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    John Franzreb • Sidoti & Company, LLC

    John Franzreb's questions to Metallus Inc (MTUS) leadership

    John Franzreb's questions to Metallus Inc (MTUS) leadership • Q2 2025

    Question

    John Franzreb of Sidoti & Company inquired about the magnitude of market share gains from the current tariff environment, the timeline for resolving aerospace and defense supply chain issues, and the factors hindering the melt utilization rate from reaching its target.

    Answer

    CEO Mike Williams explained that recent share gains were primarily from domestic competitors, though tariff-related inquiries are increasing as customers await final agreements. He noted positive news on the aerospace and defense supply chain, expecting more orders in Q4. Williams attributed the lower melt utilization to electrical supply interruptions and equipment reliability issues, and detailed a new initiative with a third party to optimize shop floor execution, targeting $10 million in annual savings.

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    John Franzreb's questions to Powell Industries Inc (POWL) leadership

    John Franzreb's questions to Powell Industries Inc (POWL) leadership • Q3 2025

    Question

    John Franzreb of Sidoti & Company inquired about the strength of the project pipeline following recent large bookings, the extent of revenue visibility, the specific contribution of project closeouts to gross margin improvement, and the drivers behind the quarterly increase in SG&A expenses.

    Answer

    CEO Brett Cope confirmed a robust project pipeline, particularly in the gas, utility, and commercial markets. CFO Mike Metcalf added that the backlog provides revenue visibility into late fiscal 2027, with about 65% converting in the next year. Metcalf clarified that on a year-to-date basis, project closeouts and unusual items contributed approximately 150 basis points to gross margin. He also attributed the higher SG&A to increased variable compensation and expenses related to the REMSAK acquisition.

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    John Franzreb's questions to Powell Industries Inc (POWL) leadership • Q2 2025

    Question

    John Franzreb inquired about gross margins, asking why pricing wasn't more aggressive and what a normal project closeout contribution would be. He also asked about the revenue impact of capacity expansion, plans for the large cash balance, a potential stock split, and the current run-rate of the data center business.

    Answer

    CEO Brett Cope explained that market conditions have stabilized but don't yet support more aggressive pricing. CFO Michael Metcalf projected a normalized gross margin rate of 26-27% excluding recent elevated project closeouts. Cope projected the expansion would add $20-$40 million in revenue next year and stated that cash is being prioritized for organic growth and M&A over buybacks or a stock split. Metcalf clarified data center revenue is still in the single-digits of total company revenue.

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    John Franzreb's questions to Powell Industries Inc (POWL) leadership • Q1 2025

    Question

    John Franzreb asked for an update on capacity expansion initiatives and whether there were plans to increase overall production capacity. He also questioned the current pricing environment and the strategy for deploying the company's substantial cash balance, probing for details on M&A.

    Answer

    Executive Brett Cope detailed that capacity expansions are on track, with the Houston product factory set for completion by mid-fiscal 2025 and newly acquired acreage providing further options. He noted pricing on large capital projects is holding steady, with value-add focus shifting to services and automation. Regarding the cash balance, Cope confirmed an active M&A focus on the product and automation spaces, targeting acquisitions in the $50-$75 million range. CFO Michael Metcalf added that a portion of the cash, around $175 million, is earmarked for working capital to execute the existing backlog.

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    John Franzreb's questions to Powell Industries Inc (POWL) leadership • Q4 2024

    Question

    John Franzreb of Sidoti & Company inquired about the key drivers of Q4 gross margins, the nature of recent project cancellations, and whether new orders are being booked at higher profit margins. He also asked for quantification of the revenue potential from capacity expansions, the contribution from data centers in Q4, the changing composition of the backlog, and the company's plans for its growing cash balance, including potential M&A.

