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    Nathan Jones • Stifel, Nicolaus & Company

    Nathan Jones's questions to Curtiss-Wright Corp (CW) leadership

    Nathan Jones's questions to Curtiss-Wright Corp (CW) leadership • Q2 2025

    Question

    Nathan Jones from Stifel asked if there were opportunities to accelerate internal R&D investments beyond the current plan and questioned why the company shouldn't be expected to outgrow the significantly increased FY26 DoD budget.

    Answer

    President, CEO & Chair Lynn Bamford confirmed there are opportunities for further investment, particularly in nuclear capacity, flight data recorders, and subsea pumps. Regarding the FY26 budget, she stated that while the company is well-aligned with spending priorities and outgrowing the budget is 'in the possibilities,' it is too early to provide a specific forecast for 2026.

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    Nathan Jones's questions to Curtiss-Wright Corp (CW) leadership • Q1 2025

    Question

    Nathan Jones asked for more color on the market potential for the new voice recorder business and questioned if the current high Defense Electronics margin represents a new sustainable baseline for the future.

    Answer

    CEO Lynn Bamford stated that while the voice recorder opportunity will be a 'long, steady ramp,' it is too early to precisely size the total market as key certifications are still in process. Regarding margins, she declined to provide a 2026 forecast to maintain investment flexibility but confirmed there were no one-time benefits in the 2025 results. CFO K. Farkas added that incremental margins for the Defense Electronics segment are expected to be in the 30% to 35% range.

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    Nathan Jones's questions to Curtiss-Wright Corp (CW) leadership • Q4 2024

    Question

    Nathan Jones asked for more detail on the strategic value of the Ultra Energy acquisition, specifically how it enhances Curtiss-Wright's position with European SMR manufacturers and creates synergies. He also inquired about the potential impact of increased European defense spending on the company's Foreign Military Sales (FMS).

    Answer

    CEO Lynn Bamford explained that the Ultra Energy acquisition provides a key European footprint to better serve customers like Rolls-Royce, enables the transition of products for more localized content, and expands the market reach for its high-temperature sensor technology into areas like commercial aerospace. CFO Chris Farkas added that FMS grew 10% in 2024 and is projected to grow at a low double-digit pace in 2025, driven by strong demand for C5ISR, naval aircraft handling, and ground-based arresting systems.

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    Nathan Jones's questions to Curtiss-Wright Corp (CW) leadership • Q3 2024

    Question

    Nathan Jones followed up on the Defense Electronics restructuring, asking for more color on the footprint changes and future capacity. He also inquired about the potential revenue impact from the Amazon/X-energy SMR announcement and the long-term market outlook.

    Answer

    CEO Lynn Bamford explained the restructuring is to prepare for future growth by reconfiguring one site and moving another to a larger facility to support the strong order book. Regarding SMRs, she positioned the Amazon announcement as a key proof point reinforcing the company's long-term targets of doubling its nuclear business by 2028 and reaching $1.5 billion in annual revenue by the mid-2030s.

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    Nathan Jones's questions to Watts Water Technologies Inc (WTS) leadership

    Nathan Jones's questions to Watts Water Technologies Inc (WTS) leadership • Q2 2025

    Question

    Nathan Jones from Stifel Financial Corp asked about the competitive advantage of Watts's domestic footprint amid tariffs, the potential for reshoring manufacturing, and the outlook for the European business, particularly the German heat pump market.

    Answer

    CEO Robert Pagano affirmed that producing in-country is a strategic advantage in the current tariff environment and that the company is constantly evaluating reshoring opportunities, noting available capacity. Regarding Europe, Pagano stated that while heat pump destocking should end in Q3, the broader European construction market remains soft, warranting continued caution.

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    Nathan Jones's questions to Watts Water Technologies Inc (WTS) leadership • Q1 2025

    Question

    Nathan Jones asked if Watts could gain market share and margin due to its U.S. manufacturing advantage amid new tariffs, similar to the 2022 supply chain disruptions. He also inquired about the pacing of recent price increases and whether they would be reversed if tariffs are reduced.

    Answer

    CEO Robert Pagano acknowledged that their U.S. footprint is helpful in the current tariff environment and that they will get their "fair share" of the market, but emphasized the situation remains dynamic. CFO Shashank Patel detailed that after the annual January price increase, two tariff-related increases were implemented in late March and mid-May. Pagano added that future pricing would remain competitive and responsive to market conditions, especially if tariffs change.

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    Nathan Jones's questions to Watts Water Technologies Inc (WTS) leadership • Q4 2024

    Question

    Nathan Jones from Stifel asked about the potential impact of U.S. tariffs on aluminum and steel, questioning the company's ability to pass on costs in the current demand environment. He also sought more color on the 80/20 product rationalization and requested details on the I-CON acquisition's valuation and strategic fit.

    Answer

    CEO Robert Pagano affirmed the company's intention to fully offset any tariff impacts with price increases, consistent with their past performance. He explained the 80/20 initiative was highlighted due to its size post-Bradley acquisition and noted similar work is underway in Europe. Regarding I-CON, he stated the acquisition multiple was under 9x and its control products will be leveraged through the Nexa digital platform.

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    Nathan Jones's questions to Helios Technologies Inc (HLIO) leadership

    Nathan Jones's questions to Helios Technologies Inc (HLIO) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. questioned how Helios plans to leverage its US manufacturing footprint as a competitive advantage amid tariff changes and asked for more detail on the recent organizational restructuring beyond the commercial team.

    Answer

    CEO Sean Bagan confirmed the US footprint provides an advantage, citing a recent competitive win in hydraulics. He emphasized that the Innovation business competes on differentiation rather than price. Bagan detailed the organizational shift from a regional structure to a brand- and product-focused model to enhance accountability and go-to-market effectiveness. He described the implementation as being in the 'early innings' but noted positive signs from new business wins and a strong product pipeline.

