Thank you. Thank you for watching. Thank you for watching. Thanks for watching! Thank you. Good morning and welcome to Columbus McKinnon's second quarter fiscal 2027 earnings conference call. My name is Anas and I'll be your conference operator today. As a reminder, this call is being recorded. I would like to turn the conference over to Alexander Eldredge with Columbus McKinnon Investor Relations.

Thank you and good morning everyone. Thank you for joining us for the CMCO second quarter fiscal 2027 earnings call. Joining me on the call this morning are President and Chief Executive Officer David Wilson and Chief Financial Officer John Linker. On today's call, we will be referencing our earnings press release and presentation, which are available on our investor relations website, investors.cnco.com. Before David and John walk you through our operating and financial performance for the quarter, I would like to remind you that during this call we may make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 in regard to our current plans, beliefs, and expectations. These statements are not guarantees for future performance and are subject to a number of risks and uncertainties and other factors that can cause actual results and events to differ materially from the results and events contemplated by these forward-looking statements. I'd also like to remind you that management will refer to certain non-GAAP financial measures. You can find reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. Also on today's call, we will make reference to pro forma metrics, which adjust for both the Tito Crosby acquisition and the divestiture of the legacy Columbus McKinnon U.S. power chain hoist and chain operations as if each transaction had been completed prior to the beginning of the prior year period to improve the comparability of results across different periods. Today's prepared remarks will be followed by a question and answer session. We respectfully ask that you limit yourself to one question and one follow-up. With that, I'll turn the call over to David.

Thank you, Alexander, and good morning, everyone. In Q2, we continued building on our strong start to fiscal 2027, advancing progress with the integration of Keto Crosby and unlocking synergies while driving organic revenue growth and delivering margin improvement. I am pleased with the progress we are making as our people, processes, and systems are coming together to enhance value, Execute day in and day out for our customers through our scaled and better positioned business and product portfolio. Turning to the quarter's results, orders exceeded $560 million for the second consecutive quarter, growing 13% on a pro forma basis, demonstrating the market's resilient demand for our intelligent motion solutions and providing visibility into future sales growth. In the period, pro forma sales grew 7% With growth across all geographies and at both Legacy CMCO and Keto Crosby. This robust revenue growth is enabled by our scaled platform, enhanced customer value proposition, and business initiatives which are unlocking market share gains in targeted growth areas. This growth is also supported by ongoing commercial initiatives and early revenue synergy wins. The team continues to make disciplined progress advancing our strategic priorities of operational excellence, commercial effectiveness, and customer experience, strengthening our foundation for sustainable growth. Our broad-based demand strength is benefiting from diversified end-market exposure with continued growth in targeted verticals including energy, defense, mobility, e-commerce, and general industrial. We are also experiencing tailwinds from data center buildouts, which drive direct demand for lifting securement hardware and permanently installed lifting solutions, while also driving meaningful upstream demand for the production of data center related equipment that also requires our solutions. Volumes are building in the Americas and Asia Pacific, while EMEA has been a bit softer, consistent with what we're seeing in PMI and industrial production data. Inflationary pressures have been persistent, but our supply chain remains resilient, and we are not experiencing any noteworthy changes in our sourcing of raw materials and components. We continue to lean on our pricing discipline to strategically realize price we're needing to offset inflation, giving us confidence in our ability to manage price-cost headwinds. Additionally, we see opportunities to improve our cost position and drive further improvements in core productivity. Adjusted EBITDA was $111 million in the quarter and increased 177% year over year. Adjusted EBITDA margin was 20.6%. These results were stronger than anticipated with sustained strength in the Americas and better than expected demand in both Asia and EMEA. Demand resilience was complemented by factors that are within our control and areas where we continue to improve. including strong operational execution, a focus on improving customer experience, and commercial initiatives that are leading to expanding market share. And since closing the Keto Crosby acquisition, the feedback we are receiving from our customers has been quite positive. I am pleased with the results we have delivered in the first half of the year, and I am proud of how our teams are coming together across the combined business. This early stage post-acquisition success gives you a glimpse at the power we are unlocking within CMCO and strengthens our foundation for sustainable, profitable growth in the years ahead. Our confidence in our shareholder value creation potential continues to grow as we drive organic growth, expand margins, deliver increasing free cash flow, and de-lever the balance sheet. On the integration front, we continue to make meaningful progress with agile execution and strong collaboration across the combined organization. Our teams have come together as one to support a common mission of providing innovative, intelligent motion solutions to our customers with unmatched safety, quality, and reliability. While we just completed our second full quarter as a combined organization, we are moving swiftly to deliver meaningful synergies and our initial integration priorities are firmly underway. We expect to meet or exceed our targeted net cost synergies and increasingly we are sharpening our focus on the longer term enablers and initiatives that will unlock the full potential of the combined business. We are also advancing revenue synergy opportunities that we expect will be meaningful over time. While these items will take time to develop as we align sales force training, channel partnerships, and supply chain optimization, We are seeing early traction from both expanding market share and leveraging our broadened product portfolio across our combined channel reach with key customers. Overall, we are advancing integration plans and building momentum to deliver sustained organic growth, capture synergies, expand profitability, generate cash, and reduce debt, unlocking substantial long-term value for all stakeholders. Thanks to the good work our more than 7,000 global team members are doing on behalf of our global business, we are increasing our full-year guidance across net sales, adjusted EBITDA, and adjusted EPS. Jon will walk you through those details and provide more context regarding our financial performance shortly. Before handing the call over to Jon, I'd like to share an example of how our team is engaging outside of their normal work responsibilities to advance Columbus McKinnon's vision of moving the world forward for a safer, more productive tomorrow. Last month, 10 of our global CMCO teammates traveled to Rwanda's Nyeruguru District where they worked with FICA, a nonprofit organization dedicated to safe, reliable, rural transport access to support the construction of a suspended trail bridge. This bridge will now provide for safer year-round access to healthcare, schools, and economic opportunities for more than 6,700 people in nearby communities. We are proud that we were able to partner with FECA to support this construction initiative through both our on-site employee volunteer team and with an assortment of hoists and lifting hardware that enabled the construction of the new suspension bridge. On behalf of our entire organization, I'd like to extend an enormous thank you to all involved in this meaningful initiative.

