Financial Data and Key Metrics Changes - The company achieved record revenue of just under $1,900,000,000 for Q2 2025, an increase of $327,000,000 or 20.9% from the prior year [21] - Gross profit for Q2 was $231,700,000, up $45,000,000 or 24.1% compared to the prior year, with gross margins improving to 12.3% from 11.9% [22] - Net income increased to $84,300,000 or $1.54 per fully diluted share, both up around 70% from the prior year [27] - Adjusted EBITDA was up over 30% to $154,800,000 compared to the prior year [27] Business Line Data and Key Metrics Changes - The Energy segment revenue increased by $263,300,000 or 27% from the prior year, driven by increased renewables activity [21] - The Utility segment revenue was up $72,200,000 or 11.6% from the prior year, driven by higher activity across all service lines [21] - Gross profit in the Utility segment was $97,500,000, up $33,500,000 or 52.3% compared to the prior year, with gross margins improving to 14.1% from 10.3% [23] - In the Energy segment, gross profit was $134,200,000 for the quarter, an increase of $11,500,000 or 9.4% from the prior year, but gross margins decreased to 10.8% from 12.6% [24] Market Data and Key Metrics Changes - The company is evaluating nearly $1,700,000,000 of work related to data centers, with optimism about winning a fair share [10] - There are between $20,000,000,000 and $30,000,000,000 of solar projects planned through 2028 on the company's sales radar [12] - The company expects a solid renewables bookings environment in the second half of the year and into 2026 [18] Company Strategy and Development Direction - The company aims to grow profitably through disciplined capital allocation and sees significant opportunities in power generation and utility infrastructure [7][10] - The strategy to improve utility margins is showing results, with a focus on attracting and retaining talent to meet growing demand [15][33] - The company is committed to disciplined bidding and project execution while managing risk to expand margins and increase cash flow [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand backdrop, stating it is the best experienced by the company [31] - The outlook for gas operations is trending favorably, with more utilities opting for third-party service providers [13] - Management anticipates continued growth in the renewables sector despite some near-term uncertainties [18][19] Other Important Information - The company maintained strong liquidity of $690,000,000, including approximately $390,000,000 in cash [28] - Total backlog at the end of Q2 was just under $11,500,000,000, with MSA backlog up over $600,000,000 from Q1 [28][29] - The company updated its guidance for EPS to $4.4 to $4.6 per fully diluted share for the full year 2025 [29] Q&A Session Summary Question: Is the expectation for a back-end loaded order book still valid? - Management confirmed that they still predict a back-end loaded order book, with good bookings expected in Q3 and Q4 [36] Question: How much of the overall demand stems from MSA customers? - A significant portion of demand is driven by MSA work, particularly in gas and electric utilities [39] Question: What are the expectations for margins in the Utility segment? - The gross margin target for 2025 was increased to 10% to 12%, reflecting a structural shift due to various initiatives [44] Question: Can you quantify the closeout payments in the Utility segment? - Closeouts contributed about $6,000,000 of incremental gross profit during the quarter [51] Question: What is the outlook for pipeline projects? - Management remains optimistic about pipeline projects, expecting to see good bookings in the power generation side [56] Question: Is there potential for organic improvement in renewables gross margin? - While there is potential for improvement, margins are generally expected to remain stable [66]

Financial Data and Key Metrics Changes - Revenue for Q2 increased by 12% to $1.46 billion, while adjusted EBITDA rose by 17.2% to $318.6 million [13][7] - Total discharges for Q2 increased by 7.2%, with same-store discharges growing by 4.7% [7][13] - Net revenue per discharge increased by 4.2%, benefiting from a decrease in bad debt expense to 2% [13][14] - Adjusted free cash flow increased by 30.5% to approximately $186 million, bringing year-to-date adjusted free cash flow to approximately $408 million, a 31.7% increase from 2024 [15][16] Business Line Data and Key Metrics Changes - Neurological conditions and stroke discharges grew by 126.7% in Q2 [8] - The discharge community rate was 84.8%, with discharge to acute and SNF rates at 8.5% and 5.8% respectively, outperforming industry averages [8][11] - The company opened a new 60-bed hospital in Fort Myers, Florida, and added 26 beds to an existing hospital in Q2 [9] Market Data and Key Metrics Changes - The demand for inpatient rehabilitation services is significantly underserved, particularly as the U.S. population ages, with the Medicare beneficiary population projected to grow substantially [10] - The average age of Medicare beneficiaries is 77 years, with the population aged 65 and older growing at a CAGR of approximately 3% [10] Company Strategy and Development Direction - The company plans to open five additional hospitals and add 30 to 50 beds to existing hospitals by the end of the year [9] - The company is increasing its 2025 guidance for net operating