Q4 2024 Fortive Corp Earnings Call
They're not nice because they're too nice
Thank you for watching!
Daryl: My name is Daryl and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Ford of Corporation's fourth quarter 2024 earnings results conference call.
Daryl: Quarter ended September 27, 2024, with these forward looking statements speak only as of the date of their need and we don't assume any obligation to update.
Jeff: With that I'd like to turn the call over to Jeff.
Jeff: Thanks Elena.
Jeff: Hello, everyone and thank you for joining us I'll begin on slide three Florida delivered better than expected performance in the fourth quarter, including higher core growth earnings and free cash flow. These results capped a strong year for fortis, including another year of record margins with gross margins of 60% and adjusted operating margins nearing 27%.
While continuing to fund future growth. In addition, we compounded adjusted earnings and free cash flow of 13%.
Jeff: <unk> two our strong multiyear track record of differentiated financial performance, our accelerated pace of innovation in 2024 helped us sustained top line momentum given the mixed demand environment and further enhances our outlook for 2025, turning to the year ahead, where it is poised for improving core sales growth and continued.
Jeff: Strong operating performance, we've taken a prudent and balanced approach to planning the year, reflecting momentum in our bookings and durable revenue growth in industrial operated solutions and advanced health care and stabilizing trends in precision technologies driving a gradual recovery through the year. Lastly, we are progressing well on the actions we announced last year.
Jeff: Further accelerate our strategy and enhance value creation, our teams have made meaningful progress towards the separation of the newly named precision technologies company called rally. We now expect the transaction to close early in the third quarter. We also executed on our plan to prioritize return of capital to shareholders utilizing a record free cash flow to read.
Jeff: Purchase shares in summary, these actions reflect our commitment to unlocking long term value for all our stakeholders turning to slide for 2024 was another year of consistent compounding cleaning the achievement of several record financial metrics since our inception, we have evolved our portfolio leveraged the Florida business system to accelerate growth in <unk>.
Jeff: Nation expand market share and profitability enforced the leadership skills, we need for the future the exceptional value created for customers and shareholders as reflected in our sustained multi year performance, including an acceleration to mid single digit core growth on average the last five years over 600 basis points of adjusted operating margin expansion and three <unk>.
Jeff: Third 50 basis points of adjusted gross margin expansion amidst unprecedented inflation, our accretive capital deployment has contributed to higher growth and higher returns as a result, we grew free cash flow an average of 18% per year over this time underpinned by industry, leading net working capital performance in summary, what is unique and.
Jeff: Truly differentiated about Florida is the breath of results that are compounding over time relative to peers. The reason for this five year track record of success is our commitment to appia and the strategic evolution of our portfolio turning to slide five our evolution of the Florida business system and continuous improvement mindset have driven an acceleration in M. P. I V.
Jeff: City, helping to sustain our top line momentum within Fps, we adult overtime proven innovation toolset to identify unmet customer needs develop new products and bring them to market faster, which ensures greater returns on our R&D investments. If several examples of how our increased innovation and velocity is contributing to growth across the enterprise.
Jeff: Starting with I O S. Fluke launched a record 20 major new products in the last two years extending their leadership position in the solar and energy storage tool and contributing 200 basis points to growth in 2024 facility and asset lifecycle revitalize their innovation efforts. The last three years launching its strongest slate of new products and enhancements while.
Jeff: We're also expanding margins 800 basis points revenues from these new offerings are expected to more than double in 2025 versus last year S. P launched a record of six new products in 2024 with five 10-K approval, which are expected to contribute over $10 million of revenue in 2025 probation added to their leading Gi position there.
Jeff: Next phase of apex insights proprietary data analytics tool that boosts provider productivity contributing to a 67% increase in apex SaaS sites in 2024 P. T is also leveraging F. B S innovation tools to advance the world's technology Tektronix launched four new products to their best in class electronic test.
Jeff: And offering serving their fastest growing markets sensing technologies is launching sensors for monitoring the liquid and air cooling systems within data centers and quality are all continues its double digit pace of growth with new electric grid monitoring and energy storage solutions to support the expansion of global power infrastructure. We're also leveraging our investments in the fourth.
Jeff: Develop advanced software data analytics, and AI capabilities, and we expect to launch new AI based product sets in 2025, and 2026 moving to the fourth quarter and full year results on slide six we ended the year with strong operating performance generating adjusted earnings growth approximately three times revenue growth core revenue.
Jeff: Growth of 2% in the quarter reflected an acceleration that I O S. Partially offset by the anticipated decline in precision technology, China headwinds continues to mute. The recovery, we are seeing certain markets acquisitions net of divestitures were offset by unfavorable FX as the dollar strengthened in the quarter further highlights of our fourth quarter performance include one.
Jeff: Hundred basis points of adjusted operating margin expansion adjusted earnings per share of $1 17, selecting a five cent beat at the midpoint with earnings up 19% year over year and record Q4 free cash flow of $465 million up 13% year over year.
Jeff: For the year core revenue growth was 1%, reflecting the mixed demand environment in core decline at P. T. Adjusted operating profit grew 7% and margins expanded 100 basis points, representing over 60% Incrementals, we delivered earnings and cash flow above our initial guidance coming into the year with adjusted EPS of $3.89.
Jeff: 13% and record free cash flow of $1 $4 billion, representing 23% free cash flow margins for the year.
Jeff: Going to slide seven I'll provide more detail on our segment performance for the quarter and the full year, starting with I O S and H F.
Jeff: Combined basis fourth quarter revenues grew 4% with adjusted operating margins up 140 basis points to over 33%. This represents 12 consecutive quarters of consistent mid single digit core growth on a combined basis, reflecting the durability and resilience of these businesses for the full year combined AOS and H S deliver.
Jeff: 4% core revenue growth and 120 basis points of adjusted operating margin expansion with over 60% Incrementals moving to the right Telegent operating solutions expanded operating margins 190 basis points on 4% revenue growth in the fourth quarter with M&A contributions, partially offset by FX headwinds stable industrial products.
Jeff: And overall in MPI momentum drove mid single digit revenue growth at fluke shipments outpaced our expectations exiting the fourth quarter. As a result, we expect a slower start to the year in Q1 before returning to more normalized throughout the rest of the year growth in facilities and asset lifecycle accelerated to high single digits in the fourth quarter enabled by stronger take rate.
