Strong Performance in SAS Segment
The SAS segment showed strong momentum with sales up almost 6% year-over-year on an organic basis. Adjusted EBITDA was up more than 3% compared to the prior year, with margin improving slightly. This marks SAS's fourth consecutive quarter of sales growth and fifth consecutive quarter of adjusted EBITDA and margin growth.
Successful Pricing Actions
Pricing actions announced in March are expected to positively affect Q2 and the remainder of the year. This is part of the strategy to sharpen efforts to delever the balance sheet through margin improvement and free cash flow generation.
Cost Reduction Initiatives
A task force is reviewing the cost and operating structure to deliver $10 million to $15 million of additional cost reductions in 2025, in addition to the previously announced $20 million by year-end 2026.
Deleveraging and Cash Flow Improvement
Capital spending is reduced to $40 million per year from $55 million in 2024. Inventory levels are expected to reduce by $20 million to $30 million in 2025, driving significant free cash flow expansion to accelerate debt reduction.