Q4 2025 EARNINGS PRESENTATION FEBRUARY 12, 2026 1 LEGAL DISCLAIMERS 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains, and management may make on our call today, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "conti ...

Core Insights - Revenue increased by 8% in the first quarter, indicating growth in sales performance despite external challenges [1] - Net profit experienced a decline, attributed to ongoing currency headwinds affecting profitability [1] Financial Performance - The company reported an 8% rise in revenue for the first quarter, showcasing a positive trend in top-line growth [1] - However, net profit fell, highlighting the impact of currency fluctuations on the bottom line [1]

Market Performance - Wall Street has shown mixed performance in 2026, with small-cap stocks outperforming large-cap stocks; S&P 500 gained 1.1%, Dow Jones rose 3.6%, Nasdaq Composite slipped 0.9%, while Russell 2000 surged 6.5% [1] Macro Environment - Major developments impacting markets include heightened geopolitical tensions, fluctuations in the U.S. dollar, disruptions from a winter storm, and the nomination of Kevin Warsh as the next Federal Reserve chair [2] Geopolitical Risks - Geopolitical uncertainty has increased due to U.S. actions involving Venezuela, renewed tensions with Iran, and policy disputes with European allies, benefiting small-cap stocks that generate most revenues domestically [3] Currency Impact - The U.S. dollar strengthened following Warsh's nomination, which supports smaller companies with limited foreign exposure and reduces currency translation risks, while large-cap companies may face challenges [4] Earnings Outlook - Small-cap earnings are recovering, with the S&P SmallCap 600 index projected to return to positive growth in 2025, expecting double-digit earnings expansion over the next two years [5] Sector Performance - The finance sector of the small-cap index S&P 600 is expected to see earnings growth of 26.7% in Q4 2025 and 33.9% in Q1 2026, driven by revenue growth of 9.6% and 8.2% respectively [7] - The aerospace sector is projected to log earnings growth of 48.7% in Q4 2025 and 40.1% in Q1 2026, supported by revenue increases of 17% and 12.3% respectively [11] - The industrials sector is expected to record earnings growth of 9.5% in Q4 2025 and 9% in Q1 2026, with revenue growth projected at 5.7% and 3.6% respectively [13] Investment Opportunities - Invesco S&P SmallCap Financials ETF (PSCF) is up 4% this year, while Peoples Bancorp Inc (PEBO) has increased by 13.4% [8] - U.S. Global Technology and Aerospace & Defense ETF (WAR) is up 4.8%, and Astronics (ATRO) has risen by 35.3% [12] - Invesco S&P SmallCap Industrials ETF (PSCI) is up 15.3%, and Proto Labs (PRLB) has increased by 30.8% [14]

Core Viewpoint - Consistency in dividend growth is a key indicator of a company's long-term performance and stability [1] Group 1: Dividend Kings - Dividend Kings exemplify consistency and have shown exceptional long-term performance, making them attractive investment options [2] - A focus on Dividend Kings that have performed well over the past several years reveals standout companies in this category [2] Group 2: Stock Selection Methodology - A stock screener was utilized to filter and identify companies, resulting in 23 candidates, with a focus on the one with the highest 5-Year Percent Change [3] Group 3: Parker-Hannifin Corp Overview - Parker-Hannifin Corp (PH) is an industrial technology company specializing in motion and control technologies, serving aerospace and industrial markets [6] - The company has transformed its business mix through acquisitions, including the Filtration Group, enhancing its growth profile [7] Group 4: Financial Performance - Parker-Hannifin's stock has increased approximately 250% over the past 5 years and over 867% in the last 10 years, marking it as the best-performing Dividend King in both timeframes [7] - In the latest quarterly financials, Parker reported a 9% year-over-year increase in sales to $5.2 billion, while net income decreased by 11% to $845 million due to higher costs, which is typical during investment periods [8]

