Thermon(US:THR)2022-05-26 20:10Financial Data and Key Metrics Changes - Fiscal year 2022 revenues totaled $355.7 million, representing a growth of 29% compared to the prior year, with adjusted EBITDA growth of 61% [7][20][25] - Free cash flow for the year was $24.2 million, which represented 120% of net income [7] - Adjusted EPS for Q4 was $0.31 per share, up from $0.02 per share in Q4 of the previous year [16][26] Business Line Data and Key Metrics Changes - Diversified end markets achieved 44% growth, now representing 60% of revenues in non-oil and gas verticals [8][12] - The power sector grew by 260%, rail and transit by 49%, and commercial business by 67% year-over-year [12][13] - Point-in-time revenues grew 34% in the quarter and 33% for the full fiscal year, while overtime revenues were up 51% in the quarter [20][21] Market Data and Key Metrics Changes - The U.S. and Canada led the recovery in FY '22, while Europe grew modestly and Asia lagged due to COVID lockdowns [13][19] - Incoming orders grew 47% in Q4 and 39% over the trailing 12-month period, with backlog up 37% year-over-year [17] Company Strategy and Development Direction - The company is focusing on diversifying end markets, with approximately 60% of end markets now outside of oil and gas [33] - Investments in R&D for new product development in rail and transit, commercial, and electrification applications are ongoing [33] - The company aims to exceed $550 million in revenue by fiscal 2026 through both organic and inorganic growth strategies [29][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as supply chain disruptions and inflation but expressed confidence in the company's ability to navigate these issues [11][30] - The company anticipates continued strong demand and a robust backlog, projecting revenue guidance for FY '23 between $350 million and $380 million [37][38] Other Important Information - The company reported a net debt to adjusted EBITDA ratio of 1.5x at year-end, indicating a strong balance sheet [27] - The company has identified a specific set of continuous improvement projects to enhance profitability in the future [23] Q&A Session Summary Question: Impact of cyclical shift in gold demand on recovery in end markets - Management noted that COVID restrictions, particularly in China, have delayed recovery, but there are positive signs in other regions [42][43] Question: Expectations for point-in-time sales versus overtime sales in FY '23 - Management indicated that point-in-time sales would likely remain consistent with historical averages but may see a slight increase [46] Question: SG&A run rate expectations amid potential global growth slowdown - Management clarified that the $80 million SG&A target was for FY '22 and that investments would continue to be made for growth [48] Question: Potential upside in oil and gas end market due to energy prices - Management acknowledged the possibility of upside in the oil and gas sector, particularly in maintenance spending [59]