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Operator: Good morning, and welcome to Rockwell Medical, Inc.'s Fourth Quarter and Full Year 2025 Results Conference Call and Webcast. Please note, this event is being recorded. At this time, I would like to turn the conference call over to Heather Hunter, Chief Operating Officer at Rockwell Medical, Inc. Heather, please go ahead. Heather Hunter: Good morning, and thank you for joining us for this update on Rockwell Medical, Inc. Joining me on today's conference call are Rockwell Medical, Inc.'s President and Chief Executive Officer, Doctor Mark Strobeck, and Rockwell Medical, Inc.'s Chief Financial Officer, Jesse Neri. Before we begin, I would like to remind you that this conference call will contain forward-looking statements about Rockwell Medical, Inc. within the meaning of the federal securities laws, including but not limited to the types of statements identified as forward-looking in our Annual Report on Form 10-K and our subsequent periodic reports filed with the SEC. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions and expectations only as of today. Except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our periodic reports filed with the SEC. Rockwell Medical, Inc.'s Annual Report on Form 10-K for the year ended 12/31/2025 was filed prior to this call and provides a full analysis of the company's business strategy as well as the company's full year 2025 results. The reconciliation of non-GAAP measures we discuss on today's call can also be found in today's press release. Our Form 10-Ks and other reports filed with the SEC, along with today's press release, our updated investor presentation, and a webcast replay of today's call can be found on our website under the Investors section. I will now turn the call over to Rockwell Medical, Inc.'s President and CEO, Doctor Mark Strobeck. Mark Strobeck: Thank you, Heather. Good morning, everyone. Thank you for joining us today on Rockwell Medical, Inc.'s fourth quarter and full year 2025 earnings conference call and webcast. 2025 represented a defining year for Rockwell Medical, Inc. We successfully navigated changes in our customer base, changes in our customer purchasing volumes, and changes in our distribution footprint, all while maintaining profitability on an adjusted EBITDA basis for the second consecutive year. We made significant operational changes to further align our infrastructure to match demand, the benefits of which began to be realized in the fourth quarter and delivered one of the highest quarterly gross margins in the company's history. Additionally, in the fourth quarter 2025, we generated positive cash flow from operations, resulting in a higher cash position at year end. We exited 2025 with a business that we expect to remain stable and well positioned to deliver sustainable profitability for years to come. Now let me delve into the details of our operational results. A central focus of our strategy over the past several years and especially throughout 2025 has been building a more durable business to reduce volatility, support more consistent margin performance, and enable us to plan our operations with greater confidence. Reducing customer concentration risk and improving revenue stability have been essential priorities for Rockwell Medical, Inc. and we believe we have made significant progress on both fronts. Today, our customer mix is diverse. We serve approximately 300 customers throughout the United States including all five of the leading dialysis providers in the U.S., along with university medical centers, community hospital systems, and other renal care organizations. In addition, we supply hemodialysis concentrates to more than 30 countries outside the United States. Let's start with Fresenius, the largest provider of renal care solutions in the world. Based on the agreement we signed back in 2024, we consistently and reliably supplied them with our concentrate products throughout 2025, and based on their projections for 2026, we expect that business to grow. As for DaVita, the second largest provider of kidney care services in the world, while they originally intended to completely transition away from Rockwell Medical, Inc. by 2025, they did not. Instead, for a variety of reasons, including our reliability, consistency, and quality, DaVita ended up extending our agreement to 2026, during which product pricing will be increased. We are excited to continue to supply and support DaVita and look forward to finding ways to reestablish a larger supply agreement with them. We expanded our relationship with Innovative Renal Care, the fourth largest dialysis service provider in the United States. We signed a multi-year agreement with IRC to support their goals to invest in high-quality hemodialysis products, streamline workflows, and help avoid potential supply chain disruptions. This multimillion-dollar purchase agreement has utilization commitments and will remain in effect for three years with the option to extend for an additional one-year period. Since announcing this transition in July, our partnership with IRC continues to grow stronger, and we now reliably supply 70% of their clinics with our hemodialysis concentrates. Efficient processes, high-quality products, business continuity, and supply chain reliability were key drivers for IRC to expand their relationship with us. We are excited to be a part of their mission. Another customer to highlight is DCI, which is one of the top five dialysis providers in the U.S. and the nation's largest not-for-profit dialysis provider. Rockwell Medical, Inc. is currently under a long-term agreement with DCI through which we supply and deliver to over 80% of their clinics. In 2025, we also signed a product purchase agreement with Concerto Renal Services, the largest provider of dialysis in skilled nursing facilities in the United States. This three-year agreement has an option to renew for one additional year and includes supply and purchasing minimums for our liquid and dry acid bicarbonate concentrates, including our bicarbonate cartridges. We currently supply 100% of their facilities where Concerto provides dialysis services. Last year, there was a major hemodialysis concentrate supply chain disruption due to another concentrate supplier in the Western part of the U.S. winding down operations due to regulatory and compliance-related concerns. To stabilize the market, we moved quickly to ensure product availability by rapidly scaling production and expanding our logistics infrastructure to address vital customer demand created by this disruption. As a result, we added 30 new customers in the West, increasing the clinics we serve and opening the possibility for further expansion. We also further diversified our concentrate product portfolio by adding a single-use bicarbonate cartridge that is 510(k) approved by the FDA and comes in two sizes: 720 and 900 grams. Interest in this disposable, which is compatible with a range of dialysis machines, continues to increase with our existing customer base as well as with prospective customers. In 2026, we expect to generate approximately $1,000,000 in net sales from our bicarbonate cartridges. As we look ahead, our pipeline remains active and diversified across customer segments and