Good day, and welcome to the AMETEK third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kevin Coleman, Vice President of Investor Relations and Treasurer. Please go ahead. Thank you, Abigail. Good morning, and thank you for joining us for AMETEK's third quarter 2023 earnings conference call. With me today are Dave Zapico, Chairman and Chief Executive Officer, and Bill Burke, Executive Vice President and Chief Financial Officer. During the course of today's call, we will be making forward-looking statements, which are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risks and uncertainties that may affect our future results is contained in AMETEK's filings with the SEC. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements. Any references made on this call to 2022 or 2023 results, or to 2023 guidance, will be on an adjusted basis, excluding after-tax, acquisition-related, and tangible amortization. Reconciliations between GAAP and adjusted measures can be found in our press release and on the Investors section of our website. We'll begin today's call with prepared remarks by Dave and Bill, and then we'll open it up for questions. I'll now turn the meeting over to Dave. Thank you, Kevin, and good morning, everyone. AMETEK delivered excellent results in the third quarter, highlighted by outstanding operational execution, superb margin expansion, strong cash flows, and earnings ahead of our expectations. In the quarter, we established records for operating income, operating margins, earnings per share, EBITDA, and cash flows. Given these strong results and our outlook for the balance of the year, we have again increased our earnings guidance for the full year. We have also been very active on the acquisition front. During the third quarter, we completed the acquisition of United Electronic Industries, and subsequent to the end of the third quarter, we acquired Amplifier Research. Today, we also announced the signing of a definitive purchase agreement to acquire Paragon Medical, a highly attractive acquisition which broadens our exposure in the medical technology space. I will provide more details on these acquisitions shortly. Now, let me turn to our third quarter results. Third-quarter sales were $1.62 billion, up 5% over the same period in 2022. Organic sales growth was flat. Acquisitions added 4 points in the quarter, and foreign currency added 1 point. Book-to-bill in the quarter was 0.96. We ended the quarter with a very strong backlog of $3.4 billion, near record levels and down a modest 2% sequentially. Our backlog is up 5% from last year's third quarter and up 23%, or $640 million from the end of 2021. AMETEK's operating performance in the third quarter was exceptional. Operating income in the quarter was a record $438 million, a 14% increase over the third quarter of 2022. Operating margins were a record 27% in the quarter, up a sizable 220 basis points from the prior year. EBITDA in the quarter was also a record at $511 million, up 10% over the prior year, with EBITDA margins an impressive 31.5%. Operating cash flow was up 45% in the quarter to a record $473 million. This outstanding performance led to record earnings of $1.64 per diluted share, up 13% versus the third quarter of 2022, and above our guidance range of $1.56-$1.58. Now, let me provide some additional details at the operating group level. First, the Electronic Instruments Group. The Electronic Instruments Group delivered impressive operating performance with continued strong and broad-based sales growth. Sales for EIG were $1.14 billion in the quarter, up 8% from the third quarter of last year. Organic sales were up 3.5%, acquisitions added 3.5%, and foreign currency added 1%. EIG's organic sales growth remains broad-based and reflects our leading position across attractive market segments and the impact of our organic growth initiatives. Growth in the quarter was particularly strong across our Aerospace & Defense businesses, as well as in our Zygo, SPECTRO, and CAMECA businesses. Third quarter operating income was a record $335 million, up 23% versus the prior year, and operating margins were a record 29.5% in the quarter, up an impressive 360 basis points from the prior year. Tremendous work by our EIG businesses in the third quarter. The Electromechanical Group also delivered solid operating performance in the quarter, despite the impact of normalization of inventory levels across our OEM customer base. EMG's third quarter sales were $487 million, down 2% versus the prior year, with organic sales down 8% in the quarter. Acquisitions added 4 points, and foreign currency added 2 points. EMG's operating income in the quarter was $128 million, down 7% compared to the prior year period, while EMG's third quarter operating margins were a very solid 26.2%. Our performance in the third quarter, and thus far in 2023, reflects the unique value inherent in the AMETEK growth model. Our differentiated businesses are aligned with diverse and attractive growth markets, while our organic growth initiatives continue to position us for long-term sustainable growth. Our distributed operating structure provides our businesses with the ability to execute their growth strategy and the flexibility to react