Image source: The Motley Fool. Friday, July 25, 2025 at 3:00 p.m. ET Call participants Chairman, President, and CEO — Mark A. Klein Executive Vice President and CFO — Anthony R. Cosentino Executive Vice President, Chief Lending Officer — Steven J. Walz For analyst quotes or media inquiries, email [email protected] Takeaways Net income: Net income was $3.9 million, with diluted EPS (GAAP) of $0.60, representing an increase of nearly 28% compared to Q2 2024. Adjusted EPS: $0.58 adjusted EPS, factoring in serv ...

Core Insights - Utz Brands reported Q2 2025 GAAP revenue of $366.7 million, exceeding analyst expectations by $4.57 million, while Non-GAAP earnings per share were $0.17, missing estimates by $0.01 [1][2] - The company experienced a 2.9% year-over-year increase in GAAP revenue, driven by a 5.4% organic growth in branded salty snacks, which represent 88% of total sales [5][6] - Despite revenue growth, escalating costs constrained margins, leading to a significant 60.2% decline in net income compared to the previous year [2][7] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.17, down 10.5% from $0.19 in Q2 2024 [2] - Adjusted EBITDA decreased by 2.0% to $48.7 million, while adjusted gross profit margin improved to 39.8%, up 2.2 percentage points year-over-year [2][7] - Selling, distribution, and administrative costs rose to $119.5 million, representing 32.6% of sales, up from 29.4% in Q2 2024 [7] Business Strategy - The company focuses on geographic expansion and investment in its "Power Four" product families, aiming to enhance operational efficiency and distribution [4][5] - Utz's retail sales increased by 3.3% in a category that saw a 1.5% decline, indicating strong consumer demand for its branded products [6] - The company is consolidating its supply network, closing a facility in Grand Rapids, Michigan, to drive productivity savings [8] Future Outlook - Management raised the organic net sales growth forecast for FY2025 to at least 2.5%, while adjusting the adjusted EBITDA growth guidance to a range of 7% to 10% [11] - The outlook for adjusted earnings per share was lowered to 7% to 10% growth due to increased capital expenditures and rising interest expenses [11] - The company aims to reduce its net leverage ratio to around 3 times by the end of FY2025, down from 4.1 times currently [12]

