AME - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the AMETEK Third Quarter 2021 conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]. to Coleman, conference Relations. Vice like speaker to now Kevin today, President would hand over the your I of Investor go ahead, Please sir.

Kevin Coleman

us and me Officer. today Good you Dave Chief Zapico, Quarter Angie. Financial and Chief are Executive Earnings for Executive Vice and joining and Officer, XXXX With you, Third Burke, AMETEK Call. Thank Conference Chairman 's Bill morning for thank President

will we'll over the excluding the it press our the adjusted XXXX. turn and with the then first Alloys taken of acquisition release the Reading and up section future in excluding risk GAAP on results make will change XXXX, now During between SEC. call any of sale the XXXX or and forward-looking our found be gain risks website. filings revise XXXX is which in from in basis, any discussion intangible call, the this may Dave. course 's quarter -- cause statements, for the I'll or also to to various of meeting of and that are AMETEK differ Investors expectations. realignment open may with AMETEK references Any call begin related Dave based quarter and that measures our update affect we on forward-looking the charges adjusted and of can to Reconciliations and Bill, to today's on significantly questions. made factors today's uncertainties subject the contained We'll first intention results results be of A uncertainties amortization, prepared to by statements an actual and disclaims from or an on remarks after-tax obligation detailed

Dave Zapico

established the Demand order quarter, sales with backlog. markets, Thank across you, growth and our remains share We in our operating record diverse earnings outstanding expectations. strong to morning, performance, end and had quarter. set Kevin AMETEK a growth, earnings robust for income, better-than-expected and records sales, per of operating and good another everyone. EBITDA, above (ph), strong leading

logistics businesses tremendous While and which and expectations. chain our issues job the exceeded delivering global remains doing supply are results challenging, navigating a networks these our

made, we is sustainability welcome initiatives, for I quarter information fourth proud AMETEK. are our our for provides read for of And the results work and of to commitments and very the AMETEK future. quarter, which year. our important and report outlook our central on the sustainability we better in to 's report, the colleagues, AMETEK was overall strength, we report of published to we and third taking earnings Grand our again model creating this proven the progress as well flexibility, latest efforts focus sustainability you to to sales performance corporate area. across the we sustainability strong exceptional This sustainability steps the the AMETEK further our We're corporate are week, a growth latest website. making our in are have all full our business located last stakeholders. increasing This strong highlight the on sustainable create future all all on Given as a reflects guidance model.

Dave Zapico

quarter turn results. let to Now, third me our

points, growth $X.XX an the third Third a in benefit billion, was added quarter above and sales billion, expectations. of over XX in the were increase same period. our Acquisitions a were XX% Overall, and orders XXXX was of period currency quarter prior-year XX%. record foreign up sales in XX% $X.XX the quarter. Organic the modest

$X.XX a start the billion, ended from backlog up We year. of the up in of While record impressive organic the orders million over XX% with were is an quarter. which $XXX the quarter

of quarter $XXX million, record the third operating margins XX.X%. a were quarter income operating Third XX% over XXXX, was and a increase

This Excluding in points EBITDA the $X.XX over was basis of of third versus the the acquisitions, to third per a guidance XXXX. quarter the dilutive margins of quarter margins record XX performance EBITDA over up operating up the outstanding above prior of XX% up XX% of range core XX.X%, record were impact a share, earnings $X.XX XX.X%. $XXX diluted led third and XXXX of to with $X.XX. year, our quarter million,

Net cash We and continue $XXX to free generate cash flow cash with XXX% operating tremendous of flow in third environment. of a results million challenging strong of flow levels Income. of Overall, conversion operating quarter

provide Next, me details level. additional some the of let operating group

up broad-based, particularly Power XX% Industrial ultra-precision a technologies and quarter across income acquisitions for added record million, a XX% EIG quarter record over foreign businesses. up and XX%, were First, last sales and a third third Sales were EIG growth growth was the remains modest XX%. year's Organic While currency and [indiscernible] Instruments last were $XXX million our quarter. versus margins same Electronic Group. year, XX%, up was strong operating was our the operating $XXX

operating EIG acquisitions, margins. at Group growth margins 's core prior year in excellent and line Electromechanical sales Excluding outstanding performance. excellent XX.X% with The delivered also were

