Day, and thank you for standing by. Welcome to the Second Quarter twenty twenty five Cadent Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michael McKenney, Executive Vice President and Chief Financial Officer. Please go ahead. Thank you, Daniel. Good morning, everyone, and welcome to Cadence second quarter twenty twenty five earnings call. With me on the call today is Jeff Poller, our President and Chief Executive Officer. Before we begin, let me read our safe harbor statement. Various remarks that we may make today about Cadence future plans and expectations, financial and operating results and prospects are forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward looking statements as a result of various important factors, including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our annual report on Form 10 ks for the fiscal year ended 12/28/2024, and subsequent filings with the Securities and Exchange Commission. In addition, any forward looking statements we make during this webcast represent our views and estimates only as of today. While we may elect to update forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views or estimates change. During this webcast, we refer to some non GAAP financial measures. These non GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non GAAP financial measures to the most directly comparable GAAP measures is contained in our second quarter earnings press release and the slides presented on the webcast and discussed in the conference call, which are available in the Investors section of our website at cadent.com. Finally, I want to note that when we refer to GAAP earnings per share or EPS and adjusted EPS on this call, we're referring to each of these measures as calculated on a diluted basis. With that, I'll turn the call over to Jeff Powell, who will give you an update on Cadence business and future prospects. Following Jeff's remarks, I'll give an overview of our financial results for the quarter, and we will then have a Q and A session. Jeff? Thanks, Mike. Hello, everyone. Thank you for joining us this morning to review our second quarter results and discuss our business outlook for the 2025. I'll begin by reviewing our operational highlights. I'm pleased to report that we had solid demand for aftermarket parts and a healthy increase in capital equipment orders during the second quarter. Overall market demand, particularly in North America, was near a historical high in the second quarter across all our operating segments. And our commercial teams did an excellent job at winning new business in a challenging environment. This performance against the backdrop of continued trade policy uncertainty and global trade tension is noteworthy. And I want to congratulate our management teams around the globe on their strong performance. Our operations continue to focus on meeting our customers' needs and implementing process improvements to increase productivity. As we will discuss this morning, our strong gross margin performance in the quarter is a result of these efforts. Turning next to Slide six, I'd like to review our Q2 financial performance. Bookings in the second quarter increased 7% to $269,000,000 led by strong capital performance and stable demand for aftermarket parts. The capital project bookings were particularly encouraging to see as the economic environment remains at a high level of uncertainty. Revenue decreased 7% compared to the record revenue achieved in the 2024. This decline was largely the result of softer capital orders in the 2024, which led to fewer capital shipments in the first half of this year. Based on our high level of project activity, we expect sequential improvements in the coming quarters. Adjusted EBITDA was $52,000,000 down 15% from the then record in the prior year period. Our adjusted EPS was $2.31 down 18% compared to the 2024. We have a growing backlog and expect strong bookings in the 2025. Capital project activity remains good, but I want to note that the timing of these orders is less certain. This uncertainty is amplified by evolving U. S. Trade policies and the ever changing tariff environment. I'll provide more details on that when I review our operating segments. I'll begin with our Flow Control segment. As you can see in Slide seven, our Flow Control segment had solid bookings in the 2025. We benefited from strong aftermarket demand, while capital project activity was softer compared to the prior year period. Revenue in the second quarter increased 4% to $96,000,000 even as weaker manufacturing activity in Europe and China dampened our results. Our aftermarket revenue remained strong in the second quarter and made up 75% of total revenue. Solid operating performance led to an adjusted EBITDA margin of 28.9%. As we look ahead to the 2025, we expect demand to improve as the year progresses. That said, the frequently changing global trade discussions and tariff targets may impact capital investment activity. Before leaving this segment, I wanted to share that the integration of Dynamic Ceiling Technologies, which was acquired in June 2024, is now complete, and we are pleased to have this leading producer of fluid rotary unions and related flow control products fully integrated into Cadent. The diversity