quickly to changing market conditions. Our asset-light business model and strong operational execution drive outstanding cash flow generation, which we redeploy on value-enhancing acquisitions. This strong cash flow and our robust balance sheet are key differentiators for AMETEK in this higher interest rate environment. Now switching to our acquisition strategy. As noted, we have been very active managing a strong pipeline of acquisition opportunities. We are pleased to welcome our most recent acquisitions, United Electronic Industries and Amplifier Research, and pleased that we have signed a definitive agreement to acquire Paragon Medical. I will provide some more color on each of these businesses, starting with Paragon Medical. Paragon Medical is a leading manufacturer of highly Engineered Medical Components and instruments, serving applications including orthopedics, minimally invasive surgery, robotic surgery, and drug delivery solutions. Paragon's broad product portfolio of single-use and implantable components are sold to a diverse blue-chip customer base of leading medical device OEMs. Paragon is an excellent acquisition for AMETEK. It expands our presence in the MedTech space and provides us with access to attractive new market segments with strong growth rates. We are acquiring Paragon in an all-cash transaction valued at approximately $1.9 billion. Paragon has annual sales of approximately $500 million and is headquartered in Pierceton, Indiana. The closing of the acquisition is subject to customary closing conditions, including applicable regulatory approvals. Now switching to United Electronic Industries or UEI, which we acquired in August. UEI is a leading provider of ruggedized test, measurement, simulation, and control solutions. UEI's custom products cater to diverse data acquisition needs, from hardware-in-the-loop testing to aircraft simulators and automated testing systems in mission-critical applications. With a strong presence in the defense, aerospace, nuclear power generation, and semiconductor, UEI nicely complements AMETEK's Power Systems and Instruments division, significantly expanding our data acquisition capabilities. UEI has annual sales of approximately $35 million and is based in Norwood, Massachusetts. Next, Amplifier Research is a leading provider of innovative RF and microwave solutions. Its equipment is used for electromagnetic compatibility testing within the defense, industrial, automotive, medical, and communication sectors. Amplifier Research is an outstanding strategic acquisition and complementary fit with our existing Compliance Test Solutions business. Their technical capabilities broaden our RF instrumentation and testing portfolio. Amplifier Research is a growing business, well-positioned to benefit from the growth and demand for electric vehicle research, development, and testing. Amplifier Research is based in Souderton, PA, and has annual sales of approximately $60 million. Our acquisition pipeline remains very solid. We have a strong balance sheet and significant financial capacity and look to remain active in deploying capital in the coming quarters. AMETEK also remains committed to investing in our businesses to help position them for long-term, sustainable organic growth. In 2023, we plan to invest approximately $100 million in these growth initiatives, including our new product development efforts, where our businesses continue to develop highly differentiated technologies to help solve our customers' most complex challenges. In the quarter, our vitality index, which measures sales from products introduced over the prior three years, was a healthy 26%. As a complement to our internal new product development efforts, our ORTEC business recently acquired a small technology company, innoRIID, to help broaden their technology capabilities in the radiation detection market. innoRIID [brings] both cutting-edge technology expertise and an exceptional product development team, known for their innovative solutions, having developed specialized artificial intelligence algorithms for radiation detection in a range of nuclear security, research, health, and medical applications. Now turning to our outlook for the remainder of the year. With strong performance in the third quarter and a positive outlook for the remainder of the year, we are once again raising our earnings guidance. For the full year, we continue to expect overall sales to be up mid- to high-single digits, and we continue to expect organic sales to be up mid-single digits. Diluted earnings per share for the year are now expected to be in the range of $6.31-$6.33, up approximately 11% compared to last year's results. This is an increase from our previous guidance range of $6.18-$6.26 per diluted share. For the fourth quarter, we anticipate overall sales to be up mid-single digits, with adjusted earnings of $1.61-$1.63 per share, up 6%-7% versus the prior year. In summary, AMETEK's third quarter results for 2023 were outstanding, with strong growth across our long cycle businesses, record operating performance, and strong acquisition activity. Our businesses continue to excel, driven by our differentiated technology solutions, serving diverse and growing markets. Our