Fortive (FTV)

Griffin Whitney VP, IR
James Lico President, CEO & Director
Charles McLaughlin SVP, CFO & Interim Principal Accounting Officer
Julian Mitchell Barclays
Andrew Obin Bank of America Merrill Lynch
Nigel Coe Wolfe Research
Steve Tusa JPMorgan
Deane Dray RBC Capital Markets
Andy Kaplowitz Citigroup
Jeff Sprague Vertical Research
Richard Eastman Robert W. Baird & Co.
Scott Davis Melius Research
John Inch Gordon Haskett
Call transcript
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My name is Catherine, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporation's First Quarter 2020 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,

Griffin Whitney

Chief Good Thank President for Jim and and Chuck and you Chief Financial everyone, us you, Lico, our on Vice President are Catherine. joining today the thank us and afternoon, call. Senior Officer; Executive Officer. our McLaughlin, With

heading Information www.fortive.com, Investors these Information. of automation XXXX, call this as We The the measures non-GAAP the divestiture the Financial call. on on periods. and October are present on business under and results are section Regulation specialty X, based SEC available A&S measures financial discontinued business historical presented by included certain operations the on of for accordingly, financial website, our continuing G the non-GAAP have results on the completed today's required relating We to of operations.

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

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

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

James Lico

our of of quarter financial dramatically reported good that first for in an operating basis well headwind the to performance flow. adjusted XXX Despite everyone. delivered environment strong impacted results Today of guide as earnings free the XXXX, of the that operating and afternoon, unexpected the expansion, topline cash reflecting we quarter. core we driving per our Griffin, share changed as course our the solid Thanks, margin performance, height over points

confident as Coming execute well our on overcome quarter that the strong resilience long-term the and advantage required challenges sustain as protect first to the our we're ability of the to portfolio cash macroeconomic ahead. playbook flow, competitive lie free in

health first impact we quarter for in potential built disruption and the our the supply XX, through the chain. some operations impact on in significantly. expectations When and Since back we guidance of and the the required macroeconomic global spread crisis February scale China efforts scope expanded our of then to challenges in the combat potential public provided had virus from from subsequent COVID-XX our

priority as highest our our lockdown which in the depend. place facilities of a customers globe of critical continue Europe commitments our teams customers essential the the on Even continue United operate squarely our ensuring provide around focused upon across broad the industries. fulfill and our of we throughout States, and much orders to to range put were is they technologies and emphasis our to way, essential health the Along safety as

ensure to past be two quickly challenges few the the home. working of cannot we our of Part faced effort personnel facilities comprehend to production shifted In responding how our we've guidelines. I broader help proud to March, under more from has our team birds early Fortive enhanced that of total months the safety over

system the continuous notably -- commitment tools to collaboration to most notably a improvement. also Fortive business out rolled our and We range office most from new sustain of technologies

across business assure from of home the as and us to continuity and management processes problem-solving, daily have FBS more product FBS companies in leadership adoption the in work customers rooms all the crisis. formats. Perhaps of challenges which development importantly, virtual their teams the continued visual they has key our fight to bear to to nimble transition The to operate and against communities operating help restrictions COVID-XX drive support such innovation enabled

Washington stereo Use products critical NXX front its of manufacturing the lines sterilization the free decontaminate for produce received has help been Authorization reconstituted alleviate workers which temporarily use which against Advanced recently US on and of compatible PB to FDA the fight near-term. Fluke the of Everett, facial in an the COVID-XX. Drug productive to respirators, Emergency capacity Food of provided from portion in will Administration to its charge shortages have system healthcare

with Fluke Sensors to ventilator working ventilators country. manufacturers are equipment supply Gem and additional expedite Health around actively hospital also the to Solutions

to lack conditions have conditions, market we given global separation. of of Turning Vontier reevaluate an the for due timing the to favorable structure and the and economic the IPO uncertain to decided

request to opportunities allocation statement. a submitted to registration advantage of strategic separating we enable and withdraw right full companies strongly that take respective result the Vontier the We is believe priorities. and their that will Vontier both Fortive the SEC a to capital decision As growth

Dave prepared the market run conditions when Morelli, the will Naemura and to rest move improve. of we Mark team the with to business Vontier Fortive remain within the and separation continue forward

were to in foreign currency growth by Sales earnings across more GVR other prior to details $X.X low to the our than growth offset turn growth billion operating by various over guidance. grew net reduced Adjusted of companies points. core Unfavorable to were basis COVID-XX. adjusted revenue. slowing as high-end decline up of rate and share quarter. the acquisitions exchange the per in meeting declines growth more due related X.X% were earnings from also year million $X.XX X.X% diluted With that X.X% $XXX.X than offset XXX core Mid-single-digit Gordian at the the let's net double-digit

gave leader in cost This start management a and running the topline turn discipline portfolio prior cost continued as of across the topline That operating points, which throughout of chain strong in headwinds resulting increased into helped part to reflected full us XXXX. with actually the Despite of structural the operating a in performance back core pricing we headwinds, margin took the margin along basis corner structure XXX late XXXX, us flow the adjusted deterioration weather supply our half due tariff cost efforts, through quarter. COVID-XX mitigation XX.X%.

