Financial Data and Key Metrics Changes - The company reported a 11% organic sales growth year over year, with total sales reaching $455 million in Q3 [4][9] - Adjusted EBITDA grew 16% to $122 million, with EBITDA margins expanding 120 basis points to 26.8%, marking the highest quarterly margins since the Elkay merger [4][10] - Free cash flow for the quarter was $94 million, contributing to a year-to-date total of $135 million in share repurchases, representing about 3.8% of total shares outstanding [4][11] Business Line Data and Key Metrics Changes - The non-residential market remains positive, while the residential market continues to experience softness [9] - Incremental demand of approximately $8 million was shipped in Q3 due to customers ordering ahead of a pricing action [9][10] - The company has seen solid unit growth across almost all core categories, with no significant changes from previous quarters [38] Market Data and Key Metrics Changes - The Dodge Momentum Index, Architectural Billing Index, and Construction Backlogs are key indicators for future non-residential construction spending [16][19] - The company expects the market outlook for 2026 to resemble that of 2025, with low growth anticipated [5][26] - The company is over-indexed to stable segments within non-residential construction, particularly in education and healthcare [25] Company Strategy and Development Direction - The company aims to leverage internal growth initiatives and competitive advantages to drive organic growth [6][30] - There is a focus on expanding into adjacent markets with innovative products while maintaining a strong core business [30] - The company has refreshed its share buyback program to $500 million and raised its dividend by 22% [4][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the current tariff environment and maintain price-cost positivity [32][68] - The company raised its full-year estimates for growth, profitability, and cash flow, projecting core sales growth of approximately 8% for the full year [31] - Management noted that the tariff costs for 2025 are expected to be approximately $50 million, slightly higher than previous estimates [32] Other Important Information - The company completed its U.S. pension plan termination, eliminating approximately $200 million in liabilities [11][12] - Sustainability initiatives have advanced, with significant contributions to cleaner drinking water and reduced plastic waste [13][14] Q&A Session Summary Question: Divergence in growth rates across product categories - Management noted that almost all core categories are experiencing solid unit growth, with no significant changes expected as they head into Q4 [38] Question: Update on Elkay Pro Filtration and LIV EZ line - The Elkay Pro Filtration system has seen strong uptake, and the LIV EZ line is expected to tap into a small market with good growth potential [40][42] Question: Volume expectations for the back half of the year - Management indicated that good volume growth is expected, with some pull forward in Q3 offset by weakness in the residential market [47][48] Question: Capital allocation priorities - The company continues to generate significant free cash flow, focusing on reducing leverage, investing in core business, and evaluating stock value for share repurchases [53] Question: M&A funnel and market opportunities - The M&A funnel has seen modest growth, with a focus on returns on invested capital rather than specific valuations [59] Question: Aspirations for residential drinking water - Management characterized the appetite for residential filtration as low, viewing the LIV EZ product as an extension rather than a significant market entry [62] Question: Consistent strong margin results - Management highlighted consistent margin expansion since the Elkay merger, with a new baseline for margins established [66] Question: Navigating the tariff environment - The company has proactively moved manufacturing out of China, positioning itself well to manage tariff impacts [68]

Group 1 - The CEO of Robinhood, Vlad Tenev, is actively seeking all merger and acquisition opportunities [2] - The company sees growth opportunities for its business on a global scale [2] - Robinhood plans to launch banking products in the third quarter [2]

Financial Data and Key Metrics Changes - Net sales increased by 4.6% to $346.6 million, primarily driven by $22 million of inorganic sales from the acquisition of UW Solutions [12] - Adjusted EBITDA margin decreased to 9.9%, primarily due to a less favorable mix and higher aluminum costs [13] - Adjusted diluted EPS declined to $0.56, driven by lower adjusted EBITDA, higher interest expense, and a higher adjusted effective tax rate [13] Business Line Data and Key Metrics Changes - Metals segment net sales declined by 3.4%, with adjusted EBITDA margin decreasing to 7.3% due to a less favorable mix and higher aluminum costs [13] - Services segment achieved a 7.6% increase in net sales, marking its fifth consecutive quarter of growth, although adjusted EBITDA margin decreased to 5.7% due to higher tariff expenses [14] - Glass segment net sales declined, with adjusted EBITDA margin moderating from elevated levels due to reduced volume from lower end market demand [14] - Performance Surfaces segment saw increased net sales driven by inorganic contributions from UW Solutions, with adjusted EBITDA margin declining to 18.8% [14] Market Data and Key Metrics Changes - The revenue pipeline for Glass is improving, positioning the segment for growth beginning in Q3 and into Q4 [8] - Metals showed solid sequential improvement from Q4, with expectations for continued improvement in Q2 [8][41] Company Strategy and Development Direction - The company is focusing on operational improvements and tariff mitigation efforts, with aggressive actions under Project Fortify expected to drive annualized savings of $13 million to $15 million [7][10] - The company is actively pursuing M&A opportunities to diversify its business mix and enhance growth prospects [11][18] Management's Comments on Operating Environment and Future Outlook - Management raised the fiscal year outlook for net sales and adjusted diluted EPS, expecting a strong second half driven by Performance Surfaces and improved glass results [11][19] - Management acknowledged ongoing market challenges but emphasized a focus on controllable factors to improve outlook [10] Other Important Information - The company expects net sales for the fiscal year to be in the range of $1.4 billion to $1.44 billion, with adjusted diluted EPS between $3.8 and $4.2 [16] - The unfavorable EPS impact from tariffs is estimated to be $0.35 to $0.45, primarily affecting the first half of the fiscal year [16] Q&A Session Summary Question: Can you elaborate on the glass business and the revenue pipeline? - Management noted good visibility six months out and mentioned a pivot to smaller jobs to fill gaps in market softness, with increasing confidence in quote activity and award rates [24][25] Question: What are the segment margin targets for different business groups? - Management indicated that metals and services face headwinds from tariffs, and while they may struggle to reach the bottom of their target ranges, they expect improvement in the second half [30][31] Question: What is driving the sequential improvement in the metals segment? - Management highlighted operational improvements and regaining customer confidence as key factors driving month-to-month sequential improvement [41][43] Question: What is the status of Project Fortify Phase two? - Management confirmed minimal savings in Q1, with more significant savings expected to materialize in Q2 [48] Question: Can you quantify the EPS impact from tariffs in Q1? - Management stated that the impact was initially estimated at $0.45 to $0.55, but has been revised to $0.35 to $0.45 for the full year, with favorable trends noted in Q1 [49][50]