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Fortive Corporation  (NYSE:FTV)
Q1 2019 Earnings Call
April 25, 2019, 5:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

My name is Erica and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Fortive's Corporate First 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 would now like to turn the call over to Mr. Griffin Whitney, Vice President of Investor Relations. Mr. Whitney you may begin your conference.

Griffin Whitney -- Investor Relations

Thank you Erica. Good afternoon everyone and thank you for joining us on the call. With us today are Jim Lico, our President and Chief Executive Officer; and Chuck McLaughlin our Senior Vice President and Chief Financial Officer.

We present certain non-GAAP financial measures on today's call. Information required by SEC Regulation G relating to these non-GAAP financial measures are available on the Investor section of our website www.fortive.com under the heading financial information.

A replay of the webcast 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 the conference call will be available shortly after the conclusion of this call until Friday, May 10, 2019. Instructions for accessing this replay are included in our first quarter 2019 earnings press release.

We completed the divestiture of the Automation & Specialty business on October 1, 2018 and accordingly have included the results of the A&S business as discontinued operations for current and historical period. The results presented on this call are based on continuing operations.

During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. All references to period-to-period increases or decreases and financial metrics are year-over-year on a continuing operations basis.

During the call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will, or may, occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2018. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements.

With that, I'd like to turn the call over to Jim.

Jim Lico -- President & Chief Executive Officer

Thanks Griffin, and good afternoon everyone. Today we reported first quarter results that reflected a solid start to 2019, setting us up to deliver another year of strong double-digit earnings growth. Our first quarter adjusted earnings per share was in line with our expectations, as the performance of Industrial Technologies led by strong growth from Gilbarco Veeder-Root was partially offset by near-term headwinds within Professional Instrumentation. We also generated strong free cash flow growth of greater than 30% in the quarter reflecting the vitality of our businesses as we continue to invest in organic innovation and pursue acquisitions that will accelerate our strategy.

On April 1st, we closed the acquisition of the Advanced Sterilization Products business from Johnson & Johnson, welcoming the business and its employees to the Fortive family. We are very pleased that we closed this complex carve out on schedule in just under 10 months. The $2.7 billion transaction represents our largest acquisition to date and provides Fortive with a strong position in the attractive $4 billion mid single- digit growth medical sterilization and disinfection market.

With a strong global installed base in leading brands, ASP brings growth, high recurring revenue and significant earnings potential to the Fortive portfolio. While ASP is our most recent acquisition, we are excited about the progress being made by the other acquisitions closed over the past couple of years. Gordian and Accruent have continued their early momentum generating strong growth through the first quarter of 2019. Likewise ISC, Landauer and Orpak are performing well as they embrace the Fortive business system in order to deliver enhanced go-to-market execution, innovation and improvements in free cash flow. The growth of these businesses continues to drive the evolution of the Fortive portfolio toward a higher growth less cyclical profile.

We look forward to sharing more detail about our progress, when we're together at our Investor Conference in May. With that I'd like to turn to the details of the quarter.

Adjusted net earnings were $245.6 million, up 6.7% over the prior year and adjusted diluted net earnings per share were $0.69. Sales grew 6. 7% to $1.6 billion reflecting a core revenue increase of 3.7%. Core revenue growth was highlighted by the strong performance of GVR as well as Industrial Scientific and EMC.

Acquisitions including Gordian and Accruent contributed 580 basis points to top-line growth, while unfavorable foreign exchange rates reduced growth by 280 basis points.

Geographically, high-growth markets core revenue grew mid-single digits led by Asia and the Middle East. China posted another strong quarter with high single-digit growth led by GVR, Fluke and Tektronix.

Developed markets core revenue grew low-single digits reflecting continued strength in North America and strong performance in Japan. Core revenue growth in North America was mid-single digits led by GVR, Tektronix, EMC and Industrial Scientific.

Western Europe was relatively flat as strong growth at GVR and Qualitrol was offset by slower growth at Fluke and weakness at Tektronix.

In the first quarter, we posted a gross margin of 51%, including a 160 basis points of pricing. Reported operating margin -- profit margin was 13.6%, reflecting 240 basis points of dilution from acquisitions and a 190 basis points of dilution from deal-related costs.

Core operating margins were down 70 basis points, as stronger volume at GVR was offset by lower-than-expected growth at Tektronix and Fluke and unfavorable foreign exchange rates across the company.

During the first quarter, we generated $137 million of free cash flow and a seasonally strong conversion ratio of 84%. Free cash flow generated in the quarter represented a 31% increase year-over-year. For the full year, we continue to expect free cash flow conversion of greater than 120%.

Turning to our segments. Professional Instrumentation posted sales growth of 8.7% including core revenue growth of 1.8%. Acquisitions contributed 950 basis points, while unfavorable foreign exchange rates reduced growth by 260 basis points. Reported operating margin of 14.4% reflected 740 basis points of dilutive operating margin associated with acquisitions and deal-related costs.

Core operating margins decreased 190 basis points reflecting the weaker-than-expected revenue growth at Tektronix and Sensing, the impact of tariffs and unfavorable foreign exchange. Advanced Instrumentation & Solutions core revenue increased low-single digits and strong performance in Industrial Scientific and EMC was offset by lower growth for Fluke and Tektronix during the quarter.

Field Solutions core revenue grew low-single digits with low single-digit growth in developed markets paced by the continued strong performance of ISC. High-growth markets grew slightly as solid growth from Fluke and ISC was largely offset by continued weakness at Qualitrol.

China posted another strong quarter with mid single-digit core growth. Fluke generated low single-digit core growth led by double-digit growth at Fluke Calibration. Fluke's industrial growth in the first quarter was impacted by slower point-of-sale trends in Western Europe and the United States and the stronger finish in 2018. We did, however, see improvement in point-of-sale growth in North America over the back half of the quarter.

Fluke Digital Systems grew greater than 30% led by eMaint, which added more than 50 new customers and generated a greater than 20% increase in annual recurring revenue. Fluke continued its strong broad-based growth in China with point-of-sale increases reflecting the enhanced strength of Fluke's competitive position and healthy momentum as it ended the quarter. On the new product front, Fluke Networks launched two new fiber testing and inspection products during the quarter, which have gotten off to a strong start.

ISC delivered high-teens core growth led by North America. INet saw another quarter of greater than 20% growth, while rental had a particularly strong quarter driven by several large project wins. The ISC team is very excited about continuing to pursue the emerging revenue opportunity from bundled solutions that combine iNet with the company's rental offering in the coming quarters. ISC delivered over 500 basis points of operating margin expansion in the first quarter as the application of FBS continues to drive consistent operational improvements.

Qualitrol's core revenue declined low-double digits during the quarter in line with our expectations. While the company had started to see some early signs and more stable conditions in certain markets, we continue to expect the headwinds from soft market conditions to remain a challenge throughout 2019.

