Teledyne Technologies (TDY) 21 Oct 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you standing by. Welcome to the Teledyne Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later on, we will conduct a question-and-answer session. Instructions will be given at that time. Instructions]. [Operator like call now host, to turn VanWees. Jason to would over the our I ahead. go Please

third and market morning Vice like to this call. I Executive This earnings our President would release earlier Teledyne's We everyone released welcome before Good to everyone. and thanks the is morning earnings conference opened. quarter Jason VanWees,

Compliance statements Sue we and we Officer Al General Senior Vice Pichelli; attorneys Joining are assumptions, In this avoid to Executive Teledyne's SEC in Al Cibik. President, be simultaneously will a replay, have made Melanie me Secretary, reminded disclosures, as noted and both filings. course, subject are results our for webcast this risks Vice Chairman, and and CEO, questions. and materially. available Main; one CFO, call After order actual today earnings Counsel, Robert, before course, caveats webcast approximately Senior But of started, Chief may forward-looking Robert will dial-in Mehrabian; President release our by your and you and various the via President to for me get remarks morning differ ask And Sue, tell to that month. and periodic selective being and all potential is of

Here is Robert.

Good comments. for Jason. joining to following the our morning you you, and thank want Thank with earnings call. open I

and research working operational XX our are of remain worldwide manufacturing corporate sites laboratory all office as only First, total home. well XX% as and from employees of our

second quarter and X rebounded test measurement businesses the the cycle X% from trough % and short in approximately environmental and our respectively quarter-over-quarter. Second, growing instrumentation

as demonstrated businesses XXXX marine our Despite imaging, commercial medical manned autonomous warfare. GAAP in cycle longer the bottomed systems to sales remain niches and and subsidy and our instrumentation have generally government and grow third improvement. such we lower electronic attractive imaging quarter. in market successfully believe markets and such the space-based in turmoil we as Fourth, margin continue Third,

the of second GAAP margin quarter in increased operating XXX operating was margin sequentially second XX.X% history. example, highest over specifically company's For the basis points the

we XX%. addition, every last nearly In except major sales declined greater achieved compared in commercial year nearly aerospace have business to where category margins

record free any also nine all-time months record flow We quarter flow cash cash third free and first achieved for period.

balance our acquisition stronger never sheet is has Finally, been pipeline and healthy. our

earnings the to lower cost for with example As in improve Coupled come. fewer continue substantially operating flow provide our leverage expect quarters. operating continues we're for should with environment cash overall demand years compounding cost lower future our and to employees, structure to X.X% significant we acquisitions, structure,

Before turning to items. Al the to comment briefly on important third segment, quarter by to want two report on performance I

First, the the OneWeb satellite Plotinus. of second, potential acquisition program and

weeks OneWeb situation Over the the last has considerably. few improved

in of financing First late of $XXX OneWeb Airbus our OneWeb parent million satellite interim secures September. customer

the payment we contract a in have favorable advance more Second recently new received and resumed October month for we production. of third limited a we substantial signed which

million $XX While million potential modest some by earlier We fourth approximately successful stoppage. OneWeb $X a bankruptcy. the a currently expect during work the quarter noted versus exit remains charge from in risk including of the

was conditions we government the that paused to not valuation authorization for we that determined seller's of acquire the proposed Teledyne. France. expectation Photonis, summary, our withdrew at the on at our acquisition of XX voluntarily French Now application communicated visible to an regarding and business by the under September In the efforts time government

the now our are year. this time Al expectations However, acquisition we performance efforts. and the hopeful in renewed core announce have have of the of valuation seller's we negotiations recent and on comment end conclude to before the At significantly will the the moderated our segments. acquisition days

last Sales instrumentation In Thank of year. versus year. decreased sales X.X% last third from quarter our X.X% decreased overall segment Robert. environmental you instruments

increased. from increased second of for Compared products science trough last laboratory sales with applications the X.X% instrumentation However, such life the as sales sequentially certain quarter. year in

