My name is Kathy and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Danaher Corporation's Third Quarter 2019 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to Mr. Matt Gugino, Vice President of Investor Relations. Mr. Gugino, please go ahead.

Thanks, Kathy. Good morning, everyone. And thanks for joining us on the call. With us today are Tom Joyce, our President and Chief Executive Officer, and Matt McGrew, our Executive Vice President and Chief Financial Officer. I'd like to point out that our earnings release, the slide presentation supplementing today's call, and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the Investors section of our website, www.danaher.com, under the heading Quarterly Earnings. The audio portion of this call will be archived on the Investors section of our website later today under the heading Events & Presentations and will remain archived until our next quarterly call. A replay of this call will also be available until October 31, 2019. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. The supplemental materials describe additional factors that impacted year-over-year performance. Unless otherwise noted, all references in these remarks and supplemental materials to company-specific financial metrics relate to the third quarter of 2019, and all references to period-to-period increases or decreases in financial metrics are year-over-year. All references to individual operating company operating margins exclude the impact of intangible amortization. We may also describe certain products and devices, which have applications submitted and pending for certain regulatory approvals or are available only in certain markets. During the call, we'll make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results may differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law. With that, I'd like to turn the call over to Tom.

Thank you, Matt. And good morning, everyone. We're pleased with our strong performance in the third quarter as we delivered 5% core revenue growth and solid core margin expansion. We believe our ongoing investments in innovation and commercial initiatives help to continue building sustainable competitive advantages across a number of our businesses. We also made meaningful progress on our two most recent portfolio moves, the acquisition of GE Biopharma and the initial public offering of our dental business. During the quarter, we achieved several important milestones related to the GE Biopharma. Earlier this week, we announced that we signed an agreement to sell certain businesses to Sartorius for a purchase price of $750 million. The revenue to be divested is approximately $140 million and consists of our label-free biomolecular characterization chromatography hardware and resins, microcarriers and particle validation standards businesses. All of these businesses are part of our life science platform. While the sale to Sartorius remains subject to certain regulatory approval, it represents a significant step in the GE Biopharma regulatory process. Timing around meeting certain closing conditions such as regulatory approvals can, of course, be uncertain. However, we remain very encouraged by the progress we're making and expect to close the GE Biopharma transaction in the first quarter of 2020. Additionally, we recently announced that the business will be called Cytiva when it officially becomes part of Danaher. The name is derived from Greek and Latin roots, meaning cell and doing. And everything biopharma customers do relate to the use, growth or analysis of cells. The name may be new, but the Cytiva logo, or the drop, is actually a reference to the iconic Pharmacia brand of the business going back to the 1960s. Pharmacia was a pioneer in the development of process chromatography and was one of…

Thanks, Tom. That concludes our formal comments. Kathy, we're now ready for questions.

[Operator Instructions]. Your first question comes from the line of Tycho Peterson with J.P. Morgan.

Good morning, Tycho.

Good morning. I'd like to start with the Diagnostics strength. You guys continue to put up great numbers there. Can you talk a little bit about how much of this is driven by the new hematology and automation launches? Can you comment on China? We've heard about some hospital issues there for Diagnostics. And here in the US, we did hear Quest the other day talk about vendor consolidation. Just curious how you think you're positioned as we go through that process with DxA 5000. Thanks.

Sure. Thanks, Tycho. A lot to cover there, starting with hematology. We've talked over the last several months, couple of quarters certainly, and most recently in my prepared remarks, about the impact of our new hematology product line. I think you probably know, Tycho, it's been in the works really since we acquired Beckman. That particular product line was a product line where we had some real challenges. And these new products, the DxH product line, particularly 900 with the early sepsis indicator, is making a significant difference. We have literally turned that business around from a business where we were not happy with our retention and our win rates to the point where now we're very happy with our retention and our win rates. And we're seeing growth in that business now that is having a material impact on the improved performance that you're now seeing from Beckman overall. Relative to the overall growth of Beckman, however, it's not purely a hematology story. Improvements in our menu across the board, across each of the analytical modalities, improvements in our automation systems – I noted the DxA 5000 which is also having impact, particularly in labs that are really challenged in terms of throughput and skilled labor where we're reducing the need for skilled labor. It's really all of those things combined that are having impact on seeing that consistent mid-single digit growth rate that Beckman is now improving towards. So, I think it's a combination of things. You asked specifically about China. We're seeing continued good performance in China. Beckman has always had a strong position in China. It's always been a key growth driver for us and it continues to be so. Clearly, it's is a highly competitive market, but we are extremely well-positioned there and continuing to see good growth, very high retention rates and very solid win rates as well. You asked about vendor consolidation. And if I caught your question accurately, I think the question was related to North America. And assuming I heard that accurately, clearly, there's always an effort across hospitals today to drive cost reductions. Vendor consolidation is certainly a part of that. But, again, as we look at our win rates and our retention rates across our North American business which is, obviously, an important part of the overall profile of Beck Dx, we continue to see both improved performance there and sustained improved performance. And again, that's underpinning that greater consistency of improvement, in fact, throughout the quarter. So, hopefully, I covered the water front. If I didn't, Tycho, happy to take a follow-up.

