Q4 2024 Methode Electronics Inc Earnings Call

Good day and welcome to the Methode Electronics 4th Quarter Fiscal 2024 Results Conference Call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question and answer session.

Operator: Biscoll 2024 Results Conference Call. At this time, all participants are in a listen-only mode.

Operator: This concludes today's conference call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Robert Cherry, Vice President of Investor Relations. Please go ahead.

Operator: After management's prepared remarks, there will be a question-and-answer session.

Robert Cherry: I would now like to turn the call over to Robert Cherry, Vice President of Investor Relations. Please go ahead.

I would now like to turn the call over to Robert Cherry, Vice President of Investor Relations. Please go ahead.

Robert Cherry: Thank you, operator.

Robert K. Cherry: Thank you, operator. Good morning, and welcome to Meth Electronics' fiscal 2024 fourth quarter earnings conference. For this call, we have prepared a presentation titled Fiscal 2024 Fourth Quarter Financial Results, which can be viewed on the webcast of this call or found at Methode.com on the Investors' page. This conference call contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the Securities Act.

Kevin Nystrom: Good morning. And welcome to Methode Electronics, Fiscal 2024, fourth quarter earnings conference call. For this call, we have prepared a presentation entitled "Fiscal 2024, Fourth Quarter Financial Results," which can be viewed on the webcast of this call or found at method.com on the investor's page. This conference call contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws. Methode Electronics no duty to update any forward-looking statement to conform the statement to actual results or changes in methods expectations on a quarterly basis or otherwise.

Robert K. Cherry: Thank you, Operator. Good morning, and welcome to Methode Electronics Fiscal 2024 4th Quarter Earnings Conference Call.

Robert K. Cherry: For this call, we have prepared a presentation entitled Fiscal 2024 Fourth Quarter Financial Results, which can be viewed on the webcast of this call or found at Methode.com on the Investors page.

Robert K. Cherry: Methode undertakes no duty to update any forward-looking statement, or to conform the statement to actual results or changes in Methode's expectations on a quarterly basis or otherwise. Forward-looking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode's filings with the Securities and Exchange Commission, such as our 10-K and 10-Q reports. At this time, I'd like to turn the call over to Mr. Kevin Nystrom, Interim Chief Executive Officer.

Robert K. Cherry: This conference call contains certain forward-looking statements which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are subject to the safe harbor protection provided under the securities laws.

Speaker Change: Methode undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in methods expectations on a quarterly basis or otherwise.

Kevin Nystrom: The forward-looking statements in this conference call involve a number of risks and uncertainties.

Speaker Change: The forelooking statements in this conference call involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in Methode's filings with the Securities and Exchange Commission, such as our 10-K and 10-Q reports.

Kevin Nystrom: The factors that could cause actual results to differ materially from our expectations are detailed in methods filings with the Securities and Exchange Commission, such as our 10-K and 10-Q reports.

Kevin Nystrom: At this time, I'd like to turn the call over to Mr. Kevin Nystrom, Interim Chief Executive Officer. Thank you, Rob, and good morning to everyone. Thank you for joining us for our fiscal 2024, fourth quarter earnings call. I'm joined here today by Ron Sumis, our Chief Financial Officer. Ron and I will have some opening comments, and then we'll take your questions.

Speaker Change: At this time, I'd like to turn the call over to Mr. Kevin Nystrom, Interim Chief Executive Officer.

Kevin Nystrom: Thank you, Rob, and good morning to everyone. Thank you for joining us for our fiscal 2024 fourth quarter earnings call. I'm joined here today by Ron Tsoumas, our Chief Financial Officer. Ron and I will have some opening comments, and then we'll take your questions. Before we discuss the quarter, I want to reiterate the news that we announced in late June regarding our CEO transition. John DeGaner, former CEO of Stonebridge, has been appointed President and CEO of Methode effective next Monday, July 15.

Kevin Nystrom: Thank you, Rob, and good morning to everyone. Thank you for joining us for our fiscal 2024 fourth quarter earnings call. I'm joined here today by Ron Tsoumas, our Chief Financial Officer. Both Ron and I will have some opening comments, and then we'll take your questions.

