PHINIA (US:PHIN)2026-02-12 14:32Financial Data and Key Metrics Changes - Total net sales for Q4 2025 were $889 million, representing a year-over-year increase of 6.7% [5][15] - Adjusted EBITDA for the quarter was $116 million, up $6 million, with a margin of 13% [6][16] - Adjusted earnings per diluted share increased to $1.18 from $0.71 in the same period last year [7] - Full year revenue was approximately $3.5 billion, a 3% increase, excluding final contract manufacturing sales from the former parent [17][18] Business Line Data and Key Metrics Changes - Fuel system segment sales for Q4 were $560 million, up 7.9%, with an adjusted operating margin of 10.7% [6][19] - Aftermarket segment sales were $329 million, up 4.8%, with an adjusted operating margin of 15.8% [7][20] - For the full year, fuel systems revenue increased by 3.3%, while aftermarket segment sales rose by 2.7% [19][20] Market Data and Key Metrics Changes - Sales in Asia and the Americas showed strength, while Europe experienced lower sales within fuel systems [14][15] - The company noted that the aftermarket segment remained resilient, supported by an aging global vehicle fleet [9] Company Strategy and Development Direction - The company aims to differentiate through product leadership and focus on sustainable growth markets [12][24] - Capital allocation remains disciplined, with a focus on M&A opportunities while returning capital to shareholders [10][11] - The company plans to continue expanding its presence in core and adjacent markets, including aerospace and defense [8][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business amid a complex operating landscape and expressed confidence in long-term growth [3][25] - The outlook for 2026 anticipates flat to slightly down global industry volumes, with expectations of mid-single-digit sales growth [24][25] Other Important Information - The company reduced its debt by $24 million, resulting in a net leverage ratio decrease from 1.4x to 1.3x [7][21] - An 11% increase in dividends and a $150 million increase in the share repurchase program were announced [11][21] Q&A Session Summary Question: Clarification on commercial vehicle growth expectations in Europe - Management confirmed that the mid to upper single digits growth expectation refers to the overall industry [27][29] Question: Inquiry about Adjusted EBITDA margins and growth hurdles - Management explained that while revenue growth is expected, factors like FX and tariffs are impacting margin expansion [30][31] Question: Details on the third aerospace and defense supply contract - Management confirmed that the third contract is with the same customer as the previous two [32] Question: Volume assumptions for 2026 and potential for positive light vehicle volumes - Management indicated that the market is expected to be flat to down, but the company anticipates market share gains [82][84] Question: Capital allocation priorities and M&A outlook - Management stated that capital allocation decisions will focus on maximizing shareholder value, with share repurchases remaining a priority [59][60]