GPGI

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8 a.m. ET Executive Chairman - David Cote Chief Investment Officer - Thomas Knott Chief Executive Officer of CompoSecure - Graham Robinson Chief Executive Officer of Husky - Robert Domodossola Operator: Good day, and thank you for standing by. Welcome to the GPGI Second Quarter Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Dave Marshall. Please go ahead. David Marshall: Good morning, and welcome to GPGI's second quarter conference call. This morning's remarks will include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially, including those disclosed in our SEC filings available at sec.gov and on our IR website. Additionally, definitions and reconciliations of non-GAAP measures used today appear in today's press release and earnings presentation, which are available in our SEC filings and on our IR website. As a reminder, following the Resolute Holdings spin-off, GPGI accounts for GPGI Holdings, including our CompoSecure and Husky businesses under the equity method of accounting in accordance with GAAP. With that, I will turn over the call to Executive Chairman, Dave Cote. David Cote: Good morning, everyone. GPGI continues to execute with discipline and focus with our customers at the center of everything we do. In the second quarter, we continued to see progress across the platform and delivered results that were consistent with both our expectations and the guidance range we introduced last quarter. The results were driven by continued strength at CompoSecure and some indications of relief as we continue to navigate transient market headwinds at Husky. Starting with CompoSecure, we're seeing the continued transformative impact of ROS on growth and operations, delivering record sales, strong operating performance and both year-over-year and sequential margin expansion. With robust demand from a broadening base of customers, CompoSecure is well positioned to continue accelerating organic growth and improving profitability in the second half of the year. CompoSecure is 1 year ahead of Husky in the deployment of ROS, and we are seeing how cultivating a high-performance culture and making strategic investments enable a sustained inflection in financial performance. Turning to Husky. We're navigating through transient market headwinds caused by volatile resin prices and shipping disruptions related to the conflict in the Middle East and continued tariff uncertainty. The macro environment has improved marginally since we last spoke to you as oil and resin prices have come off their previous peaks set in late April, and our customers are beginning to have a bit more confidence in making purchase decisions. However, the second quarter was still impacted by macro uncertainty, and we're beginning to see pockets of demand recovery and continue to expect a strong second half that is consistent with historic seasonal trends. In addition to demand gradually returning, we expect improved operating leverage and discrete cost actions to drive margin expansion, both sequentially and year-over-year through the second half. Importantly, we're starting to see initial signs of ROS taking hold at Husky and are aggressively accelerating its implementation to drive durable organic growth and sustainably higher margins. As a reminder, ROS is a cornerstone of how we operate at GPGI. It represents an end-to-end commitment to grow sales, control costs and generate the cash necessary for seed planting, accretive investing and compounding returns for investors. ROS is how we translate strategy into results, be it operating metrics, financial performance or strategic breakthroughs. I'll let Graham and Rob provide specific examples of how ROS is moving the needle at CompoSecure and Husky, but we'll note how this daily mindset compounds performance over time and builds the next generation of world-class operators. Looking at CompoSecure, we clearly see the inflection in growth and profitability enabled by our investments in the sales force and R&D over the past 21 months. This demonstrates the multifaceted focus of ROS well beyond just managing costs. The ROS flywheel specifically requires cultural change to catalyze operational change. That is why I'm so pleased we announced the appointments of Mohammad Kanaan as Chief Financial Officer; and Karen Stone as Chief Human Resources Officer of Husky. Mohammad and Karen are proven leaders with significant global experience that will accelerate the cultural transformation Rob is leading across the business, and both will be integral to our next phase of growth. Change agents make a difference. I also want to highlight how we think about DPGI's long-term growth algorithm. Specifically, we're focused on delivering mid- to high single-digit annual organic growth, over 100 basis points of annual margin expansion through the deployment of ROS, double-digit plus annual EBITDA growth and 90% to 100% free cash flow conversion over time. This is happening while we are strategically investing in the businesses, doing the seed planting today that is necessary for them to achieve their potential tomorrow. The plan is simple. We intend to grow GPGI's earnings and cash flow faster than the market to deliver superior, durable through-the-cycle returns for our investors. To conclude, we are extremely focused on execution, remain well positioned to deliver in the second half and are reiterating our full-year guidance. We're also continuing to pursue critical seed planting initiatives to deliver in 2026 and accelerate into 2027. This includes strategic investments and operational improvements that position GPGI to capture incremental sales and margin as Husky's markets rebound. Overall, our thesis remains firmly intact, and we're excited about the path GPGI is on. So with that, I'll turn it over to Tom Knott, our CIO. Thomas Knott: Thank you, Dave, and good morning, everyone. Going to Slide 4, GPGI delivered pro forma adjusted net sales of $473.2 million, down approximately 4% from the prior year, pro forma adjusted EBITDA of $113.9 million, down approximately 13% from the prior year and pro forma adjusted EBITDA margins of 24.1%, down approximately 230 basis points from the prior year. Despite the market headwinds of Husky, GPG (sic) [ GPGI ] also generated approximately $63 million in pro forma adjusted free cash flow in the second quarter, significantly higher than the prior year. As Dave mentioned, these results were in line with our expectations. Turning to Slide 5. We are reiterating our full year revenue, adjusted EBITDA and free cash flow guidance. We continue to expect pro forma net sales between $1.95 billion and $2.1 billion, pro forma adjusted EBITDA between $550 million and $610 million and pro forma adjusted free cash flow between $275 million and $325 million, which we define as cash from operations less capital expenditures, adding back onetime Husky transaction expenses on a full year pro forma basis. While these guidance ranges remain the same, we are adjusting our pro forma adjusted EBITDA margin guidance to between 27% and 29% to reflect tariff pass-through revenues and the potential mix impact at Husky from stronger system performance through the remainder of the year than we anticipated last quarter. Our full year 2026 guidance translates into roughly flat year-over-year revenue and approximately 7% pro forma adjusted EBITDA growth at the midpoint, even with the market-driven weakness at Husky, highlighting the resilience of the combined GPGI platform. Relatedly, I want to address the key components for the second half performance. Starting with CompoSecure, we expect strong revenue growth and margin expansion to continue through the rest of the year. For Husky, we expect a second half consistent with historical seasonality, coupled with improved labor and fixed cost absorption and ROS-led efficiency gains and full realization of savings from discrete cost actions to support anticipated sequential and year-over-year margin improvement. With respect to our capital structure, we remain focused on debt paydown and are still targeting 3x leverage by the end of 2026. Our long-term leverage target at GPGI is between 2x and 2.5x, excluding potential onetime step-ups for strategic acquisitions. We continue to view 2026 as a critical year of cultural change, ROS implementation and strategic seed planting at both businesses to position us for best-in-class top line growth, margin expansion and free cash flow generation across GPGI. This remains our focus, and we are confident in the work that is underway. Moving to Slide 6. I want to take a moment to discuss our philosophy regarding capital allocation at GPGI. First and foremost, we are focused on acquiring and operating companies with great positions in good industries as the company's name suggests. These businesses like CompoSecure and Husky should all generate high returns on invested capital because that is what results from having a great position in a good industry. We then aggressively deploy the Resolute operating system into each owned business, taking a systematic approach to operational improvements that both accelerate growth and drive margin expansion. This results in even higher returns on capital and accelerating growth in earnings and cash flow. With this cash flow, we first prioritize organic investments and bolt-on acquisitions as these investments usually have the highest returns on capital and serve to further bolster the competitive moats of each owned business. This is how we are building ComposSecure and Husky today. We are aggressively deploying ROS, actively making significant organic investments and consistently evaluating bolt-on acquisitions for both companies. While early days, this is the organic flywheel we expect will create compounding returns at GPGI. We are excited about the prospects for GPGI with just the 2 businesses we own today. CompoSecure and Husky each have their own high-return investment opportunities, and we have the luxury of not needing to acquire any new platform businesses. As you know, we have no deployment targets, no fund constraints or any other artificial requirements to buy new platforms, and we see opportunities to continue making high-return organic investments to drive the earnings power and cash generation capability at GPGI meaningfully higher than it is today. We are interested in acquiring a new platform only to the extent it meets our 6 acquisition criteria, a list designed to screen for durable high ROIC businesses that can benefit from ROS deployment and if that platform can be acquired at a fair price that will generate attractive returns on your capital. The organic flywheel will spin faster as we add more platforms to GPGI over time because with more platforms, we will have more organic and bolt-on investment opportunities to drive earnings and cash flow, which in turn translates into higher intrinsic value of GPGI. The key enablers for this compounding flywheel are threefold. First, our permanent capital base enables GPGI to make sound business decisions and invest with a long-term view. Second, ROS deployment is based on a proven operating playbook that we have refined across multiple companies over multiple decades. And finally, our corporate structure frees operators to exclusively focus on growing their businesses without the distractions of being a public company, but with the oversight that ensures the business is on track to achieve both near-term and long-term results. Finally, to conclude my comments, I want to briefly describe what we are seeing in the marketplace. While we are interested in companies with great position in good industries generally, in the current environment, we see a large and growing backlog of the most scaled businesses owned by private equity firms that need to access the public markets. This group of assets are too large for most sponsors to acquire, leaving a regular IPO as the primary exit path. But that path is suboptimal as it typically results in limited proceeds to the private equity sponsor, an over-levered public company and an overhang from excessive insider ownership, all of which results in an orphan security. This creates a lose-lose situation for the private equity sellers and for public shareholders. It is a topic that is beginning to get some coverage in the news, but it's a phenomenon we have been watching develop for almost 10 years at this point, starting when Dave and I began the process that ultimately resulted in our acquisition of Vertiv. Private equity firms are increasingly facing pressure to monetize their investments to return capital to their investors, while at the same time, facing a traditional IPO market that, in our opinion, does not work for almost all the highly levered sponsor-backed businesses. GPGI can address this problem in a compelling and unique way and the list of available assets in need of our solution is growing. Said simply, we believe the market is structurally moving in our direction, which adds to our confidence in the opportunity ahead, while at the same time, enabling us to be very disciplined in our assessment of new platform investments. With that, I'll turn the call over to Graham Robinson, the CEO of CompoSecure. Graham Robinson: Thank you, Tom, and good morning, everyone. Going to Slide 7. We delivered another outstanding quarter at CompoSecure. Continuing to expand upon our commercial and operational momentum. We achieved record adjusted net sales of $133.6 million, up approximately 12% compared to the prior year, underscoring both the robust demand for premium metal cards and the effectiveness of our commercial execution across markets. This strength is translating to several new program wins and accelerating issuer activity across a broadening and diversified customer base. We're also seeing continued adoption of [ across ] capabilities. In parallel with the rising penetration of premium metal cards, ROS continues to have a compounded impact across our business. We are realizing meaningful improvements across all functional areas, including manufacturing efficiencies to increase yield and drive record output, reinvigorated go-to-market strategy to effectively penetrate international markets and nonmanufacturing Kaizens to ensure efficiency gains extend beyond the factory to the office. These ROS-led initiatives directly helped us to deliver record adjusted EBITDA of $55.2 million this quarter, up approximately 14% from the prior year. A few of our recent high-profile program launches include Samsung, U.S. Bank's Amazon Business, American Express Delta SkyMiles Reserve, Klarna, DolarApp ARQ and Kast. These signature program wins reflect the breadth of demand for premium card solutions and our differentiated value proposition, combining advanced design, engineering and manufacturing capabilities to reinforce our position as the partner of choice for issuers launching high-impact card programs. And in