geographies. We continue to see strong interest from customers who increasingly recognize the importance of quality and supply chain reliability for our hemodialysis products. While we remain disciplined, we believe our diverse customer mix positions us well for sustainable growth and expansion. As our customer mix evolved in 2025, we took a hard look at our operations, not just to reduce cost, but to strengthen the foundation of our business. Throughout the year, we executed a series of targeted actions across manufacturing, supply chain, logistics, and overhead. The objective was straightforward: operate more efficiently while continuing to meet the high expectations of our customers to ensure quality, safety, reliability, and top-tier customer service. As our business evolved, we took the opportunity to further standardize processes and optimize how we deploy resources across the organization. By reducing complexity, improving planning, and better aligning capacity with demand, we are able to operate more predictably and with greater discipline. These changes support our ability to respond more efficiently as volumes and customer needs shift, the impact of which is clearly being reflected in our gross margin. It is important to emphasize that our margin expansion, especially in 2025, is not the result of temporary actions or one-time benefits. Instead, these changes reflect structural improvements in how we run our business, from how we manage production to how we align resources with demand. Our margin improvement is being driven by several factors. First, we are improving our pricing discipline across a more diversified customer base, which is allowing us to better align contract economics with the value we provide. Second, operational efficiencies of reducing costs and improving throughput. Third, a more stable production and logistics environment is enabling better planning and execution. As volumes shift and customer needs evolve, this disciplined operating model gives us flexibility to respond efficiently while maintaining high service levels. In the fourth quarter, we appointed a new head of manufacturing and operations, Rashad Brown, as Vice President of Manufacturing and Supply Chain. Rashad brings deep operational expertise and a strong track record in regulated manufacturing environments, specifically hemodialysis concentrates, having previously worked with Fresenius and other leading medical device manufacturers. His leadership is already having a significant impact on our operations through improved execution, consistency, and discipline. We expect further improvements in our manufacturing efficiencies in 2026 and beyond. Our financial performance in 2025 reflected an organization that was in transition but also laser-focused on maintaining profitability and stabilizing its business to ensure future growth. Revenue changes throughout the year reflected the combination of a change in our customer base and product mix along with additional organic growth. Similarly, we made adjustments to our organizational and manufacturing infrastructure to match the changes in our customer base, which produced consistent improvements quarter over quarter. Gross margin expanded meaningfully, making the fourth quarter 2025 one of the strongest quarters of gross margin in Rockwell Medical, Inc.'s history. Operating loss narrowed. The overall financial profile of our organization improved, and we delivered positive adjusted EBITDA for the full year 2025. We also generated cash in the fourth quarter supported by margin expansion and better working capital management. That progress further reinforces the strength of our underlying business. In short, we are doing more with less and doing it better. The business is becoming more focused and more predictable, and we believe it is increasingly well positioned to generate sustainable returns over time. We initiated a strategic shift nearly four years ago to fundamentally revitalize Rockwell Medical, Inc. Our main objective at the time was to reestablish credibility with all stakeholders, especially with the investment community. This is and remains incredibly important to our success. We are pleased to report for the third year in a row our annual performance was aligned with our annual guidance. We have strengthened the core fundamentals of this business and clarified the key drivers for its success, positioning it to become increasingly consistent, reliable, and repeatable over time. For our 2026 guidance, we believe we are well positioned to advance our strategy to drive sustainable revenue growth, expand our profitability, and further diversify our portfolio. As a result, we project our business operations in 2026 will generate adjusted EBITDA between $1,000,000 and $2,000,000 and operating cash flow to be positive. Because we are currently in negotiations with several large customers, the outcome of which has the potential to positively impact both net sales and gross margin in 2026, we expect to provide guidance on those financial metrics in the near future. Bottom line, in 2026, we believe that our business is projected to be profitable and generate cash. As new opportunities arise, we anticipate that these projections have the potential to strengthen, reflecting our business' ongoing adaptability and growth prospects. Looking ahead, we continue to focus on long-term value creation for our shareholders. Our strategy over the next three years is centered on three core elements. First, we are focused on growing our profitable, leading hemodialysis concentrates business, serving dialysis centers in the United States and around the world. This remains our core foundation. Our ability to deliver reliable supply, consistent quality, and strong service supported by a more efficient operating model enables us to be a dependable partner to our customers while sustaining margin performance and supporting shareholder returns. Second, we are focused on building a broader portfolio of renal care products that integrate seamlessly into our existing commercial, manufacturing, and distribution infrastructure. We see meaningful opportunity to leverage the platform we have built, including our customer relationships, operational capabilities, and logistics network, to support additional products that align with our expertise and enhance the overall offering we provide to customers. Third, and longer term, we continue to seek the next advancement in renal care—innovations that can drive improved treatment options and outcomes for patients. While inherently deliberate and disciplined, this work reflects our commitment to remaining forward-looking and strategically positioned within an evolving healthcare landscape. Beyond these core areas of focus, and based on what we see today, we believe that over the next three years, we have a path to meaningfully grow our business. By 2029, we believe that we will be well positioned to generate annual net sales above $100,000,000 while continuing to broaden and diversify our portfolio so that a smaller share of revenue comes from our concentrates business as it exists today. Over that same period, we expect gross margins to trend upward, potentially approaching the 30% range, and our business to move toward annual profitability in the range