With that, I'll turn the call over to Jon to walk us through our second quarter results. Thank you, David, and good morning, everyone. Through my first four months with the organization, I visited multiple facilities, engaged with our teams worldwide, and met many of our equity and debt holders and research analysts. It is clear to me that CMCO is well positioned to capitalize on megatrends driving demand, deliver organic growth through commercial initiatives, and improve margins through synergy realization and operational improvements. We expect this to lead to outsize free cash flow generation and debt reduction, which will in turn unlock shareholder value. Our second quarter results represent just the second full quarter since closing the combination with Keto Crosby. These results show early traction on our strategic priorities with stronger than expected Q2 results as we capitalized on broad-based demand for our expanded product portfolio of intelligent motion solutions and reflected disciplined operational and commercial execution. Orders of $562.6 million increased $308.9 million or 122% from the prior year, largely driven by the benefit of the Keto Crosby acquisition. Normalizing for the acquisition and the divestiture ProForma orders growth was approximately 13%, with continued strength in Americas and a significant contribution from EMEA, including an approximately $23 million order tied to an energy customer in Saudi Arabia. Excluding this order, the majority of which we expect to convert to revenue in FY28, EMEA orders were up high single digits. In APAC, our forward-looking pipeline remains healthy, But second quarter orders declined moderately on a pro forma basis following the pull forward of orders in Q1 linked to their July price increase. Backlog of $556.2 million increased 2% sequentially, reflecting strong order intake and resulting in a 1.0 booked a bill in the quarter. Current quarter backlog, which typically represents approximately half of the following quarter's revenue, was $264.9 million at quarter end. We delivered net sales of $539.3 million, which increased $278.2 million, or 107% from the prior year, driven by the acquisition of Keto Crosby, volume and pricing partially offset by the divestiture and unfavorable currency translation. Sales growth was broad-based and positive across the Americas, EMEA, and APAC, reflecting mid-single-digit growth in the legacy CMCO portfolio and high single-digit growth in the legacy Keto Crosby portfolio. Normalizing for both the acquisition and divestiture, pro forma sales growth was approximately 6.6%, which we estimate was comprised of approximately four points of price and three points of volume, partially offset by unfavorable foreign exchange. Sales growth was strongest in APAC, reflecting the impact of recent pricing, broadened product portfolio and the accelerated timing of our project delivery. The Americas continues to show strength in both short cycle and project businesses with sales growth through pricing and execution against our commercial initiatives of expanding the reach of our newly combined product portfolio. Importantly, EMEA delivered modestly positive revenue growth on a pro forma basis, which was an improvement as compared to our expectations going into Q2. as industrial activity showed signs of returning, led by investments in infrastructure, energy, and defense. Overall, demand-driving Q2 sales was both broad-based and resilient. On a consolidated pro forma basis, project-related sales increased double digits and short-cycle sales increased mid-single digits, with benefits from both pricing and volume growth from a favorable demand environment. Gross profit of $187.9 million increased $97.7 million, or 108% versus the prior year on a gap basis, reflecting the Keto-Crosby acquisition, pricing, and volume, partially offset by the impact of the divestiture and material cost and diesel inflation in COGS. On a gap basis, our gross margin was 34.8%, while on an adjusted basis, our gross margin was 36.5%. and improvement of 120 basis points year over year, primarily due to favorable price versus cost and the accretion of the Keto Crosby acquisition. Adjusted gross margins also improved sequentially when normalizing Q1 to exclude the net benefit of IEPA tariff refunds. Our SG&A expenses increased 51.9 million to 122.2 million on a gap basis due to the addition of Keto Crosby Integration costs and increased incentive compensation expense, partially offset by cost savings synergies. Adjusted RSG&A, which excludes acquisition integration costs and other non-recurring expenses, increased by $51.9 million to $111.1 million. This is where we are