asset-light business model and strong cash flows provide us with the flexibility to navigate challenging economic environments while actively deploying capital to enhance shareholder value. AMETEK remains firmly positioned for long-term sustainable growth. I will now turn it over to Bill Burke, who will cover some of the financial details of the quarter, then we'll be glad to take your questions. Bill? Thank you, Dave. As Dave noted, AMETEK delivered outstanding results in the third quarter, with exceptional operating performance, robust margin expansion, and strong cash flows. Let me provide some additional financial highlights for the quarter. Third quarter general and administrative expenses were $24.6 million, essentially unchanged from the prior year, and as a percentage of sales were 1.5% versus 1.6% in last year's third quarter. For 2023, general administrative expenses are expected to be approximately 1.5% of sales, in line with last year's G&A to sales level. Other income and expense was a headwind of $9 million in the quarter, due largely to lower pension income and higher due diligence costs. The effective tax rate in the quarter was 17.7%, down from 19% in the third quarter of 2022, due to improved utilization of tax credits. For 2023, we now anticipate our effective tax rate to be between 18.5% and 19%. As we've stated in the past, actual quarterly tax rates can differ dramatically, either positively or negatively, from this full-year estimated rate. Capital expenditures in the third quarter were $29 million, and we continue to expect capital expenditures to be approximately $145 million for the full year, or about 2% of sales. Depreciation and amortization expense in the quarter was $82 million. For the full year, we expect depreciation and amortization to be approximately $330 million, including after-tax, acquisition-related intangible amortization of approximately $157 million or $0.68 per diluted share. Operating working capital in the third quarter was 19.1% sales. Cash flow was excellent in the quarter, with outstanding growth versus the prior year. Operating cash flow was a record $473 million, up 45% versus the third quarter of 2022, while free cash flow was also a record at $444 million, up 49% over the prior year. Free cash flow conversion was 131% in the quarter, and for the full year, we continue to expect approximately 120% free cash flow to net income conversion. Total debt at September 30 was $2.2 billion, down from $2.4 billion at the end of 2022. Offsetting this debt is cash and cash equivalents of $182 million. At the end of the third quarter, our gross debt to EBITDA ratio was 1.1x, and our net debt to EBITDA ratio was 0.6x, leaving us with significant available cash and financial capacity to deploy on strategic acquisitions. As Dave has noted, we've been very active. During the third quarter, we deployed approximately $150 million on the acquisitions of UEI and innoRIID, and subsequent to the end of the quarter, we deployed approximately $105 million on the acquisition of Amplifier Research. Also, subsequent to the end of the third quarter, we announced the signing of a definitive agreement to acquire Paragon Medical for $1.9 billion, which would be our largest acquisition to date. Following the acquisition of Paragon, we would still have significant financial capacity, with approximately $1.5 billion of cash and existing credit facilities available to support our growth initiatives. In summary, AMETEK had exceptional results in the third quarter. We achieved significant market margin expansion and delivered high-quality earnings. Our strong position in key market segments, coupled with a very strong backlog and exceptional operating capabilities, positions us well for continued success. Kevin? Thank you, Bill. Abigail, could we please open the lines for questions? Thank you. At this time, we'll conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for our first question. Our first question comes from Deane Dray with RBC Capital Markets. Your line is open. Thank you. Good morning, everyone. Good morning, Deane. Hey, congrats on all the M&A successes here. Maybe we can start with Paragon. Looks right in your wheelhouse, precision medical robotics. If you could provide some color on the company in terms of like, what% are consumables? We really like seeing all those one use applications. Yeah. So consumables, comment on margins and growth, if you could, please? Yeah, sure. I'll give you my view of Paragon. As you stated, the leading provider of highly Engineered Medical Components and instruments. When you look at the key market drivers of this acquisition, you have the aging population, the demographic shifts. You also have procedure innovation, where the minimally invasive procedures are becoming more percentages of surgeries, and they do a great job at that. And also, in this market, there's a continuing trend toward outsourcing the OEMs, and the OEMs want to accelerate their time to market, and Paragon is really well positioned with significant new product wins in this space. It serves specialty applications, like we talked about the orthopedics, minimally invasive surgery, robotic surgery, and drug delivery. Orthopedics is