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    Nathan Jones's questions to Helios Technologies Inc (HLIO) leadership • Q1 2025

    Question

    Nathan Jones inquired about the competitive opportunities from tariffs, focusing on market share gains versus pricing power, the potential timing of these benefits, and requested more detail on the 'hunting, not fishing' go-to-market strategy.

    Answer

    CEO Sean Bagan responded that Helios views tariffs as a market share gain opportunity, particularly for its Sun cartridge valves and Faster couplings, with benefits expected to materialize in the second half of the year. He described the new go-to-market strategy as a shift from passively taking orders to actively targeting specific markets and incentivizing cross-selling. VP, Corporate Controller, Jeremy Evans added that this also involves deeper engagement with distribution partners.

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    Nathan Jones's questions to Helios Technologies Inc (HLIO) leadership • Q4 2024

    Question

    Nathan Jones asked about the long-term viability of the systems-and-subsystems portfolio strategy, plans for the significant underutilized manufacturing capacity, and the risk of demand destruction if tariff-related cost increases are passed on to consumers.

    Answer

    CEO Sean Bagan affirmed his commitment to the systems solution strategy, believing more value can be extracted through better integration, but also stated the company will continually evaluate if it is the 'best owner' for all assets. Regarding capacity, the current plan is to fill it with organic growth, but this could be reevaluated based on tariff outcomes or further sales declines. Bagan acknowledged the risk of demand destruction from price increases, particularly for the Balboa business, but noted that supply chains may shift and that Balboa is the smallest of the four flagship brands, limiting the total company impact.

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    Nathan Jones's questions to Helios Technologies Inc (HLIO) leadership • Q3 2024

    Question

    Nathan Jones of Stifel questioned if historical sales volumes are sufficient to reach mid-30s gross margins given recent capacity additions, whether underlying Q4 operating performance is stronger than implied by guidance, and what is driving this core improvement.

    Answer

    Sean Bagan, Interim President, CEO, and CFO, confirmed that a $225 million total company quarterly revenue level should be sufficient to reach mid-30s gross margins, as recent investments focused on productivity, not just capacity. He agreed that underlying Q4 operating performance is stronger than the guidance suggests, with headwinds from hurricanes masking core improvements. Bagan attributed the better performance to operational normalization, benefits from Centers of Excellence like the Tulsa-to-Tijuana transition, and footprint optimization.

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    Nathan Jones's questions to Ingersoll Rand Inc (IR) leadership

    Nathan Jones's questions to Ingersoll Rand Inc (IR) leadership • Q2 2025

    Question

    Nathan Jones inquired about the strategy for building out the life sciences platform, including the potential for larger acquisitions, and the possible impact of accelerated depreciation on customer spending.

    Answer

    CEO Vicente Reynal explained the strategy is to focus on acquiring niche technologies, like Lead Fluid, that are highly complementary, rather than pursuing large platform deals at this time. CFO Vikram Kini described accelerated depreciation as a potential positive tailwind but noted it is not factored into guidance and has not historically been a major needle-mover for demand.

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    Nathan Jones's questions to Ingersoll Rand Inc (IR) leadership • Q1 2025

    Question

    Nathan Jones of Stifel asked if significant tariff-driven price increases could negatively impact customers' project investment decisions. He also inquired about longer-term growth opportunities from fiscal stimulus and localization trends in regions like Europe and South America.

    Answer

    CEO Vicente Reynal acknowledged that while customers will do the math, the company's products are mission-critical and sold on ROI, and competitors are also raising prices. He stated they haven't seen project pauses yet but are being prudent. He affirmed that global localization trends are a significant opportunity, as customers increasingly demand local content, which plays directly to Ingersoll Rand's 'in-region for-region' strength.

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    Nathan Jones's questions to Ingersoll Rand Inc (IR) leadership • Q4 2024

    Question

    Nathan Jones asked for an update on previously mentioned project delays, whether U.S. policy uncertainty is causing further delays, and what catalysts are needed to move projects forward.

    Answer

    CEO Vicente Reynal noted that while capacity constraints haven't dramatically changed, customer conversations are more frequent and projects are moving forward, albeit not rapidly. He stated that U.S. policy uncertainty is not a significant factor, as MQL activity remains robust. Catalysts vary by project, from clarity on energy policy to resolving engineering capacity constraints.

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    Nathan Jones's questions to Ingersoll Rand Inc (IR) leadership • Q3 2024

    Question

    Nathan Jones asked if the MQL conversion time has stabilized or is still getting longer and if time is the only factor needed for acceleration. He also asked for elaboration on the comment that things are "boding well for organic orders."

    Answer

    Chairman and CEO Vicente Reynal said the elongation in MQL conversion has not materially worsened recently but remains well above historical norms, confirming time is the main factor for resolution. CFO Vik Kini clarified the "boding well" comment was based on the math around achieving a ~1.0x book-to-bill for the full year, which implies low-single-digit organic order growth for Q4.

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    Nathan Jones's questions to Lincoln Electric Holdings Inc (LECO) leadership

    Nathan Jones's questions to Lincoln Electric Holdings Inc (LECO) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. requested more color on the consumables business in the Americas, specifically the split between volume and price, to better gauge underlying industrial activity. He also asked about the pricing outlook for Q3 and whether further price hikes are anticipated due to potential new tariffs.

    Answer

    EVP, CFO & Treasurer Gabriel Bruno indicated that pricing on consumables was slightly higher than on equipment, implying that consumable volumes were roughly flattish, a sign of resilience. He expects another 200 basis points of pricing impact in Q3 from actions already taken. President, CEO & Chair Steven Hedlund added that announced steel and aluminum tariffs are already covered, but the company will maintain its price-cost neutral strategy and respond to any future policy changes.

