Excellent. Okay, well, welcome everyone to our 35th Annual Pump, Valve & Water Systems Symposium. I'm Kevin Dreyer. I'm co-CIO of the value team, along with my colleague Chris Marangi and Mario Gabelli. I'm joined by my other colleagues here, Tony Bancroft, Justin Bergner, Sarah Donnelly, and Simon Wong, who are going to lead us through a lot of very exciting and relevant discussions with companies in the industrial sector that are very relevant for today's economy. So with that, first to take us out with an overview of some of the markets we'll be using some of the companies that are presenting is Justin Bergner. Thanks, Kevin. Again, I'm Justin Bergner, Portfolio Manager and Industrials Analyst with the firm, and welcome everyone this morning. I just want to discuss some high-level themes as we get underway this morning. So key themes for discussion this year: big change, obviously, in the dynamic over the last year with the change in the administration come November and January. So top of mind is what is new legislation, what is new regulation, or I should say lack of regulation, and tariff policy going to look like, and how will that affect things? Will it be inflationary? Will it be disinflationary if we get benefits like productivity enhancing, accelerated depreciation? Onshoring and supply chain issues will continue, although now it's not so much how companies adjust post-COVID, but how they react to carrots and sticks as it relates to U.S. industrial policy and industrial policy by other countries. Global infrastructure investment will continue. The IIJA is still a number of years into the bill to be spent. Digital initiatives and AI clearly driving productivity and driving companies' investment decisions and the M&A environment, which started to pick up in 2024, looks to continue to strengthen as we move through 2025 under the new administration. PMI activity, which measures kind of global industrial sentiment globally, has been very lackluster the last two years. No surprise. We've started to see it pick up over the last couple of months towards that 50-ish neutral level, although still below multi-year averages. We'll see over the next few months if that rebound can sustain itself, but certainly both positively. The key inflationary metrics on the input cost side for the industrial economy have actually been quite stable despite some concerns at the macro level about inflationary dynamics. So oil prices have come down and have been stable around that $70 level. Copper, not inexpensive, but relatively range-bound and manageable at the $4- 5 per pound level. And steel is the one that probably bears watching given the new tariffs. It came down pretty meaningfully over the last couple of years and now may be ticking back up again with 25% tariffs being imposed on steel and aluminum in the U.S. And that will obviously affect the broader industrial economy to some degree. You know, we continue to grow as a globe, both in terms of population, but more importantly as a middle class, which just means more food, more water, more industrial activity and energy, and, you know, is just a continual bid on industrial activity globally. Infrastructure spend continues. The IIJA is now a few years in, $550 billion of incremental spend over five years across bridge and highway, electrical grid, and water. And then, you know, on the positive side, there's a lot of productivity upside looking out over the next couple of years, which has the potential to lower costs and lower inflationary dynamics. The big one is digital evolution, AI, as companies improve asset safety and uptime, enhance value add to the customer, and, you know, use large language models to improve the interface efficiency of their applications. So a couple of examples below of applications from companies that are here with us today. So with that, I will turn it over to Sarah, who will discuss some themes on the water side. Good morning, and thank you for joining us this morning. So water is essential, and on the screen, you'll see major issues confronting water systems in the U.S. and even globally today. Water is a scarce commodity. As a reminder, only 3% of water is fresh. Brazil, Russia, and U.S. have the most usable fresh water. In the U.S., in general, water infrastructure is old. It requires upgrading to ensure resilience. And now we're finding that the presence of PFAS, or heavy metals, and other toxins in potable water, or even in the soil, are drawing greater concerns. Consequently, we are seeing more stringent regulations established at both the federal and local levels. There is a shortage of skilled labor. So we are seeing greater adoption of technology and digital solutions to compensate for it. And this includes across water systems, but also in commercial and institutional buildings. So despite the upgrades needed, water must remain affordable. In the U.S., we consume 320 billion gal per day, of which less than 20% is used by the general population, provided by municipalities, but also for household and commercial use. In the U.S., as I noted, the infrastructure is old, and this illustrates here that the average age of water pipes in the U.S. is approximately 45 years. Municipalities are responsible for more than 1.2 billion mi of just water mains, plus there's another 1 million mi more of water pipes. Therefore, given this need for an upgrade, as water pipes are replaced, it's also stimulating demand for other products and upgrades across valves, hydrants. New technology is needed, such as sensors and monitor systems, to operate a more efficient system. So as more stringent