the largest, but there are strong positions in each of the applications. Now, the portfolio is one of your questions, consisted of single-use and consumable surgical instruments and implantable components, and about 40% of the business is recurring in nature. So the single-use and consumable surgical instruments are about 40% of the revenue, so we really like that. Has a blue-chip customer base, over 600 programs with diverse sources of revenue. About 85% of the business is on sole source programs. It's a very, very sticky business. When you combine the regulatory environment with lengthy approval processes and the capabilities of Paragon, there's high switching costs. It's a business that adds unique value to its customer base. You know, we did a lot of surveys in the market, and they're the highest quality provider. They have excellent customer service. A differentiator for them is their design and development capability, and they're really considered a true partner by their customers. And when I look at this from... That's about Paragon. When I look at it, what it does for AMETEK, it increases our MedTech exposure now to over 20%. It's one of the goals we've been trying to achieve. It adds about $500 million in revenue to EMG, and that revenue is, you know, comes from Paragon, which is a secular, low double-digit grower. It really fits our business model with the highly engineered products that provide unique value to customers. It's a growing, profitable business that provides multiple avenues of growth, and there's really an opportunity for us to improve margins by applying the AMETEK growth model. It's already a profitable business, but there's plenty of room for us to apply the AMETEK growth model and expand margins. Paragon will benefit from the AMETEK's global infrastructure for sure, and we like the management team. They're a highly talented team, and we're excited about what we can accomplish together. Importantly, the deal economics met AMETEK's traditional deal hurdles, and this is on a large deployment of capital. So our return on invested capital hurdles are met by this deal. And, you know, we paid about 15x TTM EBITDA for the business. So we're very excited for the business. It's a good business for us. We've been looking at these businesses for some time, and as universal excitement amongst Paragon and AMETEK. All right. That was a great overview, and you hit all the key questions on the consumables, margins, and growth, so sounds like a great story. And, if I could just, on a follow-up question on EMG. So we're seeing destocking all over the sector in biopharma and MedT ech. Be interested in hearing from you, besides the destocking, is there any kind of read-through on the end markets, in those business? Are you seeing any slowing there? And look, no one has a crystal ball here in terms of how long you think this lasts, but, I'd love to hear your expectation on the duration of this inventory normalization. Thanks. Yeah, sure, Deane. Great questions. You know, for the quarter, we grew our top line 5% on a mid-single digit guide. Our revenue was in line with the guides. The acquisition performed a bit better. And, you know, we maintained, as I said, our full year sales guide, mid to high single digits and organic growth of mid-single digits. To maintain that organic guide for the full year, our Aerospace & Defense business is stronger and our automation is weaker, and they're offsetting. That's one of the benefits of the AMETEK portfolio. And specifically, in terms of Q3 revenue, we saw faster destocking in our automation businesses than we anticipated. So that's what we saw there. And we expect the destocking to continue through the end of the year. In terms of, you know, your question, is it a destock or a downturn? It's very difficult, dynamic environment right now, and lots of uncertainties. With the geopolitical risks, the interest rate increases, they're factoring in for sure. But from what we see, this is largely an inventory correction. End demand looks constructive, with many new projects in the offing, and the projects are not being delayed or canceled. Our Aerospace & Defense looks solid, our medical looks solid, significant projects in semiconductor, clean energy, power grids. So we remain positive post-destocking, and we think that destocking will continue through the end of the year. In terms of, you know, 2024, we're going to sit down with our teams and understand what's going on, but in general, we're constructive. That's all real helpful. Thank you. Thank you, Deane. One moment for our next question. Our next question comes from Matt Summerville with D.A. Davidson. Your line is open. Thanks. Morning. Dave, your, your EIG margins this quarter, really moved into a new ZIP code for AMETEK. I was wondering if you could maybe talk about the key drivers as you just think about the sequential performance, right? Rev flat profitability up $28 million, on the OP line, as well as kind of the year-over-year dynamics. So maybe if you can just kind of flush all of that out, that would be helpful, and then I have a follow-up. Yeah, sure, Matt. I mean, if you'll go back and look at my, you know, last quarter or two, I told you EIG was gaining