$XXX the points the expanded million, an margins compared automation XX% the period. income quarter. sales the was XX%. again, all added and the XXX delivering XX% in a strong a to prior-year a point to to EMG's Third remains currency up businesses, operating increased year up sales X EMG's robust record of prior XX% versus in growth. across growth to record exceptional were quarter Organic strong quarter notably EMG with $XXX Growth operating million. basis our

deployment, the has thus acquisition strategy acquisitions AMETEK Now our acquisition a businesses. X $X.XX of strength of of to 's had ability AMETEK strategy. acquire highly our identify companies. strategic highly approximately reflecting with the billion to year year, this AMETEK on deployed switching to an far has strategic and acquisition and capital level excellent record lean

growth, 's to strong support to resulting flow capital important capabilities Our returns outstanding AMETEK's is us sustainable an on generation companies, operating of to Generating on acquired deployment continues long-term across improvements AMETEK our meaningful returns strategy. our deployed proven cash strong allow capital capital. element drive in critical strategy.

acquisition active. remains Our pipeline very

Our the over coming work opportunities, to acquisition quarters. remain continue diligently, to busy M&A identifying and teams expect attractive we

team complex on and We the and support efforts. in investing $XXX high-end on the recently these camera. approximately $XX 's for materials AMETEK initiatives, pixel methods. disruptive support and or fully product X.X% and direct applications. launch providing applications. leadership back dynamic in Gatan electron development the integrated [Indiscernible] Today XX for the award-winning is position, new support - was of all products the invested stem suite. provider Through the diffraction of new product important differentiated approximately expect the the unique detection RD&E, such sales. also introduction focused I our for The businesses of million 's awarded Stela businesses and like would one quality range. including Award investments, solve called hybrid of This the a Gatan. congratulate camera of to August, a XD camera, Gatan introduced history broader the the microscopy reinforces solutions third on Gatans into we over example highly to sciences camera develop organic invest most In to quarter, of our recent analysis their hybrid a pixel growth perform leading One new high Gatan at for remain new customers game to we allowing XXXX, now our user life million technology Gatan research technology. and of Innovation Stela only from XXXX product changing help is TEM Microscopy detector challenges. electron Gatan with and research highest Stela the long the to builds In microscopy supporting and of camera,

issues. supply range remains see me of adding extended the lead We for let a availability with issues challenging. Now, materials and The on times supply to touch the complexity. broad components, and labor chain logistics global chain

the exist, navigating difficulties higher we and issues are estimates given our This sales approach. our leading these exceeded are supply for environment inflation. to well, chain challenging agile the operating While quarter,

this our spread. we're than leading price able more to differentiation strong inflation However, with we higher given pricing, a to offset inflation

continue XXXX, AMETEK model. these we well-positioned the expect the of challenges will growth issues navigate we While the remain given into strength flexibility and to

remainder Moving XXXX. for to of the our updated outlook

quarter, guides. to and XXXX raised backlog, in the momentum and record we again performance strong third our order and earnings our Given continuous sales strong have the

For versus our compared now range low year, expect diluted share. expected guide approximately previous our be to we double-digits up of our approximately of are in of to expected full now increase XXXX overall XX% [indiscernible] earnings $X.XX guide an approximately two as the the $X.XX, as sales to comparable in XX% the $X.XX XX%. for be basis low XXXX basis XX%. up on to $X.XX are to over over per of be now XXXX prior previous a above percentage up sales share to per range Organic of and Diluted

overall the quarter. diluted 's are excellent. be over summary, XX% will For the earnings up versus year's to quarter. range expected anticipate per fourth that quarter, sales In be $X.XX, in quarter XX% up low were to year's $X.XX third share last Fourth fourth to between last XX% fourth we quarter AMETEK results

performing teams Our our well. businesses execute are and to continued

glad drive resilience to success niche for a The shows to of world-class will businesses, of quarter, all will will led our long-term Bill. success. continue over asset Our Burke, markets, now some environment details The of positions our sustainable continues the cover the AMETEK in strength AMETEK we'll of the the nature and be who I long-term it through growth nature your of attractive growth stakeholders. financial Bill to and model questions. model. challenging leading the of our proven performance turn workforce AMETEK then take to drive the

Bill Burke

Thank you, Dave.

