All right, let's just start off. Why are industrials the best performing sector in in your mind. What's been the catalyst. What's been the tailwind.And do you see that tailwind continuing in the second half of the year. Well, keep in mind that, you know, for the last two to three years, we've been in an industrial recession really on the back of the COVID uh hangover, if I can put it that way. And so, inventory in the channel has been depleted and really um there's a lot of pent-up demand in the system.So y ...

Acacia Research (ACTG) FY Conference Summary Company Overview - Acacia Research has transitioned from an intellectual property business to a value-based acquirer of companies, focusing on creating a diversified portfolio of assets [2][3] - The company has a book value of approximately $577 million, translating to about $6 per share, with $340 million in cash and public securities [4] Financial Performance - Acacia generated $222 million in revenue and $61 million in EBITDA, with $40 million of EBITDA related to its former intellectual property business [5] - The company operates with no debt, emphasizing a strong financial position [5] Investment Strategy - The management team, led by the CEO with a private equity background, focuses on acquiring undervalued businesses, particularly in contrarian sectors [6][8] - Acacia aims to improve the operational efficiency and profitability of acquired businesses, emphasizing hands-on management rather than passive ownership [10][11] - The company has seen a significant number of acquisition opportunities, evaluating 350 businesses last year and 280 so far this year, but remains selective [9][50] Recent Acquisitions - Acacia has made strategic acquisitions, including Benchmark Energy and Deflecto, to build a scaled oil and gas platform and diversify its portfolio [15][22] - The acquisition of Benchmark was based on identifying dislocation in the oil and gas market, focusing on cash flow generation rather than traditional valuation metrics [17][19] - Deflecto was acquired as a collection of three unrelated businesses, with plans to streamline operations and enhance value through cost-cutting and management alignment [22][24] Operational Focus - The company emphasizes operational improvements and continuous enhancement of acquired businesses, aiming to generate cash flow and increase margins [11][20] - Acacia's approach includes leveraging existing management expertise and operational partners to drive performance in acquired companies [8][26] Market Position and Future Outlook - Acacia is exploring opportunities in specialty lending and insurance, indicating a strategic focus on markets with limited capital flow [51][52] - The company is cautious about entering new markets, preferring to build around existing positions and leverage its team's expertise [54] - Acacia aims to unlock trapped value in its portfolio, with a long-term vision of growing into a formidable public holding company with multiple large businesses [42][43] Conclusion - Acacia Research is positioned as a value-oriented acquirer with a strong financial foundation and a clear strategy for operational improvement and growth through selective acquisitions [34][55]

Core Insights - Johnson Controls' heat pumps significantly reduce heating costs and emissions, achieving a 53% reduction in customer heating expenses and a 60% decrease in emissions compared to traditional natural gas boilers in 2024 [1][2] Group 1: Customer Benefits - The heat pumps provide a competitive advantage across various sectors, including industrial, healthcare, and municipal organizations, by ensuring uptime and reliability while conserving cash for growth [2] - Specific case studies highlight substantial savings and emissions reductions, such as a food company in Spain saving €1.5 million annually and reducing CO2 emissions by nearly 2,000 tons [3] - A hospital in Germany achieved a 30% reduction in energy costs and met 80% of its heating demand through a heat pump utilizing geothermal energy [3] Group 2: Industry Potential - The European Heat Pump Association estimates that over 60% of energy used by European industries is for heating, indicating a significant market for heat pumps [2] - The American Council for an Energy-Efficient Economy projects that heat pumps could replace up to 80% of industrial boilers in the U.S. by 2050, underscoring their potential for enhancing energy security and sustainability [2] Group 3: Product Innovations - Johnson Controls offers a comprehensive portfolio of heat pumps, including the 400-ton YORK® CYK Water-to-Water Compound Centrifugal Heat Pump, which is four times more efficient than traditional systems [5] - New products launched in Asia, such as the YORK® HPS-H 200 and YORK Next-Generation YSPA-V, provide energy-saving and low-carbon solutions tailored for various industries [5] Group 4: Commitment to Sustainability - Johnson Controls is leading the transition to sustainable refrigerants, offering heat pumps that utilize low and ultra-low global warming potential fluids [4] - The company emphasizes its role in accelerating climate action through partnerships with customers to achieve significant environmental benefits [2]

