Financial Data and Key Metrics Changes - In Q1 2025, the company reported net sales of $290 million, reflecting a 6.8% decrease from $311 million in Q1 2024, with an organic decline of 5% [7][26] - Adjusted EBITDA for Q1 2025 was $41 million, or 14.1% of sales, down from $54.9 million and 17.7% in the prior year [32] - GAAP net income for Q1 2025 was $13.1 million compared to $28.4 million in the prior year, impacted by lower net sales and increased costs related to ERP and restructuring [24][25] Business Line Data and Key Metrics Changes - Equipment sales declined by 9%, and parts and consumables sales decreased by 4.7%, while service and other saw organic growth, but overall service revenue was negatively impacted by foreign exchange [28] - The AMR segment experienced a 30% sales growth compared to Q1 2024, contributing approximately 5% to net sales [17] Market Data and Key Metrics Changes - In The Americas, organic net sales decreased by 6.9%, but order rates increased by 20% compared to the prior year [11] - EMEA saw a 2% growth on a constant currency basis, driven by acquisitions and pricing realization, while APAC faced a 7.5% decline due to demand issues in China and Australia [12][29] Company Strategy and Development Direction - The company is focused on executing its enterprise strategy, which includes pricing discipline, innovative product launches, and targeted market investments [13][15] - The introduction of the Clean360 program aims to enhance AMR adoption by offering a subscription model that reduces upfront costs for customers [20][76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing economic uncertainty due to tariffs and trade wars but noted stable demand for products and strong order rates [21][22] - The company anticipates order growth of 3.5% to 7% for 2025, despite challenges in translating order growth into equivalent sales growth due to prior backlog reductions [10][21] Other Important Information - The company expects to offset approximately $40 million in tariff-related costs through pricing and sourcing strategies [35][56] - Capital expenditures for 2025 are projected at approximately $20 million, with a commitment to return capital to shareholders [37][33] Q&A Session Summary Question: Margin guidance and EBITDA margin improvement - Management explained that the margin decline was due to a backlog headwind and a mix of strategic customer shipments, but they expect a return to normalized margins as the year progresses [42][44] Question: Impact of price hikes on demand - Management noted that it is too early to assess the impact of announced price hikes on demand, but they are monitoring customer behavior closely [64][66] Question: Clean360 program and AMR adoption - The Clean360 program was developed in response to customer feedback regarding high initial costs, aiming to facilitate AMR adoption through a subscription model [75][76]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net sales of $290 million, reflecting a 6.8% decrease from $311 million in Q1 2024, with an organic decline of 5% [6][25] - Adjusted EBITDA for Q1 2025 was $41 million, or 14.1% of sales, down from $54.9 million and 17.7% in the prior year [31] - GAAP net income was $13.1 million compared to $28.4 million in the prior year, impacted by lower net sales and increased costs related to ERP projects and restructuring [23][24] Business Line Data and Key Metrics Changes - Equipment sales declined by 9%, and parts and consumables sales decreased by 4.7%, while service and other saw organic growth, but overall service revenue was down by 1.4% due to unfavorable foreign exchange impacts [26][27] - The AMR (Autonomous Mobile Robot) segment saw a 30% increase in sales compared to Q1 2024, contributing approximately 5% to net sales [16] Market Data and Key Metrics Changes - In The Americas, organic net sales decreased by 6.9%, but order rates increased by 20% compared to the prior year [10][28] - EMEA experienced a 2% growth on a constant currency basis, driven by acquisitions and pricing realization, while APAC saw a 7.5% decline due to demand issues in China and Australia [11][12][28] Company Strategy and Development Direction - The company is focused on executing its enterprise strategy, which includes pricing discipline, launching innovative products, and investing in go-to-market opportunities [12][15] - The introduction of the Clean360 program aims to make AMR adoption more accessible by offering a subscription model that includes equipment, software, and maintenance [19][75] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of tariffs and economic uncertainty but noted stable demand for