of $5,000,000 to $10,000,000. These are our goals, and we see a path to achieve these goals. Of course, I would emphasize that these are longer-term directional views based on our current expectations, and they are subject to a range of risks and uncertainties so actual results could differ. Now I will turn the call over to Jesse to review in further detail our fourth quarter and full year 2025 financial results. Jesse Neri: Thank you, Mark. Good morning, everyone. As you can see from this morning's press release, we presented our financial highlights as a quarterly trend, from Q4 2024 through Q4 2025. We believe the most meaningful comparisons are quarter-to-quarter progression given the changes to our business over the past year. As Mark mentioned, we remain focused on continuing to optimize our cost structure to match the changes in our customer base. We measure our progress against this objective by focusing on three metrics: cash, gross margin, and adjusted EBITDA. We have shown consistent improvement throughout the year in each of these areas. First, we increased our cash position from $173,000,000 at March 2025 to $25,000,000 by the end of the year. Gross margin grew from 16% in Q1 to 21% in Q4. And adjusted EBITDA improved each quarter, starting at negative $400,000 in 2025, and ended with a positive $1,000,000 in Q4. We believe adjusted EBITDA is the best indicator of profitability because we remove noncash items, nonoperating items, restructuring costs, and other items that are not part of our core concentrates business. Now let me walk through our financial results for the fourth quarter and full year 2025. Net sales for Q4 2025 were $18,300,000, which was 15% higher than net sales for Q3 2025 and represents a 26% decrease over net sales of $24,700,000 for Q4 2024. Net sales for the full year 2025 were $69,300,000, which represents a 32% decrease over net sales of $101,500,000 for the same period in 2024. The decrease in net sales was driven by the expected reduction in purchase volumes by one of our customers. Gross profit for Q4 2025 was $3,900,000, which was 70% greater than gross profit for Q3 2025 and in line with gross profit for Q4 2024. Gross profit for the full year 2025 was $11,700,000, down from $17,500,000 for the same period in 2024. The decrease in gross profit was driven by the reduction in purchase volumes by the customer mentioned earlier. Gross margin for the fourth quarter 2025 was 21%, representing one of the strongest quarters of gross margin in Rockwell Medical, Inc.'s history and a meaningful increase over 14% gross margin in Q3 and 15% gross margin in Q4 2024. Gross margin for the full year 2025 was 17%, which was in line with our 2025 annual guidance and in line with our gross margin in 2024. As Mark mentioned earlier, we made adjustments to our infrastructure and operations last year to better match demand, and the results of these activities began to be reflected in our fourth quarter numbers. Net loss for Q4 2025 was $600,000, which represents a threefold improvement over our net loss of $8,180,000 in Q3 2025 and a slight improvement over a net loss of $800,000 for Q4 2024. Net loss for the full year 2025 was $5,300,000 compared to a net loss of $500,000 in 2024. Loss for 2025 includes $4,000,000 of noncash depreciation, amortization, and stock compensation expense, as well as $1,200,000 of severance and other restructuring costs associated with facility transitions. Rockwell Medical, Inc. was profitable on an adjusted EBITDA basis for the fourth quarter and full year 2025. Adjusted EBITDA for Q4 2025 was a positive $1,000,000, which represents a $900,000 increase over Q3 2025 and was generally in line with Q4 2024. Adjusted EBITDA for the full year 2025 was a positive $300,000 compared to a positive $5,000,000 for the full year 2024. Cash, cash equivalents, and investments available for sale at year-end 2025 were $25,000,000, an increase of $1,300,000 from the end of Q3. During the fourth quarter, we generated positive cash flow from operations of $2,300,000, which was partially offset by cash paid in connection with our Vopra asset acquisition. Since Q4 2024, we increased our cash position by $3,400,000. Our $25,000,000 cash balance not only provides a stable foundation for the business, but also provides the growth capital necessary to pursue the strategic activities Mark outlined earlier. Now I will turn the call back over to Mark. Mark Strobeck: Thank you, Jesse. Operator, please open the phone lines for any questions. Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad now. Press star one again to withdraw your question. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Now please stand by while we compile the Q&A roster. Your first question comes from the line of Anthony Vendetti with Maxim Group. Your line is open. Please go ahead. Anthony Vendetti: Thank you. Mark, I was wondering if, based on the current relationship with DaVita since they continued to purchase in 2025, have they given you any indication of what volume levels or commitments for 2026 they are considering, or do you have expectations for 2026 from DaVita, or is that still up in the air, negotiation phase? Any color on that would be really helpful. Thanks. Mark Strobeck: Thanks, Anthony. Yes. As part of our agreement with DaVita, they are obligated to provide us a forecast for the year, which they have. At this point, they are purchasing at volumes that are consistent with and slightly above what they have projected for us. So I think that is a positive sign. I think, as we continue to work with them and create better ways in which to service them, we are hopeful that there is an opportunity here not only in establishing a much longer-term relationship, but also the possibility of securing additional business with them. Anthony Vendetti: Okay. Great. And then two other quick follow-ups. On the West Coast expansion as well as at-home dialysis: you have 30 new accounts on the West Coast. Is there a particular goal for 2026 in terms of expansion there, or is that on a case-by-case basis? And then maybe talk about the progression of the at-home dialysis market. Where is that right now in terms of approximate percentage of revenue, and what do you see as the growth trajectory in 2026? Mark Strobeck: Yeah. So on the first question, we took over those customers. We are now in the process of putting those under long-term agreements with Rockwell Medical, Inc. Given the customer base that we already have in the West, with the addition of this group, it really puts us in a position to begin to start to expand further within the West. We are right now designing a commercial strategy to bring forward in part to do that. We will also be looking to our work with B. Braun. If you recall the partnership that we had put in place two years ago, they are heavily focused in the West. So I think collectively that is going to position us well to target dialysis centers that we otherwise have not supported in the past. As it relates to the at-home market, that market continues to establish itself. As an overall percentage of the dialysis hemodialysis market, it is probably trending towards what will be about 10%. We work with some of the largest players in that space, and so we are continuing to support those. As