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    Nathan Jones's questions to Lincoln Electric Holdings Inc (LECO) leadership • Q4 2024

    Question

    Nathan Jones asked about the company's ability to manage potential tariff-driven inflation, questioning if they could pass through costs with margin intact. He also inquired about the M&A strategy and whether the focus remains on automation.

    Answer

    CEO Steven Hedlund stated that while the company has a strong track record of managing price-cost, they are cautious about using price increases due to potential volume impacts. He clarified that the M&A focus has always been on the entire portfolio, not just automation, citing the recent Van Air acquisition as an example of strengthening the core business.

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    Nathan Jones's questions to Xylem Inc (XYL) leadership

    Nathan Jones's questions to Xylem Inc (XYL) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. voiced investor concerns about potential reductions in U.S. municipal utility funding and the possible impact on Xylem's business. He also asked for an update on the MCS segment, specifically regarding water meter destocking, second-half mix improvement, and the electric meter replacement cycle.

    Answer

    CEO Matthew Pine mitigated funding concerns by highlighting that 75% of Xylem's demand is OpEx-driven and that aging U.S. infrastructure requires replacement regardless of funding cycles. He added that State Revolving Funds (SRF) constitute only 5% of municipal budgets and expects Congress to maintain healthy funding. CFO William Grogan confirmed water meter demand is ramping up in the second half as expected, and noted the electric meter refresh cycle is in its early stages and will be a multi-year tailwind, with profitability improving due to new technology and 80/20 efforts.

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    Nathan Jones's questions to Xylem Inc (XYL) leadership • Q1 2025

    Question

    Nathan Jones of Stifel questioned whether tariffs place Xylem in a better or worse competitive position and how that might affect pricing power in different parts of the portfolio. He also requested more detail on the company's recent organizational realignment and its expected impact on the business.

    Answer

    CEO Matthew Pine asserted that with tariffs affecting about 4% of COGS, he believes Xylem remains in a strong competitive position, aided by its diversified portfolio and the critical nature of its products. Regarding the realignment, Pine described the shift from a matrixed organization to one with 16 division GMs who have full P&L accountability. He stated this is already increasing decision-making speed and customer focus, a sentiment reflected in recent positive employee survey results.

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    Nathan Jones's questions to Xylem Inc (XYL) leadership • Q4 2024

    Question

    Nathan Jones of Stifel questioned the 2025 margin guidance, asking for a reconciliation of headwinds and tailwinds given the significant benefit from restructuring, and also inquired about the potential for future cost-saving actions.

    Answer

    CEO Matthew Pine provided a margin bridge, explaining that while productivity, price, and restructuring benefits contribute about 175 basis points of expansion, a negative mix shift within the MCS segment creates a 75-basis-point headwind. This results in the guided net expansion of around 100 basis points at the midpoint. Pine also confirmed that the 80/20 simplification process is a continuous journey, suggesting that further optimization opportunities will be explored over time.

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    Nathan Jones's questions to Xylem Inc (XYL) leadership • Q3 2024

    Question

    Nathan Jones asked for details on the acquisition of a majority stake in Idrica, including its financial impact and how control changes the strategic outlook. He also questioned if the Applied Water segment has bottomed out and is poised for a return to growth in 2025, given recent order trends.

    Answer

    Executive Matthew Pine explained the Idrica majority stake will enable deeper integration, rationalize R&D, and scale the platform across Xylem. Executive William Grogan noted the financial impact will not be material in the current year, with more details to come in 2025 guidance. Regarding Applied Water, Pine agreed that the segment is likely near its bottom, with large project wins supporting an expected recovery in 2025, though 80/20 initiatives could present a slight headwind.

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    Nathan Jones's questions to Flowserve Corp (FLS) leadership

    Nathan Jones's questions to Flowserve Corp (FLS) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. requested more details on the new commercial excellence program and its deployment. He also sought clarification on the margin impact and completion timeline for the dilutive fabricated module business within the Mogus acquisition.

    Answer

    President & CEO R. Scott Rowe positioned commercial excellence as the next step to drive growth after establishing operational and portfolio (80/20) excellence. SVP & CFO Amy Schwetz added that the program is designed to enhance the entire commercial lifecycle, with pilots underway to impact 2026 bookings. Regarding Mogus, Rowe stated the last large module project will impact results into early 2026. Schwetz quantified the issue, noting these modules have margins approximately 2,500 basis points below the rest of the Mogus portfolio.

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    Nathan Jones's questions to Flowserve Corp (FLS) leadership • Q1 2025

    Question

    Nathan Jones asked about the visibility into Flowserve's project pipeline 6 to 18 months out and where potential project pushouts might first appear. He also questioned how the estimated $90-$100 million gross tariff impact would be split between price offsets and other mitigation efforts like supply chain changes.

    Answer

    President and CEO Robert Rowe clarified that visibility for Q2 and Q3 projects is high, as they have already received final investment decisions (FID). Any new delays would impact 2026-2027 bookings. He estimated that pricing actions could mitigate roughly half of the gross tariff impact, with the remainder addressed through supply chain repositioning and leveraging their global manufacturing footprint. CFO Amy Schwetz added that any timing mismatch in mitigation would likely pressure margins in the second half, particularly in the FCD segment.

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    Nathan Jones's questions to Flowserve Corp (FLS) leadership • Q4 2024

    Question

    Nathan Jones inquired about the specific strategies driving the significant growth in aftermarket bookings and questioned why Flowserve's 80/20 (CORE) initiative is not expected to create a revenue headwind, a common outcome for such programs.

