AME - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2019 AMETEK, Inc. Earnings Conference Call. [Operator Instructions].

It is now my pleasure to hand the call over to VP, Investor Relations, Kevin Coleman.

Kevin Coleman

Thank you, Andrew. you conference us call. thank quarter AMETEK's and earnings XXXX morning, for for joining fourth Good President Officer. With and and Vice Chief today Executive Chief me are Officer; Bill Dave Burke, Zapico, Chairman and Financial Executive

made are be AMETEK's fourth released This on section market on were available can quarter conference Investors website. archived call and the webcast our being our available webcasted be later morning in and site earlier systems of today. on this results and and will website. is The our also accessed

our SEC. is with During make cause the or detailed risk subject AMETEK's filings based we differ course factors disclaims in AMETEK of revise future results obligation risks discussion today's expectations. results any various actual may of forward-looking the to the to contained call, will from on intention may and any are statements, significantly which or uncertainties that statements. to and update uncertainties A forward-looking affect change that

finalization Any excluding Cuts Act. references between and be be after amortization website. to intangible the and XXXX made related and XXXX tax, acquisition-related to basis, or call the an gain adjusted on of on Reconciliations on fourth can excluding of press found quarter this adjusted the results section Jobs measures release our of our impact GAAP in and the Investors Tax will the XXXX

and up then We'll begin it today remarks with open prepared Bill, questions. and Dave for by

I'll the now to turn over meeting Dave.

David Zapico

performance financial sales XXXX, records everyone. with operating and sales, flow results, operating on earnings essentially the we quarter, year cash per fourth operating income, good including outstanding exceptional capital In share, and all cash in for acquisitions. deployment morning, strong capping by Kevin, AMETEK key EBITDA, achieved delivered free robust and you, performance metrics, flow. excellent strategic Thank highlighted another growth,

solving efforts are flow X this stakeholders. AMETEK most driven As delivering the acquisitions. challenges These strong a flow, is and differentiated results on AMETEK billion of cash with our excellent customers' employees strategic successfully our Growth our deployed mission success and talented Model our complex and $X.X for cash of solutions by consistent of worldwide. long-term result we sustainable committed to the technology

margins Now details Sales results. points Fourth Organic down X%. $X.X a in to fourth up on quarter contributed were the basis income in XX.X%. increased was of operating point acquisitions Reported the X% X% to headwind. and the XX quarter to XXXX. X.X%, operating a X.X record expanded $XXX the over currency same period billion, Recent sales quarter were million.

operating income Excluding the the impact dilutive year. over basis XX of outstanding acquisitions, margins an prior expanded points

$X.XX quarter, of a over X% record $X.XX. $XXX range fourth the share, the quarter. quarter outperforming increased diluted million our Earnings was guidance XX% EBITDA to up for per $X.XX in XXXX fourth to

million record of Our year's businesses last led cash operating over ratio in for increase quarter, conversion flow to also a fourth This superb generated cash in XX% a quarter. the $XXX the XXX% a quarter.

XXXX. quarter performance. the in to our drive productivity the operating These operational EIG's to income operating sales The a operating flat same contributions fourth million, expanded XX quarter margins growth $XXX excellence $XXX a through delivered performance Organic sales the improvements operating sales over XX.X%. led efficiency recent were and X% Instruments Group currency operating in strong the on another from Now solid quarter acquisitions. basis were and details execution. by to strong X% driven and increase a record quarter our was quarter. with up groups. quarter fourth year-on-year margin both EIG's of points Reported continues EIG initiatives. for million, Electronic meaningful record to in efforts

XX operating expanded margins basis acquisitions, points. Excluding

the in operating sales Group softness performance. solid organic lower X $XXX across a with XX quarter, down The year, income operating sales Despite headwind. The the down prior delivered XX.X%. was strong by a markets. and the responded with quarter basis X% point sales versus currency largely $XX driven our also X% Electromechanical million EMG the in with were expanding automation reported with continued quarter points margins operating solid million softness, EMG to performance. Operating group were

Excluding acquisitions, period. prior basis increased operating XX the margin points year over

was XX.X%. was full Now increasing were over prior margins were X% $X.X for Full for X.X% the operating to $X.X up results. XXXX with AMETEK year and Overall the year year, year points results. an reported up to sales basis exceptional income billion. record billion, XX

XXXX. an margins impressive dilutive expanded over impact acquisitions, the points XXX basis of Excluding operating

$X.X EBITDA per a profit earnings of of diluted increase for This XXXX last an basis year's $X.XX, share comparable of above range led guidance over $X.XX sales. XX.X% to was and XX% the outstanding well our over with and of growth record year initial billion, XX% up XXXX to $X.XX.