regulations have been announced by the EPA, this is mandating minimum standards for drinking water. Regulations have set reductions across acceptable levels of toxins, such as arsenic and, as I mentioned, PFAS. In total, the EPA estimates that we need $625 billion in water upgrades in the U.S. over the next couple of decades, and the IIJA is set to make a dent in this, as it's allotted over $50 billion to enhance safe drinking, whether it's lead pipe replacement and the elimination of contaminants, not only across potable water, but also wastewater and pollution management, and I'll turn it over to Kevin before we get started with our first speaker. Thanks, Sarah and Justin. So just to recap, when we're looking at 2025 in terms of trends, clearly top of mind is legislation, regulation, and tariff clarity, and all of those things, their impact on the economy going forward. We're seeing some improving short-cycle demand, reshoring stimulus and energy projects, infrastructure funds and mega projects. Funds and mega projects are still in focus now. We're looking at potentially a more favorable M&A environment. I guess we'll see what the companies say. And finally, smart connected and AI offerings, as well as AI being used to enhance productivity, is clearly at the forefront. So just to run through our schedule, we're going to start off with Graco at 8:30 A.M., then Watts Water virtually at 9:00 A.M., Enerpac at 9:30 A.M., ITT at 10:00 A.M., Gibraltar at 10:30 A.M. virtually, Landis+Gyr at 11:00 A.M., Flowserve at 11:30 A.M. We're going to have a short break for lunch and then return with Enpro, Mueller Water, Graham, and AMETEK in the afternoon, and then we're going to wrap up with Gorman-Rupp, Badger Meter, and Crane, so really a great list of companies. Very happy everyone can be here. We'll start in just a minute with Graco. Would welcome everyone to take their seats so we can get started with that presentation. Thank you. Okay, well, with that, kicking off our conference is Graco. Based in Minneapolis, Minnesota, Graco supplies technology and expertise for the management of fluids and coatings in both industrial and commercial applications. It designs, manufactures, and markets systems and equipment to move, measure, control, dispense, and spray fluid and powdered materials, and serves customers around the world in the manufacturing, processing, construction, and maintenance industries. In addition to its Minneapolis headquarters, Graco has regional headquarters in Belgium and China, with production and distribution centers located worldwide. Graco has 169.5 million shares outstanding, stocks at $86 for a $14.6 billion market cap, $650 million of net cash, and a $14.2 billion total enterprise value. Joining us from Graco are David Lowe, CFO and Treasurer, and John Bauer, Director of IR Finance and FP&A. So before we get right into questions, I know that David would like to get up and just say a few words framing the business for those who are maybe a little less familiar with Graco. Thank you, Kevin. And I want to thank our friends at Gabelli for the invitation to participate in this 35th annual Pump Valve & Water Systems Symposium. It's been our pleasure to participate in this program over the years on several occasions, and it's one of our favorites. Mercifully, I won't give you a prepared presentation. The Q&A is far more interesting, but I did think I would just give you a 90-second thumbnail of Graco if you're not familiar with us. Graco Inc. was founded 99 years ago in Minneapolis, Minnesota, and its original business was designing and manufacturing lubrication equipment for the automobile industry. We extended our industrial exposure into many niche markets, usually by leveraging technology we developed in one industry, one application group in our technology, and stretching it over other businesses. If you're looking for a quick way to think about the company, maybe it's we handle difficult-to-handle fluids, and maybe you could think of expensive materials. Our growth over this century has been mostly organic. As you will see, if you look at our financials, we report in three segments, but that's really deceiving. Our business is in 15-18 niche markets. That's how we think about our business on a daily basis. It's sometimes why you'll find me, I hem and haw when you ask me to generalize about what's going on, because we're balancing a lot of businesses. The businesses that we're in. I'm going to try to generalize when I say we like business-to-business. We like businesses that are global. We like recurring revenue. We like, in our terminology, critical applications, because business-to-business people will pay you well if you offer them durable, high-quality solutions. Our customers are return-on-investment driven, as in fact we are. It's part of our culture, and I think, quite frankly, it's reflected in our operating returns and our cash flows over many, many years. We have an interesting manufacturing footprint. While we are a global company, more than 80% of our manufacturing is here in the U.S. Last year, we did just a little bit over $2 billion in revenue, and we've been public since 1969. I mean, it's much better than watching paint dry, so we'll take that. Exactly. So thank you for that, and welcome again. And I add, we do want this to be interactive, so if anyone has a question, raise your hand. We're happy to get a mic to you. And those on the webcast as well, there should be a mechanism for you to submit a question. We'll find a way to get that up here to me as well. So, you know, that was a great overview. I thought we'd