Fortive (FTV) 7 Feb 192018 Q4 Earnings call transcript

My name is Ian, and I will be your conference facilitator to -- this afternoon. At this time, I would like to welcome everyone to the Fortive Corporation's Fourth Quarter 2018 Earnings Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Mr. Griffin Whitney, Vice President of Investor Relations. Mr. your begin may you conference. Whitney,

will accessing replay remain shortly be will A press until Friday, XXXX. our conference XXXX quarter next February heading Chief of Good call Thank release. on non-GAAP website, relating President until for Jim in available the of Investors required and earnings and We Chuck these financial archived and later this non-GAAP you Chief Financial archived this present quarterly the completed available XX, replay are on for Presentations everyone, included us Regulation www.fortive.com, call. you, our Lico, Events our on call fourth after conclusion the certain and Vice Instructions Specialty and of President are results on the in measures A&S are operations. continuing Automation this heading Ian. our joining of as G be to under the are Information. today of today the the SEC results section thank & for replay have us October business and The section by divestiture measures the on of the fourth included Investors operations today's and discontinued will website based Information We afternoon, on A call. the business Senior Officer; Executive Financial under Officer. our historical McLaughlin, financial With call. X, and XXXX, periods. the the of current quarter accordingly, webcast our call the on presented

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

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

everyone. Griffin, Thanks, and afternoon, good

in year the capping quarter Fortive. fourth strong to Our for another finish XXXX, provided performance transformational off a

of full generated operating product drove a sustained year-over-year, the X.X% at increase growth performance for in core line Looking share position our core solid per continue ongoing over adjusted top expansion. in core to of on and and year, innovation earnings growth our by long outperformance market competitive take order driven term. the our a we basis, of $X.XX reflected and Fortive enhance continuing operations we basis points strong XX% initiatives execution against brands of as market-leading advantage, XX portfolio share The margin range revenue invested to a

that significantly since transformation accelerated the have XXXX, the process spin. we our portfolio course our Over team of pursued

transactions to Products in growth, the the Altra stated of advance strategically During the divestiture cyclical Advanced markets. higher portfolio business. transactions, greatly and Johnson reposition year, we Johnson & our pending to Accruent, business announced Gordian and significant the strategy A&S the of less acquisition including Sterilization several These acquisitions the of

addressing on revenue since revenue profile the announced in recurring portfolio. revenue, rate. of for Gordian total growing at digital the annualized These Both and enhance and an acquisitions, acquisitions of Accruent our advance critical on the is total together, Taken Fortive recurring momentum a focused to through average high acquisitions of strategy greatly Accruent which represent the billion customers. good workflows XX% end basis, the the software-enabled demonstrating of range of execution the single-digit Gordian a a spin Fortive's are The which off $X.X growth year. start,

a up very to XXXX. Fortive, closes. make the prior the XX% and about revenue strong posted growth, basis Latin This in unfavorable growth low and single line double-digit Tektronix strength digits successful XXX during discussing to foreign we continued ahead now expect Fortive in company with integrated once transaction sensing second the With the the Accruent, I'd when the We're the net Asia very Geographically, performance quarter were Johnson transaction of quarter billion, into basis as what led with Acquisitions, core Scientific. the ASP fourth Fluke employing points business details and markets by with of revenue to was of Technologies, points. well prepare to core We to top System forward significant growth will the exchange grew All adjusted it's quarter made Business Fluke. revenue the or increase the contributed family. and transition technologies rates Veeder-Root, $XXX.X announced, Johnson of growth. Turning like strong diluted by reduced close progress a Sales the a America. were Consistent quarter look million, and ASP. Fortive first opportunities excited and X.X%. to China, net in Transportation late of Gordian $X.XX. earnings-per-share quarter. we posted of over the to earnings contribution & Adjusted in grew XXX highlighted platforms Industrial reflecting particular, recently for turn that, year, the by $X.X early high-growth as product high Gilbarco realization including while XX.X% and core to and growth

were in was the the fourth the in While we pleased continued about quarter we remain parts and with Tektronix. strengthening our quarter to outperformance Pricing above Technologies core the platforms revenue and Core tariffs dilutive PPV markets' fourth single margin and digits, operating the we in four in or certain XX mix core position. high digits, digit Developed was and a growth strength quarter, of cautious consecutive America our accelerated Scientific. by mid-single-digit are at high competitive basis at GVR during price led strong impact performances offset North revenue continued Fluke, fifth high led with during growth digits, single margin at the increasing points Industrial points of low growth and XX XX%. partially unfavorable North gross profit by of productivity reflecting quarter. at XX.X%, by margins margins In China basis Sensing XX.X% gross America. of the grew grew as market, Western Operating with positive single EMC quarter. delivering Europe strong GVR, single posted

representing from also year-on-year cash strong XXX%. XXX%, increase of $X.X our XXX During $XXX points to generated the ratio fourth the basis. quarter, XX% flow increase We free year. prior we the of cash for conversion annual full cash generated a flow pleased $XXX We an billion, free seasonally of million see conversion flow, to of year an million increase on free basis were or a

