Financial Data and Key Metrics Changes - The company reported second quarter revenue of $259 million, exceeding expectations of $250 million to $255 million, with half of the overachievement attributed to constant currency performance and the other half due to less adverse foreign exchange impacts than anticipated [1][5] - Year-over-year revenue declined by 9.8% on an as-reported basis and 7.7% on an adjusted constant currency basis [9] - GAAP gross profit for the second quarter was $164.1 million with a margin of 63.4%, compared to $185.4 million and 64.6% in the prior year [13] - Adjusted net income increased to $40.7 million, or $0.70 per diluted share, compared to $38.9 million and $0.67 in the prior year [16] Business Line Data and Key Metrics Changes - Pen needle revenue declined approximately 12.1%, while syringe revenue grew by 1.7%, safety products grew by 4.2%, and contact manufacturing grew by 73% [10][11] - The decline in pen needle revenue was primarily due to timing issues related to price increases and unfavorable prior year comparisons [11] Market Data and Key Metrics Changes - U.S. revenue for the quarter totaled $135.2 million, reflecting a year-over-year decline of 8.4% on an adjusted constant currency basis [9] - International revenue totaled $123.8 million, equating to a 7% decline on an adjusted constant currency basis compared to the prior year [10] Company Strategy and Development Direction - The company is advancing efforts to co-package pen needles with potential generic GLP-1 drugs, aiming to expand into a fast-growing market [3] - A restructuring plan has been initiated to streamline operations, with expected pretax charges of $4 million to $5 million and anticipated cost savings of $7 million to $8 million in the second half of fiscal 2025 [4][5] - The brand transition plan is underway in the U.S. and Canada, with expectations to complete the global transition within the next couple of years [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged lower projected U.S. volumes due to anticipated reductions in customer inventory levels tied to store closures at a specific U.S. retail pharmacy customer [6][22] - Despite the challenges, management expects to see flat to slightly positive overall constant currency revenue growth in the second half of the year [43][44] - The company remains committed to mitigating potential impacts from tariffs and is focused on maintaining profitability and reducing debt [19][24] Other Important Information - The company has received certification as a great place to work for 2025 in eight countries, reflecting a strong workplace culture [2] - The upcoming Analyst and Investor Day is scheduled for May 22, where the company will provide deeper insights into its portfolio and long-term financial objectives [26] Q&A Session Summary Question: Can you provide insights into growth and demand dynamics across pen and syringes? - Management explained that the decline in U.S. revenue was influenced by ERP implementations and price increase timing, but they expect improvements moving forward [29][35] Question: How should the market interpret the guidance cut? - Management indicated that despite the guidance cut, they expect stronger performance in the second half of the year, with low single-digit growth anticipated [41][44] Question: What is the impact of tariffs on margins? - Management confirmed a $3 million impact from tariffs in the second half of the year, with an estimated annualized impact of $8 million to $9 million for 2026 [49][51] Question: What is the status of the new efficiency program? - The restructuring program is focused on SG&A cost reductions, with expected savings of $7 million to $8 million in the second half of the year, and an annualized impact of around $15 million for fiscal 2026 [75][77]

Financial Data and Key Metrics Changes - Total revenue for the second quarter decreased by $9.8 million to approximately $107 million, primarily due to declines in the retail flooring, flooring manufacturing, and steel manufacturing segments [6][7] - Gross profit remained consistent at $35.1 million, with gross margin percentage increasing to 32.8% from 29.9% in the prior year period [7][8] - Net income was approximately $15.9 million for the quarter, with diluted EPS of $5.5 compared to a net loss of approximately $3.3 million and a loss per share of $1.04 in the prior year period [9] Business Line Data and Key Metrics Changes - Retail entertainment segment revenue increased by $1.6 million or 9.6% to approximately $18.5 million, driven by increased consumer demand for new products [6] - Retail flooring segment revenue decreased by $4.6 million or 14.5% to approximately $27.4 million, primarily due to the disposition of certain stores [6][7] - Flooring manufacturing segment revenue decreased by $4.4 million or 12.8% to approximately $29.8 million, attributed to reduced consumer demand [7] - Steel manufacturing segment revenue decreased by $4.2 million or 11.7% to approximately $31.3 million, driven by lower sales volumes, partially offset by revenue from Central Steel [7] Market Data and Key Metrics Changes - The company faced