AMETEK, Inc.

Good day and thank you for standing by. Welcome to the Ametek second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin Coleman, Vice President of Investor Relations and Treasurer. Please go ahead.

Thank you, Benny. Good morning, and thank you for joining us for Amatek's second quarter 2023 earnings conference call. Joining me today are Dave Zepico, Chairman and Chief Executive Officer of 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 AMETX 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 2022 or 2023 results or to 2023 guidance will be on an adjusted basis, excluding after-tax, acquisition-related, and tangible amortization. Reconciliations between GAAP and adjusted measures can be found in our press release and on the Investors 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. Emetech achieved exceptional performance in the second quarter, marked by strong sales growth, outstanding operational execution, and record results ahead of our expectations. In the quarter, we established records for sales, operating income, operating margins, earnings per share, and EBITDA. We also ended the quarter with a record backlog. Ametek's continued outstanding results reflect the strength of the Ametek growth model, the quality of our niche differentiated businesses, the benefits from our organic growth initiatives, and most importantly, the outstanding efforts from our dedicated colleagues. Considering our strong second quarter results and the positive outlook for the remainder of the year, We are again increasing our earnings guidance for the full year. Now let me turn to our second quarter results. Second quarter sales were $1.65 billion, up 9% over the same period in 2022. Organic sales growth was 5%. Acquisitions added four points in the quarter and foreign currency was flat. Our book to bill ratio in the second quarter was 1.01. our 12th consecutive quarter of positive book to build. As a result, we ended the quarter with a record backlog of $3.44 billion, up $220 million from the end of 2022, and up $1.6 billion, or 91%, from the end of 2020. Operating income in the quarter was a record $419 million, a 15% increase over the second quarter of 2022. Operating margins were 25.4% in the quarter, up an impressive 130 basis points from the prior year. EBITDA on the quarter was a record $496 million, up 12% over the prior year, while EBITDA margins were also impressive at 30.1%. This operating performance led to record earnings of $1.57 per diluted share, up 14% versus the second quarter of 2022, and above our guidance range of $1.49 to $1.51 per share. Now let me provide some additional details at the operating group level. First, the electronic instruments group. The electronic instruments group had a great quarter with excellent sales growth and tremendous operating performance. Sales for EIG were $1.13 billion in the quarter, up 10% from the second quarter of last year. Organic sales were up a very strong 8% with acquisitions accounting for the balance of the growth. EIG sales growth in the second quarter was widespread across each of our divisions with growth particularly strong in our aerospace and defense and ultra-precision technologies businesses. EIG's operating performance was impressive with strong profit growth and margin expansion. Operating income was $307 million up 16% versus the prior year, while operating margins were 27.1%, up a robust 130 basis points from the prior year. The electromechanical group also delivered strong sales growth and excellent operating performance in the quarter. EMG's second quarter sales were a record, $511 million, up 5% versus the prior year driven by the acquisition of Bison Engineering, with organic sales roughly flattened the quarter. EMG's operating income in the quarter was $136 million, up 10% compared to the prior year period. EMG's second quarter operating margins were excellent at 26.6%, up 100 basis points versus the prior year, while EMG's core operating margins, which exclude acquisition dilution, were up a sizable 180 basis points. Overall, Emitech achieved outstanding performance in the second quarter of 2023. In addition to Emitech's continued strong operating execution, Our strong results speak to the attractiveness and diversity of the end markets we serve. Our businesses hold leading positions in attractive niche market segments. Through our continued organic growth investments and strategic acquisitions, we are expanding our presence in market segments and niches aligned with strong sector growth drivers. As a result, our businesses are well positioned with differentiated solutions to benefit from the meaningful and long-term investments in areas such as electrification, clean energy, healthcare efficiency, and manufacturing reassuring. In addition to our alignment with strong growth markets, Ametek is seeing great success from our organic growth initiatives and investments. For all of 2023, we expect to spend over $100 million on incremental growth investments. These investments are largely focused on expanding our sales, marketing, and commercial excellence initiatives, as well as broadening our research, development, and engineering efforts. Ametek's research, development, and engineering teams across our businesses consistently deliver innovative and next-generation products tailored to meet the unique needs of our customers. While there are numerous examples across the company, I wanted to highlight our Abaco business unit for their outstanding accomplishments. Abaco is a leading provider of commercial off-the-shelf embedded computing systems for aerospace, defense, and specialized industrial applications. Demand for Abaco solutions remains strong given their position as a leading provider of ruggedized technology solutions with advanced thermal management capabilities. Abaco was awarded the best overall design for high performance PCBAs at the recent Accelerator Technology Innovation Awards. Abaco also recently introduced a next generation integrated computing and graphics card with the latest GPU technology. This provides our customers with advanced computing graphics processing and security capabilities required in AI-focused applications such as intelligence, surveillance and reconnaissance, radar signal processing, and deep machine learning for autonomous systems. In addition to Abaco, many other businesses are well positioned to benefit from the growing demand for high computing power and analytics. We recognize the pivotal role of organic growth initiatives in driving our overall growth strategy. These investments in organic growth, coupled with our market leadership and attractive market exposures, position the company for continued success in driving sustainable long-term growth. Now switching to our capital deployment and acquisition strategy. Over the last three quarters, we deployed approximately $530 million on the acquisition of three businesses. Navitar, RTDS, and Bison Engineering. Each of these businesses is integrating nicely into Ametek, and each is very well positioned to capitalize on attractive growth opportunities in their markets. Our acquisition pipeline remains very strong, and our businesses and internal M&A teams are actively managing a number of opportunities. Ametek remains committed to leveraging our strong cash flow to pursue strategic acquisitions that align with our growth objectives. With a robust balance sheet and significant financial capacity, we are well positioned to support our acquisition strategy and capitalize on value creating opportunities in the future. Now turning to our outlook for the remainder of the year. While uncertainties in the macroeconomic environment continue to warrant caution in the short term, we are confident in our ability to navigate through these challenges and deliver strong results. Building upon our strong first half results and positive outlook for the remainder of the year, we are again increasing our earnings guidance. For the full year, we expect overall sales to be up mid to high single digits with organic sales expected to be up mid single digits. Diluted earnings per share for the year are now expected to be in the range of $6.18 to $6.26. up 9 to 10 percent compared to last year's results. This is an increase from our previous guidance range of $5.96 to $6.10 per diluted share. For the third quarter, we anticipate overall sales to be up mid-single digits with adjusted earnings of $1.56 to $1.58 per share, up 8 to 9 percent versus the prior year. In summary, Ametek's second quarter results were excellent. Our businesses continue to deliver excellent performance, benefiting from differentiated technology solutions that cater to diverse and growing niche markets. The implementation of our organic growth initiatives has yielded higher levels of growth, while our portfolio remains aligned with attractive mid- and long-circle markets. Our asset-light business model and strong cash flows provide us with the flexibility to navigate challenging environments while actively deploying capital to drive increased shareholder value. As a result, Amatek 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, then we'll be glad to take your questions. Bill?