they bring to Cadent in terms of new markets and access to new customer segments greatly expands our opportunities as we pursue growth within our flow control operating segment. In our Industrial Processing segment, new order activity was up 9% compared to the same period last year to $105,000,000 This booking performance was led by a significant increase in capital orders for our wood processing equipment from three North American producers of engineered wood products. Revenue decreased 16% compared to the record revenue achieved in the 2024. This decline was due entirely to weaker capital shipments as our aftermarket parts business was up 7% compared to the second quarter of last year. Adjusted EBITDA and adjusted EBITDA margin declined due to lower revenue volume and the lack of operating leverage. Looking ahead to the 2025, we expect capital project activity to strengthen in this segment, particularly within our fiber processing product line, where a number of large capital projects are in the pipeline. Turning now to our Material Handling segment. We had excellent bookings performance in the second quarter of $71,000,000 The 16% increase over the prior year period was led by our bulk Material Handling product line, and we had solid growth from our Ballard product line. As was the case with our other two operating segments, weaker capital shipments were primarily contributor to a 6% decline in revenue in the second quarter. Business activity remained high with a number of larger capital projects under discussion, although the timing can be uncertain as to when these projects are executed. As I conclude my prepared remarks, I want to emphasize how pleased I am with our operations teams as they continue to execute the strategic initiatives to create and capture more value. Looking ahead to the 2025, we believe industrial demand will strengthen relative to the first half of the year, especially once the global trade issues get worked out. Our backlog is improving and we are well positioned to capitalize on new opportunities that may emerge as the year unfolds due to our ability to generate strong cash flows. And with that said, I'm pleased to announce that shortly after the close of the quarter, we acquired Babini, a small company in Italy that manufactures dewatering equipment for the food and paper industry. We were a licensee for their technology for our upcycling business, and we are excited to have them join the Cadence family. I'll now turn the call back over to Mike for a review of our financial performance in Q2 and our guidance outlook for the remainder of the year. Mike? Thank you, Jeff. I'll start with some key financial metrics from our second quarter. Our second quarter revenue was $255,300,000 included record aftermarkets parts revenue of $181,800,000 Gross margin was 45.9% in the 2025, up 150 basis points compared to 44.4% in the second quarter twenty twenty four. Despite the impact from incremental tariffs, our gross margin was close to 46% for the second quarter in a row. This increase is primarily associated with a higher overall percentage of aftermarket parts, which represented 71% in the 2025 compared to 63% in the prior year. SG and A expenses as a percentage of revenue increased to 29% in the 2025 compared to 25.5% in the prior year period. SG and A expenses increased $3,900,000 or 6% to $73,900,000 in the 2025 compared to $70,000,000 in the 2024. The weakening of the U. S. Dollar resulted in a $1,900,000 increase in SG and A expenses, including a $1,200,000 impact resulting from the change from foreign currency gains in the prior period to losses in the current period and a $700,000 unfavorable effect of foreign currency translation. In addition, we had incremental SG and A expense of $1,800,000 related to our acquisitions. Our GAAP EPS decreased 17% to $2.22 in the second quarter, and our adjusted EPS decreased 18% to $2.31 The 2025 adjusted EPS exceeded the high end of our guidance range by $0.31 due to higher revenue and better gross margin than forecast. The higher revenue in the second quarter was driven by our record aftermarket parts revenue. All of our segments had higher than expected gross margin due to the mix of aftermarket parts in the period. In addition to the revenue beat and gross margin performance, we had strong cash flow performance in the quarter, which I'll discuss further in further detail on the next slide. Adjusted EBITDA decreased 15% to $52,400,000 compared to $61,800,000 in the 2024 due to lower capital revenue at our Industrial Processing segment, which led to reduced EBITDA performance. As a percentage of revenue, adjusted EBITDA was 20.5% compared to 22.5% in the 2024. As outlined in the chart, our cash flow increased significantly compared to both the '5 and the prior year period. Operating cash flow increased 44% to $40,500,000 in the '5 compared to $28,100,000 in the '4. Free cash flow increased 58% to $36,500,000 in the second quarter 'twenty five compared to $23,100,000 in the second quarter 'twenty four. This strong performance was driven in part by an increase in customer deposits associated with capital bookings in the quarter. Non operating uses of cash in the 2025 included $34,000,000 of repayments on our debt, dollars 4,000,000 for capital