growth, with highlighted, As performance. and third the excellent delivered growth, and results strong Dave orders continued in sales operating outstanding quarter, AMETEK

provide additional for highlights some me financial the quarter. Let

and higher expense. largely $XX.X year, million prior general due were up administrative quarter, to from Third million, $X.X the expenses compensation

quarter from As was G&A X.X% year. the total sales, a prior percentage for the unchanged of

expected from of general to the prior by XXXX, are higher administrative million sales, X.X% unchanged year. be approximately also or For driven costs expenses up approximately compensation and $XX

million income or quarter year's in by sale by last a the higher in the approximately $X.XX the third $X effective of per a Third product was quarter, line a million offset driven gain approximately on XX.X% more other on gain from same quarter, and quarter. up was the rate better $X tax share sale quarter last XX.X%, expense year. by of gain versus than this The the small in --

we and excellent now XX%. expenditures continue tax Working to reflecting or Capital Actual can businesses quarterly the XX.X% rates managing be and to quarter of was work for For rate. XXXX, amortization between million sales full rate the expect positively from basis full quarter from estimated was the the in either XX% $XX capital of in tax this our the quarter expense the differ dramatically, in capital. XXXX, $XXX in expenditures in approximately down XXX of year quarter points XX.X% effective million. we our reported the million, $XX capital third be expect year. and third to were third working Depreciation negatively,

including and million, of approximately amortization XXXX, diluted amortization all be $X.XX after-tax we For million $XXX acquisition-related approximately or per intangible to share. expect depreciation $XXX of

continue this thus third to quarter XXXX, times of asset-light our far the conversion $X.XX In gross EBITDA We Net cash ratio with having and at $X.XX the business equivalents $XXX acquisitions billion, given to end, was X.X rate Total $XXX XXX% efforts. was was on to model end our cash quarter-end cash times. working than ratio our EBITDA was flow million. up debt strong million, debt from debt levels cash flow and In and was $XXX and net flow generate of quarter, million Offsetting free of $XXX cash the deployed despite less in operating cash debt million Income. -- capital X.X free XXXX. approximately of was billion management

$X.XX and throughout of approximately businesses summarize, months capacity third outstanding our the We credit and existing our of X quarter cash growth billion to to financial excellent initiatives. results and first To drove facilities continue have support flexibility XXXX. the with in

the in flow Kevin Sheet and the tremendous and quarters coming for significant Company Balance have cash years. positioned Our (ph). growth generation

Kevin Coleman

to questions. for up Thank we're you, Angie now Bill ready open (ph). (ph),

Operator

[Operator with from Davidson. DA Please Instructions] comes Your Matt first the line proceed question with of your Summerville question.

Matt Summerville

Thanks. A questions. couple of

about you You then that And looked the to talk realized with how you favorable. the in pretty quarter like? 'XX? in need what seemed First, were on thoughts are a take terms your basis, can pricing you price third year-over-year of much mentioned what spread Dave, it in where might

Dave Zapico

offset Matt (ph). more third In pricing quarter, continued Sure the our to inflation. than

of and about As sales. X.X% I X.X% prepared remarks, was was said in pricing about of the sales inflation

And around to points. of we about position got nature spread and in we XXX higher expect pricing speak So inflation. markets QX product niche with the portfolio similar world. AMETEK and results the the highly of be 's QX And a to leadership differentiated basis that'll in our slightly

haven't me I terms key true expect is done planning, going inflation, next and stay In to that a for of next year, detailed that of year. we're we be out to the but ahead

So ahead price. your inflation I question, stay of Did Matt (ph)? we'll with answer

Matt Summerville

just you. just as EMG at. really look to is they over a a component Reading if code the zip different that. two last have And where then Yes. I Thank a margins migrated divesting were follow-up, into completely versus I know years,

about in there business? going COVID some that due Help did -- cost structural how should margins about think outs forward. higher leverage outbreak. Is to think You drive during me when that still to we

Dave Zapico

development key that's we an some in We've automation cylinders, all mentioned on Reading. firing divested and has margin you profitable. drivers. But a EMG fundamentally, fantastic the it's very business done of job have

have industry of It's well system our defense We [Indiscernible] and business some a doing accelerating. our as have part that's management And -- of we part thermal high defense margin. businesses. has

but expansion. still new for and zip-code, expect to there room there's it in it I is So margin a stay

Matt Summerville

Dave you, (ph). Thank Great.

