The North America ERP go-live in November 2025 caused severe system functionality issues that halted machine order entry and parts shipping for three full weeks.
Management attributed the disruption to the unique complexity and scale of North American operations, which surpassed the stress-test assumptions and the previous successful APAC implementation experience.
Operational constraints led to an estimated $30 million net sales shortfall in Q4, driven by limited plant capacity and an inability to provide customers with reliable shipment visibility.
Profitability was pressured by $8.5 million in direct operational inefficiencies, including excessive overtime, expedited freight, and labor-intensive manual workarounds used to bypass system limitations.
Despite regional challenges, international performance remained resilient, with EMEA and APAC delivering organic growth that validated the company’s global portfolio stability.
Management emphasized that the ERP modernization remains strategically vital for long-term scalability and data integrity, despite the significant near-term execution hurdles.
The 2026 guidance assumes a ‘tale of two halves,’ with Q1 heavily impacted by a two-week physical inventory shutdown to reconcile ERP data, followed by a recovery in the back half.
Management has paused the EMEA ERP rollout indefinitely to focus 100% of organizational resources on stabilizing North American operations and achieving full efficiency by mid-2026.
The company launched a dedicated ‘TNC Robotics’ group to accelerate autonomous solution adoption, targeting $250 million in AMR revenue by 2028.
Guidance for 2026 projects 3% to 6.5% organic sales growth, with 75% of the growth driven by volume recovery and 25% by strategic pricing actions.
ERP-related spending is expected to exceed $20 million in 2026, a significant increase from the original $5 million estimate, to cover remediation and ‘hypercare’ support.
A global workforce reorganization was implemented in late 2025, expected to deliver approximately $10 million in annual savings starting in 2026.
The company recorded an incremental $6 million accrued expense following a post-trial ruling in the OWT intellectual property dispute, bringing the total judgment to $20.2 million.
Management noted that 2026 guidance does not yet account for potential impacts from recent Supreme Court rulings regarding tariffs, which may require future adjustments.
The Board of Directors added two new members and committed to proposing the elimination of the staggered board structure by 2027 following constructive engagement with Vision One.
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