Financial Data and Key Metrics Changes - Overall net sales for Q2 2025 were $58.2 million, down 9% from $63.9 million in Q2 2024 [5] - Consolidated gross earnings were 43.3% of net sales compared to 43.9% in the previous year [5] - Earnings from operations were $3.9 million, down 42% from $6.7 million in Q2 2024 [6] - Net earnings totaled $2.3 million, down 60% from $5.6 million last year [6] - Diluted earnings per share were $0.24 in Q2 2025, compared to $0.59 in Q2 2024 [6] Business Line Data and Key Metrics Changes - North American wholesale segment net sales were $45.6 million, down 9% from $50.3 million last year [6] - Retail segment net sales were $6.8 million, down 11% from $7.6 million in 2024 [12] - Florsheim Australia net sales were $5.8 million, down 4% from $6.1 million in 2024 [14] - Retail gross earnings as a percentage of net sales were 66.6% in 2025 compared to 67.5% in 2024 [12] Market Data and Key Metrics Changes - The overall men's dress, dress casual, and basic casual markets are under pressure, with the traditional men's business being one of the first categories impacted in a slowing footwear market [20] - BOGS brand sales were down 14% compared to 2024 due to sluggish consumer demand in the outdoor category [21] - Retailer inventories for outdoor footwear are now very clean, indicating cautious inventory management [22] Company Strategy and Development Direction - The company is actively working to diversify its supply chain away from reliance on China, which previously accounted for 75% of its factory base [18] - The focus is on maintaining quality and value across all brands while adapting to the evolving tariff environment [19] - The company aims to grow its wholesale business in Australia and South Africa while managing retail operations carefully [54][58] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer sentiment is cautious due to affordability issues and uncertainty around tariffs, leading to reduced discretionary spending [17] - The expectation is that the challenging environment will persist through the second half of the year [21] - The company is optimistic about new product introductions and expanding its product line to be less dependent on cold weather demand [21] Other Important Information - The consolidated effective tax rate was 51.1% for the quarter, up from 25.1% in the previous year due to a valuation allowance on deferred tax assets [15] - Cash and marketable securities totaled $83.8 million with no debt outstanding on the revolving line of credit [15] - The Board of Directors declared a cash dividend of $0.27 per share, payable on September 30, 2025 [16] Q&A Session Summary Question: Can you quantify the change in inventory due to pre-purchasing? - Management indicated that inventory levels are returning to normal, expected to be in the $70 to $75 million range, but the dollar value may increase due to tariffs [31][32] Question: What is the approach if warning flags arise regarding wholesale customers' creditworthiness? - Management stated they monitor the situation closely and aim to work with retailers while being realistic about market changes [50] Question: What is the strategic importance of Florsheim Australia? - Management emphasized the long-standing presence in Australia, the dominance in the market, and the potential for profitability through careful management of retail and wholesale operations [52][54]

Financial Data and Key Metrics Changes - NiSource reported second quarter adjusted EPS of $0.22, bringing the year-to-date total to $1.19, which is an increase of $0.13 from the same period last year [6][24] - The company narrowed its 2025 adjusted EPS guidance to the upper half of the previously stated range of $1.85 to $1.89 [7][25] - The company reaffirmed long-term financial commitments, projecting 6% to 8% annual adjusted EPS growth and 8% to 10% rate base growth through 2029 [25][30] Business Line Data and Key Metrics Changes - Strong performance was noted in both the NIPSCO and Columbia segments, which continue to outperform expectations [24] - The operational excellence initiatives, including Project Apollo and WAM, have enabled consistent and high-quality results across the business [25] Market Data and Key Metrics Changes - Customer growth was observed at nearly 1% in the electric business and 0.6% in the gas business, both surpassing forecasts [26] - Metro growth in Columbus, Ohio was reported to be 38% higher than the national average last year, indicating strong economic tailwinds [26] Company Strategy and Development Direction - NiSource's strategy focuses on disciplined capital deployment, operational excellence, and fostering constructive regulatory relationships [5][6] - The company is advancing its internal AI capabilities to enhance operational efficiency and create a sustainable competitive edge [7][8] - Regulatory achievements include a $40.7 million revenue increase in Virginia and a $257 million revenue uplift in Indiana, reinforcing stakeholder relationships [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for data centers in Northern Indiana and emphasized a disciplined approach to executing this opportunity [34][35] - The company remains focused on maximizing opportunities for stakeholders, including