Q3 2025 Matthews International Corp Earnings Call

Cancer session.

To register to ask a question you May press Star one on your Touchtone phone you may withdraw yourself from the queue by pressing star. Two. Please note. This call may be recorded I'll be say anybody should you need any it says that assistance. It is now my pleasure to turn the conference over to CFO, Steve <unk>. Please go ahead.

Stephanie: Please stand by. Your program is about to begin. Good day, everyone, and welcome to today's MATTHEWS International Third Quarter Fiscal 2025 Financial Results. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question and answer session. To register to ask a question, you may press star one on your touchstone phone. You may withdraw yourself from the queue by pressing star two. Please note this call may be recorded. I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to CFO Steve Nicola. Please go ahead.

Please stand by your program is about to begin.

Alright, Thank you Stephanie and good morning, I'm, Steve Nicola Chief Financial Officer of Matthews and with me today is Joe <unk>, Our company's President and Chief Executive Officer, and Dan So far our senior Vice President operations controller and head of global business services.

Before we start I would like to remind you that our earnings release was posted on the company's website www Dot tw dot com in the investors section.

The presentation for our call can also be accessed in the investors section of the website under presentations.

Steve Nicola: All right. Thank you, Stephanie, and good morning. I'm Steve Nicola, Chief Financial Officer of MATTHEWS. And with me today is Joe Bartolacci, our company's President and Chief Executive Officer, and Dan Stopar, our Senior Vice President, Operations Controller, and Head of Global Business Services. Before we start, I would like to remind you that our earnings release was posted on the company's website, www.MATW.com, in the Investors section. The presentation for our call can also be accessed in the Investors section of the website under Presentations. Any forward-looking information, any forward-looking statements in connection with this discussion are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors that could cause the company's results to differ from those discussed today are set forth in the company's annual report on Form 10-K and other public filings with the SEC.

Any forward looking information any forward looking statements in connection with this discussion are being made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095 factors that could cause the companys results to differ from those discussed today are set forth in the Companys annual report on Form 10-K, and other public filings with.

The SEC.

In addition, we will be discussing non-GAAP financial information and metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics in connection with any forward looking statements and non-GAAP financial information. Please read the disclaimer included in today's presentation materials located on our.

Website, now I will turn the call over to Joe.

Thank you Steve Good morning, everyone and thanks for joining us to discuss the financial results for the fiscal 2025 third quarter.

Steve Nicola: In addition, we will be discussing non-GAAP financial information metrics and encourage you to read our disclosures and reconciliation tables carefully as you consider these metrics. In connection with any forward-looking statements and non-GAAP financial information, please read the disclaimer included in today's presentation materials located on our website. Now, I will turn the call over to Joe.

We're pleased with our results this quarter, which saw initial benefits from our value creation plan that was implemented late last year, including a gain from the divestiture of <unk> now known as propel us group of which we own 40% consolidated savings from our cost reduction program initiated last year, lower corporate and non operating.

<unk> costs and improved EBITDA performance year over year by our Memorialization and our industrial technologies business segment.

Joe Bartolacci: Thank you, Steve. Good morning, everyone, and thanks for joining us to discuss the financial results for the fiscal 2025 third quarter. We're pleased with our results this quarter, which saw initial benefits from a value creation plan that was implemented late last year, including a gain from the divestiture of SGK, now known as Propelos Group, of which we own 40%, consolidated savings from a cost reduction program initiated last year, lower corporate and non-operating costs, and improved EBITDA performance year over year by our memorialization and our industrial technologies business segment. Consolidated sales were $349 million in the third quarter of fiscal 2025 compared to $428 million in the third quarter of fiscal '24. The lower revenue result, excuse me, result was primarily attributable to the divestiture of SGK in May of this year.

Consolidated sales were $349 million in the third quarter of fiscal 2025 compared to $428 million in the third quarter of fiscal 'twenty for the lower revenue result.

Excuse me result was primarily attributable to the divestiture of S. G. K in may of this year.

<unk> current results only include one full month of SG&A, excluding adjusted EBITDA of the divested SDK business from both the current and prior year quarter results in a year over year increase of 37%.

Steve will provide greater detail on propel us, but let me say that the merger of SGS and SGA is moving along smoothly and as expected.

As we detailed on our last earnings call propel US has come out of the gate projecting initial annual adjusted EBITDA of about $100 million.

Joe Bartolacci: Thus, current results only include one full month of SGK, excluding adjusted EBITDA of the divested SGK business from both the current and prior year quarter results in a year-over-year increase of 37%. Steve will provide greater detail on Propelos, but let me say that the merger of SGS and SGK is moving along smoothly and as expected. As we detailed in our last earnings call, Propelos has come out of the gate projecting initial annual adjusted EBITDA of about $100 million and has just initiated the process of synergy capture. In fact, the management team expects to be at a run rate of synergies of $10 million by year-end and a $40 million run rate of synergies by the end of calendar '26. Moreover, the team has identified $60 million of total targeted synergies, higher than originally expected.

And as just initiated the process of synergy capture in fact, the management team expects to be at a run rate of synergies of $10 million by year end and a $40 million run rate of synergies by the end of calendar 'twenty six.

Moreover, the team has identified $60 million of total targeted synergies higher than originally expected.

All in all we expect this transaction to create significant value as we exit in the future.

Early market feedback on the deal has been positive and confirmed by the addition of new business that neither of the two predecessor companies had before the merger.

We will continue to share progress on propel us is it performance with you each quarter.

As I mentioned earlier since the third quarter of last year and as demonstrated by the divestiture of <unk>. In addition to an ongoing strategic alternatives review, we have implemented our value creation plan.

Joe Bartolacci: All in all, we expect this transaction to create significant value as we exit in the future. Early market feedback on the deal has been positive and confirmed by the addition of new business that neither of the two predecessor companies had before the merger. We'll continue to share progress on Propelos's performance with you each quarter. As I mentioned earlier, since the third quarter of last year and as demonstrated by the divestiture of SGK, in addition to an ongoing strategic alternatives review, we have implemented a value creation plan geared towards simplifying the company's corporate structure, reducing costs, and expanding our work in higher growth and higher margin businesses.

Geared towards simplifying the companys corporate structure, reducing costs and expanding our work.

Work in higher growth and higher margin businesses.

Although we are seeing the early results of those efforts and a reduced corporate costs. There is more to come as our transition services agreement with propel us is expected to occur by the end.

Excuse me, although Henry let me start that from the beginning although we are seeing the early results of these efforts and a reduced corporate costs. There is more to come as our transition service agreement with <unk>.

Propeller is expected to come to an end and the fiscal 'twenty six calendar year.

In addition, we expect to close on the sale of the remaining SDK German assets, which will further simplify our structure.

Joe Bartolacci: Although we are seeing the early results of those efforts in our reduced corporate costs, there is more to come as our transition services agreement with Propelos is expected to occur by the end of the, excuse me, although let me start that from the beginning. Although we are seeing the early results of these efforts in our reduced corporate costs, there's more to come as our transition service agreement with Propelos is expected to come to an end in the fiscal '26 calendar year. In addition, we expect to close on the sale of the remaining SGK German assets, which will further simplify our structure. These actions will further reduce our overall debt levels and help drive the continued growth of our industrial technologies business segment, anchored by the financial strength and consistency of our memorialization segment.

These actions will further reduce our overall debt levels and helped to drive the continued growth of our industrial technologies business segment anchored by the financial strength and consistency of our Memorialization segment.

With respect to the strategic alternatives review, we're pleased with its progress and I can say that several opportunities have been identified and presented to the board for consideration.

We expect to complete the process and announced our conclusions about the time earnings are released in November.

We will provide updates as we proceed.

Memorialization is the bedrock of our portfolio and maintained leading positions across all of its markets.

This segment's financial stability enables continued and consistent investment in innovation across the portfolio.

Joe Bartolacci: With respect to the strategic alternatives review, we're pleased with its progress, and I can say that several opportunities have been identified and presented to the board for consideration. We expect to complete the process and announce our conclusions about the time earnings are released in November. We'll provide updates as we proceed. Memorialization is the bedrock of our portfolio and maintains leading positions across all of its markets. This segment's financial stability enables continued and consistent investment in innovation across the portfolio. Memorialization reported a modest revenue increase and strong margin results in the third quarter of fiscal '25, driven by the Dodge acquisition, which closed in early May, and the divestiture of our European cremation business last year. Inflationary pricing benefited the third quarter, offsetting a modest decline in volumes.

Memorialization reported a modest revenue increase and strong margin results in the third quarter of fiscal 'twenty five driven by the Dodge acquisition, which closed in early may and the divestiture of our European cremation business last year.

Inflationary pricing benefited in the third quarter offsetting a modest decline in volumes.

Note that the volume declines primarily relating to our granite business continued to be largely due to the release of buildup in COVID-19 related backlog in fiscal 2024, leading to a negative comparison of about $3 million on a year over year basis.

We're expecting the segment to return to a normal cadence and revenue and pricing for the remainder of the year.

Regarding tariffs, we believe memorialization may be the most susceptible.

Although the team has done a great job of finding sourcing alternatives for impacted products. The tariffs are also impacting the cost of materials, which are produced domestically as suppliers are price adjusting to reflect the higher competitive pricing, resulting from tariffs.

Joe Bartolacci: Note that the volume declines, primarily relating to our granite business, continue to be largely due to the release of a buildup in COVID-related backlog in fiscal 2024, leading to a negative comparison of about $3 million on a year-over-year basis. We're expecting the segment to return to a normal cadence in revenue and pricing for the remainder of the year. Regarding tariffs, we believe memorialization may be the most susceptible. Although the team has done a great job of finding sourcing alternatives for impacted products, the tariffs are also impacting the cost of materials which are produced domestically, as suppliers are price adjusting to reflect the higher competitive pricing resulting from tariffs. We have generally been able to pass along these higher costs and do not expect significant impact to our results for the remainder of the year.

We have generally been able to pass along these higher costs and do not expect significant impact to our results for the remainder of the year.

With respect to the Dodge acquisition the deal closed in May and we're excited about its long term prospects and fit within our portfolio of amortization products. The.

