FTV - Earnings call transcript Q4 2017

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Operator

My name is Ian, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive Corporation's Fourth Quarter 2017 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations. Ms. your begin may you conference. Curran,

Lisa Curran

required conference the Financial A non-GAAP section Information. the We non-GAAP A will replay remain Chief Good archived Thank heading financial President under on replay our available will for Jim and today and the and Chuck of and Investors the you Information of Chief Investors under everyone, website measures until Presentations our us later webcast section Officer. our call. you, archived Lico, quarterly Regulation our and on Vice Events heading President be quarter are next Ian. the joining be today replay release. website, G until earnings the this the rather call call thank this XXXX. fourth after me and on this today’s financial for afternoon, call. are Senior February accessing Officer; of Executive our our McLaughlin, Financial XXXX shortly SEC measures Friday, relating in of www.fortive.com, available present call. certain by conclusion to XX, are press these included on Instructions will of With

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

we the in to subject do filings, or on Act that enacted our occur risks Information not may we developments year our forward-looking any call, make forward-looking Tax within only date update to reduces might foreign is the these actual statements tax and are from regarding assume speak XX, cause anticipate to we among any Laws, differ ended events Form and December The as that including certain regarding XXXX. XXXX. or factors SEC any transaction These a forward-looking meaning from These forward-looking pay today. may results statements. in December to the earnings statements foreign-sourced they things tax taxes on uncertainties will was deferred, earnings. During these XX-K Jobs statements Report made, of on and that of for the to materially of statements certain creates Securities believe and available previously that Annual XX%, obligation tax make statements the forward-looking XX, of actual results materially The forward-looking tax were statements we differ the number including Federal future. will are a new other U.S. from reform subsidiaries rate one-time federal requires XX% and the companies on Cut corporate or

As XX, December XXXX the the of reform. completed not tax tax for we effects of accounting have

December as the ended to for pursuant financial on the we the effect period subject These are of a estimated reform reasonable the XXXX. and SEC, provisional However have are results amounts adjustment. made guidance by our estimate tax XX, to

of and like the In historical I'd certain the adjusted Jim. With reform. over call for provisional flow financial non-GAAP estimated measures including impact the our that, turn ratio excludes free tax to addition, of cash to conversion XXXX EPS

Jim Lico

lower fourth execution driving revenue The System points Business The a with to and defining team outperformance continued basis grew XXXX margin cash benefit everyone. our by core continued share quarter adjusted afternoon growth expansion, good closed enhance XXX and success. XX from or of earnings expansion Fortive generation. flow the strong $X.XX robust share amortization. X.X% us XX% driven and points positions free excluding Lisa, Thanks competitive operating margin core long-term by for and advantage core strong per gains, and of out well our year market

and we all report or of met them. our strategic exceeded XXXX As I'm a to prior reminder, have pleased that outlined early in we

XXX% strategies. our Qualitrol, and growth We Setra, TX share non-contact for we delivering Salix, the Fluke delivered market businesses revenue grew mixed-signal at telematics In earnings launched to the technologies company and IFC, Gilbarco points Gilbarco increased We many advancing basis conversion Tektronix, including sales growth in voltage game-changing of accelerated a Fluke, We percentage core digital tester. and including Series Kollmorgen Tektronix of the the We oscilloscope double-digit double-digit XXX free X market year. flow Veeder-Root. electrical year. as growth, by addition strong made of Veeder-Root delivered total InsiteXXX high-growth Fluke across strides and cash important and the

exposure a that market important revenue, to outcomes well diversified turn With focused Lastly, higher vision at towards that towards $X.X backdrop, successful company delivering growth building as our stronger a industrial of remain we're demonstrate acquisitions the with The portfolio strategic beyond. cyclicality Fortive as aligned XXXX quarter. to quality clearly having we billion fourth performance and on deployed to we let's strides are less positioned our secular recurring Fortive end the that realizing a Fortive growth and and made we to more to and and is in post enhancing These strong portfolio goals. we drivers. results and better details differentiated formula our continue

