Vontier - Earnings Call - Q3 2020

Transcript

Speaker 0

Good morning. My name is Pasha, and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to the Von Syr Corporation's Third Quarter twenty twenty Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations. Ms. Curran, you may begin your conference.

Speaker 1

Thanks, Tasha. Good morning, everyone, and thank you for joining us on the call. With me today are Mark Morelli, our President and Chief Executive Officer and Dave Namuric, Senior Vice President and Chief Financial Officer. We will present certain non GAAP financial measures on today's call. Information required by SEC Regulation G relating to these non GAAP financial measures are available on the Investors section of our website, www.vontier.com, under the heading Financials.

Please note that unless otherwise noted, the presented financial measures reflect year over year increases or decreases relative to the supplemental normalized financial data also posted on our website under the headings Financial. These supplemental normalized financials are adjusted for estimated stand alone public company costs. During the presentation, we will describe certain of the more significant factors that impacted year over year performance. The supplemental materials describe additional factors that impacted year over year performance. All references to period to period increases or decreases in financial metrics are year over year on a continuing operations basis.

During the call, we will make forward looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward looking statements is available in our SEC filings and subsequent quarterly report on Form 10 Q. These forward looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward looking statements. With that, I'd like to turn the call over to Mark.

Speaker 2

Thanks, Lisa. Good morning, everyone, and welcome to our third quarter earnings call and our first as an independent public company. We're excited to launch the next generation of our business as Volunteer. And while we have taken our first steps together amid unprecedented global circumstances, it's important to note that we do so with a strong, diverse and experienced team. We also have market leading positions in essential mobility technologies and a strong balance sheet.

As you'll see, as we take you through the results, we enjoy the benefit of a resilient portfolio that generates high levels of cash. Before getting to our third quarter results, I want to outline what we'll cover today. I'll start by giving you my perspective on our performance, including how the pandemic has affected our businesses and key market indicators for continued recovery. Dave will then go into more detail on the financial results, which as a reminder are presented on a normalized standalone basis from Fortive's historical results. Finally, I'd also like to highlight the unique opportunity we have to capitalize on the attractive $27,000,000,000 mobility market in which we operate.

We have strong secular drivers in our core markets, and we have attractive adjacencies in logistics and supply chain, smart cities and e mobility that offer significant runway for disciplined M and A. I'll close by sharing some brief thoughts on what I've experienced since joining the Vontier team and providing a framework for our longer term strategic direction. With that as a backdrop, let's move to some of the highlights of our third quarter results. Today, we reported adjusted diluted net earnings per share of $0.80 an increase of 25% driven by strong fall through on mid single digit core revenue growth. I'm pleased with our double digit earnings growth, which reflects the strength and durability of our portfolio.

With a goal of continuing to maximize cash and liquidity, we leveraged the VonTier business system to drive substantial working capital productivity, delivering third quarter free cash flow conversion of greater than 160% of adjusted net earnings. Our teams maintained the disciplined actions that we took in Q2 and continued to adjust accordingly in a rapidly changing environment. Additionally, adjusted operating margins expanded by more than 200 basis points to approximately 24%, reflecting gross margin expansion of 130 basis points to 44% and a reduction in operating expenses. Our guiding principle has been to manage the short term in a way that positions us to maximize long term benefit as we pace ourselves to the market recovery. Since the beginning of the COVID-nineteen pandemic, we have remained focused on the health and safety of our employees, and this continues to be our highest priority along with preventing business interruption for our customers.

I'm incredibly proud of how the Volunteer team continues to effectively address the challenges and opportunities in front of us. We rapidly embraced online collaboration and successfully converted to effective digital daily management, virtual kaizens and online sales meetings. We successfully addressed significant supply chain and product related issues as global supply chains have been disrupted. Our teams instituted daily and weekly performance measurements and developed new data driven demand scenarios. A standout example of the team's ability to monitor end market health is at Matco, where we utilize our MAXIMUS Diagnostics vehicle scan data to measure end user service activity in the repair shop.

