Watts Water Technologies, Inc.

Thank you for standing by. At this time, I would like to welcome everyone to today's third quarter 2025 Watts Water Technologies earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I'd now like to turn the call over to Diane McClintock, Senior Vice President of Investor Relations. Diane?

Thank you, and good morning, everyone. Welcome to our third quarter earnings conference call. Joining me today are Bob Pagano, President and CEO, and Ryan Latta, our CFO. During today's call, Bob will provide an overview of the third quarter, a business update, and an update on our outlook for 2025. Ryan will discuss the details of our third quarter performance, and provide our outlook for the fourth quarter and for the full year. Following our remarks, we will address questions related to the information covered during the call. Today's webcast is accompanied by a presentation, which can be found in the investor relations section of our website. We will reference this presentation throughout our prepared remarks. Any reference to non-GAAP financial information is reconciled in the appendix to the presentation. I'd like to remind everyone that during this call, we may be making certain comments that constitute forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially. For information concerning these risks, see Watt's publicly available filings with the SEC. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, I will turn the call over to Bob.

Thank you, Diane, and good morning, everyone. Please turn to slide three, and I'll provide an overview of the quarter. We're pleased with our strong third quarter results, which exceeded expectations. Watt's multi-year track record of success would not be possible without the dedication, collaboration, and support of our team members and business partners, and I'd like to express my sincere gratitude. Organic sales increased 9% in the quarter, with favorable price in the Americas, volume, and pull-forward demand more than offsetting a decline in Europe. We also benefited from incremental sales from our ICON and Easy Water acquisitions and favorable foreign exchange movements. Adjusted operating margin of 18.5% was better than anticipated due to favorable price, volume leverage, productivity, and mix. Year-to-date free cash flow continues to be solid, and we expect to generate seasonally strong free cash flow through year-end. The balance sheet remains healthy, and we have ample flexibility to support our disciplined capital allocation strategy. On that note, we're excited to have acquired Hawes Corporation, a leading global brand providing emergency safety and hydration solutions for use in industrial, institutional, and non-residential end markets for more than 120 years. The addition of HAWS innovative specified product portfolio enhances our value proposition and broadens our capabilities. HAWS has annual sales of approximately $60 million and is expected to be modestly diluted to margins for the first year, while we integrate and realize the benefits of synergies leveraging the one watts performance system. I'm also pleased with the integrations of Bradley Joe Sam icon in easy water, which are progressing well in synergy realization is tracking ahead of our original estimates. We continue to proactively manage tariff related challenges through strategic pricing and supply chain optimization. The tariff environment remains uncertain, but based on tariffs in effect as of today. Our global direct tariff impact in 2025 is estimated to be $40 million, consistent with our guidance at the last earnings call. We have successfully handled the cost impact so far in 2025 and plan to continue doing so. Now, an update on our outlook for the remainder of the year. Due to our strong third quarter performance and our expectations for the fourth quarter, we are increasing our full-year sales and margin outlook. Tariff-related price increases, foreign exchange movements, strong data center sales, and the acquisition of HAWS are all favorable relative to the sales outlook we provided in August. However, there's ongoing uncertainty around the impact of supply chain disruptions and tariffs, including the effect on new construction and global GDP, as well as around the impact of the U.S. government shutdown. As a reminder, GDP is a proxy for our repair and replacement business, which represents approximately 60% of total revenue. With that, let me turn the call over to Ryan, who will address our third quarter results and our fourth quarter in full year outlook in more detail.