Strong Q4 Financial Performance and Margin Expansion
Q4 sales grew 5%; adjusted operating income increased 9% to $252 million; return on sales expanded 90 basis points to 24.7%; adjusted EPS rose 9% to $1.18; fifteenth consecutive quarter of margin expansion.
Record Full-Year Results
Fiscal 2025 delivered record annual sales of $4.18 billion (up 2%), record adjusted operating income (up 10%), record return on sales at 25.2% (up 170 bps), and record adjusted EPS of $4.92 (up 14%).
Flow Segment Outperformance
Q4 flow sales rose 9% to $394 million (core flow +4%); commercial and industrial +12% YoY; reportable segment income up 22% and ROS increased 240 bps to 22.8%; full-year flow sales up 3% to $1.55 billion with reportable segment income +14% and ROS +230 bps to 23.3% (record).
Pool Segment Strength and New Product Recognition
Q4 pool sales grew 11% to $393 million and reportable segment income increased 11%; full-year pool sales +9% with ROS rising 60 bps to 33.8% (record). Notable product launches (e.g., Manitowoc ICE Neo, IntelliVibe, IntelliCore Plus, Everpure PFAS filtration) and industry recognition (Kitchen Innovation Award).
Record Free Cash Flow and Shareholder Returns
Generated record free cash flow of $748 million in 2025; repurchased 2.3 million shares for $225 million and announced new buyback authorization up to $1 billion; maintained a healthy leverage ratio (~1.4x) and ROIC of 16.7% (up from 15.5%).
Clear 2026 Guidance Demonstrating Confidence
2026 adjusted EPS guidance of $5.25–$5.40 (midpoint ~8% increase), total sales growth guide of ~3–4%, adjusted operating income growth of ~5–8%, and anticipated ROS expansion of ~100 bps to ~26%; price expected to be up ~2–3%, volume roughly flat, and ~$70 million of transformation savings net of investments targeted.
Strategic Organizational Realignment
Combined residential flow with residential water solutions (representing ~25% of factories) to create scale, channel synergies and potential margin improvements; management changes positioned to accelerate customer-focused growth, digital/AI, and innovation efforts.