Dave Zapico

you, (ph). Matt Thank

Operator

with next Morgan comes the Your Pokrzywinski line from question question. your please with Josh proceed of Stanley,

Josh Pokrzywinski

Josh. This is for on actually [Indiscernible]

of growth on at expect to excess how supply of, that much we today, So much to backlog, how should issues? based And you it that stands looking call chain backlog, XXXX it contribute here? where would kind

Dave Zapico

Yeah.

categorize I chain. and excess. you in give there's many issues months wouldn't into mentioned $X.XX billion more -- that call to We future I have supply because and customer of behavior earlier an as is backlog record a visibility in so the quarters

I not have not us would as would up more I demand. as but with keeping So excess, not you consider visibility, and view

about it's there's where us in backlog, you So demand, and situation insight its feel good into it. have a underlying further a we resulting giving really strong higher XXXX, really

Josh Pokrzywinski

follow-up. then And it. quick just Got a

the supply-chain on that it the start our Just as are should issues kind of labor? side, watch should what or for we AMETEK eyes to So biggest we keep Is on? do inflation conditions what potentially material and improve? freight,

Dave Zapico

That's question. a good

AMETEK. QX, supply overall those it worse the challenges And outstanding. a our we A quarter. I chain, expect environments the and in And quickly to We're for QX business conditions supply managers quarter, continue with same And own to we more persist our in inflation, conditions. experience asked business has view, biggest been of seamlessly of necessary response one the can some in P&L to During And working have nature them supply these fourth committed navigate had recall. for mean, I their dynamic where changing the as and I clearly with to of bit all logistics, was chain we running which these you labor agility teams, key, us. chain supply where our with our overall the were the teams model that would -- availability, we than with showing are authority their challenges to characterize had. and of effective is this react a corporate these businesses distributed dedicated effort issues these to disruptions. chain overall at my conditions leverage we allow combined team acts the time, approach the unit

it's over we area It's using semiconductor businesses, build electronics use in we purchasing quarter, an last mentioned our we're I of particularly that obviously. leverage in challenging decades. that's And relationships because As to chip lot up our availability. a

the distributed I with in not we and going semiconductors of sometime teams. terms have until get supply problems. point Our the and letting making to sources and qualifying It's is that it, business our in very -- XXXX. we're And was to I improvements but we P&L customers experienced environment model, designs well very of -- a satisfy tough chain to And of changing in pleased don't leaders their expect reacting one the in solve availability where late thing anticipate way. second terms engineering sure capability in to they're

Josh Pokrzywinski

you. That's helpful. Thank

Dave Zapico

you. Thank

Operator

line Wells of Please comes the proceed question Allison Poliniak next your with question. from with Your Fargo.

Allison Poliniak

Good Hi. morning.

Dave Zapico

and morning. (ph), Allison Hello, good

Allison Poliniak

to keep unique of the terms you were of managing to there really expected anticipating bit any well. chain guys Is what are could very or maybe supply could because the very because that in tempering just line guys in sense, growth this not quarter? a what they're been volume Is organic I quite have with your growth chain a issues looks supply that in been some you that of this you've or impactful strong, of be want these you I certainly obviously there organic are orders mean, strong.

Dave Zapico

That's our plan on plan we because do a based availability. extremely what material And question, good well. is Allison that (ph), we executed we set

our we out stars fact, if at some could beat the look the the have end quarter, but the at In material without of $XX we expectations, did, it we that aligned, I availability I of into shift of shipped like the it was what as of QX have kind of to QX same about to QX. feel And an additional going shifted out QX. issues? million And we're

the into we're million able to demand, that Once there it. we $XX So out. But lock the slipped we're very schedule, good was to about juggle meet executing at able we're schedule.

Now, we're not a big labor business.

-- labor is not driver a a We for cost us. have big

with able available. So labor labor get availability is the to tough, products the but manufactured we're

answer So in an million is world. your $XX ideal

Allison Poliniak

little obviously few see, pipeline the stars at could over on we pretty sounds on, more bit is there? a you. then of, next active. color environment, the thank maybe It of amount or the a the just Any like align near-term on, And the always deployed That's the if what you as year. what months, significant helpful, acquisition you're beginning focused kind

Dave Zapico

Yes.

right sort the strong. they're quality, mean, businesses and is to and don't focused that. deals months. be opportunities. you now, happen active good now, the at I those from pipeline very of And thing a remains feel and very month few next I now we're We find on out careful just the some know I we're going And are there on them over find right very but three to you the exploring are or next gems if lot have there's of that through within the active to have We're pipelines. months

meaningful level -- cash Bill a is us done we're think to and year we tailwind As have a also for this And of year. I a and XXXX so financing going mentioned, some we have of we flows. strong from got have the deals capacity going be to good

optimistic about what the done for we're our good pretty year, we've XXXX. we quality businesses about we're and that So feeling feeling this got acquired, of pipeline

Allison Poliniak

you. Thank pass it Great. I'll along.