Asia. offerings Fortive. reduced & XX%, full The strong our core offering core a continues response Reported of Fluke's eMaint sensor Tektronix. Fluke greater deliver a year momentum tariffs to XXXX for China, strong strong growth China, customers, Core by and led finishing low Fluke Product a reflecting growth Industrial weakness Solutions partially at gross at continued however, to performed points, basis growth and and Turning finish digits. reflected in led the driven continued with strategy share XXX Breakthrough double-digit core Acquisitions solutions by rates in XXXX commercially mid-single-digit the ahead at associated and digits, the growth for Tektronix digital were we factory, up strong in X.X%. leveraged the business core at growth, positive Solutions innovative and including impact point revenue from mid-single contributed delivered dilutive were markets, quarter, see North behind acquisitions than while single margins a Fluke the continue for Advanced Magazine. dilutive of a low America. by and outperformance element points XX% had the highlighted strong increased The margin Fluke operating single first and FBS Health products. at the decline expectations and growth to both Instrumentation X,XXX than high quarter, warranty-related the e-commerce for saw digits expansion a mid-single-digit and of named foreign expenses strong its Calibration, of by markets midteens our quarter in efforts, points for including XXX handheld iNet progress margin margin needed mid-single-digit year ISC growth. Systems. Fluke with quarter. Sensor, We're one-time increased XXX by ISC saw continued key sale revenue transaction Fluke low of which recently slight rental in flat, CMMS double-digit-core Digital Fluke segments. the growth This Fluke Fluke revenue growth sales its greater was highlighted deliver beyond. and some at to of of positioning basis with exchange expenses. Qualitrol. generate in a Fluke delivered while which and by by increasing high-growth basis quarter from developed strong growth XX% to Professional within during Landauer, contribution Processing unfavorable due year gains XX.X% Industrial. basis and excited year. the growth the in and the including operating North Vibration at about to full mid-single-digit increases revenue of grew growth saw its Instrumentation Fluke's strong to team posted points. which and strong was XXXX America Field performance growth, offset of in growth, posted returns by Scientific

continues increase including the during with During offering decrease continued and ISC completed reflecting capital uptime the the our year. line improvements, in the transition ISC's course FBS a yield revenue its our Qualitrol's delivery across cash declined high of core enabling of to commitment markets. strong quarter, quarter, the over speed flow operational better cloud-based solution, the core free iNet a softness to significant related working of customers. and the in to in expectations, to teens fully geographic

single-digit high EMC that the core it XXXX. digits into at Tektronix and high We well EMC. soft to the headwind delivered a for the quarter, remain been led throughout quarter challenge expect by quarter, subject single including backlog against Product volume to market conditions increased had year growth Qualitrol customer-related continue realization the it revenue quarter. midteens growth as revenue in the as a posted delays, to mentioned that last the into record for carried

for year and well flow, at XXXX. order developed with strong backlog, across continued EMC growth, high-growth Given was by up markets growth America setting broad-based mid-single-digit both in record saw and North markets. Western finished Europe. the Tektronix driven Developed Japan, Growth

it pleased targeted We markets. by from from to double-digit another its for driven momentum Tek end of growth to higher at in has Keithley. are performance Tek strong see growth continues China quarter benefit generated

wins oscilloscopes, introductions which the continued the power automotive behind driver and both end during reflecting growth, saw product in quarter. key remain markets Series the customer and of X a momentum key Tek's X New the

platform technologies digits sensing quarter. the in increased single Our high

hurricane-related platforms' the The mid-single-digit Europe shifted as China. and end in strong in from high All industrial growth North markets growth and well in regions as and quarter revenue due saw previous single-digit to quarter including growth, the major was by driven of Western the performance strong America medical delays.

the excited including positioned industrial of sensing based superior that initiatives of in share and pressure which the well gain functionality. range the across number product to Setra launched We the quarter, transducer, fourth new about AXD, features on market next-generation is are platform the

basis grew Revenue the basis XXX Reported by by of X.X%, points, foreign reflected reduce to incrementals core driven core growth XX.X%. revenue increase margin our growth exchange a operating strong rates Moving quarter. the in volume margin of including on segment. Technologies XX Industrial Unfavorable of the XX.X% operating points.

EMV by midteens sales. core revenue double low high-growth XX% developed digits, double-digit growth, low by strong driven in reflecting than in increase Gilbarco markets than core growth in markets increase midteens Transportation Technologies markets. and led platform America, developed growth delivered markets Veeder-Root revenue greater were in led and North greater high-growth a Developed Our markets. grew XX% by

enhance expectations generating Gilbarco teens to related market. of for growth globally, double-digit and declined continue GVR's high Pacific upgrades. TeletracNavman to combined our of in also see Asia continued well and Gilbarco with revenue to quarter Orpak China Chevron. core the growth continued low the we in than drive EMV exceeding level recurring growth strength by continued have decline of major expected, ongoing and USA GVR's core XX% and product where digits Pacific remains to programs synergies in double-digit gauges with XXth offset Veeder-Root a experience midteens TeletracNavman at single high-growth America, and out saw North As core tank XX pumps gains customer India customer to which in at continues the submersible North for in position In an performance including sales, quarter Asia revenue markets Shell headwind continues of the a as Orpak to in was and win a GVR's by share in XXXX. acceleration business demand driven automatic than tank included that profile. to double-walled enhance continue perform well America. from in fourth offering churn the from high greater software to perform low strong Murphy's more growth. revenue significant represented