Product realization core revenue increased low single-digit as high-teens growth in EMC was moderated by a flat quarter from Tektronix. EMC saw strong base business growth along with the continued progress of its product offerings for commercial satellites, with the first launches of satellites employing its fully network pyrotechnic release solution during the quarter.

Flat growth at Tektronix was a result of contrasting performance across developed and high-growth markets during the quarter. Developed markets grew low single digits led by strong growth in North America and Japan, which was partially offset by a decrease in Western Europe. High-growth markets were down mid-single digits, as a strong quarter in China was more than offset by declines in South Korea and the rest of Asia.

The Tektronix's full scope offering continues to drive growth benefiting from the momentum behind the 6 Series MSO, which was introduced in the third quarter of 2018. As part of the ongoing effort to reshape and focus the Tektronix's portfolio, the company also recently signed an agreement to contributes its video test and monitoring business to a new entity formed with Telestream and Genstar Capital, Telestream's private equity owner. We expect the transaction to close at the beginning of the third quarter.

Core revenue for the Sensing Technologies platform decreased low single digits in the quarter. Sensing had a slow start to the year, experiencing headwinds across certain part of its core industrial end markets including slower demand trends from electronics and semiconductor OEM customers.

Growth remain solid across the platforms medical and defense end markets, while recent new product launches continue to drive strong growth in critical environment applications. The platform performed well in China registering high single-digit growth it was offset by low single-digit declines in North America and Western Europe.

Moving to our Industrial Technologies segment. Revenue grew 4% including core revenue growth of 6.4%. Acquisitions contributed 80 basis points, while unfavorable foreign exchange rates reduced growth by 320 basis points. Reporting operating margin of 16.3% reflected 20 basis points of dilutive operating margins associated with acquisitions. Core operating margin increased 130 basis points driven by the strong volume at GVR in the quarter.

Our Transportation Technologies platform core revenue grew low-double digits led by greater than 20% in high-growth markets and high single-digit growth in developed markets. GVR delivered mid-teens core revenue growth highlighted by a low-double digit increase in developed markets and a greater than 20% increase in high-growth markets. Developed markets were led by North America reflecting a combination of accelerating EMV sales and the lapping of ERP implementation issues that affected performance in the first quarter of 2018.

Gilbarco continued to generate strong growth from EMV sales driven by programs with major oil company partners. Phillips 66 recently announced the release of outdoor EMV capability for its sites running the Gilbarco passport point-of-sale system. Gilbarco also reached an agreement with Shell to offer its EMV-ready passport edge point-of-sale solution to Shell's dealer network on a monthly subscription basis.

China saw greater than 30% growth driven by the continued regulatory tailwind at Veeder-Root from ongoing double-wall tank upgrades. GVR's strong results of high-growth markets included significant growth in India, as GVR's comprehensive product and service capability including recent innovation within Orpak's automation offering led to a number of large tender wins during the quarter.

As expected Teletrac Navman declined high-single digits in the first quarter and strong growth across Asia-Pacific was more than offset by a decline in North America. The Teletrac Navman team remains focused on stabilizing the North American business with a high level of customer churn that emerged in 2018, remains a headwind despite some improvement during the quarter. Teletrac Navman was recently awarded a FedRAMP provisional authority to operate making us director product eligible for procurement by all federal agencies based on its security and reliability as a third-party cloud solution.

Moving to franchise distribution. The platform declined low-single digits during the first quarter, Tennessee's performance was impacted by significant customer inventory reductions, while Matco was up slightly. At the company's annual tool expo, Matco launched an exclusive mobile AC recycler line optimized for up-time and service reliability that has been well received by the market and drove sharp equipment growth during the quarter.

Turning to the guidance. We are updating our full year 2019 adjusted diluted net EPS guidance to $3.55 to $3.65, representing year-over-year growth of 16% to 19% on a continuing operations basis. The revised annual guide includes $0.20 for the addition of ASP and a reduction of $0.05 due to the Tektronix Video transaction.

The guide also assumes 3% to 5% core revenue growth, 25 to 50 basis points of core OMX, an effective tax rate of 17% and free cash flow conversion of greater than 120% for the year. We are also initiating our second quarter adjusted diluted net EPS guidance of $0.86 to $0.90, representing year-over-year growth of 18% at the high-end. This includes assumptions of 3% to 4% core revenue growth and an effective tax rate of 17%.

To wrap up. Our first quarter results came in as we expected, despite some near term challenges that impact our shorter cycle businesses, as well as headwinds from tariffs and foreign exchange. For the quarter, we delivered high single-digit total revenue growth, mid single-digit core revenue growth and greater than 30% growth in free cash flow.

With the closing of ASP at the beginning of the second quarter, we also took another significant step forward in the ongoing transformation of the forward portfolio, greatly increasing our exposure to an attractive healthcare market tied to long-term secular growth drivers and adding another source of high recurring revenue and consistently robust free cash flow.

Looking ahead with the combination of resilient core portfolio, the foundation of the Fortive Business System, the growing contribution of Gordian and Accruent and the addition of ASP, we remain well positioned to deliver another year of top quartile earnings growth.

We look forward to seeing many of you at our upcoming Investor Day in New York on May 16th, where we will give you deeper insights into the digital strategy of Fortive as well as an update on our portfolio transformation efforts.

With that, I'll turn it back to Griffin.

Griffin Whitney -- Investor Relations

Thanks Jim. That concludes our formal comments. Erica, we're now ready for questions.

Questions and Answers:

Operator

(Operator Instructions) And your first question comes from Steve Tusa.

Stephen Tusa -- JPMorgan Chase & Co -- Analyst

Hi, hey good afternoon. Good afternoon and thanks for you guys, sorry. How are you doing?

Jim Lico -- President & Chief Executive Officer

Good evening, Steve.

Stephen Tusa -- JPMorgan Chase & Co -- Analyst

Thanks. On the revenue contribution from acquisitions for Gordian and Accruent, I think when I add them up I get to something like on a pro-rated basis like $100 million a quarter, yet the acquisition contribution in that segment was like $80 million I think or something like that. I mean is there seasonality to that business, or am I doing the math wrong?

Jim Lico -- President & Chief Executive Officer

Yeah. No, you're not doing the math wrong. There is a seasonality to Gordian and Accruent. It's when -- it's a little bit different than what our traditional core businesses then we think maybe we get 20% and 45% in the first two quarters of the year. And I think that it's kind of like maybe a 40-60 waiting first half to second half.

Stephen Tusa -- JPMorgan Chase & Co -- Analyst

Okay. And any on Gordian, is there any market dynamics there that are moving around relative to expectations?

