Financial Data and Key Metrics Changes - The company reported a 2% increase in sales year-over-year, reaching $760 million, with organic constant currency sales consistent with the prior year [24][25] - Gross margin improved by 165 basis points to 41.6%, while operating margin expanded by 390 basis points to 10.7% [25] - Earnings per share (EPS) surged by 240% compared to the previous year, reaching $0.07, primarily driven by higher margins and lower interest expenses due to significant debt reduction [25][26] Business Line Data and Key Metrics Changes - The intimate apparel category faced a mid-teens decline, while other segments showed growth: Basics grew low single digits, Active grew mid single digits, and new businesses, including scrubs and loungewear, increased by 60% [10][11] - Operating margin expansion was supported by cost restructuring actions, with approximately 60% of the margin improvement coming from lower selling, general and administrative (SG&A) expenses [11][12] Market Data and Key Metrics Changes - International sales increased by 4% on an organic constant currency basis, driven by growth in Australia and Asia, while U.S. sales decreased by 1% [10] - The U.S. market accounts for roughly 75% of sales, with two-thirds of those being basic products, which typically perform better in tough economic conditions [13][28] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes cost reductions, pricing actions, and leveraging strong retailer relationships to capture new revenue opportunities [6][7] - The management emphasized the importance of their diversified supply chain and the ability to shift production to mitigate tariff impacts, with zero exposure to China [15][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in mitigating tariff impacts and highlighted that the current tariff environment presents both challenges and opportunities [16][30] - The company expects continued margin expansion and operating profit growth in the second quarter, with sales projected at approximately $970 million [27][30] Other Important Information - The company reduced over $1 billion in debt last year, which contributed to lower interest expenses and improved financial health [9][26] - The company has a strong asset base and competitive advantages that position it well for future growth and shareholder returns [22][31] Q&A Session Summary Question: Can you elaborate on the effective tariff rate and revenue opportunities? - Management stated they can fully mitigate tariff headwinds, with tariffs not expected to impact until Q4, and emphasized their proactive approach to managing costs and pricing [34][36] Question: What are you seeing in the market regarding inventory management and competitor pricing? - Management noted that retailers are managing inventory tightly and there haven't been significant price moves in the market, but they are prepared for strategic pricing actions [49][54] Question: What is the outlook for the women's business and market share? - Management clarified that the weakness is primarily in the intimate apparel category, which is typical in tough economic environments, but they are optimistic about growth in other segments [58][63]

Financial Data and Key Metrics Changes - Consolidated sales for Q1 2025 were $455.2 million, a year-over-year decrease of 1% [14] - Fully diluted earnings per share were $0.67 for Q1 2025, down from $0.70 in Q1 2024 [14] - Gross profit was $163.9 million, slightly up from $163.6 million in the prior year, with a gross margin of 36%, an improvement of 50 basis points [15] - Operating income was $44.1 million, down 8% from $47.9 million in the prior year, with an operating margin of 9.7% [15][16] Business Line Data and Key Metrics Changes - Water Systems segment sales in the U.S. and Canada were up 2%, with groundwater pumping equipment sales increasing by 6% and water treatment products by 7% [17] - Distribution segment sales decreased by 3% to $141.9 million, primarily due to lower volumes and commodity price declines [19] - Energy Systems segment sales increased by 8% to $66.8 million, with operating income rising to $21.9 million and an operating margin of 32.8% [20][21] Market Data and Key Metrics Changes - Water Systems sales outside the U.S. and Canada decreased by 2%, impacted by a 5% decline due to foreign currency translation [18] - The Energy Systems segment recorded growth across key product lines, supported by robust demand in the U.S. energy sector [11] Company Strategy and Development Direction - The company is focused on faster-growing markets, operational efficiency, and integrating recent acquisitions to enhance customer service [6][7] - Strategic acquisitions in Q1 2025 included PumpEng and Barnsley, aimed at expanding product offerings and market reach [28] - The company is committed to innovation and new product development, with a focus on high-growth verticals [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying business fundamentals despite challenges from tariffs and one-time costs [7][10] - The company is adjusting the lower end of its EPS guidance by $0.10, while maintaining full-year sales expectations [24] - Management noted that the business is largely in region for region, which historically tends to be resilient even during economic softness [29] Other Important Information - The effective tax rate for the quarter was 25%, up from 22% in the prior year, impacting EPS by approximately $0.03 [22] - The company ended Q1 2025 with a cash balance of $84 million and used $19.5 million in net cash flows from operating activities [23] Q&A Session Summary Question: Insights on the energy segment margins - Management indicated that while margins are strong, they do not expect the same growth as in previous quarters but anticipate maintaining strong margins due to smarter solutions and effective cost management [34] Question: Order trends in the water segment - Management believes the order growth is organic and not significantly influenced by tariff pull-forward, with selective inventory positioning to mitigate potential tariff impacts [35][36] Question: M&A priorities in the distribution segment - Management remains open to M&A opportunities in the distribution space but is currently focused on operational efficiencies and serving the market [39][40] Question: Tariff exposure and groundwater business performance - Management stated that the overall percentage of COGS from China is under 10%, and groundwater sales in North America showed strong growth, with residential sales up 11% and agricultural sales up 3% [48][51] Question: Organic book to bill ratio in water - The organic book to bill ratio was above one for the quarter, with backlog up mid to high single digits [57]