AME - Earnings call transcript Q4 2024

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Operator

[Audio Gap]

adjusted basis, excluding after-tax acquisition-related intangible amortization, and excluding the pretax $29.2 million or $0.10 per diluted share charge in the first quarter of 2024 for integration costs related to the Paragon Medical acquisition. Reconciliations between GAAP and adjusted measures can be found in our press release and on the Investors section of our website.

We'll begin today's call with prepared remarks, and then we'll open it up for questions, and I'll turn the meeting over to Dave.

David Zapico

Thank you, Kevin, and good morning, everyone. per in cash quarter, orders flow double-digit in results margin by growth strong growth outstanding expansion, generation, earnings delivered the highlighted fourth robust and AMETEK share. strong organic records In the diluted per flow. flow as share sales, cash income, as operating free EBITDA earnings for for well and quarter, and operating established we cash

Current quarter. XXX we announced morning, also $XXX repurchased this EUR million We approximately acquisition in Micro of And million. for shares during the technique the

the combination we marks challenging a strong strength Our our which quarter performance to a of year in results leverage of this economic environment. despite proven the deliver operating model outstanding

fourth let turn Now quarter to our me results.

down and a fourth segments, Operating the quarter quarter $X.X with solid the were a in in performance billion, excellent. year. was the organic quarter X% up growth XXXX. we across over increase same were from X%, up were $XXX and flat. quarter quarter, our quarter XXXX. basis of was operating AMETEK's the X record, million, a income Orders the fourth XX in with and the positive prior quarter billion. were X% in year, was Operating acquisitions in points foreign quarter versus strong record Fourth prior EIG added the in of from sales X% currency the backlog ended the margins $X.XX orders EMG organic up period XX.X% the points sales a both Organic with

cash million operating conversion performance free the cash to fourth in to of an a quarter, $XXX ] record with generation exclude net EBITDA prior with X% impressive, [ a quarter, EBITDA [indiscernible] of robust versus and X% which XXX%. free year flow up -- with quarter impact up was margin versus sizable year's income $XXX million, While acquisitions, basis cash flow last the from XX.X%. dilutive a record the core points were margin This led in XXX margins,

of per above per were guidance up of $X.XX, quarter range XXXX and a the fourth $X.XX earnings Diluted our to share record share. XX% versus $X.XX

operating Now additional let me level. at some group details provide the

First, operating margin that delivered high businesses. EIG levels in reflect with and quality Group. expansion Electronic outstanding the fourth margin impressive of the quarter the Instruments our performance

EIG year, last while acquisitions year. these Zygo, the performance. were prior EIG as fourth XXX The delays basis from down added temporary points were sales cautious sales operating year. at the $X.XX X% also the Aerospace remains million, delays finished year, view operating fourth was businesses our Group new EIG the up also operating XX.X%, $XXX.X the a also year-end. X% from strong project Electromechanical quarter. remain our versus income our growth some of customers record billion, a was the metrology Growth optical strongest as pipeline point. X%, record advanced with down a quarter prior We as margins to businesses in year Defense up strong. and robust experienced quarter saw Similar across businesses, and in X & last were the Organic solid project

weakness was fourth margins down businesses the Strong destocking. X%. quarter year, businesses, operating quarter operating while EMG's EMG's prior [ compared ] $XXX.X the in EMG's the continued period, million, inventory income XX.X%. to our year from $XX Aerospace in to down headwinds face quarter offset sales which & prior with X% were fourth organic fourth performance was were million by exposed sales our Defense OEM in

were points financial Now $X.XX for for Operating Overall essentially from the from year income billion, year, XXXX strong the XXXX a was X% for X%, basis were in was annual XX.X% up key $X.XX EBITDA strong margins XXX sales was with points. operating for margins metrics. very up core year and up up full X% the as the billion, with performance XXXX. billion, basis year. established XX.X%. the records up prior XX we $X.XX Overall for margins year, EBITDA full all