that market grows, I think we are well positioned to take advantage of that, in part because we have configurations now of our products that work incredibly well at home. Anthony Vendetti: Okay. Great. Thanks very much. Appreciate it. I will hop back in, too. Operator: Again, if you would like to ask a question, please press star one on your telephone keypad now. To withdraw your question, press star one again. Remember to pick up your handset when asking a question. If you are muted locally, remember to unmute your device. Please stand by while I compile the Q&A roster. Your next question comes from the line of Ram Selvaraju with H.C. Wainwright. Your line is open. Please go ahead. Ram Selvaraju: Thank you very much for taking my questions, and congrats on all the recent progress. I wanted to drill down a little bit more on the likely evolution of the relationship with DaVita, and ask three questions on that front. Firstly, I was wondering if contribution from DaVita factors into your longer-term projections. If it does, to what extent? And if it does not, could you confirm that? Secondly, I was wondering, in the context of 2026, are there any factors that you see potentially driving DaVita to extend the relationship with Rockwell Medical, Inc. after 2026? In other words, is that even an option, or do you think that is definitively off the table and we should not be assuming it in any way, shape, or form? And then lastly, I was wondering if you could talk a little bit about the broader markets and competitors with you for DaVita's business, and how they might be looking to prise DaVita away. Is it primarily on price, or are they able to compete on something else? And then I have a few others. Thank you. Mark Strobeck: Great. Thanks, Ram. Maybe the first one I will let Jesse answer. Jesse Neri: Yeah. So, Ram, in terms of our longer-term projections, we are assuming consistent volumes purchased from DaVita over the next few years, so consistent with what they purchased the last three quarters of last year, going forward into this year. So no gigantic growth assumption there for DaVita. Mark Strobeck: And then on your next question, we continue to have a very strong relationship with DaVita. I think it is their intent, and it was their desire to want to put in place a long-term relationship with us. So it is our anticipation that if we continue to supply them consistently over the course of the year with products that are of the highest quality, that there is a high probability that they will continue to work with us going forward. And depending on how the performance of others continues, I think it may open the possibility for us to expand further and regain many of the clinics that transitioned away in the middle of next year. As to the third part of your question around competitors, this is really a three-party market, and it is us, Fresenius, and Nipro. We believe that Nipro continues to struggle to bring products to the market, given some of their recent historical issues around the quality of their products. We do not have much visibility into that, but all indications are that that still continues to present a challenge to them. And we continue to not only work with Fresenius, but also recognize that there are customers that continue to leave Fresenius in preference of Rockwell Medical, Inc. Not just our ability to provide products that are incredibly high quality, but our ability to distribute those through our Rockwell Medical, Inc. transportation system helps reduce the third-party cost that other customers would see if they were to purchase products from Fresenius. Our competitive advantage continues to be high-quality products—that means products that are manufactured in facilities that do not and have not had significant issues related to FDA inspections. And then secondly, because we transport our products largely on Rockwell Medical, Inc. transport, which is a more cost-effective way to get products to clinics, those are the two areas that put us at a competitive advantage. And the third is our customer service group. We have a dedicated customer service group that works exclusively with dialysis centers. As you can imagine, many of these are not set up as businesses per se. They are set up as treatment facilities really focused on delivering high-quality therapy to patients with end-stage renal disease. They are not sophisticated in procurement; they are not sophisticated in logistics. And we provide all of that through our customer service, and it continues to be an advantage for us. So those are the areas that I think differentiate us and continue to generate very positive customer feedback. Ram Selvaraju: Thank you. That is very helpful. I wanted to ask two other quick ones, if I may. Firstly, can you give us any additional granularity on how the Western expansion is going, what the prospects are for additional customer acquisition in 2026, and how you see that aspect of the business contributing to your longer-term forecast? And then I was wondering if, in the, let us call it, late 2020s timeframe—the outer years of your longer-term forecast—you can give us any further commentary on where you expect gross margin to be trending at that point. Mark Strobeck: Yep. So, as we mentioned, we stepped in and took over the business of about 30 customers in the West. That is a multimillion-dollar revenue base that we have now acquired and are beginning to support. That, as I mentioned, gives us an even stronger foothold in a region of the country that has largely been supplied by one manufacturer. So once we made that announcement and made it clear to folks that we are now able to provide products to dialysis centers in the West, we received a number of calls from customers that are looking to transition away from their current supplier. So we are in the process of prosecuting those. Those can be smaller opportunities all the way to multimillion-dollar opportunities, and we are just going to continue to prosecute those throughout the year. But we certainly think that there is a large opportunity to secure more business out there. As it relates to our projections through 2029, two things I would say in an effort to answer that question. The first is we continue to be actively engaged in a number of business development discussions around acquiring renal care products that fit very squarely into what we are doing, whether that is additional concentrates or whether that is products that are used by dialysis centers—blood tubing sets, dialyzers, et cetera. So we are now working with a couple of organizations to evaluate those and determine the prospects of bringing them to the United States for us to sell alongside our concentrates. All of those product opportunities that we are looking at are going to be higher-margin opportunities than our current business today, which is going to help pull up our overall gross margin. And then, in addition, we are also looking at one or two very innovative therapies in the space that may require additional investment to get to the market. But all of that is what we believe we can successfully accomplish to get to the revenue projections that we provided. Ram Selvaraju: Thank you so much. Mark Strobeck: Thanks, Ram. Operator: There are no further questions. I would now