the the line. driver X.X category growth revenue distribution. improving a Matco's performance diagnostics the digits. platform the Fortive Tool accelerating earnings opportunities Max specialty advantage. customer driving capital portfolio positioned accelerate allocation organic diagnostic digits single drivers, The to reflecting Moving and grew core to transform our reduced top be a storage while to consistently sustained recurring franchise consistent continue proprietary consistent is execute our growth, into low revenue database. of complex delivering innovation generate strategies to that This the the recurring The during repair single-digit and Matco quarter, MaximusFix, tied grew expected of cash well, half automotive growth System, perform our series single low us Business subscription-based also sale from over tools. year, quarters second cash category to transformation, enhance in increasing XX% of our earnings out with significantly tool pleased flow wrap and up, low growing to again, scan this product Maximus with a a conversion To quartile flow innovation we exposure demonstrated and premium within to in continues particularly formula, share enhanced deploying fourth end meet secular of attractive delivered continue from portfolio our features growing driving cyclicality, XXX%. strong enhanced flow. free we to Alongside free full acquisitions platform free we robust year drive performed This while strategy Matco our as of the how better are and cash of our our to and revenue markets growth driving enhancements of roll portfolio year ended portfolio growth coming platform. with power strong has the Fortive storage and that growth additional enabling competitive in long-term XXXX, -- X.X with will once to core better to to results Matco's operating and that continues diagnostic tool need with to shareholders. team the and for well adjusted

guide. Turning to the

include The the and on to ASP. are in the $X.XX X% enhanced We operations year growth, to the core of on basis. if-converted points, dilutive of to free net $X.XX, year. our remain also acquisition This ratio and guidance fundamentals year-over-year to basis. ahead. we strong, assumes from expansion The diluted once of does conversion growth greater effective a XX double-digit adjusted continuing also cash and core preferred pending year guide revenue operating full outperform XX% of flow net earnings deliver contribution an reflects XXXX again from diluted -- mandatory margin of for the stock X% basis outdeliver across tax our initiating sustainable EPS EPS not an XX% XXX% any representing adjusted growth guidance XX% The of the impact expect than portfolio convertible rate

technology like initiating across rate Fortive of the for In shared value first turn I'd EPS foundation extend of that, to closing, for personal of of quartile team With We improvement deliver core net to also assumption it points the continuous purpose diluted for accelerate of to delivering people which and XX and includes us effective It to thanks X% of of I'd $X.XX, to progress. to our our customers adjusted quarter culture our continued the core for is $X.XX the to top expansion are an revenue tax to teammates essential enduring my an Griffin. our our growth, guidance margin commitment which dedication for our over provides XX consistently world to X% and and enables XX%. appreciation their who operating basis like it our returns shareholders.

Thanks, Jim.

questions. move XX, circulated concludes to and to its soon. York Investor be Day into I'd in will take City. Further now will like comments, That our host New and questions, details that this Annual we we're Before opportunity formal Fortive May XXXX, on Analyst ready announce for

Instructions]. [Operator

Our the Melius is Scott first question of from Davis line from Research.

read all in anything across pretty more numbers Is what board. kind other I in little on but anything us reconcile none I -- or all the looked know the your book guys, don't order cautious a said do tangible you forward world, you answers we strong the on the there wanted all of your of China, and but have bit really than to newspaper? in China,

bit right, in think performance another maybe with increases price of business some strong you quarter as maybe stuff, had a I were yes, of had very that there's of and things, strong. strong Scott. but in you're avoiding suspect little fourth got China. pulled as for people do a couple I a China year We identified. to very One, that finished quarter of we Well, maybe unbalanced,

a we an -- going -- upgrade going Gilbarco, think little we're down a that's the to like slower I slow of double-walled on the the half sunset are year. the things. of as to at couple example, tank back basing this some in bit One,

certainly we of be as We believe that a thing we've bit double the -- think seen some slowing growth, still of book, some there little up but that been slowing growth, we've some of little in. at a know. one that's we and So business kind seen order that good will that in digits Tektronix, the probably we've mid-single-digit

So are those couple examples. of

to it's early we're continue believe and outperforming, certainly We days.

You've say a and in times a January China. tell lot that this heard you February don't few me

You really for before have to that. a get to sense have March you

the turn that And think in if -- we so upside we'll first we'll has number the have I corner a as some sense better it. quarter, to

enough. Fair I'll And but anyways. it then, normally this Okay. say not like I'm nitpicky

is, much revenue I your and to of guess point think, normal lost nice I versus year businesses a that naturally could midpoint back of basis of you're of guide what X% get fully the out core on what going bps integrated to tailwind. to of XX level bought growth would is acquisitions, you sort your about a mean, some think line in fixing how those I getting So I'm XX margin and at least, -- you gross XX bps number? margin what I be kind asking

year. XX the and that during things we've got for happened the year the every So always bps year,

got pluses there's some and So minuses.

could while yes, are number OMX, them at those that gives upside optical we offset it and repeat. that we that And having price -- year But an you they zero overcome bit the OPs, that the be the some we headwind when to tariffs, at zero falls take will have impacts we've the to come you end EPS the there. but of so the at of won't of in, fix other year. tariffs. so for might things a little offset through level, -- of things There And the to

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

Just guidance. a quarter first first the question maybe on

kind So growth you QX year-on-year have is as with the of total digit. core out low the for EPS, flattish though, pretty similar year guided up double starting for year.

the tariff lot a quarter? understand maybe So any the Maybe and there. it's just all about that. help color the Is some the headwinds just cost on of bridge then And us margins, it issue inflation? FX in

