Oct 28, 2026 earnings call — Acquisitions boost growth; record margins and backlog
Raised full year adjusted EPS outlook by $0.35 to a range of $7.23 to $7.38 per share.
Revenue $0.8B (est $0.7B) · EPS $2.05 (est $1.82)
Key quotes
"We expect these acquisitions to contribute approximately $0.30 per share to 2026 earnings."
"Sales of $344 million increased 27% in the quarter with core sales up 9.5%."
"Core FX neutral orders were up 20% year over year and up 8% sequentially."
Analyst Q&A 7
PSI upside and M&A approach
Q (Jeffrey Sprague · Vertical): Analyst asked whether the endpoint for PSI is now higher than expected, if the upside is bigger and quicker, and whether the company will seek more deals that need fixing rather than only growth buys.
A: Management said the upside is higher than they previously thought and they expect to reach $60 million to $155 million EBITDA in a faster timeframe with higher margins. They said they look at deals through their business system and are open to both well-run growth businesses and turnaround opportunities.
"I think we have that 5-year, 5-year mark where we are going to go from $60 million EBITDA to 155 million in 5 years." — Alejandro Alcala (CEO)
Canada/UK divestitures and dilution
Q (Matt Summerville · D. A. Davidson): Analyst asked if there are more major divestitures to come, and how the Building Services and Utilities sale will affect margins and how much Trillium can offset that dilution.
A: Management said there are no more substantial divestitures they are planning right now, while noting they review the portfolio annually. They said the Building Services and Utilities business is roughly $160 million in revenue and at fleet average margin, Trillium is $115 million with below-fleet-average margin, so there will be some dilution but they expect to offset a good portion with Trillium; they expect the divestiture to close near the end of the first quarter.
"you look at that and compare to Trillium is $115 million in revenue with below fleet average margin" — Richard A. Maue (CFO)
Chemical market regional outlook and PSI targets
Q (Nathan Jones · Stifel): Analyst asked for more regional detail on the chemical market and the outlook for recovery, and then followed up asking whether PSI's five-year EBITDA target will be higher than $150 million.
A: Management said they expect Europe to remain flat, while the U.S. and the Middle East are the most interesting markets, with the U.S. holding up due to a natural gas feedstock advantage; they also said about 70% of their chemical exposure is U.S.-based. On PSI, management said they expect it to grow in the 4% to 6% range and to leverage at about 35% to 40% after the 3-year mark.
"I think, it will grow in the 4% to 6% range." — Alejandro Alcala (CEO)
Acquisition margins and core leverage
Q (Myles Walton · Wolfe): Analyst asked whether PFT acquisitions were about 100 basis points dilutive and how the core business achieved about 300 basis points of margin expansion on core growth.
A: Management said margin performance was exceptional and that their core leverage rate in the quarter was just north of 40% in many businesses. They said aerospace and advanced technologies delivered strong operating leverage (just above the high end of their 35% to 40% range), PFT is already accretive as they exit the year, and they expect continued solid incremental leverage as they mix into higher-margin, higher-growth markets.
"In the aerospace and advanced technologies sector, we were just above the high end of our 35% to 40%." — Richard A. Maue (CFO)
PFT wins: cryogenics, power, pharma
Q (Damian Karas · BMO): Analyst asked for more detail on recent PFT wins in cryogenics, power, and wastewater and what they are seeing in those markets.
A: Management said cryogenics demand is driven by space launch work on rockets and launch pads and by general aerospace environmental testing in factories. They said power momentum is driven by U.S. natural gas combined cycle turbine expansion, and pharma is seeing U.S. reshoring and capacity expansion; they expect these markets to continue into 2027.
"If you think about those markets, Damian, cryogenics the 2 main markets are space launch, not only on the rocket itself, but on the launch pads, and those build outs continue." — Alejandro Alcala (CEO)
Missile program demand and contracting
Q (Andrew Steinhardt · BofA): Analyst asked about missile demand, the size and growth of the munitions/missile opportunity, and what the subcontracting/contract process looks like from their view.
A: Management said they are in about 15 missile programs and this year have a jump-off point around $35 million, mostly power and microwave products, and they expect next year to grow 40% to 50% with projections of 4x to 6x expansion over time. They said they see increasing RFQ activity, receive RFQs for tranches of multiyear opportunities, provide updated quotes, align with customers, and then secure contracts and purchase orders at different times across programs.
"Just we said, we are in about 15 missile programs I think our jump off point this year is around $35 million, mostly our different type of product power products and microwave products." — Alejandro Alcala (CEO)
PFT end-market mix and Middle East exposure
Q (Justin Ian Ages · CJS): Analyst asked for the current relative contribution of each PFT end market and for the company's exposure to the Middle East given ongoing conflict.
A: Management gave a snapshot of the PFT mix: chemical is now close to 20% (down from about 30% previously), water/wastewater is around 14% to 15%, general industrial is about 20%, and power (gas and nuclear) is about 15%. They said Middle East exposure is mainly in PFT and is less than 5% overall, shipment delays earlier in the year have mostly normalized, and higher freight costs have been more than offset.
"Now we have it close to 20% in chemical. Water wastewater is around 14% to 15%." — Alejandro Alcala (CEO)