Michael Halloran • Robert W. Baird & Co.

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CFO Scott Cottrill confirmed that the end-market outlook remains unchanged, which is why the full-year guidance is maintained. He stated that the margin cadence thought process is consistent, with Q2 typically similar to Q1, and there was nothing unsustainable in the Q1 performance. President & CEO D. Scott Barbour added that his primary concern remains the demand environment and its potential impact on absorption later in the year.

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An executive clarified that the year-over-year pricing pressure is concentrated in Q1 2026, as the company laps a prior-year impact, with pricing expected to be sequentially flat afterward. CFO Scott Cottrill added that share gains are driven by the conversion to polypropylene (HP) pipe, particularly in larger diameters and within the residential land development market where ADS has built strong relationships and sees a superior value proposition.

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CEO D. Barbour responded that customer sentiment has not changed since the last quarter, with clients remaining unsettled about the market's direction. He characterized competitor behavior as very steady for the past 7-9 months, with pricing decisions focused on achieving local objectives rather than broad, disruptive actions.

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CEO Scott Barbour explained that the primary issue is weaker-than-expected demand in the nonresidential market, which makes it difficult to pass through rising material costs in the short term. He noted this weakness also slowed growth in Allied Products. CFO Scott Cottrill added that the negative price-cost dynamic is expected to persist until the end markets improve, likely next fiscal year.

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CEO Louis Pinkham explained that the market situation is largely unchanged, with strength in aerospace, defense, and data centers expected to continue. He anticipates mid-single-digit order growth in the second half, driven by a low-double-digit increase in the AMC segment. Pinkham noted that rare earth magnets affect only about 1% of sales but caused a plant shutdown in Q2, an issue now largely addressed. He attributed the data center wins to Regal Rexnord's ability to provide customized switchgear solutions, highlighting a significant project win in July.

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CEO Louis Pinkham highlighted strong momentum in longer-cycle projects, particularly within the IPS segment, which saw orders up approximately 9%. He noted that short-cycle business remains stable. Pinkham expressed confidence in the full-year guidance, supported by a robust second-half backlog that is up high-single-digits in IPS and low-double-digits in AMC. He affirmed that the company's 'in-region, for-region' strategy and dual-country sourcing provide a significant competitive advantage, creating opportunities for share gains across its segments.

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CEO Louis Pinkham attributed the Q1 weakness to typical seasonality and the A2L pull-forward in PES, while confidence in the second half is driven by a doubling of the shippable backlog for longer-cycle AMC projects. CFO Rob Rehard detailed the path to $700M in 2025 free cash flow and a $900M exit run-rate for 2026, targeting leverage of approximately 3.0x by year-end 2025 and 2.5x by year-end 2026.

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CEO Louis Pinkham clarified the 'limited growth' forecast for 2025 is on an organic basis, citing market uncertainties. He noted that the AMC segment's business cycle has lengthened to roughly six months, while PES remains short-cycle. CFO Rob Rehard added that the company maintains a path to a $1 billion free cash flow exit rate for 2025, driven by reduced interest and restructuring costs.

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CEO Mark Bertolini confirmed Oscar is accelerating medical cost initiatives and deploying AI in clinical operations to drive value. CFO Scott Blackley addressed the risks, stating the FTR impact is minimal, dual-eligible membership is a manageable ~2.5% of their book, and SEP growth is moderating. He affirmed that these factors are incorporated into the updated 2025 guidance.

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CEO Marietta Zakas addressed the end markets, noting an expected slowdown in residential construction due to high interest rates and buyer hesitancy, consistent with previous guidance. President & COO Paul McAndrew added that the municipal repair and replacement market remains strong and resilient. Regarding margins, Zakas explained that while full 2026 guidance will come later, the company expects to build on its current momentum. She highlighted the implied full-year 2025 gross margin approaching 37% and noted future benefits from the brass foundry closure and targeted price increases to mitigate tariffs.