Yes, thanks, things. A of Julian. couple

headwind As of in you noted, Half there's that the sitting is FX, we're got $X.XX FX year. QX. in of

there's So there. pennies couple a

-- X% guiding in -- things big rate those reflecting Our up the that's finish are X% good. XX%, and to caught. QX nominally little really had stronger tax the year, are than we're still I is they X% X% We it's QX. year-over-year. And lower at probably while maybe Those a think in three to for rather

think are those main there. the takes I and puts

do you And bunch expansion? core about anticipate I is my Understood. should see at get quickly have issues to I'm margins of to think XXXX second do loaded warranty guess QX and Or then trying maybe year. instruments, ask of thinking what you for you PI specifically, the professional back-end how still these expansion this margin expect over? a that? in incremental terms question, we core we're And when maybe kind of we how inflation

and forward. I the through pretty And booked so to warranty what think we probably QX. that a in loaded QX, I be we No, level a drag one-time after loaded, year. think the to not in impact in back-end going the XX% on going in just the XX% we're so would is quarter incrementals expect that's and falling Normally, VCM's

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

X%? mentioned You price-offsetting is X% in the price of have the you What tariffs. to that level embedded

X%. of we -- it XX the to bps, get way now has there as QX, from did XXX all and probably year. trend it to It it would we expect bps price might all up well, in Probably, done

stuff of assuming regulation -- there the you mentioned dropping Okay. function And that the off, And what other EMV I then the on guess is in of you the on but for -- in was GVR? are obviously much a growth here. is how GVR rolling year, for

tailwinds GVR talk kind these So maybe what can of headwinds fast and you're then just and from drivers. regulatory grow how about various expecting on

Yes, it's so Steve, Jim.

I we're stronger was looking overage that digit than expected the They of -- at the quarter. we sort the now right in Gilbarco think year. so quarter certainly with with double-digit of fourth So growth for Gilbarco mid-single finished at some in

So we double business think going they're to going impact have to through be -- continue the in they're China be -- we And to had the well, on number, not overall the big year. while our tremendous wall strong some it's bigger Gilbarco, that in a headwind. at the

they've in well So India. high-growth other do continued like to markets

So so they some we will to will lumpy, saw markets by Gilbarco of can business, this high-growth year. things a to then good forward from around think from feel markets we to the quarter-to-quarter, balance, we and we do compliance be business Those about EMV, in be think that the And and trends good good on back we but end to -- XXXX. are move little year. the this think their pretty saw are customers starting it high-growth going be need strength, clearly the of

So stronger than we we we played in we out -- July. when saw July, think Gilbarco where as I I were think, we slightly were in thought said

or case? you're just -- easy first this than the the Don't that's Why wouldn't conservative be the than you in comps on mean year? being better here really mid-singles -- half front? I have if Gilbarco of

upside, I else, we we year, think at potential probably the the think, day, like end but finish there's the certainly did -- I very strong. of anything

to fourth tough comp then first just really quarter that will a number, impact full that the off number. bit be probably going year fourth -- half It quarter. obviously than we and the So the in then little does a in the but number the were have double-digit better posted

probably probably you'll in higher probably the So quarter. growth example yes, rates see some first as an we'll --

quarter last we the than in you the number year If see sure. issues probably for will we first remember, in that ERP had first so quarter, some mid-single-digit higher

the Citi. line is question from from Kaplowitz of next our And Andy

as Jim, actually? is last Europe think about could down than single digits. I was you mean, you talk Western there. up And I it there growth concerns know, which about are single were digits low better low quarter, you over

actually growth in what what's in the XXXX that your for region? improved forecast And So embedded in quarter?

you're talking Europe, about You're -- Andy, Western right?

Yes, correct.

little in so came than it in, -- quarter, Yes, in and still we've we a the single the thought I third around so come Andy, that was we were where quarter. going low in digit better a little fourth, in, to in been the think, -- down

point think are we an we've about now European the know a and seen, forecast kind things continue had conservative maybe -- So than of think a even though the on Western a kind fourth, single right and all the of pretty right low fourth quarter XXXX, was just one We've probably a little based for quarter still third, -- drivers had sale. on view to is where touches of low mid-single-digit we've of to we still Europe in good Europe we so lot we low quarter the better but -- through whole is year, the Gilbarco. that the was Europe environment, at in necessarily single-digit of and things don't expect the of until seen now. kind maybe as mid-single, example of We we're of I I a the so think on in

I China position by your said to the that extent strengthen the in there. -- your competitive continues was to intrigued And comments that you on

on -- on that bit. can elaborate elaborate a you a So bit maybe that

Fluke, mentioned think obviously I e-commerce well you're you in doing at GVR.

go materially versus market forward could in beat you as in in the So and terms of market XXXX China? share you

Yes.

we've there got that China to good, really think building beat product capability obviously very quarter there and I the production performance over China build market. Fluke having and of both the market, long for and -- building really for was the design products history for a

that. I there Ironically, so Tektronix, we in build to and lot of benchmark, put that started our really over and business. came think a just we've efforts the from And think continue they e-commerce I example a of great

think a other great it's I in of from those So each businesses. learning example

think position. I good It's in pretty places gauge have of the And double-digit move against in of pretty share around, that performance Things a think we have our a in hard from well there to we're just always three others pretty numbers had good. China, those kind you doing So is good. feel years mentioned. we'll sense certainly, but growth I row so now Tek

think those our as biggest that's we So well. the you belief will, businesses, I continue outperform we're of basis our three for that and if outperforming, are and kind can to