Dave Zapico

Thank Allison. you,

Operator

question Your Markets. line question. of next Deanne the from Drey proceed your with comes RBC Capital with Please

Deanne Dray

Thank morning, you. everyone. Good

Dave Zapico

morning. Good (ph). Deanne

Deanne Dray

this quarter execution Hey. when many have your of struggled. Really solid peers

Dave Zapico

Thank you.

Deanne Dray

It million actually also question the a that revenues. was out And you 's drag rolling on like that into quarter, XQ push We've an seen like wasn't we from had XX that the that. I where excuse. interesting it seen push-out fact is there on (ph) was of there but Allison first a we've how to out -- in

so numbers, strong congrats put-up still You there.

Dave Zapico

you. Thank

Deanne Dray

issues raw is material supply not doing this are that on of higher couple up like AMETEK chain conversions. the questions. chain, for There you're value companies thought A the here

and test You're more assembly. final

might become might here? on might the that the be of impact, chain? value think it supply quarters. for but chip-related components later, worse component the sense are more We you is Again, we the this issue felt it's any from already, an supply it it's in gets where -- -- be coming there know So so

Dave Zapico

worse. Yeah, don't I getting it see

have firm seem have good question. I'd I backlog, in to than things so costs pricing mentioned, to inflation and QX shortened various surcharges it comment in a possible our quotations backlog using components. And validity, areas, me handle in think higher shipping related know it's concern We're some was commodities that buy and energy there. QX, in going stabilized. the key We out for that make your locking are etc. one in items firm are as increases where appropriate. supplier as possible, of certain we a you but costs use quotation be. much The transportation is, but we we the As to that costs, the we'll length for to worse is the high-level you it's first commodities costs, even our to And orders, our we key your manageable do is the have have increases then what valid when with of And costs, time forward

to what's can into repriced take when customers necessary. increase happening our if fairly then costs. be get So now. a necessary, and And account price the items been receptive have it's can due you And to you right higher to get

job at bit together be So that's I that put I time, we're And we're there part that component X.X% to think we're market, than and our it. and process a I of across some of our pricing what's understand that happening and focused the well all true. we'll we and inflation our of stay if of think going I X.X% same it, doing running entire with good inflation and to to through. stay it, on and the understand in a a businesses, be we're package the think price front and big may of of later going to -- in But ahead businesses willing budgeting with inflation we're plan

Deanne Dray

planning process. for these top on would how give tempered be And just maybe in your supply outs? chain. it margins budgeting on how interested also. could this then given line process really if all the labor helpful might be assumptions I'd XXXX? you be that be us a also Would the it And being the mentioned comment rolling That's budgeting be for you helpful. circumstances the push XXXX issues? hearing Just Would does with change October, these

Dave Zapico

niches is and Deanne, to process allows niche I this understand inform later comprehensive markets budgeting guess of the us thoughts XXXX. for these begin we going that have the, that to XXXX and, operate our process will we market guidance Okay. you that our detailed process about know, dynamics I and preliminary in a talk And a level. we in on month

terms We we'll it's macro recovery defense mid-cycle continues. In and believe we We stable environment Aero our setup, us. a expecting recover. We spending our think continues. to of environment. process macro recovery that start see longer will the the think good cycle the overall continue for industries economic business, think improvement a to We're Commercial

terms for of some And we're you constrain In going mentioned, to supply continue as issue that of semiconductor and headwinds of with first the a I And to as the mentioned a offset challenges significant is may thing focus chain from availability Mainly And inflation Balance continue before, capacity deployment we have price. capital inflation Sheet on to primary with M&A. to remain the are with remain key final in half the we in the growth. active year. going the us.

there's now, couple going what to still really the good be So chain challenges able headwinds, we're supply out a bullish XXXX. we're managed mainly and feeling actively in we're about but about we're of to accomplish XXXX that there,

Deanne Dray

And comments October? on

Dave Zapico

trend The in grew orders. was quarter. It the the quarter strongest throughout the all. on and the the month the out, guide how pleased strongest October. And turned of it with sale so sales month And and the very showed quarter. September of the cadence for strongest -- of October required comments very meet October also with month our of quarter sequentially being to supported in through was no we're the was solid. the QX, year-to-date slowdown September was at It

Deanne Dray

Really helpful. Thank you.