Tycho, it's Matt. Tom mentioned Beckman in China, but just to give you some context on Diagnostics overall in China because that might have been part of the question as well. So, from a diagnostics perspective, in China, we were double digit core here in the quarter, just to give you some sense of the overall market over there.

Okay. And then, one follow-up on Life Sciences, 6.5% core against a 9.5% comp. That certainly stands out. Just curious how you think about the sustainability of that? A lot of that, I guess, Pall up high-single digit as well.

Sure. Tycho, we feel very good about the sustainability of our performance across Life Science. If we step back and we think about kind of Pall side of the house versus Life Science tools, Life Science tools continue to be mid-single digit across the platform. Our underlying businesses like Molecular Devices, like Microsystems, both mid-single digit performance. And then, Beck LS, as I mentioned in the prepared remarks, double-digit performance. So, on the tool side, really good performance. Obviously, a little bit more weakness in SCIEX, but we're very encouraged by the order trends that we see there. So, probably only one spot there that was maybe a little bit weaker. But, overall, I'd say the tool side very solid. And then, across the Pall business and what we would see is really the biopharma side of Pall, again, very good performance there. A solid market that we see continuing to perform well. Our biopharma exposure is now north of a $1.5 billion, most of that obviously coming from Pall Biotech. Pall Biotech saw double-digit core growth in the quarter. That's six quarters in a row of double-digit core growth. And the order trends look very good. We're also seeing good sustained performance across single-use technologies and gene and cell therapies, which are showing double-digit core growth. Admittedly, some of those are smaller portions of the overall portfolio, but really good performance. And we think those are sustainable positions over time, and building.

Okay. Lastly, could you give us the Pall industrial number?

Pall industrial, on the quarter, was…

Low-single digits, Tycho.

Okay, thank you.

Your next question comes from line of Derik De Bruin, Bank of America.

Good morning, Derik.

Good morning. Hey, did I catch you correctly, the fourth quarter guidance is 4.5% core growth ex-Dental?

That is correct.

All right. Can you sort of walk-through just sort of the market dynamics as we get there? I think that's a little bit lower than what we would've thought on it? I'm just sort of curious what you're sort of like assuming in terms of year-end spending and sort of unpack that, walking through those numbers.

Sure, of course. As you know, I think just stepping back a second, we've had eight quarters in a row of mid-single digit core growth. And we think the fourth quarter is a mid-single digit growth rate quarter as well. However, there are a couple of timing dynamics relative to our most recent – to our third quarter versus the fourth quarter. So, particularly in Diagnostics where we saw like a biosystems or radiometer at double-digit core growth rates in Q3, little help from the VIT [ph] impact in Japan, those businesses will moderate a little bit off of that double-digit core growth in Q3. And also, a couple of timing issues relative to the Life Science side where we had a big Q3, particularly for Pall, where they were some large equipment orders across biotech and the industrial side that moved from Q4 into Q3. So, really, we're talking about a little bit of timing impact there between Q3 and Q4, but we feel very good about our execution, very good about the underlying market dynamics across both Life Sciences and Diagnostics as well as across Water Quality and PID. And when you then look at our fourth quarter guidance in light of the full year, we're still talking about a full year of 2019 at 5.5% to 6%, and that's very consistent with what we talked about for the last couple of quarters. So, in general, we would characterize that fourth quarter, relative to the third, as likely more to do with timing, but still feel very good about where we'll bring in the full year.