XXXX have China thinking for noted in what up? on mid-single-digit you're based growth And you

That's where we're right. That's now. right at

as think I lot in because of of color. a mentioned January Year lot don't Chinese having China course before, you XX the New don't been a the years, February and over give I

to get March. into got really You

So us what our from customers sale right with and are of we've view telling point perspective what digit. is seen best a now mid-single

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

for two Just things me.

later on you year Just first, on hoped, $X.XX an basis about but little of the full than bit your closed full of maybe annualized ownership? for to J&J, year should a thinking be still kind run-rate relative we first expectation, roughly

four Yes, I think nothing's quarters forward. changed from the moving first

$X.XX to that's quarter think said and from that. last changed -- $X.XX think nothing's I I we

a would maybe with see deadline. question, a big deadline? be smooth EMV to to of kind compliance drill then is too, Or expect fire scramble? up bit little compliance that a kind big lining of you And avoid kind to into acceleration bit great. a point, Okay, 'XX thought do where XXXX Steve's in XXXX Do of I on respect a just you little maybe a the situation the stronger,

stronger of first in think a we've I what all, -- 'XX. had seen finish we

some -- mentioned before. that So I has as

numbers think are going we're point, the way, bit think that I a So they're be going with to think the starting are little other be going to seeing, into to good at still XXXX of Jeff, stretch numbers. more this 'XX, we're and to -- things more. move we

and a they've think make are on where we'll to here the liabilities, we about at customers but larger one's no people of crystal are looking their liability ball right So that. upgrades so some now, they're -- as make got folks, had decisions their far, some based to we where decisions intelligent based talked going perfect thus on

be things our into ball XXXX probably now. right but push says good, crystal continue So are they -- probably now right to

question the from Haskett. is John line next Inch our of from Gordon And

What digit what could Jim, and double go do they think, guidance, remind is you what to actually us? said if mid-single I you And on China in the in based happens -- XXXX, in to Fluke going -- from Tek XXXX. on guidance to in Tek XXXX? do your based

mean or... China You for Corporate?

about Tek was you didn't No, China getting hear said no, what if point. you'd I no, overall. anything to data -- had I

assumptions? Fluke the XXXX Tek in roughly growth what's just XXXX based on versus So your core and

Yes, 'XX, is I had Fluke's they think mid-single mid-single and finish in 'XX. Tek think mid-single, a stronger 'XX. I

to they XXXX. got mid in think them low closer and probably low mid-single, they're to -- I So to single

helpful. that's So hopefully,

X% contribute that to that's how the -- The in Yes the the you guide, X% Chuck, said no, sense. -- how collective I percent, pricing's acquired like -- you we've of much deals businesses That right. other done the makes done to X%? a -- what they said much what recently? that do about about X% think we've acquisitions, recently

Landauer thing only ISC includes that -- only the it growth, that only the X% core to so and it and Orpak. X% Look, a is -- include -- so

fourth like And until so the points. year. it, calculated won't The recent turn they of next think ones, I quarter that basis XX more I core was

Okay.

pretty all So small, still right?

Yes.

not about were if about what again, do just because not you that, you want in attention we're you up, Jim, how focus feel also the read then, in you've think about Where kind like about So the are macro operations an your you basis? just the but lined XXXX? in CEO And pressure the as but newspapers simply most businesses, of most issue apply if businesses, you -- concerned got to most stuff think you if all XXXX? to an do do to where they what at there's concerned

out have we've could It's our things continues be example, watchful before, or over of go I seen to as up great we're would a regionally. for we're this seeing Yes, give that but say a the I I -- we the in think think, Western make question, risk paper, not own risk. also of a about and to certainly only how I doing China maybe reading watching it. it's our start geography, some could -- we half a but us it's Germany, would prudent and probably But mentioned an eye. biggest you probably sure Europe with -- out hour Certainly, impossible, in think It's about could we as we're business, and I there. go opportunity what an down. not on -- and

of we the opportunities perspective, want operationally, a we to the a EMV in think remarks, from example, base business think convert we time. USA about certainly make an want to We into revenue Murphy's was that to and mentioned GVR to to for. front us and in prepared and sure those continue our advantage have take opportunity. I are the order relative big continue those opportunities installed that win that over increase as it wins of the big We we got, as to

we're say GVR. innovation. put analytics IoT more big broadly, digital businesses. And our accelerate then We've John, So always in would a into of always I -- to a number working effort and we're

them are you've -- Certainly, Gordian successes Digital. like to us about lot Fluke see a things. to we're or accelerate talk heard going well, learning those Accruent of from -- some as how some You

that few number talk our conference and we -- So the those of about be -- on probably would focused a talking to here we're a and that's to have to business. be leaders in all going we're in things as top the leadership weeks, going

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

of rate there. of kind quick of and Accruent? they just -- growth and the year-over-year give that kind even you just to curious, not demand rates look kind order growth like? us the though at I'm trying we Gordian core, are what update just just a can mean, expected I you they're Just and get Could out on pacing

to Yes, of we take ahead and they Accruent said, delivered growth for last year, well. any nice rate again, so own little we I double as probably our only we as digits. of be, months more from few a a high in job although, there. closer And credit a had did Gordian, rate, -- growth better a a think single-digit bit we where ownership, we we'd won't thought

So of and team XXX-day strategic we are gate together plan, the -- still well. out with I so in think going for to about Accruent the we -- the they energy and enthusiasm far, be makes a -- what can really do is really they've for think We forward. both -- to I gotten were is few can ago their going and going businesses do -- it's great -- what us for be weeks

the We'll start those look into of and impact of some things until see growth we won't opportunities to -- to take XXX-day start rates at of things those those business, growth latter nature know 'XX. just mentioned you'll their for some 'XX think growth rates we probably to into are more of as of opportunities plans, We're to as -- look. because the well. the half for continue Rick, rates we'll an but accelerate you strategic invest I and as probably to because growth look the finish 'XX us really I certainly know, and you those softer looking

time ABI any Gordian's with demand? at spend you... to Could you trying and the all do And correlate look

more a Correlate Say their bit demand with? on that. little

With the ABI Index Construction...