Jim Lico -- President & Chief Executive Officer

No. In fact we had a good quarter of both, Steve it's Jim. We saw good strength in the construction spend through the platform that the job order contracting part of the business, or what we call procurement solutions. That business was up double digits. So, and that's roughly 60% of the business. So, no, at Gordian we saw good performance and we saw good performance at Accruent as well. So, as we said in the prepared remarks, we're off to a very good start and I think one of the things we like the best about the business in addition to its great secular drivers is, we really are getting an outstanding team in both businesses.

Stephen Tusa -- JPMorgan Chase & Co -- Analyst

Okay. And then one last one from me. Just from a macro perspective, now that you kind of had an opportunity throughout the first quarter here, looking back was there any sort of pull in or pre-buy in the fourth quarter in any of your products? And maybe just touch high-level on, or what you're seeing in the macro out there? It seems like there are a lot of different businesses moving around on you, some negative, some positive relatively inconsistent performance I say. Is there anything going on the macro that kind of worries you for the second half?

Jim Lico -- President & Chief Executive Officer

Yeah, so maybe a little bit of geographies in context, Steve. I think what we saw in -- our overall North American growth was pretty good. But obviously Gilbarco drives a lot of that because of the quarter they had. I think the good news in the quarter, Gilbarco was really the high-growth markets. So, those are specifics to Gilbarco, so I don't know if you get a micro read there as much, but good high growth market performance, pretty much in every part of the world, a lot of that we said in the prepared remarks.

What we did see is relative to your pulling question or what we saw, we definitely, I think we highlighted this in February that we thought there were somewhere around 70 to 100 basis points of revenue in the fourth quarter that was probably came out of the first. We now think that number is closer to 125. And that's a chunk of tariff avoidance.

And then I think the other thing is we definitely saw North America in a number of places sort of start out slow and then get better through the quarter. Point-of-sale at Fluke is an example, clearly got better through the quarter. Matco got better in March. So, we did see some trends that were improving through the quarter. And I would say just in our distribution businesses, mostly weaker in Professional Instrumentation, clearly Europe was a weak point for our distribution in Europe.

Stephen Tusa -- JPMorgan Chase & Co -- Analyst

Got it. Okay, thanks a lot.

Jim Lico -- President & Chief Executive Officer

Yeah, thank you Steve.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks Steve.

Operator

And your next question comes from Scott Davis.

Scott Davis -- Melius Research LLC -- Analyst

Hi, guys.

Jim Lico -- President & Chief Executive Officer

Hey Scott.

Scott Davis -- Melius Research LLC -- Analyst

I just -- I don't think I've ever asked a question on Sensing Technologies business at all, but what -- does that business turnaround 2019, or are we now kind of open for 2020?

Jim Lico -- President & Chief Executive Officer

No. Well, it's probably going to be a little -- we always thought it was a low single-digit in the year and that changed -- that point of view doesn't really change, little bit different number, but probably the lower part of low single-digit. They were negative in the quarter, but we will continue to get a little bit better as -- and their comps get a little easier in the second half as well.

One of the good things about the business is they done a -- obviously very profitable part of the business and they did a good job -- they did a good job in protecting free cash flow in the quarter. So, that move to growth year through the rest of the year and they'll continue to contribute better from an earnings perspective, as they go through the year.

Scott Davis -- Melius Research LLC -- Analyst

Okay. And if I just look at slide four and you just take a look at the R&D numbers as a percent of revenues, you bought a lot of businesses, you spent a lot of money on R&D. And Jim what's your early take on if you're getting your bank for your buck on that spend? Is there any way to get any efficiency on it or productivity? And I know it's tough to scale it because they are very different companies that you own.

Jim Lico -- President & Chief Executive Officer

Yeah.

Scott Davis -- Melius Research LLC -- Analyst

But just a little comment maybe on R&D?

Jim Lico -- President & Chief Executive Officer

Yeah. I think it's a couple of things. One clearly the software businesses like Gordian and Accruent are going to require a little more R&D. And quite frankly they were pretty tight on R&D being owned -- both being owned by private equity. We will probably add to their R&D spent, as we look forward to opportunities to accelerate growth and to build out their platform and solutions. As you know the great addition of these businesses and the continued added of features to current customers, which really delivers strong earnings potential over time. So, we'll do that.

But in many standpoint the overall Fortive number of may not move all that much because we look for productivity as we're always looking for productivity in other places. We're through it some of the big spent at Tektronix on their new perform as an example. So, there's clearly what we often called dynamic research allocation where we're really moving money into places, where we have the highest growth opportunities.

Scott Davis -- Melius Research LLC -- Analyst

Okay, that's helpful. Thank you, guys. Good luck. I'm going to pour cocktail now, it's a long day.

Jim Lico -- President & Chief Executive Officer

Yeah, I hoping it's a long day.

Operator

And your next question comes from Julian Mitchell.

Julian Mitchell -- Barclays -- Analyst

Hi, good afternoon.

Jim Lico -- President & Chief Executive Officer

Hi, Julian.

Julian Mitchell -- Barclays -- Analyst

Maybe -- hey, just looking at slides 8 and 9, if we just look at the core revenue growth contribution to EPS, you did about $0.05, or you are expecting to do about $0.05 in the first half. But year is guided at about $0.25 so a big sort of step-up in that contribution from first half to second half. Maybe just walk through some of the biggest moving parts in terms of that step-up please?

Jim Lico -- President & Chief Executive Officer

Well, I think the bigger thing is just as we move through the quarter -- our volume steps up sequentially. We normally I think from Q1 to Q2 our revenues going to go up by 20%. Obviously our expenses don't -- the fixed expenses don't see that. So, that creates a normal step-up through the year.

We generally think of our earnings growth, the EPS being contribute 20% in the first quarter; 25% and 25% in the second and third; and 30% in the fourth quarter. And so that -- when you do that, it gives you this profile. And so I think that, that's most of it. The other thing -- the last thing I'd point out is there's FX in the first half particularly I think there's $0.03 in Q2 or Q1 and then $0.01 and $0.02 in Q2. And then it really flattens out in the back half. So, those are some of the dynamics that giving a little bit of back-end of a ramp through the year. But it's mostly the revenue ramp.

Julian Mitchell -- Barclays -- Analyst

Understood. Thanks. And then my second question maybe around professional instruments specifically, you talked about the sensing assumptions there. Any color maybe on what you're seeing on the order intake in Fluke and Tektronix, how quickly you think those accelerate maybe in the rest of the year? And where you thought you suffered from much of de-stocking in the distribution facing businesses in PI in Q1?

Jim Lico -- President & Chief Executive Officer

Yes. I'll take the last part first, Julian. We definitely think we saw destocking in some places at Fluke and Tek. I'd say definitely in Europe for both businesses and probably -- and certainly some in the U.S. Tek had an interesting dynamic, where their direct business was up significantly more. They had like mid-single to growth in the direct business, but the distribution business was down in the first quarter. So, that really kind of -- we attribute a chunk of that to destocking and a little bit of what we said before, which was kind of tariff avoidance, pricing avoidance that occurred in the fourth quarter, as I mentioned answer a few minutes ago.