expenditures and $4,000,000 for dividends on our common stock. Let me turn next to our EPS results for the quarter. Our adjusted EPS decreased $0.50 from $2.81 in the '4 to $2.31 in the '5. This included decreases of $0.56 due to lower revenue, dollars 0.26 from higher operating expenses, 0.2 due to higher noncontrolling interest expense and $01 due to higher weighted average shares outstanding. These decreases were partially offset by increases of $0.21 due to a higher gross margin percentage, 0.12 due to lower net interest expense and $02 from a lower effective tax rate. There was no foreign currency translation effect on net income in the second quarter as the weakening of the U. S. Dollar caused foreign currency exchange rates to more closely align with the prior period exchange rates. Looking at our liquidity metrics on Slide 15. Our cash conversion days, which we calculate by taking days in receivables plus days in inventory and subtracting days in accounts payable, decreased to 128 at the end of the second quarter 'twenty five compared to 130 at the end of the first quarter 'twenty five. Working capital as a percentage of revenue was 17.7% in the second quarter 'twenty five compared to 18% in the second quarter 'twenty four. We continue to remain focused on paying down debt as efficiently as possible. Our net debt, that is debt less cash, was $151,700,000 in the second quarter, decreasing $31,000,000 sequentially and over $100,000,000 compared to the '4. Our leverage ratio calculated in accordance with our credit agreement decreased to 0.86 at the end of the second quarter 'twenty five compared to 0.95 at the end of the '5. At the end of the second quarter 'twenty five, we had $162,000,000 of borrowing capacity available under our revolving credit facility and an additional $200,000,000 of uncommitted borrowing capacity. Now I'll review our guidance for '25. For the second quarter in a row, our book to bill ratio was over one, and the strong bookings in the second quarter led to an ending backlog of $299,000,000 up 16% over the 2024. The majority of the large capital bookings relate to projects, which we recognize as revenue from '26. While there has been some clarity on country specific tariffs, customers with large capital projects remain cautious as they evaluate how the tariffs will be applied and whether certain tariff costs can be mitigated. The estimated impact from incremental tariffs remains largely unchanged from our prior forecast. The most significant tariff impact to Cadence relates to tariffs on the imports of steel, which encouraged domestic suppliers to increase their prices and on products sourced from our facilities in China. The Trump administration eliminated prior exemptions and applied a uniform 25% tariff on all U. S. Steel imports in February and increased this tariff to 50% on June 4. We believe we'll be able to mitigate a large portion of the impact of the steel price increase by working with our suppliers and cost sharing with our customers. There was a reduction to the recently announced China tariffs from 145% to 30% effective in the May. We will continue to pursue opportunities to reduce the impact of these costs by finding alternative suppliers through cost sharing and, in some cases, making investments to change our manufacturing capabilities and manufacturing components at different Cadence facilities. While there has been some clarification on certain tariffs, newly announced tariffs continue to create unease and resulting uncertainty in the market, which has impacted our customers' decision making process for our capital equipment. We have a very healthy level of quote activity for our capital equipment, and we have seen little disruption to capital order activity related to maintenance and mission critical equipment. However, if customers have flexibility with the timing purchases, some are delaying placing the order until there is more certainty and stability in the markets they serve. This environment has made it extremely difficult for our operations to forecast the timing of capital orders requiring significant judgment on order timing, revenue recognition and future material costs. We will continue to monitor these tariff changes and we'll provide further updates as the year progresses and there is more clarity with new trade policies. We are maintaining our full year 'twenty five guidance. We continue to expect revenue of $1,020,000,000 to $1,040,000,000 in 'twenty five and adjusted EPS of $9.05 to $9.25 which excludes $0.16 of acquisition related costs. Looking at our quarterly revenue and EPS performance in 2020, we expect that the second half of the year will be stronger than the first half. Our revenue guidance for the 2025 is $256,000,000 to $263,000,000 and our adjusted EPS guidance for the third quarter is $2.13 to $2.23 which excludes $01 of acquisition related costs. We now anticipate gross margins for '25 will be 44.8% to 45.3%. As a percentage of revenue, we now anticipate SG and A will be approximately 27.8% to 28.3%. For '25, we now anticipate slightly lower net interest expense of approximately 11,500,000.0 to $12,000,000 and we continue to expect our recurring tax rate will be approximately 26% to 27%. That concludes my review of the