XXXX up X% $X.XX share, versus year per were the earnings diluted year. Full prior

delivered outstanding all also flow underscores quality exceptional free prior the very AMETEK's flexibility in flows operating the We and income flow year X% up our in versus free cash strong AMETEK and XXX%. businesses, of colleagues. with our of contributions performance XXXX the from net model of the cash to cash XXXX conversion

long-term teams and navigated results environment while ensuring well a deliver strong Our success. for complex also is positioned economic AMETEK

acquisitions. cattle turning Now and to deployment

the million the for in $XXX bringing our fourth million. approximately $XXX total As repurchased quarter, in year to repurchases shares, approximately we noted share

While our remains acquisitions. deployment top priority for capital

help for components existing with strategic customers a manufacturing and precision opportunities high precise used med industry-leading also the Our Precision capabilities leading highly to strong engineered space this fit with finish. business, accuracy to semiconductor, and Technologies quarter, Kern flows which shares. optical that solutions and other also a complex end first of tech to customers and current achieve miniaturization highly Ultra new us is inspection of industries. machine in Kern's Micro flexibility acquired surface the produce and manufacturer our and strong with high-tech Subsequent opening technique, announced growing serve we morning. is solutions and accuracy. repurchase provide opportunistically cash expanding demands up [indiscernible] our high-precision we the

I'm earned AMETEK Germany Munich, annual the of to current near sales all of approximately family. colleagues EUR Headquartered excited welcome XX million.

candidates. managing strong XXXX, Looking ahead are a to acquisition high-quality pipeline of we

capacity capital continue to have sheet, robust significant the us on AMETEK our We strategy. acquisition approach deployment, driving positioned capital healthy deploy financial With to sheet, to our providing is balance flexible acquisitions. disciplined meaningful through long-term value well a opportunity and and balance strategic

invest initiatives. our growth development to acquisitions, and investments long-term we largely in functions for across addition million to incremental best and In In $XX marketing engineering research, their we in to them approximately invested continue position businesses support and XXXX, sales growth. to organic growth

improved determined system our within growth a automation helped premium innovation. markets, of new technology innovation with latest in and XD academic and One such THE analytical both LEAP markets new and throughput, provides materials and market oldest at which nanoscale. who productivity open tomography series provide CAMECA. new product incremental adjacent investments on customers our analytical our have features and academic the With PhD earth yield the in and applications technology, million broaden XXXX. [indiscernible] of CAMECA's product our winner These industrial composition XR, development $XX customers This line level. geology from for on at advanced found leadership niche initiatives and Adam capability. materials to Pro in put minerals up in approximately invest example for collection imaging at the will support Pro lead attractive growth development capabilities. can nearly successes technology on an to data characterization targeted expect our aerospace knowledgeable the science automation that Historically, CAMECA improved and sensitivity new of and innovation Adam chemical investments now XXXX highly and this led the LEAP enhanced the high at be alloys. material We opportunities is classes used most solid to new enhanced accelerated positions of ease-of-use and all focused strengthened study [indiscernible]

applications CAMECA's emerging due to new a As result, to customer-centric approach are innovation.

the ahead. the remain year shifting cautious We as macroeconomic we Now ongoing to start the for given year our uncertainties. outlook

capital experienced orders growth the strength leading for which to half backlog, a and second our encouraged year, improved However, strong deploy of available are markets, diverse we the positions are strategic in our the by our we significant on acquisitions. in across set poised of

single on range up For year are XXXX, to earnings compared overall both sales to $X.XX, to a for per year's X% digits X% the to in compared percentage expected $X.XX be to share basis low expect of last results. we and XXXX. increase to Diluted organic the

quarter versus anticipate For year XX% to the year. $X.XX with be prior the flat to up roughly $X.XX first adjusted per quarter, of share, sales we the prior versus earnings first overall

solid quarter, in portfolio macro of a in the to to summarize, the the delivered sluggish ability execute with a our environment. to reflecting strong Just performance AMETEK fourth strategy strength growth year our and our finish

solid differentiated allocation, our operational beyond. excellence are to technologies in we industry growth capital XXXX focus ability create to on in a deep continued markets, and With niche and Our us for in growth. providing drive continue disciplined value our long-term and innovation, and foundation position well shareholders confident a expertise attractive future for

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

Dalip Puri

everyone. Thank you, good morning, and Dave,

XXXX, had flow AMETEK finish the noted, sales, operating Dave a quarter. to and earnings cash per records establishing share income, strong As in for

guidance Now provide administrative well and quarter for Starting as with and expenses. general highlights me some fourth additional the as year full additional financial the XXXX. for some let

from million $X.X up million, $XX.X were prior expenses G&A quarter Fourth the year.

