Q1 2025 Watts Water Technologies Inc Earnings Call

May 8, 2025

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Dan Mcclintock: I would now like to turn the conference over to Dan Mcclintock.

Speaker Change: And your Vice President of Investor Relations. Please go ahead.

Speaker Change: Thank you and good morning, everyone welcome to our first quarter Conference call. Joining me today are Bob Pagano, President and CEO and Shashank Patel, our CFO during today's call Bob will provide an overview of the first quarter and operational update and an update on our outlook for 2025.

Shashank Patel: Shang, who will discuss the details of our first quarter performance and provide our outlook for the second quarter and for the full year.

Shashank Patel: Following our remarks, we will address questions related to the information covered during the call.

Shashank Patel: Today's webcast is accompanied by a presentation, which can be found in the Investor Relations section of our website. We will reference this presentation throughout our prepared remarks any reference to non-GAAP financial information is reconciled in the appendix to the presentation.

Shashank Patel: I'd like to remind everyone that during this call we may be making certain comments that constitute forward looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially.

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25. Shashank will discuss the details of our first quarter performance and provider outlook for the second quarter and for the full year.

Unknown Executive: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again.

Following our remarks, we will address questions related to the information covered during the call.

Speaker Change: For information concerning these risks see what's publicly available filings with the SEC. The company undertakes no obligation to update or revise any forward looking statements whether as a result of new information future events or otherwise with that I'll turn the call over to Bob.

Today's webcast is accompanied by a presentation which can be found in the Investor Relations section of our website We will reference this presentation throughout our prepared remarks Any reference to non-GAAP financial information is reconciled in the appendix to the presentation

Diane McClintock: I would now like to turn the conference over to Diane McClintock, Senior Vice President of Investor Relations. Please, go ahead. Thank you and good morning, everyone.

Bob Pagano: Thank you Diane and good morning, everyone.

Unknown Executive: Welcome to our first quarter conference call.

I'd like to remind everyone that during this call, we may be making certain comments that constitute forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially.

Please turn to slide three and I'll provide an overview of the first quarter.

Diane McClintock: Joining me today are Bob Pagano, President and CEO, and Shashank Patel, our CFO. During today's call, Bob will provide an overview of the first quarter, an operational update and an update on our outlook for 2025. Shashank will discuss the details of our first quarter performance and provide our outlook for the second quarter and for the full year.

Bob Pagano: We began 2025 was better than expected first quarter results, including record adjusted operating income adjusted operating margin and adjusted earnings per share.

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Bob Pagano: I'd like to thank the entire watch team for their significant contributions during the quarter.

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Bob Pagano: Organic sales declined 2% in the quarter due to fewer shipping days, which we noted on our last earnings call and continuing weakness in Europe.

The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, I'll turn the call over to Bob.

Unknown Executive: Following our remarks, we will address questions related to the information covered during the call.

Unknown Executive: Today's webcast is accompanied by a presentation, which can be found in the Investor Relations section of our website. We will reference this presentation throughout our prepared remarks. Any reference to non-GAAP financial information is reconciled in the appendix to the presentation.

Bob Pagano: We benefited from incremental sales from our icon acquisition. However, the benefit was more than offset by unfavorable foreign exchange.

Thank you, Diane, and good morning, everyone.

Bob: Please turn to slide 3 and I'll provide an overview of the first quarter.

Bob Pagano: Adjusted operating margin of 19% exceeded expectations due to better than expected volume productivity and cost controls.

Bob: We began 2025 with better than expected first quarter results, including record adjusted operating income, adjusted operating margin, and adjusted earnings for share. I'd like to thank the entire Watts team for their significant contributions during the quarter.

Unknown Executive: I'd like to remind everyone that during this call, we may be making certain comments that constitute forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially. For information concerning these risks, see Watts publicly available filings with the SEC.

Bob Pagano: As a result of our solid start to 2025 and expected cash flows for the remainder of the year, we announced a 21% dividend increase beginning in June our balance sheet remains strong and provides the ample capacity to support flexibility in our capital allocation strategy.

Bob: Organic sales decline 2% in the quarter due to fewer shipping days which we noted on our last earnings call and continuing weakness in Europe .

Bob Pagano: From an operations perspective, we are proactively working to mitigate the impact of tariffs, we expect that our vertical integration strategy with the manufacturing close to our customers here in the U S will benefit us.

Unknown Executive: The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Bob: We benefited from incremental sales from our icon acquisition. However, the benefit was more than all set by un favourable foreign exchange.

Bob: Adjust an operating margin of 19%, exceeded expectations due to better than expected volume, productivity, and cost controls.

Robert Pagano: With that, I'll turn the call over to Bob. Thank you, Diane, and good morning, everyone. Please turn to slide three and I'll provide an overview of the first quarter. We began 2025 with better-than-expected first quarter results, including record-adjusted operating income, adjusted operating margin, and adjusted earnings per share. I'd like to thank the entire Watts team for their significant contributions during the quarter. Organic sales declined 2% in the quarter due to fewer shipping days, which we noted on our last earnings call, and continuing weakness in Europe. We benefited from incremental sales from our ICON acquisition. However, the benefit was more than offset by unfavorable foreign exchange.

Bob Pagano: We have a proven track record of successfully navigating inflation and supply chain challenges and are confident in our ability to execute.

Bob: As a result of our solid start to 2025 and expected cash flows for the remainder of the year, we announced the 21% dividend increase beginning in June . Our balance sheet remains strong and provides ample capacity to support flexibility in our capital allocation strategy.

Bob Pagano: The current environment.

Bob Pagano: More about tariffs in a minute.

Bob Pagano: We continue to drive productivity savings through automation lean initiatives, both inside and outside the factory walls, leveraging our one watts performance system and selective restructuring actions, including the previously announced exit from our manufacturing facility in France the <unk>.

Bob: From an operations perspective, we are proactively working to mitigate the impact of tariffs.

Bob: We expect that our vertical integration strategy with the manufacturing close to our customers here in the US will benefit us.

Bob Pagano: <unk> is progressing as expected and will be complete by year end.

Bob Pagano: We're pleased with the progress of the integration efforts with our recent icon acquisition and our teams are working together to capitalize on synergies, we expect the icon to be accretive to adjusted EBITDA margins and adjusted EPS in 2025.

Bob: We have a proven track record of successfully navigating inflation and supply chain challenges and are confident in our ability to execute through the burn environment.

Robert Pagano: adjusted operating margin of 19% exceeded expectations due to better than expected volume, productivity and cost control.

I'll talk more about tariffs in a minute.

Bob: We continue to drive productivity savings through automation, lean initiatives both the inside and outside the factory walls leveraging our one-watch performance system and selective restructuring actions, including the previously announced exit from a manufacturing facility in France.

Robert Pagano: As a result of our solid start to 2025 and expected cash flows for the remainder of the year, we announced a 21% dividend increase beginning in June. Our balance sheet remains strong and provides ample capacity to support flexibility in our capital allocation strategy. From an operations perspective, we are proactively working to mitigate the impact of tariffs. We expect that our vertical integration strategy with the manufacturing close to our customers here in the U.S. will benefit us. We have a proven track record of successfully navigating inflation and supply chain challenges and are competent in our ability to execute through the current environment.

Bob Pagano: Now an update on our outlook for the remainder of the year.

Bob Pagano: Despite the uncertainty around the trade environment, and resulting demand impacts we are maintaining our full year organic sales and adjusted operating margin outlook. We anticipate that price increases are global sourcing actions and accelerated onshoring of production should offset incremental tariff costs and any potential <unk>.

Bob: The accident is progressing as expected and will be complete by year end.

Bob: We're pleased with the progress of the integration efforts with our recent icon acquisition and our teams are working together to capitalize on synergies.

Bob Pagano: Demand reduction in the second half of 2025.

Bob Pagano: There are a few positives to note our solid first quarter and outlook for the second quarter are supportive of our full year outlook.

Bob: We expect the icon to be accreted to adjusted the Eva Tham margins and adjusted the EPS in 2025.

Bob Pagano: Mega project activity, including data centers remains strong.

Bob: Now, an update on our outlook for the remainder of the year.

Robert Pagano: I'll talk more about tariffs in a minute. We continue to drive productivity savings through automation, lean initiatives both inside and outside the factory walls, leveraging our OneWatts performance system, and selective restructuring actions, including the previously announced exit from a manufacturing facility in France. The exit is progressing as expected and will be complete by year-end. We're pleased with the progress of the integration efforts with our recent ICON acquisition, and our teams are working together to capitalize on synergy. We expect ICON to be accreted to adjusted EBITDA margins and adjusted EPS in 2025.

Bob Pagano: We also expect to see a benefit from foreign exchange movements relative to the outlook we provided in February.

Bob: Despite the uncertainty around the trade environment and resulting demand impacts, we're maintaining our full-year organic sales and adjusted operating margin outlook.

Bob Pagano: Recently global GDP forecasts have been revised downward, including the first quarter contraction in the U S.

Bob: We anticipate that pricing creases, our global sourcing actions and accelerated ensuring a production should offset incremental tariff costs and any potential demand reduction in the second half of 2025.

Bob Pagano: Given the uncertain impact of tariffs on inflation, we expect interest rates to remain higher for longer.

Bob Pagano: This may unfavorably impact residential and nonresidential new construction in the second half of the year.

Bob: There are a few positives to note. Our solid first quarter and outlook for the second quarter are supportive of our full year outlook.

Bob Pagano: We expect continued weakness in Europe due to a slowdown in new construction amid continued economic weakness we.

Bob: Mega Project Activity, including data centers, remains strong. We also expect to see a benefit from foreign exchange movements relative to the outlook we provided in February .

