Financial Data and Key Metrics Changes - Landmark Bancorp reported a net income of $4.7 million for Q4 2025, a significant increase from $3.3 million in Q4 2024, with diluted earnings per share rising to $0.77 [4][9] - For the full year 2025, net income reached $18.8 million or $3.07 per share, marking a 43% increase over 2024 earnings per share [5] - The tangible book value increased to $20.79 per share, up $0.83 from the previous quarter and $4.09 or 24% from year-end 2024 [4][5] - The efficiency ratio improved to 62.7% in 2025 from 69.1% in 2024, indicating better expense management [5] Business Line Data and Key Metrics Changes - Net interest income for Q4 2025 totaled $14.8 million, an increase of $695,000 from Q3 2025, driven by higher asset yields and lower funding costs [9] - Commercial loan production was strong, particularly in commercial real estate, with mortgage originations increasing by 11% year-over-year [6][19] - Non-interest income for Q4 2025 was $3.9 million, a decrease of $169,000 from the prior quarter, primarily due to a loss on the sale of investment securities [12] Market Data and Key Metrics Changes - Deposits totaled $1.4 billion at December 31, 2025, increasing by $63.4 million in Q4, with interest checking and money market deposits rising significantly [15][16] - Non-interest-bearing deposits accounted for 26.3% of total deposits at year-end [16] - The Kansas economy remains healthy, with an unemployment rate of 3.8% as of November 30, 2025 [21] Company Strategy and Development Direction - The company plans to continue investing in its associates and make strategic investments to enhance customer service and capitalize on growth opportunities in its markets [23] - Management emphasized the importance of maintaining a strong and resilient balance sheet while proactively monitoring credit quality to minimize future losses [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in building on the foundation set in 2025 and highlighted the dedication of associates in serving customers and strengthening communities [23] - The company remains focused on addressing non-performing loans and improving the overall quality of its loan portfolio [20] Other Important Information - The board of directors declared a cash dividend of $0.21 per share, marking the 98th consecutive quarterly cash dividend since the company's formation [8] - The allowance for credit losses stood at $12.5 million, representing 1.12% of gross loans, indicating a strong position in managing credit risk [20] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the call may have concluded without a formal Q&A segment [24]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $9.1 million, or $1.15 per share, which includes a one-time adjustment of $1.5 million related to income tax provisions [3][9] - Pre-provision net revenue return on average assets was 180 basis points, an increase of 10 basis points from the prior quarter and 75 basis points from Q4 2024 [4][9] - Net interest margin expanded to 340 basis points, up 6 basis points from the prior quarter, driven by a reduction in deposit costs [9][10] Business Line Data and Key Metrics Changes - The SBA division contributed significantly to non-interest income, with gains on sale increasing to $2.2 million for the quarter [6][11] - Total funded originations for the year reached $758 million, with net loan growth of $122 million in Q4 [5][9] - Non-interest income increased to $3.4 million, representing 11.4% of total revenue, compared to 4.6% in Q4 2024 [11] Market Data and Key Metrics Changes - Floating-rate loans comprised 38% of the total loan portfolio, up from 23% at the end of 2024 [5] - Average low-cost deposit balances increased by $22 million, or 5%, over the prior quarter and by $86 million, or 21%, versus Q4 2024 [5][9] Company Strategy and Development Direction - The company aims to strengthen credit, improve the funding mix, build non-interest income, and generate high-quality growth while investing in technology and personnel [14][16] - The focus on diversified recurring sources of revenue is yielding positive results, particularly with the growth of the SBA division [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2026 with a strong position, expecting loan growth of 4%-5% and net interest income in the range of $111 million-$112 million [16] - The company anticipates non-interest income to increase to approximately $11 million-$12 million, with total non-interest expense estimated at $64 million-$65 million [16] Other Important Information - Non-performing assets as a percentage of total assets fell to 49 basis points, down from 56 basis points in the previous quarter [7][11] - The allowance for credit losses stands at 108 basis points of total loans, with coverage of non-performing loans increasing to 188% [12] Q&A Session Summary Question: Loan growth expectations for 2026 - Management indicated that loan growth is expected to pick up in 2026, driven by a balance of payoffs and new originations [19][20] Question: Makeup of the loan pipeline - The loan pipeline is currently 60% commercial and industrial (C&I) loans, with a focus on maintaining strong C&I real estate originations [25] Question: Low-cost deposit growth expectations - While no specific guidance was provided, management expects steady improvement in low-cost deposits, which grew 5% from the previous quarter and 21% year-over-year [29][33] Question: SBA originations in 2026 - Management expects to achieve significant SBA originations in 2026, building on the first full year of the SBA division's operations [39][44] Question: Expense growth outlook for 2026 - Expense growth is expected to be driven by investments in people and processes, with a headcount increase of over 10% in the previous year [49][50]