and I the throughout AMETEK would year. to for like thank their during colleagues entire quarter efforts exceptional the all

to And strategic Design Technologies good start and We another announcing we nearly outlook, from to we're XXXX, off the IntelliPower this wanted acquisitions: Pacific the Gatan. where on XXXX highly of discuss This touch on deployed billion begin our acquisition had the also relate Growth equally $X.X acquisitions. I strong I highlights X with in to year morning. $X.X AMETEK on follows on of an that I'll Before XXXX billion Model. exciting acquisition XXXX the acquisitions. some deploying front, a

is a on million, deepen IntelliPower and for niche is technology the ruggedized high deployed IntelliPower and systems million $XXX power solutions and of acquisition. in perfectly Annual expertise. are protection provider $XX for sales in mission-critical the and given complement expertise approximately our industrial their products our systems we IntelliPower leading markets applications. unique Their and power uninterruptible reliability defense leader applications. power a businesses high-reliability, and instruments

acquire confident AMETEK. integrate very to our remain We businesses and excellent on identify, ability into

from a core to is at process, to competency sourcing due acquisition Our diligence deal integration, AMETEK.

we strong, remains another and year. to pipeline excellent Our look forward

This process. decision strategic first conditions. part made $XXX We sell the to into subject transaction the to transaction in acquisitions, million. Alloys to business XXXX, entered all-cash an to divest agreement is In a definitive review we our to during expected our quarter the close addition business Kymera closing valued International of customary as portfolio Reading to these at of

provider materials, by in being highly Reading experienced in and XXXX. leading AMETEK growth profitability engineered a since As of sales Alloys acquired solid

excellent support next we we excellent As parties, portfolio end, continue growth. stage differentiated we technology solutions for to as this evolve our to it cyclicality, appropriate In Kymera is of the to less is business. options with their partner to Reading all was for high-end, the thought for an an outcome believe explore

and acquisition #X priority I hard for the remains redeployed our AMETEK, employees them future. success capital contributions For their to would the for strategy, which like to sale proceeds deployment. be and in from continued our thank the will Alloys wish AMETEK work on Reading

This Our in operational approximately savings. strategy operational of generated to Model excellence $XX we softening is of from $XX and continues Growth of the excellence the market in levels of an drive face productivity In improvements. AMETEK higher to million record to million estimate flexibility conditions. our increase the XXXX, savings and results impressive level speaks of efficiency initial drive

the John came operational productivity. A from excellence businesses to won and Dr. XXXX. Operational toolkit efforts example Lux team, Award efficiencies improve which great Excellence these of our Our utilize new in instruments to continued our

elemental excellence and drove time cycle the working reduce outstanding businesses isotopic on to for of customers to Kaizen implemented the this of for lean productivity new During manufacturing scientific business. our the improvements sales processes the lead analysis. achievement. operational This many XX% capital, reduction and tools. the meaningful year, AMETEK, of an driving conducted Congratulations instruments profit and instruments through These the examples new their our improved their excellence team in shortened growth a leveraging is operational one and at instruments team changes times across

Our innovative to competitive quality positions future. and businesses quality microanalysis new imaging our for global In included revolutionary plasma-viewing unveiled our and products We award-winning highly control new XD These for dozens and solutions. laboratory in solutions also our measurement continued expansion. product this and to innovation through specialized advanced technology, of development on scanners test power technology and and XXXX, focused businesses market devices high-speed analysis, remain x-ray investing instrumentation. assurance, digital enhance

from the and development introduced which products years. sales have research, measures well new million, solutions customers, These technologies been our generated sales as quarter, our we X% new development solutions. In XX%, XXXX, of Index the new last speaking the product products X shown of In was an invested Vitality level our efforts. and about by of success or of approximately the received within $XXX the fourth engineering outstanding and Index, by to in Vitality our

geographies are in businesses and our also customers reach global adjacent footprint to Our new markets. expanding

showcase service channels to serve and both with and These our remain unveiled their As new We and support sales an solutions state-of-the-art capabilities. France. facilities and in these develop example, Singapore and ways serve their initiatives. innovative Technology focused in investing enable to better growth international businesses our new opportunities implementation, in and our we Centers expand products customers global customers on our calibration design, XXXX, better to Solution

Now I'll outlook to our move XXXX. for

ability given cautious, Model, the in uncertainties strong in AMETEK the to to of current of remain we Growth strength global our environment, macro the we While and are performance. confident the highly continue deliver

the the comparable XXXX expect range range first and quarter an in Reading on result. X% to excludes per $X.XX, gain be $X.XX Alloys to diluted we increase of of such, divestiture sale. guidance earnings the during XXXX's As over of assumes to share the the X% anticipated This

organic expected single Overall up low to for year. with XXXX flat sales sales digits, the in be are roughly

first low quarter, year. to sales the the digits we up be For versus anticipate prior overall single

the the expected to in are to year range share, period. X% earnings $X.XX quarter First a over increase of to diluted be X% $X.XX prior per

exceptional in continue growth results in scalable a success and drive delivered is fourth sustainable AMETEK our a tremendous summary, for AMETEK for proven our quarter, shareholders. concluding performance decade and the will a AMETEK The year excellent So stakeholders. and Growth that saw long-term Model to with

cover will take Bill of the some now quarter. turn financial to over glad Bill? it questions. be to we'll of Burke, details the will your Then who I