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CFO Steven Heinrichs confirmed that second-half margins are expected to be higher due to seasonality, benefits from the legacy foundry closure, and incremental improvements in the repair products business. On land development, President and COO Paul McAndrew noted that demand for new homes remains resilient, supported by low existing home inventory, and that the company's guidance assumes modest growth in this area.

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CEO Vicente Reynal noted that a strong first-half book-to-bill of 1.06 provides a solid backlog for the second half, with demand remaining stable through Q2 and into July. CFO Vikram Kini added that the margin improvement is driven by typical seasonality, volume flow-through, productivity initiatives, M&A integration, and a favorable comparison for the PSC segment in Q4.

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CEO Vicente Reynal confirmed the guidance change was a prudent, precautionary measure to de-risk the year, holding total revenue guidance flat despite positive tailwinds from pricing and M&A. He noted good balance in both short- and long-cycle demand. CFO Vik Kini added that the PST segment saw organic order growth in both its sub-segments, which is expected to drive revenue momentum in the second half of the year.

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CEO Vicente Reynal stated that the 2025 guidance assumes market stability, not improvement, with organic growth weighted toward the second half. CFO Vik Kini explained that Q4 PST margin weakness was due to lower volumes in ILC Dover's Aerospace & Defense business and in China, but expects a return to a 30% margin profile in 2025 driven by synergies and productivity.

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Chairman and CEO Vicente Reynal acknowledged the encouraging MQL activity but noted the conversion time from lead to order has elongated beyond the historical 6-8 weeks due to customer site readiness and pre-election uncertainty. He emphasized that these are real projects, not cancellations, which bodes well for the future. He expects a gradual recovery in 2025 and noted that the backlog grew both year-over-year and sequentially in Q3.

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CEO Matthew Pine described overall demand as resilient, noting temporary funding delays in the UK and Canada that are expected to resolve in the second half. CFO William Grogan added that MCS commercial demand is strong, with orders expected to improve sequentially, and reiterated the forecast for a positive book-to-bill ratio by year-end. Regarding simplification, Pine stated the transformation is ahead of schedule, while Grogan confirmed that the 80/20 methodology is now being implemented across all four segments, with margin improvements in Applied Water and Water Infrastructure serving as key proof points.

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CEO Matthew Pine explained that pricing actions are a mix of approximately two-thirds formal price increases and one-third surcharges, with the impact being more significant in the second half of the year. Regarding the company's restructuring, CFO Bill Grogan noted that the fundamental approach remains unchanged, though they may accelerate simplification efforts in tariff-impacted areas. He highlighted that the new, more nimble operating structure is proving highly beneficial in the current environment.

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CEO Matthew Pine explained that MCS margins likely hit a trough in Q4 2024 due to a product mix shift towards energy meters. He anticipates sequential margin improvement throughout 2025 as the mix normalizes and restructuring benefits take hold, resulting in a full-year 2025 margin rate higher than 2024's. The high single-digit growth is supported by a strong project pipeline, particularly a near 40% growth in energy meters, and an expected recovery in water meter projects in the second half of the year.

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Executive William Grogan clarified that the past-due backlog in MCS is now largely resolved and expects the segment to perform within its long-term framework next year, despite potential timing shifts. Executive Matthew Pine explained that the financial benefits from the 80/20 simplification efforts are expected to materialize in 2025, following implementation in Q4 2024. He acknowledged a potential for slight top-line pressure but reaffirmed the company's long-term 4-6% growth outlook.

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CEO Luca Savi responded that ITT's project order performance has been 'remarkable,' driven by market share gains in oil & gas and general industrial, with no significant project delays causing concern. Regarding the auto market, Savi noted that Q2 production was up and the full-year outlook is slightly improved. He attributed ITT's outperformance to broad-based success across all major regions and powertrain types, including EV and hybrid.