Yes.

around There's a but... that lot of concern

as underpenetrated an business increasing the correlate that, one penetration A opportunity of I think. necessarily just there -- It's yet -- market I lot in to versus of such the didn't the I might because I we it's from no, it's their happening -- such doesn't projects the sorry, offering. by of -- their didn't that -- it part no, found grow just that's case, that. think an correlation right actually haven't ability The catch as well Right, a hear

Fair they last there set Gems PI of kind Sensing finished enough. the those perhaps cyclical one fourth-largest around you sensitivity kinds and... automation, of maybe China. pause of maybe order in might that think strong. there's those Is around anything give in sets the it's your in question, would that a and rate your But -- businesses, year -- the businesses businesses, businesses, And to just around some of

They're likely to in 'XX. decel little a bit

they So a 'XX, slow in mid-single. they mid-single-digit were to stronger bit might as were a little too most low a And -- platform, grower. they

and into call slowing technology. would still that I a applications. bit tell we've little think be some critical I We and still seen what lot there possible. of I but in in see remarks some it's maybe cyclical businesses we beverage We've markets that's to But bit food will a environment a nice also like less introductions of the So little early prepared think Setra opportunities. had -- taken mentioned the

maybe like that a nice So less -- the reposition think just teams in verticals you of the to the trying have businesses markets I done really them job less that under some of are cyclical mentioned.

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

the Gordian, to flow you if remind could. were we free what And quarter? profiles could of stick their the cash deferred Accruent I'd with this contribution, like us and revenue cash and flow contribution,

getting comparing not how prepayment if deferred set big that's up. other really companies and they're think some you're I Deane, a to maybe about a so And revenue,

And and moving free flow. the cash so I needle there don't think especially that on there's much

it's a the businesses if profile us be? free even of what gave you or flow free expect profile you if what the flow would but cash cash yield XXX%, Just not for

what will of it be that look company around as XXX% the it's the earnings, to that -- rest would rest I the as have margins, think of similar that I think Fortive flow just but cash the great is. to free I you it think I percentage going the be. at of --

can you sometimes deferred you get I great. think that be you that revenue, jump there. see when -- beyond would off up it But

then it and when does might breaking how sense you and at piece space point? you're on acquired this to be And these just make some M&A more significant and still in solutions field you have them, for you the them that, about two, adjacencies Good. these some out feeling in referenced

to less M&A, to breaking Relative on any this at have certainly I wouldn't Yes, the think we in there. yes, it platform mandate speculate a at time. out point trying in -- fit they're necessarily solid is do funnel the time. within of I they point what

working. had already couple imagine, -- the around in some can you deals They working being a backed. brought Accruent They private they them so closed had of had were on. closed right time As a we both equity deal, already they the that of businesses funnel

businesses, experience in larger we of So business. opportunities acquisitions. integrating management and small continuing bring even good we're both look the funnel And both into both teams to to the available like have and for yes, where

this, businesses we've only not growth. to we in do So but to the both -- do got accelerate those obviously capital capacity have the of we have management

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

way. asking bit this sense? portfolio? three a I segment we but bit lopsided different at more to segment's little looking a Does year kind same today, Deane be, of question maybe as right make that a Portfolios, to the seem little Could want now. a from

with when we Well, think get agree that. with on of I suspect lopsided in what ASP. I have to But other we terms your meaning side board, that not I'm sure I the

we're up board, on its we think the that and take most platform. become segments. but that take I we'll wait -- to wait own about it probably now, we And get year what think to until ASP coming we look will a till get right once the makes -- end I we'll the before thinking on sense. It see and of

you thinking low we some talked growth if acquisitions wondering GDP what on just you about in late also be you than seems GDP, do I'm going we was this just X% the something it bit here, gets X% a where concerned Okay. you're end? simply, -- this in dead the is Can weigh X% beat organic again, about also what X% I that look that your and then the Fair that GDP. put coming would the follow-up -- a organic have higher to at but in the X% possibly at sleep. What numbers enough. the the like XX as X% in the are Day particular? faster Investor that core, into some what's after, I think you organic, particularly a is remember would plus, the and at horse the to not something Then little 'XX, you just down there can things acquisitions coming about in to into to year plus

about the thing we it Well, ASP We're Gordian, we They Gordian on. return brought look, Accruent ASP. and excited fourth you. won't that businesses all. and number turn at main is Scott, in be only the Accruent really, in The agree quarter really -- core with into the and that won't --

when think So a but comment, so you I point. main get big -- XXXX, the to think fair I that's a

to if finish mind, things happen to could you you you don't Chuck, if But out have the the there get that what What maybe that, X%? X%, are there? would the

