Financial Data and Key Metrics Changes - The company reported consolidated sales of $2.7 billion for Q2 2025, a decrease of $115 million or 4% from the same quarter last year, primarily due to lower sales volume in the Access and Transport segments [16] - Adjusted operating income was $313 million, slightly down from the prior year, with an adjusted operating income margin of 11.5%, consistent with the prior year despite lower sales [16] - Adjusted earnings per share (EPS) was $3.41, an increase of $0.07 or 2.1% over the prior year [6][17] Business Line Data and Key Metrics Changes - The Access segment delivered resilient adjusted operating income margins of 14.8% on sales of $1.26 billion, despite a $151 million decrease in sales compared to last year [17] - The Vocational segment achieved an adjusted operating income margin of 16.3% on $970 million of sales, a 220 basis point increase from last year, reflecting improved price-cost dynamics [18] - The Transport segment improved its operating income margin to 3.7% from 2.1% last year, despite a $93 million decrease in sales to $479 million [18] Market Data and Key Metrics Changes - Market conditions for access equipment in North America were in line with expectations, with sales volume in Europe lower, partially offset by sales at IUSA [17] - The company noted a return to normative levels in the book-to-bill ratio, indicating a stable demand environment [42] Company Strategy and Development Direction - The company aims for a compound annual revenue growth rate of 7% to 10% and transformative margin expansion of 200 to 400 basis points by 2028 [8] - The strategy focuses on accelerated innovation in autonomy, electrification, and intelligent connected products, supported by favorable long-term trends [5] - The company is committed to executing its strategies despite uncertainties introduced by tariffs, believing that industry-leading businesses will provide long-term growth opportunities [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to offset tariff impacts through mitigation strategies and local production [36] - The company anticipates a more limited impact from tariffs compared to the previous quarter and expects adjusted EPS for the year to be in the range of $11 per share on revenues of approximately $10.6 billion [20] - Management highlighted strong demand from infrastructure spending and data centers, which are expected to drive future growth [45][100] Other Important Information - The company has increased its outlook for free cash flow from a range of $300 million to $400 million to a range of $400 million to $500 million, reflecting improved operating performance [20] - The company stepped up share repurchases, buying back nearly 415,000 shares for about $40 million in the quarter [17] Q&A Session Summary Question: Access segment margin expectations for the second half - Management indicated that the second half results would reflect seasonality and expected some impact from tariffs in the fourth quarter, with pricing adjustments being implemented [26][30] Question: Clarification on tariff commentary - Management acknowledged ongoing tariff headwinds but expressed confidence in their mitigation strategies and local production advantages [36] Question: Expectations for orders in the second half - Management noted a healthy backlog and expected to continue booking orders in the third and fourth quarters, which is typical for this time of year [52] Question: Vocational segment performance and backlog - Management confirmed that the strong performance in the vocational segment is expected to continue, driven by increased capacity and demand for advanced technology [64] Question: Capital allocation and share buybacks - Management outlined priorities for capital allocation, emphasizing maintaining a strong balance sheet, organic growth, and share repurchases, even at current stock price levels [90]