recognition of our market-leading card designs, CompoSecure has won 5 prestigious Élan Awards of Excellence at ICMA's 2026 Expo, including Best personalization product, unique innovation, unique innovation prototype, metal feature card and best regional card in North America. While encouraged by our progress, we maintain a relentless focus on investing in our future and executing on our 3 pillars of growth, which include: one, accelerating organic growth; two, driving international expansion; and thirdly, increasing across momentum. Select initiatives to support these strategic priorities include penetration of the debit card market and introductory mental card for issuers upgrading from plastic, the opening of a new design center in London to better serve international customers, tokenization to provide an integrated activation experience and active evaluation of new verticals beyond payment cards. Moving to Slide 8. Let me revisit the strength of our model and industry fundamentals. We're seeing continued adoption of payment cards globally, increasing the total addressable base of cards in circulation. Additionally, new issuers in international markets and the fintech segment are launching their first metal card programs and existing customers are expanding their programs through tiered card stacks to further drive improved customer acquisition, spend and retention. The recent wins I mentioned highlight the trust issuers place in CompoSecure to deliver their signature programs and increasing breadth of our diverse customer base that features over 200 active card programs. CompoSecure is well positioned to further capture share with this expanding base. All of this supports a durable recurring revenue model as new cards are introduced, reissued, refreshed and upgraded over time. Turning to Slide 9. I want to highlight a few incremental points regarding our financial performance. Specifically, ROS-led initiatives continue to translate into improved profitability as we saw adjusted EBITDA margins increased 70 basis points year-over-year to 41.3%. The sequential and year-over-year margin expansion is a result of consistent incremental efficiency gains that we expect to continue going forward. At the same time, we are strategically investing some of these gains to add capacity to support our next phase of growth. Overall, our results highlight the operating leverage and tangible benefits we continue to unlock from a high-performance culture and the systematic deployment of ROS. We are operating from a position of strength and are confident in our ability to capitalize upon the significant opportunity ahead. With that, I will turn the call over to Rob Domodossola, the CEO of Husky. T Robert Domodossola: Thanks, Graham. Turning to Slide 10. Husky delivered adjusted net sales of $339.6 million, down approximately 9% from the prior year, pro forma adjusted EBITDA of $64.9 million, down approximately 23% from prior year and pro forma adjusted EBITDA margin of 19.1%, down approximately 330 basis points from prior year. Our performance was in line with expectations and reflected the demand environment characterized by macroeconomic uncertainty, geopolitical tension, elevated oil and resin prices and evolving tariff policies. These factors resulted in deferral of certain capital investment projects. Encouragingly, we began to see signs of stability during the quarter, including improvement in resin availability, stronger engagement across our system pipeline and the initial benefit of discrete cost actions that we expect to continue through the second half of the year. As sales improved sequentially, we expanded margin by approximately 590 basis points quarter-over-quarter through better labor and fixed cost absorption. We expect this trend to continue as we move into the seasonally stronger second half, consistent with historical performance. Year-over-year margin performance was primarily impacted by lower volume and foreign exchange headwinds. Looking ahead, we expect revenue to be flat to slightly up year-over-year in the second half, while margins improved as operating leverage strengthens and the benefits of our cost and productivity initiatives are realized against the higher cost base established in the second half of last year, which was in anticipation of higher revenues than what was materialized this year. Let me now address what we're doing at Husky to help navigate the current macroeconomic environment. A significant cultural and operational transformation is underway across the organization. I'm particularly excited about the recent additions to our leadership team. Mohammad brings significant financial and operating expertise. and Karen is helping accelerate our cultural transformation that is underway with added focus on accountability and engagement. We also recently promoted Benoit Jeanjot to Senior Vice President of Operations. Benoit rejoined Husky in 2025 and brings deep operational expertise to drive ROS deployment faster and deeper through our global footprint. Our transformation is anchored on the ongoing deployment of ROS, which is fundamentally changing the way we operate, particularly in periods of uncertainty. ROS provides discipline, structure and visibility needed to drive continuous improvement throughout the organization. To give you a sense of ROS in action, a few examples include daily cross-functional meetings to improve factory loading, reduce lead times and increased production outputs. We also strengthened the commercial effectiveness to continue to grow our aftermarket business while identifying and rationalizing indirect spend through procurement discipline. At the same time, we continue to make investments in innovation and product development. We are still in the early stages of ROS, but we use it every day to drive measurable improvements in growth, operations and financial performance. Moving to Slide 11. I want to take a moment to revisit the fundamental characteristics of Husky's business model. Husky's products and services support the production of essential nondiscretionary packaging needs for beverage, food and medical applications. Those end markets have demonstrated resilience across economic cycles. Our installed base of approximately 13,500 systems worldwide, split between PT and packaging provides strong foundation for reoccurring aftermarket revenue. Approximately 30% to 35% of our revenue is generated from new systems. Another 40% comes from aftermarket tooling, including molds, hot runners and controllers and the remaining 25% to 30% comes from service, including our aftermarket parts and our Advantage+Elite remote monitoring solution. This diversified revenue profile provides stability across economic cycles while positioning us to grow alongside the long-term structural trends when customers resume capital investments. Starting with systems, which typically has a sales cycle of approximately 6 months to 12 months, we have good visibility into pipeline activity, orders and backlog. Customers are engaging in long-term capacity planning discussions and we're beginning to see selective move forward with investment decisions. While near-term system demand can be volatile, over the long term, it remains the closest proxy for the health of the industry fundamentals. Beverage consumption trends remain healthy, and our customers continue to focus on securing capacity and the production needed to meet future demand. In addition, as these systems delivered industry-leading efficiencies and lower total cost of ownership, making our value proposition even more compelling during periods of elevated resin and operating costs. Aftermarket tooling, which includes molds, hot runners and controllers, generally has a 2-month to 3-month sales cycle and is primarily driven by customer brand decisions to change form factors or introduce new products, along with necessary maintenance refurbishments. During periods of high and volatile resin prices like we're seeing now, customer brands put product launches on hold until there's more certainty around resin price outlook. This creates a temporary period of order deferral, a phenomenon we are still seeing impact our aftermarket tooling business. However, we are confident that demand is being deferred rather than canceled, as evident by a robust and growing pipeline. Over the long term, trends such as lightweighting, sustainability and package optimization remain powerful demand drivers for our tooling solutions. Across both systems and aftermarket tooling, our opportunity pipeline continues to expand. This gives us confidence that we are maintaining our market leadership position through periods of volatility and reinforces our belief that our technology and innovations continue to differentiate Husky in the marketplace. On the service side, which is primarily driven by required maintenance, we observed year-over-year improvement in spare parts as customers prioritize productivity across their existing installed base. Additionally, our Advantage+Elite solutions continues to gain traction with customers, supported by strong renewal rates and expanding adoption. These solutions help customers maximize uptime, improve productivity and reduce total cost of ownership through proactive monitoring and predictive maintenance capabilities. We continue to see significant opportunity in our service business with our existing installed base. As we connect more systems to our digital platform, we expect to accelerate recurring revenue. We are also supporting additional aftermarket parts sales through proactive maintenance recommendations. At Husky, our focus is on what matters most for our customers, high uptime, high throughput and lower cost of ownership, which supports their growth and in turn, ours. Taken together, we continue to view the current softness as a point-in-time demand deferral rather than structural. We have seen this before and when customers' confidence inevitably improves and input cost volatility subsides, deferred investment activity typically returns and often at an accelerated pace. The underlying growth drivers across our end markets remain intact, including growing customer demand, sustainability initiatives, lightweighting requirements and the ongoing need for greater manufacturing efficiency. Going to Slide 12. Our technology and focus on innovation delivers industry-leading efficiencies for our customers that positions us to capitalize on the rising global demand for PET and other attractive substrates. A tiered specific examples include our new packaging machine platform, advances in our aftermarket tooling technology portfolio and a new tiered service model that gives customers increasing flexibility in how they engage with our Advantage+ digital service platform. We are particularly excited in how these innovations work together to create multiple growth opportunities for Husky. Our new packaging platform expands our presence in attractive packaging applications and creates a foundation for future aftermarket and service opportunities. Our tooling innovations allow us to capture a greater share of aftermarket spending by helping customers improve the performance of existing assets and upgrade legacy toolings already operating in the field. And our Advantage+Elite platform provides critical insights through data across our global installed base, which strengthens customer relationships and in turn, expands recurring opportunities for Husky. Collectively, these initiatives highlight our continued investments in innovation, new product development and digital capabilities that will strengthen our competitive position, expand market share and support long-term profitable growth. Lastly, the growing awareness of PT's superior carbon footprint versus other substrates, global regulatory push for plastic circularity and an aging installed base all provide further tailwinds for Husky. Overall, Husky is well positioned to capitalize on favorable long-term demand drivers across its highly durable end markets. Turning to Slide 13. I want to provide additional context around the trajectory of our financial performance. We began implementing a series of discrete cost actions during the second quarter that already generate savings with a greater benefit expected in the second half of the year. These actions focus on improving productivity, optimizing labor utilization, reducing discretionary spending and driving greater SG&A discipline across the organization. Importantly, there is an intentional strategy behind these initiatives. We are focused on enhancing efficiency and profitability while preserving our ability to respond quickly when demand fully recovers. This balance is critical as we want to ensure Husky remains positioned to capture growth opportunities as market conditions improve. Consistent with historical first and second half seasonality, we expect margins to continue improving sequentially through the remainder of the year. Margin expansion in the third and fourth quarter is expected to be driven by fixed cost absorption in the seasonally stronger second half, ongoing cost-saving initiatives and operational improvements resulting from our ROS transformation efforts. partially offset by higher capital costs from Q1 and Q2 being realized in the second half of the year. Turning briefly to tariff. While the evolving trade environment continues to influence customer purchasing time lines, as noted in the first quarter call, we do not expect tariffs to have a direct material impact on the overall financial performance. Our global manufacturing footprint provides flexibility to adapt to changing trade conditions, and we remain well positioned to manage tariff-related impacts. In summary, while market conditions remain dynamic, we believe Husky is well positioned. We see some signs of stabilization, continued customer engagement, and we are advancing our operational transformation and executing targeted cost actions. At the same time, we continue to make disciplined investments in R&D and innovation with several new products and technology advancements progressing through our development pipeline. These investments reinforce our technology leadership and position us to capture additional growth opportunities as market conditions improve. Taken together, these factors support our confidence in improved performance in the second half of 2026 and over the long term. I will now hand it back to Dave for some closing remarks. David Cote: So CompoSecure and Husky are both aggressively driving cultural transformations and advancing in their deployment of ROS, a gradual evolution that improves processes and behaviors to drive sustainable compounding returns. You can clearly see this inflection in results of CompoSecure, and you can expect the same at Husky over time as we effectively manage through market-induced volatility. As I've often said, we never let a good crisis go to waste and are fully using 2026 to