Dave Zapico

Thank you, Deanne.

Operator

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

David

us on on for end-markets some David is Ridley Can This geographies? revenue by Andrew. color and morning. you Good additional give -Lane

Dave Zapico

organic Sure. broad-based ultra-precision acquisition I businesses, range as businesses I'll at demand of percentage contribution basis and in and a process broad-based within of the teens the our or take around particularly process driving were that our up solid Magnetrol. new see they growth, David. And a from look really remarks high teens they was including the you Company, on a technologies measurement to third wide prepared strong optics in products mentioned businesses low market. driven markets, quarter, a walk were by our growth, the sales the growth and And and differentiated are growth with continue across semiconductor the and technologies

versus for be For process, expect prior year. now we low the year the full double-digits to up

Our the prior in year. market. were and acquisition And the and percentage of sales the market from on basis versus by XX% defense sales contribution were next up aerospace single-digits quarter Organic overall, segment up we the is third the organic high major Abaco. a driven solid

businesses aftermarket be our our And businesses. aerospace areas of high solid business defense single. for for of organic And businesses strong to defense growth single-digits sales in now our and mid-single-digit all to up and commercial -- to ship were business commercial our Those growth be And low up the we growth. X XXXX, and expect businesses. we expect

with And businesses. of from Sales prior automation growth organic expect organic now solutions their for XX% NSI accelerating customers Software contamination business quickly still had a the segment to moderating organic all to The for precisely. quarter. mid-teens things growth, they labor acquisitions had doing percentage is engineered good both quarter. a the engineer market our strong continuing XXXX, mid-XXs things at with up the invested our businesses in and well, the are want from processes, in free. contributed. past And from and good so very be in industrial We've driven it's a nearly very and we business move sales good next, automation Also, markets. power stronger to Go automation for our defense businesses. robust all the XX% our so and quarter, they up basis overall and by we're Crank power remained is -- Automation we automation We're a sales than And the businesses technologies demand late the in want across in the and remove approximately capacity. the moving end now but sales growth to solutions our and businesses mid-teens Solutions bit, XXXX, and at So across on share stronger, very finally, business for as Engineered commercial businesses expect were that the industrial up winning and our quarter. organic

automation the future. really strong the good a a So backlog with is about position and bullish business we're in

-- was mentioned for notable was was a That in up. geography. I'll star geographies businesses geography XX%, our where up your answer strength broad-based -- and Europe geographies It the strength up XX%, with and XX% automation every across The question, growth go and David? Asia. up quarter broad-based You was around in the the Asia. process U.S. was strong

David

I then You XXXX volumes it quick oil strange are you -- sort a looking there to some that maybe longer-cycle 'XX. to you be cycle, and about some And gas, of Aero so traditional tied are but alluded that is This talking pretty a areas that sort commercial in and things growth patient versus of cycle, areas would and like stuff. just the about talk Imagine organic this also particular in just Perfectly. of for follow-up, mid-cycle. in maybe earlier better

Dave Zapico

definitely in of but the now, business prices are, up in commercial And the we'll AMETEK of gas oil that project signaling we're gas about improving, we're returning to only I -- of where business. given aerospace mentioned and X% mid-teens beginning it areas X XXXX. and so was improve oil mean, the I our our see Yeah. it's that It's think you business, quarter. the

us going up the we getting people and benefiting catheters, stuff in that grow it from quarter. this QX, hospitals expect single-digit back we so up -- all cardiac were those procedures was are like to in up was in and high record mid-teens of that and single-digits, terms good It We the number. we're it elective business, mapping, AMETEK rolling products our we're now, growth quarter. had that largest by market solid the in electrosurgery Healthcare business. We're XX% up business, in business, of healthcare in new And vertical. feeling record. and our end so quarter surgeries really high wasn't neurostimulation, as it's our driven about and XX%, really So up the done, things to for is picked

We to expect that year. more grow next

surgeries. issues. oil yet process we're you've and elective of in acceleration that aerospace, growing across the to don't mid-cycle the businesses. key think hit and business So I our see done medical gas, is starting But either, some the Commercial,

David

congratulations you so quarter. and the Perfect. on Thank much

Dave Zapico

you. Thank

Operator

next Your Christopher of from Please with the line your Oppenheimer. proceed question Glenn Instructions] with [Operator comes question.

