Financial Performance - The company reported Q1 earnings per share of $0.83 on sales of $1.2 billion, with a return on invested capital of 15% [7][24] - Total net sales decreased by 4.9% year-over-year, or 3.6% at constant exchange rates, with organic sales excluding ESG declining by 25% [24][26] - The operating margin for the Environmental Solutions segment was 19.4%, while the overall operating margin was 9.1%, reflecting a decline of 350 basis points year-over-year [25][31] Business Line Performance - Aerials segment sales were $450 million, with operating margins slightly improving sequentially but down from the previous year [27] - Materials Processing (MP) sales were $382 million, maintaining double-digit margins despite lower volume due to cost reduction actions [29] - Environmental Solutions (ES) generated approximately $400 million in sales, representing a third of total sales, with strong performance attributed to record throughput [31] Market Data - Approximately 75% of the company's 2025 U.S. machine sales are expected to come from products manufactured in the U.S., enhancing resilience against tariffs [9][10] - The company noted a generally weak economic environment in Europe but sees potential growth in infrastructure spending in the medium to long term [17] Company Strategy and Industry Competition - The company is focused on integrating ESG into its operations, expecting to deliver over $25 million in operational synergies by the end of 2026 [18][19] - The company aims to maintain price-cost neutrality while mitigating tariff impacts through supply chain adjustments and strategic sourcing [14][53] Management Commentary on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, highlighting the need to navigate macroeconomic uncertainties and potential tariff impacts [36][37] - The full-year sales outlook remains between $5.3 billion and $5.5 billion, with expectations of a significant increase in free cash flow compared to 2024 [37][39] Other Important Information - The company ended Q1 with $1.1 billion in liquidity and plans to deleverage in the second half of the year [33] - The current backlog stands at $2.6 billion, up 13% sequentially, indicating strong demand across segments [35] Q&A Session Summary Question: Can you expand on the margin outlook for Environmental Solutions? - Management indicated that strong Q1 performance was driven by increased sales and favorable factory adoption, but expects moderation in margins going forward due to one-off factors and increased expenses [46][47][116] Question: How are you handling orders in the current tariff environment? - The company is in full mitigation mode, having pulled forward material and implemented surcharges where necessary, while maintaining price-cost neutrality as a priority [52][53] Question: What is the impact of tariffs on your manufacturing footprint? - The company highlighted that a significant portion of its products are manufactured in the U.S., providing a competitive advantage in the current tariff landscape [63][64] Question: Can you provide insights on the backlog growth in Materials Processing? - Management noted that the backlog growth is consistent with historical patterns and driven by healthy fleet utilization and replacement demand in North America [120][121]