financials, and I will now turn the call back over to the operator for our Q and A session. Daniel? Our first question comes from Ross Sparenblatt with William Blair. Your line is open. Hey. Good morning, guys. Good morning, Ross. Hey. Just touching on the demand environment. Forgive me, but I believe you said you guys are expecting sequential order improvement from here? Yes. Yep. Maybe yeah. You can help parse out That's we're really talking first half versus back half, but we are looking at both a strong third and fourth quarter. Okay. So we think closer to $90,000,000 of equipment orders in the second quarter. Is that kind of the new run rate? I mean we did have a benefit from the OSB of 18,000,000 that was announced in May. And it feels like run rate was roughly flat just from a demand perspective. So when you talk to your customers, you get the sense that, you know, maybe the tariff uncertainty is invading and just the natural maintenance needs are finally catching up. I I would say that it's as we talked earlier, industrial processing was the segment that we thought we'd have the strongest bookings growth in. And now we've seen some of that in Wood Processing. And we think that in the back half, it won't be at the second quarter level, but it will still be good on the capital side. But really, where we anticipate strong activity is in the fiber processing product line. There are a number of large projects actually throughout the world that we have our eyes on, and we hope that the customers will let those orders in the third and fourth quarter. Okay. And then just on parts and consumables, the recent strength there, do you believe that's been restocking? Is that still just the elevated age of the installed base? Or is this kind of $180,000,000 revenue sustainable on a quarterly basis going forward? Yeah. We think that it's really that it's due to the age of the installed base and that we're anticipating. Although I'd say maybe a modest movement down because of the summer months here in the third quarter, but very modest, but kind of continuing as we've seen. Okay. So capital equipment orders start to pick up and you guys deliver, what's the sensitivity we should expect, the parts and consumables down mid single digits as the installed base catches up? I mean, you're you're you know, as you're you're talking about when the equipment gets installed and what kind of impact that'll have, now you're you're out to 26. Yeah. Also, I would say that typically happens as the overall operating rates start to increase, as the economy improves. And so we wouldn't expect to see any noticeable drop off in the aftermarket because the overall operating rates will increase. As they get more confident, start to make the investments in the new equipment and bring that online, it's normally because the economic conditions have improved. And so we would expect operating rates to be up. That's very helpful. Thank you, guys. I'll jump back in queue. Thank you. Our next question comes from Gary Prestopino with Barrington. Your line is open. Good morning, Mike and Jeff. I want to get some numbers here. Mike, do you know what the current assets and current liabilities were at quarter end? Sure. One second here. He's pulling out his trusty notebook here, so just give him Okay. A As an absolute, current assets were approximately $475,000,000 and current liabilities were approximately $200,000,000 Okay. Thank you for that. And then could we could I just get some more numbers surrounding the parts and consumables? It was in flow control, it was 75% this quarter versus what was it last year at this time? 72. And I'll just go through them, Gary. So flow control, 75 this quarter, 72 last year. Industrial processing, 76 this quarter, 59% last year. And in Material Handling, 58% this quarter, 57% last year. So then overall, as we mentioned, 71% this year, this quarter, and 63% in the comparing quarter. Should should we given the fact that a lot lot more of the orders now are capital equipment, and you're gonna start seeing that come into the into the the mix when in in 2026, really? Or is it starting back half of the year? Well, we're anticipating it to come for capital revenue to pick up in the back half of the year. And as I just was mentioning to Ross, you know, that is really what we're focused on there is in the industrial processing segment, in fiber processing, there are some meaningful projects, both North America, Europe, and Asia. We and, you know, if you recall, Gary, in fiber processing for projects, those are largely recognized on an over time basis. So once we get the orders in, we will start to recognize revenue. So we really really need to see those in the back half. Unlike wood processing, where I made a note, in my call that, you know, those orders, that we got in the second quarter in in, wood processing, that will be revenue in '26 because that is gonna be a point in time essentially when it ships versus overtime for the fiber processing. I guess yeah. Okay. That's helpful. But just kind of thinking out loud here, would because you're getting more capital equipment into the mix, would would you expect to see that percentage of aftermarket parts as a part percentage of revenue jump down sequentially in in Yes. It will it