Amphenol Corporation (NYSE:APH) Q2 2019 Earnings Conference Call - Final Transcript
Jul 24, 2019 • 01:00 pm ET
Craig A. Lampo
would say that, if you can probably back into that number by effectively understanding that the implied conversion. If you take out those restructuring charges, essentially within our normal range, it's not anything really much different than that. So, if you kind of back into that it would -- you can kind of get to that number, but we really don't want to start calling out charges because we do hold ourselves basically accountable. And then in the fourth quarter, your implied conversion would be pretty strong going into the fourth quarter as we kind of go into that quarter.
I guess one other point that I would say is that, if you actually look at our year-over-year kind of implied conversion coming from Q3 of '18 into Q3 of ' 19, what you'd see actually if you take out the impact of those seven acquisitions that we now have that all are effectively in an average under our kind of average operating margin is that you would actually see that we really are also converting on the downside, which quite a significant decline organically in the third quarter, kind of in a normal range. So I have to say the management team really has done a great job of ensuring that the bottom line is protected even while taking certain cost actions that are going to be impacting the bottom line in the third quarter. To ensure that, going forward we really are in a good position from a cost perspective to be able to come out of -- in the current demand environment.
R. Adam Norwitt
And, Amit. I would say that maybe one thing here, which really gets to a core part of how we think about running the business. And we've talked about this in the past that in good times, we run the business as if we driving a car with one foot on the gas and one foot on the break and we don't change that mindset when all of a sudden you have reductions in the outlook of the demand. We are continuing to drive with one foot on the gas and one foot on the brake. And what does that ultimately mean is that these kind of the cost reduction actions are just part of the course. This is a normal type of behavior, that's why we hold ourselves accountable for it, that's why we hold our General Managers accountable for that. When you're growing, you should also grow with the understanding that one day you might have to take certain steps that will be on the other side of growth, where there is a different cycle that comes along and that kind of mindset of driving with one foot on the gas and one foot on the brake, really ultimately shows its strength in times like this.
There is no doubt. I mean are we happy to have less demand coming from certain of our end markets. Of course, not. That's we much prefer