Financial Data and Key Metrics Changes - The company reported a 16% growth in revenue for the combined brokerage and risk management segments, with 5.4% organic growth and a reported net earnings margin of 17.3% [5] - Adjusted EBITDAC margin increased by 307 basis points year-over-year to 34.5%, with adjusted EBITDAC growth of 26% [5] - GAAP earnings per share were $2.11, while adjusted earnings per share were $2.95 [5] Segment Data and Key Metrics Changes - The Brokerage segment experienced a reported revenue growth of 17% and organic growth of 5.3%, with adjusted EBITDAC margin expanding by 334 basis points to 36.4% [6][24] - The Risk Management segment, Gallagher Bassett, saw a revenue growth of 9% with organic growth of 6.2% and an adjusted EBITDAC margin of 21% [16][28] Market Data and Key Metrics Changes - In the global property and casualty (PC) insurance market, property renewal premiums decreased by 7%, while casualty lines increased by 8% overall [10][11] - For clients generating less than $100,000 in revenue, renewal premiums were up 3%, while those generating more than $100,000 saw a decrease of 2% [11] Company Strategy and Development Direction - The company aims to maintain its competitive edge through niche expertise, extensive data analytics, and global resources [16] - The full-year 2025 brokerage segment organic growth is projected to be in the range of 6.5% to 7.5% [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning despite market headwinds, noting solid client business activity and no signs of a significant economic downturn [14] - The company anticipates continued job growth in the U.S., albeit at a slower pace than in 2024, and is prepared to guide employers through challenges in health insurance [15] Other Important Information - The company completed nine new mergers in the second quarter, representing approximately $290 million in estimated annualized revenue, with a pipeline of around 40 term sheets signed or being prepared [18][19] - The company has about $14 billion in available cash and no outstanding borrowings, positioning it well for further M&A activities [35] Q&A Session Summary Question: Timing of HSR information submission to DOJ - Management confirmed they have completed responding to the DOJ's second request and are optimistic about closing the transaction in the third quarter [39] Question: Outlook for brokerage growth in the second half - Management indicated that the 5% brokerage outlook assumes continued pricing trends and potential benefits from the benefits business being pushed to the back half of the year [40][41] Question: Property pricing trends and guidance - Management clarified that they did not incorporate a 20-30% decrease in property pricing into their guidance, stating that the reported numbers are not reflective of such declines [46][47] Question: M&A activity and integration planning - Management expressed confidence in the integration of Assured Partners, stating they are ready to proceed with integration planning despite previous suspensions of some work streams [71][73] Question: Casualty line pricing expectations - Management noted that casualty rates are expected to continue increasing, with specific lines such as general liability and commercial auto showing steady growth [81] Question: E&S market trends - Management acknowledged an increase in submissions and growth in the excess and surplus market, indicating a mixed but generally positive outlook [88]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported $1 billion in orders, a 16% increase overall and a 13% increase organically, driven by strong performance across all businesses and acquisitions [7] - Quarterly revenue exceeded $970 million, up 7% overall and 4% organically, with all segments contributing [7] - Operating income grew more than twice the organic sales growth rate, and operating margin expanded over 100 basis points excluding M&A impacts [7] - Adjusted EPS grew by 10% or 16% when excluding the WorldVerlin divestiture [8] - Free cash flow reached $214 million year-to-date, with a free cash flow margin of 14% in Q2 [9] Business Line Data and Key Metrics Changes - Industrial Process (IP) orders grew by 22%, with notable strength in Gulps Pumps and Svanohoi, where orders exceeded their full year 2024 revenue in the first half of 2025 [10] - Connect and Control (CCT) saw a 9% organic growth driven by Defense and Commercial Aerospace, with total orders increasing by 36% [11] - Motion Technologies (MT) Friction team won 49 new electrified platform awards, with Friction OE growing 7% organically [12][13] - IP revenue grew 5% organically, while CCT grew 4% organically, and MT Friction OE outperformed global auto production by over 500 basis points [24][26] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.1, resulting in an ending backlog of nearly $2 billion, up 34% year-over-year and 9% sequentially [13] - The automotive market production was up 2.6% in Q2, with expectations for the full year to be flat or slightly positive [42] - The company outperformed in all three regions (Europe, China, North America) and across all powertrain types (internal combustion, hybrid, EV) [43] Company Strategy and Development Direction - The company focuses on organic growth and margin expansion, complemented by M&A activities [6] - The 2030 financial targets include more than 5% organic revenue growth and approximately 10% total growth annually, with margins expected to reach 23% [22] - The company is actively pursuing acquisition targets, with a disciplined framework for deal selection and integration [21][82] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year adjusted EPS outlook to $6.45, reflecting strong first-half performance and improved visibility for the second half [16][31] - The company expects continued growth in the Project business in IP, firm demand in Aerospace and Defense, and outperformance in Friction OE and Rail [31] - Management noted that the funnel remains healthy, with only minor shifts in order timing, indicating confidence in future performance [40] Other Important Information - The company repurchased $500 million of shares year-to-date, reducing the weighted average share count by 3% [9] - The estimated gross tariff costs for 2025 have been reduced to approximately $25 million, half of the previous estimate, with no material impact expected [32][122] Q&A Session Summary Question: Thoughts on capital equipment and project hesitancy - Management noted strong order performance with only minor shifts in timing, indicating no major concerns in the market [39][40] Question: Auto landscape outlook - The automotive production forecast for 2025 is slightly positive, with the company outperforming across all regions and powertrain types [42][43] Question: CCT orders and market growth - CCT orders grew significantly, driven by aerospace and defense, with strong share gains noted [52][54] Question: FX impact on Motion Technologies margins - The depreciation of the dollar against the euro has negatively impacted transaction margins, despite positive translation effects [56] Question: Strength in Svanahoy business - The outperformance is attributed to strong execution and product differentiation, with expectations for continued growth [63][65] Question: Pricing actions and tariff exposure - The company has successfully mitigated tariff impacts through pricing and productivity actions, with no material income impact expected [122]