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CFO Emmanuel Caprais explained that while the full-year EPS guidance is maintained, the components have shifted, with positive FX and buybacks offsetting higher inflation and a cautious H2 outlook. Both Caprais and CEO Luca Savi highlighted the record $1 billion IP backlog and improving project margins as key factors providing resilience and confidence for 2025 performance, despite a slight moderation in the project funnel.

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CEO Luca Savi reported strong Q4 organic orders in the IP segment, which grew 12%, driven by a 25% increase in projects and an 8% rise in short-cycle orders. He noted the weekly order run rate was the second-highest on record. For the full year, organic orders grew 5%. Savi added that the project funnel remains rich, especially in the Middle East and Latin America, supporting future growth.

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CEO Luca Savi acknowledged a challenging auto market but highlighted ITT's continued outperformance, which is expected to be around 700 basis points for 2024. For 2025, he anticipates a flat to low-single-digit market with continued outperformance from ITT. CFO Emmanuel Caprais specified that kSARIA is expected to contribute approximately $50 million in Q4 revenue with a modest impact on income, while causing about 400 basis points of margin dilution for the CCT segment.

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Chairman, President & CEO Aaron Jagdfeld confirmed that Ecobee is profitable and ahead of plan, with the drag coming from the 'clean energy products' like storage and solar. He explained that heavy development costs for new products like PowerCell 2 and PowerMicro are tapering off. However, he noted that the 12-18 month timeline is difficult to define precisely because of market uncertainty following recent policy changes. The company will recalibrate investment based on the market size but remains committed to its 2027 profitability goal for the segment.

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President and CEO Aaron P. Jagdfeld confirmed the low end of guidance reflects a potentially softer consumer environment. He detailed that of the $125 million potential H2 tariff impact, China-specific sourcing accounts for less than 10% of material purchases, a figure that has been halved over five years and is expected to halve again. He added that current inventory levels will buffer some immediate tariff impacts, particularly for clean energy products.

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CFO York Ragen confirmed expectations for strong double-digit growth for residential products in Q1. CEO Aaron P. Jagdfeld elaborated that significant investments in capacity, including the Trenton facility and automation, allowed the company to respond rapidly to demand surges. This prevented extended lead times and the 'scarcity mentality' ordering from distributors seen in the past, leading to what he described as a healthier and different pacing for the business going forward.

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President and CEO Aaron P. Jagdfeld stated that the projected $200 million in incremental 2024 revenue from recent hurricanes aligns with historical models. He emphasized that Generac's expanded manufacturing capacity allows for a much quicker production ramp than in the past. Jagdfeld also confirmed a significant spillover effect, noting that October is on track to be a record month for in-home consultations (IHCs) with strong demand growth seen outside of the storm-affected states.

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President & CEO R. Scott Rowe explained that while aftermarket business remains strong, project bookings in energy and chemicals were delayed due to macro uncertainty. He noted the environment is now slightly more constructive but fluid. On pricing, Rowe said list price actions are sticking in the run-rate business, though the project environment is slightly more competitive. SVP & CFO Amy Schwetz confirmed the backlog margin remains healthy, supported by the 80/20 program and strong project execution.

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President and CEO Robert Rowe stated that Flowserve's global manufacturing footprint provides a competitive advantage by enabling in-region production, mitigating tariff impacts on finished goods. He noted that raw material sourcing is similar to peers. Rowe confirmed two price increases in 2025, one annual and one in March specifically for tariffs, and expressed confidence in their stickiness. For the backlog, he highlighted the use of updated terms and conditions that allow for repricing projects via change orders to offset cost inflation.

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CFO Amy Schwetz confirmed the 2027 targets already included approximately 200 basis points from portfolio management (now driven by 80/20) and another 200 basis points from operational excellence. She explained that the 2025 quarterly cadence will revert to historical seasonality (Q1 lowest, Q4 highest) due to tough comps from a large project in Q1 2024 and the progressive ramp-up of benefits from the 80/20 program and Mogas synergies throughout the year.

