Financial Data and Key Metrics Changes - Revenue decreased by 11% in Q4 2025, primarily due to weak residential and commercial end markets, with full-year revenue down 3% [7][8] - Segment margin for Q4 was 17.7%, while full-year segment margin reached a record 20.4%, marking the first time margins exceeded 20% [5][7] - Adjusted earnings per share (EPS) for Q4 was $4.45, with full-year adjusted EPS at $23.16, a 2% increase from the previous year [7][8] Business Line Data and Key Metrics Changes - Home Comfort Solutions (HCS) revenue in Q4 was down 21%, with significant declines in residential new construction impacting performance [28][60] - Building Climate Solutions (BCS) achieved 8% revenue growth in Q4, driven by favorable mix and pricing actions despite lower organic sales volumes [16][60] Market Data and Key Metrics Changes - The North American HVAC industry faced significant challenges in 2025, including channel destocking and low dealer and consumer confidence [8][9] - The light commercial HVAC industry experienced a decline for 17 consecutive months by December 2025, but emergency replacement initiatives showed growth [8][60] Company Strategy and Development Direction - The company plans to continue strategic investments, including $250 million in capital expenditures for 2026, focusing on innovation, training centers, and digital technology [19][12] - The self-help transformation plan is entering its final phase, emphasizing portfolio diversification and market position strengthening through joint ventures and acquisitions [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2026, anticipating a return to revenue growth and continued EBIT margin expansion [22][25] - Key factors influencing future performance include consumer confidence, interest rates, and the completion of channel destocking [44][45] Other Important Information - The company adopted FIFO accounting, which positively impacted EPS by approximately $1 for 2025 [14][15] - Free cash flow for 2025 was $640 million, exceeding prior guidance, supported by strong collections and disciplined payments [18][19] Q&A Session Summary Question: HCS revenue trends in Q4 - Management noted that November and December were worse than October, with surprises mainly from residential new construction performance [28] Question: Inventory levels and normalization - Management indicated that inventory levels are higher than seasonally typical, with expectations for normalization by Q2 2026 [34][36] Question: EPS guidance for Q1 - Management expects Q1 to be down due to tough comps and ongoing destocking, with a more favorable outlook for the second half of the year [42][43] Question: Repair versus replace dynamics - Management believes the repair versus replace activity is stabilizing, with dealer confidence improving [91][93] Question: Future M&A activity - Management maintains an active pipeline for potential acquisitions, focusing on bolt-on opportunities that enhance their market position [96][97]

Core Insights - Worksport Ltd. has secured a strategic partnership with a major Asian manufacturer to mass-produce the Aetherlux Pro Zerofrost™ Heat Pump, ensuring supply chain capacity to meet global demand and aiming for commercial delivery by the end of 2026 [1][3] Group 1: Strategic Partnership and Production - The partnership marks Worksport's transition from research and development to mass production in the $160 billion global HVAC market, effectively de-risking the commercialization phase for its subsidiary, Terravis Energy [2] - The agreement allows for immediate scaling of production without significant capital expenditure, preserving cash and accelerating revenue generation [2][7] Group 2: Technological Validation and Market Position - Terravis Energy has received a competitive award from the National Renewable Energy Laboratory (NREL), providing third-party validation of the Aetherlux system, which is crucial for building trust with institutional investors and B2B partners [5] - The partnership enhances Worksport's position in discussions with billion-dollar companies regarding potential licensing and private-label distribution of the Zerofrost technology [7] Group 3: Future Revenue and Growth - Production of certification units is set to begin immediately, with commercial sales targeted for 2026, aligning with the company's growth forecasts [7] - The asset-light model of the partnership improves return on invested capital (ROIC) by eliminating the need for heavy upfront manufacturing investments [7]

