Fortive (FTV)

Lisa Curran VP of IR
Jim Lico President and CEO
Chuck McLaughlin SVP and CFO
Julian Mitchell Barclays
Andrew Obin Bank of America
Steven Winoker UBS
Scott Davis Melius Research
Steven Tusa JPMorgan
Deane Dray RBC Capital Markets
Nigel Coe Wolfe
John Inch Gordon Haskett
Andrew Kaplowitz Citi
Richard Eastman Baird
Jeffrey Sprague Vertical Research
Scott Graham BMO Capital
Tristan Margo Cowen
Call transcript
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My name is Brandon and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Third Quarter 2018 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations. Ms. your begin may you conference. Curran,

Lisa Curran

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

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

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

Jim Lico

strong everyone. and the reflecting Lisa, our our good core increasing we afternoon of Fortive underlying earnings and the reported the for the Today, strength momentum teens the third growth adjusted high portfolio, business quarter power of M&A flywheel. system Thanks, of

sheet, our accelerate continue growth our position Given free and strategy. we of cash advantaged organic strong a balance the in achievement driving flow to acquisitions pursuing to an generation healthy are while

announced acquisition we During closed quarter, the also $XXX the XXXX, billion and application we In the now of close closed. in we specialty the businesses well divestiture of billion ahead October of the million X. have automation were to billion third of of transactions have total, which $X.X of the on Through to FPS, $X schedule of acquisition Altra, $X.X able Gordian been Accruent. and already

of based quarter. the our free preferred so done offering our performance as execution as the cash balance to have well flow commitment mandatory on sheet in strong while We our consistent second successful a maintaining convertible stock

critical and into digital revenue. our assets They and together, our with Accruent advance growth for continued quality increasing range characterized attractive portfolio. limited address workflows the trends acquisition The of aimed acquisitions also Taken these our reducing cyclicality recurring strong and Gordian customers transactions portfolio by enhancement provide significantly cyclicality. efforts growth strategy the high long-term across software-enabled at significant and through entry of to represent a software margins the execution of markets

consultations Products. and binding of regulatory with offer Council FPS, of of we for hurdles & our the formal application of the way at progress paving on make announced our XX. previously continued cleared completed and we September quarter, Sterilization Advanced Johnson the our partners Johnson the toward collaboration During to Based closing acquisition European key also close Works continue on successfully requisite acceptance the the

We early continue to the close XXXX. transaction to in expect

represented special quarter responded commitment demonstrate about disasters to opportunity team and the and showed as the recent we annual that Fortive is all of our day the Florence other communities local around world third to The our to natural our Hurricane caring. through

increase as XX.X% the were effective over a Adjusted Sales strong net income weeks, was children Matco, events of Industrial in was which core Core the the strong offset in Tektronix technologies In core at for continued like food Industrial Western quarter, digits markets earnings high-single Scientific, mid-single shelters, North more offset diluted by including digits revenue well JVS. two earnings improving the points past Gordian were gross and growth With I'd hundreds of prior rate Scientific, we XXX continued adjusted X.X% $XXX.X performance XX.X% and XX.X% of challenging, based turn the market and grew America. for North Europe important more of been the Coming Accruent quarter. by of Over success building This quarter. per Asia Geographically, of to year well China continued $X.XX banks, that as for reflecting growth. long-term never of recent X.X% revenue prior that an a over in posted support revenue at are America industrial the net together by digit a third Veeder year. million pressures. on quarter. the the Acquisitions working to Automation. up impact the for our our low Systems. the growth driven Fluke, share tax inflationary across generating based grew anticipated Jacobs our details to to parts high weakness reflecting was led and with work. low-single Gems. X.X on and Vehicle reflecting participated core certain billion Technologies and communities driven from low-single as markets and and including of contribution growth as top-line homeless. strength tariffs company revenue digit Qualitrol houses partially of and of basis communities by contributed grew the our Adjusted and growth employees we Fluke, performed with the which Latin points growth becoming XX Root, by we digits Developed was and in was strength strong mid-single high-single Despite digits growth Gilbarco Sensing declined expansion in America. basis acquisitions margin of

costs of delivering the positive points consecutive at with operating quarter. core profit margins quarter margin The price six offset unfavorable within than gross Gilbarco third portfolio. was XX margin decreasing basis well PPV mix as days above at contributed with the in XX%. associated Hurricane productivity our production were Operating fourth platforms Root loss with during strong four dynamics represented or Veeder as due as to Pricing points of more by Florence quarter XX our XX.X% basis the

quarter, third cash generated XX% a the a increase of million representing year and XXX%. conversion year we flow free free over $XXX.X ratio flow During of cash