start by exciting and delighting everyone and pointing out that, you know, Graco, you've got these 15, 18 businesses. One hallmark is you generate a lot of cash flow. With that cash flow, you now have a lot of cash on your balance sheet, as we said, $650 million or so, and minimal internal capital needs. Just in November, you acquired COROB for EUR 230 million plus an earnout, and that adds to your strong position in the global paint and coating machinery manufacturing category. So first, maybe we could start, talk a little bit about that deal. What makes you excited about it? What was interesting about it in terms of technology, expertise, end markets? But then more broadly, you know, clearly M&A had dipped down for a while. We've seen it perk back up last year. A lot of people are excited about, you know, the deal-making environment. M&A has been an important way for you to grow your top and bottom line over the years. Maybe you could talk about what you're looking at now from your strategic position internally. Okay, that's a good question. This is on. The transaction that Kevin's referring to is the COROB manufacturing products business out of Northern Italy. It manufactures a variety of machines that are used in the mixing, shaking, tinting activities in the colorant marketplace. In other words, making paint the right color to match existing or desired color shades. This business, I think, characterizes a lot of things that we like about these niche markets that we're in, as well as with respect to deal strategy, the way we like to think about opportunities in this space. As far as businesses that we're in, these niche markets, most of them are not particularly large markets. They're sub-billion-dollar markets. In some cases, they're just a few hundred million dollars. And they may grow at GDP, and they may grow with technology and good pricing a little bit above GDP in this business-to-business environment, but they're not huge, and they're not exceptional growers. So you're thinking, well, what's not to like? What we like about that is it means the industry is relatively, these industries are relatively stable. You know who the competitors are. New competitors typically don't come into these specialized markets, and especially, you know, corporate industrial behemoths that they could own the whole market, and it wouldn't mean anything to them. We like that. I mean, I joined the company 30 years ago. The competitors we were talking about in those days are the same competitors we're talking about today. That's the way the Graco market is. There's two large global players. COROB is one, a business called Fluid Management that's part of a company you may have heard of. IDEX is another one. And then there's a few regional and local players. What we liked about this business, and then I'll try to talk more broadly, what we like about this business is that we know the channel and the end users. Think home. Think paint stores, people that are doing transactions involving paints and coatings. That's our world anyway, and we think we have opportunities to capitalize on where they're strong and where we're strong. COROB's operational footprint is very interesting. They're very much state-of-the-art manufacturing location in northern Italy, is highly mechanized, very competitive on a global basis, and absolutely first rate, and we would consider it the quality of a Graco factory. They also have a very interesting footprint in India, where we really have, other than a warehouse and a sales arm, we really have no activity. There, they have a long-time and experienced manufacturing operation, and they have a local sales and service network of a couple hundred people across the country that give them very, very interesting coverage. Flip it around, here in North America, which is our core business for most of our contractor products, we have a very well-developed sales and technical organization, not to mention tremendous coverage with channel partners like the largest home centers and the largest paint chains, and we think we can do some things for them there. Lastly, this was not a program. This was not an initiative that was done with an auction process. This was a business. It was privately held. In this case, it was held by private equity. Through contacts in the industry, we established a working relationship with the owner, and over a period of nine months, got to see the operations, got to know management, got to understand the dynamics better than we think we would have in the auction process, and we're very comfortable when it came time to close the sale, and I would say more broadly, we have a responsibility we know to be good stewards of capital, and when we talk about our capital deployment process, in our case, number one is we like the businesses that we're in, and we're always going to be, I would say, big on the organic side. We are committed year in and year out to product development. We invest about 4% a year in that line, in that level of activity. And we think it's important because in business-to-business environments where people are looking for ways to improve their productivity and their ROIs, in this particular case, the best mousetrap wins. If you can get it into people's hands with high enough quality, and you can support it afterwards at a reasonable price. And after that, our factories, we really believe in state-of-the-art manufacturing facilities. When you visit one of our factories, we have four in the greater Minneapolis area, not exactly the place you would think of as a major hub of manufacturing. They're state-of-the-art