Harvard Bioscience, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2020 Circa International Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during a session, you will need to press star then 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your speaker today, Mr. David Kaluzian. Thank you. Please go ahead.

Thank you, and good morning, everyone. On the call today are Scott Buckow, Sercor's president and CEO, and Abhi Khandelwal, the company's chief financial officer. The slides we'll be referring to today are available on Sercor's website at www.sercor.com on the webcast and presentation section of the Investor's Link. Please turn to slide two. Today's discussion contains forward-looking statements that identify future expectations. These expectations are subject to known and unknown risks, uncertainties, and other factors. For a full discussion of these factors, the company advises you to review CERCOR's Form 10-K, 10-Qs, and other SEC filings. The company's filings are available on its website at CERCOR.com. As for results could differ materially from those anticipated or implied by today's remarks. Any forward-looking statements only represent the company's views as of today, November 5, 2020. While CERCOR may choose to update these forward-looking statements at a later date, the company specifically disclaims any duty to do so. On today's call, management will refer to adjusted operating income, adjusted operating margins, adjusted net income, adjusted EPS, free cash flow, net debt, and organic measures. These non-gap metrics exclude certain special charges and recoveries. The reconciliation of Sercor's non-gap measures to the comparable gap measures are available in the financial tables of the earnings press release on Sercor's website. I'll now turn the call over to Scott. Please turn to slide three.

Thank you, David, and good morning, everyone. Sercor delivered a strong third quarter despite unprecedented macro challenges. The work we've done to transform our portfolio during the last three years has paid off. we now have a stronger, more resilient portfolio of essential products. Our diversification across geographies and markets and products is mitigating the ongoing weakness from the pandemic. In addition, we've been able to raise prices through the downturn because our product portfolio has strong market positions and differentiated technology. We're executing well through the downturn. Our continued focus on productivity and cost resulted in a company-wide decremental of 19% in the quarter. The $45 million cost plan for 2020 that we communicated in May remains on track. Our pricing initiatives remain on plan in both aerospace and defense and industrial. The SERCOR operating system is delivering improved operating performance across most metrics, and we expanded the margin of our aerospace and defense business by 360 basis points in the quarter, despite lower volume. Finally, we continue to take actions that best position SERCOR to take advantage of a market recovery. With 13 new product launches in Q3, we remain on track to deliver on our commitment of launching 45 new products this year. We continue to invest in front-end resources and strategic growth initiatives. We're closely collaborating with suppliers and customers to ensure alignment as markets change. And finally, we continue to focus on deleveraging the balance sheet. Now, I'd like to provide some highlights from the third quarter. Please turn to page four. We booked orders of $167 million, down 19% organically due to the impact of COVID-19 on our industrial and commercial aerospace businesses. Defense orders were relatively low in the quarter due to timing of large defense programs. The growth outlook for defense remains strong. Sales came in as expected at $187 million flat to prior quarter and down 15% organically. We continue to believe Q3 is the bottom for sales and orders. We expect sequential improvement across both businesses in Q4, which we'll talk about in more detail later in the call. Adjusted operating income was slightly more than $17 million, representing a margin of 9.3%, up 80 basis points from the prior quarter and down 130 basis points from last year, driven by lower sales volume in industrial. The company-wide decrementals were 19% in the quarter, which is significantly lower than our contribution margin, driven by productivity, aggressive cost actions, and price. Now, let me turn the call over to Abhi to discuss our third quarter results in more detail before I review the outlook for our end markets.