For than ratio cash to a free the greater XXX%. deliver are year, full on of flow conversion track we

and core revenue grew digits some slowing Field revenue mid-single impact Fluke core Core led pressures, Digital were margins margin increased the low-single EMC. tariffs dilutive of and by Systems of posted XXX Solutions sales X.X%. during XX.X% revenue flat XXX currency points. by digit double-digit which growth operating low-single mid-single delivered of with to at Scientific. operating growth Fluke core quarter, Calibration. core the Reported at Fluke reflecting basis in expenses. and digit our instrumentation markets the digits by XX.X% and reduced Tektronix, were high-single slightly driven unfavorable segments, Turning and reflected growth and Fluke and growth customer-related developed growth delays while growth growth basis Acquisitions Advanced growth Fluke points offset in margin Solutions acquisitions transaction Industrial points of to continued up at Fluke associated instrumentation professional and digit contributed the due X,XXX outperformance high markets including basis and Health Fluke in Industrial by inflationary of quarter. solutions at Group

are progress vibration market Annual the customer for China, realization quarter in Digital a digit core fully to and remain countermeasure on the large recurring software ruggedized a margin the revenues based high to the XXXX. platform, marketing hardware slightly chain INA drive related of ISC and the in released despite quarter. and gas in for outperformance investments led gateway Product we first teens greater reflecting the at product growth EMC made Qualitrol expect Scientific order the drive expect Middle live new as has real-time into combined share Systems, from by process business growth to in a compelling devices of which Europe transmits through heading reverse driving realization headwind to and of and in implementation the represents variety grew continuation delivered thus alerts quarters fourth including Tektronix. quarter quarter pace pleased platform simplifying growth the opportunities highlight Industrial revenue impact response Fortive from proposition prior market and mid-teens East. strategy reading, of ISC has of order decline recently we declined bill XXXX sales generated momentum digit to to system in a in a which double-digit we continued gateway, critical delays Fluke mid-single product messaged expansion a the than we coming growth in data registered by worker sensor of delivering far The revenue and one launched counteract [indiscernible]. tariffs a Fluke expansion we for a Flukes market We the team's applications. device Fluke, sales gains. Now led the than by fourth the expect value the orders very continued single The of RGX from recently positive XX% in offering revenue the book that quarter the significant continued lower registered for customer sales industrial This be the ongoing reflecting into growth ratio INA XXXX. quarter. core softness and that of quarters. continued location, to connected with monitoring eMaint to At the the greater the [ph]. cloud FBS America to supply from to declined low North platform which solid

by reflecting excluding North the decline U.S. driven America defense created customer growth orders highlighted X X momentum strong revenue recently in Results primarily contractors. Series Tektronix, mixed-signal digits. Europe China encouraged by we including by to We key the and the strong XD Internet were new a Smith oscilloscope. Fortune order deliver X low-single technology and offset continue to Nephew by for and markets wins a and and company. growth the order Tech strong Series growth with automotive increase end were quarter the positive Turning the in industrial double Series Series a for X delays and was sensor from XXX growth introduced large in previously, Western reflecting the in core and double-digit digit

led Our leading Double the quarter command reflecting heavy from Hurricane Gems, more results high in buses order low the declined systems sensing technologies America. revenue US. offset to related a naval digits large comparables a growth single core Florence the manufacturer platform from the at project for the revenue America in year. digit large North due headwinds included and in is to revenue North single which growth core up prior Core in a slightly China of duty than sea difficult digit in by

basis margin acquisition. increased XX operating driven associated due revenue points in currency points. points by technology XX grew core core industrial a with dilutive of margin including XXX basis while points costs of pressure revenue material operating contributed reflecting movements basis to XX.X% Orpak segment, reduced well by Moving growth Reported XXX X.X%. decline our unfavorable inflationary growth as tariffs growth X.X% as margin Acquisitions of to of of basis operating

generated digits growth from single Root core mid-single growth and grew low-single delivered mid Our strong North increase digit Florence. high by platform growth growth high low transportation technologies teens in the Veeder revenue Hurricane in impact negative growth driven markets. America Gilbarco double-digit GVR led core markets. reflecting by revenue digit

China in growth by and for wall at related gauges core double Root upgrades. submersible pumps double-digit led tank tank strong to automatic was Continued Veeder demand

pickup accelerate order a and book. North see at As anticipated sales single-site counts continue particularly we a and Gilbarco, to mid-tier in owners in fourth this expect American quarter trend EMV the reflecting with strong to

continued into class China. to the in business, be manufacturing leading headwinds digit and storage gain. revenue and very recent growth core as driven by digit an North also growth by high-single Navman’s to to in double-digit growth by new returned the the by at launches franchise Tritium, American growth the passport as our our mid-single the experience Tritium a core the digits, grew increased changes churn. best at GVR sale share Automation was full tools team robotics. automatically both Teletrac announcement repair for implementation single Altra vehicle of and Western growth they in database Moving minority In continue automotive an customer the of truck a launched nature key in led led to quarter, a electric entry led third made number revenue platform production information tariffs. new fourth a a into revenue specialty of performance the both market the edge challenges Florence core mid-single EV all Asia wrap growth unique Results growth accelerated power cash digit X.X diagnostic the driven Navman installed on per featured highlighted by North will to investment Teletrac The strong well by Europe. with delivered launches providing hard solution. Maximus to high line GVR diagnostic by Pacific with meaningful America, and Hurricane delivered quarters ELD in America quarter base markets MAX join which To the wish flow unfavorable provides focus driver such despite make, mid-teens distribution, product recently while scan high-single digits Europe. also entire Due a the fast posted had based digits core to on tool expected automation Fix continued be North were Maximus Matco the quarter, year charging recurring have strong showing driven successful double-digit to to as Matco the and we've growth and automation’s impact revenue the during reporting reflecting core of A&S adjusted revenue subscription-based where coming conference diagnostic share X.X, Maximus vehicles, team market. model, in mid-single strong earnings causing performance we a growth for We growth mid-single links tool digit in growth double-digit quarter tablet platform free During double-digit the new and called reception is at to a provides in Maximus solutions up, XXXX. JVS [indiscernible] as revenue high-single positive third and and by opportunity. some grew product associated digit digit mid- growth and a Fix. to A in point proprietary GVR’s business driven U.S. lead increases new in Western early high-single by recurring