revenue to between $5.88 billion and $5.98 billion, and adjusted EBITDA to between $1.22 billion and $1.25 billion [18] - The company continues to focus on treating complex medical conditions and developing best-in-class clinical protocols [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the demand for inpatient rehabilitation services remains considerably underserved, with a focus on treating patients with complex medical conditions [10] - The company is optimistic about future growth, citing favorable demographic trends and an increase in Medicare reimbursement rates [12][10] Other Important Information - The company repurchased approximately 232,000 shares for $24.7 million and announced an increase in its quarterly dividend to $0.19 per share [17] - The company has a favorable leverage and liquidity position, with net leverage at two times and approximately $100 million in unrestricted cash [16] Q&A Session Summary Question: What are the occupancy rates and comfort levels for single bedroom facilities? - Management indicated that occupancy in Q2 was 76.6%, up 210 basis points year-over-year, and that stabilization above 80% would prompt consideration for future bed expansions [22][24] Question: What is the company's stance on quality ratings and initiatives? - Management stated that any changes in quality initiatives did not make it into the final rule and expressed willingness to support quality measurements that are agreed upon by the industry [27][28] Question: How does the company share quality results with stakeholders? - Management shares quality metrics such as discharge community rates and patient satisfaction scores with joint ventures and referring physicians [32][34] Question: What is the story behind the increase in managed care pricing assumptions? - The increase is attributed to growth in the VA Community Care Network, which now comprises almost 18% of the managed care business and pays at Medicare CMG rates [38] Question: What are the expectations for EBITDA in the second half of the year? - Management expects to incur most preopening and ramp-up costs in the second half, with guidance reflecting potential increases in bad debt and other costs [42] Question: How is the company addressing benefits expense growth? - Management noted that benefits expense per FTE increased by 18%, driven by high dollar medical claims, and indicated that strategies are in place to manage these costs [100] Question: What is the outlook for outpatient visits and pricing? - Outpatient visits increased by 8% quarter-over-quarter, attributed to a good book of business in remaining facilities, despite a reduction in the overall footprint [124]

Financial Data and Key Metrics Changes - Consolidated reported sales growth was 3% or flat organic, with adjusted earnings per share at $1.93, exceeding original expectations [5][6] - Gross margins were pressured at 46.6%, down 170 basis points year over year, primarily due to foreign currency headwinds and inflation [19][20] - GAAP operating margin was 18.1%, with adjusted operating margin at 21.4%, down 200 basis points from the previous year [20] Business Line Data and Key Metrics Changes - Detection experienced mid single-digit organic growth driven by fixed and portable gas detection, growing 6% organically [8][10] - Fire Service organic sales declined mid single digits year over year, impacted by market dynamics surrounding NFPA standard changes [8][9] - Industrial PPE organic sales were down low single digits, with growth in fall protection offsetting declines in head protection and ballistic helmets [10][21] Market Data and Key Metrics Changes - In the Americas segment, sales increased 2% year over year, with double-digit growth in detection offset by declines in fire service and industrial PPE [21] - The International segment saw a 4% increase in sales on a reported basis, but a 4% decline on an organic basis due to lower volumes in fire service and detection [22] Company Strategy and Development Direction - The company continues to focus on its Accelerate strategy, emphasizing long-term value creation through organic growth, M&A, and cash returns to shareholders [10][13] - The acquisition of M and C Tech Group is expected to enhance fixed gas offerings and expand the total addressable market by $500 million [15][16] - The company is committed to investing in R&D to support new product development, with a focus on industrial safety technology [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business and its ability to navigate macro uncertainties, maintaining a low single-digit full-year organic growth outlook [25][26] - The timing of NFPA approval and AFG funding release will significantly impact fire service execution in the second half [26][60] - Management expects interest expense to be approximately $29 million to $32 million, including the acquisition [27] Other Important Information - Free cash flow was $38 million, representing 60% of earnings, with quarterly operating cash flow increasing more than 25% from the previous year [22][23] - The company returned over $50 million to shareholders through stock repurchases and dividends, marking the 55th consecutive year of increased annual dividends [17][24] Q&A Session Summary Question: Can you break out and quantify the growth between fixed gas, non-connected portables, and connected portables in the quarter? - Management indicated