Q1 2025 Columbus McKinnon Corp Earnings Call

Renju: Good morning, and welcome to the Columbus McKinnon First Quarter Fiscal 2025 Earnings Conference Call. My name is Renju, and I will be your conference operator today. As a reminder, this call is being recorded. I would now like to turn the call over to Kristine Moser, Vice President of Investment Relations.

Operator: Good morning and welcome to Columbus McKinnon first quarter fiscal 2025 earnings conference call.

Good morning, and welcome to Columbus, Mckinnon first quarter fiscal 'twenty 25 earnings Conference call. My name is Savannah, and I will be conference operator today. As a reminder, this call is being recorded I would now like to turn the conference.

Operator: My name is Vengeu, and I will be a conference operator today. As a reminder, this call is being recorded.

Kristine Moser: I would now like to turn the conference over to Kristine Moser, Vice President of Industry Relations. Thank you.

Over to Kristy Mazo, Vice President of Investor Relations.

Kristine Moser: Thank you. Good morning, and welcome everyone to Columbus McKinnon's first quarter fiscal 25 earnings conference call. The earnings release and presentation are available for download on our investor relations website at investors.cmto.com. On the call with me today are David Wilson, our President and Chief Executive Officer, and Greg Rustowicz, our Chief Financial Officer. In a moment, David and Greg will walk you through our financial and operating performance for the quarter. But before we begin our remarks, please let me remind you that we have our Safe Harbor Statement on slide two.

Kristine Moser: Thank you good morning, and welcome everyone to Columbus Mckinnon first quarter fiscal 'twenty five earnings conference call. The earnings release and presentation are available for download on our Investor Relations website at Investor That's the M. C. L Dot com on the call with me today are.

Kristine Moser: Good morning and welcome, everyone, to Columbus McKinnon's first quarter, fiscal 25 earnings conference call. The earnings release and presentation are available for download on our Investor Relations website at investors.cmcl.com. On the call with me today, are David Wilson, our president and chief executive officer, and Greg Rustowicz, our chief financial officer. In a moment, David and Greg will walk you through our financial and operating performance for the quarter.

Speaker Change: Amid Wilson, our president and Chief Executive Officer, and Greg Rush to West our Chief Financial Officer in a moment, David and Greg will walk you through our financial and operating performance for the quarter.

Kristine Moser: Before we begin our remarks, please let me remind you that we have our safe harbor statement on slide two. During the course of this call, management may make forward-looking statements in regards to our current plans, beliefs, and expectations. These statements are not guarantees for future performance and are subject to a number of risks and uncertainties and other factors that can cause actual results and events to differ materially from the results and events contemplated by these forward-looking statements. I'd also like to remind you that management will refer to certain non-GAAP financial measures. You can find recommendations of the most directly comparable gap financial measures on the company's investor relations website and its filings with the Securities and Exchange Commission.

Speaker Change: Before we begin our remarks. Please let me remind you that we have our safe Harbor statement on slide two during the course of this call management may make forward looking statements in regards to our current plans beliefs and expectations. These statements are not guarantees for future performance and are subject to a number of risks and uncertainties and other factors that can cause actual.

Kristine Moser: During the course of this call, management may make forward-looking statements in regards to our current plans, beliefs, and expectations. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties and other factors that can cause actual results and events to differ materially from the results and events contemplated by these forward-looking statements. I'd also like to remind you that management will refer to certain non-GAAP financial measures.

Kristine Moser: And events to differ materially from the results and events contemplated by these forward looking statements I'd also like to remind you that management will refer to certain non-GAAP financial measures you can find reconciliations of the most directly comparable GAAP financial measures on the company's Investor Relations website and in its filings with the securities and exchange can.

Kristine Moser: You can find reconciliations of the most directly comparable GAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. Please see our earnings release and our filings with the SEC for more information. Today's prepared remarks will be followed by a question and answer session. With that, I'll turn the call over to David.

Kristine Moser: Please see our earnings release and our filings with the Securities and Exchange Commission for more information.

Michigan.

Kristine Moser: Please see our earnings release, and our filings with the Securities and Exchange Commission for more information.

Kristine Moser: Today's four paragraph marks will be followed by a question and answer session.

Kristine Moser: Today's prepared remarks will be followed by a question and answer session with that I'll turn the call over to David.

David Wilson: With that, I'll turn the call over to David. Thank you, Christie.

David J. Wilson: Thank you, Kristi, and good morning, everyone. Columbus McKinnon delivered a solid quarter to start the fiscal year, achieving 2 percent sales growth, which was at the midpoint of our guidance range, and adjusted EPS of 62 cents, which was at the top end of our guidance range. Areas of strength included precision conveyance and lifting, which were up 10% and 3% respectively. Short cycle sales remained healthy, and the project business was up mid-single digits.

David Wilson: Good morning, everyone. Columbus McKinnon delivered a solid quarter to start the fiscal year, achieving 2% sales growth, which was at the midpoint of our guidance range, and adjusted EPS of 62 cents, which was at the top end of our guidance range. Areas of strength included precision conveyance and lifting, which were up 10% and 3%, respectively. Short cycle sales remained healthy, and the project business was up mid single digits. Adjusted gross margin expanded by 110 basis points year over year to 38%, a record first quarter and the second highest quarterly result in company history as we remained focused on performance improvement and 8020.

David: Thank you Christie and good morning, everyone Columbus Mckinnon delivered a solid quarter to start the fiscal year, achieving 2% sales growth, which was at the midpoint of our guidance range and adjusted EPS of <unk> 62, which was at the top end of our guidance range.

David: Areas of strength included precision conveyance, and lifting which were up 10% and 3% respectively.

Kristine Moser: Short cycle sales remained healthy in the project business was up mid single digits.

David J. Wilson: Adjusted gross margin expanded by 110 basis points year over year to 38%, a record first quarter and the second highest quarterly result in company history, as we remained focused on performance improvement and 80-20. And we delivered an adjusted EBITDA margin of 15.6% even as we absorbed 1.2 million of unique costs related to launching regional strategic partner conferences in Europe and the Americas that are aligned with our commercial and customer experience initiative.

Kristine Moser: Adjusted gross margin expanded by 110 basis points year over year to 38% a record first quarter and the second highest quarterly result in company history. As we remained focused on performance improvement and 80 20.

David Wilson: And we delivered adjusted EBITDA margin of 15.6%. Even as we absorbed 1.2 million of unique costs related to launching regional strategic partner conferences in Europe and the Americas that are aligned with our commercial and customer experience initiatives. These results are underpinned by the hard work and continued execution by our 3,600 Columbus McKinnon team members as we navigated a dynamic macroeconomic environment and leveraged commercial initiatives to advance in vertical markets that are experiencing secular growth and benefiting from Megatrends. We are growing, generating cash with normal seasonality and accelerating debt repayment. These actions are adding capacity to reinvest in our growth framework.

And we delivered adjusted EBITDA margin of 15, 6%, even as we absorbed $1 2 million of unique costs related to launching regional strategic partner conferences in Europe, and the Americas that are aligned with our commercial and customer experience initiatives.

David J. Wilson: These results are underpinned by the hard work and continued execution by our 3600 Columbus McKinnon team members as we navigate a dynamic macroeconomic environment and leverage commercial initiatives to advance in vertical markets that are experiencing secular growth and benefiting from megatrends. We are growing, generating cash with normal seasonality, and accelerating debt repayment. These actions are adding capacity to reinvest in our growth framework.

These results are underpinned by the hard work and continued execution by our 3600 Columbus Mckinnon team members as we navigate a dynamic macroeconomic environment and leverage commercial initiatives to advance in vertical markets that are experiencing secular growth and benefiting from mega trends.

Kristine Moser: We are growing generating cash with normal seasonality and accelerating debt repayment. These actions are adding capacity to reinvest in our growth framework, we have multiple levers to drive more scale and further enhance our position as a leader in intelligent motion solutions for material handling with a carefully curated offer.

David Wilson: We have multiple levers to drive more scale and further enhance our position as a leader in intelligent motion solutions for material handling with a carefully curated offering for our customers.

David J. Wilson: We have multiple levers to drive more scale and further enhance our position as a leader in intelligent motion solutions for material handling, with a carefully curated offering for our customers. We believe that increasing scale will become a compounding advantage as we execute our strategy over time. Moving to slide four, we delivered mid single-digit order growth across most areas of our business, with the exception of our crane automation business, where we saw softness and are lapping a strong prior year comparable period.