sequentially. by However, again measurement monitoring decreased this Sales the year XX.X% instrumentation X.X% instrumentation electronic for offset sales was Sales and PCI Sales than purpose however, test quarter. of general industrial of test products protocol in increased as instrumentation. year-over-year such USB system solutions year-over-year of more of from sales X.X% in declines marine test sales Express and declined. selected last particular increased decreased but oscilloscopes ambient air of in

simplification count points head to basis Overall increased due stable year-over-year operating sales. was the margin business segment instrumentation initiatives. management operating XX However, and despite margin lower

segment. imaging Turning digital to

margin I to and lower sequentially than well space, our turn the operating will sales outlook. XXXX commentary basis GAAP but increased greater sales of and decline sales operating systems. OneWeb. commercial reflected due Sales of Third sales lower with and largely manufacturing dental aerospace weaknesses due XXX decreased With lower quarter partially of aerospace by In scientific semi-conductor more some for third revenue last XD XX.X% detectors year-over-year. XXX Sue as of XX%, segment In points third engineered to and basis XX% offsetting points cost nuclear operating and increased regarding quarter margin lower markets were the X.X% as to America. will in sales strength to inspection defense in segment offset sales the of and and imaging Europe significant for greater X-ray and market related applications were industrial defense infrared electronic commercial primarily space profits flat a third Asia manufacturing sales products sensors decreased other detectors sales some from now quarter in X.X% declined additional cameras offer offset medical geospatial system points who to segment year. XX.X% continued structure. XXX with margin was Segment than largely the in a as as and increase given increased programs services. last quarter sales GAAP well call primarily an year. market and electronics as defense basis higher to greater by North

that was XXXX. million Thank I fourth and quarter in from then year operating will period the activities in expense morning amortization same for third $XXX.X expenditures of capital compared for $XXX.X compensation some covered million period $X.X $XX.X with the the will compared and in and In Al. is of XXXX. flow for million million of with $XX.X our with the $XXX.X full million million XXXX. debt expenditures expense compared I quarter million Stock for Good you third XXXX. million of for first flow $XX.X for third of and $XXX.X net the was million to not to less operating activities debt quarter X.X%. flow million to free same the by third $XXX.X quarter quarter net is cash in Record were financials both XXXX Capital period third $XXX.X cash from $XX.X Al ended cash million of XXXX third cash discuss less was XXXX. same the the of We quarter debt additional everyone. option discuss the quarter outlook. capital of million of a Robert and quarter compared that cash XXXX $XXX.X of was quarter Depreciation ratio the

for range earnings that $X.XX point full per with compared XXXX in credits. per share a Management of tax currently share in to to prior in and less full to outlook quarter earnings our compared XX.X%; our $XX XXXX the tax $X.XX will fourth the per XXXX discrete be to $X.XX $X.XX items of to increase GAAP R&D of GAAP believes share to $XX. year outlook. the expected to Turning be basis rate XXX the outlook The year year excluding due full XXXX estimated is is part

with I back discrete will to currently now XXXX in compared we tax XXXX. Robert. call pass In items addition, expect less a

you and to your like We now Thank ready answers ahead. go you're the if to proceed Alicia Sue. please questions with would question. take

question Instructions] from [Operator the line go Please Joe first of you. Giordano. ahead. comes Thank Our

Hi, everyone. Good morning.

morning, Joe. Good

that Photonis So said On development on some was kind lot you about to ambitions be and about in companies and to going on. your Robert recently to you I knew space? outlook are kind touch future what's for there is of it some ask wanted There like big that what a I been like of kind obviously OneWeb, your with interesting day of there going broader commercial want other involved that Microsoft is before growth the of stuff of buzz around sector might talking terms the OneWeb other like you new sector in that applications there forward?

you Thank question. for Joe. the Yes

measurements. instruments well the down that for us the commercial the of space Let commercial looking lot a for and studying defense are sector. for me the we in at Earth used environmental both as programs as both sector, note In our universe have

for the of on we that large programs through at looking side, satellites. weapons defense the address the On hand a have needs do number other

a of recently interest programs sector imaging of in where you the involvement are to we've is The course defense right said there now interesting us While that and our as communications there space winning mentioned, OneWeb. lot is are programs like where more the is part you been contracts in very our healthy.

