David A. Zapico
Chairman and Chief Executive Officer at AMETEK
Thank you, Kevin, and good morning, everyone.
AMETEK delivered strong results in the first quarter of 2024 with outstanding operating performance leading to double-digit growth in earnings per share. During the quarter, we established records for sales, operating income, and EBITDA and delivered robust core margin expansion and excellent cash flows. Considering our first quarter results and the positive outlook for the back half of the year, we are increasing our earnings guidance for the full year.
AMETEK's continued success is a testament to the strength and resiliency of our growth model, the quality of our businesses, and the outstanding contributions from all AMETEK colleagues.
Now let me turn to our first quarter results. Sales in the first quarter were $1.74 billion, up 9% over the same period in 2023. Organic sales were down slightly, acquisitions added 9 points, and foreign currency had a small positive impact. Book-to-bill in the quarter was 0.96, and we ended the quarter with a very strong backlog of $3.46 billion, near record levels.
AMETEK's operating performance to start the year was excellent. Operating income in the quarter was a record $446 million, a 10% increase over the first quarter of 2023. Operating margins were 25.7% in the quarter, up 30 basis points from the prior year. Excluding the dilutive impact from acquisitions, core margins were up a very strong 180 basis points versus the prior year. EBITDA in the quarter was also a record at $542 million, up 13% over the prior year with EBITDA margins an impressive 31.2%. This outstanding performance led to earnings of $1.64 per diluted share, up 10% versus the first quarter of 2023, and above our guidance range of $1.56 to $1.60.
Now let me provide some additional details at the operating group level. First, the Electronic Instruments Group. The Electronic Instruments Group had a strong start to the year with tremendous operating performance, leading to record operating margins and impressive margin expansion. Sales for EIG were $1.16 billion in the quarter, up 4% from the first quarter of last year. Organic sales were up 1% and acquisitions added 3 points. Growth in the quarter remained strongest across our aerospace and defense and materials analysis businesses.
EIG's operational execution in the first quarter was superb with strong profit and exceptional operating margin expansion. Operating income was $353 million, up 14% versus the prior year, while EIG operating margins were a record 30.5%, up a robust 280 basis points. This level of operating margin speaks to the quality and leadership positions of our highly differentiated businesses.
The Electromechanical Group also delivered solid first quarter operating performance, despite the headwinds from inventory normalization impacting some of our EMG businesses. EMG's first quarter sales were a record $579 million, up 21% versus the prior year, driven by contributions from recent acquisitions of Paragon Medical and Bison Engineering. First quarter operating income was $120 million, while core operating income margins were 24.1% in the quarter.
Our first quarter results reflect the unique capabilities of our growth model to successfully manage short-term market headwinds and deliver robust margin expansion, outstanding cash flow, and strong double digit earnings growth. Our businesses remain focused on executing our strategic initiatives and delivering differentiated technology solutions to support our customers' most complex challenges.
Our distributed operating structure enables flexibility in responding to market dynamics while our robust cash flow and balance sheet provide ample support for our acquisition strategy. This acquisition strategy, along with our organic growth initiatives, is expanding AMETEK's presence within high-growth markets. These markets include medtech, clean energy, electrification and aerospace and defense, and help ensure our diverse portfolio is well positioned to capitalize on these attractive long-term, secular growth areas.
We remain committed to investing across our businesses to accelerate new product development and expand our sales and marketing efforts. In 2024, we expect to invest an incremental $100 million in growth initiatives with a sizeable portion of this in support of our research, development and engineering efforts. The effectiveness of these investments is reflected in our vitality index, which was a strong 25% in the first quarter. AMETEK's commitment to invest in RD&E and continuously innovate ensures a steady stream of new products that support our customers' critical applications and position us for continued success.
I wanted to take a moment to highlight an example of how the elements of the AMETEK growth model work together to deliver exceptional results. AMETEK ZYGO, a global leader in the design and manufacture of advanced optical metrology systems and ultra-precise optical components, was recently awarded AMETEK's Dr. John H. Lux Award, an annual award provided to the AMETEK business that best exemplifies the commitment to continuous improvement and achievements in operational excellence.
As part of its market expansion strategy, ZYGO identified an attractive new market segment, virtual and augmented reality applications, as a compelling growth opportunity for their advanced optical metrology systems. This led to ZYGO's new product development and commercial teams working closely together to advance their technology capabilities and commercialize as a solution to support the highly precise requirements of this application. The success of this work resulted in strong demand and the need for ZYGO to meaningfully increase production.
Utilizing cross-functional teams and deploying tools like value stream mapping and Lean Six Sigma, they achieved a remarkable threefold increase in production output, allowing them to meet the growing demand for the metrology solution. This achievement highlights the synergy between our new product development, global market expansion, and operational excellence strategies to help identify, develop, and deliver exceptional technology solutions to address an important market need and accelerate growth. Congratulations to the ZYGO team for a job well done.
Now switching to our acquisition strategy. The acquisitions we completed in 2023 are integrating nicely into AMETEK. We are leveraging our proven integration capabilities and our global infrastructure to help accelerate their growth, drive operational improvements, and deliver strong returns. We are very excited about these acquisitions as they are expanding our market presence in attractive growth markets, including the medtech space through the Paragon Medical acquisition.
Paragon Medical, which we acquired in December, is a leading manufacturer of highly engineered medical components and single-use and consumable surgical instruments. Paragon has an outstanding brand, leading innovation and design capabilities, and a strong position serving a number of high growth market segments. Our integration efforts are focused on supporting and accelerating this growth while also leveraging AMETEK's infrastructure and operational excellence capabilities to drive efficiency improvements. The integration charge we took in the first quarter will allow us to drive these improvements and better position Paragon for accelerated growth and profitability.
Looking ahead, our acquisition pipeline remains robust and we are actively working on multiple opportunities. We have the balance sheet and financial capacity to deploy meaningful capital on our strategic acquisitions. We look forward to delivering continued value to our shareholders through strategic acquisitions and prudent capital deployment.
Now, turning to our outlook for the remainder of the year. We expect the impact of inventory normalization to continue through the first half of the year with improvements in the second half of the year as we indicated on our last earnings call. As a result, for the full year, we continue to expect overall sales to be up low double digits on a percentage basis with low to mid single-digit organic sales growth. Diluted earnings per share for the year are now expected to be in the range of $6.74 to $6.86, up 6% to 8% compared to last year's results, an increase from the previous guidance range of $6.70 to $6.85. For the second quarter, we anticipate overall sales to be up mid to high single digits with earnings of $1.63 to $1.65, up 4% to 5% versus the prior year.
In summary, AMETEK delivered a strong first quarter with earnings growth which exceeded our expectations, driven by exceptional operating performance. We are encouraged by these results and remain confident in our ability to navigate the current environment and benefit from improved sales growth in the back half of 2024. We are confident in the future of AMETEK as our world-class talent and the adaptability of the AMETEK growth model will continue to drive long-term sustainable success for our stakeholders.
I will now turn it over to Dalip Puri who will cover some of the financial details of the quarter. Then we'll be glad to take your questions. Dalip?
