China Sales Outlook
Q: What is the outlook for China sales this year?
A: Management expects China sales to be down low single digits for the year due to customer conservatism and tough comparisons from the previous year. This conservative outlook is embedded in their guidance.

Margin Expectations
Q: Why is Q1 margin stepping down sequentially?
A: There's a seasonal decline in revenue from Q4 to Q1, leading to a normal seasonal margin decrease. Despite this, they anticipate 75 basis points of margin expansion in Q1, representing record operating margins for the first quarter.

2025 Targets and M&A
Q: Are you on track to achieve 2025 targets?
A: Management feels confident about reaching the $450 million target in 2025. They've closed five deals, including EA, and the M&A environment is improving. These acquisitions are expected to be accretive and support future growth.

Price vs. Cost Expectations
Q: What are your price vs. cost expectations for 2024?
A: With inflation declining, they anticipate price increases of 2% to 3%. They expect to stay ahead on price cost and are focusing on design savings, aiming for record cost reductions in 2024. Supply chains are incrementally improving.

ASP Consumables Growth
Q: Is the ASP consumables growth sustainable?
A: The transition to direct sales is complete, and consumables in North America grew 7% in Q4. They expect mid-single-digit growth for ASP consumables in 2024 and are optimistic about ongoing performance.

EA Acquisition Performance
Q: How is the EA acquisition performing?
A: EA closed in early January and is off to a strong start, with December being a record order month. The business is expected to generate $190 million to $195 million in revenue, with ROIC in the mid-single digits in 2024, ahead of initial expectations.

Software Growth in 2024
Q: How will software grow in 2024?
A: They expect high single-digit software growth in 2024. Businesses like ServiceChannel and Provation are performing well, with strong net dollar retention and ARR growth, driven by FBS initiatives.

Sensing Business Outlook
Q: When will the sensing business recover?
A: After six quarters of negative orders, they anticipate the book-to-bill to turn positive around Q2, with improvement expected in the second half. They've seen early signs of recovery in semiconductor markets.

Invetech Reclassification Impact
Q: What is the impact of reclassifying Invetech?
A: Invetech was moved to Precision Technologies, aligning with sensing automation. It was a 280 basis points headwind to healthcare margins in the quarter. They are exploring options for its design engineering piece, including potential divestiture.

Destocking and Inventory
Q: Are there destocking issues in the channel?
A: Fluke experienced mid-single-digit POS growth globally in Q4, with some destocking at Tektronix in the U.S. and China. They've embedded conservative assumptions in their guidance and don't anticipate significant restocking.

ServiceChannel and Provation Performance
Q: How are ServiceChannel and Provation performing?
A: Both are on track or ahead of expectations, with ROICs in the mid-single-digit range and accelerating. They contribute positively to top-line growth and margin expansion, validating the strategic value of these acquisitions.

Fluke and Tektronix Outlook
Q: What's the outlook for Fluke and Tektronix?
A: Fluke saw mid-single-digit growth in Q4 and expects similar performance moving forward. Tektronix had low single-digit growth against a tough 20% comp from the previous year and achieved a record year. They anticipate continued solid results.

EA Margin Improvement Drivers
Q: What drives margin improvement for EA?
A: EA brings 40% incremental margins. Margin improvement comes from core growth added to Tektronix and leveraging Tek's larger sales force to expand EA's market reach, especially outside Europe.

Volume Growth Expectations
Q: Is there upside to volume growth?
A: They don't foresee a significant volume increase needed during the year. Any potential volume upside may come from restocking, but they're not relying on it, and it would likely occur in the second half if at all.

Productivity Contribution to Margins
Q: What's the margin impact from productivity?
A: They expect about $0.07 to $0.08 of productivity benefits carrying into 2024 from prior actions. Typically expecting 40% incremental margins, they anticipate 45% for the year due to these gains.

Tektronix Book-to-Bill and Outlook
Q: What's happening with Tektronix's book-to-bill?
A: Tektronix had a book-to-bill of approximately 0.85 in Q4, which is typical for that period. They expect low single-digit growth in 2024, with book-to-bill turning positive around the second quarter. Aerospace and defense sectors remain strong.

Dividend and Share Buyback Policy
Q: Will you increase dividends and buybacks?
A: As free cash flow and earnings per share grow, dividends will increase accordingly. Share buybacks are conducted opportunistically, but M&A remains the priority for capital deployment.

Fluke Health Growth Expectations
Q: Are Fluke Health's issues resolved?
A: Fluke Health expects mid-single-digit growth for the year, aligning with segment expectations. They've moved past previous challenges, and ASP's growth is a significant driver of margin expansion.

Supply Chain and Commodity Exposure
Q: How is the supply chain affecting you?
A: Supply chains are gradually improving but not yet back to normal. They have minimal exposure to commodity risks and expect inflation to decline, with price increases of 2% to 3%. They're focusing on cost reductions and design savings.

Invetech's Future Performance
Q: Will Invetech performance improve?
A: They anticipate easier comparisons in the second half, reducing the negative impact. Improvement depends on market recovery. Invetech is a small business, generating less than $100 million in revenue.

EA Sales Force Expansion
Q: Does EA have its own sales force?
A: EA came with about 40 salespeople. They've expanded its reach tenfold by integrating with Tektronix's sales force, working on cross-selling strategies to accelerate growth globally.

Invetech Design Business Divestiture
Q: Will you divest Invetech's design business?
A: They're exploring various options, including potential sale, for the design engineering segment of Invetech, which has around $20 million in revenue and operates at breakeven.

Semi-Cap Market Expectations
Q: How is the semi-cap market affecting you?
A: They're beginning to see signs of recovery, with customers planning for the second half of the year. While not expecting a significant uptick, they anticipate some improvement as book-to-bill turns positive, particularly in their Sensing and KEITHLEY businesses.

EA Revenue Contribution
Q: What's EA's expected revenue in 2024?
A: EA is projected to contribute between $190 million and $195 million in revenue for the year, supporting their overall growth guidance of 6% to 8%.

Price Assumptions in Guidance
Q: How much price is assumed in guidance?
A: They are assuming price increases of 2% to 3% in their 2024 guidance, in line with expectations of declining inflation.