Core Viewpoint - Doman Building Materials Group Ltd. reported strong financial results for Q2 2025, with record revenues driven by acquisitions and robust market demand despite challenges in the North American housing market [2][3][7]. Financial Performance - Consolidated revenues for Q2 2025 reached $886.7 million, up from $689.8 million in Q2 2024, marking a significant increase of approximately 28.5% [3][4]. - Gross margin dollars increased to $142.7 million in Q2 2025, compared to $108.1 million in Q2 2024, with gross margin percentage rising to 16.1% from 15.7% [4][8]. - EBITDA for Q2 2025 was $80.0 million, a substantial increase from $50.2 million in Q2 2024, while Adjusted EBITDA also rose to $80.0 million from $50.6 million [4][6]. - Net earnings for the quarter were $27.7 million, compared to $17.0 million in the same period of 2024, reflecting a year-over-year increase of approximately 62.4% [4][8]. Dividend Declaration - The Company declared a quarterly dividend of $0.14 per share, which was paid on July 15, 2025, to shareholders of record as of June 30, 2025 [5][19]. Year-to-Date Performance - For the six-month period ended June 30, 2025, Doman generated EBITDA and Adjusted EBITDA of $150.1 million on revenues of $1.68 billion, compared to $95.0 million and $96.2 million on revenues of $1.29 billion in the same period of 2024 [6][8]. - Gross margin for the first half of 2025 was $275.2 million, with a gross margin percentage of 16.4%, compared to $208.5 million and 16.1% in the first half of 2024 [6][8]. - Net earnings for the six-month period were $51.2 million, up from $31.4 million in the comparative period of 2024, indicating a year-over-year increase of approximately 63.2% [6][8]. Market Context - The Chairman of the Board noted that despite challenges such as cooling housing demand, high mortgage rates, and tariff uncertainties, the Company remains resilient and focused on long-term value creation and balance sheet optimization [7].

Financial Data and Key Metrics Changes - The company reported approximately $120 million in quarterly adjusted EBITDA, an increase from $102 million in the same period of 2024, indicating a year-over-year growth of approximately 17.6% [12] - Distributable cash flow as adjusted was $73 million, with a DCF coverage ratio of approximately 1.22 times, expected to rise as growth projects contribute to results [13] - The full-year EBITDA guidance remains between $480 million to $520 million [12][15] Business Line Data and Key Metrics Changes - For the Gathering and Processing segment, adjusted EBITDA was $78 million compared to $55 million in 2024, primarily due to acquisitions [13] - Wholesale Marketing and Terminalling adjusted EBITDA decreased to $23 million from $30 million in the prior year, attributed to last summer's agreements [13] - Storage and transportation adjusted EBITDA remained stable at $17 million, while investments in pipeline joint ventures contributed $11 million, up from $8 million in 2024 [13] Market Data and Key Metrics Changes - The company is focused on enhancing its competitive position in both Midland and Delaware Basins through water acquisitions and increased dedication [5] - The integration of two water gathering systems is progressing well, expected to enhance crude and water offerings in specific counties [11] Company Strategy and Development Direction - The company aims to strengthen its position as a premier full-service provider in the Permian Basin, with ongoing efforts in acid gas injection and sour gas handling capabilities [4][5] - The successful commissioning of the new Libbey plant is expected to fill to capacity in 2025, contributing to future growth [4][8] - The company intends to remain prudent in managing leverage and coverage while rewarding stakeholders through leading distributions, with a recent increase to $1.115 per unit [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the EBITDA guidance despite commodity price volatility, citing strong relationships with producers and low breakeven costs in the area [36][38] - The company is optimistic about the uptick in crude volumes for Q3, indicating a strong start to the second half of the year [37] Other Important Information - The capital expenditures for the second quarter were approximately $119 million, with $115 million allocated to growth projects, including the completion of the Libbey II gas processing plant [15] - The company has increased its liquidity by $700 million through a high-yield notes offering, bringing total availability to over $1 billion [12] Q&A Session Summary Question: Trends in processing plant volumes and potential expansions - Management confirmed that the commissioning of the plant was completed on time and is currently flowing gas, expecting to reach full capacity by year-end [20][21] Question: Competitive environment for sour gas treating capacity - Management acknowledged the recent asset transactions in the Delaware Basin and emphasized their comprehensive strategy around natural gas, which includes gathering, treating, and processing [24][26] Question: M&A opportunities and market outlook - Management stated that any M&A activity would need to be free cash flow accretive and align with their strategy, while also being open to both acquisition and divestiture opportunities [32][34] Question: Producer plans and guidance outlook - Management reiterated confidence in their guidance, citing strong relationships with producers and favorable conditions in the Permian Basin [36][38]