existing customers and communities, while maintaining financial integrity [35][16] Other Important Information - NiSource's five-year capital plan is valued at $19.4 billion, with 48% allocated to gas system hardening [22] - The company is actively engaging in commercial development of over $2 billion in identified upside projects [23] Q&A Session Summary Question: How is NiSource thinking about the data center opportunity in NIPSCO territory? - Management highlighted strong demand for data centers and emphasized a disciplined approach to execution, ensuring existing customers are protected while serving new ones [34][35] Question: How do the Genco application and counterparty negotiations relate to each other? - Management clarified that the Genco declination process and counterparty negotiations are separate but ongoing, with confidence in achieving a positive outcome [39][40] Question: What is the status of coal plant retirements and their impact on supply? - Management confirmed plans to retire the Schaeffer plant by the end of the year while working closely with state officials to align on capacity needs [58][59] Question: How does the financing strategy relate to the Genco structure? - Management indicated flexibility in financing strategies and emphasized the importance of strengthening the balance sheet to support future operations [62][64] Question: What is the timeline for the Genco declination process? - Management confirmed that all final filings are due soon, with an order expected by the end of the third quarter [78]

Financial Data and Key Metrics Changes - The company reported total revenue of $286 million, slightly down from $288 million in the same period last year, with net income of $48 million or $3.96 per diluted share, a 4% increase year-over-year [17][22]. - Gross profit increased by $6 million to $88 million, with a gross margin of 30.7%, which is 230 basis points higher than the prior year [20][22]. - The book-to-bill ratio was 1.3 times, with a backlog growth of 7% to a total of $1.4 billion [7][18]. Business Line Data and Key Metrics Changes - Revenue from the electric utility market increased by 31%, while revenues from the commercial and other industrial market and the traction market increased by 1861% [19]. - Domestic revenues decreased by 8% to $225 million, while international revenues rose by 30% to $62 million, driven by increased project volume in Canada and the Middle East [19]. Market Data and Key Metrics Changes - The oil and gas and petrochemical markets saw revenue declines of 368% and 30% respectively, attributed to challenging prior year comparisons [20]. - The company noted strong demand in the electric utility market, supported by electrification trends in the US, Canada, and the UK [16][27]. Company Strategy and Development Direction - The company announced an agreement to acquire REMSAK Limited, enhancing its electrical automation platform and allowing for a 100% Powell-built solution for the utility market [11][12]. - The focus remains on diversifying the business and expanding the product portfolio, with new product initiatives aimed at improving the mix of product versus project-based revenues [14][16]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand across all markets and the ability to deliver value to customers and stakeholders [16][23]. - The fundamentals of the US natural gas market and the ongoing momentum in data center capacity growth were highlighted as positive indicators for future order strength [15][16]. Other Important Information - Selling, general, and administrative expenses increased by $3 million to $25 million, driven by higher compensation and acquisition-related expenses [21][22]. - The company reported cash and short-term investments of $433 million, with no debt [22]. Q&A Session Summary Question: What does the opportunity pipeline look like now? - Management indicated a strong pipeline in the utility market and ongoing activity in the oil and gas segment, with significant opportunities ahead [25][26]. Question: How far does the revenue visibility extend? - The backlog is transparent, with 65% expected to convert to revenue over the next twelve months, providing good visibility into future earnings [28][29]. Question: What contributed to the improvement in gross margin? - Approximately 150 basis points of the gross margin improvement was attributed to project closeouts, with the remainder from productivity and volume leverage [30][31]. Question: Any unusual items affecting SG&A expenses? - Higher variable compensation and acquisition-related expenses were noted, but nothing unusual beyond that [32]. Question: What is the visibility in the electric utility market? - Management expressed optimism about the electric utility market, driven by electrification and data center demand [36][40]. Question: How does the acquisition of REMSAK fit into the strategy? - The acquisition is seen as a key building block for enhancing electrical automation capabilities and expanding into the North American utility market [41][44]. Question: What is the outlook for pricing in the market? - While pricing is stable, management noted that it may not improve significantly in the near term due to competitive dynamics [58][60].

