Chief Executive Officer of Twin Disc, along with Mr. Jeffrey S. Knutson, the company's Chief Financial Officer. Twin Disc shares trade on the NASDAQ under the symbol TWIN. Gentlemen, the floor is yours. Thank you, Mark. Welcome, everyone, and thank you for spending some time with us this afternoon. Before we start, just as always, the safe harbor and non-GAAP and the definitions that I'm sure you all have time to read and know very well. Just a couple of the takeaways we want you to leave with on who we are. For 100 years, we've been a leader in the global transmission power technology, and that's continuing on with our IP-protected, hybrid, and electric solutions. You'll notice at the end of the presentation that we are well positioned to benefit from the increased defense spending, particularly in NATO, on land business in Europe, and some of the marine business that the U.S. Navy is pushing very hard. You'll also get to take away that we're making a lot of enhanced margin enhancement in operational initiatives to improve margin as we go forward. We'll talk about some of our acquisitions, the successes we've had, primarily with the last three that we've made, two in Europe and one in Canada. This sets us up for strong cash flow generation as we integrate these into the business and start to grow from where we are today. Just a quick overview of Twin Disc. As I mentioned, we've been around since 1918. Always been headquartered in Wisconsin. The last two years up here in Milwaukee. Have about 1,000 employees around the world. Our two reporting segments are manufacturing and distribution. We finished last year just under $341 million with a gross margin of 27.2%. For a company our size, the graph on the right is probably a bit surprising. North America only represents 27% of our business. Our largest end market is Europe, and that's been primarily driven by the two acquisitions in Europe, but also a lot has to do with the growth of Veth in the Netherlands, which we'll touch on in a bit. Asia Pacific is on balance, the same size end market for us as North America, and then all others at 14%. When we look at our business historically, we've divided it land-based and marine-based. With the Veth acquisition in 2018, that definitely, traditionally we'd be around 50/50, and it would pendulum back and forth depending upon how end markets were doing. Since the acquisition of Veth, we've been consistently in that 60% range of marine, our marine transmissions, propellers, surface drives, and the Veth product line. Our land-based transmission system makes up just under a quarter, 24% of our products, and industrial, which is the one we focus on for growth, is at 12%. Just a quick timeline on what's been happening. We really went from 1918 to 1999 without making a true acquisition. In 1999, we acquired Technodrive in Italy, which was a mini version of Twin Disc, marine transmissions, power take-offs, industrial products. Soon after that, we did the Rolla propeller acquisition in 2004 to couple up with our surface drives, but really didn't do much again until 2018. A lot of what happened since 2018 was a real impetus to diversify away from oil and gas. Between, I would say, that 2004 timeframe and 2015, we had gone through a lot of cycles in oil and gas, both offshore marine in the Gulf Coast of the U.S. and Southeast Asia, but also pressure pumping and land-based production. In 2015, we decided that we really wanted to develop a strategy to diversify away from oil and gas. The first thing we did was acquire Veth in the Netherlands, which was 100% marine business, not focused on oil and gas, very much focused on Northern Europe. We'll see in a couple of slides how we've taken that product outside of their home markets. In the last 18 months, we followed up very quickly with two back-to-back acquisitions, Katsa in Finland and Kobelt in Vancouver, Canada. In a couple of slides, we'll show the impact that these will have if we can do the same thing that we've done with Veth in the Netherlands. Just to give you a quick picture of where our products end up, obviously, marine and propulsion systems end up in boats. This is a mega yacht built in Europe, but it could easily be a workboat, like a tugboat, pushboat, patrol boat, things like that. The products can go, we can move them from one to the other. They just have different ratings. We are well positioned in the global marketplace, both for just diesel, but as we move into hybrid, our hybrid controller is ahead of the competition. In land-based transmissions, we have three primary markets. The one shown here is airport rescue firefighting, or known as ARF, in the market. We are the number one supplier to the two leading truck manufacturers, Rosenbauer in Austria and NAFCO in Dubai. The other two segments are onshore oil and gas pressure pumping, with the two main markets being the U.S. and China, and a third one being South America with Argentina. Our third market would be our legacy military market. A fourth one that's coming up is just the new military market, which we have with Katsa, and we'll get into that. Probably our most fractured market is industrial. Many different products, many different markets, many different competitors. This is the area of the business that we see the most growth and acquisition opportunity. It's only 12% of our business right now and was really one of the drivers at Katsa and Kobelt to grow this business to a substantial size. It's on par with our marine propulsion and transmission business. A couple of the markets that have been, or one of the markets that's been, I would say, the driver for our backlog and optimism going into this year and the next few years is the defense spending. Just a 13% year-over-year increase in defense that was in the budget. The big beautiful bill has added more to that, particularly for the Navy. NATO is 150% as a percent of GDP increase year-over-year. Two things are happening for us. Land-based in the NATO countries, we've seen a lot of orders for transfer cases and drop boxes for all-wheel drive vehicles, 