Gary Prestopino • Barrington Research Associates

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CEO Steve Towe clarified that EverDriven was an existing customer that selected PowerFleet's AI video solutions after a competitive bid process to overhaul its technology. He described the multi-million dollar contract as a significant win. Towe also confirmed that the total company's organic growth was 7% for the quarter, noting the 9% figure mentioned in the presentation was specific to international operations.

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CFO David Wilson explained that services growth was primarily driven by higher ARPU, which is now above the previously stated $15 average, with a modest increase in subscribers. CEO Steve Towe added that high-value solutions are sweetening the ARPU mix. Regarding synergies, Chief Corporate Development Officer Melissa Ingram and CEO Steve Towe affirmed their focus on achieving the committed $18 million target for the year. Towe confirmed a strategic shift towards selling more modular, device-agnostic software is underway and successful.

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CEO Leroy Ball described 'Catalyst' as a new change management process designed to unlock sustainable opportunities by improving technology and skills, differentiating it from past cost-cutting efforts. He confirmed the mid-to-high teens EBITDA margin target, pointing to the current quarter's 15%+ margin as a preview of what's possible. Ball clarified that while the RUPS segment will have a very good year, it won't meet initial high forecasts, and the PC business has seen the most significant downward revision due to lower-than-expected volumes.

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CEO Leroy Ball clarified that the H2 forecast is based on customer feedback, though he acknowledged risks from economic uncertainty. He confirmed tariff discussions impacted the market and noted Koppers is managing direct and indirect consequences, such as those affecting sawmill suppliers. Ball expressed confidence in achieving the EBITDA target through ongoing cost reduction measures, even if sales are at the lower end of the forecast, though it would be more difficult.

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CEO Leroy M. Ball clarified that the company is already actively pursuing growth in Texas and the Midwest, leveraging recent investments and the Brown Wood acquisition, with further westward expansion planned for 2026-2027. Regarding the Stickney plant, he explained it processes a byproduct, and its closure would mean selling that material on the merchant market, estimating a sales impact of approximately $30 to $35 million.

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CEO Leroy M. Ball clarified that any actions would likely involve smaller, non-core businesses or capacity rationalization, particularly in the North American Carbon Materials and Chemicals (CM&C) segment, rather than a major restructuring. Regarding M&A, Ball confirmed Koppers remains open to opportunities, especially in the utility business, but noted that the timing of any potential deal in 2025 is uncertain and dependent on the sellers.

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CEO Alex Vetter explained that the Dealer Club integration automatically surfaces a dealer's aged inventory with a one-click option to launch it into the wholesale channel. While he did not provide a specific AccuTrade conversion rate, he noted dealers acquire about 20 cars per month via the tool, with significant ROI from avoiding auction fees and hidden repair costs. He also stated that dealer sentiment is improving, evidenced by strong dealer additions in Q2 and July as they return to competing for volume.

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CEO Alex Vetter stated that the AccuTrade and DealerClub integration is expected to be completed in the first half of 2025, which he confirmed is a major differentiator and source of excitement for dealers. Regarding bundling, he noted it was premature to detail a specific strategy but confirmed they are exploring models that incentivize dealers to consolidate more technology onto the Cars Commerce platform, with testing planned for the first half of the year.

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CEO Alex Vetter explained that the VPM product helps dealers improve inventory turn by putting more media weight on aging vehicles. CFO Sonia Jain added that several hundred dealers are using the product. Regarding dealer sentiment, Mr. Vetter shared that recent discussions with dealer groups indicate a desire to invest more in technology to enhance efficiency and reduce costs as vehicle gross profits normalize.

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CEO Peter Kelly explained that while he lacked a precise breakdown, the growth was a mix of new dealer sign-ups and increased volume from existing customers, including major dealer groups. He expects the commercial volume decline in H2 to be similar to or slightly better than the 9% seen in Q2. Kelly agreed that lower curtailments indicate a strong retail environment, characterizing the current used vehicle market as 'normal to somewhat robust.'

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CEO Peter Kelly stated that it was a combination of both. He confirmed OPENLANE has made increased investments in proactive go-to-market efforts to spread the word about the platform's value. He also noted that word-of-mouth is growing, citing a recent unsolicited positive mention of OPENLANE by a dealer customer on a well-known industry podcast. CFO Brad Lakhia added that the company is also optimizing the deployment of its existing field resources to drive engagement.

