Liam Burke

Liam Burke from B. Riley asked about the risk of Tutor Perini being resource-constrained given its pursuit of larger, more complex projects, and how this might affect the bidding process. He also inquired about the Specialty Contractors segment's potential for mid-single-digit margins, questioning if the strategy for this historically marginally profitable business differs from the Building and Civil segments.

Answer

Gary Smalley, CEO and President, stated that Tutor Perini does not foresee resource constraints, noting strong union labor supply and aggressive, continuous recruitment for management staff. He explained that the Specialty Contractors segment's improved profitability stems from eliminating unfavorable contracts, securing higher-margin work with better terms, and resolving disputes, with recent quarterly performance indicating a clear trend towards the targeted mid-single-digit margin range.

Liam Burke from B. Riley asked about potential resource constraints for bidding on larger, more complex projects and how this might affect the bidding process, as well as the drivers behind the expected mid-single-digit margins for the Specialty Contractors segment.

Answer

Gary Smalley, CEO and President, and Ryan Soroka, EVP and CFO, stated that they do not foresee resource constraints for day-to-day craft workers due to union agreements. They are actively recruiting project management staff and are well-equipped for future growth. Smalley explained that the improved Specialty Contractors segment margins are due to weeding out poor contracts, better contractual terms, and resolving disputes, with recent quarters showing a positive trend towards the 5%-8% range.

Liam Burke from B. Riley Financial, Inc. asked about the competitive bidding environment for large projects and whether the company is seeing increased opportunities from Department of Transportation investments in transit.

Answer

Executive Chairman Ronald Tutor confirmed that the competitive landscape for mega-projects remains favorable, stating that for the last two years they have consistently faced only one other bidder, and on two occasions, they were the sole bidder. He also affirmed that the company is a primary beneficiary of increased federal funding for transit, which is one of its biggest strengths, and hopes the trend continues.

Liam Burke from B. Riley Securities inquired whether a less stringent regulatory environment is accelerating project planning and if there has been any shift in funding sentiment for mass transit projects.

Answer

Executive Chairman Ron Tutor stated they have not yet seen any speed-up in the planning or engineering process due to deregulation, noting their primary challenge is managing their existing large backlog. CEO Gary Smalley added that while regulation hasn't sped things up, the discussion of tariffs has accelerated timelines on some smaller projects. Smalley also confirmed there have been no negative changes in funding sentiment for transit projects.

Liam Burke asked about the Performance Chemicals (PC) business, specifically if the headway made on the commercial side is significantly contributing to the anticipated revenue growth. He also inquired about opportunities for further tuck-in acquisitions in the fragmented utility pole business, and whether pricing in that sector has become prohibitive due to increased demand for infrastructure build.

Answer

CEO Leroy Ball affirmed that the commercial wins in PC during the latter half of 2025 are indeed contributing to 2026 projections and improving plant throughput, which is crucial for profitability. Regarding the utility pole business, Ball stated that Koppers is always open to disciplined acquisition opportunities, but currently has sufficient capacity to fill and is focusing on organic growth through enhanced sales skills, technology, new sales leadership, and increased sales force presence in underrepresented areas. He did not directly address whether pricing for acquisitions has become prohibitive but emphasized internal growth strategies.

Liam Burke asked if the commercial headway made in the Performance Chemicals (PC) business is significantly contributing to anticipated revenue growth. He also inquired about opportunities for tuck-in acquisitions in the fragmented utility pole business and whether increased demand has led to inflated pricing for such acquisitions.

Answer

CEO Leroy Ball confirmed that commercial wins in the PC business from late 2025 are expected to significantly contribute to revenue growth and plant throughput, emphasizing the team's refocused customer service efforts. Regarding the utility pole business, Mr. Ball stated they remain open to disciplined tuck-in acquisitions but are also focused on filling existing capacity through enhanced sales skills, technology, and expanded sales leadership in underrepresented areas.

Liam Burke of B. Riley Financial inquired about the status of contracts with Class I railroad customers in the Railroad Products and Services (RUPS) segment and the potential for follow-through on the industrial side of the Performance Chemicals (PC) business.

Answer

CEO Leroy Ball explained that RUPS contracts are long-term and the company has maximized its ability to recover costs, now focusing on internal cost reduction. He noted that while RUPS is having a strong year, customer volume forecasts have been revised down, potentially pushing demand into 2026. Regarding the PC segment, Ball acknowledged positive signs in the industrial business but stressed that the residential side is the primary driver of performance, and a meaningful recovery there is needed for significant improvement, which is now anticipated in 2026.

Liam Burke from B. Riley Securities inquired about the drivers of the RUPS segment's double-digit EBITDA margins, specifically the future impact of the utility pole product mix, and the status of contracts with Class 1 railroads.

Answer

CEO Leroy Ball explained that the utility pole business structurally carries higher margins, so its growth will be a positive driver for the segment. He added that the rail business is also improving its profitability through cost and commercial efforts. Regarding railroad contracts, Ball stated that while progress has been made, there is still more work to be done.

Liam Burke asked about the competitive strategy driving market share loss in the Performance Chemicals (PC) segment and the rationale for no immediate expansion investments in the Utility and Industrial Products (UIP) business.

Answer

CEO Leroy M. Ball explained that the PC market share loss was not due to a new competitive formula but rather a competitor's aggressive capacity investment and customers' desire to diversify their supply chains. Regarding UIP, he stated that significant prior investments already provide growth opportunities, and the company is focused on realizing returns from those before committing to major new projects.

Liam Burke asked if the return dynamics on NPK International's growth CapEx for mats would change, or if the company expects a similar incremental Return on Invested Capital (ROIC) as seen in the past year for the rental fleet.

Answer

President and CEO Matthew Lanigan confirmed expectations for similar ROIC as the previous year. Senior Vice President and CFO Gregg Piontek noted that the 2026 CapEx profile for the rental fleet resembles that of 2025.

Liam Burke asked if there are any changes to the return dynamics on NPK International's mats, given that CapEx is predominantly growth-oriented, and if the company expects a similar incremental Return on Invested Capital (ROIC) on the rental fleet as seen in 2025. He also questioned if the company's view on share buybacks has changed, considering the balance between returns and investments in the rental fleet.

Answer

President and CEO Matthew Lanigan and CFO Gregg Piontek confirmed that the company expects similar ROIC and CapEx profiles in 2026 as in 2025. Mr. Piontek clarified that there is no change in the buyback philosophy, which prioritizes capital needs for growth, manufacturing expansion, and strategic acquisitions, with any excess cash then allocated to programmatic and opportunistic share repurchases.

Liam Burke asked about the macro drivers behind the strong MR partial fixture TCE rates for Q1 2026, despite average refinery margins, and inquired about International Seaways' comfort with current spot rates versus time charters.

