Will Gildea

William Gildea of CJS Securities inquired about Astronics Corporation's potential to achieve 19%-20% EBITDA margins in Q2-Q4, given projected quarterly revenues of $245 million-$250 million, and asked for an update on the U.S. Army Radio Test Program's impact on revenue guidance.

Answer

Chairman, President, and CEO Peter Gundermann stated that achieving 19%-20% EBITDA margins is a goal, acknowledging Q4 2025's unprecedented volume and tailwinds. He noted that marginal contribution on incremental revenue, historically 40%-50%, will be tested. Regarding the Army Radio Test Program, Gundermann indicated it's less of a swing factor, with a Q2 2026 "turn on" expected, despite delays from a government shutdown.

William Gildea asked about Astronics' potential to achieve 19%-20% EBITDA margins in Q2-Q4 2026, assuming the midpoint of Q1 and full-year revenue guidance, and sought color on the U.S. Army Radio Test Program's status as a swing factor for revenue guidance.

Answer

Chairman, President, and CEO Peter Gundermann stated that achieving 19%-20% EBITDA margin is a goal, acknowledging Q4's unprecedented volume and tailwinds. He noted the Army Radio Test Program is becoming less of a swing factor, with wheels in motion for a Q2 2026 turn-on, despite government shutdown delays.

Will Gildea inquired about the European growth outlook for 2026 and strategies to enhance growth if the market remains stagnant.

Answer

President and CEO Mike Olosky expressed satisfaction with the European team's progress, noting above-market growth and a focus on profitability with a midterm target of 15% margin. He highlighted expanding share and rolling out innovations.

Will Gildea asked about the upside and downside scenarios for Simpson Manufacturing's flat North American housing starts outlook, the company's expected growth in that environment, and the 2026 growth outlook for Europe, including strategies to enhance growth if the market remains stagnant.

Answer

President and CEO Mike Olosky explained the conservative 'flat-ish' market view, noting Simpson's historical outperformance by approximately 300 basis points in volume growth versus the market since 2020. CFO Matt Dunn added expectations for continued market outperformance, carryover pricing benefits from 2025, and targeting a 20% operating margin. For Europe, Mike Olosky highlighted meaningful margin improvement, above-market growth, a low single-digit market growth forecast for 2026, and a strategy focused on expanding share and innovation to drive profitability towards a midterm target of 15%.

Will Gildea asked for an update on the production buildout for the energy orders, specifically the status of new capacity completion and testing, and the overall timeline. He also questioned whether this new capacity could be utilized for other pulse power applications if demand arises.

Answer

CEO Jeffrey Niew detailed that equipment is being moved into the Greenville facility, with a global team supporting the ramp-up. The goal is to ramp production 10x in the next five months to achieve full volume by the end of Q2, contributing to the $50-$65 million specialty film line revenue in 2026. CFO John Anderson added that a modest amount of revenue is expected in Q1, driving sequential growth into Q2. Niew clarified that the capacity is in the same facility but separated for low-mix energy production versus higher-mix standard specialty film, with automation efforts ongoing for the standard line.

Will Gildea asked for specific details on the production buildout for the energy orders, inquiring about the completion and testing of new capacity. He also asked if the new capacity could be used for other pulse power applications beyond the current energy order.

Answer

Jeffrey Niew (President and CEO) confirmed that equipment is being moved into the Greenville, South Carolina facility, with a global team supporting the ramp-up to 10x current volume in the next five months, aiming for full-volume production by the end of Q2 2025. John Anderson (SVP and CFO) added that Q1 2025 would see modest amounts, driving sequential growth into Q2. Jeffrey Niew clarified that the new capacity is set up next to the standard specialty film line, separated for low-mix production, but automation efforts will benefit the standard line long-term.

Will Gildea inquired about the current levels of investment in brands and at the corporate level, asking if they are optimal or if changes are expected. He also asked about the innovation pipeline for FY 2026 and beyond, specifically if the pace of new product introduction meets expectations.

Answer

Faisal Qadir, CFO, explained corporate costs are impacted by the exit of TSA income, with some costs pushed out of Q1. He stated that investment levels are appropriate for Global Pet Care and Home and Garden, but reduced for Home and Personal Care, with a focus on reconfiguring for productivity. He confirmed a strong innovation pipeline for Home and Garden and Global Pet Care, with David Maura, Chairman and CEO, emphasizing a continuous desire for more new products and improved margin mix.

Will Gildea asked about the current levels of investment in brands and at the corporate level, questioning if they are optimal or if increases/decreases are expected. He also inquired about the innovation pipeline for FY2026 and beyond, and if the company is satisfied with the rate of new product introductions.