David Wilson: We believe that increasing scale would become a compounding advantage as we execute our strategy over time. Advancing to slide four, we delivered mid-single-digit order growth across most areas of our business, with the exception of our crane automation business, where we saw softness and are lapping a strong prior year comparable period. Precision conveyance orders were up 5%, driven by new customer wins in the electrification space. For the remainder of our business, our order funnel remains healthier across both the short cycle categories and our project business. Short cycle orders were up 3% in the quarter, driven by share gains resulting from our customer experience initiatives. In the project business, orders were down 5% in the quarter, driven by order timing and the softness in crane automation that I just referenced.

Kristine Moser: For our customers, we believe that increasing scale, we've become a compounding advantage as we execute our strategy over time.

Kristine Moser: Advancing to slide four we delivered mid single digit order growth across most areas of our business with the exception of our Crane automation business, where we saw softness and are lapping a strong prior year comparable period.

David J. Wilson: Precision conveyance orders were up 5% driven by new customer wins in the electrification space. For the remainder of our business, our order funnel remains healthy across both the short cycle categories and our project business. Short cycle orders were up 3% in the quarter driven by share gains resulting from our customer experience initiatives. In the project business, orders were down 5% in the quarter driven by order timing and the softness in crane automation that I just referenced.

Kristine Moser: Rescission conveyance orders were up 5% driven by new customer wins in the electrification space.

For the remainder of our business our order funnel remains healthy across both the short cycle categories and our project business short cycle orders were up 3% in the quarter driven by share gains, resulting from our customer experience initiatives in the project business orders were down 5% in the quarter driven by order timing and the sort.

Kristine Moser: <unk> and crane automation that I just referenced.

David J. Wilson: Overall, our project funnel remains healthy, reflecting our customer-centric focus, targeted end-market growth initiatives, channel diversification efforts, and recent new customer engagement. On a quarter-to-date basis through last week, orders were up double digits year-over-year driven by strength and precision conveyance, particularly at Montreux. While we are not immune to the impacts related to current macroeconomic conditions, including higher interest rates for longer or indecision related to the rapidly evolving political landscape and the upcoming U.S. election, we continue to remain focused on what we can control, executing on our commercial, operational, and financial initiatives.

David Wilson: Overall, our project funnel remains healthy, reflecting our customer centric focus, targeted and market growth initiatives, channel diversification efforts, and recent new customer engagements. On a quarter-to-date basis, through last week, orders were up double digits year over year, driven by strength and precision conveyance, particularly at Mantra Tech. While we are not immune to the impacts related to current macroeconomic conditions, including higher-for-longer interest rates or in decision related to the rapidly evolving political landscape and the upcoming US election. We continue to remain focused on what we can control, executing on our commercial, operational, and financial initiatives. With this as our focus, we continue to be cautiously optimistic about our near-term prospects and our full-year outlook.

Speaker Change: Overall, our project funnel remains healthy, reflecting our customer centric focus targeted end market growth initiatives channel diversification efforts and recent new customer engagements on a quarter to date basis through last week orders were up double digits year over year, driven by strength in precision can Vance, particularly.

Speaker Change: Mantra Tech, while we are not immune to the impacts related to current macroeconomic conditions, including higher for longer interest rates or in decision related to the rapidly evolving political landscape in the upcoming U S election, we continue to remain focused on what we can control executing on our commercial operational and.

Financial initiatives.

David J. Wilson: With this as our focus, we continue to be cautiously optimistic about our near-term prospects and our full-year outlook. Backlog in the quarter increased 4%, driven by the phasing of our long-term backlog and the addition of new project wins.

Speaker Change: With this as our focus we continue to be cautiously optimistic about our near term prospects in our full year outlook.

David Wilson: Backlog in the quarter increased 4% driven by the phasing of our long term backlog and the addition of new project wins. While not in a straight line, we continue to expect backlog to further normalize from current levels over time as we improve lead times and customers adjust their ordering behaviors.

Speaker Change: Backlog in the quarter increased 4% driven by the phasing of our long term backlog and the addition of new project wins, while not in a straight line. We continue to expect backlog to further normalize from current levels over time, as we improve lead times and customers adjust their ordering behaviors.

David J. Wilson: While not in a straight line, we continue to expect backlog to further normalize from current levels over time as we improve lead times and customers adjust their ordering behavior. On slide five, you can see that our priorities remain consistent as we execute on the most important initiatives that will enable us to achieve our growth and financial performance objectives. Specifically, we remain focused on enhancing the customer experience and further differentiating our value proposition, driving operational excellence throughout the business, and executing on Footprint Simplification Plans that Facilitate Meaningful Gross Margin Expansion.

David Wilson: On slide 5, you can see that our priorities remain consistent as we execute on the most important initiatives that will enable us to achieve our growth and financial performance objectives. Specifically, we remain focused on enhancing customer experience and further differentiating our value proposition. Driving operational excellence through the business and executing on footprint simplification plans that facilitate meaningful gross margin expansion. In fact, earlier this week we announced that we are consolidating our North American linear motion facility into our manufacturing center of excellence in Monterey, Mexico. This 146,000 square foot facility is expected to see operations at the end of the second quarter and completely wind down by the end of the third quarter.

On slide five you can see that our priorities remain consistent as we execute on the most important initiatives that will enable us to achieve our growth and financial performance objectives.

Speaker Change: Specifically, we remain focused on enhancing customer experience and further differentiating our value proposition.

Speaker Change: Driving operational excellence through the business.

Speaker Change: And executing on footprint simplification plans that facilitate meaningful gross margin expansion.

David J. Wilson: In fact, earlier this week, we announced that we are consolidating our North American Linear Motion Facility into our Manufacturing Center of Excellence in Monterey, Mexico. This 146,000 square foot facility is expected to cease operations at the end of the second quarter and completely wind down by the end of the third quarter.

Speaker Change: In fact earlier this week, we announced that we are consolidating our north American linear motion facility into our manufacturing center of excellence in Monterrey, Mexico.

This 146000 square foot facility is expected to cease operations at the end of the second quarter and completely wind down by the end of the third quarter.

David Wilson: Through lean manufacturing techniques and the use of improved manufacturing technologies, we expect to have utilized just 50 to 60% of our Monterey facilities' 165,000 square feet following this action as we ramp production. This is an important next step along our 80 20 foot precipitation path to deliver 200 basis points of gross margin improvement by fiscal year 27. These strategic initiatives, in combination with our commercial priorities, enable us to deliver profitable growth focused on strategically advantaged and more. Markets. In addition to positioning ourselves to benefit from mega trends such as near-shoring, increasing defense spending, and growth in e-commerce, we are investing to become a leader in targeted vertical markets.

David J. Wilson: Through lean manufacturing techniques and the use of improved manufacturing technologies, we expect to have utilized just 50 to 60 percent of our Monterey facility's 165,000 square feet following this action as we ramp production. This is an important next step along our 80-20 footprint simplification path to deliver 200 basis points of gross margin improvement by fiscal year 27. These strategic initiatives, in combination with our commercial priorities, enable us to deliver profitable growth focused on strategically advantaged end markets.

Speaker Change: Through lean manufacturing techniques and the use of improved manufacturing technologies, we expect to have utilized just 50% to 60% of our Monterey facility is 165000 square feet. Following this action as we ramp production.

Speaker Change: This is an important next step along our 80 20 footprint simplification path to deliver 200 basis points of gross margin improvement by fiscal year 'twenty seven.

Speaker Change: These strategic initiatives in combination with our commercial priorities enabled us to deliver profitable growth focused on strategically advantaged end markets.

David J. Wilson: In addition to positioning ourselves to benefit from megatrends such as near-shoring, increasing defense spending, and growth in e-commerce, we are investing to become a leader in targeted vertical markets. Two particular areas of focus and recent success include electrification and battery production, which is a market growing at a CAGR that is north of 30% and is expected to hit $550 billion in 2030. In fact, over 200 battery factories are planned to be constructed in the next six years to support mobility, electrical capacity storage, and more.

Speaker Change: In addition to positioning ourselves to benefit from Megatrends, such as near shoring, increasing defense spending and growth in E. Commerce, we are investing to become a leader in targeted vertical markets too.

David Wilson: Two particular areas of focus and recent success include electrification or battery production, which is a market growing at a caterer that is north of 30 percent and is expected to hit $550 billion in 2030. In fact, over 200 battery factories are planned to be constructed in the next six years to support mobility, electrical capacity storage, and more. We are establishing a leadership position in the space by providing fit-for-purpose advantage solutions for battery producers, and most recently we won a $9 million order from Montrotech's asynchronous conveyance solutions from Volkswagen-backed PowerCo as they invested in factory automation solutions for their gigafactory production needs.