Answer

President and CEO Lois Zabrocky and Chief Commercial Officer Derek Solon attributed strong MR rates to geopolitical shifts, such as the EU's reduced import of Russian-origin refined products from India and Turkey, increasing demand for Atlantic Basin exports to Europe, and weather-related port delays. Ms. Zabrocky affirmed comfort with the robust spot market, indicating a judicious approach to time charters.

Liam Burke asked about the drivers behind the strong MR partial fixture TCE rates for Q1 2026, questioning if macro factors beyond refinery margins were at play, and also inquired about the company's strategy regarding spot versus time charters given the current market strength.

Answer

Lois Zabrocky, President and CEO, and Derek Solon, Chief Commercial Officer, explained that geopolitical factors, such as the EU's ban on refined Russian product from India and Turkey, are redirecting trade flows to the Atlantic Basin, benefiting MRs. Derek Solon also noted that challenging winter weather causing port delays exacerbated supply issues. Lois Zabrocky affirmed comfort with healthy spot rates for the foreseeable future but indicated a judicious approach to layering in time charters.

Liam Burke questioned whether increased non-OPEC+ production benefits Suezmax vessels in addition to VLCCs and asked if the company sees further opportunities for shareholder-friendly fleet renewal.

Answer

CEO Lois Zabrocky confirmed that Suezmax rates have a strong correlation to VLCCs and have stepped up accordingly. She added that lower oil prices are driving more Russian barrels onto legitimate tonnage, creating more business. Regarding fleet renewal, she affirmed that the company is always actively looking for new opportunities.

Liam Burke asked for the company's outlook on the Suezmax segment amid current geopolitical and production shifts. He also questioned whether opportunistic share buybacks remain a part of the capital return strategy alongside the primary dividend policy.

Answer

CEO Lois Zabrocky explained that Suezmax rates have a tight historical correlation to VLCCs and are expected to strengthen as the VLCC market improves. CFO Jeffrey Pribor confirmed that while the dividend is the primary method of capital return, share repurchases are still 'in the mix,' noting the company has remaining capacity under its existing buyback program.

Liam Burke of B. Riley Securities asked how a production shift from OPEC+ to non-OPEC nations would affect ton-mile demand and different vessel classes. He also inquired about the company's pipeline for asset acquisitions given its strong financial flexibility.

Answer

CEO Lois Zabrocky explained that growing non-OPEC supply from the Americas is additive to ton-miles, while a return of OPEC barrels would specifically assist VLCCs. On acquisitions, she stressed that the company is in a position to 'look for opportunity' rather than feeling forced to act, as it is already deploying free cash flow to shareholder returns and organic fleet renewal.

Liam Burke asked if shipyard capacity is a factor in negotiations for future FLNG projects and its impact. He also inquired about potential competition in the FLNG-as-a-service market, particularly from major energy companies.

Answer

CEO Karl Fredrik Staubo confirmed that shipyard availability is critical. He noted that Mark I and II conversions maintain competitive 36-40 month timelines, but Mark III (larger units) faces significantly longer lead times, making yard availability a negative for bigger projects. Mr. Staubo stated that Golar remains unique in FLNG vessel conversions, which offer cost and delivery advantages over new builds, despite engineering complexities. While majors are increasingly adopting FLNG technology, Golar's service provider model offers significant benefits over replication through new builds.

Liam Burke from B. Riley Securities asked if shipyard capacity and delivery timelines are significant factors in negotiations for future FLNG projects, given the high interest. He also inquired about potential competition for Golar LNG's FLNG-as-a-service model from other providers, particularly major energy companies.

Answer

CEO Karl Fredrik Staubo confirmed that shipyard capacity is a critical negotiation factor, noting competitive conversion periods for Mark I and II, but significantly extended delivery times for Mark III newbuilds. He asserted that Golar LNG remains the sole provider of FLNG vessel conversions, which offer cost and efficiency advantages over newbuilds, despite increasing adoption of FLNG technology by major energy companies.

Liam Burke inquired if Golar envisions developing FLNGs with even greater capacity than the Mark III and asked how the expected returns on invested capital for these larger units compare to those of the original FLNGs.

Answer

CEO Karl Fredrik Staubo stated that Golar does not expect to pursue units larger than the Mark III, as it would limit the number of viable fields due to reserve size and potential pressure loss issues from rapid depletion. Regarding returns, he explained that Golar targets contracts with a CapEx to EBITDA ratio of around five times for 20-year charters, including commodity exposure and inflation adjustments, which they consider to be good business.

Liam Burke of B. Riley Financial inquired about the backlog of credible inquiries for the second Mark II FLNG, slated for 2028. He also asked if these inquiries are for projects requiring greater capacity than the Mark II's 3.5 MTPA.

Answer

CEO Karl Staubo responded that there are plenty of stranded gas reserves globally and that several ongoing discussions, including in Argentina, are for more than one unit. He confirmed that many gas fields, such as Vaca Muerta and others, can support annual production of 10 MTPA or more, well beyond the capacity of a single FLNG. He noted that expansion of existing projects represents a significant opportunity, with operational synergies making multiple FLNGs in one location highly competitive.

Liam Burke inquired about the M&A pipeline for 2026, specifically whether there are sufficient opportunities to either add to the base business or make a significant difference as the company continues to gain critical mass.

Answer

Duke Austin, President and CEO, stated that every acquisition makes a difference and that opportunities are visible as far out as they can see. He emphasized a selective M&A strategy focused on cultural fit and platform solutions that provide solutions to clients. He also highlighted organic investment in vertical supply chains driven by demand, expecting a similar, potentially lumpy, cadence for M&A.

Liam Burke asked about the M&A pipeline for 2026, specifically whether there are sufficient opportunities to either add to the base business or make a significant difference as Quanta continues to gain critical mass.

Answer

Duke Austin, President and CEO, stated that Quanta sees M&A opportunities as far out as they can see, focusing on good businesses. He emphasized their selective approach, seeking platforms that provide solutions to clients. He noted that Quanta also invests organically, such as in their vertical supply chain, to meet demand. He expects a similar cadence of M&A, which may be lumpy, as they continue to be selective and follow strategic paths.

Liam Burke from B. Riley Financial inquired if the investment in Bell Lumber and Pole Company is intended as a platform for growth or primarily to serve Quanta's regional needs.

Answer

President & CEO Duke Austin clarified that the 40% ownership stake is a strategic investment in a critical supply chain solution. He positioned it alongside transformers and wire as essential for providing certainty to clients. The investment enhances Quanta's ability to offer a comprehensive, long-term solution and strengthens its supply chain initiatives, which is a key part of its collaborative discussions with customers.

Liam Burke inquired if Okeanis Eco Tankers' capital allocation strategy would change given the strong cash generation and balance, and if the company would consider moving more vessels to term charters to take money off the table.

Answer

CFO Iraklis Sbarounis affirmed that the capital allocation strategy remains unchanged, prioritizing maximum value distribution to shareholders. CEO Aristidis Alafouzos reiterated that the company currently has no interest in fixing further ships on time charters, preferring to maintain spot market exposure for potential upside.