long-term also and a significant generate our growth, faster We reduced implementing date allocation the Fortive complex to have top-line the we cyclicality, Fortive grow XX% transformation positioning made XX% earnings of free and while recurring growth progress cash strong enhanced revenue. core to a markets with continued in and portfolio year, strategies. consistent formula Throughout opportunities to in efforts, of driving also with adjusted operating flow, year results capital increase number

deliver our sustained our With all our quality system top to of aspects demonstrated the continue portfolio and to acquisition of growth. and we'll Fortive business drive flywheel, earnings of enhance the power the momentum

guide. Turning to the

updated free basis. adjusted full-year points, EPS of business. the and and tax of than $X.XX assumes basis, results net gain offering for diluted EPS expansion continuing greater year the operating We A&S growth, adjusted reflects our are of stock preferred XXX% on excluding diluted XXXX revenue from to if a $X.XX updating effective impact the excludes an business. on net a ratio to basis of XX guidance conversion the XXXX the approximately The impact guidance cash The operations of from XX.X% X% margin the dilutive converted core approximately A&S the rate which guide core divestiture of divested flow also the the

initiating expansion fourth XXX to of We guidance effective are and which operating an core diluted also our quarter margin net XX.X%. points adjusted EPS basis core includes X% of $X.XX assumptions growth, to of $X.XX rate of X% tax XX revenue to

Before XXXX. we we an given portfolio to which in XXXX the capital questions, provide complex and on to successfully transactions transformation moving early view extensive want executed

We $X.XX high growth addition assets. earnings of $X.XX of per to high collectively expect contribute share the closed reflecting acquisitions to software margin

profile core we the portfolio of ramp, enhanced gross cash fundamentals Europe and particularly free than Our margins conditions impact with portfolio exceeding solid continuing offset generate with Fortive system, in flows strong execution announced recurring unfavorable EMV tariffs. XX%. fully East. and revenue strong application the to annuity should The greater to Through America, business and of North XX% our of while of the from expect packets Middle China in monitor the the remains we

double-digit to of to turn savings summary, assumptions tax share our another the generated of our XXXX. to XXXX that grade macro In stranded deleveraging expectation is our approximately the in cash conversion offset of environment, maintain a earnings operating remaining to per it Assuming flow growth A&S cost rate us of I’d we And restructuring basis adjusted deliver investment free like and to by quickly enabling include margin over a greater anticipate of year ASP expansion, in ratio lastly, with preliminary XXX% high than it efforts. points $X.XX core fifty plan the closing an after Lisa. effective $X.XX teens. with And stable modelling rating. our We to of earnings

Lisa Curran

concludes Thank formal ready you, Jim. questions. comments. now That we are for our Brandon,


from line your comes of And question Barclays. Julian Instructions] the first [Operator Mitchell from

Julian Mitchell

start you after QX, if helping in I just X% Maybe around us quickly said to think X% sales by understand just accelerates the could core X%. growth why you doing

what that So three two pieces are or there. the get you moving biggest

Jim Lico

thanks. is Well. It Jim,

half. months second the sort range this just playing hurricane we only we talked know is backlog the the for you from I also be the pushed and quarter, the not foremost backlog, built Tech the think said some slightly first in few we with thought we second it of digit we'd we different really flew mid-single into out of range X% -- as fourth at that half that And cadence, about ago, we with a so at in built backlog and Fluke. Gilbarco,

So we're the at We well into walking of as that into moved backlog some a about talked EMC situation. fourth. good the orders

a the slightly third and quarter it's of movement, got to we we've see it's really no cadence see the just revenue, fourth the macro the So between but really change or sort how the different quarter.

Julian Mitchell

question second XXXX. with base comments for $X base my just coupling that initial of the on XXXX be sort then you would and around earnings And the gave

is right that EBIT So $X.XX way high-single be think just closed base the $X.XX, to to from the from clear, growth you core for about ASP. $X.XX $X digit deals, it, have

$X.XX something get round for up together, all of the And of template? if a so, we sort is good you that or sort next year, to that of

Chuck McLaughlin

it said isn't before, so little that that, corrected, That's but with I closed I bit a on but what one that’s think depends timing we've else with. directly agree obviously thing ASP is Julian, Hey Chuck. this the is the everything of consistent


Bank from Obin comes question next your from And America. of Andrew

Andrew Obin

by that QX, getting give questions you I maybe within bit in what's a a let okay, color outside to would geography but of Tektronix, on color happened give on appreciated. can key to been what semis, sense more we've of Chinese be just seems So highlighted whatever lot of Tektronix you a greatly happening but fleet be know

Jim Lico

in of in in mid-single one as of semiconductor Western in sort the we Tek, Europe had XD the in discussion particular, good a good. was highlights the Fortive the end quarter we impact of -- that third sun-setted good of as it. so of and pretty but we've for with said was So, we remained of all said, sensing prepared for this remarks, China the that range, digit pretty if little really Europe obvious Really bit side the

slowness you the quarter felt we So that to the really orders in in some due little little the decline that realm. North the the the moved that of -- fourth. will America was quarter of with good combined pretty about if a into decline some Really was -- bit

we’ll an but actually right the seeing, think now So, improve growth and quarter And at continuation reality, the Tektronix. that from -- seeing certainly right headlines what business in know point the we things the from for perspective China now, if good the but the headlines, number from we’ll headline China is fourth all we improve that, in look we're with quarter in what order pretty away fourth you the to we're that the at we're of watching for China become the see looks watched all for Tektronix. order’s this book