the million. were full up and year, general approximately expenses $X For administrative

was expense XXXX As in a G&A percentage X.X%, line of with sales, levels.

approximately and sales. of other million the general diligence due administrative fourth expected XXXX, quarter lower costs. For $X to expenses quarter to operating compared XXXX X.X% of down expenses to were be due are Fourth

largely tax due we the in with XXXX The operating level. of expirations. in be to quarter expenses other fourth rate from XX.X%, statute to was in line XXXX, For XXXX quarter expect effective full the down XX.X%

year, to our with full range was effective guidance tax XX.X%, the For XX% was line in rate the of XX.X%. which

XXXX, to XX% and XX%. our be rate between we anticipate effective tax For

quarter estimated acquisition-related to or and XXXX, full of quarterly for dramatically, the depreciation approximately expenditures $X.XX Capital X% the rate. of diluted and expenditures after-tax, per tax positively were share. the year expect or and from million the approximately we differ $XXX to intangible million, are million XXXX year actual As Capital $XXX have expected be million. negatively, in about stated Depreciation $XXX $XX, past, fourth $XXX and year. in for expense amortization the amortization full million was including we PAUSE $XXX rates approximately quarter amortization in full in sales. this be can $XX or either In million was

with year excellent the fourth of flow XX.X% capital working also was the million, $XXX prior $X.X cash the free strong quarter was record flow free X% up flow versus up also Operating Free the of XXXX. cash for the with record operating conversion a conversion cash XXXX XXX% quarter, quarter billion, XXX% year, flow the to was $XXX versus of cash at a flow a X% in quarter. X% income. million sales. was quarter. in full fourth record for net For at Free very of cash up

XXX%. year-end expect was this of cash conversion billion Offsetting $X.X XXXX, and million. to at cash For debt of XXXX. end the debt equivalents down we from billion, $XXX be flow free cash approximately $X.X Total is

we quarter, share share repurchases fourth the As noted, spent approximately bringing for $XXX million in the repurchases our million. approximately total year Dave $XXX on to

of end the ratio XXXX, our end on deployed of EUR quarter, fourth debt-to-EBITDA the net was Micro of At to acquisition we approximately million our the and subsequent ratio the debt-to-EBITDA current X.Xx, gross X.Xx. Additionally, was technique. XXX

We of support continue to facilities have excellent billion our financial initiatives. strategy cash and growth capacity, acquisition to $X.X approximately and credit with existing

fourth quarter growth margins summary, significant are and delivered a by deployment capital and In in well full proven and generation. current operating navigate we XXXX. value and we year robust record strong strong flow trade excellent capacity of strategy, to Kevin? cash earnings, uncertainties results, execution, and record With drive XXXX highlighted track creation positioned a to

David Zapico

Thanks, Dalip. please for open the we Andrew, questions? can lines

Operator

And Davidson. our line the Summerville comes first from with Instructions] of [Operator question Matt D.A.

Matt Summerville

then could a within a that views have I the to follow-up. And to you bit delays saw have the destocking break started duration little nature continuing about now OEM see Maybe talk of And into of you could on you of maybe your the EMG? you're remaining regarding that then comment some And February. also we're see if EIG. you

David Zapico

what delays a was project destocking largely see we've businesses impacted They were The good. been much by are orders really Solutions our It exposed orders destock. our seeing. starting board. encouraged but on Matt. But taking similar, ERG order the but wasn't OEM the across There the the delays PAUSE got a customers, And some order growth notable, improved others Automation to & in little Paragon. in shipments, EMG Sure, were in by we the were had include EIG. Engineered orders headwinds time We're also OEM substantial sequential encouraged patterns growth. double-digit we're while subsegment. to the We some in from pretty

and orders both were into organically up strength viewpoint groups very continued order positive January. that So in from the and

not through destocking. we're So the

you customers definitely a we forward. Some but easing bit not, can are through go see it, are as it some

Matt Summerville

where see on you this in about views A follow-up, that David, you can talk price for with 'XX, price/cost were are as ultimate And 'XX? year? level what your AMETEK's of what cap you

David Zapico

Sure.

we what more pretty we into that quarter, ended the XXXX, offset going we'll line performing captured were a by X%, in last budgeting bit and much inflation we've inflation more XXXX, with a increased little up our little in that than we're X%. think pretty was bit throughout I with conservative in And year, bit. saying a the than been price

So think at And degree. the that we great a the we're number you're inflation, what seeing least in to X.X% to environment for X% I mitigated is for think pricing.