Core Insights - The company reported improved margins with an adjusted gross margin of 37.6%, up 50 basis points year over year, driven by synergies, price realization, and volume leverage [1] - Fourth-quarter organic revenue rose 2.9% year over year, with significant growth in the Automation and Motion Control (AMC) segment, which grew over 15% organically [2] - The CEO highlighted solid adjusted EPS growth, strong orders, and a rising backlog, with fourth-quarter orders increasing 53.8% year over year and a book-to-bill ratio of 1.48 [4][5] Financial Performance - Adjusted EBITDA margin was 21.6%, roughly flat year over year, while adjusted EPS for the quarter was $2.51, reflecting a 7.3% increase [1] - For fiscal year 2025, orders grew 15.5% on a daily basis, with adjusted EPS rising to $9.65, up nearly 6% [14] - The company generated $141 million of free cash flow in the quarter and ended with net leverage of 3.1x [7] Segment Performance - The AMC segment saw organic sales grow 15.2% year over year, with adjusted EBITDA margin at 20.5%, down about one point from the prior year [17] - Industrial Powertrain Solutions (IPS) reported organic sales growth of 3.7% year over year, with adjusted EBITDA margin at 25.7% [17] - Power Efficiency Solutions (PES) experienced a decline in organic sales by 10.7% year over year, primarily due to weaker residential HVAC performance [17] Order Activity and Backlog - The company highlighted $735 million in fourth-quarter orders for its E-Pod data-center power solution, contributing to a backlog that is approximately 50% higher year over year [5][7] - Daily order growth surged 53.8% in Q4, with a current pipeline of about $600 million for the broader data center business [6][13] - Management expects E-Pod projects to carry adjusted EBITDA margins in the 20%+ range, with shipments anticipated to begin in early 2027 [10][12] Guidance and Future Outlook - For 2026, management guided to roughly 3% sales growth, an adjusted EBITDA margin of 22.5%, and adjusted EPS of $10.20–$11.00 [6][17] - The company plans to lower net leverage to approximately 2.7x by year-end 2026, with a focus on debt paydown as a primary capital allocation priority [20] - Management expects to realize $40 million of cost synergies in 2026, treating it as a contingency against potential P&L pressures [16] Strategic Focus - The company is addressing ongoing headwinds from rare earth magnet availability, particularly affecting parts of AMC, with mitigation plans in place [19] - Data centers remain a strategic focus, with management emphasizing the importance of this segment for future growth [13]

Core Insights - Taylor Devices, Inc. (TAYD) has seen a significant share price increase of 74.4% over the past six months, outperforming the industry average growth of 17% and competitors like Nordson Corporation and RBC Bearings [1][2] Company Overview - Taylor Devices is based in New York and specializes in designing, developing, manufacturing, and marketing shock absorption, rate control, and energy storage devices for various sectors, including structural, industrial, aerospace, and defense [3] - The company operates in competitive markets and sources materials from diverse suppliers to minimize dependency on any single source [3] Key Growth Drivers - U.S. sales accounted for 88% of total revenue in the first half of fiscal 2026, up from 82% the previous year, indicating a 15% growth in domestic sales driven by demand in aerospace, defense, and structural engineering [4] - The revenue mix has shifted towards non-long-term, higher-margin projects, resulting in a 34% year-over-year increase in sales and contributing to a 46% gross margin [5][6] - Sales to the aerospace and defense segment increased to 61% of total revenues in the second quarter, up from 59% a year earlier, benefiting from rising global geopolitical tensions and defense budgets [7] Financial Position - The company has a strong balance sheet with nearly $39 million in short-term investments and $2 million in cash, allowing for strategic investments and economic resilience [8] - Interest income from U.S. treasuries and corporate bonds rose 18% year over year, supporting profitability during operational fluctuations [8] Challenges - Taylor Devices faces operational challenges, including a 9% year-over-year decline in revenue from long-term projects and a 32% drop in international sales, indicating a reliance on U.S. markets [9] - Rising research and development expenses (up 72% YoY) have compressed margins, and declining inventory turnover suggests potential inefficiencies [9] Valuation - TAYD is currently trading at 4.35X trailing 12-month EV/sales, above the industry average of 4.13X but lower than peers like Nordson (6.25X) and RBC Bearings (9.52X) [10] Conclusion - Taylor Devices presents a compelling growth story with strong fundamentals and exposure to long-term trends in defense and infrastructure, but monitoring backlog trends and cost structures is essential for sustainable performance [11][12]

Core Viewpoint - Lincoln Electric Holdings, Inc. will participate in the Barclays 43rd Annual Industrial Select Conference on February 17, 2026, where key executives will present [1] Group 1 - Steve Hedlund, Chairman and CEO, and Gabriel Bruno, Executive Vice President and CFO, will be speaking at the conference [1] - The presentation will be available via webcast on the company's Investor Relations website [1] - A replay of the presentation will also be accessible [1]