sensing six Asia better. China PBV Geographically single growth us system deployment results Double and wins success as and high diversity growth. rate growth the growth These a strength strength XXX technology, grew continued tax earnings improved the last by increase of strong to we and Fluke through was of price of economy. Europe Latin Sales capital improved acquisitions We after year, Kollmorgen, in record posted grew and were Our growth markets points industry grew of new organic growing Gilbarco reflecting which XX%. excludes XX% substantially gross led item leading our Effective strong of quarter positive per portfolio, reflecting accelerated further reform. the effects other single growth was digits of The continued for innovations, fundamentals, reflect Operating across pricing contribution XX.X% basis net delivered FBS basis increase commercial of $X.X revenue points contribution quarter our future strong from the Developed out America. core operating share in positions of and an quarter and XX very and basis of across with in markets well high up for to earnings of industrial $XXX.X our strategic performance Western the consecutive with our business revenue growth of a revenue was single tax The over operating companies Five Fortive markets America. points. acceleration over fourth core high markets points. X%. the XXX applied performance North tax portfolio digit earnings North the strong XX% the Adjusted growth and at in of was adjusted expansion business basis industrial core core mid XX.X%, by the mid XX growth and growth. or breadth billion in platforms two-thirds digit and margin led representing Veeder-Root, digits America reflecting diluted among a gain were with by margin an in Tektronix performance. Fluke million prior of technologies. driven low in net digits year million and digit $XX.X at of profit net net drove single including product execution $X.XX margin

and a a generated strong of ratio $XXX record million delivered of fourth cash the free quarter, seasonally During conversion we flow XXX%.

based be technology testers in launched exceeded gains significantly recognized the core XXXX XXX of and penetration. segments, expanded our was XXX to first markets. businesses with revenue and digits International at core sense in contact family with revenue X.X%. market driven TX of margin mid posted digits contributed basis markets both by reported points, market make Innovation core top technology margin developed and electrical continues during field operating the TX points quarter similar high mid-single potential of the growth sales awards, by reduces reflected safety. the increases growth industry Refrigerating core Fluke's professional single continued single and Advanced with Air gains are Exposition Fluke Awards. high solutions Core growth accelerated lead core increased Tektronix. Heating at to which our growth The that clash Solutions expectations conductors honors at Conditioning currency including Fluke and by high to quarter instrumentation XXX and Field last developed the was revenue XX.X% Electrical led and with performance growth with with high share tool operating Testers instrumentation share earth growth Turning new need Fluke. growth of basis growth XX.X%. several to and eliminate up of digit for single and basis market Acquisitions favorable points growth broad electrician digit the across substantially

leadership expand Field capital enter growth deployed strategy channel note, as enabled our their devices we Solution health footprint. has market and like pleased the Our accelerated and process technology markets leverage our with very us connected I targeted the and that adjacent healthcare. On investments integration early am with to Landauer executing into initiatives solutions to and

the multiple Radius introductions the IFC refer Cultural largest will technology timing iNet double double America detect using same by we in Europe in biomedical the performance East growth to digit channel gas. driven portfolio. worker radius solutions single utilizes and at first in foot strong digit on growth, Middle sense digits and full gas any the new within monitor. Landauer detect safety prior hazardous forward declines monitor and can X market Fluke display the health as as to expansion was more two offset and This year and quarter gases area than declining up sensors and China. increase Going field the the was dual in of high to low delivered solutions. markets by project to the product growth core including area growth combination by of North

quarter, the also continued challenges As East with Middle to approvals we impacting budget you OEMs. in shared Europe delay last

of more We should than offset by Middle expect first XXXX the backlog. to be this the East into which quarter continue strong in softness

oscilloscope digits quarter, by MSO was growth Series, up the Tektronix expectations driven by of core wins oscilloscopes Series growth has Magazine. Moving to mid signal including awards business X data segments product Tektronix. X Product platform by industry including high Tektronix’s product in performance penetration center year multiple revenue continue target exceed primarily for single by led multiple led revenues of growth [indiscernible]. the mixed and digit and to realization, of and digit were core our Tektronix single double the Electronics win Sales the and

We - casting And video we quality as another order video Over-The-Top today, several with by for provider several like TV Games. of selected television OTT dollar to North of streaming earlier support order excited million Winter America. consecutive service or NBC we the also expansion were are million across production won Olympics a monitoring we Olympic and announced where provide to the for Olympics audio services

legacy and Pet target foods the in core these with counting our us Anderson-Negele's new Our and Sensing technology Stature pleased product core in share high dairy vertical particle outside target care platform also digit offerings We're verticals wins modalities growth with and digit and Bundling and revenue delivered markets. as and pressure by we critical innovate gains growth well growth products Pharma with quarter large led and project high other environments. of positions to their market. single humidity. flex expand double continues growth in