So, I think that provided the dynamic, where we'll see that play out and improve the second quarter and through the rest of the year. I would also point out the Tek had a book-to-bill over 1 in the first quarter. I think Fluke did as well. But so, we certainly feel like we're seeing some solid performance. And I think in both cases we're starting to see the point-of-sale numbers start to improve as we move through the quarter. So, I think we started off a little slower than we thought. Obviously the professional instrumentation at just under 2% core growth, certainly reflects that. Tek being flat certainly reflects that. But we think it -- we're not really expecting a big macro improvement here to deliver what we need to deliver up. It's really more just kind of working through that inventory destocking and really just kind of seeing the current rates sort of play out.

Julian Mitchell -- Barclays -- Analyst

Great. Thank you.

Jim Lico -- President & Chief Executive Officer

Thanks Julian.

Operator

And your next question comes from Deane Dray.

Deane Dray -- RBC Capital Markets -- Analyst

Thank you. Good afternoon, everyone.

Jim Lico -- President & Chief Executive Officer

Good afternoon, Dean.

Deane Dray -- RBC Capital Markets -- Analyst

Hey, could you take us through the Tektronix Video transaction. What are the economics? What's the opportunity here?

Jim Lico -- President & Chief Executive Officer

Yes. Strategically Dean as well so, we've always been looking from a portfolio perspective, we always put our businesses in the best position for success. We also asked our operating committee to do that as well. I think the Tektronix team really came back with this understanding that, hey by combining with the Telestream business not -- the video business not as core to what we do at Tek obviously.

And increasingly I think the combination of those businesses was looking better and better. So, we'll combine the businesses. We'll have a minority interest in the combined entity and we'll really benefit from the success of the synergies in the business and what Genstar is looking to do with the business over time. So, we think the economics over time are going to be good because we think the synergies are strong.

Deane Dray -- RBC Capital Markets -- Analyst

Got it. And then on the 160 basis points of price, how does that spread across the businesses? Where did you get the most price and was there any give up?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Hey, Dean it's Chuck. So, for the most part we got price across all of our company -- operating companies. A little bit more. We are a little bit more successful in IT, where it starts with a 2 rather than 1. And we're a little bit lighter on the Professional Instrumentation side at 80 basis points. So, but I think we were successful across most places. We struggled for one couple of places, where we struggled on price for some very specific reasons.

Tek they were down 50 basis points, which is not what we were expecting and we're going to work to regain that, but that was a little bit different. And also at EMC, but unrelated to they have some contractual things that was mostly known about coming in. But everywhere else, we're really happy with 160 basis points in total, where we normally would get 40 or 50.

Deane Dray -- RBC Capital Markets -- Analyst

That's great. And just on Tek on the pricing was that give up on the direct side or through the distribution?

Jim Lico -- President & Chief Executive Officer

Probably more on the direct side as those are more as you can imagine those are more case-by-case decisions on the business. And so I would say it lean more to the direct side. Little bit in distribution, but some of it was price not realized on the distribution side because of to think about it this way, we expected more price with the January one price increases, but because we had more pull in to the fourth quarter from distribution we sort of avoided the price metric if you will in the first quarter if that make sense Dean.

Deane Dray -- RBC Capital Markets -- Analyst

It does. Thank you.

Jim Lico -- President & Chief Executive Officer

Thank you.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks.

Operator

And your next question comes from Andrew Obin.

Andrew Obin -- Bank of America Merrill Lynch -- Analyst

Hey guys. Good afternoon.

Jim Lico -- President & Chief Executive Officer

Hey Andrew.

Andrew Obin -- Bank of America Merrill Lynch -- Analyst

Just a question on Professional Instrumentation margins, they've sort of been negative for a couple of quarters now. What would it take operationally for the margins to inflect back up?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

It's a great question. There is a couple of things. One is, they have been struggling for a couple of quarters. Remember tariffs are really a big impact at both Fluke and Tek and so for Professional Instrumentation that really gets hammered there pretty well. So, we will lap those tariffs and the majority of them in Q3. So, we will start to get a lift there.

Also Professional Instrumentation has high fallthrough on their -- on shipments and so we need to that pull in or that avoidance that maybe some of the distributors went for. We just need to get more volume out the door and get back to growth. So, that hurt us in Q1. So, that will start to moderate.

And one other factor is FX has really hurt us a little bit more than we expected, you know fallthrough on those things and again we're going to start, when we get into the second half we should lap those as well. So, if Fx just stays here there is some -- there is less impact in Q2 than Q1, but when we get to Q3, most of those should go away. So, I would expect that we will see -- we will be back to normal margin expansion in the second half of this year.

Jim Lico -- President & Chief Executive Officer

Andrew, the other thing that it's just maybe important to keep an eye on, is we had our best quarter in the history of the company, last first quarter of '18 our margin expansion in PI, we had 300 basis points of margin expansion in the first quarter of last year.

So, when we look on a two year stack there, we still feel pretty good about the margin expansion in the core business. Obviously the tariffs, as Chuck mentioned, have some impact there. But I think when we look at sort of the core work that we typically do, we feel pretty good about that and that will get better, as we work through the year.

Andrew Obin -- Bank of America Merrill Lynch -- Analyst

And just a follow-up question on growth. So, Q1 core growth was 3.7. I think in the second quarter we're guiding 3 to 4. For the year the ranges still 3 to 5. So, what would it take for you guys to hit the 5% organic core growth for the year, with acceleration in the second half, particularly as the comps get tougher in the second half? Thanks.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Yeah, no problem. So, I think first of all we probably want to see Western Europe get better. China to continue. We were high-single digit in the month or in the quarter We've said for a while now that China was likely to be more mid single-digit for the year. So, if China held in there, maybe got a little better and Western Europe got better. I think we'd more be at the high end of the range. And also -- we also have some easier comps in some places like at Sensing and at Fluke.

So, if we get to the higher end of their businesses as well there is some opportunity. So, we will build the business model around that range and what we feel really good about is, we're going to deliver double-digit earnings growth in the first half of the year 3% growth and we're going to deliver double -- high-teens earnings growth through the year. So, even in that range of growth rates, I think the earnings growth is going to be substantial and that's pretty much like you saw the strong free cash flow in the quarter, despite the fact that we missed the PI revenue number by a little bit. The free cash flow up 31%, I think, it was a good a testament of our operational ability to continue to deliver.

Andrew Obin -- Bank of America Merrill Lynch -- Analyst

Yeah, cash flow certain stood out. Thanks a lot.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks.

Operator

And your next question is from Richard Eastman.

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Good afternoon.

Jim Lico -- President & Chief Executive Officer

Hey Rich.