like to turn the call back over to Doctor Strobeck. Mark Strobeck: Thank you for joining us today for an update on Rockwell Medical, Inc. We are proud of our achievements in 2025 to navigate changes in our customer base, purchase volumes, and distribution footprint, all while maintaining profitability. Our team has done a tremendous job aligning our infrastructure to match demand. In 2026, we remain focused on making Rockwell Medical, Inc. profitable for what would be the third year in a row and continuing to ensure that we are set up for long-term stability and success. Strengthening our top-line revenue, expanding our profitability profile, and further diversifying our portfolio through product acquisitions and business development opportunities requires significant ongoing effort. We believe we are getting close, and we will have more to share with you as we reach key milestones in the coming months. Operator: This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Hello, and welcome to Enerpac Tool Group Corp. Second Quarter Fiscal 2026 Earnings Call. Please note that this call is being recorded. After the speakers' prepared remarks, there will be a question and answer session. If you would like to ask a question during that time, press the appropriate keys on your telephone keypad. I would now like to hand the call over to Darren Kozik, CFO. Please go ahead. Darren Kozik: Thank you, operator. Good morning, and thank you for joining us for Enerpac Tool Group Corp.'s earnings call for 2026. Joining me on the call today is our President and Chief Executive Officer, Paul Sternlieb. The slides referenced on today's call are available on the Investor Relations section of the company's website, which you can download and follow along. A recording of today's call will also be made available on our website. Today's call will reference non-GAAP measures. You can find a reconciliation of GAAP to non-GAAP measures in the press release issued yesterday. Our comments will also include forward-looking statements that are subject to business risks that could cause actual results to be materially different. Those risks include matters noted in our latest SEC filings. I will now turn the call over to Paul. Paul Sternlieb: Thanks, Darren, and thank you, everyone, for joining us this morning. As we look back at our 2026 performance, there was a lot to be pleased about. Within our Industrial Tools and Service segment, or IT&S, product sales accelerated, growing 6% organically year over year. That represents the highest growth in products that we have enjoyed in 10 quarters since 2023. Through February, we saw some strengthening in the U.S. market, with the PMI reflecting two consecutive months of expansion in the manufacturing sector. Likewise, U.S. industrial distributor survey data through February suggests improving sentiment. At Enerpac Tool Group Corp., we continue to see favorable trends, with overall product order rates growing mid-single digits and gains in each of our three geographic regions. Within our services business, which represented approximately 20% of the IT&S segment in fiscal 2025, we took decisive action to address a market slowdown in the EMEA region that has weighed on overall growth and profitability. With the announced restructuring, we are rightsizing our HydroTite service operation in the region and reducing headcount to align with current market conditions. The restructuring will also support our strategic transition toward higher margin service business and profitable growth objectives. At the same time, we are very pleased to announce a five-year contract award with a major oil and gas company operating in the U.K. North Sea. Under that contract, which is worth several million dollars annually, we will provide maintenance and pipeline service work. I am particularly proud of the fact that we were able to secure this win against significant competition. Much like the premium Enerpac tool brand, our HydroTite brand on the service side is synonymous with superior technical know-how, value-added support, and world-class job performance. In fact, the customer indicated that HydroTite was selected for this critical work, as they felt we are the only ones who could ensure reliably leak-free results. With that, let me turn the call over to Darren, who will provide more detail on our second quarter performance as well as geographic and end market trends. Then I will come back to talk about our progress on the innovation front and our successful presence at CONEXPO. Darren? Darren Kozik: Thanks, Paul. As seen on slide four, Enerpac Tool Group Corp.'s second quarter revenue of $155,000,000 expanded 2% on an organic basis. IT&S sales increased 1% organically, as a 6% gain in product sales was offset by a 17% decline in service revenue. And while there is still softness in the industrial MRO end market, we continue to enjoy growth in power generation, infrastructure, and defense end markets on a global basis. At Cortland, shown in the Other segment, we continue to capture exceptional growth of 27% in the second quarter due to its ongoing success generating new projects. Turning to slide five, which shows our performance by geography. We delivered solid 4% growth in the Americas, year-over-year growth of nearly 6% on the product side, with particular strength in standard products but somewhat offset by an 8% decline in service revenue. On the product side, we were particularly pleased with gains we made with national accounts. Turning to the EMEA region, let me first draw your attention to the pie chart on slide five, which shows the revenue breakdown between product and service for each region in fiscal 2025. Of note, it illustrates the greater relative importance of service in the EMEA region and how its performance significantly affects overall results. As such, while product revenue expanded 7% in the EMEA region, with gains for both standard product and HLT, second quarter revenue in the region was down 1% due to a 21% decline in service revenue. Geographically, on the product side, while conditions were soft in Northern Europe, Southern Europe enjoyed good performance, including some project work on the power generation side. In Asia Pacific, we resumed modest growth, led by our products business. While we continue to experience weakness in China, there were several bright spots. In India, we had another strong quarter, growing double digits due to strength in steel, process industries, and heavy equipment manufacturing. And in Australia, we continue to benefit from recovery in the core mining sector, as well as healthy demand from oil and gas. Turning to slide six, gross margins declined 410 basis points year over year. While gross margins in the product side remain at healthy levels, overall gross margins were under pressure due to lower volume in our service business. On the other hand, SG&A expense continued to reflect disciplined cost management and benefit from moving resources to our low-cost shared service model. As such, adjusted SG&A declined to 26.4% of revenue, compared with 28.3% in the year-ago period. As a result, the adjusted EBITDA margin was 21.3%, compared with 23.2% in the year-ago period. We enjoyed margin improvement in the products business. However, that benefit was offset by