Thank you. Good morning and welcome to Madison Air's first earnings call as a public company.

We're thrilled to speak with you today about Madison Air and our first quarter 2026 earnings performance. Joining me today: Jill Wyant, President and Chief Executive Officer, and JJ Foley, Chief Financial Officer.

Before we begin, I'd like to remind everyone that certain statements on this call are forward-looking in nature and are subject to risks and uncertainties that could cause actual results to differ materially. For information concerning these risks, please see Madison Air's recent SEC filings.

We undertake no obligation to update these statements as a result of new information or future events. In addition, in today's remarks, when comparing 1Q 2026 results to 1Q 2025 or referring to our 2025 performance, such information is presented on a combined basis for Madison Air and AprilAire, calculated as if AprilAire had been owned since January 1, 2025.

We will also refer to certain other non-GAAP financial measures. You can find calculations and a reconciliation of these measures to the most closely comparable GAAP measure in our earnings release, the presentation accompanying this call, and in the supplemental information as applicable, which can be found in the Investor Relations section of our website at madisonair.com.

With that, I'll turn the call over to Jill.

Thank you, Steve. Good morning, everyone, and thank you for joining us to our first quarter earnings call.

This call marks an historic milestone for the Madison Air team to present our earnings for the first time as a public company following our successful IPO. I'll begin by providing an overview of our business and our value creation model.

I'll then hand the call over to J.J. to discuss our first quarter 2026 financial results and guidance for full-year 2026, and then I'll wrap things up with key takeaways before we open the call for Q&A.

Before we dive in, a bit of context as you get to know Madison Air and our team. I joined the company as President and CEO in 2021 after serving several leadership roles with Ecolab, most recently as President, Global Regions and Global Life Sciences and Healthcare.

My career has spanned advanced manufacturing, operational execution on a global scale, and large-scale growth transformations. The sum of my experiences shapes how we're building this company, and it's what gives me confidence in the opportunity ahead of us.

With that, please turn to slide 5. At Madison Air, we see air differently.

Our mission is to make the world safer, healthier, and more productive through the power of better air. We build and scale superior air quality businesses that operate in high-value niches adjacent to traditional HVAC across commercial and residential markets.

Our portfolio of leading brands, which includes Addison, AprilAire, Big Ass Fans, Broan-NuTone, Nortek Air Solutions, Nortek Data Center Cooling, and Reznor, has delivered durable compounding growth and in fact outpaced the U.S. GDP growth rate in 16 of the last 18 years on an historical basis through 2025.

Our recent IPO was a significant milestone, enabling us to advance our strategy to deliver scalable, profitable, long-term growth. We believe we have a scalable performance trajectory for 2026 and beyond.

Our three core strengths deliver better air, stronger customer outcomes, and superior returns for our investors. Madison Air's first core strength is what we call return on air, the tangible value created when air becomes a strategic asset.

It's the tangible impact our solutions have on customer outcomes in high-value environments where air affects uptime, efficiency, compliance, productivity, and health. From reducing costly downtime in data centers, which can cost our customers up to $9,000 per minute, to contributing to improved consistency and yield in semiconductor clean rooms by reducing contamination incidents, or reducing harmful volatile organic compound concentrations in homes, Madison Air delivers return on air in mission-critical environments where air quality is vital to customer success.

Our second core strength is leadership in growth markets. In our commercial segment, we serve 15 structurally attractive high-growth end markets where performance matters and customers are willing to invest in highly engineered air quality solutions because of their capacity to deliver tangible results.

In residential, we train contractors to identify indoor air quality opportunities and communicate the value of our complete Healthy Air System. The company's third core strength is a disciplined value creation model that seeks to convert that demand into consistent profitability and strong cash flow, with a leadership team focused on strategically deploying capital to drive durable returns.

Our decentralized organization structure allows us to invest closest to the point of impact, that is to say close to the customer. Our entrepreneurial culture drives dedicated teams to wake up every day focused on the markets and customers they serve.

We estimate that we've more than tripled our total addressable market since 2021 by sharpening our focus on high-growth sectors with more complex process requirements, and are well-positioned to create durable vectors for long-term value. This model has allowed us to scale efficiently, sustain performance through cycles, and compound enterprise value over time.

Being locally agile at enterprise scale is a competitive advantage for us. The powerful combination of outcome-driven solutions, focus on growth markets, a scalable operating model, and consistent execution underpins both our near-term opportunities and long-term potential.

Please turn to slide 6. At a high level, as of 2025, Madison Air is a $3.5 billion revenue business with strong underlying profitability and cash generation, delivering 26.6% EBITDA margins and $440 million in free cash flow last year.

We've intentionally built a balanced portfolio across commercial and residential segments with meaningful exposure to replacement and upgrade activity, which helps drive resilience across cycles. We're also seeing an increasing share of demand from the aftermarket, which adds stability and more recurring revenue characteristics.

Our aftermarket sales are approximately 10% of total revenue today, and the services opportunity is growing at a double-digit CAGR. The available growth in services and potential life cycle value is very attractive.