SPX Technologies (SPXC) FY Conference Summary Company Overview - SPX Technologies operates in niche industrial applications across HVAC and detection and measurement markets [2][4] - The company has a strong track record for margin expansion and has executed 16 acquisitions over the past four and a half years [2][17] - SPX is predominantly North American, with about 83% of its revenue from this region, but is expanding in Europe and Asia [4] Core Business Segments HVAC Segment - HVAC constitutes about two-thirds of SPX's business, generating approximately $1.5 billion in revenue this year [9][31] - The segment has a margin of around 22% and is characterized by a significant portion of replacement revenue, approximately 60% [10][32] - SPX focuses on engineered products in high-tech niches, avoiding competition with larger players like Carrier and Trane [11] Detection and Measurement Segment - This segment includes technologies for underground inspections and monitoring, with a revenue target of around $710 million [34][37] - SPX is a leader in outdoor technologies, particularly in precision locators and inspection robots for water and gas infrastructure [8][34] Financial Performance and Growth Strategy - SPX aims to double its EBITDA from $483 million to approximately $1 billion over the next four to five years [12][18] - The company has a strong focus on strategic M&A, with a capital allocation strategy that prioritizes growth investments over dividends [26][39] - SPX has a robust balance sheet, with a pro forma leverage ratio of around 1.9 after recent acquisitions [40] Market Dynamics and Future Outlook - The company has seen double-digit organic growth driven by better product offerings, particularly in healthcare and institutional markets [56][57] - SPX is optimistic about entering the adiabatic and dry cooling tower markets, which could significantly expand its total addressable market (TAM) [61][62] - The company anticipates meaningful revenue opportunities from new products in the data center market by 2026 [66] Competitive Landscape - SPX competes with private companies in the cooling tower market but believes it has a competitive edge due to superior mechanical equipment [73][74] - The detection and measurement segment is expected to benefit from federal funding for infrastructure projects, particularly in transportation [75] Key Takeaways - SPX Technologies is well-positioned for growth in both HVAC and detection and measurement markets, with a clear strategy focused on engineered products and strategic acquisitions [2][17] - The company is leveraging its strong brand equity and market leadership to capture additional market share and drive revenue growth [10][11] - Future growth is expected to be supported by new product launches and increased federal funding for infrastructure projects [75]

Financial Performance - Net sales increased by 43% to $7621 million in Q3 2025 compared to $7308 million in Q3 2024[16] - Adjusted operating profit rose by 61% to $715 million in Q3 2025 compared to $674 million in Q3 2024[16] - Adjusted diluted EPS increased by 78% to $250 in Q3 2025 compared to $232 in Q3 2024[16] - Adjusted EBITDA increased by 66% to $770 million in Q3 2025 compared to $722 million in Q3 2024[16] Segment Performance - US net sales increased by 45% to $7288 million in Q3 2025 compared to $6974 million in Q3 2024[19] - Canada net sales decreased slightly by 03% to $333 million in Q3 2025 compared to $334 million in Q3 2024[19] US End Markets - Residential net sales in the US increased by 2% in Q3 2025, representing 51% of US net sales[8] - Non-residential net sales in the US increased by 7% in Q3 2025, representing 49% of US net sales[8] Capital Allocation - Approximately $690 million was deployed in capital expenditures, dividends, acquisitions, and share repurchases during the quarter[6] - Share repurchases amounted to $251 million, and dividends totaled $166 million[6]

