Robert Brooks

Robert Brooks of Northland Capital Markets inquired about the status of the ULTRA3000s being added to GE's approved aftermarket vendors list and the timeline for final approval. He also asked about the significant year-over-year growth in semi-fab sales and whether this growth rate or nominal sales level is expected to continue through fiscal year 2026.

Answer

Greg Peloquin, General Manager of Power and Microwave Technologies Group, stated that GE's engineering team has signed off on the ULTRA3000s, with final legal signatures expected within the next couple of weeks, followed by safety audits and full approval in Q2. Regarding semi-fab sales, Mr. Peloquin confirmed that Q1 of last year was a trough, and while Q1 and Q2 of the current fiscal year are expected to maintain a similar run rate, strong growth is anticipated in Q3 and Q4 based on LAM's forecasts.

Robert Brooks of Northland Capital Markets inquired about the current status of the Ultra 3000s being added to GE's approved aftermarket vendors list, referencing previous updates on final testing and legal review progress.

Answer

Greg Peloquin, General Manager of Power and Microwave Technologies Group, confirmed that GE's engineering team has signed off, and final legal signatures are expected within the next couple of weeks. He noted that two large owner-operators are also pushing for approval, with full sign-off anticipated in Q2 after a safety audit. Brooks also asked for clarification on whether Q1 of the prior year represented a trough for semi-fab sales and if the strong year-over-year growth rate is expected to continue through fiscal year 2026. Peloquin confirmed that Q1 of the prior year was the lowest quarter for LAM, indicating strong growth is expected in Q3 and Q4 of the current fiscal year, with Q1 and Q2 maintaining a similar run rate based on current forecasts.

Robert Brooks inquired about the specific new and legacy program wins that drove the significant year-over-year sales increase in the Green Energy Solutions (GES) segment. He also asked for feedback from the recent European trade show for the ULTRA3000 product family and the key differences in market dynamics between the Americas and Europe.

Answer

Gregory Peloquin, GM of Power & Microwave Technologies, explained that growth was driven by large wind turbine repowering programs using the ULTRA3000, new electric locomotive battery and starter modules, and products for 19 other customers replacing lead-acid batteries. He noted the European trade show confirmed high demand, highlighting that while North America is dominated by GE turbines, Europe's key platforms are Suzlon, Senvion, Nordex, and SSB, with whom Richardson is already testing. Peloquin confirmed the products are electrically ready for these new platforms, requiring only minor mechanical tweaks.

Robert Brooks of Northland Capital Markets requested more context on the record new consignor growth and its primary drivers, and also asked for a comparison between the partnership program and the dropship program.

Answer

CEO Rati Levesque explained that new consignor growth was driven by a combination of revamped sales incentives, new stores, the 'Real Partners' referral program, and tech tools. She clarified that the 'Real Partners' program involves referrals from stylists and closet organizers, while 'Dropship' is a B2B channel for high-value vendors to upload products directly to the site.

Robert Brooks from Northland Capital Markets asked about the primary drivers of future supply growth, the acquisition channels for new consignors beyond retail, the high AOV from retail, the retention of new Q4 buyers, and the implementation timeline for new AI initiatives.

Answer

CEO Rati Levesque stated that supply growth is driven by a 'growth playbook' targeting mid-to-high-value sellers. She confirmed retail-sourced items have a 5-7x higher average selling price due to high-value categories like jewelry and watches. She also noted buyer stickiness, especially among high-spenders. Regarding AI, initiatives like 'Smart Sales' and 'Athena' are being rolled out in 2025 to improve sales productivity, item processing speed, and data accuracy, which enhances the customer experience.

Robert Brooks questioned how The RealReal can achieve strong growth while primary luxury brands are facing headwinds, asking for factors beyond its lack of exposure to the Chinese market.