will it will moderate, and, there'll there also should be, an impact on the gross margins. It will moderate gross margins also. So we won't be, you know, we won't be running at 46% gross margins. I would kinda anticipate those to drop down into the 40 actually if we get if the mix comes in as as anticipated. And can you can you maybe just I don't wanna monopolize the call here, but just can you maybe just talk about some of the bookings that you're seeing? Is it you know, what what percentage of it is is replacement capital? What percentage of it is new capital to you in terms of new business? I would say, you know, what which which is often the case that, you know, it's always more heavily weighted towards replacement than it is, you know, new greenfields. Mhmm. Certainly, with the slowdown in Asia in particular, which is where a lot of the new greenfields, you know, over the last many years have taken place. But that being said, we're still getting greenfield projects in Eastern Europe, The Middle East and Asia, outside some outside of China. And then there are some there are conversions that are taking place where people are converting maybe modernizing a plant and putting our technology in, replacing a competitor's technology with ours. So we benefited from that a little bit last quarter. I would say the one area in the capital that is as people have heard us say over the last many years, really for the last ten to twelve years, that's kind of overperformed is the Engineering Woodside. Engineering Woodside continues to perform well. They're just finding newer and newer opportunities for the engineered products. And so that's kind of the fastest growing sector of the wood business. It happens to be one that we're very strong in. So we've really benefited over the years from that. The orders we mentioned that we received this quarter, those big orders were all in the engineered wood side. That's one that probably has probably some of the best growth opportunities, has and will going forward. Okay. And just one last question in terms of all of this new capital equipment, be it replacement or a new customer. Is there anything inherent with the newer equipment that would cause any kind of a lessening of the need of the aftermarket business from running these these this equipment in terms of the parts? Or is it still kind of It depends a little bit on the equipment. If you think on the engineering wood side, as they put this new equipment in, almost everybody is using our new knife design, our new knife technology, which really increases which really increases the aftermarket component of that. On some of the others, we're constantly trying to innovate our products to give the customer better performance, in some cases, longer life. Now there's a kind of total cost of ownership calculation that goes in that. But generally speaking, we would not expect to see any significant drop off in the parts consumables relative to new technology. While we're continually trying to improve the performance of these are very harsh rugged environments that our equipment operates in. And so you're not going to see a significant change in the life of that equipment, even though we constantly try to make it. Thank you very much. Thank you. Our next question comes from Adi Madan with D. A. Davidson. Your line is open. Hi. Thank you. It's Adi on for Kurt Yinger today, and there's a couple of questions from me. Going off the wood processing question, so obviously very encouraging news on that front. But outside of wood processing, how would you characterize the underlying demand for capital equipment bookings? And how are the conversations with customers going? Are you seeing customers more confident in placing orders? Well, we've going into this year, kind of towards the end of last year and into the beginning of this year, there were a lot of discussions and we had a lot of projects on the board. And what's happened is they as we said last quarter, many of them were delayed or paused because of all the craziness associated with primarily with the tariffs. The tariffs really created a tremendous amount of uncertainty globally. And so a lot of people said we're going to we're just going to sit on the sidelines here until this stuff clears up. Now as is always the case with these things, there's a winner and a loser. So we have some customers that will be winners associated with these tariffs, particularly our U. S. Customers that won't be subject to the same pricing pressures from foreign competition. So some our markets, some of our customers will benefit from these and others will be impacted by them. But I think what's happened is that there's been essentially kind of a capital equipment recession over the last two years. The prior eight quarters, we saw a pickup this quarter, which was the kind of the beginning of the third year of that. So we were pleased to see that. So the equipment is getting quite old and history tells us that they can't delay that forever. The equipment just starts to really be unreliable to them. So there's a lot of project activity out there. I think they're just waiting for these uncertainties to clear up and to get a little more visibility. But a fair amount of demand. And many of the markets we're