Financial Performance - The company reported Q3 revenue of $272 million, flat compared to the prior year, with record aftermarket parts revenue up 6% to $188.4 million [6][12][17] - Adjusted EBITDA was $58 million with a margin of 21.4%, while GAAP EPS decreased 12% to $2.35 and adjusted EPS decreased 9% to $2.59 [6][17][18] - Cash flow from operations was $47 million and free cash flow was $44 million, demonstrating strong business model resilience [6][18] Business Segment Performance - Flow control segment revenue decreased 3% to $94 million, with aftermarket parts revenue up 5% [7][8] - Industrial processing segment revenue decreased 4% to $106 million, with aftermarket parts revenue at a record $81 million, representing 76% of total revenue [8][9] - Material handling segment revenue increased 11% to a record $70 million, driven by an 18% increase in capital shipments [9][10] Market Conditions - Market demand for capital equipment remains sluggish, but there is increasing activity anticipated in Q4 [5][10] - Capital project orders have been delayed, with many expected to push into 2026 due to administrative processes [23][30] Company Strategy and Industry Competition - The company is focused on enhancing operational efficiencies through initiatives like the 80/20 performance enhancement program [88] - Recent acquisitions, including Clyde Industries, are expected to contribute positively to future revenue and operational capabilities [9][24][88] Management Commentary - Management expressed optimism about future capital orders, despite current delays, and noted that economic headwinds are still a concern [7][30] - The company is monitoring tariff impacts and is actively seeking alternative suppliers to mitigate cost pressures [23][24] Other Important Information - The company increased its full-year revenue guidance to $1.036 billion to $1.046 billion, reflecting the impact of recent acquisitions [24] - SG&A expenses as a percentage of revenue increased to 27.9% in Q3, attributed to various factors including acquisition-related costs [16][17] Q&A Session Summary Question: What is the percentage of aftermarket parts revenue for each segment? - Flow control: 74% current quarter vs. 70% prior year; Industrial processing: 76% vs. 67%; Material handling: 52% vs. 55% [28] Question: Can you clarify the situation with capital bookings being pushed to 2026? - Management indicated that several projects are in late stages but may not be booked until administrative requirements are met [30] Question: How are tariffs affecting capital equipment demand? - Management noted that while conditions have improved, uncertainty remains, impacting customer decision-making [33][34] Question: What is the expected contribution from recent acquisitions? - Clyde Industries and Babini are anticipated to contribute approximately $23 to $25 million in revenue combined for Q4 [57] Question: What is the backlog status? - The company ended Q3 with a backlog of $273 million, with capital orders making up about 60% of that [72]