AMETEK, Inc.

Hello, and welcome to the Ametek third quarter 2025 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 11 on your telephone. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Investor Relations and Treasurer, Kevin Coleman.

Thank you, Andrew. Good morning, and welcome to Amatek's third quarter 2025 earnings conference call. With me today are Dave Zepico, Chairman and Chief Executive Officer, and Dala Puri, Executive Vice President and Chief Financial Officer. During the course of today's call, we will 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 historical results will be on an adjusted basis, excluding after-tax, acquisition-related and tangible amortization, and excluding acquisition-related costs. 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, and then we'll open it up for questions. I'll now turn the meeting over to Dave.

Thank you, Kevin, and good morning, everyone. Amitek delivered outstanding results in the third quarter, with double-digit growth in sales, quarters, operating profit, and diluted earnings per share. Organic sales growth was strong in the quarter, leading to outstanding margin expansion in earnings well ahead of our expectations. Given these excellent results and our outlook for the remainder of the year, we are increasing our full-year earnings guidance. Now let me turn to our third quarter financial results. Sales were a record $1.89 billion, an increase of 11% from the third quarter of 2024. Organic sales were up 4%, acquisitions added six points, and foreign currency translation was a one-point benefit. Orders were also very strong in the quarter, with overall orders up 13% to a record $1.97 billion, and organic orders up 7%, leading to a record backlog of $3.54 billion. Our operational performance in the quarter was excellent, with strong margin expansion and double digit earnings growth. Operating income in the quarter was a record, $496 million, an 11% increase over the third quarter of 2024. Excluding the impact of recent acquisitions, margins were 27%, up 90 basis points versus the prior year. EBITDA on the quarter was a record, $592 million, up 11% versus the prior year, with EBITDA margins an outstanding 31.3%. This operating performance led to record earnings of $1.89 per diluted share, up 14% versus the third quarter of 2024. Now, let me provide some additional details at the group level. First, the electronic instruments group. EIG delivered outstanding operating performance in the third quarter with strong margin expansion and operating margin levels that reflect the differentiated nature of our products and solutions. EIG sales were a record $1.25 billion, up 10% from last year's third quarter. Organic sales were flat. Acquisitions added nine points, and foreign currency was a one-point tailwind. EIG operating income was $360 million, up 6% versus the prior year. Operating margins, excluding the impact of recent acquisitions, were 30.4%, up 50 basis points versus the prior year. The electromechanical group had an excellent quarter, delivering outstanding sales growth, record operating income, and sizable margin expansion. EMG's third quarter sales were a record $646 million, up 13% versus the prior year. Organic sales were up 12%, and foreign currency was a one-point tailwind. Growth was broad-based across all EMG businesses in the quarter. EMG's operating income in the third quarter was a record $164 million, up 25% compared to the prior year. EMG's operating margins were up sharply to 25.4%, a 250 basis point increase from the third quarter of 2024. Our results in the third quarter and thus far this year are a powerful demonstration of the Ametek growth model in action. Our distributed operating structure and embedded operational excellence culture has allowed our businesses to quickly react to changing market dynamics and deliver excellent results. While there are still macroeconomic uncertainty, given the ongoing trade conflicts, Amatek is well positioned. We are seeing positive inflection in our automation and engineered solutions markets, along with continued strength across our aerospace and defense businesses. Additionally, we are managing a growing pipeline of opportunities within our power businesses and are benefiting from the strong secular trends driving that market. We are also seeing some improved visibility across our process markets. Although as noted, we are closely monitoring the trade dynamics and impact on demand timing. Our recent acquisitions, Ferro, Vertec, Kern, and Paragon are integrating very well into Ametek and delivering strong results. As Dallop will cover, we have significant balance sheet flexibility providing us with ample firepower to deploy on strategic acquisitions. Lastly, our operating model continues to shine with our colleagues doing an outstanding job leveraging our global infrastructure and operating systems to drive outstanding performance. Thank you to all colleagues for your tremendous efforts. Now switching to capital deployment. As noted, our integration efforts with recent acquisitions are progressing very well. Strategic acquisitions continue to be a core element of our growth strategy and the primary focus for our capital deployment. We are managing a strong pipeline of attractive acquisition candidates and expect to be active in pursuing strategic opportunities going forward. Complementing our proven acquisition strategy is a consistent commitment to investing in our businesses to best position them for long-term success. For 2025, we now expect to deploy an incremental $90 million toward organic growth initiatives, with this investment focused primarily on research and development, sales, and