set up GPGI for an acceleration in 2027. Our strategy is simple. We combine operational excellence with disciplined underwriting to create a home for high-quality businesses led by great operators. Our permanent capital base and long-term ownership mindset position us to deliver superior returns for our shareholders. This is our focus today, tomorrow and even further into the future. So with that, let's open it up to questions. Operator: [Operator Instructions] And now we're going to take our first question, and it comes from the line of Brendan Shea from JPMorgan. Brendan Shea: If I could, I'd like to start with Husky. So you characterized the demand is deferred rather than canceled. You have visibility via orders and pipelines. Just can you quantify that pipeline conversion? Sort of what portion of the deferred system and tooling orders are already booked versus still in discussion? And then what kind of leading indicators or KPIs are you watching that would tell you whether or not that deferral thesis is breaking down for a second half acceleration versus being pushed out further into 2027? David Cote: Tom, why don't you start with overall and then Rob, all yours. Thomas Knott: Sure. Yes, Brendan. So this is Tom. I'd say what we're not giving specific numbers on pipeline and orders. But what I would tell you is we saw acceleration in pipeline relative to when we last talked to you, pipeline growth is up double digits. We feel very good about that. I think similar, seeing good growth in orders. We mentioned briefly, we're actually seeing even better performance in systems than we thought last quarter. And so while I wouldn't be declaring victory on the market, in general, we're seeing pockets of strength, and we're seeing machines particularly, which happen to have the most visibility for us as we look through the rest of the year and into '27, they're performing better than we thought last quarter. So I think generally, we're seeing things move in the direction we want, and I think the company is managing that well, and it's a result of a lot of focus by the commercial team. Rob, I don't know if you'd add to it. Robert Domodossola: Maybe just some color on some of the mix in the pipeline on the order side. But definitely, we're seeing good pipeline growth for systems, and that's PT systems and packaging machines globally. So -- and the mix is fairly even globally, which is a good sign. And just recently in the past few months, we've seen an acceleration as well in the pipeline growth of our aftermarket tooling, including both our PT tooling and our hot runner business. So that's a good sign for things to come. Operator: Do you have any further questions, Brendan? Brendan Shea: Yes, please. So just kind of if we could, we just stay on Husky here for a second. You've talked about the deployment of ROS -- they're a little bit behind CompoSecure just in terms of what you've accomplished so far. Can you talk to what has been done, what still has to be done? And then whether or not these -- the transient market headwinds, is that impacting the pace of deployment of ROS at Husky at all? David Cote: I love that question. Thank you. You talk to this -- Yes, Rob, if I could upfront, there is a lot left to do, and that's one of the things that excites us about the place because all those things that we need to work on are opportunities for us. So I'm pretty excited about where the team is going and what's possible here. So with that, Rob, I'm sorry, I didn't mean to interrupt all yours. Robert Domodossola: No, that's a great intro. Look, it's been hugely impactful in such a short period of time. And I break it into 3 big buckets. First is the strategic deployment. There's a select initiatives that matter most for the organization, a handful of initiatives that matter most for the organization in terms of prioritizing what needs to change. And ROS helps with strategy deployment through resource allocation through the best resources assigned to it and transparency and communication right through from top to bottom of the organization. So focusing on what matters most and having that discipline to drive that execution has been hugely impactful. Secondly, lean daily management has been a bit of a cultural change at Husky, where everyone is looking within their own functions and end-to-end for waste and variability to improve processes, both again, within their function across end-to-end processes. And then we've established tools like Kaizen events that bring cross-functional teams together, subject matter experts to collaborate towards continuous improvements. And that behavior, that comb behavior is what creates culture. That cadence is what matters. And so yes, those things have been hugely impactful in a very short time to help us focus on what matters to help reduce waste and variability and to bring subject matter experts together on a regular cadence to drive continuous improvement. Brendan Shea: And then one last one on Husky for me. Just kind of underlying macro expectations around the maintained guide, I guess, more of a total company question. But just you highlighted that conditions are improving within Husky, better oil and resin prices, et cetera. Can you speak to the assumed macro conditions within the guide? Can you hit those targets if the macro were to stay as is? Or are they kind of dependent upon some sort of further improvement from here? Graham Robinson: Yes, Brendan, I would say consistent with what we said last quarter is the same this quarter, which is I don't think you should impute into our comments that we're seeing material improvements from where we were. I mean I think there's -- we feel confident in delivering the guide what we put out with what we're seeing in the business, but we're not anticipating things getting better from here. I think we talked about that last quarter. We see some marginal improvement today, but it's not like we see things back to normal or anywhere close to where we would expect them ultimately. I think what you should take away is we do have real confidence in the underlying business and the quality of it and the opportunities we're addressing, like Dave mentioned and Rob mentioned. And you can be sure we're doing the things today to set us up for that long-term return, but the guide does not assume things materially improve. Brendan Shea: Okay. And then if I could squeeze in just a couple of related strategic questions. You've mentioned adding platforms over time, assuming they fit required criteria. Can you talk to the pipeline of opportunities as you see them? And then what do you kind of -- what's the ideal portfolio look like in terms of how many franchises you think is an ideal number to own at any one time? And then lastly, how do you prioritize between doing things like implementing ROS at acquired companies versus pursuing additional transactions, assuming they fit your required criteria? Graham Robinson: Sure. Dave, do you want to start, and I'll go to the pipeline and the rest? David Cote: Yes. Actually, we're very active in looking at everything you just said, bolt-ons, new platforms. And it's going to depend on the business. I mean some businesses may already be running pretty well and ROS is not going to be as essential because they're already doing things pretty well. And it's the growth characteristics that we're going to focus ROS on. Others are going to be more in a case where you just got to focus a lot more on the ops in the beginning while still supporting growth in order to make it happen. But we feel pretty good about both bolt-ons and new platforms for all the reasons that Tom mentioned in his comments. Tom? Thomas Knott: Yes, Brendan, I would just say, I mean, we've been looking at this for a very long time. I think that the pipeline of opportunities is large and growing. I think that we're going to be really disciplined in what we look at. And the businesses that we evaluate must be great positions in good industries. And I think we feel really good about what we see in front of us with Husky and with Compo. And so we're not in a rush to do anything. We don't have to. We don't need to, and we see a lot of earnings power growth and cash flow growth from these businesses, and we see a lot of opportunities for bolt-ons and for organic investments. That being said, I can talk with anyone about it. I believe there's a real structural problem facing large-cap private equity firms because I don't think that the regular way IPO is actually a credible path for a successful exit. And so we don't have to go look at all those. We know them. We spend time thinking about it. As Dave said, we're active, but we're going to be disciplined in what we look at. And I think there's a big stable of very high-quality businesses that are stuck. And we think we can be a very good solution for those, but we're not required to go do that. We don't have to do it. We're going to do it when it makes sense and fits with the overall platform. Operator: And we're going to take our next question, and it comes from the line of Kurt Martinson from Locust Wood Capital. Kurt Martinson: Good job delivering on your commitments and showing some clear progress during the quarter. In mid-March, you called out an elongation in the sales cycle. So what are you seeing so far in early 3Q? And has the expected timing from pipeline to orders and then to sales begun to shorten as bottle grade PET resin prices have become more stable in recent weeks and months? David Cote: Sure. I can answer that. Yes, we have seen some changes to the pipeline. So we measure quantity through the pipeline, the conversion rates and the time it takes to actually flow from an opportunity to an order through the pipeline. And we have seen some improvements in both our system time line through the pipeline and our aftermarket tooling pipeline. Both have increased opportunities in the pipeline and the conversion rates have remained more or less the same. Kurt Martinson: Great. And then what actions are you seeing Husky's customers take to navigate the current macro conditions, particularly with still elevated resin prices and logistical challenges related to the closure in the Strait of Hormuz? Robert Domodossola: Yes, it's a good question. I mean I think a lot of them were a bit surprised early on in the quarter, but most of them now have secured longer-range resin purchases and/or have looked for alternative sources. Kurt Martinson: Great. And then last one, probably for Dave or Tom. It does sound like the pipeline of potentially attractive acquisition candidates is only growing. Can you just share some thoughts on GPGI's current readiness and willingness to act when the right opportunity comes along? And what goes into that factor of when you think you would be willing to take action? David Cote: Sure. The -- I'll start and then turn it over to Tom. We're ready to act. And if we see the right kind of opportunity at the right kind of price, it's got to be fair to the seller and fair to our investors. we will proceed. So it's just a question of discussion with the seller and they're kind of being willing to understand that the upside for their business is significantly greater with us than it is with anybody else because of the transformation that we can affect in a business, then we'll proceed. If it doesn't make sense for our shareowners, of course, we're not going to proceed. So it's all a question of individual cases. With that, Tom? Thomas Knott: Yes, Kurt, I mean, I think you've heard us talk, you know Dave and me and the whole team here. We're incredibly focused on executing with what we've got, and you can hear that in the comments here, and it's really happening at both businesses. And I think you'll see that. I think we're focused on accretive transactions. We have the benefit of Dave and I and the team at Resolute have been looking at these businesses that are now stuck for almost 10 years. So we know them. We know how they performed. We know the quality of them. We know what we think we can do with them. And we know what we think fair prices are for them. And so it's like Dave said, we're going to keep executing with what we got. We're going to deliver on what we say, and we're going to really go and focus on making these businesses as good as they can possibly be. And if there is another great position in a good industry, a real market leader that we can acquire accretively, we will do so if we can do it at the right price. And like I said, accretion is going to be important. And I mentioned in my comments, what we like about that is we have lots of organic and bolt-on opportunities to invest for each of these businesses for Compo and for Husky, and we're evaluating those. Those are right in front of us. We're spending time on them. We're thinking about it, and they're intended to make the businesses better. If we have a third and a fourth business that is a great position in a good industry, the organic and bolt-on opportunities for the platform grow even more. And so that's why we like the position we're in. We don't have to do anything, but we're ready and we're looking and we're spending time with that disciplined framework in place. David Cote: I would say, Kurt, if I could just add to that. I mean we said this last quarter also, but the investment thesis is very much intact here. I'm quite excited as is Tom and our CEOs about what's possible here and what we're going to be able to do. It truly is unfortunate that with Husky, which have hit all the 6 criteria and is in the middle of a great cultural transformation under Rob's leadership, as you can see, he's changing and adding a lot of change agents into his organization and promoting them. It's unfortunate that the market timing, we got hit with it when we did. That being said, we're going to turn this into a powerhouse. And I couldn't be more excited about what we're going to do with GPGI and where it's going with the businesses we have and the businesses we're going to add. Kurt Martinson: Great. Excited to see this unfold over the next quarters. Good job over the past [indiscernible]. David Cote: Yes, me too. Operator: Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to the management team for any closing remarks. Thomas Knott: Thanks for joining us. David Cote: Yes. I kind of concluded my concluding remarks in my last answer to Kurt's question, it seems, but I really am pretty pumped up about where this is going and what we're going to do with it with the businesses we have and the businesses we're going to add. Thanks folks. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day. Before you buy stock in Gpgi, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Gpgi wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. GPGI (GPGI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