in are forecasted to be quite robust over the next couple of over the next few years, 2026 and 2027 in particular. And so I think people just really want to see that we put whatever these trade negotiations are. We put them behind us, and everybody says, okay. This is what I have to work with now, and we go forward under those conditions. Okay. Got it. Yeah. That makes sense. So going off that, so are you seeing, like, pockets of strength or weakening demand across the portfolio whether by geographic or by any customer set that you can give us any color on? Well, I'd say as I mentioned a few minutes ago, we continue to see strength in certain parts of our wood group, in particular the engineered wood group continues to perform well. And if you talk to an industry executives out there, they are quite optimistic about the next many years, what the engineered wood business is going to look like. They just continue to find more and more applications for it. Probably our slowest market is China. The other parts of Asia are doing a little better, but China is quite slow right now. And there's a fair amount of, I would say, economic challenges that they're dealing with right now there. North America is the strongest. And then, of course, Europe is kind of sitting in between. It'll be interesting to see what happens in Europe because they've agreed to increase their deficit spending. They've agreed to increase their military spending by quite a bit. And that should spur a lot of the industrial base over there. But we're in the very early stages of that. So it's too early to know what kind of impact that will have on the market. Got it. That makes sense. And in the context of the Babini and GPS acquisition, can you give us an update on the current full year guide assumptions versus the prior as it relates to like tariff impact, FX, organic growth, and acquisition contributions to sales? Just specific to you're talking just Babini, Adi? Babini and GPS. Yeah. Yeah. So, you know, Babini's revenue in '24 was about 19,000,000 US. So it's it's small. It's a smaller transaction. In terms of we completed it actually early here in the third quarter. So I actually didn't bake it into the guidance. It'll have a small impact on the top line. And I would anticipate out of the gate here that it will be dilutive. We'll probably be dilutive a few cents in the third quarter and maybe also in the fourth. Yes. This acquisition was very strategic for us in that we've used we've incorporated their technology into our upcycling business, which is processing the waste and rejects from industrial processes, in particular, on the paper side. And so they have probably the world's best technology for dewatering. And so we really and we've had great success. We licensed it a few years ago. We've had great success with that technology. And so when the family decided they wanted to the owner passed away and his children decided they wanted to divest of all their businesses, including Bimini, it really made a lot of sense for us to bring that into the company because it's a key technology. And we actually think it has broader they principally focus on the food side. That's where they started. And but we think there are opportunities in other dewatering areas. So it was a it's a very small acquisition, but we think strategically, it will be a nice addition. Got it. That makes sense. And last question from me. How would you characterize your margin profile backlog and current bookings relative to the gross margin we've seen over the last few quarters? Yes. Eddie, I think what's most important there is in the first two quarters, we had very strong parts and consumable mix, which helped drive the gross margin to the 46%. In the back half of the year, we're expecting the mix to moderate. And I would say the parts and consumables probably be, say, mid-60s, 66, 67. So we'll have more capital in the back half of the year, and that will weigh on the gross margins. And as I was mentioning to Gary, I'd say, I'm looking at kind of in the 44% s in the back half of the year, our margins with the capital mix we're anticipating. Awesome. Thank you for your time, and good luck here in the back half. Thank you. Thank you. You. Our next question comes from Ross Sparenblick with William Blair. Your line is open. Hey gentlemen, just a couple of follow ups if we have a second here. You kind of ran through some moving parts on tariffs. Can you just help us think about that in the framework for your prior guidance for around $0.35 as of the first quarter? Yes. It's Ross, we really amazingly, frankly, from the standpoint of when we're doing that guidance, the guidance is essentially, it's the same. We're looking at kind of that 5 to 6,000,032 to 39¢. You know? So, you know, we're really I'm I was frankly, I was quite amazed when we rolled it up that the folks did such a good job at pegging where it had land. Okay. And that's just aluminum offsetting lower China rates, presumably lower China rates? Yeah. I mean, you you you know, the rates have come down a little bit in China, but you've got, know, obviously, now you heard we're talking about 15% up for all of Europe. We had the steel tariffs double from And so we've had puts and takes here. But unfortunately, when