Speaker Change: Two particular areas of focus and recent success include electrification or battery production, which is a market growing at a CAGR that is north of 30% and is expected to hit $550 billion. In 2030 in fact over 200 battery factories are planned to be constructed in the next six years to support mobi.

Speaker Change: <unk> electrical capacity storage and more.

David J. Wilson: We are establishing a leadership position in the space by providing fit-for-purpose, advantaged solutions for battery producers. And most recently, we won a $9 million order for Ontratech's asynchronous conveyance solutions from Volkswagen-backed PowerCo as they invest in factory automation solutions for their gigafactory production needs. We see a long and attractive runway of solutions that we can deliver for this customer and others over time as our Precision Conveyance team is quickly building a reputation as a leader in intelligent motion solutions for the electrification and battery production market.

Speaker Change: We are establishing a leadership position in this space by providing fit for purpose advantaged solutions for battery producers and most recently, we won a 9 million dollar order for mantra techs asynchronous conveyance solutions from Volkswagen backed power co as they invest in factory automation solutions for their Giga factory production needs.

David Wilson: We see a long and attractive runway of solutions that we can deliver for this customer and others over time as our precision conveyance team is quickly building a reputation as a leader in intelligent motion solutions for the electrification and battery production markets.

Speaker Change: <unk>.

Speaker Change: We see a long and attractive runway of solutions that we can deliver for this customer and others over time as our precision convenience team has quickly building a reputation as a leader in intelligent motion solutions for the electrification and battery production markets.

David Wilson: Another area of focus is the life sciences vertical. Here we have had great success enabling pharmaceutical manufacturers to quickly ramp production and meet rapidly growing demand. This was done most notably during the pandemic as global pharmaceutical companies launched COVID-19 vaccines. Looking ahead, there are several rapidly growing demand areas, including weight loss injectables and related products, that are struggling to keep up with rapidly growing demand, and we are well positioned to participate in this growth. Overall, we are encouraged by the progress we are making and the potential of our business as we advance our strategy and execute on our prioritized initiatives.

David J. Wilson: Another area of focus is the life sciences version. Here, we have had great success enabling pharmaceutical manufacturers to quickly ramp up production and meet rapidly growing demand. This was done most notably during the pandemic, as global pharmaceutical companies launched COVID-19 vaccines.

Speaker Change: Another area of focus is the life sciences vertical.

Speaker Change: Here, we have had great success, enabling pharmaceutical manufacturers to quickly ramp production and meet rapidly growing demand.

Speaker Change: This was done most notably during the pandemic as global pharmaceutical companies launched COVID-19 vaccines.

David J. Wilson: Looking ahead, there are several rapidly growing demand areas, including weight loss injectables and related products that are struggling to keep up with rapidly growing demand, and we are well positioned to participate in this growth. Overall, we're encouraged by the progress we're making and the potential of our business as we advance our strategy and execute on our prioritized initiatives. We are delivering impactful improvements across the business and remain in the early innings in terms of the value these initiatives will deliver over time.

Speaker Change: Looking ahead, there are several rapidly growing demand areas, including weight loss injectables and related products that are struggling to keep up with rapidly growing demand and we are well positioned to participate in this growth.

Speaker Change: Overall, we are encouraged by the progress, we're making and the potential of our business as we advance our strategy and execute on our prioritized initiatives.

David Wilson: We are delivering impactful improvements across the business and remaining in the early innings in terms of the value these initiatives will deliver over time. Powered by our strategy and our position as a market leading provider of intelligent motion solutions for material handling, we are delivering attractive outcomes and improving financial performance. We remain confident in our ability to increase scale, compound growth, and deliver shareholder value over time.

Speaker Change: We are delivering impactful improvements across the business and remain in the early innings in terms of the value of these initiatives will deliver over time.

David J. Wilson: Powered by our strategy and our position as a market-leading provider of intelligent motion solutions for material handling, we are delivering attractive outcomes and improving financial performance. We remain confident in our ability to increase scale, compound growth, and deliver shareholder value over time. With that, I'll turn the call over to Greg to take us through the financial results. Thank you, David.

Speaker Change: Powered by our strategy and our position as a market leading provider of intelligent motion solutions for material handling.

Speaker Change: We are delivering attractive outcomes and improving financial performance.

Speaker Change: We remain confident in our ability to increase scale compound growth and deliver shareholder value over time.

Greg Rustowicz: With that, I'll turn the call over to Greg to take us through the financial results. Thank you, David.

Speaker Change: With that I'll turn the call over to Greg to take us through the financial results.

Gregory P. Rustowicz: Turning to slide 6, we delivered first quarter net sales of $239.7 million, up 2% from the prior year period. This was in line with the guidance we provided last quarter of low single-digit growth. We delivered 2.1 million of organic growth, or 0.9%, with realized pricing gains more than offsetting a slight volume decline. Montrotec revenue in April and May contributed $2.7 million to sales, or 1.1% of the increase. As the acquisition date was May 31st, beginning in June, their results are no longer included as acquired revenue.

Gregory P. Rustowicz: Thank you, David. Good morning, everyone.

Greg: Thank you David Good morning, everyone turning to slide six we delivered first quarter net sales of $239 $7 million up 2% from the prior year period. This was in line with the guidance, we provided last quarter of low single digit growth.

Greg Rustowicz: Good morning, everyone. Turning to slide six, we delivered first quarter net sales of $239.7 million, up 2% from the prior year period. This was in line with the guidance we provided last quarter of low single-digit growth. We delivered 2.1 million of organic growth or 0.9% with realized pricing gains more than offsetting a slight volume decline. Montratech revenue in April and May contributed 2.7 million to sales or 1.1% of the increase.

Greg: We delivered $2 1 million of organic growth or 9% with realized pricing gains more than offsetting a slight volume decline.

Greg: <unk> revenue in April and May contributed $2 7 million to sales or one 1% of the increase.

Greg Rustowicz: As the acquisition date was May 31st, beginning in June, their results are no longer included as acquired revenue. As a reminder, Montratech revenue has variability from period to period given the project nature of the business.

Greg: As the acquisition date was May 30, <unk> beginning in June the results are no longer included as acquired revenue.

Gregory P. Rustowicz: As a reminder, Montrotech revenue has variability from period to period given the project nature of the business. Foreign currency translation was unfavorable this quarter by 600,000, or 0.2%. Sales growth in the quarter was largely driven by Precision Conveyance, which was up 10% from the prior year. As David discussed, we are encouraged with our pipeline of opportunities for this platform, as we have significant opportunities on the horizon with both our U.S.

Greg: As a reminder, mantra tech revenue has variability from period to period, given the project nature of the business.

Greg Rustowicz: Formed currency translation was unfavorable this quarter by 600,000 or 0.2%. Sales Growth in the Quarter was largely driven by precision conveyance, which was up 10% from the prior year. His David discussed we are encouraged with our pipeline of opportunities for this platform as we have significant opportunities on the horizon with both our US precision conveyance business as well as mantra tech. Our project business also contributed to sales growth in the quarter as it was up 4% driven by strength in our stall branded product with sales into the oil and gas for vertical. Offsetting this growth was our short cycle business, which was down 2%. Although I would point out that short cycle orders were up 3% in the quarter as we advance customer experience initiatives and capture market share in the US. Sales were up slightly in the quarter, with price offsetting lower volume, as we benefited in the prior year from backlog reduction. Outside of the US, sales increased by 5% on a constant currency basis.

Greg: Foreign currency translation was unfavorable this quarter by 600000 or 2% sale.

Gregory P. Rustowicz: The Precision Conveyance business as well as MontraTech. Our project business also contributed to sales growth in the quarter, as it was up 4%, driven by strength in our Stahl-branded product, with sales into the oil and gas vertical. Offsetting this growth was our short cycle business, which was down 2%, although I would point out that short cycle orders were up 3% in the quarter as we advance customer experience initiatives and capture market share.

Greg: Sales growth in the quarter was largely driven by precision conveyance, which was up 10% from the prior year.

Speaker Change: David discussed we are encouraged with our pipeline of opportunities for this platform as we have significant opportunities on the horizon with both our U S position conveyance business as well as mantra Tech.

Speaker Change: Our project business also contributed to sales growth in the quarter as it was up 4% driven by strength in our store branded product with sales into the oil and gas vertical.

Speaker Change: Offsetting this growth was our short cycle business, which was down 2%, although I would point out that short cycle orders were up 3% in the quarter as we advanced customer experience initiatives and capture market share.