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CEO Peter Kelly responded that it's a combination of both. He confirmed OPENLANE has increased investments in its go-to-market teams to be more proactive. He also noted that positive word-of-mouth is spreading as the new brand gains traction, citing a recent unsolicited endorsement from a dealer customer on a popular industry podcast. CFO Brad Lakhia added that the company is also optimizing the deployment of its existing field resources to drive engagement.

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CEO David Dunbar explained that about 30% of new products are directed towards fast-growth markets. He and CFO Ademir Sarcevic confirmed these markets carry margins 300-400 basis points higher than the company average, which is critical to achieving long-term margin targets. Dunbar identified Engineering Technologies' sales into commercial space as the biggest new product driver in FY25. He also stated that Standex is always active in the M&A pipeline and is rapidly rebuilding its balance sheet capacity for future deals.

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CFO Ademir Sarcevic clarified that the Q4 organic decline is expected to be less severe than Q3's, driven by anticipated improvement in the Electronics segment. CEO David Dunbar stated that the high-margin Amran/Narayan business has added a couple of hundred basis points to the fast-growth market's margin profile. Regarding pricing, Dunbar and Sarcevic explained that mitigation is a combination of pricing, productivity, and sourcing, and while customer discussions are ongoing, they are confident in their ability to cover the impact outside of the more challenged Scientific business.

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Chief Financial Officer Ademir Sarcevic clarified that the 2028 targets are for the full fiscal year, not an exit rate. He projected post-acquisition quarterly amortization at $4-5 million and annual depreciation at $20-22 million, while also confirming Amran/Narayan's ~40% adjusted EBITDA margin. CEO David Dunbar added that for large grid projects, Standex is well-positioned as a supplier to all major equipment providers like Eaton, GE, and Schneider, making the company agnostic to the final contract winner.

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CFO Ademir Sarcevic confirmed the acquisition is closed and consolidated immediately, with a minor ownership stake pending regulatory approval. He and CEO David Dunbar detailed the geographic split (roughly 45% US, 55% Asia) and clarified the addressable market is $2 billion. Dunbar explained the sales process is a customer intimacy model and that FX risk is minimal due to in-country operations. Sarcevic outlined the borrowing rate, expecting it to be 6.5-7% initially before declining to the low-5% range.

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CFO Brian Herb confirmed that the margin impact from EvolutionIQ remains in a similar range, noting that the core CCC business is on track for about 100 basis points of margin expansion for the year. CEO Githesh Ramamurthy stated the company's fundamental belief is that the claims decline is driven by economic factors causing a gap between accident frequency and filed claims, rather than a material impact from ADAS technology.

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CFO Brian Herb explained that while new solutions have a compelling ROI, the company's general pricing philosophy remains around a 5:1 value ratio for carriers. CEO Githesh Ramamurthy stated that ADAS is not seen as a primary driver of lower claim frequency, as factors like distracted driving persist. He reiterated that feedback points to consumer economic behavior as the main cause.

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EVP & CFO Michael McKenney provided the requested figures for current assets ($475M) and liabilities ($200M) and detailed the parts mix for each segment, noting the overall mix increased to 71% from 63% year-over-year. He confirmed that as capital revenue picks up in the back half of the year, the parts mix will moderate, likely causing gross margins to decline from the 46% level to the 44% range. President & CEO Jeffrey Powell explained that bookings are more heavily weighted towards replacement capital, especially with a slowdown in Asia. He clarified that new equipment, particularly in engineered wood, often incorporates technology that can increase the aftermarket opportunity and that the harsh operating environments prevent any significant reduction in parts demand.

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Executive Michael McKenney provided the prior-year Q1 aftermarket revenue percentages: 74% for Flow Control, 69% for Industrial Processing, and 62% for Material Handling. President and CEO Jeffrey Powell added that project cancellations are rare and that Kadant's global footprint allows it to adapt to shifting trade patterns. Both executives confirmed that the Industrial Processing segment is experiencing the most significant impact from the current delays in capital projects.