These actions across the portfolio enabled us to adjust our supply levels and other resource needs to the rapidly changing environment. In this difficult environment, we also continued to execute on innovation. At Matco, we introduced numerous products through our distribution network to promote personal safety and protection due to the urgent need for PPE. The power of our model serving the last mile to the service technician has shown its relevance and resiliency through such a robust recovery. And at GVR, we launched several new products focused on meeting environmental regulations, including a central vapor recovery solution targeted to address India emission standards, including sensors to help customers comply with regulations.

We prioritize investment in launching TN-three 60, the new technology platform at Teletrac Navman. Feedback from our early adopter program has been overwhelmingly positive, citing speed, ease of use and differentiation with our AI features. However, unlike the 02/2009 recession, where our businesses were down only mid single digits, this market environment is far different. At peak impact in April, the shelter in place mandates drastically and rapidly reduced miles driven by greater than 40% and severely restricted access to our end user customers. Since then, we've continued to see improving demand dynamics play out within our mobility technologies and diagnostic and repair technologies platforms.

In the third quarter, mobility technologies or MT continues to benefit from EMV in GVR's North American business. We also benefit from mandatory security regulations in Mexico, which we believe are driving market share gains. The initial impact of COVID was more intense in our Diagnostic and Repair Technologies platform or DT, given the severely limited access to mechanics. However, Matco sales recovered quicker than we had anticipated as virus control measures eased, allowing increased franchisee activity. We believe we also benefited from the government stimulus programs.

We exited the third quarter with positive markers for demand, including global miles driven rebounding to approximately 80% of pre COVID levels. We experienced a V shaped recovery at Matco on robust technician employment levels. And with continued regulatory drivers impacting GVR, we ended the quarter with a strong backlog across the portfolio. While the longer term outlook depends on the phased approach in which global economies stay open or experience setbacks, we will continue to focus on managing what is in our control. We will maintain appropriate measures to adjust to the demand levels that we see, while still investing in our highest growth priorities.

With all that said, we expect fourth quarter core revenue growth of mid single digits, adjusted core operating margin expansion of greater than 200 basis points and an effective tax rate of approximately 23%. For the full year 2020, we expect core revenue to decline low single digits, adjusted core operating margin expansion of more than 125 basis points and an effective tax rate of approximately 23%. We also expect adjusted free cash flow conversion of 130% to 140% of adjusted net earnings. With that, I'll turn the call over to Dave to provide the financial results. Dave?

Speaker 3

Thanks, Mark. Our adjusted net earnings for the third quarter were $134,000,000 an increase of 25% from $108,000,000 in the prior year period. This translates to adjusted net earnings per share of $0.80 compared to $0.64 in the prior year period. The double digit increase in earnings was primarily driven by volume growth with strong fall through which led to two ninety basis points of adjusted operating margin expansion in the quarter or two twenty basis points on a core basis. Core revenue growth in the third quarter was 5.6% driven by the continued strength of the EMV rollout in North America, regulatory driven demand in Mexico and strong demand at Matco.

From the April lows, we saw continued improvement in the demand environment through the second quarter and that trend has continued exiting the third quarter. Our adjusted operating profit for the third quarter was $180,000,000 compared to $152,000,000 in the prior year period, primarily driven by strong core growth and continued cost management in both COGS and OpEx. We delivered gross margin expansion of 130 basis points, which continued which contributed to the strong operating margin expansion, a testament to the business' rapid deployment of VBS to effectively adjust costs to the demand environment. Although most of the cost actions that were implemented in response to the uncertainty caused by the pandemic were specific to Q2, we did maintain a lower level of spending in areas like travel which remains limited in this environment. All the while, we continue to fund our highest priorities to enable us to exit 2020 in a strong position.

Our earnings growth translated through to strong cash flow performance with adjusted free cash flow of $218,000,000 a conversion of 162%. Q3 is typically a seasonally stronger quarter for free cash flow conversion, but this result is well above historical conversion rates. First, our working capital performance for the last two quarters is really at levels we have not previously experienced, a testament to the team's continued application of VBS. Our AR management has resulted in improved collections performance and in inventory we took swift action heading into Q2 to adjust supply chain and that discipline has carried through the third quarter. In payables, we continue to negotiate more favorable terms and to convert more customers to our P Card program.