    Answer

    President and CEO Scott Rowe explained that aftermarket success stems from a focus on speed, enhanced customer service, and high asset utilization rates at customer sites. Regarding the 80/20 program, Rowe stated that resources from discontinued, less profitable SKUs are being strategically redeployed to the best products and customers, making the net revenue impact negligible for 2025. CFO Amy Schwetz added this effect is already incorporated into the 3% to 5% organic growth guidance.

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    Nathan Jones's questions to Flowserve Corp (FLS) leadership • Q3 2024

    Question

    Nathan Jones of Stifel asked about the progress and long-term potential of the new "portfolio excellence program," which he likened to an 80/20 framework, and its ability to drive margin expansion beyond the stated 2027 targets.

    Answer

    President and CEO Scott Rowe confirmed the initiative is a formal, data-driven 80/20 framework focused on optimizing products, customers, and profitability. He noted that while the company is confident in achieving the 100-200 basis points of margin improvement by 2027, he would be "incredibly disappointed" if that were the final outcome, suggesting significant further potential.

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    Nathan Jones's questions to Zurn Elkay Water Solutions Corp (ZWS) leadership

    Nathan Jones's questions to Zurn Elkay Water Solutions Corp (ZWS) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp sought details on the new filtration product's pricing strategy and requested clarification on the timing of demand pull-forward between Q2 and Q3.

    Answer

    CFO Dave Pauli clarified that the new filtration product carries approximately a 10% higher average selling price than its predecessor. President, CEO & Chairman Todd Adams explained that $8-10 million in sales was pulled forward into Q2, while a larger volume of *orders* was also pulled forward, with the excess set to ship in Q3.

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    Nathan Jones's questions to Zurn Elkay Water Solutions Corp (ZWS) leadership • Q1 2025

    Question

    Nathan Jones sought clarification on whether 'price-cost positive' refers to dollars or margins, questioned the potential for demand destruction from price hikes, and asked a hypothetical about whether prices would be lowered if tariffs were reversed.

    Answer

    Todd Adams, Chairman and CEO, clarified that 'price-cost positive' means positive on a dollar basis at a minimum. He acknowledged potential demand impact is unknown but expects a net benefit to the top line. Regarding a hypothetical tariff reversal, Adams stated that Zurn Elkay has not historically retraced prices but would act smartly to support the industry, leveraging its advantaged supply chain for profitability.

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    Nathan Jones's questions to Zurn Elkay Water Solutions Corp (ZWS) leadership • Q3 2024

    Question

    Nathan Jones sought clarification on whether supply chain savings are additional to the normalized 30-35% incremental margins and requested an update on the penetration of bottle fillers into the installed base of water fountains.

    Answer

    CFO David Pauli confirmed that the supply chain savings would be an additional benefit on top of the normalized 30-35% incremental margins. He also estimated an incremental 200,000-300,000 bottle fillers have been installed since July 2022. CEO Todd Adams added that it is still 'very, very early days' for penetration and expects the installed base to grow by 200,000-300,000 units annually for the next several years.

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    Nathan Jones's questions to Crane Co (CR) leadership

    Nathan Jones's questions to Crane Co (CR) leadership • Q2 2025

    Question

    Nathan Jones pressed for details on how Crane plans to achieve the significant margin uplift required to hit its 10% ROIC target for the PSI acquisition. He also asked whether the large A&E orders were lumpy or phased in over time.

    Answer

    EVP & COO Alejandro Alcala drew parallels to past successes, citing PSI's sticky technology and aftermarket as fertile ground for margin expansion via the Crane Business System, though he deferred detailed guidance until post-closing. Both Alcala and EVP & CFO Rich Maue confirmed the large A&E orders are phased in, similar to blanket orders, to meet customer build schedules.

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    Nathan Jones's questions to Crane Co (CR) leadership • Q1 2025

    Question

    Nathan Jones asked about the risk of supply chain disruptions from other suppliers impacting Crane's ability to deliver on projects. He also questioned if the stronger-than-expected PFT orders were a result of customers pre-buying ahead of tariffs and if Crane itself had built up inventory.

    Answer

    EVP and COO Alejandro Alcala stated he does not expect significant supply chain issues in PFT. For A&E, he acknowledged potential lead time extensions as the supply chain adjusts to tariffs but no major disruptions are currently seen. He confirmed Crane did not pre-buy inventory and that while there was some minor pre-buying from distributors, the order strength was primarily driven by specific project wins that landed in the quarter.

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    Nathan Jones's questions to Crane Co (CR) leadership • Q4 2024

    Question

    Nathan Jones of Stifel inquired about the dynamics of the Process Flow Technologies (PFT) backlog, the progress of the PFT portfolio's shift towards higher-growth markets, and sought clarification on the mixed signals observed in the broader industrial economy.

    Answer

    EVP and COO Alex Alcala explained that the PFT backlog reduction was due to strong shipment execution in the second half of the year after project-driven growth in the first half, noting that backlog remains 40% above 2019 levels. He added that the portfolio's mix of high-growth end markets has increased from 30% in 2017 to over 60%, with a mid-term goal of 70% and a line of sight to mid-20s operating profit. Chairman, President and CEO Max Mitchell and COO Alex Alcala both commented that while industrial signals are mixed, leading indicators remain strong, with the U.S. outperforming a stable but stagnant Europe and China.

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    Nathan Jones's questions to Veralto Corp (VLTO) leadership

    Nathan Jones's questions to Veralto Corp (VLTO) leadership • Q2 2025

    Question

    Nathan Jones followed up on previous discussions about competitive advantages from trade policy and asked about the opportunity in the U.K. water utility market.