The addition of the number one supplier of fluids and other products used by funeral directors was a logical extension of our portfolio, which comes along once in a generation and offers both cost synergies and revenue synergies as we extend the combined product offering to more clients.

The transition has been smooth, so far with synergy being quickly captured and our expectations for EBITDA improvement are high.

Joe Bartolacci: With respect to the Dodge acquisition, the deal closed in May, and we're excited about its long-term prospects and fit within our portfolio of memorialization products. The addition of the number one supplier of fluids and other products used by funeral directors was a logical extension of our portfolio, which comes along once in a generation and offers both cost synergy and revenue synergies as we extend the combined product offering to more clients. The transition has been smooth so far, with synergy being quickly captured, and our expectations for EBITDA improvement are high. It is already accretive, and we expect to eventually add around $12 million of annual EBITDA from this transaction as we integrate the business into our system. When you consider that we paid $57 million for the business, you can understand how accretive it will be.

It is already accretive and we expect the event, we expect to eventually at around $12 million of annual EBITDA from this transaction as we integrate the business into our system when.

When you consider that we paid $57 million for the business you can understand how accretive it will be.

Our industrial technology segment reported lower revenues in the third quarter, primarily due to engineering and the impact of our dispute with Tesla, which I'll discuss shortly however, other business units in this segment were up year over year.

We are quite pleased with the performance of our warehouse automation business as we saw a continuation of positive order trends for warehouse automation solutions, driven by an improvement in market dynamics.

Order rates and order size are picking up including continuing orders from lands' end and other leading retailers, resulting in a significant increase in backlog.

Joe Bartolacci: Our industrial technology segment reported lower revenues in the third quarter, primarily due to engineering and the impact of our dispute with Tesla, which I'll discuss shortly. However, other business units in the segment were up year over year. We were quite pleased with the performance of our warehouse automation business as we saw a continuation of positive order trends for warehouse automation solutions, driven by an improvement in market dynamics. Order rates and order size are picking up, including continuing orders from Land's End and other leading retailers, resulting in a significant increase in backlog. Order activity is typically high at this time of year as companies prepare for peak, excuse me, as companies prepare for peak season in the October to December holiday period. However, we believe that we will enter fiscal '26 with very strong backlogs.

Order activity is typically high at this time of year as companies prepare for peak excuse me as companies prepare for peak season in the October to December holiday period. However, we believe that we will enter fiscal 'twenty six with very strong backlogs.

Late last year, we spoke of signs of recovery in the warehouse business.

After a period of softness highlighted by supply chain Recalibration and lower capital investment the recovery is being driven by renewed interest in AI, driven automation predictive analytics and autonomous robots.

Big box retailers or reinvesting in their warehouse infrastructure and this is reflected in positive growth forecasts for global ecommerce growth.

Interactive analytics projects U S e-commerce to grow by 10% in 2020 514 trillion in 2024, and further continued to grow to $2 five trillion by 2030.

Joe Bartolacci: Late last year, we spoke of signs of a recovery in the warehouse business. After a period of softness highlighted by supply chain recalibrations and lower capital investment, the recovery is being driven by renewed interest in AI-driven automation, predictive analytics, and autonomous robots. Big box retailers are reinvesting in their warehouse infrastructure, and this is reflected in positive growth forecasts for global e-commerce growth. Interactive Analytics projects US e-commerce to grow by 10% in 2025, or $1.4 trillion in 2024, and further continue to grow to $2.5 trillion by 2030. Continued mobile adoption, supply chain innovations, and AI-driven user experience are seen as the core growth levers. Moreover, recent changes in tax law allowing for accelerated depreciation of capital investments will further drive automation investments across the value chain. We are well-positioned to take advantage of these opportunities.

Continued mobile adoption supply chain innovations and AI driven user experience are seen as the core growth levers. Moreover, recent changes in tax law, allowing for accelerated depreciation of capital and vessels will further drive automation investments across the value chain.

We are well positioned to take advantage of these opportunities.

Investing in innovation has been an essential part of our value creation plan and we're pleased to see the progress being made at our product identification business the companys oldest business.

We expect our blueprint had chip product.

<unk> two.

To launch this fall focusing on the U S and EMEA markets.

Actually and incorporates our patented silicon based print engine using disposable printed technology and offers an approximately 30% lower total cost of ownership for the customer as well as other environmental benefits.

Joe Bartolacci: Investing in innovation has been an essential part of our value creation plan, and we're pleased to see the progress being made at our product identification business, the company's oldest business. We expect our new print head chip product, Axion, to launch this fall, focusing on the US and EMEA markets. Axion incorporates a patented silicon-based print engine using disposable printed technology and offers an approximately 30% lower total cost of ownership for the customer, as well as other environmental benefits. We have identified a total addressable market of approximately $2 billion built on fast-moving consumer goods, in which Axion is ideally suited to participate. Axion is also a perfect place to benefit from global implementation of the Sunrise 2027 initiative, a measure aimed at transitioning traditional 1D barcodes to more advanced 2D barcodes by the end of 2027.

We have identified a total addressable market of approximately $2 billion built on fast moving consumer goods, and which accident is ideally suited to participate.

<unk> is also perfectly placed to benefit from global implementation of the Sunrise 2027 emission initiative a measure aimed at transitioning traditional <unk> barcodes to more advanced <unk> barcodes by the end of 2027. This.

This shift is driven by the need to support supply chain that are becoming increasingly more complex and demanding and will enable higher levels of traceability.

Data cap capacity and improved customer engagement.

Standard barcode has are up 20 characters of information, whereas the <unk> barcodes can hold thousands of characters, allowing manufacturers to include detailed product such as exploration dates batch numbers, another crucial and essential information used for traceability and compliance.

Joe Bartolacci: This shift is driven by the need to support supply chains that are becoming increasingly more complex and demanding and will enable higher levels of traceability, data capacity, and improved customer engagement. The standard barcode has about 20 characters of information, whereas the 2D barcodes can hold thousands of characters, allowing manufacturers to include detailed product data such as expiration dates, batch numbers, and other crucial and essential information used for traceability and compliance. Axion's competitive advantage is its ability to print regular barcodes and 2D barcodes at production speeds. An even greater advantage is that the existing open flow systems that are used today tend to result in ink drying and nozzles clogging, thereby requiring lines to be shut down for repair and maintenance. But with Axion, its print head is disposable.

Yes.

Axioms competitive advantages, it's ability to print regular park hubs and two D barcodes at production speeds.

Even greater advantage of that that the existing open flow systems that are used today tend to result in ink, drawing and nozzles clogging, thereby requiring lines to be shut down for repair and maintenance, but with axiom, it's printed as disposable rather than shutting down lines all that needs to be done is replacing the print.

Ted in minutes.

Additionally, the product.

The product has embedded technology that requires the use of Matthew zinc, which offers an attractive margin opportunity for us. Both of these features of action create high margin recurring revenue streams as more product is rolled out we will continue to share updates on our progress as we approach the launch date.

Let's now move on to engineering, the final piece of our industrial technologies business.

Joe Bartolacci: Rather than shutting down lines, all that needs to be done is replacing the print head in minutes. Additionally, the product has embedded technology that requires the use of MATTHEWS Inc, which offers an attractive margin opportunity for us. Both of these features of Axion create high margin recurring revenue streams as more product is rolled out. We'll continue to share updates on our progress as we approach the launch date. Let's now move on to engineering, the final piece of our industrial technologies business. Over the last year and a half, our expertise in leveraging our market-leading calendaring process to produce dried battery electrodes, or DBE, has been challenged by Tesla. As we have discussed before, we have built an extensive and highly valuable portfolio of intellectual property and know-how related to the DBE offering.

Over the last year, and a half our expertise and the levered and leveraging our market leading calendar process to produce dry battery electrodes or DBA.

Has been challenged by Tesla.

As we have discussed before we have built an extensive and highly valuable portfolio of intellectual property and knowhow related to the DB offering.

In February we received a positive ruling from an arbitrary that reaffirmed our proven history in this space and provided absolute clarity.

Regarding our right to sell DB solutions, we have established alright, and is no longer subject to dispute.

Tesla recently filed a motion in the U S District Court for the Northern District of California seeking to vacate the favorable ruling obtained by math is in a confidential arbitration.

Here's what you should know.

The recent filing is further evidence of the value of that technology and strength of the order that we received in February.

Joe Bartolacci: In February, we received a positive ruling from an arbitrator that reaffirmed our proven history in the space and provided absolute clarity regarding our right to sell DBE solutions. We have established our right and are no longer subject to dispute. Tesla recently filed a motion in the US District Court for the Northern District of California seeking to vacate the favorable ruling obtained by MATTHEWS in the confidential arbitration. Here's what you should know. The recent filing is further evidence of the value of the technology and strength of the order that we received in February. The likelihood of a judge overturning the order of an arbitrator in a proceeding mandated by Tesla's own contract is highly unlikely. Why is Tesla looking to overturn the order?

As we have discussed before, we have built an extensive and highly valuable portfolio of intellectual property and know how related to the dbe offering.

The likelihood of a judge overturning the order of an arbitrator and are proceeding mandated by tesla's own contract.

It is highly unlikely.

Why is Tesla looking to overturn the order cut it because it clearly states that the core <unk>.

<unk> intellectual property is owned by Matthews and is rooted in its advanced rotary processing and calendar technology.

Tesla recently found in a most of the US District Court for the Northern District of California, seeking, to vacate the favorable ruling obtained by math is in the confidential arbitration

<unk> has been developing next generation rotary processing and Calendaring equipment for over two decades. The company is widely recognized as a leader in calendar technology as early as 2007, Matthew has made strategic investments in this technology supports its packaging business recognizing the unique.

Joe Bartolacci: Because it clearly states that the core proprietary intellectual property is owned by MATTHEWS and is rooted in its advanced rotary processing and calendaring technology. MATTHEWS has been developing next-generation rotary processing and calendaring equipment for over two decades. The company is widely recognized as a leader in calendaring technology. As early as 2007, MATTHEWS made strategic investments in this technology to support its packaging business. Recognizing the unique capabilities of its calendaring systems, MATTHEWS later continued to innovate and diversify its applications to explore alternative uses, including DBE. Our well-established reputation in advanced rotary processing and calendaring has attracted interest from global battery manufacturers, EV manufacturers, emerging solid-state battery players, and technology leaders seeking innovative solutions for DBE. The continued stream of baseless lawsuits filed by Tesla only serves to underscore the strength and the value of MATTHEWS proprietary technology.