NEW YORK, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Resolute Holdings Management, Inc. (“Resolute Holdings”) (NYSE: RHLD), an operating management company responsible for providing management services to the operating businesses of GPGI, Inc. (“GPGI”) (NYSE: GPGI), today reported financial results for its fiscal second quarter ended June 30, 2026. Resolute Holdings reported second quarter earnings per share attributable to common stockholders of $(1.53) compared to ($0.07) in the prior year and Non-GAAP Fee-Related Earnings per share of $0.69 compared to $0.08 in the prior year. The increase in Non-GAAP profitability was driven by the higher fee stream as a result of the execution of the management agreement with Husky Holdings LLC (“Husky Holdings”) in January 2026, along with organic growth in fees from the CompoSecure management agreement. During the second quarter and through the end of July, the company repurchased $50.0 million in common shares in open market purchases and has reduced its shares outstanding by approximately 8.3% since the spin-off. As a result of the spin-off from GPGI and execution of the management agreement with GPGI Holdings, L.L.C. (“GPGI Holdings”), Resolute Holdings is required to consolidate the financial results of GPGI Holdings (and its subsidiaries, including Husky Holdings) in accordance with U.S. GAAP. This presentation of financial results does not represent the underlying economics or the positive attributes of Resolute Holdings’ standalone business model, which consist of recurring, long-duration management fees and a relatively fixed expense base. The results of the Resolute Holdings standalone business and associated Non-GAAP Fee-Related Earnings calculation are included below to provide a clear picture of the economic performance of the business directly attributable to shareholders of RHLD. This release includes such results presented in accordance with U.S. GAAP, as well as certain Non-GAAP measures, including Fee-Related Earnings. See “Use of Non-GAAP Financial Measures” below. (1)   Equity-based compensation required to be reported by Resolute Holdings related to awards issued under the GPGI, Inc Equity Incentive Plan, as amended (the “GPGI Equity Plan”). Equity granted under the GPGI Equity Plan relates to GPGI Class A Common Stock and has no impact on Resolute Holdings’ common stock outstanding.(2)   The tax impact of treating Resolute Holdings and GPGI Holdings, including Husky Holdings, as a consolidated entity under ASC 740, to arrive at the Resolute Holdings income tax expense if presented on a non-consolidated basis.(3)   Tax-effect of pre-tax adjustments at a 32.5% estimated effective rate for 2026 and 31% rate for 2025. Only applied to those adjustments that would impact Resolute Holdings’ taxes. Equity-based compensation expense under the GPGI Equity Plan is expensed for tax purposes at GPGI and not Resolute Holdings.Exhibit – Structural Relationship & Non-GAAP Financial Summary About Resolute Holdings Management, Inc. Resolute Holdings (NYSE: RHLD) is an alternative asset management platform led by David Cote and Tom Knott that provides operating management services including the oversight of capital allocation strategy, operational practices, and M&A sourcing and execution at managed businesses under GPGI, Inc. Resolute Holdings brings a differentiated approach to long-term value creation through the systematic deployment of the Resolute Operating System, which is designed to create value at both the underlying managed businesses and at Resolute Holdings. For additional information on Resolute Holdings, please refer to Resolute Holdings’ filings with the U.S. Securities and Exchange Commission or please visit www.resoluteholdings.com. Cautionary Note Concerning Forward-Looking Statements This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although Resolute Holdings believes that its plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, Resolute Holdings cannot assure you that it will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning Resolute Holdings’ possible or assumed future actions, business strategies, events, or results of operations, and other matters, are forward-looking statements. In some instances, these statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negatives of these terms or variations of them or similar terminology. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect Resolute Holdings’ future results and could cause those results or other outcomes to differ materially from those expressed or implied in Resolute Holdings’ forward-looking statements: the timing and amount of the management fees payable to Resolute Holdings, including unexpected fluctuations therein, unexpected changes in costs, risks associated with the implementation of the Resolute Operating System, unexpected market and macroeconomic developments, demand for Resolute Holdings’ services, the ability of Resolute Holdings to grow and manage growth profitably, compete within its industry and attract and retain its key employees, risks associated with Resolute Holdings’ businesses, including CompoSecure and Husky, risks associated with the acquisition of Husky and the transactions related thereto including the anticipated benefits to GPGI and to Resolute Holdings of such transactions, risks associated with global economic, business, competitive and/or other factors, including but not limited to inflationary pressures, volatile interest rates, variable tariff policies or intensified disruptions in the global financial markets, including but not limited to supply chain disruptions, changes in commodity prices, and their respective impacts on the customers of Resolute Holdings’ businesses, the outcome of any legal proceedings that may be instituted against Resolute Holdings or others, risks associated with our accounting, future exchange and interest rates, and other risks and uncertainties, including those under “Risk Factors” in filings that have been made or will be made with the Securities and Exchange Commission. Resolute Holdings undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Use of Non-GAAP Financial Measures This press release includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from non-GAAP financial measures used by other companies. Resolute Holdings believes Fee-Related Earnings and Fee-Related Earnings per share are useful to investors in evaluating Resolute Holdings’ financial performance. Resolute Holdings believes that these non-GAAP financial measures depict the performance of the business and underlying economics attributable to Resolute Holdings common stockholders. Fee-Related Earnings and Fee-Related Earnings per share should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from Fee-Related Earnings and Fee-Related Earnings per share are significant components in understanding and assessing Resolute Holdings’ financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income, net income per share, or any other performance measures derived in accordance with U.S. GAAP and may be different from similarly titled non-GAAP measures used by other companies. For investor inquiries, please contact: Resolute Holdings(212) [email protected] (1)   Equity-based compensation required to be reported by Resolute Holdings related to awards issued under the GPGI, Inc Equity Incentive Plan, as amended (the “GPGI Equity Plan”). Equity granted under the GPGI Equity Plan relates to GPGI Class A Common Stock and has no impact on Resolute Holdings’ common stock outstanding.(2)   Incremental management fees as if the CompoSecure Management Agreement was executed on January 1, 2025.(3)   One-time costs associated with the Spin-Off from CompoSecure.(4)   The tax impact of treating Resolute Holdings and GPGI Holdings, including Husky Holdings, as a consolidated entity under ASC 740, to arrive at the Resolute Holdings incometax expense if presented on a non-consolidated basis.(5)   Tax-effect of pre-tax adjustments at a 32.5% estimated effective rate for 2026 and 31% rate for 2025. Only applied to those adjustments that would impact Resolute Holdings’ taxes. Equity-based compensation expense under the GPGI Equity Plan is expensed for tax purposes at GPGI and not Resolute Holdings. A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/cf25cd22-789b-4f30-85fd-6379a2cd331a

CompoSecure delivers record ROS-enabled results Husky performance in line with expectations ROS deployment accelerating at both companies Progress across the platform – reiterating full year 2026 guidance Second Quarter HighlightsResults compared to prior year period unless otherwise noted; pro forma metrics inclusive of Husky. Pro Forma Adjusted Net Sales of $473.2 million, down 4% GAAP Net Income of $50.3 million Pro Forma Adj. EBITDA of $113.9 million, down 13%, and Pro Forma Adj. EBITDA margin of 24.1%, down 230 bps Reiterating Full Year 2026 Outlook Pro Forma Adjusted Net Sales of $1,950 to $2,100 million, flat year-over-year at midpoint Pro Forma Adjusted EBITDA of $550 to $610 million, up 7% year-over-year at midpoint Pro Forma Adjusted Free Cash Flow of $275 to $325 million Targeting Non-GAAP year-end Net LTM Leverage of approximately 3.0x NEW YORK, Aug. 06, 2026 (GLOBE NEWSWIRE) -- GPGI, Inc. (NYSE: GPGI), a diversified multi-industry platform for companies with great positions in good industries, today announced its financial and operating results for the second quarter ended June 30, 2026. Dave Cote, GPGI’s Executive Chairman, noted: “GPGI delivered second quarter results consistent with our expectations and the revised guidance range we introduced last quarter. We continue to see record strength at CompoSecure, and are effectively navigating transient market headwinds at Husky. GPGI is well positioned to deliver in the second half of 2026 and for an acceleration in 2027.” Tom Knott, GPGI’s Chief Investment Officer, added: “GPGI’s long-term strategy remains on track; CompoSecure and Husky are both high-quality businesses that are being made better as the teams’ embrace the Resolute Operating System. We remain focused on making high return organic investments in each business while continuously evaluating attractive opportunities for bolt-on and new platform M&A.” Financial Results – Second Quarter 2026 Note: All values are $ in millions, except EPS. (1) Pro forma measures reflect financial results as if the business combination with Husky had occurred on January 1, 2025. (2) Adjusted measures reflect financial results as if GPGI consolidated the results of GPGI Holdings, L.L.C., including its operating businesses CompoSecure and Husky, for the periods shown. (3) As of June 30, 2026, $107.1mn of cash was held at GPGI Holdings, and not included in the GAAP results. Note on Accounting Treatment As a result of the spin-off of Resolute Holdings Management, Inc. (“Resolute Holdings”) and the execution of the management agreement with Resolute Holdings (the “CompoSecure Management Agreement”) on February 28, 2025, GPGI is required to account for the operating results of its wholly owned operating subsidiary, GPGI Holdings, L.L.C. (“GPGI Holdings”), under the equity method in accordance with U.S. GAAP, effective February 28, 2025. Both the CompoSecure and Husky business units are under GPGI Holdings. The GAAP results presented above for the second quarter 2026 and the 2025 comparative period reflect the conversion to equity method accounting. For clarity of comparisons and to best reflect the financial results, the Company is also presenting the second quarters of 2026 and 2025 on a consolidated basis consistent with historical presentation under the “Non-GAAP” headings. Second Quarter 2026 Earnings Conference Call GPGI’s leadership team will discuss the Company’s results during a conference call on Thursday, August 6, 2026, starting at 8:00 a.m. EDT. The call and accompanying presentation will contain forward-looking statements and other material information regarding GPGI’s financial and operating results. A live webcast and replay of the call will be available on the Events & Presentations section of GPGI’s website at https://gpgi.com/events-presentations/.    Date: Thursday, August 6, 2026Time: 8:00 a.m. EDTLive webcast registration link: Here About GPGI GPGI, Inc. (NYSE: GPGI) is a diversified, multi-industry platform for companies with great positions in good industries. The platform is managed by Resolute Holdings Management, Inc. (NYSE: RHLD) and is purpose-built to acquire, own, and scale high-quality businesses led by great operators, benefiting from a permanent capital base and the systematic deployment of the Resolute Operating System. GPGI currently consists of CompoSecure and Husky – two market leaders with best-in-class financials and durable opportunities for growth. For more information, please visit GPGI.com. About CompoSecure, a GPGI Company Founded in 2000, CompoSecure is a technology partner to market leaders, fintechs, and consumers enabling trust for millions of people around the globe. CompoSecure is a leader in metal payment cards, security, and authentication solutions. CompoSecure combines elegance, simplicity, and security to deliver exceptional experiences and peace of mind in the physical and digital world. CompoSecure’s innovative payment card technology and metal cards with Arculus security and authentication capabilities deliver unique, premium branded experiences, enable people to access and use their financial and digital assets, and ensure trust at the point of a transaction. For more information, please visit CompoSecure.com and GetArculus.com. About Husky Technologies, a GPGI Company Founded in 1953, Husky is a technology pioneer that enables the delivery of essential needs to the global community with industry-leading expertise and service. Husky is a leader in highly engineered equipment and aftermarket services. Husky’s products are used to manufacture a wide range of plastic products, including beverage and food containers, medical devices, and consumer electronic parts. Husky provides comprehensive and integrated systems solutions that are comprised of injection molding machines, molds, hot runners, controllers, and auxiliaries. For more information, please visit Husky.co. Forward-Looking Statements This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although GPGI believes that its plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, GPGI cannot assure you that it will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including but not limited to statements concerning GPGI’s possible or assumed future actions, business strategies, plans including with respect to cost actions, events, results of operations, demand, the implementation and anticipated impacts of the Resolute Operating System, macroeconomic factors, trade policy including tariff uncertainty, customer demand, the Company’s anticipated responses to the foregoing, strategic investments and anticipated M&A activity, and guidance for full year 2026, are forward-looking statements. In some instances, these statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “outlook” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negatives of these terms or variations of them or similar terminology. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect GPGI’s future results and could cause those results or other outcomes to differ materially from those expressed or implied in GPGI’s forward-looking statements: the ability of GPGI to grow and manage growth profitably, implement the Resolute Operating System successfully, maintain relationships with customers, compete within its industry and retain its key employees; adverse impacts of global economic, business, competitive and/or other factors, including tariffs, regional instability, including in the Middle East, and changes in the prices for inputs including oil and resin; risks associated with our plans and strategies including cost actions; the outcome of any legal proceedings involving GPGI or others; future exchange and interest rates; changes in our accounting and/or financial presentation; anticipated levels and timing of demand for the products and services of GPGI’s businesses; the successful implementation of GPGI’s strategies; and other risks and uncertainties, including those under “Risk Factors” in filings that have been made or will be made with the Securities and Exchange Commission. GPGI undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Use of Non-GAAP Financial Measures This press release includes certain Non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from Non-GAAP financial measures used by other companies. Due to the spin-off of Resolute Holdings and the resulting shift to equity method accounting under GAAP beginning February 28, 2025, GPGI is presenting a broader set of Non-GAAP measures, including an adjusted Statement of Operations (Unaudited), an adjusted Balance Sheet (Unaudited) and an adjusted Statement of Cash Flows (Unaudited) to provide investors with financial information that we believe allows for greater comparability with our historical financial presentation and better represents the underlying performance of the Company’s business across reporting periods. Measures labeled “Adjusted,” including Adjusted Net Sales, Adjusted Net Income, Adjusted Net Income per Share and Adjusted Net Debt, show GPGI’s financial results as if GPGI consolidated the financial results of its operating businesses consistently across periods, and exclude certain non-recurring and non-operational items, which we believe provides for greater comparability across periods. Additionally, measures labeled “Pro Forma,” including Pro Forma Net Sales, Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin and Pro Forma Adjusted Free Cash Flow, also give effect to the Husky transaction as if it had occurred on January 1, 2025, for greater visibility of GPGI’s results following the completion of the transaction. GPGI uses these Non-GAAP measures internally to establish forecasts, budgets and operational goals to manage and monitor its business, as well as evaluate its underlying historical performance and/or measure incentive compensation. We believe that these Non-GAAP financial measures depict the true performance of the business by encompassing only relevant and controllable events, adjusting for variable interest entity accounting requirements that render our results incomparable across periods, and show the effect of acquisitions as if they had occurred at the beginning of the relevant period, enabling GPGI to evaluate and plan more effectively for the future. These Non-GAAP measures should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from these measures are significant components in understanding and assessing GPGI’s financial performance. Additionally, GPGI’s debt agreements contain covenants based on variations of certain of these measures for purposes of determining debt covenant compliance. Please refer to the tables below for the reconciliation of GAAP measures to these Non-GAAP measures. Due to the forward-looking nature of the financial guidance included herein, the charges excluded from the forward-looking Non-GAAP financial measures including Pro Forma Net Sales, Pro Forma Adjusted EBITDA, Pro Forma Adjusted Free Cash Flow, and Non-GAAP year-end Net LTM Leverage, including with respect to depreciation, amortization, interest, and taxes that would be required to reconcile the Non-GAAP financial measures to GAAP measures, are inherently uncertain or difficult to predict, so it is not feasible to provide accurate forecasted Non-GAAP reconciliations without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included, and no reconciliation of the forward-looking Non-GAAP financial measures is included. GPGI [email protected] Note: The Non-GAAP columns represent a consolidation of the Company’s results with those of GPGI Holdings. (1) Includes amortization of deferred financing costs for the three months ended June 30, 2026. Note: The Non-GAAP columns represent a consolidation of the Company’s results with those of GPGI Holdings. (1) Includes amortization of deferred financing cost for the three months ended June 30, 2025. (2) Includes the changes in fair value of warrant liability and earnout consideration liability for the three months ended June 30, 2025. Note: The non-GAAP columns represent a consolidation of the Company’s results with those of GPGI Holdings. Note: The Non-GAAP column represents a consolidation of the Company’s results with those of GPGI Holdings. Note: Non-GAAP EPS does not pro forma for periods preceding the acquisition of Husky. (1) Includes the changes in fair value of warrant liability and earnout consideration liability. (2) Reflects current and deferred income tax expenses. For the three months ended June 30, 2026, it was calculated by applying the Company's assumed effective tax rate. (3) Applies treasury stock method with assumed exercise at average market price. No warrants were outstanding as of the three months ended June 30, 2026.

Griffon (GFF) came out with quarterly earnings of $1.51 per share, beating the Zacks Consensus Estimate of $1.33 per share. This compares to earnings of $1.5 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +13.53%. A quarter ago, it was expected that this garage door and building products maker would post earnings of $0.99 per share when it actually produced earnings of $1.05, delivering a surprise of +6.06%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Griffon, which belongs to the Zacks Diversified Operations industry, posted revenues of $481.37 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.05%. This compares to year-ago revenues of $613.63 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Griffon shares have added about 27.1% since the beginning of the year versus the S&P 500's gain of 13%. While Griffon has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Griffon was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.55 on $478.38 million in revenues for the coming quarter and $5.17 on $1.81 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Diversified Operations is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, CompoSecure, Inc. (GPGI), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of -44%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. CompoSecure, Inc.'s revenues are expected to be $430.84 million, up 260.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Griffon Corporation (GFF) : Free Stock Analysis Report CompoSecure, Inc. (GPGI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

GPGI, Inc. reported first-quarter 2026 results on May 7, 2026, swinging to a US$235 million net loss from US$21.5 million net income a year earlier as its equity-method investment in GPGI Holdings absorbed a US$154.1 million loss following the Husky acquisition. While the newly acquired Husky Technologies faced oil and resin price volatility and tariff uncertainty, CompoSecure delivered record sales and margin expansion under the Resolute Operating System, highlighting a stark contrast between the legacy and acquired businesses. We’ll now examine how this first post-Husky quarter, combining record CompoSecure performance with Husky headwinds, reshapes GPGI’s investment narrative. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 33 best rare earth metal stocks of the very few that mine this essential strategic resource. To own GPGI today, you need to believe the Husky acquisition and broader Resolute playbook can turn a volatile industrial portfolio into a more efficient, higher earning platform, with CompoSecure’s premium cards and Arculus still anchoring the story. The sharp swing to a US$235 million loss makes near term earnings quality and balance sheet flexibility the key catalyst and risk. This quarter materially raises questions around how quickly Husky can support, rather than dilute, that thesis. Against that backdrop, the Q1 report tying a US$154.1 million equity loss to Husky, alongside record CompoSecure sales and margin expansion under the Resolute Operating System, is the critical new data point. It directly tests whether the acquisition and integration pillar that analysts had focused on can offset cyclical pressure in Husky’s markets while preserving capital for debt reduction, small dividends and any future acquisitions. Yet beneath CompoSecure’s record quarter, investors should also be aware that Husky’s commodity exposure and prior executive turnover could... Read the full narrative on GPGI (it's free!) GPGI's narrative projects $1.9 billion revenue and $410.9 million earnings by 2029. This requires 216.1% yearly revenue growth and a $546.9 million earnings increase from -$136.0 million today. Uncover how GPGI's forecasts yield a $24.33 fair value, a 88% upside to its current price. Some of the lowest ranked analysts were already cautious, assuming around US$1.1 billion of revenue and US$321 million of earnings by 2029, and Q1’s Husky driven loss could prompt you to rethink whether that more pessimistic path or the core premium card growth story feels closer to reality. Explore 4 other fair value estimates on GPGI - why the stock might be worth as much as 88% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your GPGI research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision. Our free GPGI research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate GPGI's overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 16 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. We've uncovered the 12 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This technology could replace computers: discover 27 stocks that are working to make quantum computing a reality. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GPGI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. May 7, 2026, 8 a.m. ET Executive Chairman — David Cote Chief Investment Officer — Thomas Knott CEO, Husky Technologies — Robert Domodossola Acting CFO, Husky Technologies — Kevin Moriarty CEO, CompoSecure — Graham Robinson CFO, CompoSecure — Mary Holt In the earnings release we issued earlier today and in the discussion on today's call, we also present non-GAAP financial measures to help investors better understand our operating performance. The company believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends impacting the company's financial condition and results of operations. These non-GAAP financial measures should not be considered as an alternative to performance measures derived in accordance with U.S. GAAP and may be different from similarly titled non-GAAP measures used by other companies. A reconciliation of GAAP to non-GAAP measures is available in our press release and earnings presentation available on the IR section of our website. With that, I'll turn the call over to Executive Chairman, Dave Cote. David Cote: Well, we have a tale of 2 cities. CompoSecure is performing better than our expectations reflecting just excellent implementation of the Resolute operating system for both growth and operations. Husky unfortunately has encountered unanticipated market headwinds because of oil market volatility and tariffs. This has caused customers to delay accepting orders that normally would have been expected to ship in the quarter while also reducing new orders. Well, you'll likely ask what changed. Since I spoke to you on our March 12 fourth quarter earnings call, we saw a significant and surprising increase in customers taking a wait-and-see approach in response to those changing macro conditions. At the time of the call, February year-to-date orders were up approximately 27% versus prior year and the pipeline was up approximately 6% year-over-year. The amount of book and ship required to make the quarter was not unusual given history. And in the subsequent 2.5 weeks, several customers would not finalize their orders for shipment, we could not ship to a couple of countries and customers delayed placing an official order. This trend continues today. We can't predict when it will end so we have provided a wider revised guidance range. In anticipation of lower sales, we've taken various actions on expenses to mitigate some of the impact of those lower sales. At the same time we're seeing order delays, we saw the pipeline grow approximately 4% over last year in the first quarter and up 7% year-over-year through April. So there are reasons for optimism that this will not be a long-lived problem. Consistent with this, we're seeing the 12-month pipeline up while the 3-month pipeline is down. Husky leadership is aggressively tackling ROS implementation for both growth and operations. The investment thesis is very much intact with their great position in a good industry. Now I'm very unhappy to be sharing a different result today than I expected when I talked to you on March 12. While certainly disappointing in the short term, I can still say with confidence that the prospects for GPGI performance are quite rewarding. CompoSecure is on a roll and the new leadership has significantly energized that team and is improving the culture. The commercial prospects for growth are better than ever and ROS implementation and operations is showing significant gains. The prospects for this business are terrific and they're apparent today. Compo also benefits from being more than a year ahead of Husky in ROS implementation. Husky prospects are also excellent. It doesn't show right now because of the market headwinds, but it is real. We continue to fund R&D expansion because it will greatly benefit the business' future. Consistent with our underwriting thesis, we can already see that ROS will also have a profound impact on our Husky business. With Rob's leadership, they are aggressively implementing ROS and driving the cultural change necessary for success. We will navigate the market headwinds, implement ROS, continue increasing R&D and commercial excellence and become a significantly stronger business as we exit the year. I'm also pleased to say that Kevin Moriarty, a