challenges in the flooring businesses due to ongoing softness in new home construction and home refurbishment markets, as well as economic uncertainty [5] - The steel manufacturing segment showed improved efficiencies following the acquisition of Central Steel, which historically generated higher margins [8] Company Strategy and Development Direction - The company is implementing operational initiatives to enhance performance in the retail flooring segment, including a new executive management team and targeted cost reduction initiatives [5][10] - The focus remains on operational excellence and long-term fundamentals of the business, with potential share repurchases as part of the capital allocation strategy [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the business despite challenging market conditions impacting the retail flooring and flooring manufacturing segments [10] - The company is actively monitoring potential impacts from tariffs and diversifying vendor relationships to mitigate risks [20][22] Other Important Information - The company successfully negotiated a $19 million reduction in flooring liquidators seller notes, resulting in a $22.8 million gain [5][9] - Total cash availability at the end of the quarter was $26.6 million, with working capital of approximately $49.1 million [9] Q&A Session Summary Question: About the modification of the note - The modification of the note was not anticipated in the original agreement and was a result of renegotiation [16][17] Question: Impact of tariffs on the business - The company has not experienced negative impacts from tariffs to date and is preparing for potential future changes by diversifying vendor relationships [20][22]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 decreased by $9.8 million to approximately $107 million, primarily due to declines in retail flooring, flooring manufacturing, and steel manufacturing segments [6][7] - Net income for the quarter was approximately $15.9 million, with diluted EPS of $5.5, compared to a net loss of approximately $3.3 million and a loss per share of $1.04 in the prior year period [9] - Adjusted EBITDA for the quarter increased by approximately $2 million to around $6.4 million, driven by the acquisition of Central Steel and cost reduction initiatives [9] Business Line Data and Key Metrics Changes - Retail entertainment segment revenue increased by $1.6 million or 9.6% to approximately $18.5 million, attributed to higher consumer demand for new products [6] - Retail flooring segment revenue decreased by $4.6 million or 14.5% to approximately $27.4 million, mainly due to the disposition of certain stores [7] - Flooring manufacturing segment revenue decreased by $4.4 million or 12.8% to approximately $29.8 million, driven by reduced consumer demand [7] - Steel manufacturing segment revenue decreased by $4.2 million or 11.7% to approximately $31.3 million, impacted by lower sales volumes, partially offset by revenue from Central Steel [7] Market Data and Key Metrics Changes - The company faced challenges in the flooring business due to ongoing softness in new home construction and home refurbishment markets, as well as economic uncertainty [5] - The retail flooring and flooring manufacturing segments were particularly affected by reduced consumer demand [10] Company Strategy and Development Direction - The company is focusing on operational excellence and has implemented targeted cost reduction initiatives in the flooring retail segments [10] - A new executive management team has been brought in to enhance performance through top-line growth and operational efficiency in the retail flooring segment [5] - The company is considering share repurchases as part of its capital allocation strategy, believing it represents long-term value for shareholders [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the business despite current market challenges [10] - The company is actively monitoring potential impacts from tariffs and is diversifying vendor relationships to mitigate risks [17][20] Other Important Information - The company successfully negotiated a $19 million reduction in flooring liquidators seller notes, resulting in a $22.8 million gain [5][8] - Total cash availability at the end of the quarter was $26.6 million, with working capital of approximately $49.1 million [9] Q&A Session Summary Question: Was the modification of the note anticipated in the original agreement? - Management clarified that the modification was not anticipated in the original agreement and was a new renegotiation [15][16] Question: How might tariffs affect the business? - Management stated that there have been no negative impacts from tariffs to date and that they are diversifying vendor relationships to prepare for potential changes [17][20]