<unk> of its Calendaring systems Matthews later continued to innovate and diversify into apt.

Applications too.

Floor alternative uses including DBA.

Our well established well established reputation advanced rotary processing in calendar has attracted interest from global battery manufacturers EV manufacturers emerging solid state battery players and technology leaders seeking innovative solutions for DB.

Why is Tesla looking to overturn the order to cut it because it clearly states that the core Pro proprietary intellectual property is owned by Matthews and is rooted in its Advanced rotary processing and calendaring Technology.

The continued stream of baseless lawsuits filed by Tesla only serves to underscore the strength and the value of Matthews proprietary technology.

Market interest in our solutions continued to grow as we have an increasing number of opportunities highlighted by several in the United States U S. In the U S driven by the localization of supply chain and the production of battery components.

The company is widely recognized as a leader in calendaring technology. As early as 2007 Mathews made strategic investments in this technology supports its packaging business, recognizing the unique capabilities of its calendaring systems. Matthews later continue to innovate and diversify its applications to explore alternative uses including thebe.

Our pipeline now consists of over $150 million in quotes with one recently converted to our first production line order for a leading player in solid state battery production.

our well-established well-established reputation Advanced rotary processing and calendaring has attracted interest from Global battery manufacturers, EV manufacturers emerging solid state battery players and Technology leaders seeking innovative solutions for dbe

We are also we also are working on a significant order for U S customer for our battery separator coding line a significant part of our overall energy business. The coding line operates at up to two times the speed of competitive lines further increasing productivity in the highly competitive battery space.

Joe Bartolacci: Market interest in our solutions continues to grow as we have an increasing number of opportunities, highlighted by several in the United States, US, in the US, driven by the localization of supply chains and the production of battery components. Our pipeline now consists of over $150 million in quotes, with one recently converted to our first production line order for our leading player in solid-state battery production. We are also, we also are working on a significant order for a US customer for a battery separator coating line, a significant part of our overall energy business. The coating line operates at up to two times the speed of competitive lines, further increasing productivity in the highly competitive battery space. All right.

the continued stream of baseless lawsuits filed by Tesla, only serves to underscore the strength and the value of Matthew's proprietary technology,

Alright.

We recognize the fact that other than trying to enter the DB calendar market, but matthews could process of both the leading technology and the fastest lines and we own patents on some of the most important parts of the technology that facilitates productivity.

Market interests in our Solutions, continue to grow. As we have an increasing number of opportunities highlighted by several in the United States Us in the US driven by the localization of Supply chains and the production of battery components. Our pipeline. Now, consists of over 150 million dollars in quotes with 1 recently converted to our first production line order, for our leading player in solid-state, battery production.

We will continue to focus on innovation and maintaining our competitive advantage in this important market.

As for our balance sheet, our debt position decreased.

Decreased during the quarter as we applied proceeds from the SDK transaction to our revolver, we expect our debt position to decrease further by 2025.

We are also, we also are working on a significant order for us, customer for a battery separator, coding line, a significant part of our overall energy business, the coding line operates at up to 2 times the speed of competitive lines further, increasing productivity in the highly competitive battery space.

Joe Bartolacci: We recognize the fact that others are trying to enter the DBE calendaring market, but MATTHEWS possesses both the leading technology and the fastest lines, and we own patents on some of the most important parts of the technology that facilitate productivity. We will continue to focus on innovation and maintaining our competitive advantage in this important market. As for our balance sheet, our debt position decreased during the quarter as we applied proceeds from the SGK transaction to our revolver. We expect our debt position to decrease further by 2025. As we've looked to our full-year results, when we consider our 40% interest in Propelos, we expect our adjusted EBITDA guidance to remain unchanged and to be at least $190 million. Again, note that we will have lost 60% of the remaining five months of SGK earnings.

As we've looked at look to our full year results when we consider our 40% interest in propel as we expect.

We expect our adjusted EBITDA guidance to remain unchanged and to be at least $190 million again note that we will have lost 60% of the remaining five months of SDK earnings.

We recognize the fact that others are trying to enter the dbe countering market but Matthews can processes both the leading technology and the fastest lines and we own patents on some of the most important parts of the technology that facilitates productivity.

We will continue to focus on Innovation and maintaining our competitive advantage in this important Market.

Now I'll turn it over to Steve for a discussion of the quarter's financial results.

Thank you Joe before starting the financial review, let's discuss the financial reporting with respect to SDK.

as for our balance sheet, our debt position decreased during the quarter, as we applied proceeds from the sgk transaction to our revolver, we expect our debt position to decrease further by 2025

As you're aware the divestiture of SDK closed on May one 2025, and as such our consolidated financial information reflects the financial results of the SDK business through the closing date.

As we've looked into looked to our full year results. When we consider our 40% interest in, propellers, we expect

As part of this transaction the company received a 40% ownership interest in a newly formed entity propel us group.

Joe Bartolacci: Now, I'll turn it over to Steve for a discussion on the quarter's financial results.

We expect our adjusted EBITDA guidance to remain unchanged and to be at least $190 million. Keep in mind that we will have lost 60% of the remaining five months of SGK earnings.

Please note that as a result of the integration process of propel us.

Now, I'll turn it over to Steve for discussion on the quarter's Financial results.

Dan Stopar: Thank you, Joe. Before starting the financial review, let's discuss the financial reporting with respect to SGK. As you're aware, the divestiture of SGK closed on May 1st, 2025, and as such, our consolidated financial information reflects the financial results of the SGK business through the closing date. As part of this transaction, the company received the 40% ownership interest in the newly formed entity, Propelos Group. Please note that as a result of the integration process of Propelos and transition to its own standalone reporting systems, our 40% portion of the financial results of Propelos will be reported on a one-quarter lag. As a result, except as otherwise noted, the consolidated financial information presented in the earnings release yesterday and discussed today does not include our 40% interest in the financial results of Propelos for the two months ended June 30, 2025.

And transitioned to its own Standalone reporting systems are 40% portion of the financial results of propel us will be reported on a one quarter lag.

Thank you, Joe before starting the financial review. Let's discuss the financial reporting with respect to sgk.

As a result, except as otherwise noted.

The consolidated financial information presented in the earnings release yesterday and discussed today does not include our 40% interest in the financial results of propel us for the two months ended June 32025. Similarly, our quarterly report on Form 10-Q will not reflect the results of propel us.

As you aware the destitute of sgk closed on May 1st 2025, and as such our Consolidated financial information, reflects the financial results of the sgk business, through the closing date.

As part of this transaction, the company received a 40% ownership interest in the newly formed entity Propel group.

please note that as a result of the integration process of propel,

Now, let's begin the financial review with slide seven.

For the fiscal 2025 third quarter. The company reported net income of $15 4 million.

And transition to its own Standalone reporting systems. Our 40% portion of the financial results of propellers will be reported on a 1 quarter lag.

as a result except as otherwise noted,

Or <unk> 49 per share compared to net income of $1 8 million or <unk> <unk> per share a year ago.

The increase primarily reflected the gain on the divestiture of the SD SDK business, which was partially offset by higher income taxes and interest expense.

Dan Stopar: Similarly, our quarterly report on Form 10-Q will not reflect the results of Propelos. Now, let's begin the financial review with slide seven. For the fiscal 2025 third quarter, the company reported net income of $15.4 million or 49 cents per share compared to net income of $1.8 million or 6 cents per share a year ago. The increase primarily reflected a gain on the divestiture of the SGK business, which was partially offset by higher income taxes and interest expense. The increase in income tax expense primarily reflected the impact of favorable tax benefits discrete to last year that did not repeat in the current year. Consolidated sales for the fiscal 2025 third quarter were $349 million compared to $428 million a year ago. The decrease primarily reflected the divestiture of SGK on May 1st, 2025.

The increase in income tax expense, primarily reflected the impact of favorable tax benefits discrete to last year that did not repeat in the current year.

Consolidated financial information presented in the earnings release yesterday and discussed today does not include our 40% interest in the financial results of propellers for the 2 months, ended June 30 2025, similarly, our quarterly report on form. 10 Q will not reflect the results of propellers.

Now, let's begin the financial review with slide 7.

Consolidated sales for the fiscal 2025 third quarter were 345 $349 million.

Compared to $428 million a year ago.

For the fiscal 2025 third quarter, the company reported net income of 15.4 million or 49 cents per share, compared to net income of 1.8 million or 6 cents per share a year ago.

The decrease primarily reflected the divestiture of SDK on May one 2025.

Consolidated sales impact of the SDK divestiture was $80 $2 million for the current quarter.

The increased primarily reflected a gain on the domestic. Share of the S sgk business which was partially offset by higher income taxes and interest expense.

Sales for the industrial technology segment were lower for the quarter offset partially by higher sales for the memorial in patient segment.

The increase in income tax expense, primarily reflected, the impact of favorable tax benefits discreet to last year that did not repeat in the current year.

SDK also reported sales growth for the current quarter prior to its divestiture.

Consolidated adjusted EBITDA for the fiscal 2025 third quarter was $44 6 million.

Consolidated sales for the fiscal 2025 third quarter or 3455 349 million compared to 428 million a year ago.

Compared to $44 7 million a year ago.

Dan Stopar: The consolidated sales impact of the SGK divestiture was $80.2 million for the current quarter. Sales for the industrial technology segment were lower for the quarter, offset partially by higher sales for the memorialization segment. SGK also reported sales growth for the current quarter prior to its divestiture. Consolidated adjusted EBITDA for the fiscal 2025 third quarter was $44.6 million compared to $44.7 million a year ago. Despite the divestiture of SGK, consolidated adjusted EBITDA remained relatively steady year over year as a result of increases in the industrial technologies and memorialization segments and lower corporate and other non-operating costs. On a non-GAAP adjusted basis, net income attributable to the company for the current quarter was $9.2 million or 28 cents per share compared to $17.3 million or 56 cents per share last year.