momentum, and, the momentum certainly showed up in Q3. We had an excellent operating quarter. I mean, EIG margins were up 360 basis points, driven by high contribution leverage on the growth. We really had excellent price cost. We had strongly performing acquisitions, and, it all came together to, you know, put up record margins. And then just as a follow-up, with respect to Paragon, I appreciate the stats you shared. Is there any way, to kind of parse out what you think year one cash EPS accretion would look like, and then what the expected closure timing might be for that? Thank you. Great questions, Matt. We think the closure is dependent on regulatory approval, but nothing, nothing atypical, but we think the, w e'll get the approvals and close sometime in the first quarter. In terms of year one, yeah, we'll have very modest cash EPS accretion. It's going to be impacted by purchase accounting, integration costs, realignment costs, financing costs. We'll pay with this with a mix of cash and debt and, and -- But we'll have very strong accretion in year two. And, we're excited about, getting, getting the business under our wing, improving the business, and, and delivering. You know, we're very excited. Just real quick, Dave, so you're not planning to non-GAAP those items out, you're just going to run them through the P&L then? Yeah, we'll make that decision at the time. You know, historically, we have not broke them out, but with the amount of acquisition activity that we have, it may make sense to do that. We haven't made a decision yet. Got it. Thank you, guys. One moment for our next question. Our next question comes from Allison Poliniak with Wells Fargo. Your line is open. Hi, good morning. Morning, Allison. I just want to go back to your comments on automation. If I recall, that's typically a canary in the coal mine, but it seems from your comments, what I'm reading through, I just want to clarify, that it just seems to be more industry destocking for you in that market, or was it something bigger? I just want to make sure I understand. Yeah, we think it's destocking. We think it's destocking, and the destocking will last through the year end, and, b ut post-destocking, we remain constructive. You know, that business automation sells to a lot of markets, and, you know, the healthcare part of that market is not doing well right now, and, you know, some of the other exposures, but, we think it's clearly destocking. Got it. And then on growth investments, you know, keeping to the $100 million, you know, how should we be thinking about it into 2024? Is it something that you think, you know, there could be a raise there? And then just even with Paragon, what that R&D, I think you talked about, you know, the design piece of it being very, a big part of that. How does design and R&D, is it higher than the typical AMETEK? How should we be thinking about that? I think you should think about Paragon as matching the AMETEK profile. Got it. And then organic investments as we kind of look to 2024 is, you know- Yeah, I mean, we're going to, you know, sit down with each of our teams to discuss 2024 over the next six weeks. We're going to review each of the individual businesses. We do deep dives, as you know, into what they are seeing in their niches, their market dynamics, growth opportunities, cost reduction opportunities, and we want to go through that, these meetings before there's any commentary in 2024. We'll tell you in early February. But so in terms of talking about next year, you know, we'll have the typical things like, you know, we'll expect price to offset inflation and CapEx will be about 2% of sales and things like that. But we're going to defer from talking about the overall plan until we get to meet with our teams and understand at a detail level. Perfect. Thank you. Thank you, Allison. Moment for our next question. Our next question comes from Jeffrey Sprague, with Vertical Research Partners. Your line is open. Hey, thank you. Good morning, everyone. Good morning, Jeff. Morning, Dave. Hey, just to come back to Paragon, maybe one more time, maybe somebody else to come at it again. I just kind of want to understand maybe the profit improvement plan going forward. Because it looks like rough math, right? Margins, EBITDA margins, 25% or so. You know, you're doing 800-1,000 basis points better now than that in EIG. When you talk about kind of the aspirations for the business and the cost cutting and other opportunities, is that the sort of zip code and margin improvement we should be thinking about here? And if so, over kind of how long a period of time? Yeah, that's the ZIP code, and it's over time. And we're going to build a plan with the management team and show them all the resources that AMETEK has and some of our business processes. But what you're talking about is in the ZIP code of what we have planned. Just to elaborate a little bit more on how this fits, is there a, you know, kind of a commercial or operational synergy with other parts of the business, or should we just think of this as an interesting, healthy, kind of standalone business that drops into the portfolio? We have an existing business in our EMG business. It's about a $200 million business. It's or