strong performance in detection, particularly in fixed gas and MSA Plus connected portables, with most growth coming from MSA Plus [32][36] Question: How have customers responded to pricing actions and what was the magnitude of those actions? - Management noted that pricing actions were taken to mitigate inflation and tariff impacts, with customers generally accepting these increases [45][48] Question: What percentage of the current pipeline consists of customers committed to purchasing before the new standard? - Management refrained from disclosing specific percentages but indicated a solid pipeline and readiness for both current and future customer needs [50][52] Question: What is the timing and disbursement of AFG funding? - Management confirmed that AFG funding is approved and expected to begin releasing in August [58] Question: How does the company view fourth-quarter seasonality? - Management expects the fourth quarter to remain strong, consistent with historical performance [60] Question: What elements of timing are being monitored around the new NFPA standard? - Management highlighted key milestones in the government approval process, with expectations for approval between now and early 2026 [74][78] Question: Is M and C Tech Group accretive to margins? - Management stated that M and C's margins are similar to MSA's overall margins, thus neutral on margins but accretive to EPS [86]

Financial Data and Key Metrics Changes - Net sales for the second quarter were $1,340 million, down 1% on a constant currency basis [27] - Adjusted EBITDA was $293 million, up 3% on a constant currency basis [27] - Adjusted earnings per share increased to $0.89, up 7% as reported and 10% on a constant currency basis [28] - Adjusted tax rate improved to 24.4% from 25.5% in the same period last year [28] Business Line Data and Key Metrics Changes - Food segment net sales were $896 million, flat as favorable pricing offset softer volumes [30] - Protective segment net sales were $439 million, down 3% as reported and 4% in constant currency [33] - Food adjusted EBITDA was $210 million, up 3%, with a margin of 23.4%, up 50 basis points [32] - Protective adjusted EBITDA was $78 million, down 5%, with a margin of 17.8%, up 20 basis points from the first quarter [33] Market Data and Key Metrics Changes - The U.S. beef cycle saw a decline of 7% in slaughter rates, impacting the food segment [22] - EMEA region for food showed strength with volumes up low single digits [32] - North American market pressures accelerated in the second quarter, affecting food service and industrial processing [19] Company Strategy and Development Direction - The company is focused on transforming its Protective segment and improving customer engagement [12][14] - New product innovations include the Jiffy embossed paper mailer and hybrid auto vac solutions [15] - The company is optimizing its manufacturing footprint and has opened a new facility in Lakeland, Florida [16] Management's Comments on Operating Environment and Future Outlook - Management noted a stable second quarter despite global trade uncertainties and tariff impacts [10][11] - The company remains cautious about the second half of the year due to market uncertainties and lower growth expectations [17] - Management expressed confidence in the ongoing transformation and capital allocation discipline, with net debt below $4 billion for the first time since 2022 [25][26] Other Important Information - The company is maintaining its sales guidance range of $5.1 billion to $5.5 billion and adjusted EBITDA guidance of $1.075 billion to $1.175 billion [36] - Free cash flow guidance remains at $400 million, with capital expenditures expected to be lower than originally anticipated [38] Q&A Session All Questions and Answers Question: What does the volume impact for the second half look like for food? - Management expects a volume mix in the second half to be down three points in Q3 and Q4, primarily due to consumer spending shifts [46] Question: How should we think about near-term outlook for margins specific to food? - Management indicated that while there is a margin impact from volume loss, network optimization efforts are expected to balance out margins [55] Question: Can you talk about specific cost takeouts expected for the second half? - Management highlighted a focus on cost takeout initiatives, aiming for approximately $90 million in savings for the full year [60] Question: Are you seeing any slowdown in bidding and order activity? - Management reported no significant change in order patterns and remains optimistic about the performance of the industrial portfolio [71] Question: Why is the adjusted EBITDA range for 2025 so wide? - Management attributed the wide range to conservatism and low visibility regarding end markets, preferring to wait for more clarity in Q3 [78] Question: Can you describe your issue with procuring specialty resins? - Management clarified that there are no procurement issues but noted challenges related to tariffs impacting certain specialty resins [80]

