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Fortive (FTV)

Participants
Griffin Whitney IR Officer
James Lico President, CEO and Director
Charles McLaughlin CFO and SVP
Julian Mitchell Barclays
Scott Davis Melius Research
Steve Tusa JP Morgan
Andrew Obin Bank of America
Deane Dray RBC Capital Markets
Andy Kaplowitz Citi Bank
John Inch Gordon Hasket
Richard Eastman Baird
John Walsh Credit Suisse
Nigel Coe Wolf Research
Jo Giordano Cowen
Call transcript
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Operator

Hello. My name is Jason, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporate Second Quarter 2019 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. Instructions]. [Operator

like President call Whitney, of begin conference. now Griffin to you turn your Vice Whitney, Investor to would over the Mr. may I Relations. Mr.

Griffin Whitney

joining afternoon, are financial Financial certain the today relating Lico, and McLaughlin, our website, Executive thank Thank Information our With present Chief Jim We everyone, non-GAAP and are required to and non-GAAP G Jason. the call. SEC Good you Regulation you, Chief for www.fortive.com, Officer; us Information. President on the call. Senior on Officer. on financial us today's President by our these and Chuck Investors heading measures available of measures section Vice Financial under

of for Presentations call included later of Events of replay August our press X, the heading the available of XXXX call. quarter the after will release. Instructions conference this next and under will website archived earnings replay A webcast section call this will Friday, today until & the archived our shortly A be second quarterly accessing until remain replay our Investors on conclusion be XXXX. in are the

continuing results as XXXX, historical divestiture We on the X, & included operations. results the presented and The periods. discontinued are business of the on accordingly, call Specialty of October A&S based operations for have and business Automation completed the current this on

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

and that statements to statements the forward-looking results may, the might we materially will regarding statements any statements future. anticipate will, in uncertainties, that federal including or actual differ today. laws, risks a meaning we These we the or forward-looking make of call, the forward-looking and of subject make expect During events from number are or developments occur securities within

available statements in factors XXXX. December any as statements. our we including update XX, to our assume from XX-K differ are annual obligation may These these actual Form SEC made, report ended is only to cause statements materially Information year regarding that any not results on do filings, date forward-looking forward-looking that these forward-looking the they and for the of speak

With turn to the to that, I'd like over Jim. call

James Lico

through Thanks, despite these and professional everyone. adjusted free core short XX% good Fortive diluted representing an of per including quarter cycle high-end reported In XXXX, for afternoon, of strength which evidence we total of earnings impacted growth, the business continued in Griffin, another quarter slowing driven cash $X.XX in year-over-year high-teens we quarter. Today of our the the progress disciplined our headwinds, conversion, businesses the and flow of at of guide, of execution face of increase strong hitting growth share second and and by our Varco Fortive negatively system. the the the team instrumentation outperformance the Bitterroot revenue segment, as delivered

portfolio. as enhance reflected strong and profile and continue our cyclicality the the performance Our cash reduce growth the acquisitions our flow of capital strategy deployment to of momentum earnings

solid as of of with first to products majority We ownership. of it off greater of we Johnson the quarter gotten our earnings integration half start sterilization forward & advanced expected through as agreement additional a our progresses the the transition during good Importantly, than XXXX. has providing first look contribution a exit Johnson and updates start to delivered integration services

additive well when to will as of the of earlier Instrumentation increasing portfolio the continue time in they they core At strong quarter. and the Accruent continue be also a and perform core segment during combined turn ISC the deliver single-digit third the same OMX and on to growth core basis. the core growth high generated Gordian points resilience to Professional and of XXX Landauer results, basis acquisitions

Consistent solutions. our we field technique intellect conference, to digital acquisitions bring acquisitions recently with strategy continue quality to three and within of completed the our ability highlighted digital our to high additional investor customers. proof well we solutions The demonstrate as May companies find connected that our strategy, safer accelerate during to broader, and systems as workflow

a prior the I’d Sales net the that, was adjusted million, and of quarter by EMC flat to X%. were fluke Bitterroot, details $X.XX. performance per increase XX.X% strong With in like from quarter, reflecting net the industrial over diluted grew partially $XXX.X to turn up a $X.X billion, Core and scientific, Tektronix. growth Varco offset earnings earnings to in adjusted highlighted core of share decline were is revenue and revenue which the XX.X% year

and points Accruent foreign Gordian, X,XXX basis unfavorable digits revenue basis reduced including points. growth, high-growth low-single exchange large orders Asia of markets Latin weaker growth by second due more and into the ASP that in by In in on the America. core while contributed timing Geographically some top-line year. conditions half to GVR decreased XXX at market growth rates than offset Acquisitions, of fluke India pushed strong was

India year. strong expect growth full to in for continue the We

growth Europe. while with led continued digits North Industrial and Europe low-single modest was grew across North by by more digits Core posted was core Tektronix at with Western offset growth technologies, America Western digits, growth strong China Fluke, digit Scientific, low-single in and markets low-single America GVR. decreased revenue partially and GVR, sensing weakness performances growth EMC in at mid-single ISC as strength revenue GVR. Developed the in