Core Viewpoint - SPX Technologies has acquired Thermolec Ltd. for CA$ 195 million (approximately US$ 140 million), enhancing its HVAC segment with complementary electric heating solutions [1][3]. Company Overview - SPX Technologies is a supplier of engineered products and technologies, with a strong presence in the HVAC and detection and measurement markets, employing approximately 4,700 people across 16 countries [6]. - Thermolec, founded in 1973, is a Montréal-based manufacturer specializing in custom electric duct heating solutions, generating annual revenues of about US$ 35 million [2][5]. Acquisition Details - The acquisition of Thermolec will integrate it into SPX's HVAC segment, specifically within its Electric Heat business alongside Marley Engineered Products (MEP) and ASPEQ [3]. - The acquisition is expected to leverage Thermolec's strong Canadian customer relationships to boost MEP's sales in Canada while expanding Thermolec's U.S. sales [3][4]. Strategic Implications - The acquisition is viewed as a natural extension of SPX's Electric Heat strategy, enhancing the value delivered to OEMs, distributors, and contractors across North America [4]. - Management anticipates including the impact of Thermolec in SPX Technologies' full-year 2026 guidance [3].

Core Insights - Carrier Global Corporation (CARR) is experiencing challenges despite its successful transformation into an HVAC business, particularly due to soft trends in the North American market [1]. Company Overview - Carrier Global Corporation has undergone a full transformation to focus on HVAC (heating, ventilation, and air conditioning) [1]. - The company is currently facing headwinds, indicating potential difficulties in maintaining growth or profitability in the near term [1]. Market Trends - The North American market is showing soft trends, which may impact Carrier's performance and investor sentiment [1].

Core Viewpoint - SPX Technologies, Inc. will release its financial results for Q4 and the full year of fiscal year 2025 on February 24, 2026, after U.S. market close [1] Financial Results Announcement - The financial results will be discussed in a conference call led by President and CEO Gene Lowe and CFO Mark Carano on February 24, 2026, at 4:45 p.m. Eastern Time [2] - The call will be available via webcast, with slides accessible in the Investor Relations section of the company's website [3] Call Access Information - Participants can access the call by phone through a registration link, and are encouraged to join 15 minutes early to avoid delays [4] - A replay of the webcast will be available for a limited time on the company's website [4] Company Overview - SPX Technologies, Inc. is a diversified global supplier of engineered products and technologies, with leadership in HVAC and detection and measurement markets [5] - The company is based in Charlotte, North Carolina, employs over 4,700 people across more than 16 countries, and is listed on the NYSE under the ticker symbol "SPXC" [5]

Core Insights - Fenimore Asset Management's Q4 2025 investor letter indicates a solid yet volatile stock market, influenced by AI enthusiasm, economic uncertainty, and monetary policy concerns [1] - The firm anticipates mixed market conditions in 2026, with many AI-related stocks appearing expensive while high-quality companies are trading at multi-year lows, presenting potential investment opportunities [1] Performance Summary - The S&P 500 Index rose by 2.66% in Q4 2025, with large-cap technology and communication services sectors leading the market [1] - Fenimore Small Cap Strategy returned -4.12%, underperforming the Russell 2000 Index, which returned 2.19% [1] - Fenimore Dividend Focus Strategy declined by -4.41% compared to the Russell Midcap Index's 0.16% return [1] - Fenimore Value Strategy saw a decline of -1.17% in Q4, also underperforming against the Russell Midcap Index [1] Company Focus: Trane Technologies plc - Trane Technologies plc (NYSE:TT) was highlighted as a key performance detractor in the Fenimore Dividend Focus Strategy [2] - As of January 15, 2026, Trane Technologies plc's stock closed at $387.27, with a one-month return of -0.66% and a 52-week loss of 0.49% [2] - The company has a market capitalization of $86.174 billion [2] - Despite challenges in the residential HVAC business due to industry changes, Trane Technologies plc's earnings and backlog remain strong, with AI data center cooling contributing positively [3]