machine tools, robotics. How have we stayed competitive by competing or by manufacturing in the United States? Lots of automation, lots and lots and lots of tools that are surprising in a business that is relatively low volume compared to consumer products businesses. And you say, well, how do you get away with that? We get away with that because we source all of our global demand out of dedicated factories in one place. And then finally, yes, I would say that the other two areas, the other two important buckets are development activities, and we look at our business opportunities to see if we think we can add value and if we're going to have a return on investment. And that's where we could get into a, I'll spare you, a long conversation on pricing and multiples and so forth. By the way, the COROB deal, which I said kind of fits within our special sphere, that was not as cheap as I'd like it to be, but it was between 11 and 12x. So we're not trying to avoid those deals in the, you know, elevated levels that we've seen in some markets over the last few years. And then shareholder return and returning money to shareholders. I don't think of Graco as a classic cyclical company, but because of the industries that we serve, construction markets, automotive, semiconductor, farm, etc., you do, Wall Street does. And so what that means is, as a cyclical, this is your world, this isn't my world, but as a cyclical, once every three or four years, we go on sale, right? 30%-35% down. And I know this because I've seen it over my time frame with a company. And when that happens, we like to be in a position to move quickly and move aggressively. And I think if you look at the long swath of our history, we track our purchases over the last 20 years. We've brought in a little bit more than $2 billion worth of stock. Our return on investment on that is about 15.5%. If you look at when we bought, maybe we could have done, we could have been more aggressive in 2008, 2009, but we were in the market in 2015 when it was quite soft for industrial companies. Some people have forgotten that. We were buying aggressively when COVID hit. Even a couple of years ago in 2022, when our stock was down nearly 30%, we were in the market. We always like to have the financial flexibility to do all of those things when the time is right. The drivers on number two, development, and number three, buying stock does depend on what the price of the merchandise is. Love to hear that. We'll get to your question in just a moment. Maybe somebody could give them a mic. But, you know, I could follow up with probably 15 questions from what you just said. But maybe I'll just start with, you did a resegmentation that you just announced at the end of the year that's going to be coming, you know, this coming year and how you report. I'm curious, how much of that is internal versus external? In other words, have you actually reorganized the way these businesses are managed, operated, run? Is this part of cost reduction? And obviously, one of the new divisions or the new division is called expansion markets, which is obviously pretty positive and highlighting both the growth potential in those markets as well as it sounds like that's where a lot of your M&A opportunities are going to be. Could you just kind of discuss that reorganization and new segment reporting? Yeah, so I'll start, and I'm sure David might jump in and fill in some details as well. But the principal driver behind the restructuring, which we announced last Q4 and it's in place today, is principally around growth. David mentioned in his opening remarks and again in his follow-up commentary around organic, we very much are heavily reliant on organic. And over the last 20 years, organic growth has been about 6.5% compounded over the last 20 years. And when you look at these niche businesses, David mentioned we report in three segments, but we operate in sort of 18 or so niche markets. I would say historically, we still reported in three segments, but we also had what I would call lots of little businesses underneath those segments that really were also driving investment decisions, driving new product strategy, and also, you know, a lot of new products that were going into these markets. When you look across those verticals, the same core markets and customers really traverse a lot of them. It's going to be contractor, it's going to be industrial customers, large OEMs. I think over the years, there's been a level of, I wouldn't say complexity, but we've introduced a lot of businesses that were going into these large channel customers representing different segments of the business. When we stepped back and really looked at the organization and really thought through how do we drive higher organic growth in the next cycle, we recognize that there was a growing opportunity to sort of reorganize to really focus on those customers and really be customer-focused. We've got some experience with this. About four years ago, we took our high-performance protective coatings and foam, which are large, almost industrial-type products that were in our industrial segment, and we moved them into the contractor segment. We did it principally because the customers that are buying those products are contractor customers, and we've seen some really good success. Really, the reorganization is all around organic growth. There are some synergies that we've realized as well through sales and marketing and engineering, but really the principal driver is all around organic growth and improving that. Great. Let's go to the crowd for a question. Hi, thank