Industry Overview - The Zacks Instruments – Control industry is positioned to benefit from a focus on energy-efficient production processes and integrated software systems, with rising demand for advanced technology to replace legacy industrial controls driving growth [1] - The industry comprises manufacturers of precision and specialty motion-control components and systems used across various sectors, providing solutions for flow measurement, control, and communication for air, water, and other gases and liquids [3] Growth Drivers - The industry's growth is primarily driven by the emphasis on digitized technologies in manufacturing, such as the Industrial Internet of Things, and the demand for process automation and safety automation systems [4] - Increased adoption of automation and higher investments in new technologies are expected to drive growth, particularly in North America, supported by rising infrastructural investments in the energy sector and favorable government policies [6] Challenges - Elevated customer inventory levels, high capital expenditures for infrastructure upgrades, and intense market volatility may hinder the process automation and instrumentation market [2] - Material cost inflation and rising transportation costs, along with high raw material prices due to geopolitical tensions, are affecting industry players' margins and profitability [5] Market Performance - The Zacks Instruments – Control industry has lagged behind the S&P 500 and the broader Zacks Computer and Technology sector over the past year, gaining only 2.2% compared to the S&P 500's 18.2% and the sector's 23.3% [9] - The industry has a trailing 12-month Enterprise Value-to-EBITDA (EV/EBITDA) ratio of 13.89X, which is below the S&P 500's 17.98X and the sector's 18.29X [12] Notable Companies - **Watts Water Technologies, Inc. (WTS)**: Focuses on water safety and flow control products, benefiting from cost-reduction actions and a strong balance sheet, with a long-term earnings growth expectation of 7.4% and a stock gain of 24.8% in the past year [15] - **Sensata Technologies Holding plc (ST)**: A global industrial technology company specializing in sensor-based solutions, with a long-term earnings growth expectation of 7.3% and a focus on electrification for hybrid and electric vehicles [18][19] - **Thermon Group Holdings, Inc. (THR)**: Provides engineered industrial process heating solutions, with a recent acquisition enhancing its market exposure and a long-term earnings surprise of 12.7% on average in the trailing four quarters [22]

Group 1 - The article promotes a premium service called "Value in Corporate Events" that focuses on major earnings events, M&A, IPOs, and other significant corporate events with actionable investment ideas [1] - The service aims to provide members with opportunities to capitalize on various corporate events, covering 10 major events a month to identify the best investment opportunities [1] Group 2 - The article includes a disclosure stating that the author has no stock or derivative positions in any mentioned companies and does not plan to initiate any positions within the next 72 hours [2] - It emphasizes that past performance is not indicative of future results and that no specific investment recommendations are provided [2]

THERMON GROUP HOLDINGS, INC. INVESTOR PRESENTATION FEBRUARY, 2025 February 2025 | 1 Cautionary Note Regarding Forward-looking Statements This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws in addition to historical information. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding our in ...

Thermon Group Holdings (THR) 2025 Conference June 10, 2025 02:30 PM ET Speaker0 Okay. Speaker1 All right. Speaker0 Good afternoon. My name is Trip Caldwell with Wells Fargo on the banking side. Here today with Bruce Thames and Jan Schott, CEO and CFO respectively of Thermon Holdings. Thermon is a $1,000,000,000 market cap company that's focused on custom heating solutions for process industries. But maybe, Bruce, for those that are less familiar with Thermon, you can take us a layer deeper and talk a little ...