seeing the majority of scale benefits from the acquisition and cost synergy realization. adjusted EBITDA of 111.2 million, increased 71.0 million or 177% with an adjusted EBITDA margin of 20.6%. Adjusted EBITDA margin expanded 520 basis points year over year, reflecting accretion from the Keto-Crosby acquisition, prudent cost management, and synergy realization. When normalizing for the impacts of the Keto-Crosby acquisition and divestiture in the prior period, Q2 adjusted EBITDA grew approximately 14% and adjusted EBITDA margins expanded approximately 130 basis points on a pro forma basis. We continue to believe that based on actions taken thus far, we are well positioned to meet or exceed our net cost synergy target. Net loss attributable to company in the quarter was 25.5 million or 76 cents per share on a gap basis Adjusted net income was $31.1 million, or $0.61 a share, down $0.01 versus the prior year, primarily driven by operating profit increases offset by higher interest expense and a higher share count due to the inclusion of the common shares issuable upon conversion of the preferred shares. Year-to-date, we delivered $4.6 million of free cash flow, an improvement from the prior year reflecting our higher operating profits, partially offset by higher cash interest, and a higher use of working capital to support strong year-to-date sales growth. We expect this working capital investment to convert to improved cash generation in the second half of this fiscal year. In the quarter, we opportunistically repriced our senior credit facilities, reducing the effective interest rate on both our term loan B and revolving credit facility, lowering the applicable margin spread on both by 50 basis points. On an annualized basis, we expect this to result in savings of more than $7 million. As a reminder, our long-term debt structure is comprised of a $1.4 billion term loan B and $900 million of senior secured notes. The term loan B, after the repricing, bears interest at SOFR plus 300 basis points. We have hedges in place on approximately $1 billion of this $1.4 billion, fixing SOFR at approximately 3.7%, with laddered maturities through fiscal 2031. The term loan B has no prepayment penalty for optional redemptions. The senior secured notes bear interest at 7.8%, payable semi-annually. This debt structure, along with our recent repricing, positions us well to navigate the current environment of higher interest rates. Our liquidity position remains healthy at $532 million, consisting of 110.9 million of cash and cash equivalents and 421.1 million of availability on our evolving credit facility. Given our strong Q2 results and increasing confidence in the year, we are raising our outlook for fiscal 2027. This updated full year outlook reflects strong orders and financial performance in the first half and increased confidence and traction on our strategic priorities. The revised outlook takes into account the timing of our current backlog increased interest rates, and updated foreign exchange rates. Our guidance also incorporates confidence that in the second half of the fiscal year, we will sustain the strong adjusted EBITDA margin performance from the first half when normalizing the first half to exclude the net benefits of the IEPA tariff refunds from Q1. Our increased outlook for fiscal 2027 is net sales of $2.13 billion to $2.17 billion adjusted EBITDA of $425 million to $440 million and adjusted EPS of $2 to $2.15 a share. Additionally, we have updated our guidance assumptions, which incorporate some adjustments to our acquisition purchase price accounting, which is finalized in the quarter. These assumptions include interest expense of $185 to $190 million, amortization expense of $130 to $135 million, Depreciation expense of 80 to 85 million, capital expenditures of 45 to 55 million, and normalized effective tax rate, as used in the calculation of adjusted EPS, of 25%, and adjusted diluted shares outstanding of 52 million, reflecting our expectation to pick the preferred share dividend in fiscal 2027. Our first half results give me increasing confidence in not only our integration of the Keto Crosby acquisition and synergy realization, but also that our scaled, enhanced customer value proposition is delivering value across intelligent motion solutions. We are making meaningful progress through our strategic priorities of operational execution, improved customer experience, and expanding market share. I am confident that our strategy will unlock multiple avenues of organic growth, Improve our margin profile and generate significant free cash flow to fund debt reduction. Operator, we are now ready to take questions.