4x4, 6x6, 8x8s. Europe is primarily concerned about defense of a land invasion from Russia. In the U.S., the increase in our backlog and projects has been marine-related, autonomous vessels for the U.S. Navy as they look to counterbalance China's influence in the South Pacific. These are the two, I would say, if you had to point to the two drivers in our increase in backlog, which is up 15% year-over-year, and 45% as the defense part of the backlog is increased 45% year-over-year. That pipeline number on the lower right continues to increase. Just looking at some of our strategies quickly, as I mentioned, we've been in roughly the same markets for over 100 years, typically driven by a diesel engine only. We've seen a lot of impetus in the last five years to develop hybrid and fully electric solutions. We've spent five years plus developing our hybrid marine controller. It is state of the art. It allows for dual input, single output, and multiple configurations. We've seen a lot of traction with this in the market in some specific areas, workboats, patrol boats, and yachts. We're working the same problems, same solution in our industrial and transmission space. The only thing that's really hindering this, I would say, are supply chain issues with batteries and motors, and really the inflationary costs of these products. I would say that the tariffs aren't helping the already inflationary aspect of these components. We'll cover this in a couple of slides. One of the other strategies is to grow our acquisitions outside of their home markets. We'll show what's happened with Veth in the few years since we've acquired them. We're looking to do this with both Katsa and Kobelt and any future acquisitions that we bring on board. No company has every facility completely capacitized evenly. We're no different. We have some facilities bursting at the seam, others who have a lot of capacity. We had plans in place to deal with that, but the tariffs have put them a little bit on hold. We may need some facilities that we thought we weren't going to need just based on growing business, but also having to assemble and test in an economic zone to try to avoid tariffs. We're rethinking that, but we still believe that we have the capacity on the team right now as far as facilities, the footprint to get us to $400 million. It would be acquisitions to get us to $500 million. Regardless of whether it's hybrid or electrification, there's been more and more focus with truck designers, boat designers, naval architects to supply the complete system. Certainly, our work in our control systems has helped with that. As we make more acquisitions, we're always looking to what components we can add to the system, whether it's for a boat, a truck, or construction equipment. What can we add as far in content to make us more attractive to the customer? The M&A priorities would be to complete those systems, whether it's land-based or marine. What we're really focused on, again, as I mentioned, is growing that industrial business to be on par, the same size, the same scale as marine transmission or propulsion. One of the ways to leverage that, and I talked about the hybrid, and the multiplier is only getting more, I would say, with tariffs. If you pick a vessel I have in my mind, if it was two $15,000 marine transmissions and a $5,000 control system for $35,000, that would be our content in the vessel. For a similar size vessel, same application, if it goes to our hybrid system, you're looking at $300,000- $380,000. So you're looking at a 10x multiplier. There really is a lot of growth potential. I would have said we're, you know, not all markets are going to be able to bear this additional cost in their space to do functionally the same thing, but do it a different way. We're seeing a lot of rethink of where this is going to be deployed. Is it being legislated? Are there people who are using this as a differentiator, for instance, an echo ferry who wants to be fully electric or operate silently? Is it being legislated in a harbor that you have to be zero emission or, you know, low noise or zero noise? We're prioritizing based on a lot of these inputs and factors that are changing on a monthly, quarterly basis. We think that there's absolutely a future headed to these more sustainable platforms that right now they cost more, but we think that technology and some advances will bring these more in line where it's not so much of a burden to pass on to the end user. One of the things that we've been working on to make this kind of to be the leader and prove it to ourselves is we've taken our 48-ft test boat in Australia. It's a Riviera. We've completely gutted the propulsion system and all the electronics, and we are installing a hybrid system in it that we've completely designed. We've selected the engine. It's our gearbox. We have the power take-in, the electric motor we specified, all the batteries and the inverters. We're looking at how we can commercialize this and make it less expensive and make it more attractive to the end user and the market and not have as much of a cost premium. This is something that we're actively working on right now, and we will keep the market updated on how we're doing. As John mentioned, we have had, and you can see it here, incredible success with the Veth acquisition and their growth by allowing our global network to take a very innovative, high-quality product and make it really an attractive solution around the world in new markets and new applications. You can see we're looking at, through last fiscal year, 23% CAGR coming out just after COVID in fiscal 2022. We see a great growth trajectory in Veth. We feel like that playbook is going to work similar magic on the Katsa Oy and Kobelt acquisitions. A brief overview of the footprint John mentioned before. We've got facilities around the world, which we continually review for optimization. Are we utilizing them appropriately? What can we do to balance production? Now with the tariff situation we have, it provides us with some real options in terms of moving production