Financial Data and Key Metrics Changes - Revenues for the second quarter were $188.5 million, reflecting a 3.6% increase year-over-year [20] - Same restaurant sales increased by 0.7%, driven by a 2.1% increase in average check, partially offset by a 1.4% decrease in transactions [21] - Restaurant level adjusted EBITDA was $44.5 million with a margin of 23.6%, a decrease of 90 basis points from the prior year [25] - Adjusted EBITDA for the quarter was $30.1 million, an increase of 0.7% from the previous year [26] - Cash from operations decreased by 31.1% year-over-year to $28.7 million year-to-date [28] Business Line Data and Key Metrics Changes - Non-comp restaurants contributed $6.1 million in revenue during the quarter, while same restaurant sales growth was flat on a two-year stack basis [20][21] - The company is on track to open 12 restaurants in 2025, with build costs reduced to an average of $5.2 million to $5.5 million per restaurant [12][29] Market Data and Key Metrics Changes - Transactions were down 1.4% for the quarter, but there was a sequential improvement of 170 basis points over Q1 [9] - The company is focusing on multichannel marketing in key markets like Phoenix and Dallas, which have shown sales lifts [10] Company Strategy and Development Direction - The company is focused on building awareness and driving transactions while maintaining high-quality food and guest experience [6] - Key initiatives include multichannel marketing, operational improvements, kiosk adoption, and evolving the Portillo's Perks loyalty program [10][12] - The company is refining its new market playbook, with a focus on sustained marketing investment in Texas [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Texas but remains confident in mid-teens revenue growth by 2026 [36] - The company is actively managing inflationary pressures through price increases and operational efficiencies [22][23] - Management expects total revenue growth for 2025 to be in the range of 5% to 7% [28] Other Important Information - Berkshire Partners redeemed $7.3 million in LLC units for Class A common stock, reducing their ownership to approximately 5.2% [18][19] - The company is nearly 90% hedged on beef prices, which is expected to mitigate inflationary impacts [62] Q&A Session Summary Question: Mix in the quarter and path to mid-teens revenue growth - Management explained that while kiosk usage increased items per transaction, there was a trade-down effect impacting the mix [38] - They remain confident in achieving mid-teens revenue growth by 2026 through foundational work in Texas [36] Question: Performance of new stores and marketing efforts - Management noted that some restaurants are entering their second year, and marketing efforts are ongoing to improve performance [43][45] Question: Labor and commodity inflation outlook - Management expects labor inflation to remain at 3% to 4% for the year, while commodity inflation is forecasted at 3% to 5%, primarily driven by beef [62][67] Question: Breakfast testing and limited menu impact - Breakfast testing is going well, appearing to be incremental without negatively affecting lunch or dinner sales [85] - The limited menu in Houston had some learnings, and management is adding back popular items [91] Question: Portillo's Perks loyalty program - The loyalty program has nearly 2 million members, and management sees potential for it to drive repeat frequency in expansion markets [99][103]

Financial Data and Key Metrics Changes - Production increased by 10% quarter over quarter to 33,500 barrels of oil equivalent per day, within guidance [6] - Adjusted EBITDA grew by 9% to $35 million compared to 2024 [7] - Unrestricted cash increased to over $120 million while net debt decreased by about $15 million to under $230 million [7][11] - Total debt reduced from $393 million at year-end 2024 to $350 million at the end of 2025 [11] Business Line Data and Key Metrics Changes - Nine low-cost, low-risk workovers were performed, positively impacting production and revenue [6] - Five workovers in Mobile Bay contributed to increased production at this long-life asset [7] - Capital expenditures (CapEx) for 2025 totaled $19 million, with expectations for full-year CapEx between $34 million and $42 million [11][12] Market Data and Key Metrics Changes - SEC proved reserves reported at 123 million barrels of oil equivalent, slightly down from 127 million at year-end 2024 [15] - Approximately 44% of midyear 2025 proved reserves were liquids, with 34% crude oil and 10% NGLs, while 56% were natural gas [16] - The pre-tax PV-10 of proved reserves was flat at $1.2 billion compared to year-end 2024 [17] Company Strategy and Development Direction - The company focuses on operational excellence and maximizing production across its asset portfolio [6] - Emphasis on low-risk acquisitions of producing properties rather than high-risk drilling in the current commodity price environment [11][12] - Plans to continue enhancing shareholder value through dividends and strategic asset management [8][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate regulatory changes and market conditions [20] - Positive outlook for production increases in the second half of 2025, driven by workovers and new field ramp-ups [13][14] - Management highlighted the importance of maintaining liquidity and financial flexibility amid market volatility [10][11] Other Important Information - The company celebrated its 20th anniversary as a publicly listed entity on the NYSE [5] - Recent settlements with surety providers are expected to alleviate financial pressures and improve operational conditions [18][19] Q&A Session Summary Question: What actions may the administration take to incentivize production