Thank you, sir. Ladies and gentlemen, we now begin the question and answer session. If you would like to ask a question, please press star, follow-up number one on your telephone keypad. We ask analysts to limit themselves to one question and a follow-up. If your question has been answered, you would like to withdraw from the queue, please press star, follow-up number two. And if you are using a speakerphone, please lift your hands up before pressing any keys. One moment, please, I will compile the roster. Our first question comes from Ms. Kirby with JPMorgan Chase. Please go ahead.

Hey, good morning, guys. Can you hear me all right? Yeah, we can hear you, James. Sorry.

No problem. I appreciate the commentary there. Maybe just starting, I'm trying to square the commentary from last quarter that this quarter would be the low point in EBITDA and sales, and you cited some one-time benefits last quarter. I'm just wondering, You know, look ahead if the margin cadence you described last quarter is still intact, and maybe if you can parse through the buckets of one-time benefits versus kind of sustainable, durable pricing power.

Right. Yeah, James, let me start and ask Jon to jump in. So when we entered the quarter, we had had a performance in Q1 that included the benefits of one-time IEPA tariff refunds that we knew came into that quarter. We also looked at the backlog that we had and how it phased and anticipated that Q2 would be a low point for the year as you indicated and we were indicating at the time. As the quarter progressed and demand patterns evolved, we had robust demand from a short cycle perspective. We're able to execute ahead of plan in a number of key areas. And we actually had the accelerated delivery of some project activity both in Asia and in Europe. and so the combination of those opportunities projected or continued demand and our ability to execute was what resulted in us being able to over deliver in the period. We also continued to make really good progress with our synergy initiatives and the integration of the two businesses. which was terrific. And the combination of those factors resulted in us delivering a performance that was outsized related to expectations that we previously talked about. As you know, we raised price in Q1, our Q1, in addition to some price increases that went into effect in the prior fiscal year that had carryover benefits. We're starting to see the benefits of those come through as well. and as Jon indicated in the quarter, we believe that pricing was about 4% of the growth and volume was about 3% of the growth. I'll pause there and ask Jon to continue if there's something you wanted to add.