Core Insights - Trane Technologies (TT) has a Growth Score of B, indicating a solid quality and sustainability of its growth [1] - The company's earnings for the fourth quarter of 2025 are projected to increase by 8% year over year, with earnings expected to rise by 16.1% in 2025 and 13.5% in 2026 [1][9] - Revenues are anticipated to grow by 7.1% in 2025 and 7.4% in 2026 [1][9] Market Drivers - The commercial HVAC market primarily drives Trane Technologies' business, supported by favorable government policies in the U.S. and Europe that enhance demand for energy-efficient products and decarbonization efforts [2][9] - The acquisition of Brainbox AI significantly enhances HVAC services, enabling measurable reductions in energy consumption and improvements in sustainability [3][9] Regional Performance - The Collective International HVAC business is performing well, with notable growth in EMEA and Asia, particularly in China [4] - The company's expert workforce in direct sales and service teams provides a competitive edge in capturing growth opportunities across various markets [4] Financial Health - Trane Technologies' current ratio improved to 1.21 in Q3 2025 from 1.1 in Q2 2025, indicating better liquidity due to increased cash reserves [5] - A current ratio above 1 suggests the company can efficiently meet short-term obligations [5] Competitive Landscape - The company faces competition from major players like Honeywell International, Siemens, Carrier, and Daikin Industries, which complicates the balance between growth and profitability [6] - Rising commodity prices, particularly for steel and non-ferrous metals, add to the challenges of maintaining cost efficiency while innovating [6]

Company Overview - Comfort Systems USA (NYSE: FIX) has seen its stock price more than double over the past year, driven by recognition of its potential in the artificial intelligence (AI) industry [2] - The company has a significant backlog of $9.38 billion, which is up 65% year over year, indicating strong demand for its HVAC solutions [4] Financial Performance - Comfort Systems USA reported a 35% year-over-year revenue increase in the third quarter, showcasing robust financial growth [7] - The company raised its dividend by 20% last year, reflecting a strong balance sheet and financial health, although the current yield is only 0.24% [6][8] Market Position and Strategy - The company has expanded its market share through acquisitions, including electrical companies in Western Michigan and Southern Florida, which are expected to generate an additional $200 million in annual revenue [5] - Comfort Systems USA operates 184 locations in 139 cities across the nation, positioning it advantageously near many AI hotspots and enhancing its competitive edge [7][8] Industry Trends - The HVAC sector is poised for growth as demand for AI chips increases, necessitating effective cooling solutions [4][8] - Companies are increasingly turning to HVAC providers like Comfort Systems USA to maintain optimal operating temperatures for AI chips, indicating a favorable trend for the industry [8]

Core Insights - Lennox is investing in its commercial HVAC business to enhance product availability, expand distribution capacity, and improve customer experience [1] Group 1: Distribution Enhancements - Lennox has opened its largest Regional Distribution Center in Edgerton, Kansas, covering 763,000 square feet, which significantly increases distribution capacity and supports faster fulfillment of commercial products [2] - Ongoing production in Stuttgart, Arkansas, and the fully operational factory in Saltillo, Mexico, strengthens supply reliability, allowing Lennox to deliver over 90% of commercial rooftop units and accessories within one day [3] Group 2: Digital Tools and Customer Experience - The company has relaunched the Commercial Quick Quote tool on LennoxPros, enabling contractors to quote and order emergency replacement rooftop units quickly, with features like instant quotes and real-time local inventory [4] - Feedback from contractors has led to enhancements in the Commercial Quick Quote tool, making it user-friendly and comparable to leading e-commerce platforms [4][5] Group 3: Strategic Acquisitions - Lennox is expanding its availability of commercial parts and accessories through the acquisition of Duro Dyne and Supco, providing customers with broader access to essential components for installation and service [5] Group 4: Long-term Growth Strategy - The investments in distribution and digital capabilities are aimed at positioning Lennox's Commercial business for long-term growth, facilitating easier access for customers and more effective support from the company [6]

Core Viewpoint - Lennox will report its fourth quarter and full year 2025 financial results on January 28, 2026, and provide guidance for FY 2026 [1] Group 1: Financial Results Announcement - The financial results will be reported before the market opens on January 28, 2026 [1] - An earnings conference call and webcast will take place on the same day at 8:30 a.m. Central Time [1] - CEO Alok Maskara and CFO Michael Quenzer will summarize the financial results and outlook during the call [1] Group 2: Participation Details - To participate in the earnings conference call, a call to 800-267-6316 (U.S.) or +1 203-518-9783 (international) is required at least 10 minutes prior to the start time [2] - The conference call will be webcast live on the company's investor relations website [2] - A replay of the conference call will be available until February 4, 2026 [2] Group 3: Company Overview - Lennox is a leader in energy-efficient climate-control solutions, focusing on sustainability and creating comfortable environments for customers [3] - The company's portfolio includes cooling, heating, indoor air quality, and refrigeration systems, along with HVAC parts and services [3]