Thermon Group Holdings, Inc.

Greetings ladies and gentlemen and welcome to the Thurmond Group Holdings first quarter fiscal 2023 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 this 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, FP&A, and Investor Relations. Thank you. You may begin.

Thank you, Diego. Good morning, and thank you for joining today's fiscal 2023 first quarter conference call. Earlier this morning, we issued an earnings press release, which has been filed with the SEC on Form 8-K, 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, Q1 2023. 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 recent 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 for those contemplated by those 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. Good morning, everyone, and thank you for joining today. Thurmond had an excellent quarter to start our fiscal year with better-than-anticipated organic sales growth, Record Q1 revenue and bookings, exceptional operating leverage, and year-over-year margin expansion that illustrates the momentum we carried into Q1 from the strong finish to our fiscal year 22. Our team executed extremely well in the quarter despite supply chain challenges that persist to serve our customers with commitment and grow our market share. These results were largely driven by continued investments in a winning strategy, strong execution by our ThermOn team around the globe, and fiscal discipline around cost management. As part of that growth strategy, we acquired Power Blanket on May 31st, which contributed approximately $1 million to the top line in the month of June. We'll provide more details on the acquisition later in this call. We're seeing strength in North America and a recovery in oil and gas maintenance spending driving $95.4 million in revenue, a first quarter record growing by 34% over the prior year quarter. More importantly, we saw the team deliver strong operating leverage as compared to the prior year quarter with adjusted EBITDA more than doubling to $16.6 million and more than three times the rate of our revenue growth. Free cash flow for the quarter was particularly strong at $10.3 million, which represented the second consecutive quarter of free cash flow over 150% of net income. Adjusted EPS was 25 cents a share in the quarter, bringing the trailing 12-month adjusted EPS to $1.05 a share for the business, an increase of 31% from the prior quarter. While we're seeing a weakening outlook in Europe and FX headwinds, We're raising revenue and EPS guidance for the full fiscal year, given the strong performance and strong backlog in the business. Turning now to slide four on our end markets and the external environment. To begin, I want to reemphasize the progress we've achieved in our end market diversification strategy during our fiscal year 22, with just 40% of revenues tied to oil and gas during the year. As we begin our fiscal year 23, our investment in Power Blanket accelerates these efforts to diversify with roughly 85% of the newly acquired revenues being outside of the oil and gas sector. These products have a wide range of applications in markets like commercial, construction, food and beverage, and general industrial. Turning to our other end markets, we see strength across a wide range of verticals. In chemical and petrochemical, higher demand has enabled manufacturers to pass on price increases to offset higher input costs with continued growth, although at a lower rate in the second half of this fiscal year. Much of the spending in this sector is related to maintenance and improving utilization and throughput with some investments in new capacity. While not at the pace seen in fiscal year 22, we see additional opportunities in the power sector following legislation from Winter Storm Urey, particularly along the Texas Gulf Coast. We've also received multiple orders for maintenance and refurbishment of a nuclear power plant. Going forward, we expect the power sector growth to be driven by the transition to electric from other traditional energy sources, as well as the emerging middle class in the developing world. Rail and transit, although small, remains a growing part of our business with recent wins in multi-year transit projects and new product launches in Class I rail driving growth. While nascent, we're also seeing a number of opportunities in green hydrogen emerge and a transition from gas-fired heat exchangers to electrical and heavier industrial applications that is beginning in Europe. A significant recovery in oil and gas spending appears to be underway, particularly related to upstream and downstream maintenance. These investments are also focused upon the bottlenecking utilization and throughput. Here in the chart, we see that the upstream represents roughly 17% of our end market with 90% of that revenue tied to recurring materials on the installed base. These assets will continue to produce relatively stable revenues at attractive margins for many years to come. Geographically, in the U.S. and Latin America and Canada remains robust. The eastern hemisphere is lagging due to some impact in the war in Ukraine and higher energy costs as well as COVID-19 lockdowns. Turning now to slide five on orders and backlog. We continue to see strong growth on record Q1 orders of 103 million with bookings growing 43% in the quarter and 44% over the trailing 12-month period. Excluding the one-time contract, our book-to-bill was a healthy 1.16 times and has been positive for eight of the last nine quarters. Although down sequentially, our quotation volume was up 52% year-over-year, showing continued strength in overall customer activity. Backlog of $165 million is up 39% year over year on a constant currency basis and grew 6% sequentially. Backlog is within $400,000 of a record level that was achieved in our fiscal year 2019, which was also a record year for revenue and adjusted EBITDA. With that, I'd like to now turn the call over to Kevin for a more in-depth review of our financial results. Kevin?