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CEO Scott Rowe described the power market opportunity, especially nuclear, as a long-term growth driver with a horizon longer than two years. CFO Amy Schwetz affirmed that the M&A funnel remains robust and that Flowserve has the organizational and balance sheet bandwidth for further acquisitions, aided by the straightforward integration plan for MOGAS.

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CEO Ivo Jurek confirmed the guidance assumes 'steady as she goes' fundamentals against easier comps, layered with growth initiatives. Regarding data centers, Jurek downplayed M&A, stating the organic opportunity is 'rather significant' as liquid cooling penetration is expected to be 'dramatically bigger' than previously thought. He emphasized that Gates is focused on its core competencies and tailoring its product portfolio for this market.

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CFO L. Mallard stated that the company expects to fully offset the tariff dollar impact, with minimal effect in Q2 and a close match in Q3 and Q4, resulting in about a 25 bps EBITDA margin dilution for the year. CEO Ivo Jurek added that 75-80% of the offset will come from price, with the rest from operational initiatives. He affirmed the company's strong competitive position due to its 'in-region for-region' manufacturing footprint. Regarding internal initiatives, Jurek noted that the company is ahead of schedule, particularly on 80/20 and material cost-out, which is reflected in the strong gross margin performance, and that the company is focused on managing compressible costs to protect margins.

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CEO Ivo Jurek acknowledged customer optimism but emphasized that Gates relies on hard data, suggesting sentiment may be driven by potential industrial policy and pent-up CapEx. CFO L. Mallard outlined a balanced capital deployment strategy focused on share buybacks, continued debt reduction towards a sub-$2 billion target, and increased CapEx for high-return internal projects like footprint optimization and system enhancements.

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CEO Ivo Jurek confirmed that replacement markets are providing stability, with industrial replacement 'flatlining' and personal mobility stabilizing ahead of expected 2025 growth. On M&A, Jurek stated that while they have an active team and pipeline, the immediate priority has been balance sheet repair. He believes share buybacks currently offer better returns for shareholders given the stock's valuation, but the company is positioned to pursue M&A as the stock rerates.

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President, CEO & Chairman Todd Adams confirmed that channel inventory levels are balanced, as products are typically for immediate construction or MRO needs. Regarding Q4 margins, Adams stated that the implied step-down is not indicative of a known issue but rather reflects their 'quarter by quarter' approach to guidance, suggesting there is no specific negative event being signaled.

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Todd Adams, Chairman and CEO, responded that the government vertical is relatively small and he doesn't see it as a particular headwind, given other growth drivers in drinking water. On timing, Adams agreed it was a reasonable high-level assumption that pre-bought inventory would help contain costs in Q2, with the full impact of pricing realized later in the year.

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CEO Todd Adams confirmed the assessment, noting the majority of the benefit from projected institutional starts would materialize in 2026. On capital allocation, he stated that M&A cultivation activity is 'picking up,' and he anticipates actionable opportunities to convert in 2025, while continuing double-digit dividend growth and share buybacks.

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CEO Joe Ruzynski stated that market trends felt more normal than anticipated and that the guidance for the second half assumes a return to normal seasonality. CFO Jennifer Wolfenbarger added that the company is confident in its ability to mitigate tariff and commodity cost impacts. Regarding M&A, Ruzynski confirmed the pipeline is robust and the focus remains on acquiring businesses in faster-growing markets that leverage Franklin's distribution channels.

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Interim CFO Russell Fleeger confirmed the guidance assumes price increases will be offset by some volume pressure. He anticipates a relatively normal seasonal cadence with strong backlogs in Energy Systems providing visibility. CEO Joseph Ruzynski stated that replacement-driven business is over 70-75% and highlighted the company's competitive advantage from its 'in region, for region' manufacturing strategy, which minimizes tariff exposure and is being enhanced by recent investments and acquisitions.