Operator

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

Jeffrey Sprague

can of an bit David, little update more Paragon. a give us you on

up You mentioned orders what the just business at year? that you and here were level we XXXX? for you set a in expecting firming as are on where Can us exited revenue base we're

David Zapico

wins, long-term components a markets rates, we a markets, program that's -- to are capability, customers. everyone, It destocking comers execute said, lot it additive of order business acquired as through going a I capability growing started through through -- surgical of customers they've But are single-use and in the consumable amenable aggressively. not Yes. of to destocking. the continue order uses manufacturing their the -- manufactures XXXX. our leading destocked some and which good to engineering of I and with also mean space. remind XXXX, growth tech in excellent some med they're new instruments and In we But a are

increase the that orthopedic excited of end significant business. in and their we a remain double-digit within surgical in It's is procedures input. remain markets effect We Then demand about saw strong. sequentially, order the

being at we're and share destock gaining are it's programs. is consumed these with inventory continuing the new and know we procedures So end a truly the

continue we're to investing win new to So the long-term programs. growth in

well. So legacy leading combination management team combined functioning AMETEK we Paragon also of have a Paragon, a team and management is

to the but inventory continues the we're I impact through business, As said, it. working normalization

So we're orders growth. encouraged, but that sequential

Jeffrey Sprague

to finer that. point put Dave, a on just

somewhere revenues around the then Paragon million-ish and... of in did So we year end $XXX

David Zapico

there. the year ballpark. and half. that not that grow expect the going higher Exactly. you're to as business Exactly, in move to And Jeff. -- the number, on we I'm you're pin in We're on but give throughout exact second especially right AMETEK the than we

Jeffrey Sprague

And just drill kind in last everything did also of give you're on the overly magnitude given an of you business. restructuring not maybe but and of of year Can you to the looking us margin Paragon, improvement order there? idea for

David Zapico

Yes.

definitely improvement the that now, the of we where basis see -- just improvement but of next And will it's of be XX well excess looking excess be or half, happen from for at think that. will well months. in at substantial towards in second the and I whole they're margin will XX in we're it biased it the XX points thing,

Operator

line And Cook question Truli comes our next the of Securities. Jamie with from

Jamie Cook

just pre-buy industrial you're that seeing out guess nice we're orders it investors a sound the to understanding like And have understanding I could like a you my continued in sort there from quarter. guess orders, on cadence There's I we're if single-digit of Congrats anything first doesn't in of was But then the my low comment question, some concern the second I said improve. quarter. election, to, was whether the there unusual. It more you're concerns first question, improvement you post that. growth. sounds guiding based of the flat seeing any of on economy think on

macro. the that to uncertainty of growth just some understand the given of trying on the Just you're expecting, cadence again,

David Zapico

Sure.

but the typical orders, month orders In -- the of was the was the strongest year, terms a that's quarter pretty the also for increased but cadence, strongest the of the and had whole orders. for quarter, typical we month. cans for month But December where December every

quarter January, -- orders And positive month. was that continued. same a then orders that good in So

our tariffs middle see the started from of since the it telling customers to to viewpoint. but it know, you really an continuing. And pretty we it's in feels don't last, year, is improvement when last -- of strong orders, to be anything, get our pre-buys definitely So aren't us or could but ahead

those their make their into We're we out sales as orders And the backlog, flat. I into year will starting forward. say our go way way make

we As pipelines. will throughout move good year, you the and mentioned, as mitigate have destock the we

conservative at start the So a we're the prudent it's year way looking it. is or to

Operator

from Our Andrew with BNP next comes line the of Buscaglia question Paribas.

David Zapico

we'll put on and Andrew, to hold him the why don't next go we caller?