back and as the as in our During operating practice flow free the $XXX we cash an by quarter companies cash manage year-over-year. cash as the resilient million representing The after generation the generated flow quarter. of first the generation performance the well our outlook free free first quarter free XX% cash flow, deteriorated expenditures the maximize reflecting of flow shift of cash increase to macroeconomic underlying in

core Turning Professional level adjusted margin was unfavorable in points. Core an operating margin Industrial revenue of Technologies Acquisitions to basis segment core exchange posted basis of sales resulting unfavorable growth points decline by offset points, foreign of basis while the decline. operating more XX% growth XX.X%. currency by X.X% a segments, exchange sales XXX our as X.X% contributed than rate of points. XXX XXX revenue foreign increased rates X% reduced X,XXX Instrumentation growth basis posted by of

XX.X%. points spread presentation, of all extent resulting Switching of margin quarter. some QX, the we've in in by on segment pandemic were the Core operating captured which during operating basis level regions affected major across increased margin the of COVID-XX performance of to geographies our Slide to XXX a the view adjusted XX

Looking countries XX% XX% declines quarter. was at QX. Asia, major the in core This down China by than revenue was the across declined in over driven region. all in more

beginning the due lunar week expected extended the we February. of by mandated as to at lost the a government As year holiday new Chinese

Our prior the plants reopen the national holiday years following the based on slowly began of extended containment capacity period wrap balance throughout and in week and up steadily continue the more virus measures. than utilization albeit quarter to to

well the capacity. at quarter. the of of investment significant we with as our second impact as as time, By up negative on the significantly well the across in Customers start customer sites At lockdown as where into into India rest a plus volumes operating the online March of was slowed back each quarter in went began effect. February from saw including Asia quarter, measures COVID-XX come later the same Japan and demand of end XX% picking of order to total the

Europe many of and economic of with high digits Western QX. coming was companies slow geography challenging impact in to to as lockdown operating revenue customer most Western wake our broad COVID-XX countries saw the into single core on the our in the a of Europe demand the pandemic virus. enforce the any declined impact also spread year prior significant activity

will based steps to starting decontamination on delivered part Netherlands, March. to taken ASP At the in and early in growth economies Germany course across have reopen saw early fared certain respirators which tell it's of Germany, which being demand affect mid-single-digit this to others, we're point we dynamics of these Belgium March. including how see the than countries as the over but such steps better too some deteriorate

have America United North low site is much a in of including stages with as on and on the few impact customers case Gordian the in or second GVR, difficult and to single-digits This a regional exception in the with such will reopening significant the QX, half quarter. grew plans first respond portfolio. and quarter state-by-state a we the demand much across revenue definitive view Qualitrol businesses late this States in well early negative very on point conditions access into during of customer by to core of still at ability efforts potential a reopening particularly for it the trends as was any to the April, basis how saw our the

order in in Middle Slowing our saw delays to of mid single-digit we Finally, combination in high and a increase due and associated Middle COVID-XX. with was the East supply America. the a teens East issues Latin chain decline

we see expect look to as persistent We headwinds ahead.

of Latin point and Latin driven of more the look terms forward. regions pandemic than America later America effect as in on the in of growth is we in difficult the to this potential was gauge region at from emergence Mexico. Strength was it COVID-XX XX% full other the by

broad second the well XXXX imposed will crisis year become restrictions our issued be of balance public challenging. unprecedented of the the more globe, the full pandemic as the providing and COVID-XX year Part are economic not previously the Given for upon forecasting circumstances health withdrawing posed quarter. guidance has we by as the the

for and few portfolio our companies the a operating to unprecedented within give better relative the next In global COVID-XX sense to pandemic quarters, the effort expect for of to the analyzed we've frame given impact we the you expectations various face. conditions an across

you the that COVID-XX would we approximately what will represent companies expect revenue to we've potential should includes companies that of product well which slide broken see into we to sensitivity some one, turn as based Group their we lines coming of Earnings the maybe key you out resilient demand. market XX% on total to of as year. Presentation, operating portions may operating XX the end groups or topline key If throughout substantially and continue in deterioration expect quarters disruption those four related and believe balance performance companies through Fortive grow to show the or relative

group expect mission-critical to high benefit includes to including Notably SaaS workflow Intelex, of acquisitions, this revenue as of on eMaint, our recurring of such portion software-focused from businesses and a the focus providing of a we Accruent, Gordian, many a share customers. number their and Sensus, solutions recent which

stay-at-home we XX% businesses ASP. impact back expect GVR measures businesses and a range of a of and soon lifted. in see the approximately revenue biggest total the are in represents which topline group lockdown lockdown which two should to includes restrictions bounce Fortive this The after relatively near-term are believe significant we measures then from potentially from where Group

in case end through the particular EMV at moderating quarter the North April. first stayed GVR, before of demand America in related In in the strong

begin disruption revenue around Our back GVR customer and economies up. COVID-related near-term open other issues we will globe to perform site to in the better access as expect impact the

At drop of to the and end surgical procedure March XX% saw China of but we began the April. QX ASP rebound volume height response, into continued during significant by at volume in of upwards in COVID-XX the

begin we've and to to normalize delayed the as likewise to the out geographies the side demand begin hospitals same as COVID-XX to peaks and pattern expect get can expect of procedures. other pent-up volumes address in elective for procedures soon We get seen to these and play other we

industrial across end expect after where total to the those a expect topline and of includes lockdown from core number we portfolio, sensing impact Group three a revenue businesses pause. in more and stay-at-home pressure of group to which XX% expect lifted. improvement measures to measures its and restrictions lockdown potentially markets the a includes XX% are performance short has represent significant see cycle technologies see This see we projects to near-term in Fortive our gradual as would sensitivity capital-related

offsets indicator however which other across There of potential and healthcare life quality science applications a and number beverage product ICUs pressure Setra's and are line, environments. air healthcare, in room critical including food monitors