William Burke

Dave. you, Thank

AMETEK mentioned, the performance excellent Dave XXXX completed As quarter. in with fourth

XXXX. sales, full and some as from expenses the year of approximately both administrative Let full are and administrative financial additional sales. general general level of with In were expenses were for quarter line the modestly year the me X.X%, quarter provide and, down in prior to Fourth expected of X.X% and highlights sales, of XXXX, percentage year. year's down from the X.X% be last a

from year's adjusted tax effective due compensation the of tax lower in The rate finalization benefits in XX.X%, fourth the XXXX our to rate was XX.X%. of stock was tax the quarter The and last tax returns. from quarter rate down the

be was quarter from quarterly million tax actual in past, XX.X% differ were our for Capital the at or XX%. $XX in as And year $XXX tax expenditures either the estimated we year. XXXX, stated and XX% negatively, rates fourth capital rate. in excellent between full third XX.X%, and the positively to For quarter. expect from rate this Working million can effective we've full in the the down quarter dramatically,

expect model. approximately business XXXX sales, similar We a level in capital be to at reflecting X% to of XXXX asset-light at our expenditures

expense was amortization amortization approximately in full $XXX per In $X.XX and was depreciation be XXXX, to year million diluted share. and acquisition-related quarter intangible we $XXX amortization Depreciation million, the million. $XXX million, of $XX approximately and or the expect after-tax, including

$XXX up of the also As prior conversion flow last tremendous $XXX quarter. XX% levels our flow net cash fourth Free was XXX% year's flow. at to in million, record the over businesses generate outstanding, was versus exceptional continued highlighted, a was year quarter up Operating cash of to flow Dave income. has Free cash million. cash XX%

XX% Our XXXX also Free cash flow free cash outstanding records. billion, at year was flow was $X.X in billion, XXXX. Operating was for increasing flow over XXXX levels $X each and were cash full an XXX%. flow conversion cash

the our of continue billion acquisition quarter, strong Pacific Subsequent had year to $X.X Design in of we outstanding on IntelliPower. the to on deployed successfully acquisitions. Technologies the on million flow XXXX strategic of the acquisitions We deploy end another with We and fourth Gatan. cash $XXX deployed

year-end in XX from Total quarter, of paid we cash X% at with $XXX of debt private the million placement in debt cash to of the $X.XX net EBITDA December which ratio $XXX year-end, of end quarter. In resulting Offsetting up equivalents and billion, was this notes, at addition, fourth senior consistent matured XXXX. off debt million, a XXXX. X.Xx the is in

acquisition in facilities of support investments. we cash to our of billion have $X.X the approximately Following existing growth credit IntelliPower,

colleagues our like To XXXX. work in to excellent finish, I'd echo in thanking Dave for their

Our quarter entire in businesses throughout the and delivered the exceptional year. performance

We Kevin? XXXX positioned are continued well balance for excellent strong with in sheet growth a cash and flows.

Kevin Coleman

open can the Great. Thank you, please line we for Andrew, questions? Bill.

Operator

Instructions]. [Operator

of line Matt comes question with first Summerville D.A. the Our from Davidson.

Matt Summerville

A couple of questions.

half what a cadence First, your as you half sort an the maybe maybe first we expectation guidance? standpoint from back from organic can your quarter-to-quarter, talk year throughout of Dave, about in is purely embedded versus

David Zapico

about growth the Yes. we quarter rates level organic expected throughout Sure, guidance really think all activity run for same we're our Matt. when the Really, fourth we in saw assuming and that XXXX, in of XXXX. similar

isn't back-end typical hockey on at follows forecast. AMETEK. a So a there It all pretty of HX, HX our stick

of the year, continuation negative through you But organic in QX the it's 'XX. sequentially of level first what terms linear activity, like the - the have first of quarter pretty saw as proceed in reflects now we the And during some will activity it of growth of half. you'll comps the or in terms pace look and

Matt Summerville

expectation traditional QX your the the And the walk you in for as XXXX and a you sort kind businesses, through of Can what what saw then is across of portfolio? just follow-up. do