the classified program. program involved and view overhead program the which the defense infrared For example of sector with a wide Opier in field is we're persistent

sure now satellites that have outcome but number answered OneWeb forward in we're promptly. if the increase we promise don't I them of course I They that of to think the going let's make we focused future to the question ambitions on we make for on more paid program. get Joe. what right making your and see is the know products, the

French kind what business how now kind size thought do Photonis those of acquiring the discussions? given changes On the you. you of potentially would that new, entail discussions Thank did. that like do the of government different is what be than initially with the It scope these we like does

were French more our that In place. XX% state-sponsored different of happened we basis in XX% bank Yes. and can a U.S. entity is we work government to XX% invest that thing in make acquire that and price to that was about in reduction. XXX% very company. let the asking the that's business. investment why of receive on the French and Joe appreciate all French owning itself the okay entity you a find frankly bank owning The dollars initially than we're we price especially XXX% with has have an we sure investment is and change an asked and obviously The the of a recently that to that we of government procedures going that significant government there of is important for

right think I and if an need paperwork agreement now finalize we then in with from and our the we have there. detailed see now government principle proceed we to can

to good hear. definitely that's Well,

so market, for next ones Can the quick a the year if I you your under it's give views stage opportunities and Thanks. views the your guys more on current current sector administration shifting biggest margin two early like been across Biden your portfolio. what of Just me. into defense are maybe thinking know your in

the think we're midterm I the in out I the in will years we a in short in looking defense then we're in mid range. think looking If you short for years programs mean the term flat. growth single which is the think really change next as and sector things our relatively year, indicated let's the I there at say future remain digit term administration at in

market very programs get our gain to and regardless in which our is simple; administration of share Our really to market competition. job job is against which of able supported, and the be the are is

less about good we of XX% of electronic is forward, defense that our portfolio breadth we enjoy and I today operating is attention very about going said income. my to to etc. going higher little defense expand have that commercial of our feel attention all businesses I margins. programs to Consequently of Having much So a space forward sales, than offerings communication, our imaging warfare our from of our XX% really would say where our the because

Joe. it That's

Blake next comes from line ahead. the Our of Wolfe with go Gendron question Research. Please

Thanks. morning. Yes. Good

year. margin dig next So the into I in improvement the to want

and margins goal of to of some you're timeline internally things update what with GAAP both quantified past that EBIT the date the cost forward cost you or us the if XX% could out Thanks. and better. of target doing opportunities additional would wondering I'm then in the You've the be? on that moving capture

this the can time. Sure Blake. I at that answer to try I'll best

two First, our structure. changes primary there are in cost

adding in is important program X.X% employees. of our The first we're is the lower most after In down one the people general, UK. number in about and XX-XX the that about OneWeb

our structure we margins that a approximately will cost So down the X.X% about is are X,XXX about maintaining that employees points than little is effect or of X,XXX it which XXX that help so. that less basis

which cost reducing have thing procurement and initiatives We helping aimed is the procure. initiatives other also reduce about worth buy that. as The that billion are us we our services of procurement $X.X goods board across our are and we a at

to basis points be we hoping bit that little help than from a expect well XXX you. for say year will number that higher domain but I So is gave the and that good large by a that. get as I'm I'd next

see but helpful. Understood. some product [indiscernible] into a expansions like baked where of across what specific markets. I'm the imaging, market what on considerations trends life through That's it's exactly market life and contextualize could and segment things you're carry We kind and of tough roughly those seems hoping machine it etc. lot fit focused back better that are demand longer Circling the science end of your semis, like into digital on? outlook arc across really are the to end announcements the vision to XQ segment end waiting year sciences understand