Our operating cash flows can also be impacted by a items number of and those trended favorably for us as well. All of these factors had the impact of bolstering Q3 free cash flow well above the traditional conversion levels. Our year to date adjusted free cash flow is $4.00 $9,000,000 and reflects a 151% conversion of adjusted net earnings, which again is well above our historical conversion rates of closer to 100%. Looking at the top line performance of the two platforms, MT had core growth of 5.4% led by high single digit growth in GVR where we continue to benefit from the strong EMV demand despite the deadline for the liability shift being delayed until April. U.

S. EMV was the largest growth driver, but we also saw strong demand out of Mexico driven by fiscal security regulations and continued sequential improvement in other parts of the business as access to sites and other COVID-nineteen related constraints improved. In our DT platform, core growth was 6% and driven by the sharp V shaped recovery that we experienced at Matco as COVID-nineteen restrictions eased. We attribute the sharp sequential recovery in part to a healthy technician employment environment, which is also evident in how our loan portfolio has performed with no increase in delinquencies noted from the pre pandemic environment. We also believe an element of pent up demand is driving the strong results as reflected by increased demand spread broadly across product lines, including a healthy order backlog in tool storage.

Orders grew double digits and we ended the quarter with very high levels of backlog given some pandemic related supply chain and other constraints. Looking at our business by geography, developed markets grew core revenue high single digits. This performance was led by approximately 10% growth in North America reflecting strong EMV demand and the macro recovery driving top line growth and strong margins. Western Europe improved sequentially from Q2 decline greater than 20% to a high single digit decline in Q3 driven by several key competitive wins at GVR and increased demand for environmental solutions and e mobility offerings. High growth markets are still unfavorably impacted by COVID-nineteen as primarily reflected by continuation of reduced CapEx spend and order delays by national oil companies in China and India.

Core revenues declined by mid single digits in high growth markets, but this represents a sequential improvement from being down in the mid-20s during Q2. Aside from the impacts of COVID-nineteen, we do also continue to be impacted by the compare against the double wall regulatory driver in China that benefited the prior year. As Mark noted, the evolution of the recovery remains difficult to predict, but we are focused on what we can control and we are assuming that we continue to operate in an environment consistent with what we are currently experiencing. We continue to monitor key indicators on a daily basis and we are prepared to respond to the dynamic environment should it be necessary. During this year, we took a number of cost actions in response to the environment which were mostly temporary in nature.

These temporary savings primarily impacted Q2, but we continued to see some positive impacts from lower spending in Q3 as we manage through the uncertainty of the environment. Now as we look to where more normalized business levels may be upon exiting the year, we anticipate implementing some level of permanent cost restructuring beginning in Q4. We anticipate incurring a restructuring charge of about 4,000,000 to $8,000,000 in Q4, which is excluded from our outlook of adjusted operating profit margin expansion for the rest of the year. With that, I'll turn it back to Mark.

Speaker 2

Thanks, Dave. As I mentioned previously, I want to close by sharing some observations and thoughts on Vision. I joined Frontier because of the growth and portfolio transformation opportunity and the best in class business system culture that lives in the many hardworking men and women of Vontier. I want to thank our employees for rising to the unprecedented challenge presented by this pandemic and acknowledge each and every one of their dedication during these challenging times. After nine months here, I'm even more convinced about the quality of people we have at Frontier.

The strength and resiliency I've witnessed can only come from a united culture, like the one we are forging with our Frontier business system. I've connected with folks across our operating companies and spent time with customers. I can tell you we are trusted leaders in our markets. Onteer enjoys a broad installed base that is poised to take advantage of trends in our $27,000,000,000 market. We have a proven track record of substantial and strategic portfolio transformation, and we are privileged to claim the Danaher and Fortive heritage.

I'd like to personally take this opportunity to thank the Vontier Board and Fortive for trusting me to lead at a point where we see more value being created at Volunteer with a focus on mobility infrastructure. In my previous roles, I had the opportunity to navigate strategic and necessary portfolio pivots, drive improvements in innovation and deploy business improvement systems to deliver greater earnings growth. I'm excited about integrating lessons from my past and applying them at Frontier. The first steps involved engaging the team on key priorities while facing significant market uncertainties. This is something many of us at Vontier have faced in our prior working lives.

