Financial Data and Key Metrics Changes - CNO Financial Group achieved an operating return on equity of 11.4%, an improvement from 10% in 2024, and is on track to reach a target of 12% by 2027 [13][19] - Operating earnings per diluted share increased to $4.40, reflecting an 11% growth, with full-year operating earnings per share exceeding guidance at $4.02 [5][13] - The company returned $386 million to shareholders, marking an 11% increase over 2024, and raised its quarterly common stock dividend for the 13th consecutive year [7][23] Business Line Data and Key Metrics Changes - The consumer division reported a record total new annualized premium (NAP) growth of 15%, with life NAP up 10% and Medicare Supplement NAP up 49% for the year [8][9] - The worksite division also saw record insurance sales, up 15% for the full year, with life insurance sales increasing by 36% [11][12] - Overall, the company experienced its 14th consecutive quarter of sales growth across both divisions [4][11] Market Data and Key Metrics Changes - Total health NAP increased by 22%, marking 14 consecutive quarters of growth, while Medicare Advantage policies sold decreased by 3% for the year [9][10] - The company holds over $18 billion in client assets, reflecting an 11% increase from 2024, with brokerage and advisory client assets up 24% [10][11] Company Strategy and Development Direction - CNO Financial Group focuses on the underserved middle-income market, leveraging a last-mile captive agent distribution model as a competitive advantage [5][8] - The company is investing in technology modernization with a planned investment of approximately $170 million over three years, with $20 million deployed in 2025 and $75 million expected in 2026 [21][22] - The strategic exit from the fee services business within the worksite division is progressing on schedule, expected to be completed in the first half of 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the lack of visibility in the economic environment, citing potential challenges from layoffs and job market conditions affecting consumer behavior [30][31] - Despite economic pressures, the company remains optimistic about the demand for Medicare products, with 11,000 Americans turning 65 daily, presenting ongoing opportunities [10][32] - The company anticipates continued growth in producing agent count and productivity, emphasizing the importance of agent productivity over mere count [28][29] Other Important Information - The effective tax rate on operating income was 20.6%, below the guidance range, due to tax strategies implemented in the fourth quarter [14] - The company ended the year with a consolidated risk-based capital ratio of 380%, within the target range of 360%-390% [17][18] Q&A Session Summary Question: Earnings emergence and target returns - Management indicated that the time to hit target returns varies by product, but confidence remains high due to strong sales trends [25][26] Question: Environment outlook and agent count growth - Management expects to grow producing agent count in 2026, emphasizing productivity as the primary focus [28][29] Question: Sustainability of growth levels - Management acknowledged potential headwinds but remains comfortable with guidance, expecting continued growth in Medicare Supplement sales [40][42] Question: Impact of Medicare Advantage distribution fees - Management reflected expectations of pressure on Medicare Advantage, focusing more on Medicare Supplement [44] Question: Capital deployment strategy - Management plans to return excess capital to shareholders through share repurchases while being measured in capital deployment [47][48] Question: Investment portfolio exposure to software - Management reported a small exposure to software in the investment portfolio, with a focus on mission-critical software [72][73] Question: Dynamics of turning 65 and product positioning - Management expects the number of individuals turning 65 to remain stable until around 2030, presenting ongoing opportunities for the company [79][81]

Financial Data and Key Metrics Changes - Camden Property Trust reported core funds from operations (Core FFO) for Q4 2025 at $193.1 million, or $1.73 per share, which was $0.03 ahead of the midpoint of prior guidance [34] - The company expects Core FFO per share for 2026 to be in the range of $6.60-$6.90, representing a decrease of $0.13 from 2025 results [35][36] - Same-property revenue growth for 2025 was reported at 76 basis points, slightly beating guidance [13] Business Line Data and Key Metrics Changes - Rental rates for Q4 2025 showed new leases down 5.3% and renewals up 2.8%, resulting in a blended rate of -1.6% [27] - The company disposed of 3 communities for $201 million and acquired 1 community for $85 million during Q4 2025 [29] - For the full year 2025, Camden sold 7 older communities for $375 million and acquired 4 newer assets for $423 million [30] Market Data and Key Metrics Changes - The company anticipates that new supply in its markets peaked in 2024 and will continue to decline, setting up for below-average years in 2026 and 2027 [14] - The D.C. Metro area achieved 3.5% revenue growth in 2025, with 96% occupancy heading into 2026 [19] - Houston is expected to exceed average portfolio growth again in 2026 due to limited supply [20] Company Strategy and Development Direction - Camden plans to