Fortive (FTV)

Lisa Curran VP, IR
Jim Lico President and CEO
Chuck McLaughlin SVP and CFO
Steven Winoker UBS
Steve Tusa JPMorgan
Julian Mitchell Barclays
Deane Dray RBC Capital Markets
Andrew Kaplowitz Citigroup
Jeff Sprague Vertical Research
Richard Eastman Baird
Sawyer Rice Morgan Stanley
Scott Graham BMO Capital Markets
Brian Drab William Blair
Joe Giordano Cowen
Charley Brady SunTrust Robinson Humphrey
Call transcript
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My name is Ian, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporation's First Quarter 2018 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Ms. of President Vice Curran, Investor Relations. Lisa Ms. may you begin your conference. Curran,

Lisa Curran

under the quarterly A the Lico, on Presentations Investors our Good and today heading replay Thank With Financial thank available Jim Vice G on website the Chief archived Chief President afternoon, under these relating will our and the you the Chuck Financial will Ian. Information. of Officer; later me call. our President and of next webcast Executive remain Events for be are archived measures non-GAAP heading and Officer. section our call. quarter until and available Senior conclusion website, be on release. of required the earnings replay everyone, accessing Information shortly Friday, XX. you, will first call this McLaughlin, and on of joining today replay our financial certain present Instructions conference call. our We XXXX are Investors to the this of section in by May www.fortive.com, financial for measures non-GAAP today's SEC until Regulation call press included after are A us

we presentation, factors impacted period-to-period certain performance. of will the that are to in more increases All significant references financial decreases describe year-over-year or metrics the During year-over-year.

any XX, in any and our any make differ During filings, we they expect These These cause these differ uncertainties we forward-looking speak future. date that number meaning forward-looking statements assume may that of or the or including risks a available subject from statements within the as statements Report not for ended Form from only today. events statements factors are results materially to XX-K including anticipate will we call, developments on in occur and December or obligation the do might the year forward-looking may statements we of make that our the made, the update these forward-looking actual of results forward-looking materially Federal regarding are to Securities will XXXX. actual statements forward-looking is and regarding to SEC statements. Annual Information Laws,

to Investor Industrial like to announce XXXX our focus Landauer June remarks, move take XX Day its that further we operating this in to you businesses. on will on into Fortive Jim's Pittsburgh. Today acquired host insight companies at Before also opportunity Solutions Scientific Field and newly and IFC we'll provide I'd prepared

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Jim Lico

afternoon Thanks, Lisa, and good everyone.

as We expansion our revenue, margin. are portfolio XXXX. as by and the execution growth Fortive by Business to in margins teams core double-digit in both of strong strength earnings our the gross The our using focused drove start and System strong and pleased well operating

to make in continued our have us drive marketing. investments position competitive sales and allowing enhance product innovation high We impact and growth to

mid-single points out of and strength believe revenue the synergy revenue growth reflects XXX basis to of points driven by growth digit for grew revenue the to of Industrial digit delivered brands basis our Tektronix, the continuous strong Realization, all ability and of and XX% technologies as and core in markets across positive were digits, prior Jacobs excluding to mid-single leading Europe at these including mid-single the or businesses core acquired in in We productivity. XX.X% businesses. this on strong at double-digit high technology our recent contributed I'd was for our grew America. our on grew net We growing in of As platforms, and of net that, tax the was portfolio, year. businesses a improvement We North digit demonstrating collectively contribution in growth points. strength a platforms allocation a quarter. rate. Technologies. with have model. Vehicle Veeder-Root, core America. North boosted rate to six Latin Fluke, turn low of result reflecting and basis of of on revenue commitment. deliver and Landauer, and are were and details up the five our Developed rate had acquisitions earnings core expanding at Operating innovation Systems of XX.X% also $XXX.X our XX.X% power performance gross expansion Solutions, platforms and growth by over like Scientific our digits impact PBV strategic our to delivered favorable vitality Sensing strong six our eMaint, Asia reflecting with the a continued Sensing were Gilbarco With Geographically quarter. continued sales share Veeder-Root gross automation of diluted FBS points core Through margin strength the by per China capital single effective reflecting prior good billion, process an six Fluke Adjusted net strength product was five meaningful million operating High quarter. led expansion and instill Western progress increase margin. encouraged of core the Field continues with better and and price and profit integration Core grew our based Orpak, Sales performance margin in the over Automation culture strong of and the FBS of margin Specialty by Product $X.XX, XX growth professional markets X.X% driven year earnings fall-through. our volume America The the platforms adjusted single Gilbarco margin FBS. to XXX of Qualitrol, revenue environment Adjusted $X.X of growth. of recently in was our basis topline posted inflationary expansion our drive the success six of XXX XX.X% four instrumentation

of million conversion free ratio flow, cash XX% $XXX first increase a an of the quarter, XX%. of delivered we During and generated

we the cash XXX%. expect will year that to flow For ratio our approximately be full continue free