XX as professional points instrumentation. the margins margin at application GVR offset and basis FBS of volume basis operating and Core of XX.X%, within headwinds deal of strong acquisitions, XXX basis Reported disciplined dilution from XXX help points reflecting continued operating for dilution points costs. was increased related

free flow second we generated quarter, a of conversion XXX%. $XXX of million ratio cash the During and

free for of While year. macroeconomic we XXX% and cash we than anticipate a strong continuation full flow of the generation environment, conversion expect greater the sustained uncertain

with exchange over reflected contributing growth, growth points of X,XXX continued Turning This Instrumentation to dilutive with XXX operating our costs, quarter. of adjustments, margin X,XXX operating purchase initial foreign growth the flat ASP. associated Professional basis acquisitions from Unfavorable acquisitions transaction basis of by years, transformation during sales related closing points driving growth performance segments, the reduced basis and Instrumentation Professional relatively points. core including deal few past the margin accounting posted of on revenue. and of XX.X% rates reflected Reported expenses the XX.X%

and reflecting as Fluke Core exchange. flat performance, the Solutions operating basis core performance unfavorable margins was Industrial Instrumentation decreased revenue at impact slower Scientific foreign by slowing points, and tariffs and offset the revenue of was Tektronix. and in strong EMC Advanced

growth at positive and growth developed digits low-single China the strong more were performance a decrease from slightly is continued by Field paced ISC markets than slightly Solutions performance as strong flat revenue Fluke expected core the Qualitrol. growing with ISC. was by High weakness of in offset markets

markets, management offerings. of its lease While Gordian’s a including by North by procurement its new yet the be driven performance construction end pleased variety very the Atlanta. space of and for growth and Hawaii America core Gordian. by Accruent optimization volumes not strong customers, to Department demand continued Accruent of were platform, see growth for across with increased continues the in we driven and City continues to Education paced of

was calibration, recurring grew Fluke and a XX% and flat, as low-single in growth remain Digital in low-single net customer generated tomography, greater Fluke revenue. instruments growth, in Health that and in new more XX% than digit generated eMaint increase watchful second digit potential we market through high-single for the slowing annual China half. was offset process and Networks digit revenue as by and and Fluke Systems core mid-single industrial declines at Solutions. digit growth Fluke’s growth Fluke

a and measurement Pruftechnik revolutionary now equipment $XXX As which alignment at in leading acquisition revenue, art vacuum industry monitoring, Pruftechnik, for combination leaks, of Imager, site tools, in product with to greater technology. a we in condition which also highlighted the the quickly expertise. than enables launched Industrial strategy, conference teams acquisition of maintenance sound Fluke May in utilizing and asset, The completed state best and class locate and gas accelerates accounts accurately a services. a leader monitoring Fluke investor recently Fluke’s domain liability air, million bolt-on total of of new Fluke’s vibration and testing Sonic the and

North digit points of high-single basis mix and than a application growth while in digit China, of ISC OMX in System iNet XXX with against tough improvement. the including prior in performance quarter Europe. quarter Western delivered compare was delivered America ISC this Asia year. mid-single more the Business slowing the consistent rental strong continues strong revenue led through generated high-teens growth, operational execution as the by to drive Fortive some from PPV and another strong core offset registered which Pacific, growth,

chemical, the software, analysis and assets real service cloud a These the Scientific connection [ph], Industrial of its ISC’s health based related and safer their the leading and safety workflows. the a real Intellects provides comprehensive and of and HNF provider hazard recently advanced gas workforce environmental, time assessment systems, transportation who's risk to as provide sectors. leading completed platform acquisitions a acquisition and management safety to and time of significantly between strategy oil customers

the signs quarters. certain line conditions time generated Qualitrol digits for in more revenue first in eight a declined positive with low-double expectations. in growth see to core our of Qualitrol’s continues bookings early it markets, stable as

of the delayed region the North driven America positive retrofit While digits, in to challenged Middle quarters, the due increased seven East release project spending, the performance remains lower previously in low-double first projects. by some

supported commercial weakness in customer of strong EMC as key well EMC growth, as Tektronix. at its continued as at generated backlog up offering. by growth broad double-digit flat A by was and across revenue positioned well market as core quarter EMC record defense realization aerospace for offset scaling share the growth core its gains. was the Product product lines, of satellite programs end the and based

driven impact of and entity core The product registered restricted in the on Tektronix’s in had at with macro Western to decrease mid-single led lines. this digit a slowing in slowing the Western by associated decrease based revenue, conditions Europe, weakness a U.S. continued and Tektronix negative a was Weakness Europe list impact broad across high-teens KEITHLEY. Huawei’s in inclusion much May.

status, in coming to digits of hostilities high-single are between well to from marking ongoing U.S. persist in XX growth quarters China. headwinds driving at as growing of expect trade growth. KEITHLEY any and its and Tektronix’s mid-range offerings Western perform resolution We scopes, Europe quarters, the continue challenges will strong investments new the and as consecutive Huawei pending

to Genstar closed and added announced and and five previously to Telestream its The MSOs large the customers. Capital. transaction form Tektronix three series video series continued successful four a launch tasks entity the and six to the of enterprise business with deals success contribute with including monitoring of the several new recently new

Core across share continued and critical gains. the platform growth markets, sensing technologies for revenue end the product low-single solid medical environment introductions new and driven saw increased digits, by

the end equipment slowing However the across broader also core customers end quarter. from towards saw of sensing headwinds semiconductor continued markets its industrial and

perform China supply Sensing’s well including system growth, North SBT’s than to continue traction offerings, platform AccuBin offset Europe. for condition and was XX% also chain by seeing weakness in good We're partially America monitoring Gems. from but in with greater oil the Western and applications, early IoT

also the the off China. new Japanese Japan, saw in to D for with were the introduction ASP Turning a product ENDOCLENS Sterilization is second products, the expectations growth by Terminal low-single are as of led re-processor Sterilization, growth level company market. the by as start line quarter performance in to disinfection, strong integration endoscope high Neo the supported in our progressing. and in Advanced in with by grew performance digits ASP well cleanse, solid got how automatic led improved in successful strong pleased

was Sterilization America positive consumables. the driven and up Terminal quarter, by North sequentially first from slightly

the integrated customers. network ASP saw existing several orders large from new During of and range delivery quarter, a

points continued acquisitions while operating XX revenue Technologies, X.X%, performance and XX.X% grew was contributed margin GVR rates at strong growth including volume and revenue Matco. exchange at XXX core points, reduced unfavorable by core XXX Industrial X.X%, points. basis increased Reported to by operating basis growth Moving basis foreign solid margin of driven