COVID-XX represents Group four, duration the in this portions course XX% we the of expected the Invetech cycle revenue expect XX% most includes historically and crisis. the and of instruments the both of in we've where decline the Fluke short-term to to the businesses the aftermath sensitivity business Notably, recession of total industrial most the which where depth Fortive includes most XXXX. of over including revenue business, the seen the significant short sensitivity

persistent market by and with dislocations which oil businesses expect have also to the and oil be end demand. and gas the in to exposure significant and It impacted gas would instruments ISC includes rental

to While sufficient short to term, through see of to visibility To framework, we a on XX% that decline year-over-year to quarter. of a expect to of this approximately challenging business we're position forecast on a in the the quarter, year the decrease specific, significant can XX% magnitude we the revenue while level more in second to basis be expect manage total the revenue will rest not in XX%. we fall using in that the with decrementals our believe be of decline the a XX%

margin benefit to the in within end XXXX, particularly were cost continue which helped taken significantly Professional will QX Instrumentation. the our We of at that actions from realization

we continue to XX% XX% actions to cost are year as to executed decrementals the expect portfolio. across manage of additional course the that the to Over range

the expect year. flow to We also conversion of full than deliver of free for net XXX% cash greater income adjusted

we These significant add this during As toward first reductions cycle quarter. you reduce outlook macroeconomic cost anticipation to shift in more actions year. taken first the immediate XXXX the of to dramatic the and response of have the short base decisive continued of that end our expect, to would steps to through the took in cost half recent we headwinds cost

and reducing closures. reductions and portfolio, Across our likewise to of expense a items. through we've the spend wide through spending furloughs facilities supply we've through while indirect expense demand aggressive expectations our for initiated We've labor the instituted time, to in both deterioration. cost discretionary range of also the reductions At aggressively same direct the including match our salary near-term cost direct executed primarily temporary chain use adjustments compensation

additional in this recently through quarter proactively headroom actions. In of our billion least and an liquidity total abundance and of first our extended deliver balance XXXX. provide our over of quarter billion cash enhance to net the XXXX We manage challenging caution, loan position. to the first to with leverage we for conditions. across strong entered intend maturity and We incremental during the balance various our is million of $X the $XXX savings the know sheet that liquidity year balance cost a $X covenant continued of at critical due to these term we've renegotiated May We macroeconomic August the of

delever While continue use generation expect course we steps near-term with this the our flow to us to over year, cash free these additional of provide to flexibility.

repatriating cash. past loan a commercial reduced the months, paying on with down new our the exposure Over and commercial two paper outstanding paper also our term reliability market we've

in commercial otherwise turn to million at expect facility, to We entirely coming in giving $X remains temporally access which revolving exposure present. undrawn our the paper exit our full credit months us

team shall that as our pass. appear to in the challenging as now, to turn Before this well as investors I you the I want underline for slide deck, too Fortive close as things as and XX

navigate continuing in means waters we also of drives the market the the the the that throughout the performance term, work in market differentiation, to ahead and lie enhancing our the and move short invest innovation, businesses us That that forward process. will discipline stronger While even in position we for of choppy through long-term. service maintaining them in winning M&A level product and company our talent

throughout months, on-the-fly past we public by as proud organization resilience the I've current I've global health been the the agility and seen crisis. reality the Over few the of to adapted extremely

purpose, our long-term creation strength to to opportunities portfolio, the substantial our of the With us. well-positioned of culture value shared underlying our we commitment the realize remain and ahead

With that over to Griffin I'd back like to turn it

Griffin Whitney

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


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

Julian Mitchell

Maybe just the the around first sales guys. question

maybe color you the sales April for trended help and term, understand PI You guide the to talked sort any us total and nuance terms XX% us or sales any please. orders near how for with could IT two XX% about in across placeholder divisions give the of that of

Charles McLaughlin

the to For with keep it about I here to segments, while up for pretty could at the same that differently. segments that see the up across XX% of mind same by point But there's actually XX% end just of but now in right end it a the pieces think much this think we two same that lot total, best it XX% we XX% could right the it's to is moving and in now. two

Charles McLaughlin

on just would little bit you a give give of around of what you well. of some we businesses little maybe sense bit I to color XX the to of that and slide is as try do a

and China quarter. to didn't for see think I in come but as occur we kinds China really much don't that that saw saw COVID March we toward pre back numbers second end back at come of really expect -- we the we of the

held America up on give down view back worse Europe digits. and second Gilbarco. was be strong it'll think first. regional So pretty in you of certainly a high North the We just single quarter I'll the decent

particularly would the quarter equipment America March deterioration here for sure second of from and quarter to those really of that playing through almost couple in certainly surgeries what in elective expectation was the weeks in because quarter. mentioned are last whole and being in sort and certainly of no through the fluke at and we expect point-of-sale throughout ASP of get the -- really first ground big our attack, North remarks examples improvement North with inability the second into quarter the in the of with few America a I As prepared nonexistent out

pretty much Now in that. April in with line fell

but felt we a would what of certainly we XX% So month I and is is we it some would it I I say in out thought thought make decisive We was by way one actions advance the think think would trend large not continue and that to appropriate. April down to XX%. that relative played

