Chip Moore

Chip Moore from Roth Capital Partners inquired about adjacent growth opportunities beyond battery energy storage systems (BESS), specifically asking for an update on building materials (BNC) and whether Europe would be a primary target market for such products. Moore also sought more information on the strategic review process, including its timeline and the potential options being considered by the company.

Answer

Donald Young, President and CEO, confirmed that Aspen Aerogels is working on a product for a specific slice of the large BNC market, aiming for incremental revenue by leveraging an EMF supplier and rekindling past relationships, particularly in Europe for retrofit applications due to thermal efficiency regulations. Regarding the strategic review, Young and Grant Thoele, Chief Financial Officer and Treasurer, explained it's a deliberate and urgent process, undertaken from a position of financial strength to test assumptions, accelerate growth, and optimize capital structure, but it's too early to specify logical outcomes.

Chip Moore asked about adjacent growth opportunities beyond BESS, specifically in building materials, and the target market for such products. He also inquired about the process, timeline, and potential options being considered in the strategic review.

Answer

Donald Young, President and CEO, mentioned a strong background in Building & Construction (BNC) and is developing a product for a slice of that market, likely supplied from an EMF partner, with Europe being a key target due to thermal efficiency regulations. Regarding the strategic review, he stated it's in early stages, deliberate but urgent, aimed at external validation of assumptions and accelerating growth, with no options off the table yet. Grant Thoele, Chief Financial Officer and Treasurer, added that the review is about accelerating growth and finding transformative opportunities.

Chip Moore asked about the capital deployed at the halted Statesboro plant, the potential to repurpose assets, the speed of adding modular capacity externally, and the company's plans for capital allocation.

Answer

CFO Ricardo Rodriguez stated that some equipment from Statesboro will be moved to the Rhode Island facility, while other assets may be sent to external partners. On capital allocation, he mentioned opportunities for organic growth, M&A, and potential capital return to shareholders as the company evaluates its optimal cash balance.

Chip Moore asked about the impact of project activity normalization on Itron's organic growth for 2026, questioning if mid to high single-digit growth remains appropriate given last year's project slips. He also sought insights into the trajectory of surging Annual Recurring Revenue (ARR), how Outcomes growth might have been constrained, and the competitive advantages of Itron's new capabilities.

Answer

Tom Deitrich, President and CEO, emphasized the fundamental structural change in the business, with significant large project deployments and a rapidly growing Outcomes segment (20%+ year-over-year in Q4). He highlighted ARR as a key structural difference and reiterated that Itron is a beneficiary of inevitable grid deployment growth. He noted Outcomes growth picked up after component constraints eased and expressed confidence in continued growth, bolstered by the new Resiliency Solutions segment. Deitrich also explained how Itron's expanded sales reach and comprehensive asset lifecycle support (planning, build, operations) provide a competitive edge, especially with new solutions for faster construction and disaster response.

Chip Moore from Roth Capital Partners followed up on the normalization of project activity, asking how Itron's organic growth in 2026 might have looked (e.g., mid to high single digits) if the project slips from the previous year had not occurred. He also sought further insight into the "surging ARR" mentioned in prepared remarks, inquiring about its future trajectory, how Outcomes growth might have been constrained, and the competitive landscape, particularly regarding competitors backing down from complex deployments.

Answer

President and CEO, Tom Deitrich, emphasized that Itron's business structure is fundamentally different, with a significant portion in large project deployments and networking, which inherently has lumpiness. He highlighted the Outcomes business's strong growth (20%+ year-over-year in Q4) and the structural shift towards Annual Recurring Revenue (ARR), which includes most of Resiliency Solutions, a good portion of Outcomes, and a sliver of Networks. Deitrich expressed confidence in continued Outcomes growth and the new Resiliency Solutions segment, which adds digital construction management and disaster response capabilities, enhancing Itron's competitive position by supporting customers across the entire asset lifecycle and expanding its sales reach to new customers.