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Jim or Chuck, could you just speak to the video that you're contributing -- Tek's video business you are contributing to this venture, what kind of revenue did that have? What kind of profits? And just, when do you expect that to be completed?

Jim Lico -- President & Chief Executive Officer

So, I'll take the second part first. We expect it to be completed early in the third quarter is what we're looking at. And the business in terms of size was $55 million or $60 million in revenue with for us it was probably around a I think it's 20% operating profit.

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Okay. So, pretty decent. And then I just have a question on the EPS guide for the second quarter. I'm a little bit curious, I would have thought so $0.86 to $0.90 and I'm kind of referencing your 25%, so I guess Chuck 25%. So, I guess 90 kind of fits. But I would think with the ASP acquisition I mean shouldn't that approximately a nickel to the quarter it sounds like this video business doesn't come out till Q3. So, what's the drag there on the EPS for the second quarter?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Actually I think there's only two things that you might be missing. I agree with the nickel on ASP. If you look at the core business without the benefit of Gordian and Accruent ASP and FX you get a number that's around for the quarter 25% is 80% you build that with $0. 05 of ASP as you noted and there's I think we've got $0. 06 in for Gordian and Accruent. And so that's fit in. Probably the one thing is there's still $0.1 to $0.02 of tailwind on FX.

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Okay. Okay. Very good. Thank you.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

I just want to make sure I called that headwind.

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Headwind. Yes, headwind. Yes, I understood.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

All coming up to 18% earnings-per-share growth.

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Okay, all right. Fair enough. Thank you.

Jim Lico -- President & Chief Executive Officer

Thanks.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks Rich.

Operator

And your next question is from Andy Kaplowitz.

Andrew Kaplowitz -- Citigroup -- Analyst

Yeah, good afternoon, guys. How are you doing?

Jim Lico -- President & Chief Executive Officer

Hi, good afternoon, Andy.

Andrew Kaplowitz -- Citigroup -- Analyst

Again for Chuck, SG&A was up 450 point over 30% of sales, it's not really surprising, it's a lighter quarter in sales and given the acquisition related activity you've had. But is it up simply because of that and would you expect it to come down now versus relatively, seasonally high Q1?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

So, if you're just talking about the total SG&A, actually it's up quite a bit because of the amortization and also the purchase accounting related to the deals and the deal costs. That's actually the main step-up there.

Andrew Kaplowitz -- Citigroup -- Analyst

Nothing unusual on there other than just the increased M&A activity, correct?

Jim Lico -- President & Chief Executive Officer

It's just there's a little bit with Gordian and Accruent, where they got really high gross margins and so there are above the fleet average. But the first two things I talked about is 90% of it.

Andrew Kaplowitz -- Citigroup -- Analyst

Got it. And then Jim just focusing on China for a second, you mentioned last quarter that you're seeing some slowing in Tek order book in China, but doesn't look like you saw real slowdown in that business. So, when you focus on China, I mean you mentioned maybe it can be resilient here as a lot of that resilient in GVR, the Tek actually outperformed in China and then what's going on in the rest of Asia, because you mentioned looks like South Korea being a little weak?

Jim Lico -- President & Chief Executive Officer

Yes. So, on Tek specifically, we saw, as you said, we a little bit better China than we thought. I think some of that -- we still expected that to moderate a little bit as I said. It's high-single-digits in the quarter, but probably mid single in the full year. So, I think that's still going to be a good year after, I think four years in a row of either double-digit or high single-digit growth for Tek in China. And it's been relatively resilient as you said, I think we saw most customers, in most segments the market is pretty good.

And the other thing I would call and just relative to China macro is, is that Fluke's point-of-sale in its shops, which is a pretty good bellwether for the market, was good. And Fluke's growth was pretty broad-based in China as well.

So, I think China is holding in there. I wouldn't -- I'm not going to be (inaudible) to say that everything's great and it's going to turn wonderful. But I think it's -- it was certainly solid in our -- it was a little better than we thought it would be overall. And as you mentioned GVR's continued regulatory performance, but that will wane a little bit in the second half.

Relative to Tek in the rest of Asia, very -- a lot of our business in South Korea is 3D sensing-related and it's key field (ph) related. We probably have more semiconductor process if you will or manufacturing exposure in Korea. And so while that's not a big issue for Fortive, it does impact the Asia business as we sight it and so we saw that in Korea and in other parts of Asia. So, that was probably one of the headwinds that we saw Tektronix in the quarter for sure. That moderates a little bit through the year just because that we have some easier comps.

Andrew Kaplowitz -- Citigroup -- Analyst

Thanks, Jim.

Jim Lico -- President & Chief Executive Officer

Thank you, Andy.

Operator

And your next question comes from Jeffrey Sprague.

Jeffrey Sprague -- Vertical Research Partners -- Analyst

Thank you. Good day everyone. Hey, how are you doing?

Jim Lico -- President & Chief Executive Officer

How are you? Good.

Jeffrey Sprague -- Vertical Research Partners -- Analyst

Hey, maybe just for me on ASP. Just curious how the business performed during this carve-out period, I think the 2017 revenues were $775 million or so. What's the revenue base here as it enters the Fortive Empire?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

It's probably about $825 million, $820s million somewhere around there.

Jeffrey Sprague -- Vertical Research Partners -- Analyst

And are you -- so that sounds off of my head 5% growth or so, maybe little bit more than that. Is that...

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

They are mid-single digit in '18, so yeah.

Jeffrey Sprague -- Vertical Research Partners -- Analyst

They did, OK. And is that basically what's implicit in the guide and for the year here for, it's not going to be organic obviously for you this year. But you see that type of growth continuing over the balance of '18?

Jim Lico -- President & Chief Executive Officer

We got -- we probably be in the low to mid range right now. I think we're still getting a sense of what the business can be like that a couple of one-time things that were last year. I would say maybe their natural growth rate over the last few years has been low single-digit in that range, kind of 3 to 4. But we think we know the market is growing mid single-digit. So, I think as we said a year ago, when we announced the signing of the deal that we felt good about over a time period we could turn the business into a mid single-digit grower. But I think it's implicit in the guide with about 12 months of TSAs Jeff and working through Johnson & Johnson and some of the revenue profile for a time period. It's probably going to be a more or like low single-digit and so we've got every aspect of the business under our ownership.

Jeffrey Sprague -- Vertical Research Partners -- Analyst

And I think also there was -- obviously had to do a lot of prep work to kind of accept the carve-out in the year on a price. But I think after ownership you're looking at some pretty heavy work on their matrix organizational structure and the like. Is that still in front of you? Is that embedded in the guide, or is that something that I don't know, maybe gets capitalized in acquisition accounting or something?