Julian Mitchell

second in I'm a a the in then maybe and the and is get you XX% presumably booked margin to incremental cost XX% that year guess the just included million savings the aspiration why I later declines confirm less question sales bit that my margins the just incremental margin at that intense? And curious Thanks. bit incremental in less $XXX severe savings as to around cost to get savings wouldn’t more and get

Charles McLaughlin

actions understood to think see made it of out and ratable you’ve see the XX%. all we lot us and and Julian first here the we've correctly pretty I coming that out point, got XX% QX see this calls will $XXX of think coming gets that in we million a them taking that at that we --

for to back the for the year, we're we are half given which of going also choices right there we some but to be go that the half little in still right through back now, more decrementals in year now the and half learn but XX% in that calling see now maybe place it is the for think XX% can we of uncertainty make XX% a bit XX%. the but right year difference the as -- to we the the more we're if As right that move back at could is to be you a right


from of BoA. the Andrew line Your with next Obin comes question

Andrew Obin

and think if the apologize I IT more question on apologize if I missed queue just prepared remarks? that a pricing the in just I color you Could negative. missed in Just I I it it turned in give

James Lico

talking So for QX? prices, about are you

Andrew Obin


James Lico

I it was it No negative. was don’t think

and it We positive. have as positive, did it normally

Andrew Obin

calculate I'll Maybe Okay. and I correct. apologize.

in Fortive's Just can maybe talk power pricing generally environment? just sort about of this you

James Lico

but ago the our we a think in think volume, getting to I because as price as we where tariff we see we price think in maintained year any I we a in lot deteriorated Andrew, any any the but this on would couldn’t much see were our margins point, at we really that. continue mitigations, did a the we not first seeing I of gross -- probably call -- price certainly of quarter up haven't of really pressure places price was tariff terms mitigations saw

want make slightly about this little a are partners, additional environment see albeit just changes things to in even don't careful anymore that relative we but or in direct -- of we're to we're with the probably see just in really volumes We channel reluctant not pricing terms we to how sure price environment to here. see business

Andrew Obin

lessons given think this you just main but that have long-term using differently Kaizen's give can crisis buckets what Zoom, lessons in sort more of you answer, things and kind you operating of question, I what to you've less doing cost what a make electronically structure guys of have term Fortive you -- an learned kind impact guys have the -- are us longer to the talked of about travel And savings? considered doing

James Lico

and really I the impact the at work as -- team are done quickly just eight and really level to have that weeds and Yeah a so talking from remarks, the productivity. so just has productivity I've in home of amazed our been from I the in I any and not think do perspective that the before quality prepared Chuck call, working we been now Andrew were certainly said

talent ourselves to this suggest of working certainly to early we've with things I more to open could you way it's certainly think other be hard think going second an but the gives for see think I it's many that the call employee I certainly flexibility, any sort be that way. been travel will to means, for what I long-term able us thing see not over time. it it be too think to us would would cost, reduce opportunity to I and foresee don't which

by visiting looking still we're know and to still get you closer we're back kind in We that. to customers, of Kaizen But evidence and like again forward looking -- aren’t being we're company. together forward things

completely done no that be sort we into and So, our but will office us certainly clarifying all that opportunity seeing them notes to our future things FBS these of has so we've how I think a of replicate think we we're companies. of do processes a lot lot, job for a eliminated fabulous can about of the taken new a can of operating that the in lot


next with Coe question from Research. line Wolfe Nigel comes the of Your

Nigel Coe

getting Kaizen not too close say close you When is right.

James Lico

right. that's No,

Nigel Coe

go So down Fluke 'XX, look back drop you Tektronix when were to and to 'XX, mid XXs then.

and we you're let So versus characterize just what may not the seeing back a to new similar that would and then but be the be cycle today these back expect trust news, fact profile me is then? comparing company

James Lico

context. to One that's we is 'XX go that maybe I there down quarter was you can Tek in some down find probably maybe in Fluke you Well find XX so a is if it quarters, the to in to XX range. because you probably couple back where and use One in why think a I'll groups things. think try I try and these frame the a

but just if So reference for dramatic that's don’t a than it's, your context. point, know more I little bit

'XX out, see the I the the business and we digital what is the Group to are and we think so at when Fluke one see as you far you Fluke Tek left I we've core just part at to industrial you that maybe of start you in and evident Group it go more would instruments in of and in business here think one it's you when the business resilient see call we've Fluke made look you see the to you additions so Imaging, revenue. say 'XX, which four, kind of business, what to done more those and that two, look you see Fluke once as Fluke the but see and

Service see Solution the as as Tektronix there You business Health you see the may Solutions. Fluke well

So more you broke up see to resilient the you Tek lot because the service substantial is to which in you that see that the see now the three up business are can and resilient. that's Fluke where the portfolio portfolio you in is business context what business of a additions more

So not but this of to of demonstrate the Tek and to things the more are we're what that picture a out kind visual Fluke some overall resilient done, bit ultimately calling kind give parts of to think parts aren’t of I a macro, cyclical of we've business. the which

Nigel Coe

to decline growth prior businesses to we expecting be these maybe say beautiful like to these and quarter to are with cycles. revenue trying back Are structuring that fixed multiyear the flat businesses? you are These

James Lico

businesses in group You're one two? group talking or

Nigel Coe

Group four.

