Financial Data and Key Metrics Changes - Total revenue for the fourth quarter was $759.9 million, a 12% decrease from $852.1 million in the prior year period [18] - Gross profit for the fourth quarter was $51 million, down from $141 million in the prior year, resulting in a gross profit margin of 6.7% [18] - Adjusted net loss for the fourth quarter was $44.9 million or $1.98 per diluted share, compared to a net income of $24 million or $1.05 per diluted share in the prior year [20][24] - Total revenue for fiscal year 2025 was $2.7 billion, down from $2.8 billion in fiscal year 2024 [24] Business Line Data and Key Metrics Changes - Agriculture segment sales decreased by 13.8% to $534.7 million, with same store sales declining by 15.5% [20] - Construction segment same store sales decreased by 5.5% to $94.6 million, maintaining an equipment margin above 10% [21] - European segment sales increased by 6.1% to $65.4 million, with a same store sales increase of 5.7% [23] - Australia segment sales were $65.3 million, down from $69.8 million in the prior year, driven by a same store sales decrease of 6.5% [23] Market Data and Key Metrics Changes - North American large ag equipment demand is expected to decline by approximately 30% year-over-year [11] - European operations were impacted by lower commodity prices and high interest rates, with expectations for modest revenue growth in FY 2026 [12] - Australian operations faced challenges due to weather conditions, leading to lower profitability and restricted demand in FY 2026 [12] Company Strategy and Development Direction - The company is focusing on inventory optimization and reducing aged inventory while investing in new equipment categories [9][27] - The strategy includes enhancing operational efficiency and maintaining a strong customer care strategy to drive recurring revenue from parts and service [15][16] - The company anticipates a gradual improvement in equipment margins as it optimizes its product mix throughout fiscal year 2026 [33] Management's Comments on Operating Environment and Future Outlook - Management noted that while market headwinds are expected to persist, improvements made during fiscal year 2025 position the company to navigate the current cycle effectively [16] - The company is monitoring government assistance programs and their potential impact on farmer purchasing decisions amid tariff uncertainties [47][50] - Management expressed cautious optimism regarding the construction segment's long-term outlook, supported by federal infrastructure initiatives [14] Other Important Information - The company achieved a significant inventory reduction of $419 million since peaking in the second quarter of fiscal year 2025 [26] - The adjusted debt to tangible net worth ratio was 1.8 times as of January 31, 2025, well below the bank covenant of 3.5 times [25] Q&A Session Summary Question: Service margin performance - Management expects equipment margin to increase year-over-year, attributing past inefficiencies to the transition to a new ERP system [42] Question: Inventory reduction methods - The company primarily reduced inventory through its dealer network, with some units auctioned as necessary [44] Question: Impact of tariffs on business - Management is closely monitoring tariffs and their potential impact on demand, noting that government payments could help bolster farmer operations [47][50] Question: Government assistance comparison to previous years - Management highlighted differences in the current situation compared to past government assistance periods, noting potential positive impacts depending on how negotiations unfold [56][58] Question: Optimal inventory levels - Management indicated that the targeted inventory reduction is based on current demand expectations, with flexibility to adjust as needed [64][66] Question: SG&A guidance for fiscal year 2026 - The midpoint of guidance for SG&A expenses is approximately $380 million, reflecting a decrease from fiscal year 2025 [76] Question: Floor plan payable interest levels - Interest-bearing debt under the floor plan was approximately $385 million, with expectations to reduce this significantly in the coming year [84][86]