Kevin Nystrom: Before we discuss the quarter, I want to reiterate the news that we announced in late June regarding our CEO transition. John DeGainer, former CEO of Stone Ridge, has been appointed President and CEO of Methode effective next Monday, July 15th. We congratulate John and welcome him to the Methode team. John has significant industry experience, and I think will be a strong leader for Methode into the future.

Kevin Nystrom: Before we discuss the quarter, I want to reiterate the news that we announced in late June regarding our CEO transition.

Kevin Nystrom: John Deganer, former CEO of Stonebridge, has been appointed president and CEO of Methode, effective next Monday, July 15.

Kevin Nystrom: We congratulate John and welcome him to the Methode team. John has significant industry experience and, I think, will be a strong leader for Methode into the future. Back to the quarter. Returning to the quarter, let's go to slide four of the presentation. Our sales for the quarter were $227 million, which was down $24 million year-over-year. The decline was mostly in our auto segment across all three of our reporting regions. The decrease was primarily due to program roll-offs and continued softness in the E-Bike Market, along with some EV Demand Weaknesses.

Kevin Nystrom: We congratulate John and welcome him to the Methode team. John has significant industry experience and I think will be a strong leader for Methode into the future.

Kevin Nystrom: Back to the quarter. Returning to the quarter, let's go to slide forward of the presentation. Our sales for the quarter were $227 million, which were down $24 million year over year. The decline was mostly entirely in our auto segment across all three of our reporting regions. The decrease was primarily due to programmable loss, and continued softness in the e-bike market, along with some EV demand weakness. The sales declines were offset by the acquisition of Nordic Lights in the industrial segment around the beginning of the year. After adjusting for goodwill impairment, the lower sales volume, along with continued operational inefficiencies in our North American auto operations, drove the net loss in the quarter.

Kevin Nystrom: Back to the quarter. Returning to the quarter, let's go to slide 4 of the presentation.

Kevin Nystrom: Our sales for the quarter were $227 million, which were down $24 million year-over-year. The decline was mostly entirely in our auto segment across all three of our reporting regions.

Kevin Nystrom: The decrease was primarily due to program roll-offs and continued softness in the e-bike market, along with some EV demand weakness.

Kevin Nystrom: The sales declines were offset by the acquisition of Nordic Lights in the industrial segment around the beginning of the year. After adjusting for goodwill impairment, the lower sales volume, along with continued operational inefficiencies in our North American auto operations, drove the net loss in the quarter.

Kevin Nystrom: The sales declines were offset by the acquisition of Nordic Lights in the industrial segment around the beginning of the year.

Kevin Nystrom: After adjusting for goodwill impairment, the lower sales volume along with continued operational inefficiencies in our North American auto operations drove the net loss in the quarter.

Kevin Nystrom: These are essentially the same operational challenges that we have experienced and communicated through this past fiscal year. They are being driven by increased program launches, labor turnover, and higher overall costs. With the company in the midst of a record number of program launches, it is only natural for there to be production of inefficiencies that drive higher costs. Often simply as a matter of a timing lag between the investments to develop and support the launches, and the eventual realization of sales from the launches. Customer program delays can also contribute to these fixed cost-absorbing challenges. We are taking numerous actions to mitigate these launch costs, which range from looking for customer support to reimburse some of costs, and internal cost reductions.

Kevin Nystrom: These are essentially the same operational challenges that we've experienced and communicated through this past fiscal year. They are being driven by increased program launches, labor turnover, and higher overall costs. With a company in the midst of a record number of program launches, it is only natural for there to be production inefficiencies that drive higher costs, often simply as a matter of a timing lag between the investments to develop and support the launches and the eventual realization of sales from them. Customer program delays can also contribute to these fixed cost absorption challenges.

Kevin Nystrom: These are essentially the same operational challenges that we've experienced and communicated through this past fiscal year.

Kevin Nystrom: They are being driven by increased program launches, labor turnover, and higher overall costs.

Kevin Nystrom: With the company in the midst of record number of program launches, it is only natural for there to be production inefficiencies that drive higher costs.

Kevin Nystrom: often simply as a matter of a timing lag between the investments to develop and support the launches and the eventual realization of sales from the launches.

Kevin Nystrom: Customer program delays can also contribute to these fixed cost absorption challenges.