Jeff: Revenue across our government and multi site retail product offerings as you can see on the far right of the page advanced Health care solutions grew core revenue, 5% in the quarter with FX headwinds of approximately 150 basis points as total growth consumables normalized mid single digit growth as expected and probation accelerated growth, having lapped the license headwinds earlier.
Jeff: And the year H S expanded adjusted operating margins by approximately 40 basis points in the quarter and 200 basis points for the year driven by high margin consumable growth, partially offset by unfavorable FX turning to precision technologies on slide eight revenue was approximately flat in the quarter with a core decline of 3% acquisitions net of divestitures.
Jeff: <unk> contributed approximately three points of growth in the quarter. This represents the second consecutive quarter of sequential core growth improvement enhanced by double digit growth in utility and aerospace and defense markets, just operating margins contracted 200 basis points and lower core volumes, partially offset by productivity benefits and accretive M&A core revenues at tektronix.
Jeff: <unk> were down low double digits in the quarter as expected. However orders were up high single digits for the second consecutive quarter. We continue to see investments supporting power compute and communications for datacenter expansion and demand for defense applications, driving tektronix orders growth, while China and E. Mobility remained weak we had another quarter of double digit growth at <unk>.
Jeff: Zero impact Si as our teams continue to ramp production capacity to keep up with strong demand.
Jeff: And to the right side of the page you can see the precision technologies revenue and adjusted operating performance for the past four years.
Jeff: 2021 P. T has grown core revenue at 4% CAGR with adjusted operating profit growing twice that rate at an 8% CAGR over the period core revenues declined 4% in 2024 improved portfolio positioning and focused innovation efforts have dramatically improved the recycled performance leveraging up yes tools, we've expanded our addressable market.
And added complementary solutions aligned to favorable secular trends, including next Gen power applications for new markets and new sources of energy around the world as a result P. T is a much more durable business today with a stable margin and free cash flow profile poised for recovery in 2025 with that I'll turn it over to Chuck to discuss our 2025.
Jeff: Outlook. Thank.
Chuck: Thank you, Jim and Hello, everyone turning to slide nine let me set the stage for how we're thinking about the year. We continue to be encouraged by stabilizing demand trends overall, which gives us confidence in an acceleration in revenue growth from 2024 to 2025, well we are providing full year guidance for total 40, we thought it would be.
Chuck: Helpful to frame the key drivers of the respected new companies, starting with new 40 on the left comprising our iOS and H S segments. We expect revenues of approximately $4 1 billion supported by demand for our leading safety and productivity technologies and market share gains from new.
Chuck: Introductions, we expect stable underlying industrial demand at fluke with positive point of sale in North America, and Western Europe, China is expected to slow both from a GDP and industrial production perspective, and we have reflected that into our outlook, we expect sustained momentum in our software and recurring revenue businesses.
Chuck: Including double digit a or our growth in style and stable consumables growth in health care. This yields low single digit plus to mid single digit core growth for new Ford, even 2025 regarding phase we expect growth in the second half to outpace the first primarily due to timing and days impact in Q1.
Chuck: Turning to the P. T company, we anticipate revenues of roughly $2 2 billion in 2025 with core growth up slightly for the year, our businesses aligned power infrastructure compute and communications investments for datacenter expansion, coupled with aerospace and defense systems comprised approximately 30.
Chuck: 5% of revenue and are expected to grow double digits again in 2025, coupled with stabilizing trends in broader semiconductor and sensor markets. We anticipate a return to core revenue growth in the second half of the year on slide 10, we provide further details on Q1 and 2025 guidance starting with.
Chuck: The full year, we expect core revenue was up 1.5% to 3.5% FX is expected to be at an approximate $90 million headwind for the year or roughly 150 basis points of impact to total growth adjusted operating profit is expected to increase 2% to 5% and adjusted diluted EPS guidance is.
Chuck: $4 to $4 12 up three 6% for the year, our adjusted EPS guidance includes a 20% to 25% headwind from a higher effective tax rate and FX. This is offset by lower share count and a slightly lower interest expense adjusted free cash flow is expected to be approximately one point.
Chuck: <unk> billion, which excludes the impact of separation related cash cost of roughly $185 million. The conversion rate on adjusted net income is approximately 100%. Excluding these items for the first quarter, we anticipate core revenues to be roughly flat FX is expected to be an approximate $30 million.
Chuck: Canoe headwind I O S. In Hs will start the year slower due to fluke stronger finish in Q4 and less days in Q1 impacting consumables and service utilization rates P. T is expected to be down mid single digits, representing our toughest year over year comp adjusted operating profit is expected to be roughly flat and E. P.
Chuck: As expected in the range of 83 to 86 cents, including a five cent headwind from unfavorable FX and higher taxes.
Chuck: With that I'll turn it back over to Jim to conclude thank.
Jim: Thank you Chuck I'll continue on slide 11, we've made considerable progress on the actions, we announced last September to accelerate our strategy and enhanced value creation, starting on the left we utilized a record second half free cash flow to repurchase approximately 10 million shares representing 80% of our free cash flow slightly more than we committed to.
Jim: When we announced the separation we remain committed to deploying free cash flow incremental share repurchases as we work to execute the spin balance sheet remains in great shape, we exited 2024 with net leverage of approximately one six times and we continue to expect that each company will sustain investment grade balance sheets. After the spin moving to the <unk>.
Jim: We expect the separation to close early in the third quarter. Following the progress our team has made to date, including confidentially filing a draft registration statement with the SEC in December we are processing initial comments, we expect a form 10 filing in the spring our efforts to hire top talent are well underway, ensuring we assemble a world class corporate team.
Jim: To drive future success earlier this week, we announced that P. T. Newco has an exciting new name Radiant Corporation, and we appointed Ganesh Moorthy as the Board Chair, we also announced the ounce Spoon, who is retiring from the board of board. He can't Mitchell, who both joined the rally in board together with Tami. These board designees reflect Florida's commitment to the new car.
Jim: The success and sustained value creation for all stakeholders will continue to provide additional updates as they become available.
Speaker Change: I'll wrap up now on slide 12 last week, we are excited to announce that Shar do bag was appointed Florida's New Board chair, succeeding Alan Spoon on behalf of the board and management team I want to thank Alan for his leadership and all he's done to Shepherd, Florida become a more durable growth company as we enter this new chapter I and the rest of the board are confident Charles the right person to serve.
