Financial Data and Key Metrics Changes - The fourth quarter results exceeded internal expectations, with strong growth in the offshore pipeline transportation segment driven by steady base volumes and contributions from new wells [5][11] - The quarterly common unit distribution was increased to $0.18 per unit, representing a 9.1% year-over-year increase [6] - The company exited the year with effectively zero outstanding under its $800 million senior secured revolving credit facility [6] Business Segment Data and Key Metrics Changes - The offshore pipeline transportation segment saw a 19% increase in segment margin and a 16% increase in total volumes compared to the previous quarter, marking the third consecutive quarter of sequential improvement [11] - The marine transportation segment returned to normalized operating performance, benefiting from increased refinery runs of heavy crude oil [5][16] - The onshore transportation and services segment performed in line with expectations, with increased throughput volumes across Texas and Riceland terminals [20] Market Data and Key Metrics Changes - The recent BOEM lease sale generated over $300 million in high bids for 181 tracts, indicating strong long-term interest in the central Gulf of Mexico [14][15] - The market for marine transportation remains structurally tight due to effectively zero net new supply of Jones Act vessels [19] Company Strategy and Development Direction - The company is focused on deepwater Gulf of America growth, with ongoing discussions with offshore producer customers regarding expected production volumes and drilling schedules for 2026 and beyond [7][8] - The management emphasized a disciplined approach to capital allocation, including debt reduction and evaluating future distribution increases [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding the top end of the 2026 EBITDA guidance range, despite potential disruptions from hurricanes and maintenance [9][28] - The company views the recent acquisition of LLOG by Harbour Energy as a positive development, with plans to double production from the acquired asset by 2028 [46][47] Other Important Information - The company anticipates a heavier maintenance capital year due to dry dockings, with an expected increase in maintenance CapEx of $15 million to $20 million [55] - The management team remains committed to building long-term value for stakeholders and maintaining flexibility for future opportunities [22] Q&A Session Summary Question: Guidance for 2026 and EBITDA impact from disruptions - Management expects a $5 million to $10 million reduction in segment margin due to anticipated downtime and higher marine maintenance [26][27] Question: Capital allocation and leverage ratio targets - The long-term target leverage ratio is around 4, with the board evaluating distribution growth quarterly based on performance [30][31][32] Question: Opportunities for acquiring remaining interests in offshore systems - Management is open to increasing exposure in existing offshore systems but emphasized the substantial existing capacity already available [37][39] Question: Impact of customer consolidation on long-term expectations - The acquisition of LLOG by Harbour Energy is seen as a positive, with plans to double production benefiting the company [46][47] Question: Specifics on offshore guidance for Salamanca and Shenandoah - Management is comfortable with achieving the 15%-20% guidance based on discussions with producer customers [51][53]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 17% year-over-year and 9% sequentially, driven by stabilization in industrial demand and growth in medical and advanced applications [5][17] - Full-year revenue grew by 3%, marking the first full-year revenue growth since 2021, with materials processing sales flat and welding revenue stable [6][9] - GAAP gross margin was 36.1%, while adjusted gross margin was 37.6%, impacted by planned inventory management and tariffs [20][22] Business Line Data and Key Metrics Changes - Materials processing revenue increased by 17% year-over-year, with strong performance in welding, marking, cleaning, and additive manufacturing [17] - Medical sales grew by 21% year-over-year, driven by new product traction and a major customer win [7][8] - Revenue from applications outside of materials processing accounted for approximately 14% of total revenue, with double-digit growth in micromachining, medical, and advanced applications [7][10] Market Data and Key Metrics Changes - North America sales increased by 21% sequentially and 23% year-over-year, driven by higher revenue in cutting, cleaning, medical, and advanced applications [18] - Europe saw an 8% sequential and 7% year-over-year increase, primarily from additive manufacturing and cleaning applications [18] - Asia revenue increased by 5% sequentially and 19% year-over-year, with strong demand in battery applications in China [19] Company Strategy and Development Direction - The company is focusing on strengthening its position in core industrial applications while penetrating new non-industrial markets, particularly in medical, micromachining, and directed energy [10][11] - The integration of cleanLASER has provided revenue synergies and enhanced growth in cleaning applications [12][13] - The company aims to capitalize on growth opportunities by combining laser technology with deep applications expertise to address complex customer challenges [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding improving