Kevin Nystrom: We are taking numerous actions to mitigate these launch costs, which range from looking for customer support to reimburse some of these costs and internal cost reduction. We also have our best talent keenly focused on managing the launches to maximize cost efficiency. Next, I want to move to orders.

Kevin Nystrom: We are taking numerous actions to mitigate these launch costs, which range from looking for customer support to reimburse some of these costs, and internal cost reductions.

Kevin Nystrom: We have also have our best talent, keenly focused on managing the launches to maximize cost efficiencies.

Kevin Nystrom: We have also...

Kevin Nystrom: have our best talent keenly focused on managing the launches to maximize cost efficiencies.

Kevin Nystrom: In fact, I want to move to orders. We had a strong quarter with over $140 million in annual program awards. These programs were spread across our power, lighting, sensor, and user interface applications. I can also share that the pipeline of potential awards remains healthy. I would note that the profile of the program awards and the pipeline are both heavily weighted towards EV and are subject to reduction or delay due to customer decisions or market conditions. Turning back to EV activity, their sales in the quarter were 14% of our consolidated total, or for the year were at 19%.

Kevin Nystrom: We had a strong quarter with over $140 million in annual program awards. These programs were spread across our power, lighting, sensor, and user interface applications. I can also share that the pipeline of potential awards remains healthy. However, I would note that the profile of the program awards and the pipeline are both heavily weighted towards EV and are subject to reduction or delay due to customer decisions or market conditions. Turning back to EV activity, their sales in the quarter were 14% of our consolidated total, or for the year, we're at 19.

Kevin Nystrom: Next, I want to move to orders. We had a strong quarter with over $140 million in annual program awards.

Kevin Nystrom: These programs were spread across our power, lighting, sensor, and user interface applications.

Kevin Nystrom: I can also share that the pipeline of potential awards remains healthy.

Kevin Nystrom: I would note that the profile of the program awards and the pipeline are both heavily weighted towards EV and are subject to reduction or delay due to customer decisions or market conditions.

Kevin Nystrom: Turning back to EV activity.

Kevin Nystrom: Their sales in the quarter were 14% of our consolidated total, or for the year were at 19%.

Kevin Nystrom: As previously communicated, we had a sizeable EV lighting program roll off in the fourth quarter, and we are now at the beginning of a wave of several new EV power programs. As we transition programs, there is a timing gap where we expect a period of lower EV sales before they rebound. All of this is taking place within the backdrop of a softening near-term market outlook in EV. However, as we look out several years, EV is still clearly a long-term tailwind for method, but the path, as we are seeing, may not be linear.

Kevin Nystrom: As previously communicated, we had a sizable EV lighting program roll off in the fourth quarter, and we are now at the beginning of a wave of several new EV power programs. As we transition programs, there is a timing gap where we expect... a period of lower EV sales before they rebound. All of this is taking place within the backdrop of a softening near-term market outlook for EVs. However, as we look out several years, EVs are still clearly a long-term tailwind for Methode. But the path, as we are seeing, may not be linear.

Kevin Nystrom: As previously communicated, we had a sizable EV lighting program roll off in the fourth quarter. And we are now at the beginning of a wave of several new EV power programs.

Kevin Nystrom: As we transition programs, there is a timing gap where we expect a period of lower EV sales.

Kevin Nystrom: before they rebound. All of this is taking place within the backdrop of a softening near-term market outlook in EV. However, as we look out several years, EV is still clearly a long-term tailwind for Methode.

Kevin Nystrom: But the path, as we are seeing, may not be linear.

Kevin Nystrom: At year end, our net debt was at the lowest level it has been in the last four quarters. That reduction was aided by our highest free cash flow quarter of the year. Our cash position at the end of the fourth quarter was aided by the sale of certain non-core assets, including the company aircraft. We are maintaining a sharp focus on cash generation. Lastly, we continued our share buyback in the quarter, acquiring $3 million in shares via our automated purchase program.

Kevin Nystrom: At year end, our net debt was at the lowest level it has been in the last four quarters. That reduction was aided by our highest free cash flow quarter of the year. Our cash position at the end of the fourth quarter was aided by the sale of certain non-core assets, including the company aircraft. We are maintaining a sharp focus on cash generation. Lastly, we continued our share buyback program in the quarter, acquiring $3 million in shares via our automated purchase program.