We estimate this is around 3x for Nortek and up to 9x for AprilAire. We're accelerating that growth through initiatives like Nortek Air Plus, expanding our services and parts capabilities, and by building momentum at businesses like Big Ass Fans, where we're growing installation and preventative maintenance.

Geographically, the business is predominantly North America focused, where we have strong market positions and established customer relationships. As of March 31st, 2026, we had over 8,800 employees, with about 600 of those focused on R&D to drive innovation.

Altogether, we believe our margin profile, strong cash conversion, and end market mix gives us a durable and balanced model for revenue growth and earnings. Please turn to slide 7.

We believe Madison Air's portfolio brings together broad product and service capabilities with significant opportunity as we apply our return on air approach to high-value, performance-driven end markets spanning both commercial and residential segments. We operate within an estimated $40 billion North American addressable market supported by powerful secular tailwinds, including the reshoring of advanced manufacturing, growing demand for energy efficiency, aging buildings and housing stock, increased focus on human health and wellness, and, of course, the rapid growth of AI and compute.

On the commercial side, we focus on mission-critical environments like data centers, hospitals, and advanced manufacturing facilities where performance, reliability, and energy efficiency directly impact customer outcomes. Our capabilities span the full range from thermal management and air handling to humidity control and beyond, allowing us to deliver integrated solutions rather than stand-alone products.

In residential, we play a leading role in advancing healthier solutions for single and multifamily homes. As homes become more airtight to improve energy efficiency, the need for indoor air quality solutions, including purification, ventilation, humidification, dehumidification, and sensors and digital controls, becomes even more important.

Through our channel partners, we have about 40 million annual in-home touchpoints with potential customers through HVAC replacement and service opportunities, creating a powerful route to drive adoption of these solutions. Across both segments, the common thread is our focus on solving complex air challenges in ways that are tangible, differentiated, and essential to our customers.

Please turn to slide 8. Our new business pipeline remains strong, with continued growth across key end markets.

Combined company orders grew 29%, including AprilAire orders prior to the AprilAire acquisition, and we reached a 1.4x book-to-bill ratio in the first quarter. While our orders can naturally fluctuate quarter-to-quarter based on project timing and customer schedules, our first quarter results reflect solid underlying demand despite a dynamic macro backdrop.

We exited the first quarter with record backlog of $2.5 billion, up 116% year-over-year on a combined company basis, providing good visibility into near-term revenue. Our pro forma net sales growth of 13% reinforces the growth momentum we are driving across the portfolio.

At the same time, we are closely monitoring the potential impact of the Middle East conflict on our supply chain, where we have been building resilience since the post-COVID dynamics of 2021. We're also watching the pace of customer decision-making while staying focused on execution and on controlling what we can control operationally.

As of today, we are not seeing a material impact. Additionally, as a reminder, orders face tougher comps in the second half, particularly in the fourth quarter of 2025, where the commercial segment printed a book-to-bill of 2.2x last year.

On the right, this example with Big Ass Fans illustrates how our innovation can translate directly into customer value to deliver tangible productivity gains, safety improvements, and cost savings, which is central to our customers and to our ability to sustain both growth and value pricing. This example demonstrates what return on air means for our customers.

Our Velocity trailer cover solution, which is mounted on the side of a manufacturing dock door, enables a Big Ass Fans customer to gain up to five additional trailer loads per dock per day, and delivers cooling performance in approximately half of the time of our closest competitor. It's also a great example of how our innovation is often born through the deep customer insights we gain over the course of long-standing relationships, which in this case was through our direct sales channel.

Slide 9 ties together how we translate our return on air value proposition into consistent value creation. At the core, we transform air from a commodity into a strategic asset that drives tangible business outcomes.

For customers, this means higher productivity, lower energy costs, health, comfort, and home preservation, and protection of mission-critical operations. We strive to leverage this to expand our presence in advantaged, higher-growth end markets where we believe there's meaningful runway for continued growth.

We actively drive both organic growth and disciplined capital allocation into adjacencies, supported by a focused 80/20 operating model and a strong ownership mindset across our culture. The result is a business designed to deliver sustainable, profitable growth and strong cash generation over time.

One essential element of our unique value creation model is our team, the 8,800-plus people who power Madison Air. We invest in our team and our culture to create consistency and alignment and to ensure the value creation model is embedded across the organization and shows up in how we execute every day.

Over the past few weeks alone, we've put more than 60 leaders from across Madison Air through rigorous sales and 80/20 training courses, sharpening our focus on the highest impact levers that drive growth across our businesses. We've hosted immersive sessions equipping our team to use AI as a growth enabler and to build capability throughout the organization so we can move faster and deliver stronger outcomes.

We also held an enterprise-wide innovation summit, which I host twice every year. These summits convene a diverse cross section of leaders from engineers and R&D to sales and marketing to solve our customers' thorniest challenges through innovation, all while sharing ideas, surfacing opportunities, and scaling best practices across the company.

This is collaboration with impact, grounded in solving real customer problems and delivering return on air. When our people are aligned, equipped, and moving with speed and with clarity, it shows up in how we perform.