Veeder-Root, of basis our at the pause that growth last the growth core points. revenue at in to digit growth of A shift the transportation upgrades basis and demand XXXX. digits High of decline and offset single year for quarter sales play automatic revenue in double quarter, India. dispenser to company Veeder-Root grew by It's the delay revenue core tank includes as grew out FB to digit Reported single tank growth points. Telematics with offset X.X% in core revenue we fourth Veeder-Root. continues to reflecting reflecting the margin noting margin was worth reflecting in due XXX in double highest growth markets Gilbarco acquisitions segment, timing from upgrades. gauges in digit EMV industrial X.X% expected, single to revenue Gilbarco wall core technology operating At history. mid low submersible China, digits declined operating platform tender expansion quarter XX led technology contributing related for dispenser a in continued declined XX.X% pumps liability low as the by by Partially Moving mid-single

CapEx also customer America. The utilizing During led by rate sales Sales of logging our reflecting with We in solidifying Motor improve ELD success new campaign our site of sale single the improved by FBS largest and a sequentially base adoption of We're electronic digits strong click greater in with and by December results benefited the tools Federal one lead of and into in of of installed cost growth North the XXX strong growth revenue than by the bid devices we XXXX. won growth continued growth continued that improved investment by gains. our share growth mobile Matco, encouraged went reduced greater driven director XX% mandate effect are than posted North independent Administration per the and Safety core of sale Carrier XX%. from the conversion Telematics increased generation quarter core coinciding of point marketing. digital platform XX. overall America chains SaaS also expectations second mid half revenue performance point

in Vehicle strength Europe delivered in automation in X.X high offset driven Jacobs This the and revenue growth, low Systems see growth excited mandate report an revenue growth signs doesn't we growth double to in Automation share reflecting digit U.S. continued double a to expect sales. core headcount. robotic. truck still production recent mobile delivered that softness and levels driven and ELD primarily revenue are Western of actuary gain in and requirements in at grew driving tool software, I'm distributor a high industrial increased digits double comparison. core growth by evolving, launch tool sales Class product used storage line sales. in growth full into high single Kollmorgen digit through industrial flat April improving and encouraging We go A opportunity demand the line strong specialty effect Europe by see automation digits, linear warehousing. led increased labor single NCA diagnostics single latest growth vehicle robotic as of single grew digit and the core were by in high Franchise teens and posted was Matco by compliance sales core distribution is Thompson lowers was robotic system strong enter digit driven and China. which inventory until rate. XXXX digit digit the double as X, growth technology core Kollmorgen core digit mid by While continued continue to single enforcement costs hard challenging and its markets China and continued sales with productivity mid

thanks It’s create make great that continue is of that company. to to world growth ability our will to Fortive our to who Before colleagues the and turning guidance, let me purpose extend for gratitude who build personal living and people their commitment accelerate technology It delivering industrial essential in people the success. teams continuous and the my the our shared our a progress. enduring of for give around our improvement foundation be extraordinary Fortive confidence us our our to culture

advancing a inorganic pleased number we strategies progress $X are flywheel M&A talk heard to revenue utilizing increased in an around capital We with continue raising we’ve from strong With billion our growth earnings. many by beginning building perspective. available focused our with strong itself stronger about to meaningful to year of growth that enhancement are deployment the sheet better acquisition capacity. and portfolio last balance show organic made building strategy. today our remain said, by execute The a times, Fortive a me and the our announcing company on of We we're you

it path today substantial that for cash and $X.XX have includes approximately year the of we’re of year core rate of but confidence flow expectation We're more and smart anticipate the X% XXXX allocation. diluted margin deployment range an our adjusted of to hard of full than EPS changes growth tax resulting our initiating XX%. for approximately estimated a $X.XX predict to of net timing basis conversion and XX revenue on capital which We points always X% I ever XXX%. As effective exact to core portfolio guidance expansion

net quarter rate single and turn it XX%. to guidance to And estimated of revenue first diluted includes like of of with that, I’d core are to $X.XX $X.XX an EPS growth initiating which tax Lisa. low We over our digit assumptions adjusted also effective

Lisa Curran

ready questions. now Ian, we're for

Operator

from Steve [Operator Instructions] of Our Tusa first question line from the is JPMorgan.