market conditions and customer demand, despite ongoing macroeconomic uncertainties [9][10] - Strong bookings in Q4 resulted in a book-to-bill ratio above one, indicating positive demand trends [9][25] - The company plans to continue investing in growth initiatives while maintaining a strong balance sheet [24][26] Other Important Information - The company received a Prism Award for its new 8-kilowatt single-mode laser, reinforcing its position as a leader in fiber laser innovation [15] - The company is actively looking for tuck-in acquisitions to augment adjacent markets and accelerate growth [48][49] Q&A Session Summary Question: Thoughts on cutting revenue stability and long-term growth targets - Management noted that cutting revenue has stabilized and is expected to grow alongside investments in core markets like additive manufacturing and welding [31][33] Question: Update on Directed Energy opportunities and customer interest - Management reported strong customer interest in the Crossbow system for military and civilian applications, highlighting its differentiation and scalability [35][38] Question: Margin improvement and revenue levels needed for fixed cost absorption - Management indicated that revenue levels above $270 million could help improve gross margins, with ongoing cost reduction initiatives in place [39][40] Question: Plans for investment in Directed Energy applications - Management confirmed plans to increase investment in Directed Energy, with a roadmap for higher power systems in development [44][45] Question: Competitive environment and pricing pressures in Asia - Management stated that pricing remains stable in differentiated areas like battery and additive manufacturing, despite competitive pressures in cutting [60][61] Question: Updates on semiconductor exposure and growth expectations - Management highlighted engagement in lithography, metrology, and inspection, with expectations for growth aligned with semiconductor sector investments [71][72] Question: Clarification on micromachining and additive manufacturing applications - Management explained that additive manufacturing involves sintering powdered metal, while micromachining focuses on precision cutting and drilling for various industries [76][79]

Financial Data and Key Metrics Changes - The company reported full-year Adjusted EBITDA of $248 million for 2025, an 8% increase over 2024, exceeding prior guidance [5][6] - Fourth-quarter Adjusted EBITDA was $62 million, down from $95 million in the prior year period [11][6] - Pro forma net income for the full year was $89 million, or $0.57 per share, with fourth-quarter pro forma net income of $32 million, or $0.20 per share [6][10] Business Segment Data and Key Metrics Changes - Southern Timber segment generated fourth-quarter Adjusted EBITDA of $32 million, down 8% from the prior year, due to lower net stumpage realizations [8][13] - Pacific Northwest Timber segment reported fourth-quarter Adjusted EBITDA of $5 million, a 24% decline from the prior year, primarily due to a 26% decrease in harvest volumes [18][17] - Real estate segment achieved full-year Adjusted EBITDA of $127 million, significantly above the original guidance range, with fourth-quarter Adjusted EBITDA of $33 million [19][20] Market Data and Key Metrics Changes - The company noted that rural HBU markets remained strong, contributing to the real estate segment's performance [6][20] - Pulpwood pricing in the Atlantic region was under pressure due to mill closures and increased supply, with average pricing down 27% compared to the prior year [14][16] - The company expects improved demand and pricing in local markets as sawmills ramp up production in response to higher lumber prices [15][19] Company Strategy and Development Direction - The merger with PotlatchDeltic is expected to create a premier land resources company with a diversified timberland portfolio and enhanced operational efficiencies [3][4] - The company plans to focus on disciplined capital allocation and creating long-term value through synergies from the merger [4][32] - The company is optimistic about the long-term value creation potential from land-based solutions, including solar and carbon capture projects [31][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the merger's ability to deliver strategic and financial benefits, despite challenging market conditions [4][29] - The company anticipates a tightening of supply in the timber market due to the impact of Hurricane Helene, which should support improved market conditions over time [17][56] - Management remains optimistic about the long-term demand for timber, driven by an underbuilt housing stock and expected growth in housing starts [56][57] Other Important Information - The company repurchased approximately 110,000 shares at an average price of $26.31 per share prior to the merger announcement [12] - The company paid a special dividend of $1.40 per share due to taxable gains from the sale of its New Zealand joint venture [12] - The company finished the year with $843 million in cash and $1.1 billion in debt, maintaining a conservative leverage profile [13] Q&A Session Summary Question: Insights on real estate performance and drivers for 2026 - Management noted that real estate sales are lumpy and significantly impacted by larger transactions, with strong premiums to timberland value driving performance [37][39] Question: Share repurchase strategy and capital structure considerations - Management indicated that share repurchases are attractive given the stock price discount to net asset value, with $230 million remaining on the authorization [43][46] Question: Initial harvest guidance for the combined companies - Management explained that the guidance reflects a partial year contribution from PotlatchDeltic and is generally in line with historical sustainable yields [52][53] Question: Pulpwood market dynamics and pricing outlook - Management acknowledged challenges in the pulpwood market but expressed optimism for long-term improvements as supply pressures subside [56][79] Question: Opportunities in timberland M&A and wood products investments - Management stated that the timberland M&A market remains competitive, and while they will evaluate opportunities, share repurchases currently present the best value [64][66]