Thanks, David. I would say there wasn't anything to call out of any magnitude in Q2 that sort of significantly skewed margins. We didn't have any material like the tariff refunds in Q2 like we did in Q1. So I think it's just we overperformed as the quarter progressed. We had a very strong September of sales throughput and that has some nice operating leverage on it. And that allowed a nice margin for us in the quarter. And we're really pleased with how that panned out. And so as I tried to indicate in the prepared remarks, if you just take to simplify things, if you take the first half of the year, pull out the net benefit of IEPA tariff refunds, you're at sort of Little high 19.7% EBITDA margin, something in that ballpark. And if you look at our implied second half of the year and our outlook that we just gave, we're implying that the second half is going to look similar to that. And so we're trying to signal that we're sustaining that strong margin performance and there'll be quarter to quarter fluctuations and where margins land depending on the mix. But we're really pleased with sort of how things are coming together from a margin and synergy perspective.

Yeah. and James, you recall on a pro forma basis, we ended last year at 18 and a half percent pro forma EBITDA margins. And so this is a nice progression from that point.

Right. Yeah, thanks both. That sounds great. Maybe, David, second question. You talked about the revenue synergies in their prior remarks. I know you're probably not ready to give or provide a flavor of kind of the size opportunity there. But just on the market share you're seeing or potential market share gains, maybe just any more color you can share there in terms of region or product that you're seeing potential for market share for maybe the top line synergies you talk about.

Yeah, I mean, I think we're seeing it across the organization on a global basis. We're seeing opportunities to sell our products that are legacy CMCO products into the Keto Crosby channels. We're seeing the same opportunities to sell Keto Crosby products into the legacy CMCO channels. Our combined organization presents a more valuable combined offering to the market, which is creating opportunities for us to continue to grow and position ourselves well with customers. As I said in the prepared remarks, the feedback that we've been receiving from our customers post acquisition and the way that we've been responding both with our actions in the business as well as in the way that we've been responsive to customer needs has received really favorable responses from customers. And we believe that the combined portfolio, the extended reach and our focus on improved execution, improving on time delivery and customer experience is leading to the opportunity for us to grow the business and gain some share. And so we're seeing opportunities that we've realized in all geographies. You know, perhaps if it were weighted slightly, it might be more weighted towards the Americas in the initial phases of this, just simply given our concentration and, you know, more fulsome position in that market.

Got it. I appreciate the call, guys. You bet. Thanks, James.

Thank you. Our next question will be from Matt Somerville with DA David Sink. Please go ahead.

Thanks. Can you talk a little bit about how we should expect free cash flow to cadence out for the balance of the year? You mentioned, you know, some potential tailwinds from working capital. And then maybe also to the last question, talk about how much revenue in EBITDA may have ultimately been pulled forward, if that's the right way to think about that project acceleration you mentioned in Asia and Europe.

Thanks, Matt. So from a cash flow standpoint, if you think about sort of year-to-date, some of the bigger buckets that we've had, we've got $90 million of cash interest expense year-to-date, $26 million of cash taxes year-to-date. We've called out the $24 million of cash deal costs year-to-date, and then CapEx of sort of $16 million. I think we've given guidance on sort of most of those elements for the full year. So the one, you know, outlier in that is that our working capital has definitely been a use of cash year to date. Some of that is just, you know, our sales on a pro forma basis, our sales are up about 8%. If you kind of look at the blend of Q1 and Q2, ballpark that's $80 million of sort of pro forma sales increase and typically, you know, our working capital runs about 30% of sales. We got some use of cash there of 30% of that $80 million of sales increase that is tied up on the balance sheet right now. In summary, we would expect the second half of the year certainly to see some unlock on that working capital of converting the AR and particularly the inventory into cash flow in the back half of the year and that use of cash would Flip back to, you know, at least neutral, if not positive, you know, for the full year is kind of how we're thinking about cash flow generation. So we certainly, you know, the cash flow generation is significantly weighted in the second half. I'll pause there in case or I can go to your second question on sort of the second quarter.

