Thermon Group Holdings Inc is a United States-based company that provides engineered thermal solutions for process industries. The company's product portfolio comprises electric heat tracing cables, steam tracing components, tubing bundles, and instrument and control products, as well as complementary product lines. It also provides turnkey services and design and engineering services. The company's customers include large engineering, procurement, and construction companies; oil and gas companies; commercial subcontractors; electrical component distributors; and others. The company has a presence in the United States and Latin America (US-LAM), Canada, Europe, Middle East and Africa (EMEA), and Asia-Pacific.
Performance Overview
Thermon Group Holdings Inc (THR, Financial) reported a revenue of $115.1 million for Q1 2025, marking a 7.7% increase compared to the same period last year. The gross profit stood at $50.4 million, reflecting a 6.6% rise, with a gross margin of 43.8%. However, net income saw a decline of 22.0%, amounting to $8.5 million, or $0.25 per diluted share. Adjusted net income was $13.1 million, or $0.38 per diluted share.
Key Financial Metrics
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Revenue | $115.1 million | $106.9 million | +7.7% |
| Gross Profit | $50.4 million | $47.3 million | +6.6% |
| Net Income | $8.5 million | $10.9 million | -22.0% |
| Adjusted EBITDA | $23.2 million | $22.1 million | +5.0% |
| New Orders | $127.2 million | $114.1 million | +11.5% |
Management Commentary
"I am extremely proud of our strong execution during the first quarter, highlighted by favorable momentum in our diversified end markets, the successful integration and positive contribution from our Vapor Power acquisition, and disciplined financial management leading to solid free cash flow conversion,” stated Bruce Thames, President and CEO of Thermon.
"Importantly, this quarter demonstrated the benefit of our strategic focus on growing our installed base and diversifying our revenue and end market exposure,” continued Thames.
Strategic Initiatives and Challenges
Thermon Group Holdings Inc (THR, Financial) has been focusing on several strategic pillars, including growing its installed base, decarbonization, digitization, diversification, operational excellence, and disciplined capital allocation. The company has seen a shift in customer spending priorities towards maintenance and repair needs, benefiting its OPEX-related revenue, which represented 85% of total revenues during the first quarter.
Despite these positive trends, the company faced challenges with a 34% decline in large project revenue, which was partially offset by a 22% increase in OPEX revenue. The delays in large project capital spending by customers have driven them to prioritize maintenance and repair spending, benefiting Thermon's OPEX revenue.
Financial Achievements
Thermon Group Holdings Inc (THR, Financial) achieved several financial milestones in Q1 2025. The company's adjusted EBITDA increased by 5.0% to $23.2 million, with an adjusted EBITDA margin of 20.2%. The net leverage ratio stood at 1.1x as of June 30, 2024, indicating a strong balance sheet. The company also reported a free cash flow of $8.8 million, an improvement of $10.7 million compared to the prior year period.
Income Statement Highlights
Thermon Group Holdings Inc (THR, Financial) reported a gross profit of $50.4 million, with operating expenses amounting to $31.1 million. The net income for the quarter was $8.5 million, down from $10.9 million in the same period last year. The diluted earnings per share (EPS) were $0.25, compared to $0.32 in Q1 2024.
Balance Sheet and Cash Flow
As of June 30, 2024, Thermon Group Holdings Inc (THR, Financial) had total assets of $756.9 million and total liabilities of $281.0 million. The company's cash and cash equivalents stood at $49.1 million, with total debt amounting to $169.1 million. The net debt was $120.0 million, down from $123.9 million at the end of the fourth quarter of 2024. The working capital increased by 1.2% to $158.0 million, largely due to the Vapor Power acquisition.
Outlook
Thermon Group Holdings Inc (THR, Financial) reiterated its full-year fiscal 2025 financial guidance, expecting total revenue between $527 million and $553 million, total adjusted EBITDA between $112 million and $120 million, and total GAAP EPS between $1.57 and $1.73.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Thermon Group Holdings Inc for further details.