I level So high expect just how market guess level evolve? to this you do

answer Okay I'll that. try and

Let us $XXX million million, year for imaging Last They're digital XXX. -- they about $XXX about with our were $XXX this start million. year. sales

year-over-year. flat it's So

of sensors all bit big problems, all They're has are look course or pandemic cameras that and phone us the area displaces has but healthy. that chunk things margins our is the hit has of said panel that a it's for with used of flat The It's a cameras that the business any that views is television that improved. business and with harder now inspection. have you little fairly having our at and well stable sales both with healthcare detectors. at year-over-year be sources we those and and lot detectors that X-ray industry Overall, flat is sensors. vision for both and the for in human some looking cameras million cameras That sales the as inspected area. of make the in done Now systems stay about to a and about with XXX any X-ray and by the also three-dimensional let's business in our $XXX anatomy both are about dental semiconductor make are that million. We or as but remained also used

and have has the inside the that's not active dental know the industry outside dentist that the mouth dentists we because you they're As both detectors inter-oral been slow the make very for and very up for very That recently. been extra-oral mouth. until

Our inter-oral detectors are picking up.

before don't has because Our into are our would A we be the think that this It's primarily small robust lot start area up. slowed significantly extra-oral X% items pretty looking are that XX as we would detectors radiotherapy until used an will MEMs cancer that that MEMs instruments are probably healthy. by and year. we be $XXX they bought about one the are treatment. an a frankly to here got from MEMs pick businesses that's is micro and The used back little area The fourth electronic instruments Year-over-year Europe. they for defense that there to those increase. that imaging That's studying aerospace cancer think XX% up at is that us as down micro as that go last make business. increase us we've of also for that and for the surprised for make revenue a be think going includes classified as healthcare because the end both the systems, comes the in in for programs used been so while We both next The pandemic space way business. about mechanical and two of we up well We're here That's systems, sources, healthcare instruments area our and we about picking I happen business of year year. think quarter. million. million. last magnetrons

are positive we're issue very and business. MEMs the very a We foundry largest about independent The that there the it's intensive. capital today is in world probably fab,

against balancing is and make It's of a market small. healthy and we where what we're our relatively that's last of but order business it's $XX of geospatial to kind want have. LIDARS of we share devices The million. course the always our investments area capital So other

answered So I directionally. don't know if question your that

expect imaging we think next business digital I to year. grow

That's extremely in the helpful. back queue. appreciate I detailed I'll response. get

Thank you.

Our next question Konrad from Please Greg comes ahead. Jefferies. with go

Good morning.

morning Good Greg.

mean you talked previous follow recovery the in first I I healthcare QX. doing? in on you up just release of up. I been the you that to on to have and just seems questions. a late it about mean talked of wanted pre-COVID kind How about kind straight of business and two

You've when opportunities business kind year I share its of technologies. new the and we does back to mean see think you level of picked mean get up continue do the a forward? I going next of normalized trajectory? into type that what about lot and growth

X% be a is and take that that make very Well, imaging quarter is are say detectors little use therefore very other overall surgery higher Having quarter. good detectors, said digital there for about normal it's think other have you maybe of than higher as in hospitals X% of which should businesses. the would year. We is should since that's to and reason to no resolution The next able $XX would than that's that revenue we our happen for this think of us We next a an to imaging margin We range going in I at business increase has pretty patients a healthy for detectors be digital question to overall one going that what or million in and less is year I even think project allowing much future issue in probably to much we time next to we as or simple. things. think have cancer be see treatments off. X-ray image. going to from serious no-brainer the X-ray increase

follow opportunities is to with just portion. or your just a Navy I opportunities mean also then and we're within you or mentioned And the unmanned submersible systems I water content but mean unmanned. smaller of kind talking question new outlook lot and shallow it's opportunity larger about on and defense seeing of ones what the up that it's for space think whether is growing unmanned the I

mentioned water that's provider of we're of shallow and really the That Navy you course First is our the submersible sole going for program Seals well. that.

you are to that have the move sets defense As from unmanned really being perspective two vehicles a used today. vehicles of we