The result is a business designed to deliver sustainable, profitable growth and strong cash generation over time. With that, I'll turn it over to J.J.

to walk through our first quarter financial performance and the outlook.

Thanks, Jill, and good morning, everyone. I'm excited to be here with you today on our first earnings call as a public company.

It's been an energizing and rewarding journey to get here. For those of you ramping on Madison Air, I've been with the company since early 2021.

Prior to joining, I held several executive finance roles at GE, most recently serving as the Senior Director of Investor Relations. At Madison Air, we're focused on building credibility and transparency with our new public market stakeholders.

With that, please turn to slide 11. On a pro forma basis, net sales were up 13%, and adjusted EBITDA grew 16%, with adjusted EBITDA margins expanding 70 basis points.

All three demonstrate the power of consistent execution. Pro forma net sales grew 13% year-over-year to $924 million, with strong volume growth and price realization in the commercial segment as well as strong demand for healthy air systems and price realization in the residential segment.

That top-line growth along with productivity gains and disciplined cost management translated into pro forma 16% adjusted EBITDA growth, with margins increasing by approximately 70 basis points to 25.3%, despite ongoing growth investments in the business. Because of the organizational transactions associated with our April IPO, the share count for the first quarter EPS is not comparable to what we expect for the remainder of the year.

To that end, we're reporting our adjusted net income figure here, which was $93 million in the quarter and represents 36% pro forma growth year-on-year, driven by revenue and pretax earnings growth mentioned above. On cash, we generated $50 million of reported free cash flow in the quarter, which represents free cash flow conversion of 117%.

Moreover, we met our pre-IPO delevering goals for the quarter, reducing net leverage by nearly a quarter turn from year-end 2025. It's important to note that the first quarter cash flow generation was in line with our expectations, which included a normal seasonal working capital build that we expect will normalize throughout the course of the year and is enabled by our asset-light model.

Overall, the quarter demonstrates our ability to convert revenue growth into earnings growth and cash generation. With that, let's review the segment-level performance on slide 12.

In commercial, we drove solid orders growth. Orders were up 41% year-over-year on a combined company basis, reflecting continued momentum in key technology platforms, including thermal management, air handling, and energy efficiency.

Backlog increased 124% on a combined company basis, providing good visibility and solid future revenue momentum. Strong customer demand drove 24% year-over-year reported net sales growth, or 18% growth on a combined company basis, to $610 million, which was driven by a combination of volume, pricing, and favorable mix.

This is particularly applicable in higher-value applications. Reported segment adjusted EBITDA grew 25% to $161 million, outpacing revenue growth, reflecting operating leverage supported by volume growth, ongoing productivity investments, expense management, and pricing discipline.

Overall, the segment continues to benefit from exposure to mission-critical end markets, including data centers, clean energy, healthcare, and other commercial applications. We remain focused on executing our backlog and sustaining our growth momentum.

Now, please turn to slide 13 for residential results. The residential segment performance was solid, reflecting a more balanced demand environment.

Given the short cycle nature of this business, order and backlog is less relevant than in commercial. With that said, we saw orders growth in the low single digits in the quarter.

We continue to benefit from strong demand for AprilAire's Healthy Air System. Despite softness in housing starts and remodeling activity, our first quarter results demonstrate the resilience of our model, which was purpose-built to navigate headwinds like these with vast white space penetration opportunity, opening paths to growth in otherwise suboptimal residential conditions.

In addition to a full suite of trusted brands and patent-protected solutions across the portfolio, our AprilAire Academy has trained and armed contractors to sell indoor air quality solutions like purification and humidification throughout cycles. Reported net sales increased 60%, or 4% on a combined company basis, to $316 million, supported by pricing, while overall volume was roughly flat.

In addition, reported segment adjusted EBITDA grew 84% to $79 million, with margin expansion driven by cost actions, productivity, and favorable mix. Overall, the segment continues to demonstrate strength and remains differentiated in product, channel, and results from more traditional residential HVAC providers.

We remain focused on driving growth through innovation and channel penetration execution to effectively position us as demand inflects. Please now turn to slide 14.

We'll talk a little bit about the balance sheet. The strength and flexibility of the balance sheet is supported by continued strong cash generation.

As of March 31st, net debt was approximately $5.5 billion, with net leverage of 5.7x. As a reminder, as of March 31st, Madison Air was still a private company, and therefore the first quarter debt levels do not yet reflect the approximately $2.6 billion in net proceeds from the IPO, where the full greenshoe was exercised and we executed a concurrent private placement.

The IPO was a first and important step in strengthening our balance sheet. 100% of the net proceeds were used to retire debt, including accrued and unpaid interest.

This includes our full $2.4 billion initial term loan and an additional $200 million on the incremental term loan, improving financial flexibility and positioning us to continue investing in organic growth, delevering the balance sheet, and strategic acquisitions. If we include the proceeds from the IPO and concurrent private placement, our net leverage would be 3x trailing.

