Financial Data and Key Metrics Changes - Total sales for Q4 2025 increased by 10.7% year-over-year to $134.3 million, while organic net sales declined by 5.3% excluding the Accu-Fab acquisition [15] - Manufacturing margin rate decreased to 6.6% from 8.9% in the prior year, primarily due to project launch costs and early-stage project inefficiencies [15][17] - Free Cash Flow for Q4 2025 was $10.2 million, down from $35.6 million in the prior year, largely due to a one-time settlement received in the previous year [17][18] Business Line Data and Key Metrics Changes - Net sales in the commercial vehicle market declined approximately 19% year-over-year, while construction and access market revenues increased by approximately 13% [6] - Powersports market net sales grew approximately 20% year-over-year, driven by new business wins and stabilized customer production schedules [7] - Data center and critical power market saw growth of approximately 13% year-over-year, supported by legacy OEM demand and early project launches [8] Market Data and Key Metrics Changes - The qualified opportunity pipeline for the data center and critical power market exceeds $125 million, with expected project launches valued at $40 million-$50 million in 2026 [8] - The serviceable addressable market for new data center capacity is estimated to be between $115 million and $185 million per gigawatt, representing a total market opportunity of approximately $3.2 billion [8] - The data center market is expected to grow at a compound annual rate of approximately 16% from 2026 through 2030 [9] Company Strategy and Development Direction - The company is focused on executing its MBX operational excellence framework and optimizing its manufacturing footprint to enhance operating leverage [5] - Investments are being made to support program readiness and execution in anticipation of higher volume programs, with a focus on capturing demand in the data center and critical power market [4][5] - The company aims to maintain a disciplined approach to capital deployment, prioritizing debt reduction and potential M&A opportunities to diversify end market exposure [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the fourth quarter represented a transitional period, with muted demand in legacy markets but robust demand in data center and critical power markets [4] - The company expects margins to normalize as project volumes ramp up and utilization improves, with a focus on profitable growth in 2026 and beyond [5][14] - Management expressed confidence in the growth trajectory for 2026, driven by anticipated improvements in legacy markets and strong demand in the data center sector [14][21] Other Important Information - The company is introducing quarterly financial guidance in addition to its full-year outlook to provide better visibility into business trends [12] - For 2026, the company expects net sales between $580 million and $620 million, with Adjusted EBITDA of $50 million to $60 million [19] Q&A Session Summary Question: Impact of revised ACT outlook on commercial vehicle market - Management noted an increase in Class A truck orders and expects demand to accelerate build rates from commercial vehicle customers starting mid to late Q2 [27][28] Question: Signs of improvement in agriculture market - Management indicated that while large agriculture remains down, there are signs of improvement in small agriculture and related sectors [31] Question: Margin headwinds in critical power segment - Management expects most launch costs to be incurred in the first half of 2026, with a return to full run rate anticipated by the end of Q2 [32] Question: Clarification on EBITDA guidance and margin progression - Management explained that ongoing costs and lower legacy market volumes are impacting margins, with expectations for improvement in the second half of the year [41][57] Question: Customer concentration in data center market - Management stated that the data center market is reasonably diversified across multiple customers, mitigating significant concentration risks [69] Question: Capacity to ramp up data center business without sacrificing legacy business - Management confirmed that current capacity allows for ramping up data center business while maintaining legacy business operations [78]

Financial Data and Key Metrics Changes - Total sales for Q3 2025 increased by 6.6% year over year to $144.3 million, while organic net sales excluding the AccuFab acquisition declined by 9.1% compared to the prior year period [15][19] - Manufacturing margin rate decreased to 11% from 12.6% in the prior year, primarily due to nonrecurring restructuring costs and lower customer demand in legacy markets [15][19] - Adjusted EBITDA margin fell to 9.8% from 12.6% year over year, attributed to lower legacy customer demand [18][19] - Free cash flow for Q3 was negative $1.1 million compared to positive $15.1 million in the prior year, impacted by $3.5 million in nonrecurring costs [18][19] Business Line Data and Key Metrics Changes - Net sales to the commercial vehicle market declined by 24% year over year, with a projected 28% decline in Class 8 production for 2025 [8][10] - Construction and access market revenues increased by 10.1% year over year, supported by the AccuFab acquisition and strong nonresidential activity [8][10] - Powersports market net sales grew by 6.4% year over year, driven by transient aluminum-related demand, while agriculture net sales declined by 21.8% due to elevated interest rates [9][10] Market Data and Key Metrics Changes - The data center and critical power market is expected to represent 20% to 25% of total revenues in the coming years, driven by significant capital investments and a growing opportunity pipeline [7][10] - Customer engagement remains strong, with $30 million in new project awards secured in the data center and critical power markets during Q3 [10][11] Company Strategy and Development Direction - The integration of the AccuFab acquisition is expected to yield revenue synergies of $20 million to $30 million in 2026, with gross margins projected to be approximately 10 percentage points above historical averages [6][7] - The company aims to diversify its revenue base and strengthen its long-term growth profile by focusing on faster-growing and higher-margin end markets [7][10] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year 2025 financial guidance, expecting net sales between $528 million and $562 million, with continued softness in certain legacy markets [20][21] - The company anticipates a transitional period with margin pressure as it ramps up data center and critical power production while managing legacy market demand [21][22] Other Important Information - The company plans to use positive cash flow in Q4 to reduce debt, maintaining a focus on financial discipline and operational efficiency [20][21] - Net debt increased to $214.9 million, resulting in a net leverage ratio of 3.5 times as of September 30, 2025 [19][21] Q&A Session Summary Question: How is the rollout of productivity initiatives going? - Management reported that productivity initiatives have been implemented across all plants, positioning the company for significant margin expansion once volumes return [26][27] Question: What is the timeline for closing the decremental margin gap? - Management expects to see improvements by mid-2026, with a conservative approach to the commercial vehicle forecast [29][30] Question: What changes have occurred since the AccuFab acquisition? - The company has been actively engaging new customers and expanding its pipeline, with a qualified opportunity pipeline exceeding $100 million [38][39] Question: What are the key milestones for realizing AccuFab synergies? - Key milestones include ramping up production of battery backup cabinets and distribution units starting in Q4 and Q1, respectively [83] Question: How is production capacity being balanced between legacy markets and data center exposure? - The company is having discussions with legacy customers to secure additional volumes while reallocating capacity to data center customers [88][89]