Financial Data and Key Metrics Changes - The company reported a 7% increase in sales for the fourth quarter, driven primarily by growth in the Climate Solutions segment [21] - Adjusted EBITDA increased by 32% or $25 million, with an adjusted EBITDA margin of 16.1%, representing a 300 basis point improvement from the prior year [22] - Full year adjusted EBITDA margin ended at 15.2%, which is 210 basis points above fiscal 2024 [23] Business Line Data and Key Metrics Changes - Climate Solutions segment reported a 30% increase in revenues and a 45% increase in adjusted EBITDA, resulting in a 220 basis point improvement in adjusted EBITDA margins to 21% [7][15] - Performance Technologies segment achieved a 15% adjusted EBITDA margin in the fourth quarter, with a 200 basis point year-over-year improvement [11][20] - Data center sales grew by $69 million or 80% from the prior year, driven by higher North American sales and the Scott Springfield acquisition [15] Market Data and Key Metrics Changes - North America showed strong demand for chillers, with data center sales significantly contributing to revenue growth [8][15] - The European market is experiencing some downturn, with customers adjusting their spending plans [52] Company Strategy and Development Direction - The company is focusing on expanding its Climate Solutions segment and has made significant investments to drive growth [5][10] - A new modular data center cooling solution is being launched to meet market demands for high-density compute infrastructure [9] - The Performance Technologies segment is being reorganized into two product groups to better focus on key end markets and customers [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the data center market, with visibility of customer plans extending up to five years [38] - The company anticipates total sales growth of 2% to 10% for fiscal 2026, with Climate Solutions expected to grow by 12% to 20% [27] - Performance Technologies is expected to see sales decline by 2% to 12% due to depressed end markets [28] Other Important Information - The company generated $27 million of free cash flow in the fourth quarter, with full year free cash flow at $129 million [24] - A $100 million stock buyback program was announced, with $18 million of share repurchases completed [25] Q&A Session Summary Question: Can you discuss data center visibility and customer build schedules? - Management indicated strong confidence in data center opportunities, with visibility extending up to five years for some customers [36][38] Question: Is there anything sourced from China that is hard to find elsewhere? - The company has significantly reduced dependency on China and feels comfortable with its local supply chain strategy [40] Question: What is the outlook for Performance Technologies? - The largest uncertainty is the rate of market recovery, particularly in Performance Technologies, while Climate Solutions is expected to grow steadily [41] Question: Can you clarify the split in data center revenue between the US and Europe? - The split is approximately 75% North America and 25% Europe [64] Question: How will data center revenue ramp up in fiscal 2026? - The first quarter is expected to be the softest, with ramp-up occurring throughout the year as capacity increases [66] Question: What is the growth outlook for Climate Solutions? - Data center revenue is expected to grow by at least 30%, while other areas may see flat or low double-digit growth [70] Question: What are the plans for divestitures in the Performance Technologies segment? - Currently, no divestitures are built into the guidance, but the company is focused on exiting non-strategic businesses [78]

Financial Data and Key Metrics Changes - The company is reaffirming its 2025 earnings guidance range of $4 to $4.2, representing a 5% growth rate at the midpoint over 2024 EPS [9][10] - Year-over-year earnings drivers for Q1 2025 included $0.29 per share of new margins, with $0.26 from new rates and rider recovery, and $0.03 from customer growth and usage [13][14] - O&M expenses increased by $0.24 per share, primarily due to higher employee costs, outside services, and insurance costs [15][16] Business Line Data and Key Metrics Changes - The company has successfully implemented new rates through five rate reviews since early 2024, recovering over $1.3 billion in new system investments [6][8] - The data center demand is projected to reach approximately 500 megawatts by the end of 2029, with expectations for EPS contribution from data centers to double to over 10% of total EPS by 2028 [12][21] Market Data and Key Metrics Changes - The company reported strong customer growth, with two new all-time customer peak loads at Wyoming Electric, reflecting nearly a 10% increase over the previous peak in January 2024 [7][8] - The company is experiencing favorable business and regulatory climates, which are contributing to ongoing growth opportunities [8][10] Company Strategy and Development Direction - Key objectives for the year include achieving 5% year-over-year earnings growth, executing regulatory initiatives, and a $1 billion capital plan [5][6] - The company is strategically expanding its infrastructure to serve growing customer demands, particularly in data centers and blockchain operations [8][12] - The capital plan prioritizes safety, system integrity projects, and infrastructure expansion to support growing demands [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 guidance and long-term EPS growth targets of 4% to 6% [10][31] - The company is well-positioned to maximize growth opportunities while mitigating risks, such as through wildfire legislation in Wyoming [8][29] - Management noted that the future of the Inflation Reduction Act is uncertain, but the company's strategic exposure is minimal [10][11] Other Important Information - The company has a strong liquidity position with nearly $700 million available under its revolving credit facility [17][18] - The company has a history of 55 consecutive years of dividend payments, targeting a payout ratio of 55% to 65% [18][19] Q&A Session Summary Question: Can you elaborate on the electric rate case and the request for rehearing? - Management confirmed an increase in new annual revenue of about half a million and is reviewing the decision for potential next steps [33][34][36] Question: What is the outlook for the franchise agreement in Pueblo? - Management expressed satisfaction with the recent vote to keep the franchise agreement and emphasized the importance of affordability and economic development in the area [37][39][40] Question: Can you discuss the timing of equity needs and the lower levels expected in the future? - Management clarified that equity issuance is based on timing of capital projects and maintaining credit metrics, with expectations for lower equity needs in 2026 and beyond [42][45] Question: What is the status of wildfire mitigation efforts in Colorado and South Dakota? - Management anticipates similar outcomes in Colorado and South Dakota as seen in Wyoming, with ongoing legislative efforts [48][49] Question: Is there interest in capital light strategies in South Dakota? - Management noted continued interest from large customers in Colorado and South Dakota, with potential for customized tariffs based on customer needs [56][57] Question: How are insurance costs being handled in Colorado? - Management indicated that insurance cost recovery will be rolled into rate reviews in Colorado, similar to the approach taken in Wyoming [62]

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