North led highlighted digit America Technologies Europe Our reflected growth related by by share EMV increase Western revenue mid-single while core the low-double gains America. strength BP's GVR markets, core strong continuation single grew Transportation in spending sales, of a high developed high-single digit North digits, by platform in and [indiscernible] subsidiary. digit strong reflected revenue delivered growth in

greater and to competitors. in GVR than of mid-single a its of Citgo into In Gilbarco sale as of than timing compared sale markets high releases now of growth volume decline posted the the the year. year period, on growth India on tenders install system more half is Shell XX% Passport available point ahead Networks. shifted the the XX% well digit point base, second also completed Gilbarco’s in of of software prior China of outdoor other EMV capable and passport

paced automation growth has in the also and drive is healthy going. markets momentum new which GVR with a Latitude, dispenser far launched up digits that Orpak’s strong markets backlog orders growth high-single support its from received and coming GVR thus well growth growth is strong will additional in offering leading been by by very quarters. year-to-date platform to high customers expected high

expectations with than strong decrease revenue across by core America second Europe. offset North more in growth a In-line TeletracNavman's quarter was digits Pacific and low-double decline the Asia and Western in

While North businesses the significant customer headwind, remains churn. in TeletracNavman resulted focus reduction on America the in continued a a teams stabilizing

channel. new performance see We for quarters in across backs improvement to continued well enterprise and and the launches bookings as coming large customers expect on sales ACV the better of the in SMB product as

quarter. the platforms core increased distribution, low-single during second digits franchise to Moving revenue the

mid-single Matco the by outperforming diagnostics and decline paced strong in As mid-single at growth growth by partially Hennessy. in tools. hardline offset quarter Matco digit a digit was in

part Maximus with diagnostic tablet to diagnostics in plans. offered which full and OEM customizable new highly was growth High-teens level diagnostics of a featured due products. expertise, Maximus family the Max two Flash subscription monthly provides a diagnostic Flex The in live additions Matco's Plus

guide. Turning to the

to our we $X.XX annual of a to updating year. continuing has second the EPS cycle XXXX XX% year on basis. revised net guidance diluted year-over-year of during second reduced which half slowing the short The the guidance quarter, to $X.XX through growth emerged full demand adjusted that are to We operations been the trends reflect expect to impact XX% representing

The assumes and of revenue the than and XX.X% X.X% rate core X.X% guidance effective free of for greater cash growth flow revised to conversion tax XXX% year.

initiating growth, of of effective core points third of representing an year-over-year also tax and $X.XX, EPS XX.X%. at core are basis high-end. of the diluted assumption X% to to revenue $X.XX includes growth guidance X% our of We quarter adjusted This rate XX net OMX, XX%

growth wrap application flow of growth face the strong delivered slowing anticipated and elements earnings we the in core across of To portfolio. of basis cash OMX execution up, double-digit during cycle lower expected overall to the strong from growth. short delivered resilience points and Disciplined than from challenges both few positioning The acquisition of quartile foreign our the continues and to the deliver and top the the some another exchange, quarter. despite free our tariffs enhance Tektronix earnings from the us performance quarter portfolio, of volume past and deliver Fluke FBS of and years the continue of child conversion, XX to well --

turn it I'd to that, With over to like Griffin.

Griffin Whitney

comments. concludes Jim. our now we're ready Thanks, That formal Jason, for questions.

Operator

Yes, Instructions] Mitchell of Julian line first [Operator question from Barclays. Our the comes sir. of

Julian Mitchell

afternoon. good Hi,

James Lico

Hi, Julian.

Julian Mitchell

of Maybe just some in a the half. earnings of question the phasing first around second

looks midpoint third have taking increase full of the guide. you XX% a about like quarter, just of It in midpoint EPS sequentially QX. So the year

there a a increase, big a but was if check you to that? sequential drives wanted I QX, of such pre-buy last helping understand what had just correct So up that's big roughly and uplift? lot

Charles McLaughlin

Yes.

look look The high-teens in about the quarter. when you and year, we're there's get. things at $X.XX last growth look there. And at and the XX% to X% we year-on-year the year-on-year two the is of volume And it you of a think get I from at year-on-year you think way at it we high-end I guide the around QX between to get and I three QX, I -- the then whiffed. normal Gordian those increase XX% whiffed were the way Accruent those our talking seasonality year-on-year fourth -- things things is, One think also I I you so there's and between that will more think got there's when core at ASP. X%. few There's

Julian Mitchell

cash you. outflow. just the for was on was thank then on like whole up second in maybe a Understood, the pressure quarter, the some following And free of an flow. working bit look half as receivables That the under particularly a capital it

that free quickly through flow talk maybe recovers. So how cash

Charles McLaughlin

NAP, hole that to ASP the receivables cash big one-time are be except we the delivering just main signed. the we be flow, recently well most And a receivables that part we that that thing businesses flow, this of that us as cash done all here first can performing very and of is deal through QX. acquired no one Certainly, -- so time acquired but put -- deal for got the halfway we on behind outlier of so is lot those going but refill thing will that as there that roughly

I think our line free that see we we growth in see the cash flow, with earnings. in roughly adjusted ongoing growing

Julian Mitchell

you. Great, thank

Charles McLaughlin

Thanks, Julian.

Operator

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

Scott Davis

guys. afternoon, Good Hi.

