AMETEK, Inc.

Ladies and gentlemen, thank you for holding. Your conference will begin shortly. Thank you for your patience. Thank you. Welcome to the second quarter 2022 Emotech earnings conference call. My name is Richard and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press 01 on your touchtone phone. I'll now turn the call over to Kevin Coleman, Vice President of Investor Relations and Treasurer. Mr. Coleman, you may begin.

Thank you, Richard. Good morning, and thank you for joining us for Amatek's second quarter 2022 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'll be making 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 2021 or 2022 results will be on an adjusted basis, excluding after-tax, acquisition-related, and tangible amortization. Reconciliation 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 we'll open it up for questions. And I'll turn the meeting over to Dave.

Thank you, Kevin, and good morning, everyone. Ametek had another excellent quarter, with stronger than expected organic sales growth, outstanding operating performance, robust margin expansion, and record earnings. Importantly, demand remained strong and broad-based across our diversified niche markets, leading to impressive organic order growth and a record $3.1 billion backlog. Given our second quarter results and our outlook for the back half of 2022, we have increased our earnings guidance for the year. Now let me turn to our second quarter results. Second quarter sales were a record, $1.51 billion, up 9% over the same period in 2021. Organic sales were up 12%. Acquisitions added a point and foreign currency was a three-point headwind in the quarter. Organic orders were up a very strong 11 percent despite a highly challenging prior year comparison. Book-to-bill was 1.09 in the second quarter, our eighth consecutive quarter of positive book-to-bill. Operating income in the quarter was a record $365 million, a 15 percent increase over the second quarter of 2021. Operating margins were 24.1 percent in the quarter, up 130 basis points from the prior year with strong incremental margins. EBITDA in the quarter was a record $444 million, about 15% over the prior year, with EBITDA margins of 29.3%. This outstanding performance led to record earnings of $1.38 per diluted share, up 20% versus the second quarter of 2021, and above our guidance range of $1.27 to $1.30, driven by stronger than expected sales, and excellent operating performance. Now let me provide some additional details at the operating group level. First, the electronic instruments group. Sales for our electronic instruments group were $1.03 billion, up 10% from last year's second quarter. Organic sales were up 12% in a quarter, with foreign currency headwinds more than offsetting acquisition contributions. Organic growth remains very strong across our EIG businesses, with particularly impressive growth across our ultra-precision technologies and P&AI division. EIG's operating performance was impressive, resulting in record operating profit and robust margin expansion in the quarter. Second quarter operating income was $265.1 million, up 70% versus the prior year. and operating margins were 25.8% in the quarter. The electromechanical group also delivered strong sales growth and excellent operating performance in the quarter. EMG's second quarter sales were a record, $486.3 million, up 7% versus the prior year, with organic sales growing 11% in the quarter. EMG's growth was also broad-based, with strong growth across both our EMIP and automation businesses. EMG's operating income in the second quarter was $124.4 million, up 11% compared to the prior year period. EMG's second quarter operating margins were excellent, at 25.6%, up 70 basis points versus the prior year. Overall, outstanding results in the quarter. reflecting the quality of our differentiated businesses, the strength of our operating model, and the tremendous efforts of our employees. I would like to thank all Ametek colleagues for your commitment to Ametek and for the many important contributions you make to our sustained success. Now, let me touch on the supply chain. Overall, the global supply chain remains constrained, with the largest challenging challenges continuing to be the availability of electronic components. As we noted previously, we have strategically decided to hold additional inventory of select components to support the strong customer demand and as a hedge against the tight supply chain. Additionally, Ametek's global sourcing teams are doing an outstanding job working to identify additional sources of supply. While these supply chain issues are leading to higher inflation, we have been able to more than offset this inflation with higher pricing, leading to a strong price inflation spread again this quarter and outstanding margin expense. The combination of our global supply chain capabilities and pricing power provides us the confidence and our ability to manage through these uncertain times. During our first quarter earnings call, we noted that the COVID-driven lockdowns across parts of China were expected to delay some China sales from the second quarter into the second half of the year. These lockdowns caused less impact on the business in the quarter than we anticipated. Due to the excellent efforts of our China team, we were able to operate in a closed-loop system and adjust our logistics and supply chain networks to support production and shipments. Additionally, during the last two weeks of the quarter, as restrictions were lifted, we were able to resume multi-ship production and recover much of the delayed shipments. The impact of China's zero-COVID policy is something we are closely watching as we may need to react and adjust in the future. Thank you to our entire team in China for your tremendous commitment and resilience during this time. Now switching to our acquisition strategy. Our top priority for capital allocation remains the value-enhancing strategic acquisitions. Our M&A pipeline is very strong. Our business unit and corporate development teams are busy managing an active pipeline of attractive acquisition candidates. As Bill will highlight in a moment, we have a strong balance sheet and excellent cash flows providing us with meaningful capacity to support our acquisition strategy, and we expect to be active in the second half of the year. We also remain focused on driving higher levels of organic growth by consistently investing in our businesses to support their strategic growth initiatives. We're seeing the benefits of these investments in stronger organic growth. Our investments in research, development, and engineering continues to yield advanced technology solutions, allowing us to expand our leadership position across our niche markets. One measure of the success of these efforts is our vitality index. which was a very strong 26% of sales in the second quarter. This level of vitality reflects our business's ability to develop new products aligned with compelling growth opportunities. One example of this is Ametek's expansion into the high-growth areas of precision optics. Ametek's Zygo business, based in Middletown, Connecticut, provides leading-edge, extreme precision optics for the design and protection of very large, complicated aspheric lenses. These capabilities supported the manufacture of the 18 hexagonal shaped mirrors, which make up the James Webb Space Telescope's primary mirror. The James Webb's telescope very recently produced the deepest and sharpest infrared images of the deep universe. Truly amazing images do impart to Zygo's capability. Zygo also provides advanced optical systems for use in the next generation of semiconductor production equipment. Their incredibly precise mirrors are playing an important role in supporting the development of EUV, or extreme ultraviolet optics, for the next generation of semiconductor technologies. Just two of the many examples across Ametek of the unique and highly differentiated capabilities and technologies we provide our customers. Now turning to our outlook for the remainder of the year. With our strong results in the second quarter, continued solid orders of momentum, and record backlog, we've increased our full-year earnings guidance. For the full year, we expect overall sales to be up high single digits, with organic sales now also expected to be up high single digits, versus our prior guidance of up mid to high single digits. Diluted earnings per share for the year are now expected to be in the range of $5.46 $5.54, up 13% to 14% compared to 2021. This is an increase from our previous guidance range of $5.34 to $5.44 per diluted share. For the third quarter, we expect overall sales to be up in the high single digits compared to the same period last year, and third quarter earnings are expected to be in the range of $1.36 to $1.38 per diluted share, up 8% to 10% versus the prior year. While we are closely monitoring the various macroeconomic headwinds, we are not seeing slowing in our businesses as demand remains solid and our businesses are operating at a high level. We are confident in our ability and improved outlook for the year, given our strong backlog, ability to offset inflation with price increases, and outstanding operating capability. In summary, Ametek's second quarter results were excellent. Our businesses are well positioned with differentiated technology solutions serving a diverse set of growing niche markets. Our organic growth initiatives are driving higher levels of growth and our portfolios align with attractive mid and long cycle markets. Additionally, our SLA business model is strong cash flows provides us the flexibility to navigate challenging environments while continuing to deploy capital and drive increased shareholder value. Amitek remains firmly positioned to deliver long-term sustainable growth. I will now turn it over to Bill Burke, who will cover some of the financial details of the quarter, and then we'll be glad to take your questions. Bill?