Answer

CEO Rati Levesque emphasized the company's resilient business model, which is distinct from the primary market. She reiterated that the combination of value, luxury, and sustainability resonates strongly with consumers. Levesque pointed to the success of the 'growth playbook,' strong supply, robust demand metrics, and a diversified product mix as key differentiators that allow the company to thrive.

Robert Brooks asked about the go-to-market strategy for the newly scaled Crane Authentication business, focusing on the nature of discussions with potential new customers. He also inquired about the potential for the Authentication segment's growth rate to accelerate over the next 18 months, possibly driven by a major new brand win.

Answer

President and CEO Aaron Saak explained that the strategy centers on leveraging technology leadership and prestigious reference customers like the NFL to win new business directly. The sales process involves a 'land-and-expand' model focused on increasing share of wallet. Both Saak and SVP and CFO Christina Cristiano reiterated expectations for steady and consistent mid-single-digit growth for the segment, emphasizing its resilient, recurring revenue nature rather than projecting a dramatic acceleration.

Robert Brooks inquired about the recent micro-optics win through the OpSec channel, asking about the customer, key deal drivers, contract scope, and the mechanics of the online brand protection service.

Answer

CEO Aaron Saak explained that the win was with a new luxury perfume customer, validating the strategy of selling a full suite of authentication solutions. He highlighted that the key driver was Crane NXT's unique and wide-moat technology leadership. The initial contract covers a few products with potential for expansion. He also described the online brand protection service as a software-driven process that uses AI-enabled algorithms to scrape websites, identify counterfeits, and facilitate their removal from online marketplaces.

Robert Brooks asked about the drivers behind strong gas sales, which exceeded $100 million for the second consecutive quarter. He also inquired about the company's appetite for further growth CapEx after the Jamaica financing and how U.S. international diplomacy, particularly tariffs, might impact growth opportunities.

Answer

CFO Dana Armstrong attributed the strong gas sales to an ongoing Atlantic Basin deal and three additional cargoes. CEO Steven Kobos emphasized these were back-to-back deals with locked-in margins. On growth, Ms. Armstrong confirmed a strong appetite and ample capacity, with pro forma net leverage below 2.5x. Mr. Kobos stated that Excelerate is 'essentially tariff proof' and that trade deficits in other countries actually create tailwinds for LNG import infrastructure.

Robert Brooks of Northland Capital Markets asked how the newbuild FSRU's 1 Bcf/day capacity compares to the current fleet's capabilities. He also inquired whether the LNG carrier acquisition was being pursued to meet a specific customer's needs or as a more speculative asset. Finally, he asked about the previous fleet reliability record.

Answer

COO David Liner stated that the current fleet's regasification capacity ranges from 500 MMcf/d to 1 Bcf/d and noted that reliability is generally above 99%. CCO Oliver Simpson clarified the LNG carrier is first needed to support existing supply deals, with the secondary benefit of having a conversion-ready asset to reduce future project timelines, rather than being tied to a specific customer's needs at present.

Robert Brooks of Northland Capital Markets asked about the conversion timeline for an LNG carrier to an FSRU, the types of projects it would suit, the commercial strategy for the newbuild FSRU arriving in 2026, and its potential EBITDA contribution.

Answer

COO David Liner explained that an FSRU conversion is notably faster than a newbuild, potentially a year less, and is ideal for smaller projects. He confirmed the strategy to acquire a carrier in 2025 and use it for trading while preparing for conversion. CCO Oliver Simpson added that the newbuild FSRU is a unique, uncontracted asset suited for high send-out needs and that the company is excited about its prospects, but did not comment on specific commercial discussions or EBITDA potential.

In a follow-up, Robert Brooks of Northland Capital Markets sought confirmation on whether asset sales were still included in the updated net CapEx guidance for 2025.

Answer

EVP & CFO Chris George confirmed that asset sales remain in the base case plan to offset capital expenditures. He emphasized that the company has flexibility with its maintenance spending and possesses significant free cash flow generating capability, particularly from its infrastructure assets, once the current phase of growth projects is complete.