Liam Burke inquired about Okeanis Eco Tankers' future plans for trading vessels clean versus crude, specifically whether the company intends to continue trading clean or revert to crude given the strong crude market.

Answer

Aristidis Alafouzos (CEO) explained that OET has historically found it challenging to secure consecutive clean voyages for crude carriers. Following the discharge of the current gas oil cargo, the plan is to return the vessel to crude trade, targeting high-paying, long-haul eastbound voyages from regions like the U.S. Gulf, Guyana, or Brazil. He also asked about opportunities within the capital structure beyond the recent sale-and-leaseback buyouts. Iraklis Sbarounis (CFO) highlighted that the buyouts significantly improved pricing, extended maturities, and enhanced amortization profiles, adding substantial value. He noted OET's competitive advantage in the financing market and stated that with the remaining two leases to be bought out in May and June, no imminent capital structure work is needed, given the expected average cost of capital post-June.

Liam Burke from B. Riley Securities questioned whether the lifting of sanctions on Russia could paradoxically benefit modern tanker owners by shifting trade from the shadow fleet to conventional vessels. He also asked for an explanation for the quarter-over-quarter increase in vessel operating costs.

Answer

CEO Aristidis Alafouzos argued that even if some sanctions were lifted, the uncoordinated nature of US, UK, and EU sanctions would make it very complicated for shadow fleet vessels to re-enter the compliant market, suggesting a continued benefit for compliant tonnage. CFO Iraklis Sbarounis explained that the rise in operating costs was primarily due to the strengthening of the Euro against the US Dollar, which impacts euro-denominated crew costs, as well as normal seasonality.

Liam Burke of B. Riley Securities inquired about the primary drivers for Suezmax capacity tightness and the factors sustaining rate momentum into Q2 2025.

Answer

Aristidis Alafouzos (executive) detailed that Suezmax supply is tightening due to sanctions on the aging Russian fleet and a shift to longer-haul voyages. He also explained that stronger rates fixed in late Q1 will positively impact Q2 earnings due to voyage timing and IFRS accounting principles, mitigating typical seasonal weakness.

Liam Burke asked about the strategy of converting VLCCs from dirty to clean trade, inquiring if the company would repeat this during future slow seasons, whether vessel age is a limiting factor, and what other macro pressures are affecting VLCC rates beyond China trade and OPEC+ cuts.

Answer

Aristidis Alafouzos, an executive, confirmed that Okeanis would consider converting vessels again if the clean market is strong and the VLCC market is weak. He noted that while newer vessels are easier to clean, they successfully converted a 13-year-old ship. Alafouzos also identified reduced long-haul business from the Atlantic and Russia's over-compliance with production cuts as additional factors pressuring VLCC rates.

Liam Burke inquired if there have been changes in trading patterns that would favor Newcastlemaxes over Capesize vessels for Genco. He also asked about Genco's interest in adding to its Supramax fleet versus solely selling older vessels as part of fleet renewal.

Answer

John C. Wobensmith, Chairman and CEO of Genco Shipping & Trading Limited, clarified that trading patterns haven't drastically changed, noting Newcastlemaxes are consistently utilized on Brazilian and West African bauxite trades. He expressed satisfaction with Genco's Newcastlemax and Capesize fleet, highlighting the premium-earning nature of recently acquired Newcastlemaxes. Mr. Wobensmith indicated that growth would primarily focus on Capes and Newcastlemaxes, with Supramax fleet renewal involving selling older vessels rather than adding new ones, due to the larger ships' higher upside potential and favorable supply-side dynamics.

Liam Burke asked if Genco's trading patterns have shifted to favor Newcastlemaxes over Capesize vessels, given previous discussions on Capes' flexibility. He also followed up on Genco's interest in expanding its Ultramax/Supramax fleet or if the focus remains on selling older vessels in that segment.

Answer

John C. Wobensmith, Chairman and CEO of Genco Shipping & Trading Limited, clarified that Newcastlemaxes are consistently utilized on Brazilian and West African bauxite trades. He expressed satisfaction with the acquired Newcastlemaxes due to their premium earning potential and low fuel consumption. Genco plans to continue growth in the Capesize and Newcastlemax sectors, while maintaining the Ultra/Supramax fleet, potentially renewing older Supramax vessels. Mr. Wobensmith confirmed that any activity in the smaller segments would primarily involve selling older vessels, with capital redeployed into larger ships, which offer higher upside potential due to favorable supply-side dynamics.

Liam Burke of B. Riley Securities asked about the key drivers for the recent rate increase in non-Capesize vessels and questioned the availability of attractively priced Capesize acquisition opportunities amid firming asset values.

Answer

President, CEO & Director John Wobensmith attributed the non-Cape rate strength to a combination of a robust Brazilian grain crop, a resurgence in coal shipments, and improved market sentiment following clarity on trade tariffs. Regarding Capesize acquisitions, Wobensmith acknowledged firm asset values but stated that sensible deals still exist, emphasizing the company's analytical approach to ensure returns. He reiterated a positive long-term view on the sector due to future demand growth and low supply.

Liam Burke of B. Riley Securities asked about the influence of the coal trade on the non-Capesize vessel market. He also questioned if achieving zero net debt remains a primary goal or if the company would maintain moderate leverage to fund its capital allocation program.

Answer

CEO John Wobensmith described the coal trade as 'slow and steady' and noted that recent pressure on minor bulks stemmed from front-loaded vessel deliveries and trade uncertainties between the U.S. and China. On the balance sheet, Wobensmith affirmed that zero net debt is 'still a goal' and achievable, but the company will not hesitate to temporarily increase leverage for accretive acquisitions, aiming to stay below a 30% leverage ratio before deleveraging again.

Liam Burke of B. Riley Securities asked about Genco's acquisition pipeline given the current asset price environment for Capesize vessels and whether the company plans to maintain its revolver facility after achieving its net debt zero target.

Answer

Executive John Wobensmith confirmed Genco is still actively pursuing its fleet renewal program, noting that while asset prices have softened slightly, they remain firm for modern eco-vessels. CFO Peter Allen added that the company will maintain its revolver, which has over $330 million in undrawn availability, to provide significant flexibility for future accretive growth opportunities.

Liam Burke asked about Seanergy's chartering strategy, specifically balancing longer-term time charters versus spot market exposure, and how the company manages inflated asset values of older vessels against attractive future rate environments.

Answer

Chairman and CEO Stamatis Tsantanis explained that Seanergy consistently balances its chartering strategy, with approximately 35% of days already secured in long-term contracts for the year. He noted the company plans to increase fixed-rate exposure as the market strengthens post-Chinese New Year. Regarding fleet management, Mr. Tsantanis detailed the strategy of securing prompt new building delivery slots at high-quality shipyards while potentially disposing of older assets to manage asset values and capitalize on the attractive rate environment.