market its California properties for sale to expand its footprint in the Sun Belt and simplify its operating platform [10][31] - The company intends to reinvest approximately 60% of the sales proceeds into high-demand Sun Belt markets and use the remainder for share repurchases [31] - The overall portfolio is graded as a B with a stable but improving outlook for 2026 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty about the operating environment but noted strong apartment absorption rates and resilient residents [8][10] - The company expects modest acceleration in operating conditions in the second half of 2026, with a revenue growth midpoint of 75 basis points [16] - Management highlighted that the current economic conditions could lead to a significant recovery in rental rates once supply and demand dynamics shift [102][106] Other Important Information - The company anticipates $14 million in legal expenses as part of non-core adjustments, which are expected to normalize over time [70] - New legislation in Colorado has impacted utility rebilling, resulting in a loss of approximately $1.8 million in revenue, affecting same-store NOI [118] Q&A Session Summary Question: Why is now the right time to sell the Southern California portfolio? - Management believes there will be a pivot point in Sun Belt growth, and they want to be ahead of that trend [46][49] Question: How are you thinking about splitting the California portfolio for sale? - There are many buyers interested, and the company will maximize the purchase price through various sale structures [50] Question: What are your expectations for new and renewal rents throughout the year? - Slight improvements are expected in the first quarter, with more visibility during peak leasing seasons [55] Question: How will the timing of 1031 exchange acquisitions affect guidance? - The company expects no net impact on 2026 guidance from the California sale and anticipates redeployment of capital in mid-year [60] Question: What are the expectations for stabilized returns on new developments? - Costs are decreasing by 5%-8%, but developments remain challenging [66] Question: Can you provide more details on the $14 million in legal expenses? - This amount includes legal costs related to ongoing battles, which are expected to resolve and normalize over time [70] Question: How will the new Colorado legislation affect ancillary income? - The legislation will significantly impact revenue, accounting for about 19 basis points of same-store NOI [118]

Financial Data and Key Metrics Changes - Camden Property Trust exceeded its original guidance for Core FFO by $0.13 per share, reporting Core FFO for Q4 2025 at $193.1 million or $1.73 per share, which was $0.03 ahead of the midpoint of prior guidance [9][34] - Same-property revenue growth for 2025 was reported at 76 basis points, slightly beating the midpoint of guidance [13] - The company expects Core FFO per share for 2026 to be in the range of $6.60-$6.90, with a midpoint of $6.75, representing a $0.13 decrease from 2025 results [35] Business Line Data and Key Metrics Changes - Rental rates for Q4 2025 showed new leases down 5.3% and renewals up 2.8%, resulting in a blended rate of -1.6% [27] - The company disposed of three communities for $201 million and acquired one community for $85 million during Q4 2025 [29] - For 2025, Camden sold seven older communities for $375 million and acquired four newer assets for $423 million [30] Market Data and Key Metrics Changes - The company anticipates that new supply in its markets peaked in 2024 and will continue to decline, setting up for below-average years for new supply in 2026 and 2027 [14] - The Washington, D.C. Metro area achieved 3.5% revenue growth in 2025 and is rated A- with a moderating outlook for 2026 [19][20] - Austin is rated C+ with an improving outlook, as new supply is slowing, but it will take time for market-wide occupancy to improve [26] Company Strategy and Development Direction - Camden plans to expand its Sun Belt footprint by selling its California properties, with preliminary indications of value ranging from $1.5 billion to $2 billion [31] - The company intends to reinvest approximately 60% of the sales proceeds into high-demand Sun Belt markets and use the remainder for share repurchases [31] - The overall portfolio is graded as a B with a stable but improving outlook, with expectations for modest revenue growth in 2026 [18] Management's Comments on Operating Environment and Future Outlook - Management highlighted the uncertainty in the multifamily REIT sector but expressed confidence in the resilience of residents and the affordability of apartments compared to homeownership [8][11] - The company expects operating conditions to improve in the second half of 2026, with a slight acceleration in job growth primarily in Sun Belt markets [16] - Management noted that the current economic environment has led to a hiring freeze, but there is optimism for better job growth in 2026 [88] Other Important Information - The company is facing a new Colorado legislation that affects utility rebilling, which is expected to impact same-store NOI by approximately 19 basis points [120] - Legal expenses are becoming a significant part of the business, with $14 million in non-core adjustments anticipated for the year [70] Q&A Session Summary Question: Why is now