The decreased primarily reflected the domestic share of sgk on May, 1st 2025.

Despite the divestiture of S. G. K consolidated adjusted EBITDA remained relatively steady year over year as a result of increases in the industrial technologies and memorial <unk> segments, and lower corporate and other nonoperating costs.

The Consolidated sales impact of the sgk destitute was 80.2 Million for the current quarter.

Sales for the industrial technology segments were lower for the quarter offset, partially by higher sales for the memorialization segment.

On a non-GAAP adjusted basis net income attributable to the company for the current quarter was $9 2 million or.

Sgk also reported sales growth for the current quarter prior to its destitute.

<unk> 28 per share compared to $17 3 million or <unk> 56 per share last year.

Consolidated adjusted. EBA for the fiscal 2025 third quarter was 44.6 Million compared to 44.7 million a year ago.

The decline primarily reflected the impact of higher interest expense and income taxes for the current quarter as adjusted EBITDA was relatively consistent.

With respect to propel us based on preliminary financial projections that they provided to us their current estimate of adjusted EBITDA for May and June 2025 was $16 8 million.

Despite the destitute of sgk Consolidated adjusted Eva remained relatively steady year-over-year, as a result of increases in the Industrial Technologies and memorialization segments and lower corporate and other non-operating costs.

Please note that these projections are unaudited and subject to review and as a result may change.

On the non-gaap adjusted basis. Net income attributable, to the company for the current quarter was 9.2 million.

Dan Stopar: The decline primarily reflected the impacts of higher interest expense and income taxes for the current quarter as adjusted EBITDA was relatively consistent. With respect to Propelos, based on preliminary financial projections that they provided to us, their current estimate of adjusted EBITDA for May and June 2025 was $16.8 million. Please note that these projections are unaudited and subject to review and as a result may change. Our 40% portion of this amount would be $6.7 million. Accordingly, with the addition of our 40% interest in Propelos, the company's pro forma consolidated adjusted EBITDA for the fiscal 2025 third quarter would be $51.3 million compared to $44.7 million a year ago, representing an increase of 14.8%. Please see the reconciliations of adjusted EBITDA and non-GAAP adjusted earnings per share provided in our earnings release. Please move to slide eight to review our segment results.

Our 40% portion of this amount would be $6 7 million Accordingly, with the addition of our 40% interest in propellers. The company's pro forma consolidated adjusted EBITDA for the fiscal 2025 third quarter would be $51 3 million compared.

Or 28 cents per share compared to 17.3 million per 56 cents per share. Last year,

The decline primarily reflected the impacts of higher interest expense and income taxes for the current quarter, as adjusted IBA was relatively consistent.

Compared to $44 7 million a year ago, representing an increase of 14, 8%.

With respective, propellers based on preliminary Financial projections that they provided to us, their current estimate of adjusted, Eva Duff for May and June, 2025 was 16.8 million.

Please see the reconciliations of adjusted EBITDA and non-GAAP adjusted earnings per share provided in our earnings release.

Please note that these projections are un audited and subject to review and as a result may change.

Please move to slide eight to review our segment results.

Our 40% portion of this amount would be 6.7 million.

Sales for the Memorial <unk> segment for the fiscal 2025 third quarter or $203 7 million compared to $202 7 million for the same quarter a year ago.

Acquisitions, primarily the Dodge company contributed sales of approximately $6 million to the current quarter, which were offset partially by the disposition of the European cremation equipment business.

Accordingly with the addition of our 40% interest in propellers, the company's pro-forma Consolidated. Adjusted. EBA for the fiscal 2025. Third quarter would be 51.3 million compared to 44.7 million a year ago. Representing an increase of 14.8%

Sales volumes for cemetery memorials, and caskets declined for the quarter compared to last year, primarily resulting from lower U S caskets deaths.

Please see the reconciliations of adjusted Ava and non-gaap adjusted earnings per share provided in our earnings release.

Dan Stopar: Sales for the memorialization segment for the fiscal 2025 third quarter were $203.7 million compared to $202.7 million for the same quarter a year ago. Acquisitions, primarily the Dodge company, contributed sales of approximately $6 million to the current quarter, which were offset partially by the disposition of the European cremation equipment business. Sales volumes for cemetery memorials and caskets declined for the quarter compared to last year, primarily resulting from lower US casket deaths, offset partially by inflationary price realization and higher mausoleum sales. Additionally, granite memorial sales a year ago had the favorable impact from working down backlogs that accumulated during the pandemic. Cremation equipment sales also declined from a year ago. Memorialization segment adjusted EBITDA for the current quarter was $42.8 million compared to $38.7 million for the same quarter last year.

Please move to slide 8 to review our segment results.

Offset partially by inflationary price realization and higher Mazda land sales.

Additionally, granite memorial sales a year ago had the favorable impact from working down backlog that accumulated during the pandemic.

Sales for the memorialization segment for the fiscal Q3 2025 were $203.7 million, compared to $202.7 million for the same quarter a year ago.

Cremation equipment sales also declined from a year ago.

Memorial <unk> segment adjusted EBITDA for the current quarter was $42 8 million compared to $38 7 million for the same quarter last year.

Acquisitions. Primarily the Dodge company. Contributed sales of approximately $6 million to the current quarter, which were offset partially by the disposition of the European. Cremation equipment business,

The increase primarily resulted from the benefits of cost savings initiatives and price realization offset partially by the impact of lower sales volumes and higher material costs acquisitions, and the disposition of the unprofitable European cremation equipment business also contributed to the increase in segment.

Sales volumes for Cemetery, memorials and caskets declined. For the quarter compared to last year, primarily resulting from lower us casket to Deaths. Offset partially by inflationary price, realization and higher, Mausoleum sales.

additionally, Granite Memorial sales a year ago, had the favorable impact from working down backlogs, that accumulated during the pandemic

Adjusted EBITDA.

Cremation equipment sales also declined, from a year ago.

Please move to slide nine.

Sales for the industrial technology segment for the fiscal 2023rd quarter were $87 9 million compared to $91 7 million a year ago. The decline mainly resulted from lower sales for the segment engineering business.

Dan Stopar: The increase primarily resulted from the benefits of cost savings initiatives and price realization, offset partially by the impact of lower sales volumes and higher material costs. Acquisitions and the disposition of the unprofitable European cremation equipment business also contributed to the increase in segments adjusted EBITDA. Please move to slide nine. Sales for the industrial technology segment for the fiscal 2025 third quarter were $87.9 million compared to $91.7 million a year ago. The decline mainly resulted from lower sales for the segment engineering business, offset partially by higher sales for the warehouse automation business. Lower engineering sales reflected declines for both the energy and coating and converting businesses. Order rates for warehouse automation improved during the quarter, reflecting continued recovery in this market. Sales for the product identification business were relatively unchanged compared to the same quarter a year ago.

Memorialization segment adjusted ibida for the current quarter was 42.8 Million compared to 38.7 million for the same quarter last year.

<unk>, partially by higher sales for the warehouse automation businesses.

Lower engineering sales reflected declines for both the energy and coding and converting businesses.

Order rates for warehouse automation improved during the quarter, reflecting continued recovery in this market.

Costs Acquisitions and the disposition of the unprofitable European cremation equipment business. Also contributed to the increase in segments. Adjusted Evita

Please move to slide 9.

Sales for the product identification business were relatively unchanged compared to the same quarter a year ago.

In addition, the shutdown of the <unk> automotive business, which was part of the <unk> acquisition in 2022 contributed to the segment's year over year sales decline.

Sales for the industrial technology segment for the fiscal 2025 third quarter, where 87.9 million compared to 91.7 million a year ago.

The decline mainly resulted from lower sales for the segment. Engineering business offset partially by higher sales for the warehouse automation business.

Changes in foreign currency rates had a favorable impact of $2 $9 million on the segment's current quarter sales compared to a year ago.

Lower engineering sales, reflected declines, for both, the energy and coding and converting businesses.

Adjusted EBITDA for the industrial technology segment for the current quarter was $9 million <unk>.

Order rates for warehouse automation improved during the quarter reflecting continued recovery in this market.

Compared to $4 2 million for the same quarter a year ago the.

Dan Stopar: In addition, the shutdown of the R+S automotive business, which was part of the Ulbricht acquisition in 2022, contributed to the segment's year-over-year sales decline. Changes in foreign currency rates had a favorable impact of $2.9 million on the segment's current quarter sales compared to a year ago. Adjusted EBITDA for the industrial technology segment for the current quarter was $9 million compared to $4.2 million for the same quarter a year ago. The increase primarily reflected the benefits from the segment's cost reduction actions, which were initiated in our fiscal 2024 fourth quarter. Additionally, the segment's adjusted EBITDA benefited from higher warehouse automation sales. Please move to slide 10. Sales for the brand solution segment were $57.7 million for the quarter ended June 30, 2025, compared to $133.4 million a year ago.

Sales for the product identification business, were relatively unchanged compared to the same quarter a year ago.

The increase primarily reflected the benefits from the segment's cost reduction actions, which were initiated in our fiscal 2020 for fourth quarter.

Additionally, the segment's adjusted EBITDA benefited from higher warehouse automation sales.

In addition the shutdown of the r plus S Automotive business which was part of the brick acquisition in 2022. Contributed to the segments year-over-year, sales decline,

Please move to slide 10.

Sales for the brand solutions segment were $57 $7 million for the quarter ended June 32025, compared to $133 $4 million a year ago. The decrease resulted from the divestiture of the SDK business, which excluded the European packaging business on May one.

Changes in foreign currency, rates had a favorable impact of 2.9 Million on the segment's, current quarter sales compared to a year ago.

Adjusted IBA for the industrial technology segment for the current quarter was $9 million compared to 4.2 million for the same quarter a year ago.

2025 the.

The consolidated sales impact of the SDK divestiture was $82 million for the current quarter.

The increased primarily reflected the benefits from the segment's cost reduction actions, which were initiated in our fiscal 2024, fourth quarter.

Additionally, the segments adjusted ebitda benefited from higher Warehouse automation sales.

Prior to the divestiture sales were higher than a year ago, principally reflecting a combination of organic growth and favorable currency impacts.