David Zapico

business. with line were Process in excellent in driven sales with Matt. single start They Gatan. our fourth Scientific the contributions and flat Telular, were with high quarter, sales generally Sure, solid expectations. by acquisitions year a completed Organic of quarter. Spectro an in Overall digits I'll up our XXXX from

did year-end. discretionary see at CapEx some However, we slower

expect we to sales organic be flat Process. versus for roughly XXXX, For XXXX

acquisition digits in sales Overall were up difficult with Aerospace. QX against the plus by in fourth businesses driven & low Next, a of digits down for the comp Defense Aerospace In single mid-single-digit Defense quarter XXXX, in mid-single expect sales across low sales and excellent organic Aerospace a XX% Organic our PDT. A&D year growth & were across platform across very last 'XX saw our each segment. solid another XXXX. up digits We growth quarter. we businesses with of low fourth year's to balanced single growth

Programmable our for to flat solid digits XXXX, sales with were sales our businesses And for quarter, we Power & organic growth in Power be in the business. Organic & particularly up across Industrial Power expect low Industrial. roughly single

Solutions expect year. our sales the Matt. flat roughly softness & & roundabout, continued Engineered businesses. And be saw driven versus the business fourth Solutions organic prior organic to a mid-single-digit That's Automation we our businesses sales the global by our Automation quarter XXXX, decline in across Automation In Engineered

Operator

Rosenblatt. comes the next of from And question our with line Scott Graham

Scott Graham

Acquisition But quite with has market just thinking couple the a - upstream. oil in Automation coronavirus kind follow-up and the for piece, you of kind has questions. for that's been sales whole is taken a So really and the obviously business. I the gas The of oil gas turn side over piece is things, a were know, thing. that I on of of upsetting down obviously, worse I time. a the have that think, year. the And then do managed the wondering on I what the was taken And

David Zapico

Okay. Yes.

And flat our year, project - had Oil - but was Our some QX, in was smaller - & some flat 'XX was we been we There for for a performance, performance. was it presence Over and the our upstream There full a business East, Middle up of the X/X performed timing Gas - flat. have 'XX, well. in it year we has full it a expect for downstream. And presence. mid-single-digits.

So businesses the the XXXX, sales. a we've of about AMETEK level that growing, And divestiture the of whole of $XXX commodity-related about X% it's if our about the the XXXX commodity for be is, period, Alloys, back around point it's think exposure into the businesses our same it. - you one grown been company, And After million. and will announcing time sales. were Reading XX% XX% of

and of oil X% gas, X% metals. So

has Gas we're $XX Oil our And with feel feel order, us. downstream, & portfolio. and for about a mid really when We good that solid. exposures. the in level, at good our looks past barrel it okay about still predominant the And businesses So we $XX an been in

base of So good recurring we're we're part it, projects working a we and the have that business. feeling good have good pretty we revenue about some And on. that in

Scott Graham

could in end goes business. a column market still up things My of - assuming maybe simply kind on lost oil follow-up are auto the little automation that break that now, but color weakest. more you for is by just that that on I'm where

David Zapico

what If you than was weakness weaker automation the European expected. happened really want continued, to automation understand and that is business, the

last Europe weak think was you - the was U.S. if Asia kind and Europe. So was weak spot strong, back automation. quarter, was The to positive. The U.S. quarter, the really of spot for this

that's and Automation So in the Asia the business. Europe really maintained and weakness, story

of bit in December and January, normalized. encouragement sequentially, Now a little the is orders

pretty So it's the in we European QX. bottom, see was the unanticipated where seemed that and if to geographical But weakness continues. a have much issue found weakness we'll

Scott Graham

That's hugely quick one could XXXX? in. your What's I sneak this last It's for just one. expectation If helpful. a productivity

David Zapico

for productivity Yes. The $XX XXXX expectation is million.

were But we So all at we executed incremental And are the $XX We up XXXX very These at for productivity million ended through incremental. that year, numbers. million. start well. for are numbers P&L. see set year, we incremental began through the Those at million. the the $XX you'll of - that $XX XXXX, working

Operator

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

Deane Dray

might some you this, for I orders have versus were missed but segments? what us organic the And expectations. the maybe comments tell could

David Zapico

a January And go Automation seeing parts before, we're I'll have stabilized in of And book-to-bill we the - both into as automation CapEx X spending. billion, a backlog now I our discretionary orders was we're late up the of have orders And by down record with of year-end orders seeing X% the And I groups driven were and weaker and with orders it business. sequential quarter. the and - we - was weakness December, X.XX quarter. $X.XX sure. single in through were growth pitch. mean, Organic the said low whole down Yes, digits. X%. the

whole Deane. picture on the orders, that's So

Deane Dray

question, look, near-term And kind your - of demand this everyone's China. does about expectations in potential being disruptions of that revenues? the your in your Just then, quarter, have? for that? for disruptions, chain how And is guidance braced do what asked in anything Is terms you embedded are Got of there supply it. disruptions X% you and

David Zapico

Yes.