Jim. I think -- it's Scott,

it that and There's numbers that. the mid-single They're I range it digit. within that really things two think think back -- China mid-singles. lower North Probably of One, not in solid. end Western would mid-single be things. two on I in of coming maybe probably called a Europe, a digit. the slower America's We probably, little bit

high Western the any those, probably then to degree, to we're you doing. good, there, be is if lower reality of America's What you and into -- what mid-single-digit growth we I never good, I see that, You get we doing rest two the looks depending market low that. continues start I pretty good to not start And do thing I'm North where what the should be the end the weighing that like are economics it's February, in doing Europe pretty in a And for be -- end would never but to other business. a year you to environment the likely I brutal -- to with that the found an most need think stay America's think the North that's of China having if relatively not great to of markets necessarily call think guide. a holds to going on of small, be

question from next Stanley. our Morgan line from Pokrzywinski Josh the is And of

in we price you just -- a pull at having made out? pulling pulled comment be the comment of as comp probably else you beating you just to first the I anything pretty China, elsewhere Jim, know this gets from on you to -- of forward easier mentioned wonky to point, easier, the the the that earlier at can kind but with January in this is bit a quarter, I would some tell? that the guess, behind point, keep forward there GVR think bridge it'd XQ, got Yes, go point horse better. are that backlog? dead that in maybe little Otherwise, best about that you back out the about price anything feels to Or

Yes.

is is, quarter basis -- of one to probably about was fourth equated think points growth XXX I we Yes, think probably first there's in probably to the quarter XX that business. we

you if probably guide, you're to XXX -- is our look part that So XX that at happened. of

it quarter. -- decided year-end to to content business, to that spend at that where in that in EMC and That's had So out as and get wanted wanted went well. and Gilbarco comes part of there really One, to our and business it at the was overage in take in looked a was QX money is -- customers down there -- those revenue few some things. people a one orders place. certainly

pricing around of pull the that had the And that some company. quarter their of Tek. of some the Fluke the As and prepared in history they we remarks, happened actions biggest tariffs at got we've mentioned in then forward

to about to And XX things so XXX. equal those combined

what go we probably China that also business that saw the we know was quarter. based so with, we how some North but transacted on in finished, think, in America we some around have And optimism I and would of first

pieces it move obviously that the the of with it then XQ but of same that side should sequentially volume I a lot that around about Got closes a know bridge? line anything think a still, if is in kind will just XQ there in to with to quarter, that off and ASP drops there's with beyond deals we moving anything margin it. adds stick on the further input? And on, of thought,

difference step especially a between QX, nothing quarters, these at to when there it's QX that's thing, main the that's think significant you what normally I from that down, happens look to comes but No, mind abnormal.

And Suisse. the from John of next question Walsh line is our Crédit from

Can a lot piece of of give for just actually the where specific. so just ground you us XXXX base little get business? ended know that off So we but the jumping more ballpark to wanted covered, EMV for revenue of the a

Are you the over XX% through as we're we XX% about -- the talking cycle, through cycle well, about a sunset little the XXXX.

think So it bit that's extends that a we But about thought as out where I we'd maybe also farther. be, little mentioned see, before, ahead. we we

points So number's never remaining we the so X than the John, precision XXX%, a saying, probably said but call we go but more XX% some too the percentage at or of of because out point, this think know, XX%, actually little XXXX. will that been -- this by -- X is don't to you -- at -- as XXXX we've specific want that into get point. it -- end remaining, not I be we'll to it's a And bit false we least probably think at pushing roughly do pushing

is you've QX look differently, think core negative Okay. and after right, full already And kind platforms and about some growth buckets, or But of whether it's in all kind as large or either where any product transportation, on year main construct? question the to sensing, utilization, platforms about your both in in solutions, talked just down year? and the across QX the think full a field is. the then the you are we those there core get ranges maybe of major growth growth full I little year, at QX Or of those for

All platforms have the growth, John.

negative the prepared businesses places and remarks, the a at the other, where few telematics for in two individual mentioned one we might be As quarters, Qualitrol.

in solutions, Qualitrol individual telematics not obviously those close Tech, businesses, but So to they're businesses those even biggest field Transportation in platforms. sits the in

if we the but So the can around, turn hardest them the make grow, platforms probably individual to will businesses are to working will. you sure we're businesses those continue

from from Bank the And our Obin Andrew line of America. is of next question

about how any first Just Pacific on in the the And book shutdown I Tektronix, the do quarter? collect think did Professional business a, the impact quarter? ability in the federal-related revenues to Instrumentation, on as Scientific, from

little. the resources in worried the were have they products great booked. in do to Yes, little team interestingly We some that. about ahead business enough, very approve EMC We had before come that did but getting ship, a a they because of the job

probably had impact within really -- but little Gordian, bit we So of our a company size on balance, of a scale. we the and of at had weeds

thus So impact. direct far, no

think it's any too third You might I if derivative say maybe -- tell there's impact. second to or early and

line And our from the next Research. Wolfe question Nigel is of from Coe

horse why has a outside worked I we and the external maybe the Chuck, It And are in prior forward math expense folks really really what hate basically from above beat year. is FX third me there to the of struggling guidance math your XQ during your of estimates lot again. -- $X.XX in that to here, is quarter, So as to tell us just seems it struggling understand times death so roll organic Gordian only X is XQ Could that way the to I'm the but, and I I'm know X year-over-year? the midpoint or top you my and so line well, explore out XQ. the effect down M&A the really

be would there, help So good. some maybe it

down. in our thing one tax think not rate up I is So QX,

You said our tax rate QX is down.