Speaker Change: Or is the next chair she's been providing valuable contributions to our board since 2020 and her deep insights into our business culture and strategy combined with her extensive operational and leadership expertise per her well the stores the execution of our long term strategy with a more focused and resilient portfolio.
This next chapter as a manifestation of the strategy, we laid out at our inception profitably evolve our portfolio to deliver in any environment that was the case in 2024, our enhanced portfolio positions innovative new products and dedication to the Florida business system have allowed us to deliver consistent compounding performance over the last five years, we are well positioned to continue.
Speaker Change: This track record in 2025 and beyond as we progress through the separation we could not have reached this milestone in Florida's journey without our unique culture and the passion of our 18000 teammates around the world together, we show up with a mindset, we can do and be better I know I speak for the entire Ford team, including the limit and Tammy when I say I cannot be more excited.
Speaker Change: Good for the future as both companies are strategically well positioned for enduring success with that I'll turn it to Atlanta.
Speaker Change: That concludes our formal comments Daryl we are now ready for questions.
Speaker Change: Thank you well now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two to remove your question from acute for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment. Please while we poll for your questions.
Speaker Change: Hmm.
Speaker Change: Our first questions come from the line of Rob Mason with Baird. Please proceed with your questions.
Rob Mason: Yes, Hi, and happy Friday.
Speaker Change: Thank you so you're not saying that on a fourth conference call. So just maybe to start Jim could you dig into the the product side of the business and in thinking this is more around.
Rob Mason: See I O C H S new 40.
Rob Mason: When you you framed out 'twenty 'twenty five or made some initial comments back in October I'm, just curious around the Dod has anything changed evolved as you've tightened up the plans you made a comment around China is softer.
Rob Mason: But just some perspective, there around the product side.
Rob Mason: Yeah, and maybe take all way around Florida.
Rob Mason: First of all first of all on New Florida as you as you mentioned iOS and H S. I would say you know really the the aspects of the business and software and health care really performing well, we had a little bit stronger end of year at fluke.
Rob Mason: And some of that would be to get into that later, but but I think just continuing to demonstrate.
Rob Mason: In fluke, the resiliency and durability, particularly around product innovation much of which we highlighted on the prepared remarks I would say.
Rob Mason: What has changed or maybe with what we're going into 'twenty five wrap them a.
Rob Mason: A lot of a lot of the past is similar we've got a little bit of headwind on the days and the consumables businesses and the service parts of our software businesses, which has a little bit of headwind just in the quarter, but really good performance in Q1 across the portfolio and what what I'll call, New Florida on the peak, but China, China is a little bit of a head.
Rob Mason: And for sure. Most that's that's most pronounced in the first quarter because what we saw last year in the first quarter and you probably remember this was we did see some optimism on the part of China Channel partners in anticipation of some of the policy changes that were going to occur and the impact the China government last year, and obviously that didn't happen.
Rob Mason: But so we've got a little bit tougher comp in China in the first quarter kind of is going to be down across really across the board. So on the peace tea front I would say a lot of the orders were good we.
Rob Mason: We talked about the order growth and in a couple of quarters in a row now we'll see order growth in the second half as well and P. T. I mean, I would say you know just China, but again, there China weak and you know we're not getting out of the game here.
Rob Mason: Really as we anticipated, but we're certainly not seeing any dramatic increases in China as we start the year out.
Rob Mason: Understood.
Rob Mason: Maybe just as a follow up you know specifically and maybe this touches on some of the P. T. Because you do have more governor government exposure. There are you seeing anything.
Rob Mason: You know post election that.
Rob Mason: You know around the flow of funds that youre trying to account for in the planning.
Rob Mason: Just within your various government exposures.
Rob Mason: We have not in fact, you know and I think we've said this in a couple places part parts of the portfolio, where we have exposure to the government Gordian is a good example, although less more state and local less federal but you know the our productivity solutions really I think are going to resonate and really drive cost reduction so to some extent we think in <unk>.
Rob Mason: Opportunity where were more where maybe theres more physical responsibility actually plays to our plays in our favor.
Rob Mason: On the product side of the businesses, we've actually seen strength, we are we actually and we've gotten some nice a nice large orders from some of the prime across the portfolio. So I would say at this point nothing would indicate that customers are changing their mindset around where the where we're seeing our business here at least over the or the law.
Rob Mason: Last few months.
Rob Mason: Great. Thanks, so much.
Rob Mason: Thanks, Rob.
Speaker Change: Thank you our next questions come from the line of Julian Mitchell with Barclays. Please proceed with your questions.
Speaker Change: Hi, Julien.
Julian Mitchell: Hey, good afternoon, Chuck I'm, maybe I'm just a first question on the precision Tech organic sales guide. So just there's a bunch of moving pieces, but just trying to understand that improvement in year on year organic sales from the first quarter to the balance of the year.
Julian Mitchell: Maybe help us understand how much of that is a function just of selling days versus you know easier calm some end market improvement that you've embedded maybe in China or somewhere else.
Julian Mitchell: So I suppose the orders conversion into sales you've had six months of decent orders it sounds like that will persist.
Julian Mitchell: Are we seeing those orders convert into sales already and it's just the the mismatch is it's just a function of different comps or are these somehow kind of longer dated.
Julian Mitchell: <unk> activities in the order book that will come into revenue later than normal.
Speaker Change: Yeah, well I'll start back there Julien, but let me let me let me start with the I think what you were talking about the cadence I would certainly say the cadence through the year for P. T will be you know really down mid single digit in the first quarter, probably a little bit better in the second quarter and then some growth in the second half I think that gets them to be about.
Speaker Change: Up slightly for the year some of that is gonna be comps, particularly in China, where we see a lot more of the dramatic a tougher comp in the first quarter and in the first half.
Speaker Change: We've always said that we thought some market improvement would occur in the back half of the year, that's embedded but it's not a dramatic improvement in any way shape or form, but we did think some markets would start to come back and we've actually seen a number of things where customers were actually seeing that the other aspect is we're getting a really high really high volume number.
Speaker Change: And in places, where we're seeing dramatic growth.
Speaker Change: I believe in quality rolling many of them see we've got some investments to improve capacity, which will also help us in the second half. So I think the combination of you know comp in China.
Speaker Change: Some market market improvement, but.
But nothing dramatic and the combination of our ability to get more out here is really what what changes first half the second half and then you know I think it.
Speaker Change: It is as I said as I think about really what are.