Andrew Obin

to just well, have Fluke sort you up doing recently. I highlight seems And of it Digital accelerated to follow

has did up big new in to products, in but some what picture, that business? changed You growth accelerate bring a

Jim Lico

great a It’s question.

a talked great we monitoring. we're really a about condition to modality of that, quarter launched that starting the First gets to we ease the really little took for some hardware sales a of longer, real of life, challenge this think, sensor use, three-year bit core that product, I really see vibe a

solution the -- eMaint’s for as double-digit we So, really killer we hardware a since with the good bought -- been out comes said, grower business.

regard getting in well. scale that as we're So

nice up plus I some just along, come business. So and think really to added the the to hardware not -- so with of XXX well, as the new it tailwinds is we addition for in customers selling starting current the customers it's customers quarter create


from your comes of UBS Steven question And Winoker next

Steven Winoker

behind dig kind of getting why you around hit comment pushed a on it I When Jim, sequentially FDS backlog behind know another you is companies kind couple just maybe of that quarter pieces of better they give know see that after the macro-related, simple you're us of we the I it's but get in not to not what whys fashion, had actually worry with may some the give you to like saying this. us you confidence of that. other QX. driving push Hey sense a some little that that into what times are all good could would but or

Jim Lico

Clearly, the then GVR you a loaded slightly deal cadence that the quarter with it came saw one the our of things at home with kind like was of back-end to hurricane and lot had when was that. issues of at and at employees a things time

the owners lot up And we some the side small is number they so, -- side cost the thing a about that quarter but thought, order pushed quarter. in of we production of of as we in quarter, we showed showed well, which of in only headwind the lost our those net small a things could. freight, a up fourth into cost network on of a a days, was linear maybe the so the was it downside quarter as really from put maybe number also us it than the less nice protect a not in was revenue premium later customers the But cost to them

into chunk the quarter. the pushes really we the in that of backlog the big saw that -- fourth So

customer due. felt went backlog to a were that just where I story, as went be and -- about other through going was -- think all necessarily we of past large backlog lot good build pretty but places some situations, we has were Chuck its it backlog everyone wasn't The the as really I forecasts, them just due of rather we but orders,

customers So answer. the some some pushing of getting was combination orders out really things delayed,

we're us almost done right revenued. with the of -- already now for have the those month Now quarter most and orders

now feel the that had. we’ve good the those some about are of we you that know improvements fact So,

already revenued. remarks, As like we of these them the some been orders took longer just And government of I said, really we prepared have thought. were some really, mentioned in than

Steven Winoker

And time, about Root like could I'd investment on be to that to footprint Tritium, seems and the bit long think, earlier it this could how little Veeder gears announced, over over footprint of terms of then, the in shift maybe that Gilbarco that for just you that significant just affects you on, like the rather your X move expand me call thinking sort just term. to and that October utilizing a mentioned in a I

Jim Lico

we're to fast to starting EV wanting you gas a an know talk station they're about as network not We're an to about scale really investment in We've to got to sort starting because prudent large it, charging And we with great us a need. as excited solution owners, that really needs slow. of they're the the think we'll gas to allows technology make -- know way world for to it’s that obviously it’s be here owners. station footprint have around you going to be a something

faster really globalize for like great advantage is charging that business IP with technology that’s us that and Tritium. So this can got protected a a we've partner we

in some to of U.S. the to be be the going it and that's folks, owners, in will So, some bit gas will utility. be be little a Europe, network mostly it it's going different, oil large

to have partners we'll the so And expand as some different slightly business. well

we trade So vehicles the I how things prudent, so we're timing Association customers, think some but well, electric have about long play National of I what we're timing depending do think right our getting it I if We investment the I to of know meaningful and and at that globalize mentioned will the necessarily work the really for as excited excited of do on be to we can offering. and had mean by had to of business we a the we company weeks with about the take purchase where the show what to announcement we with there large Convenience as them customers a technology. help -- this scale were and a launched way pretty don't out hopefully ago, made all lot think few that's we we is Stores


Research. comes question From next Melius your from And Scott Davis

Scott Davis

the basis caught couple look to price points, kind a granularity of your around you offs the call, behind? have a I I’m color things, you hard. of up a trying on arms to get now my get price quarters are was big are little these some When little up or of always to if at are spin Trying when XX you still cost it’s

Chuck McLaughlin

Hey Scott, Chuck. this is

we So our we see I of team think what the pricing, your ahead should cost we're that question great price they here I inherent because the but think here. and work does is in that accelerate procurement is from

Scott Davis

rising coming neutral least are costs that are at or the that coming? prices to Be

Chuck McLaughlin

think basis greater points, be is, than saying to rather than what going XX forward. expected that I I'm I'd

to not but hit nature really. them they chain some all supply of of some in yet As happened even our haven't but priced, but countermeasures tariffs are are

that’s to inflation normal than think more think that tailwind. but in know an and environment to we we price going we're we then we're -- be historic. inflationary So And we expect get