Answer

Faisal Qadir, CFO, explained that corporate costs face a $20 million headwind from TSA income exit, with half expected to be covered this year, and Q1 costs were lower due to S4 go-lives being pushed. Investment levels are appropriate for Global Pet Care and Home and Garden, but have been reduced for Home and Personal Care, with a focus on reconfiguring for productivity. He confirmed a strong innovation pipeline for Home and Garden and Global Pet Care. David Maura, Chairman and CEO, emphasized a continuous desire for more innovation and new products with better margin mix.

Will Gildea from CJS Securities asked about the company's capital allocation strategy amid a soft consumer environment, particularly regarding brand investments, and whether the M&A landscape has improved with the new tariff situation.

Answer

CEO David Maura explained that while the stock is undervalued and share repurchases will continue, the primary focus is on strategic M&A to grow the pet and home & garden segments. He stressed the importance of maintaining balance sheet flexibility for this purpose. Maura noted that the M&A environment is improving slowly, but challenges remain, such as high seller expectations, which recently caused them to be outbid on a target.

Will Gildea then shifted to inquire about Enerpac Tool Group's pricing strategy for calendar year 2026, specifically asking if an annual price increase should be expected at the beginning of the year.

Answer

Paul Sternlieb, CEO of Enerpac Tool Group, clarified that the company aims to offset tariff and cost impacts to maintain margins. He confirmed a small, low single-digit price increase was implemented in early December, which will gradually roll through the channel due to notice periods. He emphasized a continuous focus on price and productivity to sustain high-margin targets.

Will Gildea inquired about the unexpected sharp decline in service revenue during the quarter and the company's efforts to improve service business profitability.

Answer

CEO Paul Sternlieb expressed disappointment, attributing the decline primarily to a contraction in the U.K. market and the strategy of passing on lower-margin projects. He noted that the service business is margin-dilutive but the company is consolidating its footprint and anticipates growth and margin expansion in fiscal 2026. Regarding pricing, CFO Darren Kozikowski confirmed a low single-digit price increase in early December for products in the Americas and Europe, aimed at offsetting tariffs and maintaining margins.

Will Gildea from CJS Securities inquired about the gross margin impact from the mix shift to Heavy Lifting Technology (HLT), the progress of the DTA integration, the expected cadence of profitability in the second half, and the current M&A pipeline.

Answer

President and CEO Paul Sternlieb explained that strong HLT growth, which has slightly lower gross margins than standard tools, impacted overall margins. CFO Darren Kozik added that the second half of the fiscal year is typically stronger, with over 52% of revenue, which provides volume leverage and improved profitability, supporting the full-year guidance. Regarding the DTA integration, Mr. Sternlieb confirmed it is progressing well with a strong strategic fit and positive customer response. He also described the M&A funnel as robust, with a focus on high-quality, complementary businesses, supported by a healthy balance sheet.

Will Gildea, from CJS Securities, inquired about Maximus's fiscal year 2026 adjusted EBITDA margin expansion drivers, revenue guidance by segment, the anticipated impact of the recent government shutdown on Q1 and full-year results, capital allocation priorities including M&A targets, and the current phase and timing of opportunities related to the One Big Beautiful Bill Act, particularly concerning SNAP and Medicaid.

Answer

CFO David Mutryn and CEO Bruce Caswell detailed that margin expansion is driven by technology deployment, automation, and cost management across all segments, with capitalized software projects now operational. They noted mild revenue contraction expected in U.S. federal and U.S. services segments due to non-recurring 2025 overperformance. Regarding the government shutdown, CEO Caswell stated minimal Q1 FY2026 impact due to essential services and prior funding, while CFO Mutryn mentioned some payment delays but overall good October collections. For capital allocation, CEO Caswell outlined M&A criteria focusing on U.S. federal growth (defense/national security), customer access, technical capabilities, and business systems, with CFO Mutryn emphasizing organic growth acceleration. On the One Big Beautiful Bill Act, CEO Caswell explained states are pre-planning for Medicaid, with SNAP being a priority due to payment error rate implications, and Maximus is actively engaging with AI-driven tools and leveraging its 30 years of experience to address these significant expansion opportunities.

Will Gildea (CJS Securities) requested an update on Maximus's engagement with states regarding opportunities from the One Big Beautiful Bill Act, specifically inquiring about the current phase of opportunity, active work with states, and the timing of RFPs.

Answer

President and CEO Bruce Caswell noted no new policy updates, with Medicaid work requirements regulations expected by summer. He highlighted SNAP as a current state priority due to payment error rate implications for federal funding starting FY2028, emphasizing Maximus's 30 years of experience with work requirements and AI-driven tools to address error causes. He expressed cautious optimism for procurement activity, citing an RFI already issued by one state, and called it the most significant expansion opportunity for U.S. services since the Affordable Care Act.