Speaker Change: When we look at the business more broadly it's also the innovation cadence. We we mentioned this in the prepared prepared remarks, but a number of the innovations, particularly at Tektronix really starts to take hold in the second half none of whiskey, but we really don't have a lot of that embedded at this point.
Speaker Change: Okay.
Speaker Change: That's helpful. Thank you and then just my follow up would be around.
Speaker Change: Yeah, tariffs, but potential there and maybe.
Speaker Change: Anyway in which you could size, perhaps share of purchases or cogs or something like that from some of the countries that may be affected in terms of U S tariffs yeah.
Speaker Change: Well I would say number one.
Speaker Change: The Canada, Mexico, even though they were they were postponed.
Speaker Change: Really doesn't have an impact to us so so in that sense, a really no impact I'm trying to the China tariffs as you know we've had a strong playbook since two 2018, we've really just pulled up pulled out that plagued playbook. We talked about you know a number of scenarios that we we created several months ago when when when we started hearing about what the potential could.
Speaker Change: B, we have already enacted those countermeasures and and that's embedded in our guide. So we if you know the 10% tariffs in China have been counter measured and well we'll move through our what we have I think to some extent, how we thought about the year from a macro perspective in China does have some of the economic impact of some of the tariffs I'm not sure we could.
Speaker Change: Point to any of those with true specificity, but I think that's the way we've planned China going to be down here you know mid single digits for the year in China for Ford If I was thinking back to the fact that you know there's going to be some uncertainty amongst customers and are in China, and ultimately that will impact our revenue. So we've tried to be.
Speaker Change: About that as we are as we look into the into the year.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you our next questions come from the line of Nigel Coe with Wolfe Research. Please proceed with your questions.
Joe: I know I, Joe Good afternoon, Hi, good morning. Good afternoon. So Chuck I think this might be your last earnings call I'm sure you're going to Miss this.
Speaker Change: This whole process, but thanks for all the help over the years and good luck with your retirement.
Joe: Hum.
Speaker Change: Thank you couple of quick ones, Yeah, a couple of quick ones here I'm just the days had within one Kiwi we've heard this from some other companies is this just the.
Joe: No leap year than in the prior year quarter.
Joe: Quarter or was there something on Chinese new year, and any more color there and and then just the FX is sometimes had an impact on margin conversion I think mainly within H S. So any any sort of peculiar.
Joe: Sort of things that the two kind of like with this no dollar strengthening.
Joe: But I think that a couple of things there.
Joe: You were asking about days I think there is nothing.
It's just a simple base because I don't think we have.
Joe: You look at the whole year I think there's a big difference there so they'll come back.
Joe: But that's that's the main thing there I mean, what are you talking about the health margins are they get hit with a little bit more FX impact to the margins I think that's what you're seeing there.
Joe: Because if they are de is intact to health care and you think about yeah, how much of that data packages that can fill a hole or examples that's about 200 basis points of headwind in the first part.
Joe: Right, Okay, Yeah to a baseball game, that's that's what I was thinking as well.
Joe: And then just a follow on with the spin I'm just wondering if there's any more visibility on our public company costs and and stranded costs from the spin.
Joe: Yeah.
Joe: Oh, Yeah, I know I think we sized them roughly around $50 million to $60 million I think some of that we all get after between now and spin.
Joe: An offset of about half of that and the other half of it will probably take maybe 12 to 18 months to work out and work out, but we expect to get.
Joe: Got it all normalized and neither on the on the separation costs I think we you know on the slide we showed $185 million. Yeah. That's mostly one that's all one time costs, that's mostly professional services taxes lawyers the banker fees to do some of that work. So we've we've outlined that on the slide deck as well so as Chuck said, well, we will get after that.
Joe: You know, we'll get out after the stranded costs, making good progress on building. The teams here. So we feel as I met as I mentioned in the prepared remarks, we feel really good about our ability to get get the teams ready for and hence our ability to speed up the time line.
Speaker Change: Okay. Thanks, Jim.
Speaker Change: Thank you.
Speaker Change: Thank you our next questions come from the line of Steve Tusa with J P. Morgan. Please proceed with your questions.
Steve Tusa: Hey, guys How's it going.
Speaker Change: Chuck Thanks, Thanks for all the help over the years and best of luck.
Steve Tusa: Thank you.
Speaker Change: So it just on the on the product business is back to the tariff question did you guys see any kind of preordering.
Speaker Change: Ahead of the change in administration and potential tariffs and I'm just curious as to how the quarter played out sequentially by month kind of adjusting for seasonality.
Speaker Change: The way he if he could.
Speaker Change: Yeah, So I wouldn't say, we identified any additional revenue.
Speaker Change: Relative to relative to people pre buying.
Steve Tusa: Steve You know what we saw in the in the fourth was.
Steve Tusa: I'm pretty good cadence through point of sale was positive in North America as an example at flu.
So in that cadence was relatively consistent throughout the quarter, that's probably our best benchmark.
Steve Tusa: But you know we identified roughly about $10 million of revenue at fluke that we think came out of the first quarter, but that was really more bolt, mostly U S distribution and European distribution people were starting to get close to incentives.
Steve Tusa: As the year played out and so that there was a little bit of additional buying to get into incentive plans and things like that so it's really that that we identified so it really wasn't around tariffs it as near as we can tell.
Speaker Change: Got it and then just last one on me as a follow up on the Tektronix.
Steve Tusa: Tektronix the the T N M side of P T.
Speaker Change: Which verticals are you are you seeing the best order rates in which ones are kind of picking up here the most.
Speaker Change: Yeah, I mean, we've had we've had really strong anything tied to you know defense has been strong for several quarters I would say that the high end of what I'll call for lack of a better term the high end of of a semiconductor height and high speed compute hyper scalar is those kinds of quantum computing.
Speaker Change: All of those have been really good so design efforts investments that are going into those those opportunities have been really strong you know broadly industrial hasn't has been pretty good too.
Speaker Change: You know, particularly in North America, where we've seen the weakness as we mentioned in the prepared remarks, it's really western Europe, and and in China and that really part part of that is E mobility and the other part of that is just broadly China and most of that is really export control customers that we can no longer it's no longer do business with.
Steve Tusa: Got it okay. Thanks, a lot have a great weekend alright, thanks, Steve Yeah, you too.
Speaker Change: Thank you our next questions come from the line of Jeff Sprague with vertical Research partners. Please proceed with your questions.