Oh, yeah, the second quarter is great. Thanks.

Yep. On the second quarter, we did call out one project in APAC. It was around $5 million that did get pulled forward based off of customer needs, and that was a very high-margin project. It was enough to skew our original outcome a bit in terms of some of the drivers from our original talking points for Q2. Outside of that, I wouldn't cite any significant sort of pull-in type of activity that took place from a sales standpoint in Q2. It was just an extraordinary normal course. But just overall, we saw strong orders, and that translated into strong sales in the quarter. And certainly, as I indicated, it got better as the quarter progressed, and we exited the quarter with just a really nice September, our lifting hardware business in the U.S. was particularly strong, which was in that short cycle, which we have less visibility to when we give comments at the beginning of the quarter. And that business really progressed well as the quarter progressed into Q2.

Thank you. And then just as a quick follow-up, can you be a little bit more specific around where you were from a price-cost spread standpoint in Q2 and how we should be thinking about that spread in Q3 and Q4?

Thank you. So we called out on a pro forma basis, we called out the four points of price for the combined business We're not in a position to quantify the specifics of the price cost, but it was favorable. We did see inflation in both material cost as well as diesel, so it's not like all that price is dropping to the bottom line. But as of right now, just given where we stand with integration and analytics, I'm not in a position to quantify the exact price cost benefit in this context. But as we go through the back half of the year, We expect that price-cost relationship to remain favorable. We're always going to be on our front foot, I should say, in terms of looking at other areas of inflation that might be of concern so that we can make further adjustments to pricing as needed. But based off where we sit today, we feel like we'll be able to maintain that favorable price cost in the second half.

Thanks, Matt. Thank you.

Our next question will be from John Tanamontag with CGS.

Please go ahead.

Hi, good morning. Thank you for taking my questions and congrats on the next quarter. I was wondering if you could go a little bit more into the detail on the end demand and the drivers of outperformance, particularly in EMEA and Europe. As you mentioned, data centers have been stronger in North America. There was an energy project in Asia that pulled forward. But what are the countries and the actual applications that are driving the stronger than expected demand that you're seeing? in those regions. Thank you.

Thanks, Jon. I would say that it's been largely energy, general industrial demand, and as we called out, we did see some increased demand in defense. And so from my perspective, those would be three primary drivers outside of normal economic activity that sort of showed up a little bit better for us in the period in Europe. And, you know, we continue to execute in that region on a number of key initiatives from cross-selling to market reach. We did call out the very specific project in energy that we got with Saudi Arabia, as Jon highlighted. The markets for The mobility market are percolating. There's a lot of really interesting activity in our rail business, notably, that was in the funnel. But in the quarter, it would primarily be energy, general industrial, and I'd say defense outside of the normal level of activity.

Got it. And then just to clarify, in that last quarter, you had highlighted that there would be some Maybe Headwind's getting things into the Middle East. Has that bottleneck been cleared and you can ship there now or is that still in place?

Yeah, I mean, it remains challenging, but we've found ways to navigate. And so while routes to delivering into that market have evolved and the time to deliver might be a little bit longer, we're finding ways to execute and get our product to our customers but it's not in the same and as efficient a way as we had previously been able to.

Understood, thanks. And then just a quick one for Jon. It looks like you took down your CapEx by a little bit. Was something pushed out or did you get more efficient or something else happened? Just wondering what's going on there.

No, nothing pushed out. We've just underspent sort of our original budget so far year to date with other focuses on integration activities and so it's just a push out. There's no signaling there in terms of Anything else? Just lowering our expectations slightly. Yeah, just timing.

Okay, great. Thank you very much. Thanks, Jon.

Thank you. Our last question will be from Steve Farazani with CDOT. Please go ahead, Steve.