Kevin Nystrom: At year end, our net debt was at the lowest level it has been in the last four quarters.

Kevin Nystrom: That reduction was aided by our highest free cash flow quarter of the year. Our cash position at the end of the fourth quarter was aided by the sale of certain non-core assets, including the company aircraft.

Kevin Nystrom: We are maintaining a sharp focus on cash generation. Lastly, we continued our share buyback in the quarter, acquiring $3 million in shares via our automated purchase program.

Kevin Nystrom: Let's go to page five of the presentation. The awards identified here are some of the key wins in the quarter and represent $141 million in annual sales at full production. The launch top timing of most of these programs could be anywhere in the range of one to two years from now. The awards were mainly for power products associated with the EV skateboard architecture. These awards were also weighted towards the United States and Asia. In other areas, we were awarded programs for sensors, user interface, and solutions for applications in e-bikes, traditional auto, and commercial vehicles. It was by far our strongest quarter for the year for awards and was once again driven by EV.

Kevin Nystrom: Let's go to page 5 of the presentation. The awards identified here are some of the key wins in the quarter and represent $141 million in annual sales at full production. The launch timing of most of these programs could be anywhere in the range of one to two years from now. The awards were mainly for power products associated with the EV skateboard architecture. These awards were also weighted towards the United States and Asia.

Kevin Nystrom: Let's go to page 5 of the presentation.

Kevin Nystrom: The awards identified here are some of the key wins in the quarter and represent a hundred and forty one million dollars in annual sales at full production.

Kevin Nystrom: The launch timing of most of these programs could be anywhere in the range of one to two years from now.

Kevin Nystrom: The awards were mainly for power products associated with the EV skateboard architecture.

Kevin Nystrom: These awards were also weighted towards the United States and Asia. In other areas, we were awarded programs for sensors, user interface, and solutions for applications in e-bikes, traditional auto, and commercial vehicles.

Kevin Nystrom: In other areas, we were awarded programs for sensors, user interface, and solutions for applications in e-bikes, traditional cars, and commercial vehicles. It was by far our strongest quarter of the year for awards, and was once again driven by EV. As I mentioned earlier, the award pipeline remains healthy but is also very EV-centric. Now, let's go to page six of the presentation. In summary, for the quarter, sales were under pressure from major auto program roll-offs and market headwinds in the e-bike and EV market. The goodwill impairment, operational inefficiencies of our auto segment, and lower sales volume drove a net loss.

Kevin Nystrom: It was by far our strongest quarter for the year for awards and was once again driven by EV. As I mentioned earlier, the award pipeline remains healthy but is also very EV centric.

Kevin Nystrom: As I mentioned earlier, the award pipeline remains healthy but is also very EV-centered.

Kevin Nystrom: Let's go to page six of the presentation. In summary for the quarter, sales were under pressure from major auto program roll-offs and market headwinds in the e-bike and EV markets. The goodwill impairment, operational inefficiencies of our auto segment, and lower sales mind volume drove a net loss. However, we reported the best quarter of the year for free cash flow and new program awards. Lastly, we delivered the lowest quarterly debt level of the fiscal year.

Kevin Nystrom: Let's go to page 6 of the presentation.

Kevin Nystrom: In summary for the quarter, sales were under pressure from major auto program roll-offs and market headwinds in the e-bike and EV markets.

Kevin Nystrom: The Goodwill Impairment

Kevin Nystrom: Operational inefficiencies of our auto segment and lower sales volume drove a net loss. However, we purported the best quarter of the year for free cash flow and new program awards.

Kevin Nystrom: However, we delivered the best quarter of the year for free cash flow and new program awards. Lastly, we delivered the lowest quarterly debt level of the fiscal year. Going forward, we are fully focused on profitability improvement. We are undertaking initiatives to reduce costs, particularly in the areas of sourcing, logistics, and sales and administration. We are also focused on monetizing non-critical assets, managing our strong backlog of program launches, and improving low-margin programs. We will also continue our efforts to reduce working capital, increase cash flow, and reduce net debt.

Kevin Nystrom: Lastly, we delivered the lowest quarterly debt level of the fiscal year.