share well at as digit digit China single growth world Turning Electrical and across core to leading operating Fluke X.X%. Fluke core XX.X% as of instrumentation points, single in sale of growth product offset of given high revenue growth indicators Professional point data Fluid as our growth and XX.X% sustain Fluke, technology. margin Reported sales of by by the of dilutive core contributed of strong high growth expansion currency margin in consecutive segments. growth. growth digit basis Industrial, the partially and X%. a including Testers XX.X% points Acquisitions XXX basis posted favorable field seventh margin accelerating up grew of XXX reflecting quarter, delivered Tektronix. operating new the and quarter posted reflecting Networks. with strong Field including the of Solutions with and our in Fluke at digits revenue core including continued Growth TX was mid-single single across increasing around to accelerating high I'm lines, Instrumentation United single growth the digits quarter regions, at Solutions States. products growth such broad confident led Advanced led by sense the increased family acquisitions. and associated gains with for and market revenue high all trajectory based core during growth demand at

software now Fluke plan addition are revenue It to incidents double-digit for maintenance-down happen. pleased as for pleased operating panic iNet of from text single to monitor growth the is strong The margin and alerts quarter digits, Middle includes launch FBS Scientific performance delivered available iNet double-digit time core gas is ISCs the driving which that digit very they gas customers rentals. are today, see great area ahead e-mail business allowing America well. plan and Net eMaint strong key I'm for We driven orders and decline single early as integration we revenue was to growth as a by and Europe provides seeing sales and the Safety strong live received March Solutions. success monitoring a to respond I and high with referenced of announcement where hazards, in real expansion. monthly and and situations, go-to-market low is continued business instruments Health performing radius of ahead performance growth Industrial with Qualitrol we growth and more several expand while high synergies East. North core and include markets. in Landauer double-digit range in to last Solutions ISCs growth Rentals iNet and weekly declines than Fluke by Now offset

share or through continue to Pacific in product and market and Middle Helping softness conditions Americas gains East the to this offset expect in We new launches. the Asia Middle year. the East

Monitoring avoiding Bushing to System Transformer additional help by electric loss unplanned outages. power new transformer the and provides utility functionality example save For millions

As mentioned, look excited we're at businesses you June. Field to to showcase Solutions We and forward our this Pittsburgh. leaders in IFC Lisa seeing

platform led in X Moving led mid-single grew mid-single Solutions. the and for digit and penetration growth Tektronix of Wideband was The MSO developed mid-single product by back by double-digit by at Tektronix. markets realization. at continued core oscilloscopes, revenues quarter to growth growth Series, the quarter digits and digit Growth in driven Tektronix the

second large series next when XXXX. quarter XD launch Tek to we a in X lap As addition will the reminder, of highlighted the the in sensing we quarter

expect to and arbitrary overall market core comparison growth as our second increased product revenue quarter, is AWGXXXX believe new issue, drive we conditions we customer more remain While business several continue new the gains. demand in of moderate and including introductions, will share generator, a waveform this positive

tech demonstrating Lastly, achieving a as enduring market X moment for value they I'd milestone like million recognize oscilloscope, their sold the take leadership. further team to important to our [ph]

to digit PacSci's Historically for We're Space down year. core for New our expectation of Architecture with Modular single or EMC which Propulsion PacSci well the resonating Technology, the quarter. low growth backlog of customers maps Applications. excited levels about was high high System digits in is mid single support While growth

high revenue quarter platform headwinds et well by Sensors. its partially Europe growth prior cetera, single technologies in year markets NAVC growth digit Developed delivered by offset [ph] sensing as in single markets from digits, digit at grew strength growth was and high low Our led high in America. double-digit strong orders Gems as the core North single large in growth

target and two launched critical realize vertical, to products food non-dairy gains continue share care market the beverage new market. and environment focused and including on We

growth Technology to XXX revenue core points. including [Technical of core Difficulty] margin of margin basis basis points contributed XX.X%, operating performance, points, expansion segment, Moving acquisition's grew our of Industrial and operating currency XXX revenue XX basis reported

retailers Gilbarco was at double-digit to offset than Veeder-Root. bookings by orders GPT more automatic as major in pleased Our the secured These Navman, expected we with for for low Chevron to win announce GVR with in Transportation automation are telematics Veeder-Root at to first to agreement drive our partnering quarter. improved at Payment demand continues wins Texaco continued while driving orders single Orpak growth submersible was to offer growth also I'm competitive several channel European digit program India where globally. double-digit tenders timing Teletrac related growth tank core play hinges and in retailer a EMV revenue high business and and multiyear out for in our and out signed high tank quarter low core half, for fast to that performance and in growth and shipment Orpak expectation Teletrac African digits as double master our second large dispenser platform some Veeder-Root automation China by double Gilbarco led GVR upgrades. EMV growth substantial today compliance. are Chevron Australia, Strong in shifted high wall declined an won a double-digit Systems. revenue mid-single to growth, exclusive core of delivered energies for for and the by digits, Technologies market several grow year. to Navman decline we the Mexico base pumps continued for led growth core business large installed us addition in remainder the New next Zealand confidence success market and double-digit sales give core GVR a