James Lico

call saw come back Group I track this typically depending would sort PMI. if particularly how improvement 'XX, things think you think you and what call Tek I is four, never the, in think parts the Group in in light where four on of some we know both roughly to in of Fluke of it long industrial but to with global production, tough

much So both models. drivers Groups businesses resilient maybe more secular and track a one to like I think model closer bit start business to and service two SaaS and you metrics where little find these

Nigel Coe

seeing in environment been and in us side and you're just have through about at price SaaS Great some there is a getting tool nice we seen churn. to has that what there chatter pick flavor my of this up the SaaS because maybe of any maybe contract know segue Okay. thanks. April accruing some follow-on Gordian you like Have

James Lico

good Fluke XX%. Fluke grew be I would grew the e-may business example the Yeah. double-digit In and Digital. quarter Well think

businesses and part one the of the resilient in the and grew the Intellect more just you grew all business resiliency relative of SaaS digits quarter. grew Sensing through of So double SaaS, the to [ph] to numbers. the Gordian example an quarter probably give our in quarter working in

pretty grew much quarter. on actually businesses those all for So the track

of where do we site. see that professional service, on where Most revenue those degradation that have there. see comes the some We services like part or think. What get and year they we of businesses services in installation couldn’t some things is back in full we

So headwind bit staff. aren’t the little of booking you maybe a maybe onsite bit contracts. customers long-term the change all signing see necessarily a from because little the Bookings

thing has a when overtime the the sea held where change see start little see they economic [ph] the solutions of in you saving Gordian of where the pricing that. really greater well in a and like really time paying XXXX money health on to Fortune money depth there companies You'll save little activities but on think like of maybe about quite are business to some we'll you of frankly whether in bit focused bit and be no Intellect are where when or things impact the where aspects safety that up you're is the HS,

the I secular those well drivers here to businesses. hold think are in going up pretty


Your the with Steve next comes JPMorgan. of from line question Tusa

Steve Tusa

were weren’t recently TV you? think Jim, on you I

James Lico

too. think were I you

Steve Tusa

round be margin looks in number that like like numbers make bit or being decrement; Anyway just assume math tough kind XX% decline subtracting of a type of kind you decrementing this of the I know $XXX reconcile. on million just -- to then Is kind savings. of would little and like savings It's it of XX% extra just the decremental a XXX% simple there sound those taking some like mix back it if of to I just million turning conservative something I'm of guess. I picking a $XXX that's impact that. the there kind the

James Lico

it by quarter to break think better that. I you do if is it

map the that will but the were it we're help is math and is is XX% decrementals out QX just XX% should to XX% what what if do in quarter given we on called things XX% because there trying we you're down I down higher XX%. did to is to I frontend you make you down say year that think on to XX% by we've about some more loaded some think that as the here funny makes going expect

about call follow-up going will math down. how the our comes So forth in

Steve Tusa

saying certain seriously certain you're a decline. level of kind of at assuming like So you're of a revenue that level

than example for came in if the So less revenue XX%.

I that XX% implicit type what of of you're the that So guide annual in a decline, Is revenue in like kind guess is saying.

Charles McLaughlin


don't is we throughs types manage we a about the think we by we but do your of obviously yet/ -- as maybe we In have think maybe actions a that to we are year to pulling these fall guidance specifically will know clarity moderates around what second and that way go quarter. is. we're There the half have the more I second bit, little through second the it through more know trying it half, better don't the

James Lico

things our wondering vast obviously what's between to that going to the we probably I one the two going built these the of not when of Chuck was been that second We and of greater half isn’t time. second just a is would of I've we amount even a what happen. through few suggest to scenarios think the would where going like, around we're number add look this

said So worse confident built actions we're scenarios scenarios reductions the we if are as scenarios, both call identified bulk to if those get the just I available multiple things we days in saw it's pull too well, we think and but the that and think early to some still the several decrementals like to such cost as we've and up in come we if relative got down, additional certainly anything yet. levers we've can that we early needed on presentation things

Steve Tusa

not on just along most visibility and revenue of they declines companies a talking up like there's XX And the a lot I follow of of but teens, worse whatever. a then case kind and are this are the to and kind to here that down of bounces then a things know of mid down was April quarter have about line some back start saying reshape

should relatively that You're to quarter XX have given be the in second in it XX context holding that of those especially up. groups have all those for revenues is the steep, you of

How more of of XX the to you kind that question punching reconcile range given defensive portfolio saying. bad of what versus do seems the you it kind under how I have Are in just out the around of there? the it's of pivoted just others like it's it be XX low while guys kind not to kind giving macro that? certainly the the is and thought in of are they kind out

James Lico

for speak can't I Well others.

that look of I it would about if in of stuff our think businesses one Gilbarco you the restrictions think I big the can't severity our at this way, largest ground. businesses put

restrictions in until ground. not had first these quarter very putting America strong sites they lifted they're got the in while a So inevitably North

the is certainly think we we confident that we're ultimately resilience come there the is make does year one and EMV that demand not will in think back year because that with quarter So there. still

not take and are just very states closed. many considered that mouths, Matco, another place shelter people elective repair many are were obviously in so You place and surgery nonessential needs with to like then impact. dramatically. where are and In much up so putting and maybe sheltering as Those shops really come AFP business

we in build probably we think would never the economic in while. we we seen little shelter given scenario a -- a portfolio I place So would plan pandemic haven’t for when

it unique those them in business than in consequence category the two very say once we come in if much are So put back faster why play you economic things was restrictive these that's the if will come will. and because

Steve Tusa

quick those those Are last Okay. orders How are one are GVR? trending or up of down? at held one. kind

James Lico

they’ve North particularly in held decently No up America.