Financial Performance - VSE achieved record revenue of $272 million in Q2 2025, a 41% increase year-over-year, driven by strong performance in aviation distribution and MRO businesses [16][18] - Adjusted EBITDA increased by 52% to $43 million, with an adjusted EBITDA margin of 16%, reflecting a 110 basis point improvement from the prior year [16][18] - Adjusted net income reached $20 million, with adjusted net income per diluted share of $0.97, marking increases of 149% and 106% respectively [16][19] Business Segment Performance - Aviation segment revenue also increased by 41% to $272 million, with distribution revenue up 50% and MRO revenue up 27% [20] - Organic revenue growth in the aviation segment was approximately 13% when excluding recent acquisitions [20] - The company is focusing on higher margin product lines, leading to a reduction in less profitable used serviceable material (USM) revenue by about 20% on a run rate basis [11][20] Market Environment - The aviation aftermarket showed resilience, with a rebound in activity in May and June after initial softness due to tariff uncertainties [15] - Engine-related MRO and distribution revenue now represents over 50% of total aviation revenue, indicating strong demand in this segment [15] Company Strategy and Development Direction - VSE completed the sale of its fleet segment, transitioning to a pure play aviation aftermarket company, and is now focused on higher growth and higher margin opportunities [6][25] - The company is prioritizing integration of recent acquisitions, including Turbine Weld and Kaelstrom, to unlock efficiencies and enhance customer value [26] - VSE is also capturing cost synergies from acquisitions, with $4 million in identified cost savings already being realized [12][26] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in continued strength in the aviation aftermarket, particularly in the engine segment, and anticipates revenue growth of 35% to 40% for the full year 2025 [22][15] - The company is raising its full-year adjusted EBITDA margin guidance to 16.5% to 17%, reflecting a higher margin product mix [22] Other Important Information - VSE secured a new $700 million credit facility, providing financial flexibility to support growth initiatives [7] - The company generated approximately $6 million in free cash flow during the quarter, an improvement of about $28 million compared to the previous year [24] Q&A Session Summary Question: Can you discuss organic growth expectations for the second half of the year? - Management indicated that organic growth is expected to be in the low to mid-teens, with engine markets outperforming component markets [32][34] Question: What are the synergies from recent acquisitions? - Management noted that synergies from Kaelstrom are being realized ahead of schedule, contributing to strong margins [36][62] Question: How sustainable is the free cash flow generation? - Management expects strong improvement in free cash flow in the second half of the year, driven by better working capital management [42] Question: What is the strategy for the USM business? - The company is shifting the USM business to focus on higher margin product lines and integrating it with repair capabilities [45][84] Question: What are the opportunities in the hydraulics market? - Management sees potential in the hydraulics market, emphasizing faster turnaround times and quality in supporting OEM authorized work [73] Question: What is the outlook for engine aftermarket demand? - Management believes that engine aftermarket demand will continue to outpace component demand in the near to mid-term due to supply chain constraints [77]

Financial Performance - HII reported Q2 2025 consolidated revenue of $3082 million, a 3.5% increase compared to $2977 million in Q2 2024[19] - The company's Q2 2025 segment operating income was $172 million, a 15.3% decrease from $203 million in Q2 2024[23] - Free cash flow for Q2 2025 was $730 million, significantly higher than the negative $99 million in Q2 2024[26] - Capital expenditures in Q2 2025 were $93 million, representing 3.0% of revenues[27] Segment Performance - Newport News Shipbuilding's revenue increased by 4.4% to $1603 million in Q2 2025[19] - Ingalls Shipbuilding's revenue increased by 1.7% to $724 million in Q2 2025[19] - Mission Technologies revenue increased by 3.4% to $791 million in Q2 2025[19] Future Outlook - HII reaffirms its 2025 segment revenue and operating margin guidance[31] - The company is increasing its 2025 free cash flow guidance to between $500 million and $600 million[31] - Shipbuilding revenue for FY25 is projected to be between $8.9 billion and $9.1 billion, with an operating margin between 5.5% and 6.5%[32] - Mission Technologies revenue for FY25 is expected to be between $2.9 billion and $3.1 billion, with an operating margin between 4.0% and 4.5%[32]

Core Insights - WuXi AppTec reported strong 1H25 results with significant revenue and net profit growth, margin expansion, and effective execution in its core CRDMO platform [1] - The company raised its full-year revenue and free cash flow guidance due to rising backlog and sustained global demand [1] Financial Performance - Revenue from continuing operations reached RMB20.4 billion, up 24.2% YoY, while adjusted non-IFRS net profit rose 44.4% YoY to RMB6.3 billion, with gross profit margin (GPM) at 44.5% and net profit margin (NPM) at 30.4% [2] - Backlog increased to RMB56.7 billion, reflecting a 37.2% YoY growth, indicating healthy demand despite a normalization from 47% YoY growth in Q1 [2] Segment Performance - The TIDES segment (oligonucleotides and peptides) was a standout performer, with 1H revenue up 142% YoY to RMB5.0 billion, and a backlog increase of 48.8% YoY [3] - The Chemistry segment also showed solid growth, with a 33.5% YoY increase to RMB16.3 billion, driven by strong demand in small molecule CRDMO [3] Other Segments - WuXi Biology grew 7.1% YoY to RMB1.25 billion, although gross margin slightly declined due to pricing pressure [4] - Testing revenue declined 1.2% YoY, and Clinical CRO & SMO revenue dropped 4.7% YoY, reflecting challenges in early-stage biotech funding and clinical trial outsourcing [4] Guidance Update - Full-year 2025 revenue guidance was raised to RMB42.5-43.5 billion, implying 13-17% growth in continuing operations, and free cash flow guidance increased to RMB5-6 billion [5]

