Financial Data and Key Metrics Changes - In 2025, the company generated $448 million in adjusted EBITDA with a 13% margin, and free cash flow was $44 million [8][9] - For Q4 2025, adjusted EBITDA was $125 million with a margin of 14%, and free cash flow was $38 million [10][11] - The net debt to adjusted EBITDA ratio was 1.6 times, indicating a strong financial position [8] Business Line Data and Key Metrics Changes - Uncoated freesheet sales volume increased by 9% quarter-over-quarter in Q4 2025 [9] - Price and mix were unfavorable by $21 million in Q4, primarily due to lower paper prices in Europe and Brazilian export markets [11] - Volume increased by $18 million, largely driven by Latin America and North America [11] Market Data and Key Metrics Changes - The European industry supply and demand environment remains challenging, but there are signs of improvement as pulp prices began to rebound in Q4 2025 [12] - In North America, industry operating rates are improving, with a significant decline in imports throughout the second half of 2025 [13] - The company communicated paper price increases to customers in various regions, expecting realization to begin in Q2 2026 [12][13] Company Strategy and Development Direction - The company aims to achieve world-class excellence in safety, employee engagement, customer centricity, operational excellence, cost leadership, and sustainability [4][5] - The flagship growth strategy focuses on investing in low-risk, high-return projects to strengthen uncoated freesheet capabilities [25] - The company plans to maintain a strong balance sheet while returning cash to shareholders and reinvesting in the business [26] Management's Comments on Operating Environment and Future Outlook - Management anticipates 2026 will be a transition year, with expected negative adjusted EBITDA impacts in North America due to lower sales volume and one-time outage costs [19][20] - The company expects to generate over $300 million in free cash flow and greater than 15% returns on invested capital as industry conditions improve [27][72] - Management emphasized the importance of long-term value creation and disciplined capital allocation [26][72] Other Important Information - The company discontinued providing full-year adjusted EBITDA and free cash flow guidance to focus on long-term value creation [6][7] - Capital spending outlook for 2026 is expected to be $245 million, primarily for investments at the Eastover Mill [14] Q&A Session Summary Question: Update on operations in Europe and potential margin improvement - Management highlighted successful investments at the Saillat Mill to improve product mix and emphasized the need for market price improvements for margin recovery [30][33] Question: Investor interest in capital allocation - Management noted that there has been strong support from investors regarding capital allocation priorities and reaffirmed their commitment to maintaining a strong balance sheet [36][38] Question: Nymölla's long-term fit - Management acknowledged the challenges faced by Nymölla but emphasized its strategic importance and potential for improvement as wood costs begin to decrease [41][42] Question: Impact of Lenzing's production scale-up on fiber costs - Management confirmed that Lenzing's project would not impact fiber costs at Neenah [48] Question: Share repurchase pause - Management explained the decision to pause share repurchases was due to anticipated capital intensity and cash flow requirements for 2026 [55][58]

Financial Data and Key Metrics Changes - Sales growth was approximately 20% in Q4 and 11% for the full year 2025, with adjusted EBITDA margin at approximately 25% in Q4 and 24% for the full year [4][11] - Adjusted EPS was $1.27 in Q4 and $4.06 for the full year [5][11] - Free cash flow conversion ratio was approximately 135% in Q4 and 94% for the full year [4][11] Business Line Data and Key Metrics Changes - In the CPI segment, core sales were flat in Q4, with double-digit growth in gaming offset by softness in other markets, and adjusted operating margin improved to approximately 32% [12] - Security and Authentication Technologies (SAT) saw core sales up approximately 11% in Q4, driven by strong performance in Crane Currency, with adjusted operating margin decreasing by approximately 420 basis points [13][15] - Crane Authentication performed as expected, contributing to the overall growth in SAT, with a backlog up more than 50% year-over-year [16] Market Data and Key Metrics Changes - The international currency business showed strong performance, with organic backlog up over 30% year-over-year and 20 new Micro-optics wins in 2025 [6][24] - The company secured significant contract renewals with major sports leagues, enhancing its market position in authentication and traceability technologies [8] Company Strategy and Development Direction - The company is focused on accelerating organic revenue growth while maintaining strong margins and free cash flow, with significant investments in international currency and micro-optics technology [4][24] - The acquisition of Antares Vision is a strategic move to expand into higher growth markets, with plans to take the company private by mid-2026 [9][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sales outlook for 2026, driven by a strong backlog and new currency series launches, including the new $10 bill [6][19] - The company anticipates full-year sales growth of 4%-6% in 2026, with