One and many had in of the sample that water a and formation in ocean a they in battleship salinity, from the largest reception. glides really transmission as of affects the sonar programs is Navy. of them course of is probably area the a a the use vehicle which that In can order hundred that glider as to gliders density the front we've

of of medium-sized that more a vehicles make an prime. area and both those at course opportunity, as well overseas opportunities we is some Another military in have have area and sold as especially we're we that looking autonomous as we to our

kind probably a the to the that a and course to large at our fairly are subcontractor water today we bid are back able of to are technologies to area. if vehicle vehicle shallow displacement in the available okay and vehicles the just AUVs exit and come look what the, Going you to for of only at that The housed if and look the going were submersible coupled were with submarine submarine. but vehicles and you to mentioned frankly bullish as that someone else world say be on we I and that go it be in a new that's is to unmanned ours with exit program submarine

quick one. And one then more just

less conservative just to half. I on Photonis volume of to deal billion M&A. in I that broader think the market well well you prudent I in around tend do mean than about mean given are excess last of in valuations, to that quarter what you and M&A potential talked the M&A? seems capacity be a you opportunities, just seeing fairly be whether dollars

when Yes. right the was our We've very DALSA. we're improved afforded which came being to able XXXX to cash that two crisis soon. strong acquired us and the are crisis to I'll very the financial flow out in to one but doing you $XXX be XXXX Fast was second for was mention downturn prudent crisis went to demonstrated like companies we we XXXX characteristics to both when to aggressive. we revenue. that also million just us in through the of more one about just after opportunities both the [indiscernible] lost We we oil as in forward now be XXXX

we eXv there well, acquired was that done of margins X%-X% acquisition out of and today. largest we that's It's came we they're XX% date. $XXX to started which our As really million reaching about last with almost

because ability Now going than or flow back dollars significantly our today. has I before had that your now question said observation that cash a a our more little and to we increased of billion

I to and half. closer it's So think a one

as sitting of I could fourth a more X.X. than EBITDA X.X Today should in be acquire as is go quarter or limit how generation we're that. to with we around the depending and an little much think X debt EBITDA on whether ratio cash billion it far better about we

to So I of doing. would we're billion is that range X.X X the say billion, capable X.X

estimates at $XXX if closing you million about going costs, which Photonis cost be - take million. Now etc. to best for this to least is our is going $XXX

with You to X.X X.X subtract us capability. billion that out X additional that billion billion - leaves

of hard very we as come looking we're year. out this So

offer my of things always would front always shareholders where forward they're be be said they're window how it looking saying attractive. I the some boards used I mirror through boardroom in at rear management time before always saying least looking think looking is view view are their well people the having a stock of and are kind an difficult and whereas are obviously the of as to what

I environment is us for we So good think having think that acquisitions. to said make a of this all

you. Thank

of ahead. Buscaglia line Our comes the question from next Bank, with Berenberg please Andrew go

don't Good morning on. think Operator is Andrew Andrew. I

Okay.

on will the move to We next one.

Ricchiuti comes line Our with next and Jim Needham from go of Please Company. question ahead. the

morning Good Jim.

For but operator I end the are your because hear getting is questions not we're the There something not can through. wrong some reason people. at you coming

that Robert on my mute. more me. about and That's phone apology. on a I talk on closing lot attractive a wonder you was business. I one the think bit about if I had find you acquisition my may little so maybe If confident Roberts could I Robert Photonis sound about what you this

think it it little that some bit respects about you eXv looks a did to talk I can. if but bit you the reminiscent of wonder extent the a you little acquisition in of I could

Sure.

