Q1 2025 Thermon Group Holdings Inc Earnings Call Transcript
Key Points
- Thermon Group Holdings Inc (THR) achieved nearly 8% revenue growth in the first quarter, driven largely by the successful integration of the Vapor Power acquisition.
- The company reported strong cash flow and adjusted EBITDA growth, highlighting disciplined financial management.
- Thermon Group Holdings Inc (THR) has diversified its end market exposure, reducing reliance on the oil and gas sector, which has helped stabilize revenue streams.
- The company has a robust pipeline of decarbonization opportunities, with $320 million in potential projects, representing 30% of the total pipeline.
- Thermon Group Holdings Inc (THR) has maintained a strong financial position with a leverage ratio of 1.1 times, providing ample capacity to pursue growth objectives and capital allocation priorities.
- Organic revenue declined by approximately 5% in the first quarter, excluding the contribution from Vapor Power.
- Large project revenue decreased by 34% due to extended sales cycles and customer uncertainty related to the macro environment.
- Sales in the US-LAM segment, excluding Vapor Power, declined by 14%, and sales in the EMEA region declined by 19%.
- Adjusted EBITDA margin slightly decreased to 20.2% from 20.7% in the same period last year, impacted by higher labor content contracts and strategic initiative investments.
- Backlog declined 10% on an organic basis, excluding the contribution from Vapor Power, indicating potential challenges in securing new large projects.
Hello, and welcome to the Thermon Q1 2025 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Ivonne Salem. Please go ahead, Ivonne.
Thank you, Diego. Good morning, and thank you for joining Thermon's Fiscal 2025 first-quarter results conference call. Leading the call today are CEO, Bruce Thames; and Vice President and Corporate Controller, Greg Lucas. Earlier this morning, we issued an earnings press release, which has been filed with the SEC on Form 8-K and it's also available on the Investor Relations section of our website. Additionally, the slides for this conference call can be found in our IR website under News & Events IR Calendar Earnings Conference Call Q1 2025.
During the call, we will discuss some items that do not conform to generally accepted accounting principles. We have reconciled those items to the most comparable GAAP
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