adjusted EPS expected in the range of $4.10-$4.40 [18][21] Other Important Information - The company announced a 6% increase in its annual dividend while maintaining capacity for future acquisitions [18] - Adjusted EBITDA margin is expected to be approximately flat year-over-year at around 28% for 2026 [20] Q&A Session Summary Question: Can you discuss the margin performance in SAT and pricing strategies? - Management highlighted strong growth and backlog in international currency, emphasizing that contracts are executed from backlog, which provides visibility into future performance [36] Question: What is the expected EPS cadence throughout the year? - EPS is expected to accelerate through the first half of the year, with a total guidance of $4.10-$4.40 reflecting continued strength in currency and authentication [40][41] Question: What are the dynamics in the CPI segment for the first quarter? - CPI is expected to be flat in 2026, with mid-single-digit growth in services and low single-digit declines in vending due to tariffs [51] Question: What is the status of the $10 bill onboarding? - The company is preparing for a mid-year announcement from the U.S. Treasury, with expectations for full consumer release in Q4 [54][81] Question: Can you provide insights on the international currency growth drivers? - Management identified increased counterfeiting, growth in emerging economies, and faster redesign times as key drivers for sustainable growth in international currency [66]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported total revenues of $394.3 million and adjusted operating income of $128 million [8] - The Sphere segment generated revenues of $274.2 million, an increase of over 60% compared to the prior year period, driven by higher revenues from the Sphere Experience [8] - Adjusted operating income for the Sphere segment was $89.4 million, compared to an adjusted operating loss of approximately $800,000 in the prior year quarter [9] Business Line Data and Key Metrics Changes - The Sphere Experience saw significant revenue growth due to The Wizard of Oz, with over 2.2 million tickets sold and approximately $290 million in ticket sales [6] - MSG Networks generated $120.1 million in revenues and $38.6 million in adjusted operating income, reflecting a decrease in subscribers and lower affiliate rates [10][11] Market Data and Key Metrics Changes - The company is expanding its presence with a new Sphere venue in National Harbor, Maryland, expected to attract over 15 million annual visitors [4] - The company is in discussions for additional Sphere projects in both domestic and international markets [5] Company Strategy and Development Direction - The company aims to create a global network of Sphere venues powered by proprietary technology and immersive content [4] - Continued investment in immersive technology and experiential content is planned to maintain Sphere's leadership position [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and the potential for substantial long-term growth, particularly with the expansion of Sphere venues [6] - The company is optimistic about ticket sales and demand for The Wizard of Oz, even during traditionally weaker periods in Las Vegas [28] Other Important Information - The company has refinanced its credit facility related to Sphere in Las Vegas, extending the maturity for a new five-year term and improving the borrowing rate [11] - The company is actively pursuing partnerships with various brands for sponsorship opportunities, including recent deals with Delta and Anheuser-Busch [56] Q&A Session Summary Question: How many sphere expansion projects are expected in the next few years? - Management indicated they could handle 5 to 6 projects simultaneously, assuming they are profitable [14][15] Question: Have elevated construction costs impacted conversations with potential partners? - Management stated that the business model still supports the investment level, and they are exploring new construction methods to lower costs [16] Question: Can you provide more details on the National Harbor location selection? - The location was chosen due to a competitive offer and favorable dynamics in the area [20] Question: How are ticket sales for The Wizard of Oz trending? - Management noted strong growth despite seasonal headwinds and is confident in future demand [28] Question: What is the outlook for SG&A expenses in 2026? - Management emphasized a focus on cost-saving opportunities while ensuring infrastructure supports growth [31] Question: Can you provide an update on the residency pipeline through 2027? - The company is nearly fully booked for 2026 and is focused on long weekends to maximize attendance [47] Question: What is the status of the sponsorship strategy and Exosphere progress? - The company reported strong growth in sponsorships and debuted an interactive game experience, indicating positive momentum [56]