Bob Pagano: We saw ongoing heat pump destocking in the first quarter and anticipate this to continue in the second quarter, but current market feedback suggests potential recovery in the second half of the year.

Robert Pagano: Now, an update on our outlook for the remainder of the year. Despite the uncertainty around the trade environment and resulting demand impacts, we're maintaining our full year organic sales and adjusted operating margin outlook. We anticipate that price increases, our global sourcing actions, and accelerated onshoring of production should offset incremental tariff costs and any potential demand reduction in the second half of 2025.

Bob: Recently, Global GDP forecasts have been revised downward, including a first quarter contraction in the US.

Bob Pagano: Please turn to slide four and I'll provide an overview of the cost impact of the current tariffs and the actions we're taking.

Bob: Given the certain impact of tariffs on inflation, we expect interest rates to remain higher for longer. This may unfavorably impact presidential and non-residential new construction in the second half of the year.

Bob Pagano: The table on the left illustrates the estimated impact of currently enacted tariffs on our 2025 cost base.

Bob Pagano: We source globally and expect there will be some impact in most countries, we import from where the biggest impact on raw material and components sourced from China.

Bob: We expect continued weakness in Europe due to a slowdown in new construction amid continued economic weakness

Robert Pagano: There are a few positives to note. Our solid first quarter and outlook for the second quarter are supportive of our full year outlook. Megaproject activity including data centers remain strong. We also expect to see a benefit from foreign exchange movements relative to the outlook we provided in February.

Bob Pagano: We have been proactively working on a number of actions to offset the cost impact, including implementing price increases relocating our supply chain by leveraging our dual source supply base and increasing capacity across our U S manufacturing footprint.

Bob: We saw ongoing heat pump destocking in the first quarter and anticipate this to continue in the second quarter, but current market feedback suggests potential recovery in the second half of the year.

Bob: Please turn to slide four and I'll provide an overview of the cost impact of the current tariffs and the actions we're taking.

Bob Pagano: We've invested in our north American footprint and supply chain diversification over many years and believe we are well positioned to mitigate the impact of tariffs on our cost base and stakeholders.

Robert Pagano: Recently, global GDP forecasts have been revised downward, including a first quarter contraction in the U.S. Given the uncertain impact of tariffs on inflation, we expect interest rates to remain higher for longer. This may unfavorably impact residential and non-residential new construction in the second half of the year. We expect continued weakness in Europe due to a slowdown in new construction amid continued economic weakness. We saw ongoing heat pump destocking in the first quarter, and anticipate this to continue in the second quarter, but current market feedback suggests potential recovery in the second half of the year.

Bob: The table on the left illustrates the estimated impact of currently enacted tariffs on our 2025 call space.

Bob: We source globally and expect there will be some impact on most countries we import from with the biggest impact on raw material and components sourced from China.

Bob Pagano: One last item I'd like to mention is that our search for a new CFO is ongoing and we're making good progress we will inform you as soon as we have identified a candidate in the meantime, Shashank will stay on as CFO to ensure a smooth transition.

Bob: We've been proactively working on a number of actions to offset the cost impact, including implementing price increases, relocating our supply chain by leveraging our dual source supply base and increasing capacity across our U.S. manufacturing footprint.

Bob Pagano: With that let me turn the call over to Shashank, who will address our first quarter results and our second quarter and full year outlook Shashank.

Bob Pagano: Thank you Bob and good morning, everyone.

Bob: We have invested in our North American footprint in supply chain diversification over many years and believe we're well positioned to mitigate the impact of tariffs on our cost-based and stakeholders.

Bob Pagano: Please now turn to slide five which highlights our first quarter results.

Robert Pagano: Please turn to slide four and I'll provide an overview of the cost impact of the current tariffs and the actions we're taking. The table on the left illustrates the estimated impact of currently enacted tariffs on our 2025 call space. We source globally and expect there will be some impact on most countries we import from with the biggest impact on raw material and components sourced from China.

Bob Pagano: Sales of $558 million were down 2% on a reported and organic basis.

Bob: One last item I'd like to mention is that our search for a new CFO is ongoing and we're making good progress. We'll inform you as soon as we have identified a candidate. In the meantime, Shashank will stay on as CFO to ensure a smooth transition.

Bob Pagano: As previously discussed we had fewer shipping days in the first quarter, which unfavorably impacted our sales by approximately 3% across all regions.

Bob Pagano: Americas organic sales were down 1% and reported sales were flat.

Bob: With that, let me turn the call over to Shashank, who will address our first quarter result in our second quarter and full year outlook. Shashank?

Bob Pagano: This was better than expected, particularly with the reduced shipping days.

Robert Pagano: We've been proactively working on a number of actions to offset the cost impact, including implementing price increases, relocating our supply chain by leveraging our dual source supply base, and increasing capacity across our US manufacturing footprint. We've invested in our North American footprint and supply chain diversification over many years and believe we're well positioned to mitigate the impact of tariffs on our cost base and stakeholders.

Bob Pagano: Sales from our icon acquisition added $5 million Euro.

Shashank: Thank you, Bob, and good morning everyone. Please now turn to slide five, which highlights our first quarter results.

Bob Pagano: Europe organic sales were down 9% and reported sales were down 12% with declines across all geographies due to fewer shipping days heat pump destocking and weakness in new construction markets driving destocking in the wholesale channel.

Shashank: Sales of $558 million were down 2% on a reported and organic basis.

Shashank: As previously discussed, we had fear of shipping days in the first quarter which unfavorably impacted our sales by approximately 3% across all regions.

Bob Pagano: <unk> sales increased 9% on a reported basis and 13% on an organic basis growth in China, the middle East and Australia were partly offset by a decline in New Zealand, primarily driven by fewer shipping days.

Robert Pagano: One last item I'd like to mention is that our search for a new CFO is ongoing, and we're making good progress. We'll inform you as soon as we have identified a candidate. In the meantime, Shashank will stay on as CFO to ensure a smooth transition.

Shashank: America's organic sales were down 1% and reported sales were flat. This was better than expected that particularly with the reduced shipping days.

Bob Pagano: Back to the prior year adjusted EBITDA of $119 million increased 1% and adjusted EBITDA margin of 21, 4% increased 80 basis points.

Sales from an iconic position added $5 million $1 million.

Shashank: Europe Organic Sales were down 9% and reported sales were down 12% with declines across all geographies due to fear shipping days, heat pump destocking and weakness in new construction markets driving destocking in the wholesale channel.

Shashank Patel: With that, let me turn the call over to Shashank, who will address our first quarter results and our second quarter and full year outlook. Thank you, Bob. And good morning, everyone.

Bob Pagano: Adjusted operating income of $106 million increased 2% and adjusted operating margins of 19% were also up by 80 basis points and as a Q1 record for watts.

Shashank Patel: Please now turn to slide five, which highlights our first quarter results. Sales of $558 million were down 2% on a reported and organic basis. As previously discussed, we had fewer shipping days in the first quarter, which unfavorably impacted our sales by approximately 3% across all regions. America's organic sales were down 1% and reported sales were flat. This was better than expected, particularly with the reduced shipping date. Sales from Icon Acquisition added $5 million. Europe organic sales were down 9% and reported sales were down 12% with declines across all geographies due to fear shipping days, heat pump de-stocking, and weakness in new construction markets driving de-stocking in the wholesale channel.

Shashank: Atme of sales increased 9% on a reported basis and 13% on an organic basis.

Bob Pagano: Adjusted EBITDA and operating income benefited from price productivity favorable mix and cost controls, which more than offset inflation volume deleverage and investments.

Shashank: Wrote in China from the Middle East and Australia were partly offset by decline in New Zealand primarily driven by fear shipping days.

Bob Pagano: The Americas segment margin increased 130 basis points to 23, 4%.

Shashank: Compared to the prior year, Adjusted EBITDA of $119 million increased 1%, and Adjusted EBITDA margin of 21.4% increased 80 basis points.

Bob Pagano: Europe segment margin decreased by 180 basis points to 13, 9%.

Speaker Change: And Anthony of segment margins decreased 70 basis points to 17, 5%.

Shashank: Adjusted operating income of $106 million increased 2% and adjusted operating margins of 19% who are also up by 80 basis points and is a Q1 record for Watts

Bob Pagano: Adjusted earnings per share of $2 37.

Bob Pagano: Increased 2% versus last year with operational contribution and reduced interest expense more than offsetting incremental tax expense and foreign exchange headwinds.

Shashank: Adjusted EBITDA and operating income benefited from price, productivity, favorable mix and cost controls, which more than offset inflation, volume delivery and investments.

Bob Pagano: The adjusted effective tax rate in the quarter was 24, 5% up 70 basis points compared to the first quarter of 2024, primarily due to a lower tax benefit from the vesting of stock compensation awards that occur in the first quarter of each year.

Shashank Patel: Acme of sales increased 9% on a reported basis and 13% on an organic basis. Growth in China, the Middle East and Australia were partly offset by decline in New Zealand, primarily driven by fewer shipping days. Compared to the prior year, Adjusted EBITDA of $119 million increased 1%, and Adjusted EBITDA margin of 21.4% increased 80 basis points. Adjusted operating income of $106 million increased 2% and adjusted operating margins of 19% were also up by 80 basis points and is a Q1 record for Watts. Adjusted EBITDA and operating income benefited from price, productivity, favorable mix and cost controls, which more than offset inflation, volume deleverage and investment.

Shashank: America's segment margin increased 130 basis points to 23.4%, Europe's segment margin decreased by 180 basis points to 13.9%, and Apnea's segment margin decreased 70 basis points to 17.5%.