called our Engineered Medical Components. So we're familiar with this segment. They're completely different end markets, but think about that as additive to that existing position, but in a greater scale. And then maybe just one last one from me. You know, the MedTech world's been a little rocky here, you know, the last couple of years, procedures, post-COVID, everything. You characterize it as a double-digit secular grower, but are they kind of sitting in a little bit of a trough here, impacted by those sorts of forces? Or maybe just kind of the- No, not really. They're growing nicely. I mean, you have the market growth that they're benefiting from, and they happen to be in the fastest areas. They've deployed their resources well, and they're benefiting from the fastest growth areas. You know, there's a, they're winning new business on new programs, and it's pretty substantial. And you know, we did surveys on these businesses, and this is a really good business in terms of their capability and how they take care of their customers, and they're definitely winning share. So, you know, it's going to be a low double-digit grower for the next, conceivably, in the next few years. And a lot of that's programmed in. Now, you know, that's the way we're looking at it. There's going to be ups and downs as we go throughout the years, but this is a solid business with really good growth prospects. Great. Congrats and good luck with it. Take care. Thanks. Yep. One moment for our next question. Our next question comes from Scott Graham with Seaport Research Partners. Your line is open. Hey, good morning. Thanks for taking a minute here. Good morning, Scott. Nice, nice quarter. Thank you. So just a couple of items, Bill. What was the working capital percent last year? Give me one second on that. Sure, sure. I'll ask another one. It was. Yeah. I got it. It was 18. 4 18.4, okay, thanks. And then, you know, the $1.5 billion of availability, just maybe walk us through that. That That is net of Paragon, I assume. And is that like an assumption at about 2.5x leverage? No, that's the amount of cash and availability under our revolver post Paragon. The leverage post Paragon would only be about 1.5x EBITDA at the gross level. So substantial- Okay. Financial flexibility, as well as we're still, you know, well under levered, I would say. And as Dave's talked about, lots of other opportunities available to us as we look to continue the acquisition strategy. So again, it's always finding the right businesses for the AMETEK portfolio. It is not capital constrained. Right. Right. Yeah, that's how you do that as well. Another way to make that point- I guess- Another way to make that point- Sure. As Bill said, post Paragon, we have 1.5 leverage. If we wanted to take it up to 2.5 leverage, which is, we've been there before, and that's not a high, a higher number for all, we could spend $2.6 billion on acquisitions. Above and beyond Paragon. Right. Above and beyond Paragon. We're in the M&A game, and our pipeline looks really good. We have the balance sheet to be able to execute on it and the capability to integrate these businesses. Thank you for that. I appreciate it. When you are looking at deals these days in this interest rate environment, you're obviously funding them off of a lot of balance sheet liquidity, and admittedly, maybe now higher rates off of the revolver. But are you imputing an interest rate that is, you know, kind of more market-oriented when you make these decisions? Yeah, our models use current borrowing rates as part of that decision-making process. Got it. Thank you. Last question is, you know, the typical one. Dave, would you mind kind of maybe unbundling the four divisions? Sure, Scott, I'll walk around the business. Start with our process business, and overall sales for process were up mid-single digits, at low single digit organic sales, and the contribution from the acquisition of Navitar. Demand across our process markets remain solid. Our products and technologies are well aligned with important secular growth trends, like the energy transition and healthcare. Growth in the quarter was strongest across these end markets, while our high-end optics business in Zygo continues to perform very well, with strong demand for their custom optical solutions. For the full year, we continue to expect mid-single digit organic sales growth for our process businesses. Going to Aerospace & Defense next. Our Aerospace & Defense continues to perform well. Organic sales were up low double digits in the quarter. Growth remains strong and broad-based across our A&D subsegments. A growth in the quarter was strongest in our defense businesses, while commercial OEM and aftermarket businesses also grew at healthy levels. Given this strong performance, we now expect sales for Aerospace & Defense to increase mid-teens on percentage basis for the full year. In Power & Industrial, those businesses delivered solid results in the third quarter, with overall sales up mid-teens. This growth was driven by a low single-digit organic sales growth and the contribution from the acquisition of RTDS Technologies. We saw the strongest growth in the quarter across our renewable energy and power simulation