pressure in the service business, and to a smaller extent, an FX impact of roughly 50 basis points. On a per-share basis, we reported earnings of $0.31 in 2026, versus $0.38 in the year-ago period. On an adjusted basis, earnings were $0.39 in both periods. In the second quarter, we booked a restructuring charge primarily related to the service business totaling $3,300,000. We expect to see the initial benefit of the savings in the third quarter and anticipate a payback period of about one year. Turning to the balance sheet shown on slide seven, Enerpac Tool Group Corp.'s position remains extremely strong. Net debt was $89,000,000 at the end of the second quarter, resulting in a net debt to adjusted EBITDA ratio of 0.6 times. Total liquidity, including availability under our revolver and cash on hand, was $499,000,000. Cash flow was strong, with year-to-date cash flow from operations of $29,000,000 compared with $16,000,000 in the year-ago period. In addition, year-to-date free cash flow expanded by $18,000,000 from $5,000,000 in 2025 to $23,000,000 in 2026. During the quarter, we returned significant capital to shareholders, repurchasing $51,000,000 worth of stock. Out of the $200,000,000 authorized by our Board in October 2025, approximately $135,000,000 remains, and we will continue to opportunistically repurchase stock. Looking ahead, while our product business remains strong, the service side of our business continues to experience pressure in the near term. Additionally, we recognize that the evolving conflict in the Middle East could have a direct impact on our business in the region, as well as potential ramifications as it relates to global inflation and economic growth. As such, we have narrowed the guidance range for fiscal 2026. We are now guiding to a full-year net sales range of $635,000,000 to $650,000,000. That represents organic sales growth of 1% to 3%. But keep in mind that growth rate is composed of solid product growth in the mid-single-digit range or even a bit better, which is offset by projected service contraction in the low- to mid-teens range. We are now guiding to adjusted EBITDA of $158,000,000 to $163,000,000 and adjusted EPS of $1.85 to $1.92. We held free cash flow guidance at $100,000,000 to $110,000,000 given our strong cash flow generation year to date. As we look forward, restructuring and rightsizing of our EMEA service operations will establish a more competitive cost structure and a platform for growth. In addition, through the execution of Powering Enerpac Performance, or PEP, we see further opportunities to improve operating efficiency, with our continued focus on procurement and the productivity of our manufacturing footprint, which supports our healthy product business. With that, let me turn it back to Paul. Paul Sternlieb: Thanks, Darren. As you may know, we recently exhibited at CONEXPO, North America's largest construction trade show. Attendance and engagement were extremely strong. At the event, we demonstrated our latest infrastructure lifting and smart transport solutions, including several newly launched innovations. The conversations with customers were very productive, resulting in some meaningful orders booked at the show itself. And this was the first major U.S. trade show where we exhibited our DTA automated guided vehicles. Among featured solutions included on slide nine were a new line of split flow pumps. The diesel-powered split flow pump, which we added with the recent acquisition of the Hydropack assets, enables operation without an external power source. As such, it provides greater mobility and application flexibility, which can be a significant advantage for customers across many end markets, including infrastructure and power generation. We also introduced our battery split flow pump. Not only does it allow for operation without a power source, but it also enables use in enclosed spaces by eliminating emissions and significantly reducing noise. And we also showcased and launched our IntelliLift 2.0 wireless gantry controller. With this controller, Enerpac Tool Group Corp. has introduced the world's first software-defined, wireless, and scalable heavy lift control platform capable of operating up to eight hydraulic gantry legs in synchronous fashion from a single control unit. It also provides the foundation for recurring software updates, multi-application expansion, and long-term ecosystem value. In addition, we launched our new cribbing rooms, our updated skid track system, and a new lightweight tow jack. These products are just a sample of what has come from our increased and more focused investment in innovation, an effort that continues to respond to our customers' needs and build the strength of the Enerpac brand. Before we open the call to your questions, I would like to thank our team across the globe. I applaud their talent and dedication. I also appreciate each and everyone's role in building a culture of ownership, accountability, and teamwork here at Enerpac Tool Group Corp. Particularly rewarding on a personal note is the way our employee engagement scores have improved every year since 2022 and now exceed industrial manufacturing industry benchmarks. It is our people and shared culture that make Enerpac a premier industrial solutions provider. With that, we will now open for questions. Operator: We will now open for questions. Your first question comes from the line of Will Gildea of CJS Securities. Your line is now open. Will Gildea: Hi, Paul and Darren. Good morning. Can you talk about how much of your business comes from the Middle East, and are you seeing an impact in the region due to the current conflict? Paul Sternlieb: About 10% of our total revenue for the company. What I would say on impact—I mean, we do not obviously know how long this conflict will last and if it would materially impact our outlook for the year. But certainly, it does create a greater level of uncertainty, no doubt. We have seen, since the conflict with Iran, some pause in service work in the Middle East, mainly due to inability to access facilities, customers shutting sites, deferring work. And I would say largely we believe that is work that has been pushed to the right. Work will need to take place. In some cases, given some of the damage to facilities, there will be more work post the conflict. But beyond the Middle East itself, of course, there are impacts more broadly from higher oil prices, inflation, general economic headwinds that the conflict has created. So what I would say, and what I have said to our team, is we are working on what we can control, which is obviously keeping our people safe in the region, which we are doing and have done, and certainly trying to proactively identify additional commercial opportunities on a global basis to mitigate any impact to our business. Will Gildea: Thank you. That is super helpful. And on the updated guidance, can you provide some more detail on your expectations and maybe talk about how you are thinking about the cadence from quarter to quarter? Darren Kozik: Sure, Will. As we look at revenue, I would say in the first place, as we talked about, our product business is very strong. IT&S product in the first half is up 5%. We expect to see mid-single-digit growth for that business for the total year, so