We believe we have clear line of sight to achieve our long-term targeted range of less than 2.5x net debt-to-EBITDA in the next 12 months. As of the first quarter, we maintain solid liquidity of roughly $563 million, including $229 million of cash on hand and $334 million of available capacity on our revolver, providing ample flexibility to support operations and strategic initiatives.

In the second quarter, our ratings were upgraded two notches by the rating agencies, reflecting our lower leverage and financial performance. Additionally, we completed an upsizing of our revolver to $1.3 billion, which will become active in the second quarter.

We want to reiterate our thanks to our great banking partners for the continued support. The business continues to generate strong cash flow, and reported free cash flow conversion of approximately 117% in the first quarter was driven by disciplined working capital management and earnings growth.

Reported LTM free cash flow margins were 12%, and organically, we expect free cash flow conversion of net income above 100%. With that, please now turn to slide 15 to discuss capital allocation priorities.

Our capital allocation framework remains consistent, disciplined, focused on deploying cash to maximize shareholder returns, centered on three clear priorities. First, we continue to invest in high-return organic growth opportunities, particularly in mission-critical, defensible technologies and durable end markets where we see the strongest demand for margin expansion potential.

Second, we're committed to maintaining a strong, flexible balance sheet with a clear path to be able to deliver net leverage of less than 2.5x net debt-to-EBITDA in the next 12 months. Third, we intend to pursue disciplined and strategic M&A to accelerate growth and strengthen the portfolio.

We're focused on assets that expand our capabilities, enhance our technology platforms, and deliver clear strategic and financial long-term returns. We're willing to flex leverage modestly above our targeted range for the right opportunities, but with a clear commitment to delever post-acquisition.

Overall, we believe this balanced approach positions us to drive long-term value while creating or maintaining our financial flexibility. Please turn to slide 16.

As a newly public company, we're taking a disciplined approach to evaluating our financial guidance strategy to support long-term value creation and transparency. For 2026, we're providing annual guidance, and as appropriate, may offer directional or qualitative updates throughout the year.

We expect to further refine and communicate more formal guidance framework next year. We're introducing full-year 2026 guidance that reflects continued growth and disciplined execution across the portfolio.

We are planning for net sales of $3,750 million to $3,850 million, representing mid-single to high-single-digit growth year-over-year on a pro forma basis, which really we expect will be driven by sustained growth offense in our core markets. This 2026 growth outlook is above our longer-term mid-single-digit growth ambition that we discussed throughout the IPO process.

Looking at second quarter visibility, we see mid-single-digit plus total net sales growth against a tough prior-year comp of mid-teens growth. That's using $880 $868 million as a second quarter 2025 pro forma jumping-off point.

Margins in the second quarter will step up sequentially. However, the year-on-year comparison is a tough comp.

We anticipate full-year 2026 adjusted EBITDA of $1,020 million to $1,065 million, for high-single-digit growth to low-double-digit growth on a pro forma basis. This is also an increase from our longer-term high-single-digit growth ambition, with 27% resulting adjusted EBITDA margins as a result of expected continued operating leverage, productivity initiatives, and favorable mix.

On free cash flow, we continue to plan free cash flow conversion to be greater than 100% of net income. Our outlook assumes a demand environment that remains stable overall, with continued strength in our core commercial end markets, including data centers, logistics, and healthcare.

In residential, we're assuming slow but steady improvement in the housing sector, with potential growth underpinned by our healthy air white space opportunity. In addition to the headline guides, we expect CapEx investments to be less than 2% of sales, interest expense of approximately $250 million, an adjusted effective tax rate of 29%, and diluted share count of approximately 510 million.

We've also included approximately $40 million in central expenses, which includes the required activities that come with being a public company. Our guidance assumes gross tariff costs in the range of $100 million, which are near-term margin headwinds that we expect to offset over time through a number of actions, including pricing and operational activities.

We are not yet seeing meaningful near-term impact from the Middle East conflict at present, but continue to monitor the global environment closely. As Jill mentioned, we've been proactively building our supply chain resilience since 2021, and that work is paying off.

We feel like we're in a position to play growth offense despite some of the challenges or uncertainty in the macro backdrop. With that, I'll turn the call back to Jill.

Thank you, J.J. Our recent IPO was a significant milestone, and our team at Madison Air is excited for the future.

Entering the public markets will provide to us the opportunity to invest through cycles, strengthen our position in high-growth end markets, and accelerate innovation where performance matters most. What will remain constant is who we are.

Our mission, to make the world safer, healthier, and more productive through the power of better air, guides us. Return on air is the standard for the value we create for our customers.

Our values—trust, bias for action, entrepreneurialsism, and our focus on safety—define the way we lead and how we serve our customers. Our decentralized, growth-oriented culture empowers our people and fuels our performance into the future.

We thank you for listening to today's call, and now we'd like to open it up for questions. Thank you, and, Amy, I'll turn it back to you.

Thank you. Good morning, everyone, and congrats to the entire team on the public company launch.

Thank you, Deane. Good morning.

One of your top growth verticals is data center. Would love to get some additional color there.