little oriented we a it bank than oriented. and much find with positive the some investment we've discussions be them had I'm First government because about French business more to more

feel they're enterprise it have better that but course technology doesn't we think number about a to making think with shareholder Of I going can out say I of minority we years. of a as because France sure move in a live for that the

have for second systems. The seems difficult is have provides non- pretty to image like due businesses this we well during to check just get vision seems it night our diligence because business held final that intensifiers period that primarily business part up your defense to [indiscernible] the that

field That experts all more towards Now bring what not we which our of digital are that. which imaging is in. digitization and is are capabilities moving all to we of duplicative complementary it

it'd because which been very we to that didn't instrument we to synergistic of night businesses multiplier; missing us instruments using academic attractive laboratories interact private vision. enterprise attractive also scientific instrumentation with That's because value same camera across laboratory has the that the bought the serve this is we which substantial the Therefore the recent world be sister and been used do think best owned nice technology has with. it's our very photon we to have and bring bring think in really for field to with spectrometry it for low part by detectors a companies a year firm. to commercial area. the There past equity that businesses because also in overlap us a light business last to and is small we they mass and acquired existing So that the is

are about Jim. some the that those specifics So acquisition of

I wonder but might a if build on That's it book book orders, helpful to any color Robert. you maybe and per you and did segments. may little the to missed also give information have build

You gave color about in is any I business also if wonder business you the anticipating there provide of I little bit units. the you're think some a other what imaging QX. could for of on digital color

in build. Let we about book maybe book to QX systems a me is more our The with business build to start book a that the big because get is to but X.XX. build engineer excluding X.XX little a than lumpy a very that it's that over little

we end quarter the that to expect far to based everything the and see to so just one below build maybe book exceed year in on quarter X.XX. one expect next in We X.XX- we

QX about even higher Now I XXX though income that's benefits quarter. very revenue let's the was I be in about X should was the to EPS the we which over X%. million, end similar I I and have said increase QX revenue third That to where revenue one-time equal that. many up attractive X% higher digital think about the talked It the about us somewhat, million X imaging had in in than expected little didn't very same, be we about or would million, a QX or so for because by $XX revenue say being QX to QX up and

taxes, $X.XX the this year is versus quarter to year there one-time the year's third last income quarter. you if digress and of of benefit against a second third items last to tax Just one-time charges take third for difference quarter from

non-GAAP really from do but do So we're only to -- of apples we never that kind down you do third if about $X.XX $X.XX you measures apples which year's an if last quarter.

now So revenue increasing fourth our better achieving in what achieve this about I we groups quarter million our we're happen to can increase a think is the will $XX have well the midpoint early revenue quarter and overall was what what coupled think going which earnings as if margin into will that we we raise and our of earnings various as of margin the that better is so Sue alluded as we XX.X% today. to is

Got helpful. it. very you. That's Thank

from go line next Please ahead. question Noah comes Poponak the Sachs. of Goldman with Our

Hi, everybody. good morning

Good morning Noah.

up exit comment? just or you think get cyclical help there bottom Robert, versus to that Can or you've helpful. your happened comfortable that's sort order quarter more rate elaborate an I in you following of in be seen detail prepared you rate mean, on into us entry your the mentioned remarks and would action a that any that is businesses.

As mentioned five X% earlier, and environmental revenue the and X% we've and we've seen Pichelli said to it measurement improvement six businesses. test in in I Al seen also and

over about Our those are book build to two in to areas one [X.XX X.XX].

what and are So going consequence, above think as to those a do that sold going X% we we we businesses think X% to okay forward.

importantly as or we're We our seeing instrumentation more so some million maybe think expect [sale] much as but business in I some marginal total improvements act. $XX

as offering area are but is that China some downturn we that of also and encouraging products water we're area see for Of coming their the pharmaceutical us. out course as well in doing new well sampling

imaging, I maybe $XX QX. $XX the million instrumentation would in could In $XX one. as million be be digital I've QX already spoken it even in high So to the to million versus as about think

have but of and think in In I that some aerospace to that our fairly if we going movement much because about the going primarily don't all I pretty in of some up healthy. domain be because think defense is on quarter-over-quarter already and there's engineered have we're million defense to any think in the margins be flat think I add I system uptick $XX we may the pressure our have you we things could we'll increase but generally revenue mentioned. aerospace

long-term sort to that year That's full the like the targeting together depending margin today Okay. Trying commentary of margin operating where in officially looks XX% segment around fourth is level of made is on at is XXX tell it helpful. basis can't approximately company XXXX more and the points in we points exactly you to total improvement the you then XXX then, the and the are going something you've comments improvement I quarter sounds come improvement margin for piece of made or operating earlier of kind a basis kind it of but mean I of not like you've beyond years? looking certainly at if a in that. target quite expect segment next that XX% are zone few provided year

