Robert Samuel Karlov

Robert Samuel Karlov, on behalf of Ross Sparenblek at William Blair, asked about April order trends for the Environmental Solutions Group (ESG) to verify that Q1 strength was not a pull-forward ahead of tariffs. He also asked if the orders delayed from Q4 due to a dealer transition were fully recaptured in Q1.

Answer

President and CEO Jennifer Sherman explained that a tariff-related pull-forward was unlikely due to long backlogs and the ability to surcharge. She attributed the broad-based order strength to successful market share initiatives. CFO Ian Hudson confirmed that while some of the delayed dealer orders were placed in Q1, they were not a meaningful driver of the quarter's overall growth.

Robert Samuel Karlov, on for Ross Sparenblek, asked for color on the remaining hurdles to reducing product lead times and requested a quantification of the expected revenue contribution from the recent acquisition of Standard Equipment.

Answer

President and CEO Jennifer Sherman identified continued supply chain consistency and internal initiatives at the Vactor and Elgin facilities as key to reducing lead times, noting production was up 12% but strong orders have kept lead times long. CFO Ian Hudson detailed that Standard Equipment's historical revenue was $40-$50 million annually. He projects an incremental revenue contribution of about $20 million in 2025, split roughly 50-50 between new equipment and aftermarket, and expects the acquisition to be accretive to earnings and cash flow next year.

Asked for clarification on Marel-related regulatory filings, an update on Marel investor outreach, and details on the progression of poultry orders and customer sentiment.

Answer

Executives clarified that the status of Marel regulatory filings varies by jurisdiction, with some being formal and others (like the EU) in a pre-submission phase. They detailed extensive and successful outreach to Marel's institutional and retail investors. They also noted that poultry orders accelerated through Q2 and are expected to continue gaining momentum based on solid customer fundamentals and increasing quoting activity.