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CFO Jeffery Taylor outlined the 2025 guidance, projecting a $15-20 million FX headwind, 1-4% organic revenue growth, and 3-7% organic EPS growth. CEO Joseph Ruzynski added that positive order trends and focused investments provide confidence. Regarding M&A, Ruzynski stated the focus is on near-adjacencies like wastewater, municipal, and industrial markets where the company has existing exposure and can strategically add to its portfolio.

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Executive Jeffery Taylor stated that channel inventories are normalized and the company is getting positive pricing on engineered products, though facing negative pricing on commodity products like plastic pipe. CEO Joseph Ruzynski added that for 2025, the company will lean more on productivity than price to offset inflation. Regarding his strategic focus, Ruzynski highlighted "focus and velocity" on key initiatives, such as driving innovation in electrification and IoT, expanding into faster-growing verticals, and using data and digital tools to improve operational integration and forecasting.

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SVP and CFO Sameer Ralhan explained that pricing actions began impacting results late in Q2, with the full run-rate benefit expected in Q3 and Q4. He projected that Q3 margins would be similar to Q2, with a "meaningfully better" margin performance expected in Q4 as pricing fully offsets tariff impacts.

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SVP and CFO Sameer Ralhan clarified that the extra selling days from Q1 will reverse in Q4, with no impact on Q2 or Q3. He explained the Q2 guidance reflects prudence amid geopolitical uncertainty, a potential timing lag between tariff implementation and countermeasures, and a mix shift toward equipment sales, which can temporarily affect margins.

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President and CEO Jennifer Honeycutt noted that recent performance is largely a continuation of prior trends, including strength in industrial water, steady analytics growth, and an ongoing CPG market recovery. SVP and CFO Sameer Ralhan added that the 2025 top-line guidance assumes these trends will continue consistently, noting the business has minimal seasonality outside of a potential Q4 uptick in equipment sales.

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President and CEO Jennifer Honeycutt described the CPG recovery as "slow and steady" rather than a sharp inflection. She cited five consecutive quarters of recurring revenue growth and two quarters of equipment sales growth in PQI as positive indicators. Regarding the digital workflow, she stated that CPG customers are early in their digitization journey and Veralto sees further opportunities to solve customer pain points both organically and inorganically.

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CEO Stephen Shafer explained the China review is about broadening the options to ensure future success as the market evolves. CFO Charles Lauber detailed that Rest of World margins face headwinds from lower China volumes, while North America margins will be impacted by rising steel costs and the full effect of tariffs in the second half, which will be offset by pricing actions implemented in May.

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CFO Chuck Lauber confirmed the 6-8% tariff impact is separate from steel cost outlooks. He expects a normalized annual cadence for demand, supported by the company's initiative to level-load production. Chairman and CEO Kevin Wheeler added that channel inventory is in good shape, being flat to slightly down year-over-year. President and COO Stephen Shafer explained that cross-functional teams are managing both short-term actions, like sourcing from alternate supplier facilities, and longer-term changes, which are dependent on how the tariff situation evolves.

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CFO Chuck Lauber confirmed that the 2025 outlook assumes a return to a more normal seasonal cadence for water heaters, with about 51% of sales in the first half, but noted difficult comps from an unusually strong first half in 2024. Regarding margins, Lauber explained the 50-basis-point headwind from tankless production will persist through 2025 as production transitions. An executive, likely President and COO Steve Schafer, added that the water treatment restructuring is a strategic shift to focus on more profitable and competitive channels, which is expected to improve margins in that business by approximately 250 basis points.

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CEO Kevin Wheeler noted that while sell-out data isn't perfect, customer feedback indicates a flattish market. CFO Charles Lauber added that their proactive replacement survey remains strong, providing confidence. On costs, Lauber explained that while steel is a slight tailwind for Q4, other unfavorable material costs result in a relatively flat overall cost outlook and a stable price/cost dynamic.

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President and CEO Richard Tobin explained that margin performance exceeded expectations, driven by accretive growth platforms that offset lighter volumes in areas like cryogenic components and traditional refrigeration. Tobin clarified that the guidance increase was primarily a roll-forward of the strong first-half performance and that the company removed previous cautionary language due to sustained positive order momentum.

