Financial Data and Key Metrics Changes - Q4 net sales were $104.7 million, a decline of $1.8 million compared to the previous year's Q4, while full year net sales were $422.2 million, down $42.1 million year-over-year [10][25][27] - Adjusted operating income for Q4 was $3.3 million, up from $2.4 million in the prior year, and for the full year, it was $14.2 million, an increase of $9.1 million from the previous year [11][27] - Adjusted EBITDA for Q4 was $12.9 million, up from $12.1 million a year ago, and for the full year, it was $49 million, compared to $48.3 million for the prior year [12][26][28] - Adjusted EBITDA margin for Q4 was 12.3%, representing a 100 basis point improvement on an as-reported basis [26] Business Line Data and Key Metrics Changes - Power Solutions segment net sales for Q4 were $45.5 million, up 14.9% year-over-year, driven by new program launches in electrical and defense business [30] - Mobile Solutions segment Q4 net sales were $59.3 million, down from $63.8 million in the prior year, primarily due to the rationalization of dilutive business [32] - Power Solutions adjusted EBITDA for Q4 was $6.4 million, an increase of $0.8 million year-over-year, while Mobile Solutions adjusted EBITDA for Q4 was $10 million, showing slight improvement [31][34] Market Data and Key Metrics Changes - The global automotive market is expected to grow slightly by 2% in 2026, with specific growth outlooks varying by region [18] - The commercial vehicle market is anticipated to begin growing in 2026, supported by strong orders and an upcoming EPA mandate [19] - The defense electronics market is growing strongly, with increased production capacity to meet demand from customers like Raytheon [49] Company Strategy and Development Direction - The company is shifting its sales profile towards higher value end markets and capabilities, moving away from low-value commodity automotive parts [7] - A record level of program launches is expected in 2026, with a pipeline of over $800 million in high-quality prospects [8][37] - The company aims to achieve adjusted gross margins of 20% and is focusing on cost rationalization programs to offset inflation [39] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility remains high in markets due to global supply chain issues, tariffs, and geopolitical unrest [9][21] - The company is optimistic about returning to net sales growth in 2026, with a forecast of $445 million to $465 million in sales [55] - Management emphasized the importance of new business wins, targeting $70 million to $80 million in new business for the year [22][55] Other Important Information - The company completed a significant transformation plan, including the closure of four plants and the exit of unprofitable business lines [7][51] - The company achieved cost-out targets of $15 million for the year, which offset inflation and pricing pressures [17] Q&A Session Summary Question: Can you expand on the data center end market opportunity? - Management highlighted the precision requirements for products in the data center market and the immediate ramp-up potential due to supply chain needs [60][63] Question: What does the roadmap for sustaining sales growth in 2026 look like? - Management indicated that growth will primarily come from new wins, with a significant increase in capital spending allocated to growth initiatives [64][65] Question: What is the cadence of ramp in 2026 in terms of revenue? - It was noted that approximately $20 million to $25 million of revenue is expected from launches occurring in 2026, alongside revenue from programs launched in 2025 [72] Question: What sort of CapEx activity are you planning? - The majority of CapEx will be directed towards growth programs, with over $15 million allocated for launching new business [73] Question: How much visibility do you have beyond Q1? - Management confirmed a healthy backlog and strong orders for Q2, indicating positive momentum [74]

Financial Data and Key Metrics Changes - For Q4 2025, net sales were $104.7 million, a decline of $1.8 million compared to Q4 2024, while full-year sales were $422.2 million, down $42.1 million year-over-year [9][25][27] - Adjusted operating income for Q4 was $3.3 million, up from $2.4 million in the prior year, and for the full year, it was $14.2 million, an increase of $9.1 million from $5.1 million in 2024 [10][27] - Adjusted EBITDA for Q4 was $12.9 million, up from $12.1 million a year ago, and for the full year, it was $49 million compared to $48.3 million in the prior year [11][27] Business Line Data and Key Metrics Changes - In the Power Solutions segment, Q4 net sales were $45.5 million, up 14.9% year-over-year, driven by new program launches in electrical and defense business [29] - The Mobile Solutions segment saw Q4 net sales of $59.3 million, down from $63.8 million, primarily due to the rationalization of dilutive business [31] - Power Solutions adjusted EBITDA for Q4 was $6.4 million, an increase of $0.8 million from the previous year, while Mobile Solutions adjusted EBITDA was $10 million, reflecting successful shedding of unprofitable sales [30][33] Market Data and Key Metrics Changes - The global automotive market is expected to grow slightly by 2% in 2026, with specific growth outlooks varying by region [17] - The commercial vehicle market is anticipated to improve in 2026, supported by strong orders and a forthcoming EPA mandate [18] - The defense electronics market is growing strongly, with increased production capacity to meet demand from customers like Raytheon [47] Company Strategy and Development Direction - The company is shifting its sales profile towards higher value end markets and capabilities, moving away from low-value commodity automotive parts [6] - A record level of program launches is expected in 2026, with a pipeline of over $800 million in high-quality prospects [7][35] - The company aims to achieve adjusted gross