Robert Brooks asked for details on the new Colorado venture, specifically what capabilities Select and its partners each contribute and how the opportunity was developed. He then shifted to the Chemical Technologies segment, asking for the specific drivers behind its market share gains.

Answer

EVP of Strategy Mike Lyons and CFO Chris George explained that Select brings 15+ years of operational expertise in water management, while its partners contribute senior water rights, storage assets, and real property. The opportunity arose from Select's long-standing presence in Colorado and recognizing a unique chance to consolidate scarce resources. For the Chemicals segment, CEO John Schmitz and CFO Chris George attributed market share gains to new product development tailored for produced water reuse and the challenges of longer laterals, supported by their in-basin Permian chemistry plant.

Robert "Bobby" Brooks from Northland Capital Markets asked for clarification on several points: the specific EBITDA impact from the Q4 facility downtime in the Delaware Basin, the nature of new product wins in the Chemical Technologies segment, the reason for the Q3 activity pull-forward impacting Q4, and the meaning of an "integrated system" for the New Mexico recycling facility.

Answer

CFO Chris George explained that over half of the consolidated EBITDA decline in Q4 is attributable to the high-margin Water Infrastructure facility downtime. COO Michael Skarke noted that the Chemical Technologies wins are primarily with E&P operators in the Permian, driven by a direct sales focus and product performance. George clarified the Q3 pull-forward was completions-related, specifically for a freshwater pipeline being converted to produced water use, done in coordination with customers. Skarke and George described the "integrated system" as interconnecting facilities to create a larger network, enabling better water balancing, increased utilization, and the ability to move water across a wider geographic area to meet demand from multiple customers.

Robert Brooks from Northland Capital Markets asked about the new Talkcast podcast feature, the financial difference between an EAP patient and one on insurance, and the composition of the sequential growth in payer patients.

Answer

CEO Dr. Jon Cohen explained that Talkcast podcasts are generated and then reviewed by therapists who decide whether to release them to patients, with 6,000 released in the initial weeks. CFO Ian Harris clarified that both EAP and insurance sessions are fee-for-service and part of payer revenue, but insurance-covered sessions generally have higher rates and are not session-capped, leading to better lifetime value. He also noted that the sequential growth in payer patients was broad-based, driven by Military, Medicare, and existing commercial plans.

Robert Brooks asked for clarification on the acquisition strategy optimized towards 'checking coverage,' inquired about the drivers of Talkspace's marketing efficiency, and asked about the relationship between Payor session growth and revenue growth.

Answer

CFO Ian Harris clarified that the acquisition strategy refers to customer acquisition, with marketing messages leading with 'check your eligibility.' He attributed marketing efficiency to a strong value proposition (free or low-cost access via insurance) and cost-effective awareness from large partners. CEO Dr. Jon Cohen added that adding large populations like Medicare to their in-network status is highly efficient. Harris confirmed that session growth is the largest volume driver for Payor revenue.

Robert Brooks asked about the potential business impact of a rollback in EPA emission standards, such as the 2027 rules, and requested more specific examples of how Atmus is reconfiguring shipping routes to mitigate tariff impacts.

Answer

CEO Stephanie Disher stated that Atmus is well-positioned to support OEMs regardless of the outcome of the EPA's regulatory review, but it is too early to speculate on specific OEM design changes. CFO Jack Kienzler added that mitigation actions, including shipping lane reconfigurations and resourcing, have already been enacted to minimize customer impact before turning to price adjustments.

Robert Brooks asked about actions to mitigate tariff exposure from China and Mexico, the market reception for its initial industrial filter product, and the primary hurdles in its M&A strategy for industrial filtration, particularly regarding valuation.