    Answer

    President and CEO Jennifer Honeycutt highlighted execution via the Veralto Enterprise System, while SVP and CFO Sameer Ralhan pointed to "region for region" manufacturing as a key advantage. Regarding the U.K., Honeycutt stated the company is well-positioned to capitalize on local spending increases due to its direct-to-customer model.

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    Nathan Jones's questions to Veralto Corp (VLTO) leadership • Q1 2025

    Question

    Nathan Jones inquired about potential competitive advantages from tariffs due to Varalto's supply chain and manufacturing positioning, and asked for clarification on how the 3.5% tariff impact is being mitigated.

    Answer

    President and CEO Jennifer Honeycutt stated that Varalto views market dislocations as an opportunity to perform well, leveraging its asset-light model, direct sales force, and the agility of VES. SVP and CFO Sameer Ralhan clarified the 3.5% gross impact will be defrayed through a combination of three levers: strategic sourcing, manufacturing footprint shifts, and targeted pricing actions, not just price increases.

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    Nathan Jones's questions to Veralto Corp (VLTO) leadership • Q4 2024

    Question

    Nathan Jones asked for clarification on the drivers of margin expansion in 2024 versus the more modest guidance for 2025, and questioned the 40% incremental margin target for 2025 compared to the long-term 30-35% goal.

    Answer

    SVP and CFO Sameer Ralhan explained that for 2025, a positive price-cost differential is expected to continue, with R&D stable at ~5% of sales and targeted commercial investments moderating the expansion. He clarified that the 30-35% incremental margin is a long-term target that allows for investment, while the 40% target for 2025 is based on specific plans for the year, following a ~50% incremental margin in 2024.

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    Nathan Jones's questions to Veralto Corp (VLTO) leadership • Q3 2024

    Question

    Nathan Jones asked for elaboration on the simplification of the Veralto Enterprise System (VES) toolkit and its impact on capitalizing on growth. He also questioned the financial algorithm for the TraceGains acquisition, including the path to double-digit ROIC and its expected earnings impact in 2025.

    Answer

    President and CEO Jennifer Honeycutt explained that VES was simplified to a core set of 5-6 fundamental tools to drive discipline and focus across all functions, fortified by select growth and operational tools. Regarding TraceGains, SVP and CFO Sameer Ralhan stated that due to continued growth investments, the acquisition is expected to be modestly dilutive to earnings in 2025, with a minimal overall impact.

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    Nathan Jones's questions to A O Smith Corp (AOS) leadership

    Nathan Jones's questions to A O Smith Corp (AOS) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. asked for clarification on the announced 6-9% price increase versus the guided 5% COGS impact from tariffs, suggesting a potential net margin benefit. He also requested more detail on the 'operational excellence' priority, particularly regarding lean principles.

    Answer

    CFO Charles Lauber clarified that the 5% tariff impact is on total company COGS, but the cost impact is predominantly concentrated in the North America segment, making the price increase more of an offset. CEO Stephen Shafer elaborated on operational excellence, explaining it involves expanding the AOS operating system beyond the plant floor to end-to-end processes to drive more discipline and efficiency.

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    Nathan Jones's questions to A O Smith Corp (AOS) leadership • Q4 2024

    Question

    Nathan Jones asked for more color on China's trade-in stimulus programs, questioning their impact in Q4 and what is assumed in the 2025 guidance. He followed up to clarify if the guidance assumes any material benefit from these programs.

    Answer

    President and COO Steve Schafer explained that while the stimulus program did generate good sell-out for channel partners in Q4, it did not fully flow back to A.O. Smith's results. He stated that the company is entering 2025 cautiously, as the program's sustainability and execution vary by province. While the extension of the program is encouraging, the guidance for 2025 includes only a minimal, cautious benefit, as management is waiting to see if it translates to fundamental consumer demand.

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    Nathan Jones's questions to A O Smith Corp (AOS) leadership • Q3 2024

    Question

    Nathan Jones sought clarification on the commentary about shortened lead times, which he recalled had normalized previously, and asked for a historical perspective on the impact of Chinese government stimulus.

    Answer

    CEO Kevin Wheeler clarified that lead times, while previously normal, were temporarily extended by a large pre-buy ahead of a Q1/Q2 price increase; the recent shortening was the normalization from that event. He cautioned against using historical stimulus as a guide for China, noting the current market maturity and property issues are different. CFO Charles Lauber added the latest appliance program appears more targeted than past ones.

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    Nathan Jones's questions to Badger Meter Inc (BMI) leadership

    Nathan Jones's questions to Badger Meter Inc (BMI) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. questioned the sequential increase in SG&A expenses, asking for a breakdown of the drivers like the SmartCover acquisition and a one-time deferred compensation item, and whether this represents a new baseline.

    Answer

    CFO Robert Wrocklage confirmed the main drivers were a full quarter of SmartCover's SG&A and intangible amortization ($1.6M), plus a unique $1M deferred compensation expense. He noted that underlying SG&A growth supports ongoing investments in software and product development. CEO Kenneth Bockhorst added that the company still expects to grow revenue faster than SG&A over the long term.

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    Nathan Jones's questions to Badger Meter Inc (BMI) leadership • Q1 2025

    Question

    Nathan Jones asked for a quantification of the expected COGS impact from tariffs, confirmation of the ability to offset it with price, and whether customers had pulled forward orders ahead of potential disruptions.

    Answer

    CEO Kenneth Bockhorst described the tariff situation as 'manageable' and stated the company is not competitively disadvantaged, planning to use targeted pricing actions to mitigate impacts. He also explained that order patterns were normal, as the majority of direct-to-utility customers lack the ability to pull forward deployments.