Financial Data and Key Metrics Changes - The total net income for Q2 2025 was ARS 40.3 billion, a decline from ARS 119.7 billion in the same quarter of 2024, primarily due to a negative variation of ARS 76 billion in financial results [7][8][13] - EBITDA for the natural gas transportation segment decreased to ARS 85.6 billion from ARS 118.2 billion in Q2 2024, reflecting a reduction of ARS 32 billion [9][10] - EBITDA for the liquids business fell over 50% to ARS 25.3 billion compared to ARS 52.6 billion in Q2 2024, largely due to extraordinary expenses from a flood [10][11] Business Line Data and Key Metrics Changes - The natural gas transportation segment's EBITDA decreased by ARS 32 billion, attributed to transitional tariff adjustments and inflation impacts [9][10] - The liquids segment's EBITDA decline was influenced by ARS 16.6 billion in extraordinary expenses from the March flood and a decrease in sales volume from 250,000 metric tons to 211,000 metric tons [10][11] - Midstream and other services saw an increase in EBITDA to ARS 52 billion from ARS 41.5 billion in 2024, driven by higher sales from increased natural gas transportation volumes [12] Market Data and Key Metrics Changes - The average natural gas transportation volume rose from 25 million permits per day in 2024 to 30 million in Q2 2025, while natural gas conditioning volume increased from 16 million to 27 million cubic meters per day [12] - The price of natural gas increased from ARS 2.9 to ARS 3.3 per million ETU, impacting EBITDA negatively [11] Company Strategy and Development Direction - The company is focused on expanding its transportation capacity, with a bid submitted for the Perito Moreno pipeline expansion project, which is expected to be awarded on October 13, 2025 [5][6] - The company has received a 20-year extension of its license, enhancing its operational stability and long-term planning [6] Management's Comments on Operating Environment and Future Outlook - Management noted that the monthly tariff adjustments will help mitigate some inflation impacts, but the overall operating expenses have increased due to the tariff revision process [30] - The company expects to generate ARS 300 million annually from the regulated EBITDA after the tariff process is completed, contingent on inflation rates in Argentina [41] Other Important Information - The company reported a cash position decrease of 33% to ARS 676 billion, with EBITDA generation during Q2 amounting to ARS 163 billion [14] - A dividend payment of ARS 200 billion was approved and paid in June 2025 [7] Q&A Session Summary Question: Confirmation of impairment related to the climate event - Management confirmed an impact of ARS 16.6 billion due to extraordinary expenses from the flood [18] Question: Update on the NCL project timeline - Management is evaluating costs and expects results by September [20] Question: Sustainability of current EBITDA levels - Management indicated that the midstream services segment is expected to continue growing [22] Question: Recovery of profitability in the liquids segment - Full operations resumed on May 7, and management expects improved performance moving forward [24] Question: Increase in general costs - Management explained that the tariff revision process has led to higher operational costs compared to the previous year [26] Question: Status of insurance claims related to the flood - Insurance assessments are ongoing, with expectations for compensation numbers in two to four months [28] Question: Outlook for the regulated transportation segment - Management stated that future revenues will depend on the level of monthly adjustments based on inflation and wholesale price indices [30] Question: Perito Moreno pipeline tender status - Management confirmed they are the only bidder and expect the contract to be awarded on October 13 [32] Question: Financial investment decision timing - Discussions with gas producers are ongoing, with potential project advancement expected by the end of the year [33] Question: Total cost of maintenance due to the flood - Estimated total costs are around ARS 40 million for all expenses and asset impairments [34] Question: Amount received for ship or pay contract compensation - Management confirmed an amount of ARS 7 million received [35] Question: Deterioration of account receivable for the regulated transportation segment - The issue was attributed to a specific marketer, with 50% of the bad debt recovered [37] Question: CapEx for the Perito Moreno pipeline expansion - Management indicated a CapEx of around ARS 500 million for the project [38] Question: Financing for the GPM pipeline project - Management expects to finance imports of around ARS 70 million and use internal cash for the project [42]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the second quarter reached $165 million, a 2% year-over-year increase [24] - Adjusted earnings per share also hit a record of $1.92, marking a 4% year-over-year increase [25] - Global rooms increased by 3% year-over-year, with total worldwide rooms growing by 2.1% [25][28] - Domestic RevPAR declined approximately 1.6% year-over-year, while overall RevPAR decreased by 2.9% [28] Business Line Data and Key Metrics Changes - Domestic extended stay room system size grew by 10% year-over-year, with a 7% increase in domestic openings [25] - The Comfort brand saw a 50% increase in global openings and a 23% year-over-year increase in domestic franchise agreements [26] - The upscale portfolio, including the Send Hotel Collection, reached over 65,000 rooms worldwide, with a 29% year-over-year increase in domestic franchise agreements awarded [27] Market Data and Key Metrics Changes - International business achieved a 10% growth in adjusted EBITDA, with a 5% expansion in the rooms portfolio year-over-year [5] - The EMEA region saw a 7% increase in room count, reaching over 63,000 rooms [9] - In Canada, the lodging market is projected to grow at an average annual rate of over 5% over the next five years, reaching over $50 billion in total revenues by 2030 [8] Company Strategy and Development Direction - The company is focusing on expanding its global footprint through acquisitions and partnerships, including the acquisition of the remaining 50% interest in Choice Hotels Canada [6][32] - The strategy includes transitioning to a fully direct franchising model in Canada, allowing for a broader product offering across 22 brands [7] - The company aims to enhance its portfolio by exiting underperforming hotels and focusing on more revenue-intensive segments [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing growth in international markets and the potential for increased market share [6] - The company anticipates continued growth in the extended stay segment, which has shown resilience during uncertain economic times [11] - Despite macroeconomic challenges, management remains confident in the long-term outlook, driven by strategic investments and a focus on higher revenue-generating hotels [23][34] Other Important Information - The company achieved a record second quarter adjusted EBITDA despite a weaker RevPAR environment [24] - The effective royalty rate increased by eight basis points year-over-year, contributing to revenue growth [30] - The company returned $137 million to shareholders year-to-date, including $27 million in cash dividends and $110 million in share repurchases [32] Q&A Session Summary Question: How does the company decide on direct versus master franchise in different markets? - The decision is based on market fundamentals, including the ability of small business owners to aggregate capital and the regulatory environment [37][40] Question: What is the growth outlook for Canada? - The dynamics around development and hotel openings in Canada are similar to the U.S., with a healthy growth rate of 5% expected [44][46] Question: What is the long-term expectation for international EBITDA? - International EBITDA is currently about 6% of total EBITDA, with significant growth opportunities anticipated [50][53] Question: What current trends are impacting RevPAR expectations? - The company is experiencing softness in international inbound and government travel, affecting RevPAR guidance [60][61] Question: Are there any significant loans to be aware of? - The company clarified that loans made were not to competitive brands and are primarily for launching new brands [67][70] Question: What is the current status of the global net system rooms? - The guidance for global net system rooms is for 1% growth this year, with strategic terminations of underperforming properties factored in [73][75] Question: How is the company managing the balance between occupancy and rate? - The company is focused on maintaining occupancy share gains, which is crucial for future rate increases [84][86]