Answer

CEO Steph Disher stated that a 'region-for-region' manufacturing strategy limits exposure, and pricing is the immediate lever for tariffs, as used for recent China tariffs. She noted the organic industrial product is in its infancy. For M&A, she clarified that the main challenge has been finding targets with the right strategic fit and scalability for Atmus, rather than valuation disagreements.

Robert Brooks asked for a detailed breakdown of the international business performance, particularly in Europe and APAC, and inquired about the success of the automated line in France and future automation plans for margin expansion. He later followed up on the M&A pipeline, asking what factors were preventing deals from closing.

Answer

CEO Stephanie Disher noted that nearly all international markets are seeing downside, with India being the strongest performer despite some softening and China expected to remain challenged. She confirmed that automation is a core part of their strategy and a key driver of margin expansion, along with purchasing efficiencies. On M&A, she described a disciplined process focused on three industrial verticals, stating that balancing strategic fit, growth, and returns takes time and that several opportunities are in due diligence.

Robert Brooks of Northland Capital Markets asked about the primary obstacles for customer adoption of the Oasis desalination technology, specifics on growing regulatory support for beneficial reuse, the drilling strategy for the Evergreen brine well, and the deepwater market outlook's resilience to commodity price changes.

Answer

CEO Brady Murphy explained that while customers need to gain comfort with the evolving technology and regulatory framework, commercial discussions are accelerating. He cited positive legislative movements in Texas as evidence of regulatory support. Murphy confirmed the Evergreen well can be drilled and placed on standby until the processing facility is ready. Regarding the deepwater market, Murphy and VP Kurt Hallead noted its long-cycle nature insulates near-term projects from price volatility, with the 2025 schedule firm and new contracts being signed for 2026-2027.

Robert Brooks questioned TETRA's expectations for the upcoming AOGC lithium royalty ruling, the recent move to secure external bromine supply, and the connection between a new Brazil contract and prior capacity expansions.

Answer

CEO Brady Murphy stated that the AOGC ruling is critical for project economics and that TETRA's royalty from Standard Lithium is already set at 2.5%. He explained that seeking external bromine supply offers flexibility for staging the Arkansas project's capital investment, rather than reflecting a change in the strong demand outlook. He confirmed the Brazil capacity expansion was a strategic move in anticipation of the market shifting to heavier brines, which the new contract win validates.

Robert Brooks inquired about the end-market mix within the record $228 million in orders, whether there was any demand pull-forward due to tariffs, the continuation of ordering trends into Q2, and the integration progress of Profire, including cross-selling opportunities.

Answer

Todd Gleason (executive) stated there was no material pull-forward of orders and that the strong trends have continued into Q2. He described the order mix as balanced, with notable strength in gas infrastructure and nuclear. On the Profire integration, Peter Johansson (executive) reported it is proceeding very well functionally, while Todd Gleason highlighted that Profire achieved record first-quarter bookings, underscoring the business's strength and positive cultural fit.

Robert Brooks of Northland Capital Markets questioned what new forecasting tools or processes were implemented to manage larger, complex projects and improve guidance confidence. He also asked if manufacturing capabilities from the Profire acquisition could be leveraged to mitigate tariff impacts.

Answer

Todd Gleason, CEO, clarified that the 2024 guidance miss was due to project timing dynamics rather than forecasting tool failures, but noted ongoing improvements like ERP consolidation. He expressed high confidence for 2025, driven by strong bookings and completed acquisitions. On manufacturing, Gleason stated Profire's assets are primarily for its own use, though other domestic facilities like Verantis' could be leveraged for other business lines if economically justified in the long term.

Robert Brooks inquired about the strategy to grow Profire's industrial revenue, the composition of the strong October orders, and the specific capabilities gained from the WK acquisition.

Answer

CEO Todd Gleason stated it was premature to detail specific customer strategies for Profire before the deal closes but confirmed the $100M+ in October orders were roughly two-thirds diversified and one-third from a large energy project. CFO Peter Johansson highlighted that the WK acquisition adds expertise in high-temperature incineration of waste streams and brings new technologies that complement CECO's portfolio.