Jim Lico

Scott, maybe the We'll see as just fourth in it quarter accelerate one thought. said. Chuck

to the lot a pretty chain were we're into gross we've deep good into term nature get reflects relative expanded call carry third XXXX. those go as how the And I sure of of, attempt the pricing to quarter, things So, to in supply of because an we been we business started traction model and we really pretty the short going to fact early we change efforts in our in also to The feel kind trying the covered and some this mentioned, and what of some into quarter quarter. in make that the that that. fourth Chuck and think appropriately water I in about part countermeasures quarter that in fourth margins the are

Scott Davis

a just then, enough. structure takes that's get you Accruent. bit, the And your margin of that businesses up How to Gordian to long little Okay, back think and it segment fair like average. up

Jim Lico

close is already, we're XXXX. both Gordian and that XXXX I really, pretty businesses, relatively so by range -- in by you probably think we quickly of I think know the into in probably

be half and businesses. of the are XXXX in And the second So maybe they great XXXX zone. will into

ourselves ask we're think we we question do into One it of can that the to strategic as of is is growth though the and plans, I caveats XXX-day get rate. accelerate the we going

to that seen we're see put So some at bottom eMaint, didn't growth that accelerated at benefit before, to because to invest decided of we we've question in back marketing. all the the to might to eMaint the and investment and necessarily eMaint, that had it additional of line money we early some take starting we sales at require

go So businesses to the we the of XXX-day growth opportunities gross the done a rate kind haven't that we prudent for thing are in wait accelerate those be sort that going through margins necessarily we'll we to and would certainly with plan, of do. to recurring yet think look the are strategic revenue, but that to

Scott Davis

has? had, margin impact I’m technologies. And impact trying just quick, you like hurricane questions really I've on measure your industrial figure what to and you a out. to three I'm kind because asked line of this just say of top knocks that with you time it Can going any the never When a or have point precision something

Jim Lico

fall XX%. margin the than think through volume the we I impact Yeah, calculate of greater on

So, would also good is volume we're in and got we're increasing operating in but idea, about normally deliver a the at than the seeing. of basis talking the we’ll efficient increase margin due up yeah, we’ve PI also for in we just expect the are of I'm Gilbarco, IT we whole -- that ramping OMX fact that in really business pretty to we're terms the year. whole with margin volume But XX be to less points

to be going okay. We’re


JPMorgan. question from next Steven Your Tusa comes from

Steven Tusa

exactly watching you for you are business? China most your specifically makes that what about, out said XXXX, not the watching for worries guess, are China, in talk you China I specifically most of you of kind cautious, what but cautious Can you're you what you

Jim Lico

the were we clearly saw I a in business. the said at have utilities challenging think where small down that what Qualitrol we some we prepared Fluke. remarks that there in going by what those saw, principally we utilities, We is investment sales really part saw parts of the and of and meant parts we some

the to that the remains don't -- the going if there's we have look China of But one sale impact a see watch day it continue of day continue Fluke at watching particular point high-single that. of a to of trends. just huge to view That’s course verticals We watch didn't of of good strong, we're at semiconductor to has want economy. sort which we still the we're but have Now grew digits, they our so for on markets And because electronics in to Tektronix. to and impact.

trends the walled investment So growing Veeder those you us we’ll has as GVR And business Root that trend the that been are gas in the the that's probably our some places and that's business. business, well are very right relative obviously of business for so well. and will because there secular sort secularly the certain going of within move a watch GVR station now if tank needle double to

Steven Tusa

numbers And of can with how as you give to like the to amount about in are some that some think sourced number, it coming a reasonably can that tariff side that just maybe getting XX% which China our are on sizable know almost up color you coming on us and to stuff, you some including price they're us is all simple give to you of kind on math went way are which XX% how applying and what then you tariff offset the on you're to and look or you with companies at that, color anywhere it including? tariffs came entirely you to you from from

Jim Lico

lists. one, it's we but come prescriptive we've lever more what -- amount, duty and mean, all we're exactly from products. but been we’re using tariffs things, was There's all generally have is entire ship first where good it I But there's actually we we XXX be using, rather after going We're XXX, some a see lever. one it exact have we lag. we therefore, that like and know supply a the handle also the and to to things it that there is -- countermeasures. and all together -- feel our is specifically the teams Steve, up a price where work sourcing all, going moving we've chain duties, a have three, those of matched not of to will the and it's sizes those in on cases really be of two, more three we're offset our and you producing pretty on and We -- team very – got couple

We to but where at a the are seeing us us a a them tariffs, a couple least probably more new quarter run lag goes that we better I’m new or It takes of saying a tariff in. it takes to of get not that offset months tariff. rate. when part fully quarter new in, in

since it's we so back so out that's but a And little it got I little giving -- XXXX. more the of in bit in last new and why us end, put been handled as say, we've hit talked, a there's and list offset

Steven Tusa

cost total So year-over-year you what's number, have overcome? the that to

Chuck McLaughlin

XX range million the In XX of million. to


your Markets. Dray Deane question And next from from RBC is Capital

Deane Dray

price. want to the of heard I question again X had you had I correctly, back price positive go out X you if to said and it businesses

what getting, of kind can and of customers get calibration price who terms pushback in the you So any price and more there? from do any of didn't you're ranges

Jim Lico


have the foremost, look price number. and every -- think hit we we'll XX in metric, a we businesses I I maybe first that as few don't at quarter, bps, said as part of think that

we product in price the new some folks example. third US into carry military full with platforms we've hit we're I second because as the part, think But, we reductions realization, at gotten get we’ll of I year. to in look will on balance, a got some it, quarter an good the really didn't -- as have contract in looking that most price be suspect we price, half And that that the position at sort point. find we’ll as of

we and in. price see an we're question, Chuck previous Most going price the in, on of mentioned gross it how increases really is think to are price. that's about as the the so of acceleration So,