Financial Data and Key Metrics Changes - The company achieved record Q2 sales of $5.2 billion, with organic growth of 6.6% and a 150 basis points margin expansion, resulting in a 27.1% adjusted segment operating margin [4][10] - Adjusted earnings per share (EPS) grew 17% to $7.65, with net income reaching $980 million, reflecting an 18.9% return on sales [10][11] - Cash flow from operations was $1.6 billion, representing 16% of sales, while free cash flow was $1.5 billion, or 14.2% of sales [17] Business Line Data and Key Metrics Changes - North America sales were approximately $2 billion, with organic growth of 2.5%, driven by strength in off-highway and aerospace and defense verticals [13] - International sales reached a record $1.5 billion, up 12% year-over-year, with organic growth of 4.6% [15] - Aerospace sales were a record $1.7 billion, up 14.5% year-over-year, with an adjusted segment operating margin of 30.2% [16] Market Data and Key Metrics Changes - Orders in North America increased by 7% compared to the prior year, with a backlog reaching a record $11.7 billion [12][13] - International orders improved by 6%, with positive orders in both Europe and Asia-Pacific [15] - The aerospace segment saw a 14% increase in backlog, reaching a record $8 billion [16] Company Strategy and Development Direction - The company is focused on interconnected technologies that provide efficient solutions across market verticals, with a strong emphasis on the off-highway market [5][6] - The acquisition of Filtration Group Corporation is expected to enhance the company's presence in life sciences, HVAC, and industrial markets, with anticipated cost synergies of approximately $220 million [8][9] - The company aims to maintain a disciplined acquisition strategy that is accretive to organic growth and improves profitability [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another record fiscal year in 2026, supported by strong orders and positive growth across various segments [11][19] - The company noted that while some markets are recovering, challenges remain in transportation and upstream oil and gas sectors [40][41] - Management highlighted the importance of productivity and automation projects over large capacity expansions, indicating a gradual recovery in the industrial sector [125] Other Important Information - The company is increasing its full-year guidance for organic sales growth to a range of 4%-6%, with specific increases in aerospace and diversified industrial segments [21][22] - Adjusted segment operating margins guidance has been raised to 27.2% for the full year, reflecting an increase of 110 basis points from the prior year [23] Q&A Session Summary Question: Positive organic growth across technology platforms - Management acknowledged the positive organic growth across all three technology platforms and attributed it to both company-specific factors and broader market cycles [30][31] Question: Outlook for international growth and regional dynamics - Management provided insights on regional growth, indicating a positive outlook for North America and Asia-Pacific, while Europe showed signs of recovery [39][42] Question: Pricing and cost management amid inflation - Management confirmed strong pricing power and ongoing efforts to manage costs effectively, ensuring that inflation does not impact EPS [74][75] Question: Filtration Group acquisition timing and hurdles - Management indicated that standard regulatory filings are the primary hurdles for the Filtration Group acquisition, with an expected closing timeline of 6-12 months [76] Question: In-plant equipment spending trends - Management noted that customers are prioritizing productivity and automation projects, which benefits the company, while capacity expansion remains gradual [125]

Financial Data and Key Metrics Changes - Brunswick Corporation reported net sales of $5.4 billion for 2025, a 2% increase over the prior year, marking the first full-year net sales growth in three years [4] - Adjusted earnings per share (EPS) for 2025 was $3.27, impacted by tariff headwinds, with free cash flow generation reaching $442 million, a 56% increase year-over-year [4][18] - The company achieved a 41% increase in Q4 earnings compared to the prior year, driven by higher sales and operational improvements [16] Business Line Data and Key Metrics Changes - The propulsion segment saw a 23% increase in sales, with double-digit growth across all product categories, driven by strong OEM orders [18] - The aftermarket parts and accessories (P&A) business grew sales by 15% in Q4, marking the third consecutive quarter of growth [19] - The boat segment reported an 11% sales increase, with growth across premium, core, and value categories [22] Market Data and Key Metrics Changes - The U.S. retail boat market finished 2025 down approximately 9% in units, while Brunswick's global retail unit sales were down only 5% [3][11] - Mercury