Operator

of Our with line Linzey comes the next Mizuho. from Brett question

Brett Linzey

the comments, It come to building year. the want of softness end Just sounds the back the project the to pipeline is maybe strong. at like and

log how might on front -- looks about when guidance release? you Are conversion you timing Solutions construct? as So ES-Engineered pretty giving these projects customers per good. of one thinking And indication are of any these backlog the

David Zapico

Yes.

XXXX. projects going the have but play the of where bottomed, that's now the in where we -- place of really -- are and we're A in terms And been think the moving. it's piece destock most. to good the to right OEM it's pipeline. ES see delayed have I a -- And the expecting the at think we've we're and in now. out I side business, to It's suffering that grow And from from great I a think -- automation we have of business,

med business, the we've side of to on started the abate. see already the tech And destock

So will to expect the year, throughout we guidance and X progress play that's out the and year. we do we better where are, businesses our as those that throughout

Brett Linzey

anything for as embedding lot how and defense? we And aftermarket the moving I defense. about maybe to you're you're shifting in to over what Okay. Great. guide an the give pieces just year? and there. about Could us versus profitability Arrow outlook of thinking OE know think shift on aerospace to then more update And you the of terms on in a versus there

David Zapico

Sure.

was for strongest was fourth year. in the quarter. goes And digits strong up in for Growth the single mid-single mid-single had A&D quarter commercial digits the Our it across quarter, another the our it It businesses. high year, business, digits. -- up a fourth

So a money saw go fourth OE, of OE we on the We sales of quarter. component lot the money make of lot in aftermarket. already the up on a

So and I we're defense markets. don't think in and strength there. XXXX, commercial grow mid-single We our in think seeing there's it's going a at margin digits, to concern both

commercial healthy those So be bit stronger may will of defense, be XXXX. than growers in a but both

Operator

comes with line Rob Melius of next Research. from Wertheimer Our question the

Robert Wertheimer

hatches? Was can performance margin given the especially strong, about in general wonder, environment. through? characterize the bit how a cost the just the just you margin I improvement So margin a was Is this Maybe the flowing approached how see improve flowing down batten and you core acquisition soft you of quarter? through? improvement just talk this Is quarter? normal very for in

David Zapico

Yes.

think -- quarter. AMETEK it's We excellent the I operational had excellence. an operating

margins price have core XXX mix. margins cost And positive reported were up points productivity. points. basis a got got good and good were We XX up We we good

it quarter we've year a margins good after good margins, time. been So for was a but for delivering long for year

basis for you And mean, year, working We're the were points. see core It's don't XXX I that, any up margins going to that's it. constantly I reason our stop. DNA. think on our

operational we And to that we're it. executing excellence high and margin programs, have them. contribution We businesses contributing are have

was margin was good. we So had We but performance was very good. expected. the It it some set, records of kind that

Robert Wertheimer

Okay. Perfect.

might stop test there. and is one laboratories, trick government dramatic there or measurement, nothing scientific hiccups on in potential answer to you're [indiscernible] obviously This stutter of instruments lot back now. flow because there's little right may And and forth so But policy negative. forth. in though to seeing a I'll any So a going be

David Zapico

thing one demand very specific to any hurt internationally the demand. laboratory is right say laboratory now. I see will strong about mean going the don't that's I thing I Yes.

it so driving U.S. that's more than the So

regulatory about regulatory think moving When positive a or forward antitrust. environment, looking different I the to projects I relief, the approach faster. we're There's overall administration with think to new

increased on a for manufacturing That's that's an of military us. on have manufactured focus in We the taxes a do development. in energy us. good spending, and for lower the products We lot good U.S. U.S. for focus There's There's

boost equipment investment. There's tax breaks to planned

depending manufacturing U.S. pro-growth really be a think in the manufacturer capability significant how options can many footprint a provides and opportunities a a us. with with of lot the those situation policies U.S. of And I as positive develops. So U.S. lot for

a think that We our opportunity see throughout some to get asset-light consistent we model flexible and strategy year, have develop. with we as this we'll

Operator

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

Andrew Obin

organic quarter Just growth to in clarify, first guidance? that's embedded your rate what's

David Zapico

Let We Andrew. me number, see. flattish it's a --

flat. So organic total both the sales and were sales

Andrew Obin

Okay.