well, delay have I that, oil a around oil the like national and they the a holding see pretty North we we I prepared or a that example remarks will you are an orders come little as prices Chin with example, we're that bit the that take in confident down in up, but tender are as it as something around issues may just think world we Some but think back. India mentioned company America, of an if

stuff see come a the Once the when can pretty ground, starts good then quickly. construction you'll starts in United we'll that business back have around to we States, put


Dray of the RBC Markets. comes question next with from Deane Capital line Your

Deane Dray

that delaying and surprise No But you're you also are interested the delaying you Vontier. I the said timing structure. be on timing would here

might change what how based at the upon we looking the So spend of before? structure were

James Lico

to with things to One were We of separation I and go hasn't be the the three strategy is around that keep to at end all. whether said is think changed mind. at ready team the forward management move in we QX, we the evaluate which the market next probably there would we we're to to be go. months don't that. and really market the think and market so the and this look is stable the in for ready looking type what to move for to for Obviously was transaction is for that become few able at of separation receptive we us forward just

or there, our is that like always works what said we right of get looks looking we've but can't which like now, split options and out to when us open one be will really tell we're then like both And for we we'll best stakeholders. all spin figure

Deane Dray

receivables liquidating assumptions credit might've the on Okay. CapEx I you sounds are don’t working we were you for and looking then have I be quality out you What source then Chuck know thinking missed free saying Good. guidance and so familiar a portfolio XXX%. and about I forth? before better while you'd what will if That that and cash than and inventory with capital, becomes means some be what for that flow,

Charles McLaughlin

probably we ago, when answer the what more very CapEx. than but -- I'd we actually we'll you CapEx for that's simple our the on were three Probably expect CapEx year-over-year year months be light, bit guiding more the but were CapEx easiest probably to way on the what a true about think down XX%

When the as one on got to operating know of procurement our going sure so we capital on more the down we value it bring don't on core working worked make and capital inventory comes comes hard a then terms team what we've revenue companies focus working that as we're to that as we've really supplies strong very and you we'll drivers need. do is

as the to in coming a slows that will some the terms of that source of best trying use job in be maintaining down rather near-term. So inventory up the than up naturally that'll we of free cash QX cash cash can turns the

situation. but our we every bit what when teams these one every quarter. recover. want than different to have to going different are to not with But up things start that little with too want up inventory balance, a But little to much operating a deal they don't strike be will to end don't that's We companies end of too with

with well-suited business us we're think do I XX to system So help that.

Again flow cash OpCo to an off we're OpCo collections. by story. receivables On it's a start good in

go confident not were and in the around feel year through We It's that this of have are said. Jim a daily just this lot as XXXX in people management is I, to perform how and us going well. we with the as number we of as OpCo's Jim a

So confident we at. about feel where we're


Andy Your next question Citigroup. Kaplowitz the comes from of with line

Andy Kaplowitz

all the the does M&A its for on up at you for Do drift setting few bit year. your a stay capital given mentioned focus recover they see once acquisition Jim, basically way increased balance over Vontier sheet forward you together focus and own? Fortive the over offend next from more if the and that be we next you with to Vontier quarters change even while would moving play a

on but to a short-term comment your eases? appetite larger not as deal in obviously acquisition the you do pandemic could the So your pipeline,

James Lico

portfolio just maybe as thought strategic last brought number think billion on remind we that technology, spent XXXX that I as always well a might ourselves we Yeah year $X good little we a smaller. that and a had of be built companies and this tend investments more to always in things year, be some in

there that's spun so Vontier part be was necessarily still we what that it's saw I we of were something preclude if that. will is doing -- and wouldn't we've view probably attractive, and would always that ourselves until that if said Fortive think remains see from our we and

end and during of start seller's buyer's quarters price expectations usually this things more It generally on for those to as -- at -- during aren’t in and think market the continued focus time more right stuff. cultivation Andy you because to aligned to part out takes price work more we've expectations a equal point and focus generally work few as I up. time, this we front this on

can bet this We'll would were be bold and focus the to quarters. say there. continue to I things on anything but certainly certainly any likely would the most and on I we in we're that opportunity if we wait, patient for to we next So if year we'll look control we do the were few

Andy Kaplowitz

question see in semiconductor kind ask about and and you some Seems some and just at types helpful a really your different maybe weakness of you more way peers Steve's talked have electronics. China. some strength China of of least in specifically of then Jim to like not recovery That's V-shaped in a

color maybe on you more that on your could So give electronic a businesses? comment focused us and little

James Lico

sure. Yeah

I say got for letters I'd always think recovery. So we

If largest of end snapback the got not electronic businesses China. at in four at is the day, a this there, our that's we slow. think look recovery is I Tektronix focus, pretty

seen We in little slow come first have quarter, haven't but much. and of impact that's the bit that still Huawei back relatively a been

has like things nice seen demand Fluke imaging. in

So it part of is they’ve seen slow. some strong demand there the but remains remaining still

there. recovery So I haven’t seen much

the still North other of in Gilbarco, that there. around lot ground there mentioned mostly the put are been waiting we've with think restrictions we're world. I seeing but a places to stuff in America given that I

than course slow of elective China. I their two XX% were peak the and ASP in other mentioned at down that's surgeries So probably more been

back So but XX happen they’ve days. to yet. We normal next back come would come anticipate over not considerably, to that the

little bit a back come could that faster. So

Just of bit color. to little give a you

So up, I than all quarter. of the China overall looks all the first don’t think does day does second the I mean that end that of in in it it add quarter we China when does what the think different


of Your the with Sprague next question comes Vertical from Jeff Research. line

Jeff Sprague

pieces want cost Good is everybody $XXX understand around evening sure the to I million to just there. the savings fully the everyone. well. come moving Hope to make

million is cut a $XXX $XXX is to run then off rate there. it had annualized the a we it quarter or So million and

be on what would of and color it what's what's little temporary, out Just really how rolls structural helpful? bit it is,