current GPGI Board member and deeply experienced finance leader, has stepped in to be Husky's acting CFO. This is yet another benefit of having a Board of superb operators. I've worked closely with Kevin in the past and he has a tremendous reputation as an operating CFO. We are actively evaluating a long list of candidates for the full-time role. But in Kevin, we have a proven leader who brings a steady hand to Husky and I know we'll benefit from his financial and operating capabilities. I wish we could have seen the Husky market issues sooner than we did of course. I have not looked forward to today. That being said, nothing has changed concerning GPGI and the prospects for both businesses. I'm personally energized by the progress I'm seeing in both businesses. The cultural change is well on its way at Compo and the cultural change needed at Husky is being accelerated in dealing with these unfortunate market headwinds. We can't predict today how long the headwinds will continue so we'll be cautious in our 2026 outlook. That though shouldn't take away from what both businesses can accomplish given they both have a great position in a good industry. I can promise you GPGI has my full attention. You all know my family and I have a lot of our own money involved here so I want to see GPGI perform extraordinarily well as much as all of you do. We will get through this just like we have in the past. This is an unfortunate blip, nothing more. We're excited about the path GPGI is on and what it will become. So with that, I'll now turn it over to Tom Knott, our Chief Investment Officer, to review our financial performance. Thomas Knott: Thank you, Dave. Going to Slide 4. GPGI delivered pro forma adjusted net sales of $421.2 million, up approximately 3% from the prior year; pro forma adjusted EBITDA of $82.1 million, down approximately 16% from the prior year; and pro forma adjusted EBITDA margins of 19.5%, down approximately 430 basis points from the prior year. As Dave mentioned, these results reflect record sales performance at CompoSecure offset by market-related underperformance at Husky. Given Husky's size relative to CompoSecure, this macro-driven delay in demand at Husky is more than offsetting excellent performance at CompoSecure. Starting with CompoSecure. We delivered a record quarter as strategic investments in the sales force and enhanced focus on commercial excellence are driving strong organic growth supported by ROS in the factory. ROS initiatives have led to a step change in manufacturing yields and operational efficiencies throughout the production process, which were the primary drivers of adjusted EBITDA margins expanding approximately 300 basis points in the quarter. Graham and Mary will go into more detail. But I would just highlight that CompoSecure is now 18 months of implementing the Resolute Operating System and we are pleased with the cultural and operational intensity taking hold at the company today. We expect CompoSecure to continue its strong trajectory of organic sales growth and improved profitability through the remainder of 2026. Turning to Husky. Rob and Kevin will discuss our performance in the quarter and our outlook, but I will reiterate Dave's comments in noting that customer demand for Husky's products deteriorated rapidly at the end of March in a way that surprised us. This change more than offset the strong pipeline and order book we saw developing through the first 2 months of the year as customers aggressively shifted to a wait-and-see posture as resin prices spiked. While we expect the business to rebound when uncertainty subsides, this change in near-term demand has led us to revise our outlook for GPGI. Turning to Slide 5. You have heard us in the past discuss the complicated accounting we are required to use. Given the transaction this quarter on top of that existing accounting complexity, Slide 5 shows a simplified walk to pro forma adjusted EBITDA. The full reconciliation appears in the appendix. As previously announced, we refinanced our debt concurrent with the transaction closing, extending maturities and materially reducing our interest burden. This is the first major component. Transaction expenses were in line with expectations and were paid through closing. These transaction expenses taken together represent over $200 million of onetime GAAP expenses, which will not recur going forward. Net interest expense for the quarter reflects stub period interest, deferred financing cost and the interest on the new debt. Other key items include purchase price intangibles amortization, ordinary course income tax provision, noncash TRA liability remeasurement, stock-based compensation and foreign exchange impacts. Moving to Slide 6. We're providing more details this quarter than normal to give a full picture of what we were seeing at Husky when we last spoke to you on March 12 and how things changed through the end of the quarter. Pipeline orders and backlog at Husky were trending favorably through February with positive commercial activity giving us confidence in our full year guidance for both Husky and GPGI. This momentum turned quickly late in the quarter. Orders fell 16% year-over-year to the end of March as resin prices spiked and customers delayed accepting shipments and placing orders. Backlog followed a similar pattern in 1Q. We saw an accelerated recovery through February following a softer January, but the negative trend accelerated in the middle of March with simultaneously decline in order activity. Despite all of this, our pipelines remain strong growing 4% year-over-year for the first quarter and ending April up 7% year-over-year. Even with this healthy pipeline growth, we continue to see slower conversion rates as customers defer some purchase orders in the current environment. Turning to Slide 7. The underlying demand drivers for our products namely nonalcoholic beverage demand remains resilient. This supports the healthy and expanding pipeline we've discussed even though near-term orders are volatile. While macro conditions have introduced significant ambiguity that is influencing near-term customer purchasing behavior, the core fundamentals of the market that Husky serves remain intact. Even though oil market volatility and its impact on resin prices is impacting customer behavior today, the volatility is also reinforcing areas where Husky products are well differentiated. As resin prices rise, the value of our systems become increasingly compelling for customers because our equipment delivers industry-leading throughput, superior cycle times, higher preform consistency, greater uptime and lower energy consumption. All of this enables us to offer customers a 15% to 20% lower total cost of ownership versus competitive offerings. Additionally, as the price differential between virgin and recycled resin gets smaller, customers are increasingly evaluating RPET as a feedstock alternative to virgin resin. Husky is the preeminent manufacturer of recycled PET systems, which will result in additional opportunities for new equipment sales and retrofit upgrades if customers shift to more sustainable feedstocks as an alternative to now expensive virgin resin. So while the current uncertainty is causing some customers to delay near-term purchasing decisions, we remain confident that the underlying demand driver, particularly consumption of bottled water, remains strong and that this period will drive customers to focus more on productivity, sustainability and system efficiency; all areas where Husky excels. I want to also take a moment to explain how we're responding to this challenging market environment at Husky. On the cost side, we are in the process of implementing targeted furloughs across jurisdictions to reduce direct labor cost without impacting our industrial base or impairing our ability to respond to the rebound in demand. We are aggressively managing indirect spend and making necessary changes to be more efficient while also working towards a full return to office to maximize collaboration and increase cross-functional accountability across sales, finance and operations. On the commercial side, we are reinvigorating our sales force under new leadership thus commercial excellence is also a key strategic priority. Husky is a little more than a year behind CompoSecure on the implementation of ROS. And while the market backdrop for our customers has changed meaningfully in a short period of time, we remain focused on doing the right things to position the business to achieve its potential. This includes making the necessary investments to accelerate innovation and long-term organic growth through aggressive expansion of the R&D organization and an unrelenting focus on ROS implementation. These critical initiatives are not stopping despite the market volatility we are facing because they will position the business to benefit from the rebound in demand and for the future more broadly. With that, I will turn the call over to Rob Domodossola, the CEO of Husky. Robert Domodossola: Thanks, Tom. Going to Slide 8, I want to begin at the most fundamental level of what we do. Husky produces systems that make a precursor to nondiscretionary items, primarily water bottles. Demand for these products is durable with long established history of through-the-cycle growth in periods of macroeconomic volatility. The current period of volatility is no different. The demand for nonalcoholic beverages continues to expand around the world. Our customers are continuing to operate these high essential systems every day to meet this demand and that will continue. While the current demand shock driven by steep increases in oil and resin prices has made customers delay normal purchasing behavior, the fundamental drivers of demand for our products remain solidly intact. Specifically, we currently have an installed base of 13,500 systems that are primarily used to produce nondiscretionary products. This installed base is embedded in our customers' operations and drives a large and growing aftermarket revenue stream across parts, tooling and services. The installed base is globally diverse across developed and emerging markets and new systems have a higher content than legacy ones. Roughly 35% of our revenue is tied to new system sales, which is currently being impacted most significantly by the demand shock as customers pause large capital investments while 65% of our revenue is tied to recurring revenue. Although current market dynamics are causing near-term demand deferrals, the mission-critical nature of our products and consistent underlying demand drivers in the markets we serve gives us the confidence in a return to normalized order patterns. Adding to our confidence, Husky is well positioned because our system delivers the lowest total cost of ownership for customers through faster cycle times, higher quality, lower energy use and maximum uptime. As higher oil and resin costs persist; our lightweight solutions, resin efficiency and system productivity enhanced by our connected Advantage+Elite remote monitoring further differentiates the value proposition of Husky's equipment relative to competitors. Taken together, we remain very focused on delivering on what matters most to our customers; uptime, output and durability at the lowest total cost. Turning to our results. We delivered pro forma adjusted net sales of $29.8 million and pro forma adjusted EBITDA of $38.2 million, down 5% and 40% year-over-year, respectively. As Dave and Tom mentioned, the Middle East conflict altered customers' purchasing behavior nearly overnight in mid-March as supply disruptions drove sharp increases in virgin PET prices, up approximately 46% in March and April. These higher input costs combined with tighter supply and increased financing costs have weighed on near-term demand as Dave and Tom described. We view these dynamics as cyclical rather than structural. In fact elevated material and operating costs tend to reinforce demand for efficiency, lightweighting and system level performance; all areas where Husky is highly differentiated and we've seen this pattern before. When geopolitical tensions ease and input costs stabilize, deferred investments tend to rebound and they rebound sharply. Importantly, the end markets we serve are tied to essential customer needs, which has historically proven resilient across cycles. Operationally, as Dave and Tom mentioned, we are in the early stages of implementing the Resolute Operating System and our focus is now entirely on disciplined execution. ROS is fundamentally changing the way we operate and these changes matter even more in times like these. A key initiative we are implementing includes the integrated sales, inventory and operations or SIOP planning to improve job sequencing, manufacturing output and to reduce waste. We are also managing indirect spend and enhanced enterprise cost discipline across our procurement team. And of course AI will be an accelerator to ROS as we identify bottlenecks and improve lead times. ROS is critical to our long-term success and we are using it every day to drive measurable inputs; improvements to growth, operations and financial performance. While the first quarter was disappointing, we know that fundamental SIOP planning efforts underway to establish a high performance culture and invest for the future are the right steps and are improving the business. Husky operates in essential categories. As macro pressures ease, we expect to see a rebound in deferred investment consistent with past cycles. Now turning to Slide 9. Given the breadth of our business, I want to cover what we're seeing in individual product lines and key geographies starting with our product lines. Specifically in systems, orders are being deferred to the resin price volatility, tariff-related uncertainty and elevated financing costs. We expect the weakness we saw in the first quarter to continue through the year if the market headwinds persist. For aftermarket tooling, orders at the end of last year were lower due to customer uncertainty related to tariffs, which weighed on Q1 2026 sales. However, we expect this segment to return to growth in the second half as customers invest in tooling for the existing installed base while deferring the purchases of new equipment. With respect to hot runners and controllers, we saw strong revenue growth across most regions in the first quarter, but continued market ambiguity is weighing on the order outlook in the near term. Lastly, for aftermarket parts and services, market ambiguity and tariff noise impacted demand at the end of Q1, which is expected to persist in Q2, but we expect to return to growth in the second half as customers increasingly prioritize productivity. In our key geographies, starting in North America, we see a pause in demand for PET systems, partly offset by growth in tooling, spare parts and services. We believe North American market is close to trough levels and