Chip Moore of Roth Capital Partners, LLC asked about the growth opportunity for Itron's edge intelligence solutions in Europe over the next several years, noting early signs of traction.

Answer

CEO Tom Deitrich confirmed a reemergence of interest in Europe for advanced grid solutions beyond basic metering. He stated that Itron is focused on selling complete, high-margin solutions and views Western Europe as an increasingly active market for its edge intelligence platforms in the coming years, complementing its already strong water business in the region.

Chip Moore asked about the biggest risks and potential upsides to the 2025 revenue outlook and inquired about the margin trajectory towards the 2027 targets, considering recent cost actions.

Answer

CFO Joan Hooper identified potential new trade policies as the biggest risk to the 2025 outlook, as none are currently assumed. She broke down the guidance, expecting Devices to be down, Networks to be flat-to-low growth (due to 2024's catch-up revenue), and Outcomes to have another strong year. Hooper expressed confidence in reaching the 2027 targets, noting that recent factory shutdowns will yield about $10 million in savings in 2025, and she expects gross margin to improve year-over-year.

Chip Moore asked for clarification on revenue pulled forward from 2025 into Q3 and the drivers behind the implied margin step-down in the Q4 outlook.

Answer

CEO Tom Deitrich and CFO Joan Hooper explained that some Q3 revenue strength was due to customers accelerating shipments planned for Q4 or early 2025. For the Q4 outlook, Hooper noted that margins will be impacted by seasonally higher OpEx, the non-recurrence of the Q3 tax benefit, and some minor productivity impacts from the final stages of factory closures.

Chip Moore followed up on the pent-up demand in Motive Power and Class 8 trucking, asking about EnerSys's ability to meet this demand in the back half of the next fiscal year if it materializes.

Answer

Shawn O'Connell, President and CEO, affirmed that EnerSys is well-positioned and ready, citing factory efficiencies, improved supply chains, and tariff mitigation efforts. He provided an example of a large fleet operator needing 50,000 new tractors just to maintain their current fleet, indicating significant deferred investment. He highlighted ample capacity, with the Missouri plant operating efficiently and meeting milestones. Andrea Funk, EVP and CFO, added that the invigorated operating model is creating synergies between Motive Power and transportation, and the A&D business is also strong, with a 27% year-over-year backlog increase.

Chip Moore (ROTH Capital Partners) asked for an update on EnerSys's planned lithium cell factory, specifically regarding the expected 'favorable outcome,' the evolution of the strategy, and the timeline for a final decision. He also followed up on pent-up demand in Motive Power and Class 8 trucking, asking about EnerSys's readiness and capacity to meet this demand if it returns in the latter half of the next fiscal year.

Answer

Shawn O'Connell, President of Energy Systems Global, EnerSys, expressed strong encouragement regarding ongoing discussions with the Department of Energy and the administration, noting the grant remains intact. He highlighted the alignment with government priorities such as secure domestic supply chains for the military, grid resiliency, and U.S. job creation, emphasizing bipartisan support. O'Connell affirmed EnerSys's readiness to meet returning demand in Motive Power and Class 8, citing factory efficiencies, supply chain improvements, and tariff mitigation efforts. He provided a compelling example of a major fleet operator needing 50,000 tractors to simply maintain their existing fleet, underscoring the significant pent-up demand in Class 8. Andrea Funk, EVP and CFO, EnerSys, added that synergies between Motive Power and Transportation, along with strong A&D business growth (27% YoY backlog increase), position the company well.

Chip Moore of Roth Capital Partners inquired about the recovery in the Energy Systems segment, specifically the drivers and cadence in communications, and also asked about the margin trajectory following the new cost optimization program.

Answer

President & CEO Shawn O'Connell confirmed a recovery in telecom and broadband, driven by early-stage network build-outs and DOCSIS 4.0 upgrades. EVP & CFO Andrea Funk added that while Q1 was pressured by pre-tariff buying in the prior quarter, data center demand was robust, up 14% YoY. Regarding cost savings, Funk stated that the $80 million annualized program will begin to show material impact in the second half of the fiscal year, with $30-$35 million in savings expected in FY26, and that Q1 should represent the earnings low point for the year.