Financial Data and Key Metrics Changes - The company reported a total net income of ARS 40.3 billion for Q2 2025, a decline from ARS 119.7 billion in the same quarter of 2024, primarily due to a negative variation of ARS 76 billion in financial results [8][9][14] - EBITDA for the natural gas transportation business decreased to ARS 85.6 billion in Q2 2025 from ARS 118.2 billion in Q2 2024, attributed to transitional tariff adjustments and inflation [10][11] - The cash position decreased by 33% to ARS 676 billion, equivalent to approximately EUR 565 million [15] Business Line Data and Key Metrics Changes - EBITDA for the liquids business fell over 50% to ARS 25.3 billion in Q2 2025 from ARS 52.6 billion in Q2 2024, impacted by extraordinary expenses from a flood and reduced sales volume [11][12] - The midstream and other services segment saw EBITDA rise to ARS 52 billion compared to ARS 41.5 billion in 2024, driven by increased natural gas transportation volumes [13] Market Data and Key Metrics Changes - The natural gas transportation volume increased from an average of 25 million permits per day in 2024 to 30 million in Q2 2025, while natural gas conditioning volume rose from 16 million to 27 million cubic meters per day [13] Company Strategy and Development Direction - The company is focused on expanding its transportation capacity through a project to enhance the Perito Moreno pipeline, with a bid submitted and a contract expected to be awarded by October 13, 2025 [6][7][34] - The company has received a 20-year extension of its license, allowing for continued operations and capacity commercialization [7] Management's Comments on Operating Environment and Future Outlook - Management noted that the monthly tariff adjustments will help mitigate the impact of inflation on revenues, although operating expenses have increased due to the tariff revision process [28][33] - The company expects regulated EBITDA to reach ARS 300 million annually post-tariff adjustments, contingent on inflation rates in Argentina [43] Other Important Information - The company approved a dividend payment of ARS 200 billion, equivalent to approximately ARS 170 million, paid on June 11, 2025 [8] - Extraordinary expenses of ARS 16.6 billion were incurred due to the flood event on March 7, 2025, with expectations of insurance recovery [12][20] Q&A Session Summary Question: Confirmation of impairment related to the climate event - Management confirmed an impact of ARS 16.6 billion due to extraordinary expenses from the flood [20] Question: Update on the NCL project timeline - Management is evaluating costs and expects results by September [21][22] Question: Sustainability of current EBITDA levels - Management indicated that midstream services are expected to continue growing [23][24] Question: Recovery of profitability in the liquids segment - Full operations resumed on May 7, 2025, with expectations for improved performance [25][26] Question: Details on increased costs - Management noted that tariff revisions began in April, affecting operational costs [27][28] Question: Status of insurance claims related to the flood - Insurance assessments are ongoing, with expectations for compensation in two to four months [29][30] Question: Outlook for the regulated transportation segment - Future revenues will depend on the level of monthly inflation adjustments [32][33] Question: Financial investment decision timing for projects - Discussions with gas producers are ongoing, with potential decisions expected by the end of the year [35] Question: Total cost of maintenance due to the flood - Estimated total costs are around $40 million [36] Question: Amount received for ship or pay contract compensation - The amount received was $7 million [37] Question: Deterioration of account receivables - The issue was related to a specific marketer, with partial cash recovery expected [39] Question: CapEx for the Perito Moreno pipeline - Estimated CapEx is around $500 million for the expansion project [40] Question: Financing for the GPM pipeline project - The project is expected to be financed through a mix of cash and potential debt [44]

Core Insights - MPLX LP reported Q2 2025 earnings of $1.03 per unit, missing the Zacks Consensus Estimate of $1.07, and down from $1.15 in the prior year [2] - Total quarterly revenues were $3 billion, below the Zacks Consensus Estimate of $3.2 billion, and decreased from $3.1 billion year-over-year [2] - The weak results were primarily due to decreased gathering throughput volumes and increased operating expenses [2] Segmental Highlights - MPLX has redefined its reporting segments to Crude Oil and Products Logistics and Natural Gas and NGL Services [3] - Adjusted EBITDA from the Crude Oil and Products Logistics segment increased to $1.14 billion, up from $1.1 billion a year ago, driven by higher rates and increased throughputs [4] - Total pipeline throughputs were 6.1 million barrels per day, a 1% increase from 6.02 million barrels per day in the prior year [4] - Adjusted EBITDA from the Natural Gas and NGL Services segment was $552 million, slightly below $554 million in the year-ago quarter, impacted by higher operating expenses and project spending [5] - Gathering throughput volumes averaged 6.56 billion cubic feet per day, a 1% decrease from the prior year, while natural gas processed volumes totaled 9.7 Bcf/d, indicating a 2% improvement [5] Costs and Expenses - Total costs and expenses were $1.71 billion, up from $1.63 billion in the previous year, primarily due to higher operating expenses [6] Cash Flow - Distributable cash flow totaled $1.42 billion, providing 1.5x distribution coverage, an increase from $1.4 billion in the year-ago quarter [7] - Adjusted free cash flow declined to $1.13 billion from $1.45 billion in Q2 2024 [7] Balance Sheet - As of June 30, 2025, MPLX had cash and cash equivalents of $1.4 billion and total debt of $21.2 billion [8]