the right time to sell the Southern California portfolio? - Management believes there will be a pivot point in Sun Belt growth, and they want to be ahead of that trend [46] Question: Can you discuss the guidance for new and renewal rents? - Slight improvements are expected in the first quarter of 2026, with more visibility during peak leasing seasons [55] Question: How will the timing of 1031 exchange acquisitions work? - The California sale is anticipated to close mid-year, with redeployment of capital happening in the summer [60] Question: What are the expectations for stabilized returns on new developments? - Costs are coming down by 5%-8%, but developments remain challenging [66] Question: How will the new legislation in Denver affect ancillary income? - The new legislation will impact utility rebilling, resulting in a loss of approximately $1.8 million in revenue [120]

Financial Data and Key Metrics Changes - Regency Centers achieved NAREIT FFO per share growth of close to 8% and Core Operating Earnings per share growth of nearly 7% for the full year [16][19] - Same-Property NOI growth finished at 5.3%, driven by strong operating fundamentals and substantial external growth [9][16] - The company expects same-property NOI growth in a range of 3.25%-3.75% for 2026, largely driven by rent spreads and redevelopment deliveries [17][19] Business Line Data and Key Metrics Changes - The company reported significant same-property NOI growth of 5.3%, supported by substantial base rent contributions and increased occupancy [9][16] - Average percent commencement rate for the portfolio increased by 150 basis points year-over-year, indicating strong tenant demand [9][11] - Cash rent spreads of 12% in Q4, with renewal spreads at a record 13%, highlighting the depth of embedded mark-to-market in the portfolio [11][12] Market Data and Key Metrics Changes - Tenant demand remains exceptionally strong across nearly every category, with significant leasing activity from grocery anchors like Whole Foods, Sprouts, and Trader Joe's [10][12] - The company noted historically low bad debt and continued growth in tenant sales and foot traffic, reinforcing the durability of its portfolio [6][8] - The development pipeline includes over $300 million of new project starts, with a total of more than $800 million in new projects started over the past three years [7][14] Company Strategy and Development Direction - Regency Centers is focused on ground-up development as a primary driver of external growth, leveraging expertise and access to low-cost capital [7][15] - The company aims to create long-term shareholder value while amplifying its NOI growth profile through disciplined capital allocation [8][19] - The management emphasized the importance of maintaining a strong balance sheet and liquidity position to remain opportunistic in the market [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operating environment, noting robust demand for grocery-anchored real estate and a favorable backdrop for physical retail [8][19] - The company is optimistic about the significant momentum into 2026, with strong fundamentals and active leasing teams driving occupancy and rent growth [12][19] - Management acknowledged potential challenges in the broader retail environment but emphasized the essential nature of their tenants and the resilience of their portfolio [53] Other Important Information - Regency Centers has a strong development platform with a projected visibility of nearly $1 billion in project starts over the next three years [14][19] - The company maintains a fortress balance sheet with A3, A- credit ratings from Moody's and S&P, and no need to raise equity or sell properties to fund its investment pipeline [19] Q&A Session Summary Question: Follow-up on acquisitions and dispositions - Management noted that there is strong demand for grocery-anchored real estate, with a broad range of opportunities available, but they do not guide on acquisitions [21][23] Question: Impact of Amazon closing grocery stores - Management expressed confidence in the grocery sector, highlighting that Amazon's focus on Whole Foods is encouraging and that they are exploring options for the closed stores [29][30] Question: Development and redevelopment spend guidance - Management indicated that the $325 million development and redevelopment spend is roughly two-thirds ground-up and one-third redevelopment [38] Question: Changes in store openings or closures - Management reported strong tenant health, with below-historic norms for accounts receivable and continued upward trends in sales and foot traffic [51][53] Question: Leasing spreads and renewal spreads - Management explained that renewal spreads exceeded new spreads due to favorable supply-demand dynamics and opportunities to mark below-market leases to market [82][83]