Gregory P. Rustowicz: In the U.S., sales were up slightly in the quarter, with price offsetting lower volume as we benefited in the prior year from backlog reduction. Outside of the U.S., sales increased by 5% on a constant currency basis.

Speaker Change: In the U S sales were up slightly in the quarter with price offsetting lower volume as we benefited in the prior year from backlog reduction outside.

Speaker Change: Outside of the U S sales increased by 5% on a constant currency basis.

Greg Rustowicz: This was primarily the result of Mantra Tech acquired revenue in organic growth, which contributed 3% and 2% of sales growth, respectively. On slide 7, gross profit increased 2.4 million or 2.7% versus the prior year driven primarily by pricing, favorable sales mix and Mantra Tech acquired gross profit even as we absorbed 1.8 million of monitoring Mexico startup costs and business realignment costs. We recorded a gross margin of 37.1% in the first quarter, up 30 basis points versus the prior year, and an adjusted basis gross margin was 38%, up 110 basis points year over year. Moving to slide 8, RSGNA expense in the quarter increased 2.1 million to 60.4 million dollars.

Gregory P. Rustowicz: This was primarily the result of Montrotech acquired revenue and organic growth, which contributed 3% and 2% of sales growth, respectively. On slide 7, gross profit increased $2.4 million, or 2.7% versus the prior year, driven primarily by pricing, favorable sales mix, and Montrotech acquired gross profit, even as we absorbed $1.8 million of Monterey startup costs and business realignment costs. We recorded a gross margin of 37.1% in the first quarter, up 30 basis points versus the prior year.

Speaker Change: This was primarily the result of mantra Tech acquired revenue and organic growth, which contributed 3% and 2% of sales growth respectively.

Speaker Change: On slide seven gross profit increased $2 4 million or two 7% versus the prior year, driven primarily by pricing favorable sales mix and mantra Tech acquired gross profit even as we absorbed $1 8 million of Monterrey, Mexico startup costs and business realignment costs.

Speaker Change: We recorded a gross margin of 37, 1% in the first quarter up 30 basis points versus the prior year.

Gregory P. Rustowicz: On an adjusted basis, gross margin was 38%, up 110 basis points year over year. Moving to slide 8, RSG&A expense in the quarter increased $2.1 million to $60.4 million. This was driven primarily by the acquisition, which added $1.7 million of acquired costs in the quarter. RSG&A expense also included $1.9 million of Monterey, Mexico, factory startup costs and $500,000 of business realignment costs. We also incurred $1.2 million in costs related to our strategic partner conferences in both the U.S. and Europe, which were not held in the prior year.

Speaker Change: On an adjusted basis gross margin was 38% up 110 basis points year over year.

Speaker Change: Moving to slide eight our SG&A expense in the quarter increased $2 1 million to $64 million.

Greg Rustowicz: This was driven primarily by the acquisition, which added 1.7 million of acquired costs in the quarter. RSGNA expense also included 1.9 million of monitoring Mexico factory startup costs and 500,000 of business realignment costs.

Speaker Change: This was driven primarily by the acquisition, which added $1 7 million of acquired costs in the quarter.

Speaker Change: Our SG&A expense also included $1 9 million of Monterrey, Mexico factory startup costs and 500000 of business realignment costs. We also incurred $1 2 million of costs related to our strategic partner conferences in both the U S and Europe, which were not held in the prior year.

Greg Rustowicz: We also incurred 1.2 million of costs related to our strategic partner conferences in both the US and Europe, which were not held in the prior year. Turning to slide 9, we generated operating income of 21.1 million in the quarter, down 1% to the prior year. Impacted by the factory startup costs, business realignment costs, and the strategic partner conference costs that I just mentioned. Adjusted operating income was 25.7 million, roughly flat to the prior year. On slide 10, we recorded gap earnings per diluted share for the quarter of 30 cents, down 2 cents versus the prior year.

Gregory P. Rustowicz: Turning to slide 9, we generated operating income of $21.1 million in the quarter, down 1% from the prior year, impacted by the factory startup costs, business realignment costs, and the strategic partner conference costs that I just mentioned. Adjusted operating income was $25.7 million, roughly flat to the prior year. On slide 10, we recorded GAAP earnings per diluted share for the quarter of $0.30, down $0.02 versus the prior year. Impacting GAAP EPS were the previously mentioned new factory startup costs in Monterey, Mexico, and business realignment costs. Together, these items impacted GAAP EPS by 11 cents per share.

Speaker Change: Turning to slide nine we generated operating income of $21 1 million in the quarter down 1% to the prior year impacted by the factory start up costs business realignment costs and a strategic partner conference cost that I just mentioned.

Speaker Change: Adjusted operating income was $25 7 million roughly flat to the prior year.

Speaker Change: On Slide 10, we recorded GAAP earnings per diluted share for the quarter of 30.

Speaker Change: Down to <unk> versus the prior year impacting GAAP EPS were the previously mentioned new factory start up costs in Monterrey, Mexico and business realignment costs.

Greg Rustowicz: Impacting gap EPS where the previously mentioned new factory startup costs and monitoring Mexico and business realignment costs. Together, these items impacted gap EPS by 11 cents per share. Adjusted earnings per diluted share of 62 cents was flat to the prior year, with a higher amortization expense addback and lower interest expense offsetting other below-the-line items. On slide 11, our adjusted EBITDA increased 2% year over year in the first quarter, and adjusted EBITDA margin of 15.6% was in line with the prior year. This included the impact of the strategic partner conferences, which impacted our EBITOM Argin by 50 basis points.

Speaker Change: Together these items impacted GAAP EPS by <unk> 11 per share.

Gregory P. Rustowicz: Adjusted earnings per diluted share of $0.62 was flat to the prior year, with a higher amortization expense add-back and lower interest expense offsetting other below-the-line items. On slide 11, our adjusted EBITDA increased 2% year-over-year in the first quarter. An adjusted EBITDA margin of 15.6% was in line with the prior year. This included the impact of the Strategic Partner Conferences, which impacted our EBITDA margin by 50 basis points. Moving to slide 12, free cash flow improved $7.1 million from the prior year.

Speaker Change: Adjusted earnings per diluted share of <unk> 62 was flat to the prior year with a higher amortization expense add back and lower interest expense offsetting other below the line items.

Speaker Change: On slide 11, our adjusted EBITDA increased 2% year over year in the first quarter.

Speaker Change: Adjusted EBITA margin of 15, 6% was in line with the prior year.

Speaker Change: This included the impact of the strategic partner conferences, which impacted our EBITA margin by 50 basis points.

Greg Rustowicz: Moving to slide 12, free cash will improve 7.1 million from the prior year. Negative free cash will have 15.4 million in the first quarter, reflected normal working capital seasonality in our business. CapEx in the quarter was approximately $5 million, comparable with the prior year. Free cash flow conversion for the quarter on a trailing 12-month basis was a strong 108%. Turning to slide 13, our total debt was down 4% for March 31st levels. We paid down 20 million of debt in the quarter, and our increasing our expected debt repayment in fiscal 25 from 50 million to 60 million.

Speaker Change: Moving to slide 12 free cash flow improved $7 1 million from the prior year negative free cash flow of $15 4 million in the first quarter reflected normal working capital seasonality in our business.

Gregory P. Rustowicz: Negative free cash flow of $15.4 million in the first quarter reflected normal working capital seasonality in our business. CapEx in the quarter was approximately $5 million, comparable with the prior year. Free cash flow conversion for the quarter on a trailing 12-month basis was a strong 108%.

Speaker Change: Capex in the quarter was approximately 5 million comparable with the prior year.

Speaker Change: Free cash flow conversion for the quarter on a trailing 12 month basis was a strong 108% turning to slide 13, our total debt was down 4% from March 31st levels, we paid down $20 million of debt in the quarter.

Gregory P. Rustowicz: Turning to slide 13, our total debt was down 4% for March 31st. We paid down $20 million of debt in the quarter, and are increasing our expected debt repayment in fiscal 25 from $50 million to $60 million. Our net leverage ratio was 2.6 times on a financial covenant basis, down 0.3 times year-over-year, and we expect our net leverage ratio to end the current fiscal year at approximately two times. As a reminder, we repriced our Term Loan B in March, lowering our cost of debt.

Speaker Change: We're increasing our expected debt repayment in fiscal 'twenty, five from 50 million to $60 million.

Greg Rustowicz: Our net leverage ratio was 2.6 times on a financial covenant basis, down 0.3 times year over year, and we expect our net leverage ratio to end the current fiscal year approximately 2 times. As a reminder, we repriced our term loan being March, lowering our cost of debt. We expect this to generate approximately 2.5 million of interest expense savings in fiscal year 25.