Kevin Nystrom: Going forward, we are fully focused on profitability improvement. We are undertaking initiatives to reduce costs, particularly in the areas of sourcing, logistics, and sales and administrative costs. We are also focused on monetizing non-critical assets, managing our strong backlog of program launches, and improving low margin programs. We will also continue our efforts to reduce working capital, increase cash flow, and reduce net debt. These actions are all foundational to our long-term plans and will carry on beyond the company's leadership transition.

Kevin Nystrom: Going forward, we are fully focused on profitability improvement.

Kevin Nystrom: We are undertaking initiatives to reduce costs, particularly in the areas of sourcing, logistics, and sales and administrative costs.

Kevin Nystrom: We're also focused on monetizing non-critical assets, managing our strong backlog of program launches, and improving low-margin programs.

Kevin Nystrom: We will also continue our efforts to reduce working capital, increase cash flow, and reduce net debt. These actions are all foundational to our long-term plans and will carry on beyond the company's leadership transition.

Kevin Nystrom: These actions are all foundational to our long-term plans and will carry on beyond the company's leadership transition. Simply put, our fiscal 2025 will be a year of repositioning the business with the goal of returning the company to growth and profitability in 2026.

Kevin Nystrom: Simply put, our fiscal 2025 will be a year of repositioning the business with the goal of returning the company to growth and profitability in 2026.

Kevin Nystrom: Simply put, our fiscal 2025 will be a year of repositioning the business with the goal of returning the company to growth and profitability in 2026.

Kevin Nystrom: Now, before I turn the call over to Ron, who will provide more detail on the fourth quarter financial results, I would like to recognize Ron for his service to Methode. Ron's retiring, and this is his last earnings call. Ron has been a valuable contributor to Methode for over 40 years and will long be remembered as a pillar in the history of this company. We thank Ron for his tireless efforts and wish him and his family the best in retirement. With that, Ron, I'll hand it over to you.

Kevin Nystrom: Before I turn the call over to Ron, who will provide more detail on fourth-order financial results, I would like to recognize Ron for his service to Method. Ron is retiring tomorrow, and this is his last earnings call. Ron has been a valuable contributor to Method for over 40 years and will long be remembered as a pillar in the history of this company. We thank Ron for his tireless efforts and wish him and his family the best and retire.

Kevin Nystrom: Now, before I turn the call over to Ron, who will provide more detail on fourth quarter financial results, I would like to recognize Ron for his service to Methode. Ron's retiring tomorrow.

Kevin Nystrom: And this is his last earnings call. Ron has been a valuable contributor to Methode for over 40 years and will long be remembered as a pillar in the history of this company.

Ronald L.G. Tsoumas: We thank Ron for his tireless efforts and wish him and his family the best in retirement. With that, Ron, I'll hand it over to you. Thank you, Kevin, and good morning everyone. Please turn to slide 8.

Ron Sumis: With that, Ron, I'll hand it over to you. Thank you, Kevin. Good morning, everyone.

Ronald L.G. Tsoumas: Thank you, Kevin, and good morning, everyone. Please turn to slide 8. Fourth quarter net sales were $277.3 million compared to $301.2 million in fiscal 23, a decrease of 8%. This quarter's sales included $21.8 million from the Nordic Lights acquisition and $1.1 million of unfavorable foreign currency translation; excluding Nordic Lights and foreign currency, sales decreased by 15%. The quarter saw the continuation of two key automotive program roll-offs, one in North America and one in Asia, the one in Asia fully rolled off in the fourth quarter.

Ronald L.G. Tsoumas: We also had persistent softness in the e-bike market and some weakness in EV demand. The e-bike market continues to be overcrowded... Fourth quarter loss from operations was $61.5 million, down from $8.5 million in income in fiscal 23. Income was down due to the goodwill impairment and ongoing operational inefficiencies, which were mainly in a North American automotive business, which drove higher inventory, labor expense, and other increased production costs, combined with lower sales value. Similar to our second quarter of the past fiscal year, at the end of the fourth quarter, we experienced a goodwill impairment triggering event when our market cap was less than our book value.