you. You know, you mentioned that you have state-of-the-art factories and you, you know, have been using tools and automation. Well, I've been reading a number of academic articles and books recently, all making the point that the U.S. is manifestly not a global leader in what's called advanced manufacturing, mostly because it requires such heavy expense and long-term oriented capital expense, and the question is, how do you see that from your point of view? For example, are the tools and the instruments that you're automating with mostly from Germany, Japan, South Korea, or wherever, not the United States? And particularly for these niche businesses only doing a few hundred million a year, it's really expensive. I don't know how you do it to really get into what's called advanced manufacturing, so that's my first question, and I have one more after. All right, well, it's a good question. And I would say that our model, what helps us on our model is that we consolidate all of our volume in single locations, as you said. We are not a high volume, I mean, what's a high volume business? If you're making power drills or something, you're measuring your output in the millions. In our contractor business, which would be a high volume business for us, we measure our output in the tens of thousands of units a year. In our industrial business, that's where I spent about 25 years, we measure our output of high volume units a few hundred a year. And so you look at this and you're thinking, well, gee, that's not a lot. But first thing, you can see it builds the case for, well, for goodness sakes, do it in one place. While the volumes are not high for individual SKUs, we share lots and lots and lots of common platforms, technologies, and parts. So we may have individual parts that go into dozens of different pumps, dozens of different spray guns and such, and we are able to build it on a cost-effective basis. Maybe we are lucky in the particular choice of the competitors that we have in our marketplaces. I talk about these niche markets. You know, there are a few hundred million in revenue normally. I mean, a big one for us might be maybe the pro-paint side of the contractor business, sorry for the jargon. Maybe that's $1 billion worldwide. That would be a big guy, a big guy for us. In those spaces, there's companies that we compete with, including some public companies you're familiar with. We compete with IDEX in two or three places, great company. We compete with Nordson in a couple of three places, great company, Dover and IR and such. But we really aren't competing with global behemoths. By that, I mean, we're not in these five and 10 and 20 billion dollar markets, and we don't find ourselves competing with Siemens or American Emerson Electric or Honeywell or Rolls-Royce or, you know, people that could, you know, overwhelm us. We're competing with a handful of, I'll call it sophisticated corporate players that are competent competitors, and they compete in the right way, and they want to make money as we do. And so far, it's been a recipe for success. And just to put a number on that, 8% of cost of goods sold is labor. So the labor component is quite small, and then you're really talking about the raw inputs, which, you know, there's global markets that we're buying those off of, so. Okay, that is very much appreciated. My second question, totally unrelated topic. Given you have great cash flow characteristics, what are the advantages, if any, today of being public? That's a hard one. You want to do it? Pros and cons. There's pros and cons. Obviously, you know, from the company side as opposed to your side, you know, we'll call it the quarterly reporting drill, it's an ongoing drumbeat. The annual reporting requirements, the filing of the 10-Ks and all that, I mean, it's an expensive process, and how smaller companies do it, smaller companies than Graco, I have no idea. What I would say, as I think about your question, we do strive to take at least advantages of some aspects of being a public company. Employees around the world, except in places where it gets complicated by taxes and local, you know, local law, but most of our employees are here in the U.S., so these things work. We have a couple, three, what I would call participation programs with our employees that they can take advantage of the financial success of the company over many years. Like a lot of companies, there's no great secret here. We have an employee stock purchase plan where you can buy in at a discount every year, and you know, once a year, you get shares at an attractive price that, as an employee, you can retain, and we hope most of them do, or you can sell right away as a way of participating in the organization and making people owners and having skin in the game as part of it. We also have, I would say maybe a little more unusually, a rather generous all-employee stock grant program where every so, you know, typically it's on a three-year drumbeat. We grant stock options to all of our employees, as I said, except in places where it doesn't work or it's too clunky, but think the U.S., it works well here, and those stock options vest over time, and it's another way, with leverage, of giving employees some additional skin in the game, and when we look, the heart of our business are our factories. We're an operating company. We're not a portfolio company. We probably aren't a classic industrial marketing company either. The heart of our business is our factories, and in our factories, if you visit them, you will see they're warm in the winter and they're cool in the summer. And there