we have been very pleased with that performance. On service, we have continued pressure in the third quarter, but we expect to see a little bit of a rebound in that business in Q4. As you saw in our prepared remarks, we think that business for the total year will be down a decline of the low- to mid-teens. So that is the framework from a revenue perspective. As we look at gross margin, we expect to see sequential improvement into Q3 and then into Q4. That is coming off of roughly 46%, just north of that in Q2. So we expect to see that improvement in the second half. SG&A—our goal is simple: maintain or improve SG&A as a percent of sales for the year. So I think that is the framework we have on the lines of the P&L. From a free cash flow perspective, strong performance—$23,000,000, up $18,000,000 year over year—so we held that guidance. And as we step back, I think we look at the business and still see opportunities to improve the margins. We are looking at the service business. We have ongoing initiatives in procurement and at our manufacturing footprint, and obviously we have PEP running to improve those margins in the second half. That is kind of the framework and how we think about the business. Will Gildea: Thank you. Darren Kozik: Thanks, Will. Operator: Your next question comes from the line of Ross Sparenblek of William Blair. Your line is now open. Sam Carlo: Good morning. This is Sam Carlo on for Ross. Thanks for taking my question. I guess, starting on the HLT business, I am curious specifically, have you seen any project slowdowns as a result of the macro uncertainty over the past month or so? Paul Sternlieb: No. Nothing to date, Sam. In fact, our HLT business remains, I would say, quite strong and healthy. Good backlog. It is a product line where I would say we are extremely differentiated. We continue to see really robust engagement with customers, good order rate activity. We are also encouraged by activity we see particularly for HLT in the data center end market. Although still a relatively small portion of our overall revenue as a company today, we do see good upside opportunities. We did have good engagement with customers at the CONEXPO show in Las Vegas specifically around data centers, including some repeat orders. Sam Carlo: Got it. That is good to hear. I guess, switching gears a little bit. We noticed there is an incremental M&A cost as well as some sizable share repurchases in the quarter. Can you give us an update on what your M&A pipeline looks like, and maybe update us on your near-term capital allocation priorities? Paul Sternlieb: Yeah. Absolutely. I can talk about some of the M&A, and Darren can talk more broadly around capital allocation. But I think, clearly, value-creating M&A remains a very key focus and key part of the overall growth strategy for the company. We continue at any point in time to evaluate interesting opportunities that we think could be value creating and could have synergies and good strategic and financial fit with our company. Yes, we did incur some more significant costs in the quarter related to different opportunities that we have been evaluating. I would say that we continue to have and cultivate a fairly robust funnel, and at any point in time, we are having a good number of ongoing discussions at various stages of evolution with different target opportunities. Obviously, we cannot really comment more specifically. But I do feel that the M&A environment overall is robust, that our funnel is extremely robust, and that we are spending certainly appropriate time engaging on that in the marketplace and with particular targets. And, of course, as you know, we have a balance sheet to support, from a capital perspective, really anything that we think would be appropriate for the company and our shareholders. Darren Kozik: Yeah, thanks, Paul. I would just add from a capital allocation perspective, our first priority is obviously investing organically back in the business. You will see our CapEx trends there. We want to improve our operations, whether it be IT or in the factory footprint. We are doing that CapEx in the first priority. I would say then, secondly, when we see an opportunity in the market for share repurchase, we will take it. We obviously saw some of that in Q2. But that does not prohibit us from other activities. You can see our leverage at 0.6 times. You can see we have not tapped the revolver, so we have plenty of firepower left for M&A. So we are really consciously balancing all those activities across those three priorities. Sam Carlo: Got it. That is good color. And then quickly, one more. Maybe comment on the size and strategic fit of the Hydropack acquisition. It sounds like you guys have added some products using that platform. Paul Sternlieb: We did. That was really effectively a small tuck-in. It was an asset purchase—really not material in terms of the cost for us to acquire that. But it is a partner we have worked with for a long time. And that particular product line is very additive to what we do. It is a specific gap we had in our portfolio on split flow pumps powered through alternative sources—in this case, diesel—for portability and remote site applications. So we were extremely pleased to get that across the finish line and to be able to announce and show it at CONEXPO, where we actually did get quite a degree of interest. It has been a product that has been in the market, and successfully so, for quite a number of years, but we do believe with Enerpac Tool Group Corp.'s global presence, distribution network, and the strength of our brand overall that we can continue to grow that product line much more. So we were super excited to get that over the line. Sam Carlo: Got it. That is good color. I will leave it there. Thanks, guys. Darren Kozik: Thanks. Operator: Your next question comes from the line of Tom Hayes of ROTH Capital Markets. Your line is now open. Tom Hayes: Morning. Paul Sternlieb: Morning, Tom. Tom Hayes: On the service business, I know you guys have taken—I think you mentioned two restructurings in the past year. Can you maybe just talk about scope, the payback, and kind of where you have the service business positioned now? Darren Kozik: Sure, Tom. We did take two. Our first was in 2025. That was roughly a $6,000,000 charge, but only about $4,000,000 of that was related to people. That was really global reductions, and some of those activities just take time to mature for the business. So as you saw in Q2, our SG&A was rather favorable versus prior year, so we are starting to see some of that come through. Overall, that restructuring had about a 12-month payback. Then just in this quarter, we announced another restructuring just over $3,000,000. That was primarily tied to our service business. We have seen some pressure there, specifically in Europe and the Middle East, so we did make those adjustments. What I will say is that the benefit of that will flow through both direct cost and SG&A given the nature of our service business. From a service perspective, we think we have the right footprint now. Obviously, you heard Paul talk about the big deal we have won. And even in our guidance, we think Q3 is going to be tough, but Q4 should be a rebound in our service business. So we think we are in a good spot. Tom