Financial Data and Key Metrics Changes - For the full year 2025, total company production grew by 11% to approximately 100,000 barrels of oil equivalent per day, with oil production growing by 4% to nearly 40,000 barrels per day [7] - Fourth quarter adjusted net income was approximately $71 million or $0.38 per diluted share, with adjusted EBITDA coming in at $216 million [8][16] - Free cash flow for the full year exceeded $425 million, with approximately 75% returned to shareholders through dividends and share repurchases [9][19] Business Line Data and Key Metrics Changes - The company achieved a new production record in the fourth quarter, averaging nearly 104,000 barrels of oil equivalent per day, reflecting a sequential increase of 3% [8] - Operationally, field-level cash operating expenses declined by 7% to $5.12 per BOE during 2025 [7] Market Data and Key Metrics Changes - Total revenue per BOE declined 13% quarter-over-quarter due to a decrease in oil prices [21] - The company remains completely unhedged for all its oil and natural gas production, with anticipated oil price differentials of approximately $3 per barrel [23] Company Strategy and Development Direction - The company's strategy focuses on steady mid-single-digit total production growth, high pre-tax margins, and reliable free cash flow while maintaining a low reinvestment rate [10][11] - The company plans to remain fiscally prudent with capital spending expected to be approximately flat year-over-year while delivering total production growth of approximately 5% in 2026 [13][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate product price volatility and emphasized the importance of maintaining low leverage and a strong balance sheet [15][11] - The outlook for 2026 is optimistic, with expectations for gradual production growth despite potential winter weather impacts in the first quarter [23][44] Other Important Information - The company repurchased approximately 8.9 million shares throughout 2025, reducing the diluted share count by roughly 4.5% [9][17] - A 10% increase in the quarterly dividend to $0.16 per share was recently announced, marking the fifth consecutive annual increase [19] Q&A Session Summary Question: Performance of recent wells in Giddings - Management noted that recent wells have outperformed type curves due to improved drilling practices and better rock quality, with no significant changes in completion design [25][26] Question: M&A activity and pricing trends - Management indicated that competition for acquisitions has increased, particularly for larger deals, and expressed a preference for opportunities with undeveloped upside rather than PDP-heavy assets [28][30] Question: Well-cost reductions and capital efficiency - Management reported a reduction in the cost of standard Giddings wells to around $1,000 per foot, with expectations for flat to slightly decreasing service costs [35][36] Question: Capital allocation strategy in a higher oil price scenario - In a scenario with higher oil prices, management indicated that excess cash would likely be allocated to dividends, share repurchases, or opportunistic acquisitions, rather than increasing rig counts [99][100] Question: Development approach and well pad sizes - The company continues to operate with an average of 3-4 wells per pad, with flexibility to drill longer laterals when possible [50][51] Question: Maintenance capital expectations - Management estimated maintenance capital to be around $400 million, with a focus on maintaining production levels without excessive spending [79][80]

Financial Data and Key Metrics Changes - Revenue increased by 21% to $56.7 million, driven by strong performance across end markets [4][15] - Adjusted EBITDA rose by 50% to $6 million, with an adjusted EBITDA margin of 10.7% [4][18] - Net income for the quarter was $0.25 per diluted share, and adjusted net income was $0.31 per diluted share [18] - Gross profit increased by 15% to $13.5 million, with a gross margin of 23.8% [16] Business Line Data and Key Metrics Changes - Sales to the defense market increased by $8.3 million, driven by project milestones and growth in existing programs [15] - Sales to the energy and process market increased by $2.1 million, or 13%, reflecting strength in aftermarket sales [15] - Aftermarket sales to energy and process and defense markets were $10.8 million, up 11% year-over-year [16] Market Data and Key Metrics Changes - Book-to-bill ratio was 1.3x, with backlog reaching a record $515.6 million, up 34% year-over-year [5][20] - Approximately 85% of backlog is attributable to the defense market, providing stability [20] - The company expects 35%-40% of backlog to convert to revenue over the next 12 months [5][20] Company Strategy and Development Direction - The acquisition of XDot Bearing Technologies enhances competitive positioning in high-speed rotating machinery [6] - FlackTek acquisition adds a third core technology platform, expected to bring advanced materials and processing capabilities [7][10] - The company is focused on organic investments and disciplined expansion to support long-term growth [14] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand in defense and energy markets, despite some slowing in large CapEx purchases due to macroeconomic factors [13][14] - The company remains confident in achieving long-term objectives of 8%-10% organic revenue growth and low to mid-teen adjusted EBITDA margins by fiscal 2027 [24] - Management emphasized disciplined execution and ongoing investments to enhance capabilities and customer relationships [14][15] Other Important Information - The company completed significant facility expansions, including a new Navy manufacturing facility and renovations in Colorado [12][13] - The integration of FlackTek is progressing well, with expectations for enhanced revenue visibility and customer retention [11] Q&A Session