Financial Data and Key Metrics Changes - APA Corporation reported consolidated net income of $347 million or $0.96 per diluted common share for Q1 2025, with adjusted net income of $385 million or $1.06 per share, reflecting a significant after-tax gain on debt extinguishment and a charge for deferred tax liability in the UK [19][20] - The company generated $126 million of free cash flow in the first quarter, with past due balances in Egypt at their lowest since the end of 2022 [20] Business Line Data and Key Metrics Changes - In the Permian, oil production was within guidance despite a larger-than-expected impact from downtime, with capital expenditures coming in below guidance due to improved drilling performance [6][14] - In Egypt, gas production exceeded guidance due to successful development programs, with an average realized gas price of $3.19, up from $2.97 in the previous quarter [20][28] - The North Sea operations also performed well, with volumes ahead of guidance driven by operational efficiency [7] Market Data and Key Metrics Changes - The company anticipates continued growth in gas volumes in Egypt, expecting to reach approximately 500 million cubic feet per day by year-end [28] - The average realized gas price is expected to increase steadily, reaching $3.8 in Q4 2025 [28] Company Strategy and Development Direction - APA is focused on cost reduction initiatives, targeting $130 million in realized savings for 2025 and an annualized run rate of $225 million by year-end [9][17] - The company is streamlining its portfolio, having signed an agreement to sell New Mexico Permian properties for $68 million, which will primarily be used for debt reduction [13][60] - The strategic shift towards gas drilling in Egypt is seen as economically favorable, especially with the new gas price agreement [16][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining free cash flow despite commodity price volatility, with a focus on operational efficiency and cost reductions [6][17] - The company is optimistic about the potential for further drilling efficiencies in the Permian, allowing for reduced rig counts while maintaining production levels [14][39] - Management highlighted the importance of balancing growth with shareholder returns and strengthening the balance sheet [17] Other Important Information - The company has made significant progress in reducing controllable spending, particularly in the Permian, with an average savings of $800,000 per well achieved [23][24] - Changes in upstream capital definitions were made, with cash ARO expenses and leasehold acquisitions now treated as separate line items [31] Q&A Session Summary Question: Cost savings achievements and future targets - Management confirmed that they are ahead of schedule on cost savings, with expectations to potentially raise targets in the future [35][36] Question: Rig count and production maintenance - Management indicated that they can maintain production flat with 6.5 rigs and are confident in further efficiency gains [39] Question: Asset sale motivations - The sale of New Mexico assets was strategic, allowing the company to focus on core Texas operations and reduce debt [60][61] Question: LOE inflationary pressures - Management acknowledged challenges in achieving LOE savings due to inflation but remains optimistic about future reductions [64][65] Question: Gas development in Egypt - Management confirmed a shift towards gas drilling in Egypt, with oil production expected to remain stable due to condensate from gas production [94][95] Question: Buyback strategy amidst market conditions - Management stated that while they are focused on debt reduction, they remain open to opportunistic buybacks if conditions allow [104]

Financial Data and Key Metrics Changes - APA Corporation reported consolidated net income of $347 million or $0.96 per diluted common share for Q1 2025, with adjusted net income of $385 million or $1.06 per share [18] - Free cash flow generated in Q1 was $126 million, with past due balances in Egypt at their lowest since the end of 2022 [19] - The company increased its 2025 savings target from $60 million to $130 million, with an annualized run rate savings target of $225 million by year-end [8][34] Business Line Data and Key Metrics Changes - In the Permian, oil production was within guidance despite a larger-than-expected impact from downtime, with capital expenditures below guidance due to improved drilling performance [5] - In Egypt, gas production exceeded guidance due to successful development programs, with an average realized gas price of $3.19, up from $2.97 in Q4 2024 [19][15] - The North Sea operations saw volumes ahead of guidance, driven by strong operational efficiency [6] Market Data and Key Metrics Changes - The company anticipates gross gas volumes in Egypt to grow to 470 million cubic feet per day in Q2, with expectations to exit the year around 500 million cubic feet per day [14][27] - The average realized gas price is expected to increase to $3.8 in Q4, reflecting a strong performance in the gas market [27] Company Strategy and Development Direction - APA Corporation is focused on cost reduction initiatives, aiming for top quartile operational performance in the Permian and sustainable reductions in controllable spend [8][10] - The company plans to allocate proceeds from the sale of New Mexico Permian properties, which contributed approximately 5,000 barrels per day, primarily towards debt reduction [12][60] - The strategic shift towards