Financial Data and Key Metrics Changes - The company reported a record revenue growth of 13.5% to $124.7 million in Q2 2025, exceeding expectations [5] - Gross margin for the quarter was 42.9%, up six basis points sequentially, but down from the previous year's second quarter due to revenue mix [15] - EBITDA for the quarter was $25 million, reflecting a growth of 14.7% when normalizing for one-time costs [18] - Net income increased by 7.8% for the quarter, with a net income margin of 13% [26] - Earnings per share (EPS) was $0.59 for the quarter, normalizing for one-time costs would result in an EPS of $0.63 [27] Business Line Data and Key Metrics Changes - Total product revenue increased by 13.9%, while total service revenue grew by 12% quarter over quarter [24] - The automotive window tint product line grew by 22.5%, contributing significantly to overall product revenue growth [24] - The company experienced strong performance in the dealer service business, with revenue growth outpacing the aftermarket channel [30] Market Data and Key Metrics Changes - The U.S. region revenue grew by 8.4% to $70.4 million, marking a record for the quarter [6] - Canada region revenue increased by 7.4%, showing recovery after a slow start to the year [8] - China revenue was $7.7 million, reflecting a more normalized revenue recognition cadence [10] - Latin America saw a revenue decline due to inconsistent timing in large distributor markets [11] Company Strategy and Development Direction - The company is focused on consolidating international distribution and expanding its direct sales model in key markets like Brazil [19][44] - There is an emphasis on enhancing the personalization platform to increase consumer awareness and drive product sales [20][35] - The company plans to launch new products, including colored paint protection films, to expand its product offerings [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance relative to competitors despite a challenging environment [13] - The company anticipates Q3 revenue to be in the range of $117 million to $119 million, facing a tough comparison to the previous year's highest revenue quarter [12] - Management expects low double-digit growth in China, driven by increased efforts in the OEM and PDI channels [52] Other Important Information - The company ended the quarter with approximately $50 million in net cash on the balance sheet [18] - There were one-time costs of $1.6 million in SG&A for the quarter, related to restructuring and M&A activities [17] Q&A Session Summary Question: Any more color on the dealer service business trends? - Management noted that the dealer service business continues to grow faster than the aftermarket channel, with July setting records in terms of vehicles and revenue [30] Question: Can you delve into the personalization platform initiatives? - The personalization platform aims to increase consumer awareness and facilitate online transactions, ultimately driving revenue for installers [35] Question: Any considerations for gross margin and OpEx in the second half? - Management indicated that the overall cost structure is stable, with no significant changes expected for the rest of the year [38] Question: Thoughts on M&A opportunities with the current cash position? - The company is actively pursuing M&A opportunities, focusing on consolidating international distribution and expanding dealership business [44] Question: How is the U.S. market positioned for the second half and into 2026? - Management emphasized the importance of focusing on controllable factors to increase attach rates, regardless of fluctuations in new car sales [49] Question: What is the growth outlook for China? - The company expects low double-digit growth in China, with significant upside potential from pursuing OEM and PDI channels [52]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss attributable to common stockholders of $17 million or negative $0.35 per basic common share, which includes a provision for credit losses of $11 million or negative $0.23 per basic common share [19] - Distributable loss for the quarter was $45.3 million or negative $0.94 per basic common share, including write-offs of $36.1 million or negative $0.75 per basic common share [19] - Book value at June 30 was $7.99 per common share, a decline of about $0.25 from Q1, primarily due to the GAAP net loss [20] Business Line Data and Key Metrics Changes - The total loan commitments at the end of the second quarter were $1.9 billion, with an outstanding principal balance of $1.8 billion and about $78 million in future fundings [12] - The loan portfolio yield for the second quarter was 7.1%, which would be 8.2% excluding nonaccrual loans, showing an improvement from the prior quarter's yield of 6.8% [12][13] - The weighted average risk rating of the portfolio improved slightly to 2.8 due to ongoing loan resolutions and no negative credit migration during the quarter [12] Market Data and Key Metrics Changes - The commercial real estate market saw continued improvement in sentiment and liquidity, with increased refinancing activity and sales transaction volume [7][8] - The transitional floating rate lending market has strengthened across most