we our to point, our focused from foremost, our very well-being first now. you the exposure on be things perspective, that in as And situation closely. on so guidance and have don't based do some unanticipated The business operations any fluid safety and and supply global year our City of and do the we significant expect very consequences And chain the to supply it's in difficult is delays we chain there any nor we're of know we're the suppliers and we But know disruptions. of a And what employees, sales, Wuhan employees. - chain Wuhan of is quantify, area. we about X% don't expect significant first the - some know, in supply monitoring full to

And point So of appropriate. monitor we'll we'll have end without this longevity to assess the so we chain this supply adjust closely. very or any It's as the difficult severity capability, global situation. demand very at do knowing and risk possible

highlight to they'll - the fluid reopened Year, how Lunar our week. following point the not China one And facilities reopen situation next have in is or although New

operate coronavirus. our detect the reopen supply support in motion customers asked medical is a One in of solutions help us We China. the control used government to that provide to to of our have order we to couple to manufacturers to equipment who provide device facilities medical Chinese to

and up today line running with a we're need. to fill So that

employees we I both And learn China really know around the in you and it, taken changing world. focus to time. let and as is. steps the we'll it's quantify we've what that the And the on our safety So more of we all think

Deane Dray

that? of didn't know We the could just match a candidates and because - as one cyclicality there Dave, what trimming you squeeze other trimming for in the same returns. looking Alloys divestitures. good for. at potential hard regarding that's it's the the I it's margin helpful. like get I If to really redeploy divest, any did more business, - the really other at real looking seeing portfolio, you're the Reading - you But like Compounders don't potential just typically topic so business. look are but quite are

David Zapico

do customers. our that where so we have every We And was different just chain Reading hard at was the business. our dealing you really And other businesses value as more it And a the portfolio. didn't strategic Alloys, for good AMETEK. mentioned, end cyclical. different, it we a visibility look have And we is in year, was review with

it and at So still a decision divestitures we and And metals made a divest We to we're this out, very other stood portfolio. have it. comfortable solid was And good our it planned kind with time. business, decision. the of are no

Operator

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

Joshua Pokrzywinski

bias Just amount to either one of on kind guess, is being or was have a higher see follow-up of good on kind should good Clearly, portfolio. with larger long-term the a you of a a is the on consequences larger both. more M&A that of do the toward velocity of the evidence the look success And Deane's it become compounder momentum we pipeline side keep of going. acquisitions? need norm? that question I the XXXX When of to unintended today, deals at you

David Zapico

we as want XXXX, are too, great We a one on you more And saw And also are typical, a some IntelliPower I capital our and clearly for it's had some there on priority know, successful there that to our cash today. had mean, first our like pipeline, and the successful larger acquisitions, all deploy but M&A. question, announced that Josh. acquisitions smaller-sized XXXX. you are we flow acquisitions a deployment. free Yes, we - of

- $XXX evaluating in going And acquired now. the we be deal we're look do And We're of that about you able thing over right opportunities. billion, remains of our and number funnel We million sales. kind those If consistent, would so say, X X a I to we years, deployed same acquisitions. $X.X very forward. completed last should feels we good

to revolver capacity with free and we're even $X.X another - have to unused capital with $X.X As generate in outlays, flow. of these - another cash. existing cash firepower billion generate Bill we anticipate going And our mentioned, billion

So we're very active.

team a The it. I and dedicated single really to of processes, feel to we And a develop right that set have a pipeline, AMETEK about have a combination event. now. are good We processes of acquisitions not the well-defined at

Joshua Pokrzywinski

leads guess, XXXX bogey of that Got the solid. related looks that, I and is kind in Or unrolling? newer element are for to this of members larger productivity I very productivity rigor guess, just operational the portfolio through part a to AMETEK that it. there That's helpful. is ramp the of them And are given lot of productivity numbers? you running there guys kind of another that deck of

David Zapico

Yes, get our margins. both. it saw the revenue it's like time, the model times, productivity. more the And very flexible. business, continuing do pricing. business where we and And But couple I looking The strong opportunities. we're starts slow of excellent to quarters. think at in when same We're is excellent provide get last get you a execution to resulted and been, acquisitions down, growth continuing by And combination of extremely it's We've taking at to excellent businesses actions. in

and of expect inherent So year really our really another we model. in in strong execution XXXX, it's

a And to when the And We that variety have to starts of run do. contingencies have we to the planed. then a waver bit, businesses through line know we know cycle. what operators revenue how

So feel kind this comfortable of environment. in I managing

Joshua Pokrzywinski

from CapEx sense and of here. the levels? bit set Any spring that at spending that Clearly, very clear? a lower projects the to on all release are in formed customers uncertain going world. just get end there's coiled And that a comfortable there's all of small sneak in if being the are when Or I kind we are still budgets people can that's at just given one one