Talk about data center orders, if possible, and maybe kind of separate what you're seeing in terms of liquid cooling versus what would be kind of traditional air conditioning, computer room air conditioning, what kind of growth you're seeing there, and anything about the hyperscale mix would be helpful. Thank you.

Thanks for the question, Deane. Agree, data centers were a primary commercial orders and revenue growth driver in the quarter.

Again, I would highlight they're one of 15 end markets that we serve. We saw nicely broad-based growth across the majority of our markets—areas like institutional and government and clean energy, which are really supported by our broad technology platform base in air movement, air handling, thermal energy, and energy efficiency.

We like how we are intentionally positioned across mission-critical end markets. Data centers remain strong.

I would say, second part of your question, air versus liquid, I would say very balanced. Liquid is a larger share of the pie, if you will, than it was last year.

We see that trending nicely. As we spoke about late last year and early into 2026, we really like how the diversification, not only amongst the hyperscale community, but between hyperscalers and co-locators, we continue to really advance the ball nicely, diversified us across the players that we believe are the right ones the stars to hook our wagon to, if you will, in the quarters and years ahead.

Feeling good about data centers, but more broadly about the broad-based growth we saw across a majority of our end markets. We think, again, this idea that our portfolio is well-positioned and our decentralized operating model means we've not abandoned our core or those core customers while we pursue data center growth exposure.

Hi, good morning and congratulations on the first set of results. Maybe just wanted to understand how you're thinking about the commercial business.

It looks like you're guiding about $600 million of sales each quarter, which is what you did in Q1. It looks odd because sequentially there should be a step-up through the year, and you had orders of I think a billion in Q1 almost.

Maybe help us understand that conversion of orders to revenues in commercial. Is that just a lot of conservatism in that revenue guide for the year in terms of very limited sequential step-up from Q1 sales?

Thank you.

Julian, good morning and thank you for the question. I think just grounding everybody back on where we were.

We saw 13% growth of net sales in the quarter, 18% of that on commercial. Orders up 29%, with orders in commercial up 41%.

I think you saw about $610 million of sales for commercial in the quarter. I would expect some step-up as we get into the second quarter.

Not only, you think about businesses like Big Ass Fans, which do pick up as you kind of get into that heating season, but we do expect to ramp the data center business throughout the year. I would remind you again that same seasonality that we see pick up going into the hot months do kind of come off.

There is a little bit of that. You kind of have the data center business filling in some of that seasonality.

I think, as you look in the back half of the year, we are playing with a range of outcomes here, but I think we feel confident about the orders momentum here in the quarter and feel good about that high-single-digit type-plus guide that we talked about for commercial for the year.

Hey, good morning, everybody. Jill and J.J.

Good morning, Scott.

Can you guys talk about your customer inventories and your different channels? Fair amount of price that you probably have had to get here and there, Trying to get a sense if there's anything pulled forward in the backlog or just a better sense perhaps of where inventories stand, particularly on the resi side, where they might be a little bit volatile.

If I zoom out, of our 13% net sales growth, volume was about 9 points, price was about 4. Commercial growth was mostly volume-driven.

That's typically a backlog-driven business. On the residential side there, across the segment, volumes were more flattish, while price was positive on a pro forma basis.

Broad comment with regards to pricing. Obviously, there's a lot of inflation between tariffs and commodities inflation, some of which has been induced by the tariffs.

We've got to stay on top of that, but at the end of the day, we are very focused on delivering value for customers, driving their return on air, better tangible, better business outcomes. We feel like we get paid fairly for that value.

We feel from a pricing standpoint, our interests are aligned with those of our customers. I would say no big change from a residential perspective in terms of channel-based backlogs.

That business was up mid-single digits. I think a great hallmark of our continued resilience, particularly good demand for the healthier solutions on the AprilAire business.

I think at the end of the day, the biggest message there is we still feel like we're in the early innings of a very significant penetration opportunity. 92% of U.S.

homes have nothing that we offer in terms of healthy air solutions. That's how I'd sort of characterize our point of view on pricing and what we're seeing in terms of residential inventories and the like.

Thanks. Good morning, everyone, and congrats on the IPO as well.

I just wondered maybe could fill in some more details around the business unit performance. Clearly, data center had a very strong quarter.

We think it's up 50%. Just wondered if you can maybe comment on that.

Looks like Big Ass Fans had a very strong quarter as well, but maybe just fill in some of the details there. Perhaps J.J., could you just clarify on the tariffs?

You said $100 million of gross impact. Is that over and above what you were planning, or is that broadly in line with where you expected to be?

Good morning, Nigel. Thank you for the question and for being here today.

I'll start. You're right.

Very good first quarter in terms of broad-based growth across the majority of our end markets. We talked about the 15 verticals, the majority of them grew in Q1.

Yes, strong demand across institutional markets, government end markets, clean energy, especially as we talk about behind-the-meter power and the like. All of that growth supported by the air movement, air handling, and energy efficiency platforms in commercial.