Hi, Good day, everyone, Hey, How're you doing good to catch up.
Speaker Change: Couple of loose ends here just on the days are can we just have the number like how many days are we talking about here. It sounds like it's two ish two day, yes, two days right. It was about $8 million.
Speaker Change: Yeah.
Speaker Change: And you think of that you know you think it affects what 60 or 70% of your business is that the right ballpark.
Speaker Change: It's really no it would be in consumables, which are about health care.
Speaker Change: The remaining three or $4 million and and in services and places like Guardian to take rate isn't that.
Speaker Change: Yeah. So it doesn't feel like services most of them do you think about daily services like we would do in the service organization for Fluke and Tek as well as the services that we have in software.
Speaker Change: Okay.
Speaker Change: Yeah, I think it might impact things in distribution, but maybe not the people want it they'll catch it up okay. That's helpful. Thank you and then just on China. I think you said down mid single digits. I think that was a 2025 estimate can you just kind of level set us on how much China, what China did in 'twenty 'twenty four for the year and in the quarter.
Speaker Change: Yeah, So I think for pricing down high single digits for 24 down mid single digits for 25, with probably Q1 being down you know high single digit to low double digits in the quarter Mhm mhm, well, that's more broadly and you know what's interesting.
Jeff is our hydro our high growth markets ex China have actually been continuing to grow really well.
Speaker Change: So.
Speaker Change: I think the offset there is gonna be we continue to see good growth in some of the other higher high high growth markets.
Speaker Change: And then just maybe finally for me on sort of the flat a O P for Q1.
Speaker Change: I take it that's still some margin pressure in P T.
Speaker Change: And then some upward trajectory in the other two segments, but any.
Speaker Change: You'd say, there that kind of get us in the right ballpark.
Speaker Change: Yeah, I mean, I would I would say on flattish growth, we're typically going up you know.
Speaker Change: But that's that's kind of the overall overall, Florida.
Speaker Change: We had good margin expansion last year, so 110 basis points in 'twenty, four and Q1. So when you kind of look at where we're at on a two year stack still good despite kind of that low single digit growth that we would've had in autumn.
Speaker Change: On a comparable basis, but its exactly right new Ford over iOS, and how health will be a we will have good margin expansion.
Speaker Change: And you know with being down the way we are a P. T will we're doing a nice job of offsetting you know when I think about how we've done in P. T over the last year, given the fact that our tech being down our highest gross margin business. It's been really good operational performance to offset a number of those things and obviously our margin expansion for the year was good in 'twenty four.
Speaker Change: For Florida in part because of I O S and H S doing a great job, but also the the countermeasure work the P T did as well.
Speaker Change: Great. Thanks, a lot.
Jeff: Thank you Jeff.
Speaker Change: Thank you our next questions come from the line of Scott Davis with Melius Research. Please proceed with your questions.
Speaker Change: It's guy guys.
Speaker Change: Good morning out there still.
Speaker Change: But.
Speaker Change: I don't think you addressed it in prepared remarks, but maybe you did but this is this is for Chuck.
Speaker Change: Right it seem to be pretty volatile for the size of the company is there any particular reason why that's been hard to pin down.
Speaker Change: Well.
Speaker Change: The tax rate came down in Q4 due.
Speaker Change: Due to discrete items that typically where most of those things land and they can be somewhat unpredictable and we don't forecast them and so I think that that's what you're seeing there and when you take out discrete items actually.
Speaker Change: Holding into that 14% range.
Although Matt Okay songs.
Got it alright, so if we wanted to Mark if we if you wanted to mark to market kind of where we are with probation and an N. A S. P. Let's just take those two businesses what what do you guys think.
Speaker Change: But the new realistic kind of long term growth rates are I mean, we know what what you thought they were when you did the deals but it's been a few years now so.
Speaker Change: If we just mark to market now and you said, okay over the next five years or even longer what would you expect to be kind of the entitlement.
Speaker Change: Potential growth rates for those two assets now.
Speaker Change: Yeah, I would say your ASP mid single digit that's a combination of you know additional electric procedures, plus some price plus some volume share gain and then as we mentioned in the prepared remarks.
Speaker Change: Really starting to see the innovation flywheel start so we feel good that you know as we've talked over the years, Scott and as you know we had six five 10-K approvals here and you know it takes a while to get the innovation cycle moving in in health care, just because of the regulatory environment, but we were really starting to see that so we feel really good about that mid single.
Speaker Change: Growth rate going on.
Speaker Change: Little bit impacted how.
Speaker Change: We just talked about the days, that's our biggest days impact is that S. P. But when we look really at the entitled growth rate is mid single digit probation, probably high single low double.
Speaker Change: You know when we look at the SaaS conversion it'll it'll move around a little bit depending on how that conversion goes but that's a combination of really just the continued work great work. We're doing we haven't talked about it in a long time you know in some time, but you know they're doing a great job I mentioned, the the dramatic improvement or increase in SaaS sites that we have.
Speaker Change: And that's really the great work, we're doing we've really got a good sales motion going and as we also mentioned we got apex insights, which is their AI offering which is now starting to get some traction as well with customers self so call it high.
Speaker Change: High single to low double and that's that's really what we thought we would underwrite when we are when we bought the business.
Speaker Change: Yeah, consistent okay I'll pass it on thank you guys best of luck this year cause hijacked see Ya.
Speaker Change: Yeah.
Speaker Change: Thank you our next questions come from the line of Andrew Open with Bank of America. Please proceed with your questions.
Andrew: Oh, yes, good morning, Hi.
Speaker Change: Hi, how are you.
Speaker Change: Just the first question maybe talk about are you still you saw for assets are you know Gordon accruing service channel where are we in those growth rates and what those look like exiting the year and going to 'twenty five.
Speaker Change: Yeah, we had a growth of high single digits for both the quarter and the year Andrew our.
Speaker Change: Our software revenue grew overall in.
Speaker Change: Q1 is going to grow high single and that's with some headwinds on the service front. So we think that high single is good. We're seeing you know we have those dramatic growth rates at Gordian for for a number of years, so with gordian rates moderating a little bit down into the into the low double digit range low to low double digit, but we're seeing and purpose.
At our current in service channel. So good growth good growth there I just mentioned about probation. Good growth. There. So intellectually we've got we're starting to improve the growth rate. There. We've had we had a little bit of a challenge there in 'twenty four but we've done some nice work there.
