AMETEK, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the fourth quarter 2021 Amatek, Inc. 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 the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. It is now my pleasure to introduce Kevin Coleman, Vice President of Investor Relations and Treasurer.

Thank you, Andrew. Good morning, and thank you for joining us for AMETEC's fourth quarter 2021 earnings conference call. With me today are Dave Zepico, Chairman and Chief Executive Officer, and Bill Burke, Executive Vice President and Chief Financial Officer. During the course of today's call, we will make forward-looking statements, which are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risk and uncertainties that may affect our future results is contained in AMETEC's filings with the SEC. AMETEC disclaims any intention or obligation to update or revise any forward-looking statements. Any references made on this call to 2020 or 2021 results will be on an adjusted basis, excluding after-tax, acquisition-related and tangible amortization, and also excluding the gain from the sale of Reading Alloys in the first quarter of 2020 and the reliance charge taken in the first quarter of 2020. Reconciliations between GAAP and adjusted measures can be found in our press release and on the investor section of our website. We'll begin today's call with prepared remarks by Dave and Bill, and then open up for questions. I'll now turn the meeting over to Dave.

Thank you, Kevin, and good morning, everyone. Ametek concluded 2021 with an excellent fourth quarter. Stronger than expected sales growth and outstanding operating performance resulted in robust profit and earnings growth. Demand remains strong and broad-based across our end markets, leading to superb order growth and a record backlog as we enter 2022. We are integrating six recent acquisitions into the Ametek growth model and are well positioned to deploy capital on additional acquisitions given our excellent cash flow generation and strong balance sheet. We asked a lot of our teams in 2021 as the pandemic and supply chain tightness led to disruption and uncertainty. As always, our colleagues stepped up to these challenges and delivered tremendous results. Thank you to all Ametek colleagues for your hard work and tremendous contributions to our success. Now let me turn to the fourth quarter results. Fourth quarter sales were a record $1.50 billion, up 25% over the same period in 2020 and above our expectation. Organic sales growth was 17%, Acquisitions added nine points and foreign currency was a one-point headwind in the quarter. Overall orders in the fourth quarter were $1.61 billion, an increase of 26% over the prior year period, while organic orders were up an impressive 22% in the quarter. We ended the quarter with a record backlog of $2.73 billion, which is up over 50% from the start of the year, driven by strong underlying orders across our businesses plus the contributions from acquisitions. Fourth quarter operating income was a record, $361 million, up 21% versus the fourth quarter of 2020, and operating margins were 24%. Excluding the dilutive impact of acquisitions, core operating margins were 25.8%, up a very strong 90 basis points versus the fourth quarter of 2020. EBITDA in the fourth quarter was $437 million, up 21% over the prior year, and EBITDA margins were 29.1%. This operating performance led to record earnings of $1.37 per diluted share, up 27% over the fourth quarter of 2020, and above our guidance range of $1.28 to $1.30. Our record performance in the fourth quarter speaks to the strength of the Ametek growth model, and our ability to drive strong growth throughout economic cycles. While the pandemic impacted results in 2020, we have quickly recovered and are now running well above pre-pandemic levels. For example, Amitek's fourth quarter 2021 sales were 15% higher than our sales in the fourth quarter of 2019, prior to the start of the pandemic, while core operating margins were up 300 basis points and earnings were up 27% versus the fourth quarter of 2019. Now let me provide some additional details at the operating group level. First, the electronic instruments group. Sales for EIG were a record, $1.06 billion, up 29% compared to last year's fourth quarter. Organic sales were up 17%, acquisitions added 13%, and foreign currency was a one-point headwind. Growth remains strong and broad-based across EIG, with particularly strong growth on our Gatan and Kamika businesses. EIG's fourth quarter operating income was a record $280 million, up 18% versus the same quarter last year, and operating margins were 26.4%. Excluding the dilutive impact of acquisitions, EIG's core margins were excellent at 29.3%. up 50 basis points from the fourth quarter of 2020. The electric and mechanical group also delivered outstanding sales growth and excellent operating performance. Fourth quarter sales for EMG were $447 million, up 18% versus the prior year driven by broad-based organic sales growth. Our automation businesses saw continued strong demand across a wide range of end markets. EMG's operating income in the fourth quarter was $105 million, up 32% compared to the prior year. EMG's operating margins expanded an exceptional 260 basis points to 23.6%. Now for the full year results. Overall performance was outstanding in 2021, establishing annual records for essentially all key financial metrics. Overall