Financial Data and Key Metrics Changes - For 2025, the company reported adjusted operating earnings per share of $2.77, exceeding expectations and continuing a track record of exceeding guidance [6][18] - The company achieved a 7.4% annual earnings growth rate and 8% rate base growth since 2021, demonstrating its ability to navigate changes effectively [6][13] - The full-year GAAP earnings were $2.73 per share, with quarterly earnings of $0.58 on a GAAP basis and $0.59 on a non-GAAP basis [18] Business Line Data and Key Metrics Changes - The company maintained top quartile reliability metrics across its utilities, ranking first, second, fourth, and seventh among peers based on 2024 benchmarking data [6][10] - The company plans to invest $41.3 billion in capital over the next four years, with over 70% of the increase driven by transmission investments [10][24] Market Data and Key Metrics Changes - Anticipated load growth in the company's jurisdictions is expected to exceed 3% through 2029, indicating robust demand [11] - The company has a large load pipeline supported by an increasing number of signed transmission security agreements [12] Company Strategy and Development Direction - The company aims to lead the energy transformation by focusing on affordability and delivering investments that benefit customers [5][10] - The strategic focus includes maintaining a strong balance sheet while funding investments in a disciplined manner [13][40] - The company is actively engaging with federal, RTO, and state leaders to address high supply prices and emerging reliability risks [15][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet unprecedented demand and navigate industry changes [5][6] - The company anticipates annualized earnings growth of 5%-7% through 2029, with a focus on maintaining operational excellence and affordability [13][34] - Management highlighted the importance of collaboration with stakeholders to address affordability and reliability challenges [16][68] Other Important Information - The company executed a $60 million customer relief fund to support low and moderate-income customers facing higher supply costs [14] - The company has committed to keeping O&M costs relatively flat from 2024 to 2026, demonstrating a focus on cost management [30][31] Q&A Session Questions and Answers Question: Could you comment on the rate-based growth and financing lag? - Management noted that actual rate base growth has been about 8% and earnings growth at 7.4%, indicating a continuation of this track record [45][46] Question: What is the regulatory strategy for 2026 in Pennsylvania? - Management stated that they are in constant conversations with stakeholders and are considering the best approach for regulatory filings in Pennsylvania and Maryland [48][49] Question: How is the company addressing supply challenges? - Management emphasized the need for utility-generated power to lower customer costs and improve reliability, supporting the development of a reliability backstop option [52][54] Question: What is the outlook for rate base growth and EPS growth? - Management indicated that while rate base growth is consistent, they aim to provide defensible numbers that account for financing costs while striving to exceed expectations [83][85]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a net loss of $79 million, or $1.54 per dilutive share, with adjusted EBITDA of $103 million, which includes $25 million of fire and idle costs from Leer South and $11 million from West Elk [12] - For the full year 2025, the net loss was $153 million, or $2.98 per dilutive share, with adjusted EBITDA of $512 million, impacted by $101 million related to Leer South fire and idle costs and $11 million from West Elk idle costs [13] - The company returned a total of $245 million to stockholders in 2025, constituting nearly 100% of free cash flow generation [7][8] Business Line Data and Key Metrics Changes - The Leer South mine resumed longwall mining in mid-December 2025 after a combustion event in early 2025, achieving its production target in January 2026 [5] - West Elk transitioned to the B seam, which has significantly better mining conditions, and is now running at high productivity levels [6] Market Data and Key Metrics Changes - U.S. utility coal consumption increased by 12% in 2025 compared to 2024, with coal-fired generation in the PJM and MISO areas rising over 19% and 15%, respectively [14] - Global coal demand rose by approximately 0.5% to 8.9 billion metric tons in 2025, continuing a multi-year growth trend [16] Company Strategy and Development Direction - The company is focused on operational excellence, capturing synergies from the merger, and expanding its customer base for high-quality coal [4][5] - The company supports the Trump administration's initiatives to preserve and upgrade the U.S. coal fleet and expand coal exports [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance for 2026, expecting strong results from both Leer South and West Elk mines [24] - The company anticipates a significant reduction in merger-related expenses and an increase in insurance recovery compared to 2025 [21] Other Important Information - The company is advancing efforts in rare earth elements and critical materials, with ongoing projects in the PRB and Northern Appalachia [22][23] - Capital expenditures for 2026 are expected to be between $325 million and $375 million, with a focus on maintenance and growth initiatives [20] Q&A Session Summary Question: Can you break out the high CV committed and priced for PAMC coal? - The company has approximately 20.5 million tons committed for high CV, with 12 million domestic and 8.5 million for export, linked to API2 pricing [30] Question: What is the outlook for shareholder returns? - The company plans to continue returning 75% of free cash flow to shareholders, with expectations for increased returns in 2026 [40] Question: What are the expectations for unit costs in 2026? - The company expects unit costs to improve in 2026 compared to 2025, with a focus on operational efficiency and cost management [57][58] Question: How is the market for high-volume coal with Leer South ramping up? - The company is seeing increased appetite in Asian markets and anticipates contracting significant volumes, particularly linked to PLV prices [62]