Chip Moore of ROTH Capital Partners asked for an update on the Specialty segment, focusing on visibility in aerospace and defense, the impact of the Bren-Tronics acquisition on order size, progress on the heavy-duty trucking aftermarket rollout, and the company's M&A appetite given its low leverage.

Answer

CEO David Shaffer and COO Shawn O'Connell confirmed strong performance and visibility in aerospace and defense, noting that customers like the stability EnerSys's balance sheet brings to Bren-Tronics, leading to larger order discussions. O'Connell added that new, more efficient production lines are coming online, which will be fully running by Q3 of the next fiscal year. Regarding M&A, Shaffer and CFO Andrea Funk confirmed the balance sheet is strong with leverage at 1.5x, and they are actively evaluating bolt-on acquisition opportunities.

Chip Moore requested an update on the traction of Remsdaq in the US market, particularly in data centers, and the opportunities for service offerings in this sector.

Answer

Brett Cope, Chairman, President, and CEO, highlighted Remsdaq's strategic value, enabling quicker technology adoption in the US data center market for protective and control logic. He noted securing the first order for a high voltage control and protection substation, a new area for Powell. He also mentioned developing service ideas with clients for constructability and timing on the build side of data centers, seeing it as a significant future opportunity.

Chip Moore asked for more details on the data center market, specifically regarding the cadence of deliveries, the potential for follow-on orders from phased facility builds, and the company's capacity expansion plans, including the ramp-up of switchgear supply. He also questioned the broader supply-demand environment and its potential impact on pricing and margins over the next several years, given industry-wide capacity expansion announcements.

Answer

Brett Cope, Chairman, President, and CEO, described data center work as a 'design one, build many' product strategy, leading to more repetitive production flow. He highlighted the addition of a 50,000 sq ft leased facility to support this growth and inventory, with further evaluations for additional facilities and permanent investments underway. Cope expressed increasing confidence in the market, noting more strategic discussions with clients and the programmatic approach of phased expansions fitting Powell's model for sticky relationships. He also mentioned that Remsdaq's technology is gaining traction in the US data center market, enabling new opportunities, and that the service team is exploring opportunities on the build side for data centers.

Chip Moore inquired about the C&I segment's modest decline in the quarter, asking if it was timing-related and about future opportunities for new products. He also questioned the sustainability of the phenomenal growth in the utility sector and the long-term trends. Additionally, he asked about Powell's potential role in the evolving 800-volt DC architectures for data centers and sought clarification on the normalized gross margin expectations for fiscal 2026, considering the 100 basis points from project closeouts in the current quarter.

Answer

Chairman and CEO Brett Cope attributed the C&I decline to timing, emphasizing growing opportunities for both existing and new products in data centers. He expressed strong satisfaction with the utility strategy, noting equal weighting with oil and gas in the backlog and expecting continued robust demand. Cope confirmed Powell's technology could play a role in 800-volt DC architectures for data centers, leveraging existing DC switchgear and breakers, though some R&D for rectifiers would be needed. CFO Mike Metcalf stated that with strong project execution and anticipated favorable closeouts, margins in the 'upper 20s' are realistic for fiscal 2026.

Chip Moore from Roth Capital inquired about the C&I market's modest decline in the quarter, asking if it was timing-related and about future opportunities for new products. He also questioned the sustainability of growth in the electric utility sector and Powell's potential role in evolving 800-volt DC architectures for data centers. Finally, he sought clarity on the sustainability of gross margins, specifically regarding project closeouts and a normalized margin rate for fiscal 2025.