Ron Sumis: Please turn to slide 8. Fourth-order net sales were 277.3 million compared to 301.2 million in fiscal 2023, a decrease of 8%. This quarter and sales included $21.8 million from the Nordic Lights acquisition and $1.1 million of unfavorable foreign currency translation. Excluding Nordic Lights and foreign currency, sales decreased by 15%. We also had persistent softness in the e-bike market and some weakness in EV demand. The e-bike market continues to be overstocked. Fourth quarter loss from operations was $61.5 million, down from $8.5 million of income in fiscal 23. Income was down to the goodwill impairment, the ongoing operational inefficiencies, which were mainly in a North American auto mode of business, which drove higher inventory, labor expense, other increased production costs combined with lower sales volume.

Ronald L.G. Tsoumas: Based on this, we performed a quantitative analysis on our reporting units with Goodwill, and we determined that at our North American Auto Reporting Unit, the current value of the reporting unit was less than the carrying value, resulting in a Goodwill impairment of $49.4 million. There is no remaining goodwill at this recording.

Ronald L.G. Tsoumas: Fourth quarter net sales were $277.3 million compared to $301.2 million in fiscal 23, a decrease of 8%.

Ronald L.G. Tsoumas: This quarter's sales included $21.8 million from the Nordic Lights acquisition and $1.1 million of unfavorable foreign currency translation.

Ronald L.G. Tsoumas: Excluding Nordic lights and foreign currency, sales decreased by 15 percent.

Ronald L.G. Tsoumas: The quarter saw the continuation of two key automotive program roll-offs, one in North America and one in Asia.

Ronald L.G. Tsoumas: The one in Asia fully rolled off in the fourth quarter.

Ronald L.G. Tsoumas: We also had persistent softness in the e-bike market and some weakness in EV demand. The e-bike market continues to be overstocked.

Ronald L.G. Tsoumas: Fourth quarter loss from operations was $61.5 million, down from $8.5 million of income in fiscal 23.

Ronald L.G. Tsoumas: Income was down to the goodwill impairment, the ongoing operational inefficiencies, which were mainly in a North American automotive business, which drove higher inventory, labor expense, other increased production costs, combined with lower sales volume.

Ron Sumis: Similar to our second quarter of the past fiscal year, at the end of the fourth quarter we experienced a goodwill impairment triggering event when our market cap was less than our book value. Based on this, we performed a quantitative analysis on our reporting units with goodwill, and we determined that in our North American auto reporting unit, the current value of the reporting unit was less than the carry value, resulting in a goodwill impairment of $49.4 million. There is no remaining goodwill at this reporting unit. Adjusting for the goodwill impairment of $49.4 million and restructuring costs of $2.3 million, which were partially driven by headcount reductions, our non-GAF adjusted loss from operations was $9.8 million.

Ronald L.G. Tsoumas: Similar to our second quarter of the past fiscal year, at the end of the fourth quarter, we experienced a goodwill impairment triggering event.

Ronald L.G. Tsoumas: when our market cap was less than our book value.

Ronald L.G. Tsoumas: Based on this, we performed a quantitative analysis on our reporting units with goodwill.

Ronald L.G. Tsoumas: And we determined that at our North American Auto Reporting Unit, the current value of the reporting unit was less than the carrying value, resulting in a goodwill impairment of $49.4 million. There is no remaining goodwill at this reporting unit.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairment of $49.4 million and restructuring costs of $2.3 million, which were partially driven by headcount reductions, our non-GAF-adjusted loss from operations was $9.8 million. Please turn to slide 9.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairment of $49.4 million and restructuring costs of $2.3 million, which were partially driven by headcount reductions, our non-GAF adjusted loss from operations was $9.8 million.

Ron Sumis: Please turn to slide 9. Fourth quarter deluded earnings per share decreased to a negative $1.63 from a positive $22 in the same period last fiscal year. The EPS was negatively impacted by lower operating income, the goodwill impairment, and higher net interest expense. A larger tax benefit compared to the prior year was a partial offset. Adjusting for the goodwill impairment of $1.4 per share, restructuring costs of $5 per share, and again on sale of assets of $5 per share, our non-GAF adjusted diluted EPS decreased to a negative $23 per share. The gain on the sale of assets was mainly driven by the sale of the company aircraft.

Ronald L.G. Tsoumas: Please turn to slide 9.