Marine maintained a leading U.S. retail outboard share of approximately 47%, gaining 70 basis points in the second half of the year [12] - Dealer inventories remained low, with Brunswick's pipelines down approximately 2,200 units from the previous year [12] Company Strategy and Development Direction - Brunswick plans to leverage improved market conditions in 2026, with expectations for a flat to slightly up U.S. retail boat market [23] - The company is focusing on operational efficiencies and new product introductions, including the Mercury 808 outboard engine concept [6][31] - Brunswick aims to continue returning capital to shareholders while investing in new products and technology [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improved market conditions for 2026, supported by falling interest rates and strong retail demand [5][9] - The company anticipates further incremental tariff costs of approximately $35-$45 million in 2026, net of mitigation actions [10] - Management noted that the retail financing rates have decreased to around 7.5%, down from 9%-10% at the peak, which is expected to benefit consumer purchasing power [37][55] Other Important Information - Brunswick's liquidity at year-end was $1.3 billion, including access to an undrawn revolving credit facility [15] - The company plans to retire approximately $160 million of debt in 2026, contributing to a net debt leverage target of 2.5x or lower by year-end [29] - Brunswick received multiple awards for its products and innovations, including recognition at the Consumer Electronics Show [33] Q&A Session Summary Question: What was the retail performance in the fourth quarter? - Management indicated that retail performance was flat, with continued strength in premium and core brands, and some recovery in value products [36] Question: How should we think about inventory levels for 2026? - Management expects inventory levels to be flat to slightly reduced, aiming to match wholesale and retail [39] Question: What can you tell us about repeat buyer behavior and deferred trade-up cycles? - Management noted a significant gap between new boat sales and replacement rates, suggesting potential for increased retail demand as conditions normalize [42] Question: Can you discuss the growth in sales to OEM customers? - Management confirmed that Brunswick's boat brands are gaining share, with new multi-year agreements signed with major OEMs in Europe [46] Question: How much of a benefit could come from the potential elimination of IEEPA tariffs? - Management estimated a full-year impact of $20 million-$25 million from IEEPA tariffs, which would be beneficial if eliminated [54]

Financial Data and Key Metrics Changes - The company reported net revenue of $987 million for the first quarter, an increase of 8% from the prior year [5] - Operating income rose to $131 million, up 12% year-over-year [5] - Adjusted earnings per share (EPS) increased by 17% to $0.34, while GAAP EPS was reported at $0.40 [5][12] Business Segment Performance - The Government Services segment generated $382 million in revenue, growing 5% despite a U.S. government shutdown [6] - The Commercial and International Group segment's revenue increased by 10% to $605 million, driven by growth in the UK and Ireland [6][7] - Margins for both segments improved by 40 basis points, with Government Services at 18% and Commercial International at 13% [6][7] Market Data and Key Metrics Changes - Federal work increased by 7%, primarily due to projects with the U.S. Army Corps of Engineers [8] - U.S. state and local markets grew by 10%, driven by municipal water treatment and digital water modernization [8] - International work accounted for 48% of total revenues, growing at a rate of 13% [9] Company Strategy and Industry Competition - The company focuses on water supply, treatment, flood control, and environmental stewardship, which remain in high demand [3] - Strategic growth areas include technology and automation, with plans for acquisitions to enhance capabilities [17][24] - The company aims to leverage its strong balance sheet for investments in growth opportunities [16][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth despite challenges like the government shutdown, expecting federal orders to increase in the second half of the fiscal year [10][11] - The company anticipates continued strong demand in water and environmental services, with a forecasted revenue growth rate of 5%-10% for international markets [25][26] - Management highlighted the importance of bipartisan support for future growth, particularly in federal spending [59] Other Important Information - The company announced a 12% increase in its quarterly cash dividend, marking the 47th consecutive quarterly dividend [17] - A stock buyback program was initiated, with $50 million repurchased in the first quarter [18] - The company divested its Norway operation, which was deemed non-core, while acquiring Halvik and Providence to enhance its consulting services [77][80] Q&A Session Summary Question: Strength in Federal Business - Management noted that the 7% growth in federal business was supported by advanced planning and strong relationships with clients, particularly the U.S. Army Corps of Engineers [35][38] Question: International Business Performance - The UK and Ireland have shown strong double-digit growth, while Canada is performing well with significant infrastructure investments [40][42] - Australia is recovering from previous declines, moving from -15% growth to flat performance [44][46] Question: Guidance and Market Conditions - Management indicated that guidance reflects a midpoint of 9% revenue growth, with potential risks from government shutdowns impacting the low end of the range [56][58] Question: M&A Focus and Strategy - The company is looking for strategic acquisitions that could justify higher leverage, with a focus on partnerships that transform the industry [65][66] - Management emphasized the importance of maintaining shareholder value while pursuing growth through acquisitions [72][74]