James Lico

Scott. Hi,

Scott Davis

four a fully SG&A Are traditional get structural why boarded, as there more slide ballpark? the big picture call Chuck Fortive Jim they deltas. Just any once and at can SG&A reasons assets the observation have levels XX% looking and newer on

Charles McLaughlin

Scott its primarily is that that’s about Charles, that you added as things deal cost whiffed of on. going year-on-year as couple the the the was well one, amortization are seeing

that's close So basis points. XXX to pretty

James Lico

to related the And more businesses a the typically I at bit with businesses even relative that all we house a to little and data the built SG&A expense the would IT gross tend we’re some that to G&A goes a expense more bit higher those having the acquiring look think margins. I in And they and of because things. are to have little capability software you IT have

tend a a bit pay higher direct bit a purely just to new because little look look in businesses ASP driven little a the business you when today, in have businesses, cost more like time look see the general see IT little of estimated more similar certainly you're think G&A at you selling, the why margin more bit G&A little to some structure been we've because just And gross more what where more bit bit but I little cost So over other software of the in little if by able that. businesses. reason engineering, that have a more probably they you businesses bit expense. sales for would at a particularly, achieve no But in we of to

Scott Davis

answers any Okay, ISC I visibility, you a get what extent just sell a lesser I you Landauer particularly. time are think channel the to good guess levels where do sense I a to have of versus And it. think guess about through? then, and you have when given sense trying do ASP, that inventory

James Lico

as get get business some line, the We of in on have so transition ASP, these we visibility agreements. more of decent we off service

We to will the ability those some things of the neighborhood of in see have into with key a see channels how channel partners. we of better other parts the portfolio. In

of ISC have to achieve others, with Some some of similar that other work currently the to of that we’re the we continue channel partners we as with starting parts Fortive.

today, ultimately the it bit partners. but get pretty visibility little we’ll kind a U.S. the Fluke than reside So have say of European of do that and we distribution get a chunk won't we visibility more at we channel with decent where

Scott Davis

helpful, Okay. thank Super guys. you

James Lico

Thanks, Scott.

Operator

Steve question of next Morgan. from Tusa JP comes Our

Steve Tusa

going? How's Hey, it guys.

James Lico

Good.

Steve Tusa

Just for other different can one, deals, actual the Accruent? and Gordian on numbers the like and you revenue what’s give us ISC ASP, ASP, the

Charles McLaughlin

a XXX. million ISC, I’m is year asked about of numbers, the million it on give So that you annualize this end to $XXX an it’s for north $XXX it’s and ASP you call going basis, maybe little think I over market

Steve Tusa

the more I about actual sorry, asking Yes, quarter the was quarter.

then Accruent and quarter So in quarter? and in contribute the in a ASP Gordian much how

Charles McLaughlin

distributors want from day nothing I about -- that think core make our sure the I we the So little numbers. saw revenue, countries, you our haircut understand sets on what bit obviously. two a number in But to

come for So And just back get number I'll that I let -- really to now. right you. you then think me quick that

Steve Tusa

changed have you saying -- the buying patterns have are something you near-term? So distributors in the guys

Charles McLaughlin

outside so they're is the J&J. as No, managed by ASP U.S., the acting still being And distributor.

a the business. quarter, to therefore of off over it, ASP $XXX of of portion expect have million their in So us little a haircut takes while you'd a because say third maybe this

This quarter, reported hit had we numbers. our $XXX million

Steve Tusa

it. Got Okay. Accruent? about Gordian and what And then

Charles McLaughlin

million. about those a bit Yes are -- a they’re about two over $XXX little just little

Steve Tusa

worse that Okay. is that any the are more so you through you to did there in comes on started? than seeing when kind guess, it businesses, that And -- your changes And mean, shorter cycle July exit I the at quarter trends far views notable? anything of all? you I

Charles McLaughlin

at And Yes, think good. total we true. America that EPG, I in think talked Steve, about being pretty North when we I was talked

for it was Tek. Gilbarco and less sort more and Although Tek. we saw And June both and it Fluke Fluke changed of

So revenue really looked for think we looked at I really of of would the really say, we the point reflected Tek, and we the supply about we sort about of weeks in sale, Fluke of think guide when that second half what and inventory, at drop.

really So in probably see that's we second think we'll what a half.

down probably other the -- digits. said the and they and And I in were I we principally what that's bigger are was again, thing low-single down change digit. I at or probably flattish for is we Fluke we think low-single Tek, Europe, more think Europe, X.X, than obviously think that

seeing is until really So we up ended point-of-sale a June. in a slower what Europe

Instrumentation really what our drop the forecast how well. the in -- for say account to try second half two, the is ago probably is view three Professional between precipitous it's in Europe? half, that So months for more for is second And as we

Steve Tusa

one Okay. where operating And for of kind one segments? some what quarter it have feel Because range hard like we kind third your margins, to last be guide the pretty to should is. get hit then where to that of

Charles McLaughlin

we want particularly margins, hit to you or think to… have core don't operating I one say I’d talking Are So just hard. about them you

Steve Tusa

Yes, XQ, them? want for about to margins however segment talk you

Charles McLaughlin

range. XX-XX In the

Steve Tusa

Yes.

Okay, a lot. great. Thanks

Charles McLaughlin

Thanks.

Operator

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

Andrew Obin

good Hi, afternoon.

James Lico

Andrew. Hi,

Andrew Obin

highlight is that European sort of and weakness. did a driving questions, on just Fluke up Hi, Steve follow you Tek

how and is it exactly industry Tek, trends slowdown? why? better any does that get Fluke And causing the specific happening in and what So are

James Lico

prudent in to Definitely question, to We drop but there get lines, channel right. your first think certainly we destocking, a demand was one, More standpoint, across down. the we the -- put all component from is think as that. that Well, was not saw saw product second half, so and will automotive be Tek. any better it get probably think I'll that specifically, to Andrew. a second more I I answer That's it better an does decided a much it really assume we question at it was how -- saw go precipitous the to it I macro also

an slower While so not exposure automotive sell R&D us, we for labs was into and -- that's but to sure. that that's enormous of do the

one of what Just as example we saw.