organically quarter. quarter are we So first from fourth the to accelerating

David Zapico

from to going minus we're X% Yes, X%, flat. Yes. minus

organic accelerating a from in So to tied orders. the is through growth the QX, it's to QX organic acceleration and order input

So year. throughout continue I think going to that's the

those a organic the were our So will it's versus a and increased year. slow acceleration sequential through continuation the of be QX, as quarters, strong, organic just orders growth

Andrew Obin

Got combining the you. And then just sort questions. of X

are -- And meaningful Do did First, you your the a guidance? does in see we all U.S. noise? because it FX this how tariff how impact also, outlook exporter. you

about So impact, on how margin? revenue should the we and think the both

David Zapico

our our Yes, we've we've pass impact niche get strategy for customers, guidance that's on takes of the over We and we have do PAUSE for the playbook from executed tariffs We And a the flawlessly, good shortly have previously. relevant, And required. China questions. they into account, about XXXX products. plans heard the the elections same tariffs few manufacturing weeks. and been days, supply differentiated XXXX making after executed if that enacted ready highly when we the plan to cost our chains we're done the as few contingency to it's are to tariffs. now the we is things manufacture and weeks, few We China. if But last since thing China decoupled

footprint, I asset a flexible significant U.S. have as We model. manufacturing a said,

because slowdown very an know we're that. it everything And of for and we and decoupling budget. with our chains through think clear China -- to I to ready take got from No capability, is in our that agile. and that past be we a destruction trade mean demand success our covered. positioned of with doesn't our we're assumed supply But this with doesn't and what assume account we operational manage war environment. current broader we're the I into So our guidance escalating well think economic

Dalip Puri

are a And a foreign we business, global business. obviously, exchange, Andrew, on dollar-centric but U.S. we're primarily

to And we few a years, the -- is the our last foreign by using lot So exposed we're offsets, can a very level exchange. and flow PAUSE movement. line. dollar much have not top exchange think through U.S. cash and impacted our profit of so And natural broad-based footprint line overly hasn't at balanced it not bottom foreign I we very impacted

Operator

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

Christopher Glynn

ground lot covered. A of

Just the that the curious on how you the [indiscernible], long addressable And market? how about like? What's competition think [indiscernible] at you've been business? looking

David Zapico

Sure, division company and ago part what's these surfaces we years they services Sure. that technology. It's Precitech. a in extremely with Chris. sister business of of ultraprecision part diamond-turning XX machines a well company and bought as our Technology that about build called And of our named for current the has that optical we different incredibly look are done some kind business AMETEK. make at precise And

to them medical end exceptional markets think semiconductor business, leader need a precision. the with of we of us solutions [indiscernible] niches, systems. market, have customers. acquisition, Their -- running sister precision, and this market set of research lot highly the accuracy high submicron Precitech includes that for also is market, differentiated, solves It's the bigger to places space capability our and there's a in typical we AMETEK grow are companies business do that And opportunities the as level levels they market, It [indiscernible] the

Gap] [Audio

outside of Price good of company, to with it's Germany. most a team They're staying of Fair we work our over us. And acquisition. world. be Germany. technology sales going the And sales XX% all but is German a are of think outside management are the in exported

of to well goes best the get Munich if the it's within AMETEK and family systems So the to world businesses.

Christopher Glynn

kind of the years part you to Several ago, some a a cycle And Great. churning divestitures. here. of degree just through went

bubbling for now, As are any play you've oil you areas the shrunk out there look metals, at up for and of instance. divestiture? portfolio Are really potential realizing things that

David Zapico

smaller the our And going things that inconsequential. now. through year, There's go the went portfolio these the nothing nothing it strategic We of or and impact be to right substantial. There's act we to year, that be may this guide. some that's during plants analysis large every we through There will on year. Yes. like or we we but continue have course that

Operator

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

Nigel Coe

if what seeing Lots of What but is between curious businesses? and in by does if -- is destockings? were Paragon rebound -- organic out sorry EMG information, badly for I'm quite I'm single missed full the that I X rebound digit And the break and I low David. you're you're how ERG? if this, impacted think just just stronger I'm a EMG a those in factoring in wondering stronger automation just that given So year,

