Financial Data and Key Metrics Changes - In Q3 2025, the company achieved sales growth of 3%, with adjusted operating income increasing by 10% and adjusted EPS rising by 14% to $1.24 [5][13] - Return on sales (ROS) expanded by 160 basis points to 25.7% [5][13] - The company generated record free cash flow of $719 million year to date, up 14% year over year, and increased return on invested capital (ROIC) to 16.7% from 15.2% a year ago [16][17] Business Line Data and Key Metrics Changes - Flow sales increased by 6% year over year to $394 million, with residential sales up 3%, commercial sales up 5%, and industrial sales up 10% [13][14] - Water Solutions sales declined by 6% to $273 million, with commercial sales down 6% and residential sales also down 6% [14][15] - Pool sales increased by 7% to $354 million, driven by price, volume, and the Gulfstream acquisition [15][16] Market Data and Key Metrics Changes - The company expects Flow sales to be up low single digits, Water Solutions to be down mid-single digits, and Pool sales to be up approximately 7% for the full year [18] - The company anticipates fourth quarter sales to be up approximately 3% to 4% [19] Company Strategy and Development Direction - The company is focused on transformation initiatives and has delivered approximately $56 million in transformation savings year to date, aiming for $80 million in 2025 [8][9] - The company continues to invest in growth initiatives and innovation through digital and product technology [7][8] - The acquisition of Hydrostat for $292 million is expected to enhance the commercial Flow business [5][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of their strategy and increased full-year guidance, expecting adjusted EPS of approximately $4.85 to $4.90, up 12% to 13% from 2024 [6][18] - Management noted that while there are uncertainties related to tariffs and interest rates, they are optimistic about the company's performance and growth potential [49][50] Other Important Information - The company has raised its dividend for 49 consecutive years and plans to continue share repurchases [8][10] - Bob Fishman, the CFO, will be leaving the company effective March 1, 2026, with a smooth transition planned [10][11] Q&A Session Summary Question: Concerns about Pool margin productivity - Management acknowledged the tough comparison for Pool margins but expressed optimism for a rebound in Q4, highlighting investments made to drive future growth [24][25] Question: Core Water Solutions growth outlook - Management noted a slight decrease in growth expectations for core Water Solutions, attributing it to slower market conditions, particularly in the food service industry [30][31] Question: Transformation savings and future potential - Management confirmed confidence in achieving the $80 million transformation savings target and indicated ongoing opportunities for further savings [36][37] Question: Flow segment pricing and performance - Management reported strong performance across residential, commercial, and industrial segments, with price increases being maintained [39][40] Question: Hydrostat acquisition and growth potential - Management indicated that Hydrostat is expected to contribute $10 million in Q4 and projected $50 million in revenue for 2026, with cross-selling opportunities identified [64][65]

Financial Data and Key Metrics Changes - The company reported record sales of $644 million for Q2 2025, an increase of 8% on a reported basis and 6% on an organic basis [15][16] - Adjusted EBITDA of $153 million increased by 22%, with an adjusted EBITDA margin of 23.8%, up 280 basis points [17] - Adjusted earnings per share rose by 26% to $3.09, driven by operations, acquisitions, foreign exchange, and reduced interest expense [18] Business Line Data and Key Metrics Changes - Organic sales in the Americas increased by 10%, while reported sales were up 11%, driven by price, volume, and pull forward demand [15][16] - Europe experienced an organic sales decline of 8% and reported sales down 3%, attributed to ongoing OEM and market weakness [16] - APMEA sales decreased by 1% on an organic basis and 3% on a reported basis, with growth in Australia, New Zealand, and the Middle East offset by declines in China [16] Market Data and Key Metrics Changes - The Americas segment margin increased by 290 basis points to 27.2% [17] - Europe segment margins increased by 170 basis points to 11.7% [17] - APMEA segment margin remained flat at 18.9% compared to the prior year [17] Company Strategy and Development Direction - The company is focusing on M&A, having acquired EasyWater, which is expected to contribute approximately $5 million in sales and be neutral to adjusted EPS in 2025 [11] - The rollout of the Nexa Intelligent Water Management solution is gaining traction, with successful installations in various sectors [12] - The company is committed to sustainability, having published its 2024 sustainability report highlighting progress in safety, energy efficiency, and water conservation [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current trade environment and increasing full-year sales and margin outlook due to strong first-half performance [25][26] - There is caution regarding the European market, with ongoing softness in general construction and uncertainty around order rates [49] - The company expects continued strength in data centers, which is offsetting residential market softness [94] Other Important Information - The company estimates a direct tariff impact of approximately $40 million for 2025, down from a previous estimate of $60 million [21][56] - Free cash flow year-to-date through Q2 was $105 million, with expectations for sequential improvement [19] Q&A Session Summary Question: Impact of pull forward in sales - Approximately $20 million of sales pull forward was realized in the quarter [28] Question: Pricing dynamics and tariff impacts - Price realization was approximately 3% in Q2, with expectations for mid-single digits in the second half [57] Question: Competitive positioning and domestic manufacturing - The company believes its domestic manufacturing strategy provides a competitive advantage in the current uncertain market environment [43] Question: Update on European heat pump market - Destocking in the heat pump market is expected to end by Q3, but general construction remains soft in Europe [49] Question: Changes in tariff estimates - The reduction from $60 million to $40 million in direct costs is due to changes in tariffs, including new copper tariffs [56] Question: Integration of acquisitions - All acquisitions are integrating well, with synergies being realized across the board [61] Question: Future of Nexa platform - The company expects the sales cycle for Nexa to shorten as more customers realize its benefits [77]