Financial Data and Key Metrics Changes - West Fraser generated an adjusted EBITDA of -$79 million in Q4 2025, an improvement from -$144 million in the prior quarter, which included a $67 million out-of-period duty expense [4] - For the full year 2025, adjusted EBITDA was $56 million, down from $673 million in 2024 [4] - Cash flow from operations was negative $172 million in Q4, with net debt at $131 million, compared to a net cash position of $212 million in the previous quarter [10] Business Line Data and Key Metrics Changes - The lumber segment reported an adjusted EBITDA of -$57 million in Q4, compared to -$123 million in Q3, excluding the $67 million duty expense [6] - The North America EWP segment had an adjusted EBITDA of -$24 million in Q4, worsening from -$15 million in Q3, with a $239 million non-cash restructuring charge [7] - The pulp and paper segment reported an adjusted EBITDA of -$1 million in Q4, an improvement from -$6 million in Q3 [8] - The Europe segment's adjusted EBITDA was $4 million in Q4, up from $1 million in Q3, indicating a moderately improved business environment [8] Market Data and Key Metrics Changes - The overall Q4 results showed sequential EBITDA improvement supported by reduced SPF log costs, lower southern yellow pine manufacturing costs, and lower OSB labor costs, despite lower lumber and North American OSB prices [9] - Southern yellow pine shipments were 6% lower quarter-over-quarter, while unit manufacturing costs also decreased [10] Company Strategy and Development Direction - The company has focused on high-grading its mill portfolio, including closures of higher-cost assets and ramping up the Allendale OSB mill in South Carolina and the new Henderson lumber mill in Texas [5] - Since 2022, West Fraser has removed over 1.1 billion board feet of capacity through mill closures, representing a 16% decrease in lumber operating capacity [14] - The company has invested nearly $1 billion in capital over the last four years to modernize assets and improve operational flexibility [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the difficult end markets in 2025 but emphasized a long-term focus on operational excellence and cost management [13] - The company remains optimistic about its future, particularly with the ramp-up of the Henderson Mill and ongoing portfolio optimization [14][17] - Management is cautious about the demand outlook for OSB compared to lumber, reflecting mixed sentiment from customers regarding growth in the repair and remodeling market [50] Other Important Information - The company had over $1.2 billion of available liquidity at year-end, providing financial flexibility to support capital allocation strategies [5][12] - Management is actively evaluating the impact of U.S. tariffs on operations and will adjust forecasts as necessary [11] Q&A Session Summary Question: Can you provide insights on margins between SPF and SYP in Q4? - Management noted that the pricing spread between SPF and SYP has started to close, reflecting adjustments in customer demand patterns [20][21] Question: How sustainable are the lower costs observed in Q4? - Management indicated that the trends in cost structure are a result of efforts made over the past years to lower costs through capacity adjustments and modernization [22] Question: What are the M&A opportunities given the current lumber market? - Management emphasized the importance of asset quality and indicated that they are prepared to react to quality opportunities that may arise [25][26] Question: How should we view the ramp-up of the Henderson Mill in a muted demand environment? - Management stated that the Henderson Mill is in early stages of startup and is expected to replace existing volume in the market [29] Question: What is the outlook for housing measures from the administration? - Management expressed optimism about any measures that could improve housing affordability and demand for lumber, though the timing and impact remain uncertain [46][47] Question: What drives the difference in demand outlook for OSB versus lumber? - Management noted mixed customer sentiment regarding growth in the repair and remodeling market, leading to a cautious outlook for OSB [50]