gas drilling in Egypt is seen as economically favorable, especially with the new gas price agreement [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining production levels in the Permian with reduced rig counts, citing improved drilling efficiencies [13][38] - The company is positioned to respond to oil price fluctuations, with a threshold for significant cuts set at WTI prices dropping into the low fifties [98] - Management highlighted the importance of balancing growth with shareholder returns and strengthening the balance sheet [16] Other Important Information - The company has made significant strides in cost reduction, particularly in the Permian, capturing $800,000 in cost savings per well [21] - A new CFO, Ben Rogers, was appointed, emphasizing a continued focus on managing the cost structure [11] Q&A Session Summary Question: Insights on cost savings achieved - Management confirmed that they are ahead of schedule on cost savings, with expectations to potentially raise targets in the future [32][34] Question: Rig count and production levels in the Permian - Management indicated that they can maintain production flat with 6.5 rigs and are confident in further efficiency gains [38] Question: Clarification on capital delivery pace and original assumptions - Management acknowledged that original targets were aggressive, but cost savings are being realized faster than anticipated [44] Question: Plans for Alaska and funding considerations - Management discussed the quality of reservoir sands in Alaska and the strategy for appraisal and development [46][50] Question: Asset sale motivations and implications - The sale of New Mexico assets was strategic, allowing the company to focus on core Texas operations and debt reduction [56][60] Question: LOE inflation and initiatives - Management noted that while some cost reductions are slower than expected, they are exploring various options to manage LOE costs [62][64] Question: Gas development attractiveness in Egypt - Management confirmed that gas development is currently more attractive than oil, with plans to shift focus accordingly [90][92]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported revenue of $210.5 million, a decrease of 17.3% compared to Q1 2024 [8][12] - Adjusted EBITDA for the quarter was $38.4 million, down 42.1% year-over-year, resulting in an adjusted EBITDA margin of 18.2%, a decrease of approximately 790 basis points from the prior year [15] - Adjusted net income was $17.7 million, a decrease of 51.6% from the previous year, with adjusted EPS at $0.13 [16] Business Line Data and Key Metrics Changes - The self-storage segment saw a revenue decline of 23.1%, attributed to decreased volume due to economic uncertainty [8][12] - New construction revenues decreased by 25.5%, primarily due to project delays linked to high interest rates [12] - The R3 segment experienced a revenue increase of 19.3%, driven by door replacement and renovation activities, despite a nearly 50% decrease in retail big box conversions [12][13] Market Data and Key Metrics Changes - The international segment's revenues increased by $6.5 million, or 44.2%, compared to the prior year, due to normalizing market conditions following a recession in the UK [13] - The commercial and other sales channel experienced a 1% decline, primarily due to softness in the rolling sheet door market, partially offset by contributions from the TMC acquisition [8][12] Company Strategy and Development Direction - The company is focused on operational excellence and disciplined capital allocation while investing for long-term success [6][7] - A cost reduction plan is in place, expected to yield annual pre-tax savings of $10 million to $12 million by the end of 2025 [9][15] - The company anticipates a shift in customer focus towards optimizing and upgrading existing properties rather than new construction [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for self-storage solutions despite current market volatility [9][11] - The company expects to see strengthening results in the latter half of 2025, with a reaffirmation of full-year revenue guidance between $860 million and $890 million [17][18] - Management noted that the current tariff environment is manageable, with estimated impacts in the low single-digit millions for 2025 [10][11] Other Important Information - The company generated cash from operating activities of $48.3 million and free cash flow of $41.9 million in the quarter, representing a free cash flow conversion of 170% of adjusted net income [16] - The company repurchased 600,000 shares for $5.1 million during the quarter, with $16.3 million remaining on its share repurchase authorization [10][17] Q&A Session Summary Question: What is the latest on project delays and order activity in the pipeline? - Management noted that projects are moving through the pipeline, with steady small growth in both backlog and pipeline [25][27] Question: How is pricing expected to change given steel inflation and tariffs? - Management indicated that pricing would blend into the year, with Q1 not as impacted due to existing inventory [28][29] Question: What is the