represents a market within our oldest installed base. Shifting to Europe, we're seeing growth in aftermarket tooling driven by lightweighting and sustainability mandates that support further shifts to rPET adoption. For the Middle East and Africa, we see strong consumption-driven growth in PET systems and growth in hot runners for medical applications, offset by near-term geopolitical disruptions. Turning to LatAm. Inflationary pressures and the steep tax on sugar-sweetened bottled beverages in Mexico are driving near-term softness in PT systems. While aftermarket tooling continues to grow, given shift towards lightweighting and package optimization. Lastly, in Asia Pacific, we continue to see consumption-driven growth in PET systems and demand for hot runners tied to food and packaging and medical applications. I will now turn it over to our acting CFO, Kevin Moriarty, to review our financial performance in more detail. Kevin Moriarty: Thanks, Rob. Let's turn to our financial performance on Slide 10. Given the number of moving parts, let me level set where we landed for the quarter and our path forward. As a reminder, the first quarter is seasonally the smallest for Husky with the second half of the year typically much stronger than the first. Against this backdrop, Husky faced significant macroeconomic headwinds that weighed on both growth and profitability. We reported pro forma adjusted net sales of $290.8 million, down 5% compared to the prior year as declines in new system sales and tooling offset strong growth in spare parts, hot runners and controllers. Pro forma adjusted EBITDA decreased 40% to $38.2 million, driven primarily by lower revenue and resulting under-absorbed labor and continued investments in R&D and front-end sales capabilities to support future growth. In aggregate, these factors translated to an approximately 770 basis point erosion in pro forma adjusted EBITDA margin to 13.2%. As Dave, Tom and Rob all mentioned, we had over $20 million in revenue that got pushed out at the very end of the quarter. This included approximately $6 million tied to customer delays in taking deliveries, approximately $5 million tied to shipment and logistical delays tied to the Middle East conflict and approximately $4 million tied to delays in customer payments. Combined with the growth investments being made, this quantum of deferred revenue exacerbated margin degradation in the seasonally smallest quarter of the year as we carried excess labor costs relative to demand. Consistent with historical first half and second half seasonality, we expect margins to expand in the second quarter and continue improving sequentially throughout the year, driven by improved fixed cost absorption in the seasonally stronger second half, the impact of ongoing cost actions and acceleration operational efficiencies from ROS-led initiatives. These initiatives are central to our thesis of driving sustained margin expansion and bolstering long-term profitability at Husky. On the tariff front, after the Supreme Court invalidated IEEPA tariffs in February, the U.S. implemented modified Section 232 tariffs on April 6, 2026. While continued tariff policy pivot add uncertainty to when customers place their orders, we do not expect them to have a material impact on our results. The U.S. market represents less than 27% of our total sales, which helps moderate our overall exposure. Of this, roughly 40% of the revenue relates to systems and tooling shipped into the U.S. that is subject to a 15% tariff, 1/3 from imported aftermarket parts that have tariffs declining from 50% to 25%, and the balance is primarily hot runners, parts and services that are locally produced or delivered and therefore, not impacted. In addition, consistent with our standard terms and conditions, we have been successfully passing through tariff-related costs to customers since the third quarter of last year and will continue to do so. Finally, our Husky equipment qualifies under USMCA and remains exempt from the 3.1% U.S. import duty, further limiting our exposure. And we are not alone when it comes to tariffs. Industry demand in the U.S. has been negatively impacted for the last 2 years. The U.S. is an importer of PET systems and Husky's primary peers do not have domestic production capability. We believe our North American presence positions us favorably relative to international peers importing into the U.S., while this tariff regime remains in place, while also allowing us to capture the inevitable cyclical upturn. With that, I will turn the call over to Graham Robinson, the CEO of CompoSecure. Graham Robinson: Thank you, Kevin, and good morning, everyone. Going to Slide 11. We delivered an outstanding quarter at CompoSecure, continuing to build upon our commercial and operational momentum. We achieved record pro forma net sales of $130.4 million, up 26% year-over-year, underscoring both the effectiveness of our commercial execution and the robust demand for premium metal cards. We are seeing this strength translate into new program wins and accelerating issuer activity across leading fintechs and traditional financial institutions. We're also seeing growth in metal cards that have Arculus capabilities. At the same time, the Resolute Operating System continues to have a deep and profound impact across the business. We are realizing meaningful improvements across all functional areas from sales performance to improved operations, which helped us deliver strong pro forma adjusted EBITDA of $47.6 million, up 37% compared to a year ago. While we are encouraged by our progress, we remain highly focused on investing in our future, in line with our strategic and execution framework that includes 3 pillars of growth: one, accelerating organic growth; two, driving international expansion; and thirdly, increasing Arculus momentum. In the first quarter, we saw several exciting customer programs go live, including the American Express Graphite business card, X Money from Elon Musk, the Robinhood Platinum card and Revolut Audi F1 card as well as Fold, [ Cast ], Kraken and MetaMask US, which provide crypto rewards and the optionality to pay with crypto. These signature program wins reflect the breadth of demand for premium card solutions and our differentiated value proposition, combined with advanced design, engineering and manufacturing capabilities to reinforce our position as the partner of choice for issuers launching high-impact card programs. Most recently, we strengthened our leadership team by appointing general managers to lead our Arculus and international businesses. With that, I will turn it over to our CFO, Mary Holt, to review our financials in more detail. Mary Holt: Thank you, Graham. Let's turn to our financial performance on Slide 12. In the first quarter, CompoSecure delivered strong results across all key financial metrics, driven by continued demand strength and increasing impact of the Resolute operating system across the organization. As Graham mentioned, adjusted net sales were $130.4 million, up 25.6% year-over-year, driven by robust demand from traditional banks and leading fintech customers. Adjusted EBITDA increased 36.8% to $47.6 million, reflecting both volume growth and meaningful operational efficiencies, which led to a 300 basis point improvement in adjusted EBITDA margin to 36.5%. Some of these productivity gains will continue to flow through to profitability, while some will be strategically reinvested to support sustained growth. Overall, this performance highlights the operating leverage and tangible benefits we are realizing from the systematic deployment of the Resolute Operating System, including enhanced throughput and process innovation, which has led to higher and more consistent yields at the factory level. I will now hand it back to Tom to review GPGI's revised guidance. Thomas Knott: Thanks, Mary. Turning to Slide 13. We are introducing new guidance for 2Q '26 and revising our full year 2026 outlook to reflect the macro-driven headwinds facing Husky. For 2Q ' 26, we expect net sales between $425 million and $475 million, pro forma adjusted EBITDA between $105 million and $120 million and pro forma adjusted EBITDA margins between 24.7% and 25.3%. For FY '26, we now expect pro forma net sales between $1.95 billion and $2.1 billion, pro forma adjusted EBITDA between $550 million and $610 million and pro forma adjusted EBITDA margins between 28.2% and 29%. Consistent with the historical trends in the seasonally lowest quarter for free cash flow and despite the market-related challenges we faced at Husky, we generated approximately $29 million of adjusted free cash flow similar to last year's level, which gives us further confidence in our revised full year estimate of between $275 million and $325 million in pro forma adjusted free cash flow. Finally, we anticipate ending the year with approximately 3x total leverage. Our revised guidance reflects the impact of the market shock facing Husky, but we continue to view 2026 as a critical and foundational year of cultural change, ROS implementation and strategic seed planting at both businesses that will position us to deliver best-in-class top line growth, margin expansion and free cash flow generation across the GPGI platform. This remains our focus, and we are confident in the work underway at both businesses. With that, I'll hand it back to Dave for some closing remarks. David Cote: Thanks, Tom. We've got 2 businesses in CompoSecure and Husky that hold great positions in good industries, both of which are becoming even stronger through the cultural transformations their teams are driving and the consistent deployment of the Resolute Operating System. You can see the results clearly now at CompoSecure. The market dislocation we're experiencing in Husky is making those improvements harder to see, but they are there. The culture and the business processes are getting better. We're committed to continuing the course, investing smartly for the future and the results of our efforts will become evident. So with that, I'd like to open up the call for Q&A. Operator: [Operator Instructions] Our first question comes from the line of Jacob Stephan with Lake Street Capital Markets. Jacob Stephan: I guess, first, I just kind of wanted to understand on the guidance a little bit better and make sure I have clarification on Slide 13, you have kind of 2 arrows pointing to the high end and the low end. So the low end represents Iran conflict being delayed with the Strait disrupted and the high end would be if the conflict is resolved. I guess if you could give a little bit better sense on like timing. Does the low end of the range, I guess, assume the conflict last for the remainder of the year? Or does the high end assume that this is over to borrow? Any kind of comments you can give there? David Cote: Yes. The way I would look at it is what we're trying to reflect is the impact of delays. So if the delays continue because the Iran conflict just keeps going, then those delays are going to cause us to come into the lower end of the range. To the extent that our customers let go of those delays and maybe even if the conflict is continuing, but they stop delaying because they need the aftermarket or they need the machines, then we'll end up towards the higher end of the range. So it's more a reflection of what do we think could happen on customer delays today driven by the Iran conflict and tariffs. Jacob Stephan: Okay. Got it. And then I guess just kind of continuing on the guidance factor. When you look at kind of the second half for adjusted EBITDA, I think it implies relatively higher adjusted EBITDA in the second half. I know Q4 is a strong quarter for Husky, but we're looking at kind of $450 million to $550 million of EBITDA in the back half versus the first half. So I guess any color there, especially when you kind of talk about the margins compressing on Husky a little bit? Kevin Moriarty: Sure. This is Kevin. If you look at our first half, second half; seasonally, second half represents roughly 60% of our revenue base. And again, with the cost -- better cost absorption, vertical contribution margins improving as well as the cost actions, we feel that the second half will be stronger. Jacob Stephan: Okay. And then just lastly on CompoSecure the core business there. Wondering if you could touch on the, I guess, new card launch pipeline. Is that strong looking at the kind of the last 3 quarters of the year? Graham Robinson: Yes. The pipeline continues to be quite strong. And we speak in a number of different dimensions. The programs that we have with our existing customers, those customers are also continuing to create and generate new programs also. And then lastly, we continue to penetrate a new customer base, both internationally and domestically and also with fintechs and with our traditional banks. So we are -- we continue to be quite optimistic about the strength of the pipeline that we have and what we're seeing going forward. Operator: Our next question comes from the line of Tomo Sano with JPMorgan. Tomohiko Sano: I'd like to ask about the Husky s margin declined by 770 basis Y-o-Y in the past quarters. So looking ahead to second quarter and remainder of the year, what specific factors or initiatives do you expect will drive the margin improvement towards your full year guidance? Could you qualify the key assumptions for margin recovery in the back half, please? Kevin Moriarty: Sure. So as I alluded to, the first quarter is historically are some lower revenue number. So as we sequentially go through the year, revenue will grow, which has been our historical pattern, heavier weighted to the third and fourth quarters. So the variable part contribution margin we're expecting on that is going to sequentially improve the margin rate. We're driving the ROS initiatives internally, which we expect to provide some lift as well as we've commented on cost actions that we're taking. We institute some furloughs as well as some indirect cost actions that we're also expecting to provide some lift. Tomohiko Sano: And a follow-up regarding leveraging the ROS to drive the margin improvement for Husky. Could you share some examples of the cultural changes and operational opportunities being executed to enhance resilience and profitability, please? Robert Domodossola: Sure. Maybe I'll start. It's Robert. One of the biggest things is what I mentioned, the SIOP process is really intended to level out the factories. It's hard to keep your costs under control if you have peaks and valleys. But with level loading of the factories, it's much easier to get the labor and material costs aligned with the volume that's coming out of the factories. So that's one of the biggest initiatives that we have right now. With reduced lead times, that also helps to level load the factories, not just making us more competitive, but more profitable as well. We have a significant focus on supply chain procurement excellence that's helping with material cost reduction. And finally, on the commercial excellence side, our whole go-to-market approach, we are taking steps to have some very effective value propositions globally rolled out, especially with regards to our new product launches. Operator: Thank you. And I'm currently showing no further questions at this time. This does conclude today's call. Thank you all for your participation. You may now disconnect. 