Financial Data and Key Metrics Changes - Contract sales grew by 10% in 2025, marking the highest growth since 2022, with Adjusted EBITDA reaching $1.15 billion, a 4% increase year-over-year [6][16] - Total revenue before cost reimbursements for the quarter increased by 1% to $1.3 billion, while Adjusted EBITDA to shareholders grew by 12% to $324 million, with margins of 26%, up 250 basis points from the prior year [18] - Adjusted free cash flow for the year was $756 million, or over $8.25 per share, with 79% of that cash flow returned to shareholders through share repurchases [17][26] Business Line Data and Key Metrics Changes - In the real estate business, contract sales for the quarter grew by 2% to $852 million, with tours up 9% year-over-year to 225,000 [18][19] - The financing business reported revenues of $134 million and profit of $81 million, with margins of 60% [20] - The resort and club business saw revenue growth of 6% to $219 million for the quarter, with segment profit of $160 million and margins of 73% [24] Market Data and Key Metrics Changes - The company surpassed pro forma consolidated 2019 tour flow levels for the first time, indicating a recovery in market demand [11][18] - The annualized default rate for consolidated portfolios improved to 9.86%, reflecting a 24 basis point improvement from the previous quarter [21] - The weighted average interest rate for originated loans was 14.6%, with combined gross receivables for the quarter at $4.3 billion [20][21] Company Strategy and Development Direction - The company is focused on four strategic priorities: attracting new customers cost-effectively, enhancing member lifetime value, product evolution and innovation, and driving operational excellence [10][12] - The introduction of HGV Max has significantly increased the lifetime value of Max members by over 20% compared to non-Max members [12] - The company aims to maintain capital returns as the primary use of free cash flow, with a commitment to repurchase approximately $150 million of shares per quarter [27][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a stable consumer environment where travel remains a priority, carrying significant momentum into 2026 [9] - The guidance for 2026 anticipates low single-digit contract sales growth and mid-single-digit EBITDA growth, with expectations for strong cash flow conversion [28][30] - Management highlighted the importance of operational excellence and cost management as key drivers for future performance [14][15] Other Important Information - The company achieved $100 million in cost synergies from the Bluegreen acquisition ahead of schedule [16] - The company is undergoing a rebranding process for Bluegreen resorts, with plans for additional rebrands in the coming years [15] - The liquidity position as of December 31 was over $1 billion, consisting of $239 million in unrestricted cash and $809 million available under the revolving credit facility [31] Q&A Session Summary Question: Quarterly cadence expectations for 1Q and beyond - Management indicated high single-digit growth in tour flow for Q1, with a slight decline in VPG due to tough comparisons from the previous year [34][38] Question: Clarification on loan loss provision increase - Management explained that the increase in loan loss provision was due to upgrades to legacy Bluegreen owners and changes in underwriting processes that require more capital upfront [41][42] Question: Thoughts on excess inventory and potential asset streamlining - Management acknowledged the need to optimize the portfolio and indicated that some acquired properties may not align with long-term goals, but further details will be provided later [49][50] Question: Philosophy around share buybacks - Management confirmed a commitment to a $150 million quarterly buyback, emphasizing a preference to maintain current leverage levels rather than increasing them for repurchases [54][56] Question: Sales force effectiveness and strategic changes - Management expressed satisfaction with the sales force's performance and noted ongoing efforts to improve capabilities across a broader range of markets [66][68]

Financial Data and Key Metrics Changes - Consolidated revenue for the quarter was $700 million, down 9% year over year, but in line with expectations [10][19] - Adjusted earnings per share (EPS) was $0.56, down 19% year over year, consistent with expectations due to lower starting backlog [10][20] - Adjusted EBITDA was $97 million, a decrease of 15% year over year, with a consolidated adjusted EBITDA margin of 13.7%, down 110 basis points compared to the prior year [19][20] Business Line Data and Key Metrics Changes - Advanced Process Solutions (APS) revenue was $511 million, down 10% year over year, with adjusted EBITDA of $83 million, a decrease of 14% [21][22] - Molding Technology Solutions (MTS) revenue was $196 million, down 5% year over year, with adjusted EBITDA of $27 million, a decrease of 15% [23][24] - Backlog for APS was $1.6 billion, down 17% year over year, while MTS backlog increased 1% to $233 million [22][24] Market Data and Key Metrics Changes - North America and Europe markets remain sluggish, particularly in automotive, while Asia shows stability with growth in India [15][24] - Customer quote pipelines remain healthy, especially in India and Saudi Arabia, despite global macroeconomic uncertainty [12][36] Company Strategy and Development Direction - The company is focused on transforming its portfolio towards higher margin, higher growth, and less cyclical industrial leaders [6][8] - The sale of a 51% stake in Milacron for $287 million is part of this transformation, allowing the company to concentrate on core business and enhance shareholder value [6][26] - The company aims to maximize shareholder value by deleveraging and enhancing its margin profile [8][25] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth strategy despite ongoing macroeconomic pressures [17][31] - The company anticipates continued softness in North America and Europe in the near term, with expectations for improved performance as order decision timing normalizes [15][31] - Management remains optimistic about the potential for future returns from the Milacron business under Bain Capital's ownership [9][68] Other Important Information - The company expects to close the Milacron transaction by the end of the fiscal second quarter or early in the third quarter, with net proceeds used for debt pay down [26][27] - Updated fiscal year guidance reflects approximately $2.63 billion to $2.8 billion in revenue and adjusted EBITDA of $411 million to $447 million [28][29] Q&A Session Questions and Answers Question: What do customers need to see to move from quoting to placing orders? - Management indicated that geopolitical factors and clarity on interest rates are significant concerns for customers before making major investments [36] Question: What percentage of revenue does aftermarket represent and what is the outlook? - Aftermarket orders were close to 40% of total orders for the quarter, with expectations for continued improvement throughout the year [39][40] Question: What drove the decision to sell a majority stake in Milacron rather than a full divestiture? - The decision was based on a regular review of assets to determine the best return for shareholders, allowing Milacron to pursue growth opportunities while focusing on core businesses [54][55] Question: What are the expected EBITDA margins and free cash flow conversion capabilities post-divestiture? - Expected EBITDA margins for MTS are projected to be in the mid-20s, with a target of 100% free cash flow conversion in the medium term [58][73]