We were very encouraged by both the orders and the sales performance there in Q1 and think that bodes well for broad-based continued strength and performance across the portfolio. Again, I think a good function of how intentionally positioned we are across a number of mission-critical end markets, not just the data center space, but also the fact that our decentralized model, we align focused teams to ensure that we have balanced growth because we get up every day and focus on driving innovation and moving the needle from a return on air perspective in a broad array of end markets, all while pursuing this nice upcycle, if you will, in data centers.

J.J., I'll turn it to you for the second half of that question.

Perfect. Good morning, Nigel.

I would say on tariffs, we definitely on a net basis expect more inflation, so that's including raw materials and tariffs. We expect to be able to manage that for the full year.

It's incorporated into the guidance we shared earlier. That being said, it's an approximately a $50 million increase in 2026.

So 50 was in the run rate last year, 50 incremental, 100 total given the latest tariff announcements. Those are gross figures, excluding our mitigation actions.

As we said earlier, expect to recover on a dollar basis in the year and rate basis exiting the year. I would say it's important to note those figures that I just walked through exclude any potential IEPR refunds.

We'll submit for those refunds, but that is a smaller piece of the total landscape and not factored into the guidance. Then related to margins, we covered cost and margin in the first quarter at the total company level, given the work that we did last year.

We're confident that we're making continued progress in '26.

Hey, good morning, Jill and J.J., and I echo my congratulations as well. I guess the question I have is really around backlog.

I think your backlog was up around $500 million sequentially. I'm curious, as you're thinking about the duration of that backlog now, given that you are seeing continued strength in data center, how much of that is actually pushing out into 2027 at this point?

Yeah.

Good morning, Joe, and thank you for the question. I would answer backlog in a couple of key respects.

First and foremost, we're confident in our positive sales momentum, and I think that backlog, particularly on the commercial side, gives us good visibility into that near-term revenue. About two-thirds of the company's backlog-driven.

The backlog tends to extend one to three quarters in duration typically. In some verticals, data centers being one of them, that is being extended not because our lead times are extending necessarily, but because the customer really wants longer-term visibility to what's happening there.

They want us to have the supply chain ready. We want to be partnered with them, see the orders coming down the pike such that we can continue to execute.

That backlog, principally in the thermal management technology platform in the data center business, maybe four to five quarters in duration, a little bit longer than what we continuously see. Then, the only other thing I'd add is and just to sort of put a finer point on what we talked about in the prepared remarks, we continue to monitor the potential impact of what's going on in the world, whether that be the Middle East conflict and its effects on supply chain or the pace of customer decision-making, but we're not seeing anything that we foresee to as we sit here today will materially impact us.

We're continuing to focus on good solid execution, delivering that backlog according to the customers' timetable, and continuing to control what we can control operationally.

Hey, thanks. Good morning, everyone, and congrats.

Just one on sort of price/mix for me, if we could. Just on mix specifically within commercial, J.J., I think you said it was positive in the quarter.

I would have thought the really strong data center growth would have been mix negative as opposed to positive, maybe just touch on that. Then 4% price is very significant in the quarter.

I just wonder what you're expecting on a full-year basis for price.

Maybe in reverse order, I would say on the pricing side of things, first of all, good morning, Jeff. We're thinking probably a few points of price for the total year.

To your point, four points of price in the quarter was pretty strong. Much of that was carry-in as a function of the work that we had done last year, primarily linked to the conversation that we had around offsetting inflation and tariff pressures.

As it relates to the commercial business itself, we saw very good volume growth. There is a little bit of business mix pressure that kind of nets out when you kind of think about that falling to the bottom line, but there were a number of the smaller businesses that had very nice incremental margins, and that was really what drove that positive mix.

The more that we can get some of those DOAS businesses contributing to top-line growth, that gonna come through with very solid incrementals and allow us to kind of deliver that full-year guidance that we talked about. The

Hey, everybody. Good morning, and thanks for all the details and congrats.

Maybe just the question I wanted to focus on is just on AprilAire. I guess, if I do the calculations on the M&A contribution, it looks like that business might have been up mid-teens on a year-over-year basis, just want to verify that.

Is that type of growth something that you could expect to continue this year? Because that's meaningfully above what we're seeing on the resi HVAC side.

Hey, Tim. Thank you.

Good morning and thank you for the question. Our residential segment, very proud of our team, up 4% in Q1, showing good strong continued resilience and outperformance, as you've noted, vis-à-vis more traditional HVAC shipments in Q1.

AprilAire grew very nicely in the quarter, real kudos to that team. We saw demand for healthier solutions that was in the low-double-digit growth territory, this has just been a terrific addition to our residential segment.

I would attribute that to a couple of things. I think as we noted throughout the process of going public, the AprilAire business has grown high-single-digit CAGRs since 2007, and I really attribute that to they are still in the very early innings of a lot of white space penetrating and opening up and cracking into white space.

92% of U.S. homes have nothing, no purification, ventilation, humidification, dehumidification, sensing or controls.

We've got a lot of white space to penetrate the Healthy Air System. We really benefit from that 40 million at-bats, 30 million times a year an HVAC contractor is in the home to do a service, annual or biannual service checkup, and the balance of those 40 million at-bats, the remaining 10 million are typically HVAC replacements.