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CompoSecure delivers record ROS-driven results Husky impacted by unexpected market headwinds due to oil and resin price shock and continued tariff uncertainty ROS deployment accelerating across the enterprise First Quarter Highlights Results compared to prior year period unless otherwise noted; pro forma metrics inclusive of Husky Technologies for full quarter. Pro Forma Adjusted Net Sales of $421.2 million, up 3% GAAP Net Loss of $235.0 million Pro Forma Adj. EBITDA of $82.1 million, down 16%, and Pro Forma Adj. EBITDA margin of 19.5%, down 430 bps Second Quarter 2026 Outlook Following quarterly guidance is based upon expectations for the combined results of CompoSecure and Husky Technologies. Adjusted Net Sales of $425 to $475 million Adjusted EBITDA of $105 to $120 million Full Year 2026 Outlook Following annual guidance is based upon expectations for the combined results of CompoSecure and Husky Technologies including for full first quarter. Pro Forma Adjusted Net Sales of $1,950 to $2,100 million Pro Forma Adjusted EBITDA of $550 to $610 million Pro Forma Adjusted Free Cash Flow of $275 to $325 million Non-GAAP year-end Net LTM Leverage of approximately 3.0x NEW YORK, May 07, 2026 (GLOBE NEWSWIRE) -- GPGI, Inc. (NYSE: GPGI), a diversified multi-industry platform for companies with great positions in good industries, today announced its financial and operating results for the first quarter ended March 31, 2026. Dave Cote, GPGI’s Executive Chairman, noted: “The first quarter was highlighted by record sales at CompoSecure, reflecting the effectiveness of implementing the Resolute Operating System for both growth and profitability. At Husky, we unfortunately encountered unanticipated market headwinds due to oil and resin price volatility and continued tariff uncertainty. As a result, we are taking necessary cost actions while continuing to make strategic investments for future growth. We will navigate these market headwinds, implement ROS, and become a stronger business as we exit the year.” Tom Knott, GPGI’s Chief Investment Officer, added: “While the abrupt macroeconomic headwinds facing Husky overshadowed the record sales at CompoSecure, we remain focused on driving cultural change, ROS implementation, and continued seed planting to make 2026 a foundational year that sets us up to deliver best-in-class top line growth, margin expansion, and free cash flow generation.” Financial Results – First Quarter 2026 (1) Pro Forma measures reflect financial results as if the business combination with Husky Technologies had occurred on January 1, 2025. (2) Adjusted measures reflect financial results as if GPGI consolidated the results of GPGI Holdings, L.L.C., including its operating businesses CompoSecure and Husky, for the periods shown. (3) As of March 31, 2026, $115.1mn of cash and restricted cash was held at GPGI Holdings, and not included in the GAAP results. Note on Accounting Treatment As a result of the spin-off of Resolute Holdings Management, Inc. (“Resolute Holdings”) and the execution of the management agreement with Resolute Holdings (the “CompoSecure Management Agreement”) on February 28, 2025, GPGI is required to account for the operating results of its wholly owned operating subsidiary, GPGI Holdings, L.L.C. (“GPGI Holdings”), under the equity method in accordance with U.S. GAAP, effective February 28, 2025. Both the CompoSecure and Husky Technologies business units are under GPGI Holdings. The GAAP results presented above for the first quarter 2026 and the portion of the 2025 comparative period from February 28 to March 30, 2025 reflect the conversion to equity method accounting. For clarity of comparisons and to best reflect the financial results, the Company is also presenting the first quarters of 2026 and 2025 on a consolidated basis consistent with historical presentation under the “Non-GAAP” headings. First Quarter 2026 Earnings Conference Call GPGI’s leadership team will discuss the Company’s results during a conference call on Thursday, May 7, 2026, starting at 8:00 a.m. EDT. The call and accompanying presentation will contain forward-looking statements and other material information regarding GPGI’s financial and operating results. A live webcast and replay of the call will be available on the Events & Presentations section of GPGI’s website at https://gpgi.com/events-presentations/. Date: Thursday, May 7, 2026 Time: 8:00 a.m. EDT Dial-in registration link: Here Live webcast registration link: Here About GPGI GPGI, Inc. (NYSE: GPGI) is a diversified, multi-industry platform for companies with great positions in good industries. The platform is managed by Resolute Holdings Management, Inc. (NYSE: RHLD) and is purpose-built to acquire, own, and scale high-quality businesses led by great operators, benefiting from a permanent capital base and the systematic deployment of the Resolute Operating System. GPGI currently consists of CompoSecure and Husky Technologies – two market leaders with best-in-class financials and durable opportunities for growth. For more information, please visit GPGI.com. About CompoSecure, a GPGI Company Founded in 2000, CompoSecure is a technology partner to market leaders, fintechs, and consumers enabling trust for millions of people around the globe. CompoSecure is a leader in metal payment cards, security, and authentication solutions. CompoSecure combines elegance, simplicity, and security to deliver exceptional experiences and peace of mind in the physical and digital world. CompoSecure’s innovative payment card technology and metal cards with Arculus security and authentication capabilities deliver unique, premium branded experiences, enable people to access and use their financial and digital assets, and ensure trust at the point of a transaction. For more information, please visit CompoSecure.com and GetArculus.com. About Husky Technologies, a GPGI Company Founded in 1953, Husky is a technology pioneer that enables the delivery of essential needs to the global community with industry-leading expertise and service. Husky is a leader in highly engineered equipment and aftermarket services. Husky’s products are used to manufacture a wide range of plastic products, including beverage and food containers, medical devices, and consumer electronic parts. Husky provides comprehensive and integrated systems solutions that are comprised of injection molding machines, molds, hot runners, controllers, and auxiliaries. For more information, please visit Husky.co. Forward-Looking Statements This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although GPGI believes that its plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, GPGI cannot assure you that it will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including but not limited to statements concerning GPGI’s possible or assumed future actions, business strategies, plans including with respect to cost actions, events, results of operations, demand, the implementation and anticipated impacts of the Resolute Operating System, and statements relating to macroeconomic factors including oil and resin price volatility, trade policy including tariff uncertainty, customer demand, profitability, strategic investments and otherwise with respect to, and guidance for, second quarter and full year 2026, are forward-looking statements. In some instances, these statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “outlook” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negatives of these terms or variations of them or similar terminology. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect GPGI’s future results and could cause those results or other outcomes to differ materially from those expressed or implied in GPGI’s forward-looking statements: the ability of GPGI to grow and manage growth profitably, implement the Resolute Operating System successfully, maintain relationships with customers, compete within its industry and retain its key employees; impacts on customers and on us of global geopolitical, economic, business, competitive and/or other factors, including tariffs, conflicts, supply chain constraints, oil and resin prices and financing constraints; risks associated with our plans and strategies including cost actions; the outcome of any legal proceedings that may be instituted against GPGI or others; future exchange and interest rates; changes in our accounting and/or financial presentation; anticipated levels and timing of demand for the products and services of GPGI’s businesses; the successful implementation of GPGI’s strategies; and other risks and uncertainties, including those under “Risk Factors” in filings that have been made or will be made with the Securities and Exchange Commission. GPGI undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Use of Non-GAAP Financial Measures Due to the spin-off of Resolute Holdings and the resulting shift to equity method accounting under GAAP beginning February 28, 2025, GPGI is presenting a broader set of Non-GAAP measures, including an Adjusted Statement of Operations (Unaudited), an Adjusted Balance Sheet (Unaudited) and an Adjusted Statement of Cash Flows (Unaudited) to provide investors with financial information that we believe allows for greater comparability with our historical financial presentation and better represents the underlying performance of the standalone business across reporting periods. This press release also includes certain additional Non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that may be different from Non-GAAP financial measures used by other companies. GPGI believes Pro Forma Net Sales, Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Adjusted Net Income, Adjusted EPS (Basic and Diluted), Adjusted Cash & Short-Term Investments, Adjusted Net Debt, and related measures are useful to investors in evaluating GPGI’s financial performance. Specifically, we believe Adjusted Net Income, Adjusted EPS (Basic and Diluted), Adjusted Cash & Short-Term Investments and Adjusted Net Debt provide greater comparability with historical results, because they show GPGI’s financial results as if GPGI consolidated the financial results of its operating businesses consistently across periods, and exclude certain non-recurring and non-operational items, and Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin further adjust for the results of Husky from January 1-11, 2026, prior to the completion of GPGI’s combination with Husky, for greater visibility of GPGI’s results following the completion of the transaction. Pro Forma Net Sales similarly adjusts for the results of Husky from January 1-11, 2026.GPGI uses these Non-GAAP measures internally to establish forecasts, budgets and operational goals to manage and monitor its business, as well as evaluate its underlying historical performance and/or measure incentive compensation. We believe that these Non-GAAP financial measures depict the true performance of the business by encompassing only relevant and controllable events, adjusting for variable interest entity accounting requirements that render our results incomparable across periods, and show the effect of acquisitions as if they had occurred at the beginning of the relevant period, enabling GPGI to evaluate and plan more effectively for the future. These Non-GAAP measures should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from these measures are significant components in understanding and assessing GPGI’s financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of GPGI’s liquidity. These Non-GAAP measures may be different from similarly titled Non-GAAP measures used by other companies. Additionally, GPGI’s debt agreements contain covenants based on variations of certain of these measures for purposes of determining debt covenant compliance. GPGI believes that investors should have access to the same set of tools that its management uses in analyzing operating results. Please refer to the tables below for the reconciliation of GAAP measures to these Non-GAAP measures. Due to the forward-looking nature of the financial guidance included above under “Second Quarter 2026 Outlook” and “Full Year 2026 Outlook,” the charges excluded from the forward-looking Non-GAAP financial measures including Pro Forma Net Sales, Pro Forma Adjusted EBITDA, Pro Forma Adjusted Free Cash Flow and Non-GAAP Year-end Net LTM Leverage including with respect to depreciation, amortization, interest, and taxes that would be required to reconcile the Non-GAAP financial measures to GAAP measures are inherently uncertain or difficult to predict, so it is not feasible to provide accurate forecasted Non-GAAP reconciliations without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included, and no reconciliation of the forward-looking Non-GAAP financial measures is included. GPGI Contact [email protected] Note: The Non-GAAP columns represent (1) a consolidation of the Company’s results with those of GPGI Holdings, for consistency with prior consolidated presentation, and (2) the addition of the financial performance of Husky from January 1-11, 2026, prior to the completion of the acquisition of Husky. (1) Includes amortization of deferred financing costs for the three months ended March 31, 2026. Note: The Non-GAAP columns represent a consolidation of the Company’s results with those of GPGI Holdings, for consistency with prior consolidated presentation. (1) Includes amortization of deferred financing cost and for the three months ended March 31, 2025. (2) Includes the changes in fair value of warrant liability and earnout consideration liability for the three months ended March 31, 2025. Note: The non-GAAP columns represent a consolidation of the Company’s results with those of GPGI Holdings, for consistency with prior consolidated presentation. Note: The Non-GAAP column represents a consolidation of the Company’s results with those of GPGI Holdings L.L.C. (“GPGI Holdings”), for consistency with prior consolidated presentation. Note: Non-GAAP EPS does not pro forma for periods preceding the acquisition of Husky. 1. Includes the changes in fair value of warrant liability and earnout consideration liability. 2. Reflects current and deferred income tax expenses. For the three months ended March 31, 2026, it was calculated by applying the Company's assumed effective tax rate. 3. Applies treasury stock method with assumed exercise at average market price. No warrants were outstanding as of the three months ended March 31, 2026.