property types, indicating a recovery in the lending market [8] Company Strategy and Development Direction - The company plans to focus on loan and REO resolutions while maintaining higher levels of liquidity, expecting to return to core lending and restart origination efforts by the end of the year [17] - The company aims to regrow its portfolio in 2026, with expected originations between $750 million and $1 billion [38] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery in the commercial real estate market, noting that while there are challenges, there is also a slow but steady improvement in office leasing [41][43] - The company anticipates that run rate profitability will improve as it continues to resolve non-earning assets and repay high-cost debt [22] Other Important Information - The company successfully resolved two nonaccrual loans totaling about $132 million in UPB during the second quarter [13] - The aggregate CECL reserve at June 30 was about $155 million, down from $180 million in the previous quarter [20] Q&A Session Summary Question: Outlook on the resolution of remaining assets in the four-rated bucket - Management indicated that they are actively monitoring and working with sponsors on the four-rated loans, but timing for resolution is hard to predict [28] Question: Reason for the general reserve increase - The general reserve increased by approximately $11 million due to an update in the economic forecast used in the CECL model, which was less favorable than the previous quarter [30][31] Question: Outlook for originations and timing - Management expects to restart origination efforts by the end of the year or early next year, with a focus on attractive investment opportunities [36][38] Question: Trends in the office portfolio - Management noted slow but steady improvement in office leasing across many markets, with capital slowly returning to the sector [41][43] Question: Rebuilding the lending pipeline - The company is in touch with borrowers and brokers and expects to begin quoting later this year, with a short process to get the lending engine back up and running [46] Question: Distributable EPS expectations - It is expected that distributable EPS will be below the dividend until the company starts rebuilding its loan book [48]

Financial Data and Key Metrics Changes - The second quarter RevPAR increased by 2.2% compared to last year, while total RevPAR grew by 3.7% [29] - Adjusted EBITDAre for the second quarter was $73 million, and adjusted FFO was $0.28 per diluted share [29] - The company has a net leverage of 3.5 times trailing earnings or 4.8 times including preferred equity [29] Business Line Data and Key Metrics Changes - Urban hotels led the portfolio with RevPAR growth of over 9%, driven by strong corporate group and business travel demand [7] - The Marriott Long Beach Downtown saw RevPAR increase nearly 70% due to recent investments and brand conversion [7] - The Renaissance Orlando at SeaWorld reported a year-to-date production increase of 16% in room nights and over 30% in revenue [11] Market Data and Key Metrics Changes - The company experienced mixed performance across various markets, with San Francisco showing RevPAR growth of 6.5% and total RevPAR growth of over 16% [9] - Washington DC faced challenges due to government cancellations, impacting performance negatively [10] - Wailea and Key West saw increased price sensitivity, contributing to lower than expected growth [12] Company Strategy and Development Direction - The company is taking a cautious approach to fourth quarter expectations due to heightened uncertainty and limited visibility [6] - There is a focus on capital recycling, with the sale of Hilton New Orleans St. Charles and $100 million in share repurchases planned [18] - The company aims to drive earnings growth through renovations and strategic investments in existing properties [92] Management's Comments on Operating Environment and Future Outlook - Management noted a more cautious outlook for the remainder of the year, primarily due to continued weakness in government demand and softer leisure demand [19] - There are encouraging signs in leisure bookings in Miami and Wailea, which could lead to better-than-anticipated fourth quarter results [6] - The company expects total portfolio RevPAR growth to range from 3% to 5% compared to 2024, with adjusted EBITDAre projected between $226 million to $240 million [31][32] Other Important Information - The company has nearly $145 million in total cash and cash equivalents, equating to over $600 million in total liquidity [30] - The updated guidance reflects a more cautious expectation for the remainder of the year, particularly for Andaz Miami Beach [31] - The company has repurchased over 11 million shares this year, contributing to an estimated 6% accretion in earnings per share [34] Q&A Session Summary Question: Recent booking trends in Maui - Management noted that occupancy in Kaanapali has improved, which positively impacts Wailea's performance, leading to increased leisure bookings [40][41][44] Question: Change in outlook and EBITDA reduction - The reduction in outlook is attributed to softness in Wailea and Washington DC, along with a slower ramp-up at Andaz Miami Beach [50][54] Question: Comfortable leverage and buyback strategy - The company is comfortable with its current leverage and sees ample capacity for additional share repurchases, balancing this with other capital allocation opportunities [58][60] Question: Group business outlook for 2026 - Management indicated that DC, Miami, and New Orleans are expected to be stronger markets, with good growth anticipated in San Francisco and wine country [65][66] Question: Impact of renovations and future growth - Renovations in various properties are expected to contribute to future growth, with specific focus on improving transient bookings and group business [92][94]