Core Viewpoint - Modine has announced the acquisition of L.B. White to diversify its HVAC offerings, particularly in portable and agricultural heating solutions, with the transaction expected to close on May 31, 2025 [1][2]. Company Overview - Modine is a global leader in thermal management technology, with over 100 years of experience in providing heating solutions [3][4]. - The company operates in various segments, including Climate Solutions and Performance Technologies, and employs over 11,000 people worldwide [4]. Acquisition Details - The acquisition of L.B. White is based on an enterprise value of approximately $112 million, with L.B. White expected to report revenue of $73.5 million for fiscal 2025 [3]. - The acquisition is anticipated to be immediately accretive to earnings and is expected to generate incremental growth and cost savings through synergies and the application of Modine's 80/20 operating model [3]. Strategic Alignment - The acquisition aligns with Modine's strategy to expand its portfolio with complementary technologies that address unique climate requirements in various end markets [2][3]. - L.B. White is recognized for its specialized heating technology, holding a market-leading position in swine and poultry agriculture heating in North America and being a top player in portable heating solutions [2][3].

Economic Overview - U.S. stocks have rebounded over the past month after a turbulent start to 2025, driven by concerns over tariffs and high inflation [1] - The recent market rebound has been volatile, influenced by ongoing uncertainties regarding tariffs and the Federal Reserve's rate cut plans [2] Tariff Impact - President Trump imposed significant tariffs in April, including a 145% duty on Chinese imports, which prompted China to retaliate with 125% tariffs on U.S. goods [3] - A recent trade truce between the U.S. and China has temporarily suspended tariffs for 90 days, but uncertainty remains regarding future trade agreements and their economic implications [4] Inflation and Federal Reserve - Inflation has shown signs of easing, with the Consumer Price Index (CPI) rising by only 0.2% in April, following a 0.1% decline in March [5] - The CPI increased by 2.3% year-over-year in April, marking the smallest annual gain since February 2021, indicating a gradual approach towards the Federal Reserve's 2% inflation target [6] Dividend-Paying Stocks - In light of economic uncertainty, investing in dividend-paying stocks is recommended as they tend to be more stable and reliable during market fluctuations [7] Company Highlights The Toronto-Dominion Bank (TD) - TD announced a dividend of $0.75 per share, with a dividend yield of 4.31% and a payout ratio of 53% of earnings [9] - The bank has increased its dividend 12 times over the past five years [9] Marriott International, Inc. (MAR) - Marriott declared a dividend of $0.67 per share, with a dividend yield of 1.04% and a payout ratio of 26% of earnings [12] - The company has increased its dividend five times in the last five years [12] Lennox International Inc. (LII) - Lennox announced a dividend of $1.30 per share, with a dividend yield of 0.81% and a payout ratio of 20% of earnings [14] - The company has increased its dividend five times over the past five years [14] Ralph Lauren Corporation (RL) - Ralph Lauren declared a dividend of $0.91 per share, with a dividend yield of 1.20% and a payout ratio of 27% of earnings [16] - The company has increased its dividend three times in the last five years [16]

Core Insights - Lennox has appointed Tracy Embree to its board of directors, effective May 22, 2025, bringing significant experience from her previous role as President of Otis Americas [1][2] - The board believes Ms. Embree's background in industrial strategy, emerging technologies, and sustainable solutions will enhance Lennox's strategic growth initiatives [2] - Ms. Embree has a strong history in complex manufacturing environments and has held various leadership roles, including a 23-year tenure at Cummins Inc. [3] Company Background - Lennox is a leader in energy-efficient climate-control solutions, focusing on sustainability and reducing carbon footprints for residential and commercial customers [5] - The company is recognized for its innovation in cooling, heating, indoor air quality, and refrigeration systems [5] Educational Background - Tracy Embree holds a bachelor's degree in chemical engineering from the Massachusetts Institute of Technology and an MBA from Harvard Business School [4]