digital marketing initiatives. The tangible results of this focus are clear, with our third quarter vitality index a strong 26%. The benefits of these investments coming to fruition can be seen in the many new product innovations across the company. I wanted to highlight a few of these new product innovations, the first one from our Virtec Vision business. Virtec Vision is the leading provider of 3D laser projection and quality control inspection systems for critical aerospace and industrial applications. Virtec recently introduced a new AI-powered camera and software monitoring system that complements its advanced 3D laser projection system. further advancing their intelligent real-time inspection capabilities. The IRIS AI inspection camera addresses customers' critical need for improved quality control and real-time documentation in complex manufacturing workflows. The AI-powered camera captures and documents every step of the build process, creating a complete digital record for each part. A notable feature of this new solution is the ability for users to create custom ai inspection models that can automatically detect anomalies allowing for real-time process corrections with this new product launch vertek makes powerful digital manufacturing tools intuitive and operator friendly helping customers improve quality and productivity our nsi mi technologies business the global defense Tech leader in advanced RF and microwave test and measurement solutions is also doing an outstanding job developing highly differentiated custom solutions for their customers' critical applications. NSI is aligned with strong secular growth themes tied to advancements in satellite systems, autonomous vehicles, and defense systems, and as a result, are seeing excellent demand for their advanced measurement solutions. NSI's recently introduced new product, the vector digital receiver advances their antenna, radome, and electromagnetic field measurement capabilities, directly supporting the development of next-generation communication systems and advanced sensors for air, land, space, and sea applications. I also wanted to congratulate our Rolland business on an impressive recent industry recognition. Roland is a global leader in advanced clinical communications and workflow solutions for hospitals and healthcare systems worldwide. For the second consecutive year, Roland has won the prestigious MedTech Breakthrough Award for Best Clinical Administration Hardware Device. This award recognizes Roland's responder platform for its critical role in addressing key challenges in modern healthcare, such as nursing shortages and clinician workload stress. The new Responder Enterprise Converge simplifies and coordinates care by improving direct staff-to-staff and patient-to-staff communication, which leads to faster response times, enhanced patient safety, and better staff efficiency. This recognition underscores Rollins' technology leadership and its commitment to developing solutions that empower healthcare professionals and improve patient outcomes. This is a fantastic example of how our businesses are translating their technological innovation efforts into market leading award winning solutions for our customers. Finally, an update on the global trade environment. The situation continues to be very fluid and ever changing. We remain vigilant in monitoring developments and proactively managing potential impacts. As we have discussed, our businesses continue to execute their well defined mitigation plans, which include targeted pricing, strategic supply chain modifications, and utilizing our global manufacturing footprint to adapt to changing demand patterns. Our teams also continue to leverage our U.S. manufacturing presence to support global customers adapting their own supply chains. Ematek's culture and decentralized operating structure remain key advantages. providing flexibility to implement these actions quickly and effectively. Our proven playbook for navigating these uncertain environments continues to serve us well and our teams are executing effectively. Now turning to our outlook for the remainder of the year. We continue to expect full year sales to be up mid single digits on a percentage basis compared to 2024. Given our strong third quarter performance, and outlook for the fourth quarter, we are increasing our earnings guidance for the year. Diluted earnings per share for the year are now expected to be in the range of $7.32 to $7.37, up 7% to 8% versus the prior year. This is an increase from our previous guidance range of $7.06 to $7.20 per diluted share. For the fourth quarter, We anticipate overall sales to be up approximately 10% with earnings in the range of $1.90 to $1.95 per share up 2% to 4% versus the prior year. Fourth quarter earnings growth would be 6% to 9% adjusting for last year's lower than normal tax rate. To summarize, Amitek delivered an excellent third quarter with strong sales and orders growth, robust margin expansion, and earnings well ahead of our expectations. Our businesses continue to execute exceptionally well, delivering our differentiated technology solutions across a diverse set of niche markets. The durability of our operating model and our strong cash flow provide us with the flexibility to navigate through challenging market conditions and continue to proactively invest in our businesses and in strategic acquisitions. As a result, We remain firmly positioned to deliver long-term sustainable growth and create value for our shareholders. I will now turn it over to Dalip Puri, who will cover some of the financial details of the quarter, then we'll be glad to take your questions. Dalip.