Steve Tusa

through? on So just first on transportation way come how that kind will that of trend the tech, a just of an half expect can in update you should us bit little give you

Jim Lico

As remarks been we prepared quarter. We came the fourth said how the see first quarter - similar the predicting the in XXXX fourth in of to it. around we’ve

get out year to play progressively improve. So We the in growth that will we then and continue we would the half. we’ll expect think as through second

remarks mentioned at CapEx So I prepared solidify to start the we point. as in that think will

about feel we out. think see right where good go as we’ll things I now the that and plays obviously as year

Steve Tusa

kick guess to you in just like is years? that feel said I over three next something And a you do billion or guys you capacity. what commentary $X immediately you that the can - you have is Can acquisition around like

Chuck McLaughlin

Steve still to grade. max if want capacity keep that there’re commitment you do that’s the strong a we have we several investment into assumption that a everything probably built year. assumptions to this that with know and Obviously

where what So at want we felt could we’re just to frame do. we and we

Steve Tusa

to update weakness an again an remarks, of on kind semi there? business I any CapEx, of didn’t hear your on lastly outlook for this related the just then And update signs prepared the sorry in its

Chuck McLaughlin

bit of see good and be them their be strong, XXXX the of - of affect year a quite exposure slowdown well semi year, in have relative And years year little to China. we business after which next like for China a the mostly think single-digit growth. three for We will the high would China in a double-digit is price a most that but tax most. strong really Yes, I exposure particularly growth see that tech still again and think they probably we

Operator

from next our line is And of Research. the Scott from question Melius Davis

Scott Davis

price I XX when you up net that? was how couple that you or just were said do things, clarify of that then XX comparable or something costs of up bps, of want and your to was reconcile just cost price

Jim Lico

inflation able we would are XX pretty very here. in inflation So all at every of We've I we're have been seeing cost closely it. we really and business almost so price much minimal say look to mitigate not

a I’m not off would it So exactly points the it’s that be what to minimal compared sure but got. of that Scott couple number be might we XX

Scott Davis

And if you think EMV guys pushed how also mean XXX% chance if I this getting cetera depreciation any rich market? can or forward cash now because guys money money and we ends now. have matters to do our pulled but spend the about there does just getting out up Is XXXX not much stuff spend this in et as you that guys full

Jim Lico

The in tax a industry. rate that does lot help

that individual start their suspect the them. tax available to opportunities think I as So to what rate and will businesses be about

that conversation second it I it I will why we - but we the that haven't had. we but yet I be will a XXXX. said is suspect suspect heard that a in think of it what that conversations does massive solidify half still and do pull think will forward, customer it really I don't

Operator

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

Andrew Obin

do you about going about inflation. How about guys capital capacity, year billion in always there in your and what inflation think is capital over if are do environment this the you cost concerns environment will up. in it how think you of to question get we The adjust $X goes your cost how this of where

Jim Lico

it capital, we maybe bolt-ons Well for and about and first talked as we about on Andrew five we XX% a deployment. think at bigger liked the years always on maybe - taking return capital returns return way for little invested getting we look

they cost as capital. it different range and in the go going hurdle look cost down ever going change ways of rates up. the far we’re of X rates didn’t still up, to capital change We really of not As in that many went really as interest of cost debts doesn’t

Andrew Obin

semiconductor just if a the market about on China, because as follow China truck growth relates also there think you component on equipment. up Jacobs key the Can you to And that's particularly talk well? it in touched I

Jim Lico

in will certainly just it it a up be XXXX in - think JVS. I than it was for had be slower slow in XXXX a will we XXXX little bang year

a for up start it good will will business made Jacobs. net-net for by slow high the grow will a They’ll will for U.S. it in little bit the they to the bit. that have China it mute a continue but still So slow had so they've be double-digit itself it But also year XXXX get growth bit won't yes in will little really them. a little China to

Operator

question next And Dean your of line RBC comes from from the Markets. Dray Capital

Dean Dray

any the surprises Fortive Maybe reform in unique highlight? that start there with that anything made this Chuck. Where that provisional. emphasis you tax application, there to Was was Lisa would

Chuck McLaughlin

have and we us estimate. that, with make SEC done this think number very complexity a gave option we we the her by a keeps sheer to we’ve minor the provisional build number Having that extensive - or No, means but we've up got up an sense adjustments. put it good just could the putting and provisional to and provisional good it it's volume make option unprecedented of a work said

Dean Dray

reform tax within divest businesses on will be changes. that second and have the non-core leakage you potential Do own derivative willing potential tax for portfolio? companies your just acquisitions then sense now so And is less but as that to also any Fortive,