Speaker Change: Two to improve that so you know overall software in very good shape.
Speaker Change: You know we mentioned it a number of places where we've got some innovation going on as well and following the prepared remarks. So acts the team's executing well innovation flywheel starting to starting to take take a to have some real impact I would think those businesses and I think as you look at all around and I know you you do this a lot I think those numbers are going up.
Speaker Change: Up pretty well so we feel we feel good about where our software businesses are and and we've also dramatically improved the profitability, we talked about the 800 basis points of the prepared remarks and are in the south where we're just we've got a lot of people were really demonstrated how FBS can really accelerate our software business and I think you'll you'll continue to hear that.
Speaker Change: As we are as we progress through the year.
Speaker Change: And then can we just talk about sort of utility power vertical it seems structurally things are changing there over the long term how is the conversation changing was the customers do need to have capacity to do have the right exposure. If you could expand on that because that's a big topic. Thank you yeah. It is and so it really comes in two ways and in a smaller.
Speaker Change: The way it comes from what we do with EAA in Tektronix, where we are really playing in a lot of the technologies and R&D investments that are going into the next generation of utilities and as as the grid yes.
Speaker Change: Get the grid gets improved and technologies are going into that obviously R&D organizations around the world was designing those components of designing those those chipsets and we're very involved with tech NDA. There the bigger number as you point out is it quality role and and that's been very strong that's both on the grid monitoring side, but also on the transformer side.
Speaker Change: We've got a number of new sensors that we're launching with those businesses, we've had double digit growth in our in that business for several years and as I mentioned on a previous question, we're ramping capacity because some of it were really up against our own capacity here and we look out that's a longer cycle businesses as we look out the next 12 to 18 months we.
Speaker Change: To see customers, making dramatic investments.
In those markets. So we are that's gonna be a good growth drivers we've talked about for a for a what I'll call Valeant, because we have a new name now for P. T and that'll be a good growth driver for a rally in going forward.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question is coming from the line of Joe Giordano with TD Cowen. Please proceed with your questions.
Joe Giordano: Hi, Joe Hey, guys. Thanks for taking my questions.
Speaker Change: When I benchmark Tech versus your peer peer group do you think you guys have just more structural exposure to things like E V in China than some of your competitors do.
Speaker Change: Well I think the comps are tough because you know you don't give a perfect perfect view, but I would say you know with with ebay, we might have a little bit more evs exposure as a percent of the business, but but.
Speaker Change: But I think I think those numbers are relatively in line and when we comp up against over multi years. We are we see pretty similar performance.
Speaker Change: Okay, and then just on PT margins in the quarter like I think they were expected to ramp pretty considerably and they were down sequentially on higher revenues just curious of any color on that.
Speaker Change: And in Q4 or Q1.
Speaker Change: Before the P P.
Speaker Change: Do you see margins in Q4, yes, their favorite down relative to the volume decline.
Speaker Change: Revenue.
Speaker Change: Clarence lately.
Speaker Change: But you've been slowing a little but yeah, we have a little bit less revenue, there and a little bit less revenue in some places where you know there are in some of our higher profitable businesses. Some of that is that production capacity point I made some of its attacks out so a little bit is that a little bit of that is is it's a little bit of volume and then a little bit of mix shift.
Speaker Change: Okay. Thanks, guys.
Speaker Change: Thanks, John.
Speaker Change: Thank you our next questions come from the line of Andy Kaplowitz with Citigroup. Please proceed.
Andy Kaplowitz: Hey, good morning, everyone.
Speaker Change: Hi, Andy.
Andy Kaplowitz: Thanks for all your help.
Speaker Change: Chuck and Jim maybe you can update us on how youre thinking about price versus cost and twenty-five. There's obviously some tariff related uncertainty, but I would imagine that the material cost inflation has been relatively benign so what's embedded in your expectations for 'twenty five.
Speaker Change: We've got about you know, we've got about 200 little over 200 basis points price.
Speaker Change: Across the enterprise and.
Speaker Change: And that's pretty consistent look maybe 225 basis points, so that's pretty consistent in and across segments. So in that sense in that sense. We'll continue to you know we always go after more price. So that's usually a it's a testament to our team's well see you know that'll that'll mean, some will start.
Speaker Change: Going to see volume.
On the on the iOS from here, but you know we won't have volume in P. T. Most likely so given given the given the outlook that we've got around flattish. So so.
Speaker Change: So for the full year.
Speaker Change: Helpful. And then in H S. I think in Q3, you had double digit consumables growth was mid single digits. In Q4, I know you talked about the difference in days in Q4 Q1, it's probably not the big reason, but do you see anything in any test that actually slowed or was it really just the days is there a difference a bigger difference in growth between the U S and for instance.
Speaker Change: And China in Hs.
Speaker Change: Yeah Health Health is has done a really good place you know Q4 had didn't have the benefit of the year before comp that Q2, and Q3 dead. So we really saw good underlying performance.
Speaker Change: A bit of impact on this IV bags situation, which will we will see you in a couple of months in Q1, but but but you know broadly really good performance that it and health, particularly are really across the board in all the businesses I would say Europe was good so in that sense, China, a little a little challenge so.
Speaker Change: I would say if you're anywhere in house, where we're watching is in China, but more broadly across the across the world Japan Middle East you know, we're really seeing good performance.
Speaker Change: Across our health business is now our most global business as Asps. So when we think about around the world. It really as you know we've asked piece really the one one visit that sells everywhere in the world.
Speaker Change: I appreciate the color.
Speaker Change: Thanks, Dan.
Speaker Change: Thank you our next questions come from the line of Chris Snyder with Morgan Stanley. Please proceed with your question.
Speaker Change: Hi, Chris Yeah, I wanted to Hey, How's it going guys. Appreciate the question I wanted to ask on a P. T orders you know great to see that double digit positive for the second quarter in a row.
Speaker Change: Our orders going higher in absolute terms, because I know you know that the comps are negative and then you know with that anything you could share on how precision tech the book to Bill is trending in Q4. Thank you.
Speaker Change: Okay.
Speaker Change: Yes, that's a book to Bill for P T and certainly for attacking something on a combined basis is one for the year, it's a little below just below one.
Sex or the fourth quarter, but that's typical for us in the fourth quarter given the seasonality in the shipments.
Speaker Change: Yeah, I would say dollars I think we're off a Q4 from Q3 and it will grow well grow orders in the first half.