Okay. That's helpful. And just out of curiosity, you talked a little bit about Western Europe and what's going on there, and specifically just wondering if some of the bioprocess strength you've seen or some of the stuff you've seen is potentially related to pull forwards in – because people are worried about Brexit and stuff. We've heard that from other companies recently that there may be some spending patterns that we've seen this year, can you talk about anything you're seeing in the European trends and sort of how that market is shaping up into the close?

Sure. We are not seeing any sort of unusual procurement behavior in that regard in Western Europe. Europe, overall, across Q3 was performing at about a low-single digit rate. That's down a little bit clearly from the first half. We've seen a bit of softness in certain pockets, like at Videojet, a bit at SCIEX and a bit at like a Microsystems. As we look at where those pockets of softness, I think they really speak to some of the overall macro softness in Europe because when we unpack where some of the differences are between the first half and the second half, it largely looks to be around instrumentation and equipment, some of the larger capital spend, some of the OEM customers, for example, in the packaging world, those are the areas where we some of that softness. So, I would attribute that low-single digit performance in Europe a little bit more to the macro softness in Europe than I would some – any unusual procurement behavior going on one way or the other.

And that's stuff that's not sort of have been into the research labs, it's more the industrial…

That's right. Those are the areas that would speak a little bit more to the industrial side of the house. Admittedly, we're not – with our low percentage of the portfolio that's literally industrially exposed, we're not a terrific proxy, but we can certainly see a few of those pockets, whether it's in North America or in developed Europe where some of that macro slowdown exists. But again those are pretty small pockets.

Great. Thank you.

Thank you.

Your next question comes from the line of Vijay Kumar with Evercore ISI.

Thanks for taking the question, guys. And congrats on a nice print here. So, Tom, maybe one big picture question for you to start off with. On a pro forma basis, when you look at the assets, some of the comments you made on DBS and how underlying growth for acquired business have improved, if I just look at the numbers, the core Danaher is, call it, a mid singles core. Ex-Dental, that helps your core. And now GE comes in with DBS, this seems to be a solid mid singles. And even if macro were to soften going forward, it seems like that mid-single digit, that stable, strong, mid-single digit piece that should be pretty much intact. So, I'm just curious on that pro forma growth outlook on how you guys are looking at it?

Well, Vijay, first of all, I think your summary of the portfolio today is an accurate one. We've made tremendous progress in the evolution of the portfolio towards establishing that mid-single digit growth performance. And I think we've done that with businesses that have demonstrated, over time and over cycles, their stability in driving that consistent kind of growth performance. Now, some of that comes from being in terrific markets with leading positions in those markets, but it also comes from the nature of the balance of sale whereby, as I mentioned earlier, with 70% of our revenue roughly being recurring revenue, largely in the form of consumables that are captive to the instrumentation and with the addition of service and other associated aftermarket, the combination of being in great markets with leading businesses and that strong aftermarket consumables position is what gives us confidence that we built a portfolio that is designed to be sustainable over macro cycles. Now, that doesn't mean that we are completely immune, as I just mentioned about a couple of soft spots here and there that could be geographic or could be where we have a little bit of exposure to a more industrial-oriented market. But in general, we've built a portfolio to that effect. And, yes, the addition of the GE Biopharma business is but one more significant step in reinforcing that kind of market position. So, we feel very good about that looking forward into 2020 and beyond.

That's helpful, Tom. And, Matt, one quick one for you on this fourth quarter guidance. It looks like the guide implies a solid market expansion in Q4. One, am I right in my math on that solid margin expansion and maybe comment on where this is coming from, OpEx versus IGM?

Yeah, it's probably going to be a little bit of both on the gross margin side and the OpEx. But the way that I kind of think about – I think you're right, Vijay. I think the way that we kind of think about the Q4 guide, especially with some of the noise in there with the NCI and the FX, we're kind of talking about 4.5% core growth, kind of a normal solid 35% fall through. And really, that NCI headwind of call it a couple of pennies is really the only change here that we've sort of made to the guide, if you will. But, yeah, I think you're right, we anticipate having pretty good fall through like we normally would expect here in the fourth quarter. I suspect it will be a little bit on the gross margin side and probably with that comes the operating leverage as well.

Thanks, guys.

Thanks, Vijay.

Your next question comes from the line of Scott Davis with Melius Research.

Hi, Scott. How you're doing?