Financial Data and Key Metrics Changes - The company reported Q1 sales of $389 million, representing 5% core growth and 4% reported growth, impacted by 1% from currency fluctuations [9][10] - Adjusted EBITDA for Q1 was $98 million, with an adjusted EBITDA margin of 25.2%, reflecting a 110 basis point year-over-year improvement [10][11] - Net debt leverage ended the quarter at 0.9 times, including $77 million used for share repurchases [11] Business Line Data and Key Metrics Changes - Mid single-digit core sales growth was observed in nonresidential end markets, while residential and some commercial segments showed softness [10] - The company achieved solid execution on growth initiatives, driving sales performance to the higher end of the outlook provided previously [10] Market Data and Key Metrics Changes - The company experienced a 33% increase in the volume of filtered water delivered in Q1, totaling 600 million gallons, driven by growth in the installed base of filtered units [12] Company Strategy and Development Direction - The company is focused on minimizing exposure to China, with plans to reduce COGS from China to 2-3% by the end of 2026 [6][20] - A multiyear strategy has been implemented to restructure the supply chain, aiming for a competitively advantaged cost structure [8][14] - The company is also committed to sustainability, having received recognition for its efforts in this area [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in being price cost positive despite potential new tariffs from non-China sources [6][8] - The company anticipates that the operating environment will involve some level of new tariffs or added costs for the foreseeable future [22][23] - Management reaffirmed full-year guidance, projecting core sales growth in the low to mid-single digits for Q2 [26] Other Important Information - The company has seen a 60% increase in submitted continuous improvement (CI) projects year-over-year, aimed at enhancing operational efficiency [25] - The company is actively evaluating M&A opportunities while maintaining a strong balance sheet and cash flow generation [11] Q&A Session Summary Question: Changes in guidance and volume/price contributions - Management indicated that while there have been many moving parts, they are confident in managing to at least the guidance provided in February [30][31] Question: Impact of pricing on demand - Management acknowledged potential demand destruction but emphasized that they are not constructing guidance based solely on this assumption [46][47] Question: Education vertical spending trends - Management reported no observed slowing or increased hesitancy in the education vertical [55] Question: Confidence in affirming full-year guidance amid tariff risks - Management expressed confidence in their ability to manage effectively despite potential tariff increases [58][59] Question: Competitive positioning and cost structure - Management believes they are well-positioned from a cost perspective relative to peers, with limited available capacity in the industry [108][112] Question: Share buyback strategy - Management confirmed the ability to continue share repurchases based on current cash flow and leverage position [113][114]

Financial Data and Key Metrics Changes - In Q4 2024, sales decreased by 1% to $1,000,000,000, but adjusted operating income increased by 17% to a record $231,000,000, with return on sales (ROS) expanding by 370 basis points to 23.8% [10][20] - For the full year 2024, sales were $4,100,000,000, with adjusted operating income of $959,000,000, up 12%, and adjusted EPS of $4.33, up 15% [11][12] - The company generated record free cash flow of $693,000,000, marking a nearly 26% year-over-year increase [29][30] Business Line Data and Key Metrics Changes - Flow segment sales decreased by 5% in Q4 to $361,000,000, while commercial sales increased by 7% [22] - Water Solutions segment sales decreased by 4% in Q4 to $258,000,000, with reportable segment income growing by 21% to $62,000,000 [25] - Pool segment sales grew by 5% in Q4 to $354,000,000, driven by both price and volume [26] Market Data and Key Metrics Changes - The company expects total sales in fiscal 2025 to be approximately flat to up 2%, with flow sales expected to increase slightly and water solutions sales expected to decline by low single digits [32][39] - Pool sales are projected to increase by approximately 4% to 5% in 2025, benefiting from a recent acquisition [40] Company Strategy and Development Direction - The company is focused on transformation initiatives and the implementation of the "eightytwenty" strategy to drive profitability and operational efficiencies [16][18] - The ROS target has been increased to 26% by the end of 2026, reflecting confidence in achieving higher profitability despite macroeconomic uncertainties [28] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was a transformative year with strong performance across all segments, despite macroeconomic challenges [7][9] - The company anticipates a recovery in residential markets in the second half of 2025, contingent on interest rate stabilization [111] Other Important Information - The company has increased its dividend by approximately 9%, marking the 49th consecutive year of dividend increases [30] - The company is committed to maintaining a disciplined capital allocation strategy, focusing on organic growth and strategic acquisitions [30] Q&A Session Summary Question: What is the split between the legacy transformation program and the new eightytwenty program? - Management indicated that the benefits of transformation will be captured in the productivity column, with eightytwenty helping to focus the business [44][45] Question: How is pricing being managed in light of tariffs? - The company expects to implement a price increase of 1.5% to 2%, which includes adjustments for tariffs, and anticipates that price will offset additional tariff costs [46][48] Question: What is the outlook for the pool market? - Management remains cautious about new pool builds, expecting low single-digit growth in new and remodeled pools, with aftermarket sales also projected to grow [56][106] Question: How are tariffs affecting the financial outlook? - The company has embedded the impact of tariffs in its adjusted EPS guidance, with expectations for minimal impact in Q1 and more significant effects in subsequent quarters [55][62] Question: What is the expected contribution from the recent acquisition? - The acquisition is expected to contribute approximately $35,000,000 in revenue for 2025, with a net benefit of about $30,000,000 [77]