Thermon Group Holdings, Inc.

Greetings and welcome to the Thurmond Group Holdings fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, Yvonne Salem. Vice President of FP&A and Investor Relations. Thank you. You may begin.

Thank you, Diego. Good morning, and thank you for joining today's fiscal 2022 full-year conference call. Earlier this morning, we issued an earnings press release, which has been filed with the SEC on Form 8K, and it's also available on the Investor Relations section of our website. Additionally, the slides for this conference call can be found in our IR website, under News and Events, IR Calendar, Earnings Conference Call Q4 2022. During the call, we will discuss some items that do not conform to generally accepted accounting principles. We have reconciled those items to the most comparable GAAP measures in the tables at the end of the earnings press release. These non-GAAP measures should be considered in addition to and not as a substitute for measures of financial performance reported in accordance with GAAP. I would like to remind you that during this call, we might make certain forward-looking statements regarding our company. Please refer to our annual report and most recently quarterly report filed with the SEC for more information regarding our forward-looking statements, including the risks and uncertainties that could impact our future results. Our actual results might differ materially from those contemplated by these forward-looking statements, and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as might be required by law. Now, I would like to introduce Bruce Thames, our President and Chief Executive Officer, for his opening remarks.

Thank you, Yvonne. Thank you all for joining our call today. We appreciate your interest and investment in Thermon. Following my remarks, Kevin Fox, our CFO, will provide more detail on the financial results for our fourth quarter of fiscal year 22 and full year. I'd like to begin by turning to slide three to reflect on our full year fiscal 22 results. Fiscal year 22 marked a year of recovering top line with solid leverage on the bottom line underpinned by strong execution by our team. Top-line revenues grew 29% in the year, while adjusted EBITDA growth of 61% expanded at more than twice the rate. Free cash flow for the year was $24.2 million, which represented 120% of net income. More importantly, we advanced our long-term strategic initiatives of diversified end markets, developing economies, and technology-enabled maintenance. During the year, we were able to achieve 44 percent growth in diversified end markets to achieve 60 percent of revenues in non-oil and gas verticals. We also saw a solid continuation of market uptake of the new Genesis network with six system purchase orders to date as customers seek to streamline and more effectively manage their assets. In addition, we launched numerous new products and software ranging from a market-leading 3D design software to products for commercial, rail and transit, and environmental heating applications. These new products were instrumental in driving the growth seen in the diversified end markets during the year. I also want to thank our teams around the globe for their commitment to safety. Fiscal year 22 marked the second consecutive year of zero lost time incidents and we were recently awarded best in class and recognized as a mentor company for our commitment to safety out of over 1,500 contractors. Thermon also advanced our commitment to sustainability and ESG during fiscal year 22. Many of our products actually reduce emissions, lower energy consumption, and shrink the carbon footprint, helping our customers create more sustainable operations. During the year, We also expanded our disclosures on a wide range of environmental and social issues, assigned clear accountability within our corporate governance structure, and increased the overall diversity of our team. Our teams accomplished all of this while facing widespread supply chain disruptions, 40-year high inflation, and a war in Ukraine. Overall, I'm very proud of this team and their achievements in fiscal year 22, and look forward to continuing to work alongside them to deliver profitable growth as we execute our strategy. Turning now to slide four on our end markets. To begin, I want to highlight the advancements we've seen in our efforts to diversify end markets during fiscal year 22. We were able to drive growth in diverse end markets by 44 percent almost three times that of traditional oil and gas end markets during the fiscal year. As a result, oil and gas now represents just 40% of our mix, while the majority of our business is driven by a wide range of diverse end markets with GDP plus growth opportunities. Some great examples include power, growing by 260%, which included the impact of winter storm Uri along the Texas Gulf Coast. We see continued opportunities in the power sector going forward, driven by the transition to electric from other traditional energy sources. We also grew rail and transit by 49% year over year, with the launch of the Hellfire Blizzard duty and expansion of our business development team. Our commercial business grew by 67%. driven by the launch of a low-smoke, zero-halogen heat tracing offering in Europe, combined with our D-profile freeze protection heating cable for the global market. Our marketing campaign and channel development in food and beverage resulted in 27% growth in the year. In addition, these efforts, we continue to see strength in the chemical and petrochemical sector, which has grown to become our largest end market. Geographically, we saw the U.S. and Canada lead the recovery in FY22, with Europe growing modestly and Asia lagging due to COVID lockdowns throughout the year. Turning now to slide four for our Q4 results. Our strategic pillars around in-market diversification, developing economies, and technology-enabled maintenance combined with strong execution have been key to our success this quarter and fiscal year. fourth quarter exceeded our revenue expectations despite the supply chain challenges that persist. Revenue finished the quarter up roughly 40% year over year at $102.6 million, driven largely by strength in North America. Excluding the one-time labor contract, which represented $12 million in revenue during the quarter, revenue grew by 24% year over year. This marks the third consecutive quarter where revenue has exceeded our expectations, highlighting continued strength in the recovery. This quarter, we also saw price increases in productivity essentially offset inflation, with $18.3 million in adjusted EBITDA for the quarter, up 214% over the prior year quarter. The balance sheet is also in very good shape with net debt to adjusted EBITDA at 1.4 times at year-end, finishing at the lower end of our projected range. We believe this positions us well to pursue inorganic growth opportunities that augment our three strategic platforms. Free cash flow was particularly strong at 13.2 million, representing 152 percent of net income for the quarter. Adjusted EPS finished the quarter at 31 cents a share, up from two cents a share in Q4 of last year as the team tactfully balanced cost management with continued investments for growth. The momentum we are seeing sets the business up well for continued success in FY23 and beyond. Turning now to slide six on orders and backlog. We continue to see strong growth in incoming orders with bookings growing 47% in the quarter and 39% over the trailing 12-month period. Excluding the one-time contract, our Q4 book to bill was a very strong 1.2 times and has been positive for seven of the last eight quarters. In addition, our quotation volume was up 76% year-over-year and 87% sequentially. Backlog is up 37% year-over-year and 7.2% sequentially. Based upon the level of activity, we continue to see opportunities to drive growth and anticipate a return of capital spending during the second half of this fiscal year. With that, I'd like to turn the call over to Kevin for a more in-depth review of our financial results. Kevin?