Financial Performance - Thermon Group Holdings, Inc. (THR) reported fourth-quarter fiscal 2025 adjusted earnings per share (EPS) of 56 cents, exceeding the Zacks Consensus Estimate of 50 cents, representing a year-over-year growth of 64.7% driven by revenue growth, enhanced profitability, and reduced interest expenses [1] - Revenues for the quarter totaled $134.1 million, beating the Zacks Consensus Estimate by 0.4%, and expanded 5% year over year, supported by strong OPEX revenues and contributions from Vapor Power and F.A.T.I. [2] - For the full fiscal year, total revenues reached $498.2 million, up 0.7% year over year, with record revenues and adjusted EBITDA achieved through successful integrations of acquisitions and strategic execution [3] Segment Performance - Revenues from Decarbonization and Electrification reached $63 million in fiscal 2025, marking an 80% year-over-year growth, primarily driven by Vapor Power, although organic revenues in this segment contracted by 19% due to shifts in U.S. policy [3] - The opportunities pipeline for Thermon was $435 million, reflecting a 70% year-over-year increase, indicating positive demand trends in electrification, decarbonization, on-shoring, and power markets [4] Profitability Metrics - Gross margin during the quarter expanded by 330 basis points to 44.3% from 41% in the prior-year quarter, attributed to a favorable revenue mix, improved pricing, and productivity enhancements [5] - Adjusted EBITDA for the quarter increased by 29% year over year to $30.5 million, driven by revenue growth and productivity gains, despite some weakness in large projects [6] Cash Flow and Liquidity - As of March 31, 2025, the company had $39.5 million in cash and cash equivalents and total debt of $138.9 million, compared to $48.6 million and $172.5 million in the prior-year period [8] - For fiscal 2025, THR generated $63.1 million of cash from operating activities, slightly down from $66 million in fiscal 2024 [8] Future Outlook - For fiscal 2026, revenues are projected to be between $495 million and $535 million, indicating a year-over-year growth of 3.5% at the midpoint, with adjusted EBITDA expected to remain flat [10] - Management anticipates GAAP EPS to be between $1.35 and $1.57 and adjusted EPS to be between $1.77 and $1.99 for fiscal 2026 [10] - The effective tax rate for fiscal 2026 is projected to be approximately 26%, with a slight decline in adjusted EBITDA margin expected due to tariff mitigation efforts [11]

Core Insights - Thermon Group reported a 5% year-over-year revenue growth to $134.1 million for fiscal 2025's fourth quarter, with an adjusted EBITDA margin of 22.7% and record annual free cash flow of $53 million [1] - The company experienced a 29% year-over-year increase in backlog as of March 31, driven by strategic expansion into high-growth markets and a rebound in oil and gas activity [2][3] Financial Performance - Revenue for fiscal 2025's fourth quarter was $134.1 million, reflecting a 5% increase from the previous year [1] - Adjusted EBITDA margin stood at 22.7%, indicating strong operational efficiency [1] - Annual free cash flow reached a record $53 million, showcasing robust cash generation capabilities [1] Backlog and Market Dynamics - The backlog increased by 29% year-over-year, with organic backlog growth of 20%, indicating sustained order strength despite a 37% annual decrease in revenue from large capital projects [2] - The book-to-bill ratio has remained above 1.0 for four consecutive quarters, supported by increased activity in the oil and natural gas sectors [2] Strategic Initiatives - The lifting of the U.S. moratorium on new LNG export project permits led to increased project bidding, with Thermon securing five major awards [3] - The acquisition of Vapor Power in January 2024 expanded the sales pipeline by 25%, while the acquisition of Fati later in fiscal 2025 doubled Fati's backlog due to demand from Thermon's legacy customers [3][4] Tariff Impact and Mitigation - Management anticipates an annualized gross tariff headwind of $16 million to $20 million, with a net impact of $4 million to $6 million after mitigation efforts [5][6] - The company is implementing price increases, supply chain reconfigurations, and production shifts to offset cost inflation from new import taxes [5] Future Outlook - For fiscal 2026, management projects revenue between $495 million and $535 million, representing a 3.5% growth at the midpoint, and adjusted EBITDA of $104 million to $114 million [7] - A brief margin dip is expected in the first half of fiscal 2026 due to tariff impacts, but margins are anticipated to recover in the second half as pricing actions take effect [7] - Management remains neutral to cautious on demand expectations due to macroeconomic and trade policy risks, while emphasizing aggressive capital allocation for M&A, share repurchases, and organic growth investments [7]

THERMON GROUP HOLDINGS, INC. EARNINGS PRESENTATION FOURTH QUARTER FISCAL YEAR 2025 MAY 22, 2025 Q4 FY2025 Earnings | 1 Actual events, results and outcomes may differ materially from our expectations due to a variety of factors. Although it is not possible to identify all of these factors, they include, among others, (i) future growth of our key end markets and related capital investments; (ii) our ability to operate successfully in foreign countries; (iii) uncertainty over and changes in administrative poli ...

