AMETEK INC/ Q3 FY2024 earnings call

• AMETEK delivered strong third quarter results with sales of $1.71 billion, up 5% y/y. Organic sales down 2%, acquisitions added 7.5 points, foreign currency flat. Orders up 12%, book-to-bill 1.02, organic orders up 2%. • Operating income $446 million, up 2% y/y, operating margins 26.1%. Core margins 27.4%, up 40 basis points. EBITDA $553 million, up 4% y/y, EBITDA margins 31.2%. Free cash flow up 4% y/y, conversion 135%. • Acquired Virtek Vision, a strategic fit with Creaform. Invested $90 million in growth initiatives in 2024. Vitality Index was 28% in Q3. • CAMECA business saw strong growth, Polygon Physics acquisition enhanced CAMECA's capabilities.

Electronic Instruments Group (EIG): Sales were $1.13 billion, in line with the prior year. Organic sales down 2%, acquisitions contributed 2 points. Operating income was $339 million, up 1%, operating margins 29.9%, up 40 basis points. Electromechanical Group (EMG): Sales were $574 million, up 18% y/y. Organic sales down 3%, acquisitions contributed over 20 points. Operating income was $132 million, up 3%, operating margins 22.9%.

• Raised full-year earnings guidance: Sales expected up 5%-7% y/y. Diluted EPS $6.77-$6.82, up 6%-7% y/y (previously $6.70-$6.80). • Fourth quarter: Sales mid-single digits growth, earnings $1.81-$1.86, up 8%-11% y/y.

Q: Matt Summerville asked about medical and life sciences end markets and destocking.

A: Dave Zapico said demand in line with expectations, destocking headwinds continue, but new opportunity funnel remains strong.

Q: Deane Dray asked about end markets geographies, including China.

A: Asia business did well, China up 10%. Aerospace & Defense delivered strong performance.

Q: Jeff Sprague asked about Paragon and EMG orders.

A: EMG orders up 12% organically, Paragon met expectations with sequential order improvement.

Q: Rob Wertheimer asked about acquisition pipeline and destocking.

A: Pipeline robust, destock working through, but hard to predict China's market.

Q: Scott Graham asked about Vitality Index and aerospace customers.

A: Vitality Index at 28%, aerospace businesses well-positioned with diverse exposures.

Q: Brett Linzey asked about OEM destock and project delays.

A: OEM destock was significant, Q4 guide assumes normal seasonality.

Q: Nigel Coe asked about orders and Paragon's book-to-bill.

A: Orders positive, backlog healthy, but no specific numbers on Paragon's book-to-bill.

Q: Andrew Obin asked about orders and Paragon's restructuring.

A: Orders subject to macro factors, Paragon's restructuring ongoing with regulatory considerations.

Q: Joe Giordano asked about aerospace exposure and Paragon revenue.

A: Boeing exposure managed, Paragon executed in line with expectations.

Q: Jeff Sprague asked about price and cost spread.

A: Price back to normal, 3 points of price in quarter, 100 basis points positive spread.

Q: Steve Barger asked about semi-cap cycle.

A: Semiconductor businesses up mid-single digits, Polygon Physics acquisition enhances capabilities in advanced semiconductor space.