Summary Question: Demand in defense and CapEx plans - Management indicated that they are not surprised by the magnitude of CapEx increases and will continue to invest at a rate of 7%-10% of revenue [26][28] Question: M&A strategy and future acquisitions - Management stated that they will focus on investing in existing platforms but may consider additional acquisitions in the future [29][30] Question: Pursuing new work from the Navy - Management highlighted the applicability of their core competencies in pursuing new opportunities within the Navy [31][33] Question: Growth in existing defense programs - Management confirmed that they are winning additional scope on current projects through successful execution [37][39] Question: Book-to-bill ratio outlook - Management clarified that the long-term target of 1.1 for book-to-bill is not meant as guidance for fiscal 2026, as current performance exceeds this target [40][42] Question: Material receipts impact on gross margin - Management noted that material receipts are expected to normalize in future quarters, impacting gross margin [63][64] Question: Testing facilities activity - Management reported that the testing facilities are currently booked for specific programs, with ongoing discussions for future opportunities [73][75]

Financial Data and Key Metrics Changes - The company reported a loss before income taxes of $1.3 million for the first quarter, significantly improved from a pretax loss of $18.9 million in the same quarter last year, driven by revenue growth and improving margins [8] - Gross margin improved to 36.6%, up 6.7 percentage points from the prior year, primarily due to overhead absorption from higher volumes and price increases offsetting material cost increases [8] - Operating expenses increased by $2.1 million compared to the previous year, mainly due to increased sales volume-related expenses, partially offset by decreased warranty expenses [8] Business Line Data and Key Metrics Changes - The fishing segment, particularly the Minn Kota and Humminbird brands, showed solid performance with strong demand for new products like the XPLORE Series and MEGA Live 2 fish finders [4] - In the camping and watercraft segment, investments in digital and e-commerce have paid off, with Jetboil and Old Town seeing growth driven by online sales [4][5] - The diving segment experienced increased sales due to improved global market conditions and successful product innovations, particularly the SCUBAPRO's new HYDROS PRO 2 [5][6] Market Data and Key Metrics Changes - The company noted that markets have stabilized, contributing to double-digit growth in the first quarter, which is typically a slower period [3] - Trade inventory levels were reported to be in a healthy position, allowing for good sell-in during the first quarter [17] Company Strategy and Development Direction - The company aims to maintain a strong innovation pipeline, grow digital and e-commerce momentum, and improve product costs and operating efficiency through cost-saving initiatives [7] - The focus on innovation is seen as critical for maintaining market leadership amid strong competition [13] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the start of fiscal 2026, highlighting improved profitability and execution of growth plans despite uncertainties in the broader environment [4][6] - The company remains confident in its ability to create long-term value for shareholders, with a debt-free balance sheet and ongoing dividend payments [9] Other Important Information - The inventory balance at the end of the first quarter was $183.9 million, down about $17.7 million from the previous year [9] Q&A Session Summary Question: Pricing versus unit volumes - Management indicated that most of the revenue increase was driven by unit volume, although pricing adjustments were made in response to cost increases [12] Question: Contribution of new products to sales - Management confirmed that innovation remains critical, with improvements in new product success rates observed over the last couple of years [15] Question: E-commerce revenue percentage and growth goals - E-commerce is the fastest-growing channel for the company, with goals to continue expanding it at a faster pace than overall business growth [16] Question: Current trade inventory levels - Management reported that trade inventory levels are healthy, allowing for good sell-in during the first quarter [17] Question: Future cost savings initiatives - Management emphasized that cost savings initiatives will continue to be a key strategy, especially in volatile supply chain conditions [18] Question: Warranty expense impact on operating expenses - Warranty expenses were noted to have decreased, contributing to a slight reduction in operating expense percentage [19] Question: Future tax rate expectations - Management indicated that the tax rate may fluctuate based on profits in various geographies, particularly due to a valuation allowance in the U.S. [21]