Please move to slide 10.

Adjusted EBITDA for the SDK brand solutions segment was $5 million for the current quarter compared to $16 $1 million a year ago, excluding the impact of the divestiture adjusted EBITDA was relatively consistent with last year.

Dan Stopar: The decrease resulted from the divestiture of the SGK business, which excluded the European packaging business, on May 1st, 2025. The consolidated sales impact of the SGK divestiture was $80.2 million for the current quarter. Prior to the divestiture, sales were higher than a year ago, principally reflecting a combination of organic growth and favorable currency impacts. Adjusted EBITDA for the SGK brand solution segment was $5 million for the current quarter compared to $16.1 million a year ago. Excluding the impact of the divestiture, adjusted EBITDA was relatively consistent with last year. Please move to slide 11. Cash flow used in operating activities for the fiscal 2025 third quarter was $15.2 million compared to cash provided by operating activities of $13.5 million a year ago. Costs in connection with the SGK transaction and our restructuring actions were significant factors in the change from a year ago.

Sales for the brand solution segment were 57.7 million for the quarter ended June, 30 2025 compared to 133.4 million a year ago.

the decrease resulted from the destitute of the sgk business which excluded the European packaging business on May 1st 2025,

Please move to slide 11.

Cash flow used in operating activities for the fiscal 2025 third quarter was $15 2 million compared.

the Consolidated sales impact of the sgk destitute was 80.2 Million for the current quarter.

Compared to cash provided by operating activities of $13 $5 million a year ago.

Prior to the destitute sales, revenues were higher than a year ago, principally reflecting a combination of organic growth and favorable currency impacts.

Costs in connection with the SDK transaction and our restructuring actions were significant factors in the change from a year ago.

Additionally, legal costs and working capital impacts from the ongoing dispute with Tesla unfavorably impacted operating cash flow.

Adjusted. Even though for the sgk brand solution, segment was 5 million for the current quarter compared to 16.1 million a year ago. Excluding the impact of the destitute was relatively consistent with last year.

Please move the slide 11.

Year to date cash used in operating activities was $33 $9 million for the current year compared with cash provided by operating activities of $43 3 million last year.

Cash flow used and operating activities for the fiscal 2025 third quarter was 15.2 million compared to cash provided by operating activities of 13.5 million a year ago.

Outstanding debt was $702 million at June 32025, representing a reduction of $120 million during the current quarter.

Dan Stopar: Additionally, legal costs and working capital impacts from the ongoing dispute with Tesla unfavorably impacted operating cash flow. Year-to-date cash used in operating activities was $33.9 million for the current year, compared with cash provided by operating activities of $43.3 million last year. Outstanding debt was $702 million at June 30, 2025, representing a reduction of $120 million during the current quarter. The reduction reflected net proceeds from the SGK divestiture, offset partially by the acquisition of the Dodge company, settlement of currency hedges in connection with SGK-related assets, and transaction-related costs. Based on our current operating cash flow projections and the potential sale of our European packaging business, we expect further debt reduction in the fiscal 2025 fourth quarter. For the fiscal 2025 third quarter, the company purchased approximately 386,000 shares under its stock repurchase program at an average cost of $19.96 per share.

Costs and connection with the sgk transaction. And our restructuring actions were significant factors in the change from a year ago.

The reduction reflected net proceeds from the SDK divestiture offset partially by the acquisition of the Dodge Company.

Additionally, legal costs and working capital impacts from the ongoing dispute with Tesla unfavorably impacted operating cash flow.

Settlement of currency hedges in connection with SDK related assets and transaction related costs.

Based on our current operating cash flow projections and the potential sale of our European packaging business. We expect further debt reduction in the fiscal 2025 fourth quarter.

Year to date cash used in operating activities, was 33.9 Million for the current year, compared with cash, provided by operating activities of 43.3 Million last year.

For the fiscal 2025 third quarter. The company purchased approximately 386000 shares under its stock repurchase program at an average cost of $19 96 per share.

Outstanding debt was 702 million at June 30th. 20225 representing a reduction of 120 million during the current quarter.

The reduction reflected net proceeds from the sgk destitute offset partially by the acquisition of the Dodge company.

Year to date repurchases totaled approximately 562000 shares.

As I referenced earlier, we initiated cost reduction programs in the fourth quarter last year that spanned several of our business units and corporate functions.

Settlement of currency hedges in connection with sgk related assets and transaction related costs.

We initially projected annual consolidated savings from these programs to be up to $50 million. We are currently on track towards seed this projection.

Based on our current operating cash flow projections, and the potential sale of our European packaging business. We expect further debt reduction in the fiscal, 2025 fourth quarter

The most significant portions of the savings are targeted from our engineering and tolling operations in Europe, and our general and administrative costs.

Dan Stopar: Year-to-date repurchases totaled approximately 562,000 shares. As I referenced earlier, we initiated cost reduction programs in the fourth quarter last year that spanned several of our business units and corporate functions. We initially projected annual consolidated savings from these programs to be up to $50 million. We are currently on track to exceed this projection. The most significant portions of the savings are targeted from our engineering and tooling operations in Europe and our general and administrative costs. As I noted earlier, we have begun to realize these savings as indicated through the improved adjusted EBITDA margins for our industrial technology segment and lower corporate and other non-operating costs. Current quarter adjusted EBITDA margin for the industrial technology segment was 10.3% compared to 4.6% a year ago, and our corporate and other non-operating costs declined 13.6%.

for the fiscal 2025 third quarter, the company purchased approximately, 386,000 shares under its stock repurchase program at an average cost of $19.96 per share.

As I noted earlier, we have begun to realize these savings as indicated through the improved adjusted EBITDA margins for our industrial technology segment.

Year to date repurchases total. Approximately 562,000 shares.

Lower corporate and other non operating costs.

As I referenced earlier, we initiated cost reduction programs in the fourth quarter last year. That spans several of our business units and corporate functions.

Current quarter adjusted EBITDA margin for the industrial Technology segment was 10, 3% compared to four 6% a year ago.

We initially projected annual Consolidated savings, from these programs to be up to $50 million. We are currently on track to exceed this projection.

Our corporate and other nonoperating costs declined 13, 6%.

Lastly, based on our results through June 32025, and our fourth quarter projections, we are maintaining our previous earnings guidance of adjusted EBITDA of at least $190 million for fiscal 2025.

From our engineering and tooling operations in Europe, and our general administrative costs.

Which includes our estimated 40% share of propel us adjusted EBITDA from May one 2025 through September 32025.

As I noted earlier, we have begun to realize these savings as indicated through the improved adjusted ebitda margins for our industrial technology segment and lower corporate and other non-operating costs.

Current quarter adjusted. Ebita margin for the industrial technology. Segment was 10.3%. Compared to 4.6% a year ago.

Please note that this projection maintains our original guidance as provided in November of 2024, adjusted only for the SDK divestiture and 40% interest in propel us.

Dan Stopar: Lastly, based on our results through June 30, 2025, and our fourth quarter projections, we are maintaining our previous earnings guidance of adjusted EBITDA of at least $190 million for fiscal 2025, which includes our estimated 40% share of Propelos adjusted EBITDA from May 1st, 2025 through September 30, 2025. Please note that this projection maintains our original guidance as provided in November 2024, adjusted only for the SGK divestiture and 40% interest in Propelos. Finally, the board declared last week a quarterly dividend of 25 cents per share on the company's common stock. The dividend is payable August 25, 2025, to stockholders of record August 11, 2025. This concludes the financial review, and we will now open the call to any questions. Stephanie?

And our corporate and other non-operating costs declined 13.6%.

Finally, the board declared last week, our quarterly dividend of <unk> 25 per share on the company's common stock.

Lastly based on our results through June 30th 2025 and our fourth quarter projections, we are maintaining our previous earnings guidance of adjusted Eva of at least 190 million dollars for fiscal 2025.

Dividend is payable August 25, 2025 to stockholders of record August 11 2025.

This concludes the financial review and we will now open the call to any questions.

Which includes our estimated 40% share of propella. Adjusted Ava from May 1st, 2025, through September 30th 2025,

Definitely.

Thank you at this time, we will open the floor for questions if you'd like to ask a question you May press Star one now to move yourself from the queue you May press star two.

Please note that this projection maintains our original guidance as provided in November 2024, adjusted only for the sgk Devastator and 40% interest in. Propellers.

That is star one to ask a question.

And our first question will come from Dan Moore with CJS Securities.

Finally, the board declared last week, a quarterly dividend of 25 cents per share on the company's common stock.

Hi, Good morning, it's Pete Lukas for Dan <unk>.

Turning with the Dodge company.

<unk> had sales of $6 million and the goal of $12 million EBITDA.

The dividend is payable. August 25, 2025, the stockholders of record, August 1125.

What was the EBITDA contribution this quarter and what are you looking for in terms of sales and EBITDA in Q4.

Stephanie: Thank you. At this time, we will open the floor for questions. If you'd like to ask a question, you may press star one now. To remove yourself from the queue, you may press star two. Again, that is star one to ask a question. And our first question will come from Dan Moore with CJS Securities.

This concludes the financial review and we will now open the call to any questions. Stephanie

Thank you. At this time. We will open the floor for questions. If you'd like to ask a question, you may press star 1. Now to remove yourself from the queue. You may press star 2.

Okay. Peter so so with respect to the Dodge company acquisition. So for this quarter the EBITDA contribution was.

Again, that is star 1 to ask a question.

And our first question will come from Dan Moore with CJs securities.

Pete Lucas: Hi, good morning. It's Pete Lucas for Dan. Starting with the Dodge company, I think you had said sales of 6 million and a goal of 12 million EBITDA. What was the EBITDA contribution this quarter, and what are you looking for in terms of sales and EBITDA in Q4?

It was approximately.

$1 million on the six six.

$6 million sales number if you recall.

We announced the acquisition we had talked about the current run rate for the Dodge company being in the $6 million range. So it was pretty much consistent with that estimate and right now.

Hi, good morning. It's Pete. Lucas for Dan, uh, starting with the Dodge company. Um, I think you had said sales of 6 million and a goal of 12 million IBA, what was the IBA contribution this quarter? And what are you looking for, in terms of, uh, sales and EBA and Q4

Similar similar run rate into the fourth quarter.

