Financial Data and Key Metrics Changes - For fiscal year 2025, total sales reached an all-time high of $3.7 billion, with an operating profit margin of 15.7% and earnings per share of $3.68, which was at the higher end of the guidance range [6][17] - In Q4 2025, sales increased by 5% year over year to $981 million, with adjusted EPS of $1.03, up approximately 10% year over year [12][19] - Operating margin for the quarter was a record 16.4%, up 10 basis points from the prior year, with cash conversion at 123% [19][20] Business Line Data and Key Metrics Changes - **Mobile Solutions**: Total sales were $588 million, a 2% increase year over year, with aftermarket sales at $468 million, up 3% [14][15] - **Industrial Solutions**: Sales rose 8% to $310 million, with IFS sales growing 11% to $262 million [16] - **Life Sciences**: Sales increased by 14% to $82 million, driven by strong growth in food and beverage and disk drive segments [16] Market Data and Key Metrics Changes - In China, sales grew 14% year over year, marking the fourth consecutive quarter of growth, with both first fit and aftermarket sales increasing [15] - Aerospace and defense sales decreased by 6% to $47 million due to a decline in defense sales following the completion of large projects [16] Company Strategy and Development Direction - The company is focused on optimizing its cost structure while investing in growth areas such as solvent recovery and new disk drive technologies [13][29] - The strategy includes disciplined investments in R&D and capital expenditures, with a commitment to M&A opportunities primarily in life sciences and industrial businesses [29][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macro uncertainties and cyclical headwinds, with expectations for another record year in fiscal 2026, projecting total sales of $3.8 billion [17][27] - The company anticipates an incremental margin of approximately 40% and a continued focus on margin expansion despite challenging market conditions [27][28] Other Important Information - The company returned $465 million to shareholders through share repurchases and increased dividends by 11% [6][17] - The company is in the heavy lift phase of footprint optimization, expected to be mostly complete by 2026 [13] Q&A Session Summary Question: What is the outlook for agricultural demands? - Management noted that agricultural orders likely bottomed within the quarter, with slight growth expected but not at double-digit levels [36][37] Question: What is the status of bioprocessing solutions commercialization? - Management indicated that traditional life sciences businesses are performing well, but upstream bioprocessing remains muted, with significant growth expected more in fiscal 2027 [39][50] Question: How does the company view the connected products strategy? - Management clarified that the connected products strategy is not subscription-based but aims to deepen customer relationships, leading to increased replacement parts sales [52][53] Question: What is the outlook for the aerospace and defense segment? - Management expects aerospace and defense sales to be flat after cycling against record levels in the prior year, with a solid quote backlog [76][108] Question: How does the company plan to manage capital allocation? - The company maintains a balanced approach to capital allocation, focusing on organic growth, M&A opportunities, dividends, and share buybacks [29][88]

Financial Data and Key Metrics Changes - For fiscal year 2025, total sales reached an all-time high of $3.7 billion, with an operating profit margin of 15.7% and earnings per share of $3.68, which was at the higher end of the guidance range [5][16][18] - In Q4 2025, sales increased by 5% year over year to $981 million, with adjusted EPS of $1.03, up approximately 10% year over year [11][18] - Operating margin for the quarter was a record 16.4%, up 10 basis points from the prior year [18][22] Business Line Data and Key Metrics Changes - **Mobile Solutions**: Total sales were $588 million, a 2% increase year over year. Aftermarket sales were $468 million, up 3%, while off-road sales increased by 5% [13][14] - **Industrial Solutions**: Sales rose 8% to $310 million, with IFS sales growing 11% to $262 million [15] - **Life Sciences**: Sales increased by 14% to $82 million, driven by strong growth in food and beverage and disk drive segments [15][22] Market Data and Key Metrics Changes - In China, sales grew 14% year over year, marking the fourth consecutive quarter of growth, with both first fit and aftermarket sales increasing [14] - Aerospace and defense sales decreased by 6% to $47 million due to a decline in defense sales following the completion of large projects [15] Company Strategy and Development Direction - The company is focused on optimizing its cost structure while investing in growth areas such as solvent recovery and new disk drive technologies [12][29] - The strategy includes disciplined growth investments and maintaining a strong balance sheet to support potential M&A opportunities [29][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macro