businesses, including RTDS. Our power businesses are well positioned to benefit from long-term investments required to modernize the electric power grid and build out of the renewable energy infrastructure globally. For all of 2023, we continue to expect mid-single-digit organic sales growth for our power business. Finally, our Automation & Engineered Solutions business. Overall sales for A&ES were down mid-single digits in the quarter, with contributions from the acquisition of Bison Engineering being more than offset by a low double-digit decrease in organic sales. As we expected, the impact from normalization of inventory levels, which we talked about earlier, across our OEM customer base, combined with challenging prior year comparisons, created a short-term headwind for our OEM-exposed businesses. We believe underlying demand is solid, as we talked about earlier, and across our diverse Automation & Engineered Solutions markets, and we remain constructive. But we do expect, as we said before, that the inventory normalization is gonna recur throughout the OEM customer base will continue through the end of the year. And now for the full year, we expect organic sales for our Automation & Engineered Solutions businesses to be down mid-single digits versus the prior year. So that's all for the sub-segment commentary, Scott. Thanks very much. Thank you, Scott. One moment for our next question. Our next question comes from Nigel Coe with Wolfe Research. Your line is open. Thanks. Good morning, and congrats on the deal. Deals even. So good morning. Can you hear me? Yes, we can hear you, Nigel. Okay, good. I couldn't hear you. Okay. So, maybe you could do the same process geographically, talk about what you're seeing by geography. Right. I'd be curious about Europe and China. And also, you gave some perspective on business performance. Maybe you could talk about maybe just kind of final points on 4Q, maybe talk about core growth. Yeah and acquisition contributions for 4Q. Okay. Q4 and geography. Okay, I'll go across the geographies. We had continued solid growth in the U.S., with the international slowing a bit. So I'll unpack that a bit. The U.S. was up mid-single digits with notable strength in our process business. Europe was down low single digits, notable strength in process in our aerospace business, but weakness in automation. You mentioned China. Our China exposure was down 3%, strong growth in process, weakness in automation. And overall Asia was down about 10%. So China did better than overall Asia. China is about 9% of sales. So again, up in the U.S., slowing in international markets. And the second question you asked was on Q4 and the guide for Q4. And our sales will be up mid-single digits. We'll grow in revenue. There are two factors impacting the earnings in Q4, and one of them is a higher tax rate, and the second one is there's some acquisition integration costs in there related to the deals we completed. But we're very confident in our guide for Q4. I'm sorry, David, what was the core growth for, for 4Q? Core growth for Q4 was low to mid-single digits. Okay, so that's obviously acceleration from 3Q. Yes. But what's driving that acceleration? I think we're seeing some good demand on the EIG side from the typical year-end selling, year-end sales that we typically get of capital spending, plus the EIG business is performing well. So our aerospace and our process businesses are performing well, and that's what driving your organic sales in Q4 to be higher than the organic sales in Q3. Got it. That's helpful. Maybe just one more from me. So obviously, Paragon, big deal. You know, you've closed another, you know, smaller deal. You sound really bullish on the outlook as well, so it seems like the pipeline is still pretty fertile. I mean, are we seeing here a change in behavior from sellers? Are we seeing more willing sellers? Are we seeing any change in sort of ask multiples here? Any color in the market would be helpful. Yeah, I think it's a little choppy in the market, and people are reevaluating, and you know, the interest rates are higher, so financing that debt on a continuing organization may be a challenge. And as I said, in the beginning of the year, our pipelines are strong. I would categorize our pipeline right now as very strong. We have a lot of attractive candidates we're looking at, and I'm just bullish on being able to differentiate AMETEK's performance over the next 12-24 months with our OpEx and our M&A. Great. Thanks, David. Thank you. One moment for our next question. Our next question comes from Christopher Glynn with Oppenheimer. Your line is open. Thank you. Good morning. Good morning, Chris. Want to keep it going on Paragon a little bit. I think you listed as for medical components and instruments. I'm wondering if it is the OEM in some of the instrument spaces, and also a little bit on ownership history and the deal process, competitiveness, and such. Yeah. When you, when you think about Paragon, they're largely selling to an OEM customer base, but they do sell some of their, they do sell some of their surgical instruments directly to the end customer, but it's largely an OEM customer base. We purchased the business from American Securities, and