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    Nathan Jones's questions to Badger Meter Inc (BMI) leadership • Q4 2024

    Question

    Nathan Jones of Stifel inquired about the reasons for the sequential revenue decline in the second half of 2024 after a peak in Q2. He also questioned the competitive moat of the SmartCover acquisition and asked about its long-term margin potential.

    Answer

    CEO Kenneth Bockhorst and CFO Robert Wrocklage clarified that Q2 2024 revenue was unusually high due to working down the backlog, which they had previously advised against extrapolating. Regarding SmartCover's competitive position, Wrocklage highlighted its 20-year market leadership, while Bockhorst noted Badger Meter's unique ability to enhance it with advanced communications and software. Wrocklage stated that while SmartCover's current margins are below the core business due to growth investments, they are expected to become well above average over the long term through synergies and scale.

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    Nathan Jones's questions to Pentair PLC (PNR) leadership

    Nathan Jones's questions to Pentair PLC (PNR) leadership • Q2 2025

    Question

    Nathan Jones of Stifel Financial Corp. inquired about the business environment for Pentair's longer-cycle, CapEx-driven businesses, primarily within the Flow segment. He asked how macroeconomic uncertainty and tariffs were affecting customer decision-making and order patterns.

    Answer

    President and CEO John L. Stauch acknowledged a slowdown in orders in late 2024 and Q1 2025 but noted a pickup in Q2, leading to an improved full-year outlook for the Flow segment. He clarified that Pentair's business is more configured-to-order with shorter cycles of one to two quarters, so the recent order improvement provides good near-term visibility rather than a long-term backlog for 2026.

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    Nathan Jones's questions to Pentair PLC (PNR) leadership • Q1 2025

    Question

    Nathan Jones inquired about competitive supply chain advantages or disadvantages in the current tariff environment and asked about the feasibility of moving the remaining China-sourced supply chain elsewhere.

    Answer

    CEO John Stauch acknowledged a varied competitive landscape, stating that in some businesses they may face margin pressure, while in others, price increases could exceed tariff impacts. He confirmed that while they are actively working to shift sourcing, some components can only be sourced from China, which may lead to discontinuing certain product lines and guiding customers to alternatives.

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    Nathan Jones's questions to Pentair PLC (PNR) leadership • Q3 2024

    Question

    Nathan Jones of Stifel inquired about the typical lag time between interest rate cuts and their impact on residential businesses, and asked for an update on the operational and organizational excellence initiatives.

    Answer

    President and CEO John Stauch estimated a 6-to-9-month lag for interest rate cuts to meaningfully impact the business, suggesting a second-half 2025 effect. He described organizational excellence as an offset to reinvest in growth, while operational excellence progress has been partially masked by headwinds like higher utility and insurance costs.

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    Nathan Jones's questions to IDEX Corp (IEX) leadership

    Nathan Jones's questions to IDEX Corp (IEX) leadership • Q1 2025

    Question

    Nathan Jones of Stifel asked about the timing of tariff-related price increases and their potential impact on short-cycle demand. He also requested more detail on the strategy and long-term benefits of combining businesses into strategic growth platforms.

    Answer

    CFO Abhi Khandelwal detailed that the tariff impact would be minor in Q2 ($10-$12M) with the majority hitting in Q3 and Q4. CEO Eric Ashleman explained the growth platform strategy enables cross-business collaboration to create novel solutions, such as combining Airtech and Mott technologies for data centers. He emphasized that this is done while maintaining local decision-making, and CFO Abhi Khandelwal noted future benefits will come from footprint consolidation and sourcing savings.

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    Nathan Jones's questions to IDEX Corp (IEX) leadership • Q4 2024

    Question

    Nathan Jones of Stifel asked for a breakdown of the $40 million in Q4 projects by segment to better understand core growth, the expected organic growth by segment for the Q1 2025 forecast, and the long-term financial impact of the company's strategy to leverage scale on gross margins and SG&A.

    Answer

    CFO Abhishek Khandelwal clarified that about 80% of the $40 million in Q4 projects were in the HST segment. For the Q1 2025 organic growth forecast of -3% to -4%, he projected FMT to be down mid-single digits, HST down low-to-mid-single digits, and FSDP up low-single digits. Khandelwal explained that platform optimization is expected to drive long-term EBITDA margin expansion, with goals for HST to reach the low-to-mid 30% range, FMT to stay above 30%, and FSDP to approach 30%. CEO Eric Ashleman provided sourcing synergies as a tangible example of this leverage.

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    Nathan Jones's questions to IDEX Corp (IEX) leadership • Q4 2024

    Question

    Nathan Jones of Stifel asked for a segmental breakdown of the $40 million in Q4 project shipments and the expected organic growth by segment for Q1 2025. He also sought more detail on the financial impact of the 'leveraging scale' initiative, such as its expected contribution to gross margin or SG&A leverage over time.

    Answer

    CFO Abhi Khandelwal clarified that approximately 80% of the Q4 projects were within the HST segment. For the Q1 2025 outlook, he projected FMT to be down mid-single digits, HST down low-to-mid single digits, and FSDP up low single digits. Regarding the scale initiative, Khandelwal framed the impact in terms of long-term adjusted EBITDA margin targets: low-to-mid 30% for HST, over 30% for FMT, and near 30% for FSDP. CEO Eric Ashleman added that sourcing synergies and resource leverage, as seen with the Mott integration, are key drivers of this margin expansion.

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    Nathan Jones's questions to IDEX Corp (IEX) leadership • Q3 2024

    Question

    Nathan Jones from Stifel asked how IDEX fosters collaboration across business units, like in Intelligent Water and HST, without compromising its decentralized structure. He also questioned the nature of the 20% organic order growth in HST, asking if the underlying demand was flat after accounting for blanket orders.