I hope so. Yes.

we XX.X% which do various going we year but table get we XX% noted just to go quarter, from Let to improve would operating we end improved. QX around let would we've should do of me said operating was have we continuously fourth the in a the which is others be XX.X me you I'm which QX second. XX.X%. my in the it I the margin -- operatives If is because what the margins looks in what for back and about that the about year thought than segment and early If some segment to with should end was of of about course it company what XX% total

we because forward we programs and bunch basis the into and going we other that of whole actions spoke procurement expect that year. both have, to points bump up next next of year XX/XX people that XXX Now about a

put cost somewhat because that frankly moderate percentage thing it's put Our fixed. the XX, took basis and it next XXX if going years. corporate that the few but in improve think on disappointed between and Having the this we points to XX year somewhere that enjoy of can't I out operating forward same it fairly next I continuously of fruits margins a would XX be our we and margins lot are because going you of you to costs if the on would said and we're year

Okay. CapEx discussed you speak -- into then come XXX% statement. that the ahead to the that to perpetuity That's it had of I flow for you in the provide like guess to year. if expect to the possible October it previously then then I wanted of is the update just related would that? is net an bracket OneWeb guess pretty if you you'll ask helpful you're conversion full just the just income quantify flow $XXX conversion reason cash maybe any advance to is about Is payment to free willing and high to certainly down, finally cash year and million mentioned we're and looks that or assuming to not

have because start from general. XXX% all Let me. capital introducing me that that's we the that we of costs the rear question Over and and yes that anticipate because end of working easier the programs managed in to reducing will for one conversion continue answer

million million the the flow $XXX to over the included said $XXX we government little where for had for that Act. be enjoyed QX also we I repay a free $XX.X going QX Now cash the the year, In CARES dollars that to it'd million. flow in of cash

then is within healthy the think little I momentum than south do drop by all flow expect If end future in in we continue we higher reach a $XXX I our the good which for or the us net north that debt that year can million expect XXX XXX. of for like acquisitions. that $XXX that really over a terms million So position I XXX will the a of cash we really of be a and ours. of a very that's puts company can little around maybe if should

much. Thanks so helpful. Very

Sure.

ahead. Our next of the Blake with Gendron question comes Research. from Please line Wolfe go

two if marine mix is versus like it to next year really Yes. the have three here. would a instrumentation call back If I margin industrial free quick shorter what recovery testing environmental me first and here. a pump the on Thanks do plane there that from how do stack outperforms little looks environmental from follow-ups me enough on for just getting not time the is versus cycle testing? up to perspective bit. out starting Feel

Let instrumentation significantly but of they're lower the gas and have fairly general still okay and remain defense is above time oil test said the businesses. increases. markets lower than markets back, you until a in from flat they're we've expect away me are the source and so very gas oil don't points going we though points primarily that until however to XXX if more Having Environmental look businesses even start. they businesses basis margins come the basis The and business, about a for and improving because measurement our marine to XXX the some about marine at businesses they're others. margins moved marine average the now healthy the total revenue though those long are are year-over-year markets even

flattens think of higher our looking forward ones margin but encourage the I we'd together combined kind So growing. it out that that we're are businesses to

and not And on and announcement then does Thanks. obviously think maybe a TBD about just Biden M&A, the do as processes with you that's tax? but rush one all one Photonis election your to in Understood. pipeline withstanding administration quick deal is because at you wouldn't tax kind normalize accelerate of M&A any change regime maybe valuations or you that in the expect

House. occupying of White that's I the administration is Never difficult which do one. hurry anything. to will up going a answer regardless following. Boy the have, can not only We're to never

looking that I I at think we're the we will or ones the at. think taxes down looking change businesses we're buy up but will that

term them margins improve to election. not because good and it businesses buy of and the can we wouldn't the subsequent long will in because they're I the their about election rush or We

very the up. everybody's and going improve prices go are year either wouldn't slow On hand other I it because things about next to be are going to

So might this a be good opportunity.

the for much so Thanks time. Understood.