from our view, they did an excellent job running the business and had a fantastic management team in place, have a good growth strategy, and, you know, what they did is really position kind of a pure MedT ech play by you know, repositioning this with some other parts of their portfolio. So we're pretty excited about what we're buying. Okay, thanks for the added color. Yep. Thank you, Chris. One moment for our next question. Our next question comes from Peter Costa with Mizuho. Your line is open. Good morning, everyone. This is Peter Costa. I'm for Brett Linzey. So just coming back to orders, could you provide some context around the monthly order cadence through the quarter and then moving into October? Have you been seeing anything concerning or anything tracking better than your internal expectations? Thank you. No, I think the quarterly evolution of orders is about what we see. We mentioned our, you know, book-to-bill and things like that, and we started out in Q4 in line with what we need to deliver those results. So, you know, we had talked our last few earnings calls, we highlighted a couple of dynamics that would impact orders, and our orders have been very strong for an extended period of time. In fact, we averaged 18% organic growth in 2021 and 2022, and we had 12 consecutive quarters up to this quarter with positive book-to-bill. So as a result, we have a near record backlog, as we said. You know, these dynamics are playing out as we anticipated. Perfect. Thank you. Yep. One moment for our next question. Our next question comes from Andrew Obin with Bank of America. Your line is open. Hi, this is David Ridley-Lane on for Andrew Obin. Wondering if you- Hello, David. Morning. Wondering if you've seen any impact from the higher interest rates on end market demand, and in particular, you know, some of the other publicly traded test and measurement companies have mentioned project delays, particularly in China. Have you seen anything along those lines? Yeah, as I mentioned, we were down about 3% organically in China, so there was some delays, but it wasn't substantial. You know, in terms of increasing interest rates, that's one of the uncertainties that we're clearly looking at, and it's a very dynamic environment right now. And there are factors for sure, but we're not seeing an impact on projects proceeding or anything like that from the interest rates at this point. Got it. And are you supply chain constrained at this point in your Aerospace & Defense businesses? Is that a sort of limiter on growth accelerating and even greater over time? We are not supply chain limited in aerospace at this time. Now, the industry is dealing with some supply chain difficulties, but we're not limited. All right. Thank you very much. One moment for our next question. Our next question comes from Michael Anastasiou with TD Cowen. Your line is open. Thank you. Good morning, everyone. Good morning, Michael. Back to Paragon, you know, currently, medical-related revenues are about, give or take, 10% of sales, and after this acquisition, it takes you to about 20%. So was just expecting. Just curious if you're expecting to make, like, a deeper push into medical moving forward? And then what is sort of like the best way to think about balancing M&A dollars for these different end markets as well? Any color would be helpful. Yeah, there's a balance in AMETEK's end markets, and we really like that balance. That's why we're able to navigate some of the challenges that we're going through right now. So it's we plan on keeping that balance, but if there are other attractive areas in the medical space, we'll certainly look at them. But you know, it's we like the balance in the portfolio. And what was your other question, Michael? Oh, M&A dollars. Yeah. I mean, you know, we have a distributed operating model, and all of our businesses, we have management teams there that are, you know, doing strategy work around their businesses and trying to make their businesses better, and they're bringing forward acquisition candidates. So, we don't have a predefined amount of capital that we're gonna apply to certain markets. We're gonna looking for the deal, the deal quality, the quality of the businesses, and if we have the management teams to integrate them. So we have a different viewpoint. We don't look at it from the top down in terms of dollars allocated per market. Gotcha. That, that's helpful. And just kind of diving back into it, so potentially, depending on availability of assets and that such, do you expect, you know, total revenues to the medical end market? - you know, increasing over time? Yeah, I think medical- And how do you expect that? Yeah, it's 20% now. It could, it could go, you know, 25, 30, that wouldn't bother us, but, but we, we plan on having a diversified revenue base. Great. Thank you. Thank you. Thank you. That concludes the question and answer session. At this time, I would like to turn it back to Kevin Coleman for closing remarks. Thank you, Abigail, and thanks everyone for joining us for our conference call. As a reminder, a replay of today's webcast can be accessed in the Investors section of ametek.com. Have a great day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.