Financial Data and Key Metrics Changes - Regency Centers achieved NAREIT FFO per share growth of close to 8% and Core Operating Earnings per share growth of nearly 7% for the full year 2025, driven by strong operating fundamentals and substantial external growth from acquisitions and development projects [15][18] - Same-Property NOI growth finished at 5.3%, supported by substantial base rent contributions and low levels of uncollectible lease income [7][15] Business Line Data and Key Metrics Changes - The company reported a significant increase in same-property shop occupancy by 40 basis points, reaching a record of 94.2% leased at year-end [7][8] - Cash rent spreads of 12% in Q4 and renewal spreads at a record 13% highlight the depth of embedded mark-to-market in the portfolio [9][10] Market Data and Key Metrics Changes - The grocery leasing activity was significant, with leases signed with major retailers such as Whole Foods, Sprouts, and Trader Joe's, indicating strong demand in the grocery sector [8][9] - The company noted that tenant demand remains exceptionally strong across nearly every category, with a notable increase in leasing activity for shop spaces [7][10] Company Strategy and Development Direction - Regency Centers is focused on ground-up development as a primary driver of external growth, with over $300 million in new project starts in 2025 and a pipeline translating into meaningful NOI growth in 2026 and beyond [5][12] - The company is leveraging its expertise and long-standing tenant relationships to build high-quality shopping centers at meaningful spreads to market value, positioning itself favorably in a low-supply growth environment [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operating environment, noting that physical retail, particularly grocery-anchored real estate, continues to benefit from limited new supply and strong tenant demand [6][18] - The guidance for 2026 anticipates same-property NOI growth in the range of 3.25%-3.75%, driven by rent spreads and redevelopment deliveries [16][17] Other Important Information - The company has a strong balance sheet with A3, A- credit ratings from Moody's and S&P, and nearly full availability on its $1.5 billion credit facility, providing a solid foundation for future investments [18] - Regency Centers is not planning to raise equity or sell properties to fund its investment pipeline, relying instead on strong free cash flow generation [18] Q&A Session Summary Question: Thoughts on acquisitions and market opportunities - Management noted that there is growing demand for grocery-anchored real estate, with a broad range of opportunities available, but emphasized that acquisitions will only be pursued if they meet quality and growth profiles [20][22] Question: Impact of Amazon closing grocery stores - Management reassured that the closure of Amazon Fresh stores does not indicate a pullback in physical retail, as Amazon still owns Whole Foods and is expanding that brand [28][29] Question: Development and redevelopment spend guidance - The company indicated that the $325 million development and redevelopment spend is roughly two-thirds ground-up and one-third redevelopment, with a strong focus on ground-up development moving forward [35][37] Question: Current tenant health and consumer resilience - Management reported that tenant health remains strong, with below-average accounts receivable and increasing sales and foot traffic, indicating confidence in the current market conditions [51][53] Question: Construction cost assumptions and pressures - Management expressed confidence in stable construction costs and good visibility in their underwriting, indicating no anticipated pressure on development yields [94][95]

Financial Data and Key Metrics Changes - Revenue increased by 21% to $56.7 million, driven by strong performance across end markets [4][15] - Adjusted EBITDA rose by 50% to $6 million, with an adjusted EBITDA margin of 10.7% [4][18] - Net income for the quarter was $0.25 per diluted share, and adjusted net income was $0.31 per diluted share [18] - Gross profit increased by 15% to $13.5 million, with a gross margin of 23.8% [16] Business Line Data and Key Metrics Changes - Sales to the defense market increased by $8.3 million, driven by project milestones and growth in existing programs [15] - Sales to the energy and process market increased by $2.1 million, or 13%, reflecting strength in aftermarket sales [15] - Aftermarket sales to energy and process and defense markets were $10.8 million, up 11% year-over-year [16] Market Data and Key Metrics Changes - Book-to-bill ratio was 1.3 times, with backlog reaching a record $515.6 million, up 34% year-over-year [5][20] - Approximately 85% of backlog is attributable to the defense market, providing stability [20] - The company expects 35%-40% of backlog to convert to revenue over the next 12 months [20] Company Strategy and Development Direction - The acquisition of XDot Bearing Technologies enhances competitive positioning in high-speed rotating machinery [6] - FlackTek acquisition adds a third core technology platform, aligning with long-term goals of 50% defense and 50% commercial revenue mix [7][8] - The company is focused on disciplined investments to expand capabilities and deepen customer relationships [14] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand across core end markets, despite some slowing in large CapEx purchases due to macroeconomic factors [13][14] - The company remains confident in achieving long-term objectives of 8%-10% organic revenue growth and low to mid-teen adjusted EBITDA margins by fiscal 2027 [24] - Management emphasized the importance of disciplined execution and ongoing investments for future growth [14] Other Important