Speaker Change: Our net leverage ratio was two six times on a financial covenant basis down 0.3 times year over year, and we expect our net leverage ratio to end of current fiscal year at approximately two times.

Speaker Change: As a reminder, we repriced our term loan b in March lowering our cost of debt. We expect this to generate approximately $2 5 million of interest expense savings in fiscal year 'twenty five.

Gregory P. Rustowicz: We expect this to generate approximately $2.5 million of interest expense savings in FY25. Slide 14 provides our guidance for fiscal year 25 and the second quarter. Our guidance considers the improvements we are driving throughout the business, our visibility into the funnel, and our solid performance in the first quarter despite a softer macroeconomic backdrop. We have also built into our forecast for the second quarter the expected impact of consolidating our North American linear motion production into our Center of Excellence in Monterey, Mexico.

Greg Rustowicz: Slide 14 provides our guidance for fiscal year 25 and the second quarter. Our guidance considers the improvements we are driving throughout the business, our visibility into the funnel, and our solid performance in the first quarter despite a softer macroeconomic backdrop. We have also built into our forecast for the second quarter the expected impact of consolidating our North American linear motion production into our center of excellence in monitoring Mexico. With that in mind, we are issuing the following guidance. In the second quarter, we expect sales growth to be down low to mid-single digits from the prior year, and adjusted EPS growth to be down mid-single digits year over year.

Speaker Change: Slide 14 provides our guidance for fiscal year, 'twenty, five and the second quarter.

Speaker Change: Our guidance considers the improvements we are driving throughout the business our visibility into the funnel and our solid performance in the first quarter, despite a softer macroeconomic backdrop.

Speaker Change: We have also built into our forecast for the second quarter the expected impact of consolidated in our North American linear motion production into our center of excellence in Monterrey, Mexico.

Gregory P. Rustowicz: With that in mind, we are issuing the following guidance. For the second quarter, we expect sales growth to be down low to mid-single digits from the prior year and adjusted EPS growth to be down mid-single digits year over year. We are also anticipating several one-time costs related to the factory closure, including $2 to $4 million of expected cash restructuring costs and $4 to $5 million of non-cash asset impairment costs related to the consolidation.

Speaker Change: With that in mind, we are issuing the following guidance and.

Speaker Change: In the second quarter, we expect sales growth to be down low to mid single digits from the prior year and adjusted EPS growth to be down mid single digits year over year.

Greg Rustowicz: We are also anticipating several one-time costs related to the factory closure, including two to four million of expected cash restructuring costs and four to five million of non-cash asset impairment costs related to the consolidation.

Speaker Change: We are also anticipating several one time costs related to the factory closure, including $2 million to $4 million of expected cash restructuring costs and four to 5 million of noncash asset impairment costs related to the consolidation.

Greg Rustowicz: This is an important step on our 80-20 journey with our overall footprint simplification plan expected to deliver 200 basis points of gross margin improvement by fiscal 27. For the full year, we are reaffirming our fiscal 2025 guidance of low single-digit sales growth year over year. Mid-to-high single-digit growth in adjusted EPS, catbacks in a range of 20 million to 30 million, which includes 8 million related to our footprint simplification initiative, and we expect our net leverage ratio to end fiscal 25 at approximately two times.

Gregory P. Rustowicz: This is an important step on our 80-20 journey, with our overall footprint simplification plan expected to deliver 200 basis points of gross margin improvement by fiscal 27. For the full year, we are reaffirming our fiscal 2025 guidance of low single-digit sales growth year-over-year, mid-to-high single-digit growth in adjusted EPS, CapEx in the range of $20 million to $30 million, which includes $8 million related to our footprint simplification initiative, and we expect our net leverage ratio to end fiscal 2025 at approximately two times. Operator, we are now ready to take questions.

Speaker Change: This is an important step on our 80 20 journey with our overall footprint simplification plan expected to deliver 200 basis points of gross margin improvement by fiscal 'twenty seven.

Speaker Change: The full year, we are reaffirming our fiscal 2025 guidance of low single digit sales growth year over year mid to high single digit growth in adjusted EPS Capex in a range of 20 million to $30 million, which includes $8 million related to our footprint simplification initiative and we expect our net leverage ratio to end fiscal 'twenty five.

Speaker Change: Approximately two times.

Operator: Operator, we are now ready to take questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Operator, we are now ready to take questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question. You may press star 2 if you would like to remove your questions from the list. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button.

Speaker Change: Thank you.

Speaker Change: We will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Confirmation tone will indicate your line is in the question queue.

Speaker Change: I stopped to if you would like to move your questions from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. As a reminder, please restrict yourself to one question and one follow up one moment. Please while we poll for questions.

James Kirby: As a reminder, please restrict yourself to one question and one follow-up. One moment, please, while we poll for questions. The first question comes from the line of James Kirby with JPMorgan Chase. Please go ahead.

Operator: As a reminder, please restrict yourself to one question and one follow-on. One moment please, while we pull for questions.

James Kirby: The first question comes from the line of James Kirby with J.P. Morgan Chase. Please go by.

Speaker Change: The first question comes from the line of James Kobe with JP Morgan Chase. Please go ahead.

James Kirby: Hey, good morning, guys. I just want to start with the second quarter guidance in the context of the full-year guidance. Is it safe to say that the second quarter will be the lowest point of the year, or is it too early to tell kind of what the back half holds? No, that's what we expect.

David J. Wilson: Hey, good morning, guys. Just want to start with the second quarter guidance in the context of the full year guidance. Is it safe to say that the second quarter will be the lowest point of the year, or is it too early to tell kind of what the back half holds?

James Kobe: Hey, good morning, guys.

James Kobe: Just wanted to start with the second quarter, our guidance in the context of the full year guidance is it safe to say that second quarter will be the lowest point of the year or is it too early to tell kind of what the back half holds.

David J. Wilson: Now that's what we expect.

Speaker Change: No that's what we expect.

James Kirby: Thanks. Got it.

Gregory P. Rustowicz: Got it, and I guess off the same question you mentioned the monitoring benefit from pricing. You know what is embedded in the second half of the year. I assume we take another step down, maybe next quarter, in 2Q, but is there anything in the back half of the year that gives you confidence that that pricing might return to strength.

Speaker Change: Okay got it and I guess off the same quest.

James Kirby: And I guess off the same question, you mentioned the monitoring benefit from pricing.

Speaker Change: Question, you mentioned, the moderating benefit from pricing.

James Kirby: What is embedded in the second half of the year? I assume we take another step down maybe next quarter in 2Q, but is there anything in the back half of the year that gives you confidence that pricing might return to a strength? I would say, James, that we have a position of strength as it relates to pricing typically, and that we do outpace inflationary costs with our price adjustments. And so I don't believe we're in a position of weakness relative to pricing. I just think that the point that we're making is the pricing has moderated in terms of the impact relative to the lower inflationary environment that we're in.

Speaker Change: What is embedded in the second half of the year I assume we took another step down maybe next quarter.

Speaker Change: <unk>, but is there anything in the back half of the year that that gives you confidence that that pricing might.

Speaker Change: <unk> returned to a strength.

Gregory P. Rustowicz: I would say, James, that we typically have a position of strength as it relates to pricing and that we do outpace inflationary costs with our price adjustments, and so I don't believe we're in a position of weakness relative to pricing. I just think that the point that we're making is that pricing has moderated in terms of its impact relative to the lower inflationary environment that we're in. And so while I don't expect pricing to have a material impact on the second half of the year, we do believe that it'll be outpacing the impact of any inflationary pressures that we would see.

Speaker Change: I would say James that we.

Speaker Change: Have a position of strength as it relates to pricing typically in that we.

Speaker Change: Do outpace inflationary costs.

James Kobe: With our price adjustments and so I don't believe we're in a position of weakness relative to pricing I just think that the point that we're making is that pricing has moderated in terms of the impact relative to the lower inflationary environment that we're in.

James Kirby: And so while I don't expect pricing to have a material impact on the second half of the year, we do believe that it will be outpacing the impact of in the inflationary pressures that we would see. And James, I would just add that in our North American lifting business, our price increases took effect in the month of June. And so there's backlogs still priced at old pricing. So we do expect pricing, as we alluded to at the end of the fourth quarter, to moderate as inflation has come down, but we would expect it to be in that one-to-two percent range for the year.

Speaker Change: And so while I.

Speaker Change: I don't expect pricing to have a material impact on the second half of the year. We do believe that it'll be outpacing the impact of any inflationary pressures that we would see and James I would just add that in our north American lifting business are price increases took effect in the month of June and so theres backlog still price debt.

