Financial Data and Key Metrics Changes - In Q4 2025, the company achieved a gross profit dollar growth of 16% and revenue growth of 8% compared to Q4 2024, generating $61 million in operating cash flow [4][15] - The quarterly gross profit margin reached a record of 31.4%, which was 215 basis points higher than the prior year [4][18] - For the full year 2025, revenues increased by 9% to $1.1 billion, with net income rising to $180.7 million, or $14.86 per diluted share, compared to $149.8 million, or $12.29 per diluted share in the prior year [20][23] Business Line Data and Key Metrics Changes - The electric utility sector saw a doubling of revenue compared to the same period last year, while the light rail traction sector increased by 85% [17][19] - The petrochemical sector experienced a decline of 25%, and the oil and gas sector decreased by 10% due to challenging comparisons from large industrial project orders booked in fiscal 2023 [17][19] - The company booked $271 million in new orders in Q4 2025, a 1% increase year-over-year, with a total of $1.2 billion in new orders for the full year, up 9% from fiscal 2024 [6][21] Market Data and Key Metrics Changes - Domestic revenues increased by 2% to $239 million, while international revenues surged by 38% to $68 million [17] - The backlog at the end of fiscal 2025 was $1.4 billion, with electric utility and oil and gas sectors each comprising one-third of the total backlog [16][24] - Approximately 60% of the backlog is expected to be convertible in 2026 [68] Company Strategy and Development Direction - The company is focusing on expanding its presence in the electric utility and commercial sectors, which accounted for 41% of revenue in fiscal 2025 [5] - A $12.4 million investment to expand capacity at the JacintoPort facility is aimed at supporting anticipated LNG project development over the next three to five years [8][9] - The acquisition of REMSDAC is expected to enhance the company's electrical automation strategy and product offerings [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the commercial environment for all end markets, expecting continued momentum into fiscal 2026 [11][12] - The fundamentals in the oil and gas market support expectations for continued order strength, particularly in the LNG sector [11] - The company anticipates another strong year of activity in 2026, driven by investments in electrical infrastructure [12][25] Other Important Information - The company holds zero debt and ended fiscal 2025 with cash, cash equivalents, and short-term investments of $476 million, reflecting strong commercial activity [24] - Research and development spending increased by 17% to $11 million, focusing on new product design and development [23] Q&A Session Summary Question: Changes in Competitive Landscape or Pricing Environment - Management noted that the oil and gas market remains healthy, but some regions are softer and more price-sensitive, while the electric utility market is more demand-driven [29][30] Question: Seasonality and First Quarter Outlook - The first quarter is expected to be seasonally softer due to holidays, but overall optimism for the year remains high [31] Question: SG&A Expenses and One-Time M&A Costs - SG&A expenses increased by $5 million year-over-year, with $3 million attributed to compensation and nearly $2 million to acquisition-related costs [32][33] Question: Trends in Commercial and Industrial (C&I) Sector - Management indicated that the decline in the C&I sector was largely due to timing, with significant growth opportunities in data centers [38] Question: Sustainability of Growth in Electric Utility Sector - The company is optimistic about the sustainability of growth in the electric utility sector, with equal weighting in backlog between oil and gas and utility sectors [40] Question: R&D Spending and Commercialization Timeline - R&D spending is expected to remain at current levels, with some products anticipated to hit the market in 2026 [65][66] Question: Capacity Expansion and CapEx Budget for 2026 - The CapEx budget for 2026 includes the $12.4 million for JacintoPort expansion and an additional $5-$7 million for maintenance and productivity projects [67] Question: Data Center Revenue as a Percentage of Backlog - Data center revenue is approximately 15% of the backlog, with half of that being attributed to data centers, which is an increase from the previous year [70]