Steve Nicola: Okay, Peter. So with respect to the Dodge company acquisition, so for this quarter, the EBITDA contribution was approximately 1 million on the $6 million sales number. If you recall, when we announced the acquisition, we had talked about the current run rate for the Dodge company being in the $6 million range. So it was pretty much consistent with that estimate. And right now, similar run rate into the fourth quarter.

Helpful. Thanks, and then on the industrial side performed well revenue is still down a bit but closer to flat year over year, what was energy storage related revenue for the quarter and what was it in fiscal Q3 last year same question for warehouse automation.

Really just trying to see where did you see declines in what are the key areas.

Okay, Peter. So, so, with respect to the Dodge company acquisition. So for this quarter, the ebit dot contribution, uh, was approximately, uh, 1 million on the 6 on, on the 6 million dollar, uh, sales number, if you recall, uh, when we announced the acquisition, uh, we had talked about the current run rate for the Dodge company being

You can offset those declines with the growth.

Yes.

Yes.

So Peter yes. So.

In the 6, uh, million dollar range. So it was pretty much consistent with that estimate. And right now, uh, uh, similar similar run rate, uh, into the fourth quarter.

Pete Lucas: Helpful, thanks. And then on the industrial side, performed well, revenue still down a bit, but closer to flat year over year. What was energy storage-related revenue for the quarter, and what was it in fiscal Q3 last year? Same question for warehouse automation. Really just trying to see where did you see declines, and what are the key areas where you can offset those declines with growth?

Without providing the numbers our sales in the energy business and the total engineering business were down from a year ago and as I mentioned earlier, it's related to the to the ongoing issues that we've had.

Joe discussed before as well as what we talked about in the press release, so but.

Those reductions were mitigated by nice improvement in our.

Partially mitigated I should say by nice improvements on our warehouse automation business.

Uh, helpful thanks. And then on the industrial side, uh, performed well. Uh revenue is still down a bit, but closer to Flat year-over-year. What was energy storage related revenue for the quarter? And what was it? Uh in fiscal uh Q3 last year. Same question for warehouse automation, really just trying to see uh where did you see? Declines and what are the key areas? Uh, where you uh can offset those declines with growth?

Steve Nicola: So Peter, yeah. So without providing the numbers, our sales in the energy business and the total engineering business were down from a year ago. And as I mentioned earlier, it's related to the ongoing issues that we've had that Joe discussed before, as well as what we talked about in the press release. But those reductions were mitigated by nice improvement in our partially mitigated, I should say, by nice improvements in our warehouse automation business.

Helpful. Thanks, I'll jump back in the queue.

Thank you. Our next question will come from Colin Rusch with Oppenheimer.

The <unk> business and our warehouse automation business it seems like.

Both are really focused on velocity of goods through warehouses and production facilities and just want to understand how much synergy you see.

Over the next call it three to five years.

So Peter, yes. So uh, without providing the numbers, our sales in the energy business and the total engineering business we're down from a year ago. And as I mentioned earlier, it's related to the, to the, ongoing issues, that, that we've had, that, that Joe discussed before, as well as what we talked about, in the press release. So, but, uh, those reductions were mitigated by nice improvement in our partially mitigated. I should say bye. Nice improvements in our warehouse automation business.

Pete Lucas: Helpful, thanks. I'll jump back in the queue.

Uh, helpful thanks. I'll jump back in the queue.

Stephanie: Thank you. Our next question will come from Colin Rush with Oppenheimer.

Thank you. Our next question will come from Colin Rusch with Oppenheimer.

Our call on hold on just a second we just I don't think we caught the early part of that call.

Colin Rusch: The new print head business and the warehouse automation business, it seems like you know both are really focused on the velocity of goods through warehouses and production facilities and just want to understand how much synergy I'd see over the next, call it, three to five years.

Oh sure sorry, if I missed part of that question.

Yes.

Just wanted to hear what you.

What sort of synergies you guys are seeing in between the new printhead business and the warehouse automation.

It seems like.

the the new print head business and the warehouse automation business, it seems like, you know, both are really focused on velocity of goods through warehouses, uh, and production facilities, and just want to understand how much Synergy you guys see over the, the next call at 3, to 5 years,

Both our focus on improved velocity and accuracy through both warehouses and manufacturing and just want to understand.

How much you guys see those two supporting each other over the next three to five years or so.

Steve Nicola: Colin, hold on just a second. We just, I don't think we caught the early part of that call.

Okay.

Colin Rusch: Oh, sure. Sorry for the trouble.

Our call is on hold. Just a second. We just, uh, I don't think we caught the early part of that call.

Joe are you connected.

Steve Nicola: The early part of that question.

Colin Rusch: Yeah, I did. Yeah, I know. Can we just want to hear what you know, what sort of synergies you guys are seeing between the new print head business and the warehouse automation business. You know, it seems like you know both are focused on improved velocity and accuracy through you know both warehouses and manufacturing and just want to understand you know how much you guys see those two supporting each other over the next three to five years or so.

Oh I'm.

I'm sorry.

No that's okay, sorry, yeah.

Hello, there Collyn how are you.

I thought I thought I understood. The question and so let me, let me kind of phrase. It this way at the end of the day when you walk into an automated warehouse aside from the fact that robotics will become more and more a part of an autonomous.

Warehouse product has still moved and we will continue to move through conveyors for a long period of time those conveyors read barcodes.

Steve Nicola: Okay. Joe, are you connected? Oh, there I am. I'm sorry. I hit a button.

Uh, yeah, I know it. Can we just want to hear what you uh, you know, what sort of synergies you guys are seeing between the new print head business, and the warehouse automation, um, business. You know, it seems like, uh, you know, both are focused on improved velocity and accuracy, uh, through, uh, you know, both warehouses and Manufacturing and just want to understand, um, you know, how much you guys see, uh, those 2 supporting each other over the next 3 to 5 years or so?

Okay.

Joe, are you connected?

They move that along the process. So we think the connection between the warehouse automated warehouses and our new print head where we are.

Pete Lucas: Oh, that's okay.

Steve Nicola: Sorry. Hello there, Colin. How are you? I thought I understood the question. And so let me kind of phrase it this way. At the end of the day, when you walk into an automated warehouse, aside from the fact that robotics will become more and more a part of an autonomous warehouse, product is still moved and will continue to be moved through conveyors for a long period of time. Those conveyors read barcodes as they move that along the process. So we think the connection between the automated warehouses and our new print head, where we currently don't operate in warehouses today, is significant. So that's a great question, and we look forward to talking more about that as we start to roll it out.

Currently don't operate in warehouses today is significant so.

It's a great question and we look forward to talking more about that as we start to roll it out.

And then the second question is really around potential incremental acquisitions. Obviously, you guys have a long history of <unk>.

Tuck ins that are pretty effective, but given kind of.

The early days of automation and the push towards.

Oh, there I am. I'm sorry. Hit a button. Oh, that's okay. Sorry. Hello there. Calling, how are you? Uh, I thought, I thought I understood the question. And, uh, so let me let me kind of phrase it this way, at the end of the day, when you walk into an automated Warehouse aside from the fact that, uh, robotics will become more and more a part of an autonomous Road, Warehouse product is still moved and will continue to be moved through conveyors for a long period of time. Those conveyors, read barcodes.

Faster delivery times and e-commerce still being relatively nascent despite.

The concept being around for a fair amount of time there are there's a lot of technology. That's been developed and kind of early stage I'm. Just curious about how you guys are approaching some augmentation for that automation business and an opportunity for you guys to accelerate some of the growth there.

Colin Rusch: And then the second question is really around potential incremental acquisitions. Obviously, you guys have a long history of tuck-ins that are pretty effective. But given kind of the early days of automation and the push towards faster delivery times and e-commerce still being relatively nascent despite the concept being around for a fair amount of time, there is a lot of technology that's been developed in kind of early stage. I'm just curious about how you guys are approaching some augmentation for that automation business and opportunities for you guys to accelerate some of the growth there.

As they move that along the process. So uh, we think the connection between the warehouse automated warehouses and our new print head uh where we currently don't operate in warehouses. Today is significant so uh you're it's a great question uh and we look forward to talking more about that as we start to roll it out.

Another good question. So one of the things that we're really focused on obviously.

Laser focus on getting our debt positions reduced so that will be our primary focus. However, there are other ways to participate in new startup situations and one of the most particular ones that were interested in is embedding our software into driving the automated warehouse in the autonomous robots that are associated with that last quarter, we announced.

A partnership with with the Teradyne folks.

Embedding our software into <unk> into managing the robots, we have several other startup kind of situations like that where our software is being embedded into the hardware to be able to drive that so.

Joe Bartolacci: Another good question. So one of the things that we're really focused on, obviously, we're laser-focused on getting our debt positions reduced. So that'll be our primary focus. However, there are other ways to participate in these startup situations. And one of the most particular ones that we're interested in is embedding our software into driving the automated warehouse and the autonomous robots that are associated with that. Last quarter, we announced a partnership with the Teradyne folks, embedding our software into managing the robots. We have several other startup kind of situations like that where our software is being embedded into the hardware to be able to drive that. So although we may not be looking necessarily for any significant investment in acquisitions in these startup spaces, we are playing in a different way because at the end of the day, software drives a robot.

Uh, and then the the second question is really around, you know, potential incremental Acquisitions. Obviously, you guys have a long history of tuck-ins that are are pretty effective, but given, you know, kind of the early days of of Automation and the push towards um, you know, faster delivery times and e-commerce, you know, still being relatively nent despite, um, you know, the the concept being around for a fair amount of time, there is a lot of, uh, technology that's been developed in kind of early stage. I'm, I'm just curious about how you guys are approaching some augmentation for that, that automation business, and, and opportunities for you guys to accelerate some of the growth there,

Though we may not be looking necessarily for any significant investment in acquisitions and new startup spaces. We are playing in a different way because at the end of the day software drives a robot.

Excellent. Thanks, so much guys.

Thank you we'll take our next question from Liam Burke with B Riley's Securities.

Thank you and good morning, Joe Good morning, Steve.

Good morning.