expected cadence of cost savings from structural reductions? - The company expects to reach a full run rate for cost savings by the end of Q2, with various initiatives in place to drive these savings [52] Question: How is the R3 segment performing and what are the expectations for retail conversions? - Management observed incremental increases in R3 projects and expects retail conversions to stabilize [39][40] Question: Are there signs of stabilization in the commercial segment? - Management confirmed stabilization in the commercial segment, with growth in certain product lines [46] Question: Are there more project starts moving forward or cancellations? - Management reported an increase in project starts, with no unusual cancellations noted [48]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported revenue of $210.5 million, a decrease of 17.3% compared to Q1 2024 [8][13] - Adjusted EBITDA for the quarter was $38.4 million, down 42.1% year-over-year, resulting in an adjusted EBITDA margin of 18.2%, a decrease of approximately 790 basis points from the prior year [15] - Adjusted net income was $17.7 million, a decrease of 51.6% from the previous year, with adjusted EPS at $0.13 [16] Business Line Data and Key Metrics Changes - The self-storage segment saw a revenue decline of 23.1%, attributed to reduced volume due to economic uncertainty [8][13] - New construction revenues decreased by 25.5%, primarily due to project delays linked to high interest rates [13] - The R3 segment experienced a revenue increase of 19.3%, although retail big box conversions and facility expansions were down nearly 50% [13][15] - The international segment's revenues increased by $6.5 million or 44.2% compared to the prior year, benefiting from normalizing market conditions [14] Market Data and Key Metrics Changes - The company noted ongoing macroeconomic volatility impacting customer liquidity and capital deployment [6][9] - The backlog and pipeline showed growth despite market uncertainty, indicating stability in demand for self-storage solutions [7][20] - Tariff impacts are expected to be low single-digit millions for 2025, with potential ongoing annual impacts estimated at $10 million to $12 million beyond 2025 [11][12] Company Strategy and Development Direction - The company is focused on operational excellence and disciplined capital allocation while investing for long-term success [6][7] - A cost reduction plan is in place, expected to yield annual pre-tax savings of approximately $10 million to $12 million by the end of 2025 [10][15] - The company anticipates a shift in customer focus towards optimizing and upgrading existing properties rather than new construction [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the self-storage industry, citing strong underlying demand drivers [12][20] - The company expects results to strengthen in the latter half of 2025, with an increase in R3 project activity [18][19] - Management acknowledged the challenges posed by high interest rates but noted that project timelines are beginning to normalize [26][49] Other Important Information - The company generated cash from operating activities of $48.3 million and free cash flow of $41.9 million in the quarter, representing a free cash flow conversion of 170% of adjusted net income [16][17] - The company repurchased 600,000 shares for $5.1 million during the quarter, with $16.3 million remaining on its share repurchase authorization [17][18] Q&A Session Summary Question: What is the latest on project delays and order activity in the pipeline? - Management noted that projects are moving through the pipeline, with steady growth in both orders and backlog since the beginning of the year [26][28] Question: How is pricing being affected by tariffs and steel inflation? - Management indicated that pricing impacts are expected to blend into the year, with Q1 not as affected due to existing inventory [29][30] Question: What is the expected cadence of cost savings from structural reductions? - Management expects to reach a full run rate for cost savings by the end of Q2, with various initiatives in place to drive these savings [53][54] Question: How is the R3 segment performing and what are the expectations for retail conversions? - Management observed an increase in R3 project activity and expects steady state performance in retail conversions moving forward [40][41] Question: Are there signs of stabilization in the commercial segment? - Management confirmed stabilization in the commercial segment, with growth in certain product lines, although the commercial sheet door sector remains depressed [47]