Bob Pagano: GAAP purposes, we incurred $1 million of pretax acquisition costs and $17 million of pre tax restructuring charges.

Shashank: Adjusted earnings per share of $2.37 increased 2% versus last year with operational contribution and reduced interest expense, more than offsetting incremental tax expense and foreign exchange

Bob Pagano: Any related to the exit of our site in France.

Bob Pagano: These charges were partially offset by a nonrecurring tax benefit related to the reversal of a prior year tax liability.

Bob Pagano: Our free cash flow for the quarter was $46 million compared to $37 million in the first quarter of last year.

Shashank: The adjusted effective tax rate in the quarter was 24.5% up 70 basis points compared to the first quarter of 2024 primarily due to a lower tax benefit from the vesting of stock compensation awards that occur in the first quarter of each year. [inaudible]

Bob Pagano: The cash flow increase was primarily due to the timing of income tax payments compared to last year.

Bob Pagano: We expect sequential improvement in our free cash flow and are on track to achieve our full year goal of free cash flow conversion greater than or equal to 100% of net income as previously communicated.

Shashank Patel: America's segment margin increased 130 basis points to 23.4 percent. Europe's segment margin decreased by 180 basis points to 13.9 percent. And APMEA segment margins decreased 70 basis points to 17.5 percent. Adjusted earnings per share of $2.37, increased 2% versus last year with operational contribution and reduced interest expense, more than offsetting incremental tax expense and foreign exchange headwind. The adjusted effective tax rate in the quarter was 24.5 percent, up 70 basis points compared to the first quarter of 2024, primarily due to a lower tax benefit from the vesting of stock compensation awards that occur in the first quarter of each year.

Shashank: For gap purposes, we incurred $1 million of pre-tax acquisition costs and $17 million of pre-tax restructuring charges primarily related to the exit of our site in France.

Bob Pagano: During the quarter, we repurchased approximately 19000 shares of our class a common stock for $4 million.

Shashank: These charges were partially offset by a non-recurring tax benefit related to the reversal of a prior year tax liability.

Bob Pagano: Additionally, as Bob mentioned, we announced a 21% increase in our dividends that will begin in June.

Shashank: A fee cash flow for the quarter was $46 million compared to $37 million in the fullest quarter of last year. The cash flow increase was primarily due to the timing of income tax payments compared to last year.

Bob Pagano: Our balance sheet remains strong and provides us with ample flexibility on net debt to capitalization ratio at quarter end was negative 9% compared to positive 2% in the prior year and our net leverage is negative 0.3.

Shashank: We expect sequentially improvement in our free cash flow and our own track to achieve our full-year goal of free cash flow conversion greater than or equal to 100% of net income as previously communicated.

Bob Pagano: Our solid cash flow and healthy balance sheet continue to give us capital allocation optionality.

Bob Pagano: Now on slide six let's review, our assumptions about our second quarter and full year outlook.

Shashank: During the quarter, we re-purchased approximately 19,000 shares of our class A common stock for $4 million. Additionally, as Bob mentioned, we announced a 21% increase in our dividends that will begin in June .

Shashank Patel: For GAP purposes, we incurred $1 million of pre-tax acquisition costs and $17 million of pre-tax restructuring charges primarily related to the exit of our site in France. These charges were partially offset by a non-recurring tax benefit related to the reversal of a prior year tax liability. Our fee cash flow for the quarter was $46 million compared to $37 million in the first quarter of last year. The cash flow increase was primarily due to the timing of income tax payments compared to last year. We expect sequential improvement in our free cash flow and are on track to achieve our full year goal of free cash flow conversion greater than or equal to 100% of net income as previously communicated.

Bob Pagano: We are reaffirming our 2025 outlook, which reflects the market factors previously discussed by Bob and assumes that the current cap structure remains in place.

Bob Pagano: Under of the year.

Shashank: The balance sheet remains strong and provides us with ample flexibility. Our net debt to capitalization ratio at quarter end was negative 9%, compared to positive 3% in the prior year, and our net leverage is negative 0.3.

Speaker Change: As previously mentioned, we anticipate that price increases are global sourcing actions and accelerated onshoring of production should offset incremental tariff costs and any potential demand reduction in the second half of 2025.

Shashank: A solid cash flow and healthy balance she continued to give us capital allocation of

Speaker Change: For full year 2025, we are maintaining our consolidated organic sales growth outlook at a range of minus 3% to plus 2%.

Shashank: Now on slide six, let's review our assumptions about our second quarter and full-lear outlook.

Speaker Change: Our reported sales growth is increasing to a range of minus two to plus 3% due to favorable foreign exchange movements, which are listed by region in the appendix.

Shashank: We are reaffirming our 2025 Outlook, which reflects the market factors previously discussed by Bob and assumes that the current type structure remains in place for the remainder of the year.

Shashank Patel: During the quarter, we repurchased approximately 19,000 shares of our Class A common stock for $4 million. Additionally, as Bob mentioned, we announced a 21% increase in our dividends that will begin in June. The balance sheet remains strong and provides us with ample flexibility. Our net debt to capitalization ratio at quarter end was negative nine percent compared to positive three percent in the prior year. And our net leverage is negative zero point three. A solid cash flow and healthy balance sheet continue to give us capital allocation optionality.

Speaker Change: Regionally, we expect the Americas to be slightly better, but offset by Europe, which we expect to be down a point compared to our original outlook.

Shashank: As previously mentioned, we anticipate that price increases are global sourcing actions and accelerated ensuring a production should offset incremental tariff costs and any potential demand reduction in the second half of 2025.

Speaker Change: We are also maintaining our full year adjusted EBITDA and adjusted operating margin outlook consistent with our guidance in February.

Shashank: For full year 2025, we are maintaining our consolidated organic sales growth outlook at a range of minus 3% to plus 2%.

Speaker Change: Our free cash flow expectation remains in line with our previous outlook.

Speaker Change: We expect to deliver free cash flow conversion of greater than or equal to 100% of net income in 2025.

Shashank: Our reported sales growth is increasing to a range of minus 2 to plus 3% due to favorable foreign exchange movements, which are listed by region in the appendix.

Shashank Patel: Now on slide six, let's review our assumptions about our second quarter and full year outcomes. We are reaffirming our 2025 outlook, which reflects the market factors previously discussed by Bob and assumes that the current tariff structure remains in place for the remainder of the year. As previously mentioned, we anticipate that price increases, our global sourcing actions, and accelerated onshoring of production should offset incremental tariff costs and any potential demand reduction in the second half of 2025.

Speaker Change: Next a few items to consider for the second quarter.

Speaker Change: On an organic basis, we expect organic sales growth to be flat to up 3%.

Shashank: Originally, we expect the Americans to be slightly better, but offset by Europe , which we expect to be down a point compared to our original outlook.

Speaker Change: Regionally, we expect low to mid single digit growth in the Americas and low single digit growth in apnea, partly offset by a high single to low double digit decline in Europe.

Shashank: We are also maintaining our full year adjusted EBITDA and adjusted operating margin outlook consistent with our guidance in February .

Speaker Change: We expect approximately $7 million of incremental sales in the Americas from acquisitions.

Shashank: Our free cash flow expectation remains in line with our previous outlook as we expect to deliver free cash flow conversion of greater than or equal to 100% of net income in 2025.

Speaker Change: We estimate that foreign exchange in the quarter will be neutral in total.

Speaker Change: Our assumptions by region are listed in the appendix.

Shashank Patel: For full year 2025, we are maintaining our consolidated organic sales growth outlook at a range of minus 3% to plus 2%. Our reported sales growth is increasing to a range of minus two to plus three percent due to favorable foreign exchange movements which are listed by region in the appendix. regionally, we expect the Americas to be slightly better, but offset by Europe, which we expect to be down a point compared to our original outlook.

Speaker Change: We expect we will begin to see the impact from Ias 20 actions in the second quarter with an estimated $2 million of product exits primarily within the Americas.

Next, a few items to consider for the second quarter.

Shashank: On an organic basis, we expect organic sales growth to be flat to up 3%.

Speaker Change: Second quarter EBITDA margin is expected to be in the range of 21, 6% to 22, 2% or up 50 to 110 basis points.

Shashank: Recently we expect low to mid-single digit growth in the Americas and low single digit growth in apnea partly offset by a high single to low double digit decline in Europe .

Speaker Change: Operating margins should be in the range of 19, 1% to 19, 7%.

Shashank: We expect approximately $7 million of incremental sales in the Americas from acquisitions.

Speaker Change: 30% to 90 basis points.

Shashank Patel: We are also maintaining our full year adjusted EBITDA and adjusted operating margin outlook consistent with our guidance in February. Our free cash flow expectation remains in line with our previous outlook as we expect to deliver a free cash flow conversion of greater than or equal to 100% of net income in 2025.

Speaker Change: We expect that price and volume leverage in the Americas and EMEA.

Shashank: We estimate that foreign exchange in the quarter will be neutral in total

Speaker Change: More than offset continued volume deleverage in Europe.

Our assumptions by region are listed in the appendix

Speaker Change: Other key inputs for the second quarter and the full year can be found in the appendix.

Shashank: We expect we will begin to see the impact from our 80-20 actions of the second quarter with an estimated $2 million a product exits primarily within the Americas.

Bob Pagano: With that I'll turn the call back over to Bob before moving to Q&A Bob.

Bob Pagano: Thanks to shrink on slide seven I'd like to summarize our discussion before we address your questions.

Shashank: 2nd quarter EBITDA margin is expected to be in the range of 21.6% to 22.2% or up 50 to 110 basis points.