David Zapico

is slightly higher than EMG. to organic EMG going growth have

the So It's it's and going low for to year higher. digit be EMG to to -- a be higher. bit going single but is going be bit a

Nigel Coe

higher. A little bit

obviously, And came I mean, just bit spectacular, in fourth I EMG in ERG lighter. in the was that typically there's the some margins then know disabsorption but quarter. And production the great. quarter. That's fourth EMG Okay. PAUSE a

like shortfalls extended was production in wondering, quarter? any there intentional Just fourth the

David Zapico

and effect. is it's a calendar automation down it. with destocking profitable, And the It's going No. there. extremely business And our substantially we're through

had cost thing on good to in is basis business. leaned margins really we we've points part that over good structure core So And XXX at place of a grow. the and out the the we're

that should probable destocking us. turns, looking abates has business as sales when forward that be So some to bottomed, and for we're

Nigel Coe

next or growth this follow-on year? And to organic quarter positive a first that the about you year back comment Are then automation expecting be to to automation margins. in quick just

David Zapico

automation business business medical lagging Yes. a The is bit. the

to So see we'll how have that plays out.

Operator

TD Our Cowen. next Giordano Joe question from of comes line with the

Joseph Giordano

the did, did give quarter? book-to-bill If the you sure or you not for -- order apologize actual number I'm the any... I

David Zapico

Yes.

little [indiscernible]. a that. both grab both if they was were on Organic more strong. the me was were groups positive. book-to-bill EIG, but X.XX were we EMG I backlog. exclude bit Let FX than said, both X%. positive The And orders

Joseph Giordano

Got can you and view it. then outlook through just And walk aerospace in think for defense. mentioned to us you the -- the I

like do your action you walk like kind can view. with So XXXX the of the

David Zapico

yet. that to didn't We get

process We in year, the last project temporary the we organic high-end the to we our in advanced our PAUSE for digits sales And forward spending. single be a good Process optical a to delays XXXX, quarter process quarter. business microscopy year. the quarter. as experienced expect delays. we our businesses some then to digits experienced side, on some as the last strong declined full similar to single Similar for up temporary quarter, within looking So saw growth metrology fourth And had well businesses. low in low

there, business strength And then I digits defense in and up commercial and to expect and And XXXX. we both we talked defense aerospace already. be mid-single expect about for the it ongoing

So process go Power mid fourth Industrial, Aerospace & -- flat our & the were sales quarter. to low then in Defense you

power Our provides to growth business, saw the in simulation which PAUSE research quarter. institutions systems utilities RTGS and advanced

we've by businesses were inventories. remain in the consistent the year the were XXXX, And level. levels with Engineered driven finally, our our normalization given and low Organic high Paragon OEM during continued quarter, digits single Industrial we down of sales for the expect Power up PAUSE For XXXX automation seen contributions from the the Solutions sales the sales relative organic the business. customer acquisition. digits, & to flat Overall to double

digits organic expect mid-single for with we up XXXX, for year be growth year. sales the improving trends And throughout the to

Operator

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

Unknown Analyst

that investments. on And And split segment? that in [indiscernible] Sahil mostly growth context XXXX engineering? you the growth on Dray. adding Can investment? what the provide any $XX is is is was sales million This How and between for Deane

David Zapico

$XX XXXX and is was The the $XX XXXX million million.

again, And and the they're incremental research, it's largely So spend. close. very engineering development spend. And that's

about $XX So work. X/X marketing of sales and million marketing is I'd say the of X/X and additional channels, RD&E is it

toward biased And X/X. X/X, size of EIG about of EIG. largely the it's because So

pretty it's whole bias it's EIG. So to the -- company across

Unknown Analyst

Index third it. the which a Index XX% reached Vitality new the was the XXXX? Could And I range most that XX% to you level how XX%. you Got target Vitality then excited believe, discuss product do see the for And you're of about the in trending? noted intros quarter, within strong you

David Zapico

QX actually, at talk is XX%. extremely vitality was index And good XX% and mention between We in we about Yes. a it, a but XX% didn't high it being number.

new low a numbers. engine it's working, why I one and that's it our strong So the next a going tracking years It is XX was good a us. of we in to number pipeline started was such the We XX number year. to mid-teens down think have And PAUSE off teens, So like think new this. highest ago. is product many orders. We of pay for