Jim Lico

make does or be little with financials to because someone being tend I be through lower, obviously speculation start these bit would balance, would to – always else decisions. better. to pretty that tax on more think it's related us say certainly a that strategic divestitures think look to the people the whether early as rate Certainly, Dean. start generally it I things it's

provide as go we'll that. balance do year, probably see some we through on that others will opportunities. additional suspect And the I So

it. do it's about really real And the what I the think for our strategy, ability us can and about with those grow really though we business it's long-term – are to sale. we business really things, a it’s in little time. on over bit could It's success long-term the get potential because the for money the what's reasons more for about not doing

Operator

of next from Steve from And line question our the Winoker is UBS.

Steve Winoker

maybe little breakout cadence, detail? just X% bit between growth in bit PI more IT, across to of but a X% you little you that businesses talked not Could terms a that core the a and

Jim Lico

the see you’ll you'll single-digit range the in IT digit PI probably see range. mid-single think I in low

As longer far as the more as better turns back we quarter, year that'll to as But get thought out we’ll in probably the I year. half through even of just growth bit growth Gilbarco out PI. the see a little of

said point-of-sale remarks our industrial businesses quarter, As businesses. of seen the like better of prepared in but and businesses the more sensors related maybe in industrial has in our the more and North and a well we've are economy Fluke that number improved. Fluke did automation We've in very some broadly our macro America

So visibility that in little first a part we'll which bit the I suspect see to. certainly of year we of have the –

it's North a really America quarter as take the be. we And good year, think India is nice but good. China we all tip that We small as for we And base, while might will improvement geographically, done last this to of the quarters. still be necessarily not will Latin be sense. as we year. the North good will America the over to double-digit think think and a we gives So be here America mentioned, will And be range some good. good. every continue It . may has couple think going be far ex-Gilbarco I you that in pretty pretty If think China businesses

too gave days. play out So think least I a will we kind how it you too, – at the but but early much information, gives view of maybe geography some hopefully year perspective

Steve Winoker

little us, And of by QX, to great. it does if some Jim, same? a drop are way, you too, out about impact QX prior looking like a QX QX, Is the thinking back on it the for of and seen never for are you or than too seasonality much years. bit that's seem guys the in less that tax that about how in information – I kind we've

Jim Lico

about talking VCM? You're the

Steve Winoker

Yes.

Jim Lico

bit. A little

as will we be stronger a models QX. we're have bit think how That's it I in versus QX looking for little well.

Steve Winoker

And kind $X pocket I'm today, at M&A that about available air the this M&A your fueling opportunity forward moves and talking flywheel of the challenge. like, from to retail Is billion you're a then I'm kind also that lower? thinking as and fueling mean longer through might staring of EMV billion lastly just term, that about that less retail and thought base Jim that something fast significantly that the if company you and $X.X become quarter revenue than capacity,

Jim Lico

think I seen the positions growth know we've good, significant good lower Well, I in don't really high markets.

and And so EVs in lot India parts places seeing – of a of some Asia. other the tenders largest the we're of in like of company talk about Southeast history the

conversations around So high we're still seeing the electric vehicle. despite a lot of growth market activity tender

part of opportunities technologies I look growth time, think continue a Gilbarco We're secular for take cities trend of telematics. and chain some certainly retail think of and Over the kind the will exist beyond So taking transportation drivers Veeder that money be Root. in will bigger fueling, like smart supply market high-growth just and of to I are that warehousing. at those and of like smart of going logistics advantage into transportation, advantage telematics, lot

So I of I to suspect opportunities – think drivers is take as a will there well. going at on business a changes look of advantages continue longer-term to those be as we'll platform, and some

going of dispenser but get little anytime payment And still challenges out a to rid in credit fraud the bit soon. be really pure sure there. so will card are perspective, about in Point-of-sale a I'm might less going America platform those North I be good general. to opportunities, still exist. feel we're not

the look the for we still I probably company, opportunities geography, AV So change for will anything. there's line as ultimately when we as we there. EV more at portfolio, And as and revenue broadly, think many by you think but look think there's company product around and opportunities the the

fast some high So other sort those provide charging, that opportunities are grid, of challenges to for Fluke number putting the as businesses for required of for the that a well. of and and Qualitrol power – changes for all our opportunities going with the are into

on EV trends are and with So balance, we and threat that opportunities both more AV EMV going the and combination in see the of market. on

Operator

And Deutsche our Inch Bank. John of next line from is question the from

John Inch

the this there not $X.XX had kind curious the I'm Were in to trying we gains in any of modeled just and degree? way getting there. gains to there versus quite bridge the it, any any quarter were I'm quarter?