James Lico

to the over about meant more think be it's last three I quarters.

little as it in will those. of more with think So quarter give million a $XXX some of maybe bit QX

did anything I an announced the fourth restructuring we quarter. we have in beyond where think or don't there's what last

there these had things into nature programs travel side somewhat down them trying and by we team sales coming out. things other on miscellaneous OpEx their actions, going We're least the well some these as spend going and there will like at we pay really marketing be some around is throughout but the that that furloughs out the way spending to come it margins down obviously temporary. are slow maybe be coming that to So around it, in are the maintain as some to into is put coming will

of we'll those look at some are ones. bigger that every the Those ones of and make are actions but the identifies but got some main and bucket to sure we've

Charles McLaughlin

part in continue factory. Jeff, obviously of amount improvement I'd just historically as kept decent say add may on historically we've of a be temporary labor to

nature as I degrees to little quite the bucket from want So of than more additional going buckets well a the understand we're as this maintain see to for the continue we of and of but a think that going well it we can as XXXX to play we need happen, temporary we're because as of might productivity as in to cycle perspective, probably going cost and accelerate reductions as a as recovery many as exit typically evaluate what's we that's frankly and can demand we down part how to and long productivity rates in freedom to look certainly like out. into bit

Jeff Sprague

make to as sales relative to really if to and XX% we're that back still XXs your a $XXX down asking was like declines sales Tusa margin seem five with the implied begin the guess Steve out to theoretically underlying sense. underlying but cost what to holding kind the at and observed low year your million to progresses around just number of savings, crazy mid-XXs I gross million back isn't moderate me and brings $XXX doesn't that maybe XX% decrementals the XX% of that decremental XX%. So we if to handle, lot of it then decremental implies model

Charles McLaughlin

gross on comes will but and for moving pieces decrementals XX% yeah sure. Yeah as it than mind line with from higher there's into margins fall the that I in being that where think the that through our look plus in places at other top we keep XXs depending

XX% crazy a is are actually XX% will it not that's that to at through. we fall So where -- where right

get second what and into half falls you're is we through evaluate As the if after you're than continue little different can depends what XX% to a down get we it and down that you if we'll XX%.

come more that. on So to


from Your Richard Baird. line Eastman next question comes the of with

Richard Eastman

a thought around business the the the fairly that just just released, Is there. price businesses Telematics if would've strategy substantial Jim might've a business? here change curious any kind up just resilient because more of true in today of accounting were business value your and there? the there's I I that strategy change is perhaps noticed or documents to been paid it of any one that I'm SaaS an of implied versus charge

Charles McLaughlin

That accounting that's of a impacts charge. and it, to what We drove through bit forecast non-cash that creeps an our of analysis do of an is annual value all over charge. little business. purely just it as takes That impairment the line was close it our down one that the COVID

James Lico

half play back some of bring strategy the I got would think Mark no hired we've through is they’ve Vontier to we bit, of excited in team to and pretty new here there say, in little in the going those has relative think on obviously the been team very role in about a leadership the in strategy, involved a to I is actually change fact had for [ph] change work who going out I year.

there bit some bit the so a freight got folks who've got we seen As of some fleet you little they is small lowered and little of impact, a in trucks. of degradation, business said, they’ve reduction number

-- not there thing than it's of of So else. mentioned a changing as some Chuck there little there degradation anything but is is kind more an outlook is

now. by the self-help to can't -- that is half been quickly we we has year, move start because needle project we end said doesn't So of think for it as that year, see it I fast, I I the back but the of think the in there several quarters know the a

before. positive think I than be is to ever more inclined team out the

out. where see it we'll So plays

Richard Eastman

Sensus, is come back businesses a Land even Medical from really to to there healthcare when then leverage Fluke they basically businesses lose gross this patient you visits perspective but businesses, but ramp perspective? procedures ramp and back like at as in margin, orders those businesses nice Okay, you did leverage just those the are like Hour, as and do control follow-up and sales start the correlated up said the back a some it movement is sales a a or very up they of ASP, from

James Lico

in Picking of biggest that is pretty this afternoon talking the seen country No challenging, but there CEO of case elective you on demand. talking this was of is a they’ve is with a good I timing hospital in all about is pent groups networks as including leverage. not who a up true little obviously say just different literally procedures. kinds one this the patient that

of a is and right. are here bunch going type to needs surgeries I There for particular clinical procedures. in the think and happen whole demand And for the financial the going that hospital. profitable what's elective are That's both elective happen the pent-up obviously need in of clinical procedures, to very these

accelerate from So real there a this. financial be to need perspective is a going to

how an states to in back we acceleration. to difficult number So to see countries business. get quickly in those and will given particularly but Europe the the Land expect number on Hour quarter example. we there turned when, the grew things on leverage would need think first that predict this the do in in turn the be of as US

despite in continue at continue challenges. cases business The some we Sensus to to those some grow even good performance So of even we saw well. some as SaaS


the Melius Scott from with comes of question next Your Davis line Research.