So, of going inflation ’XX. to we're going be as be any expansion that or from to shape to price offset else, tariffs any some well as -- inflation, margin whether that opportunity that perspective, good in anything to it I have, in think plus price continue we gain we're cost the be

Deane Dray

welcoming the separate just your look then doesn't fit becomes it with current Accruent, segmentation topic, of new Gordian obvious quite and increasingly Fortive. And just the for that

So of what might to that given you have look thought what re-segmenting and like? kind

Jim Lico

get what's that sense, it on timing, expect. make business. make but going and come Accruent think things sets of and the I'd excited the sense other we’ve be will our the that current with thinking will at ASP that wait I the probably And board, really as is a notice our Well, that. level, of looking we’ll we after platform to Gordian that's and we’re similar side to till acquisitions course, what that then most That's to


from And your next Wolfe. from question comes Coe Michael

Nigel Coe

This Michael Coe for is Coe. Nigel

night making you’re pretty at here. So, us work hard late

headwinds. businesses Any the be of that or So, four will three color helpful? to IT ramp X% still with would range expect the we little are these of the and maybe be to seeing X% on some GVR maybe major is there, PI a or of help about guess, up that in some particular range both I segments on bit in seeing for XQ. you

Jim Lico

distributed. think, evenly we well, I should see pretty

Gilbarco, going at of the to see needle some It's will the see probably. whole think see businesses, And other you, in in each without examples. see big up. at Nigel. So, not Fluke move numbers, think range those around don't it the to delta up of two continuations, an see between be to I -- like you with we'll so suspect the enormous of will the hard kind business in the I you'll Tektronix businesses acceleration probably the as for be good acceleration continuation you the I honest us

So we I that that, just backlog be of demand that that see some think see. related to some you'll and start will will be of

US that, continue pretty be our assumptions of think sort that's will the So we sort to regionally, good. of

maybe As Western defined, of think mentioned, weakening. we a Europe, we EMEA, well, Europe little broadly

but have So be parts see Russia and that and the weaker continue also continuing Middle and been good. East, East Europe, the to western China Russia Middle we and and Asia pretty would see of

probably but a So, we kind give for and maybe the regionally better. part, hanging, bit think being it hanging the -- you Fluke big Gilbarco and little I of in about a we think Midco most there, think businesses Tek that's how

Nigel Coe

XX% the at about working, are looking number I the new is margin think segment IT then for segments. And a the ex-automation, it

costs, You mentioned as does in look? segment those China to and that And China would China the costs are automation from divestment weigh helpful? that be qualification on start how all cost the any the you then cost,

Chuck McLaughlin

but fourth right, they’re Yeah. get here IT They're acquisitions to we'll in We've people. redeploy after you’re that quarter. the not cost, big segment got some in a them these really opportunity and the some with

in necessarily not get but much some, there that though is it dollars section. and get it's to be after So IT could them the out, needing we'll restructuring that

Nigel Coe

on And and I it for understand ASP that meet quite threshold because China not doesn't then quickly the the Is just deal. that sales? for -- China that

Jim Lico

think essentially way to that’s yeah, the it. about Yeah, easiest

don't which was I there's issues think a we through got mentioned we all anti-trust Works as any hurdles work regulatory really no that because with think China, good the and the at see principally we all. Council, consultations, really we in it's about prepared the remarks, European -- not step

that, which waiting hard to much are on simpler anti-trust -- things for -- than up much subsidiaries and do, focused really approval. simpler like it's So, setting much but like things


question And from your next Inch from John Gordon comes Haskett.

John Inch

had the up thought So XX sort lost days, for that that the be there parse is volume, margins in to had core the Delta Is production the out Chuck you thought terms accounted to of margin what -- points. you Jim, of the difference. will XX. quarter way decline basis the in lower and of some XX just

Jim Lico

the evenly our two we those that there, through would really some the mentioned, but saw from into on in we better there we pains will flowing Yeah. got the as XX% we OMX us to drive have volume and things QX. production we QX, Gilbarco than maybe margin expect two and be split increase would is core where we coming is to thought other, do are are we in volume down our growing One in accelerating the -- things. greater and and we and between it, business John,

John Inch

trend in the of weaker of kind stuff stuff toward and end that or September, of was this you relatively play the Does that the Jim volumes this consistent? terms quarter kind was out noticed a of say

Jim Lico

during think that happened to Well, I EMB that there's got maybe quarter came were pushed things. that. wave down, was things two that towards other the unrelated the There's that but in really there that are the end,

time customer one moved that into some just And pushouts things October.