Jim Lico

one-time None about in you're the talking gains? adjusted earnings,

John Inch

be… a had Yes business I you know don't that if or that sale might anything like

Jim Lico

on we've In the Cons unit sale the yeah, NetScout $X million had the of if again the part line, the interest. there's building go to in that was And time. numbers, a GAAP the on you sale of related gain other back

in So but numbers. in the there, adjusted that's not

John Inch

those IT core growth. I Was perhaps course guess, in It's a The pick not something offline. see that over right margins there of industrial adjusted, I'll pretty else? to trending, little where mix you of anything do the wide, sort core it you the XXX. pressed technologies percent PI the else the look in a VCMs going XXXX? good, points or And the XX with up in The okay. did on even segment respect though basis on of

Chuck McLaughlin

because QX, in of mostly And normal, IT So topline. a than timing. was of little there's bit the lighter

your where going number. XX good year should last to XX tough a with back about to look can is to we But what forward, expect the had VCM question You a they compare. fundamental

look up going trending that's and expect their we'd what back right forward. year, where If at you that's and whole just they're

John Inch

Chuck? both For segments,

Chuck McLaughlin

Yes.

John Inch

a maybe the that was say you call Can FX an XXXX? of in run there fourth cadence the I out on would specific that's ask noteworthy margins quarter different over to course that impact rates

Chuck McLaughlin

slight there and not half our think, tapers in QX. you'll material but the really off. couple a first of we'll quarter XXXX it a I a it bridge think favorable, I was and see then wasn't in of no in that cents And QX see

John Inch

you targets Where Just respect where where it service, it had the lastly, new mix, your end XXXX? end based the revenue of we before? to software presented part see a on would you you as with to year and did like in

Jim Lico

through the year. is range think which We've said where XX were to be we'd XX I we in

we XXX at I expect ticks the think that probably to we basis closer of would ended up points I or year. XXX through the end the XX year. go as

John Inch

up ticks like it Organically that?

Jim Lico

XXX get of businesses Yes, bought, plus you businesses. and the because the the inside and year well, fact like things those all full of we just some growth

Operator

next the question from from Group. our of Andrew Citi line Kaplowitz And is

Andrew Kaplowitz

been And you a the growth over mentioned it’s I single-digit. growing you quarters, several so markets to mid high bit but have double-digits low think for last

slowed down to is, in of going growing you And it markets I'm difficult think grow China But mid-single issue do QX? growth see Middle to was double-digits. East sure, the high happen. Some significantly or comparisons the just higher XXXX? the that Good still more in digits

Jim Lico

probably big right. the East was just some little time. India happens one. in was too the timing, quarter, tender Middle because too lower exactly a timing So all fourth the the The you're in fourth that

overall But, bit And quarter by we're around good so we'll a XXXX will it that that XXXX. little year moves we’ll good in have India in there. a a in year look past confident that –

where bit high single probably good digits So a think China will be we’ll we’ll little see in I the good small of good that's to think Latin said stand, I I China, will America to but India, base. by look think slow I enlarge year as a in continue

noted at So some - half. as the those in the move little Qualitrol challenges think and backlog, I some be still first a of in through we’ll level Middle Middle - with slow we’ll bit East think the but their prepared East we in I remarks

Andrew Kaplowitz

strong backlog in there growth slip go that XXXX? in to Middle help does the business as you mention did East that in You Qualitrol, back

Jim Lico

by are they like through year - as of do of with be end working obviously off some business they to back that it site that right that get I’m of growth they be I year Yes, the now have they able just now projected the the too the right to looks does and year. and would end thinking think by line

Andrew Kaplowitz

to be productivity of actually your gains incremental. your had else forecast in last equal? XXXX just gains upside and because think in to XX% productivity that And or guys XXXX XX% don't and year you for haven't that you have then to I discrete have forecast $X.XX Is in restructuring obviously XXXX, done or could you you here of $X.XX

Chuck McLaughlin

didn’t with it the So got no, lump productivity to continue that productivity - other because we many definitely just bridge call its out bars actually just we we it’s a in kind interest expect it too the that and price to of gains to getting on share and graph. gain was on