James Kirby: And, James, I would just add that in our North American lifting business, our price increases took effect in the month of June, and so there's backlog still priced at old prices. So we do expect pricing, as we alluded to at the end of the fourth quarter, to moderate as inflation has come down, but we would expect it to be in that 1 to 2 percent range for the year. So we would see it modestly higher going forward as the price increases take effect.

Speaker Change: Old pricing. So we do expect pricing as we alluded to at the end of the fourth quarter to moderate as inflation has come down, but we would expect it to be in that 1% to 2% range for the year.

James Kirby: So we wouldn't see it, you know, modestly higher going forward as the price increases take effect. Got it. That makes sense. I appreciate it, Greg. Thanks.

James Kobe: So we wouldn't see it modestly higher going forward as the price increases take effect.

Gregory P. Rustowicz: You got it. That makes sense. I appreciate it, Greg.

Speaker Change: Got it that makes sense I appreciate it great David.

Speaker Change: Yes.

James Kirby: Thank you.

Matt J. Summerville: Thank you. The next question comes from the line of Matt Summerville with D.A. Davidson. Please go ahead.

Speaker Change: Thank you next question comes from the line of Matt come open with D. A Davidson. Please go ahead.

Matt Hummel: Next question comes on the line of Matt Hummel with DA Davidson. Please go ahead.

Matt Hummel: A couple of questions. So I guess first with the second quarter dynamic, I guess maybe you weren't sure when which quarter this was going to happen 90 days ago, but I guess why not kind of get out in front and articulate that you know the second quarter was going to be a little bit of an air pocket on the move. And then, similarly, that implies a pretty big and uncharacteristically big second half of the year.

Gregory P. Rustowicz: Yeah, a couple questions. So I guess first, with the second quarter dynamic. Maybe you weren't sure when, which quarter this was going to happen 90 days ago, but I guess, why not kind of get out in front and articulate that, you know, the second quarter was going to be a little bit of an air pocket on the move. And then similarly... That implies a pretty big and uncharacteristically big second half of the year, so help us get comfortable that the full year guide on the bottom line is still achievable.

Matt J. Summerville: Yes, a couple of questions. So.

Speaker Change: I guess first with with the second quarter dynamic I guess.

Matt: Maybe you weren't sure when which quarter. This is going to happen 90 days ago, but I guess why not kind of get out in front and articulate that.

Matt: The second quarter was going to be a little bit of an air pocket on the move and then similarly.

Speaker Change: That implies a pretty big an uncharacteristically big second half of the year. So help us get comfortable that the full year guide on the bottom line is still achievable.

Matt Hummel: So help us get comfortable that the full year guide on the bottom line is still achievable. Yeah, absolutely, Matt. Fair enough. And in terms of the timing, we're managing the business. We have employees that we need to be sensitive to. Obviously, we can't get out ahead of that with that communication and articulate that detail until we're ready to do it. It has implications on notifications that we need to make relative to the WARN Act and other related filings. So, you know, we communicate that when we're ready to do so. We've been very clear about the fact that we're marching towards a multi-action plan that results in 200 basis points of expansion.

Gregory P. Rustowicz: Yeah, absolutely, Matt. Fair enough. And in terms of the timing...

Speaker Change: Yeah, absolutely Matt fair enough.

Speaker Change: In terms of the timing.

Speaker Change: We're managing the business, we have employees that we need to be sensitive to obviously, we can't get out ahead of that with that communication and articulate.

Speaker Change: That detail until we're ready to do it it has implications on notifications that we need to make relative to the warn act and other related filings. So we communicate that when we're ready to do so we've been very clear about the fact that we're marching towards a multi.

Speaker Change: <unk> action plan that results in 200 basis points of expansion and so the second half of the year now obviously has a ramp relative to the first half, but it's well within the range of what we think is achievable, it's a 6% growth with a modest gross margin expansion and we have.

Matt Hummel: And so the second half of the year now obviously has a ramp relative to the first half, but it's well within the range of what we think is achievable. It's a 6% growth with a modest gross margin expansion. And we have, as we indicated in our previous discussions, an elevated backlog and order rates that we think will support that outcome. And so, as we expect backlog to moderate or normalize over the balance of the year and the order rates that we referenced in our prepared remarks earlier, we think that will be positioned to execute on that plan for the rest of the year.

Speaker Change: As we indicated in our previous discussions and elevated backlog and order rates that we think will will support that outcome and so as we expect backlog to moderate or normalize over the balance of the year and the order rates that we referenced in our prepared remarks earlier, we think that will be positioned to execute.

Speaker Change: On that that plan for the rest of the year and Matt just to add on from an EPS perspective, we will benefit from interest expense savings as we've repriced our term loan b back in March and we've been very aggressive in paying down debt. We would also expect.

Gregory P. Rustowicz: And Matt, just to add on from an EPS perspective, we will benefit from interest expense savings as we've repriced our Term Loan B back in March and we've been very aggressive in paying down debt. We would also expect incremental gross margin expansion. We do expect that by the fourth quarter, we should start to benefit from the facility consolidation that we announced today, and you know all about it, so we feel very confident with our guidance overall.

Matt Hummel: And Matt, just to add on from an EPS perspective, we will benefit from interest expense savings as we've reprised our term loan V back in March. And we've been very aggressive in paying down debt. We would also expect incremental gross margin expansion. We do expect that by the fourth quarter we should start to benefit from the facility consolidation that we announced today. And so we feel very confident with our guidance overall.

Gregory P. Rustowicz: Incremental gross margin expansion, we do expect that by the fourth quarter, we should start to benefit from the facility consolidation that we announced today.

Speaker Change: All right. So we feel very confident with our guidance overall.

Matt Hummel: As I think about the second quarter, can you maybe articulate what the top and bottom line impact of stuff you can't non-GAAP out associated with this move?

Matt J. Summerville: As I think about the second quarter, can you maybe articulate what the top and bottom line impact of stuff you can't non-gap out associated with this move? Is there a way to parse out the financial impact on the P&L in the quarter from this, I'm just going to generally, generically call it sort of disruption, if you will? Yeah.

Speaker Change: As I think about the second quarter can you maybe articulate what the top and bottom line impact of stuff you can't non-GAAP out associated with this move can you just is there a way to parse out the financial impact on the P&L in the quarter from this I mean, just kind of generally generically call. It does.

Matt Hummel: Is there a way to parse out the financial impact on the PML and the quarter from this?

Matt Hummel: I'm just going to generally, generically call it sort of disruption, if you will. Yeah, so it's really a top line issue for us, Matt. Matt, you know, from a duplicate cause, from a moving cause, restructuring cause, all of those costs, asset impairments, and we've laid out a number of those in the 8-K that was filed this morning. Those will all get adjusted out, and it's really the top line impact, as with just disruption from a facility where people were notified very recently that their jobs are going to end here. And so that's going to have an impact potentially on productivity and on our ability to maintain our typical delivery performance.

Speaker Change: <unk> if you will so it's really a top line issue for us Matt from a from a duplicate costs from a moving costs restructuring costs all of those costs asset impairments and we've.

Gregory P. Rustowicz: Yeah, so it's really a top-line issue for us, Matt, from a duplicate cost, from a moving cost, restructuring cost, all of those costs, asset impairments, and we've laid out a number of those in the 8K that was filed this morning. Those will all get adjusted out, and it's really the top-line impact, with just disruption from a facility where people were notified very recently that their jobs are going to end here, and so that's going to have an impact potentially on productivity and on our ability to maintain our typical delivery performance.

Speaker Change: Laid out a number of those in the in the 8-K that was filed this morning.

Speaker Change: Those will all get adjusted out and it's really the top line impact.

Gregory P. Rustowicz: As you know with us with just disruption from a facility where people were notified very recently that their jobs are going to end here and so that's going to have an impact potentially on productivity.

Speaker Change: Our ability to.

Gregory P. Rustowicz: Our typical delivery performance.

Matt Hummel: And we're obviously going to try to do better on that, but it's just, you know, we would expect, and I guess we're being prudent with the idea that there is going to be some amount of disruption. Got it.

Gregory P. Rustowicz: And we're obviously going to try to do better on that, but it's just, you know, we would expect, and I guess we're being prudent with the idea that there is going to be some amount of disruption.

Speaker Change: And we're obviously going to try to do better on that but it's just we would expect and I guess, we're being prudent with the idea that there is going to be some amount of disruption.

Matt Hummel: Thanks, Greg. Thank you.

Greg: Got it thanks, Greg.

