taxes5,7946,37735,71133,698Depreciation9,9619,57338,82436,857Amortization4,2104,05216,54716,227EBITDA$ 37,965$ 50,796$ 204,191$ 220,623EBITDA % net sales10.2 %13.2 %12.7 %13.5 %Adjustments:CEO Transition(1)$ —$ —$ 2,310$ —Acquisition and Integration Expenses(2)1,647—3,274—Restructuring Expenses(3)5,1501,0027,0894,228Gradall Strike(4)———3,556Adjusted EBITDA$ 44,762$ 51,798$ 216,864$ 228,407Adjusted EBITDA % net sales12.0 %13.4 %13.5 %14.0 %Notes:1.CEO Transition includes accelerated stock compensation, recru ...

Core Viewpoint - U.S. small-cap stocks are experiencing significant performance gains, outperforming large-cap stocks, with expectations for further growth if the Federal Reserve cuts interest rates [1][2][6]. Small-Cap Stock Performance - The S&P Small Cap 600 Index has increased by 10.7% in the last three months and 4.1% over the past 30 days, while the S&P 500 Index has risen by 8.9% and 1.8% respectively [1]. - Small-cap stocks are more sensitive to economic conditions and interest rate changes, making them a focal point for potential investment opportunities [4][6]. Interest Rate Impact - A projected 0.25% cut in the federal funds rate is anticipated to benefit small-cap companies by lowering borrowing costs, which is crucial as these companies often rely on debt financing [2][3]. - Lower interest rates are expected to enhance earnings power for small-cap firms by reducing interest expenses [3]. Economic Growth and Small-Caps - If lower rates stimulate the economy and growth stabilizes or accelerates, small-cap stocks are likely to outperform as they typically do in the early to mid-stages of economic expansion [4][6]. - However, if rate cuts are a response to economic weakness, small-cap stocks may underperform due to their cyclical nature [6]. Notable Small-Cap Stocks - **Patrick Industries**: Year-to-date performance of 37.00%, expected to benefit from lower rates leading to volume growth and a successful M&A strategy [8]. - **Federal Signal**: Year-to-date performance of 38.00%, poised for growth due to lower borrowing rates for industrial customers and benefits from infrastructure spending [9][10]. - **LKQ Corporation**: Year-to-date performance of -10.42%, positioned to gain from increased demand for vehicle parts as consumers extend the life of their vehicles amid high prices [11][12]. Investment Strategies - The small-cap sector presents opportunities for value addition through mutual funds or active ETFs, especially as information asymmetry increases with smaller companies [13]. - Investors are advised to seek quality managers who focus on well-valued companies and maintain close relationships with company management for better monitoring [14].