David Zapico

that deals coronavirus And trade signed, a recently the situation. with been have building. momentum bit of a you're With dealing there's now the

we're of momentum we it's willing to spend. certainly, a have building. read. felt it now impact. And like So positive get tough just to And see people were the to feeling some kind But

Operator

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

Nigel Coe

on were on in I'm comments you're And December, we're weaker. January those very your Asia wondering it's if tends interesting that opposite on because sequential your comment decline being think is But at question was to So And you stability stability more more were some I'm well. and It as regional to EMG. of X%, to question destocking regions. wondering more the therefore, channel if then sort as hearing which sort of comments Europe, I just elsewhere. speak seeing just my real down on the could what Q-over-Q activities. touch a

David Zapico

some Automation was I typically, segment, Yes. EMG, typical. the saw historically, do we fourth a and Aerospace The was bit. business it have in mean, And relatively things our business also our just year. military the slower of is that the quarter calendar parts European business, that delays, business - program highlighted in that on EMG were delayed a

margin challenged the the throughout excellent I has certainly, operated actions. well. had - Automation taking expansion. been are in an excellent And year, results. the And and very team has said, those the done that's We as has the - of but job business So there business included

It's - we business. at And where out it's a I haven't We individual what that's timing just bit automation It's really automation-driven. and little we're at, spiked EMG. of the military. European issue. was That's there because an those do. just That's specifically, a

We backlog, in issue very a QX. timing have good but just a

and the Europe the In we Asia in U.S., solid in while quarter. were were growth down terms globe, of the

is had worse, when to but a we a between QX. similar the and we in international we Europe to low single-digit them. And XXXX, U.S. little Asia the there is Process was look mid-single the And performance expect growth in change. and market do we And down at the So difference small And a the was U.S., particularly little digits maybe had better. Power. in

confident So set pretty level we our same in that. as We XXXX the I activity at said, saw with feel for plan QX. we

Nigel Coe

you That's helpful. the - And Is mentioned I your book-to-bill the in think quarter. was correct? X.XX comment that

David Zapico

Yes.

Nigel Coe

during seems of to last that book fourth X.XX don't Yes, XQ? How quarter, the mean, like a rate does number. 'XX. book-to-bill I I your sort that XQ compare have good from normal

David Zapico

Yes.

backlog think in where that the I acquisition. you're the has also booking that, acquisitions the of

be So it approximately. out normalize I if the for around you acquisitions, will think X

Nigel Coe

be Okay. fairly would And that normal.

David Zapico

Yes, that's fairly normal.

Nigel Coe

And just one on quick a D&A.

million said that and breaks as for $XXX up I million $XXX intangibles tangible. you for XXXX. think million And then $XXX

William Burke

It's about about and then $XXX - And amortization for million. about $XXX million it's - for yes. XXXX, depreciation

Operator

question of And Christopher the Glynn from with our comes Oppenheimer. line next

Christopher Glynn

So one and It backlog little if you like if the a helped just delays kind kind wondering most on kind less a if of conversion first quarter see of, forward. record organic, is EMG so quarter. in little normal a of the military push bit, is backlog, going wondering view likely negative the your that just in sounds

David Zapico

military Yes. is The correct the difficult EMG going to for comps definitely QX but in are the very EMG. itself, -

will level in another best that, would the was So And similar I describe you roughly the question? be have QX. did way it Chris. be That can to it sequentially

Christopher Glynn

quarter. Yes. has lot mention in I'm A is acquisition EMG, component now. dealing been any get you one - other I hear contribution. one didn't did the I asked missed in right acquisition but Pacific I there,

David Zapico

fourth in acquisition X about an point. component EMG in was quarter. was It There the Yes.

Operator

the line with And of Poliniak Wells our next question Allison comes from Fargo.

Allison Poliniak

Josh's acquisition along question. Just on - want or on to comment his follow

or your enter technology we you changed as but size, deals? But year. look thought strong as a XXXX, end around we has markets had clearly about for talked You process

David Zapico

is I potential at following for. they a been business, years percentage looking the - how example we question. or private when not we're looking to great types are retire. a we've have recurring businesses a deals the an we beating the businesses there it's is noncyclical, ownership a buying companies these bushes, trying the the of looking to a - retire we're revenue. they're existing for often businesses looking had like - That's that it's - of those good up AMETEK it's stock in around exposure. in of that or that. And things that and want wanted so similar-type have the market mean, and certainly, If for for things, IntelliPower, that return out teams to doing years, existing find an And can't we CEO many digging ownership of We're

for them we've years. been And with working

We're won't going our the the Aerospace, get it's key pipeline But looking we're that businesses. pipeline market time, And We're not on a to this it's for the on, the That's health approximately went looking criteria. because to cost. differentiated what's feel during type predict going and always looking have but really about it. good more above. do about or people quarter in when in and now. the we're if of this know or dedicated - to a all So businesses, We doing going cost-driven area. care that deals we've there's any difficult that's now. we buy good analytical It's I feel Process you're been to wide Power, and next to of extend right our so we the We businesses horizon. long, deal, XX