Operator

is from next Vertical Research question line Sprague from Jeff our Group. of And

Jeff Sprague

a then Just one and just question financial couple on related things. business items

optimism it little going the in elaborate that your talking can business, or optimism something? new a you're signs or on seeing Matco something of you you’re in products is particular Jim about, tool precisely what in bit Just

Jim Lico

might turn highlight headcount. saw is that look get typically good the think are something predicting to fourth will wouldn’t things better. data I little summer. that try we into at we and be starting going to We've to strengthening us quarter that a of franchisee Well things of we which get the business to in which better believe get to anything terms got good, see, did in that which led our I the was are we but franchisee quarter couple in year What is every we attendance fourth see still like with order this around points the some saw bit in the something days the some starting think growth our start large here better over good saw we was Expo right first to We event in year. that. a

a good of good start prepared effort mentioned job a very little as to remarks get opportunity. things team they of we’ll where in executing done job great that but lot bit are the think really the in yet, and optimism is plus wouldn't through year. diagnostics in forward-looking as to a obviously bit them market starting we and have better progress better. They've more we I a a doing we places happen a I the those have So lot little call

think year. better the get that through this think number quarter, will be mode but the I I growth they’ll probably in

Jeff Sprague

just Then I reported just bridge running I want the to numbers think is the in correct? clarify Those operating as bottom on your right, XX they the through that million the them acquisition pick segment related cost profit that was you out than quarter. more of bridge, disclosed were it in your

Jim Lico

that’s correct. Yes

Jeff Sprague

except And that that the burn a long-term for long-term rate? we be Are then XX% think - cover. as the a number higher you that’s off drift think or domicile that I a seen pretty and number, you say year solid might firms confident shorter-term tax you or two finally Irish on in is Chuck I about can lowest I've there something

Chuck McLaughlin

lot that's more very to going it’s and we're you more our is spend higher we’ll a of done unless drift there. the with good very maybe forward. spent think the don't time run But the up. likely the been pleased work has going We've there's as change pronounces coming feel there pretty team all there to some in about we some XX%. forward We tech happy going code incremental and that get and use But work I can with think we’re

Jeff Sprague

I'm luck. congrats good jealous Indeed

Chuck McLaughlin

Thank you.

Jim Lico

tech great days probably our team, the last job. our do Jeff. working so tech been And hardest XX is in in Fortive they a Thanks team

Operator

of from BMO Markets. And from Scott Capital our line next question is the Graham

Scott Graham

you taken being in I'll but offline to want you take transaction too PI out. EPS brief can are costs then shown essentially in out and say can am and the here on we of misunderstanding? question margin. margin it maybe we'll the maybe you be I The not basis Can I out higher Jeff points adjusted me transaction if help here costs talk we as how if it margin the similar have taken yet this have just a of XXX they adjusted shouldn’t offline. kind are been out walk-through the or after

Jim Lico

we one the adjusted about that. but margins wrong not you’re transaction costs on out adjusted if No, I for place but think the EPS, we out just that's correct,

Scott Graham

other was the And cost forward see eliminate ton from on of up due of margin dilution is The the here this acquisitions basis that amortization. acquisitions out looks go we to on on like amortization those Where kicking a the we terms in type kick a future kick do should up question that from of to dilution. go in acquisitions?

Jim Lico

to I which for walk what rather think try I question and is but try to But pointed that focus segment presentation. focus - core we until a kind year. I had we we a to one the give and those each the the on margins that's it when of you of things, just we on on that reason that's through But reason multilayered we’ll take offline the to core get you

Scott Graham

go this on comfortable basis that is this forward you're the margin of that But this adjusted an with is I this margin? quarter, something and I'm guess saying to through type on what basis, is did run something hit

Jim Lico

per it share yes we earnings and grow that think We are. helps so

Operator

line from And from our next is question Goldman Joe Sachs. the Ritchie of

Joe Ritchie

from products I from around the product So this And maybe bit really you're introductions year how a thinking maybe a for little forward perspective. go we’re are guess doing a growth working. just you about touching on all business what the rates are impressive guys second then longer-term tech clearly about rate and the perspective. a talk growth