Very strongly poised, if you will, to make that purchase decision. Really coupled with the contractor conversion opportunity still really largely lies ahead of us.

I think there are more than 70,000 HVAC contractors, if my facts are correct, in the U.S., and we are maybe 15, 18, 20% penetrated. I think when you combine those factors, it really provides a durable growth runway for us in residential.

Not to say that we're immune from housing starts or OEM volumes, but at the end of the day, we just get up working to control what we can control and cracking into that white space, and I think you saw that again in Q1.

Hey, good morning, guys. Thanks for taking the question.

Jill, I think actually maybe both you and J.J. mentioned the services opportunity.

Can you just sort of talk about how you view that evolving over the medium term? Where can that go for you, and how do you prosecute that?

Thanks.

Thank you, Steve, and good morning. Thanks for being here.

We're excited about the services opportunity. We expect our aftermarket opportunity to continue to grow at a faster rate than equipment volumes, which it did, it's been growing at a strong double-digit CAGR.

It cleared that hurdle again here in Q1. As we've talked about in the past, we don't target a specific percentage of sales from aftermarket, but I would expect it to continue to grow as a percent of sales.

It's a little bit of the equipment sales number continues to grow quite rapidly, and so that impacts the math mathing, if you will. For us, services is all about focus.

There's no structural barriers there. It's really about focus, and it's what part of our total story around being in the early innings of a long and profitable growth story.

We're investing. We prioritized four businesses that were really excited to continue to build our service presence around.

Each of them, as I sit here today, has what we call a segment leader or maybe more commonly referred to as a business unit leader. We are deploying growth capital into our services businesses, whether that be more people, digital tools, digital platforms, parts and distribution infrastructure.

Like I said, saw continued strong growth in the first quarter, very excited about our momentum here. Whether it's at Big Ass Fans, where we've basically built from the ground up a certified nationwide installer network that allows us to with one phone call serve multi-unit customers across the nation, or in Nortek Data Center Cooling business, where we are literally sending our own personnel in to start up, commission, and service those data center assets, which get run pretty hard out in the field with our own personnel.

We're excited about services, and in 1Q again, we showed good strong growth, and the focus is paying off.

Hi, good morning. This is Natalia on behalf of Andy Kaplowitz.

Congrats on the IPO and the quarter as well.

Thanks, Natalia. Good morning.

Thanks for being here.

Hi, good morning. Thank you.

You reiterated a path towards under 2.5x net leverage within 12 months, and your free cash flow conversion was strong this quarter as well. Should we think about deleveraging as the primary use of cash flow near term, or is there some flexibility for incremental M&A sooner?

If so, what would make it the right opportunity to acquire another company?

I'm happy to hit on leverage, and then, Jill, maybe you can hit on just M&A and our thinking on that front. I think as we mentioned in the prepared remarks, we're at 3x trailing after you apply the net proceeds.

I think, for us, we continue to invest, number one, in organic growth. We love to have you think about us as an organic growth company with M&A as an upside lever.

Then the second priority for us is delevering, and the third being able to pursue that. We've got about half a turn of leverage reduction to go, which as we said earlier, both EBITDA and cash flow will contribute to achieving that goal here over the course of the next 12 months.

We feel pretty good about doing that. Near-term focus is getting down to that less than 2.5x.

Very proud of the team. I think we are right about at 3x trailing ahead of what we had committed.

Not only as a function of the IPO proceeds, 100% of which on a net basis were used to retire debt, but just the continued efficient generation of our free cash flow that our team continues to deliver. As J.J.

mentioned, the capital allocation priorities have not shifted. From an M&A perspective, again, I'd say, Natalia, you should think of us as an organic growth company with M&A as a lever.

I'm really excited, and hopefully Q1 builds broader excitement as well about our organic growth prospects. We continue to be busy deploying growth capital into the core.

As J.J. noted, we're committed then as well to delivering on that delevering of our balance sheet commitment.

M&A is very much within our sights. We believe that we have a pretty special and proprietary M&A capability.

Real shout-out to Larry Gies there, who's been planting seeds, our founder and the chair of our board, and cultivating relationships for many, many years. Over time, you will see us continue to do high-return M&A where it strengthens our ability to grow.

We're always underwriting what's next and we're never in a hurry. While we would be willing to flex leverage for the right deal with a path to bring that leverage back down, we remain very much aligned with investors in seeing the long-term leverage target equal 2.5x.

That's kind of how I size it up. Thanks for the question, Natalia.

Hey, everyone. Nice job this quarter.

I wanted to ask about the commercial air handling business. You mentioned in the release it was down a little bit.

Just a little more color on what's driving that, and then what's the outlook look like? Do you think you'll return to growth this year?

On that front, you're referring really to sales in the first quarter. Here, I would say, first and foremost, I'd start with the benefits of a diversified portfolio and our decentralized operating model such that the majority of our 15 end market verticals grew in the first quarter.