in the Gulf Of America? - Management mentioned potential lower royalties and the need to address the idle iron act, which they view as counterproductive [25][26] Question: What is driving the expected production ramp in Q3? - The COO indicated that low-cost workovers and ramping up acquired fields will contribute to increased production [30] Question: How do surety and bonding issues impact acquisition strategies and liquidity? - Management clarified that resolving these issues will positively affect M&A activity and liquidity, as previous demands were seen as collusive [34][40] Question: Can you provide details on the properties contributing to the positive reserve revisions? - Management noted that better performance from Cox assets and optimization projects in Mobile Bay contributed to the revisions [44][46]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported an EPS of $0.06 per share compared to a net financial loss of $0.09 per share in the previous year, marking a significant turnaround [20] - Year-to-date NFE reached $313.4 million or $3.13 per share, an increase of nearly 55% year-over-year, driven by higher utility margins and improved performance across various segments [20][21] Business Line Data and Key Metrics Changes - New Jersey Natural Gas remains the strongest contributor to NFEPS, benefiting from a recent rate case settlement and customer growth [8] - Clean Energy Ventures (CED) is expected to contribute over 20% of NFEPS this year, supported by high-performing operating assets and the monetization of the residential solar portfolio [8] - The Save Green program saw a capital projection increase of over 30%, with expected investments rising to $90 million to $95 million, driven by growing adoption of efficient HVAC systems [10][11] Market Data and Key Metrics Changes - The company serves approximately 588,000 customers, with over 90% being residential, primarily in economically vibrant counties experiencing solid population growth [9] - The storage and transportation segment is positioned to serve growing energy demand, with favorable market conditions for storage [17] Company Strategy and Development Direction - The company raised the lower end of its fiscal 2025 NFEPS guidance range to $3.20 to $3.30 per share, reflecting strong operating performance and greater visibility into full-year results [6][7] - The capital plan for fiscal 2025 and 2026 ranges from $1.3 billion to $1.6 billion, aligning with a long-term NFEPS growth target of 7% to 9% [21] - The company emphasizes a disciplined capital deployment strategy focused on utility infrastructure, clean energy investments, and optimizing storage and transportation capabilities [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changing environments and allocate capital effectively to meet evolving customer needs [25][26] - The company is optimistic about the resolution of the Adelphia Gateway rate case and expects to file an offer of settlement with FERC soon [17][32] Other Important Information - The company maintains a strong balance sheet with $825 million of credit capacity across its facilities, supporting its capital plan and working capital needs [24] - The Save Green program is highlighted as a key strategic advantage, providing benefits to customers while supporting decarbonization goals [11][61] Q&A Session Summary Question: Impact of Adelphia rate case settlement in 2026 - Management indicated that details are still under negotiation and will be shared once finalized [31][32] Question: CEV's 131 megawatt target relative to initial expectations - Management clarified that the target reflects projects nearing construction and expressed confidence in achieving capital targets despite market dynamics [33][34] Question: Timeline for Leaf River expansion decision - Management expects to narrow down the expansion details in the coming months, with a focus on customer needs and regulatory approvals [40][52] Question: Strength of Storage and Transportation segment - Management attributed strong performance to a robust natural gas market and increased demand for infrastructure [41] Question: Higher CapEx in Save Green program - Management noted strong demand for energy-efficient systems and effective program execution as key drivers for increased CapEx [60] Question: Future dividend considerations - Management stated that dividend increases will align with historical growth rates and past performance [54] Question: Interest in gas infrastructure growth projects - Management confirmed ongoing investments in reliability and infrastructure to support customer growth [64]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $203 million for the quarter, reflecting a 29% increase year-over-year with margins improving by 360 basis points [4][18] - Contract sales were down less than 1% for the quarter, an improvement compared to Q1, with first-time buyer sales up 6% year-over-year [6][15] - Delinquencies declined by 50 basis points sequentially and 110 basis points year-over-year, reaching the lowest levels in two years [15][29] Business Line Data and Key Metrics Changes - Owner sales declined by 4% due to lower VPGs, while owner tours remained flat [15] - Total company rental profit decreased by $7 million or 16% to $35 million, driven by increased unsold maintenance fees and marketing expenses [17] - Management exchange profit increased by 3% to $98 million, attributed