Shashank Patel: Next, a few items to consider for the second quarter. On an organic basis, we expect organic sales growth to be flat to up 3%. Regionally, we expect low to mid-single-digit growth in the Americas and low single-digit growth in apnea, partly offset by a high single to low double-digit decline in Europe. We expect approximately $7 million of incremental sales in the Americas from acquisitions. We estimate that foreign exchange in the quarter will be neutral in total.

Our first quarter performance was better than we anticipated with record first quarter sales adjusted operating income adjusted operating margin and adjusted earnings per share due to our strong performance in the Americas and apnea.

Shashank: Operating margins should be in the range of 19.1 to 19.7% or up 30 to 90 basis points.

Shashank: Expect that price and volume leverage in the Americas and apnea will more than offset continued volume

Bob Pagano: We are actively working to manage the current trade environment and expect that our U S footprint global supply chain and price increases will enable us to navigate it successfully.

Shashank: Other key inputs for the second quarter and the full year can be found in the appendix.

Bob: With that, I'll turn the call back over to Bob before moving to Q&A, Bob.

Bob Pagano: We are maintaining our full year organic sales and adjusted operating margin outlook, despite the macro uncertainty and expectation of softer market conditions as the year progresses. Nonetheless.

Shashank Patel: Our assumptions by region are listed in the appendix. We expect we will begin to see the impact from our 80-20 actions in the second quarter with an estimated $2 million of product exits, primarily within the Americas.

Bob: Thanks, Shashank. On slide seven, I'd like to summarize our discussion before we address your questions.

Bob: Our first quarter performance was better than we anticipated, with record first quarter sales, adjusted operating income, adjusted operating margin, and adjusted earnings for share, due to a strong performance in the Americas and apnea.

Bob Pagano: Even our business is resilient over the long term our portfolio is agnostic to end markets and our teams are pivoting to growing sub verticals.

Shashank Patel: Second quarter EBITDA margin is expected to be in the range of 21.6% to 22.2% or up 50 to 110 basis points. Operating margins should be in the range of 19.1 to 19.7% or up 30 to 90 basis points. We expect that price and volume leverage in the Americas and APMEA will more than offset continued volume de-leverage in Europe.

Bob Pagano: Additionally, our business model includes a large repair and replacement component provides a durable base and drive steady revenue and cash flow.

Bob: We are actively working to manage the current trade environment and expect that our U.S. footprint, global supply chain, and price increases will enable us to navigate it successfully.

Bob Pagano: Our balance sheet remains strong and provides ample flexibility to support our capital allocation priorities, including M&A and continued investment in new product development and our digital strategy.

Bob: We are maintaining our full-year organic sales and adjusted operating margin outlook despite the macro uncertainty and expectation of softer market conditions as a year progresses.

Shashank Patel: Other key inputs for the second quarter and the full year can be found in the appendix.

Bob Pagano: In addition, we are increasing our dividend by 21% starting in June.

Shashank Patel: With that, I'll turn the call back over to Bob before moving to Q&A.

Bob: Nonetheless, as proven, our business is resilient over the long term. Our portfolio is agnostic to end markets, and our teams are pivoting to growing sub verticals. [inaudible]

Robert Pagano: Bob. Thanks, Shashank.

Bob Pagano: We believe our highly experienced team is well positioned to proactively navigate current market conditions as we have done in the past we're confident in our ability to control costs through our one watts performance system, while capturing our fair share of demand and positioning us to capitalize on long term secular trends.

Robert Pagano: On slide seven, I'd like to summarize our discussion before we address your question. Our first quarter performance was better than we anticipated, with record first quarter sales, adjusted operating income, adjusted operating margin, and adjusted earnings per share due to a strong performance in the Americas and Africa. We are actively working to manage the current trade environment and expect that our U.S. footprint, global supply chain, and price increases will enable us to navigate it successfully. We are maintaining our full year organic sales and adjusted operating margin outlook despite the macro uncertainty and expectation of softer market conditions as the year progresses.

Bob: Additionally, our business model includes a large repair and replacement component that provides a durable base and drives steady revenue and cash flow.

Bob: Our balance sheet remains strong and provides ample flexibility to support our capital allocation priorities including M&A and continued investment in new product development and our digital strategy.

Speaker Change: With that operator, please open the line for questions.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: Bad debt I would like to ask a question. Please press star one on your telephone keypad convince you haven't joined the queue.

Bob: In addition, we are increasing our dividend by 21% starting in June.

Speaker Change: I would like to withdraw your question simply press Star one again.

Bob: We believe our highly experienced team is well positioned to proactively navigate current market conditions as we have done in the past.

Nathan Jones: Our first question comes from Nathan Jones from Stifel. Please go ahead.

Robert Pagano: Nonetheless, we've proven our business is resilient over the long term, our portfolio is agnostic to end markets, and our teams are pivoting to growing subverticals. Additionally, our business model includes a large repair and replacement component that provides a durable base and drives steady revenue and cash flow.

Bob: We're confident in our ability to control costs through our one-watts performance system while capturing our fair share of demand and positioning us to capitalize on long-term secular trends.

Nathan Jones: Good morning, everyone.

Nathan Jones: Hey.

Speaker Change: I wanted to start off right on that last thing that you said above there about winning your fair share I wanted to talk about weighing more than your fair share.

For that operator, please open the line for questions

Speaker Change: Thank you. We will now begin to question an answer session. If you have doubted it would like to ask a question, please press star one on your telephone. Keep that to if you had enjoyed a cue. If you would like to withdraw your question, simply press star one again.

Speaker Change: I recall in 2022, when supply chains were messed up and your competitors couldn't get product in from China that you guys won some additional shares we get very good margin you didn't have to give the typical project discounts.

Robert Pagano: Our balance sheet remains strong and provides ample flexibility to support our capital allocation priorities, including M&A and continued investment in new product development and our digital strategy. In addition, we are increasing our dividend by 21% starting in June. We believe our highly experienced team is well positioned to proactively navigate current market conditions as we have done in the past. We're confident in our ability to control costs through our one Watts performance system, while capturing our fair share of demand and positioning us to capitalize on long term secular trends.

Speaker Change: I would say the same conditions have been created again here not necessarily because competitors can't get products that because it's so much more expensive.

Nathan Jones: The first question comes from Nathan Jones, from Stiffle. Please go ahead.

Speaker Change: I wanted to start off right on that last thing that you said above there about winning your fair share I wanted to talk about weighing more than your fair share.

Speaker Change: Maybe just talk a little bit about where you see opportunities.

Speaker Change: To gain share to gain margin because of that advantaged Manny.

Speaker Change: I recall in 2022, when supply chains were messed up and your competitors Couldnt get product in from China.

Speaker Change: Manufacturing footprint that you guys have.

Unknown Executive: With that, operator, please open the line for questions. We will now begin the question and answer session.

Speaker Change: Thanks, Nathan sure listen as you know our primary strategy has been to make products in the region for the region. However, there are products that we source from low cost countries, such as China to be competitive in the marketplace. So we don't directly talk about competitors or anything like that but look at.

Speaker Change: You guys won some additional shares at very good margins because you didn't have to give the typical project discounts.

Unknown Executive: If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.

Speaker Change: I would say the same conditions have been created again here not necessarily because competitors can't get products that because it's so much more expensive.

Speaker Change: Having our products closer to the customer and then this tariff environment that is very helpful. Because.

Nathan Jones: first question comes from Nathan Jones from Stifel. Please go ahead. Good morning, everyone. All right, then. I wanted to start off right on that last thing that you said, Bob, there about winning your fair share. And I wanted to talk about winning more than your fair share. I recall in 2022, when supply chains were messed up and your competitors couldn't get product in from China, that you guys won some additional shares with very good margins, you didn't have to give the typical project discount. It would seem that the same conditions have been created again here, not necessarily because competitors can't get products, but because it's so much more expensive.

Speaker Change: So maybe just talk a little bit about where you see opportunities.

Speaker Change: Our cost structure with the tariffs are different.

Speaker Change: To gain share to gain margin because of that advantaged Manny.

Speaker Change: Position and I think we use the example in the past.

Speaker Change: Manufacturing footprint that you guys have.

Speaker Change: Some of our gas connectors that we make in the U S. Our primary competition is in China, and certainly we were able to take share as you said during that timeframe, but look at we're going to as I said in the last comment we're going to get our fair share of the market and with all these tariffs moving around.

Speaker Change: It's just the dynamic environment. We're in now so stay tuned we like I said, we'll get our fair share and.

Speaker Change: Having our products closer to the customer and then this tariff environment that is very helpful. Because.

Speaker Change: Let's see how it progresses throughout the year.

Speaker Change: Our cost structure with the tariffs are different.

Speaker Change: Fair enough I.

Speaker Change: I guess, maybe if you can just talk a little bit about.

Speaker Change: Position and I think we use the example in the past.

Speaker Change: The pacing of the price increases that you've put through.

Robert Pagano: So maybe just talk a little bit about where you see opportunities to gain share, to gain margin because of that advantaged manufacturing footprint that you guys have. Thanks, Nathan. Well, sure. Listen, as you know, our primary strategy has been to make products in the regions for the region. However, there are products that we source from low-cost countries such as China to be competitive in the marketplace. So we don't directly talk about competitors or anything like that. But look at having our products close to the customer and in this tariff environment, that's very helpful because, you know, our cost structure with the tariffs are different or in a better position.

Speaker Change: And then yeah.

Speaker Change: These are all price increases rather than surcharges. Obviously, there is talk about the tire staying reduced on China. If those do get reduced what happens to your pricing structure do you need to do some of that back or would you hold onto it and then I'll pass it on thanks.