Relative to Fluke, I as be think it in was in -- we you, And, the also second reflected point-of-sale. that's saw we with about well. June how to think drop half honest

So, and it was well. relatively as broad based

So just feels now and from that's feels reflected And, reflect demand, then I think end what's we're that's you I more if how see it improvement. we think will, how it so user going signs right and look for that macroeconomic, everything we'll destocking. standpoint, to for

where that in of thing, And, the we're U.S. right this us at tell in seeing Steve now. nothing July that very because particularly days July and different July of early than point asked in as looks know you holiday at and kind how -- the and we're would week. any how It's

Andrew Obin

think just there PI quarter, you good PI And down had XXX also bps. X.X%, this of was sort in pricing margin core I

in does margin in and the core So how half PI? trend second pricing

Charles McLaughlin

Chuck. is this Andrew, Hey

but more good, right, slowing pricing it the little bit volume. a offset it by you're was was was the So,

first hadn't XXX see improving to [ph] QX that all, start -- we lapping improved QX, and margins it slowdown, would QX, we to But in better -- from that in that sequentially FDS to get from I good then will Although QX I think has positive would tariffs don't chance improvements has and of because on but points basis discipline in continue believe QX. QX basis a had the to I of from the -- too. some QX if would PI in we QX, expect at in QX continued probably down PI. XXX have and OMX will of it again points I been has expect OMX going if we're core sequential

Andrew Obin

pricing And sustainable? is

Charles McLaughlin

think we put year. lot of I last I in price think a

the So a half in price last metric I the by that'll think we be tariffs -- second all little for put of bit because first but year in being half price to tariffs, be less comp. offset the the might the we'll

you'll think probably difference isn't see, I So the much, to first half. half those between things two second

Andrew Obin

it. Appreciate lot. a Thanks

Charles McLaughlin

Thanks, Andrew.

Operator

Dray our Capital question And comes Markets. from next Deane RBC of

Deane Dray

afternoon, everyone. Good you. Thank

James Lico

evening, Deane. Good

Deane Dray

same I assume the that follow assess you was the Hey. the at that XXX that after of integration established is reevaluate acquisition, how practice all would there days an Danaher, -- you going way? And got you've could of follow-ups and kind maybe well, the for then couple along share ASP what gone negatives, learned, a what's any surprises I've positives, of there. you

James Lico

Well, things. a doing. what what some days XXX to we been I've about it. We finished so we've close XXX seen days, about But quite pretty couple haven't and we've been

weeks. day them, So week over every I think XXX their I've here the pretty with either several see or last been We'll with ASP customers team, either much with shortly.

of the it's like that seen management. to at we day, those and the sort Terminal really the really to particularly in our expand think here we in really are that Sterilization on position, some we see tools aspects some very clear the of the is, felt the I we've number opportunities quarter hospital, But recently. of we saw We've I is the it of force sales in think FBS, what a of end market for ability important put market management, real in funnel

lot a we is saw some creation. value how see the supply chain with we think opportunities of consistent I which of

see we how something in we'll saw part future. the the good And quarter. strategically, we that important in we an have the think China I was So also opportunity a think growth of in That's China.

our is Terminal growth position So represent priorities. good, U.S. it, important you three I think opportunities is good. are when markets position high some And think our about strategic the globally Sterilization

even to than probably also FBS is, But more we for value consistent, think, opportunity very thought. the add I

have days, the of a Although Deane, of transitions said service some in lot we agreements. really work, we early as it's remarks, prepared these getting through around

together business to and team with them create excited to a we're great but going that's really about take work little a the there time. our while, really over So really us to opportunity

Deane Dray

That's helpful.

question, on was will can about in that comment the services but answering in J&J part in price receivables those Chuck purchase the were U.S. Steve's the closing, missed then not Just post-closing you the maybe that transition end? this a the the And adjustment? that I that when reflected of talked was outside acquisition, services deal

James Lico

the can between end transition now tag team think work the lot year. a of got and we’ve this of agreement, We one, I the services

occur little What end big the -- those year. more lot half kind So remarks of we takeover of of get of we to things the the say a the that of that lot get while accelerating I and a of in end And XXXX. prepared when occur to things starting most is the of countries as those XXXX is will number see toward now a first this into -- would completed. we start will really said between the

So and lot here on the work of was be and from a lot of work Canada the really took as that recently, the to like to year I then, spadework is a to things we doing a the now foundational end that. systems set think up between of but country about just work the

a XXXX, see to number in things So, good you where those be it's really occurring. of to start

Deane Dray

About the receivables?

Charles McLaughlin

X:XX:XX. contemplated that from the the Yes, was deal in

the knew them that we wasn’t port with adjustment. a think I was deal with happy but that there So everybody very about fair struck that were we deal

Deane Dray

instead? do it Why the Got with it. don’t payables you

Charles McLaughlin

was it then clear be receivables payables. To

of it So is those. both

Deane Dray

hear. Good to you. Thank

Operator

comes our Citi of next from Bank. Andy Kaplowitz question And

Andy Kaplowitz

Good afternoon, guys.

James Lico

Andy. Hi,

Andy Kaplowitz

last any new piece the FX. core ago the about from lowering and $X.XX think if much core lowering just guide in the quarter’s of Was [indiscernible] $X.XX, walk big of of we some $X.XX As $X.XX and [ph] change Pruftechnik to XXXX that from growth? of the add to guide anything maybe into contribution there Accruent did Gordian growth under revenue ASP then and how in EPS the to

James Lico

in we our And changing performing anything has there that the cycle, our what And we no so lowering change slowing above are primarily really expected. in to. about or at guide done Andy, The nor -- about only the expect PI. is not that we’re all do been short acquisitions we in

your of question. point So I think that's the main

Andy Kaplowitz

and anything is Pruftechnik [indiscernible] they did the it into Yes, add EPS?