to increased revenue in the vacation ownership segment [17] Market Data and Key Metrics Changes - The company achieved nearly 90% resort occupancy, with strong performance in Maui, Coastal Florida, and The Caribbean, while Las Vegas showed relative weakness [5] - First-time buyers represented a third of total contract sales in the quarter, up 200 basis points from a year ago [7] Company Strategy and Development Direction - The company is focused on modernization initiatives expected to deliver $150 million to $200 million in run rate benefits by the end of 2026, with half from revenue initiatives and half from cost savings [6][11] - The modernization program aims to enhance decision-making speed, optimize IT platforms, and drive growth in the leisure-focused business [7][12] - The company plans to restrict inventory spending to low-cost reacquired inventory and capital-efficient arrangements [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model and the continued prioritization of leisure travel by consumers [4][13] - Despite external uncertainties, the company expects high occupancy rates to continue and anticipates strong owner keys for the second half of the year [12][14] - The long-term financial model remains unchanged, with expectations for high single-digit to low double-digit EPS growth over time [14] Other Important Information - The company ended the quarter with $800 million in liquidity and a leverage ratio of 3.9 times [18] - Adjusted free cash flow is expected to be between $270 million and $330 million for the year, excluding one-time cash costs related to modernization initiatives [20] Q&A Session Summary Question: Contract sales trends in June and July - Management confirmed that July contract sales were up slightly from June, with June showing a 3% year-over-year increase [26][27] Question: Loan loss provision expectations - The loan loss provision guidance increased to 12.5%, which is about half a point higher than previous expectations, reflecting ongoing improvements in delinquencies [28][29] Question: Expanded owner benefits and EBITDA impact - The expanded owner benefit provides more options for owners but is not expected to significantly impact EBITDA growth [33][34] Question: Share buyback restrictions - Management indicated that there were blackout periods preventing share buybacks, but they plan to be opportunistic in the future [36][37] Question: Inventory efficiency and cost implications - The company aims to reduce inventory levels to one to two years on hand, with a slight increase in product costs expected over the next few years [45][46] Question: Loan loss provision increase despite improving delinquencies - Management explained that while delinquencies are improving, they are still higher than desired, prompting a conservative approach to the loan loss provision [53][54] Question: Sales performance in Maui - Maui showed strong year-over-year performance, with contract sales and occupancy rates improving, although some challenges remain [59]

Financial Data and Key Metrics Changes - Net sales grew 3.3% to a record $454.3 million, while adjusted EBITDA increased 1.6% to a record $72 million, and adjusted EPS was $2 per share compared to $1.98 last year [6][21] - Gross margin was 33%, reflecting a seasonal mix shift towards higher margin products and progress on pricing initiatives [6][21] Business Line Data and Key Metrics Changes - Food service segment sales increased 4.8%, driven by price increases and volume growth in pretzels, with pretzel sales up 12.8% [9][21] - Retail segment sales decreased by 7.1%, primarily due to a decline in frozen novelty and handheld sales, although Dogsters and Dipping Dots Sundays continued to grow [11][21] - Frozen beverage segment sales increased by 6.1%, with a modest decline in beverage volume offset by higher machine revenue [13][21] Market Data and Key Metrics Changes - Box office sales increased 37% year-over-year, driven by the success of the Minecraft movie, which helped to compensate for sluggish performance in other channels [7][21] - Beverage sales were negatively impacted by foreign exchange headwinds, which affected total frozen beverage segment sales by approximately 270 basis points [13][21] Company Strategy and Development Direction - The company is focused on targeted pricing actions, cost reduction initiatives, and consumer-led innovation across its portfolio to address near-term challenges [19][20] - Plans to innovate around better-for-you products and eliminate certain artificial ingredients from products served in schools by 2026 [18][21] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the consumer backdrop, tariff-related risks, and projections for box office sales to be down in Q4 [19][20] - The company is optimistic about growth prospects, including potential permanent menu placements with major QSR customers [10][16] Other Important Information - The quarter included a non-recurring gain of $10.6 million from insurance proceeds related to last year's plant fire and a $1.5 million brand impairment charge [21] - The balance sheet remains strong with approximately $77 million in cash and no long-term debt [26] Q&A Session Summary Question: Retail segment promotional activity pullback - Management acknowledged insufficient promotional depth in the retail segment and plans to correct this in the future [30] Question: Handheld capacity outsourcing plans - Management confirmed that capacity from a shut-down plant has been successfully shifted to another facility, which can now produce more than before [31][33] Question: Cost structure around marketing and distribution - Marketing expenses increased due to summer promotions, while distribution costs improved through freight optimization and lower fuel expenses [37][39] Question: Handhelds volume expectations for fiscal 2026 - Management expects a 10% lift in handhelds next year, with capacity in one plant rising about 37% [46] Question: Materiality of new programs with QSR chains - Management indicated that tests with churros and frozen beverages could have a meaningful impact on sales for 2026, with positive indications from ongoing tests [48][49]