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Michael McKenney, Executive, identified the Industrial Processing segment, led by wood and stock prep, as having the most favorable outlook, followed by a recovery in Material Handling in the second half. Jeffrey Powell, President and CEO, noted that the M&A pipeline is very active but pricing is driven more by private equity leverage and interest rates than economic sentiment. He added that Kadant remains disciplined on pricing.

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President & CEO Justin Jude expressed confidence in the new European leadership team to execute a three-year transformation plan. Senior VP & CFO Rick Galloway added that the $75 million in cost cuts should be implemented by year-end, with the full benefit realized in 2026. On ADAS, Jude confirmed the long-term outlook is unchanged, with the overall collision market still expected to grow despite ADAS headwinds on accident frequency.

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CFO Rick Galloway detailed the targets, stating the goal is to reduce SKUs from a starting point of 750 million down to approximately 600 million by the end of 2027. He noted that the company has reviewed over 60% of its product brands and aims to have reviewed 80% by the end of 2025 as part of the multi-year initiative.

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CFO Rick Galloway clarified that the net impact of a legal settlement and a cyber incident in North America was about 50 basis points on the full-year margin. He also confirmed the prior-year European impact was from items like severance. President and CEO Justin Jude discussed EV initiatives, including battery remanufacturing and selling collision parts from salvaged EVs. Jude also reiterated that headwinds like falling used car prices are moderating, with improvements expected in the back half of 2025.

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CEO Justin Jude stated that the complex SKU rationalization analysis is expected to be completed in early 2025, with tangible benefits beginning to materialize in the second half of 2025. Regarding divestitures, he emphasized that the company's portfolio review is a continuous, ongoing process across all geographies and that there could be more transactions, but he prefers to announce them upon completion rather than speculate.

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Nicholas Pinchuk, Chairman & CEO, stated the negative FX impact was 6 cents per share. He detailed that the new Triton platform is priced around $4,500-$5,000 and features wireless speed, a waveform zoom capability, long battery life, and increased memory. He also explained that C&I's international weakness was pronounced due to turbulence in Asia and slowness in Europe, while the U.S. was primarily impacted by project delays from trade uncertainty.

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CEO Nicholas Pinchuk stated the negative FX impact was 6 cents per share. He detailed that the new Triton platform, priced around $4,500-$5,000, offers wireless speed and a unique zoom feature. He clarified that C&I's weakness was more pronounced internationally due to turbulence in Asia and Europe, while the US was impacted by project delays from trade policy uncertainty.

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CEO Nicholas Pinchuk suggested that a pullback in elective repairs was plausible, noting that lower-credit customers are showing more reticence. He clarified that the negative sentiment was a continuous issue throughout the quarter, driven by broad uncertainty from the new administration's actions, not just an acceleration of tariff concerns in March. He described it as a pervasive worry that 'the world is going to come off the rails.'

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CEO Nicholas Pinchuk confirmed the pivot was a primary driver, highlighting that hand tools were the strongest category and represented a larger portion of the sales mix. He noted this was supported by new products and promotions. For the C&I segment, he explained that the growing demand for torque products is driven by increasing complexity and the need for precision and documentation in critical industries like aviation.

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Executive Scott Stewart identified two key storm periods that caused widespread school and business closures: January 20-21 and February 13-17. Executive Ravi Venkatesan added that the equipment sales slowdown was driven by economic uncertainty affecting micro markets and vending, but not Smart Stores, which were actually supply-constrained rather than demand-constrained. He noted that equipment purchasing has since rebounded in Q4 as market uncertainty has eased.

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CEO Ravi Venkatesan clarified that the micro-lending program is operated through a partner, Fundbox, and Cantaloupe does not underwrite or hold any loan paper. He explained the initiative is designed to alleviate capital constraints for SMB customers, enabling them to purchase more equipment. Venkatesan confirmed that growth is healthy across both transaction and subscription revenues, driven significantly by the expanded footprint of micro markets, the new Smart Store product, and placement in new, higher-value locations.

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CEO Ravi Venkatesan identified the prevention of retail theft ('shrink') as the main driver for Smart Store adoption, with deployments in fitness centers, corporate breakrooms, and hospitals. He confirmed Cantaloupe provides an end-to-end solution, working with partners for components. Both Venkatesan and CFO Scott Stewart stated the average ticket price is expected to continue rising, driven by a shift to higher-value food and non-food items, though they did not provide a specific breakdown of transaction types.