James Lico

to but are down deals. costs five earnings -- this or with up there is Not deal year, those -- some associated go meaningful months they no for that, we

Andy Kaplowitz

growth some about, push Did high difficult the there you That’s it’s expecting push helpful. have outs the half which some down been slowed in it comps in and saw to business we to a outs talked in the other like GVR markets. you of at be had be the growth Jim, happening as any second you then, did than outs markets in there you just [indiscernible] push we And going know guys looks mentioned bit year? is see slowing points

James Lico

-- things countries. it's I Well won just that. getting and very India one is think I think I process getting tenders installed a contract much the really through story it’s really the and we two And number things GVR -- think significant all and of

markets thing still a growth color and very the good, feel the on we growing. for year-to-date anything and growth have wouldn't is backlog high read So India good into Gilbarco very I

So dynamics in it's some that India second quarter the pushing. are of really things

really wins to is slowing China and bit wall that the has that a second still just some be will through last growth with seeing double of do but substantial we’re There really upgrades the in half. little year in tank probably

year, or and for and unusual still little it year. two unusual. for in that’s quarter China again business at into we see happen GVR China the bit growth in the But a not market So about pushed the same for really confident quite in for this we that's time growth a Gilbarco the but in frankly, feel India maybe high-growth tender

Andy Kaplowitz

Appreciate it. guys. Thanks,

James Lico

Thanks, Andy.

Operator

question from next of Hasket. Inch is our John Gordon And

John Inch

considering Hey, ANF be on thinking again congratulated deal. you was events, should the By recent I way guys. the

going So there. that out throw to I just

quarterly growth, Hey, you're terms for four the in fourth think just growth quarter. I two implicitly four and and third the to quarter two of organic for of the second to half, the assuming forecast to for kind four two

pre-buy, really the sort Third assumptions here? third quarter I right, going making the you're get you that better or of recollect deferral because of has had a into Gilbarco quarter fourth there Is you quarter sort quarter. the lot baked what's easier fourth to of any assumption if is to had fourth from comparisons, Veeder-Root somehow quarter,

James Lico

more easier core bit fourth we've to turn of our against we I Accruent and are Gordian acquisitions, to quarter, quarter, some that going comp get particularly, difficult in the does little a that third range think think But, I when the and so to help that than And sure. I year. wider is a about. think last for comp talked there got we us normally

expected QX. intently. -- going we're from you how we that figure what's watching QX up out to think this on point at But might here pretty I can So from go

John Inch

that of like or come presumption of way So -- order in takeaway pickup just natural there's fall, something just trends no the or It's kind that. any that chips right?

James Lico

little little Andy's a India here just could I there's bit there. help answering questions, there the -- tenders bit was where and a falling, Yes, as

And in where but and little in fall. mentioned, fourth really said, as the bit But so a we tougher of quarter as comp little full a Gordian bit get the I quarter, those a there's Chuck quarter. of Accruent think you fourth

that of sort of there's comp. of within little relative core business year pickup a by the to really tougher regionally But any grow. no that up makes or slightly So big for expectation bit

John Inch

And those kind businesses of so are sense. well Gordian just Accruent and make that's doing

James Lico

rate and that Yes, with so remarks, prepared the And, said things there. good. far the so going as really happy on we're in are we were take

John Inch

to thought just of a rest from drop think In did how I through sudden the of first said the that happen to March, second quarter move might us and or of wall kind and of processes and a you a as what of hit point of of actually trends sort improve we kind of hold last of progressed kind all give the little that to as year? sale kind quarter, quarter, quarter began into kind

James Lico

Yes, you memory. have good a

there really So April, feel us the The good even bit, in trends. little and did June were particularly pretty they particularly slow and pretty things Fluke through a bit for the they turned in good. point-of-sale first time. slowed made March, Europe, -- big in a sure May. part they about And held in March, But little the a they up of it's Fluke trends in U.S., or that point-of-sale in particularly

just we a quarter in supply some and might days' starting to consistent second channel was partners starting slowing around inventory saw even first saw sales to to typically make of more decisions out. quarter. we also have still and -- We people change we sell inventory build what where in cases had And an see

is not what then year second we this at up saw supply all. the days' in typically supply in days' And bit was -- a So quarter. that and this goes little Fluke

people clearly inventory So tighter I managing with the a had and do were to suspect it lot uncertainty.

June. bit, quickly the case in of Europe, supply in pop-up. sell saw saw case of started weeks and but we in definitely slow sales the down in So pretty down a little U.S., go we out And down go we of pretty

all put second we've assumptions half. So the of those into

John Inch

Tek today? seeing detrimental and guys in businesses? little last is think Fluke regions detrimental where margins some and of right are they globally, that in softness down What Just a there of out. you have called I sort are Again, those you bit

Charles McLaughlin

detrimental. run it they XX%. goes world. short in run across down the But pretty really around different the as over that’s There's others. a much when They're will short go Well, the down that one the in than margin not consistent

James Lico

it Yes, particularly John. was most in June, when of

on margin really more around consistent the that, bit relative structure. -- to world little really in we're we're a Just Fluke, particularly

sure obviously June as now in the we we to that through and year. that right hard when in So working very the happens stuff short improve go make those run. We're

John Inch

Thanks, Awesome. it. guys. Appreciate

James Lico

you. Thank

Operator

Eastman question Baird. next our Richard of comes And from

Richard Eastman

bit Yes. would Huawei there due just what's out growth their that piece half could R&D Hey, were problem market. once tech. I what softness down maybe you digit. you parse are of think rate? I did parse reference just Huawei’s mid-single follow I'm a is could Jim, is the on Thank and weighted. KEITHLEY, you tech up But Huawei But out list? impact KEITHLEY probably there over Can for half around there there. said curious, think the you. question semi entity I of the tools at you to was or presume kind you and kind a the just little was And tech outweighted

James Lico

KEITHLEY the right you so, you're than is -- as more Yeah you is Asia and would very and first much and exposure. foremost exposure around is, what whole, has manufacturing More more it electronics, has as know. exposure, really I tech as well say as the well semiconductor KEITHLEY

Huawei, an Asia, China saw we story where than much, And it think story. the mostly slowing. scope. based and the but R&D slowing and KEITHLEY Asia tools, mostly of it's was just I so more semiconductors, manufacturing electronics at exactly And just than say And was more would sort very broad the right I