Financial Data and Key Metrics Changes - The accident year combined ratio improved to 94.6%, resulting in an underwriting profit of $5,600,000, a significant increase from $96,700,000 recorded last year [6] - Net income for the quarter was $10,300,000, consistent with last year's results of $10,100,000 [12][13] - Book value per share increased from $47.85 at March 31 to $48.35 at June 30 [12] Business Line Data and Key Metrics Changes - Gross premiums grew 18% over 2024, reaching $109,900,000, excluding terminated contracts [7][16] - Wholesale commercial premiums increased by 8% to $69,100,000, with average rate increases of about 4% [17] - Bacon Express premiums grew 27% to $12,400,000, driven by organic growth [18] Market Data and Key Metrics Changes - The overall premium growth outlook for 2025 is positive, with expectations of 10% growth [19] - The non-cat loss ratio improved to 50.1 in 2025 from 54.1 in 2024, indicating better underwriting performance [15] Company Strategy and Development Direction - The company is investing in technology and expanding underwriting capabilities through organic growth and selective acquisitions [10] - A new policy rating and issuance system is expected to be rolled out to agency partners in early 2026 [8] Management Comments on Operating Environment and Future Outlook - Management noted that while there are growth opportunities in certain segments, there are also emerging price competition in small commercial lines [23] - The company expects to maintain solid premium pricing in line with loss inflation [19] Other Important Information - The company received approval for $100,000,000 in dividends from its insurance subsidiaries to bolster liquidity [9] - Discretionary capital was reported at $265,000,000, supporting growth in the Agency and Insurance Services segment [20] Q&A Session Summary Question: What is the nature of the corporate expenses related to business development? - Management explained that they are looking to expand agency operations and have been reviewing various opportunities, which involves some due diligence costs [22] Question: What is the outlook for the overall E&S market? - Management indicated that while there are growth opportunities in certain segments, there is increased price competition in small commercial lines [23] Question: Will administrative expenses continue to grow? - Management stated that while they are engaging outside contractors for reviews, any significant increase in expenses would likely coincide with closing transactions [28][30] Question: What is the exposure to new fires in California? - Management confirmed that initial reserves for California wildfires have remained stable, with no significant new exposure identified [31] Question: What are the return on equity targets for the next few years? - Management expects returns on equity to reach around 12% for the insurance operations and 8% to 9% for the holding company, with a focus on reducing the expense ratio [34][35]

Financial Data and Key Metrics Changes - The economic book value decreased by 1% to $13.69 per share, while GAAP book value also fell by 1% to $13.12 per share [14] - Distributable earnings (DE) for the quarter were $0.24 per share, down from $0.29 per share in the previous quarter, primarily due to credit losses [17] - GAAP earnings were $33.2 million or $0.22 per basic common share, driven by an increase in net interest income to $61.3 million [14][15] Business Line Data and Key Metrics Changes - The company sourced $876 million in loans and securities, including $500 million in non-QM loans and $217 million in business purpose loans [12][20] - The delinquency rate for loans over 60 days decreased from 7.5% to 7.3% [15][24] - Lima One originated $217 million in business purpose loans, with an increase in mortgage banking income from $5.4 million to $6.1 million [23] Market Data and Key Metrics Changes - The market for securitized mortgage credit assets continues to deepen, with increased liquidity and strong investor appetite [6][9] - Mortgage credit spreads widened in April but retraced to levels seen at the end of Q1 by the end of the second quarter [6][22] - The company completed its eighteenth non-QM securitization in May, selling $291 million of bonds at an average coupon of 5.76% [21] Company Strategy and Development Direction - The company aims to continue focusing on non-QM loans, business purpose loans, and agency securities, with plans to grow the business purpose loan originations [20][23] - The management is