Information - The company completed significant facility expansions, including a new Navy manufacturing facility and renovations in Colorado [12][13] - The company has a strong cash position of $22.3 million and robust operating cash flow of $4.8 million [21][22] - Tariff impacts are estimated to be between $1 million and $1.5 million for the full year, with minimal impact in the third quarter [17] Q&A Session Summary Question: Demand in defense and CapEx plans - Management indicated that the defense platform remains healthy, with ongoing investments to increase capacity and efficiency [27][28] Question: M&A strategy and future acquisitions - Management stated that while FlackTek adds a third platform, future focus will be on investing in existing platforms before considering new acquisitions [29][30] Question: Pursuing new work from the Navy - Management highlighted the applicability of core competencies in pursuing new opportunities within the Navy [31][33] Question: Growth in existing defense programs - Management confirmed that they are winning additional scope on current projects, leading to increased opportunities [37][38] Question: Book-to-bill ratio outlook - Management reaffirmed that the long-term target for book-to-bill ratio remains at 1.1, despite current performance exceeding that [40][42] Question: Material receipts impact on gross margin - Management explained that material receipts are lumpy and expected to normalize in future quarters [63][64] Question: Testing facilities activity - Management reported that the testing facilities are currently booked for specific production programs, with ongoing discussions for future opportunities [75][76]

Financial Data and Key Metrics Changes - CNO Financial Group achieved an operating return on equity of 11.4% for 2025, up from 10% in 2024, reflecting strong operational momentum [12][21] - Operating earnings per diluted share increased by 11% to $4.40, with full-year operating earnings per share exceeding guidance at $4.02 [5][12] - The company returned $386 million to shareholders, marking an 11% increase over 2024, and raised its quarterly common stock dividend for the 13th consecutive year [6][12] Business Line Data and Key Metrics Changes - The consumer division reported a record total new annualized premium (NAP) growth of 15%, with life NAP up 10% and Medicare supplement NAP up 49% for the year [7][8] - The worksite division also saw record insurance sales, with a 15% increase for the full year and 13% for the fourth quarter, driven by life insurance sales up 36% and hospital indemnity insurance up 41% [10][11] Market Data and Key Metrics Changes - Total health NAP increased by 22%, marking 14 consecutive quarters of growth, while Medicare Advantage policies sold decreased by 3% for the year [8][9] - The company expects overall demand for Medicare products to grow, with approximately 11,000 Americans turning 65 each day, indicating a stable market opportunity [9][29] Company Strategy and Development Direction - CNO Financial Group focuses on the underserved middle-income market, leveraging a last-mile captive agent distribution model as a competitive advantage [5][6] - The company is investing in technology modernization with a planned investment of approximately $170 million over three years, with $20 million deployed in 2025 and $75 million expected in 2026 [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic visibility due to layoffs and job market challenges, which could impact discretionary purchases but noted the ongoing opportunity from the aging population [28][29] - The company anticipates continued growth in producing agent count and productivity, emphasizing that agent productivity is a primary focus for 2026 [26][27] Other Important Information - CNO Financial Group's consolidated risk-based capital ratio was 380%, within the target range of 360%-390%, indicating a strong capital position [16][17] - The company issued $400 million of fixed-rate bonds in the fourth quarter, contributing to disciplined portfolio management and strong earnings fundamentals [15][16] Q&A Session Summary Question: Earnings emergence and target returns - Management indicated that the time to hit target returns varies by product, but confidence remains in meeting ROE targets due to strong sales momentum [23][24] Question: Environment impact on recruiting and agent count growth - Management expects to grow producing agent count in 2026, emphasizing productivity over sheer numbers, while acknowledging economic pressures on consumer spending [25][26] Question: Sustainability of growth levels - Management believes growth is sustainable, with Medicare supplement sales expected to rise while Medicare Advantage sales may decline due to market conditions [37][38] Question: Impact of Medicare Advantage distribution fees - Management has reflected expected pressures in Medicare Advantage in their projections, focusing more on Medicare supplement products [40][41] Question: Capital deployment strategy - Management plans to return excess capital to shareholders through share repurchases while being measured in capital deployment [44][46] Question: Investment portfolio exposure to software - The company has limited exposure to software in its investment portfolio, focusing on mission-critical software and maintaining a cautious approach to risk [72][73]