Jim Lico -- President & Chief Executive Officer

No, I think if you're talking about the standing up, the team it's going to run this. I think that we've done quite a bit of that. I think the thing that's in front of us really is basically outside of the U.S., We've got these TSAs, that we're going to have bring them under into our IT platform and that's going to go on for probably four quarters. And as we do, your profitability will accelerate every time we move off of one of those.

I think everything we've seen thus far we have done a lot of work in this regard Jeff, is it the cost structure that led to the returns for the business, is every bit in place. So, we feel very good about that. We think we still believe in the opportunity to improve the gross margins as well. And then finally, when you look at the -- so a lot of the tenants of the core tenants of the value creation there and we did this in a much lower interest rate cost and at a much different tax rate. And so the returns -- the return profile has improved pretty a great deal, since we announced the deal 12 months ago -- 10 months ago.

Jeffrey Sprague -- Vertical Research Partners -- Analyst

Great. Thank you for that.

Jim Lico -- President & Chief Executive Officer

Thanks, Jeff.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks, Jeff.

Operator

And your next question is from John Inch.

John George Inch -- Gordon Haskett Research -- Analyst

Hi everybody.

Jim Lico -- President & Chief Executive Officer

Hey John.

John George Inch -- Gordon Haskett Research -- Analyst

Hi, guys. Hey, Chuck the convertible senior notes you just issued seemed to have been done a very favorable terms. I'm not sure if that's incrementally additive even by a penny or two to sort of the thought process this year? And I was wondering about just the balance sheet in general given if you can do that with that tranche or other things you could perhaps be doing, or thought process around the balance sheet, or is it pretty well locked in?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Well, I think in terms of the guide, first thank you, we like the deal with the convertible notes. But we as we came out this year, while we don't know the exact terms of that. We had most of that factored in when we set the original guide. So, it's not accretive to the guide, but we do -- we like the deal that the we did.

Are there other things around the balance sheet? It isn't just because on this one is a convertible note. I mean it's treated as debt, not equity. So, I don't think it gives us any more debt financing for M&A around that. But are there other things around the balance sheet? We are -- there is -- we're continuing to look and see what our optionality is and as we said for a while, we'll consider what the best fit at the time is for financing and raising capital.

John George Inch -- Gordon Haskett Research -- Analyst

But it sounds like it's going to be tied to probably future M&A. It sort of brings up the question, Jim, how are you thinking at this stage in late April about additional portfolio moves in 2019. And you guys have done a ton over the couple of years, probably a lot of digestion work I'm assuming, but you obviously want to be opportunistic. Is there an early read in terms of kind of how are you thinking about these opportunities today, or are you content sort of sit back and wait?

Jim Lico -- President & Chief Executive Officer

Yeah, I would rarely be described as someone, who sits back and waits on anything. But so I feel obligated to answer that is, as we're certainly leaning in to opportunities. John, we have been pretty busy. I think we have been as busy as we have been over a time period. So, we will continue to look for opportunities. As you said, we just closed 24 days ago the largest acquisition in the history of the company, and so we certainly are digesting that and spending a considerable amount of time to make sure we do that right and that's important.

So, I don't want in any way shape or form suggest that that's not a first priority because it is. But we also want to make sure we just between Gordian and Accruent and also with ASP, we have not bought, call it, almost $10 billion of served market opportunity with it and with that comes more opportunity. So, we feel good about the opportunities in front of us, but again I think we now have the -- we certainly have the ability to be disciplined like we always have been and we will return focused as well. Almost sun-setting our three-year anniversary here pretty soon. As you know well, the deals have ebbed and flowed and I suspect that will continue to be true.

John George Inch -- Gordon Haskett Research -- Analyst

Got it. Thanks so much, guys.

Jim Lico -- President & Chief Executive Officer

Thank you.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks John.

Operator

And your next question is from Josh Pokrzywinski.

Jim Lico -- President & Chief Executive Officer

Hi Josh.

Joshua Pokrzywinski -- Morgan Stanley -- Analyst

Hi, good afternoon, guys.

Jim Lico -- President & Chief Executive Officer

We are doing great.

Joshua Pokrzywinski -- Morgan Stanley -- Analyst

Excellent. So, just one follow-up on Gordian and Accruent. So, just one follow-up on Gordian and Accruent, you had them under your belt for a while now. And I think obviously some differentiated assets in the software space. But it seems like every company out there is coming out with kind of a software add-on for everything they're doing and obviously the big software guys are still everywhere.

When you think about your total software exposure, including those to iNet, eMaint, you're kind of putting all in one big basket. How would you characterize the competitive landscape? Are you seeing more folks show up? Do you feel like the niches are well protected? And how does that make you feel about kind of more activity in those spaces?

Jim Lico -- President & Chief Executive Officer

Well, I would say that the environment hasn't changed a lot in the last several months, but certainly for the last few years it's been competitive in the sense of we have just -- the two major deals that we've done were in private equity hands and private equity are showing up increasingly in a lot of these transactions. So, I would say, I wouldn't necessarily say we want to play, where we're advantaged, where we have a proprietary view as a business, where -- and certainly now with some of the additions, where we have synergy.

And so I think those -- we're going to play in places, where I think we're more likely to win. But I think the most important part is first having a strategic view of how to build a workflow and to really understand, what you can do with the business, not only with the business you have, but also with additional things and building more scale.

And as you point out now, with Gordian and Accruent, eMaint alone and sort of that facilities maintenance, facilities management software space, we're almost at a $0.5 billion. That gives us a tremendous amount of scale in which to do things. And then in some of our other businesses, where we have strategic positions, we're adding on to things to make a -- just make the workflow more competitive. And that builds on the strength of the brands, whether it be Gilbarco or Tektronix or whatever. So, we're continuing to do those things as well.

And I would say, the other thing I would say is that, while maybe the follow up question might be pricing. I don't think we're -- for great assets, I don't think we're really seeing differences in pricing over the last year or two. I think the crummy assets maybe have prices have increased. And so everything -- and the bottom end has moved up. But I think when you look at what great growth, great margin profiles with good high recurring revenue, those really strong assets with differentiated market positions, fundamentally that pricing really hasn't changed in the last year or two.

Joshua Pokrzywinski -- Morgan Stanley -- Analyst

Got it. That's helpful, Jim. And then just one shifting gears a little bit. Thinking about the second half, or even maybe beyond the second half, at some point before too long you're going to run into some pretty tough comps on GVR. And I think orchestrating the hand off between that business and some of the PI stuff, where it's just kind of the higher quality businesses over time or the ones that are getting more of the focus. Do you anticipate that being a smooth hand off i.e. some of the headwinds today or end market shuffling today, times itself to where it goes away by the time GVR has tougher comps?