    Answer

    CFO Michael Metcalf explained that Q4 gross margins were lifted by 150-200 basis points from project closeouts and 60 basis points from three non-systemic project cancellations. CEO Brett Cope stated that pricing on new jobs has not significantly changed and detailed the capacity expansions, noting the Hansen facility could add $20-$40 million in revenue over two years. Cope also confirmed data center sales were in the low double-digits (around 10%) for the quarter and highlighted that the utility sector is causing the most significant change in the backlog's composition. Regarding cash, Cope affirmed that the company is very active in evaluating M&A opportunities, with a clearer strategic focus emerging for the midterm.

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    John Franzreb's questions to CTS Corp (CTS) leadership

    John Franzreb's questions to CTS Corp (CTS) leadership • Q2 2025

    Question

    John Franzreb of Sidoti & Company inquired about the differing trends in CTS's medical market, specifically the 60% growth in therapeutics versus softness in diagnostics. He also asked about the financial impact of tariffs, the outlook for the transportation market, the integration progress of the SciQuest acquisition, other cost-saving initiatives, and the current M&A landscape.

    Answer

    CEO Kieran O’Sullivan explained that strong therapeutic sales were driven by a large order, while diagnostic softness stemmed from capital spending in Asia and potential tariff effects, though he expects overall medical growth for the year. CFO Ashish Agrawal noted that the tariff impact was minimal in Q2. Regarding transportation, Mr. O'Sullivan described a mixed regional outlook with potential bottoming in China but ongoing caution due to tariffs. He confirmed the SciQuest integration is proceeding well, with a focus on growth rather than cost savings. For M&A, Mr. O'Sullivan stated CTS is actively exploring opportunities in diversified markets and aims to complete a deal within 12 months to support its inorganic growth targets.

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    John Franzreb's questions to CTS Corp (CTS) leadership • Q1 2025

    Question

    John Franzreb of Sidoti & Company, LLC inquired about the drivers behind strong Q1 bookings, particularly whether pre-buying ahead of tariffs was a factor. He also asked about any changes to transportation market assumptions, the expected cadence of profitability for the remainder of 2025 to meet guidance, the reasons for the Q1 SG&A increase, and the outlook for seasonality, CapEx, and the tax rate.

    Answer

    CEO Kieran O'Sullivan clarified that strong Q1 bookings were driven by medical therapeutics and defense, not pre-buying, and that the company hasn't factored a demand drop from tariffs into its guidance. He explained that profitability is expected to ramp through the year, aided by the SyQwest acquisition's seasonality and favorable product mix. CFO Ashish Agrawal attributed the SG&A increase primarily to the SyQwest acquisition, including amortization, and confirmed the company is managing discretionary spending. Agrawal also noted that normal seasonality will be affected by SyQwest's second-half strength, and confirmed the CapEx budget is around 4% of sales and the tax rate guidance is 19-21%.

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    John Franzreb's questions to CTS Corp (CTS) leadership • Q4 2024

    Question

    John Franzreb of Alliance Global Partners inquired about the potential impact of tariffs on CTS's operations, the expected revenue contribution from the SyQwest acquisition in the 2025 guidance, and the company's outlook for the Class 8 truck market.

    Answer

    CEO Kieran O'Sullivan stated that CTS is proactively mitigating potential tariff impacts by working with customers and suppliers, leveraging its global footprint and past experience. For the 2025 guidance, he noted that SyQwest is expected to show solid growth, contributing to an overall forecast of 1% to 7% company growth, with transportation declining slightly and diversified markets growing in the high single digits. O'Sullivan also indicated that the commercial vehicle market is expected to experience softness throughout 2025.

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    John Franzreb's questions to CTS Corp (CTS) leadership • Q3 2024

    Question

    John Franzreb of Sidoti & Co. asked about the drivers for the strong Q3 gross margin, the sequential decline in R&D spending, the financial contribution of the SyQwest acquisition, the market outlook for 2025, and the company's strategy for future M&A and debt repayment.

