Oct 30, 2026 earnings call — Record adjusted EBITDA and pricing to offset inflation
Reported $90 million adjusted EBITDA, the highest in company history for a second consecutive quarter.
Revenue $0.5B (est $0.5B) · EPS $2.39 (est $2.10)
Key quotes
"Net sales increased 10% year over year, driven by a 7% increase in price and mix, resulting from successful pricing actions necessary to offset persistent inflation."
"Sales volumes increased 3%, driven by global net share gains that exceeded the high end of our target range, with Asia Pacific once again being the largest contributor."
"Through the first three quarters, operating cash flow totaled $48 million, below recent periods, primarily due to higher working capital."
Analyst Q&A 6
EMEA margins, SG&A, seasonality and pricing
Q (Mike Harrison · Seaport Research Partners): Asked whether recent EMEA margin strength is a new floor and could rise with volume or deflation. Also asked if the SG&A improvement was one-time and about Q4 seasonality, downtime by region, and pricing realization.
A: Management said three things drove the EMEA margin strength: network actions including the Germany plant closure and right-sizing, exiting unprofitable contracts, and winning good new business; they hope this is a floor but are pursuing further transformation and network efficiency. On SG&A, they said there was nothing unusual in the quarter, they raised incentive compensation a bit, and they expect to maintain SG&A in the low to mid-20s percentage range into 2027. For seasonality, they expect a typical Q3-to-Q4 holiday drop around 4%, see North America stronger, Europe similar, and Asia-Pac (notably China) possibly more pronounced; they said some index adjustments and targeted pricing actions will occur in Q4.
"The combination of those three things, I think, are all helping." — Joe Berquist (CEO)
Customer restarts and gross margin outlook
Q (Jonathan Tanwanteng · CJS): Asked how much customer restarts helped and whether they cannibalize other business as production ramps. Also asked about gross margin trajectory beyond Q4 and the outlook for input prices.
A: Management said the customer restarts are a North America / U.S. phenomenon and are not expected to cannibalize their other business; metals production rose and overall industrial production in North America is showing relative strength. On gross margin, they said they target gross margins above 36%, experienced unexpected raw material inflation in Q3, and expect to be sustainably above 36% but it may take a quarter or two to get there. They also noted typical Q3-to-Q4 seasonality can reduce gross margin a point to a half point sequentially due to lower manufacturing absorption.
"To Joe's point, I think the overall goal here is continue to focus on gross margins above 36%." — Tom Coler (CFO)
Asia pricing and raw material supply
Q (Pete Osterland · Truist): Asked if they can fully pass inflation through in Asia without losing share and how long the lag would be versus other regions. Also asked if any raw materials raise security-of-supply concerns for 2027.
A: Management said Asia-Pacific is more price competitive, but they expect to return Asia margins to historical levels and typically see a one-to-two quarter lag when chasing inflation there. On raw materials, they said supply has been a challenge recently but they are confident they can continue to supply their full portfolio reliably worldwide, they can flex the global supply chain, and they would explore alternative technologies if needed.
"Right now, we are confident in our ability to continue to supply all of our portfolio reliably to everywhere in the world." — Joe Berquist (CEO)
Supply issues vs post-COVID and price dynamics
Q (Daniel Rizzo · Jefferies): Asked whether supply-security issues are more acute now than in the post-COVID period. Also asked how pricing behaves if input costs flatten or decline—do they give concessions?
A: Management said the post-COVID period was worse and that many companies learned to reroute logistics then, so current conditions are not as bad as that period. On pricing in a deflationary environment, they said margins can expand but changes lag due to index pricing and operational mechanics; they do not treat products as pure commodities and manage to a margin percentage rather than giving everything back.
"I actually think it was worse in that post-COVID era." — Joe Berquist (CEO)
Volume outlook, share gains, and M&A focus
Q (Arun Viswanathan · RBC): Asked whether Asia will still grow despite tougher first-half comps and where Americas share recovery stands. Also asked about the M&A opportunity set and capital allocation priorities.
A: Management said they achieved positive volume growth in Asia this quarter and expect at minimum a flat underlying market there, noting 13 quarters in a row of net share gains in Asia and expecting positive volume, revenue, and EBITDA in 2027. On M&A, they said there is a robust pipeline, they remain disciplined, and they prioritize deals that add capabilities or portfolio expansion (including technology and sustainable materials) and that can be integrated globally.
"we would expect in 2027 to have positive volume growth, positive revenue growth, and positive EBITDA growth overall" — Joe Berquist (CEO)
Incentive comp accounting and customer focus
Q (David Silver · Freedom): Asked how incentive compensation is accrued and whether accruals are smoothed across quarters. Also asked about customer retention, segmentation, and how resources might shift regionally over the next few years.
A: Tom said they set an annual incentive budget aligned to targets and adjust accruals through the year based on performance and forecasting, with accruals running through SG&A and generally relatively smooth rather than lumpy. Joe said churn remains low single-digit, they have re-segmented customers to tailor service (using digital tools and activity-based costing), and they are focused on long-term customers while optimizing profitability by customer; on regions, he said EMEA has been weak and they are pivoting toward Asia where they plan to spend more.
"We do set a budget every year for annual incentive comp for our short-term incentive comp program." — Tom Coler (CFO)