Joe Obviously Tesla is still very anxious to the battery dry battery electrode is still important part of their overall strategy, but are you sensing any change in urgency to develop this.

Rival DBE platform to the existing.

Colin Rusch: Excellent. Thanks so much, guys.

another good question. So what, what are the things that we're really focused on obviously? Uh, we're we're laser focused on getting our debt positions reduced, so that'll be our primary focus. However, there are other ways to participate in the startup situations and 1 of the most particular ones that we're interested in is embedding our software into driving the automated warehouse and the autonomous robots that are associated with that. Last quarter, we announced uh, a a partnership with uh, with the Turan folks, uh, embedding our software into into managing the robots. We have several other startup kind of situations like that, where our software is being embedded into the hardware, uh, to be able to drive that. So uh, although we may not be looking necessarily for any significant investment in uh, Acquisitions in these startup spaces, we are playing uh in a different way because at the end of the day, software drives a row

Battery processing.

Stephanie: Thank you. We'll take our next question from Liam Burke with B Riley Securities.

We are seeing obviously there are participants around the world that are trying to develop solutions.

Steve Nicola: Thank you. Good morning, Joe. Good morning, Steve.

Joe Bartolacci: Good morning, Liam.

And no one has yet to develop a competitive solution as of yet so right now I would say there is a drive.

Steve Nicola: Good morning, Liam. Joe, obviously Tesla is still very anxious to drive battery electrode. It's still an important part of their overall strategy. But are you sensing any change in urgency to develop this rival DBE platform to the existing battery processing?

Many in the industry to reduce their costs. There are improvements on the wet process that are going on as well ultimately we believe and I think some of the largest players believe the dry is is the next stage of further cost reductions. So I think although the market has slowed I would say for EV.

Joe Bartolacci: We are seeing, obviously, there are participants around the world that are trying to develop solutions, and no one has yet to develop a competitive solution as of yet. So right now, I would say there is a drive by many in the industry to reduce their costs. There are improvements in the wet process that are going on as well. Ultimately, we believe, and I think some of the largest players believe the drive is the next stage of further cost reductions. So I think it means, although the market has slowed, I would say for EV and demand, the desire to continue to lower the cost hasn't changed, Liam. So we think this is still an opportunity for years to come.

Uh, Joe, I obviously Tesla is still very anxious to, uh, the battery. Uh, Drive battery. Electrode is still an important part of their overall strategy. But are you sensing any change in urgency to develop this, uh, rival uh, dbe platform to the existing um, battery processing?

And demand.

The desire to continue to lower the cost Hasnt change Lam. So we think this is silly and opportunities for years to come.

Super and I am sure I heard this right, but you said you did land a production.

<unk> systems order on the DB.

We landed a smaller one for a solid state player. Yes, we have and we also are in the midst of a proof.

Proving out our coating line system, which is another piece of equipment that is highly specialized.

And to the what's called battery separator coatings.

That goes between the.

Cathodes.

Our machine operates at twice the speed of current competitors. So.

Steve Nicola: Super. And I'm sure I heard this right, but you said you did land a production size systems order on the DBE process?

Uh, we are seeing. Uh obviously there are participants around the world that are trying to develop Solutions. Uh and no 1 has yet to uh, develop a competitive solution as of yet. So right now I would say there is a drive uh by many in the industry to reduce their costs. Uh there are improvements in the wet process that are going on as well. Uh ultimately we believe and I think some of the largest players believe the dry is the is the next stage of further cost reductions so, I think it it mean although the market has slowed, I would say for Ev and demand the desire to continue to lower, the cost hasn't changed Liam. So we think this is still a an opportunity for years to come.

As we demonstrate that in the marketplace, we think more and more will come our way.

Okay, and then just very quickly on the legacy product.

Joe Bartolacci: We landed a smaller one for a solid-state player. Yes, we have. And we also are in the midst of proving out our coating line system, which is another piece of equipment that is highly specialized into what's called battery separator coatings that goes between the anode and cathodes. Our machine operates at twice the speed of current competitors. So as we demonstrate that in the marketplace, we think more and more will come our way.

Super and I'm sure I heard this right? But you said, you did land a production, uh, size systems order on the dbe process

Densification business.

Is it just a quarterly lag or is there anything else going on there.

We had a we had a pretty good quarter in product Densification I wouldn't say there was anything significant there.

We're ramping up as we speak with the launch of our axiom products. So we will have some costs associated with that as we move into next quarter, but.

Product identification continues to move forward.

Steve Nicola: Okay. And then just very quickly, on the legacy product identification business, is it just a quarterly lag, or is there anything else going on there?

And I would say that we've had.

We we landed a smaller 1 for a solid state player. Yes, we have. And we also are in the midst of, uh, proving out. Our coding line system, which is another piece of equipment that is highly specialized, uh, into the what's called battery separator Coatings. Uh, that goes between the, uh, the anode cathodes. Uh, we our, our, our machine operates at twice the speed of current competitors. So uh, as we demonstrate that in the marketplace, we think more and more will come our way.

Had some challenges frankly.

As tariffs have forced us to source elsewhere as well as some supplier.

Very quickly on the Legacy, uh, product identification business. Um,

The issues that have.

Slowed us down with the launch of other solutions that we put out in the marketplace, but I think that's just a temporary little glitch that will move forward the product identification businesses, well positioned to have a pretty strong year.

is it just a quarterly lag? Or is there anything else going on there?

Joe Bartolacci: We had a pretty good quarter in product identification. I wouldn't say that there was anything significant there. We're ramping up as we speak with the launch of our Axion product. So we'll have some costs associated with that as we move into next quarter. But product identification continues to move forward. And I would say that we've had some challenges, frankly, as carriers have forced us to source elsewhere, as well as some supplier issues that have slowed us down with the launch of other solutions that we put out in the marketplace. But I think that's just a temporary glimpse that we'll move forward. The product identification business is well-positioned to have a pretty strong year.

Great. Thanks, Joe.

Okay.

Thank you we'll take our next question from Justin Bergner with Gabelli funds.

Good morning, Joe Good morning, Steve.

Hello, there good morning.

Nice quarter.

<unk> had a few clarification questions.

To start has the roadwork revere sale closed.

It has not just and we would expect that to close before September 30.

Steve Nicola: Great. Thanks, Joe.

Uh, we had a we had a pretty good quarter in product identification. I wouldn't say that there was anything significant there. Uh, we're we're ramping up as we speak with the launch of our action products so we'll have some costs associated with that as we move into next quarter. But uh, product identification, continues to move forward. Uh, and I would say that I I we've had some challenges frankly, uh, as tariffs have forced us to Source elsewhere as well as some supplier uh, issues that have uh, slowed us down with the launch of other solutions that we put out in the marketplace, but I think that's just a temporary, uh, little glitch that we move forward. The product identification business is well, positioned to have a pretty strong year.

That is in the works as we speak that should generate little over $30 million of net cash.

Great. Thanks. Joe.

Stephanie: Thank you. Thank you. We'll take our next question from Justin Bergner with Gabelli Funds.

Pete Lucas: Good morning, Joe. Good morning, Steve.

Closer to $47 million in consideration.

Thank you, we'll take your next question from Justin bergner with gabelli funds.

Joe Bartolacci: Hello there, Justin.

Steve Nicola: Good morning.

Good morning, Joe, good morning, Steve.

Okay, and what's the delta between the net cash in the consideration.

Pete Lucas: Nice quarter. Had a few clarification questions. To start, has the rotary graver sale closed?

Hello there. Good morning.

There are some long term liabilities as they will assume like pensions.

Nice quarter. Um, had a few clarification questions.

And we're going to have to carry a bit of a note on one with one of the pieces of the business have yourself of about 500, okay.

To start has the Roto gravier sale closed.

Joe Bartolacci: It has not, Justin. We expect that to close before September 30th. We have that is in the works as we speak. That should generate a little over $30 million of net cash and closer to $40-some million in consideration.

Alright, and then the European packaging sale Thats contemplated what are the <unk>.

Metric can you provide any metrics around how large that businesses.

Can you give us that one.

It has not Justin, we expect that to close before September 30th. We have uh, that that is in the in the works. As we speak uh that should generate a little over million dollars of net cash uh and closer to 407 million of consideration.

Pete Lucas: Okay. And what's the delta between the net cash and the consideration?

Yes, Justin that's about a $50 million to $60 million annual revenue run rate and today that EBIT does relatively at the last 12 months has been relatively breakeven operation.

Joe Bartolacci: There are some long-term liabilities that they will assume, like pensions, and we're going to have to carry a bit of a note on one of the pieces of business we're selling of about $5 million.

Okay. That's helpful.

Pete Lucas: Okay. All right. And then the European packaging sale that's contemplated, what are the metrics? Can you provide any metrics around how large that business is?

But I assume you're still hoping to.

Okay. And what's the Delta between the net cash and the consideration? Uh, there is some long-term liabilities that they will assume like pensions uh, and uh, we're we're going to have to carry a bit of a note, uh, on, uh, 1 of the 1 of the pieces of the business, we're selling of about 5 million, okay?

That's something positive there.

That is the business, we're selling adjustments so you know.

All right. And then the European packaging sale that's contemplated. What are the...

I mean.

The European packaging business is the roto gravure business.

Joe Bartolacci: Steve, can you give us that one?

Metrics. Can you provide a metrics around how large that business is?

Steve Nicola: Yeah, Justin. That's about a 50, 60 million annual revenue run rate. And today, that EBITDA is relatively, if the last 12 months have been relatively break-even operation.

Can you give us that 1?

Oh, Okay Gotcha Gotcha that I was just can see I wanted to make sure I can tell by your question yet.

Confusion there.

Okay, they're one and the same that's helpful.

Yeah, Justin that's about a 5060 million annual revenue, run rate and today, that ebit does relatively it, last 12 months has been relatively Break Even operation.

Pete Lucas: Okay. That's helpful. But I assume you're still hoping to net something positive there.

And then just on the debt bridge.

Okay, that's helpful.

What were the could you just provide any indication I see that the 228 million.

Joe Bartolacci: Well, that is the business we're selling, Justin, just so you know. I mean, the European packaging business is the rotary graver business.