We have shifted priorities through policy deployment, a process embrace in VBS and one I have used previously to engage teams to achieve outstanding results. We believe there will be evolving opportunities within our portfolio and around ESG. The next ten years of mobility will bring more change in the way that people and products move than any other decade since the invention of the automobile. Over the remainder of this year, we will double down on our strategic planning efforts because positioning for the long term is our way forward. We have a strong legacy of moving ahead of secular shifts, and we're uniquely positioned to capitalize within the mobility arena.

We couldn't be more excited about the journey ahead of us and establishing our own independent record of strong performance and shareholder returns for many years and decades to come. United by our shared purpose, Frontier is mobilizing the future to create a better world. With that, let me turn the call over to Lisa.

Speaker 1

Thank you, Mark. That concludes our formal comments. Tasha, we are now ready for questions.

Speaker 0

Your first question is from the line of Nigel Coe with Wolfe Research.

Speaker 4

Congratulations on getting the first quarter into the books. The margin performance was really sort of what caught my eye. And I think gross margin was up 50 basis points on sort of flat sales. So maybe talk about what you saw in terms of price across the portfolio, raw material benefits and kind of how that plays out over the next couple of quarters? And maybe just give us a pulse check as well on Tatrak and Admin, how that's tracking as well?

Speaker 3

Nigel. Hey, it's Dave. I'll jump in on the first part and then pass it to Mark. So price was about flat in the quarter. I think that was more a function of kind of what people bought.

Obviously, price remains a strategic lever for us and we would anticipate that continuing to be that way into the future, but about flat in the third quarter. We also saw a lot of productivity from the perspective of raw material pricing and those things, our PPV actions and VAV actions and those really help drive gross margin expansion. And then of course, we remain very diligent on cost. We took a lot of the actions that we experienced in the third quarter continued maybe some of the temporary actions came back, a lot of them did, but continue to be very diligent around cost given the environment that we saw. So those things obviously transpired well to drive margin expansion.

As far as Teletrac Navman, pass it to Mark.

Speaker 2

Yes. Thanks, Dave. Nigel, we continue to see good progress with Teletrac Navman. As we said in our road show, we've been pretty encouraged by the reduction in churn. As just a reminder, churn was mostly a North American issue.

We have pretty good churn in Australia, New Zealand and The U. K, but it had spiked up over the last couple of years in The U. S. And so moderating that churn is a big step forward. And of course, another big step forward is the launch of our TN three sixty platform that I also mentioned on our prepared remarks.

And we like the response we're getting from customers right now. As a SaaS business, it does take a while for that to flow through into revenue, but we do like the market. It's excellent high single digit market growth opportunity. And as we also said, it was a breakeven business. So getting that to return to profitability could be a good uplift for us.

Speaker 4

Great. Thanks, Mark. Thanks, Dave.

Speaker 3

You bet. Thanks.

Speaker 0

Your next question is from the line of Julian Mitchell with Barclays.

Speaker 5

Hi, good morning. Maybe my question will be around margins and cost control. So you've guided for that big EMV revenue headwind next year. Just wondered if you could give us more insight as to what cost actions you're taking to offset that headwind and how you're thinking about margins over the next twelve months? And also related to that, I saw the fixed cost or restructuring actions you talked about in Q4.

So when we're looking at next year, should we expect the fixed cost out and the temporary cost perhaps return to be fairly balanced or neutral?

Speaker 3

Hi, Julian, it's Dave. I'll make a couple of comments and Mark can talk about some of the actions that he sees for next year. But as far as the cost out, we saw about $20,000,000 of cost out in the second quarter. Some of that was kind of what I'll call hybrid. And so we saw some continued savings from that in the third, maybe $5,000,000 of that.

So but the preponderance of that, that second quarter will come back next year. I think some things like travel will remain limited, but also we would see some volume offsets on a year over year basis particularly in the second quarter next year just given the ease of the compare. As far as further cost actions, I think we see a number of opportunities. I'll let Mark kind of explain those.

Speaker 2

Yes. So Julien, as you know, The U. S. EMV has been a strong tailwind for us. And the reason why I start there is that we've been doing a great job chasing revenue and we believe we're gaining share also with my comments on the prepared remarks.

At the same time, we have an opportunity to reduce costs as that rolls off. And then we have a lot of complexity in the business. So there's a simplification effort where we're doing analytics on right now that we think can absolutely inform that in a very sensible way for us. At the same time, we have a few businesses where their operating profit is below where we think they can be and we're driving actions accordingly. One of those is Hennessy that we spoke about.