Speaker Change: M P T a little bit of pressure in the first quarter because of some of the comp issues I was mentioning around China, but we still see continued growth in orders here in the first half so and then to Steve's question around you know how does some of the timing I think it was steves around six months or nine months, we will start to see some of that shipment impact we did see some of them.
Speaker Change: Those orders more backend loaded some of it is because there's semiconductor related and their semiconductor investments in the second half, but we also saw some of our sensing companies that typically get blanket orders. Some of those orders. We've got normally we would get for a full 12 months, we've only got for a few months.
Speaker Change: So we see a little bit of that order rate coming into shipments more little bit more backend loaded than typical.
Speaker Change: But we we felt very comfortable with where that sort of seasonality relative to years past.
Speaker Change: Thank you for that we'd really appreciate it and then maybe just following up on you know what.
Speaker Change: Surprised to see precision tech organic growth worse are lower in Q4, I think down mid single for the Q4 down three you just because we are saying that plus motor momentum. It doesn't seem like the days impact was all that material for our purposes and tax based on some of the prior commentary. So I guess is this is it.
Speaker Change: Is the Q1 is that down mid single, reflecting E. Electro now coming into organic and you know with that what is the expectation for EAA electro and twenty-five. Thank you yeah. So I would say a couple of things on the first quarter, what is China, China, a little bit a little bit more challenged than we anticipated. So I'd say that's <unk>.
Speaker Change: Part of that second of all you're right, yeah going into core and he had its best quarter last year was was the first quarter because of the backlog coming in so that's part of it as well we think you know some goodness. The good thing about yeah, we certainly and we mentioned it in the prepared remarks, but just to put a bow around it much of that he had a much of that E mobility challenge that we saw.
Speaker Change: Principally in Western Europe, and in China is he a so that is a that is certainly we think EBITDA will grow mid single digits. This year and with the power of FBS and some of the things we've done operationally, we're going to get that their margin rate back to where they were when we bought the company. So so the margin rate is now in really good shape, we're going to put it.
Speaker Change: It will be the business would be back into growth mode. As we move through the year. The tektronix sales synergies are ahead of plan and that's really really working well, particularly in North America as we find new Dew point parts of growth in different markets and we've started to started to get some of those orders. So I think those that those are some of the things that are going on.
Speaker Change: But again as.
Speaker Change: We've talked about this through 24 of the large order EV business that that was a big part of their business back in 'twenty, two and 'twenty three we have not seen that come back nor have we planned for it to come back in 'twenty five.
Speaker Change: Absolutely.
Speaker Change: Headwind is about $10 million on a reported basis.
Speaker Change: $10 million at the core decline what are you ever hear from Q1.
Speaker Change: Thank you for that really appreciate it.
Speaker Change: Thank you our next questions come from the line of Deane Dray with RBC capital markets. Please proceed with your questions. Thank.
Speaker Change: Thank you good day, everyone I also want to wish Chuck all the best.
Speaker Change: Thanks, Thanks, Dave.
Speaker Change: Jacques before you ride off into the Sunset and wanted to put the spotlight on our networking capital and at 6% that puts board of in among the elite and so I was hoping you could just parse out how that looks new Florida versus rallying.
Speaker Change: I say that right rallying so that's rounded up.
Speaker Change: How does that break out I would imagine the more software part of our new Florida of Skus that lower but just directionally can you help us there.
Speaker Change: Yeah, I think that.
Speaker Change: I'm not sure I haven't really looked at it that detailed in terms of with rally, but we have looked at it excluding the software which would have been around 9% and that's what I would expect rally in that zone, but they.
Speaker Change: Which is also really good.
Speaker Change: Yeah.
Speaker Change: That's a really good work.
Speaker Change: So similar question for the two I was not expecting rallying to be that low on the net working capital, which is a positive obviously, but just what does that mean for rallying pre cash flow. After both companies kind of free cash flow cadence four.
Speaker Change: On an annual basis based upon that it's got to be both very comfortably above 100% conversion.
Speaker Change: No I think I'm, not above 100%, but pushing and I'd say that 95 to 100.
Speaker Change: Two things that really drive you for 100 of it would be whether you have software. Some software companies have negative working capital or doing M&A and be able to do improvement but.
Speaker Change: I call them expected to be 95.
Speaker Change: Yeah. It will certainly get more clarity as we get to Investor day, but you know Dan you pointed out the free cash flow both businesses is going to be really strong great.
Speaker Change: Great and just to clarify on your software businesses collectively are you at the negative working capital level.
Speaker Change: Collectively.
Speaker Change: No because it's not all software companies do that but some do.
Speaker Change: We're we're pretty flat yeah, we're still working through service channel is probably the big change there Deane.
Speaker Change: They werent typically that way and so you know contractually we're working through that over time.
Speaker Change: Our current is probably the biggest negative working capital software business we have.
Speaker Change: Great. Thank you for all that color.
Kim: Thanks Kim.
Speaker Change: Thank you our next questions come from the line of Jamie Cook with Truest Securities. Please proceed with your questions.
Jamie Cook: Hi at just two quick follow ups, one with N. P. T. I think last quarter. You noted some improvement in semi can you just talk about what you saw specifically in the fourth quarter and your expectations for 2025 and then my other question. There you know congrats on the spin happening earlier I'm, just because we get questions on it I assume.
Speaker Change: The probability of any anything happening on P. T and inbound offer we can just assume that sort of put to bed and and and I'm not not on the table. Thank you.
Jamie Cook: Yeah.
Jamie Cook: Take the second one I think that's probably a pretty that's it.
Jamie Cook: That's a fair assumption that are where we're going forward with the with the spin.
Jamie Cook: And we have evaluated all inbound offers.
Jamie Cook: And then remind me the first question that you had.
Jamie Cook: Yeah.
Jamie Cook: Jamie This is Jim I would I would say a couple of things one is where was it a kind of a little bit getting back to the prepared remarks, the high speed compute aspects of of semiconductor had been good you know Nvidia is a cause customer some some of the large hyperscale or are customers. So I would say that's the good part I would say the pretty typical to what youre seeing in some other place.
Jamie Cook: There's the the weaker aspects of semi are more than just you know sort of discrete consumer products that kind of stuff and we don't anticipate a return on that we're starting to see some green shoots there, but without a doubt and that's some of that's in the order rate, but we were sort of expecting some improvement in that by the end of the year, but we haven't anticipated.