Liam Burke from B. Riley Securities asked about Seanergy Maritime's strategy for balancing longer-term time charters versus spot market exposure, especially given the current rate environment. He also inquired about how the company manages inflated asset values of older vessels against attractive future rate expectations.

Answer

Chairman and CEO Stamatis Tsantanis explained that approximately 35% of available days are already secured in long-term contracts through year-end, with plans to increase fixed-rate exposure after the Chinese New Year. Regarding asset values, Mr. Tsantanis noted the inflation in five-year-old ship values, leading the company to pursue newbuildings with prompt delivery slots (two Capesizes for 2027, one Newcastlemax for 2028) while also considering disposing of older assets like the Dukeship.

Liam Burke asked about the drivers behind the steep rebound in Capesize rates late in Q1 2025 and inquired whether one-time OpEx and SG&A costs from 2024 were now fully in the past.

Answer

Executive Stamatios Tsantanis attributed the rate rebound to a reversal of market dynamics where smaller Kamsarmax vessels had been 'cannibalizing' Capesize cargoes, a trend that is now correcting. Executive Stavros Gyftakis confirmed that the one-off expenses, including $4.1 million in litigation costs, are behind them and provided guidance for OpEx to remain at $7,000/day and G&A to normalize to 2023 levels.

Liam Burke of B. Riley Securities inquired about the drivers behind the steep rebound in Capesize rates after a weak Q1 and asked for clarification on whether one-time operational and G&A expenses from Q4 would recur.

Answer

Executive Stamatios Tsantanis attributed the rate rebound to a reversal of market dynamics where the Kamsarmax segment had been cannibalizing Capesize cargoes, noting that underlying Capesize fundamentals remain strong. Executive Stavros Gyftakis confirmed that the Q4 one-off expenses, including delivery costs and $4.1 million in litigation fees, are not expected to recur and provided a forward-looking baseline for OpEx and G&A.

Liam Burke asked about the pipeline for future vessel acquisitions, questioning if Seanergy could add more ships given their recent opportunistic purchases, and how these potential asset purchases would align with the new formula-based dividend policy.

Answer

Stamatios Tsantanis, an executive, responded that Seanergy sees opportunities to acquire one to three more well-priced vessels over the next 3 to 6 months. He expressed confidence that the equity required for these acquisitions could be absorbed without negatively impacting the new dividend formula, which is based on operating cash flow.

Liam Burke asked for the outlook on coal as a market driver for the remainder of 2024, whether any scheduled dry-docking would impact H2 utilization, and for clarification on the slight increase in vessel operating expenses (DVOE).

Answer

Executive Stamatios Tsantanis confirmed a positive outlook for coal, driven by strong energy demand in Southeast Asia and India and an increased ton-mile effect from vessels avoiding the Red Sea. He stated that while a couple of ships have minor dry-docks scheduled for H2, they will not have a substantial P&L impact. Regarding DVOE, Tsantanis explained the increase is a strategic decision to invest in higher-quality maintenance and crews for vessels acquired at a low book value, which ultimately prevents costly delays and is more economical than the initial purchase savings.

Liam Burke inquired whether the multi-year lift from global refinery capacity redistribution is expected to continue or has bottomed out, and asked if Scorpio Tankers plans any additional fleet tweaking (sales or purchases) given its strong liquidity and market rates.

Answer

Head of Corporate Development and Investor Relations James Doyle confirmed the trend of refinery closures in developed markets and lack of new construction in emerging markets will continue, supporting long-term ton-mile demand. Chief Commercial Officer Lars Dencker Nielsen and CEO Emanuele Lauro indicated they are actively engaged in the secondhand market and expect to sell assets opportunistically, highlighting the 'super strong' S&P market for tankers, but are not actively buying beyond conservative renewal.

Liam Burke asked if the multi-year trend of global refinery capacity redistribution, which has boosted product tanker demand, is expected to continue or if it has bottomed out. He also inquired about any further fleet adjustments planned, given the company's strong liquidity and market rates.

Answer

James Doyle, Head of Corporate Development and Investor Relations, confirmed that the trend of refinery capacity redistribution is expected to continue, citing ongoing closures in developed markets like the U.S. West Coast and limited new capacity in emerging markets. Lars Dencker Nielsen, Chief Commercial Officer, and Emanuele Lauro, CEO, stated that Scorpio Tankers is actively engaged in the secondhand market and expects to sell assets opportunistically. Mr. Lauro added that the S&P market is 'super hot,' particularly for LR2s and MRs, driven by momentum in the crude tanker space.

Liam Burke inquired about how increased crude production from OPEC+ and other nations is affecting the refined product tanker market, and whether the proposed USTR tariffs could impact the sale and purchase market for Chinese-built vessels.

Answer

Chief Commercial Officer Lars Nielsen stated that a strong crude tanker market reduces the risk of cannibalization from crude tankers, noting that several LR2s recently switched to dirty trades. President Robert Bugbee added that more and cheaper oil is a net positive for demand, especially with low inventories. Regarding tariffs, Mr. Bugbee asserted that their impact on the product tanker market appears to be 'pretty insignificant.'

Liam Burke from B. Riley Financial asked if Scorpio Tankers is still considering opportunistic vessel sales and sought an outlook on the continuing trend of global refinery capacity realignment.

Answer

President Robert Bugbee stated that while the company is happy with its current fleet, it remains open to opportunistic sales if the value is right. Executive James Doyle commented that the trend of refinery closures in developed markets and slow new capacity additions in emerging markets is very constructive for ton-mile demand, noting expected closures for the year have already doubled.

Liam Burke asked if Scorpio Tankers would consider selling more LR2s if asset prices remain high and inquired about the company's ultimate debt reduction target, questioning if the goal is to become net debt zero.

Answer

President Robert Bugbee confirmed that the company will continue to opportunistically sell assets at high prices, viewing it as a common-sense strategy to capitalize on the spread between vessel values and the company's stock price. Regarding debt, Mr. Bugbee stated that the company has already reached its target of having net debt around the scrap value of the fleet and declined to provide further details on future leverage levels.

Liam Burke asked how long the ongoing redistribution of global refinery capacity will continue to boost ton-mile demand, and if it's safe to assume a favorable supply/demand gap will persist.

Answer

President Robert Bugbee described it as a long-term trend of "addition by subtraction," where older refinery closures in the U.S. and Europe are replaced by exports from modern facilities, benefiting product tankers for years to come. He confirmed that this dynamic supports a continued favorable supply/demand balance.

Liam Burke from B. Riley Securities inquired about the directional trend of quote activity for energy storage, specifically if it's increasing and concentrated on larger systems, the company's ability to pass through increasing copper and bronze prices, and an update on the cremation business.

Answer

Joe Bartolacci, President and CEO, clarified that quote activity for energy storage is concentrated on customers capable of placing larger orders, with a $50 million item being the largest, and other customers having potential for future large orders. Dan Stopar, CFO, stated they buy copper out for about six months and have passed through price increases to largely offset costs, though Joe Bartolacci noted that copper prices are sometimes moving faster than price adjustments. Bartolacci also mentioned that after restructuring and divesting European operations, the cremation business is expecting a strong year, driven by new products and significant investment in its service portfolio.