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Executive Richard Tobin responded that while short-cycle businesses are performing well, the guidance trim reflects concern over potential delays in customer CapEx projects due to macro uncertainty. He added that company inventory is intentionally high after buying forward on materials to support expected demand, and they can manage it down in the second half.

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Executive Richard Tobin affirmed that sequential demand should be relatively stable, with growth weighted towards Q2 and Q3. On M&A, he noted the pipeline has improved in quantity and quality, with many deals coming to market. He also mentioned working on proprietary deals and that the company's cash position makes it popular. Executive Brad Cerepak added that the cash is generating interest income and is not assumed to be deployed in the forecast.

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CEO Richard Tobin explained that managing capacity is a selective Q4 action to optimize cash flow, not a broad-based move like in the past. He explicitly confirmed that the 25% margin goal applies to the entire Clean Energy & Fueling segment.

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President and CEO Sundaram Nagarajan detailed the outlook, noting sustained strength in the ATS segment driven by investments in computing power for AI and cloud. For the Medical and Fluid Solutions (MFS) segment, he confirmed the Atrion acquisition is performing well and destocking severity is lessening. He identified ongoing weakness in industrial systems within the Industrial Precision Solutions (IPS) segment. Executive VP & CFO Daniel Hopgood quantified the divested medical business as approximately 4% of the medical segment's year-to-date sales, stating the sale will be about 100 basis points accretive to the segment's margins.

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CFO Daniel Hopgood detailed that the low end of the revenue guidance assumes a modest ATS recovery and little recovery elsewhere, while the high end assumes a more traditional, accelerated recovery. He confirmed the current backlog is expected to ship this fiscal year. For incremental margins, Hopgood reiterated the long-term blended target of 35%, with organic growth contributing at a higher rate and acquisitions like Atrion at a lower rate.

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CEO Sundaram Nagarajan detailed varied end-market conditions, noting steady consumer non-durables but muted capital spending in IPS, and weakness in medical interventional solutions offset by modest growth elsewhere in MFS. CFO Daniel Hopgood confirmed the guidance assumes flat organic growth and typical seasonality, with a slight Q1 impact from the Chinese New Year. Nagarajan affirmed the Q4 ATS performance was normal and that positive order trends support the outlook for modest growth.

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SVP and CFO Christina Cristiano attributed the record backlog primarily to the International Currency business, driven by the timing of large projects and five new micro-optic wins. She stated that about 65% of the backlog is expected to be delivered in 2025. President and CEO Aaron Saak explained the Authentication go-to-market strategy is structured around four key areas: government tax stamps, government ID, physical brand protection, and online brand protection, leveraging the strengths of both legacy OpSec and De La Rue.

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CEO Aaron Saak stated that net leverage is expected to be approximately 2.3x after the De La Rue closing, with a continued disciplined M&A strategy focused on deals between $100M-$500M. CFO Christina Cristiano quantified the OpSec acquisition's dilutive impact on SAT margins at about 250 basis points for 2024 and 2025. Both executives indicated that margins are expected to recover and become accretive post-2025 as the new U.S. currency series, with higher technology content, begins to launch.

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Management confirmed the guidance does not include any contribution from the De La Rue acquisition until it closes. President and CEO Aaron Saak agreed that 2026 should see normalization, with the timing of the new $10 bill release as a potential upside. He affirmed that the 2025 U.S. order mix, skewed to lower denominations, is 'very much near the lows' historically and is expected to revert to the mean over time.

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CEO Robert Pagano explained the cautious second-half outlook stems from macro uncertainty related to tariffs, not an observed slowdown, noting that Q1 and April were strong. CFO Shashank Patel added that second-half margins are typically lower sequentially and the guide accounts for potential volume deleverage. Both executives confirmed that the combination of price, global sourcing actions, and onshoring is expected to maintain the full-year margin outlook.