Answer

Brett Cope, Powell's Chairman and CEO, clarified that the C&I decline was largely due to project timing, with significant growth opportunities in data centers. He expressed strong confidence in the sustainable growth of the electric utility market, now equally weighted with oil and gas in the backlog, and confirmed Powell's engagement in discussions around future DC data center architectures, leveraging existing technology with potential R&D for rectifiers. Mike Metcalf, Powell's CFO, explained that Q4 gross margins benefited from 100 basis points of project closeouts, with 125 basis points year-to-date, and projected full-year fiscal 2026 margins to be in the 'upper 20s' due to continued strong execution.

Chip Moore from Roth Capital Partners, LLC asked about the drivers of the strong momentum in the electric utility market, the strategic rationale and potential for the REMSAK acquisition, the impact of short-cycle business on gross margins, and for an update on capacity expansion initiatives.

Answer

CEO Brett Cope attributed utility market success to a long-term strategy of becoming a trusted partner, combined with new demand from data centers. He detailed that the REMSAK acquisition provides a key technology (RTUs) that Powell will leverage from the UK into the North American market. CFO Mike Metcalf noted the short-cycle book-to-bill cadence has increased to ~$50 million per quarter. Cope also confirmed the new Houston facility is operational and that the company is actively exploring further offshore-focused expansion.

Chip Moore of Roth Capital Partners, LLC asked about the drivers of the strong electric utility results, the strategic rationale and North American potential for the REMSAK acquisition, the recent increase in short-cycle business, and the status of capacity expansion initiatives.

Answer

CEO Brett Cope explained that utility growth stems from a long-term strategy to become a trusted partner, now benefiting from a generation wave driven by data centers and general load growth. He detailed that the REMSAK acquisition provides a key technology for electrical automation with plans to leverage its next-gen platform in North America. CFO Mike Metcalf noted the short-cycle book-and-ship business cadence has increased to ~$50 million per quarter. Cope also confirmed the new Houston facility is operational and that the company is actively exploring further offshore-focused expansion.

Chip Moore of Roth Capital Partners, LLC inquired about the light electric vehicle (LEV) market, seeking to understand its potential contribution and visibility given its lumpy nature. He also asked for confirmation on whether to expect sequential revenue growth in Q3.

Answer

CEO Kang Sun described the LEV market in Europe and Asia as a significant opportunity due to a revolution in vehicle design and battery standards that favor Amprius's technology. He noted the qualification time is short, offering near-term potential. Dr. Sun also affirmed that based on the current customer qualification pipeline, sequential revenue growth should be expected in Q3.

Chip Moore of Roth Capital Partners inquired about the large project pipeline for the Heat Trace business, particularly in light of recent final investment decisions (FIDs) in the market. He also asked for more detail on the go-to-market strategy for the new data center load bank opportunity.

Answer

CEO Bruce Thames responded that the total bid pipeline is up 43% year-over-year, with a strong backlog that is up 27%. He noted that while some large project bookings were weaker in Q1, the cadence has improved, and the fiscal year's revenue is now expected to follow a more typical pattern, with about 55-56% occurring in the second half. Regarding data centers, Thames explained that the load banks are used later in the construction cycle for commissioning and that the go-to-market strategy is primarily direct, with potential for new partnerships in the rental and technology sectors.

Chip Moore of Roth Capital Partners, LLC inquired about the large project pipeline for Heat Trace, particularly in light of recent Final Investment Decisions (FIDs), and sought more detail on the data center opportunity, including the go-to-market strategy and timing of load bank deployment in the construction cycle.

Answer

President, CEO & Director Bruce Thames reported that the total bid pipeline is up 43% year-over-year, with a robust backlog that is up 27%. He noted that project timing suggests a more typical revenue cadence for the year, with H2 being stronger than H1. For data centers, Thames explained that load banks are used late in the construction cycle for commissioning and throughout the asset's life. The go-to-market strategy is primarily direct, though the company is exploring partnerships with rental and technology firms.

Chip Moore of Roth Capital Partners, LLC inquired about the large project pipeline for Heat Trace, particularly in light of recent FIDs, and sought details on the go-to-market strategy for the new data center load bank products.