Growth Strategy - The company plans to strategically pursue emerging growth opportunities, including strategic acquisitions in diverse regions and across industry sectors [18]. - The company expects to secure more new facility project bids, enhancing its revenue potential [18]. - The company anticipates an increase in revenues, reflecting positive market conditions and operational strategies [18]. - The company aims to integrate acquired companies effectively to achieve synergies and enhance overall performance [18]. - The company is committed to developing strategic alliances with major customers and suppliers to strengthen its market position [18]. Financial Health - The company believes its cash flows will be sufficient to meet operational needs for the next year [18]. Market Competitiveness - The company is focused on responding to new market developments and technological advances to maintain competitiveness [18]. - The company acknowledges risks related to competition and the ability to deliver existing orders within its backlog [19]. - The company recognizes the importance of managing risks associated with foreign operations and economic conditions [19]. - The company is focused on maintaining compliance with environmental and health regulations, which could impact operations [19].

Thermon Group Holdings (THR) Q4 2025 Earnings Call May 22, 2025 11:00 AM ET Company Participants Ivonne Salem - Vice President of FP&A and Investor RelationsBruce Thames - President & CEOJan Schott - SVP & CFOJustin Ages - Director - Equity ResearchJonathan Braatz - Partner Conference Call Participants Chip Moore - Managing Director & Senior Research AnalystBrian Drab - Equity Research Analyst Operator Greetings, and welcome to the Thermon Group Holdings Fourth Quarter Fiscal Year twenty twenty five Earning ...

Financial Data and Key Metrics Changes - The company reported revenue of $498 million for fiscal year 2025, a 1% increase year-over-year despite a 37% decline in large capital projects [11] - Adjusted EBITDA margin improved to 22% for fiscal year 2025, up 86 basis points from the previous year [11] - Free cash flow for the year was $53 million, with a gross margin expansion of 196 basis points [12] Business Line Data and Key Metrics Changes - The company achieved 3% organic growth in Q4 2025, marking the first growth in over a year, driven by improved order trends in various verticals, particularly in the LNG market [7][8] - OpEx revenues for Q4 2025 were $111.8 million, a 7% increase year-over-year, representing 83% of total revenues [25] - Large project revenue for Q4 2025 was $22.3 million, down 5% year-over-year but up 20% compared to the previous quarter [25] Market Data and Key Metrics Changes - US sales increased by 6% due to strong OpEx revenue and improved large project trends [27] - EMEA revenue rose by 51% year-over-year, while Canadian sales decreased by 6% due to macroeconomic conditions [27] - APAC revenues were reported at $9.2 million [27] Company Strategy and Development Direction - The company focuses on three strategic pillars: growing the installed base, pursuing decarbonization, digitization, and diversification [14] - The acquisition of Vapor Power expanded the addressable market and increased the sales pipeline by 25% [13] - The company aims to diversify its revenue base, achieving 70% of revenue from diverse markets ahead of schedule [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive order momentum and backlog growth, despite broader macroeconomic uncertainties [13][36] - The company anticipates margin headwinds in the first half of fiscal year 2026 due to tariffs, with a projected annualized impact of $16 million to $20 million [32][36] - The guidance for fiscal year 2026 includes revenue expectations between $495 million and $535 million, reflecting a cautious outlook [36] Other Important Information - The company repurchased over $20 million in shares during fiscal year 2025 and plans to refresh its share repurchase program to $50 million [30] - The company maintained a strong financial position with net leverage of 0.9 times at the end of the fiscal year [30] Q&A Session Summary Question: Can you elaborate on the resurgence in LNG? - Management noted that since the lift of the moratorium in January, several projects have moved forward quickly, particularly in the U.S. Gulf Coast and the Middle East, with approximately $80 million in LNG opportunities in the pipeline [40][41] Question: What are the expectations for margins in FY 2026? - Management indicated that there will be near-term impacts on gross margins in the first half of the year due to inflationary pressures from tariffs, but they expect pricing actions to offset these impacts later in the year [44][46] Question: How is the backlog and CapEx spending forecasted for FY 2026? - Management reported a strong backlog build in capital projects and anticipates that order rates for larger projects may be muted until clarity on trade policy is achieved [50][51] Question: What are the capital allocation priorities? - The company plans to maintain capital investments for growth, continue share repurchases, and actively pursue M&A opportunities [64][66] Question: What is the expected net impact of tariffs for the upcoming year? - The net impact of tariffs is projected to be in the range of $4 million to $6 million for the fiscal year, primarily affecting the first half [76][78]