Financial Data and Key Metrics Changes - The company achieved record high EBITDA of $106 million in Q2 2025, with a last twelve months EBITDA of $344 million, benefiting from stable cash costs and higher gold prices [7][31] - Net revenues increased to $190 million in Q2 2025, reflecting a significant rise due to increased production and gold prices [31] - Net profit for the quarter was reported at $8 million, with adjusted net income reaching $37 million [9][33] Business Line Data and Key Metrics Changes - Gold equivalent production for Q2 was 64,000 ounces, an increase from 60,000 ounces in Q1 2025, and consistent with the same period last year [6][19] - Copper production contributed approximately 20% to revenues, with adjustments made for gold equivalent calculations based on copper sales [7][8] - The adjusted EBITDA contributions from various business units included Aranzazoo and Minos at $36 million and $34 million respectively, while Almas contributed $25 million [35] Market Data and Key Metrics Changes - The average gold price for the last twelve months was approximately $2,800, with current prices hovering around $3,400, indicating potential for further EBITDA improvement [7][31] - The company is experiencing stable all-in sustaining cash costs at BRL $1,449 million, consistent with previous quarters and last year when adjusted for constant prices [22][24] Company Strategy and Development Direction - The company is focused on three strategic avenues: delivering greenfield projects on time and budget, increasing exploration investments, and pursuing M&A opportunities [15][96] - Recent acquisitions include Bluestone and MSG, with plans to ramp up production at Borborema and Herradorada, expected to contribute significantly to future output [10][12] - The company aims to improve its market multiple by increasing production and addressing trading volume through its NASDAQ listing [13][100] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about production increases in the second half of the year, particularly with Borborema expected to reach commercial production by September [11][73] - The company is actively engaging with local communities and authorities in Guatemala to ensure smooth project development [44][47] - Management highlighted the importance of maintaining safety standards, with over 1,000 days without lost time incidents during construction [17] Other Important Information - The company announced a dividend of $0.33 per share, resulting in a last twelve months dividend yield of 7.4% [16] - The IPO on NASDAQ is seen as a strategic move to enhance liquidity and market presence [14][96] Q&A Session Summary Question: What is the timeline for the final investment decision between Matupa and Guatemala? - Management expects to make a decision by the end of the year, contingent on social licensing progress in Guatemala [44][49] Question: What are the first impressions from site visits to MSG and opportunities for improvement? - Initial assessments indicate potential for increased production and reduced costs through equipment upgrades and operational efficiencies [46][50] Question: Is there space for additional M&A given the stronger cash position? - The company remains open to M&A opportunities while focusing on current projects, with a cautious approach to ensure accretive acquisitions [54][60] Question: What is the expected production and sales level for Borborema in Q3 and Q4? - The company anticipates reaching around 80% capacity by September, with plans to achieve full capacity by the end of the year [71][73] Question: What is the cash impact from gold hedges in the coming quarters? - The company has hedged approximately 80% of projected production from Borborema, with varying impacts expected in the second semester [72][78]