Jim Lico -- President & Chief Executive Officer

Yeah. So, I think Chuck and I can tag team just a little bit. I think strategically we're certainly looking with within Gilbarco, within transportation Tek and within Fortive to countermeasure these things. So, within Gilbarco we're building out our high-growth market positions. We've done two acquisitions really almost three acquisitions over the last several years in India as an example to build our positions in high-growth markets. We just launched the new dispenser for high-growth markets that is I think a really great product. So, build out our positions in market, where that are non-EMV that's number one. I think number two is continue to take advantage of opportunities like an electric vehicles, where our Tritium investment is doing some things and we're certainly continue to do that.

So, that's what we're doing within Gilbarco. And then certainly in the platform, we're looking for new opportunities. And certainly, as you mentioned, the breadth of opportunities that we have throughout Fortive to also do these things, are going to be all opportunities for us to countermeasure, if you will, the EMV shortfall, which inevitably will happen. I think, I don't think -- I think we've been consistent well over for at least couple of years to say that inevitably, there will be a step down at some point in time. That's I would say somewhat predictable, probably not within the specific quarter, but certainly within a couple of quarters we have a pretty good sense for that.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Yeah, Josh, if I could add on it, you want to size that when you start looking at in '20, beyond 2021, 2022 and 2023 is probably $100 million to $200 million step down over an eight quarter period, which is probably about $0.10 to $0.20. And if you think about $0.10 a year, I think we can handle that in terms of an earnings power. Also worth noting $1.7 billion of acquired assets growing at high single digits is also part of and given mentioned some of those in the GVR platform.

Joshua Pokrzywinski -- Morgan Stanley -- Analyst

Awesome. Thank you guys.

Jim Lico -- President & Chief Executive Officer

Thanks, Josh.

Operator

And your next question is from Scott Graham.

Jim Lico -- President & Chief Executive Officer

Hey, Scott.

Scott Graham -- BMO Capital Markets -- Analyst

Hey, good morning. I was hoping you could give us a little bit more color on what the PI impact from acquisitions, it looks like on a full-year basis it was minus 410 this quarter. What does that look like on a full year basis?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Are you talking about on the SG&A there or on the...

Scott Graham -- BMO Capital Markets -- Analyst

I'm talking about on your exhibit on Page 6, the operating margin on bundle.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

I see. I have to think about that. And I prefer to not to just pitfall here because we got the ASP coming in here with its amortization, but it's likely to be in the same size as what we just saw with Gordian and Accruent for the full-year, because they are rough -- if you think about $2.8 billion spent on Gordian and Accruent, $2.7 billion on ASP, it's going to look about the similar impact on our total operating margins. But I think that anyways so I think that's what -- that's what I would expect to see.

Scott Graham -- BMO Capital Markets -- Analyst

That's fair. And so when you are talking earlier about the upward inflection in the PI margin, you were just talking about the core?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Yes that's right, and sure.

Scott Graham -- BMO Capital Markets -- Analyst

Okay. I also notice that when you talked about OMX not only did that number come down from plus 50 to plus 25 to 50 on a full year basis, where you talked a lot about mix. I was hoping if you could tell us a little bit more maybe size that for us, is that 30, 40, is that 25 basis points of takedown, what happened with OMX both the guidance and what's going on with the mix within that?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Well, most of what happened with the guide for the year is the first quarter and so our first quarter coming in at negative 70, it didn't make the second half go up anymore. And it's really not much more complicated than that. I do think that we will see sequential improvement from Q1 to probably flat, a little bit positive to back to normal because the big headwinds of that we called out in order of mix and tariffs and FX are really a first half problem and then they normalize when we get to the second half.

Jim Lico -- President & Chief Executive Officer

Scott, we're very focused on continuing to countermeasure all those things. So, I think the idea that I think Chuck and I have spent a considerable amount of time making sure that we've got the actions in the businesses to go after this. And that's why I think even though you see a little bit of a lower OMX, you see the continued strength in EPS and you see the continued strength in free cash flow. So, the metric itself it's a little bit influenced by the way you measure tariffs and things like that. But at the end of the day, what we don't change as you see the incredibly strong high-teens EPS growth and a continued focus on 120% free cash flow conversion.

Scott Graham -- BMO Capital Markets -- Analyst

Good to hear. Okay, thank you.

Jim Lico -- President & Chief Executive Officer

Thank you.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks, Scott.

Operator

And your next question comes from Nigel Coe.

Nigel Edward Coe -- Wolfe Research -- Analyst

Thanks, guys. Good afternoon.

Jim Lico -- President & Chief Executive Officer

Hi, Nigel.

Nigel Edward Coe -- Wolfe Research -- Analyst

Hey, so we covered a lot of ground. But I do want to go back to Gordian and Accruent and they will be roll into core come September in 4Q. So, may be just speak to how those performed in 1Q core on a like-for-like basis? How did they hold up in the current environment?

And then the second part on that is, just stripping out -- trying to do the math on EBITDA margins, by the way the additional disclosure is great. It looks like the margin came in at about 23%, 24% for Gordian and Accruent. Is that math correct because we're working with low 30s for those two companies?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Yeah, you're talking about the EBITDA for Gordian and Accruent, which you said...

Nigel Edward Coe -- Wolfe Research -- Analyst

Yeah, that's right. That's right.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

I think for this year, yes, it starts probably a little under that, but not much and ramps through the year. So yes, that's correct.

Nigel Edward Coe -- Wolfe Research -- Analyst

Okay. And then the like-for-like growth...

Jim Lico -- President & Chief Executive Officer

Nigel, your first question was a little bit, I think around durability of Gordian and Accruent, is that?

Nigel Edward Coe -- Wolfe Research -- Analyst

No, no. It's really more about how they performed in the quarter, Jim.

Jim Lico -- President & Chief Executive Officer

Okay. Got it.

Nigel Edward Coe -- Wolfe Research -- Analyst

Yeah.

Jim Lico -- President & Chief Executive Officer

And I would also say just to that point is, and maybe just it's a small, but important caveat is that we've spend a bunch of time with the businesses and we may choose to invest in the business through the year. In fact for sure we have had already approved some additional investments to accelerate the growth in the business too, which may not necessary pay out in any particular quarter, but gives us a much more durable revenue stream in the years to come. So, you know us well, so you know from time-to-make we will make those decisions and that could impact that percentage by a few hundred basis points depending on when and how we do it.

Nigel Edward Coe -- Wolfe Research -- Analyst

Okay. And the growth truck, what was the growth at Gordian and Accruent?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

High single-digit in Q1 and that's what we did -- that's what we expected, that's what we're seeing and we expect that as that comes into Q4 this year that's probably 30 point lift to our core growth.