optimistic about the economic return potential of the portfolio, indicating that the economic earnings power is closer to a 10% dividend yield [29] - The company is actively resolving non-performing loans and expects to utilize additional loan sales to accelerate the resolution of underperforming assets [16] Management's Comments on Operating Environment and Future Outlook - The management noted that the economic and macro environments appear clearer as the year progresses, with resilient growth despite slower than expected rates [8][9] - There is a consensus for two rate cuts later this year, which is favorable for mortgage REITs [9] - The management expressed confidence in the current earnings power of the portfolio and the sustainability of the common dividend [18] Other Important Information - The company expects to lower its G&A expenses by 7% to 10% per year from 2024 levels due to ongoing expense reduction initiatives [18] - Subsequent to the quarter end, the economic book value is estimated to have increased by approximately 1% to 2% [19] Q&A Session Summary Question: Economic return for the portfolio - Management discussed the economic return of the portfolio and indicated that the economic earnings power is much closer to a 10% dividend yield, with potential upside as capital is redeployed from troubled loans [28][29] Question: New loan officers at Lima One - The new hires are focused on the West and Midwest, with expectations for aggressive growth in the latter half of the year as they ramp up [40][41] Question: Capital allocation trends - Management indicated that they would continue to deploy capital across non-QM, HC, and business purpose loans, with a preference for increasing business purpose loan originations [33][49] Question: Distribution potential for new transitional loans - Management noted that they have been selling rental loans and expect to grow originations, with a balance between securitization financing and loan sales [56] Question: Execution risk for developers - Management stated that they are not seeing material pressure on rental income and exit prices, tracking these metrics month to month [65][66] Question: Relative risk of loan vintages - Management indicated that the 2023 vintage for multifamily loans was tougher, but overall LTVs are low, minimizing concerns about losses [67] Question: Callability of non-QM portfolio - Management explained that lower interest rates could lead to more callable deals, but the impact would be marginal due to offsetting swaps [70][72]

Financial Data and Key Metrics Changes - In Q2 2025, Lift Truck revenues declined by 19% year over year, primarily due to lower volumes across all product lines and weaker industry booking rates since early 2024 [19][20] - Adjusted Q2 operating profit was $5 million, significantly down from the prior year, impacted by lower volumes and increased material and freight costs due to tariffs [21][22] - The company reported a net debt position improvement year over year, with a steady liquidity position and increased unused borrowing capacity by 3% to nearly $260 million at the end of Q2 [27][28] Business Line Data and Key Metrics Changes - Lift Truck bookings in Q2 decreased to $330 million from $590 million in Q1 2025, with a notable decline in Europe and The Americas, while Asia Pacific bookings remained steady [13][14] - Bolzoni's revenue declined year over year due to the phase-out of lower-margin legacy products, but Q2 revenue grew sequentially due to higher volumes in attachments and forks sales in The Americas [23][24] Market Data and Key Metrics Changes - The global lift truck bookings market contracted in Q2, reflecting broader capital goods sector trends, with customers deferring capital expenditures due to economic uncertainty [11][12] - The order backlog at the end of Q2 was $1.7 billion, down from $1.9 billion in the previous quarter, primarily due to shipments outpacing new bookings [14][15] Company Strategy and Development Direction - The company is focusing on manufacturing and selling products within the same region to lower shipping costs and speed delivery, while also seeking new cost-effective supply partners [8][9] - Strategic initiatives include optimizing the manufacturing footprint and realigning the Nuvera business to adapt to changing economic conditions [10] Management's Comments on Operating Environment and Future Outlook - Management noted that economic uncertainty and fluctuating tariff levels continue to impact business, but they are taking proactive measures to protect financial health and maintain dealer relationships [5][6] - The company expects to increase production rates in the second half of 2025, contingent on demand stabilization, while remaining cautious due to ongoing economic uncertainty [17][18] Other Important Information - The company plans to invest between $50 million and $60 million in capital expenditures for 2025, focusing on advanced products and manufacturing efficiency initiatives [44] - Recent tax legislation is expected to lower tax expenses and cash outflows, positively impacting financial results in the second half of 2025 [43] Q&A Session Summary Question: Expectations for seasonal trends in North