Liam Burke asked about the directional trend of energy solutions quote activity, whether it's concentrated on larger systems, the company's ability to pass through increasing copper and bronze prices, and the performance of the cremation business.

Answer

Joe Bartolacci clarified that energy solutions quote activity is concentrated on customers capable of larger orders, not necessarily larger individual systems, with a $50M item being the largest. Dan Stopar and Joe Bartolacci mentioned that while they buy copper out for six months and pass through increases, prices have been moving faster. Joe Bartolacci confirmed the cremation business expects a strong year after restructuring and divesting European operations, driven by new products and services.

Liam Burke inquired about the current performance and trends within Matthews International's memorialization cremation business.

Answer

Joe Bartolacci, CEO, confirmed that the cremation business is performing well. He mentioned the sale of the underperforming European business and the consolidation of a West Coast facility into Apopka, Florida, indicating ongoing efforts to improve efficiency.

Liam Burke from B. Riley Securities asked if customers are becoming more receptive to working with Matthews International on battery technology orders, despite the ongoing Tesla lawsuit, and sought an update on the performance and strategic adjustments within the memorialization segment's cremation business.

Answer

CEO Joe Bartolacci clarified that customer reticence is less about the Tesla lawsuit and more about market environments, noting overcapacity in the EV battery sector but significant opportunities in the European market and solid-state solutions. He also mentioned increased interest in ultra-capacitors for energy storage. Regarding the cremation business, Mr. Bartolacci stated it is performing well, following the divestiture of an underperforming European operation and the consolidation of West Coast support into the Apopka, Florida facility, with ongoing efforts to improve efficiency.

Liam Burke of B. Riley Securities questioned if there was a changing sense of urgency among competitors to develop a rival to Matthews' dry battery electrode (DBE) platform. He also sought confirmation of a new production-size order for the DBE process and asked about the performance of the legacy product identification business.

Answer

President, CEO & Director Joseph Bartolacci responded that while the EV market has slowed, the industry's desire to lower costs remains high, keeping DBE technology relevant. He confirmed a smaller DBE order from a solid-state battery player and noted a significant order for a battery separator coating line is in progress. For product identification, he attributed recent performance to temporary supplier and tariff issues but stated the business is well-positioned for a strong year with the upcoming Axion launch.

Liam Burke of B. Riley Securities questioned if there was a changing sense of urgency among competitors to develop a rival to Matthews' dry battery electrode (DBE) platform. He also sought confirmation of a new production-size order for the DBE process and asked about the performance of the legacy product identification business.

Answer

President & CEO Joseph Bartolacci responded that while the EV market has slowed, the industry's desire to lower costs remains strong, keeping the DBE technology relevant. He confirmed a smaller order from a solid-state battery player and noted they are working on a significant order for a specialized battery separator coating line. For the product identification business, he attributed recent performance to temporary supplier and tariff-related issues but stated it remains well-positioned.

Liam Burke inquired about the timeline for re-establishing sales momentum for the Dry Battery Electrode (DBE) technology following the favorable Tesla arbitration ruling and asked for an update on the new printer platform.

Answer

President and CEO Joseph Bartolacci explained that while a private dispute had curtailed marketing efforts for nearly two years, he expects a gradual ramp-up with multiple customers, which could expand quickly. He clarified this is a multi-year event with some benefits expected in 2025. He also confirmed the new printer platform is in production ramp-up for a launch this year and highlighted a recent project win for 2D coding technology in Europe.

Asked for details on the Memorialization segment, specifically if cremation growth is lifting other memorial products and if the business can achieve organic growth.

Answer

The diversity of the Memorialization portfolio, including strong cremation-related product sales ($140M) and mausoleum construction, is driving performance. The business is not seen as materially declining. Organic growth is possible, driven by price increases and growth in cremation memorialization. The segment generates exceptional cash flow with over $160M in EBITDA on ~$20M in CapEx.

Liam Burke inquired about the 4% decline in service revenue, seeking clarification on whether it was due to normal seasonality or other influencing factors. He also asked why construction same-store sales were not recovering in line with broader infrastructure trends.

Answer

Bo Larsen, CFO, explained that service revenue is impacted by new equipment deliveries and PDI labor, noting that flat service revenue is positive given the 30% decline in large ag new equipment. Bryan Knutson, President and CEO, added that the construction segment's performance is tied more to ag and residential markets, with recent declines influenced by a large backlog of wheel loader deliveries in the prior year. He noted stability in data center projects and cautious optimism for next year.

Liam Burke with B. Riley Securities inquired about the 4% year-over-year decline in service revenue, seeking clarification on whether it was seasonal or influenced by other factors. He also asked about the continued softness in construction same-store sales, noting it seemed worse than expected given broader infrastructure activity.

Answer

CFO Bo Larsen explained that service revenue is impacted by new equipment deliveries and PDI labor, noting overall flat service revenue despite a 30% decline in large ag new equipment sales, with initiatives for mid-single-digit long-term growth. For construction, Bo Larsen attributed the decline to difficult year-over-year comparisons due to a backlog of wheel loader deliveries in the prior year. President and CEO Bryan Knutson added that their construction business is more tied to ag and residential, which are lagging, but sees stability in data center projects and potential uplift in 2026.

Liam Burke from B. Riley Securities inquired about any potential positive catalysts in the challenging agricultural sector and questioned why the construction segment appears equally challenged despite a more optimistic backdrop.

Answer

Executive Bryan Knutson noted that some government payments, trade negotiations, and recent rains provide stability to the Ag sector, but the full impact of subsidies remains a significant unknown. For Construction, Knutson acknowledged it's more stable than Ag, with backlogs growing. Executive Bo Larsen added context, clarifying that Construction is seeing a modest pullback from record highs, whereas Agriculture is experiencing trough-level industry volumes, making their situations fundamentally different.

Liam Burke, Managing Director at B. Riley Financial, inquired about the exact delivery date for the Dakin Connexion vessel and the partnership's strategy for funding future dropdown acquisitions, specifically regarding the four additional vessels available from the sponsor, and the anticipated timing of such fleet expansion.

Answer

Derek Lowe, CEO & CFO of KNOT Offshore Partners, clarified that the Dakin Connexion was delivered on July 2nd. Regarding future dropdowns, Mr. Lowe stated that the partnership does not have specific timing, as they respond to vessels offered based on terms and financial capacity, including leveraging opportunities like the Toba Connexion sale and leaseback.

Liam Burke with B. Riley Securities inquired about the delivery timeline for the Dakin Connexion vessel and the company's strategy for funding future dropdown acquisitions, specifically asking if KNOT Offshore Partners expects to continue financing these in a shareholder-friendly manner.