Financial Data and Key Metrics Changes - The company reported a full-year growth in NOI of 4.8% and a 5% increase in normalized FFO per share for 2025 [3][6] - Fourth quarter normalized FFO was $0.79 per share, and full-year normalized FFO was $3.06 per share, representing 4.2% and 5% growth respectively compared to the prior year [13][14] - Core community-based rental income increased by 5.5% for the full year 2025 compared to 2024 [14] Business Line Data and Key Metrics Changes - The MH business generated over $1 billion in revenue in 2025, with a combined revenue CAGR of 5.9% over the last five years [8] - Core RV and marina annual base rental income increased by 4.1% compared to the prior year, while core seasonal and transient rent combined decreased by 9.1% [15] - The membership business contributed $65.6 million net for the full year, with approximately 5,900 upgraded membership subscriptions enrolled [15] Market Data and Key Metrics Changes - Approximately half of the MH revenue comes from Florida, with 20% from California and Arizona, and the rest from North Central and Northeast US [8] - The average occupancy in California properties is 96%, reflecting strong demand in high-cost markets [10] - The company noted that 70 million baby boomers are in the U.S., with 10,000 turning 65 every day, indicating a favorable demographic trend for the company's offerings [10] Company Strategy and Development Direction - The company aims to continue its focus on community engagement and resident retention, emphasizing the value proposition of affordable living environments [4] - Initial guidance for 2026 anticipates normalized FFO growth of 3.7% and a 5.3% increase in the annual dividend rate to $2.17 per share [6][17] - The company is focused on internal growth and operational expansions, particularly in the Sunbelt markets, while maintaining a strong balance sheet [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the operating model, citing stable cash flow and solid underlying business trends [6][7] - The company expects to have approximately $100 million of discretionary capital after meeting obligations for dividend payments and capital expenditures [6] - Management noted that demand for MH and RV offerings remains strong, supporting consistent growth in long-term revenue streams [12] Other Important Information - The company has no secured debt maturing before 2028, with a debt to EBITDARE ratio of 4.5 times and interest coverage of 5.7 times [20] - The company is experiencing a timing difference in recognizing non-core income due to insurance proceeds and recovery of storm-affected properties [123] Q&A Session Summary Question: What gives confidence that seasonal and transient can accelerate through the balance of the year? - Management indicated that the first quarter earns approximately 50% of anticipated full-year seasonal rent and almost 20% of full-year transient rent, with favorable booking pace expected [26][29] Question: What is the expected impact of insurance renewal on expenses? - Management noted that they are pleased with the lack of adverse claims experience in 2025 and indicated that the insurance market is softening, but specific guidance will be provided after the renewal process [34] Question: What is the outlook for Canadian customers? - Management stated that Canadian customers represent 10% of total RV revenue, with no significant increase in home sales observed, but demand remains strong [51] Question: What is the strategy for the rental home business moving forward? - The company plans to prioritize selling homes but may accept rentals as demand arises, as rentals can expose more prospects to future home buying [102] Question: What is the outlook for the campground membership results? - Management highlighted that while there has been a decline in membership count, annual income has increased significantly, indicating a shift in the customer base [118][120]

