Otter Tail Corporation, founded in 1907 and headquartered in Fergus Falls, Minnesota, is a diversified enterprise operating in the United States with a focus on three primary sectors: electric utility, manufacturing, and plastic pipe production. The company, which adopted its current name in 2001, generates, transmits, distributes, and sells electricity ...Otter Tail Corporation, founded in 1907 and headquartered in Fergus Falls, Minnesota, is a diversified enterprise operating in the United States with a focus on three primary sectors: electric utility, manufacturing, and plastic pipe production. The company, which adopted its current name in 2001, generates, transmits, distributes, and sells electricity through its utility segment, serving approximately 133,000 residential, industrial, and commercial customers across Minnesota, North Dakota, and South Dakota. Its power generation mix includes coal, wind, hydroelectric, and natural gas, and it actively participates in the Midcontinent Independent System Operator (MISO) markets. The manufacturing segment provides contract machining, metal parts stamping, fabrication, and painting services, as well as producing specialized plastic thermoformed products for horticulture, life sciences, industrial packaging, and material handling across diverse industries such as recreational vehicles, agriculture, construction, and energy equipment. The plastics segment manufactures PVC pipes essential for water management applications including municipal water supply, rural water systems, wastewater treatment, storm drainage, and water reclamation, sold to wholesalers and distributors through a combination of independent representatives and direct sales teams. Financially, Otter Tail has a market capitalization of approximately $3.94 billion, with an enterprise value of $4.85 billion, and has shown consistent profitability with a net profit margin of 14.8%. The company maintains a strong balance sheet with a current ratio of 1.707 and a debt-to-equity ratio of 0.675. Its leadership, under CEO Charles 'Chuck' MacFarlane since April 2015, has overseen steady growth, with 2025 revenues of $1.3 billion and net income of $276 million. Otter Tail also demonstrates a commitment to shareholder returns, with a dividend yield of 2.4% and a payout ratio of 47.5%.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$1.3B
-2.0%
-3.6%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$275.9M
-8.5%
-110.5%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+27.8%
-36.5%
+149.9%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+26.5%
-7.2%
-129.5%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+21.2%
-6.7%
-110.9%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$97.9M
+4.1%
+76.1%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+7.5%
+6.2%
+75.2%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
59.3%
-2.4%
+6.3%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
2.28x
+12.0%
-16.3%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Good morning, and welcome to Otter Tail Corporation's Second Quarter 2026 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] I will now turn the call over to the company for their opening comments.
Beth Eiken: Good morning, and welcome to our second quarter 2026 earnings conference call. My name is Beth Eiken, and I'm Otter Tail Corporation's Manager of Investor Relations. Last night, we announced our Q2 financial results. Our complete earnings release and slides accompanying this call are available on our website at ottertail.com. A recording of this call will be available on our website later today. With me on the call today are Chuck MacFarlane, Otter Tail Corporation's CEO; Tim Rogelstad, Otter Tail Corporation's President; and Tyler Nelson, Otter Tail Corporation's Vice President and CFO. Before we begin, I want to remind you that we will be making forward-looking statements during the course of this call. As noted on Slide 2, these statements represent our current views and expectations of future events. They are subject to risks and uncertainties, which may cause actual results to differ from those presented here. So please be advised against placing undue reliance on any of these statements. Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission, which we encourage you to review. We will be referencing certain adjusted financial measures or non-GAAP measures throughout this call, including adjusted net income, adjusted earnings per share and adjusted return on equity. For more information, please refer to our quarterly earnings release and the non-GAAP reconciliations included in the appendix of our earnings presentation. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments or otherwise. I will now turn the call over to Otter Tail Corporation's CEO, Mr. Chuck MacFarlane.
Chuck MacFarlane: Thanks, Beth. Good morning, and welcome to our second quarter earnings call. Please refer to Slide 4 as I begin my remarks with a summary of quarterly highlights. Our team advanced our strategic initiatives during the second quarter, delivering on near-term priorities for the benefit of our customers and shareholders. Otter Tail Power continues to execute on our regulatory agenda. We secured route permits for two of our large regional transmission projects, marking an important milestone in the development of these reliability-driven investments. We also filed our 15-year Integrated Resource Plan with the Minnesota Public Utilities Commission. The IRP outlines our preferred plan for meeting our Minnesota customers' future capacity and energy needs. We believe the requested resources will position us well to continue delivering low-cost, reliable electric service. Our Manufacturing and Plastics segment team members successfully capitalized on opportunities for …