Great. It's easy covering your company. Every quarter, you put up decent numbers and not exactly sure what you make and what you sell, but it's working.

Scott, you know we love to make life easy for all of the visitors on this call. One of our goals, among many.

I don't know if I might be the last industrial guy left, but you're not going to get rid of me that easily.

That's okay. Welcome back. What's up today?

So, I've got two questions for you, Tom. The first is just the asset sales. Maybe a little bit of color around how this – was this a compromise with the regulators, was this something the regulators requested, was it US regulators or was it more globally geared? Just a little bit more color on that.

Sure, Scott. Well, when we initially announced this deal, we did it with the clear understanding that regulators were going to do what obviously they would do in a deal of this magnitude, and that that would be done across the span of regulatory bodies from the US to Europe, other countries and certainly to China. And so, eyes wide open that those reviews would take place and that there was always a prospect that there could be a small portion of the GE portfolio or the Danaher Life Science portfolio that the regulators may have questions about. And so, the sale of the businesses that we announced earlier this week to Sartorius was really a function of what we believe were very constructive discussions with regulatory bodies across the world and with a clear understanding of what the rationales were from their perspective as well as ours, and this is simply something that regulatory bodies along with us came to the point where we thought – where both parties thought that this made sense. And so, it really was a series of globally-oriented conversations and made sense to take that step.

,:

Yeah, Scott. It's Matt. So, I think if you kind of look back at maybe the two core metrics, if you will, that we sort of talk about with deals, if you think about core growth at Pall, so when we kind of bought Pall, I would say it was more of a low-single digit core growth business, in that over the course of, let's say, last, I guess – like you said, four years here, the team has done a really good job at kind of taking DBS – in particular, DBS on the growth side and the innovation side and really changing that fundamentally to be more of a mid-single digit plus type growth rate. So, I think you've seen a significant progress on the top line. As far as kind of OP goes, I think when that business came in, it was kind of a high teens type of OP. Today, we sort of own that business at, call it, a 1000 basis points better than that. So, we've made really good progress on kind of the team coming in there and taking out some of the costs that we knew were there. I think, if you remember, we talked about kind of a cost target at the initial that was kind of $300 million. I think we took that up even to $350 million ultimately. So, from an ROIC perspective, I think that so far as we stand here, I would stay that that exceeds where we thought we would be.

Okay. Well, congratulations on that. Thank you, guys.

Thanks, Scott.

Your next question comes from a line of Doug Schenkel with Cowen.

Hey, Doug.

Hey, good morning, guys. So, I guess, first a question on interest rates. So, the interest rate on the Eurobond was under 1%. Recognizing you still need to issue the rest of the debt and probably a good chance it's going to come in at a rate that is at least slightly higher than the Eurobond, it still seems like you're going to have some upside relative to the deal model you shared with the investment community originally. So, by our math, every 50 basis points of lower interest rate translates into about $0.10 of earnings upside. Does that seem reasonable and should we expect you to let this flow through or is there likely to be some reinvestment?

Yeah. I think the numbers that you're quoting on the Eurobond are accurate, obviously. I don't think – and we do still need to do the US deal here. And like you said, I suspect that will probably be at a higher rate, but we will get to that in the fourth quarter. I think as far as kind of trying to think through the deal model, I think I would say, at this point, we are not trying to update, if you will, kind of the GE accretion. We're, obviously, going to have some moving pieces here. You're going to have a little bit of a headwind, though modest, from the divestitures that we just announced on Monday. Obviously, just talked about likely some favorable financing costs so far on the Eurobond deal. Also, likely to have a business in the GE Biopharma business that when it – it's had a pretty good year here in 2019. So, I think the way to think about it is we will kind of holistically pull all of that together for you when we do update the guide, so that we can kind of incorporate all of that at one time.

Okay. Thank you for that. And very quick follow-up related to the deal as well and following up on the last question on divestitures. Based on where you are in the regulatory process and the fact that you did announce those divestitures earlier this week, how would you characterize the probability that additional divestitures could be required from here on out?

Well, Doug, as you saw in the announcement – first of all, those divestitures are pretty modest on a relative basis at $140 million. So, less than 5% of the revenues that we are going to acquire. But, of course, the regulatory process is a fluid one. So, while we believe this was a significant – a major step towards approval, at this point, we can't comment on this any further. It was an important milestone. But as we commented, we don't expect either this deal to close, nor the actual formality of those approvals to be completed until the first quarter and, therefore, closing immediately following that. We can't comment any further about any prospects for any further actions.