Jim Lico

exceptionally strong have had from number execution they very standpoint. a done you of said as that a year really things well they So an

the the we the introduction new last next really in continue first first that we of of X the of to of mobile highlighted the Series Series manufacturer and product a platform really that remarks. the is X large in large a about of That out year new talked things year come that in the order second we years. with year did over in a the think phone a generation part product prepared several series will of really great we had I from a helped the strong, - job half

but grower runway better always runway. product during deliver than the popup that’s that in time only and said platform low somewhere they tend of growth better little than itself period that some year, little not long the they’ll bit also over the will a itself tech single-digit will market the have some a So growth. things in We've are next market above better when perform around to a bit is

business service So our substitute we now. continue is out of the about we’ve which a is been what cyclicality it part that's of extending it with with and to how to think Tektronix less build trying business pretty do

also So XXXX that in that and of you’ll number make those you the not growth only and our doing actions been less are working cloud it cyclical the things saw see and cloud long-term we’re have to solidify XXXX. but in rate

Joe Ritchie

maybe had some think on double you touching digits. positive IFC, heard I And here comments pretty my on base, just growing follow I

give curious just you a can to integration said us Just you well growing? think more little on see how I business update that going of but an is was that Landauer bit

Jim Lico

about great we already the little with culture really, a business their last a We with progress. a with did lot about with the in action we progress made opportunity that team on and impressed to review really week continuous and job a really They We've it. with So number an have they've see little month the happy the a deal, into system and to of we’ll And week, have last were a see here bit really using work done they do it. strong short and the with rebranded that channel Fortive just we after remarks side. now. the the maybe been really portfolio had obviously improvement Fluke closed take bit and ISC we've pretty then solutions. good them get in team on done a their a to process the have after. the were I the seeing had because health Landauer later some the IFC synergy we’re need mentioned we’re real of entirety they revenue prepared

good - it's then early early the in alternative we days early be good place days that. So in feel good a very days to in still to it’s but

Operator

Brian the And of from Blair. question William line is from our next Drab

Brian Drab

on were larger listening potential tax looking idea acquisitions here M&A the through idea obviously X bolt-ons with comments thinking the lot more post X clarity that versus us was was made and a if the the billion I is of I have of you’re are to of comments activity - notes you XXXX at made There recent think. X acquisition warming the to billion. Are wondering the for larger up here maybe what sooner as I a just that thinking, in one. policy that back the I up just the us to you most expected billion I'm So I'm near-term? coming on about that you a the of just And a you large I'm - so - warming

Jim Lico

be opportunities I our what to clear think of could look spending things. at our sense for And tried strategic a One capacity accelerate to Brian two we've Well is businesses. would to about always you two point we try that give in we time.

very funnel of The and try platforms of funnel anything. you the telegraph good, have time longer the is good meaning to the we to is the us. today breadth businesses, front think opportunities Sometimes have I'm we funnel do give a be across we'll what of I in this and meaning to trying geographies. funnel that, the the really breadth we cycle of strength transparent the not about

take to So we to things, those it it not deploy that. want we good be could there's rather to anybody opportunity didn't about advantage warm know up but opportunities predict to of avail feel we transparent - really of we and should they kind you sense what trying of that us. but never give just real and very We feel how good themselves we're

Brian Drab

than larger or one and the one say And I up billion? mean four, by pipeline billion have in don’t I is anything follow just is there X that X

Jim Lico

are variety to Well pipeline road. a lot do in sizes some I the from down we probably it’s - would of do even of today the there anything couldn’t love things things but to think hard call

think that’s way tomorrow. and things things things the So we the we and could are about we can breadth why of it that’s the do the do I today think

strategic the our do I thing always the cultivate on think but of drop next we been to about can funnel way. don't vision a the that eye we real what have an just success on making has book and sure that have rather - bank

time. hopefully the breadth great we’ll we us there make reality those so with some for work and opportunity over is do a of And of

Operator

time, I questions. Presenters, back no to this And at I’m showing it that further turn you. have we

Jim Lico

everybody. Thanks

remarks, spent prepared thank really world we're wanted we As in thank I with for vision year the around us, of really we to to the who our us also you employees the of time for the given really of the company a sense allowed of strength want and you've our We you give the us. all had. to the feedback but said proud who

proud about of excited even more incredibly We’re XXXX. XXXX, but

and great see things soon conferences for and soon. you. you a like the real in and around night. team we'll So Lisa you of forward we’ll that. a questions look and Thank all Have seeing number are follow-up

Operator

gentlemen, quarter call. Corporation for we us XXXX Fortive joining Ladies you earnings thank for and greatly fourth the

You may now disconnect.

Fortive (FTV) 9 Feb 182017 Q4 Earnings call transcript