Core Viewpoint - Total Energy Services Inc. reported record financial results for the second quarter of 2025, driven by increased activity in Australia and strong demand in North America, despite declines in U.S. drilling and completion activity [2][18]. Financial Highlights - Revenue for the three months ended June 30, 2025, was $250.4 million, a 17% increase from $213.3 million in 2024. For the six months, revenue rose 20% to $502.3 million from $418.0 million [2]. - Operating income increased by 53% to $22.3 million in Q2 2025 from $14.6 million in Q2 2024, and for the six months, it rose 32% to $48.4 million [2]. - EBITDA for Q2 2025 was $45.4 million, up 21% from $37.4 million in Q2 2024, while for the six months, it increased 19% to $95.9 million [2]. - Net income attributable to shareholders for Q2 2025 was $17.1 million, an 11% increase from $15.5 million in Q2 2024, and for the six months, it rose 17% to $36.1 million [2]. Segment Performance Contract Drilling Services (CDS) - Revenue for CDS in Q2 2025 was $71.2 million, a 5% increase from $67.9 million in Q2 2024. For the six months, revenue rose 9% to $162.3 million [5]. - EBITDA for CDS increased by 11% to $16.0 million in Q2 2025 from $14.5 million in Q2 2024 [5]. - The segment experienced a decline in U.S. activity but was offset by increased Australian activity following the acquisition of Saxon [6]. Rentals and Transportation Services (RTS) - RTS revenue decreased by 9% to $16.2 million in Q2 2025 from $17.8 million in Q2 2024, with a 2% decline for the six months [7]. - EBITDA for RTS fell by 8% to $5.6 million in Q2 2025 [7]. - The decline was attributed to lower industry activity and a change in the mix of equipment operating [8]. Compression and Process Services (CPS) - CPS revenue increased by 22% to $133.2 million in Q2 2025 from $109.5 million in Q2 2024, and for the six months, it rose 28% to $239.4 million [9]. - EBITDA for CPS grew by 26% to $22.2 million in Q2 2025 [9]. - The segment benefited from increased fabrication sales and parts and service activity [10]. Well Servicing (WS) - WS revenue surged by 64% to $29.8 million in Q2 2025 from $18.2 million in Q2 2024, with a 47% increase for the six months [11]. - EBITDA for WS increased by 66% to $3.5 million in Q2 2025 [11]. - The growth was driven by increased activity in Australia and Canada, offsetting declines in the U.S. [14]. Financial Position - Total assets as of June 30, 2025, were $949.9 million, a 1% increase from $937.7 million in 2024 [23]. - Long-term debt and lease liabilities increased by 37% to $108.7 million [4]. - The company reported positive working capital of $111.8 million, including $34.2 million in cash [16]. Capital Expenditures and Outlook - Total Energy executed $26.3 million in capital expenditures in Q2 2025, primarily for rig upgrades and rental equipment acquisitions [15]. - The company increased its 2025 capital expenditure budget by $19.5 million to $102.4 million, focusing on growth opportunities [19]. - The CPS segment's backlog reached a record $303.9 million, providing visibility into 2026 [18].

Financial Data and Key Metrics Changes - The company reported a Q3 EBITDA margin of 54.4%, supported by growth in the commercial aftermarket and a focus on operating strategy [13][39] - Operating cash flow for Q3 exceeded $630 million, with a cash balance of nearly $2.8 billion at the end of the quarter [13][40] - Full fiscal year 2025 sales guidance was decreased by $60 million to a midpoint of $8.79 billion, while EBITDA guidance was raised by $40 million to a midpoint of $4.725 billion, reflecting a 13% increase [14][17] Business Line Data and Key Metrics Changes - Commercial OEM revenue decreased by 7% year-over-year in Q3, attributed to lower production rates at Boeing and Airbus [25][26] - Commercial aftermarket revenue increased by approximately 6% compared to the prior year, with growth across all submarkets [28][29] - Defense market revenue grew by approximately 13% year-over-year, with healthy bookings supporting continued growth [30][31] Market Data and Key Metrics Changes - The commercial OEM market is expected to see revenue growth in the flat to low single-digit percentage range, down from previous expectations [15][16] - The commercial aftermarket and defense revenue growth guidance remains unchanged, with expectations of high single-digit to low double-digit percentage growth [16][31] - The company noted that supply chain issues remain a bottleneck for OEM production ramp-up, but improvements are being observed [28][78] Company Strategy and Development Direction - The company aims to provide private equity-like returns with the liquidity of a public market, focusing on proprietary aerospace businesses with significant aftermarket content [10][11] - Recent acquisitions, including Servotronics and Simmons Precision, align with the company's strategy to enhance its portfolio [21][22] - The company maintains a disciplined approach to capital allocation, prioritizing reinvestment in businesses and accretive M&A [23][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the commercial OEM market, despite current challenges, and expects a return to positive growth in Q4 [62][63] - The company remains focused on operational excellence and efficient cost structures to navigate uneven demand in the commercial OEM market [19][39] - Management highlighted the importance of monitoring the aerospace and capital markets for future adjustments [18] Other Important Information - The company announced leadership transitions, with Mike Lisman set to take over as CEO on October 1 [38][39] - The company is approximately 75% hedged on its total gross debt balance, providing protection against interest rate fluctuations [41][42] Q&A Session Summary Question: About the aftermarket performance and future expectations - Management indicated that the commercial aftermarket growth is in line with expectations, and they anticipate continued growth in the high single-digit to low double-digit range [47][49] Question: Visibility into fourth-quarter growth rates - Management expressed confidence in achieving the guidance for the year, with expectations for a return to positive growth in the commercial OEM segment [60][63] Question: Supply chain improvements and potential headwinds - Management noted that supply chain conditions are improving, although some issues remain, and they are hopeful for a quick resolution to any disruptions [78][81] Question: Competitive landscape and second sourcing - Management reported no significant changes in the competitive landscape regarding second sourcing or PMA competition, maintaining a strong position in the market [102][104] Question: Insights on recent acquisitions and future opportunities - Management expressed optimism about the acquisition of Simmons and the potential for more carve-outs in the aerospace and defense sector [107][108]

Financial Data and Key Metrics Changes - The company reported a nearly 27% growth in revenue for Q2 2025, with a 3.5% increase in legacy business sales, and a year-to-date growth of approximately 26% [3][4] - Adjusted EBITDA increased by $20 million, up 190 basis points to 12% [4][22] - Non-GAAP diluted earnings per share rose by 31.6% for the quarter and 47.9% year-to-date [22] Business Line Data and Key Metrics Changes - Vehicle Control segment sales increased by 6.9% in Q2, with year-to-date growth of 5.3% [17] - Temperature Control segment sales rose by 5.5% in Q2, with year-to-date growth of 12.3% [19] - Nissens Automotive contributed $90.5 million in net sales and $16.3 million in adjusted EBITDA, exceeding expectations with an 18% EBITDA margin [20][21] - Engineered Solutions segment sales declined by 8.3%, reflecting a slowdown in certain end markets [21] Market Data and Key Metrics Changes - The North American aftermarket remains stable, with strong demand for nondiscretionary products [27][28] - Nissens is outperforming the European aftermarket, gaining market share and expanding into new categories [42][44] Company Strategy and Development Direction - The company is focusing on integrating Nissens to leverage synergies and expand product offerings [10][28] - A new distribution center in Shawnee, Kansas, is expected to enhance operational efficiency and capacity [12][60] - The company is adapting to the changing tariff landscape by relocating production and implementing cost-sharing strategies with suppliers [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging economic environment, with a bullish outlook for future growth [26][28] - The updated sales guidance for the full year is now in the low 20% range, reflecting strong performance and the impact of tariffs [24][25] Other Important Information - Cash used in operations decreased to $5.9 million from $10.1 million year-over-year, indicating improved cash flow management [22] - The company plans to continue monitoring interest rates for potential refinancing opportunities [56] Q&A Session Summary Question: Pricing trends in the second half and SKU inflation assumptions - Management indicated that pricing plans are in place to cover tariff costs, with expectations for nominal increases across the offering [33] Question: Comparison of POS to sell-in and inventory builds - Vehicle Control sales were up low to mid single digits, reflecting ongoing customer expansion rather than a reaction to price increases [34][35] Question: Timing of tariff impacts and segment breakdown - Higher costs were observed in Q2 due to inventory turnover with higher tariffs, but these are expected to be offset in the second half [40][41] Question: Performance of Nissens and European aftermarket - Nissens is exceeding expectations, gaining market share and expanding into new categories, with strong performance in temperature control products [42][44] Question: Expectations for margins and efficiency post-distribution center completion - Management expects better efficiencies and cost savings from the new distribution center, although some net higher costs are anticipated initially [60][61] Question: Future tariff costs and their impact - Current tariff costs are not expected to decrease significantly, with management prepared to adapt pricing strategies as needed [63][64]