    Answer

    CEO Eric Ashleman explained that collaboration is managed through a flat organizational structure and a strategic focus on areas where it adds customer value, all supported by the company's culture and talent development. CFO Abhi Khandelwal clarified that while blanket orders contributed significantly to HST's growth, about half of the sequential and year-over-year increase came from 'straight demand,' indicating underlying market improvement.

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    Nathan Jones's questions to IDEX Corp (IEX) leadership • Q3 2024

    Question

    Nathan Jones from Stifel asked how IDEX fosters collaboration across business units without compromising its decentralized structure and questioned the drivers behind the 20% organic order growth in the HST segment, particularly the impact of blanket orders.

    Answer

    CEO Eric Ashleman explained that collaboration is managed through a flat organizational structure and a strategic focus on areas where it adds customer value, supported by the 80/20 model and talent development. CFO Abhi Khandelwal clarified that roughly half of the HST segment's sequential and year-over-year order growth came from blanket orders, with the other half from underlying demand improvement.

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    Nathan Jones's questions to ESAB Corp (ESAB) leadership

    Nathan Jones's questions to ESAB Corp (ESAB) leadership • Q1 2025

    Question

    Nathan Jones asked for more color on the North American volume 'lull' and inquired about the timing and potential impact of European stimulus on ESAB's business.

    Answer

    CEO Shyam Kambeyanda described the North American situation as a broad-based 'lull' as customers await tariff clarity, not a deterioration. Regarding Europe, he expressed optimism, expecting German stimulus to activate in Q3/Q4. He noted ESAB is well-positioned to benefit from broader European investment, though this potential upside is not yet included in the company's forecast.

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    Nathan Jones's questions to MRC Global Inc (MRC) leadership

    Nathan Jones's questions to MRC Global Inc (MRC) leadership • Q4 2024

    Question

    Nathan Jones of Stifel inquired about the confidence in the significant Q2 revenue step-up given recent weakness, the factors behind the 2025 gross margin guidance, the implied EBITDA margin outlook, and the remediation plan for the recently disclosed inventory control issue.

    Answer

    CEO Rob Saltiel expressed confidence in a Q2 rebound, citing a 19% year-to-date increase in U.S. backlog driven by the end of gas utility destocking, tariff-related inflation, and midstream natural gas strength. CFO Kelly Youngblood explained the 21% gross margin guidance is conservative, as it accounts for non-repeating high-margin sales from 2024 but has potential upside from inflation. She confirmed the implied EBITDA margin is in the mid-6% range. Regarding the inventory issue, Saltiel clarified it was a process failure at two locations, not a material misstatement. Youngblood detailed a remediation plan involving increased oversight, consulting, retraining, and leveraging the new Oracle ERP system for enhanced automated controls.

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    Nathan Jones's questions to MRC Global Inc (MRC) leadership • Q3 2024

    Question

    Adam Farley, on behalf of Nathan Jones from Stifel, questioned the normalization pace of channel inventories in the gas utilities sector and asked about the internal initiatives that drove MRC Global's strong cash generation and working capital efficiency.

    Answer

    President and CEO Rob Saltiel explained that customer destocking in the gas utilities sector is in its 'later innings,' evidenced by three consecutive quarters of revenue growth. He anticipates a recovery in project spending in 2025. On cash generation, Saltiel credited improved inventory productivity through a hub-and-spoke system and diligent cash collection efforts, which reduced days sales outstanding and led to a record-low net working capital to sales ratio of 14.3%.

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    Nathan Jones's questions to MRC Global Inc (MRC) leadership • Q2 2024

    Question

    Nathan Jones of Stifel, Nicolaus & Company inquired about the drivers behind project push-outs in the DIET sector and the company's confidence in a 2025 recovery. He also asked for more color on the Gas Utilities sector, specifically regarding ongoing customer destocking and the basis for expecting increased capital spending next year.

    Answer

    CEO Rob Saltiel attributed project delays to high interest rates but expressed confidence in a 2025 rebound based on direct tracking of specific projects and customer assurances. For Gas Utilities, Saltiel confirmed that while destocking continues for some customers, the business has bottomed out and is recovering. He cited public announcements and analyst reports from MRC's largest customers indicating CapEx growth of 4-6% in 2025 and beyond, underpinning MRC's optimism.

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    Nathan Jones's questions to Valmont Industries Inc (VMI) leadership

    Nathan Jones's questions to Valmont Industries Inc (VMI) leadership • Q4 2024

    Question

    Nathan Jones from Stifel asked how the company has accounted for rising steel prices and tariffs in its guidance and its ability to pass on these costs. He also questioned the new capital allocation plan, specifically the increased CapEx and the strategic criteria for M&A.

    Answer

    CEO Avner Applbaum stated that the guidance includes known tariffs and that the company is using its established playbook to manage impacts, noting customers are accepting necessary price adjustments. CFO Tom Liguori confirmed guidance reflects current steel futures. Regarding capital, Applbaum detailed that the $150M in CapEx is to expand capacity at North American plants to meet infrastructure demand. He described the M&A strategy as disciplined, core-focused, and targeting synergistic opportunities that are accretive in year one.

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    Nathan Jones's questions to Valmont Industries Inc (VMI) leadership • Q3 2024

    Question

    Nathan Jones from Stifel asked for clarification on the drivers behind higher year-over-year average selling prices in the utility business, given the deflation in steel costs. He also inquired about the status of capacity expansions for distribution and substation products.

    Answer

    President and CEO Avner Applbaum explained that strong demand allowed for deliberate value-based pricing, particularly on smaller distribution and substation structures which saw an increased mix this quarter. He noted that as a large transmission project from 2023 wound down, the new mix drove higher pricing. CFO Tom Liguori quantified the steel deflation headwind on infrastructure revenue growth at about 1.5% and noted its near-term impact on gross margins. Applbaum added that capacity expansions are an ongoing focus, citing specific improvements in Mexico, Tulsa, and a doubling of capacity at the Fort Meade concrete facility.