Hayes: Okay. Appreciate the color. And then it was really nice to catch up with you guys at CONEXPO. The booth was great and seemed busy for the days that I was there. But I was just wondering, can you provide a little bit more detail on the pace of the introductions of the new products, and should we expect some impact to the top line this year, or is it more of a next year contribution from the new products? Paul Sternlieb: Thanks, Tom. We were extremely pleased with the team's progress on innovation and our ability to launch quite a number of new products at the CONEXPO show—six in total. Those are all really new-to-market opportunities not only for Enerpac Tool Group Corp., but in most cases, to the world in terms of differentiation on the product lines. Some of these are really exciting, extremely differentiated technology that just is not available to customers today until we launch. The team has done a great job there. You can see that we are picking up and accelerating the pace of innovation. Last year, we launched five new products in fiscal 2025. I think we said last quarter we hoped to come close to doubling that. Obviously, we are well on pace in the first half of the year with six already launched. We do have more products planned for launch in the back half of this fiscal year, so stay tuned on that. That is the benefit of our very focused investment we have been making in innovation—the investments we made behind our innovation lab here at our headquarters in Milwaukee, our prototype facilities, etc.—that is really allowing us to dramatically increase the pace of innovation and reduce the time to market, with the ability to do prototyping on the fly and in real time and effectively overnight in many cases on parts. In terms of the incremental revenue, as typical for our markets and Enerpac products, most new products we launch frankly take multiple years to ramp for a few reasons. One, it is just the nature of our end markets—seeding these products and customers taking time to understand them and then to trial them and then ultimately buy them in bigger quantities. Secondly, of course, we globalize them over time and commercialize them in different regions where we are operating. That does take time for us to be able to, in some cases, get certifications and get inventory levels at the appropriate amounts depending on the country or the region. Even with products that we have launched over the last two or three years, we continue to see those ramp commercially quarter over quarter. So we will see some revenue benefit, I believe, in the second half of this year from these products launched, but it is not going to be hugely meaningful. Again, we expect to see more significant benefit over the next 12, 24, 36 months. Tom Hayes: Is there anything you can talk about a little bit about the new U.K. service contract—maybe timing of when that is going to begin and any expected financial impact? Paul Sternlieb: We were, again, very pleased with that. Very competitive process. Great customer. And as we referenced, this is a five-year award that we were given that is worth several million dollars per year, and we were awarded really on the basis of our technical proficiency and world-class performance. That is extremely exciting. We do expect to start to see revenue flow from that contract in Q4 of this fiscal year. And, of course, that is not the only thing in that market we have been working on. As we referenced in last quarter's call, although we have had our challenges in the service business in EMEA, our team commercially has been hard at work on trying to offset that with additional wins, and this is just one great example we wanted to highlight that we thought was quite meaningful. Tom Hayes: Great. Appreciate the color. Thanks. Paul Sternlieb: Thanks, Tom. Operator: If you would like to ask a question, please press star followed by 1 on your telephone. Your next question comes from the line of Steve Silver of Argus Research. Your line is now open. Steve Silver: Thanks, operator, and thanks for taking my questions. Paul, it was great to hear about the strong leads and the industry response coming out of CONEXPO. I am curious, including the new leads that you have also previously discussed coming out of the DTA acquisition, can you discuss a little bit about the current lead pipeline versus any historical trends there? Paul Sternlieb: Good morning, Steve. Thanks for the question. I would reference back to our Enerpac Commercial eXcellence, or ECX, program, and that has really been the foundation that we have set for commercial excellence and how we drive lead management and lead cultivation here at Enerpac Tool Group Corp. globally across all our regions. We have really seen that significantly strengthen over the past year. That is a program that we built proprietary for Enerpac. We first rolled out in the Americas region and then over the last year or so more globally. We use that to manage our funnel process and drive lead conversion with our CRM. We use salesforce.com to track all of our leads globally. We can get real-time dashboards on the quantity and quality of leads, conversion rates, days in stage—all sorts of interesting stats that give us some leading indicators around the health of our pipeline. Broadly, that is looking quite favorable. And then, of course, you see that more as a lagging indicator in order rates, which we referenced in our prepared remarks. The order rates in the quarter were strong, with strong growth in every single region year over year. I am really encouraged by the progress that our team has made commercially on ECX. I think it is having a real impact for us. It is driving focus on our commercial team, and it is making sure that we follow up in a timely manner as we generate new leads. We also have some interesting opportunities where we are piloting some implementation of AI in our business, specifically on the front end around lead generation, and I think we will see that continue to bear some additional fruit for us in terms of new lead identification and qualification over the next few quarters. Steve Silver: Great. Thanks for the color. And one more, if I may, for Darren. The tax rate—the tax guidance range for fiscal 2026 is fairly wide at this point. While you narrowed the guidance range operationally, is there anything you can discuss in terms of jurisdictions or any puts and takes around the tax guidance range at this point of year? Darren Kozik: From an overall tax guidance perspective, we have kept the range. There is obviously tax planning that is underway, and it is always difficult to determine when some of those things will happen, so we do keep that range a little bit wider. From a one big beautiful bill perspective, we do not see a significant impact on rate. A little bit of benefit on cash there, which we baked into our guidance. But we did hold that rate at 21% to 26%. Steve Silver: Fair enough. Thanks so much. Operator: Thank you. I would now like to hand the call over to Paul for final remarks. Paul Sternlieb: Thank you again for joining us this morning, and if you have any follow-up questions, please feel free to reach out directly to Darren, and have a great day. Operator: Thank you for attending today's call. You may now disconnect. Goodbye.