to optimize the tariff situation depending on where that end market is. While it makes us relatively complex for a $350 million public company, it now is giving us some good opportunities to optimize that. As we look at future M&A opportunities, I think the playbook remains the same. We want to continue to diversify away from oil and gas. That's a great market for us, and we do very well there, but it also is very cyclical. What's worked well is the diversification in our recent acquisitions away from oil and gas, making us more stable and predictable, looking for companies that are financially achievable for us. In that, say, $35 million- $60 million range is something that we feel comfortable, that we can integrate, we can financially manage in companies that are within, let's say, our wheelhouse in terms of the products that they provide, the markets they serve in, the geographies that they're in, and the applications. Typically, regional companies, often family-owned, that we feel like we have a great opportunity to help them grow globally as they fit into our portfolio. As John mentioned, Katsa and Kobelt, two recent acquisitions, some of the details here. I think the key thing is these are both very successful companies in their home markets with very respected product lines and very strong management teams. Those are all really ingredients for success as we bring them into our group and allow our global service and support network to help them grow around the world. As we come off of those two acquisitions, recent acquisitions, we look at our capital allocation priorities in this way. I think right now we'd like to bring debt down to, again, a very low level. We did that after the Katsa acquisition. We did it after the Veth acquisition, really preparing ourselves for the next acquisition. We're really right now in the integration phase of the last two, but preparing for the next one and continuing to chase that next one. While we're doing that, we'll continue to invest in organic growth. All the things that John mentioned in terms of the military, the global defense spending will require us to invest in some capacity, some machine tools to meet that growth. We'll continue to chase acquisitions in a similar strategy that we've applied in the last few, and always reviewing our dividend in terms of where that fits. You know, we brought the dividend back a few years ago. As far as we're concerned, it's back to stay, and now we will look at when does it make sense to increase that as we balance that against all of our other capital priorities. Just bringing it back to that first slide, leaving the key points with you, we're a leader in global power transmission technology. We've got some great market tailwinds that we are poised to benefit from, very strong backlog coming into fiscal 2026. We see margin improving, and we see a lot of initiatives in place that will continue that trajectory. We've got a really good track record of integrating acquisitions, and I think we've seen, and the board has seen, how beneficial that can be in a relatively short period of time. That remains a key part of our strategy, and as we execute that, that will drive volume, that will drive cash flow. It will improve our balance sheet and allow us to take that next step. I think with that, we can open it up for questions. You've been active on the M&A front with acquisitions like Kobelt. Can you expand on how these integrations are progressing and how they've strengthened your market position and product offering? Sure, Mark. We've typically, when we do an acquisition, the first 12 months, or I would say the first six months is very heavy with finance and IT, getting the, because typically they're small private companies. They have not done SEC reporting. They haven't done monthly closes. We're really, we've just finished the first year with Katsa doing that, and it went very, very well. We're kind of midstream with Kobelt. The other area where we focus on is with IT, making sure that their systems are secure, their data is secure, and that there's not a backdoor from the acquisition back to us. That takes up the lion's share of the first year. What we then do is we get the product people and the engineering people and the sales people together and look at where we, you know, the synergies that we basically put down on a spreadsheet and thought about at a high level when discussing it before the acquisition. We give it to some people to make sure that we can do it. I'm happy to say that coupled with our reorganization of the company, we have an individual running each business, one running marine, one running propulsion, one running industrial, one running transmission, with a P&L and a full P&L and a factory reporting to them. We've had two gentlemen from Katsa, one from Finland, one is running the industrial business. Through the acquisition, we got him, a very strong person to run engineer and salesman by trade. That has gone very, very well. We're well on the way to rationalize the two product lines. Finland is winning on a lot of this stuff, which is great. They're not subject to tariffs around the world. That's been beneficial. The other gentleman in Finland is running our traditional Twin Disc plants. We've consolidated the plants under the not propulsion plants. The two plants are reporting up to him. The one with Katsa has gone very, very well so far. It's helped grow our business defense-wise in Europe with some of these customers because they realized that Katsa may be running out of capacity, but we can move some of the product and that demand to our other facilities within the NATO countries. This has proved, bringing two, this is one case where one plus one does not equal two, it equals three. We've just started with Kobelt going very well. They haven't done a full year yet of four-quarter closes, but we've done training on their product line for our people in Australia and Southeast Asia. We've done the U.S., and this week we're doing training for the sales team in Europe. The next thing is to talk with, they