Summary of Carrier's Investor Day Conference Company Overview - **Company**: Carrier - **Industry**: HVAC (Heating, Ventilation, and Air Conditioning) and Climate Solutions - **Key Leadership**: Dave Gitlin (Chairman and CEO), Patrick Goris (CFO), Gurang (President of Climate Solutions Americas), Thomas Heim (President of Climate Solutions Europe) [5][3][93] Core Points and Arguments Strategic Priorities - Carrier aims to be the global leader in intelligent climate and energy solutions, focusing on talent, culture, and purpose [6][5]. - The company has undergone a transformation since its spin-off, establishing a new leadership team and a performance culture [8][10]. Financial Performance - Sales have increased by 30% and profits by over 80% since the spin-off, with margins expected to be 400 basis points higher than in 2020 [12]. - The HVAC business is projected to exceed $20 billion in sales, up from under $10 billion in 2020 [13]. - The company has reduced its leverage ratio from close to 4x to about 2x, providing ample capital for growth [12]. Growth Strategy - Carrier targets consistent growth of 6% to 8% over the medium term, driven by differentiated products, aftermarket services, and systems solutions [16][30]. - The growth formula includes contributions from market growth, aftermarket, and new product offerings [17]. Market Trends and Opportunities - Significant global demand for air conditioning is expected to rise, particularly in regions with extreme temperatures [18]. - The shift towards electric solutions and the increasing demand for transport refrigeration, especially in China and India, are key growth drivers [19]. - Carrier is positioned to address energy consumption challenges, as HVAC systems account for over 50% of home energy use during peak hours [19]. Product and Aftermarket Innovations - Carrier has increased R&D investment by 50% since the spin-off, leading to improved product differentiation and market share [20][21]. - The aftermarket business has seen double-digit growth, with a parts capture rate increasing from 20% to a target of 65% [26][27]. - The company has a large installed base of 45 million residential units, providing significant aftermarket opportunities [27]. Digital Transformation - Carrier is leveraging digital solutions to enhance customer engagement and operational efficiency, with over 3.5 million connected devices [29][40]. - AI-driven diagnostics and remote monitoring are being utilized to improve service delivery and customer satisfaction [43][60]. Capital Allocation and M&A Strategy - The company prioritizes organic growth, followed by selective M&A that aligns with strategic priorities [44][45]. - Carrier plans to deploy $10 billion of excess capital for further value creation [44]. Regional Insights - **Americas**: The Climate Solutions Americas segment reported $10.5 billion in revenue with a 22% operating margin, focusing on both residential and commercial markets [50]. - **Europe**: The Climate Solutions Europe segment aims to improve its adjusted operating margin from 9.4% to mid-teens levels, leveraging the combination with Fisman Climate Solutions [95]. Additional Important Insights - Carrier emphasizes a performance culture and continuous improvement as core to its operational strategy [39]. - The company is focused on reducing complexity in its product offerings, achieving a 50% reduction in SKU count [86]. - The integration of various technologies and systems is expected to enhance energy efficiency and customer value [36][38]. This summary encapsulates the key points discussed during Carrier's Investor Day, highlighting the company's strategic direction, financial performance, growth opportunities, and commitment to innovation in the HVAC industry.

Financial Performance & Targets - Carrier expects net sales of approximately $23 billion in 2025 [15, 332] - The company aims for a medium-term organic revenue growth of 6-8% [29, 230] - Carrier targets a medium-term adjusted operating margin exceeding 50 bps annually [71, 230] - The company anticipates a medium-term adjusted effective tax rate of approximately 21% [230, 257] - Carrier projects a medium-term free cash flow deployment of around $15 billion, allocating approximately $5 billion to dividends and $10 billion to acquisitions and share repurchases [270] Business Segment Highlights - Climate Solutions Americas (CSA) reported net sales of $10.5 billion in 2024 with an adjusted operating profit of 22.1% [80] - Climate Solutions Europe (CSE) reported net sales of $5 billion in 2024 with an adjusted operating profit of 9.4% [115] - Climate Solutions Asia Pacific, Middle East & Africa (CSAME) reported net sales of $3.5 billion in 2024 with an adjusted operating profit of 13.3% [164] - Climate Solutions Transportation (CST) reported net sales of $2.7 billion in 2024 with an adjusted operating profit of 16.9% [196] Strategic Initiatives - Carrier is focused on product differentiation, aftermarket growth, and system solutions to drive organic revenue growth [29] - The company aims to capture a larger share of its own aftermarket, targeting double-digit growth [43] - Carrier plans to invest in digital capabilities to enhance product differentiation, revenue opportunities, and organizational productivity [73]