Financial Data and Key Metrics Changes - Total revenues increased by 12% organically, with the US market growing by 16%, marking one of the strongest performances since 2021 [9][30] - Adjusted diluted EPS grew by 10% in the quarter, or 14% when excluding the impact from the tax rate reset [9] - Adjusted EBITDA increased by 10%, with an adjusted EBITDA margin of 35.6% [30] Business Line Data and Key Metrics Changes - In the U.S., financial services revenue grew by 19%, or 11% excluding mortgage, with double-digit growth in mortgage, consumer lending, and auto [10][31] - Emerging verticals accelerated from 7% growth in Q3 to 16% in Q4, with strong performance across insurance, media, tenant and employment screening, tech, retail, and e-commerce [10][32] - Credit solutions grew by 13%, driven by U.S. non-mortgage volumes, while marketing solutions saw a growth acceleration from flat in 2024 to 7% in 2025 [15][16] Market Data and Key Metrics Changes - Internationally, revenue grew by 2% on an organic constant currency basis, with Canada and the U.K. both achieving double-digit growth [11][34] - India experienced a revenue decline of 4% in Q4, attributed to a reset year for unsecured lending and credit card originations [11][37] - The U.K. business grew by 10%, and Canada grew by 13%, reflecting strong performance from banking and fintech customers [34] Company Strategy and Development Direction - The company aims to build on its momentum and drive innovation-led growth, with a focus on launching new AI-powered solutions [20][21] - The strategic focus for 2026 includes enhancing product predictiveness and capturing more value within customer workflows [20] - The company completed its transformation investment program, which is expected to yield full target savings in 2026 [19][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit revenue growth and double-digit adjusted EPS growth for 2026, assuming stable business conditions [19][55] - The company anticipates a gradual recovery in international markets and modest U.S. lending growth [19][42] - Management highlighted the importance of AI in driving growth and improving operational efficiency, positioning the company advantageously in the market [22][28] Other Important Information - The company repurchased approximately $150 million in shares during the quarter, totaling $300 million for 2025, and raised its quarterly dividend by 9% to $0.125 per share [9][40] - The acquisition of Monevo and majority ownership of TransUnion de México were completed, expanding the company's global reach [14][40] Q&A Session Questions and Answers Question: U.S. emerging vertical guidance - Management acknowledged strong growth in emerging verticals and emphasized a prudent conservative approach to guidance, setting the stage for potential outperformance [60][62] Question: Differentiation in marketing and fraud - Management highlighted the unique identity data assets and resolution capabilities that set the company apart from competitors, emphasizing the proprietary nature of their data [71][73]

Financial Data and Key Metrics Changes - Total revenues increased by 12% organically, with the U.S. market growing by 16%, marking one of the strongest performances since 2021 [9][30] - Adjusted diluted EPS grew by 10% in the quarter, or 14% when excluding the impact from the tax rate reset [9] - Adjusted EBITDA increased by 10%, with an adjusted EBITDA margin of 35.6% [30] Business Line Data and Key Metrics Changes - U.S. Financial Services revenue grew by 19%, or 11% excluding mortgage, with double-digit growth in Consumer Lending and Auto [10][31] - Emerging Verticals accelerated growth from 7% in Q3 to 16% in Q4, with double-digit growth across Insurance, Media, Tenant and Employment Screening, Tech, Retail, and E-commerce [10] - Credit Solutions grew by 13%, driven by U.S. non-mortgage volumes, while Marketing Solutions saw a growth acceleration from flat in 2024 to 7% in 2025 [15][16] Market Data and Key Metrics Changes - International revenue grew by 2% on an organic constant currency basis, with Canada and the U.K. both achieving double-digit growth [11][34] - India experienced a revenue decline of 4% in Q4, attributed to a reset year for unsecured lending and credit card originations [11][37] - Latin America declined by 3% due to softer economic conditions, while Asia Pacific saw an 11% decline [36] Company Strategy and Development Direction - The company aims to build on its momentum and drive innovation-led growth, with a focus on launching new AI-powered solutions [20][21] - The strategic focus for 2026 includes enhancing product predictiveness and capturing more value within customer workflows [20] - The company plans to expand its offerings in India, leveraging favorable economic and demographic trends [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit revenue growth and double-digit adjusted EPS growth for 2026, assuming stable business conditions [19][54] - The company anticipates a gradual recovery in international markets and modest U.S. lending growth [19][54] - Management highlighted the importance of