expect or industry the industrial in electronic China application. reflecting this with mid-teens devices increased growth North is was footprint two, could in to growth platform sale performance United struggle packaging director as continued delivered the mandate less takes AKMXG the only previously in into by by point associated which allows Specialty the its revenue revenue the year. space hold. as strong servo the cost low decrease in support to growth, believe milestone, posted the America, quarter in FedRAMP combination demand achieve We order in mid-single in while revenue the for growth growth in ultra we headwinds closing in its of getting new in bottling automation to with product XX% JVS product, United announced the by continue advancing Authorization and from power and machine, by continues reflecting in Despite the is product and AKMXG Federal quarter, to double-digit robotic according of Europe core of for size, Class delivered Kollmorgen line, issues they Our platform production The the driven distribution Europe Risk to core integration growth, use first core present Jacobs Automation Vehicle in and States. Ready China. and end motor and North mandate first and to ensure digit logging driven the core Kollmorgen and revenue driven by posted A March the with and need plan customers Status program. strong next automation strength America. up and to led moderated Systems strong complexity still States. a growth double-digit truck business in received the Thomson our NF growth. this

using Expo Distributor with and of in positive. platform Expo tool revenue would to our enhancing with continue team's and core our slightly. continue on out were to in franchise To build drive coupled - sales We our business and market. adjusted and We're results to Fortive operating year by high Fortive growth we The The double-digit outperform annual had position. and is that order the confident system We growth the continue core share us our impact we our less up. a be expect opportunities years and to XXXX a coming million help double-digit small strong flattish, continue hard impact execution competitive focus guide. in recorded be distribution. growth come. announced provide we history line this sales At second point, it softness reflected grew gains the to recently to additional growth given and were the margin to capacity better outsized expansion. to earnings growth With Moving wrap offset amount strong is I will highest enhance stronger helpful tariffs. as our we market tool XXX start and storage. to continued the sentiment and the Matco relative surrounding substantial thought respect M&A and import, and portfolio expect transparency outperformance $X you would the our pursuing in Section than

and chain third are our additional supply expect actively this We from impact second risk. tiers mitigating the and of we

close focus and suppliers our XXX, stay the Section impact. to exposure frame customers Regarding has the and to understand to been

and U.S. situation the to between China. continue dynamic will We this monitor

plays brand to appropriate us with our Fortive identify situation the gives out, the the As tool combined the business system countermeasures. of strength

effective expected year. the lowering XXXX expectation growth guide, we X% and $X.XX points full adjusted or flow core of for are cash growth XXX% net margin XX% Turning EPS XX% includes to to we to are our $X.XX, digit to and of guidance the from X% year year. of tax of to to for our XX the free rest core rate expansion diluted conversion our of a basis We revenue core which XX mid-single the anticipate rate raising

With quarter I'd an revenue second rate it digit guidance We over and growth on includes $X.XX to effective Lisa. EPS core assumptions of to tax that, are also which like turn of initiating mid-single diluted adjusted $X.XX, XX%. net our to

Lisa Curran

Ian. you, Thank

for You can questions. open the line


[Operator Our Steven question first UBS. of is Instructions] line from Winoker

Steven Winoker

Hey, good morning.

Sorry, Good morning say, I should these used afternoon, to I'm actually calls, right.

just through something the question high quarter first the second to us little on this confidence Can listen, this seeing just know, that rollout that the see GVR you actually if you in isn't give going shifts, second that gives you we're come shift keep quarter? conviction thing to So what a and that of more you kind quarter.

Jim Lico

Yeah. Thanks, Steve.

I and about this. we've is kind think foremost, first like first of the this a shift talked really time

just if to the little order we bit happened really think was back I rate what the quarter saw a end. out more played move the

to quarter. actually So bill our book was one over

that the So second got just orders just get shift some we saw we didn't we was and that out really - backlog the quarter. really them in

really about we So there. feel what's confident

we well. as little few to in that a conversion the rest system that wanted ERP shipping we of given we January. January in implemented the also year we a have I do strong, We at so - that mean, see days did Gilbarco,

combination things the a puts few quarter. really two so And things of second the those into

mid-single second as some into well as year, confident the of we as a as prepared So of year. we digits our the in actually the we've think And we in confidence things quarter mentioned rest mentioned in in I the a give said, the and of conversations, things we'll get that. of be strong positive for about Gilbarco we of remarks, rest the like the we're the combination customer the number seen,

Steven Winoker

then expansion to talk of XX the basis core about operating XX margin And Okay. year. for points you

points basis quarter core. XXX in did You the of

how the in pressures we the of driving what's think the year? about of rest So should sort

Chuck McLaughlin

Steve, this is Chuck.

we normal quarter. pressures normally the in in were so the points And of XX rest basis looking year, the for a

we're that material a XX but that. - also happy had growing little for we're really anything us little it as XX back I over bit cost good really through could QX was there. with good with and strong. had number mix. In A And we see a So come delivery savings. with think FBS. of our faster, based is lot XX We pricing, a doubt happy No we broad really and points basis a starts favorable IT


our question Steve And the line from from Tusa JPMorgan. next is of

Steve Tusa

Hey, or guys. Good evening afternoon…

Jim Lico

Good evening.

