Financial Data and Key Metrics Changes - Net sales for the quarter reached $7.6 billion, an increase of 4.3% year-over-year, driven by organic growth of 5% and acquisition growth of 1%, despite a 1.7% negative impact from one fewer sales day and foreign exchange [6][16][19] - Gross margin improved to 31%, up 50 basis points year-over-year, attributed to actions taken to capture value and moderating deflation [6][18] - Operating profit increased by 6.1% to $715 million, with an operating margin of 9.4%, expanding by 20 basis points [19][22] - Diluted earnings per share rose by 7.8% to $2.5, supported by operating profit growth and share repurchases [7][19] Performance by Business Lines - HVAC customer group saw a strong growth of 10% in the quarter, primarily due to focused investments and expansion efforts [10][13] - Waterworks revenue grew by 12%, driven by public works and municipal activities, reflecting diversification efforts [11][14] - Residential trade plumbing revenues declined by 1%, consistent with recent trends, facing challenges in new construction [10][12] Performance by Markets - In the U.S., net sales grew by 4.5%, with non-residential revenue growth of approximately 7% driven by large capital projects [8][21] - Canadian net sales were down 0.3%, with organic growth of 3% offset by foreign exchange impacts [21] Company Strategy and Industry Competition - The company continues to invest in key growth areas, including HVAC, Waterworks diversification, and large capital projects, while streamlining operations to enhance efficiency [29][30] - The launch of Ferguson Home aims to provide a seamless omnichannel experience, integrating showroom and digital channels [15][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite a dynamic and uncertain environment, with expectations for low to mid single-digit revenue growth for the full year [7][27] - The company anticipates continued strong performance in the fourth quarter, supported by solid bidding activity and market share gains [62][63] Other Important Information - The company completed three acquisitions during the quarter, enhancing its market position and capabilities [25] - A nonrecurring business restructuring charge of $68 million was incurred, expected to yield approximately $100 million in annualized cost savings [19][72] Q&A Session Summary Question: How much of the organic volume growth is attributed to internal initiatives versus market improvement? - Management indicated that the 5% organic growth is largely due to internal initiatives, particularly in the non-residential sector, and they expect the market to improve in the coming years [33][34] Question: What factors contributed to the strong gross margin of 31%? - Management noted that the strong gross margin was due to actions taken in pricing strategy and moderating deflation, with expectations to maintain margins above 30% in the fourth quarter [36][37] Question: How is bidding activity progressing in the commercial industrial sector? - Management reported strong bidding activity, particularly in data centers, and expressed optimism about the growth in large capital projects [42][43] Question: How is the company managing price increases in the current tariff environment? - Management emphasized their pricing strategy focuses on value rather than just price, and they are working closely with suppliers to manage costs effectively [44][45] Question: Can you provide insights on the Waterworks segment's growth and bidding activity? - Management highlighted strong growth in Waterworks, particularly in public works, and noted supportive bidding activity in residential new construction [55][56] Question: What is the outlook for HVAC growth and branch conversions? - Management stated that the majority of HVAC growth is organic, with ongoing counter conversions to enhance service for dual trade contractors [67][69] Question: How will the restructuring program impact future operations? - Management indicated that the restructuring is largely complete, with expected annualized savings and improved operational efficiency moving forward [72][73]

Summary of the Conference Call for Yizhi Konjac Company Overview - **Company**: Yizhi Konjac - **Industry**: Konjac products, including konjac powder, konjac food, and related applications Key Points and Arguments 1. **Revenue Performance**: In Q1, Yizhi Konjac's konjac powder revenue remained flat year-on-year, while overseas markets grew over 60% due to higher cost acceptance from international clients and expansion into animal nutrition and health products [2][16] 2. **Konjac Food Segment Growth**: The konjac food segment saw significant growth with a year-on-year increase of 87%, driven by rapid market expansion and strong performance from the marketing team. The OEM business grew by 96%, with major contributions from clients like Weilong, Three Squirrels, and Mixue Ice City [2][4][7] 3. **Partnership with Kudi Coffee**: The company partnered with Kudi Coffee to supply konjac balls, although Kudi is not an exclusive buyer. The profit margin for these products is low due to strict cost control from downstream clients and intense market competition [2][10][11] 4. **Raw Material Cost Pressure**: Rising raw material prices have put pressure on profit margins. The company began using high-priced raw materials in Q1, with a lag in price transmission to downstream clients. The overseas market has seen smoother price transmission compared to the domestic market, which remains cautious [2][18] 5. **Strategies to Mitigate Margin Pressure**: The company is employing various strategies to address margin pressure, including developing new products (e.g., konjac balls, plant-based shrimp), expanding the customer base, increasing the sales proportion of konjac ingredients, and pushing for price transmission [2][18] 6. **Prepaid Accounts and Contract Liabilities**: Prepaid accounts increased by 75%, primarily for konjac purchases from Southeast Asia. Contract liabilities grew by 95%, mainly due to pre-received payments for konjac powder, with overseas orders being processed faster than domestic ones [5][24] 7. **Market Outlook for Konjac Food**: The konjac food market is expected to continue its explosive growth, with increasing consumer recognition of its health benefits. The company plans to focus on this sector over the next one to two years [21] 8. **OEM Client Expansion**: New OEM clients include Jin Zai, with significant contributions from established clients like Weilong and Three Squirrels. The company is also in discussions with other potential clients [7][9] 9. **Impact of Government Subsidies**: Government subsidies vary annually, typically ranging from 5 million to 10 million yuan. The company anticipates higher subsidies this year due to significant investments in projects [30] 10. **Raw Material Supply and Pricing Trends**: The price gap between yellow and flower konjac has narrowed from 30% to under 10%, with both maintaining high price levels. The company expects procurement costs to remain high this year [23][38] Additional Important Insights - **Seasonal Sales Trends**: Historical data indicates that konjac ball sales peak in Q2 and Q3 due to increased demand for fruit tea in warmer weather [11] - **New Product Development**: The company plans to launch new tea drink ingredients, focusing on taste and form variations while maintaining similar application scenarios [12] - **Market Dynamics**: The konjac food industry is experiencing a shift, with larger manufacturers building their production lines, potentially affecting the OEM market share [20][37] - **Future Capacity Plans**: The company aims to fully utilize konjac powder production capacity by June 2025, with a target of 10,200 tons [17] This summary encapsulates the key insights from the conference call, highlighting the company's performance, market dynamics, and strategic initiatives in the konjac industry.