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    Nathan Jones's questions to DNOW Inc (DNOW) leadership

    Nathan Jones's questions to DNOW Inc (DNOW) leadership • Q4 2024

    Question

    Nathan Jones inquired about the potential impact of tariffs on DNOW's 2025 guidance, the factors contributing to the wide revenue forecast range, and customer intentions regarding upstream activity in light of current U.S. policy.

    Answer

    President and CEO David Cherechinsky explained that potential tariffs are factored into the wide 2025 revenue guidance, noting that while generally constructive for margins, widespread tariffs could be disruptive. He highlighted that over 60% of DNOW's steel products are U.S.-sourced, providing a natural hedge. The guidance range also reflects upside potential from midstream activity versus risks from shifting government subsidies. Regarding upstream, Cherechinsky stated the forecast is based on customer feedback indicating lower activity, but acknowledged a "wildcard" potential for increased investment due to changing political sentiment.

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    Nathan Jones's questions to DNOW Inc (DNOW) leadership • Q3 2024

    Question

    Nathan Jones of Stifel inquired about the M&A environment following the election, the maturity of the acquisition pipeline, project deferrals, the impact of customer capital discipline, disruptions from industry consolidation, and the potential limits of inventory turn improvements.

    Answer

    President and CEO David Cherechinsky stated that a new administration could create a more business-friendly climate for M&A, but DNOW's focus remains on growing its Process Solutions business. He confirmed active M&A conversations are ongoing but declined to provide specifics to maintain negotiating leverage. He noted that approximately $10 million in North American projects were deferred from Q3 to Q4 due to product availability. Cherechinsky also explained that customer capital discipline has muted cyclicality, and while customer consolidation creates short-term disruptions, DNOW's scale and digital capabilities are long-term advantages. He believes the current inventory turn rate of 5.2x is excellent and has limited further upside without risking service levels.

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    Nathan Jones's questions to ITT Inc (ITT) leadership

    Nathan Jones's questions to ITT Inc (ITT) leadership • Q4 2024

    Question

    Nathan Jones asked about the potential impact of tariffs on products from Mexico, specifically for the Motion Technologies and Connect & Control Technologies (CCT) businesses, and how those costs would be managed with customers.

    Answer

    CEO Luca Savi explained that the tariff impact is complex and requires a granular, case-by-case analysis, and that the company is developing both operational and commercial action plans. CFO Emmanuel Caprais added that for CCT, impacts would be addressed through price and productivity, with proactive communication already underway with distribution customers. Savi concluded it is an industry-wide issue given competitor footprints.

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    Nathan Jones's questions to ITT Inc (ITT) leadership • Q3 2024

    Question

    Nathan Jones asked for more detail on why large Industrial Process (IP) projects are now highly profitable, a change from historical performance, and inquired about the biggest opportunities for implementing more strategic, value-based pricing.

    Answer

    CFO Emmanuel Caprais explained that improved project profitability comes from close customer collaboration on specifications, pricing for engineering changes, and ensuring complete documentation on delivery. CEO Luca Savi added that rigor in bidding and execution remains critical. For strategic pricing, Savi identified the CCT segment, particularly aerospace components and aftermarket repairs, as the area with the greatest opportunity.

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    Nathan Jones's questions to Parker-Hannifin Corp (PH) leadership

    Nathan Jones's questions to Parker-Hannifin Corp (PH) leadership • Q1 2025

    Question

    Nathan Jones sought more color on North American headwinds, specifically within the In-plant & Industrial and Off-Highway verticals. He also asked about the divested business, questioning why Parker is no longer the best owner and if more large divestitures could be expected.

    Answer

    CEO Jenny Parmentier explained that In-plant weakness is due to near-term project and CapEx delays, while Off-Highway is pressured by OEM destocking and production cuts, particularly in agriculture. Regarding the divestiture, she described it as a result of the 'best owner' strategic review, noting the business was not a core technology for Parker, though she did not signal a trend of similarly sized divestitures.

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    Nathan Jones's questions to Illinois Tool Works Inc (ITW) leadership

    Nathan Jones's questions to Illinois Tool Works Inc (ITW) leadership • Q3 2024

    Question

    Adam Farley, on behalf of Nathan Jones, asked about the potential impact of the upcoming U.S. election on sentiment in the Welding and broader industrial markets. He also inquired about any operational impacts from recent hurricanes.

    Answer

    CEO Chris O'Herlihy and CFO Michael Larsen both stated that as a short-cycle company, they are not hearing anything overt or specific from customers related to the election beyond anecdotes. CFO Michael Larsen also confirmed there was no impact from recent hurricanes on ITW's facilities or people.

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    Nathan Jones's questions to Lindsay Corp (LNN) leadership

    Nathan Jones's questions to Lindsay Corp (LNN) leadership • Q4 2024

    Question

    Nathan Jones inquired about the drivers behind the significant decremental margins in the irrigation segment, questioning the impact of the Brazil market versus other mix effects. He also asked for details on the new Middle East project's revenue contribution in Q4 and its expected impact on revenue and margins in fiscal 2025.

    Answer

    CFO Brian Ketcham explained that the decremental margins were almost entirely due to the international irrigation business, specifically the sharp year-over-year downturn in Brazil from a record 2023. He noted the new MENA project, which shipped approximately $14 million in Q4 and is expected to contribute around $80 million in fiscal 2025, is slightly dilutive to overall margins by about 100 basis points. He also projected Brazil would see a low double-digit decline for the full year in 2025.

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