Steve Tusa

there, out On really Tektronix, guys in promotion, that as you kind as on world are that's of the of been I has you fast. guess Tektronix, well of know, technology channel is growing obviously both what - seeing part side there the robotic the

just next curious quarters? So your as several the is what outlook to there for

Jim Lico

Tek, certainly impact. a to good relative quarter strong we seeing - Yeah, we're saw

in comp we exposure, are strong very of probably we year mid-single digit think bit a have electronic more I where so a off ago. a little from China

that for happen. building Tek. North will sort in strength So good of Steven. just as well, Tek business obviously China America also we was continued semiconductor there beyond broadened feel to like be We're for

prepared I think on will in prepared going we Tek remarks a got we've think technology. is that a there. play in year, referenced of in Kollmorgen. that at we to is strong feel how the remarks new quarter main the we with in and Kollmorgen, the number we'll exposure balance product continued introductions as of in we really about and really Relative number with out prepared world the good out application robotics the discussed in new for our And the around strong see the growth really product strength are that mentioned The remarks. really robotic I the pilots

business So at just good core strong on the little a we second comps, be. about will the Kollmorgen half for the we'll because of where the in We'll the probably moderate still year. remain but feel bit

Steve Tusa

senses I'm today, the running assume like organic that you're out. mix mean, we a to you automation kind do automation, organic obviously out growth you out automation what math the growth high add sure like, you're the do acquisitions this can math, just the up go can well, And net math. of kind same of, Are the not kind you've then this essentially but two I those am and the you comes they they at of So - all single to sure business if for what of got and running is But digit some at. you I'm business do maybe year? then acquisition what do have guy, I know, associates getting

Jim Lico

I think if look… you

Steve Tusa

sense sort any question, make what exact pro of The forma…

Jim Lico

think, to what know you're at. I trying I get

not I principally because all good the all year two ones a quarter think be we and second obviously or Let in now of it the the look as as organically [indiscernible] our number organic name. acquisitions, XX% question the really Fluke were what IFC fourth seeing in of they're me last very helpful the Chuck first we but and through a still There up at same. at big If the - for year, automation separate is to the When the clean we're we good - think we're are up small. - numbers [ph]. they'll half and they in about now. quarter really look Landauer had that we look mostly shot to you automation growth But so three really go number, did right core Orpak, but those on that that the are about is mentioned organic it's what we relative the performance in certainly acquisitions do? eMaint, we core core But around, in we - things that core or out as or like they'll the and through

So exact - the Europe really within same [ph] it really been within almost - number. around it's

Chuck McLaughlin

only more high, we're the to recent multiple gap, right. most I where I probably or over is beat you up giving is years there. that I or would not thing if probably think, add single-digit that's acquisitions think probably exactly be the long-term years, And look the going or


of And Mitchell our from next Julian is Barclays. question line the

Julian Mitchell

Hi, evening. good

question… a Just

Jim Lico


Julian Mitchell


go mix through extremely sort of within within be of was year? rebounding. Professional margin in the there strong of that guess, anything for the performance just impact the core fade onetime about margin first spoke But sort or tech balance quarter, may quickly as industrial and I the may You we Instrumentation

Chuck McLaughlin

unique sometimes strong in when and that, Chuck. margins we Professional can growth higher got Instrumentation. Julian, we nothing is It's really like a No, pop and some you in that. this see gross did,

margin - later in expansion. or within Now is we'll be the invest year, evaluating PI about maybe gross operating there we is the nothing much anomalous how margin but

Julian Mitchell

on industrial talking within you. little going There forth. talked a pre-muted and about then, so distribution, the other been I of franchise you Matco bit about is what's guess, Thank around and a And automotive companies lot there. Understood. trends

Just wonder balance the your update give And overall Matco? how can if of you year? the think for franchise you trends an outlook on

Jim Lico

in we Yes. quarter. say It's - really I - good the Matco think, a we from performance

as outperformed relative to company we peer I they industry. the clearly look think,

On the category. backs of like and really diagnostics and good a expo things our tools

I tools think our need do they're away doing. those the Julian, customers right categories, that to work

has that So I speaks to. that think tool a typically been slower. for It's off that something storage, wanted to quarter which if a customer they put could two, or

new think are need I what sales actually better because to So frankly into car sales to the older you're dealers. little three most repair. cars that's is to Quite our bit shops run in opposed as quarters - being seeing. car short repair a And slowing more as of be tend tend

So related are repair of to to sales shops network, most the not our around the they mostly related country. dealer are

to with have we storage. with we said as a few - that 'XX, second tends well with mechanic hours to dollars the we'll economics we 'XX accumulate think, think mechanics in that times start to see correlate think pretty start improved some the think I the this and we So half. tool And downturn,

focused on But not think Matco tied sales the short the we new car very improve half start to we're we're will second to tool So run. start really improve. and will - storage to in hence in

a how strengthen the we I bit now, go but think the year, in it then car from years through Matco to sales see we put then, market the new dent we have think down mentioned, right as little year. continues XX now might for Now


Deane Markets. And Capital from our the next question RBC of is Dray line

Deane Dray

Thank you. everyone. afternoon, Good

Jim Lico

Hi, Deane.