Second Quarter 2025 Financial Performance - Net sales increased by 3% to $1,461.6 million compared to the second quarter of 2024[27, 28] - Gross profit increased by 4% to $531.4 million, with gross margin improving 30 basis points to 36.4%[25, 27] - Net income attributable to SiteOne increased 7% to $129.0 million[25, 27] - Adjusted EBITDA increased 8% to $226.7 million, and the margin improved 60 basis points to 15.5%[25, 27] - Acquired sales contributed $40.9 million, representing 3% to the overall growth rate[29] Balance Sheet and Cash Flow - Working capital increased to $1,061.7 million[30] - Cash provided by operating activities was $136.7 million[30] - Share repurchases amounted to $54.3 million[25, 30] - Net debt was $531.6 million, with a leverage ratio of 1.3x Net debt / Adjusted EBITDA[30] Acquisitions and Growth Strategy - The company acquired Grove Nursery and Nashville Nursery[24] - Green Trade Nursery acquisition was completed[25] - Full year Adjusted EBITDA is expected to be in the range of $400 million to $430 million[44]

July 30, 2025 Second Quarter 2025 Earnings Click Here to Edit Title Cautionary Statement Click Here to Edit Title Cautionary Statement Under the Private Securities Litigation Reform Act; Non-GAAP Measures This presentation contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements may relate to, among other things, the Company's third quarter 2025 and full year 2025 outlook including expected organic sales, expected earnings ...

Financial Data and Key Metrics Changes - The company reported revenue of €3.7 billion for the first half of 2025, representing a year-over-year increase of 7% on a reported basis and 10.1% on a like-for-like basis at constant currency [9][38] - Adjusted EBITDA reached €876 million, a significant increase of 12.7% on a reported basis and 20.1% on a like-for-like basis at constant currency [10][39] - Free cash flow improved by nearly €200 million year-over-year, reaching €182 million higher than the previous year [10][40] - The leverage ratio improved to 4.2 times, the lowest in five years, reflecting strong cash flow generation and deleveraging efforts [11][39] Business Line Data and Key Metrics Changes - Biopharma reported growth of 8.2% on a reported basis and nearly 12% on a like-for-like basis, driven by strong demand for immunoglobulin products [14][42] - The albumin segment grew close to 10%, recovering from a temporary impact in Q1 due to a drug license renewal process in China [20] - Alpha-one and Specialty Proteins revenue grew 6.6% at constant currency, reaffirming market leadership [21] Market Data and Key Metrics Changes - The immunoglobulin franchise saw a growth of 12.5% on a reported basis, with a remarkable 17.8% growth on a like-for-like basis [18] - The diagnostics business reported a 2.8% growth at constant currency, with all major segments showing performance growth [32] Company Strategy and Development Direction - The company is focused on executing its value creation plan, which emphasizes commercial growth, margin expansion, and pipeline execution [8][12] - Innovation remains a core driver, with upcoming product launches such as fibrinogen in Europe and the U.S. [12][30] - The company is committed to improving profitability through targeted cost reduction initiatives and operational efficiencies [11][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex and dynamic environment, including foreign exchange volatility and external uncertainties, but expressed confidence in the company's ability to adapt [6][63] - The strong performance in the first half of the year supports the expectation of continued positive results in the second half [13][64] - The company reaffirmed its full-year guidance for 2025, despite macroeconomic challenges [58][64] Other Important Information - The successful delisting of BioTest is expected to unlock value from this strategic asset [13] - The company announced a €0.15 per share interim dividend, marking the first dividend payment in over four years [53][54] Q&A Session Summary Question: Free cash flow and dividend reinstatement - The management confirmed that lower interest costs are a factor in the raised free cash flow target, but not the sole driver for reinstating the dividend, which aligns with the capital allocation framework [67][69] Question: Albumin market outlook - Management indicated that pricing pressure in China is due to government efforts to reduce healthcare costs, but they are well-positioned with local partnerships to navigate these challenges [70][71] Question: IG trends and CIDP share loss - Management noted that the deceleration in IG growth is influenced by currency impacts and emphasized that IG remains the standard of care in CIDP, with continued growth expected [75][76] Question: EBITDA guidance and cash flow phasing - Management acknowledged that FX uncertainties impact EBITDA guidance but reaffirmed confidence in the overall performance, expecting stronger cash flows in H2 [88]