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CFO Carol Hibbard confirmed that the tariff impact, primarily from Europe, will begin in Q3 and represents a single-digit percentage of a typical system's cost. She added that they are in discussions with suppliers to find offsets. Hibbard also affirmed their focus on SG&A leverage, noting that as they scale and realize synergies from acquisitions, they can improve operational efficiency and profitability.

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CFO Carol Hibbard stated that breaking 20% systems gross margin in the first half is optimistic, particularly for Q2, citing the drag from ops gross margin and increased OpEx. CEO Rick Cohen addressed the AI question by emphasizing Symbotic's competitive moat, stating that with 1 billion annual transactions, the company's vast and unique dataset for training AI models keeps it far ahead of competitors, regardless of training cost reductions.

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CFO Carol Hibbard clarified that EPC costs are part of COGS, not OpEx, and the Q1 OpEx increase is driven by R&D and SG&A to support scaling. Regarding steel, she explained that most contracts have pass-through clauses, which protect gross profit dollars but could nominally impact the gross margin percentage.

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CFO Nathan Winters attributed the lower Q1 impact to successful front-loading of purchases ahead of tariff effective dates and inventory capitalization timing. He clarified the full-year impact is relatively balanced between segments, though slightly more weighted to the AIT segment due to fewer product exemptions compared to the EVM segment.

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President and CEO Neil Schrimsher reaffirmed the long-term mid-to-high teens incremental margin goal, citing the company's proven ability to manage through inflationary cycles. He stated that growth, through both organic investment and M&A, remains the primary capital allocation priority, but confirmed they will be active with buybacks. CFO David Wells added that with leverage at just 0.4x, the company has 'plenty of dry powder' for all capital deployment opportunities.

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President and CEO Neil Schrimsher explained that January sales improved from down double-digits early in the month to up low-single-digits in the final weeks. He stated that while Engineered Solutions could grow to 50% of the business, a balanced 50-50 mix would be a good outcome. He also noted encouraging order rates in automation and tech. Executive Ryan Cieslak added that both segments would likely trend similarly in Q3, with Engineered Solutions potentially outperforming in Q4.

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President and CEO Neil Schrimsher stated it was difficult to quantify the hurricane's impact but acknowledged some customer disruption. Executive Ryan Cieslak provided color on comps, noting November's is similar to October's while December's is easier. Schrimsher attributed the company's strong performance to its strategic focus and execution, highlighting the trend of customers consolidating spend with more capable suppliers and the growing contribution from cross-selling initiatives.

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President and CEO Thomas Amato confirmed that segment guidance is unchanged due to broad market uncertainty, particularly around tariffs. He stated that while the company incurred a one-time freight expense in Q1, similar costs are not expected, but relocating production could take over a year if needed. Regarding Aerospace, Amato attributed the conservative outlook to general uncertainty despite the strong start. He also noted no abnormal customer pre-buying activity and said the company would have more clarity on tariff impacts by the end of Q2.

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CFO Scott Mell provided specific margin enhancement targets for 2025: 100-150 basis points for Packaging, 150-200 bps for Aerospace, and 100-150 bps for Norris Cylinder. President and CEO Thomas Amato addressed tariffs, explaining that near-term mitigation involves commercial actions while long-term solutions could involve relocating manufacturing, a 12-18 month process. Regarding strategy, Mr. Amato stated the Board is assessing how to unlock maximum shareholder value from its high-quality business platforms. Mr. Mell added that the Board is actively working with Spencer Stuart on the CEO search.

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President and CEO Thomas Amato confirmed that with a new 3-year labor agreement at its single unionized aerospace facility, no further near-term labor disputes are expected. He noted that a backlog of orders should mitigate any immediate impact from the Boeing strike. The expected Q4 packaging margin improvement is attributed to eliminating operational inefficiencies from a rapid demand snap-back, not just volume absorption. Regarding portfolio strategy, Amato stated the board's review process is a normal course of business and has not changed. CFO Scott Mell added that the GMT acquisition is expected to be accretive to adjusted EPS, while Amato described the M&A pipeline as active for Packaging and more selective for Aerospace.

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CFO W. Humphrey confirmed it was fair to assume flow-through normalized in March as demand recovered. CEO Lawrence Silber expressed confidence in local market stability due to business diversification and the expansion of specialty offerings, and he stated that he did not believe local revenue was down year-over-year in Q1.

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CFO W. Humphrey stated the goal is to maintain dollar utilization by managing fleet mix, but acknowledged the challenge from slower local markets. CEO Lawrence Silber asserted that the industry is not overfleeted, citing discipline in disposals and rates from peers and OEMs, and attributed local market softness to a slowdown in new project starts, not excess supply.

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CFO W. Humphrey attributed the expected Q4 margin strength to cost actions taken in Q2, strong demand components, and a more favorable year-over-year comparison, noting the hurricane impact was still uncertain. CEO Lawrence Silber stated it was too early to guide 2025 fleet growth but confirmed that, at a minimum, the company would cover replacement CapEx, prioritizing mega projects and acquisition needs.

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CEO Erik Gershwind responded that the company has seen no evidence of outsized pre-buying activity to date. Regarding end markets, he noted that while heavy manufacturing was soft in Q2, it saw progressive improvement through the quarter and into March. He specified that automotive and heavy truck remain very soft, while the aerospace outlook is robust, though overall uncertainty has increased.

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CFO Kristen Actis-Grande detailed the expected productivity savings and provided a framework for modeling second-half OpEx. CEO Erik Gershwind described the end-market environment as generally soft, except for aerospace, and noted that lower sales per vending machine and implant program reflect customers tightening spending, despite some growing optimism for calendar 2025.

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EVP and CFO David Schulz confirmed the EPS guidance assumes only a half-year of preferred dividend payments, as the company plans to redeem the stock in June. He explained the Q1 low-to-mid-single-digit organic growth guidance balances the strong January start against tougher comps in February and March and continued softness in the UBS segment during the first half of the year.

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CFO David Schulz stated that while CSS margins should improve sequentially, EES and UBS margins will face pressure from lower sales volumes, leading to an overall company adjusted EBITDA margin that is flat to slightly down in Q4 vs Q3. On capital allocation, he confirmed that value-accretive M&A is the top priority. The company will balance using cash for tuck-in acquisitions against warehousing cash for the upcoming preferred debt takeout, with the ability to leverage the balance sheet if needed.

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CFO Dee Merriwether quantified the Q4 sales impact as a ~50 basis point headwind from holiday timing, partially offset by a hurricane benefit. CEO D.G. Macpherson confirmed that January activity, outside of early weather disruptions, had returned to normal levels. Regarding SG&A, management declined to provide specific dollar amounts but noted incremental investments would focus on marketing and seller expansion.

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CFO Holden Lewis explained that revenue growth north of mid-single digits is still the level required to begin leveraging the P&L. CEO Dan Florness noted that while customer business has been weak, he sees a higher probability of stabilization in 2025. Holden Lewis specified that Ag, consumer durables, and pulp/paper remain weak, with some effects from the Boeing strike impacting aerospace.

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CEO Rob Saltiel estimated the destocking process is in the 'sixth or seventh inning,' with most of it complete but some lingering into 2025. He clarified that the Gas Utilities margin profile—slightly dilutive on gross margin but accretive on net margin—is not expected to change. Regarding capital allocation, Saltiel highlighted the company's unprecedented balance sheet strength and flexibility, stating that the board is actively considering options to benefit shareholders but did not disclose specific plans.

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