Financial Data and Key Metrics Changes - The company reported record net sales of $908 million for Q3 2025, an increase of 8.2% year-over-year, benefiting from the SEM acquisition, favorable foreign exchange, and increased volume in Asia and the Americas [6][18] - Adjusted EBITDA reached $133 million with a margin of 14.6%, reflecting a 30 basis point year-over-year expansion, primarily due to lower R&D expenses and strong performance from the fuel systems segment [6][8] - Adjusted earnings per share increased to $1.59, up from $1.17 in the same period last year [8] Business Line Data and Key Metrics Changes - The fuel systems segment saw sales increase by 13.4%, with a segment margin of 13.3%, up 190 basis points year-over-year, driven by supply chain savings and productivity improvements [19] - The aftermarket segment's sales were slightly up year-over-year, with a margin of 15%, down 80 basis points due to unfavorable product mix [20] Market Data and Key Metrics Changes - The company experienced increased sales volumes in Asia and the Americas, contributing to overall revenue growth [6][19] - The impact of foreign exchange was a favorable $19 million, while the SEM acquisition contributed an additional $8 million to net sales [18][19] Company Strategy and Development Direction - The acquisition of SEM is expected to enhance the company's ignition and electronic control capabilities, creating a platform for innovation and efficiency [5] - The company is consolidating four ERP systems into a single global SAP S/4HANA platform to enhance efficiency and data visibility [5] - The company is focused on operational and cost efficiency initiatives to drive sustainable performance across all markets [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic and industry outlook but emphasized a commitment to operational efficiency and customer value [6] - The company adjusted its 2025 revenue guidance upward by $40 million, reflecting contributions from SEM and favorable market conditions [16][25] - Management expressed confidence in generating solid returns despite challenges from tariffs and market volatility [26] Other Important Information - The company returned $41 million to shareholders through dividends and share repurchases during the quarter, maintaining a solid balance sheet with cash and cash equivalents of $349 million [15][24] - The company expects to incur restructuring charges of approximately $35 million to optimize its operations, with an estimated $25 million in annual savings [26] Q&A Session Summary Question: Can you provide more detail on the 5.1% sales increase excluding acquisition and currency impacts? - Management indicated that the increase was balanced between pricing, tariff recoveries, and volume growth [30] Question: Will pricing remain sticky moving forward? - Management stated that pricing linked to tariffs is expected to remain stable unless tariffs are removed, impacting EBITDA margins [31] Question: How is the aerospace program progressing? - Management confirmed increased interest from aerospace companies and expects additional awards in the coming quarters [34] Question: What is the guidance for SEM in Q4? - Management noted that Q4 typically sees lighter sales due to seasonality, with SEM expected to contribute around $7 million [39] Question: What impact is the Ford fuel pump recall having on cash? - Management reported no cash impacts or adjustments to warranty accruals related to the recall [50] Question: When will the restructuring program be fully realized? - Management indicated that the restructuring program is rolling out now, with full realization of savings expected by 2028 [52]