Nigel Edward Coe -- Wolfe Research -- Analyst

Okay, great. And then just quickly on the ASP accretion. The phasing of the accretion it looks like a nickle in 2Q, obviously it looks like a $0.07, $0.09 in 3Q, 4Q. Is that the TSA's roll-off you alluded to? Is that contributing to the better accretion in the back half of the year? And are we still looking at $0.30, $0.35 for the first 12 months?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

All right. So, $0.30, $0.35 for first 12 is -- that's still the range. And yes, for the most part and why it's stepping up as it goes through time. There is also a little bit of seasonality, it's like many businesses the fourth quarter is can be stronger than the first and what not. But I think those are major levers.

Nigel Edward Coe -- Wolfe Research -- Analyst

Okay, thanks guys.

Jim Lico -- President & Chief Executive Officer

Thanks Nigel.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thanks Nigel.

Operator

And your next question comes from the John Walsh.

John Walsh -- Credit Suisse -- Analyst

Hi, good afternoon and good evening. A lot of ground covered so just a quick one here. Just looking at the language in your press release around the headwinds on Professional Instrumentation, just wanted to make sure I understood clearly, I mean, that's really a way to call out, what you were talking about with the distribution channel? Or is there anything else that, that language alludes to, I guess?

Jim Lico -- President & Chief Executive Officer

No. It's really kind of in our short cycle businesses primarily it's Fluke and Tek. They're probably greater fourth quarter than we originally expected, which led to some -- and we will call most of that probably tariff avoidance. So, it's that. There is a little bit of point-of-sale starting slower too in the first part of the quarter as well, John. So, I wouldn't -- I think it's those two things. The destocking some of it is because of the point-of-sale, it's also some of the because of the increase in inventory that they had at the end of the year.

John Walsh -- Credit Suisse -- Analyst

Okay, great. And then I guess I'm looking at the Q you guys call out Germany as a country. Obviously, there's been a lot of concerns around Germany, given what we've seen from some of the macro data there, your sales are actually down very modestly. Maybe just help us understand really what drives your business there, and maybe even broaden it out to Europe, because actually thought the European performance was a little bit better given some of the macros scares?

Jim Lico -- President & Chief Executive Officer

Yes, I think, as we said, I would -- I'm still -- I still think Europe is a challenge for us. So, in the quarter Qualitrol and GVR which -- Qualitrol was one -- was a project, GVR was more secular, typically not a good read on the macro. That's a broader Europe comment, John.

When you look at Tek was down in Europe and a chunk of that was in Germany. Fluke had a weaker, but they weren't down in Europe, they were weaker than normal. So, I think those are maybe a little bit more of a telltale sign of the macro. And so we don't have a big belief that that's going to significantly improve. For the rest of the year we'll sunset some easier comps, but I think we're watching -- we're reading a lot of the same macro stuff. Everyone's reading. We're certainly looking through a lot of the other peer company filings to get a read on that. And I think it seems like it kind of depends.

So, the good news is like some of our software businesses have been pretty resilient. I think Accruent was up high single-digits in Europe as an example. So, the places where we have good resiliency within the business model are still doing pretty well.

John Walsh -- Credit Suisse -- Analyst

Great. Thank you.

Jim Lico -- President & Chief Executive Officer

Thank you.

Operator

And your last question comes from Joe Giordano.

Joseph Giordano -- Cowen And Company -- Analyst

Hey, Joe.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Hey, Joe.

Joseph Giordano -- Cowen And Company -- Analyst

Hey, so, Chuck did you give the specific number for Fluke, like I think you said Fluke Digital, what the growth was in the quarter and did you give like the legacy Fluke growth in the quarter?

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

I don't believe I did. The total Fluke was low single-digits, basically yes.

Joseph Giordano -- Cowen And Company -- Analyst

Low single-digit, OK. And was there a management changes going on there this quarter?

Jim Lico -- President & Chief Executive Officer

Yeah. So, I think we were -- it's interesting, but we did -- we announced a couple of changes. We put in many of our senior leaders have been sort of owner operators and businesses since our inception. We've hired somebody from the outside that was in immersion for a while, and put him -- Mark Trombly (ph) into the Fluke job and we promoted Tami Newcombe into the Tektronix job. So, those two organizational announcements have been out there and we're really excited about having two really strong leaders in to new positions, also freeze Pat and Wes obviously picked up a lot with all the new acquisitions. Pat certainly has been the lead role on ASP. So, gives us the opportunity for the two of them to spend more time on building out the platforms and that kind of thing.

Joseph Giordano -- Cowen And Company -- Analyst

And then what the -- I just want to make sure on the build up here for Gordian and Accruent, I'm getting the math right. So, I think it's $0.06 in 2Q is the expectation. Was it something like $0.04 in the first quarter here?

I think we're saying $0.05.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Okay. And then, we're having that into core in 4Q right, so the incremental on top of that in your full year, that's just in from the third quarter, right?

Yes. It's turn core in the fourth quarter.

Joseph Giordano -- Cowen And Company -- Analyst

Okay. Just want to confirm that. That does the bridge we are looking at apples-to-apples. Okay, guys.

Jim Lico -- President & Chief Executive Officer

Thank you.

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Thank Joe.

Jim Lico -- President & Chief Executive Officer

So, I think that's it. Thanks everybody for a great interaction and the time today. Obviously a busy day for everyone and so we appreciate the time you've taken to be with us. We are really proud of the work we did in the quarter. Certainly some things to fix, as I think we mentioned we're very focused on that, but at the same time the ability to sort of do what we believe is going to be a strong year. We're off to a good start. We look forward to seeing all of you in New York in May and we will give you more detail on ASP, on Gordian and Accruent. We will certainly outline our digital strategy and certainly give you a better perspective on a number of the strategies that we are utilizing to drive growth this year. But more importantly to build a better Fortive over time.

Thanks and our -- Griffin and his team and Chuck are around for questions tonight, tomorrow and next week. Take care everybody. Have a great week.

Thank you. This does conclude today's conference call. You may now disconnect.

Duration: 66 minutes

Call participants:

Griffin Whitney -- Investor Relations

Jim Lico -- President & Chief Executive Officer

Stephen Tusa -- JPMorgan Chase & Co -- Analyst

Chuck McLaughlin -- Senior Vice President & Chief Financial Officer

Scott Davis -- Melius Research LLC -- Analyst

Julian Mitchell -- Barclays -- Analyst

Deane Dray -- RBC Capital Markets -- Analyst

Andrew Obin -- Bank of America Merrill Lynch -- Analyst

Richard Eastman -- Robert W. Baird & Co. -- Analyst

Andrew Kaplowitz -- Citigroup -- Analyst

Jeffrey Sprague -- Vertical Research Partners -- Analyst

John George Inch -- Gordon Haskett Research -- Analyst

Joshua Pokrzywinski -- Morgan Stanley -- Analyst

Scott Graham -- BMO Capital Markets -- Analyst

Nigel Edward Coe -- Wolfe Research -- Analyst

John Walsh -- Credit Suisse -- Analyst

Joseph Giordano -- Cowen And Company -- Analyst

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