The company is increasing its prior guidance for revenue growth for full-year 2018, which is due to improving end-market conditions for both residential and C&I products. Full year net sales are now expected to improve between 6 to 8% over the prior year, which is an increase from the 3 to 5% growth previously expected. Core sales growth is expected to be between 5 to 6%, which is an increase from the 2 to 3% growth previously expected. Importantly, this guidance does not yet include any impact from the Selmec acquisition, as the specific timing of closing is undetermined pending regulatory approvals. Also, this top-line guidance assumes no "major" outage events and a baseline power outage severity level similar to the longer-term average for the remainder of the year. Should the baseline power outage environment in 2018 continue to be higher, or if there is "major" event during the year, the Company could exceed these expectations. Net income margins, before deducting for non-controlling interests, are still expected to be between 9.5 to 10.0% for the full-year 2018, with adjusted EBITDA margins, also before deducting for non-controlling interests, still expected to be between 19.0 to 19.5% for the year. This updated guidance assumes that additional inflationary pressures from higher commodity prices, tariffs, the weaker U.S. dollar and certain wage pressures will be largely offset by the benefit from additional leverage of fixed operating costs on the expected higher core sales growth. Operating and free cash flow generation is expected to be strong, with the conversion of adjusted net income to free cash flow expected to be over 90%.
