AMETEK Views Downturn as Opportunity for Well Priced Acquisitions and Expansions

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Researched by Industrial Info Resources (Sugar Land, Texas)--Global electronics manufacturer AMETEK Incorporated (NYSE:AME) (Paoli, Pennsylvania) recently announced earnings for the company's first fiscal quarter of 2009. Net income for the company declined 11% year over year, moving from $66.4 million in 1Q08 to $59.1 million in 1Q09. Despite these lower profits during the current global economic downturn, AMETEK is continuing a series of acquisitions and expansions throughout the world.

At a conference call regarding the company's earnings, Frank Hermance, AMETEK's Chairman and CEO, said, "We will continue to invest in acquisitions, global and market expansion, and research, development and engineering expense. This will help our performance during the downturn and position us to outperform during the upturn."

This quarter, AMETEK acquired Miami, Florida-based High Standard Aviation, an aerospace repairs and service company, giving AMETEK a strong foothold in the southeastern U.S. and increased access to Latin American markets. International sales for the company accounted for 48% of the company's total sales this quarter, and the company has recently opened new demonstration facilities in China and India.

Despite reducing employee headcount by approximately 1,000 people since January, AMETEK seems to be viewing the current economic downturn as period of opportunity for the company's growth. "The pipeline of acquisition remains good, and we expect it to improve as the year goes on. We continue to look to add additional differentiated business to AMETEK," said Hermance. "We remain a very disciplined, yet aggressive acquirer. We have the financial and managerial capacity to continue to do acquisitions. Our balance sheet is strong, and our cashflow and financing facilities provide us with ample liquidity to pursue this strategy. We believe this will be a great environment as the price for acquisitions recedes."

Expansion and growth of the company's existing facilities also continue. The company's capital expenditure for the quarter was about $6 million, and AMETEK expects total capital expenditure to be approximately $44 million for the year. Recently added to Industrial Info's North American Industrial Database is the expansion of AMETEK's titanium alloy plant in Robesonia, Pennsylvania. Upon approval and acceptable market conditions, AMETEK is planning to issue requests for qualification in late summer, with construction of the $6 million project planned to kick off in early fall of this year.

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