Christopher Glenn

Thanks. Good morning, everybody.

Dave Zapico

Good Chris. morning,

Christopher Glenn

Dave. Hey,

on answer You particular little So areas just Any to those. of results a space really comment want a creation to was curious. looking of questions or principle. share of market bit, actually expand I areas mentioned on? gain lot of kind you automation in

Dave Zapico

would want business broader some the remove because the maintain. don't be in Because difficult business, that of the you to macro, on is places well. at that labor can't from want to hire doing people Yeah. the that business say orders. automation you about when key And I I And more when extremely labor your you that's processes. can right talked give They issue deliver customers I look our driving now. to labor dependent earlier, and

discrete so right businesses, and and last and there's in the now, We've factory in the put few in acquired both technologies years, together. them the we automation. at-capacity invested more You’re right automation automation

quickly efficiently. value We automation do design that have right compelling customized sub-assemblies we a right and is can doing business things now. the really And very that proposition, and

Chris the pretty it. So your Does outlook answer we're (ph)? question, for bullish on that

Christopher Glenn

illustrate other model, are in to even by if themselves areas than I more illustrative but line was might particular the niche curious the because business, speak maybe AMETEK top discrete growth if moving it's a any there

Dave Zapico

Right.

think our And emissions gas sustainability have of we've trying greenhouse to is understand traction done the in very that's equipment. solutions. now at we very another researchers in instrumentation sustainability look we're trajectories, very of our work and some I That generated But area industrial some heavy for us durable from terms requires equipment emissions of that, case is to good well the unique understand if China. report, the emissions in helping highlighting processes them. In pollution see starting in selling that you China, some

but So the it's sustainability get hands another thing around, be we're our rapidly. that growing pretty starting will solutions to

Christopher Glenn

for [Indiscernible] Great. Thanks the

Dave Zapico

you. Thank

Operator

question line [Indiscernible] the your next Your Wolfe with from Research. question. proceed Please comes of with

Sufia Abdul Rauf

Good guys. Hey. morning,

Dave Zapico

morning. Good

Sufia Abdul Rauf

awesome I'm Nigel Coe. the Congrats for on quarter. on

fiscal 'XX any thoughts do from So accretion deals you your in around M&A see updated around really this year year? M&A,

Dave Zapico

it's I about these very M&A and benefit early footprint. line with talked integration we still that for of developed from businesses they're No, as them is part the with that I $X.XX in each to businesses. going we're but the pleased the so And are our to from integration ownership, we're And have deliver accretion 's all we far about very in -- global nicely process. think think AMETEK this bullish had year. play Akhil's being -- that. also the deals businesses And acquired, benefit we'll and they book custom from we're And them of

I'm XXXX go throw we're that of and we once the our everything, business you. to of and that detailed And to everything units through all in going of the come process. with terms going our from back in think communicate we'll analyze I understand bucket to budgeting

Sufia Abdul Rauf

quarter. that sales then And normal see Do fourth Gotcha. EIG around quarter? the sales for in for you seasonal uptick

Dave Zapico

fourth seasonality There the for quarter, so that. see is a of EIG in you'll a of bit bit

Sufia Abdul Rauf

that's Well, right. you. from All Thank me. it

Dave Zapico

you. Okay, thank

Operator

Your next line Please Vertical the with of Andrew question Shlosh comes question. from Research. proceed your with

Andrew Shlosh

Hey, for Jeff on there. Sprague. you? Shlosh is are Andrew This How

Dave Zapico

Andrew. Hi,

Andrew Shlosh

elective is surgery a have a You where XXXX? said of feel Do business digits. elective me, high volumes electric couple procedure great ones quick single for versus have up Just -- you for the are

Dave Zapico

us of year you. the that on flattish QX probably first business half am I give the in about in to able that single-digit can a right And tell from comment the the picked can't going be to here. down up high to I and bit. best that -- we I for that's now. was it further and It range, was expect growth you