QX.

Okay.

to think XX.X% and around in thereabouts QX, tax rate and our going is I prior the be was it year. Yes, in XX%

smaller? Okay, so nothing okay, take So and go... else? off-line it we'll Nothing

a also as talked $X.XX we've shares the more little And There's mentioned headwind. as tax. a quarter. I also long got us about headwinds, as reiterating dead year, -- in I we're from bit the it's of given FX, beating So this horses.

through go we've on And margin, on this more this well. then as again, we'll Okay, off-line. PI the touched

about mix, some I you think PI. mix think, I in negative Jim, talked

I'm And I a -- flow? PI. Chuck, mix Am in does that you're Fluke this negative how for up very So think that strong maybe in then, and just that is were the in quarter? could the you marking the to why that just quantify February. factor I not PI, roughly to understand Tektronix referring if then -- set because more maybe was

don't I mixed was impact PI. there a So think in

two things is PI, not biggest going Fluke hits it there's had in in the we and there's -- that's think -- is primarily -- entirely, I but tariff hits, on places Tek.

another and basis So that points. $X XX the is of XX warranty probably million, OMX. our on gives us points And basis that's about headwind

another a warranty. it's so points basis bit but probably company, XX little XX the on for the As --

So we're two, headwinds when two on you we'd at be weigh digits. the those triple those are flat OMX, why our otherwise

And That Nigel, little a have but mix, we been might remarks, little I a prepared just it bit as we the was about IT -- talked that than overall. think bit PI. more in was

there. we're what about that's talking So

-- of he there. at little obviously Fortive. answered all And So bit just overall Instrumentation. as mentioned, the That's questions mix within a Chuck the Professional

negate the that considerable some I we're pushed you we PI pleased the at we put -- the warranty of us But feel with the work XXXX. of up. get love in pretty that charge it mean, ended with margins for sort that if we So the did of kind through think combined tariffs, actually -- issue. obviously and don't day, good pretty And we good teams where really in about think quarter. shape through we put to a our a the did in end year the as fourth in one-time I that,

Jim. helpful, pretty That's

in PI, to margin's So think just point, underline QX? core QX you the up

Yes.

Yes.

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

third to bit on about a I really that you just was more from like think I'm M&A more Gordian Accruent but of from quite into 'XX there, off the a little bit and -- time than acquisitions curious up quarter. the a bleeding how have Just see it we're impact in of thinking. what on know you cadence larger PI basis. stepped

Are the up the the step cost? amortization about or you on up talking step around deal the

cost, the the XXX Not for minus acquisitions, transaction yes.

Okay.

deals yes, got credit On both revenue in they for full quarter. the side, well, fourth the we I clearly, think,

number's -- -- go -- core -- will it -- to probably going and it's in of obviously, will a so the -- year. I next fourth it think quarter end at So that it's

see for quarter's we seasonally -- So should the big fourth always those businesses.

I that So necessarily -- four. by wouldn't multiply number there's

like mean, -- I the the margin on sorry, no, No, sorry. no, side, on the PI.

minus On points. the acquisitions XXX margin, operating you basis had

how curious of... Just that kind

get we on -- the better And the They're very through Yes, through for to the sure, there's the will quarter absolutely year. -- year. -- they'll little closed. had in impact margins continue they'll we given improve where they

question obviously, big on And in a ASP. out hospital. mean, I a Okay. then sterilization, thing

that kind on that So single-use, like I'm Or how like have that pull does -- the two curious any ASP? -- trend towards of opposite how does impact the how trends? on that

tracking But of I technologies because when still world. products We've around products lot might very impact. not to think fall typically products there our of the are the going there's those our single-use, And into and category. look we some a necessarily they single-use underpenetration that exposure to and where the doesn't sterilize at technologies little that It the that we opportunities. products been be used, that not are -- the are

about visiting regulations for are -- ASP when So the few U.S. around clearly hospitals of there months we X.X team, you lot were all and world market -- in unpenetrated opportunity a there. standards obviously, China of and But our developed. a in Europe, the fairly ago and look forms

of And as And opportunities. very think us. System about side exposure when look and to them of at sales leaders, the was growth them we opportunity Business to and this they're incredibly I some the week. certainly, some of that's they're the we're it's lots Fortive unbalanced. -- here I stuff, with underpenetrated with roll out available were excited we with Interestingly the there's -- So the you enough, little a Yes, single-use. of market, number tools

growth business, So we I as fronts, see Joe, more we across think get and all opportunity. more the into a

call closing And remarks. further at this Jim time, to I'm to showing that we turn the questions. like for have no back I'd Lico

growth, what's a thing us snowy quarter XX% taking the history finish weather, for We did our days cold for best -- year. X% hand, despite other are it know pretty the obviously It's XXXX. strong and quarter best of everybody, thanks, had yet portfolio think about work and we given But come in we with a Ian, to Seattle. the that to the core We on of rare growth still very but the transformation growth. I the earnings excited in incredibly our the over this great core that's the That's company, we in in great, evening. are ahead time Thanks, think us.

are through support, your for Thanks, everybody. thanks and a Have tomorrow. great and for tonight and and So available clarification night. Griffin -- team obviously, questions and

We gentlemen, you Ladies conference participation. conclude the your call. does and for thank this

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