    Answer

    CEO Kieran O'Sullivan and executive Ashish Agrawal explained that the gross margin improvement was driven by a strategic shift in sales mix towards diversified markets, favorable foreign exchange rates, and factory efficiencies. Ashish Agrawal clarified that the R&D drop was due to the timing of customer reimbursements. Regarding SyQwest, it contributed $3.6 million in Q3 sales and is accretive at the EBITDA level but slightly dilutive to EPS in the short term. Kieran O'Sullivan noted that while a detailed 2025 outlook will come later, they see positive trends in industrial and defense but near-term softness in medical and transportation. He also confirmed the company remains active in its M&A pipeline to support diversification, with Ashish Agrawal adding that M&A and buybacks are higher priorities than aggressive debt repayment.

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    John Franzreb's questions to Carriage Services Inc (CSV) leadership

    John Franzreb's questions to Carriage Services Inc (CSV) leadership • Q1 2025

    Question

    John Franzreb asked for management's opinion on the impact of 'vaccine fatigue' on business, requested details on current cost-saving measures and their completion timeline, and inquired about Carriage's historical performance during recessions and the strategic levers it might use in a future downturn.

    Answer

    CEO Carlos Quezada stated that he does not see 'vaccine fatigue' as a factor, attributing strong performance to the successful execution of their strategic plan, pricing structure, and operating model. CFO John Enwright detailed ongoing supply chain initiatives targeting insurance assignments, urns, caskets, and fleet management, with savings expected to be realized progressively through the year. Quezada added that the industry is historically resilient during recessions and that while preneed sales might require more effort, the company can accelerate lead generation to meet its growth targets.

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    John Franzreb's questions to Carriage Services Inc (CSV) leadership • Q3 2024

    Question

    John Franzreb of Sidoti & Company asked about the sustainability of the elevated preneed cemetery sales, questioning if the recent performance is an anomaly or a new sustainable run rate. He also inquired about the muted Q4 outlook compared to historical seasonality, whether COVID-related volume impacts have been fully anniversaried, and sought clarification on the 13-14% overhead cost guidance.

    Answer

    CEO Carlos Quezada stated that the preneed cemetery growth is sustainable, driven by a more mature strategy, better lead generation, and strong leadership, projecting low double-digit growth for the next 4-5 years. He expects normal seasonality to return in 2025, with Q3 2024 being an exception due to large sales. He also explained that volume adjustments are ongoing as the company balances pricing and market share. CAO Kathryn Shanley clarified the 13-14% overhead target is on an adjusted basis, excluding items like Project Trinity costs, and is the normalized expectation for 2025.

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    John Franzreb's questions to Carriage Services Inc (CSV) leadership • Q2 2024

    Question

    John Franzreb of Sidoti & Company sought clarification on the cremation strategy, asking about the mix between service acceptance and price increases. He also inquired about the expected financial impact of the supply chain review and the outlook for death rates in the second half.

    Answer

    CEO Carlos Quezada explained that while data on cremation service upgrades is still new, the trend is very positive. Regarding the supply chain, he detailed a phased approach, expecting $450,000 to $700,000 in savings by year-end 2024 and around $2 million in 2025 from Phase 1 alone. He acknowledged the unexpected drop in death rates in September of the past two years but does not anticipate a repeat in 2024 based on positive July trends.

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    John Franzreb's questions to Hillenbrand Inc (HI) leadership

    John Franzreb's questions to Hillenbrand Inc (HI) leadership • Q2 2025

    Question

    John Franzreb asked for details on the four levers intended to offset tariffs, questioning which would have the most immediate impact and how targeted the planned surcharges would be. He also sought clarity on whether the $15 million tariff impact estimate already includes mitigation efforts and requested a walkthrough of the TerraSource divestiture's timing and cash proceeds.

    Answer

    CFO Bob VanHimbergen identified dual sourcing as the strategy with the most immediate near-term impact. He noted that surcharge pricing will be targeted, with greater effectiveness in the APS segment compared to the more price-sensitive MTS segment. He confirmed the $15 million tariff cost in the outlook is a high-end estimate that includes some initial mitigation, but expects further offsets over time. He then detailed the TerraSource deal, explaining that Hillenbrand expects to receive approximately $100 million in net proceeds, which will be used for debt paydown upon closing in late Q3 or early Q4.