Financial Data and Key Metrics Changes - Revenue for 2025 was $21.9 billion, representing a 5% organic growth, with adjusted segment operating margin at 15.8%, up 40 basis points [16] - Non-GAAP EPS increased to $10.73, an 11% rise over 2024, while adjusted free cash flow grew to $2.8 billion, over 20% increase [16] - For Q4, revenue was $5.6 billion, up 6% organically, with a segment operating margin of 15.7%, also up 40 basis points [16] Business Line Data and Key Metrics Changes - Communications Systems (CS) delivered $5.7 billion in revenue for 2025, with a margin of 25.2%, reflecting 4% growth and 50 basis points margin expansion [17] - Integrated Mission Systems (IMS) reported $6.6 billion in revenue, achieving 8% organic growth with a margin of 12.2% [17] - Space and Airborne Systems (SAS) generated $6.9 billion in revenue, with a margin of 12.3% [18] - Aerojet Rocketdyne achieved 12% organic revenue growth, exceeding $2.8 billion with a margin of 12.5% [19] Market Data and Key Metrics Changes - The company ended 2025 with a record backlog and order book exceeding $38 billion, with a Book-to-Bill ratio of 1.3 [11] - Key wins included a $2.2 billion award from South Korea for next-generation airborne early warning jets and an $850 million SDA contract for 18 satellites [12][14] Company Strategy and Development Direction - The company is focusing on evolving its business by aligning its portfolio with fast-growing defense priorities and pursuing strategic partnerships [4][5] - Plans include an IPO for the missile solutions business in the second half of 2026, with the Department of War as an anchor investor [5][20] - The company aims to enhance production capacity for critical missile programs and has begun construction to expand capacity on solid rocket motors [8] Management's Comments on Operating Environment and Future Outlook - Management highlighted a complex and rapidly evolving defense environment, emphasizing the importance of speed and execution [8] - The company anticipates continued strong demand for its products, with expectations of double-digit growth for the missile solutions business [30] - The 2026 guidance includes revenue expectations of $23 billion to $23.5 billion, representing 7% organic growth [20] Other Important Information - The company has reorganized its business segments from four to three to better align technology and business models [4] - The company has exceeded its LHX NeXt $1 billion savings commitment one year ahead of schedule [14] Q&A Session Summary Question: Long-term agreements for Missile Solutions - Management confirmed ongoing discussions with the Department of War regarding long-term agreements and expressed optimism about the growth potential of the missile solutions business [26][27] Question: CapEx expectations - Management indicated a planned increase in CapEx to about 2.5% of sales for 2026, with a focus on modernizing production lines [32][33] Question: Government stake in Missile Solutions - Management clarified that the government is expected to hold a single-digit equity ownership stake in the Missile Solutions business [40] Question: Revenue outlook for RemainCo - Management projected solid mid-single-digit growth for RemainCo, with expectations of leveraging a potentially larger defense budget in 2027 [46][49] Question: Production plans and competitive landscape in space - Management discussed the importance of speed and scale in satellite production and highlighted the company's investments in new facilities to meet demand [80][82] Question: Sustainability of CSD margins - Management expressed confidence in maintaining healthy margins for the Communications and Spectrum Dominance segment, with potential for future margin expansion [72][76]

L3harris Technologies (NYSE:LHX) Q4 2025 Earnings call January 29, 2026 10:30 AM ET Company ParticipantsChris Kubasik - CEOKen Bedingfield - CFOKristine Liwag - Executive DirectorMyles Walton - Managing DirectorNoah Poponak - Managing Director and Equity ResearchRobert Stallard - PartnerScott Mikus - Director of Aerospace, Defense and Space ResearchSeth Seifman - Executive DirectorSheila Kahyaoglu - Managing DirectorTony Calderon - VP of Investor Relations and Corporate DevelopmentConference Call Participan ...

Financial Data and Key Metrics Changes - Revenue for 2025 was $21.9 billion, representing a 5% organic growth, with adjusted segment operating margin at 15.8%, up 40 basis points from 2024 [14][15] - Non-GAAP EPS increased to $10.73, an 11% rise year-over-year, while adjusted free cash flow grew to $2.8 billion, over 20% increase [14][15] Business Line Data and Key Metrics Changes - Communications Systems (CS) generated $5.7 billion in revenue for 2025, with a margin of 25.2%, reflecting 4% growth and 50 basis points margin expansion [16] - Integrated Mission Systems (IMS) reported $6.6 billion in revenue, achieving 8% organic growth with a margin of 12.2% [16] - Space and Airborne Systems (SAS) had revenue of $6.9 billion and a margin of 12.3% for 2025, with Q4 revenue slightly up due to increased FAA volume [17] - Aerojet Rocketdyne delivered 12% organic revenue growth, exceeding $2.8 billion, with a margin of 12.5% [18] Market Data and Key Metrics Changes - The company ended 2025 with a record backlog exceeding $38 billion and a Book-to-Bill ratio of 1.3 [10] - Key awards included a $2.2 billion contract from South Korea for airborne early warning jets and an $850 million SDA contract for missile defense satellites [11][12] Company Strategy and Development Direction - The company is focusing on aligning its portfolio with defense priorities, including a recent divestiture of a majority stake in its civil space propulsion business to enhance focus on military needs [3][4] - Plans for an IPO of the missile solutions business in 2026 are underway, with the Department of War as an anchor investor [4][19] - The company aims to increase production capacity for missile systems and solid rocket motors to meet growing demand [5][6] Management's Comments on Operating Environment and Future Outlook - Management highlighted a complex and rapidly evolving defense environment, emphasizing the need for speed and execution [7][9] - The company anticipates a 7% organic growth for 2026, supported by a robust order outlook and record backlog [12][20] - Management expressed confidence in meeting future demand and maintaining operational agility [24][25] Other Important Information - The company has reorganized its business segments from four to three to better align technology and business models [4] - The 2026 guidance includes expected revenue of $23 billion to $23.5 billion, with a segment operating margin anticipated to be in the low 16% range [20][21] Q&A Session Summary Question: Long-term agreements for Missile Solutions - Management confirmed ongoing discussions with the Department of War regarding long-term agreements and expressed optimism about the growth potential of the Missile Solutions business [26][27][30] Question: CapEx expectations - Management indicated a planned increase in CapEx to $600 million for 2026, emphasizing the need for investment to modernize production capabilities [32][34] Question: Government stake in Missile Solutions - Management clarified that the government is expected to hold a single-digit equity stake in the Missile Solutions business post-IPO [39] Question: Revenue outlook for RemainCo - Management projected solid mid-single-digit growth for RemainCo, with expectations of leveraging a potentially increased defense budget in 2027 [44][46] Question: Production plans and competitive landscape in space - Management discussed the ramp-up of production capabilities in new facilities and the competitive landscape for satellite contracts, emphasizing the importance of speed and scale [78][80]

Financial Data and Key Metrics Changes - The company reported sales of $3.8 billion in 2025, a slight increase over the previous year, with earnings per share (EPS) rising 6% to a record $3.85 [10][6] - Free cash flow for 2025 was $546 million, a 15% increase compared to 2024, with a free cash flow conversion rate of 100% [13][14] - The company returned $597 million to shareholders through dividends and share repurchases [6][14] Business Line Data and Key Metrics Changes - North America segment sales were $3 billion, slightly up from 2024, with a segment margin of 24.4%, an increase of 20 basis points year-over-year [10][11] - North America water heater sales increased by 1%, while boiler sales grew by 8% due to higher commercial and residential volumes [7][10] - Water treatment sales in North America decreased by 2%, but sales in priority channels grew by 10% [8][9] - Rest of the World segment sales decreased by 4% to $880 million, primarily due to lower sales in China [11][12] Market Data and Key Metrics Changes - In China, third-party sales decreased by 12% in local currency due to economic weakness and soft consumer demand [9][11] - The company expects China sales to decrease mid-single digits in 2026 due to ongoing market challenges [20][21] - The India business, including Pureit, is projected to grow approximately 10% as the company leverages brand synergies [21][28] Company Strategy and Development Direction - The company is focused on portfolio management, innovation, and operational excellence as key strategic priorities [22][24] - The acquisition of Leonard Valve is aimed at expanding into the water management market, enhancing digital capabilities and integrated product offerings [26][27] - The company plans to continue investing in gas tankless offerings and other energy-efficient products to maintain market leadership [16][22] Management's Comments on Operating Environment and Future Outlook - Management noted that the U.S. residential market is expected to remain flat to down due to pressures in new home construction [18][19] - The company anticipates a return to growth in China in the second half of 2026, driven by internal actions and market recovery [21][38] - Management expressed confidence in the company's ability to navigate competitive pressures and maintain profitability through strategic actions [28][29] Other Important Information - The company has increased its dividend for over 30 consecutive years, with a quarterly dividend of $0.36 per share approved [14][15] - The company expects to repurchase approximately $200 million of its stock in 2026 [17][15] Q&A Session Summary Question: What is driving the persistent downturn in residential volumes? - Management indicated that the downturn is primarily due to pressures in new home construction, with emergency and proactive replacements remaining stable [36][37] Question: What indicators suggest a return to growth in China? - Management highlighted the need to move past the impact of government subsidies and focus on remodeling and refurbishments as key drivers for growth [38] Question: Can you elaborate on the competitive intensity in the wholesale channel? - Management noted that competitive pressure is increasing due to low new home construction and retail gaining market share, but emphasized their strong position in both retail and wholesale channels [42][43] Question: What is the growth outlook for the water treatment business? - Management expressed optimism about continued growth and margin expansion in the water treatment business, driven by strategic focus and integration efforts [70][73]