Allison Poliniak

before? No, that And one Any just color technology like on that's last a you there? whatever AMETEK to be did What great. then complement. a bring IntelliPower. a have may does not nice Seems it that or

David Zapico

an supplies. market. have IntelliPower industrial is systems process already what And power we sell And the brings sell really those thing, to uninterruptible the big to the it mission-critical market, sciences we applications. it mean, defense existing I power in sure. and life products, uninterruptible we presence ruggedized to Yes, sold

customer have in can set ships, supplier blue-chip a base. so And battery units. stations, that UPSs networks, And serve an have distribution we really for sole-source conditioners, a power they land of applications. ground key include the provider unique largest component think they're numerous they're robust vehicles, UPS, products mobile So for They they also external of programs. packs, a that grow. DoD. Their on we a programs They're company industrial with the power and ruggedized

term, It's visibility with opportunity. the acquisition, with in revenue mid-single-digit synergy on grower, business, so the management meaningful and pretty a remaining we're a strong there's short the deal. happy solid like So we the team

Operator

question next of comes Gordon our the And Delevska Haskett. with Ivana line from

Ivana Delevska

Creaform. about some So Telular, your all? just wanted and of to they businesses, weaker like the affected higher-growth by macro ask Are Spectro at getting

David Zapico

some those their lighter. that segment our EIG And businesses well. year-end But some overall, businesses pledge, and did Process where people usually segment. our well. doing and up capital holding in was and see - are capital a a capital We year-end, spend are those at - that - in very are bit Those see spending we businesses very

Ivana Delevska

acquisition Gatan. on follow performance up did the compare the your one then outlook plan? And How to in current just the and quarter

David Zapico

I a question. mean, great forecast. well. performed the business It our bit was than Right, better

also very pleased Gatan So of we're And unit business the with we within AMETEK. combination performance. announced that with another

So as that same well. integration have very proceeding was really base. the announced as in January, and characterize customer And I it will we drive a the substantial would synergy

Operator

the Robert from our line of with question next Stephens. McCarthy comes And

Robert McCarthy

backlog you, terms - for, also orders. the have talk the organically, such for I orders around growth guess I question organic you lever because your obviously, and conversion? price how but feel for price only Anything not margin can the about a in really shoring price up incremental about first of is would you is key the

David Zapico

price I much the that mean, was we full year quarter Yes. the fourth got in 'XX. like

about of a we results. XX and 'XX, very a So we XX about had the with pleased positive And spread bps spread. expect for bp

the going that's we're from so performing lower than because X%. that lower be think deliver we is been be about that the well we pricing improving impact it confident XXXX, lower bit couple Now is a basis we're years. next to But might spread, model points. have our and the XX able And built X.X past productivity And over that incremental we because of year. for expect about operating point also. And we've will be a slightly there into tariffs inflation, to

Robert McCarthy

several negative time during years? in was us teeth of the it oil pricing Was what 'XX, spread frame Remind for kind gas the of your the a 'XX recession. and

David Zapico

don't negative, of negative. don't it in have went think front numbers I I don't think went it me. those I

after on negative the all. don't can You with call, recall that but I going Kevin at check

Robert McCarthy

I weren't drawdown you fourth share the afraid in terms obviously, a Okay. you repurchase of prudent. capital for And then material it 'XX, in deploy when quarter was time, was to market, of guess, there and thought that pretty at

perhaps air pocket just the think we happening? on unclear Given you election, geopolitical bid/ask on to the terms have you given macro, the higher given tacit justification in for selling meaning an a of share coronavirus, see don't of to you're year might transact in kind properties, of a people that trends, have terms deals a prospect it harder spread could be repurchase you transact up hit amp do of the willing if you buy, ability deals the could that or to than

David Zapico

I at And strategy reality it's buybacks. But - do now, from a as to the think we pipeline, buyback we're we and balance deploy opportunistic. M&A. strong the And sheet. we'll have great we more sheet capital M&A. short the our term, to then balance right that. a Now Rob. is But on have on mean, focused going And a great our our in look I the want overreaction if we marketplace, there's to we're deploy question,

Operator

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

David Ridley-Lane

David any This half of you is on impact cost? production from Ridley-Lane XXX Andrew. in if the for Max expect first Curious Boeing's kind follow-on