Financial Data and Key Metrics Changes - The company reported flat sequential sales and flat year-over-year sales on a pro forma basis, attributed to a successful new business program despite a softening base business [6][7] - Adjusted gross margins were 16.9%, with a target to reach 19% to 20% over five years [14] - Adjusted EBITDA for the quarter was $10,600,000, with a full-year guidance range of $53,000,000 to $63,000,000 [15][48] - Working capital was $84,800,000, down $4,600,000 year-over-year, representing 19.1% of trailing twelve-month sales [16][36] Business Line Data and Key Metrics Changes - In the Power Solutions segment, net sales were $43,500,000, down from $48,200,000, primarily due to the impact of the Lubbock facility and unfavorable foreign exchange [42] - The Mobile Solutions segment reported net sales of $62,200,000, down from $73,100,000, impacted by rationalized business and lower automotive volumes [45] Market Data and Key Metrics Changes - The automotive market is experiencing a shift towards hybrid vehicles, which is beneficial for the company as it allows for the use of existing assets [57][58] - The company is seeing increased activity in tariff-related RFQs, particularly in reshoring opportunities from Canada and China [53][56] Company Strategy and Development Direction - The company is focusing on a profitable immediate growth strategy (PIGS) to ramp up new business, with 120 programs worth $55,000,000 in annualized sales expected to ramp up this year [8][10] - A significant transformation plan is underway, with 70% completion, focusing on enhancing leadership and addressing underperforming areas [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that business uncertainty has increased, leading to lighter sales than planned, particularly in global automotive [6][9] - The company is optimistic about both 2025 and long-term goals, with a focus on cost reduction and operational efficiency [12][49] Other Important Information - The company is initiating free cash flow guidance in the range of $14,000,000 to $16,000,000 for the year, reflecting improved margin capture and anticipated proceeds from the CARES Act [48] Q&A Session Summary Question: Can you provide more detail on tariff-related RFQs? - Management indicated that there is significant activity in reshoring opportunities from Canada and China, with a mix of new capital and reuse of existing capital [53][56] Question: How is the automotive market affecting new business opportunities? - The shift towards hybrid vehicles is seen as beneficial, allowing the company to utilize existing assets while also entering new markets for EV components [57][58] Question: Can you elaborate on the $55,000,000 in new business wins? - The timing for these wins is expected to be weighted towards the second half of the year, with a ramp-up period of three to six months for immediate programs [65][66] Question: What about the $15,000,000 cost savings target? - The cost savings are expected to be evenly distributed throughout the year, with some back-end loading [70] Question: Are there any more plant closures expected? - There are two additional plants under evaluation for potential closure, but no firm plans have been established yet [72]

Financial Data and Key Metrics Changes - The company reported a net loss of $72.9 million or a loss of $1.14 per share for Q1 2025, compared to a net loss of $51.4 million or $0.81 per share in Q1 2024 [23] - Revenue for the quarter was $601.5 million, up 0.7% year over year [24] - Adjusted EBITDA excluding restructuring charges was a loss of $24.2 million, compared to a negative $21.5 million in Q1 last year [26] - SG&A totaled $42.9 million, an increase of $11.1 million from the prior year due to restructuring and severance charges [27] Business Line Data and Key Metrics Changes - The company achieved a record 100% utilization rate across its nine operating plants, demonstrating strong asset performance [25] - The anticipated consolidated SG&A run rate is expected to decline from $118 million in 2024 to approximately $93 million by year-end 2025 [8][27] - The company has achieved $30 million in annualized cost savings and expects to reach a total of $50 million in cost reductions [6][7] Market Data and Key Metrics Changes - U.S. ethanol exports are expected to surpass last year's record of nearly 2 billion gallons in 2025 [18] - Ethanol market fundamentals showed typical seasonal weakness in Q1, but margins have strengthened heading into Q2 and Q3 [17] - Current ethanol inventory levels are at 25 million barrels, with expectations to drop towards 23 million as the driving season begins [81] Company Strategy and Development Direction - The company is focused on returning to sustained profitability and has executed a zero-based approach to its cost structure [5][6] - A strategic marketing partnership with EcoEnergy has been established to enhance scale and optimize transportation and marketing economics [19] - The company is pausing its clean sugar technology initiative to maximize ethanol production and improve operational efficiency [15][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive EBITDA for the remainder of the year based on current market conditions and actions taken [34] - The carbon strategy remains on track, with construction of carbon compression infrastructure advancing as planned [30] - Management acknowledged the challenges faced in the protein business but remains committed to executing the strategy [91] Other Important Information - The company has strengthened its liquidity position, with $126.6 million in cash equivalents and restricted cash at quarter-end [28] - Capital expenditures