Blake. you Thank

line Please next Bank. from Buscaglia go the Andrew comes Our Berenberg ahead. of question with

you Can now? me difficulty. guys. Had technical Hey some hear

Yes.

For sure.

picked pretty I'm can but that some Everything's within right. pretty high digital in guys segment. curious level powerful growth see All imaging over you

of some there into you so look of business of differences have, to you've more you guess that do I XXXX? and a [bull] entering or had and could about upside years are specifically thinking muted back over XX% between grow think growth some machine I there. going? order up given magnitude the that kind of optimism you given XXXX in tech cycle. you're in seems the I this see and case a Where be XXXX how you be where to If brewing would that semis guess business? to there able XXXX couple organically vision the set

eXv, Well, I think that up the acquisition so things absence the acquisition. year any really of XXXX obviously we got also let's bumped say in that's that but year because acquired

situation imaging now. acquisition question think single another million digits will expecting should and Photonis or get expect $XXX the going we I make as and top digits that's single that digital hump think overall that the plus without we'll and right worth now we for sure. higher the expected are put of over the on that to for course domain. to line us us grow If business overall the experiencing caveat in if revenue I hit revenue in only is be The in we it has we're so right throwing can said is of a were healthcare improve. pretty healthcare I imaging we our grow growth happen to that this high I hard digital you

Okay.

and Okay this I exposure. you're know piece gas is but and oil offshore small

based if it's your play where to from that segment in I want growth what's that that energy. pretty to view think pessimistic long-term in outlet business if mind your Any being as for strategically and guys? you very went opportunity on it optimistic on change in in So viable a there for going still on you

vehicles program others. would second are and as is used which our importantly major a production our I have to then we two well defense parts hydraulically where offshore both more our course of obviously making submarine of businesses. sensors And There lot is we in there say construction, marine Yes. the that in part penetrators player or energy autonomous for whether the is but is as science then are exploration a fleet.

science future that's So in going will probably the I our of etc. of so construction, almost remain throwing if is and business and years defense XX% grow forward. be think business sector going healthy you're that and really and to

segment, million the marine million Now, revenues of $XXX and is production overall to about exploration. oil $XXX segment of sub the has it sub so the offshore the rest segment,

which There oil. they exploration barrel going offshore total. pretty looking of very is put industry. that think kind but back that is growth if That of vessels after That help winning business business we a we products in business That standardized going XX margins relatively not the It's more do exploration, marine oil be a is plus to continuously are and high I dollars people in say our to there still going have and I'd this where for cables margins. is right that's because for on Let's we're hope be have is healthy where still margins to done because is downturn area to say even primarily answers. for in benign be that our best developments forward has streamer there generally stable fairly that products will a comes of about going we not if the above us the the average that segments think water and XXX what I really the The been we've recently marine is we and enjoying now. can the provide improve good sensors. we the buy us the come back stable. used and million

Thanks. Yes. No, that's great detail.

Sure.

questions. further no are there And

now call. Alicia, to our Wees much. and conclude Jason conference very ask would you Thank I

you and us morning. joining everyone this Robert again thanks for Thank

if then you sign Of course you. have could the please free information the to earnings feel questions call Alicia replay follow-up the give if call everyone. on off for Operator, Thank and you on me the release. number

after conference Ladies X will available XX, replay you. and pm gentlemen November be Thank this through for today XXXX.

the any entering using That XXX-XXX-XXXX and conference our participation dial you access for Conferencing participants are You XXX-XXX-XXXX. service. does by X-XXX-XXX-XXXX system Those numbers and and for again AT&T conclude code replay your today. Thank at access dialing time for XXX-XXXX. XXX-XXXX. access may code International X-XXX-XXX-XXXX

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