products and strong order rates [20][21] - The company expects to grow orders by 3.5% to 7% in 2025, despite challenges in translating order growth into equivalent organic sales growth due to prior backlog reductions [9][22] Other Important Information - The company anticipates a full-year impact of approximately $40 million from tariffs, representing around 5% of total cost of goods sold, and is implementing mitigation strategies [34][35] - The company maintains a strong liquidity position with approximately $80 million in cash and $434 million in unused borrowing capacity [32] Q&A Session Summary Question: Concerns about margin guidance and inflationary pressures - Management explained that the margin decline was due to a backlog headwind and a mix of strategic customer shipments at lower margins, but they expect a return to a more normalized mix in future quarters [40][46] Question: Impact of price hikes on demand - Management noted that it is too early to assess the impact of announced price hikes on demand, but they are closely monitoring customer behavior [62] Question: Clarification on the Clean360 program - The program was developed in response to customer feedback regarding high initial costs of AMR products, aiming to provide a more accessible option for customers [72][75]

Financial Data and Key Metrics Changes - For the full year 2024, the company achieved double-digit sales growth and increased adjusted EBITDA by more than 30% [10] - Consolidated net sales for Q4 were $620.3 million, representing a 13.8% increase year-over-year [36] - Adjusted EBITDA in Q4 was $118 million, a 29% increase compared to the same period in 2023 [38] Business Line Data and Key Metrics Changes - The consumer vertical saw pro forma revenues grow double digits, with adjusted EBITDA increasing by over 27% [25] - Lugano reported annual sales growth of more than 50% and adjusted EBITDA of $195 million, a 76.4% increase year-over-year [26] - The industrial segment experienced flat sales and a modest decline in adjusted EBITDA as the company focused on long-term repositioning [29] Market Data and Key Metrics Changes - The CODI Momentum Index, a gauge of economic activity, currently reads 1.06%, indicating a stable outlook despite a slight decline from year-end levels [18] - Consumer spending remains steady, particularly among higher-income consumers, which is expected to benefit the company's portfolio [19] Company Strategy and Development Direction - The company is shifting focus to more innovative and disruptive businesses to drive long-term value creation [11] - Strategic acquisitions included the purchase of Honey Pot and Lifoam, while divesting Ergobaby and the Crosman airgun business to optimize long-term focus [12] - The company aims to identify and support strong businesses with innovative and sustainable models, guided by a buy, build, and grow philosophy [21] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about prospects for 2025, expecting resilience and growth in the economy [17] - The company is monitoring geopolitical uncertainties and believes its subsidiaries are well-positioned to navigate the evolving tariff landscape [20] - The outlook for 2025 includes expected adjusted EBITDA between $570 million and $610 million, with a focus on growth investments [43] Other Important Information - The company raised over $115 million in preferred equity in 2024 to improve its capital structure [13] - A revised management services agreement aims to reduce long-term costs for shareholders and align management compensation with shareholder interests [15] Q&A Session Summary Question: Guidance on branded and industrial growth - Management indicated that growth from Lugano is expected to continue, but they have a more modest overall growth forecast [53][54] Question: Impact of PFAS charge on 5.11% - The $11 million charge related to PFAS regulations was noted, and management confirmed that adjusted EBITDA would have been significantly higher without this charge [57][58] Question: Tariff exposure and portfolio positioning - Management discussed the proactive steps taken to diversify supply chains and mitigate tariff impacts, feeling well-positioned compared to competitors [66][70] Question: M&A activity outlook for 2025 - Management expressed optimism about the M&A environment improving slightly in 2025, with a focus on acquiring innovative and disruptive businesses [72][74] Question: Performance of Lugano and EBITDA margins - Management attributed strong EBITDA margins at Lugano to operational leverage and effective buying strategies, while also noting potential margin dilution from new salon openings [86][88]