Will Gildea, on behalf of CJS Securities, asked for more detail on the drivers behind the commercial revenue rebound and its expected sustainability. He also requested an update on the adoption of the Nokē Smart Entry system, particularly regarding progress with larger REITs.

Answer

CEO Ramey Jackson attributed the commercial growth to three areas: product diversification and specification wins in Asta Rolling Steel, a rebound in the carport and shed business supported by a new distribution center, and positive contributions from the recent TMC acquisition. On Nokē, Jackson noted that testing with large customers is progressing well, with the new wired ION product's stability and price point driving significant interest from large institutional customers.

Will Gildea, on for Dan Moore, asked for more color on the drivers of the commercial revenue rebound and its sustainability, and also requested an update on Noke Smart Entry adoption, particularly among larger REITs.

Answer

CEO & Director Ramey Jackson attributed the commercial growth to three areas: product diversification and architectural specification wins in Asta Rolling Steel, a rebound in the carport/shed business supported by a new distribution center, and contributions from the TMC acquisition. Regarding Noke, he noted that tests with larger customers are progressing and the new wired ION product is gaining traction due to its stability and price point, with strong interest from large institutional customers.

Speaking for Chris Moore, Will Gildea of CJS Securities asked about Kornit's progress toward its 30 Apollo system target for 2025, including the number of orders and customer concentration. He also requested the expected revenue mix for FY25 between systems, consumables, and services.

Answer

CEO Ronen Samuel acknowledged that Kornit is currently tracking below its 30-system target for the Apollo in 2025 but did not provide a specific number of orders. He emphasized that the Apollo is successfully penetrating the screen market with incremental volumes. Regarding the revenue mix, Samuel did not give exact percentages but highlighted that system revenue and the number of units shipped had doubled year-over-year, indicating the systems portion of the business is growing significantly.

Will Gildea, on for Chris Moore at CJS Securities, requested an update on the strategic agreement with Water Guru, including product integration and revenue expectations, and asked about the potential impact of a significant interest rate reduction on future revenue.

Answer

VP Corporate Controller Jeremy Evans reported that the Water Guru product launched in Q2, with a gradual revenue ramp expected into 2026 based on hardware sales and recurring revenue from replacement cassettes. CEO Sean Bagan added that Helios is now manufacturing the product, displacing a previous China-based supplier. Bagan also stated that while an interest rate cut would be a helpful tailwind for its consumer-exposed markets, the company's growth plans are not dependent on it.

Will Gildea of CJS Securities, on behalf of Dan Moore, requested details on the timeline for new PCC satellite plant launches and an outlook for the steel market and MINSCAN system penetration.

Answer

Group President D.J. Monagle, with context from CEO Douglas Dietrich, outlined a schedule of new satellite facilities coming online in India and China through late 2025 and early 2026, focusing on packaging, NewYield, and printing/writing applications. Group President Brett Argirakis described the steel market as stable in North America but weak in Europe. He noted significant progress with MINSCAN installations, with 17 installed to date, 8 new agreements signed in 2025, and the first European sale secured, indicating a long runway for further penetration.

Will Gildea, on for Dan Moore, asked for an update on the pricing gap between new modular rentals and the average rate on the existing fleet, and for more detail on demand trends in the portable storage business.

Answer

CFO Keith Pratt stated that modular spot rates are generally stable and confirmed the pricing gap between new shipments ($11.68/unit) and the average fleet rate ($840/unit) is approximately 39%, which is consistent with the prior quarter. CEO Joseph Hanna added that the portable storage business is showing clear signs of improvement, highlighting that sequential revenues were up and June shipment volumes were the highest since January 2024.

Will Gildea, on behalf of CJS Securities, asked for expectations on Q2 production rates versus Q1, the outlook for gross and operating margins for the remainder of 2025, and the impact of tariff uncertainty on customer demand.

Answer

Executive Robert Bates projected that Q2 production, particularly in Texas, would be higher than Q1, aided by a simplified product portfolio. He positioned the Q1 gross margin as being at the lower end of the expected range, suggesting a figure around 30% is realistic going forward. On tariffs, Bates stated that while they are a consideration, the impact is not huge as most materials are domestically sourced; he identified broader business uncertainty as the more significant headwind.

Will Gildea, on for Dan Moore, asked about the potential for margin expansion in 2026 and beyond, following the investment year in 2025. He also inquired about the most promising areas for M&A.

Answer

CFO Craig Conti explained that 2026 margins will depend on the pace of new geographic expansion, noting that Government Solutions margins are expected to be in the high-20s to 30% range. CEO David Roberts stated that while the M&A pipeline is active across connected vehicle and urban mobility, the company remains price-disciplined, leading to a focus on share repurchases.