Answer

CEO and CFO Derek Lowe clarified that the Dakin Connexion was delivered on July 2nd. Regarding future dropdowns, Mr. Lowe explained that the company responds to vessel offers based on negotiated terms and its financial capacity, highlighting opportunities for re-leveraging from the debt portfolio, similar to the Toba Connexion sale and leaseback.

Liam Burke inquired about the delivery timeline for the Dakin Connexion vessel and the partnership's strategy for funding future dropdown acquisitions, specifically asking if the shareholder-friendly approach used for Dakin Connexion could be sustained for the four additional vessels available from the sponsor.

Answer

CEO and CFO Derek Lowe clarified that the Dakin Connexion was delivered on July 2nd. Regarding future dropdowns, Mr. Lowe stated that transactions are considered unitholder-friendly when on accretive terms, and the timing depends on vessel offers, negotiated terms, and the partnership's financial capacity, including debt schedule and re-leveraging opportunities like the Toba Connexion sale and leaseback.

Liam Burke inquired about the potential timing for the 11 drop-down vessels from the sponsor and the outlook for refinancing upcoming balloon payments.

Answer

CEO and CFO Derek Lowe stated there is no clear timing for drop-downs, as each is reviewed on its own merits. Regarding refinancing, he noted that conversations with lenders are underway, and while there have been no negative indications, the company aims for comparable or better terms.

Liam Burke asked about KNOT Offshore Partners' capital allocation strategy given its improving liquidity and cash flow, and inquired if the company's available vessels are well-suited for the upcoming demand from new FPSO projects in the North Sea and Latin America.

Answer

CEO and CFO Derek Lowe explained that while the financial position is strengthening, the immediate priority is addressing upcoming debt refinancings. He stated that the Board continues to balance accretive fleet investments with a long-term sustainable distribution for unitholders. Lowe also confirmed that the company's vessels have the appropriate specifications to meet the anticipated new demand.

Liam Burke asked for commentary on how the charter rates for recently announced contracts and extensions compare to the partnership's previous charter levels.

Answer

Derek Lowe, CEO & CFO, explained that charter rates reflect the market conditions at the time of their signing. He specified that more recent contracts, such as for the Hilda and Torill Knutsen, would reflect the current, stronger market, while older contracts for vessels like the Ingrid and Carmen Knutsen were established in a different rate environment.

Liam Burke inquired about the strategic options for the Dan Sabia vessel, the outlook for North Sea activity supporting vessel utilization, and the company's approach to refinancing its significant 2025 balloon payment.

Answer

CEO and CFO Derek Lowe explained that KNOT Offshore Partners is evaluating both long-term contracts and potential divestment for the Dan Sabia to maximize value. He affirmed confidence in North Sea activity levels and noted that while it is early, the company has a strong track record of arranging refinancings well ahead of maturity.

Liam Burke from B. Riley Financial asked if the company is satisfied with the return on investment for its recent vessel upgrades, which command a premium on fixtures. He also questioned whether drydocking schedules were altered to align with the weaker charter market and in anticipation of a future recovery.

Answer

CEO Richard Tyrrell affirmed that the return on the ~$10 million per-vessel upgrade investment has been good, yielding about $5,000 per day, with potential to capture more of the value from charterers. He explained that drydocking schedules were not significantly altered, as they are typically planned for shoulder seasons, but noted the benefit of completing them during a period of low opportunity cost, which also reduces future off-hire days.

Liam Burke of B. Riley Securities inquired about the current asset prices for modern, non-older LNG vessels and asked about CoolCo's potential to expand its fleet given its stated financial flexibility and patience.

Answer

Executive Richard Tyrrell responded that asset prices for modern 2-stroke vessels remain high, closely tracking newbuild prices of around $250 million. Regarding fleet expansion, he affirmed that while CoolCo is always evaluating opportunities, the company remains disciplined and has not yet found a transaction that meets its criteria, though it continues to look.

Liam Burke of B. Riley Financial questioned the lack of long-term charter activity despite a projected market tightening in 2027 and asked about the company's strategy for pursuing asset acquisitions in the current depressed market.

Answer

Richard Tyrrell (executive) stated that the bid-ask spread for long-term charters remains too wide, as charterers are hesitant to commit to high rates (e.g., high $80,000s) while spot rates are historically low. Regarding acquisitions, he acknowledged the challenge of balancing attractive pricing with near-term market risk in an illiquid asset market but confirmed CoolCo is actively monitoring for value-accretive growth opportunities.

Inquired about the rechartering prospects for vessels with expiring contracts later in the year, whether the new long-term charter is a positive indicator for them, and if there are any dividend limitations within the loan covenants.

Answer

The executives stated that while the markets for newbuilds and existing vessels are different, positive sentiment from the successful long-term charter is beneficial. They are confident about rechartering prospects as the market enters a seasonally strong period. They also confirmed there are no dividend limitations in the loan covenants as long as the company remains in compliance.

Liam Burke of B. Riley Financial asked for an outlook on the vessels coming up for recharter later in the year and whether the successful long-term GAIL charter positively impacts their prospects. He also questioned if the company's loan covenants impose any restrictions on dividend payouts.

Answer

Executive Richard Tyrrell explained that while the long-term and shorter-term charter markets are distinct, positive sentiment from the GAIL deal is beneficial. He expressed confidence for the upcoming recharters, noting the market is entering a seasonally strong period. Executive Johannes Boots clarified that as long as CoolCo complies with its financial covenants, there are no limitations on its ability to pay dividends.

Inquired about the charter strategy for the two newbuilds and the impact of canal disruptions on charterer behavior.

Answer

The newbuilds are targeted for long-term charters (5-15 years), primarily with traditional customers who charter through cycles. Canal disruptions are causing charterers to proactively plan for needing additional shipping capacity, which is expected to be positive for future demand.

Liam Burke of B. Riley Financial asked if the typical second-half seasonality for operating cash flow would change and what specific factors are driving the growth in the company's opportunity pipeline.

Answer

CFO H. Andrew DeFerrari confirmed that the normal second-half cash flow seasonality is expected, which will be further aided by a $50 million cash tax benefit from recent legislation. CEO Daniel Peyovich attributed the strong pipeline momentum to broad industry growth where Dycom's scale and proven ability to execute are increasingly favored by customers.

Liam Burke of B. Riley Financial inquired about L.B. Foster's capital allocation strategy, questioning the balance between acquisitions, organic growth investments, share repurchases, and debt reduction. He also asked about the composition of the backlog and whether there was strong follow-through for key growth areas like Precast Concrete and Friction Management.

Answer

John Kasel, President & CEO, responded that the primary focus is on funding organic growth, particularly in the successful Precast Concrete business, and continuing the active share repurchase program. While the company maintains an active M&A pipeline for potential tuck-in acquisitions, the immediate priority is executing on current organic opportunities. Kasel confirmed that the backlog shows strong momentum and follow-through in both the Friction Management and Precast Concrete businesses, providing confidence for the second half of the year.