So way we our that investments we value in can we're sure we're and at making adding now. the to customers. a good a putting think it's It's number look

-- We premium value prices our providing adding that weren't before. It pricing shows to new and to features products get customers providing up can having we in also. by

strategy spend So innovation the the it's a We our matches a market amount And company. healthy healthy and that leadership focus of technology leadership, amount. of RD&E. given niche

Operator

Our next question with of Mason comes from Baird. the line Robert

Robert Mason

exposed you're or [indiscernible] more, you business, your your were rest now. earlier mentioned you that government a own where Can world had driving that into that bit? footprint just of U.S. you Dave, versus labs difference? or Is differences just seeing that drill what's it, strength or -- call overlay maybe little right in the

David Zapico

made, the It in channel priorities. It but work a seeing we that we're could investments lot of place expansion could is government be lab Asia. be

So healthy healthy. everywhere, particularly is Asia the but is market

Robert Mason

could the that, thought kind how a there, guidance, -- regions just XXXX geographic relative thinking the overlay continue about could Maybe to provide for XXXX? you of just your to to you're

David Zapico

where offset about U.S. the Yes. some in Europe ended We in XXXX, growth by XXXX. up we essentially Asia, and declines strong I'll in had [indiscernible] talk

plus had year, we the the that was and So down down the our full business that internationally in automation if largely U.S. U.S. And you in look X MST was at about

places in were and flat. like was we in Asia, roughly up China So

in Europe. Asia we said, plus some the to of China. in thinking think strength and for in maybe we outside grow. think regions some of in to us. XXXX, we're Europe is some all we Europe. in when of there hanging see So about looking for going We're continue, We kind -- than I strength in more were that's Like strength X China strength actually

think We going to U.S. for have good us. is channels growth there, to we and the return

all. across growth balanced be will it So

Robert Mason

When full number year? a China was that you QX flat, said was or

David Zapico

year I was think it number. a full

Operator

And [indiscernible] [Audio our line with of from question Gap] Joe comes Giordano next the

Joseph Giordano

did did, the quarter? I'm or I order the give for If book-to-bill the not number actual sure you you apologize. --

David Zapico

Yes.

outlook the Let me were aerospace Yes. grab that. defense. to view the in orders and X% Organic for

what So can walk [indiscernible] you your kind of do with

Joseph Giordano

[indiscernible]. the You mentioned in outlook

David Zapico

positioned, sides and a pipelines We think strength hoping to some ongoing in steady. and military commercial that to we're well our We're going there. of both we abate lot those both good And the our saw We those it. bit are is do pretty activity, businesses. much well, But [indiscernible] and going then in aerospace of delays. are and defense, project aftermarket quoting a it's think

Joseph Giordano

cash of deal you like Do we cash, expect This XXXX? you a yes, in the see series ton to of quarter. the year, sort current Paragon-ish-size are in of another And deals? like going a generating are flow

David Zapico

question. deals put smaller and our Right have pipeline, deals in we technology Pernin pipeline. we where now, also Great have I bigger our

have we deals, $X still we the debt-to-EBITDA and calculate X.X% spend in So can -- on we a we have -- probably billion of way only and XXXX about it.

that were. back So that like picking businesses holding is People And properties we're there's were up very on bit. market it aggressive in a area. the in seems

to we So balance long-term be and to be strong to deals we're reward a sheet, opportunistic shareholders we're going dividend, share with our going ever to with buybacks, but able think We're our ever-increasing going able with shareholders, get increasing. done. be an dividend to

we're we it we So sheet can do a balance have it to all, going where do all. and

area right the think now. M&A the in most is But optimism I

Operator

the Coleman hand now Relations to any I'll Vice closing over Kevin back and for remarks. Investor Treasurer, President, call

Kevin Coleman

webcast of and in section Investors great thanks, for our the everyone, joining ametek.com. Andrew, today. Have And a a accessed can be of day. replay a you, Thank call the as reminder,

Operator

may and today's Ladies gentlemen, concludes Thank for you call. and participating, now you disconnect. this conference

AMETEK (AME) 4 Feb 252024 Q4 Earnings call transcript