you add it all up, it hasn't changed much. Okay. And then just SG and A. I mean, looks like it's taken a little ahead of the informal guidance for 2025. I know we have M and A coming in there too. So can you maybe just give us a sense of where that should shake out? Is that closer to 28% of sales now? I think in the guidance range I gave, you know, we're I said that we'll come in at 27.8% to 28.3%. So yeah, 28% is probably a good marker there, Russ. Perfect. And then just any sense on the TNC mix of the acquisitions? Sorry. What was that? What what what The the and the renewals mix. I mean, last year, you guys had some pretty phenomenal deals that were highly accretive. It seems like that's been the focus. This one is really gonna be more towards the capital side. Okay. Of course, when we when now that now that we have it, we'll work hard to build that parts and consumables business. Absolutely. Alright. Thanks, guys. Thank you. Our next question comes from Walter Liptak with Seaport Research. Your line is open. Thanks. Good morning, guys. Good morning. I wanted to ask you had nice report for this quarter, and it was above your own guidance. And I think I know that was why that happened, but I wonder if you could talk about what went well this quarter that put you above guidance. Yes. The really, the primary driver was the continued strength in the parts and consumable business, and it actually beat our forecast. So the top line beat was driven by parts and consumables. And of course, that drove a strong mix towards parts and consumables, which drove a strong gross margin performance. So that at the end of the day, that was really what drove that EPS beat. Okay. And was it a market related thing? Or is this your people out there to go get more parts and sales market share? What do you attribute it to? Yeah, I mean, as you know, that's a key focus of ours. So every day our guys get up and their primary job is to go out and chase that aftermarket. So we're constantly trying to improve that. But I would say also that, as we said last quarter, the aftermarket is really kind of over performing the operating rates out there relative to where you would expect them to be. And we think that's the result of not making investments in equipment for the last two plus years. It's just like you drive an old automobile, you drive it two years past its useful life, you've to put a lot more parts in it to keep it running. And so I think it's a combination of both. Our guys out there working hard trying to capture every dollar they can find and having some success in doing that. But also, it's just that there's more to chase out there because the equipment that's running is really getting old. And that's why we think there's going to be a capital buying cycle that has we had a good start this quarter, but we think there should be a pretty lengthened capital buying cycle. Whether it continues this year or trips into next year, they're going to have to start making investments because they haven't for a few years now. Okay. Got it. Okay. That makes sense. So when you're when you're thinking about the third quarter and that parts mix coming down from where it was this quarter, I think that makes sense just because of the, you know, maybe more capital projects shipping. But did you factor in in the third quarter, like, a deceleration in parts sales? It it it was very it's very modest, Walt, and it's really I'd attribute it to Summer. Summer. People take vacations. They don't buy. It's very modest. Particularly in Europe. In Europe, you know, they take those extended summer vacations, and so there's nobody there to place orders. Okay. Okay. Good. Okay. I appreciate it. Thank you. Thank you. Our next question comes from Adi Madan with D. A. Davidson. Your line is open. Hey, just wanted to follow-up contributions you're expecting from a g from GPS acquisition as well for 2025, like you broke out for Babini. Any color on that? Yeah. So really, when we say Babini, know, that we're kinda talking about both of those. GPS is a small manufacturer of of gearboxes that they primarily supply to Babini. They do sell to the outside world, but they they their principal customer is supplying to to Babini. So when we talk about the the, you know, the the combination of two of them, we just call it Babini. Got it. Thank you for that. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Jeff Powell for closing remarks. Thank you, Daniel. So before wrapping up the call today, I just wanted to leave you, as I always do, with a few takeaways. Despite the weaker economies in certain areas of the world and the global trade uncertainties, second quarter was strong in terms of capital order activity and relatively stable with respect to our aftermarket demand. Solid execution by our operations teams led to excellent gross margin performance, and our commercial teams were very successful in winning key projects during the quarter. We have strong market position and expect strengthening demand as the second half of the year and project activity gains momentum. And with that, we want to thank you for joining us today, and we look forward to updating you next quarter. This concludes today's conference call. Thank you for participating. You may now disconnect.