Liam Burke asked whether L.B. Foster is seeing increased capital expenditures from rail customers during a potential economic slowdown and questioned if the decline in pipe coating sales was due to seasonality or project-based lumpiness.

Answer

President and CEO John Kasel confirmed that they are seeing increased maintenance and capital work from rail customers who are hardening their track systems, which is reflected in the growing backlog. Regarding pipe coatings, Kasel stated that the business is recovering strongly, with significant hiring and operations running near full capacity, anticipating a multi-year profitability restoration. CFO Bill Thalman clarified that the Q1 sales dip was due to a large prior-year order completing, while the backlog actually increased 51% in the quarter, signaling strong future demand.

Liam Burke from B. Riley Securities asked for an update on the geographic performance of the construction business outside of Florida and inquired about the current M&A environment and potential opportunities.

Answer

CEO Ryan Greenawalt stated that geographies with heavy manufacturing exposure are experiencing softer sentiment. CFO Tony Colucci added that northern regions performed well due to market share gains. Regarding M&A, Ryan Greenawalt reiterated that opportunities are driven more by generational succession planning than economic cycles and that the pipeline for potential deals remains solid across all segments.

Liam Burke inquired about the drivers of acceleration in the data center and grid modernization sector, the scope of new contracts in the educational healthcare space, and the trend of winning business from competitors.

Answer

The company attributed engineering growth to marquee projects, better integration, and a strong secular market. In healthcare, the focus remains on K-12, where they are successfully adding new contracts and taking market share from competitors due to their institutional expertise in a fragmented market.

Liam Burke of B. Riley Securities inquired about the acceleration in the data center and grid modernization sector, asking how RCMT's multiyear preferred partner agreements are contributing. He also asked if new healthcare contracts are primarily K-12 and about the trend of winning business from competitors.

Answer

Bradley Vizi, Executive Chairman & President, attributed the engineering acceleration to marquee projects enhancing brand equity, improved internal integration, and a protracted secular bull market for energy infrastructure. Kevin Miller, CFO, confirmed that new healthcare contracts are predominantly in the K-12 space. Both executives affirmed the strategy of taking market share from competitors, with Mr. Vizi highlighting RCM's opportunity to set best practices in a fragmented market.

Liam Burke of B. Riley Securities asked about the potential impact of political policy uncertainty on RCM's business and the reasons for the slight year-over-year decline in Healthcare segment gross margins.

Answer

Executive Chairman Bradley Vizi responded that the company is largely insulated from macroeconomic and political shifts by focusing on secular growth themes and has not seen any negative impact. Chief Financial Officer Kevin Miller attributed the Healthcare margin dip to normal quarterly fluctuations and a minor business mix shift toward certain nursing contracts, clarifying it is not a negative trend and that he expects margins to improve in Q2.

Liam Burke from B. Riley Securities asked about the sustainability of the significant reduction in overhead costs and sought clarification on the nonrecurring expenses that compressed funeral home margins in the quarter.

Answer

CEO Carlos Quezada explained that after significant work on systems and processes, the current overhead level is stable and should remain just under 13% of revenue, even with future acquisitions. CFO John Enwright added that the company has lowered its long-term overhead guidance range to 13-13.5%. He clarified that the funeral margin pressure from "nonrecurring" items was due to certain benefits received last year that did not repeat, plus a multi-year expense catch-up entry.

Liam Burke from B. Riley inquired about the funeral home EBITDA margins, asking if the current high-30s level is sustainable or has room for expansion given the company's vendor and pricing strategies. He also asked whether the strong growth in preneed sales was a function of a larger sales force or increased productivity.

Answer

CEO Carlos Quezada responded that while new supply chain agreements for caskets and urns present a significant opportunity, the focus is on both margin and volume growth by offering better pricing to families. He believes the current funeral home margins are sustainable for 2025. Regarding preneed sales, he attributed the growth to three factors: a larger sales force, a more productive sales force, and two unusually large, non-recurring sales totaling nearly $2 million in Q3.

Liam Burke from B. Riley questioned the drivers behind the significantly high cremation and cemetery margins in the quarter and asked if the company saw growth in both traditional burial and cremation contracts.

Answer

CEO Carlos Quezada attributed the strong cremation margins to a new strategy focused on educating families about service options and a strategic pricing review. He noted the burial rate declined slightly while the cremation rate increased. For cemetery margins, Quezada explained they were boosted by large sales and a successful Ching Ming season. While not sustainable at the exact Q2 level, he expects margins to remain high for the next 2-3 years due to untapped opportunities.

Liam Burke of B. Riley Financial inquired about the relationship between softening freight rates and charter rates for Q3, and whether GSL's liner customers are showing interest in longer charter durations.

Answer

CEO Thomas Lister responded that charter rates are remaining firm despite downward pressure on freight rates in certain markets like the Transpacific. He added that while liner operators still have an appetite for multi-year charters (two years for smaller ships, three-plus for larger ones), they are not necessarily seeking longer durations than what has been recently observed.

Liam Burke inquired about the current charter rate environment, asking if customers are extending charters at favorable rates, and questioned the company's acquisition strategy given the recent opportunistic asset sales.

Answer

Executive Thomas A. Lister explained that while some charters renewing from the super-cyclical peak might see a notch down, the current charter opportunities remain very attractive and robust. Executive Chairman Georgios Youroukos added that GSL maintains strict financial criteria for acquisitions and sold older ships because the sale prices were more attractive than chartering them, with the cash proceeds held for future investments.

Liam Burke from B. Riley Securities inquired about the current chartering appetite from liner companies for GSL's vessels and the company's strategy regarding the divestment of older assets versus holding them for cash flow.

Answer

Executive Thomas A. Lister clarified that charter rates for their vessel types remain strong due to limited availability, which supports their increased dividend. He also stated that while the recent sale of three older ships was an opportunistic part of fleet renewal, GSL's primary strategy is to hold and operate assets through the cycle to maximize long-term value.

Liam Burke asked for clarification on the third-quarter dividend, seeking to confirm if the announced $0.45 per share amount included both the regular and the supplemental dividend.

Answer

Thomas A. Lister, an executive at Global Ship Lease, confirmed that the $0.45 per share dividend is the total amount, incorporating both the regular base dividend and the supplemental portion.

Liam Burke of B. Riley Financial asked if the primary challenge in the accelerating Pipeline segment was scaling the business or if the competitive landscape had changed. He also inquired about any early-stage discussions related to nuclear power projects.

Answer

CEO José R. Mas explained that the main factor is the timing of projects, as customer sentiment on natural gas has shifted dramatically, leading to a surge in planning and engineering activity that will translate to future work. He stated MasTec is not afraid of competition and will get more than its share. Regarding nuclear, he said MasTec is paying close attention and will be engaged when it becomes a growing generation source.

Liam Burke asked if the pipeline business is currently benefiting from LNG-related projects and whether the company has seen any positive impacts from deregulation.

