• Revenue: $115 million, a decrease of 7.4% year over year.
• Vapor Power Contribution: $12.1 million in revenue during the second quarter.
• Large Project Revenue: $17.5 million, down 51% from the same period last year.
• OpEx Revenues: $97.2 million, an increase of 10% compared to last year.
• Adjusted EBITDA: $23.8 million, down from $27.7 million last year.
• Adjusted EBITDA Margin: 20.8%, down from 22.4% in the same period last year.
• Orders: $131.1 million, an increase of 13% year over year.
• Backlog: $214.9 million, up 29% compared to the previous year.
• Free Cash Flow: $6.7 million in the quarter, an improvement of $6.1 million versus last year.
• Net Debt: $129 million, with a net leverage of 1.3 times.
• Fiscal 2025 Revenue Guidance: $495 million to $515 million.
• Fiscal 2025 Adjusted EBITDA Guidance: $105 million to $110 million.
• Fiscal 2025 Adjusted EPS Guidance: $1.77 to $1.89 per share.

• Warning! GuruFocus has detected 3 Warning Signs with COTY.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Thermon Group Holdings Inc (NYSE:THR) reported improved order momentum with orders increasing by nearly 13% on a reported basis.
• The company successfully executed its capital allocation priorities, including the acquisition of FTI and a share repurchase program.
• Thermon Group Holdings Inc (NYSE:THR) achieved its fiscal year '26 goal of generating at least 70% of revenues from diversified end markets.
• The acquisition of FTI expanded Thermon Group Holdings Inc (NYSE:THR)'s geographic footprint in the eastern hemisphere, enhancing its market presence.
• Thermon Group Holdings Inc (NYSE:THR) generated strong free cash flow, with $6.7 million in the quarter, an improvement of $6.1 million compared to the previous year.

Negative Points

• Thermon Group Holdings Inc (NYSE:THR) experienced a 7.4% year-over-year decline in revenue, primarily due to continued weakness in large project revenues.
• Large project revenue decreased by 51% during the quarter, reflecting delays in customer decisions on large capital projects.
• The company's adjusted EBITDA margin decreased to 20.8% from 22.4% in the same period last year, due to volume shortfalls and lower project margins.
• Thermon Group Holdings Inc (NYSE:THR) adjusted its full-year 2025 guidance downward, reflecting challenges in the large project market.
• The company faced extended decision cycles and uncertainty from customers, particularly on larger capital projects, impacting revenue recognition timing.

Q & A Highlights

Q: Can you provide an update on the sales guidance and the contribution from Vapor Power? A: Bruce Thames, President, Chief Executive Officer, Director: Yes, the Vapor Power business is still tracking in the $55 million to $57 million range for the year. Our backlog is strong, and if we can grow capacity to ship, there might be some upside. This range is included in our guidance.

Q: Can you give more details on the nuclear market's current size and its relevance to your business? A: Bruce Thames, President, Chief Executive Officer, Director: The nuclear opportunities in our pipeline are about 4% of the $1.2 billion total. We also have large opportunities not included in this number, such as a facility expansion and small modular reactors, which are about $100 million.

Q: How does the recent election impact the probability of large projects being released? A: Bruce Thames, President, Chief Executive Officer, Director: With the elections behind us, there is more clarity, which should positively impact overall activity. We have seen some projects move forward, such as a large carbon capture petrochemical project and a multi-year rail and transit project.

Q: What are your expectations for the heating season, considering last year's warm winter in Canada? A: Bruce Thames, President, Chief Executive Officer, Director: We are planning for a more normalized winter. Our material sales have been strong, and we see momentum continuing. Our backlog is growing, and we are involved in engineering and design for upcoming projects.

Q: Are the large projects being delayed primarily in the oil and gas sector, or are they elsewhere? A: Bruce Thames, President, Chief Executive Officer, Director: The delays are broad-based across sectors, including renewables and semiconductors. Many projects are in the engineering phase, with execution expected in early 2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.