Financial Data and Key Metrics Changes - In Q2 2025, the company's sales were $1.54 billion, a decrease from $1.63 billion in Q2 2024 [17] - Adjusted EBITDA was $202.2 million with a margin of 13.2%, compared to $208.4 million and 12.8% in the previous year [19] - GAAP net income was $39.3 million or $0.32 per share, up from $18.2 million or $0.15 per share in Q2 2024 [23] - Adjusted earnings per share increased to $0.21 from $0.19 year-over-year [23] - Operating cash flow was $91.9 million, down from $142.8 million in Q2 2024 [24] Business Line Data and Key Metrics Changes - The driveline unit experienced a margin increase of approximately 30 basis points to 13.8%, while the metal forming margins increased by approximately 20 basis points to 8.9% [20] - R&D spending was reduced by $8 million year-over-year, reflecting optimization efforts [19] Market Data and Key Metrics Changes - The company anticipates North American production volumes to be between 14.6 million and 15.1 million units for 2025 [15] - The company noted that while overall industry volumes declined, key truck and SUV programs outperformed the industry [11] Company Strategy and Development Direction - The company is focused on operational excellence, cost control, and enhancing productivity, with a goal of continuous improvement [11] - The acquisition of Dolly is expected to create a leading global driveline and metal forming supplier, generating an estimated $300 million in cost synergies [8] - The company is preparing for electrification while also leveraging its existing internal combustion engine (ICE) capabilities [12][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand for ICE and hybrid vehicles, citing consumer preferences and government policy changes [11][58] - The company is well-positioned to handle trade and tariff volatility, with 90% of products produced in North America being USMCA compliant [12][25] - Management updated the 2025 financial guidance, targeting sales of $5.75 billion to $5.95 billion and adjusted EBITDA of approximately $695 million to $745 million [15][30] Other Important Information - The company closed the divestiture of its India commercial axle business for approximately $65 million [10] - The company incurred incremental tariff costs of approximately $10 million in Q2 2025, with an expected full-year net impact of $10 million to $15 million after mitigation [28][29] Q&A Session Summary Question: Thoughts on T1 production levels for the year - Management confirmed a production range of 1.3 million to 1.4 million units, with a strong first half performance [36][37] Question: Impact of GM's onshoring production - Management indicated flexibility and capacity to support GM's production shifts, expecting content gains from the Dolly acquisition [40][42] Question: Status of additional plant due diligence for Dolly - Management is currently assessing manufacturing synergies and sees potential upside but cannot quantify it yet [46][47] Question: Specifics on tariff costs - The $10 million in Q2 primarily comes from rest of the world scenarios, with minimal exposure from USMCA compliant imports [49] Question: Changes in emissions regulations impact - Management noted a balanced approach to ICE, hybrid, and electrification, preparing for multiple propulsion systems [58][60] Question: Free cash flow generation in the second half - Management explained that working capital dynamics typically lead to stronger cash flow in the fourth quarter [84] Question: Balance sheet outlook post-acquisition - Management aims for leverage neutrality at close and plans to strengthen the balance sheet while generating strong cash flow [100][101]