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CEO Robert Pagano stated the demand outlook is largely unchanged, with uncertainty pausing some new construction but institutional markets remaining strong. On European margins, he explained they are structurally lower than in the U.S. due to the OEM mix. The goal is to return to pre-downturn levels by managing the fixed cost base, as seen with the facility closure in France, and that a return in volume is key to margin recovery.

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CFO Abhi Khandelwal confirmed comfort with the guidance, explaining that the Q2 outlook is supported by the backlog and the full-year guide incorporates a $60-$65 million tariff impact offset by pricing. He noted the extra $20 million in cost savings is a proactive measure. CEO Eric Ashleman added that the company's resilience stems from its strategic growth platforms in advantaged markets, multiple layers of productivity initiatives, and the agility provided by its 80/20 business principle.

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CFO Abhishek Khandelwal explained that the Q1 softness is primarily due to the non-recurrence of $40 million in Q4 projects and a significant sequential headwind from share-based compensation. He contrasted the current environment, where the Health & Science Technologies (HST) segment has strong momentum from new blanket orders, with early 2024's industrial strength. CEO Eric Ashleman added that the semiconductor outlook includes a customer-specific inventory adjustment in the first half but is supported by positive MRO trends and strong bookings for next-generation technology, bolstering confidence in a second-half rebound. Ashleman described platform optimization as a key strategy to gain commercial efficiency and resource leverage, driving both top-line growth and earnings expansion.

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CFO Abhi Khandelwal explained that the Q1 outlook is impacted sequentially by the non-recurrence of $40 million in Q4 projects and a $0.20 EPS headwind from share-based compensation. He noted that while industrial backlog is lower year-over-year, the Health & Science Technologies (HST) segment has strong momentum from new platform blanket orders. CEO Eric Ashleman added that a specific customer inventory adjustment in semiconductors will affect H1 but is offset by positive MRO trends. Regarding optimization, Ashleman stated the goal is to drive both top-line growth and bottom-line leverage by creating commercial efficiencies and focusing resources closer to the customer, which is reflected in the 2025 guidance.

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CFO Abhi Khandelwal attributed the Q4 sequential ramp to specific, large projects in the backlog for the ABEL, MPT, and Mott businesses. CEO Eric Ashleman outlined the long-term growth strategy, stating the reshaped portfolio now targets mid-single-digit plus organic growth, supplemented by acquisitions to reach a high-single-digit total growth rate. He expects this to drive double-digit earnings expansion, supported by high margins and 80/20 principles.

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CFO Abhi Khandelwal attributed the Q4 ramp to specific, large projects in the backlog for the ABEL, MPT, and Mott businesses. CEO Eric Ashleman outlined a long-term growth algorithm targeting mid-single-digit plus organic growth, supplemented by 1-2 points from M&A, aiming for high-single-digit total growth and double-digit earnings expansion, driven by the shift towards faster-growing markets in HST.

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CEO John Stauch described the current environment as complex, with the channel's ultimate reaction to pricing and supply management still developing. CFO Bob Fishman reiterated the company's commitment to a balanced capital allocation strategy, including debt paydown, dividend increases, share repurchases like the $50 million in Q1, and strategic M&A, all focused on maximizing ROIC.

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CFO Bob Fishman noted commercial filtration is performing well, and Manitowoc Ice is expected to return to growth next year. President and CEO John Stauch added that cross-selling synergies are ahead of expectations. Regarding capital, he stated the focus is on buybacks and debt paydown while the M&A pipeline remains slow.

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CEO Kevin Holleran explained that while early buy participation was higher, a smaller percentage of those orders shipped in Q4 2024 compared to the prior year, creating a larger backlog entering 2025. CFO Eifion Jones added that Q1 seasonality is expected to be normal. Regarding housing, Holleran stated that new pool attachment rates likely declined in 2024 and highlighted that low existing home turnover also negatively impacted new pool construction.

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