL-LIABILITY-AND-EQUITY> 554,060
<SALES> 430,638
<TOTAL-REVENUES> 430,638
<CGS> 331,396
<TOTAL-COSTS> 331,396
<OTHER-EXPENSES> 51,296
<LOSS-PROVISION> 1,970
<INTEREST-EXPENSE> 10,454
<INCOME-PRETAX> 36,210
<INCOME-TAX> 14,132
<INCOME-CONTINUING> 22,078
<DISCONTINUED> 11,199
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,277
<EPS-PRIMARY> .98
<EPS-DILUTED> 0
</TABLE>