So through math. our the check go

I the with, of remarks in the was the I pleased strength in very think said midrange. were one thing scopes, as prepared we the particularly

will continue new particularly We if our to grow platform well. very platform, sole scope you the

Charles McLaughlin

KEITHLEY that numbers And and I put to roughly that. a I twice think that I little was X.XX%. over called down And when was think let’s about think Huawei you that, -- then will million, $XX

James Lico

rest thirds of the defined. it three two. and miss other broadly those quarters two then Europe, of And So the is of is really kind Western

Richard Eastman

look that or? is pretty volume that just -- is was when Is that around which literally op margins that I margins, much the delivering GVR XXX% a question just that absorption? really then incremental And quick at there. And Okay. IT the largely

Charles McLaughlin

any it but just just did it this get they Well, I until also, was what do can to business that think helps focused growing can always there flows. But concierge. last and when a year that on little score. in is good there quarter the volume points number, is and probably compared Try certainly always up easier good it's say, and and bad there's XX back a one is one basis ebbs and well, what's OMX both timers,

see one stronger, I mean doesn't to goes that You when anything just something zero, either. remember quarter

So…

Richard Eastman

Okay, fair enough.

James Lico

that's as And obviously And if well. you look business good Matco a quarter had at segment us. a the of for good

story saw the of probably -- quarter this in part good some other the we Matco things nice think I is some well. as So saw

Richard Eastman

quick, it's just both? And did did in core core growth, included high-single Okay. growth I was not accruing know real say digits then it their Gordian yours, hold you that but their Jim,

James Lico

probably high-single That's Yes. The is right. combined digits. number

Charles McLaughlin

playing does encouraged why it that out we excited. is we're very we're expected. like And Yeah, this year that’s tracking

Richard Eastman

Perfect.

Okay, thank you.

James Lico

Thanks, Rick.

Operator

John comes Suisse. of question Credit Walsh next our And from

James Lico

John. Hey,

John Walsh

confidence you What this of are you you're economy. afternoon activity But about to projects. But of We that's uncertainly the have you or for coding digit good that Accruent, that say it's the always when businesses, Actually, whether it uncertainty question, industrial as of into talked the more can't cycle is example. factors kind Hi, this out and and businesses. some up high-single software growth Gordian macro tracking, to following can about there of kind spill think think rate, of CapEx parts sustain one of got the short evening. not leads on these when they you other of things there.

James Lico

of Accruent look at stuff. Yes, little eMaint would to you a we bit maybe industrial about revenue have exposure. But And little And and tomorrow would we'll Gordian a know a as say so high And necessarily recurring as things. couple bit with going these I businesses, well. different. kind talk eMaint they're not move more

to as customer we bookings, the we're on bookings, And case significant new what really see the bookings. we order so, said customer looking is new eMaint, had very new of the

the looking churn down move at road. We're if canceling. customers are new customer that's the looking at going bookings, needle we're because see So to really to

whatever, Sometimes for say, better or seats you start of slowdown, see of don't maybe lack people to might I'll well, term. I in economic less a need an all this, use

those quite So looking metrics frankly them at every the And day. people at closely. businesses very those we're looking are in

why So mentioned bookings good. new look like and things those really the at that's when you metrics, are we some of iNet

recurring at to the what and we're ACV, we’re and churn. annual we're high a going at of contract call So, these understand really quarters. is really looking for looking it us what really those really looking in we businesses, at a at we view three how gives we're to business be couple look good those is metrics looking bookings the revenue value, average numbers, And

John Walsh

of capacity stands near-term? expect think kind if do in it through maybe of you the the us as pipeline, kind talk And anything billion, number and I now then right Okay. north of just $X.X the there's

James Lico

maybe incredibly deals use on XX we hate in in some transformational And us -- pleased this talking deals near-term, we and closed to I'll look many the you We're about, done. commented for respects. I the quite when were at, of an -- business as about obviously mean, at last The got a well, we're the in days. is that. few frankly, I quarter, last Yeah, near-term, we're the anything obviously ASP comment excited really really the we because and we've example,

us new we the us close at excited around workflows now this, modules sell ago, two two look two that ISC, to about really the businesses, a years You and systems. we really bought It because them bolt-on safety, Intellects we're adjacent and one gives great then a deals safer a gives for software. market on of really set platform really top iNet helps of the EH&F [ph] new is

Fluke gives one adjacency. vibration. classic bolt-on experienced for bolt-on proof an a positioned then incredibly condition us monitoring a and the a monitoring our with team really other the particularly that's game around at condition raises in well obviously technique, workflows understanding we’re and So significantly And with

the just last have we're very but the solutions in good So is funnel to that's I quarter, talk particular the about of done breath funnel the when of this great in of is -- are those talk are are good feel kinds third still in mentioned, a funnel I the the Obviously those -- second breadth the continues early and funnel and quarter we've and that about the John, think breath. and funnel. that I really what really the in I we deals field about of in much example when three

Deane Dray

you. thank right, All

James Lico

Thank you

Operator

question Nigel Research. from Coe our Wolf comes of And next

James Lico

Hey, Nigel.