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $20.3 million for Q3 fiscal 2026, with a total of $58 million in revenue for the nine months [15][4] - Adjusted EBITDA for Q3 was $2.6 million, with a consolidated adjusted EBITDA of $1.6 million for the second quarter [15][4] - The company posted a net loss of $4.1 million or 37 cents per diluted share for Q3 [15] Business Line Data and Key Metrics Changes - The audio division generated $18.6 million in revenue and $2.6 million in adjusted EBITDA for Q3 [15] - PodcastOne subsidiary achieved record revenue of $15.9 million and adjusted EBITDA of $2.8 million [15][16] - Slacker subsidiary reported Q3 revenue of $2.8 million with an adjusted EBITDA of negative $0.1 million [15] Market Data and Key Metrics Changes - The company is trading at 60% of revenues, while the industry is trading over 3x revenues [6] - The private sector in podcasting and audio is trading over 3.7x, with transactions above 5x revenues in the last 120 days [6] Company Strategy and Development Direction - The company aims to scale profitably and close the earnings delivery gap, with preliminary fiscal guidance of $85 million to $95 million in revenues and $8 million to $10 million in adjusted EBITDA for the next fiscal year [5][6] - The focus is on expanding partnerships with major companies like Amazon, Apple, and Tesla, and converting over 1 million free and ad-supported subscribers into paid tiers [8][9] - The company is also investing in original IP, with over 15 projects in the pipeline, and plans to expand live experiences, which previously accounted for 50% of revenues [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for transformational growth, highlighting the importance of AI and behavioral data in driving future opportunities [16][11] - The company is focused on leveraging its $125 million net operating loss carryforwards for long-term shareholder value and tax efficiencies [5][6] - Management noted that the current B2B deals and upcoming partnerships could represent significant growth opportunities, with expectations of substantial revenue increases [41][76] Other Important Information - The company has streamlined its workforce from 350 to 88 members, reducing operating expenses by over 52% year-over-year [4] - The company has paid off over $2.5 million of debt, strengthening its balance sheet and capital flexibility [4][5] Q&A Session Summary Question: On the B2B business and customization - Management explained that the B2B deals are customized and that the company is leveraging AI to enhance service delivery, making it difficult for competitors to replicate [19][20] Question: Advertising revenue potential for Slacker - Management indicated that the advertising business is robust and that partnerships with programmatic advertising companies are expected to drive revenue growth from free subscribers [26][27] Question: Competitive landscape for content provision - Management stated that while some competition exists, the company's unique service offerings and flexibility provide a competitive advantage [31][32] Question: Timing and revenue from the 30 million subscriber deal - Management confirmed that the deal is signed and expected to ramp up in the following year, with conservative revenue estimates included in the guidance [36][62] Question: Conversion rates from Tesla users - Management highlighted a significant conversion rate from Tesla users and expressed optimism about future revenue growth from this segment [70]

Financial Data and Key Metrics Changes - The company reported a revenue of $21.8 million for Q1 2026, representing a 36.5% increase from the previous year, driven by growth in the commercial aftermarket business and higher service revenues [9][10] - Adjusted EBITDA grew 141% to $7.4 million, up from $3.1 million in the same period last year, largely due to revenue growth and a more favorable revenue mix [4][14] - Net income for the quarter was $4.1 million, compared to $700,000 last year, with GAAP earnings per diluted share increasing to $0.22 from $0.04 [13] Business Line Data and Key Metrics Changes - Product sales reached $13.6 million, up from $10 million last year, primarily due to stronger volumes of aftermarket product upgrades [10] - Service revenue increased to $8.2 million from $6 million, driven by growth in service volumes related to IRUs and radio products [11] - Gross profit rose to $11.9 million, an increase of 80%, with gross margin improving to 54.5% from 41.4% [11][12] Market Data and Key Metrics Changes - The company faced a decline in F-16 revenues by approximately $1.2 million due to a manufacturing transition, but expects a ramp-up in revenues as the year progresses [10][24] - Temporary headwinds were noted in the business jet markets, leading to a revenue decline of approximately $1 million during the quarter [10] Company Strategy and Development Direction - The company is focused on its IA Next long-term value creation strategy, which prioritizes profitable growth, operational excellence, and disciplined capital allocation [4][5] - The long-term target includes achieving $250 million in revenue with Adjusted EBITDA margins between 25%-30% through organic and inorganic growth [5] - The company is pursuing complementary acquisitions to expand capabilities and increase recurring revenue streams [7][8] Management's Comments on Operating Environment and Future Outlook - Management expects organic revenue to be essentially flat year-over-year due to the pull forward of revenue related to F-16 production and service revenue [17] - The outlook for the remainder of fiscal 2026 remains positive, with expected second-quarter revenues in the range of $20 million to $22 million [17] Other Important Information - Cash flow from operations was $8.2 million, up from $1.8 million in the previous year, with free cash flow increasing to $7 million from $1.6 million [15] - The company had total debt of $23.8 million and cash and cash equivalents