Steve Ferazani: Thank you. The next question comes from the line of Steve Ferazani with Sidoti & Company. Please go ahead.

Steve Ferazani: Thank you next question comes from the line of Steve <unk> Sidoti <unk> Company. Please go ahead.

Steve Farazani: Next question comes from the line of Steve Farazani with Sudoti and Company, please go ahead. Hey, good morning, everyone.

Kyle May: Hey, good morning, everyone. This is Kyle May on for Steve.

Kyle May: Hey, Good morning, everyone. This is Kyle may on for Steve.

Kyle May: This is Kyle May on for Steve.

Kyle May: Just wondering if you could talk about any updates on cross-selling of new acquisitions. And if you found traction for the monotract outside of its previous core markets. Yeah, absolutely.

David J. Wilson: Just wondering if you could talk about any updates on cross-selling new acquisitions and whether you found traction for the monotrack outside of its previous core market. Yeah, absolutely.

Steve Ferazani: I'm just wondering if you could talk about any updates on cross selling of new acquisitions.

Speaker Change: And if he found traction for the monitoring outside of its previous core markets.

David J. Wilson: We've had good success at training our workforce around the world to represent the broader precision conveyance portfolio, and we've been building a nice pipeline of opportunities beyond geographies that that business has serviced as well as we expect to as we go forward. And so we've got a funnel of opportunities that are quoted and active that is around five million dollars in the U.S. right now for that product line. We did close an opportunity with a prescription fulfillment service provider that we communicated last quarter that was a nice large order, and it's one of several that could come that are not included in the number that I just gave you that could come over time.

David J. Wilson: Yeah, absolutely. So Kyle, good morning.

Speaker Change: Yeah, absolutely. So good morning, we've had good success at training our workforce around the world to represent the broader precision conveyance portfolio and we've been building a nice pipeline of opportunities.

Kyle May: So, Kyle, good morning. We've had good success at training our workforce around the world to represent the broader precision conveyance portfolio, and we've been building a nice pipeline of opportunities beyond geographies that that business has serviced, as well as we expect to as we go forward. And so we've got a funnel of opportunities that are quoted and active that is around $5 million in the US right now for that product line. We did close an opportunity with a prescription fulfillment service provided that we communicated last quarter that was a nice large order, and it's one of several that could come that are not included in the number that I just gave you.

Speaker Change: <unk> geographies that that business is service as well as we expect to as we go forward.

David J. Wilson: And so we've got a funnel of opportunities that are quoted and active that is around $5 million in.

Speaker Change: In the U S right now for that product line, we did close an opportunity.

David J. Wilson: With a prescription fulfillment service provided that we communicated last quarter that was a nice large order and it's one of several that could come that are not included in the number that I just gave you.

David J. Wilson: And so we're broadening their reach into areas from a footprint perspective and a market perspective that go beyond where they've been able to play. And most recently, what we're really excited about is that we've really begun to demonstrate our specific application advantages related to the battery production market with MontraTech. And so that led to the power co-order that we referenced in the prepared remarks, and there's a nice runway of opportunity for those expansion investments that they'll be making over time as well as others related to that very attractive end market.

Kyle May: That could come over time. And so we're broadening their reach into areas from a footprint perspective and market perspective that go beyond where they've been able to play. And most recently, what we're really excited about is that we've really begun to demonstrate our specific application advantages related to the battery production market with monitor tech. And so that led to the power quarter that we referenced in the prepared remarks. And there's a nice runway of opportunity for those expansion investments that they'll be making over time, as well as others related to that very attractive and market.

Speaker Change: That could come over time, and so we're broadening their reach into areas from a footprint perspective and.

David J. Wilson: And market perspective that go beyond where they have been able to play in most recently, what we're really excited about is that.

Speaker Change: Really begun to demonstrate or specific application advantages related to the battery production market with mantra Tech and so that led to the power cohort that we referenced in the prepared remarks, and there's a nice runway of opportunity.

David J. Wilson: For those expansion investments that they'll be making over time as well as others related to that that very attractive end market.

Kyle May: Got it. That's helpful.

Gregory P. Rustowicz: Got it. That's helpful. And my next question: cash conversions topped 100% for the last four quarters. Is that something that you can maintain at or above 100%?

Speaker Change: Got it that's helpful.

Kyle May: And my next question.

Kyle May: Cash conversions topped 100% for the last four quarters.

Speaker Change: And my next question cash conversions topped 100% for the last four quarters.

Kyle May: Is that something that you can maintain had a above 100%. We think we can, Kyle, and it's because, you know, we are a capex-like company and we, you know, just with the cash generation capability of the company, we should be 100% and north of 100%.

Speaker Change: That something that you can maintain at or above 100%.

Gregory P. Rustowicz: We think we can, Kyle, and it's because, you know, we are a CapEx-like company, and we, you know, just with the cash generation capability of the company, we should be 100% and north of 100%.

Gregory P. Rustowicz: We think we can Kyle and it's because we are a capex light company and we just with the cash generation capability of the company, we should be 100% and north of a 100%.

Kyle May: Okay, great. Thanks for the time.

Kyle May: Okay, great. Thanks for the time.

Kyle May: Okay, great. Thanks for the time.

Kyle May: Thanks, Kyle. Thank you.

Scott: Thanks Scott.

Jonathan E. Tanwanteng: Thank you. The next question comes from the line of Jon Tanwanteng with CJS Securities. Please go ahead.

Speaker Change: Thank you next question comes from the line of John One thing with CJS Securities. Please go ahead.

Jonathan Wanteng: Next question comes from the line of Jonathan Wanteng with CGS Security. Please go ahead. Hi, good morning. Thank you for taking my questions.

Jonathan E. Tanwanteng: Hi, good morning. Thank you for taking the time to answer my questions. Greg, I was wondering if you could give a little bit more specificity as to the revenue impact from the move in Q2. Also, were there any pull-ins in Q1 to the extent you anticipated the move, and how much do you think is pushing out to Q3 and beyond? I guess what I'm trying to get at is what the normalized run rate is expected to be, you know, assuming things go as planned.

Jonathan E. Tanwanteng: Hi, Good morning, Thank you for taking my questions.

Jonathan Wanteng: Greg, I was wondering if you could give a little bit more specificity as to the revenue impact from the moving Q2. Also, were there any pull-ins in the Q1 to the extent you anticipated the move? And how much do you think it's pushing out the Q3 and beyond? I guess what I'm trying to get out is what the normalized run rate is expected to be, you know, assuming, you know, things go as planned. Yeah, so John, we would expect that there will be some disruption. We've put a lot of effort into planning for this, but nonetheless, we do think there is going to be some impact.

Jonathan E. Tanwanteng: Greg I was wondering if you could give a little bit more specificity as to the revenue impact from the move in Q2.

Jonathan E. Tanwanteng: Also were there any pull ins into Q1 to the extent you anticipated the move and how much do you think is pushing out to Q3 and beyond I guess, what I'm trying to get at what the normalized run rate is expected to be.

Speaker Change: It does.

Speaker Change: Assuming things go as planned.

Gregory P. Rustowicz: Yeah, so John, we would expect that there will be some disruption. We've put a lot of effort into planning for this, but nonetheless, we do think there is going to be some impact. You know, in the order of magnitude of probably a couple million dollars.

Speaker Change: Yes, so John we would expect that there will be some disruption we've put a lot of effort into planning for this but nonetheless, we do think there is going to be some impact it's in the order of magnitude of probably.

Jonathan Wanteng: It's, you know, in the order of magnitude of probably a couple million dollars, we would expect. Okay, and do you expect that pent-up demand?

Gregory P. Rustowicz: A couple of million dollars, we would expect.

David J. Wilson: Okay. And do you expect that pent-up demand, I guess, to be served in Q3 pretty quickly, or does that customer go away, I guess, to a different provider if they can't get it?

Speaker Change: Okay, and do you expect that pent up demand I guess to be served in Q3 pretty quickly or does that customer go away I guess two different providers, if they can't get it.

Jonathan Wanteng: I guess to be serving in Q3 pretty quickly, or does that customer go away? I guess to a different provider if they can get it.

David J. Wilson: Now, John, this is David. We'd expect that to be made up for in Q3 or, worst case, in Q4 and come back in the year. And we obviously are maintaining a close proximity to our customers and communicating with them related to these changes and ensuring that we have the right kind of service levels with all the pre-planning work that we've done both in Mexico and at our existing facility. This is prudent as we plan and think about the impact that could come from these moves.