sales for the year were $5.5 billion, up 22% from 2020. Organic sales increased 15%, acquisitions added 7%, and foreign currency a modest tailwind. Overall orders were up 40% versus the prior year, with 26% organic orders growth leading to a record backlog and providing us solid visibility as we look ahead to 2022. Operating income for 2021 was $1.3 billion, up 22%, and operating margins were 23.6%, with core margins up 110 basis points versus the prior year. EBITDA for the year was $1.6 billion, up 20% from 2020. And full-year 2021 earnings were $4.85 per diluted year, up 23% versus the prior year. In addition to the excellent financial results in 2021, we also positioned Ametek for long-term success by continuing to invest in our businesses to support their organic growth initiatives. One important initiative is new product development as we look to further expand our differentiated technology solutions and attractive growth markets. In 2021, we invested $300 million in research, development, and engineering, or approximately 5.5% of sales. This level of investment was up 22% over 2021. One way we measure the success of new product development efforts is through our Vitality Index, which reflects the level of sales from products introduced over the past three years. In the fourth quarter, our Vitality Index was a very strong 25%. These investments are driving outstanding innovation, including a growing number of important solutions in support of our customers' sustainability initiatives. We're supporting the development and expansion of renewable energy solutions, providing important technologies used to monitor, measure, and reduce greenhouse gas emissions, assisting scientists in their understanding of the impacts of climate change, and supporting the development and testing of electric vehicles. To name just a few of the important applications Ametek plays a key role in supporting. We are expanding our research, development, and engineering investments and expect to invest approximately $340 million, or 5.5% of sales, in RD&E in 2022. This is a 13% increase over 2021 RD&E spend. We are also deploying our capital on strategic acquisitions, adding to our portfolio of market-leading industrial technology businesses and driving excellent returns for our shareholders. We had a record year of capital deployment in 2021, deploying approximately $2 billion on the acquisition of six businesses. Our latest acquisition, AlphaSense, was completed in the fourth quarter. AlphaSense develops and manufactures gas and particulate sensors for use in environmental health and safety and air quality applications. Their sensors are used in both fixed and portable systems to detect a variety of gases, including oxygen, volatile organic compounds, and harmful toxic gases. AlphaSense's sensor projects and Technologies are highly complementary with our MOCOM business and provide our sensor offering serving and broaden our sensor offering, serving critical health, safety, and environmental applications. AlphaSense is based in Essex, UK and has annual sales of approximately $30 million. Our acquisition pipeline remains active. Our M&A teams continue to work diligently and we expect to remain very busy in 2022. As our results reflect, our businesses are doing an excellent job managing the ongoing operational challenges caused by the pandemic. Ametek's flexible, agile operating structure, including our global supply chain capabilities, provide us the ability to quickly adjust and react to challenges. These supply chain issues are leading to higher inflation. However, we are able to more than offset this inflation with higher pricing given our differentiated product offering. Overall, the operating environment remains similar to what we experienced during the third quarter, with extended lead times for a broad range of materials and components, along with logistics and labor availability issues. We remain focused in the short term on managing our supply chain and ensuring we can safely operate our factories, while also continuing to drive long-term operational excellence initiatives across our businesses. Moving to our outlook for 2022. We remain cautious in the short term given ongoing COVID-19 and supply chain challenges. However, we are confident in the strength of our businesses and our ability to manage through these uncertain times. For the full year, we expect overall sales to be up approximately 10% with organic sales up mid to high single digits versus 2021. Diluted earnings per share for the year are expected to be in the range of $5.30 to $5.42, up 9% to 12% compared to 2021. For the first quarter, overall sales are expected to be up approximately 20% compared to the same period last year. And first quarter earnings are expected to be in the range of $1.24 to $1.28 per diluted share, up 16% to 20% versus the prior year. In summary, I would like to thank all of our employees for their tremendous efforts this past year. Ametek's fourth quarter and full year results were excellent and reflective of the resilience and strength of our workforce and the Ametek growth model. Our strong orders and record backlog position us nicely for 2022, and we look forward to the new year and continuing to build on the momentum gained in 2021. I will now turn it over to Bill Burke, who will cover some of the financial details, and then we'll be glad to take your questions. Bill? Thank you, Dave.