Deane Dray

questions of on couple a For Fluke.

that us Fluke you any you rental fleet take sales? you you you analogy, question, And it could through on is a offering the that cannibalize said of first The basis? need utilization versus kind does are what economics, use do

Jim Lico


Deane, a have part there? second yes, First, you

Deane Dray

the question Fluke of interested just at And you do. channel? the sale, sell-through I'm versus sell-in of then point I second in is the accelerating touched on from the part always

Jim Lico

it. Got Yes.

what economics the program where found down facility the IFC around are pretty have the part we what an frankly we're tends What very taking utilizing often which, months. rental are maybe unknown they was And be two pretty two market, or market the opportunity for the tools. And So we bought this of opposed site upgrades, really once to good. as when is to are to a is saw rental Fluke use the or new three tools. needing not as they to it really found people of accelerate we will is this three that - that quite

So two or months. maybe we think for three

the is payback. upside payback we twice, the a a going to program now a So than it's We just on is less pretty use think year. We And good to a rental us. within - is work of really can of cannibalization basically be for did that. lot really understand and the it rate bit little

So but will point-of-sale It here to point-of-sale, North America. like. saw we POS what the accelerated economics the month-to-month, over move last we bit look good little does feel around a about months. about we pretty feel Relative good Fluke in several

as at as America. well improved remarks, in North prepared mentioned Kollmorgen also Thomson, We we as her saw point-of-sale

continue sort the those three at now get would three where and to that those good. our to pretty things things we good pretty to well think going trajectory So are we weathers And right good. point-of-sale I are that look be is see suggest data, if pretty

Deane Dray

it they them and you're Danaher, That's economics be is then towards drive Fortive, was there was they is focus M&A a the follow-up this it focus wanted big they a sustainable that when threshold it much potential targets? hitting terms work in gross that of for real and for helpful. question, of the got to and margin, XX for that. on for your basis to be above And How M&A or

Jim Lico

always an dynamic level at innovation. We - assess certainly businesses when answer of market quality of an look gross it me - and we important first. of pricing second acquire, important that's part to power, margin trends Well, position, let terms the in ability

about think to higher Difficulty] think the at to margin. more an always So we have those of [Technical revenue how important it's tend kinds we're Relative recurring gross businesses about we be as that looking metric. things,

intention some is these aspect the to the financial portfolio. important accelerate trying of strategic So intent it of kinds somewhat, the of more business but models is into our of

gross Professional first to So I Dan, to usually gross industrial gross felt to good lower in speak quarters. margins margin were improve grow that's Instrumentation a that gross able about gross and one our will margin technology their quarter nature sales. XX% by be really of good margin The despite the question, margins. flattish

throughout incredibly when did think we're work That's of our gross teams quarter to do. the work I only proud around in look portfolio, also business innovation, model of the margin. drive we you it's So not FDS the

it think speaks our to year. confidence the I in


And next from Kaplowitz of Citigroup. from is the our line Andrew question

Andrew Kaplowitz

afternoon, the on guys. I either sales peers just follow-up been shorter you're cycle mentioned two up. I bucking had who you your have some strong, some trend question, Good think a weakness crop of of

Fluke maybe in would is was high focused industrial high any Are I versus you including your think that there, there just up single-digits, say is hitting you you your energy business difference share within single-digits. businesses? markets mentioned between industrial your also up businesses

Jim Lico

differentiate oil it's our to at what from we from think to benefit So getting hard I maybe channels, we us pure look gas. that industrial would when tend some probably think and for

out point-of-sale than I first will in. our the take I to speak So Fluke, just we're - But is faster if sale all. our as maybe core of

feels good. that So

of innovation. good a some we're is probably really share, it market on I job think doing

also strong part certainly to feel I that's But it. able make. our distributors will partnerships it, having would about with good but and of so of industrial a lot we have be that So

Some has pretty high because of our share. market market this is Fluke

do to the of things market. make is So really their have to some

Andrew Kaplowitz

Okay. then I'm as not peers weakness have that Western respond may to elaborate question, Europe in helpful. any you related weakness maybe seem if some doesn't you saw quarter, weaker in region? Easter be prices May whether several or this be slightly the East begun And see improvement But That's will of like sure it's it can here? the on Matco. Middle

Jim Lico


just up too. POS wanted I I to think, maybe, come answer

comp tougher now, to while half. We strong start the will we really in second will right - seeing some we're get POS

see So strong POS. we'll history

half, transact working We be where Relative expect because comps good of second to the secular couple might we in Middle the East strong we with they quarter. through some numbers We POS had just their in the will Western OEMs. got a a less little of Europe, good but half. business the off probably a things European be second

number Europe. that our So us like bigger and little good in places a of Kollmorgen, But bit. business we in businesses, saw Fluke

innovation will We then joked January about it to call that the to think good. I on will to the Europe I ends call being think and had pretty up continue they in this continue And we and say, year in trends well. do some the across with, the think, business I that do execution of and our in as job that of robotics to like things really the businesses are driving number good regard a our and like


And line Vertical next question our from the Jeff Research. is of from Sprague

Jeff Sprague

your are of the I resources there. one maybe Is more business tax. What related spending entitlement think, rate? opportunity Most tax have just you a there guys of there? questions, views on on lot Obviously,

