Financial Data and Key Metrics Changes - Company reported Q1 fiscal 2026 earnings of $0.70 per share, up from $0.48 per share in the prior year quarter, with adjusted earnings at $0.74 per share compared to $0.50 per share last year [10][11] - Consolidated sales for the quarter were $304 million, an 18% increase from $257 million in the prior year quarter, driven by higher volumes in the building product segment and the inclusion of Elgin Manufacturing [10][11] - Gross margin improved to 27.1% from 24.3% year-over-year, despite a $2.2 million purchase accounting charge related to Elgin [4][11] Business Line Data and Key Metrics Changes - Consumer products sales in Q1 were $119 million, up 1% year-over-year, with adjusted EBITDA of $16 million and a margin of 13.6%, down from $18 million and 15.1% last year [15] - Building products sales grew 32% year-over-year to $185 million, with adjusted EBITDA of $58 million and a margin of 31.3%, compared to $40 million and 28.4% in Q1 last year [16][17] Market Data and Key Metrics Changes - The consumer environment remains cautious, with demand closely correlated to point-of-sale activities, while the building products segment showed strength in cooling and construction products [15][16] - Elgin Manufacturing contributed $21 million in sales for Q1, enhancing the company's position in commercial HVAC [16][17] Company Strategy and Development Direction - Company is focused on building a sustainable growth platform through innovation, transformation, and acquisitions, with recent product launches driving market share growth [6][7] - The acquisition of Elgin Manufacturing is seen as a strategic move to enhance capabilities in commercial HVAC and broaden market reach [7][76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds such as cautious consumer behavior and high interest rates but expressed confidence in the company's growth trajectory and ability to capture market opportunities [5][8] - The company is optimistic about future performance, believing that its best days are ahead despite ongoing challenges in various end markets [8][9] Other Important Information - The company invested $13 million in capital expenditures during the quarter, with $9 million related to facility modernization projects [12][14] - The board declared a quarterly dividend of $0.19 per share payable in December 2025 [14] Q&A Session Summary Question: What drove the margin in the building product segment? - Management indicated that solid execution in normalized markets and growth in heating, cooking, and cooling products contributed to improved margins, with expectations of reaching 12-13% over time [22][23] Question: What are the drivers for WAVE's outperformance? - WAVE continues to perform well, driven by strong end markets in education, healthcare, and transportation, with expectations of steady performance moving forward [25] Question: How is the company addressing tariff impacts? - Management noted that tariffs have created complexities, but being a domestic manufacturer provides a competitive edge, allowing for better pricing strategies [26][28] Question: What is the outlook for the M&A pipeline? - The company remains optimistic about M&A opportunities, focusing on high-margin, low-asset intensity businesses in niche markets [49][50] Question: How does seasonality affect the business? - Management explained that Q1 and Q2 are typically weaker due to seasonality, with expectations for stronger performance in Q3 and Q4 [90]

Financial Data and Key Metrics Changes - Company reported Q1 fiscal 2026 earnings of $0.70 per share, up from $0.48 per share in the prior year quarter, with adjusted earnings at $0.74 per share compared to $0.50 per share last year [10][11] - Consolidated sales for the quarter were $304 million, an 18% increase from $257 million in the prior year quarter, driven by higher volumes in the building product segment and the inclusion of Elgin Manufacturing [10][11] - Gross margin improved to 27.1% from 24.3% year-over-year, despite a $2.2 million purchase accounting charge related to Elgin [4][11] Business Line Data and Key Metrics Changes - Consumer products segment sales were $119 million, up 1% year-over-year, with adjusted EBITDA of $16 million and a margin of 13.6%, down from 15.1% last year due to lower volumes and tariff charges [15][16] - Building products segment sales grew 32% year-over-year to $185 million, with adjusted EBITDA of $58 million and a margin of 31.3%, up from 28.4% last year, driven by higher volumes and contributions from Elgin [16][17] Market Data and Key Metrics Changes - The consumer environment remains cautious, with demand closely correlated to point-of-sale activities, while the building products segment benefited from a shift towards environmentally friendly refrigerants and increased capacity from modernization investments [16][17] - Elgin Manufacturing contributed $21 million in sales for Q1, with expectations for growth in commercial HVAC and structural framing markets [17][73] Company Strategy and Development Direction - Company is focused on building a sustainable growth platform through innovation, transformation, and acquisitions, with recent product launches contributing to market share growth [6][7] - The acquisition of Elgin Manufacturing is seen as a strategic move to enhance capabilities in commercial HVAC and broaden market reach [7][73] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds such as cautious consumer behavior and high interest rates impacting construction activity, but expressed confidence in the company's ability to grow adjusted EBITDA by 34% year-over-year [5][8] - The company remains optimistic about future growth opportunities, particularly in the commercial HVAC market, and is committed to maintaining a strong balance sheet while pursuing M&A opportunities [50][75] Other Important Information - The company invested $13 million in capital expenditures during the quarter, including $9 million for facility modernization, and returned $9 million to shareholders in dividends [12][14] - The company has approximately $35 million of modernization spend remaining, with expectations for further improvement in free cash flow conversion as capital expenditures normalize [14] Q&A Session Summary Question: What drove the margin in the building product segment? - Management indicated strong execution in normalized markets, with growth in heating, cooking, and cooling businesses contributing to improved margins [22][23] Question: What are the drivers for WAVE's outperformance? - WAVE continues to perform well, driven by strong end markets in education, healthcare, and transportation, offsetting weaknesses in office and retail [25][26] Question: How is the company addressing tariff impacts? - Management noted that tariffs have created complexities, but being a domestic manufacturer provides a competitive edge, allowing for better pricing strategies [27][28] Question: What is the outlook for ClarkDietrich? - Management expects ClarkDietrich to face challenges due to lower construction spending but remains optimistic about future recovery as infrastructure projects continue [44][46] Question: What is the M&A pipeline outlook? - The company is actively seeking high-margin, low-asset intensity businesses in niche markets, with a solid pipeline for potential acquisitions [49][50]