Morning, David. Morning, Jon. Appreciate all the commentary this morning. Just wanted to touch on sort of longer term where you are on the leverage journey. It sounds like I wouldn't have expected you to make progress in the first two quarters. Sounds like you made a little bit. I think, Jon, you mentioned the expectation of a reversal of working capital, the typical second half. Can you walk us through where you think you are, and can you provide us any thoughts on the cadence of how you're going to get there in the next 18 months?

Thanks, Steve. We continue to have confidence in hitting the four times by the end of FY28. based off of how we are reporting our leverage in these calls we are taking into account the run rate of the synergies of the 70 million synergies and these ratio numbers that we're giving so that would imply in order for us to achieve the four times by FY28 we need to grow the core business EBITDA as well as generate free cash flow fairly significantly and as I just indicated we do expect some Free Cash Flow Generation in the second half of the year, just from unlocking the temporary working capital investment from the sales growth. And as we move into next year, I continue to see significant opportunities just to improve underlying working capital metrics themselves. So if you look at inventory turns and DSO and DPO, we absolutely see opportunity to move the needle on those metrics. And today we're at about two and a half Times Inventory Turns, and if we could get that to three times, for example, that would be a significant unlock in terms of free cash flow and a step change in generation. So I'd say that is a big area of focus over the next 18 months is that discipline around the balance sheet and cash flow and making sure that we see that come through and the whole organization is centered around making sure that we generate cash flow and de-lever. and then you know back on the core business you know while we're not you know not yet giving outlook for FY28 here we'll certainly do that in the coming quarters but in order for us to achieve the four times you know it's not just going to be a free cash flow story there's got to be some core business EBITDA generation and given how orders are trending this year you know we've posted a couple of good quarters of orders some of that's already feeding FY28 and we have the visibility of the synergies that we're achieving that we know we're going to get the carry forward of and FY28. That's what gives us confidence to sort of say that EBITDA is going to continue to improve into FY28. So the combination of those two things is what gives us the visibility to say that four times by the end of FY28 is still what's the focus area and confidence in what we hope to achieve.

That's really helpful. Now that we're a couple of quarters in, have you started to more fully explore what the opportunities to expand with Keto Crosby are in terms of cross-selling and other initiatives that could be a driver to growth and margin in 28, 29? And if I can just sort of add on how you think the macro needs to hold up to get you to your targets by the end of next year.

Yeah, we have, Steve, we've been working on that since pre-acquisition and have been really deep into it since we've closed the deal. There are a lot of cross-selling opportunities, geography by geography. We're doing work on sales training and development. We're doing work on channel development. We're looking at our supply chains and the availability of product and materials in regions. We have identified a list of initiatives basically region by region, which is how we're executing within the business today and are delivering on those in large part in the early innings. They build over time. We haven't given a guidance number, but we do believe that there is upside potential from revenue synergies that have not been factored into our forward guide and in our Our synergy number overall that we've been communicating, which is more of a net cost synergy savings target. So we're really pleased with the progress we're making. Feel good about the way the early developments have unfolded. And, you know, we're not counting on a lot different in terms of the market performance. dynamics. We know that there have been positive drivers, megatrends that we do think will continue, but we're not counting on something that's materially different going into 28 and 29 to support the trajectory that we have more of a sustained level of activity at current levels to support what we're trying to achieve in the out periods.

Great.

Thanks, David. Thanks, John. Thank you, Steve.

Thank you, Steve. That concludes the Q&A section of the earnings call. I will now turn the call back over to Mr. Wilson for closing remarks.

Thank you, Anas, and thank you to everyone for joining us this morning. We're pleased with the strong start to the year and our progress that we are making across the combined organization. We have significant opportunities ahead of us, and our confidence continues to grow in our ability to drive sustainable organic growth, expand margins, generate strong free cash flow, and reduce debt. Most importantly, I want to thank our more than 7000 team members around the world for their continued focus on our customers and strong execution. We look forward to updating you on our progress next quarter. Thank you very much for joining us today.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.