Nigel Coe

James. Good Hey guys. afternoon,

Just a we've one but EBITDA do to want talk I ASP, added fair want that so about revisit to contribution. bit the far,

higher the of of given the question quarter, real roll I don’t is the maybe year, this upper similar math? half off XX%. we in should XXs, That's story? on be on I'm right and teens, from that a acquisitions calculating EBITDA margin that more of until that's TSA back case, up or I'm to if Chuck you. think expect XXXX And Accruent with stepped really might the last the my now to EBITDA the Gordian ASP that higher sort XXXX, the about revenues is, ASP to guessing through

James Lico

of where couple Well on part to there’ll a I'm be in upper when starting is we're go. so the of last things, to the teams in think side, think ASP get to but for good caught I XXs is is of be place I your we to I other -- the out going not sure which us nature question, about mid EBITDA, the mid-XXs the the

half that year. from some think accretion be TSAs in there’ll of the back the I

Canada, of of slow to there'll then next in not they're think a and QX to they're start those whiffed year. going and quarter, of but I speed. more a going we little -- be that's and pick closed bit to QX accelerate closing up continue then Fourth

gradual, the system that's an two first half that then up, stand IT next year. TSAs that'll a of of sometime So and day not a there's that's country the and more that's cut over, happen in

Nigel Coe

is checking the do correct? boxes to this making the side that crossing the all that on regulatory else, more anything sure to And with is you're than

James Lico

We're out ASP. really carving a of business right

just a ERP, So things. we're systems in RA the lot financial re-creating we're business, those those system, the they with more other of the what QA places several adding but than systems have, like creating of recreating other in also things have. already the -- we're We're we that but

get it, of done. part it's got spadework good a that's to but So, we’ve

Nigel Coe

progressing China? that quarter, behavior just it customers China is And in QX. well right just seen maybe you Yes. in the your Jim, quick you you follow address now seem got whether then through elements how the of I’m a trend in And what stabilization kind on, sure if mentioned not from and of characterize

James Lico

China couple first that's story. we've saw would probably have June really July of the so seen I of consistently -- we seen we’re we saw U.S. not say the that what probably weeks slowly here. when and at the about seeing talking whether too in tell look think a and similar and a color or I we early we’re bit I little We said difference. PI saw probably really in in Europe changes to that as still it's

around good haven't best anything July Certainly, the part -- the the two caveat generally are here things more to have of that first the view with as things. have us we moving But seen sense. tell of a are getting would or weeks better first first three that a point. is aren’t We weeks, negative weeks few at that the that always this more we’ll quarter I

Nigel Coe

Thanks guys. it. Appreciate

James Lico

Nigel. Thanks,

Operator

our And next comes question Cowen. of Jo Giordano from

Jo Giordano

competitors. thing taking Hey, my of as geographic, consistent for guys? at guys. players different highlight it’s curious trends And that at seems One I some different end commentary for or take question. am to if to scope sure type different what and the within on Thanks times causing for your business. major be see that of like oscilloscope you’d three anything commentaries times be kind to different might you And figure for variance trying out it but I’m the reconcile to business across Tektronix kind your market not is like

James Lico

we’ve three generally but exposure to consistent market, more exposures, we or say pretty is think over have I market the in two the folks an some been end our example and [indiscernible] business years more XG tied case, would least XG our I were at they as growing. last with maybe

investments backs series. it’s So we and launched the just on three and been on the the we four platform the of made new

we that two years year our series years the And the sixth third ago launch launches this about was this we two a so we ago. time, did did of that's had now five I series think around

and Now the three four.

and growth. lines are product those continuing And are deliver growing to all

little market customers things. end up more, a So of that numbers exposure those certain will maybe push kind bit

dive what tell in say can our business. happening of So in the into great with I confidence I this only don't you details case, what's others

Jo Giordano

further avenue? the with what main on investment well, for as Fair EV I guys is making curious melt as that two to update and into time also into and an recently some There have competitor some side, deal just a on GVR you the outlook enough. there markets ADD your how is will over made know those and news charging EV ventures

James Lico

the large energy UK great X,XXX tritium of I them, think on with Europe. was in Europe a several next really couple years. where Yes, had the largest the sales that for met May a UK next We’ve made. be several is to we think supplier I to actually the with Identity box make We with out chargers our announced in [ph] I happy a we're I charging. investment partnership in order locations great got a customers relationship fast team calling relationship the months our very over which just ago years. announced with and We in the charging over in

So them to them, we’re the business with going are exposing helpful relationship exposure of happy team, to and our also the improvements investment learning we’re to operational time, really and from is market the certainly same helping customer the some they’re great long-term. we’re the fund be new that base a at building

very position. we So, about feel good

think fast we were think position in as know happen the we I certainly but place aren’t with we’re tritium. ago, as we’re accelerated seeing the now, a the years maybe right probably in is to thought and I growth EV partnership all few and through accelerated going position

Jo Giordano

forward is that there lower guide specific anything we then, or quick cause just going And the Chuck, should XXXX? there real anything that into about structural think tax rate how on and

Charles McLaughlin

No, I year -- XXXX. slightly think for for at I think we XX% were the

What's QX that drove to lower, first some XXXX discrete the it So year in but so a happened bit -- good little use. is XX%, QX XX%. probably number ongoing a unique items XXXX are is that in a half and as pretty for good to

Jo Giordano

Okay, thanks guys.

Charles McLaughlin

Jo. Thanks,

Operator

Lico. turn are the And this I'd call Jim to Mr. time, questions no at over there like back further to

James Lico

the taking everyone, appreciate support. the thanks, today. Thanks, your time And And Jason. We our to take you for story. time understand all

to things change highlighted the portfolio. quarter done capital the of a are we've excited several really the we Fortive proud in around certainly out the about allocation that of And the the of we join we're As think for companies some with lot transformation we I doing And play new we're will May, work saw in great the incredibly of family. us. front new

it uncertainty, for that the bit a realized We of call talked some us, was second a and that macroeconomic we about. little higher environment quarter I lower slowdown would

business been growth flow. both make believe for sure we've so the the prudent free really outstanding in continuing and also long-term, half to to cash deliver And managing second the and we're we EPS

be We'll standpoint, well quarters there. conversations and Chuck a So out couple have the a obviously to good And think Thank team right an in very the what great from call. to of our position we're you we're for we what's of next we and around thanks for after continue -- we're are have economic now. we Thanks, outcome not of think prepared will while summer. the predict the Jason. and and that questions Griffin obviously, available rest trying

Operator

does Thank and participation. you for your call. today's you. Thank conclude Ladies gentlemen, this

disconnect. may You now