margins of 20% and is focusing on cost rationalization programs to offset inflation [14][38] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility remains high in markets due to global supply chain issues, tariffs, and geopolitical unrest [8][20] - The company is optimistic about returning to net sales growth in 2026, with a forecast of $445 million to $465 million in sales [50][51] - Management emphasized the importance of tactical maneuvering in response to ongoing market volatility and supply chain disruptions [21] Other Important Information - The company has completed the majority of its transformation plan, including plant closures and workforce reductions, which are now behind them [6][76] - The company is looking at financial and strategic options to address its capital structure, which includes high levels of debt [49] Q&A Session Summary Question: Can you expand on the data center end market opportunity? - The company is focused on high precision products for data centers, including watertight couplings and cable assemblies, with an immediate ramp-up expected due to high demand [57][59] Question: What does the roadmap for sustaining sales growth in 2026 look like? - The company plans to double its capital spending, with growth primarily driven by new wins that have already been secured [61][62] Question: What is the cadence of ramp in 2026 in terms of revenue? - The company expects to see between $20 million and $25 million of revenue from new launches in 2026, alongside continued revenue from programs launched in 2025 [68] Question: What sort of CapEx activity are you planning? - The bulk of CapEx will be directed towards growth programs, with over $15 million allocated for launching new business [70] Question: How much visibility do you have beyond Q1? - The company has a healthy backlog and expects Q2 to be consistent with sales guidance, although firm releases for Q3 and Q4 are not yet available [71][72]

Financial Data and Key Metrics Changes - Net sales for the first quarter were $796 million, down 7.8% year-over-year, with a 4.1% decrease when excluding foreign exchange impacts and prior year contract manufacturing revenues [9][28] - Adjusted EBITDA was $103 million with a margin of 12.9%, representing a year-over-year decline of 260 basis points [10][34] - Adjusted earnings per diluted share were $0.94, excluding non-operating items [11][31] - The balance sheet remains strong with cash and cash equivalents of $373 million, and total liquidity of approximately $900 million [12][37] Business Line Data and Key Metrics Changes - Aftermarket segment sales decreased by 3.9% year-over-year, primarily due to lower OEM sales [29] - Fuel system segment sales were down 10.2%, or 7.3% excluding prior year contract manufacturing sales, attributed to lower OE sales across all regions [29][32] - Total segment adjusted operating margins were 12.2%, a decrease of 140 basis points year-over-year [10][31] Market Data and Key Metrics Changes - The macroeconomic environment and automotive industry showed signs of slowing, similar to the second half of 2024 [7] - The North American market is experiencing a softening in commercial vehicle (CV) and light vehicle (LV) segments, with expectations of no pre-buy effect in the second half of the year [21][51][120] Company Strategy and Development Direction - The company is focused on long-term profitable growth through capital investment, share repurchases, and dividends [19][20] - There is a commitment to expanding product offerings and capturing new business wins, particularly in alternative fuels and aftermarket segments [15][17][25] - The company aims to navigate near-term uncertainties while maintaining a strong financial position to invest in business and pursue acquisitions [25][72] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs and macroeconomic conditions but expressed confidence in the company's resilience and ability to adapt [22][25] - The company expects to maintain a strong order board and sees opportunities for growth despite current market softness [51][122] - The effective tax rate for 2025 is expected to be between 38% and 42%, with ongoing efforts to improve it [43] Other Important Information - The company returned $111 million to shareholders through share buybacks and dividends during the first quarter [12] - Capital expenditures were $35 million, representing 4.4% of sales, primarily for new machinery and equipment [40] Q&A Session Summary Question: Impact of tariffs on business - Management indicated that the majority of North American business is USMCA compliant, positioning the company well to manage tariff impacts [48] Question: Changes in production market - Management confirmed a softening in the commercial vehicle market but noted a stable order board and ongoing demand from customers [51][54] Question: FX impacts on guidance - FX headwinds were initially estimated at $80 million but are now closer to $20 million, with expectations of stability for the remainder of the year [59] Question: M&A strategy amid uncertainty - The company remains in a strong cash position and is focused on smaller, cash-flowing tuck-in acquisitions [72] Question: Supplier settlement and standalone costs - Management clarified that the supplier settlement was a one-off headwind and that standalone costs are expected to stabilize [78][84] Question: New product development and commercialization - The company continues to see strong demand for new products and expects to add over 2,000 SKUs annually [114] Question: Customer sentiment regarding tariffs - Management reported no significant changes in customer behavior or delays in development activities due to tariffs [106] Question: Free cash flow and shareholder returns - The company will assess share buybacks each quarter based on cash flow forecasts and market conditions, with a current limitation on repurchases due to a tax manager agreement [128]