Speaker Change: It's just a dynamic environment. We're in now so stay tuned we like I said, we'll get our fair share and.

Speaker Change: With regards to price increase Nathan we had our annual price increase in January that we talked about during the last earnings call. Since then the tariff related price increases there's been one at the end of March and then Theres one that takes effect may 12.

Speaker Change: Let's see how it progresses throughout the year.

Speaker Change: Fair enough I.

Speaker Change: I guess, maybe if you can just talk a little bit about the pacing of the price increases that you've put through.

Speaker Change: Those are that's the latest status and obviously, we will talk about the realization on those price increases when we have the second quarter earnings call.

Speaker Change: And then yeah.

Speaker Change: Regarding pricing in the future look at these are big tariff amounts and adjustments. So we're going to be competitive in the marketplace and with a focus on taking care of our customers. So again stay tuned we're watching this very carefully and we'll be competitive.

Robert Pagano: And I think we used the example in the past of some of our gas connectors that we make in the U.S. Our primary competition is in China. And certainly, we were able to take share, as you said, during that timeframe. But look at we're going to, as I said in the last comment, we're going to get our fair share of the market. And with all these tariffs moving around, you know, it's just a dynamic environment we're in now. So stay tuned. Like I said, we'll get our fair share and let's see how it progresses throughout the year.

Nathan Jones: With regards to price increase Nathan we had our annual price increase in January that we talked about during the last earnings call. Since then the tariff related price increases there's been one at the end of March and then there's one that takes effect may 12.

Speaker Change: Great. Thanks, very much for taking my questions.

Nathan Jones: Thanks Nathan.

Speaker Change: Our next question comes from Mike Halloran from R. W. Baird. Please go ahead.

Speaker Change: That's the latest status and obviously, we will talk about the realization on those price increases.

Mike Halloran: Good morning, guys.

Speaker Change: Good morning.

Speaker Change: So can we just I just want to make sure I understand what you're saying with the front half versus back half margin and revenue cadence.

Speaker Change: The second quarter earnings call.

Unknown Executive: Fair enough.

Nathan Jones: I guess maybe if you can just talk a little bit about the pacing of the price increases that you've put through, and then, you know, if these are all price increases rather than surcharges, obviously, there's talk about the, you know, the tariffs being reduced on China.

Speaker Change: Is it fair to say that the incremental pricing, you're getting as being offset by some assumption.

Nathan Jones: If those do get reduced, what happens to your pricing structure? Do you need to give some of that back? Or would you hold on to it?

Speaker Change: <unk> weakness from a volume perspective.

Speaker Change: Great. Thanks, very much for taking my questions.

Speaker Change: Thank you Jonathan.

Speaker Change: Yes.

The nuance I guess I'm getting at is I know there was originally some softness embedded in the guide coming in the back half of the year.

Speaker Change: Our next question comes from Mike Halloran from R. W. Baird. Please go ahead.

Robert Pagano: And then I'll pass it off to With regards to price increase, Nathan, we had our annual price increase in January that we talked about during the last earnings call. Since then, the tariff-related price increases, there's been one at the end of March, and then there's one that takes effect May 12th. That's the latest status.

Speaker Change: Is that.

Speaker Change: Increased.

Mike Halloran: Good morning, guys.

If so is it perspective or is it reactive meaning it doesn't sound like you've seen any softening really in the business, it's been relatively stable and obviously this quarter.

Speaker Change: Good morning.

Speaker Change: So can we just I just wanted to make sure I understand what you're saying with the front half versus back half margin and revenue cadence.

Robert Pagano: And obviously, we'll talk about the realization on those price increases when we have the second quarter earnings call. Yeah, regarding pricing in the future, look, these are big tariff amounts and adjustments. We're going to be competitive in the marketplace and with a focus on taking care of our customers. Again, stay tuned. We're watching this very carefully, and we'll be competitive.

Speaker Change: What you think is going to happen next quarter very good performance.

Speaker Change: Is it fair to say that the incremental pricing, you're getting as being offset by some assumption.

Speaker Change: So it's just something we've seen or you're just saying hey look the environment is what it is and we just wanted to take a cautious approach because of the macro signals.

Speaker Change: <unk> weakness from a volume perspective.

Speaker Change: Adjusting something worse in the back half.

Speaker Change: Yes.

Speaker Change: The nuance I guess I'm getting at is I know there was originally some softness embedded in the guide coming in the back half of the year.

Speaker Change: Yes, I think it's the latter Mike could just the uncertainty that's around there with all the tariffs we've had a solid first quarter.

Unknown Executive: Great, thanks very much for taking my question.

Speaker Change: Is that.

Speaker Change: Increased.

Speaker Change: Well as April has been very good so we're watching that and some of that is just people being price increases et cetera in the marketplace. So we're just watching demand wanted to make sure its not being pulled forward too much and then we'll watch what happens if these big price increases like the China, 145% stay in place.

Unknown Executive: Thank you.

Speaker Change: If so is it perspective or is it reactive meaning it doesn't sound like you've seen any softening really in the business, it's been relatively stable and obviously this quarter.

Michael Halloran: Our next question comes from Mike Halloran from RW Baird, please go ahead. Good morning, guys. One microphone. So, can we just, I just want to make sure I understand what you're saying with the front half versus back half margin and revenue cadencing. Is it fair to say that the incremental pricing you're getting is being offset by some assumption on incremental weakness from a volume perspective? The nuance I guess I'm getting at is I know there was originally some softness embedded in the guide coming in the back half of the year. Is that increased? And if so, is it prospective?

Speaker Change: What you think is going to happen next quarter very good performance.

Speaker Change: Is this something you've seen or you're just saying hey look the environment is what it is and we just wanted to take a cautious approach because of the macro signals are suggesting something worse in the back half.

Speaker Change: I believe that will certainly impact demand in the second half again, its a fluid motion.

Speaker Change: And when you look at the all the leading indicators in the market indicators have not really changed right. So it didn't make sense for us to increase the second half of the year at this point in time. So we'll watch it is only the first quarter, we will watch and see how things flow through.

Speaker Change: Yes, I think it's the latter Mike could just the uncertainty that's around there with all the tariffs we've had a solid first quarter.

Speaker Change: As well as April has been very good. So we're watching that some of that is just people being price increases et cetera in the marketplace. So we're just watching demand wanted to make sure its not being pulled forward too much and then we'll watch what happens if these big price increases like the China, 145% stay in play.

Speaker Change: Yeah agreed no incentive to do that.

Speaker Change: And then just another question on the margins front half versus back half back half is down for fun has probably a little more than normal I'm sure. Some of that is the conservatism you just referenced that some of that just associated with the math behind putting in incremental pricing that kind of more one for one on EBITDA dollars based on what you know today or are there anything.

Robert Pagano: Or is it reactive? Meaning? It doesn't sound like you've seen any softening really, in the business, it's been relatively stable. And obviously, this quarter and what do you think is going to happen next quarter? Very good performance. So it's just something you've seen, or you're just saying, Hey, look, the environment is what it is. And we just want to take a cautious approach, because the macro signals are suggesting something worse in the back half. Yeah, I think it's the latter, Mike. It's just the uncertainty that's around there with all the tariffs. We've had a solid, you know, first quarter, as well as April, it has been very good.

Speaker Change: I believe that will certainly impact demand in the second half again, its a fluid motion.

Speaker Change: Anything else I should be thinking about going into the back half on the margin line.

Speaker Change: Yes, Mike primarily it's driven typically we have first half margins are higher than second half, while I can say sequential margins from a historical perspective.

Speaker Change: Yeah agreed no incentive to do that and then just another question on the margins front half versus back half.

Speaker Change: And then secondly, there's going to be a piece of volume deleverage that impacts the second half and again thats to be ascertained, we'll just have to see how that goes.

Speaker Change: Back half is down for fun has probably a little more than normal I'm sure. Some of that is the conservatism you just referenced.

Speaker Change: Go to plays out.

Robert Pagano: So we're watching that some of that is just people feeding price increases, etc. in the marketplace. So we're just watching demand want to make sure it's not being pulled forward too much. And then we'll watch what happens if these big price increases, like the China 145% stay in place. I believe that will certainly impact demand in the second half. Again, it's a fluid motion. And when you look at all the leading indicators in the market indicators, they've not really changed, right. So it didn't make sense for us to increase the second half of the year at this point in time.

Shashank Patel: But implicitly shanker, you're saying that the pricing is not margin dilutive in the second half.

Speaker Change: Some of that just associated with the math behind putting in incremental pricing that kind of more one for one on EBITDA dollars based on what you know today or are there anything anything else I should be thinking about going into back half on the margin line.

Shashank Patel: But the the pricing is we're holding our margins with the price tariff cost impact in the second half and it's not only price Mike It's price, it's our global supply chain and our footprint adjustments. So all of those together are maintaining our margin outlook.

Speaker Change: Yes, Mike primarily it's driven typically we have first half margins are higher than second half, but I guess, a sequential margins from a historical perspective, and then secondly, there's going to be a piece of volume deleverage that impacts the second half and again thats to be Azzedine, we'll just have to see how that goes as the go to plays out.

Speaker Change: Great that makes a lot of sense. Thanks, guys I appreciate it.

Shashank Patel: Thank you. Thank you.

Jeff Hammond: Our next question comes from Jeff Hammond from Keybanc.

Unknown Executive: So we'll watch, it's only the first quarter, we'll watch and see how things flow through. Yeah, agreed. No incentive to do that.

Speaker Change: But implicitly shanker, you're saying that the pricing.

Speaker Change: Please go ahead.