America and EMEA - Management expects more stable decision-making in the Americas as tariff rules stabilize, while EMEA is anticipated to follow typical seasonal trends with a weaker third quarter [51][57] Question: Changes in views on tariffs and their impact - Management has adjusted to the tariff environment, expecting a mix of pre- and post-tariff pricing in the backlog, with ongoing adjustments based on tariff changes [58][62] Question: Competitive landscape following Toyota's privatization - Management does not expect immediate market dynamics to change but acknowledges the potential for increased flexibility among competitors [66] Question: Concerns about investing in technology amidst profitability challenges - Management remains committed to investing in technology and efficiency, with capital expenditures exceeding depreciation and amortization [70] Question: Mix and profitability within the backlog - Management maintains pricing discipline and expects to improve the margin profile of the backlog, despite challenges from tariffs [75][78] Question: Impact of sourcing components from China and India - Management is working to transition sourcing to mitigate tariff impacts, particularly for highly engineered components [80][82] Question: Bolzoni's legacy products and market share outlook - Management anticipates the phase-out of legacy products by 2027 and has made progress in gaining market share despite a smaller market size [88][93] Question: Competitive behavior in the current market - Management notes that while some pricing actions are observed, traditional competitors are generally maintaining discipline in production and pricing [95][97]

Financial Data and Key Metrics Changes - In Q2 2025, the company increased net income by 22% and adjusted EBITDA by 13% [7][17] - Consolidated gross margins improved by nearly two percentage points, reaching 55% in the Water Infrastructure segment [7][17] - SG&A expenses increased to $39 million, representing just under 11% of revenue [22] Business Line Data and Key Metrics Changes - Water Infrastructure segment revenues increased by 12% with gross profit before D&A growing by 15%, achieving a gross margin of 55% [17][19] - Water Services segment revenues decreased by approximately 4% sequentially, with gross margins holding relatively flat at around 20% [19][20] - Chemical Technologies segment saw a sequential revenue decline of approximately 11%, but gross margins before D&A exceeded expectations at 17.5% [22] Market Data and Key Metrics Changes - The company added approximately 60,000 acres of leasehold dedication and 385,000 acres under right of first refusal agreements in the Northern Delaware Basin [13][15] - New Mexico's contribution to total fixed recycling capacity increased from zero to over 60% in about two years [15] Company Strategy and Development Direction - The company is focused on growing its water infrastructure, scale, and margin, with a strategic emphasis on long-term contracts and rationalizing its water services segment [6][8] - The acquisition of assets from Omni Environmental Solutions aims to enhance the infrastructure business while monetizing non-core parts of the water service segment [9][10] - The company is exploring financing options for Peak Rentals to unlock value while maintaining strategic alignment with its core water infrastructure growth strategy [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong 20% year-over-year growth in the Water Infrastructure segment for 2026, building on double-digit growth expected in 2025 [16][18] - Despite anticipated challenges in the second half of 2025 for the completions-oriented parts of the business, management expects continued strong free cash flow generation [18][23] Other Important Information - The company generated over $10 million of free cash flow during Q2 2025, despite significant capital expenditures [24][25] - The company expects net CapEx in 2025 to be between $225 million and $250 million, with a focus on growth capital [25][26] Q&A Session Summary Question: What inning is the company in regarding market opportunities? - Management indicated that they are far along in the build-out phase, with major contracts in place and starting to receive calls for additional acreage [28][30] Question: What is the market opportunity for Peak Rentals? - Management highlighted Peak's unique position in the market, particularly in power generation, and the potential for economic value through battery technology integration [38][41] Question: What is the expected CapEx budget for 2026 to support growth? - Management stated that the 20% growth projection for 2026 is based on current contracts, with an expected capital deployment of approximately $225 million in 2025 [52][53] Question: Are there other assets being considered for divestiture? - Management confirmed that while they have rationalized trucking operations, they are focused on maintaining strategic relationships with remaining assets that support infrastructure [75][79] Question: What is the status of operations in Colorado? - Management reported ongoing progress in Colorado, with a focus on developing a reliable water network and engaging with local stakeholders [82][85]