Chuck McLaughlin

planning. entitled but put else when you things There say, of - would and changes I the year think Jeff, looking do can XX% I results. its opportunity team year. business to that option got of proud to to of then of looking the we - as we as model. really idea really certainly has this had exercises QX you for the the our do. be for were there that rate a we what lot options U.S. part year a change bit little higher the outside wouldn't tax that down we I of we acquisitions coming with in was on about here. do say of tax tax a say anything, happy top And than tax mix about it of I to would can better that have wouldn't that, and And just always when think then that lot lot been coming But the see earnings too we're but Part we're and a we're rest to of the likely forward, we them is our lower I lowered reform. the is for do the and also of see

Jim Lico

just Jeff, add. I would

an of Trump the we've day, has tax do rate I of in same think, is done we say our at kind easy think that company. reality in it's team the continuous Chuck improvements Administration, this, - looking for way the it's but two years opportunities. the at end everywhere people I really outstanding job the say and They the else improvement to had applied wouldn't in look than tax to at but pretty less for

Jeff Sprague

to this rate to we tax or nearing Should taxes minus cash or be expect that? plus relative GAAP

Chuck McLaughlin

cash got tax effective rate. now rate tax actually under our our We

to XX% So it the foreseeable is will future going we than less for got be model the


the from our of is Baird. Eastman line question from And Richard next

Richard Eastman

is I for kind three a growth the your so or the confidence? year for? the four. full noticed Where that talking in Where now, first core for the core guide extra up is are point picks of we digits or of mid-single or... point again, the, by growth about coming Is

Jim Lico

as to we talking growth do turn will We don't half, to deadline. Gilbarco QX second get to So that in change. we the the earlier year to been QX, saw was but the closer be first already share. now that We There quarter of four, to as change timing seem year Jim and mid-single. we've as bit and and going low-single we we see all, the the mentioned But of Gilbarco a really start as little in three the really is first much for - QX. don't rest we've will of always as that from talked being being about see, in a with that guide always about

Richard Eastman

full for year above that's on anything a have little do some nickel that? there there? just we cushion curious is above mid-point? And in here. Okay. tax think I perhaps down the still again I midpoint the in went And if the mix up or the then QX, mean, we're like by guide XX%, $X.XX another adjusted rate comes slippage a Or bit little

Jim Lico

the First And company for fundamentals nickel, or that's the and going for good, $X.XX mid-single that's the high-end year tax at guide penny really the is We going the coming of the rate and of in XX of down growth all, there to of drive digit and really normal like low and FX. that's we another the took on the forward not of different. above basis rest points

there We QX, lot to year are aware play. that we're and in though is the of a sitting

QX So in we then tax went FX. with up taking in and

Chuck McLaughlin

QX markets early you But still the And focused what think markets outperform around performance, focused and the days, better, outperformance demonstrated but professional just here. when we look market will a much We're we I Chuck our we're focused on a so the portfolio, I'd we are early. now in have but we strong in I that. took and is upside certainly, to to on example, add strong is probably performance then great right instrumentation mentioned, very what see. as if on very it's think, some can continue we share areas,

'XX, a you us going quarters, very number to making last to sure have in there's take the on make time, having invest of. sure us Chuck 'XX, investing for and can followed we're work know, care we future we we're make business. continue things want to that thing of 'XX long always for there focused risky the want to thing well. we good the some to we're in mentioned, As but one also It's that as And we sure is a so as


from question our Rice line is from next And Morgan Stanley. Sawyer the of

Sawyer Rice

here pipeline question obviously but at of will extended stepping I'll my acquisition then sense urgency may to channel you the again the and any out but a maybe have here, and quarter some the capacity here, the size size bring talk maybe are on maybe M&A the on you most us. of post-Altra? a question the bit maybe just in another for multiples seeing and follow-up guys pipeline Any platform of and here, Just be of looking assets in

Jim Lico


a I I within were M&A we of a talking each quarter-or-so, think, talked is about that year and transactions for as had we quarter number then episodic, think, from completed. we ago, first,

confident a and involved in the we're things think, that feel - We're Relative we difference busy. future. of do working a hard. number we very that So I is saying M&A right little we're in very will in now. in obviously a is here done bit There to, there get of

of stuff. So our week. done the one group think, sellers I M&A probably lot a maybe are of Expectations the reasons you lot peer months seen last shorter that's in big on being amongst a why well, of seen of as haven't this a bit the particularly little six higher little a

be but a So may I certainly little I opportunity, think higher. is expectations think there

one that's thing. So

relative probably we're we five and how probably said, ago, And to when think within a would went I platform, left. years add two we it years new about years, new out think into now, with two years we three platform.

market we a guess, today. more like $XX is current I the new served probably So of within the really have billion we of platform doing than portfolio likely. But the

and the Investor You're opportunity to on with about the Conference solutions going how things platform our field there that hear as well.

done their our I think of we leaders growing that's about platforms, how always that. platform think perfect a and example

results is non-core think over and first XX% revenue of between is over field core platforms. solutions those that way the we've up I quarter up instrumentation the - You see XX% in and where out professional built because

in So and hear that you'll kind you of that. see success about

there new to about So certainly do to we'd we to it. don't a certainly but opportunities a portfolio, feel there necessarily love do obligated things an are are to kinds new improve platform, portfolio. their and to add of lot that we - is for talked create If that, would looking we opportunity


Graham from the question Scott from our is Capital BMO And Markets. next

Scott Graham

of Just a couple questions.