Answer

CEO Jose Mas clarified that LNG-related work represents a longer-term opportunity and is not a factor in the current backlog or the growth expected in 2025. Regarding deregulation, he noted that while there is optimism about potential future changes to the permitting environment, no significant positive impacts have materialized in the market yet.

Liam Burke of B. Riley Securities questioned if the company's first-mover advantage in medium gas and LCO2 carriers would attract new orders from competitors. He also asked about the ease of financing these new, specialized assets.

Answer

CEO Gerasimos Kalogiratos stated that while he expects more LCO2 carrier orders over the next 6-12 months, the market will likely remain tight due to limited shipyard capacity and specialized materials. He confirmed that the financing process for the first two vessels was 'easy' and the assets were 'quite popular' with financiers due to their trading flexibility and role in the energy transition, expressing confidence in financing the remaining newbuilds.

Liam Burke asked about Capital Clean Energy's first-mover advantage with its medium gas and LCO2 carriers, the potential for competing orders in the market, and the ease of financing these new types of assets.

Answer

CEO Gerasimos Kalogiratos acknowledged the company's early position and expects more LCO2 carrier orders over the next 6-12 months, but anticipates a tight market due to limited shipyard capacity and specialized materials. He described the financing process for the first two vessels as 'easy' and popular with lenders due to their trading flexibility and role in the energy transition, expressing confidence in financing the remaining newbuilds.

Liam Burke of B. Riley Securities asked about the shift in capital return strategy, specifically the dividend reduction in favor of a new share buyback program, and inquired if the announced cost savings were from the SSI fleet integration or general operational reviews.

Answer

CEO Mark Filanowski explained that the Board, which includes new directors, now sees a share buyback as a timely way to return value to shareholders given the recent stock price decline. He noted the dividend policy will be reviewed quarterly. Filanowski also clarified that the cost savings are a result of both integration synergies from the larger SSI fleet, such as lower insurance premiums, and ongoing operational efficiency efforts.

Liam Burke asked about the key drivers for the significant TCE rate premium in Q1, the timeline for integrating newly acquired vessels into Pangaea's specialized chartering model, and the reasons behind improved profitability in the Port Services business.

Answer

CEO Mark Filanowski attributed the TCE premium to their strategy of handling difficult, higher-paying cargoes in niche markets like icy waters, which competitors often avoid. He noted that integration of the new vessels is progressing well and that Port Services profitability increased due to handling more high-margin dry bulk business and expanding operations in new locations like Aransas and Tampa.

Liam Burke asked about the integration timeline for the 15 new handysize vessels from the M.T. Maritime merger and whether Pangaea could maintain its market outperformance during the transition. He also inquired about the outlook for the remainder of the fourth quarter, given the company's strong performance to date versus the typical seasonal slowdown.

Answer

Executive Mark Filanowski explained that fully integrating the new vessels into their premium business model will take time as the ships will be on existing voyages upon takeover. He noted that while their Q4 performance has been strong, the broader market is trending down towards the seasonally weaker first quarter, and Pangaea's own recent fixtures reflect this flattening trend.

Liam Burke asked for an assessment of the macroeconomic environment, questioning if any particular end market was showing inordinate strength, and inquired about the company's capacity and asset needs to handle larger projects.

Answer

Executive Gary Bowman stated that new bookings were strong and well-distributed across all verticals, giving the company confidence to reaffirm its full-year guidance despite broader economic uncertainty. CFO Bruce Labovitz addressed capacity, explaining that the company is balancing headcount growth with investments in efficiency technologies like automation and geolocation to enhance productivity and manage larger assignments more effectively.

Liam Burke asked if the significant year-over-year improvement in operating cash flow represents a sustainable trend and inquired about potential future pressure on input costs once current procurement strategies are exhausted.

Answer

CFO Scott Thanisch confirmed that the company expects the trend of improving cash flow to continue and anticipates positive cash flow for the full year. CEO Travis Boone addressed input costs by stating that future bids will incorporate expected cost increases for materials like steel, thereby managing risk through the pricing and contingency process.

Liam Burke of B. Riley Securities asked if the strong market conditions would prompt a change in chartering strategy and whether there was interest from oil majors in ordering new vessels with long-term charters.

Answer

Herbjørn Hansson (Founder, Chairman and CEO) and Bjørn Giæver (CFO) both affirmed that the company's primary objective is to become debt-free, thus maintaining high exposure to the spot market is the current strategy. They explained that long-term charters for newbuilds are not a priority, given the long lead time for new vessels (delivery in early 2026) and the significant increase in newbuild prices, which supports a strong market outlook.

Liam Burke from B. Riley asked if the strong market conditions would alter the company's chartering strategy and whether there was interest from oil majors in ordering newbuilds with long-term charters.

Answer

CEO Herbjørn Hansson and CFO Bjørn Giæver explained that the primary objective is to become debt-free, so the strategy remains focused on the spot market to maximize cash flow for debt repayment and future dividend increases. They noted that long-term charters for newbuilds are not a current priority due to long delivery lead times and the strength of the spot market.

Liam Burke from B. Riley asked about Nordic American Tankers' fleet management strategy, specifically how the company balances its goal of growing to 30 Suezmaxes with its commitments to paying dividends and reducing debt.

Answer

Executive Chairman Herbjørn Hansson explained that the company's strategy is guided by a capital allocation program where paying dividends is the top priority. He described balancing fleet growth, dividends, and debt as a complex picture with many elements, emphasizing that the company is currently in a strong position and is being pursued for potential deals, though they are not actively seeking acquisitions at this time.

Liam Burke from B.Riley FBR asked for an outlook on the momentum for TCE rates for the remainder of 2019 and how the company plans to allocate its strong cash flow between debt repayment, asset acquisitions, and dividends.

Answer

Chairman and CEO Herbjørn Hansson expressed optimism for 2019, citing a balanced market, a strong global economy, and geopolitical uncertainty as positive drivers for the tanker business. He reiterated that the primary long-term objective is to have no debt and maintain a conservative financial stance. The main priorities for cash allocation are customers and shareholders, with dividends being a key element of shareholder returns.

Liam Burke from Wunderlich America asked whether the expected growth in the forklift business was a function of market expansion or new contract wins, and how the increasing on-road revenue mix would impact the aftermarket business.

Answer

CEO Gary Winemaster attributed the forklift business growth to a combination of market expansion, market share gains within existing customers, and the addition of new customers. He also confirmed that the aftermarket segment continues to grow year-over-year, driven by the service and parts needs of the large installed base of heavy-duty products.

Liam Burke of Wunderlich inquired if the strategy of eliminating commoditized products at 3PI would be applied elsewhere and whether incremental capital projects were needed to support the company's growth.

Answer

Chairman and CEO Gary Winemaster clarified that the 3PI situation was unique and that the company is confident in its margins and positioning in other segments. He also stated that no major capital projects are needed for production scaling, as the business is not capital-intensive. Future investments will be targeted at specific new customer programs and evaluated on their return.