And so we have a similar kind of activity there where we think we can return that business to higher levels of profitability. So as you look at sort of the simplification opportunities like Dave said on the restructuring side that we think that not only does VBS offer us ways to focus on growth, it also offers ways to ring out a better cross measures as we go through The U. S. EMV dislocation.

Speaker 5

Great. Thank you.

Speaker 0

Your next question is from the line of Andy Kaplowitz with Citigroup.

Speaker 6

Mark or Dave, can you give us perspective regarding your backlog being up 30%? That obviously seems like a very strong number. Is it just mostly EMV related work in The U. S? Is it macro strength?

Is it across the board? Where do you have the most visibility? And does it give you confidence in being able to offset some or all of that EMV related headwind that you will have as you go through 2021?

Speaker 2

Yes. So our backlog is pretty healthy right now. It's up about 30%. It's a combination of certainly the work that we've been doing around taking advantage of this U. S.

EMV opportunity also in Mexico. But I think at the same time, the sort of surprise that we saw in our Matco business, we have a pretty strong backlog there, grew double digits and we're sitting on a strong backlog. Had we shipped all that backlog, we would have clearly been in the mid double digits on that in terms of revenue as well. So having a healthy backlog at a time like this is probably a good thing. You want to ask a follow on to that?

Speaker 6

Yes. And then again as you go into 2021, obviously, you've mentioned before the headwind that you expect from EMV. It seems like you have relatively balanced backlog as you just said, Mark. So does that help you to maybe grow? Or can the other businesses help offset that 350,000,000 headwind that you've said before?

Speaker 2

Yes. So the EMV issue that we're talking about is really U. S. EMV. And yes, the other businesses can absolutely help offset that offset that, excuse me.

A couple of things that we've said around that is the growth potentials in high growth markets, where the build out of the footprint, also the sophistication of what they're looking for in terms of automation for regulatory drivers such as security, vapor recovery, which I also talked about on our earnings call. These regulatory drivers globally offer really good opportunities for us to continue to grow that. I think at the same time, when you look at the portfolio of opportunities that we're in, we're in a $27,000,000,000 market opportunity. And as a consequence, there's lots of areas for growth. One of the other things that I also we also talked about was on the DT platform side that as that returns to growth too, that's really easy compare next year compared to this year, obviously, because of the COVID drop off, where that platform dropped pretty significantly in the April, May timeframe.

Speaker 6

Appreciate it, Mark.

Speaker 0

And your next question is from the line of Richard Eastman with Baird.

Speaker 7

Mark, could you guys perhaps just kind of characterize the China and India markets and maybe just the tone of business kind of as you're tracking along into and through October here. But just kind of characterize that as part of the growth strategy around high growth markets.

Speaker 2

Yes. So we definitely see both those markets representing a fair amount of growth opportunity for us because the fact that regulation there, particularly like I just said on vapor recovery and also on the security side, these are big themes for those governments as they continue to roll out and infrastructure builds. And so we take advantage of that. In the case of India, there we see pretty significant growth. The issue, of course, is it can be lumpy.

And of course, impacted by the COVID, we don't really know the rate that installs will go into the ground. But that being said, we have an excellent position there in the market. We're one of the few people that can really offer a complete automated solution there, including the servicing network. So we're very pleased with the position we are in India, and we're positioned well to capitalize on that growth as it rolls out. China, of course, has been affected by double wall pipe, us less so than some of our competitors.

And at the same time, some of the national oil companies have been impacted by reduced margins, so some of the backlog has been pushed out. But once again, we also think that represents a good growth opportunity.

Speaker 7

And just near term tone of business, has India stabilized from a demand perspective?

Speaker 2

It's been pretty spiky. As you probably saw through the summer, it was a little concerning what we saw the impact of COVID and the government's response to that. Obviously, lot of things were shut down and you couldn't have access to the customer sites for installations. So it will be a little bit lumpy as we kind of work through that. It's obviously eased a bit.

Of course, how things roll out as we go through these next couple of months is a little hard to say. We are optimistic. We've seen things thaw and kind of move forward, but the pace and rate of which is going to be really difficult for us to comment on given sort of the uncertainties what's happening with the pandemic.