Robert Brooks asked about the duration of headwinds from a prior-year supplier settlement and stand-alone costs, sought more detail on the 350bar GDi win in Brazil and the expanded wallet share with a U.S. distributor, and questioned the basis for confidence in passing through tariff costs.

Answer

CEO Brady Ericson clarified the supplier settlement was a one-time retro recovery in Q1 2024, creating a difficult year-over-year comparison, and noted the company is fully out of all TSAs. Regarding business wins, he stated the Brazil GDi program was over a year in development and will launch in 2-3 years, and described the wallet share gain as 'meaningful.' He explained that confidence in passing through tariff costs stems from ongoing discussions, existing agreements with customers, and collaborative efforts to mitigate the impact.

Robert Brooks of Northland Capital Markets inquired about the specifics of PHINIA's capital expenditures, details on its second aerospace and defense win, the strategic rationale for entering that market, and the nature of recent commercial vehicle business wins.

Answer

CEO Brady Ericson and CFO Chris Gropp clarified that the $105 million in CapEx was for the full year, supporting new programs and commercial vehicle (CV) capacity expansion. Ericson confirmed the second aerospace win is with an existing customer and leverages PHINIA's high-precision manufacturing capabilities, which are a key differentiator. He also noted that recent CV wins included both on-highway and off-highway applications.

Robert Brooks asked for a breakdown of tariff impacts by product segment, clarification on the drivers behind the Connectivity segment's sales decline, and more detail on the company's AI-related revenue and customer base.

Answer

Lynn Hutkin, VP of Financial Reporting and Investor Relations, detailed that the Connectivity segment is largely unimpacted by tariffs, while the Power and Magnetics segments have about 60% of their sales unaffected. She also confirmed that a decline in commercial air sales was the primary reason for the Connectivity segment's performance. CFO Farouq Tuweiq added that AI revenue is primarily driven by sales to next-generation, private GPU manufacturers with whom Bel has close development partnerships.

Robert Brooks of Northland Capital Markets inquired about the expected Q1 revenue contribution from the Enercon acquisition, the timeline for realizing cross-selling synergies, and details on initiatives from the new Global Head of Sales.

Answer

Executive Farouq Tuweiq stated that while Bel will blend results, the core Power segment will be down YoY in Q1 due to prior-year supplier issues and recent pull-ins. He cautioned that significant defense-related cross-selling synergies with Enercon are unlikely in 2025 due to long sales cycles. Tuweiq and an Unknown Executive detailed the new sales strategy, which focuses on improved team alignment, better customer targeting, revised commission structures, and a greater emphasis on e-commerce channels.

Robert Brooks asked about the drivers behind the sequential decline in the Power and Protection segment, the source of confidence for year-over-year growth in 2025, the status of replacing a lost supplier, and whether recent strong bookings were tied to AI or other emerging growth areas.

Answer

Executive Lynn Hutkin attributed the Power segment's sequential decline to normal Q3 seasonality in Europe and the previously discussed supplier trade restrictions. Executive Farouq Tuweiq confirmed that strong Q3 bookings, particularly in fuses and from AI customers, along with improving inventory levels and customer conversations, are driving confidence for a return to growth in 2025. Tuweiq also noted that replacing the lost supplier will take time due to customer requalification processes.

Robert Brooks asked for an update on emerging opportunities in AI, EV, and space, questioning if AI could shorten sales cycles. He also inquired about early results from recent sales initiatives and sought clarity on the Q3 guidance impact from a restricted Chinese supplier.

Answer

Executive Daniel Bernstein confirmed the Power segment is a key beneficiary of AI, with new opportunities emerging and sequential growth expected. He noted that Bel's products are largely 'AI ready,' which may lead to the use of channel inventory first. Lynn Hutkin, an executive, provided space revenue figures, reporting $2.3M in Q2 and maintaining a $7M full-year forecast. Regarding the restricted supplier, Bernstein explained the company took a conservative view in its Q3 guidance, assuming zero revenue from that source while it works on requalifying new suppliers.