of $8.3 million, resulting in a net debt of $15.5 million [16] Q&A Session Summary Question: What products drove the increase in commercial aftermarket demand? - The increase was mainly driven by sales of new products developed for air transport, including the ICAT system for the 757 and 767 [19] Question: Was there any pull forward in demand? - The strong first quarter was attributed to significant growth in the previous year, with organic growth expected to be in the single digits for 2026 [20][22] Question: What growth opportunities exist for the F-16 platform? - Growth opportunities include new contracts and RFPs from Lockheed and the U.S. government for subassemblies and full units [24][25] Question: What surprised the company to the upside in the last quarter? - The upside was due to the timing of shipments, with some purchase orders arriving sooner than expected [31] Question: What is the outlook for defense programs outside of the F-16? - There are numerous RFPs for upgrades to various platforms, indicating a strong opportunity for growth in defense spending [32] Question: Is there any acceleration in the M&A pipeline? - The company expects to see opportunities in the near term, although some previous opportunities were not aligned with strategic objectives [33] Question: How is the integration of F-16 components progressing? - The integration took longer than planned due to requirements from Lockheed Martin and the U.S. government [39] Question: What is the market interest in UMS and the regulatory environment for automation? - There is significant interest in cockpit automation, with potential regulatory changes expected to allow for one-pilot operations in the future [41][42]

Financial Data and Key Metrics Changes - Primerica reported a record year in 2025 with a 10% increase in adjusted net operating income to $751 million and a 16% increase in diluted adjusted operating income per share to $22.92 [5][14] - The company achieved a 16% increase in fourth quarter adjusted net operating income and a 22% increase in diluted adjusted operating income per share [4] - Record adjusted operating revenues reached $3.3 billion, up 8% year-over-year, and record net operating income was $761 million, up 10% [14] Business Line Data and Key Metrics Changes - Term life insurance sales faced challenges with a 10% decline in new policies issued for the full year compared to record levels in 2024, while estimated annualized issued term life premiums declined 7% [7][10] - Investment and savings product (ISP) sales grew significantly, with fourth quarter sales of $4.1 billion, up 24% year-over-year, and total annual sales of $14.9 billion, also up 24% [9][10] - Client asset values increased by 15% to $129 billion, supported by strong annual net inflows of $1.7 billion [11] Market Data and Key Metrics Changes - The U.S. market saw nearly 3,500 licensed representatives close over $500 million in mortgage loans, a 26% increase from 2024 [12] - Canadian clients experienced over 18% growth in mortgage volume year-over-year [12] Company Strategy and Development Direction - The company aims to grow its sales force by approximately 1% in 2026, focusing on improving recruiting and licensing efforts [5][6] - Primerica is investing in technology and training to enhance sales processes and improve productivity among representatives [40][80] - The company plans to maintain a conservative outlook for policy growth in 2026, projecting a 2%-3% increase in term life sales [9][18] Management's Comments on Operating Environment and Future Outlook - Management noted that cost of living pressures are beginning to ease, which may improve purchasing power for middle-income families [30][45] - The company anticipates a gradual normalization of persistency rates as economic conditions stabilize [17] - Management expressed optimism about the ISP segment's growth potential, driven by favorable demographic trends and increasing demand for retirement solutions [10][15] Other Important Information - Primerica returned approximately 79% of net operating income to shareholders through share repurchases and dividends, indicating a disciplined approach to capital deployment [22][23] - The company maintains a strong financial position with $521 million in cash and invested assets [22] Q&A Session Summary Question: What is driving the term sales outlook of 2%-3% growth for 2026? - Management indicated that improving purchasing power for middle-income families and easing economic uncertainties are expected to drive sales momentum [28][30] Question: Why are term life and ISP showing diverging trends? - Management explained that different segments of the middle-income market react differently to economic conditions, with ISP benefiting from money in motion towards retirement accounts [32][33] Question: What is the potential impact of AI on the business model? - Management views AI as an opportunity to improve efficiencies and reshape workflows, enhancing the sales process without threatening the relationship-based model [39][42] Question: What distractions are being observed in the middle market? - Management noted that tight budgets and economic uncertainties have been distractions, but there are signs of improvement as cost pressures ease [44][45] Question: What is the outlook for term life margin? - Management expects the term life operating margin to be around 21% for the year, with stable benefit and claims ratios [18][67]

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]