John Inch

it versus Fluke little Field all Fluke looked sounded solutions, realized or to same. mid-single on qualified low and I was up commentary. growth basement does also was the Was last compares upbeat a rate it that quarter bit softer? single think, the pretty about that lower It drove

Jim Lico

but I the or big think Fluke was that, there Qualitrol. like a XXX little something delta it's bps is softer, maybe

been really a in they in with the we mentioned the world work working quarter than have remarks. try tough We around prepared as the business, had tougher -- to market and just a

will is and that's remarks, as to great, So, one we to we ISC at did did and it continue But mentioned but at probably – our think this that's going can smaller luckily, point. going that continue of think XXXX what businesses, is in into continuing it's to year we tell prepared the really we're I work so Qualitrol. great, countermeasures on Fluke

John Inch

just various you company these of and down respond? businesses I outperformed little but -- looks China playbook? you've guys do thinking Jim, bit, is. periods before. lived global other every kind are big are on I sort confident softening, global I you measures the in what’s I are how mean, for sort doubling the mean, mean, efforts, Tektronix, going how in Europe, of the it a Fluke, you -- mean possible about economy, what's through you like Like, of you’ve not given I'm like

Jim Lico

revenue certain going -- here have is where the to to I really Yeah. really have with been be we'll their day, I through businesses kind individual go what be and in think an it is will sit of times, here this on going unfortunately, have understand probably cycle opportunities. to coming to is Chuck the the basis many too end but of the at I going down we through think and the really Well, by they individual budget weeks thing businesses are and done

and do as We that. to we take And talked opportunities manage, think I but be I reality, seen, listened still more I that globally it's that -- want already demand this going probably next realistic we globally to seen and talk definitely as we to to our we We're make to headlines and we the early. to peers while anything think has so how any as trying like a there's we're maintain us know sure certainly I haven't making make this other where and trying see go some places, going those a sure year while we really places take this about to we advantage know correctly is opportunities. to change at the same China, I with mean America time, and others the I and of North have is think a so tailwind for several moved, advantage be how to to so I going view versus and understand right we're think things of already we in mentioned, having not in think mentioned, I bets EMV. idea think a now, growth of now lot continue CEOs little it's we mentioned happening having well, important tuned


from comes question next Kaplowitz Andrew your And Citi. from

Andrew Kaplowitz

about headwind, the in really currency beyond? going QX, for emerging think should saw you has Currency you fair amount and currency any markets impact you a transactional in quarter forward moved, containing see really where the a [indiscernible] we just in that and I Look, how few been this guys. of think QX was cost could

Chuck McLaughlin

those FX saw quarter in it our and to -- the just in they We dollars us that move enough, if in need cost have general, businesses for structure, things huge we if it’s all. to deal and third seeing right us the adjust not asking with at but don't, then we we for currencies little we're our about you're we Chuck. movements move quarter, hedge but don't in about probably We hedging, that. Andy, penny and a costs think

Jim Lico

Andy, each teams on a street country. with lot of we price do our within time spend

we movement, currency seen we've up where street or want sure taking with that our that. dealing prices are we're So make to impacted, prices

of pretty a our So do company regular on that that's basis. leaders work piece a common operating

Andrew Kaplowitz

was given book, quarter. order a strong hurricane the the obviously America and North in mention you Can impact there in

I look think you've toward And in single acceleration would you low visibility next as you What into these then it digits it? are that year, said good good grown have that about? have gotten America. been you North talking

Jim Lico

we Yeah. A -- thought probably and few digits GBR just mid-single single half that going the higher second quarter view in low months digits in in mid-single It's the third. to still said slightly fourth digit ago, we be probably and little a we that, be obviously that. would the

here same. in the order cadence and but book into quarter come bit, it to think that, of the of little start the about for book. the good changes I what I shipments, customers feel the the got the to So, we'll view they've larger fourth the would point forecast a like this see order business of our and a because pretty of some world movement we're think, see the the, looking of to but for is at obviously we We close given


Eastman And is your from next Richard question from Baird.

Richard Eastman

bit want I of little talked for a a Qualitrol. about kind digit return just single growth to this Again, to minute. EMEA rate, low we

of businesses Do weak, Middle a said think Europe inflection head some that was of in low of rate, maybe of here -- in ‘XX. again Western versus you here, give is see as into growth an single about maybe and but little trend you kind could head point, that just bit but region. disturbing at into more I talk on kind color the you all we these JVS kind digit East

Jim Lico

we Yeah. Well, have I sure, for a think, Russia. in don't huge business

about an EMEA needle about all Western it Fluke kind is talking Europe. a think good. and a move about business, was Europe the pretty places runs and they this is really point usually Western talk way for example us, they're leader of run lot doesn't those of right, sale of So, the we which actually and the necessarily but folks

that an obviously we've pretty sense but So was as of got us there, a mentioned that example of things some GVR. hindered. optimism was Qualitrol -- business That some then sized We situation as gives decent that in are the Italy, well.

mid-single -- as three it's ’XX, what to really that Western point, the years tell moving the this Western like digit decline I we a that growth I Europe several at hard single we Europe and might quarter, think had it's but too digit think think we've we for really think it I low definitely years heard about I'm the strong look a early Europe, to saw sure in seeing last this defined. not year, is so I certainly would decline but and slowing in we're call broadly next in certainly

Richard Eastman

so is solutions and in And is digits, on kind said How just you -- did that primarily you and Fluke there? it the was passing, the are mentioned question perform Landauer a of just prospects plus quarter Fluke then what very still basically, this quick health double in this biomedical.