conventional's. of of of on tools the with this and there curve that I conversion percentage Accelix, Where The you last sort at summer, tools are point? tools, the First sort which in of of solutions. spoke was conversion sort made sort think, X% were field number of about XX that connectivity to I guess, of portfolio up of represented

Jim Lico

is probably Well, I than tools. of those was percentage portfolio the has X% our to probably a about alluding five. bigger We think, of probably have market

we've tools categories, the that. key a look there. exactly at of out you got that number some So is. it's sure probably if it But are a now of I'm higher what not range of

growth exact or is at sure those back of on I think connection certainly what say acceleration technology best connected about continue number will is tools as places I'm that, the to TX not Fluke certainly the the the quarter is those the penetration we to getting we out. about family a core but that. prepared we're have remarks are where talked and some We get in well. accelerate of

accelerate to continuing we're that think that. certainly we So

We I part eMaint more we our that's The felt we software the broadly of about a to really our want have quarter. think doing core about been as good in job, portfolio. mentioned think a really connected around can they that utilize as to they hands do. tools just sales tool to overall good as the put able be what tools well great and

customers point little to Our is share of The a aspect the we solution well. condition think while longer very feel of is we convert business just this, slower on bit one pilots. monitoring maybe doing and the for good taking about is

a of get remains our level greater certainly we'll detail of we Conference a we great couple selling of where in learning quarters at. focus we So on just we're a feel that we cycle that's detailed that to that - when Investor a bit level said And about and for longer, field good but little year in solutions.

Scott Graham

rentals Do it? help the the conversion or hinder speed

Jim Lico

but it, it. hinder they they I think, help don't I don't really

bought just pervasive. more It's more to just tools I it's opportunity be try than at the think thing. thing. It's niche more think part-time rental and they have. be us more customers reluctantly of And It days. tools a have when really that a a the to high-volume day typically out more they be the program still will more early of the I won't of of need likely for end an get

really I helps now will strategy little think it not. while our forward us or a take


next from question William the of Drab is Brian our of Blair. And line

Brian Drab

up you going general, - Business about acquisition, least how business? on thoughts as you digits, business? any little the is the excluding And mid-single orders orders. accretion Just large cut land as a bit in expected? at And regularly in large couple questions here. that in of left that talk a see Can

Jim Lico


see, and Fluke when Solutions. maybe current that that Biomedical will see we is large buy like what think, the I the in is think at large that government something other lot It's really Fluke when occasionally of that a happens once we the which make typically Throughout businesses, orders. a other part Brian, business, agency related, business up that. we our of typically Health And of government year really I orders see end have one time every time. only or doesn't

in struck really how a fix the wanted good about of business the to them that's time. for year try that margin plan, the applying by the they of of long to the things I as the tools organization broadly us, period So We frequency we on telling how fix team lot just was I with are for the were feel and was their and really earlier they that. strategic to side. progress made a the Chuck XXX-day

businesses it's right pretty margin But through we than core good We're from there a to better early. on is see. now, perspective side. the That's fall seeing still anticipated. a little the good bit So

as I better, think are long-term both still returns to here think but planned. business in I will early to we certainly continue be and days and good So confident us, long-term going strongly do believe the we'll returns make the short-term it's it's that the in the for we're coming a deal and

Brian Drab

balance or quick it's quarters granularity which this have slightly more fourth in the Okay. revenue like any you year. organic give growth? looks in Great. organic comp the Is And the terms one coming revenue of, growth, would for the then worse additional of quarter, better mid-single can on us digits one

Jim Lico

all pretty we relative going quarter pretty see the but obviously, that close. it's how the - seems things quarters, couple reality next fourth probably the will being one a feel consistency be of we be always Well, the but play but way fourth quarters. out, is right long up of will better like we end now for quarters quarter to And

the about And I think I so that's it. think way


Joe question of our is Giordano from line And the next from Cowen.

Joe Giordano

that very of may someone of current One terms for be your moral cyclicality clear wants who looking the with characteristics you companies this transformation kind in cost things, does has that company have portfolio of into in Got you be are like one how as two for translate No you. portfolio strategy the synergies. not is, of to and else's some characteristics? those may progress

some get what So are maybe that? you ahead doing to of of

Jim Lico

employee continues, this Yes, that more say our I engagement excitement would out never think operation I of higher. has been coming the people - to

portfolio. how of So our the businesses we feel about about good feel and all people

ability the that to Fortive recurring business going something whether I reduce been slightly about, have we've done to revenue, our of might businesses that be of have that on have on ability transformation a improve job services been some bit that in and working of to talking may business, think businesses all maybe will Altra the businesses that, the But is different model to little software. had a and even be the it's cyclicality business more other a all great remaining in regard. aspect some and the

that's I talk about. it's businesses consistent history. what do. have So And really a making better, And what I our think zero up businesses can our our really moral, to we that to and I we conversations high issue that's about expectations theme think are our are think and so about always and businesses with

to pretty the different So had close I really than is organization. don't this and what we think

to we feel and make continuous businesses everybody believes better drive I ability sort our that our of So the pretty as understands in in. confident portfolio, improvement