Jeff Hammond: Hey, good morning, guys.

Unknown Executive: And then just another question on the margins front half versus back half. Back half is down versus front half, probably a little more than normal. I'm sure some of that's the conservatism you just referenced. Is some of that just associated with the math behind putting an incremental pricing that is kind of more one for one on EBITDA dollars based on what you know today? Or is there anything else I should be thinking about going into the back half? Yeah, no, Mike, primarily it's driven, typically, we have first half margins are higher than second half margins, so it's sequential margins from a historical perspective.

Jeff Hammond: Yes.

Speaker Change: Is not margin dilutive in the second half.

Speaker Change: Bob you mentioned kind of controlling pre buying but what have you seen from a pre buy ahead of these these may 12 increases and are you doing anything to kind of limit.

Speaker Change: But the the pricing is we're holding our margins with the price tariff cost impact in the second half and it's not only price Mike It's price, it's our global supply chain and our footprint adjustment. So all of those together are maintaining our margin outlook.

Jeff Hammond: The impact of that.

Speaker Change: Yes, we saw some pre buy.

Speaker Change: Impact in the first quarter is the last at the end of the last week of the month actually we saw some of that flow through about $5 million in the first quarter and the second quarter April has been solid because people are doing that we are controlling.

Speaker Change: Great that makes a lot of sense. Thanks, guys I appreciate it.

Speaker Change: Thank you.

Jeff Hammond: Our next question comes from Jeff Hammond from Keybanc. Please go ahead.

Shashank Patel: And then secondly, you know, there's going to be a piece of volume D leverage that impacts the second half. And again, that's to be ascertained, we'll just have to see how that goes, as the quarter plays out. But implicitly, Shank, are you saying that the pricing is not margin dilutive in the second half? But the pricing is, we're holding our margins with the price tariff cost impact in the second half. And it's not only price, Mike, it's price, it's our global supply chain and our footprint adjustment. So all those together are maintaining our margin outlook.

Jeff Hammond: Hey, good morning, guys.

Speaker Change: Order input, we don't want everybody to buy a year's full of inputs. So we're basing it on prior history and making sure. We're looking at that but April was solid.

Speaker Change: Yes.

Speaker Change: Bob you mentioned kind of controlling pre buying but what have you seen from a pre buy ahead of these these may 12 increases and are you doing anything to kind of limit.

Speaker Change: We're just watching that flow through it's difficult to understand what real demand is versus how much is that price increase but I go back to the fundamentals and the market has not changed significantly there's just more uncertainty and people are just trying to get in front of this right now, but as you know we have about three months of inventory on hand, so we can we have that.

Speaker Change: The impact of that.

Speaker Change: Yes, we saw some pre buy impact in the first quarter at the last at the end of the last week of the month actually we saw some of that flow through about $5 million in the first quarter and the second quarter April has been solid because people are doing that we are controlling.

Speaker Change: And certainly our price increases that youre showing talked about have been incrementally going through at this point in time.

Unknown Executive: Great, that makes a lot of sense.

Unknown Executive: Thanks, guys. Appreciate it.

Speaker Change: Order input, we don't want everybody to buy a year's full of inputs. So we're basing it on prior history and making sure. We're looking at that but April was solid.

Jeffrey Hammond: Our next question comes from Jeff Hammond from KeyBank. Please go ahead. Hey, good morning, guys. My...

Speaker Change: Okay, and then what's informing the weaker Europe got it it seems like we're hearing at least better news on.

Speaker Change: On the heat pump side, just more color there.

Robert Pagano: Hey, Bob, you mentioned, you know, kind of controlling pre buying, but what have you seen from a pre buy ahead of these, these may 12 increases? And are you doing anything to kind of limit? You know, the the impact Yeah, we saw some pre-buy impact in the first quarter, at the last end of the last week of the month, actually, we saw some that flow through about $5 million in the first quarter. In the second quarter, April has been solid, because people are doing that we are controlling order input, you know, we don't want everybody to buy years full of input.

Speaker Change: Yes, I think it's really the heat pump side, just like you. We think it's going to come back in the second half of the year. It's just new construction, we saw more destocking than we thought was going to happen.

Speaker Change: Inside of this and there's just some uncertainty.

Speaker Change: <unk> and new construction. So we're just believe that it's prudent at this point based on order trends and what we're seeing to be cautious with Europe at this point in time.

Speaker Change: And certainly our price increases that youre showing talked about have been incrementally going through at this point in time.

Speaker Change: Okay, and then what's informing the weaker Europe got it it seems like we're hearing at least better news on.

Speaker Change: Okay, if I could sneak one more in.

Speaker Change: Just maybe update us on how things are going with with Bradley Joe semi con in terms of integration cost revenue synergies.

Speaker Change: On the heat pump side, just more color there.

Robert Pagano: So we're basing it on prior history, and making sure we're looking at that. But April was solid. We're just watching that flow through. It's difficult to understand what real demand is, versus how much is that price increase. But I go back to the fundamentals, the market has not changed significantly, there's just more uncertainty. And you know, people are just trying to get in front of this right now. But as you know, we have about three months of inventory on hand. So we can, we have that. And certainly our price increases that Shashank talked about, have been incrementally going through at this point in time.

Speaker Change: Underlying demand trends.

Speaker Change: Yes, all three of the businesses are doing really well and I would say all of our synergy tracking is ahead of schedule, which is exciting the integration with the teams is going well and.

Speaker Change: Inside of this and there's just some uncertainty in particular in new construction. So we're just believe that it's prudent at this point based on order trends and what we're seeing to be cautious with Europe at this point in time.

Speaker Change: Seeing the benefit clearly Joe Sam If you remember also has a benefit because it has U S manufacturing capabilities and again in this marketplace. That's a good thing.

Speaker Change: Okay, if I could sneak one more in.

Speaker Change: Just maybe update us on how things are going with with Bradley Joe semi con in terms of integration cost revenue synergies.

Speaker Change: Okay. Thanks, a lot.

Robert Pagano: Okay, and then what's informing the weaker Europe guide? It seems like we're hearing at least better news on the on the heat pump side, just just more color there. Yeah, I think it's really the heat pump side, just like you, we think it's going to come back in the second half of the year.

Jeff Hammond: Thank you Jeff.

Speaker Change: Our next question comes from Brian Connors from Northcoast Research. Please go ahead.

Speaker Change: Your line demand trends.

Speaker Change: All three of the businesses are doing really well and I would say all of our synergy tracking is ahead of schedule, which is exciting the integration with the teams is going well and.

Brian Connors: Good morning.

Good morning, Ryan.

Brian Connors: I haven't.

Speaker Change: Pick a different angle on the price cost issue I know some of the peers in the brass bronze world have talked about specific.

Robert Pagano: It's just new construction, we saw more destocking than we thought was going to happen inside of this. And there's just some uncertainty, in particular, in new construction. So we're just believe that it's prudent at this point, based on order trends and what we're seeing, to be cautious with Europe at this point.

Speaker Change: We're seeing the benefit clearly Joe Sam.

Speaker Change: If you remember also has a benefit because it has U S manufacturing capabilities, so and again in this marketplace. That's a good thing.

Speaker Change: Elements in raw materials being in restricted supply for example dismissed as a key ingredient for some of the brass products that I assume you use as well on that that's gotten really really tight and.

Speaker Change: Okay. Thanks, a lot.

Jeff Hammond: Thank you Jeff.

Speaker Change: Precipitated some of these price increases is that an issue as well or is really the main thing you're facing in terms of passing on price is that is it really exclusively tariffs.

Unknown Executive: Okay, if I could sneak one more in.

Speaker Change: Our next question comes from Ryan Connors from Northcoast Research. Please go ahead.

Robert Pagano: just maybe update us on how things are going with, you know, with Bradley Joe Sam icon in terms of integration, cost revenue synergies, you know, underlying demand. Yeah, all three of the businesses are doing really well. And I would say all our synergy tracking is ahead of schedule, which is exciting. The integration with the teams is going well. And we're seeing the benefit clearly. JOSAM, if you remember, also has a benefit because it has US manufacturing capabilities.

Ryan Connors: Good morning.

Speaker Change: Good morning, Ryan.

Ryan Connors: So I haven't.

Speaker Change: I think it's a little bit of the raw materials, but it's mainly the tariffs and some of the more smaller of our products that we have that we get from China to be competitive in the current marketplace. So.

Ryan Connors: Pick a different angle on the price cost issue I know some of the peers in the brass bronze world have talked about specific <unk>.

Ryan Connors: Elements in raw materials being in restricted supply for example dismissed as a key ingredient for some of the brass products that I assume you use as well on that that's gotten really really tight and.

Speaker Change: Our team has done a nice job of securing our fair share of the allocations going forward of the components of our raw material, but it's something we continue to watch daily to make sure we know where we're at but we have a good three months.

Speaker Change: And as precipitating some of these price increases is that an issue as well or is really the main thing you're facing in terms of passing on price is that isn't really exclusively tariffs.

Unknown Executive: And again, in this marketplace, that's a good Okay, thanks a lot. Thank you.

Speaker Change: Inventory as well as supply chain availability for an additional three months.

Speaker Change: Related to our copper and some of our units that we use in our founders, yes, I think you're right.

Ryan Connors: Our next question comes from Ryan Connors from North Coast Research. Please go ahead. Good morning. Good morning, Ryan.

Speaker Change: And more of their raw material restrictions have been on the rare Earth metals and we don't in our.

Speaker Change: Processes, we don't use.

