Securities Act of 1933 and the U.S. Securities Exchange Act of 1934.
Sales growth in the quarter came in better than expected and was quite good given the excellent 8% growth in the prior-year quarter.
Total local currency sales growth in the quarter was 4%.
We again faced meaningful headwinds in the quarter due to adverse currency and impact of tariffs.
For the full-year 2019, we exceeded $3 billion in sales and achieved 5% growth in local currency.
Excluding this business, we have 6% growth in local currency sales.
We achieved a strong improvement in operating margins and a 12% increase in adjusted earnings per share.
One final comment on full-year 2019, we generated more than $530 million in free cash flow.
We expect the coronavirus to significantly impact sales in China in the first quarter due to the loss of selling days.
Sales were $844 million in the quarter, an increase of 4% in local currency.
On a U.S. dollar basis, total sales increased 3% as currencies reduced sales growth by approximately 1% in the quarter.
4, we show sales growth by region.
Local currency sales grew 6% in the Americas, 1% in Europe, and 5% in Asia/Rest of World.
China had growth of 8%, a little bit better than what we expected the last time we spoke.
Local currency sales for the year grew 5%.
And as Olivier mentioned, excluding Food Retail, local currency sales growth was 6% in 2019.
By region for the year, sales increased 6% in the Americas, 3% in Europe and 6% in Asia/Rest of World.
6, we outline local currency sales growth by product area.
For the fourth quarter, Laboratory sales grew 6%, Industrial increased 2%, with core industrial up 4%, while product inspection was flat.
Food Retail declined 2% in the quarter.
In 2019, Laboratory sales grew 7% in local currency, Industrial grew 4%, with core industrial up 6% and product inspection up 2%.
Food Retailing declined 8% in 2019.
Overall, total sales in 2019 were up 5% in local currency and 6% if we exclude Food Retailing.
Gross margin in the quarter was 59%, a 60-basis-point increase over the prior-year level of 58.4%.
R&D amounted to $35.3 million, which represents a 2% decline in local currency.
This decline was impacted by timing of activity and the 15% local currency growth in R&D in the prior year.
SG&A amounted to $206.7 million, a 3% increase in local currency over the prior year.
Adjusted operating profit amounted to $256.3 million in the quarter, which represents a 7% increase over the prior-year amount of $239.7 million.
We estimate currency reduced operating income by approximately $3.5 million.
We also estimate tariffs were a gross headwind to operating income by approximately $2.5 million.
Absent adverse currency and the gross impact of tariffs, operating income would have increased 9% in the quarter.
Operating margins reached 30.4% in the quarter, the first time we crossed 30% and represented a 110-basis-point increase from the prior year.
Amortization amounted to $12.8 million in the quarter.
Interest expense was $9.6 million in the quarter.
Other income amounted to $1.9 million.
Our effective tax rate in the quarter was 20% before discrete tax items and adjust for the timing of stock option exercises.
Moving to fully diluted shares, which amounted to $24.6 million in the quarter and is a 3.5% decline from the prior year, reflecting the impact of our share repurchase program.
Adjusted earnings per share for the quarter was $7.78, a 14% increase over the prior-year amount of $6.85.
Absent currency and the gross impact of tariffs, our adjusted earnings per share growth would have been 16% in the quarter, a level we are very pleased at.
On a reported basis in the quarter, earnings per share was $7.84, as compared to $7.11 in the prior year.
Reported earnings per share in 2019 includes $0.11 of purchased intangible amortization, $0.15 of restructuring, and a $0.32 difference between our quarterly and annual tax rate due to the timing of stock option exercises.
In the quarter, we also incurred a one-time noncash deferred tax gain of $0.64 related to changes in Swiss tax law.
We expect our effective tax rate to remain at 20%.
One final point on reported earnings per share in Q4 of last year, 2018, we recorded a one-time noncash acquisition gain of $0.75.
We achieved 5% growth in local currency sales, 100-basis-points improvement in operating margin, and 12% growth in adjusted earnings per share.
In the quarter, adjusted free cash flow amounted to $186.2 million, a 23% increase over the prior year on a per share basis.
Our working capital statistics remained solid, with DSO at 40 days and ITO at 4.5 times.
For the year, adjusted free cash flow amounted to $531.3 million, as compared with $455.9 million in the prior year.
This represents a 20% increase on a per share basis and represents a net income conversion of approximately 95%.