Joe Giordano

if the our like how And year, Okay. sold? do this that you report, businesses model businesses ANS the contributing to of out those take is rest was for the can the how much segment? that? that if are of core effectively for in in growth you have internal your Chuck, quarter you if just just what model you then, digit And mid-single And

Chuck McLaughlin

second take first. We'll question the

model have through built year. the the We into progress business the business

gets year. - not So deal going be to said will change the closed, that's until the until which of have have we end we at the

like business without same GB businesses businesses, X.X growth. mid-single-digit out is, important without think thing the I the at quarter. single-digit But if the and its for look just low we the the of ANS is really it it the is take


And our a JPMorgan. next question is from from Steve the Tusa follow-up line of

Steve Tusa

next at questions. will on to divestitures? the you gap kind aim done can year impress you closed you do the out loss obviously gap? handle - these year-end, by kind bit have or are you a that comes get on thing kind that from handle comes how to times don't for is bit get a around? you this close and acquisition guidance of something bridge want when to kind the of you that of on expanding the of So kind just to year deals going of bridge time Just How or the from Or next

Jim Lico

track of as the by that But progress on We're making two separately, the end the at with and then really know, can't of done - hard can to do M&A always Steve, first chime very that it. that are then and things get have And are we'll hard. we and deal, I'll we're you we been. that. Those Altra in. looking with that, year. as we very - timing control are you go very We're on Jim working just pleased towards with is we're the working

optimistic I out about but So understand and to both we're you're but hard seeing will what working of we're those do what fall things there. the in saying, we're realized

Chuck McLaughlin

any I better. couldn't answer

hi. I'm So to going just say


BMO next from Markets. our question is a Graham Capital of Scott And from the line follow-up

Scott Graham

on to increase rate lower plus here question EMV. want structure the million a The $XXX I tax ask we're facing market opportunity?

Jim Lico

so. think don't I No,

- different number if from But you shops, have we don't that we could suspect changes I so small customers see we don't the accelerate strategies we what of mix - far. think tech think the probably so things. thus We large-scale wondered market. mom-and-pop really because the retailers I some it

the think compliance-driven I situation.

probably going So They obviously do not the be people to would to want idea is that complaint. less happen.

the the regulatory driver. that's driver we really and here, is So real that environment suspect the of

then that as pocket different of out. to growth But we As think that tax we growth a the QX quite haven't we thought that air in we accelerate mode business now said would going move year couple we and in remainder And that's in frankly yet. will I we mentioned and things we do, the year. as the maybe thought QX have seen QX ago an and situations, might of in a some for be we to is what's mentioned,

Scott Graham


You easy did segments? Second say is makes both positive in that one one, Chuck,

Chuck McLaughlin

segments? Was in the I've I talked mix segments. the No, positive between was about well both think mix

and the see faster a think, growing years segments, IT within that both through. I showing say PI on we margin of expansion that look a with think that So When can bit I little they fall you drove in those because are more segments. I both

So the yes. be guess, I answer would


And a Charley we line of have the from Brady question SunTrust Robinson Humphrey. from

Charley Brady

picture chunk broad you GVR. will But thoughts thought bigger of we effectively what's that's kind installed going get longer-term at more that that you a maintain the U.S. good I'm we it. get basis? happens? there Is deadline come about or of Or sure base recurring growth kind here, longer-term question replaced the stream? in to you some be through a When trying to least function around for at How May do of don't product what on the of your GVR. revenue think just a mitigate

Jim Lico

Yes. on back we the We'll certainly where plays revenue coming from year, out. depending probably a that are have

did XXXX revenue that. recurring business acquisition move really of we model last markets on from what what base from has Charlie, in will. high-growth focused growing larger and the think that the OPEC a the the lot was sort year focused we're that helps about been XXXX building the organically XXXX we I a really And mitigate if to said on, of drop, was you

business in places As investments we very start massive which great like to are network. there off a the their in mentioned we prepared are in a building India, very, strong making remarks,

a that be of level going mitigate earnings to can course, as the are those of do working the we'll and to So we well. things obviously kinds at

some revenue at between logistics with that way, I our us have of and little about come bit, so size we're but customers time model some into things So where we things that from feel chain can allow with network. the do what because with will number the current recurring And probably the revenue supply data acquisition, will a building of negative fall Gilbarco the will in scale good doing need build analytics technology to we for by we're XXX in to a upgrade that the model. there. And of will and get


further turn this no showing I'm we questions. audio to at time, And it Presenters, have I back that you.

Jim Lico

of We taking excited will thanks, more busy and what our time Business all possible. teams Ian, you're thanks, us out I we point did you make all couldn't and hope with it. pleased very good June this - spend in play make today. really System all a couple the a very Well, everyone We year busy forward. perspective saw And and be for to the you for that see about quarter of from we know feel throughout the quite quality Fortive week of Pittsburgh. quarter. how the work weeks We're for the to - of in are to frankly, We busy for quarter with excited you. about at can the you

quality we players the make successful. platform. built think, to of the the I on team every how quality business of we you so importantly, And will field that we the see the day will more the have, you see that put the

seeing to team calls. to to available Lisa Thank and We talking look Chuck soon. are we you. soon. look you for forward forward you So And


quarter joining first the you XXXX thank Fortive we earnings gentlemen, and Ladies for Corporation's for call. us

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