Okay. Totally understood. Maybe just a couple on the quarter. First, on Diagnostics, core margin expanded 100 basis points and was ahead of our forecast. Could you talk through some detail on that performance? And specifically, I'd be curious how Cepheid margins are progressing and how growth improvement at Beckman is really contributing to this performance? And then, just on Pall, it seems like the bioprocessing market is growing broadly at a very strong 15-plus percent rate based on what some of your peers have reported over the last few days. I think you noted that Pall Biotech grew double digits. Is it reasonable to believe that you're growing Pall Biotech at least at that 15% plus level that we're hearing from others? Thank you.

Doug, I'll take the Biopharma piece first and Matt will jump back in on the Dx margins. Yes, the simple answer is, what you are hearing from other sources around the growth in the bioprocessing market overall as being a double-digit growth rate market and a very attractive one, and one by the way that we and obviously others believe is sustainable in terms of its growth prospects, we at Pall are clearly benefiting from that and taking advantage of that opportunity to drive that kind of growth. We did put up double-digit growth within that business, and that's across obviously our filtration business, which is fundamental to biologic drug production, but also includes growth in the really innovative ends of the spectrum around Biopharma which is really around single use technologies which are becoming increasingly important as biological drugs are being produced in smaller and smaller batch sizes for unique patient populations, as well as in the growth areas around cell and gene therapy, which while being somewhat nascent today are going to be significant growth drivers in the future and we are participating in that growth today with outstanding products and I think a series of new products that will be coming over time that we're very excited about.

Yeah, Doug. As far as the Dx margins go, in particular in the quarter, I think we had a pretty good performance generally speaking out of all of the businesses, but I would call out both like a biosystems and radiometer. Those are some of our higher margin businesses and, obviously, both of those growing sort of in the double-digit core growth. Certainly helps the margin performance. But, overall, I think it was pretty good with a little bit of a boost here from those businesses that had been kind of sort of high-single digits here year-to-date, turning in kind of a low-double digit performance in the quarter. So, I think that's a big ramp of it. As far as Cepheid's margins go, again, it's sort of similar to the Pall story. I think the team there has done a fantastic job of really balancing growth, while also focusing on the margin side of it. And they've done a really nice job of kind of embracing DBS and leading from the front. And today, I think when we bought it, it was sort of a – maybe a breakeven type business from an OP perspective. And today, those margins are, call it, 20% or so from an EBITA [ph] perspective.

Thanks, Doug.

Your next question comes from a line of Steve Beuchaw with Wolfe Research.

Hi. Good morning and thanks.

Good morning

I had just a couple for Tom and then one for Matt. Tom, I wonder if you wouldn't mind unpacking the number at SCIEX a little bit. I'd say prospectively, you mentioned that you saw some really good trends on orders. It would be helpful to know a little bit more about what you're seeing. And then, for the quarter, SCIEX is a little bit unique relative to some tools businesses, in that you have a clinical exposure. It would be nice to hear how you saw the relative trends in that business between clinical, some of the core applied markets where you have a good presence. And then, to the extent you have any comment on what you're seeing on pharma on the R&D, that would be really helpful. Second question is just more of a global question on municipal and broader government project demand. You're uniquely well positioned to have a view on how that's tracking. And then, I'll go ahead and, Matt, ask you just one. And more of a prospective, big picture question. You have a lot of moving parts in the model given that we're divesting Dental and we have GE coming into the fray, looking for the majority of 2020. Can you just talk prospectively about the impact on earnings and cash to the extent you can, associated with those transitions? If you can give us any update on the thinking, so we know how and maybe some of it's below the line to think about those items going forward. Really appreciate the help here.