Financial Data and Key Metrics Changes - The company reported record consolidated revenue and the second highest adjusted EBITDAre in the history of the same store hospitality segment, trailing only the second quarter of the previous year [5][19] - Same store adjusted EBITDAre was $187 million, a decline of approximately $18 million year over year, but still the second highest quarter of all time [19] - Adjusted EBITDAre guidance for the full year 2025 was revised to a range of $767 million to $813 million, reflecting the acquisition of JW Marriott Desert Ridge and adjustments for transient rate risks [28][30] Business Line Data and Key Metrics Changes - The hospitality segment's RevPAR was essentially flat compared to last year, with total RevPAR declining by 160 basis points due to a shift in group mix and timing of the Easter holiday [16] - Leisure demand increased approximately 4% compared to last year, driven by strong performance at Gaylord Palms and Gaylord Rockies, partially offset by softer demand at Gaylord Opryland [18] - The entertainment segment delivered record revenue of $143 million and adjusted EBITDAre of $34 million, driven by investments in Southern Entertainment and other venues [22][23] Market Data and Key Metrics Changes - In Nashville, transient occupancy trends lagged behind the top 25 markets, but visitation and tourism remained robust, with rooms sold in the market increasing year over year [9][25] - The influx of new hotel supply in Nashville has pressured room rates, leading to a modestly softer transient segment compared to earlier expectations [25][56] - Group rooms revenue on the books for 2026 and 2027 is up 910% compared to the same time last year, indicating strong future demand [22] Company Strategy and Development Direction - The company is focused on integrating the recently acquired JW Desert Ridge property into its portfolio, aiming to create value through capital investments and enhancing group rotation opportunities [13][14] - The long-term strategy includes expanding the JW brand presence in key markets to replicate the success of the Gaylord hotels [37][38] - The company remains optimistic about the long-term potential of the festivals business and its ability to attract a diverse customer demographic [23][95] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unpredictable operating environment, citing factors such as tariffs, inflation, and interest rates impacting customer behavior [6][21] - Despite near-term uncertainties, management noted improvements in meeting planner sentiment and bookings activity for 2025 [7][18] - The company expects transient demand to improve as tourism grows and hotel demand catches up with new supply [9][25] Other Important Information - The company completed the acquisition of JW Desert Ridge, which has been a long-term target, and is expected to enhance the overall portfolio [4][13] - The company has maintained a strong balance sheet with $421 million in unrestricted cash and total available liquidity of approximately $1.2 billion [30][32] - Capital expenditures for 2025 are expected to be around $350 million, including investments at Desert Ridge [33] Q&A Session Summary Question: Lead volumes were down 16% year over year. How do you expect that to trend? - Management noted that lead volumes have faced pressure but expect improvement for 2026 and beyond, indicating that current challenges are primarily for 2025 [36] Question: What are the long-term plans for the JW brand? - Management expressed interest in adding more JW properties in key markets to create rotation opportunities and enhance the portfolio [37][38] Question: What is driving the resilience in out-of-room spending? - Management attributed the strong out-of-room spending to investments in capital improvements and the overall economic environment, which remains stable [46][50] Question: How is the Gaylord National performing in a challenging market? - Management reported positive performance at Gaylord National, citing structural changes made post-COVID that have benefited the hotel long-term [48] Question: What is the outlook for transient business across the portfolio? - Management indicated that while there is some softness in transient business, properties like Gaylord Rockies and Gaylord Palms are performing well, and investments are expected to yield positive results [74][76] Question: How have cancellations evolved since the initial shock period? - Management noted that cancellations were primarily due to macro concerns, but the second quarter showed a return to normal levels, with no long-term issues anticipated [84][86]