uncertainties and cyclical headwinds, with expectations for another record year in fiscal 2026, projecting total sales of $3.8 billion [16][27] - The company anticipates an incremental margin of approximately 40% and a continued focus on margin expansion despite challenging market conditions [27][28] Other Important Information - The company returned $465 million to shareholders through share repurchases and increased dividends by 11% [5][16] - The company is committed to maintaining its position in the S&P high yield dividend aristocrat index, with a forecasted repurchase of 2% to 3% of outstanding shares in fiscal 2026 [30][86] Q&A Session Summary Question: When did agricultural orders bottom for your team? - Management indicated that agricultural orders likely bottomed within the quarter, with slight upticks observed, but not significant growth expected in the near term [35] Question: What is the outlook for bioprocessing solutions? - Management noted that while traditional life sciences businesses are performing well, the upstream bioprocessing segment remains muted, with expectations for growth more likely in fiscal 2027 [38] Question: How is the first fit versus aftermarket revenue growth expected to trend? - Management expects first fit sales to rebound, particularly in the U.S. and Europe, while aftermarket sales are anticipated to grow due to continued market share gains [39][41] Question: What is the outlook for the power generation super cycle? - Management confirmed that the power generation business remains strong, with no signs of cooling in the super cycle, and backlog coverage is at its longest [95] Question: How does the company view its M&A pipeline? - Management expressed a strong appetite for M&A, with a good pipeline of opportunities, particularly in life sciences and industrial businesses [86]

Financial Data and Key Metrics Changes - Sales reached a record $454 million, up 4.8% from $433 million in the same period last year, driven by higher volumes and pricing despite unfavorable foreign exchange impacts [12][18] - Adjusted EBITDA was $95 million, representing a margin of 21%, compared to $93 million and 21.4% in the prior year [12][19] - Adjusted earnings per share increased to $0.75 from $0.71 year-over-year [13][19] - Adjusted free cash flow was $36 million, up from $34 million in the prior year [20] Business Line Data and Key Metrics Changes - The aftermarket segment showed strong growth, supported by expanded product coverage and distribution partnerships, while first fit business faced challenges due to regulatory uncertainties [9][48] - The company achieved a 4% increase in volume, with aftermarket contributing significantly to this growth [44][64] Market Data and Key Metrics Changes - The U.S. market is expected to decline by 15% to 25% in heavy and medium-duty segments due to regulatory uncertainties and tariff policies [15] - In China, the market showed temporary growth, but challenging conditions are expected to persist [16] - Overall company revenue guidance for 2025 was raised to a range of 1% to 4% growth compared to the prior year [16] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: growing share in first fit, accelerating aftermarket growth, transforming the supply chain, and expanding into the industrial filtration market [8][11] - The operational separation from Cummins is on track for completion in the third quarter, which is expected to enhance operational flexibility [6][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties and maintaining operational performance, with expectations for continued growth despite market challenges [5][16] - The company anticipates pricing to provide approximately 2.2% revenue growth, with tariffs expected to fluctuate [14][27] Other Important Information - The company has repurchased $20 million of stock in the second quarter, totaling $30 million year-to-date, with plans for further repurchases [7] - The effective tax rate for 2025 was reported at 21.9%, slightly up from 21.8% in the previous year [20] Q&A Session Summary Question: Pricing expectations and tariff impacts - Management clarified that pricing expectations were adjusted due to changes in tariffs, particularly related to China, with a current expectation of 0.8% pricing impact from tariffs [24][26] Question: EBITDA margin guidance - Management explained that the expected EBITDA margin for the second half is below 19%, influenced by seasonality and market conditions [33][35] Question: Volume experience in the second quarter - Management noted strong volume performance, with some pre-buy activity due to midyear price increases and tariff uncertainties [44][47] Question: Industrial filtration market entry - Management confirmed ongoing efforts to enter the industrial filtration market through both organic and inorganic strategies, with modest growth expected [58][59] Question: Drivers of outperformance in the quarter - Management attributed the outperformance to share gains, effective pricing strategies, and successful tariff mitigation efforts [64][66]