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Executive Ravi Venkatesan explained that SB Software's product is ready for continental Europe, and Cantaloupe's larger sales and distribution channels will now facilitate that expansion. He also confirmed that implementation cycle times have returned to the normal 6-week trend. Executive Scott Stewart clarified that Q4 gross margins were consistent with the prior three quarters and highlighted the significant year-over-year margin expansion for fiscal 2024, with total adjusted gross margin increasing from 33% in FY23 to 38% in FY24.

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Chairman and CEO Bill Angrick explained that severe weather in the Southeast disrupted the asset listing process for rolling stock. Regarding margins, Angrick cited a mix of factors including revenue sharing with third parties, setup costs for new retail programs, and tempered consumer demand. EVP and CFO Jorge Celaya added that the prior year's Q2 had unusual benefits from delayed GMV, and that the current shift to 'lower touch' programs reduces operating expenses, creating leverage not apparent in direct profit alone. He also noted some transportation costs were incurred for inventory that will be sold in a future quarter.

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Chairman and CEO Bill Angrick stated that vehicle flow in GovDeals is healthy but not the primary growth driver, with strong performance also coming from non-vehicle capital goods and real estate. He clarified that GMV growth is a "good mix" of both new client acquisition and deeper penetration of existing relationships. For Auction Software, Angrick explained it uses a hybrid model of SaaS subscription fees and a percentage of GMV, and it will be leveraged to provide white-label auction platforms to resellers in the retail segment and dealers on the Machinio marketplace.

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Chairman and CEO William Angrick explained that participant growth was broad-based, led by the Retail and GovDeals segments, and not specifically driven by the Sierra acquisition. He confirmed that prior years' investments are now being leveraged, with future spending focused on incremental AI-driven efficiencies. Angrick projected that the $2 billion GMV and $100 million EBITDA milestones are achievable 'in the next few years,' likely within a 2 to 4-year window, supported by organic growth, non-GMV services, and acquisitions.

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Executive Kyle Beilman clarified that ExtraCash usage is tied to pay cycles and that 97-98% of origination value goes to repeat customers, many of whom have transacted 20-30 times. Executive Jason Wilk added that while direct deposit penetration is still below 10%, Dave is winning significant essential spending. Beilman confirmed that the guidance includes disciplined investments in product development and data, along with a planned ramp-up in marketing spend.

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CFO Kyle Beilman deferred the service revenue breakdown to the upcoming 10-K filing. CEO Jason Wilk stated that while the Dave Card has grown naturally, the company plans more R&D investment this year into loyalty and incentives to drive further adoption. Wilk also clarified that starting in Q2, all new customers will be onboarded exclusively to Coastal, with a plan to migrate the existing user base over time.

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Executive Jason Wilk reiterated that the company does not disclose direct deposit metrics but focuses on total card spend, and confirmed that ExtraCash advances to the Dave Card remained steady at around 30% of originations. Regarding the FTC matter, Wilk stated that the legal process is uncertain, and while the FTC could decide not to invest resources in litigation, Dave is currently preparing to defend itself in court. Executive Kyle Beilman added that the company feels good about its facts in the case.

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CFO David Hession confirmed the current quarter's interest expense is a good run rate for modeling, attributing the decrease to significant debt paydown. CEO Kevin Olsen contrasted the current 30-40% China sourcing with the 70%+ figure from 2018-2019, noting the key lesson was supply chain diversification. Olsen declined to quantify new product contribution but stated the outperformance versus the market was largely driven by new product success.

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CFO David Hession identified the 'other income' as income from a joint venture. CEO Kevin Olsen explained that while the company does not release specific sales dollar metrics for new products, new product sales dollars increased year-over-year due to a focus on more complex, higher-priced parts. Regarding the Heavy Duty outlook, Olsen stated that Dorman is not planning for a significant growth inflection in 2025, instead focusing on new product development and productivity initiatives.

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CEO Jim Kessler declined to provide specific metrics on performance improvements, but highlighted that the company issues a quarterly KPI report to insurance partners and expressed confidence in exceeding committed SLAs. Regarding tariffs, Kessler stated that while the specifics are unclear, any short-term disruption could be a long-term tailwind for asset prices, and the company is well-positioned to help partners navigate the environment.

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