Sure, Steve. Thanks. So, let's start with SCIEX. You heard my comment accurately that while SCIEX was down slightly in the quarter, we are, in fact, encouraged by the order trends that we're seeing and we do in fact expect some improved performance in the fourth quarter. When we look at the quarter itself, third quarter, we clearly were up against a tough comp. SCIEX, so I think I mentioned was up nearly 10% in the third quarter of last year. So, certainly, a bit of a challenge from a comp standpoint. But we did see some – outside of that, some softness in North America. A little bit of that was timing of some larger deals in the second half between Q3 and Q4, but also – and this does get a little bit into some of the market segments that you asked about. We are seeing the consolidation of some small and midsize reference labs, and that has created a bit of a headwind there. You asked about specifically the clinical market, and SCIEX has certainly had a position in clinical over time, but over the last couple of years, we've seen a number of challenges in that market that are not unique to SCIEX. Just broadly defined challenges around changes in reimbursement and guidelines around pain management, for one example. And, certainly, the impact both across small and midsize labs are related to those challenges in clinical. So, SCIEX was really built on the back of tremendous strength and depth of technologies and capabilities around pharma. Small molecule certainly originally and more recently around large molecule positions. And those positions continue to be reasonably good, particularly biopharma which, obviously, is a growth segment. Core small molecule pharma was much more modest in its growth globally. Academic was…

And, Steve, as far your kind of – your question on the moving pieces with GE and Dental, I think maybe the way I think about it is sort of that, from an EPS perspective, obviously, Q4, there's no GE impact. And we talked a little bit here earlier about all the moving pieces that are there and, obviously, as we get a little closer to close, we will update all of that for 2020. But as far as Q4, obviously, nothing to think about. As far as Q4 goes for EPS for Envista, the NCI, I kind of put a placeholder of maybe $0.02 in there for the NCI for the fourth quarter. And then, as far as kind of cash flow goes, I think that was your next question. If you think about, we sort of talked about GE coming in at maybe roughly $1 billion worth of cash flow and Envista will kind of be out there, I think, talking to you guys about their own 2020 cash flow projections when they get a little closer. So, I don't want to kind of speak for them, but I think you can kind of pencil in that GE have call it a billion and we'll let Envista talk about 2020 cash flow when they talk to you guys later today.

Okay. Great details. Really appreciate the time here.

Thanks, Steve.

Your next question comes from the line of Dan Brennan with UBS.

Thank you. Great. So, maybe a question just on Q3, Q4. Tom, I think you mentioned a few times, maybe a little bit of timing benefit or timing push out. And, obviously, with the size of Danaher, I'm sure there's always lots of small shifts. But just wanted to understand, was there a more pronounced timing benefit this quarter? And maybe could you just help us then think about – implicit in your fourth quarter guide, how do we think about kind of Life Science, Diagnostics and kind of EAS?

Sure, Dan. Yeah, I think perhaps a little bit of timing issue between Q3 and Q4 here and the margin would have been a little bit more pronounced than what we've seen. But I think if you look at the fundamentals underneath each one of the platforms, Life Science, Diagnostics and EAS, each one of them continued to perform quite well. Again, our exposure to the macro environment is somewhat limited in the sense of being a good proxy for an industrial slowdown. We don't have a lot of industrial exposure left. And so, we generally feel very good about how the overall platform will perform going through the fourth quarter and how we're set up for 2020.

Okay. Great. And then, you kind of touched upon my kind of second part of the question. Maybe could you help us think about, like maybe between your 70% recurring business on instrument side of the house, were there – you mentioned earlier in the call that there's a bit of pressure there from what you're seeing globally. It's a question we get a lot, like differentiating between Danaher and other players in the broader tool spaces, the global economy is getting softer. So, how do we think about kind of your instrument kind of growth rate kind of as we look out here with PMIs being a bit weak and the global economy slowing? Thanks, Tom.

Sure. Here's one sort of way to think about it, Dan, using some specific numbers. If you look at the third quarter, our consumables business was up, call it, 6% versus the equipment side of the house, which is up more like 4%. And so, if you think back to the last couple of quarters, those have been closer to even – about equal equipment versus consumables. Here you see the consumables number continuing to be quite strong and the equipment number being a little bit softer. And I think that's probably the best way to look at what is underneath some of the softness that I talked about that may be impacted by the macro environment across a business like Videojet, for example, or SCIEX or possibly like a Microsystems, probably to name three examples of businesses where the equipment side of the house is a higher percentage of the balance of sale than on average across the portfolio.

Great. Thank you.

You bet.

We have reached the allotted time for questions. I will now turn the call back over to Matt Gugino for closing remarks.

Thanks, Kathy. And thanks, everyone, for joining us. We're around all day for questions.

This concludes today's Danaher Corporation's third quarter 2019 earnings results conference call. You may now disconnect.