Jim Lico

Health a digit mid-single had quarter. Yeah. Fluke They very were quarter. in the good

the they're about that broader now In plan, solutions their all yesterday really more these how got with customer fact, a broadly integration excited really were about thinking for we strategic they're of different together, how the team they've set. bringing set

and quarter that I we're they we where ahead point now working with very this the sure, wanted strategies on outperformed team team certainly but what in ahead of is So, excited the we’re some be think Landauer to really doing. and to at about is for stay


your from Research. Vertical comes question And from next Sprague Jeffrey

Jeffrey Sprague

me. Two things for

of now you just a on XXXX? rate of growth rebased as EMV. this modestly us give what sense actually XXXX you're a First, in Can expecting

Jim Lico

think crystal is I probably next mid-single probably say looking, ball it's now I right think, mean, digit for year. we would

Jeffrey Sprague

the kind margins and deal sort accounting of secondarily just actually then trying And to the through noise.

Chuck, or in little only transaction of a is XX PI, just in bridge, in roughly million of that’s costs, that XX we the bps that see the that rest the Just on so other? kind X that's confused million is So,

Chuck McLaughlin

forward. have is ASP don't of you That's and appropriately to ANS going Yes. because one going other in in really be not those segments there

Jeffrey Sprague

of out, And then pull else kind like there that something there? inherently if is other on we looks then low going it's

Jim Lico

in think that we've so. as got I that No. cost didn't well, I he’d think don't corporate was well. normal picked

Jeffrey Sprague

close a follow number, This million, I take it I’ll up. low seems if but million, XX to out, XX like

Jim Lico

that, Yeah. Accruent I did get there's of We total there. think but follow to amount of the Gordian can it's in some businesses, the and in

cost, on security, up think follow but the to deal I social about missing relative we million can So you're that. XX


comes your from question Scott And next from Graham BMO Capital.

Scott Graham

the the we at the looking we I'm the acquisitions, throw of in XXXX. closed it there, a like Just slide largely X, me push, when consider correct initial bridge, thinking looks and on ASP ASP ANS, want And if that's guess not I'm that I kind sort with of you're amount I'm you there. thinking the would and have transact in sure what of when still that net wrong, you that will accretion kind you

that what So to have how closed capacity that moment going you with of a coming, the and look does your is slow now ASP pipeline acquisitions do at and the right is us could you bit this and give idea an down

Jim Lico

team one. tag this we'll So

I right think the good funnel looks now.

so opportunities, hand. we've talked, funnel. The with on they the serve couple new the see available think because at pretty new look and bring of they PE, they They the That's us. new market come about deals M&A in I the can of years, come front, Accruent with last those funnels already really were and Gordian nice to we and parts opportunities as market to opportunities -- we were active thing the over which continue in they acquisitions.

got to that close we've opportunities ASP we some wait there. but does so obviously as well deal. will And

but been slow we've situation foremost like work work so in, there. sure, we first days, busy think XX over cultivation that's and for market necessarily we like funnel, I down, the the the the last down we’re don't we opportunities still the the So pretty are and

over we consternation So, obviously on going thing situation last some is the things on, trees current but those so the other probably haven't and yet. the the market couple that seen kind weeks, of shakes

Chuck McLaughlin

other X.X in grade with our billion, going that and flow, room then I de-lever, we strong maintains billion questions, to investment say work we said, And XXXX just forward. to X then Scott of we de-lever your have simply as keep cash to

saying mean ASP, you you're and this on there organic with X if in In margin you’re missing terms to if is push in you I what's might, a a think think push, that. year, slide you of expansion not or I probably we need -- from offline this can work add the is the the

Scott Graham

the acquisitions the is I Actually plus on ANS that like meant fair acquisitions estimate. is looks what push, ASP that minus roughly a was closed a

Chuck McLaughlin

ultra-deal, and mentor complicated you're but that. It’s which the the line, with and into easier how comes is the retired No. that come it’s shares to understandable pass missing plays convert

you So not but through an track. that think exact push there I is let's walk that,

Scott Graham

you same your I but page at think but of I in things The about were organic and acquisitions, then plus in you a some GDP next organic know term growth and faster at plus, up to the weaker that little can still for long meeting, bit at other China, in GDP question but GDP, stay kind is, for along you add I concerns is GDP, that we Europe all, target little a of level year. hear investor didn't with move this talk being pushed

Jim Lico

before you I budget. give try even early color our think to we

I’d it how certainly till played influence numbers think some out. that quarter at in we has point is how but sure. stay for this in the that's from the think I we So well, specific range we see that options away end, See any of

early share of we're -- get it, we're make as you. and we puts obviously we you that of about we'll as So I to provide about. insight with little the really certainly the level have that just to as wanted give try Chuck how all do as you to how is talking of get view least We thinking given view tried think with occurred XXXX takes bit this, What some sure, and we'll details, just them about were a to deeper to to closer had thinking we and you at more some it goes.


next Giordano Cowen. from Joe question from And your comes

Tristan Margo

Joe. Thanks is taking This for Tristan question. for the Yeah. in

share you’re your using quiet for count here, that quick guide. a Just the what's XQ

Chuck McLaughlin

I guess XXX million.


questions no are more queue. there in And

Jim Lico

discussion. we these everything we for we're and months Well, an you years. on Okay. can really third energy understatement where incredibly to in with sit appreciate evening coming into businesses the the quarter the quarter. thanks be think, what more were pleased to we exceptionally We're with and with the time this We're today word able the about excited use would all really even time Coast. everybody and accomplish here in in the excited, to help do the and put I really our East We listen transformational

various to time your time, fall, up. here forward follow places and certainly look throughout we'll your for Thanks night. of a questions for thanks are the and thanks IR Lisa great available seeing So for and many the in but everybody. Have you team


today's does conclude conference this And call.

now may You disconnect.