Scott Davis

pretty my so the was is there just things awful you the been liquidity one with or likely lot made I an meaningful goes cost there of but was Most answered curious expense but otherwise about making of along increase, is interest of it have that big questions a moves? moves

James Lico

penny total but than probably fees And penny like half. you frankly there lower there's then the anytime change the floor a floors the of a off of some certainly and some a I is cost at were it's but in than negotiating in LIBOR think it's more -- those, year less that that where below around terms right in changing of now. we're There's

cost huge a not them. So for

Scott Davis

a aggregated now, running of have? is And then that -- one follow-up I seeing know that facilities quick you’ve the for you a and of there businesses, an guys right given just but percent a a the number. number there Is recall have up you I something

James Lico

have Yeah we might've up been two the our US our downturn of and we are couple in much and the one where so we were and had where where facilities working we been. up have facilities now facilities We all down facility or the in through running all a situation of or situations Europe where been day local were US but the through and pretty running. had or

quarter furloughed to all able demand, We facilities run a as have we now few of have with but the said world. the facilities -- we we some second were in around


line Haskett. John Gordon of question Inch next the John comes from with with Your inch

John Inch

equipment the just consumables dovetailing ASP to remind procedures into mix sort and to point just versus just Can back these of context? to the so down are trying of elective us this levels sort put sort of in and consumables of of running some today a you what forth, of

James Lico

and sterilization quarter of an world, Yeah pretty North good on larger XX% we as much daily US of go check deals XX%, then of consumables that and those it in in get decent because thought parts XX% we that's probably United little number it's about you some around bit software moves example senses the servicing together by the is if The really a but probably Sensus to States. depending on go the amount XX% with data the Sensus. tracks America or down in it's of see a Trax in XX%,

So in get data the as a we in we in down I mentioned Europe peak I we at XX%. and have decent remarks that's prepared China and good as probably don't and about as the data mentioned number a saw

consumables those significant reductions John. seen we've So in

NXX We really see back those in large, really are countries in want and That probably little come in we respirators Europe. bit elective decontaminating procedures back volume the US revenue. to drive order brings in that some to but and by a

John Inch

opportunity, it minor in was quarters is move business? that the the Yeah to about decontamination next grow-out once to or needle the gets is it rollout enough going let's to still full relatively I ask big you call few or that to whatever

James Lico

going now masks They use the most day opportunity. single are hospitals turn essentially end right been in probably want measure. challenge. really at part. the create a a At not STERRAD, the them capacity of a it's to to No to time they're This more PPE can gives on temporary the for at has utilize the their really when hospitals

use financial it's more longer-term. more So out, to decontamination an out need many the customers probably opportunity hospitals our of million plus effort help really really to when how quarter, the effort neighborhood for to in not the of really to us was an tell $XX big will in that necessarily help a but hard

John Inch

kind are two M&A of this like growth your it's terms the question How issues, the what be in of have CEO to to of holistic you worse possibly economic US one for talking sizable we're the going there Jim, sort into relations when pressing assets about had becomes this a play the of been out risk maybe I war, long-term China, pandemic as much China you and turn about ask of extreme. operations but on countries? It's we of and how our something you future trajectory could sort between more thinking guys want thing a in nonetheless. in this politics the subsides all the the cold have depending

James Lico

we're a for China back a having for close to close and been I've time Yeah to Danner days you the those and in questions. know run long pretty it pretty time long

Jon even we or one assess supply think our China. the since things once and chain where from at -- we've we derisked as I our to we considerably going in deriks We're mostly a really those will to China continue probably started, ago. considerably, were supply year continue chain tariff so to make we

locally bigger moves places to continued we look have any we left. evaluate, in at think as mentioned we'll big are many moves, honest don’t to but To about certainly continue move build have So businesses. to for we be we we've this any, our continuing of

the exclusively to certainly and know a more lot almost Our healthcare there's on wonder energy US I business in the so that built origin in Europe, in healthcare situation. and side about we're fine

So in as referring that was your in case am that well. also questions I

that. what think We're is need So things in from are monitoring anyway and in able we've that think place well-positioned to described if we you move I that I good can situation demonstrated pretty do certainly to we're the we other things do, a all tariff obviously we're we quickly

James Lico

everybody available certainly has team also that everyone think follow-up and got Chuck available. am we the Griffin appreciate are to make for available. through Obviously I if we about put for everything want energy into want anyone there and today. and I certainly the ourselves and know time, a are not sure energy We're we this. time needs available and that and and to make to lot sure appreciate I we

weeks the in probably thank focus to at is when understanding we've to of time than just overused we'll strategically out perspective the months come. has wake these years play on up. to very while we the would you days been from teams we're it's that that moves moves give made day sure resiliency confident strong continue three good I last want uncertainty is safety often word want just health used important the a the there is see and in around every to the to the also us But and more very and and be and make business most over our I a position that in never we been an unprecedented in term we've a to near-term, am quarters able that everyone manage the multiple to so be scenarios

of any you to that give more or give to Hopefully this continue we forward help to available shape you of we what in certainly presentation did So seeing continue look form. better available color. way, and sense to to you give we're and a we're a dialogue to color

the time a We'll forward hope Have your we everybody and such in to all work productive and home future. I as when able -- look evening. been and in the something. We to hope safe family the can safe. this hope from I conference everybody see you a forward time want call not challenging to in you talk on to all soon. well. or friends those wish I Thanks you’ve to are days hopefully we is a look everybody. stuff be they're not-too-distant at great I


call. conference participation. you your and this gentlemen, concludes today's Thank for Ladies

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