Answer

President and CEO Bruce Thames stated that the total bid pipeline is up 43% year-over-year, with recent large project wins in rail, LNG, and downstream oil. He anticipates a more typical back-half weighted revenue distribution for the year. Regarding data centers, Thames explained that load banks are used late in the construction and commissioning phase and that the go-to-market strategy is primarily direct, though the company is exploring new partnerships with rental and technology firms.

Chip Moore of Roth Capital Partners, LLC inquired about the large project pipeline for Heat Trace, especially in light of recent FIDs, and sought more detail on the data center opportunity, including the go-to-market strategy and timing of product use in the construction cycle.

Answer

President, CEO & Director Bruce Thames highlighted that the total bid pipeline grew 43% and the backlog is up 27% year-over-year, with recent wins in rail, transit, and LNG. He noted the fiscal year's revenue now appears more back-half weighted. For data centers, Thames explained that load banks are used late in the construction and commissioning phase. The go-to-market strategy is primarily direct, though the company is exploring partnerships with rental and technology firms.

Chip Moore of EF Hutton inquired about Core Molding's growth prospects, focusing on the $15 million in new annual business, particularly the capacity and potential of proprietary SMC. He also asked about the strategic advantage of the company's U.S. and Mexico footprint, progress in newer markets like medical and turf protection, the purpose of recent large press upgrades, and details surrounding a recent M&A attempt, including market valuations and competition from private equity.

Answer

Executive David Duvall explained that the new SMC business leverages existing capacity for the construction market and offers a shorter quote-to-cash cycle. He noted that while the sales pipeline is robust, major customer decisions are being delayed by market uncertainty. Duvall confirmed their North American footprint is an advantage for reshoring business from China and highlighted progress in turf protection and medical sectors. He detailed that press upgrades aim to increase operational speed and efficiency. Regarding M&A, Duvall expressed disappointment over a lost deal to a private equity buyer, emphasizing Core's value as a long-term home for acquired companies. Executive Alex Panda added that acquisition multiples in their target market are currently between 6x and 7x EBITDA.

Chip Moore of EF Hutton inquired about Core Molding's growth prospects, including details on the $15 million in new annual business from sheet molding compound (SMC) and its capacity. He also asked about the strategic advantage of the company's U.S. and Mexico manufacturing footprint, progress in newer markets like medical and turf protection, the purpose of recent large press upgrades, and the dynamics of the M&A market after a recent deal fell through to a private equity buyer.

Answer

Executive David Duvall explained that the new SMC business, primarily in construction, offers a shorter quote-to-cash cycle and that the company has ample installed capacity. He noted that while the sales pipeline is robust, major customer decisions are being delayed by market uncertainty. Duvall confirmed their North American footprint is an advantage for reshoring opportunities and highlighted progress in turf protection and medical sectors, with smaller programs being won while larger ones are on hold. The press upgrades aim to increase the speed and efficiency of older equipment. Regarding M&A, Duvall expressed disappointment over a lost deal, emphasizing Core's value as a long-term home for acquired companies. Executive Alex Panda added that acquisition multiples are currently in the 6-7x range.

Chip Moore of EF Hutton inquired about Core Molding's growth initiatives, including the potential of its proprietary SMC business and the status of its new business funnel. He also asked about the strategic advantage of its U.S. and Mexico manufacturing footprint, progress in newer markets like medical and turf protection, the rationale behind recent press upgrades, and the M&A environment following a recent failed acquisition attempt.

Answer

CEO David Duvall highlighted the significant opportunity in proprietary SMC, noting existing capacity and a shorter quote-to-cash cycle, though he mentioned large customer decisions are being delayed by market uncertainty. He confirmed the company's U.S./Mexico footprint is a key advantage for reshoring opportunities. Duvall also noted progress in newer markets, with smaller programs being won while larger ones are on hold, and explained that press upgrades are aimed at increasing operating speed and efficiency. Regarding M&A, Duvall expressed disappointment over a recent deal lost to a private equity buyer, while CFO Alex Panda added that market multiples are currently around 6-7x EBITDA and that Core was competitive on price.