AI in driving growth and improving internal processes, positioning the company advantageously in the market [22][28] Other Important Information - The company repurchased approximately $150 million in shares during Q4, totaling $300 million for 2025, and raised its quarterly dividend by 9% to $0.125 per share [9][41] - The acquisition of Monevo and majority ownership of TransUnion de México were highlighted as strategic moves to enhance growth [14][41] - The transformation investment program was completed on schedule and budget, expected to deliver significant cost savings and operational efficiencies [42][43] Q&A Session Summary Question: U.S. emerging vertical guidance - Management acknowledged strong growth in emerging verticals and emphasized a conservative approach to guidance, aiming for beats and raises throughout the year [60][62] Question: Differentiation in Marketing and Fraud - Management highlighted the proprietary identity data assets and resolution capabilities as key differentiators, emphasizing the challenges competitors face in accessing similar data [70][72]

Financial Data and Key Metrics Changes - Total revenues increased by 12% organically, with the US market growing by 16%, marking one of the strongest performances since 2021 [5][26] - Adjusted diluted EPS grew by 10% in the quarter, or 14% when excluding the impact from the tax rate reset [5][27] - Adjusted EBITDA increased by 10%, with an adjusted EBITDA margin of 35.6% [26][27] Business Line Data and Key Metrics Changes - U.S. financial services revenue grew by 19%, or 11% excluding mortgage, with mortgage revenue increasing by 37% [6][29] - Emerging verticals accelerated to 16% growth, up from 7% in the third quarter, with double-digit growth across various sectors including insurance and e-commerce [6][30] - Credit solutions grew by 13%, driven by U.S. non-mortgage volumes, while marketing solutions saw a growth of 7% [11][12] Market Data and Key Metrics Changes - International revenue grew by 2% on an organic constant currency basis, with Canada and the U.K. both achieving double-digit growth [7][31] - India experienced a decline of 4% in the quarter, attributed to a reset year for unsecured lending and credit card originations [7][33] - The U.S. markets are expected to see high single-digit growth, while international markets are anticipated to grow mid-single-digit [42] Company Strategy and Development Direction - The company aims to build on its momentum and drive innovation-led growth, with a focus on launching new AI-powered solutions [17][18] - The strategic focus for 2026 includes enhancing product predictiveness and capturing more value within customer workflows [17][18] - The company completed its transformation investment program, which is expected to yield full target savings in 2026 [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit revenue growth and double-digit adjusted EPS growth for 2026 [16][50] - The company anticipates a gradual recovery in international markets and modest U.S. lending growth [16][34] - Management highlighted the importance of AI in driving growth and improving operational efficiency [19][24] Other Important Information - The company repurchased approximately $150 million of shares in the fourth quarter, totaling $300 million for 2025 [5][37] - A quarterly dividend was raised by 9% to $0.125 per share, reflecting a commitment to returning capital to shareholders [5][37] - The acquisition of a majority ownership of TransUnion de México is expected to close in the first half of 2026 [37][38] Q&A Session Questions and Answers Question: Insights on U.S. emerging vertical guidance - Management acknowledged strong growth in emerging verticals and emphasized a conservative approach to guidance, aiming for beats and raises throughout the year [54][55] Question: Differentiation in marketing and fraud solutions - Management highlighted the proprietary identity data assets and resolution capabilities as key differentiators, emphasizing the extensive data sources and integrations that competitors may lack [65][66]

Financial Data and Key Metrics Changes - Core FFO per share for Q4 2025 was $0.32, and for the full year, it was $1.17, aligning with guidance [9] - Same-store NOI grew by 1.8% in Q4 and 2.4% for the full year, driven by a 2% increase in same-store revenue [9][10] - Operating expenses increased by 2.4% in Q4 and were modestly higher for the full year due to various factors, including higher repairs and maintenance [11] Business Line Data and Key Metrics Changes - The company renovated 2,003 units in 2025, achieving an average unlevered return on investment of 15.3% [6] - In 2026, the company plans to renovate between 2,000 and 2,500 units, adding six new communities to the Value-Add Program [7] Market Data and Key Metrics Changes - Job growth in the company's markets is forecasted to average 60 basis points, double the national average of 30 basis points [8] - The company generates nearly 70% of its NOI from communities in seven of the ten highest in-migration states, supporting apartment demand [8] Company Strategy and Development Direction - The company aims to capitalize on growth opportunities by focusing on operational efficiencies and cost savings through technology adoption [5] - Capital allocation will prioritize investments in the value-add program, with expectations of improved market fundamentals in 2026 [6][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, citing