Speaker 7

Okay. And just one question for a follow-up question for Dave. In the gross margin improvement, adjusted gross margin improvement year over year, is how much of a factor was mix between the two segments?

Speaker 3

Mix was pretty helpful. Was helpful, obviously, was a good mix given the strength of North America. But on a comparative basis, we had a pretty good North America year last year as well in third quarter. So probably not as big a help as you would think, Rick. It's really it was more driven by productivity actions and of course the volume helped as well.

Speaker 7

Very good. Thank you.

Speaker 0

Your next question is from the line of John Walsh with Credit Suisse. Good

Speaker 8

morning.

Speaker 2

Hey, good morning. I

Speaker 8

guess a question around the deployment of cash. Obviously, was very strong this quarter. I wanted to actually ask about two businesses in particular. You talked a little bit about Teletrac, Navman in an earlier response, but curious if you think that business is at a point where they're kind of entitled to have capital allocated to them in the terms for bolt ons? And then also a little bit more color if you could on GTT's performance and kind of their entitlement to do bolt ons as well because there seems to be some interesting things developing in that space.

Speaker 2

Yes, John, this is Mark. I'm really happy portfolio that we have. We're positioned well for this $27,000,000,000 market that we operate in, and we think that there's a lot of near end kind of growthy spaces. You spoke about two. We like a lot about logistics and supply chain themes.

If there's one thing that COVID and the economic impact of that is showing is the importance of the supply chain, the efficacy of it. And obviously, Teletrac Navman has an offering there that can help, could clearly be expanded on. The markets are growthy. They're fragmented. We think there's lots of opportunities.

We're clearly evaluating that as an option. And it's a strong $7,000,000,000 high single digit market growth. So I think that represents a good possible area. At the same time, GTT, it's a toehold in smart cities, which we think is also pretty relevant. Once again, good growth opportunity, very fragmented, near end adjacencies for us.

But when you look kind of across the field here, I think it's one of our biggest questions that we're asking ourselves is it's like there's so many good opportunities for us to deploy into how do we pick through this. As Dan Her and Fortive have always said that deals can be episodic and that strategy will inform exactly our disciplined approach for M and A, which I think we've got a really good model for. Cultivation that is initiated by the way into the operating companies where they do cultivation as well is clearly a part of what they do as a business. And as we've assembled an excellent team with Elizabeth Cheever on M and A and Rupa Unikrishnan on strategy, I think we're well positioned to be able to answer some of these questions. And we've got the right processes in place to move it forward.

So I'm pretty excited about our ability to transform the portfolio.

Speaker 8

Great. Maybe just as a follow on to that, do you have kind of what the businesses did in Q3? I don't know if I heard that in prepared remarks. And then what the expectations for those businesses would be embedded in your Q4 guide? Thank you.

Speaker 3

Yes, I'll try to address that John. We're not necessarily going to the POPCO level with everything. We talked about Mobility Technologies having core growth of 5.4% and that was primarily driven mostly by GVR, which was high single digits. The other businesses were a loss, TeletracNavman more because of some of the turn we're in the middle of making and GTT more just volume related and deliveries kind of mid single digits. On the Diagnostics and Repair side, grew 6% that was really driven by Matco and Hennessey, again a large sequential recovery, but really about kind of more flattish in the quarter.

As far as the fourth goes, we weren't breaking down the guide beyond the color we gave in the remarks.

Speaker 8

Great. Thank you.

Speaker 3

Thank you.

Speaker 0

At this time, I'm not showing that there are any more questions. I would like to turn the call back over to Mark for closing remarks.

Speaker 2

Yes. Thank you, Pasha. I appreciate it. I couldn't be more passionate about the opportunities we have to leverage VDS to not only improve our business today, but also to take advantage of this $27,000,000,000 market that we operate in. And I'd be remiss not to mention and thank the Vontier team for their incredible work through pretty unprecedented times to stand up the company, I think, very successfully as well as Jim Lico and the Fortive team for their tireless support in helping us optimize what's in front of us.

So thank you for joining us on today's call. I couldn't be more excited about our future ahead. Have a good day.

Speaker 0

Thank you, ladies and gentlemen, for participating in today's conference call. We ask that you now disconnect your lines.