Financial Data and Key Metrics Changes - Adjusted EPS for Q4 2025 was $1.53, up 21% year-over-year, driven by a 5.4% core sales growth [6][30] - Full-year adjusted EPS increased by 24%, supported by strong team performance and investments in advanced technologies [6] - Core FX neutral backlog increased by 14% year-over-year, indicating strong demand [30] Business Line Data and Key Metrics Changes - Aerospace and Advanced Technologies segment sales reached $272 million, a 15% increase, primarily organic [31] - Process Flow Technologies segment sales were $309 million, flat compared to the previous year, with core sales down 1.5% [32][20] - Adjusted segment margin for Aerospace and Advanced Technologies expanded to 23.6%, up 50 basis points from the previous year [32] Market Data and Key Metrics Changes - Commercial OEM sales increased by 27%, while military OEM sales rose by 18% [32] - Total aftermarket sales increased by 1%, with commercial aftermarket sales up 3% and military aftermarket down 3% [32] - Core FX neutral orders in Process Flow Technologies decreased by 3%, driven by weaker chemical end markets [32] Company Strategy and Development Direction - The company aims for 4%-6% core sales growth and 35%-40% core operating leverage, with a focus on delivering shareholder value [5] - Recent acquisitions, including Druck, Panametrics, and Reuter-Stokes, are expected to enhance growth and support existing and new customers [6][9] - The company plans to expand its Aerospace and Advanced Technologies segment by exploring adjacent markets and technologies [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and resilience of the company’s team and portfolio, anticipating strong performance in 2026 [11] - The company expects core sales growth for Aerospace and Advanced Technologies to be at the high end of the 7%-9% long-term growth assumption [16] - Management noted that while the chemical market remains sluggish, other segments like pharmaceuticals and cryogenics are expected to grow [20][56] Other Important Information - The company will exclude non-cash, tax-affected, acquisition-related intangible amortization from its non-GAAP presentation of adjusted EPS starting in 2026 [12][34] - The integration process for recent acquisitions is underway, with expectations for these businesses to be slightly accretive to earnings in 2026 [22] Q&A Session Summary Question: What are the pricing opportunities at Druck in 2026 and 2027? - Management indicated significant pricing opportunities and expects improvements starting this year, with no obstacles to achieving goals [40][41] Question: Can you clarify guidance related to cost takeout at PSI? - Management confirmed that there are no changes to previously discussed cost takeout expectations, which remain consistent with earlier communications [42][43] Question: Can you discuss the strategic direction of the renamed AAT segment? - Management explained that the renaming allows for expansion into adjacent technologies and markets, similar to previous successful strategies [52][53] Question: What is the outlook for the chemical market in 2026? - Management expects the chemical market to remain sluggish, with no strong uptick anticipated, but is prepared to capitalize on any opportunities [56][58] Question: What are the expected synergies from the PSI acquisitions? - Management indicated that while initial synergies may be modest, they expect significant improvements in margins and performance in the coming years [95][96]

Financial Data and Key Metrics Changes - Adjusted EPS was reported at $1.64, reflecting a 5.6% core sales growth, primarily driven by Aerospace & Electronics and Process Flow Technologies [5][19] - Adjusted operating profit increased by 19%, supported by strong net pricing and productivity [19] - Core FX neutral backlog rose by 16% year-over-year, indicating continued strength in Aerospace & Electronics [19][21] Business Line Data and Key Metrics Changes - Aerospace & Electronics sales reached $270 million, a 13% increase, with total aftermarket sales up 20% [21][22] - Process Flow Technologies delivered sales of $319 million, up 3%, with flat core performance and a slight benefit from acquisitions and foreign exchange [22][23] - Adjusted segment margin for Aerospace & Electronics expanded to 25.1%, while Process Flow Technologies saw a margin of 22.4%, reflecting strong productivity and pricing [22][23] Market Data and Key Metrics Changes - The defense and aerospace markets remain robust, with expectations for low double-digit core sales growth for the year [11][21] - The chemical market showed softness, particularly in Europe and China, but North America and the Middle East exhibited positive activity [31][32] Company Strategy and Development Direction - The company is on track to close the acquisition of Precision Sensors & Instrumentation, which is expected to enhance financial profiles and margins [6][9] - The strategic outlook remains focused on operational execution and commercial excellence, with an organic growth assumption of 4% to 6% for 2026 [8][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate current macroeconomic challenges and maintain operational consistency [19][25] - There is optimism regarding the stabilization and potential recovery of the chemical market in the upcoming year [42] Other Important Information - The company raised its full-year adjusted earnings outlook to a range of $5.75 to $5.95, reflecting a 20% growth at the midpoint compared to the previous year [7][24] - The company expects to offset tariff impacts through pricing and productivity measures, with a gross cost increase of approximately $30 million for the year [21] Q&A Session Summary Question: Can you discuss the expectations for the non-chemical portion of Process Flow Technologies? - Management indicated strong growth in wastewater and cryogenics, with double-digit growth expected in these areas [30][31] Question: What are the key drivers of margin upside in Process Flow Technologies? - The margin upside is attributed to innovation, new product launches, and effective pricing strategies [34][36] Question: How is the company preparing for potential impacts from a U.S. government shutdown? - Currently, there are no expected impacts from the government shutdown, and operations remain stable [57] Question: What is the outlook for organic growth in Aerospace & Electronics next year? - Management expects to be at the high end of the long-term growth range of 7% to 9% for Aerospace & Electronics [104] Question: How does the company view automation in its operations? - The focus is on specific tasks for automation rather than complete factory automation, addressing skilled labor gaps [96][98]