have a very extensive, even though they're a very small company, they had an extensive dealer network around the world. Right now we're beginning the discussions with the individuals on how this rolls out. Certainly we have our distributors around the world that think that they can fill some pretty good gaps and grow this business. So far, Mark, we're very, very optimistic. Still very early on everything but finance and IT, but so far going very well. Can you talk about which end markets are the strongest contributors, and how diversification supports more consistent performance over time? Sure. If you go back to pre-2020, pre-COVID, our results were very much reliant on oil and gas, and oil and gas in the U.S. We weren't nearly as diversified. We didn't have Veth, Katsa, or Kobelt. We could have really, really great years and really, really bad years. It was all beholden to one market. Hence the desire, the strategy, and the vision to de-emphasize oil and gas and add other product markets. Right now I would say everything coming out of COVID had challenges, and they were mostly supply chain challenges, resource challenges as far as people. I would say that all of our markets this year are poised to have, I mean, last year they had a better year than the year before. Some were flat, up single digit. None of them went backwards with the exception of oil and gas. That's because there were fewer units to China, fewer rebuilds in the U.S. It didn't knock us to our knees the way it would in the past. We're anticipating all of our markets are going to have a better year this year than last year. The markets that are truly going to have much better performance year-over-year is defense. What I talked about at the beginning, the Navy spending in the U.S. on autonomous vessels, where we're sending these boats that have three, four, or five of our marine transmissions, they're $150,000 each, and it moves the needle very quickly. In Europe, it's the truck spending in Finland, the company in Finland, that is going to be the biggest year-over-year growth. Those are the two that are driving it, but we're expecting growth in all of our markets. The caveat to that is that the 232 Tariffs aren't at 50% for very long. That primarily affects business in the U.S., and it makes us, I would say, more uncomfortable. More uncomfortable in the outlook, but more uncomfortable in blanket stocking orders, and everyone's just going to be buying exactly what they need, ones and twos, and not placing orders for three to six months. Now we've seen growing traction in defense and government programs. Can you share more about the pipeline there and how Twin Disc is positioned to capture long-term opportunities in that space? Yeah, certainly the biggest growth that we're seeing, you know, since 9/11, the focus has been on desert and mountain warfare, trucks and tanks, planes obviously. We really haven't done much for the fleet. We see that changing rapidly as far as what we need to do to catch up to maintain stability in the South Pacific. Autonomous vessels is just one, you know, the growth in autonomous vessels, but replacing a lot of the fleet. Particularly, when it gets into our range, you know, boats that are 40- 300 ft in a certain style, we're the only U.S. marine transmission manufacturer. We're in a good position, provided we're not overly greedy and don't screw up. This is our market. This is where historically we excel. We see this for the next five years, that this is going to be a very, very good market for us. Thankfully, the supply chain for this is not heavily reliant at all on imports. This is not necessarily tariff impacted at all, which is nice. There's predictability there on what our input costs are, so we can give our customers predictability on what their cost is going to be. Yeah, with Katsa, it's a skill, I think we've acquired a skill set that we used to have more of, and it's design engineers working with vehicular OEMs off-road on custom solutions for them. I absolutely believe that our success with Patria in Finland is going to spill over to other clients, other customers in other regions, potentially non-NATO, whether it's Southeast Asia, Australia, the U.S. military, that we're going to be able to grow the Katsa Oy design business. Where we manufacture it, it may be Katsa designs, the Finnish engineers design it, but we build it, assemble in the U.S. Certainly, the capability and what we have to bring, we had drifted mostly to, in defense, it had been mostly marine. The Katsa acquisition brings us squarely back into, I feel that we can be very, very competitive in trucks again. We hadn't been for a long time. Now, as you've been investing in hybrid and electrification solutions, where are you seeing the most customer interest, and how do these initiatives differentiate Twin Disc in the market? Yeah, I said the most, I would say, it depends on the quarter, but there's the most, it's pretty even on the interest. Where, ironically, we've seen the most traction is in marine, which is interesting because it's the only market where you're not slowing down or going downhill or braking. You're never regenerating electricity and recharging the batteries. We've had applications and we've had prototypes out there in our transmission and industrial markets, but we're getting the most traction in marine. I think it's really because it's being legislated and asked for, either legislated or asked for the most. Whether it's, you know, a completely electric ferry like Maid of the Mist at Niagara Falls, lots of applications and requests for Australia and New Zealand for fully electric and hybrid ferries. In California, which has a lot of regulations pushing it this way, that's where we're seeing, I would say, the most success in the numbers of applications we do and what we have on order. Marine is going to be, for us, the fastest growing part of our hybrid and electrification efforts. I think that's about all the time we have. It's been a fascinating discussion. Gentlemen, thank you for joining us today. Thank you. Thanks, Mark.