improving market fundamentals and strong demand driven by job and population growth [23] - The company anticipates same-store NOI growth of 80 basis points in 2026, with a focus on maintaining operational stability [17][19] Other Important Information - The company sold a 356-unit community for $50 million and entered a new joint venture in Indianapolis for a 318-unit community [13] - A $350 million unsecured term loan was secured to improve liquidity and manage debt maturities [15] Q&A Session Summary Question: How does the new lease rate growth assumption incorporate market rent growth? - Management indicated that the new lease growth starts negative in January but is expected to improve throughout the year, with first-half growth down about 2.25% and second-half growth up roughly 75 basis points [25] Question: Can you discuss the performance of non-same-store properties? - Management noted that non-same-store properties are performing in line with expectations, but two development deals are behind schedule due to higher concessions [27] Question: What impact will concessions burning off have on rent growth projections? - Management expects lower concessions in the back half of the year, which should improve rental rate growth, particularly for renewals [32] Question: Can you elaborate on the performance of specific markets? - Management highlighted strong performance in markets like Atlanta and Nashville, while noting challenges in Memphis due to slower macro growth [40] Question: What is the strategy regarding fixed and floating rate debt? - Management plans to maintain a flexible approach, favoring floating rate debt in the current environment while monitoring interest rate markets closely [86]

Financial Data and Key Metrics Changes - Fourth quarter sales were impacted by a quality event with the largest customer, but excluding this event, the company delivered strong financial results with 7% year-on-year organic growth [4][15] - Adjusted earnings per share for the quarter were $1.53, up 9% sequentially [15] - Adjusted EBITDA was $57 million, or 22.5% of Value-Added Sales, down 7% year-over-year but up 170 basis points from a margin perspective [16] Business Line Data and Key Metrics Changes - Electronic materials experienced a 20% increase in sales, driven by growth in the semiconductor market, marking the strongest sales quarter in nearly three years [7][17] - Precision optics delivered a 26% increase in sales, marking the third consecutive quarter of top-line improvement [8][18] - Performance materials saw Value-Added Sales of $132.4 million, down 32% year-over-year, primarily due to lower Precision Clad Strip sales [16] Market Data and Key Metrics Changes - The semiconductor business saw order rates up 6% year-on-year, with a 14% increase excluding China [9] - The new energy market experienced more than double sales year-on-year, supported by a multi-year supply agreement with Commonwealth Fusion Systems [10] - Defense sales surpassed $100 million for the second consecutive year, with 10% yearly growth since 2020 [10] Company Strategy and Development Direction - The company is focused on growth in the new energy market and has made significant investments to enhance its capacity, particularly in beryllium production [11][38] - The transformation of precision optics is expected to unlock additional growth and margin expansion opportunities [13] - The company anticipates continued progress toward a midterm EBITDA margin target of 23% supported by top-line growth and operational improvements [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence entering 2026, expecting approximately 15% earnings growth driven by new business wins and market recovery [11][22] - The company is addressing the quality event with corrective actions and enhanced quality control measures to minimize future risks [6][29] - Management highlighted the importance of strong partnerships with customers and the commitment to delivering high-quality products [6][14] Other Important Information - The company ended the quarter with a net debt position of approximately $445 million and $224 million of available capacity on its existing credit facility [21] - The first quarter of 2026 is expected to be slower due to normal seasonality and additional costs related to ramping up production [22][49] Q&A Session Summary Question: Details on the Precision Clad Strip quality issues and customer expectations - Management explained the quality event was due to a control failure in production, which was addressed with corrective actions and a revised quality system [27][28] Question: Electronic materials business performance and margin expectations - Management noted strong top-line growth in electronic materials but highlighted mixed factors affecting margin performance [31][34] Question: Beryllium capacity and strategic mineral reserves - Management confirmed a $65 million investment from a defense prime to expand beryllium capacity, with additional capacity expected by 2028 [11][38] Question: Working capital needs and inventory management - Management acknowledged increased working capital due to growth and acquisitions but emphasized ongoing initiatives to manage inventory efficiently [71][74] Question: Energy market contributions and order book dynamics - Management confirmed initial shipments to Commonwealth Fusion Systems and discussed the implications for future energy market contributions [85][87]