Jamie Cook: Any big dramatic improvements or are in the end by the end of the year.
Thank you.
Jamie Cook: Thank you.
Speaker Change: Thank you our next questions come from the line of Joe O'dea with Wells Fargo. Please proceed with your questions.
Joe O'dea: Hi, Hey, John Thanks for taking my questions Hey.
Speaker Change:
Speaker Change: Fair amount of focus on on China, but you know just if you could talk a little bit about regional expectations specific to fluke really.
Speaker Change: And how you think about the growth opportunity within the guide if we think about it from North America Europe.
Speaker Change: China kind of perspective, what type of growth you think you can do in fluke.
Speaker Change: Yeah, I think when you think about we did I think we did.
Speaker Change: Sort of low single digit plus it's look at 'twenty four we'd anticipate the same thing being in 25, so pretty similar expectations team's done a nice job as we mentioned.
Speaker Change: You know, making it a lot of their own locked with a with this acceleration of innovation cycle.
Speaker Change: America will be the will be the winner in the clubhouse most likely regionally we did but we expect some growth in western Europe, and we expect good growth outside of China in the high growth markets, We do expect probably China to be down a little bit in the full year with most of that being in the first half just because the comps are most.
Speaker Change: Comp challenge. So we don't have a big anticipation of any big big improvement in and are in the market as I mentioned point of sale is a little mixed or sort of day to day run rate point of sale at fluke in China is actually down it was down but our sort of project based point of sale is actually up. So so we are still seeing some and I think that's really a.
Speaker Change: A function of the innovation, we're finding places where that innovation can work, but sort of the day to day run rate business is still hasn't come back yet.
Speaker Change: It will probably we will continue to stay.
Speaker Change: Prudent around that as well so you know flu splits in a really good position as we start the year off and after after a strong finish some of the you know maybe a little bit of that weakness in the first quarter is what we mentioned, which is some of the revenue coming out of the first quarter, we saw that in the fourth.
Speaker Change: And then on the sensing side, just any color on what kind of growth you expect out of call a troll trying to get a little bit of perspective on.
Speaker Change: Whether those capacity constraints and what kind of an impact they have on our growth constraints.
Speaker Change: And also within sensing just anything on hang slur and demand trends and in Europe, you know whether theres any.
Speaker Change: Encouraging there.
Speaker Change: Well I would say number one.
Speaker Change: Qual throw out multiyear double digit growth and we would expect that again this year. So.
Speaker Change: And that's a little bit of the capacity constraints, it's not just the volume this year. It's the sum total of the continued volume growth that we've we've got so we'll have a little bit of capacity increase there that to deal with the long term demand trends that are that are very strong sensing in general we saw order growth in the second half I think double digit order growth in sensing in the <unk>.
Speaker Change: It can have so we oh.
Speaker Change: Some of the blanket orders that we would normally see at the end of the year to cover the entire year, we did not see and I would say that's part of that is thankful or as you point out and I you know I think where your questions going is exactly right.
Speaker Change: Their exposure to European our automation is is a higher percentage of of anywhere else in sensing and that's really where their business has been the most week and also China has been weak.
Speaker Change: We have some automation customers there as well so and that would principally be a discrete automation, which is probably consistent with a lot of what you've heard from others.
Speaker Change: Now over the last few weeks.
Speaker Change: Indeed, it is thanks a lot.
Speaker Change: Thank you.
Speaker Change: Thank you our last question will come from the line of Scott Graham with Seaport Research. Please proceed with your questions.
Speaker Change: Awesome.
Scott Graham: Good afternoon, and good morning to you and thank.
Chuck: Thank you for taking the question and Chuck I'm, Good luck and be happy.
Oh.
Chuck: A couple of questions.
Chuck: Around first of all on my questions are actually all around the margin so in the quarter.
Chuck: Was price cost your you know your typical spread 5100 basis points is that fair.
Chuck: Yeah prices, 3% in the corner and when you look at depressed margins expanded gross margin 10 basis points in the Florida, so relative to that sort of sporadic probably on par with what it's been over the course of the ER.
Chuck: Okay, and then could you remind us what the restructuring savings will be what's what's the plan there and how they layer into.
Chuck: Earnings in as the quarters progressed.
Chuck: Well, we we funded $20 million of restructuring in the fourth quarter.
Chuck: Assume that that often.
Chuck: Gradually.
Chuck: Benefits of that over the course of the year not much maybe a couple of million dollars of benefit call. It a penny in the first quarter guidance.
Chuck: So all I had thanks a lot.
Scott: Alright, Thanks Scott.
Speaker Change: Thank you there are no further questions at this time I would now like to hand, the call back over to Jim Lico for any closing comments.
Jim Lico: Well, thanks, Garo and thanks to everyone are incredibly incredibly thoughtful a set of questions. We appreciate all of that obviously, a lane and team will be available for any other questions. I just want to thank everyone. A lot of comments around chocolate just want to make sure everybody knows he's he's not going anywhere he is going to.
Jim Lico: To support the Ford team here are in through the spin. So you may have an opportunity to hear from him a little bit but he's done obviously, you've done a great job for us over the years.
Jim Lico: And we're excited for what he will do next but but that's not just that's not tomorrow you still got some work to do near as I can tell so anyway.
Speaker Change: She can hear exciting times for us we couldn't be more excited good finish to the year, Yeah I think in many respects we pointed out some of the five year numbers, that's where we're really proud of when you look at several records set in 2024 are around a number of things. Despite some of the mixed macro environment, we were able to do a number of things in the March.
Speaker Change: And free cash flow front that I think are just synonymous without be asked and really have an opportunity to to really set us up for 2025, but the probably the most important thing is how FBS is really driven innovation and really when you see that across the board I think you'll hear more of that as we progress through the year. We're excited about twenty-five we're excited with the fact that we can.
Speaker Change: Bring to you that the idea that the spend is going to happen faster. It really speaks I think as well to the power of F b asset and the quality of our team. So we're a lot we'll look forward to the follow up questions. We'll see many of you out on the road here soon a lot to do here between now and the and the spend we're excited about it and we look forward to continuing to talk about all the exciting things going on in Florida.
Speaker Change: Have a great day and have a great weekend.
Speaker Change: Right.
Speaker Change: Thank you. This does now conclude today's teleconference. We appreciate your participation you may disconnect your lines at this time.
Speaker Change: Enjoy the rest of your day.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Yeah.