Core Viewpoint - Sotera Health Company has appointed Richard G. Kyle as a new independent director to its Board of Directors, enhancing its leadership team with his extensive experience in operations and governance [1][2][3]. Group 1: Appointment Details - Richard G. Kyle will serve on the Leadership Development and Compensation Committee and the Nominating and Corporate Governance Committee [1]. - His previous role was as President and CEO of The Timken Company, where he led financial transformation and strategic diversification [2]. - Kyle's selection is based on his experience in leading global operations and strong financial acumen [2][3]. Group 2: Leadership Insights - Michael B. Petras, Jr., Chairman and CEO of Sotera Health, expressed excitement about Kyle's appointment, highlighting his leadership experience as a public company CEO [3]. - Kyle continues to serve on Timken's Board and has been on the Board of Sonoco Products Company since 2015, where he holds multiple committee roles [3]. Group 3: Company Overview - Sotera Health is a global provider of sterilization solutions, lab testing, and advisory services for the healthcare industry [4]. - The company operates through three business segments: Sterigenics, Nordion, and Nelson Labs, with a commitment to safeguarding global health [4].

Group 1: Market Overview - The recent volatility in the market highlights the importance of portfolio diversification, particularly as tech-only portfolios have suffered significant losses [1] - The S&P 500 and Nasdaq Composite experienced declines due to a sell-off in tech stocks, while the Dow Jones Industrial Average rose by 260 points, or 0.5% [2] Group 2: Technology Sector Performance - Advanced Micro Devices saw a sharp decline of 17% following a perceived disappointing first-quarter outlook, with other chipmakers like Broadcom and Micron Technology also experiencing losses [3] - Software stocks have faced significant selling pressure amid concerns over AI disruption, with Oracle dropping 5% and the iShares Expanded Tech-Software Sector ETF falling for the seventh consecutive session [3] Group 3: Other Industries' Performance - Companies such as Campbell's, PepsiCo, Smuckers, and Kraft Heinz have seen stock price increases despite challenges, indicating resilience in the consumer goods sector [4] - In the healthcare sector, firms like Johnson and Johnson, Merck, and Amgen have performed well and are considered valuable investments [4] Group 4: Banking and Industrial Sectors - Banks have been advancing as investors believe they will benefit from AI improving operational efficiency, alongside industrial companies like Honeywell, Dover, and Emerson Electric [5] - These firms are characterized by earnings, dividends, and stock buybacks, making them attractive compared to tech stocks [5] Group 5: Earnings Season Impact - During earnings season, companies can provide significant upside surprises, leading to positive stock performance, which aligns with traditional market behavior [6]

Core Viewpoint - Matthews International is undergoing a strategic pivot focused on divestitures, debt reduction, and enhancing its core business in memorialization and high-value intellectual property, with significant gains from recent asset sales [3][4][6]. Financial Performance - For Q1 of fiscal 2026, Matthews reported a net income of $43.6 million, a turnaround from a net loss of $3.5 million in the previous year, primarily due to gains from divestitures [4][9]. - Consolidated sales decreased to $285 million from $402 million a year ago, with divestitures accounting for approximately $120 million of the decline [11]. - Adjusted EBITDA for the quarter was $35.2 million, down from $40.0 million, reflecting lower performance in the engineering business [11]. Debt Management - Remaining pension liabilities have significantly decreased to below $10 million from over $300 million a few years ago [1]. - Net debt as of December 31, 2025, was reported at $506 million, a reduction of $173 million in the quarter, aided by divestiture proceeds [1][6]. - The company executed early redemption of $300 million of 8.625% senior secured notes, which is expected to save about $12 million annually in interest expenses [6]. Divestitures and Strategic Focus - Matthews completed the sale of its warehouse automation business for $225 million, achieving a 15x adjusted EBITDA multiple [2]. - The sale of Saueressig, a European packaging business, for $41 million helped the company avoid significant restructuring costs and further reduce pension liabilities [2]. - The strategic pivot includes a focus on memorialization, which saw segment sales increase to $204.2 million from $190.5 million, supported by the Dodge acquisition [12]. Future Outlook - The company anticipates adjusted EBITDA guidance of at least $180 million for fiscal 2026, factoring in contributions from the Dodge acquisition and additional cost actions in the engineering business [19]. - Management expects to exit its 40% equity position in Propelis within 18 to 24 months, with anticipated synergies exceeding $60 million [5][8]. - Capital spending for fiscal 2026 is projected to be around $25 million, with a quarterly dividend of $0.255 per share declared [19].