Andrew Shlosh

apologize end-market missed No, detail give if sense. off that rattle makes some Did the I of research it. you business? I the on

Dave Zapico

Gatan research to function that again been I research The talked getting to but back that targeted at And it's starting has and product -- strong, industrial I you as segment. introduction been is research research of give the is market. perform environment impacted the grow is by COVID. the is -- research, with to about normally. has didn't than starting business university AMETEK. And is And our see XX% business perfectly people think the are specifically in what the within process about university we people

a up normal bullish and they much get to it's as average, not on to after we're for but market that as more business So market us. COVID. good the It's AMETEK as begins heal back it

Andrew Shlosh

Appreciate That's color great. the there.

Dave Zapico

you. Thank

Operator

Your line question. Steve with comes with Markets, the Capital proceed your KeyBanc of from next please Barger question

Ken Newman

on guys. for Hey, Newman It's good morning, Steve. Ken

Dave Zapico

are you doing? Ken, how Oh,

Ken Newman

you? Good. How are

Dave Zapico

Good.

Ken Newman

in I and the think in curious mentioned the for index I'm products on much color about the vitality how an any you talk had increase by growth has if guidance where new RD&E year. quarter the driven just you been? was

Dave Zapico

our question, mentioned optimistic us. and we was on good and and Right. healthy so It's And sales last them. we're have. funding, that that of the as bullish R&D for the increased have In a pretty and level a on quarter, XX%, spending Ken. index initiatives quarter, on also we things our vitality marketing I lot And we we're

the price customers sales but also. a -- sales. we about value healthy the sales, is One ability spending product new to industrial couple X.X% It's investing these we're have the from our latest a think amount new things. for because raise going we're have to gives we're an So for us of of customers. our most gives for and us products it but that business, it

capability we So also our the business. investments in link make, that the we to pricing

factor us. So important an that's for

Ken Newman

out expansion impact index? Okay. from coming any because the issues, next at in all quarter material the would of of still third chain you I And mix when impact into market or to about shifting the does the sales vitality products of supply one that of kind new of expect think that

Bill Burke

mid-twenties is is or supply. area to semiconductors, think level, in chip terms it like extent XX% the new of it, with than across could think because a pretty but new in particular but we're very good be I I'd targeting to electronics product are introductions, focused probably -- what products. on product the on new the see availability It's challenges relies broader semiconductor delayed, that and one a constrained we're it's the that a the I of introduction

Ken Newman

into of kind that -- And Segway’s well my question. pretty my Right. in next follow-up

obviously got computing Just very you've diverse a that on businesses the of spreads the needs. gamut shortage, of set semiconductor

of how chips bleeding can we the think automation computer of trailing Abaco idea needed edge chips the of give just business, exposure kinds of is you As embedded semi for of the more versus versus business your edge? much in an the us the toward

Bill Burke

have microprocessors portfolio particularly are the the chips now. is such we the Yeah, right cheap higher-end that and ones of broad-based issue -- are the I particularly But availability an a think products

Dave Zapico

and second engineers of and group we to capability both engineers a active through that the importantly, sources, qualify that are use our chips it our our a have these up come It's microprocessors. market QX. in most have over our we're and not that can these And available, an things through. and really some lot that we of team it's The we've leverage product -- if comes different we're able is or capability a Company. up that's chip have within them EMG. different not solve something businesses and relationships that's just other I that to is purchasing EIG availability there's our job as Europe, differentiate so U.S. people not we a engineering of one things the we component, Bangalore using that going in alternatives, when engineering But product time. in one versus and in our and some on great engineers said, a it's business on in the we're in We're probably the It's the some period set did our quickly. strong of in find we they to problems quickly work than managing of the focused product. using affects passive and -- it's one component, people But more there's maybe it an of more long been our

Ken Newman

color. Good very Thank you much.

Dave Zapico

Thank you.

Operator

additional Coleman this At no remarks. closing there the I now back are floor questions. any turn will for to further time, or Kevin

Kevin Coleman

reminder, a may And the a thank as our for great accessed today. joining of Angie (ph). Thank of Investors call replay Have in today's be a everyone section And ametek.com. webcast day. you,

Operator

participating in conference for today's Thank you call.

You now time. this disconnect lines at your may

AMETEK (AME) 2 Nov 212021 Q3 Earnings call transcript