This is the dynamic we saw on the air handling technology platform sales in the first quarter really dates back to what J.J. and I talked about, sort of late last year, which was in the aftermath of Liberation Day 2025, sort of the middle of last year, our pipelines were healthy, they continued to grow, our pipeline was as big as it's been at the time, but customers were just a little bit hesitant to press the go button on new projects.

We saw that in the first quarter on sales. That said, if you look at orders rates in Q4, momentum picked up very nicely in that and other technology platforms.

That strong orders performance year-on-year continued in the first quarter. Between just some hesitancy on behalf of customers, as we noted in the prepared remarks, orders can be lumpy, they come in at different points in time, but at the end of the day, exiting the year and saw continued orders momentum in the first quarter, and really continuing to spend that from our diverse exposure to both residential and commercial markets and 15 end markets in the commercial segment.

Good morning, everyone. Congratulations on the IPO as well.

I'll ask one on AprilAire. It's been about a year since you've owned that business now.

Can you just talk about the integration, whether that's complete, synergy generation, and whether there's more to generate out of that as we go forward here? Then if there are any cost synergies or revenue synergies remaining to come out of other acquisitions that you've made along the way over the years would be helpful.

Thanks for taking the question.

Maybe I'll take the AprilAire and then J.J., you can hit on residual synergies from other deals. Delighted with the acquisition of AprilAire, Research Products, as it's known, just a phenomenally mission-driven and committed team of folks who've dedicated their professional lives to making the world safer, healthier, and more productive through the power of better air.

As we noted, AprilAire grew very nicely in the quarter with strong demand for the healthier solutions. It's a $15 billion residential market.

92% of homes have nothing in terms of indoor air quality solutions or healthier systems. The large bolus of contractor conversion opportunity lies ahead.

We are very proud of our residential segment teams and very grateful to the AprilAire acquisition. We don't really call them integrations, we call them transitions, because one of the things we do that we think makes our M&A capability pretty special is we buy businesses to allow them to continue to do what they do.

You've seen AprilAire do that since May of 2025 when we acquired them. As to your question on synergies in the AprilAire acquisition, that is on track to the previously stated commitments that we've conveyed exiting 2026.

We're on track, and that is really a combination of growth acceleration and some cost out. I would also note that we were together a few weeks ago for one of the innovation summits that I host, and our team there, the AprilAire team showcased the forward-looking view of their innovation road map, just on the heels of launching new technologies like Wi-Fi-enabled dehumidification and one of the most water-efficient humidification platforms on the market.

They've just got a great lineup. A lot to look forward to, both in terms of cracking into that white space, delivering better return on air both for contractors and homeowners through some of the innovation they've launched and have on the come.

Synergies on track, business is performing, just very, very grateful to that team. J.J., anything you'd add on other broader deal synergies?

Nathan, appreciate the question. Look, you know us, with 80/20, you're never done.

It's a mindset, and so I think there's a number of spots where we're doubling back at different parts of the portfolio and really making sure that we're seeing those 80/20 benefits ring through, particularly around focus on growth. We actually took one of the commercial businesses that came with the AprilAire acquisition, to Jill's point, that's really just getting started.

I think for us, more broadly, you'll see that show up as we think about material cost reduction, freight optimization, and productivity in the factories. There's still a number of sort of mindset how we run the business synergies to be achieved on Nortek and a number of the other businesses over time.

Thanks for the question.

Hey, guys. Congrats on your first print as a public company, and thanks for taking my questions.

Thank you. Good morning.

Appreciate it.

Good morning. Just on the AprilAire and IAQ piece, and just want to dive a little deeper on the building blocks to penetration.

If I remember correctly, the 8% market penetration assumes just one device per household. I think AprilAire has five.

I'm assuming that one device can mean just a stand-alone plug-in humidifier. On average, how many devices does AprilAire sell on a first-time sale?

I'm just trying to think through how much growth to expect to be from market penetration in terms of homes versus just more content in the home.

I think both are opportunities. It's both taking the 8% of U.S.

homes that on average have one device to more of the healthy air pillars around purification, ventilation, humidification, dehumidification, sensing and controls. Even on that 8% of U.S.

homes, if we go from one to two solutions, that doubles the AprilAire business. There's real compounding tailwind, if you will, to further penetration of the 8% of homes that have something.

Then, as you noted it today, I would say on average it is one pillar per sale, and then, you still have that 92% of homes that have nothing. With our new Wi-Fi-enabled dehumidification platform, there are 40 million basements in this country, 20 million crawl spaces in this country.

That innovation opened up a new channel to market for us in the form of the basement, crawl space, pest elimination channel. This team is just really very focused on growing the core, penetrating the white space, becoming an embedded and indispensable partner to their HVAC contractor partners.

They get rewarded with growth. Frankly, when HVAC shipments are down, our contractor partners need us more than ever.

We feel good about that business, we feel good about that team, and we have continued to deploy growth capital there to ensure they have everything they need to continue to grow that franchise.

Great. Thank you again, and thank you, everyone, for your time and continued interest in Madison Air.

Additional information from today's call is available on our website at investors.madisonair.com. We look forward to updating you on our progress in the next quarter.

Thank you again.