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    John Franzreb's questions to Hillenbrand Inc (HI) leadership • Q4 2024

    Question

    John Franzreb inquired about geographic demand shifts, focusing on India and China, and asked for an update on test lab activity as a leading indicator for future business.

    Answer

    CEO Kim Ryan described India as a continued growth opportunity with strong performance, while China's demand has stabilized at lower levels after a significant downturn. She emphasized the company's 'local for local' strategy. Ryan confirmed that test lab activity remains a robust and positive leading indicator, with labs for key end markets like recycling, food, and polyols remaining full, signaling serious customer investment and future capital projects.

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    John Franzreb's questions to AZZ Inc (AZZ) leadership

    John Franzreb's questions to AZZ Inc (AZZ) leadership • Q4 2025

    Question

    John Franzreb from Sidoti & Company asked about the current momentum of the order book given the macroeconomic environment and questioned how to think about zinc supply in the current tariff environment.

    Answer

    Executive Tom Ferguson described field reports as optimistic, with projects moving forward and customers confirming capacity for Q1 and Q2. Executive Jason Crawford noted that sentiment at recent industry forums has been upbeat. Regarding zinc, Executive David Nark clarified that zinc is on the tariff-exempt list, the vast majority of AZZ's supply is from North America, and suppliers have expressed no concerns about availability.

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    John Franzreb's questions to AZZ Inc (AZZ) leadership • Q3 2025

    Question

    John Franzreb asked about the sustainability of the Metal Coatings segment's high margins, the seasonality and outlook for the AVAIL JV income, and the progress on securing customers for the new Washington, Missouri plant beyond the anchor tenant.

    Answer

    CEO Thomas Ferguson stated that the Metal Coatings segment's strong margin performance is sustainable due to fundamental operational discipline and zinc productivity, and the company is considering resetting its target margin range upwards. He confirmed the AVAIL JV has seasonality but possesses a very strong backlog on its electrical side. Regarding the new plant, Ferguson noted that filling the remaining capacity looks 'really good,' with opportunities to optimize production between the new facility and the existing St. Louis plant.

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    John Franzreb's questions to AZZ Inc (AZZ) leadership • Q2 2025

    Question

    John Franzreb from Sidoti & Company asked about AZZ's capacity to handle hurricane reconstruction work in the Southeast, the timing of such a ramp-up, the impact of zinc price volatility on the current pricing environment, and the reason for the sequential dip in JV income.

    Answer

    Executive Thomas Ferguson confirmed that AZZ's facilities in Virginia, South Carolina, Alabama, Tennessee, and Mississippi are well-positioned to support rebuilding efforts, with a typical 3-to-6-month lag before reconstruction demand ramps up. Regarding zinc, he explained that while volatility exists, AZZ's pricing is largely disconnected from the underlying commodity cost, though rising zinc prices can make it easier to increase overall service prices. He clarified that the lower JV income was a timing issue and expressed confidence it would rebound, maintaining the full-year guidance.

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    John Franzreb's questions to ESCO Technologies Inc (ESE) leadership

    John Franzreb's questions to ESCO Technologies Inc (ESE) leadership • Q4 2024

    Question

    John Franzreb of Sidoti & Company inquired about the Test business's growth assumptions for China, the potential impact of a U.S. administration change on the utility and renewables business, and the specific financial line items affected by the debt refinancing and restructuring adjustments.

    Answer

    CEO Bryan Sayler explained that the guidance does not assume a significant recovery in China for the Test business. Regarding policy changes, he noted that underlying electricity demand remains strong, and while renewable incentives could face threats, the need to optimize existing assets benefits the Utility Solutions Group. CFO Christopher Tucker clarified that the debt refinancing costs hit the interest expense line, while restructuring charges were recorded at the EBIT line.

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