Robert Pagano: So I had a Take a different angle on the price-cost issue. I know some of the peers in the brass-bronze world have talked about specific elements in raw materials being in restricted supply. For example, bismuth as a key ingredient for some of the brass products that I assume you use as well, and that that's gotten really, really tight and is precipitating some of these price increases. Is that an issue as well, or is really the main thing you're facing in terms of passing on prices that isn't really exclusively tariffs? I think it's a little bit of the raw materials, but it's mainly the tariffs and some of the more smaller of our products that we have that we get from China to be competitive in the current marketplace.

Speaker Change: Any of that.

Speaker Change: Okay.

Speaker Change: Our team has done a nice job of securing our fair share of the allocations going forward.

Speaker Change: And then secondly, just conceptually on the price issue. So we have some competitors out there who are who source from China directly with these astronomical price increases, we've seen 60% or more.

Speaker Change: Components of our raw material, but it's something we continue to watch daily to make sure we know where we're at but we have a good three months.

Speaker Change: Inventory as well as a supply chain availability for an additional three months.

Speaker Change: How do you look at that Opportunistically are there cases, where you would say look we don't really have to raise price any more than five or 10%, but maybe it will go for 20 or 30, just because we've got this air cover of competitors that are out there we can undercut them.

Speaker Change: Related to our copper and some of our even gifts that we use in our foundries, yes, I think you're right.

Speaker Change: And more of their raw material restrictions have been on the rare Earth metals, and we don't in our processes.

Speaker Change: Processes, we don't use.

Speaker Change: Amazingly with a 30% price increase I mean is there is there that does the market allow for that kind of opportunism on price or is it going to be more <unk>.

Speaker Change: Are there any of that.

Speaker Change: Okay.

Speaker Change: <unk> on what's what's your actual tariff costs are.

Robert Pagano: So our team has done a nice job of securing our fair share of the allocations going forward of the components of our raw material. But it's something we continue to watch daily to make sure we know where we're at. But, you know, we have a good three months of inventory as well as supply chain availability for an additional three months related to our copper and some of our ingots that we use in our foundries. Yeah, I think Ryan, more of the raw material restrictions have been on the rare earth metals.

Speaker Change: Ryan we always look at valuing and pricing to value, we're providing to our customers. So we look at what competitors price, we try to be competitive in the regions and in the markets and again with some of these.

Speaker Change: How do you look at that Opportunistically are there cases, where you would say look we don't really have to raise price any more than five or 10%, but maybe we will go for 20 or 30, just because we've got this air cover of competitors that are out there we can undercut them.

Speaker Change: Tariffs that are going in place we don't believe they are sustainable.

Speaker Change: And that that will change in the long run. So I think it's you got to be careful to whip sign a lot of these price increases are at list price levels and it varies there's big ranges of products, where some of the products are low single digit increases in bummer in high double digit increases, but again it depends on the component of the product.

Speaker Change: Amazingly with a 30% price increase I mean is there is there that does the market allow for that kind of opportunism on price or is it going to be more <unk>.

Unknown Executive: And we don't, in our processes, we don't use hardly any of that. Okay.

Speaker Change: <unk> on what's what's your actual tariff costs are.

Ryan Connors: And then secondly, just conceptually on the price issue. So we have some competitors out there who source from China directly with these astronomical price increases. We've seen 60% or more. How do you look at that opportunistically? Are there cases where you'd say, look, we don't really have to raise price any more than 5 or 10%, but maybe we'll go for 20 or 30, just because we've got this air cover of competitors that are out there. We can undercut them amazingly with a 30% price increase. I mean, is there that, does the market allow for that kind of opportunism on price or is it going to be more passing on what your actual tariff costs are?

Speaker Change: And we look at our customer region by region and <unk>.

Speaker Change: Making sure we're taking care of customers. So we'll be looking at that and certainly looking at getting our fair share price in the marketplace.

Speaker Change: Tariffs that are going in place, we don't believe they're sustainable.

Speaker Change: Got it thanks for your time.

Speaker Change: And that they will change in the long run so I think it's.

Speaker Change: Thank you Ron.

Speaker Change: <unk>.

Speaker Change: You got to be careful to whipsawing.

Speaker Change: Our next question comes from Andrew Krill from Deutsche Bank.

Speaker Change: These price increases are at list price levels and it varies there's big ranges of products, where some of the products are low single digit increases in summer and high double digit increases, but again it depends on the component the product and we look at our customer region by region and.

Speaker Change: Go ahead.

Speaker Change: Hi, Thanks, good morning, everyone.

Speaker Change: Good morning, Good morning, I guess here.

Speaker Change: And you're more U S centric manufacturing guys, especially relative to some peers.

Speaker Change: Could you comment on like your utilization of your facility, there and trying to get a sense of how much more capacity you have to quickly ramp up to those as you shift away from other areas like China.

Speaker Change: Making sure we're taking care of customers. So we'll be looking at that and certainly looking at getting our fair share price in the marketplace.

Robert Pagano: Ryan, we always look at valuing and pricing to value we're providing to our customers. So, you know, we look at what competitors price, we try to be competitive in the regions and in the markets. And, and again, with some of these, you know, tariffs that are going in place, we don't believe they're sustainable, and that they'll change in the long run. So I think it's, you got to be careful to whipsawing, a lot of these price increases are at list price levels. And it varies, there's big ranges of products where, you know, some of the products are, you know, low single digit increases, and some are in high double digit increases.

Speaker Change: Got it thanks for your time.

Speaker Change: And are you planning any further capex that they will be out this year or is it a bit too early.

Ron: Thank you Ron.

Speaker Change: Our next question comes from Andrew Krill from Deutsche Bank.

Speaker Change: I will expand further thanks.

Speaker Change: Go ahead.

Speaker Change: Yes. The good thing is we're not fully utilized on our manufacturing footprint in North America. So we do have second shifts, but we can improve our second shifts.

Andrew Krill: Hi, Thanks, good morning, everyone.

Speaker Change: Good morning, Good morning, I guess here.

Speaker Change: You're more U S centric manufacturing I guess, especially relative to some peers.

Speaker Change: <unk>.

Speaker Change: Very few of our facilities are running a third shift. So we don't have to put significant capital expenditures and we believe we have adequate footprint, we just going to expand shifts in capabilities as needed.

Speaker Change: Could you comment on like your utilization of your facility, there and trying to get a sense of how much more capacity you have to quickly ramp up those as you shift away from other areas like China.

Ryan Connors: But again, it depends on the component, the product, and we look at a customer region by region and making sure we're taking care of customers. So we'll be looking at that and certainly looking at getting our fair share of price in the market. Got it. Thanks for your time. Thank you.

Speaker Change: Great that is helpful and next for <unk> with the margins they are pretty impressive and wanted to around 14%.

Speaker Change: And are you planning any further capex to build out this year or is it a bit too early.

Speaker Change: Ill expand further thanks.

Speaker Change: Yes. The good thing is we're not fully utilized on our manufacturing footprint in North America. So we do have second shifts, but we can improve our second shifts.

Speaker Change: Q2 guide.

Speaker Change: Stepping back pretty materially approaching 10% or so.

Andrew Krill: Our next question comes from Andrew Krill from Deutsche Bank. Please go ahead. Hi, thanks. Good morning, everyone. Good morning. You're more U.S. centric manufacturing, especially relative to some peers.

Speaker Change: And a little on what went well in the first quarter and maybe why there was a pretty big step down for <unk>.

Speaker Change: There are very few of our facilities are running a third shift. So we don't have to put significant capital expenditures and we believe we have adequate footprint, we just going to expand shifts in capabilities as needed.

Speaker Change: <unk> for the rest of the year it doesn't improve that much from there. Thanks.

Speaker Change: Looking at Q1, you're right the margin expansion Q over Q1 to Q1 was because it was very good part of that was volume driven piece of it right. We've talked about we shipped about $10 million more than we anticipated and some of that was pre price increase pull in about half of it. The other half was actually a data center business, which was up <unk>.

Robert Pagano: Could you comment on your utilization of your facilities there and trying to get a sense of how much more capacity you have to quickly ramp up those as you shift away from other areas like China?

Speaker Change: Great that is helpful and next for uninterrupted with the margins they are pretty impressive and wanted to around 14%.

Speaker Change: <unk> guide.

Robert Pagano: And are you planning any further CapEx to build these out this year or is it a bit too early to expand further? Yeah, the good thing is we're not fully utilized on our manufacturing footprint in North America. So we do have second shifts, but we can improve our second shifts and, and a very few of our facilities are running a third shift. So we don't have to put significant capital expenditures and we believe we have adequate footprint, we're just going to expand shifts and capabilities as needed.

Speaker Change: Stepping back pretty materially approaching 10% or so can you just expand a little on what went well in the first quarter and maybe why you know theres, a pretty big step down for <unk>.

Speaker Change: Typically as well as you look at sequentially Q1 to Q2, we're still expanding margins by about 40% to 50 basis points Q1 to Q2, and then Q2 Q2 prior year, it's still up about 60 basis points at the midpoint. So there is still margin expansion going on but Q1 did benefit from some incremental volume as well as a consequence.

Speaker Change: <unk> for the rest of the year it doesn't improve that much from there. Thanks.

Speaker Change: Yeah look in Q1, you're right the margin expansion Q over Q1 to Q1 was because it was very good part of that was volume driven piece of it right and we talked about we shipped about $10 million more than we anticipated.

Speaker Change: And in Q1, as we saw the trends coming in.

Speaker Change: Okay great.

Speaker Change: Is that sort of full company are in euro.

Speaker Change: No that was that was in total so.

Speaker Change: Some of that was pre price increase split about half of it. The other half was actually a data center business, which was up significantly as well as you look at sequential Q1 to Q2, we're still expanding margins by about 40% to 50 basis points Q1 to Q2, and then Q2 Q2 prior year, it's still up to about 60 basis points at the midpoint. So there is still margin expansion.