aren't a lot of sharp objects and there aren't pools of water lying around, and it's not dusty and it's not noisy. And when you go and start talking to our employees in the factory, you'll find not just machinists, but assemblers and packers that have worked there for 20, 30, and 40 years. And you go, how's that running? We pay a competitive wage. We have a suite of benefits, and we offer them a way of sharing in our success with these kinds of programs. And I would argue it's that stability and the buy-in that the employees have for us that has contributed very substantially to our success over, you know, over a long period of time. They can raise families in a metropolitan area. They can save money for college and for cabins. We do all of this, and I hope not to offend anybody on the East Coast. Never. This is a non-union operation, and we're in Minnesota, for God's sakes, so I think it says something about the way we try to make our relationship and our employees, you know, we have a shared set of objectives and interests, and in some small way, being a public company helps us. Maybe I could just follow up to that first question about manufacturing. Obviously, an advantage having all your manufacturing or most of it in Minnesota. Could you talk us through tariffs? Obviously, that helps you for your sales in the United States, but both for some of your inputs coming into those factories, whether it's raw inputs or the machinery itself, and then conversely, for your sales outside the United States, just walk us through how you're thinking about potential tariff impacts. Okay. So it's also a timely question, right? And a good one. And of course, the answer is we don't know, right? I mean, we don't know how this is going to play out. As a manufacturer with most of our operations in the U.S., I would say the vast majority of our key vendors are domestic companies or are located nearby. It's just the nature of how logistics work in manufacturing, except in some cases with some materials and some electronics that come in overseas. So as we've tried to get our hand around, handle around that part of the equation, I mean, it's, you know, it's not nothing, but I'm talking about, you know, adding to our, you're our expert here. I mean, if we added to our purchase costs of 1% or 2%, that would highly surprise me. That's not really where I guess I lose sleep. Where I do lose sleep is we don't have complete visibility, and I don't think anybody does, as to where do our vendors get all of their parts? Where do our vendors do their buying and such? And we probably have a degree of dependency there that we don't understand today. And I'd be exaggerating if I said, oh, I'm not worried about it, but I don't know if that's a million or 10 million. It's probably not a, it's probably not. But then lastly, the real question, and I'm, you know, this is the Harvard Club, and I didn't go to Harvard, but the complications, the risks, and maybe the opportunities of changing the relationship that global trade has been based on and has been developing during the whole post-war period, we don't know. It could represent an opportunity in terms of when the countries look at these really niche products that are used to help make their countries and their markets more productive and meet the needs that you folks were talking about at the beginning of the presentation today, need for infrastructure, need for more housing, need for more water, need for more things. Maybe we get a pass, but there's no guarantee that we will, and we'll have to see. Yeah. We're coming close to time, so I'm going to sneak in a couple final questions. So first of all, a lot of positives in the business, but there were some negatives. You called out your semiconductor business and China as headwinds in 2024. How do you see those businesses turning around to seeing your positive outlook into 2025? And then I'm also just curious from your perch, what's your view of the home building industry, both new construction and repair and remodel? Yeah. So I see we're at time, but I would say if you look at our results in 2024 on the industrial side, it's really a story of both China and semiconductors. And I would say certainly a very strong negative impact on both. But if you were to just kind of look at the underlying order activity throughout the year, I would say there was a steadiness to both whereas we exited the end of the year, I would say it appears that there's been some stabilizing kind of at these lower levels. And so as we come into 2025, hopefully we're reaching a point where the headwinds are behind us and perhaps we can start improving off of a lower base. As far as housing goes, I mean, you know, Northeast people know about the affordability crisis, and we keep our eye on interest rates. I'd say those are the broad negatives, and that's probably going to resolve, but not this quarter, not this year. On the other hand, the factoids we take some comfort in is age, the median age of U.S. housing is now 42 years. That represents a big opportunity. 20 years ago, back in 2000, it was 28 years. So as housing ages, it needs to be either remodeled or rebuilt. We think that represents an opportunity. At some point, some of those homes owned by 60% of the homeowners who have mortgages at 4% or less are going to have to make a move. When more existing homes come to market, that's very good for us in the remodel and repaint sector because people spend most money on their homes just before they sell it or just after they move in. Great. David and John, thank you. Thank you to Graco. Let's give them a hand.