David Zapico

so will build not aircraft. plan. I a on about on a jets, XXXX, commercial dependent they and that's that programs question, production all different in assumes start-up mid-year XXX our $XX of be a based mean, in headwind the one your a current Yes, great question, of David. we're But business to any and specifically Max we're lot million military, - aircraft,

a excuse it's me. XXXX, $XX So - versus about million headwind XXXX

David Ridley-Lane

through And date? any as first bookings, commentary to quick on pipeline did And the maybe How as develop it. quarter? a Got EMG follow-up. the you went quarter

David Zapico

had December, it in weaker in Yes, said the The that January. orders yes. as started. bookings, EMG was and But stabilized previously, the continued quarter like I

showed And sequentially, a then our feels orders and with a ramp as included we January, and December, was month, have typical order EMG QX - - for typical short in January, business, plan. it in we automation time the period. that EMG from stabilized during had fairly the And said, in good in that. like So entire right line I

Operator

our next comes Berenberg. from line question And of with Andrew the Buscaglia

Andrew Buscaglia

would I - the what about talked and January. talk weakness touch automation December, business? - your think other orders each the continuing you got business. what I of areas down on regionally, or Can about or somewhat some you you - orders But but talked can areas normalized low organic worse you weakened because about about things in major other single digits normalized know got the What or worse. X% are

David Zapico

Yes.

and versus our military The delays I for than factor, and sales weaker issue quarter. fourth other in another discretionary experienced related more we thing, We of in earlier. CapEx really And the and was that the orders it's issue, mentioned Aerospace - point, then an there's spend anticipated. a major business program in

Operator

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

Richard Eastman

you XXXX see like at look low around question seems look with exposure, buckets growth it a of you think commented both at of business from just flat Dave, - expectation, X mid-single you EMG the flat-flat, look into core as commentary I you single you and Automation a I when When quick standpoint? kind Aerospace, think a to and where XXXX to those growth your around the digits. risk do Process, core

David Zapico

that we're We plan currently a Yes. by together with to run deal that put rates taking the at. try that

factored So are the risk AMETEK's we macroeconomic there's very didn't specific risks, want more and But risk a businesses think that in. hockey well. than stick executing have budget, and because clearly we they're we

backlog. had We be execute to have the in to a excellent capability pricing showing We're record backlog. able on backlog. generate We're productivity. We excellent to going the that

And another plans. So that's the realities market. we And our strong the to hockey with year to that's we're we're guidance of at, ball, our because we expecting like rates execution. XXXX called stick best based base tried we've don't flat. the the crystal where run and it with attempt of And on moderate

Richard Eastman

to of so sift we and about expect margins acquisitions margins you look XXXX, maybe improvement kind points? of... to what XX Are do op op out what into out year? kind for you from that full But contribution. talking see Or difficult the in As basis

David Zapico

core in improvement quarter. of in margins XXX in basis XX margin all to we improvement. had have the our And XXXX. points points XX fourth core we basis - XX Yes, margin of operating had points basis income We plan,

Richard Eastman

Okay, for 'XX.

question last very a here. just then And Okay.

Just around question a quick Gatan.

You quarter quarter. mentioned it a came for had as partial the in it fourth good

electron - Growth for maybe I million for There's Gatan? or As from thinking revenue to for we think was in $XXX would singles. spoke million high year. weakness your the me, the kind market, a be a I'm excuse when a revenue maybe of some contribution been What of curious. full mid-singles plan $XXX to rate the business 'XX speaking microscope of good thermo was commentary acquired, - we're which in

David Zapico

Yes.

laid much pretty million. what it's we think $XXX out. It's I roughly

Operator

And the our Giordano of from Joe question line last and Company. comes with Cowen

Robert Jamieson

is this Rob on morning. Joe Jamieson This for

margin quick or on business are? your question profile for IntelliPower. what a Just you expectations maybe talk the about Can that

David Zapico

Xx EBITDA, it's And for It's profitable we opportunity, synergy a our XX% you And we we're EBITDA and roughly Xx meaningful great a paid going so think approximately - we million, Yes. so get return sales. business, $XXX paid to that there's a business. out. figure can It's stakeholders.

Robert Jamieson

guidance But just X? production follow-up Or... very Okay. quick number or embedded business. Great. like there? your this a your what's of Aero's it a And - guide, terms then small your the XXX is piece baked production in small Like, total in planes a on how I Is Max. many know what's in your number? of

David Zapico

Boeing. we disclosure No, on that our activity be our plan what can I midyear, I bit say we difficult is think know have would And - I number about it a don't million headwind, forecast. starting $XX for to with yes. and a agreements the us little

Robert Jamieson

per Okay. guys And content-wise, you have plane like XX,XXX right?

David Zapico

Yes, that's right.

Operator

disconnect. wonderful participating for does you you conclude like day. have and conference. thank in Everyone, We now the to would program, may today's This a

AMETEK (AME) 5 Feb 202019 Q4 Earnings call transcript