We remain cautious on the macroeconomic environment as certain indicators are weak.
We continue to expect local currency sales growth in 2020 will be approximately 4%.
Our sales guidance for 2020 remains unchanged and we are also maintaining our full-year adjusted earnings per share guidance in the range of $24.85 to $25.10, which reflects a growth rate of 9% to 10%.
In total, for 2020, we expect currency and the gross impact of tariffs to reduce our earnings per share growth by 2%.
Absent currency and tariffs, our earnings per share growth of 11% to 12% is the same as what we provided in November.
We expect interest expense to be approximately $42 million in 2020 and amortization to be $53 million.
Other income in 2020 will be approximately $7 million.
Based on market conditions today, we expect local currency sales growth to be approximately 0% to 1%.
First, Q1 will be our toughest sales growth comparison for the year as we had 7% growth in the first quarter of last year; second, we expect food retail to be down double digits in the quarter, which impacts sales growth by approximately 1%; and third, as Olivier mentioned earlier, we expect the coronavirus to have an impact on our sales in the quarter, but not for the full year.
In Q1, we would expect sales in China to be down mid- to high single digits which impacts our sales growth in the quarter by approximately 2%.
Excluding the impact of the retail decline and adjusting our guidance for the estimated coronavirus impact, we would have expected sales growth in Q1 to be in the range of 3% to 4%.
On a two-year stack basis, this would have been growth in the 10% to 11% range, which we're pleased with.
We would expect that adjusted earnings per share in the first quarter to be in the range of $4.20 to $4.30, a growth rate of 2% to 5%.
Absent currency and tariffs, adjusted earnings per share growth in the first quarter would be 7% to 10%.
In terms of free cash flow, we expect approximately $560 million, which is a 10% increase on a per share basis.
We plan to repurchase shares of approximately $800 million in 2020, which includes an incremental amount as we target a net debt-to-EBITDA leverage ratio of 1.5 times.
With respect to the impact of currency on sales growth, we expect currency to reduce sales by approximately 100 basis points.
In the first quarter, we would expect currency to reduce sales by 160 basis points.
Our Lab business continues to perform very well with 6% local currency sales growth in the quarter.
Overall, we expect good growth in our Laboratory business in 2020, although we faced more challenging comparisons after several years of very strong growth.
Core industrial did great in the fourth quarter, increasing 4% against 13% growth in the prior year.
Finally, Food Retail was down 2% in the quarter, pretty much on target with what we had expected.
We would expect a modest decline in the first quarter, principally due to a significant decline in Food Retail, as well as the 9% growth in Q1 2019.
Americas continues to do very well with 6% growth in the quarter.
I want to point out that in Q1 last year, China grew 13%, the strongest quarter of the year.
Service and consumables together represent about one-third of our sales growth, and both grew 7% in 2019.
We can provide more than 40% of the instruments that the scientists or chemists uses daily in a typical analytical lab.
We expect customers could achieve productivity improvements of up to 30% with this revolutionary product.

Summary:
We again faced meaningful headwinds in the quarter due to adverse currency and impact of tariffs.
For the full-year 2019, we exceeded $3 billion in sales and achieved 5% growth in local currency.
We expect the coronavirus to significantly impact sales in China in the first quarter due to the loss of selling days.
Sales were $844 million in the quarter, an increase of 4% in local currency.
On a U.S. dollar basis, total sales increased 3% as currencies reduced sales growth by approximately 1% in the quarter.
By region for the year, sales increased 6% in the Americas, 3% in Europe and 6% in Asia/Rest of World.
SG&A amounted to $206.7 million, a 3% increase in local currency over the prior year.
Adjusted earnings per share for the quarter was $7.78, a 14% increase over the prior-year amount of $6.85.
On a reported basis in the quarter, earnings per share was $7.84, as compared to $7.11 in the prior year.
We remain cautious on the macroeconomic environment as certain indicators are weak.
Based on market conditions today, we expect local currency sales growth to be approximately 0% to 1%.
Excluding the impact of the retail decline and adjusting our guidance for the estimated coronavirus impact, we would have expected sales growth in Q1 to be in the range of 3% to 4%.
We would expect that adjusted earnings per share in the first quarter to be in the range of $4.20 to $4.30, a growth rate of 2% to 5%.
Overall, we expect good growth in our Laboratory business in 2020, although we faced more challenging comparisons after several years of very strong growth.