Jonathan Wanteng: Now, John, this is David. We'd expect that to be made up for in Q3 or, worst case, in Q4 and come back in the year, and we obviously are maintaining a close proximity to our customers and communicating with them related to these changes and ensuring that we have the right kind of service levels with all the pre-planning work that we've done. Both in Mexico and at our existing facility. This is prudent as we plan and think about the impact that could come from these moves. We're confident in the plan that we're executing, but obviously we have to be sensitive to the fact that there could be some disruption in the period.

David: No. John This is David we would expect that to be made up for in Q3 or at worst case in Q4 and come back in the year and we.

David J. Wilson: Obviously, you're maintaining a close proximity to our customers and communicating with them related to these changes and ensuring that we have the right kind of service levels with all of the preplanning work that we've done both in Mexico.

David J. Wilson: And at our existing facility this as prudent as we plan and think about the impact that could come from.

David J. Wilson: We're confident in the plan that we're executing, but obviously, we have to be sensitive to the fact that there could be some disruption during the period. And then there's a level of backlog phasing that impacts the revenue profile of the second quarter based on the order rates and the timing of orders that came in during the first quarter. And so our project backlog phasing has an impact on the top line in the second quarter as well as as we advance through this quarter.

David J. Wilson: These moves were confident in the plan that we're executing but obviously we have to be sensitive to the fact that there could be some disruption in the period and then there is a level of backlog phasing that impacts the revenue profile of the second quarter based on the order rates and the timing of orders that came in in the first quarter and so our project backlog.

Jonathan Wanteng: And then there's a level of backlog phasing that impacts the revenue profile of the second quarter based on the order rates and the timing of orders that came in in the first quarter. And so our project backlog phasing has an impact on the top line in the second quarter, as well as we're advancing through this quarter. Got it. That's helpful.

David J. Wilson: <unk> has an impact on the topline in the second quarter as well as we're advancing through this quarter.

David J. Wilson: My second question is, I think you had previously talked about your book to bill likely to be below one for the year just as you burned off your backlog. It was above one this quarter. It looks like it's going to be above one in Q2 with revenue down and orders to date being better. I'm just wondering how you're thinking about the rest of the year beyond that and if there's anything that's different from what you're used to.

Speaker Change: Got it that's helpful. My second question just I think you had previously talked about your book to bill likely to be below one for the year just as you burned off backlog.

Jonathan Wanteng: My second question, just I think you had previously talked about, you know, your book-to-bill likely to be below one for the year just as you burned off backlog. You know, it was above one this quarter. It looks like it's going to be above one in Q2, with the revenue down in the orders to date being better.

David J. Wilson: <unk>.

David J. Wilson: It was above one this quarter it looks like it's going to be above one in Q2 with the revenue down in orders to date being better.

Jonathan Wanteng: Just wondering how you're thinking about the rest of the year beyond that. If there is anything that's different from what you expected. We remain really encouraged with the funnel of activity that we're managing and the opportunities that we think are realistic for us to close on. We're obviously maintaining a focus, as I said in my prepared remarks, on what we can control. So we're executing on our commercial initiatives and our customer experience initiatives. We feel like that is resulting in some attractive opportunities. And thus far, we've had a level of success with that. We remain encouraged, but we're, you know, maintaining the guidance that we said at the beginning of the year.

Speaker Change: Wondering how youre thinking about the rest of the year beyond that.

Speaker Change: That's different from what you expected.

David J. Wilson: We remain really encouraged by the funnel of activity that we're managing and the opportunities that we think are realistic for us to close on. We're obviously maintaining a focus, as I said in my prepared remarks, on what we can control. So we're executing on our commercial initiatives and our customer experience initiatives. We feel like that is resulting in some attractive opportunities, and thus far, we've had a level of success with that. We remain encouraged, but we're maintaining the guidance that we set at the beginning of the year. And, as I said earlier, we remain cautiously optimistic about our ability to achieve it. Okay, great. Thank you, guys.

Speaker Change: We remain really encouraged with the funnel of activity that we're managing and the opportunities that we think are realistic for us to close on we're obviously, maintaining our focus as I said in my prepared remark remarks on what we can control. So we're executing on our commercial initiatives and our customer experience initiatives.

David J. Wilson: We feel like that is resulting in some attractive opportunities and thus far we've had a level of success with that we remain encouraged but we're maintaining the guidance that we set at the beginning of the year and as I said earlier, we remain cautiously optimistic about our ability to.

Jonathan Wanteng: And, as I said earlier, we may be cautiously optimistic to achieve those.

David J. Wilson: To achieve those.

Jonathan Wanteng: Okay, thank you, guys.

Jonathan E. Tanwanteng: Okay, great. Thank you, guys.

David J. Wilson: Okay, great. Thank you guys.

Operator: Thanks, John.

John: Thanks, John.

David Wilson: Thank you, ladies and gentlemen. We have reached the end of the question and answer session.

Lady: Thank you Lady.

David J. Wilson: Ladies and gentlemen, we have reached the end of the question and answer session. I would now like to turn the floor over to Mr. Wilson for closing comments.

Jonathan E. Tanwanteng: Ladies and gentlemen, we have reached the end of question and answer session I would now like to turn the floor over to Mr. Wilson for closing comments.

David Wilson: I would now like to turn the floor over to Mr. Wilson for closing comments. Thank you everyone for joining us today. Our team continues to execute our strategic plan and prove our customers' experience and make significant progress on our simplification initiatives. I'd like to extend my personal thanks to our entire team for the dedication and the relentless execution that enabled us to begin fiscal 25 with strong results. In our first quarter, we delivered year-over-year sales growth, expanded gross margin, secured new customer wins, increased backlog with a book-to-build ratio in excess of one, and accelerated debt repayment.

David J. Wilson: Thank you, everyone, for joining us today. Our team continues to execute our strategic plan, improve our customers' experience, and make significant progress on our simplification initiatives. I'd like to extend my personal thanks to our entire team for their dedication and the relentless execution that enabled us to begin Fiscal 25 with strong results. In our first quarter, we delivered year-over-year sales growth, expanded gross margin, secured new customer wins, increased backlog with a book-to-bill ratio in excess of 1, and accelerated debt repayment.

David J. Wilson: Thank you everyone for joining us today, our team continues to execute our strategic plan improve our customers' experience and make significant progress on our simplification initiatives I'd like to extend my personal thanks to our entire team for their dedication and their relentless execution that enabled us to begin fiscal 'twenty five with strong results.

David J. Wilson: Our first quarter, we delivered year over year sales growth expanded gross margin secured new customer wins increased backlog with a book to bill ratio in excess of one and accelerated debt repayment.

David Wilson: We also announced the continuation of our footprint simplification plan and the consolidation of our North American linear motion facility into our Monterey, Mexico, Manufacturing Center of Excellence.

David J. Wilson: We also announced the continuation of our footprint simplification plan and the consolidation of our North American Linear Motion Facility into our Monterey, Mexico Manufacturing Center of Excellence. This is an important next step along our journey to deliver 200 basis points of gross margin expansion by fiscal year 27. Finally, our team remains focused on the prioritized initiatives that will enable us to achieve our growth and financial performance objectives. We're encouraged by the pipeline of opportunities we see in our funnel, continue to be optimistic about our prospects, and are reiterating our full-year guidance.

David J. Wilson: We also announced the continuation of our footprint simplification plan and the consolidation of our North American linear motion facility into our Monterrey, Mexico Manufacturing Center of Excellence. This is an important next step along our journey to deliver 200 basis points of gross margin expansion by fiscal year 2007.

David Wilson: This is an important next step along our journey to deliver 200 basis points of gross margin expansion by fiscal year 27. Finally, our team remains focused on the prioritized initiatives that will enable us to achieve our growth and financial performance objectives. We're encouraged by the pipeline of opportunities we see in our funnel, continue to be optimistic about our prospects, and are reiterating our full year guidance.

David J. Wilson: Finally, our team remains focused on the prioritized initiatives that will enable us to achieve our growth and financial performance objectives. We're encouraged by the pipeline of opportunities we see in our funnel continue to be optimistic about our prospects and are reiterating our full year guidance.

David Wilson: Thanks for investing your time with us today. As always, please reach out to Christy if you have any questions.

Operator: Thanks for investing your time with us today. As always, please reach out to Kristi if you have any questions. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you.

David J. Wilson: Thanks for investing your time with US today as always please reach out to Christie if you have any questions.

Operator: Thank you, but this includes today's teleconference; you may disconnect your lines at this time. Thank you for your participation.

Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, www.facebook.com

Operator: Thank you.

Operator: Concludes today's teleconference. You may disconnect your lines at this time, thank you for your participation.

Operator: Okay.

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