Robert Brooks of Northland Capital Markets followed up on the M&A outlook, asking for details on the $20 million in acquisitions baked into 2025 guidance and whether the company's acquisition strategy is broadening in size or region. He also questioned how the Luminis data platform could be leveraged for deals outside the Bakken and how the addition of operated Lucero acreage impacts the development priority of Vitesse's non-op inventory.

Answer

CEO Bob Gerrity confirmed Vitesse's acquisition lens is broadening to include gas assets and opportunities outside the Bakken. President Brian Cree added that they adhere to a strict rate-of-return hierarchy and will not be 'aggressive,' but are confident in closing deals. CFO Jimmy Henderson described the $20 million figure as a placeholder. Gerrity also affirmed their 'Luminis' data platform is used to analyze deals across multiple basins. Cree explained the Lucero assets add flexibility and compete for capital against their non-op inventory, with plans to complete two DUCs in 2025.

Robert Brooks asked about the drivers of double-digit growth in top North American metro areas and its replicability, the reasons for sequential growth in active customers, the strategy for attracting higher-quality merchants, and the potential for counter-cyclical tailwinds from macroeconomic pressures.

Answer

CEO Dusan Senkypl explained that growth in top metros stems from a targeted 'market management' strategy, which is still being optimized before a wider rollout. He credited active customer growth to platform stability and improved marketing, adding that the 2025 plan assumes continued acquisition improvement. CFO Jiri Ponrt noted that while a weaker economy could be a headwind, it also presents a tailwind as merchants seek to fill capacity and consumers look for value.

Robert Brooks of Northland Capital Markets asked for details on achieving the 14-day 100% marketing ROI target, clarification on why higher voucher redemption rates create a revenue headwind, and the company's strategy for its SumUp stake.

Answer

Executive Dusan Senkypl stated that marketing ROI is generally near its target, with recent inefficiencies caused by platform changes and pre-election ad costs. Executives clarified that higher redemption rates reduce 'breakage' revenue (from unredeemed vouchers), which is recorded at 100% of the value, thus creating a headwind. Regarding SumUp, Senkypl confirmed it is a non-core asset, but any sale is complex and requires coordination with SumUp and sufficient market demand.

Robert Brooks of Northland Capital Markets inquired about Evolution Petroleum's M&A strategy, asking about the company's capacity for multiple simultaneous deals, the size of potential targets, and the macro factors driving the current M&A pipeline. He also sought clarification on the production reporting delays in the SCOOP/STACK assets.

Answer

CEO Kelly Loyd stated that potential M&A targets are similar in size to past acquisitions and the company would consider multiple deals if they are digestible and accretive, noting the current market sees better alignment between buyer and seller expectations. CFO Ryan Stash added that Evolution has a history of closing deals in close succession. Regarding SCOOP/STACK, COO J. Bunch explained that reporting delays can occur due to small working interests, but access to electronic data is improving this issue.

Robert Brooks inquired about the significant outperformance of SCOOP/STACK wells versus acquisition models, the drilling cadence for upcoming wells, and the expected production and CapEx impact from new Chaveroo wells. He also asked for clarification on the drivers behind lower Lease Operating Expenses (LOE).

Answer

CEO Kelly Loyd confirmed that SCOOP/STACK wells are performing approximately 65% above the acquisition type curve, attributing it to conservative underwriting. COO J. Bunch added that the geology in the area makes type curves difficult to predict. For Chaveroo, Bunch outlined CapEx of about $3.5 million per well with an expected gross output of 220 barrels of oil per day per well. CFO Ryan Stash explained that lower LOE costs were influenced by the temporary CO2 pipeline shutdown and a structural shift towards lower-cost shale production from SCOOP/STACK and Chaveroo.