Speaker Change: Europe, specifically for Europe, specifically I mean, we.

Shashank Patel: Great, that is helpful. And next for Ungerup with the margins, they're pretty impressive and 1-2 around 14%. But for the 2-2 guide, you have them stepping back pretty materially, you know, approaching 10% or so. Can you just expand a little on what went well in the first quarter and maybe why? Big step down for 2Q and I think it's implied for the rest of the year. It doesn't improve that much from there. Yeah, look, in Q1, you're right, the margin expansion Q over Q, Q1 to Q1 was, was very good. Part of that was the volume driven piece of it, right?

Speaker Change: <unk> Q1, Q2, one of the strongest quarters.

Speaker Change: But year over year with the heat pump destocking.

Speaker Change: <unk> have become more difficult because it depends on the heat from Destocking started it started in the second quarter of last year and this year, we certainly expect that to continue the second quarter of this year.

Speaker Change: Going on but Q1 did benefit from some incremental volume as well as cost containment in Q1, as we saw the types coming in.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Okay great.

Speaker Change: For the full company or in Europe.

Speaker Change: Our next question comes from Joe Giordano from TD Cowen.

Speaker Change: No that was that was in total so.

Speaker Change: Hey, guys good morning.

Speaker Change: Europe, specifically for Europe, specifically I mean, typically Q1 Q2 are the strongest quarters.

Speaker Change: Good morning.

Speaker Change: And on the Americas Guide for revenue.

Shashank Patel: We talked about, we shipped about $10 million more than we had anticipated. And some of that was pre price increase pull in about half of it. The other half was actually data center business, which was up significantly as well. As you look at sequential Q1 to Q2, we're still expanding margins by about 40 to 50 basis points, Q1 to Q2. And then Q2 to Q2 prior, you're it's still up to about 60 basis points at the midpoint. So there's still margin expansion going on. But Q1 did benefit from some incremental volume, as well as cost containment in Q1 as we saw the tariffs coming in.

Speaker Change: You started off the year a bit better than I think you were thinking.

Speaker Change: But year over year with the heat pump destocking the comparisons become more difficult because it depends on the heat from Destocking started it started in the second quarter of last year and this year, we certainly expect that to continue the second quarter of this year.

Speaker Change: Guys, just coming close to plus five I'm, just trying to think how to square that with like the full year guide.

Speaker Change: He is very conservative in light of what you expect first half performance to be on easier comps in the back half.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: So part of that is the demand destruction, we talked about right so with the incremental tariff prices.

Speaker Change: Our next question comes from Joe Giordano from TD Cowen.

Speaker Change: We do expect demand might be impacted in the second half obviously.

Joe Giordano: Hey, guys good morning.

Speaker Change: Good morning.

Speaker Change: Short book and ship business, we have visibility into the second quarter, but we're cautious about the second half. So we've kind of baked that into the second half guide for now and we'll see how things progress over the second quarter and Joe look at a lot of people.

Shashank Patel: Okay, great. And was that for the full company or? Now that was that was in total for Europe specifically, for Europe specifically, I mean, we you know, typically, Q1, Q2 are the strongest quarters. But year over year with the heat pump destocking, the comparison become more difficult because it depends on the heat pump destocking started and started in the second quarter of last year. And this year, you know, we certainly expect that to continue the second quarter of this year.

Speaker Change: And so on the Americas guide for revenue.

Speaker Change: And you started off the year a bit better than I think you were thinking.

Speaker Change: Guys just coming in close to plus 5% I'm, just trying to think of how to square that with like the full year guide.

Speaker Change: Yes.

Speaker Change: What affinity to price increases.

Speaker Change: Seems very conservative in light of what you expect first half performance to be on easier comps in the back half.

Speaker Change: And that and we just want to make sure they're not pulling give us a.

Speaker Change: Second half demand into Q2, so we're just watching it very carefully.

Speaker Change: So part of that is the demand destruction that we talked about right so with the incremental kind of prices.

Speaker Change: Many moving parts in the economy, right now and I think it makes sense.

Speaker Change: We do expect demand might be impacted in the second half obviously.

Speaker Change: So the second half of <unk>.

Speaker Change: But we will settle down a little bit and understand and food demand.

Joseph Giordano: Our next question comes from Joe Giordano from TD Cal. Hey guys, good morning. Good morning. And so on the America's Guide for Revenue. He started off the year a bit better than I think you were thinking. QQ guide is coming in plus two plus five. I'm just trying to think of how to square that with like the full year guide. Seems very conservative in light of what you'd expect first half performance to be on easier comps. So part of that is the demand destruction we talked about, right. So with the incremental tariff prices, we do expect demand might be impacted in the second half, you know, obviously, we're, you know, short book and ship business, we have visibility into the second quarter.

Speaker Change: That's fair.

Speaker Change: On the margins for Americas.

Speaker Change: Yes.

Speaker Change: Like the levels that youre at now.

Speaker Change: Okay.

Joe: Yes, no a lot of people.

Speaker Change: Got it.

Joe: The price increases that you're getting more watching that and we do want to make sure they're not pulling off.

Speaker Change: Okay.

Speaker Change: And what do you think this can go.

Joe: The second half demand into Q2, so we're just watching it very carefully.

Speaker Change: Okay.

Speaker Change: Additionally.

Joe: Regardless of the economy right.

Speaker Change: Portfolio as you integrate these deals.

Joe: Right now and I think it makes sense.

Speaker Change: The potential for this business.

Joe: So the second half for sure until it settles.

Speaker Change: Okay.

Joe: So, let's talk a little bit of an understanding true demand.

Speaker Change: Uh huh.

Speaker Change: But as I think you're asking mark businesses.

Joe: That's fair enough.

Joe: And as for Americas.

Speaker Change: It would be.

Joe: Yes.

Speaker Change: Our whole strategy.

Joe: Like the levels that you're at now.

Joe: Okay.

Speaker Change: 30 to 50 basis points of margin year over year, that's our target goals.

Robert Pagano: But we're cautious about the second half. So we've kind of baked that into the second half guide for now. And we'll see how things progress over the second quarter.

Joe: Lower level.

Joe: Got it.

Joe: Okay.

Speaker Change: Yeah.

Joe: And where do you think this can go.

Speaker Change: So.

Speaker Change: You too.

Robert Pagano: Yeah, and Joe, look at a lot of people. Yeah, no, a lot of people are trying to beat the price increases. And again, we're watching that. And we just want to make sure they're not pulling, let's call it the second half demand into Q2. So we're just watching that very carefully. Too many moving parts in the economy right now, I don't think it makes sense to be heroes in the second half of the year, but we'll settle down a little bit and understand from demand in the second half of the year. That's fair.

Joe: Okay.

Speaker Change: We're driving that through our organization.

Joe: Additionally.

Speaker Change: Do.

Speaker Change: Perfect.

Joe: Portfolio as you integrate the deal.

Speaker Change: Value of our new products for new firm through the Bronx provided.

Joe: The potential for this business.

Speaker Change: For our customers.

Joe: Okay.

Speaker Change: And unfortunately.

Joe: Okay.

Joe: Great.

Joe: You are asking Mark business.

Okay.

Speaker Change: Okay.

Joe: Okay.

Joe: <unk>.

Speaker Change: Sure.

Joe: Our whole strategy.

Joe: Good.

Joe: 30 to 50 basis points of margin year over year, that's our target goals.

Speaker Change: There are no further questions at this time I will turn the call back over to Bob Pagano Watts water technologies CEO.

Robert Pagano: And also on the margins for America is we don't have a lot of historical precedent at like the levels that you're at now, basically. Unknown Speaker Your guide for 2Q is kind of in the give or take 25% range. Where do you think this can go from an additional portfolio as you integrate into people's lives. Let's look at the potential for this. It was different than you're expecting us to actually, but like you were asking, more business sustainability. We, as we've had a, you know, our whole strategy is growing 30 to 50 basis points of margin year over year, and that's our target, our goal is what we, you know, still invest in business.

Joe: No.

Joe: So.

Joe: That will continue to zero, we're driving that.

Speaker Change: Thanks for taking the time to join US today. We appreciate your continued interest in watts and look forward to speaking with you again during our second quarter earnings call. In early early August have a good day and stay safe.

Joe: We do.

Speaker Change: It's not.

Joe: Value of our new products for new firm through the Bronx provided.

Joe: For our customers so we're pricing accordingly.

Joe: Okay.

Joe: There are no further questions at this time I'll turn the call back over to Bob Pagano Watts water technologies CEO.

Joe: Thanks for taking the time to join US today. We appreciate your continued interest in watts and look forward to speaking with you again during our second quarter earnings call in early August have a good day and stay safe.

Robert Pagano: So, that'll continue to be our goal, we're driving that through our organization, and we do. And it's not just us, it's the value of our new products, our new farm-related products, providing incremental value to our customers, so we're pricing it, unfortunately.

Speaker Change: Since the meeting you may now disconnect.

Joe: Okay.

Joe: Yeah.

Joe: Okay.

Joe: Yeah.

Unknown Executive: There are no further questions at this time.

Robert Pagano: I'll turn the call back over to Bob Pagano, Watts Water Technologies CEO. Thank you for taking the time to join us today.

Joe: [noise].

Unknown Executive: We appreciate your continued interest in Watts and look forward to speaking with you again during our second quarter earnings call in early August.

Unknown Executive: Have a good day and stay safe.

Joe: Yeah.

Q1 2025 Watts Water Technologies Inc Earnings Call

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