MTS Systems Corporation (NASDAQ:MTSC) Q3 2019 Earnings Conference Call - Final Transcript

Aug 06, 2019 • 10:00 am ET

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MTS Systems Corporation (NASDAQ:MTSC) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the MTS Third Quarter 2019 Earnings Conference Call. [Operator Instructions].

At this time, I'd like to turn the conference over to Mr. Brian Ross, MTS Executive Vice President and Chief Financial Officer, please go ahead.

Executive
Brian T. Ross

Thank you, Stephanie. Good morning, and welcome to MTS Systems Fiscal 2019 Third Quarter Investor Teleconference. Joining me on the call today is Jeff Graves, our President and Chief Executive Officer.

I want to remind you that we will make forward-looking statements today as defined by the Private Securities Litigation Reform Act of 1995. Future results may differ materially from these statements, depending upon risks, some of which are beyond Management's control. A list of such risks can be found in our latest SEC Forms 10-Q and 10-K. We disclaim any obligation to revise the forward-looking statements made today based on future events.

This presentation will also include reference to non-GAAP financial measures. These measures are used by Management to evaluate the operating performance of the Company over time. They should not be considered in isolation or as a substitute for GAAP measures. A reconciliation of our non-GAAP measures to the nearest GAAP measure can be found in our earnings release.

I will now turn the call over to Jeff.

Executive
Jeffrey A. Graves

Thank you, Brian, and good morning, everyone. We appreciate you joining us on our call this morning. Having executed well for the first nine months of our fiscal year, our performances headlined by another strong quarter of top line growth. Revenue was up almost 20% from the prior-year quarter, virtually equaling our record performance in our fiscal second quarter of this year. This brings our year-to-date top line growth rate to 15%, reflecting broad secular strength in global research and new product development investments by our university and OEM customers around the world, as well as continued investment in industrial automation for enhanced productivity and reliability of manufacturing systems. By all measures, we consider this to be a great achievement in today's marketplace, and we look forward to finishing the year in a solid fashion.

While our Test and Simulation business continued an exciting year of growth. In the third quarter, our Sensors business also accelerated, delivering nearly 7% revenue growth in the quarter compared to the prior-year. This brought our year-to-date growth rate for Sensors to 3.4%, and we expect to see further acceleration in top line performance in our fourth-quarter.

Our sales performance reflects the strength of our technology offerings, our broad geographic presence and the expansion of our market verticals in both our Sensors and Test and Simulation businesses. This top line performance reflects the increasing success of our growth and diversification strategy, capitalizing on our market-leading Sensors and Test and Simulation product technologies, combined with delivering premium service to our customers across the globe.

Consistent with the message that I've been delivering all year long, we continued to leverage the strong -- core technologies in both of our businesses and prioritize the introduction of new products and