Uh, but I assume you're still hoping to net something positive there.

Sale proceeds.

well that that is the business we're selling Justin just so you know

Just what was the leakage on the transaction costs and.

I guess hedge derivative.

I mean, the, the European packaging business is the rotor of your business.

Pete Lucas: Oh, okay. Gotcha. Gotcha. That was just confusing.

Oh,

Settlements.

Joe Bartolacci: Yeah, I want to make sure I can tell by your questions you had a little confusion there.

Sure so.

Yes, let me walk through that so the 228 is is primarily driven by cash that was in embedded in subsidiaries call. It trapped cash embedded in subsidiaries that went with the business.

Pete Lucas: Okay. They're one and the same. That's helpful. And then just on the debt bridge, what were the, could you just provide any indication? I see the 228 million sale proceeds. Just what was the leakage on the transaction costs and the, I guess, head derivative settlements?

Okay. Gotcha. Gotcha. That was just confusing. I want to make sure I can tell by your questions you had. You had a little confusion there.

Okay, there 1 the same um, that's helpful. Um,

And then just on the depth bridge.

In addition by the way to some pension obligations that were assumed by the business. So that's the reason the primary reason for the number.

What were the... could you just provide any indication? I see that the $228 million sale proceeds.

228 versus the $2 50.

just what was the leakage on the transaction costs and the um I guess head head derivative

The.

Steve Nicola: Sure. Yeah, let me walk through that. So the 228 is primarily driven by cash that was embedded in subsidiaries, call it trapped cash embedded in subsidiaries that went with the business, in addition, by the way, to some pension obligations that were assumed by the business. So that's the reason, the primary reason for the number of 228 versus the 250. The currency hedge amount is in the $35 to $40 million range. And then you know the Dodge company acquisition price was close to $60 million.

settlements.

<unk> hedged amount is in the $35 million to $40 million range.

Sure, sure. So um

And then you know the.

You know that the Dodge company acquisition price was close to $60 million.

Okay, and then there was a small delta for transaction costs.

Yeah, let me, let me walk through that. So the 228 is is uh, primarily driven by cash. That was in embedded in subsidiaries call a trapped cash embedded in subsidiaries that went with the business

Yes, there are and then yes, there are and Thats ultimately what gets you to the 2100 $20 million of debt reduction gross debt reduction for the quarter.

Okay. That's very helpful. Thank you for that.

Just to clarify make sure. So when you reiterate your 190 million.

In addition, by the way, to sum pension obligations that that were assumed by the business. So that's the reason, the primary reason for the number, uh, of 228 versus the 250, the, uh, the uh, uh, currency hedge amount is in the 35-40 million range.

Adjusted EBITDA that includes not the lagged propel us but your estimated.

And then, you know, the, um, um, you know, the the Dodge company acquisition price was close to 60 million.

Pete Lucas: Okay. And then there's a small delta for transaction costs?

Number for these.

Two months for the quarter just finished and then for the September quarter for your equity income portion.

Steve Nicola: Yeah, there are. And then, yes, there are. And that's ultimately what gets you to the $120 million gross debt reduction for the quarter.

Okay, and then there was a small Delta for transaction costs.

That is correct.

Okay Gotcha.

Pete Lucas: Okay. That's very helpful. Thank you for that. Just to clarify, make sure, so when you reiterate your $190 million of adjusted EBITDA, that includes not the lagged Propelos, but your estimated number for these two months for the quarter just finished and then for the September quarter for your equity income portion.

And then just a bigger picture with respect to Tesla.

There. Yeah, there are. And then yes, there are. And that's ultimately what, what gets you to the 2020 million of debt, reduction gross, debt reduction, for the quarter.

Has there been anything new in the legal front in the last couple of months or what the actual you're referring to was.

Okay, that's very helpful. Thank you for that. Um, just to clarify, make sure. So when you reiterate, your 190 million

In the spring.

No no.

There was this spring they did file.

of adjusted ebit da that includes not the lagged propellers but your estimated

It's a tedious two additional suits one seeking to overturn the ruling that we received Justin which is.

Number for these.

Steve Nicola: That is correct.

2 months for the quarter, just finished. And then for the September quarter for your Equity income portion.

Quite interesting since the contracted they provided to us required arbitration. They just don't like the outcome.

Pete Lucas: Okay. Gotcha. And then just a bigger picture, with respect to.Tesla,

That is correct.

No.

Stephanie: has there been anything new in the legal front in the last couple of months, or what the action we were referring to was in the spring?

That is one that they filed for those that are following that and secondly, they are looking to try to reverse a patent that we have again, a very very very long shot effort tablet gives further evidence of the value of what we have.

Just, uh, bigger picture with respect to Tesla, has there been anything new on the legal front in the last couple of months or what? The action we were referring to was.

Speaker 2: No, no, they, I mean, it was this spring. They did file two additional suits, one seeking to overturn the ruling that we received, Justin, which is quite interesting since the contract that they provided to us required arbitration. They just don't like the outcome. So, you know, that is one that they filed for those of you that are following that. And secondly, they're looking to try to reverse a patent that we have. Again, a very, very, very long shot effort, but it gives further evidence of the value of what we have.

Um, in the spring.

Okay, but those those initiatives were not in the last couple of weeks, so as we're kind of.

No no no yes, yes.

Okay.

Got you and then just a bigger picture the 150 million of.

Interest in your.

Energy storage business.

What type of time frame.

Could these convert around and are you still delivering I mean are you still delivering some backlog to Tesla for their energy storage business as we speak.

Stephanie: Okay, but those initiatives were not in the last couple of weeks. Those were kind of.

No, no they they I mean was this spring? They did file uh ah ah ah 2 2 additional suits, 1 seeking to overturn the ruling that we received Justin, which is, uh, quite interesting since the contract that they provided to us required arbitration. They just don't like the outcome. So, uh, you know, that is 1 that they filed for those of you, that, that are following that and, secondly, they're looking to try to reverse a patent that we have again, a a very, very, very, very long shot effort. Uh, but it gives further evidence of the value of what we have.

Speaker 2: Oh, no, no, no, no, no. Yeah, yeah.

Stephanie: Okay. Gotcha. And then just a bigger picture, the, you know, 150 million of interest in your energy storage business. What type of timeframe, you know, could these convert around? And are you still delivering? I mean, are you still delivering some backlog to Tesla for your energy storage business as we speak?

For delivering some but not a lot for the most part of that has slowed there their demand is slowed and they have slowed with that.

Okay, but those those initiatives were not in the last couple of weeks. Those were kind of no no no no no no. Yeah, yeah yeah, okay gotcha. Um and then just uh, bigger picture the you know 150 million of

With regard to the backlog and the order that we received for the.

For the solid state manufacturer.

Interest in your um, energy storage business.

We would expect that to be starting to realize here in the coming weeks months at the most we have a fairly significant order were working on here in North America for a.

What type of time frame? Um,

So for the battery coating line that is.

Speaker 2: We're delivering some, but not a lot. For the most part, that has slowed. Their demand is slowed, and they have slowed with that. With regard to the backlog, the order that we received for the solid state manufacturer, we would expect that to be starting to realize here in the coming weeks, months at the most. We have a fairly significant order we're working on here in North America for the battery coating line. That is closer to $50 million, and that is looking to somewhere in the next 60 to 90 days at most. We're improving now at this point in time.

You know, could these convert around, and are you still delivering? I mean, are you still delivering some backlog to Tesla for your energy storage business as we speak?

Closer to $50 million and that is looking to somewhere in the next 60 to 90 days at most.

Moving now at this point in time.

Next 60 to 90 days for when you'd recognize it as an order knowing we would we would we will receive the order right now that orders, where you are selling in the testing phases and the processes for these at Reno as many of these companies that we're dealing with haven't produced anything yet. So this one in particular has a fairly significant support by the U S government. So they have the.

Funding and they are proving out their processes, we are a critical part of that process.

And as they test our equipment and test our solution. That's when we expect to have that order.

We're delivering some but not a lot. Uh, for the most part that is slowed, their their demand is is slowed and they have slowed with that, uh, with regard to the, the backlog of the order that we received for the, um, uh, for the solid state manufacturer. Uh, we would, I expect that to be starting to realize here in the coming weeks months at the most, we have a fairly significant order. We're working on here in North America, for a, uh, for the battery coding line, that is uh, closer to 50 million dollars. And that is looking to uh, somewhere in the next 60 to 90 days at most

Okay. Thank you for taking all my questions and very much appreciate it.

Stephanie: Next 60 to 90 days when you'd recognize it as an order.

We're improving now at this point in time.

Speaker 2: No, and we would, we will have received the order. Right now, that order is, we are still in the testing phases. The processes for these, you know, as many of these companies that we're dealing with haven't produced anything yet. So this one in particular has a fairly significant support by the US government. So they have the funding, and they're proving out their processes. We are a critical part of that process. And as they test our equipment and test our solution, that's when we expect to have that order.

No problem.

Thank you. This does conclude our Q&A session today I'd like to now turn the conference over to Steve Nicola for closing remarks.

Thank you Stefan and thanks to everyone on the call and we look forward to our fourth quarter earnings release and conference call. In November 2025. Thank you again and have a great day.

Next 60 to 90 days from when you'd recognize it as an order know and we would, we would we will have received the order right now, that order is where you're selling, the testing phases and the processes for these, you know, as many of these companies that we're dealing with haven't produced anything yet. So this 1 in particular has a fairly significant, uh, support by the US government. Uh, so they have the funding uh, and they're proving out their processes. We are a critical part of that process. Uh, and

Thank you ladies and gentlemen, this does conclude today's presentation you may now disconnect.

Stephanie: Okay. Thank you for taking all of my questions. I very much appreciate it.

As they test our equipment and test our Solution, that's when we expect to have that order.

Speaker 2: No problem.

Okay, thank you for taking all of my questions. Very much. Appreciate it.

No problem.

Thank you. This does conclude our Q&A session today. I would like to now turn the conference over to Steve Nicolas for closing remarks.

Thank you Stephanie, and, and thanks to everyone who, uh, on the call and, uh, we look forward to our fourth quarter, earnings release and conference, call in November 2025, thank you again and have a great day.

Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect.