Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the Best Conservative Stocks to Buy Right Now. On March 24, the company announced that it had completed the acquisition of Clario Holdings, Inc. The consideration included $8.875 billion in cash, along with potential additional earnout as well as other payments. These are mainly dependent on performance. The Clario business is now set to be a part of Thermo Fisher Scientific Inc. (NYSE:TMO)’s Laboratory Products and Biopharma Services segment. Is Thermo F ...

Financial Data and Key Metrics Changes - The company reported a 17% adjusted net sales growth for Q4 2025, driven by metal roofing and structured acquisitions, despite challenges in the residential end market [5][7] - Adjusted operating margin was 10.8% and EBITDA margin was 13.6%, resulting in adjusted EPS of $0.76 for the quarter [7] - For the full year 2025, adjusted net sales grew by 12% to $1.14 billion, with operating and EBITDA margins of 13.3% and 16.3% respectively, leading to adjusted EPS of $3.92 [7][8] Business Line Data and Key Metrics Changes - Residential segment adjusted net sales increased by $15 million or 8.9%, primarily due to metal roofing businesses, while total segment organic growth decreased by 4% [9] - AgTech net sales grew approximately $20 million or 46.6%, driven by the Lane Supply acquisition, although organic volume decreased [13] - Infrastructure net sales increased by $4.4 million or 24.3%, with backlog decreasing by 4% due to project timing [15] Market Data and Key Metrics Changes - The U.S. residential roofing market was softer than expected in the second half of 2025, with significant inventory reduction efforts noted [10][11] - The company experienced a downshift in demand patterns due to weather events impacting contractor access [11] - AgTech backlog increased by 239%, with organic backlog growing by 187% [13] Company Strategy and Development Direction - The acquisition of OmniMax is expected to accelerate the company's strategy in the building products market, with the residential segment projected to represent over 80% of total business in 2026 [4][17] - The integration of OmniMax is focused on stabilizing the organization, establishing governance, and executing synergy capture [21][24] - The company aims to optimize its product portfolio and enhance service reliability through integration initiatives [25][28] Management's Comments on Operating Environment and Future Outlook - Management anticipates a continued soft market in the first half of 2026, with expectations for improvement in the second half [39] - The company expects to generate double-digit operating cash flow as a percentage of sales and free cash flow of approximately 8% for the year [42] - Management remains cautious about Q1 earnings due to high debt levels and acquisition-related charges [47] Other Important Information - The company completed the sale of TerraSmart's eBOS business for $70 million, with proceeds aimed at debt reduction [7][8] - The company is targeting a leverage ratio of approximately 2.5x adjusted EBITDA by the end of 2027 [48] Q&A Session Summary Question: What is the outlook for the residential market? - Management expects the residential market to remain soft in H1 2026, with potential recovery in H2, and is building plans around this market condition [53][56] Question: How will adjusted earnings be distributed throughout the year? - Management indicated that less than 20% of adjusted EPS is expected in Q1, with a more balanced distribution anticipated in H2 [58] Question: What is the status of the Arizona AgTech project? - The Arizona project has been removed from backlog due to financing delays, but the company is confident in achieving double-digit margins with other projects [82]

Q4 and Full Year 2025 Earnings Presentation February 26, 2026 © 2026 First Advantage FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements relate to matter ...

Financial Data and Key Metrics Changes - The company reported fourth quarter sales of approximately $1.4 billion, with full year sales of approximately $5.8 billion, reflecting a decrease from $6.12 billion in 2024 [6][16] - Adjusted EBITDA for the fourth quarter was $169 million, or 12.2% of sales, while for the full year it was $743 million, or 12.7% of sales, up from 12.2% in the previous year [6][7] - Adjusted earnings per share in the fourth quarter was $0.07, compared to a loss of $0.06 per share in the same quarter of 2024, and for the full year, it was $0.53 versus $0.51 in 2024 [19] Business Line Data and Key Metrics Changes - The company experienced margin improvement in both metal forming and driveline business units, focusing on operational efficiency [7][10] - The sale of the commercial vehicle axle business in India negatively impacted sales by $27 million in the fourth quarter [16] Market Data and Key Metrics Changes - North American production is expected to be approximately 15 million units in 2026, Europe at approximately 17 million units, and China at approximately 33 million units, with global production at approximately 93 million units [12] Company Strategy and Development Direction - The company aims to achieve efficient integration of the Dowlais acquisition, targeting $300 million in synergies with a focus on operational excellence and profitability [10][11] - The strategic combination is expected to enhance the product portfolio and customer base, supporting electric, hybrid, and ICE powertrains [10][14] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment due to ongoing trade policy discussions and macroeconomic factors, but remains optimistic about achieving financial targets [12][30] - The company expects to generate adjusted free cash flow of $235 million to $325 million in 2026, with a focus on margin growth and capital allocation [25][26] Other Important Information - The company has changed its name from American Axle & Manufacturing Holdings, Inc. to Dauch Corporation, reflecting its new identity post-acquisition [13][14] - The company expects to incur cash costs associated with synergy capture in the range of $100 million to $125 million for 2026 [26] Q&A Session Summary Question: What is the outlook for the two individual businesses? - Management noted that both legacy businesses are experiencing similar market conditions, with slight declines in production forecasts for North America and Europe [34][35] Question: Can you clarify the cash flow situation considering restructuring costs? - Management expects to generate positive cash flow from operations even after accounting for restructuring and synergy costs, projecting $50 million of cash flow available for debt repayment in 2026 [40] Question: Is there potential for upside in the $300 million synergies? - Management expressed confidence in achieving the $300 million synergies and indicated potential for additional savings as they assess the Dowlais plants [48][49] Question: How will Dowlais's equity income be reported? - Dowlais's equity income will be reported as equity income in the P&L, contributing approximately $65 million to $75 million to adjusted EBITDA [61]

Financial Data and Key Metrics Changes - Sales growth was approximately 20% in Q4 and 11% for the full year 2025 [4] - Adjusted EBITDA margin was approximately 25% in Q4 and 24% for the full year [4] - Adjusted EPS was $1.27 in Q4 and $4.06 for the full year [5][11] - Free cash flow conversion ratio was approximately 135% in Q4 and 94% for the full year [4][11] Business Line Data and Key Metrics Changes - CPI core sales were flat in Q4, with double-digit growth in gaming offset by softness in other markets [12] - Security and Authentication Technologies (SAT) saw core sales up approximately 11%, driven by strong performance in Crane Currency [14] - Adjusted operating margin for SAT decreased by approximately 420 basis points due to unfavorable mix and increased costs [15][16] Market Data and Key Metrics Changes - International currency business saw organic backlog up more than 30% year-over-year [7] - CPI expected to be flat year-over-year in 2026, with mid-single-digit growth in services and low single-digit decline in vending [19][51] - SAT expected to deliver high single-digit growth in U.S. currency and mid-single-digit growth in Crane Authentication [19] Company Strategy and Development Direction - Company is focused on accelerating organic revenue growth while maintaining strong margins and free cash flow [4] - Investments are being made to expand capacity in international currency to meet rising demand [25][26] - The acquisition of Antares Vision is on track, with plans to take the company private by mid-2026 [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the currency business, citing strong demand and new contract wins [5][7] - The company anticipates a challenging comparison in Q4 2026 due to strong performance in Q4 2025 [62] - Management expects to see accelerating growth throughout 2026, particularly in the second half of the year [22][52] Other Important Information - The company announced a 6% increase in its annual dividend while maintaining capacity for future acquisitions [18] - Adjusted EBITDA margin is expected to be approximately 28% in 2026, reflecting high profitability in CPI and synergy realization in Crane Authentication [21] Q&A Session Summary Question: Can you discuss the margin performance in SAT for Q4? - Management noted strong growth and backlog in international currency, emphasizing that contracts are executed from backlog, which provides visibility into 2026 [38] Question: What is the expected EPS cadence throughout the year? - Management indicated that EPS will accelerate through the first half and level off in the back half, with guidance reflecting continued strength in currency and mid-single-digit growth in authentication [41][42] Question: What are the dynamics in CPI for the first quarter? - CPI is expected to be flat in 2026, with services growing at mid-single digits and vending down in low single digits due to tariffs [51] Question: What is the status of the $10 bill onboarding? - Management is confident that the U.S. Treasury will announce the new $10 bill mid-year, with full consumer release expected in Q4 [54][80] Question: What are the drivers for faster growth in international currency? - Management identified increased counterfeiting, growth in emerging economies, and faster redesign times as key drivers for sustainable growth in international currency [67][69]

Financial Data and Key Metrics Changes - Sales growth was approximately 20% in Q4 and 11% for the full year 2025, with adjusted EBITDA margin at approximately 25% in Q4 and 24% for the full year [4][11] - Adjusted EPS was $1.27 in Q4 and $4.06 for the full year [5][11] - Free cash flow conversion ratio was approximately 135% in Q4 and 94% for the full year [4][11] Business Line Data and Key Metrics Changes - CPI core sales were flat in Q4, with double-digit growth in gaming offset by softness in other markets [12] - Security and Authentication Technologies (SAT) saw core sales up approximately 11% in Q4, driven by strong performance in Crane Currency [14] - Adjusted operating margin for SAT decreased by approximately 420 basis points due to unfavorable mix and increased costs [15] Market Data and Key Metrics Changes - International currency business showed strong performance with organic backlog up over 30% year-over-year [7][25] - CPI is expected to be flat year-over-year in 2026, with mid-single-digit growth in services and low single-digit decline in vending [19][51] Company Strategy and Development Direction - The company is focused on accelerating organic revenue growth while maintaining strong margins and free cash flow [4][30] - Investments are being made in international currency business to expand capacity and meet rising demand [25][27] - The acquisition of Antares Vision is progressing, with plans to consolidate results under Crane NXT in 2026 [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales outlook for the currency business in 2026, supported by a strong backlog and new contract wins [7][30] - The company anticipates full-year sales growth of 4%-6% in 2026, with adjusted EPS guidance in the range of $4.10-$4.40 [18][22] Other Important Information - The company announced a 6% increase in its annual dividend while maintaining capacity for future acquisitions [18] - Adjusted EBITDA margin is expected to be approximately flat year-over-year at 28% for 2026 [21] Q&A Session Summary Question: Can you discuss the margin performance in SAT and pricing strategy? - Management noted that contracts are executed from backlog, and they are focused on maximizing value and pricing power with new contracts [38][39] Question: What is the expected EPS cadence throughout the year? - EPS is expected to accelerate through the first half of the year, with a total guidance of $4.10-$4.40 reflecting continued strength in currency and authentication [41][42] Question: What are the dynamics in CPI for the first quarter? - CPI is expected to be flat in 2026, with growth in services and a decline in vending due to tariffs, with Q1 anticipated to be the lowest quarter [51][52] Question: What is the status of the $10 bill onboarding? - Management is confident that the U.S. Treasury will announce the new $10 bill mid-year, with full consumer release expected in Q4 [54][80] Question: What are the drivers for faster growth in international currency? - Growth is driven by increased counterfeiting, growth in emerging economies, and faster redesign times for currency [67][69]

Financial Data and Key Metrics Changes - Sales growth was approximately 20% in Q4 and 11% for the full year 2025, with adjusted EBITDA margin at approximately 25% in Q4 and 24% for the full year [4][11] - Adjusted EPS was $1.27 in Q4 and $4.06 for the full year [5][11] - Free cash flow conversion ratio was approximately 135% in Q4 and 94% for the full year [4][11] Business Line Data and Key Metrics Changes - In the CPI segment, core sales were flat in Q4, with double-digit growth in gaming offset by softness in other markets, and adjusted operating margin improved to approximately 32% [12] - Security and Authentication Technologies (SAT) saw core sales up approximately 11% in Q4, driven by strong performance in Crane Currency, with adjusted operating margin decreasing by approximately 420 basis points [13][15] - Crane Authentication performed as expected, contributing to the overall growth in SAT, with a backlog up more than 50% year-over-year [16] Market Data and Key Metrics Changes - The international currency business showed strong performance, with organic backlog up over 30% year-over-year and 20 new Micro-optics wins in 2025 [6][24] - The company secured significant contract renewals with major sports leagues, enhancing its market position in authentication and traceability technologies [8] Company Strategy and Development Direction - The company is focused on accelerating organic revenue growth while maintaining strong margins and free cash flow, with significant investments in international currency and micro-optics technology [4][24] - The acquisition of Antares Vision is a strategic move to expand into higher growth markets, with plans to take the company private by mid-2026 [9][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales outlook for 2026, driven by a strong backlog and new currency series launches, including the new $10 bill [6][19] - The company anticipates full-year sales growth of 4%-6% in 2026, with adjusted EPS expected in the range of $4.10-$4.40 [18][21] Other Important Information - The company announced a 6% increase in its annual dividend while maintaining capacity for future acquisitions [18] - Adjusted EBITDA margin is expected to be approximately flat year-over-year at around 28% for 2026 [20] Q&A Session Summary Question: Can you discuss the margin performance in SAT and pricing strategies? - Management highlighted strong growth and backlog in international currency, emphasizing that contracts are executed from backlog, which provides visibility into future performance [36] Question: What is the expected EPS cadence throughout the year? - EPS is expected to accelerate through the first half of the year, with a total guidance of $4.10-$4.40 reflecting continued strength in currency and authentication [40][41] Question: What are the dynamics in the CPI segment for the first quarter? - CPI is expected to be flat in 2026, with mid-single-digit growth in services and low single-digit declines in vending due to tariffs [51] Question: What is the status of the $10 bill onboarding? - The company is preparing for a mid-year announcement from the U.S. Treasury, with expectations for full consumer release in Q4 [54][81] Question: Can you provide insights on the international currency growth drivers? - Management identified increased counterfeiting, growth in emerging economies, and faster redesign times as key drivers for sustainable growth in international currency [66]

Financial Data and Key Metrics Changes - Adjusted EPS increased by 7% for the quarter and 14% for the first half, reflecting strong execution against market opportunities [8][10] - Revenue for the quarter was $5.4 billion, with EBITDA of $826 million and EBIT of $603 million, significantly higher than the prior year due to the Berry acquisition and improved productivity [10][11] - Free cash flow was $289 million for the quarter, with a quarterly dividend declared at $0.65 per share, up from the prior year [11][24] Business Line Data and Key Metrics Changes - Global Flexible Packaging Solutions segment sales increased by 23% on a constant currency basis, while volumes were down approximately 2% [19][20] - Global Rigid Packaging Solutions segment sales also increased significantly, with volumes flat compared to the prior year, excluding non-core businesses [22][23] - Adjusted EBIT for the Flexible segment rose 22% on a constant currency basis to $402 million, while the Rigid segment's adjusted EBIT was $228 million, up over last year [21][23] Market Data and Key Metrics Changes - In developed regions, volume trends were down low- to mid-single digits, with Europe being more challenged than North America [20][22] - Emerging markets showed low single-digit growth in Asia Pacific, offset by lower volumes in Latin America [20] - Focus categories such as pet food and meat proteins performed better than the broader portfolio, while other categories like liquids and unconverted film and foil saw lower volumes [20][21] Company Strategy and Development Direction - The company is focused on delivering core business performance, accelerating synergy realization, and optimizing its portfolio, particularly the $2.5 billion of non-core businesses [9][10] - The acquisition of Berry is seen as a transformative step, positioning the company for long-term growth and value creation [5][9] - The company aims to deliver at least $260 million of synergies in fiscal 2026 and a total of $650 million by fiscal 2028 [16][28] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half, expecting volume performance to remain consistent with the first half, while focusing on cost control and productivity improvements [33][34] - The company reaffirmed its financial guidance for the fiscal year, with adjusted EPS expectations updated to $4.00-$4.15 per share [9][25] - Management noted that while the market environment remains challenging, they are well-positioned to capture revenue synergies and improve performance in non-core businesses [40][52] Other Important Information - The company has made significant progress in safety performance, with a total recordable incident rate of 0.52, and 79% of all sites remained injury-free [6][7] - The new CFO, Steve Scherger, has been actively engaged in understanding the business and is expected to contribute to value creation [16][18] Q&A Session Summary Question: Volume expectations for the next two quarters - Management indicated that they expect volume performance to be consistent with the first half, with some potential for upside from revenue synergies [33][34] Question: Fourth quarter initiatives for guidance confidence - Management highlighted seasonality, synergy growth, and expected improvements in non-core businesses as key drivers for EBIT improvement in the second half [39][40] Question: Volume performance in major categories - Management noted that overall company volumes were down 2.5%, with core portfolio volumes down 1.5%, indicating performance in line with broader industry trends [43][45] Question: Non-core business EBIT expectations - Management expects non-core EBIT margins to return to more traditional levels of 7%-9% in the second half, driven by improved contractual terms and operational performance [55][72] Question: Synergy capture details - Management confirmed that synergy capture was evenly split between G&A and procurement, with expectations for continued ramp-up in the second half [65][66]

Financial Performance - The company reported adjusted EPS growth of 7% for Q2 and 14% for the first half, indicating strong execution against market opportunities [8][10] - Revenue for the quarter was $5.4 billion, with EBITDA of $826 million and EBIT of $603 million, significantly higher than the prior year due to the Berry acquisition and improved productivity [10][11] - Free cash flow was $289 million for the quarter, with a quarterly dividend declared at $0.65 per share, reflecting a commitment to annualized dividend growth [11][24] Business Segment Performance - In the Global Flexible Packaging Solutions segment, sales increased by 23% on a constant currency basis, driven primarily by the Berry acquisition, although volumes were down approximately 2% [19][20] - The Global Rigid Packaging Solutions segment also saw significant sales growth due to the acquisition, with volumes flat compared to the prior year, indicating a sequential improvement [22][23] - Focus categories such as pet food and meat proteins performed better than the broader portfolio, while other categories like liquids and unconverted film saw lower volumes [20][23] Market Dynamics - Volume trends in developed markets showed low- to mid-single-digit declines, with Europe facing more challenges than North America [20][22] - Emerging markets experienced low single-digit growth in Asia Pacific, offset by declines in Latin America, indicating mixed performance across regions [20][22] - The core portfolio's volume performance was approximately 1.5% lower than the prior year, reflecting market dynamics that remain largely unchanged [12][42] Company Strategy and Competitive Position - The company is focused on delivering core business performance, accelerating synergy realization, and optimizing its portfolio, which includes evaluating alternatives for $2.5 billion of non-core businesses [7][10] - The company aims to deliver at least $260 million in synergies for fiscal 2026, with a total of $650 million expected by fiscal 2028 [16][26] - The core portfolio, which includes health, beauty, wellness, protein, liquids, food service, and pet care, is positioned for sustainable long-term growth [11][12] Management Commentary on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half, expecting volume performance to remain consistent with the first half, while also focusing on cost management [31][32] - The company reaffirmed its financial guidance for fiscal 2026, with adjusted EPS expectations updated to $4.00-$4.15 per share, reflecting a commitment to double-digit EPS growth [9][25] - Management highlighted the importance of customer relationships and the need for a balance between price and volume in the current market environment [76] Other Important Information - The company has made significant progress in integrating the Berry acquisition, with a focus on operational synergies and cost management [15][16] - The new CFO, Steve Scherger, has been actively engaged in understanding the company's strategic priorities and operational capabilities [18][19] Q&A Session Summary Question: Expectations for volume performance in the next two quarters - Management indicated that they expect volume performance to be consistent with the first half, with some potential for upside from revenue synergies [31][32] Question: Initiatives for fourth quarter guidance - Management highlighted seasonality, synergy growth, and improvements in non-core businesses as key drivers for expected EBIT improvement in the second half [36][37] Question: Volume performance relative to the broader industry - Management noted that overall company volume performance was down 2.5%, which is in line with broader industry trends, with core portfolio volumes down 1.5% [40][42] Question: Improvement expectations for non-core EBIT contribution - Management expects non-core EBIT margins to return to more traditional levels in the second half, with improvements driven by better contractual terms and pricing [50][51] Question: Exit rates on volume performance - Management stated that focus categories collectively outperformed the core business, with pet care showing strong growth and healthcare experiencing some weakness due to a weaker flu season [55][56]

Q3 2025 Performance Highlights - Revenues reached $409 million, a 3.8% year-over-year growth assuming the Sterling acquisition occurred on 1/1/2023[20, 22] - Adjusted EBITDA was $118 million, resulting in a 29% Adjusted EBITDA Margin[20] - Adjusted Diluted EPS was $030[20] - Adjusted Operating Cash Flow reached $805 million after adjusting for $81 million of Sterling acquisition and integration costs[22, 52] Synergy Realization and Financial Outlook - $52 million in run rate synergies were actioned as of September 30, 2025[44] - The company is targeting total run rate synergies of $65 million to $80 million within two years post-closing[43, 77] - Full year 2025 revenue guidance is refined to $1535 billion to $1570 billion[61] - Full year 2025 Adjusted EBITDA guidance is refined to $430 million to $440 million, with an approximate 28% margin[61] Strategic Focus and Growth Drivers - Retention reached 97%, up from 96% in Q2[23, 41] - Go-to-market success resulted in combined new logo, upsell, and cross-sell contribution of 9%[41] - The company is focused on FA 50 strategy, actioning best-of-breed product and platform approach to accelerate new logo, upsell and cross-sell, and enhance customer value proposition[17]