in Q1 were $16.7 million, with expectations for the remainder of 2025 to be around $20 million [29] - The company is actively engaged in a strategic review, considering various paths including a company sale or asset divestitures [32] Q&A Session Summary Question: Can you provide insight into the hedging framework and its reestablishment? - Management emphasized that hedging is a good practice for managing risk and that they are locking in margins when market opportunities arise [39][41] Question: What is the status of the CEO search? - The process is ongoing, nearing final stages, with a focus on candidates who can bring relevant industry experience [44] Question: Can you provide updates on carbon capture construction timelines? - Construction is on track for early Q4 startup, with no major delays anticipated [48] Question: What are the potential impacts of tariffs on product exports? - Currently, there has been no adverse impact from tariffs, but the situation remains unpredictable [49][52] Question: How is the company addressing the protein market dynamics? - The domestic protein market is expected to be flat, but the company is focusing on higher-margin segments like pet food and aquaculture [62]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $63.2 million, down 8% from the prior year, with professional services down 4.2% and property management down 14.9% [6][13] - Adjusted EBITDA was $2.4 million with an EBITDA margin of 3.8%, showing improvement from $1.4 million or 2.2% in the previous quarter [15] - Adjusted EPS was $0.05 per share, while the GAAP loss was $0.07 per diluted share [15] Business Line Data and Key Metrics Changes - Professional segment revenues increased sequentially by 5.6% compared to the previous quarter, despite a year-over-year decline of 4.2% [6][13] - Property management revenues declined over 14% on both a sequential and year-over-year basis, but there are signs of improvement with revenues per billing day increasing [14][10] Market Data and Key Metrics Changes - The U.S. apartment rental rates are starting to elevate again, which is expected to improve the economics for property management companies [11] - The company signed 23 new logos in Q1 2025, up over 60% from 14 in Q1 2024, indicating positive momentum [10] Company Strategy and Development Direction - The company is focused on strategic alternatives and restructuring initiatives to recalibrate costs and improve efficiency [5] - There is a commitment to growth initiatives and managing controllable factors amidst macroeconomic uncertainties [19] - The company aims to leverage prior investments in technology and processes to drive long-term shareholder value [19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consulting projects and business spending, despite uncertainties in trade policies [7][18] - The labor market remains solid, with job additions indicating potential for future growth [19] - Management is optimistic about the property management segment as rental rates improve, but acknowledges ongoing challenges [12][11] Other Important Information - The company entered into waivers and amendments with lenders due to non-compliance with financial covenants at the end of 2024 [16] - The company is continuously looking for ways to improve cost effectiveness and operational efficiency [28] Q&A Session Summary Question: Could you provide context around the new logos and average deal size? - Management indicated that several contracts were signed in March, and they would follow up with specific data [22][23] Question: Are there discussions regarding pent-up demand due to tariff uncertainties? - Management believes there is pent-up demand, but clients are currently in a cautious "wait and see" mode [24][25] Question: Is the technology platform fully rolled out? - The technology platform is fully rolled out, with ongoing improvements being made to enhance efficiency [26][27] Question: How much of the expense reductions were factored into Q1 results? - Approximately 65% to 70% of the expense reductions were realized in Q1, with full benefits expected in Q2 [28] Question: What is the competitive dynamic within property management? - The competitive environment remains stable, and the company continues to secure preferred partner agreements [29][30] Question: When might property management return to year-over-year stability? - Management is working towards regaining growth trajectory and is seeing positive signs [31] Question: How comfortable is management with street estimates? - Management beat estimates for Q1 but has not yet reviewed Q2 estimates [37] Question: How does the company reconcile the cautious mindset of customers with the increase in new logos? - It varies by sector, with some sectors showing movement while others remain cautious [44] Question: Is there a shift in professional services performance? - Professional segment revenues increased in Q1 compared to Q4, indicating a positive trend [46][47] Question: What is the historical behavior in spending post-recession? - Historically, the industry rebounds quickly, but current conditions are unique, with cautious spending observed [54]