Ronald L.G. Tsoumas: Fourth quarter diluted earnings per share decreased to a negative $1.63 from a positive 22 cents in the same period last fiscal year. The EPS was negatively impacted by lower operating income, the goodwill impairment, and higher net interest expense. A larger tax benefit compared to the prior year was a partial loss. Adjusting for the goodwill impairment of $1.40 per share, restructuring costs of $0.05 per share, and a gain on sale of assets of $0.05 per share, our non-GAAP-adjusted diluted EPS decreased to a negative $0.23 per share. The gain on this sale of assets was mainly driven by the sale of the company's aircraft.

Ronald L.G. Tsoumas: Fourth quarter diluted earnings per share decreased to a negative $1.63 from a positive $0.22 in the same period last fiscal year.

Ronald L.G. Tsoumas: The EPS was negatively impacted by lower operating income, the goodwill impairment, and higher net interest expense. A larger tax benefit compared to the prior year was a partial offset.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairment of $1.40 per share, restructuring costs of $0.05 per share, and a gain on sale of assets of $0.05 per share, our non-GAAP-adjusted diluted EPS decreased to a negative $0.23 per share.

Ronald L.G. Tsoumas: The gain on this sale of assets was mainly driven by the sale of the company aircraft.

Ron Sumis: Shifting to EBITDA, a non-GAAP financial measure, fourth quarter EBITDA was a negative $44 million versus a positive $21.9 million in the same period last fiscal year. EBITDA was negatively impacted by the lower gross profit, lower sales, partially offset by lower selling expenses. Selling administrative expenses 8.5 million lower, primarily due to the acquisition cost of Nordic Blight in the prior year, which accounted for $6.8 million of a decrease. Adjusting for the goodwill impairment of $49.4 million, restructuring costs of $2.3 million, and the gain on sale of assets of $2.4 million. Our Adjusted E, but does decrease 26.4 million to 5.3 million.

Ronald L.G. Tsoumas: Shifting to EBITDA, a non-GAAP financial measure, fourth-quarter EBITDA was a negative $44 million versus a positive $21.9 million in the same period last fiscal year. EBITDA was negatively impacted by lower gross profit, lower sales, partially offset by lower selling expenses. Selling Administrative Expense was $8.5 million lower primarily due to the acquisition costs of Nordic Lights in the prior year, which accounted for $6.

Ronald L.G. Tsoumas: Shifting to EBITDA, a non-GAAP financial measure, fourth quarter EBITDA was a negative $44 million versus a positive $21.9 million in the same period last fiscal year.

Ronald L.G. Tsoumas: EBITDA was negatively impacted by the lower gross profit, lower sales, partially offset by lower selling expenses.

Ronald L.G. Tsoumas: Selling administrative expense was 8.5 million lower primarily due to the acquisition cost of Nordic Lights in the prior year, which accounted for 6.8 million of the decrease.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairment of $49.4 million, restructuring costs of $2.3 million, and the gain on sale of assets of $2.4 million, are adjusted but decreased $26.4 million to $5.3 million. Please turn to slide 10. Debt was up $24.1 million from the prior year end, but it was down slightly from the third quarter. The debt increase was mainly due to working capital investments and higher capital expenditures both to support sales and new program launches.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairment of $49.4 million, restructuring costs of $2.3 million, and the gain on sale of assets of $2.4 million.

Ronald L.G. Tsoumas: Our adjusted EBITDA decreased $26.4 million to $5.3 million.

Ron Sumis: Please turn to slide 10. Death was up 24.1 million from the prior year end, but it was down slightly from the third quarter. The dead increase was mainly due to working capital investments in higher-capacts, both to support sales and new program launches. We ended the quarter with 161.5 million in cash, up 4.5 million from the end of last fiscal year, and up 38.6 million from the third quarter. The sale of the company aircraft was a notable driver of the sequential increase. Net debt, a non-GAAP financial measure, increased by 19.6 million from the prior year end to 169.4 million, but was down 39 million.

Ronald L.G. Tsoumas: Please turn to slide 10.

Ronald L.G. Tsoumas: Debt was up 24.1 million from the prior year end, but it was down slightly from the third quarter. The debt increase was mainly due to working capital investments and higher cap acts, both to support sales and new program launches.

Ronald L.G. Tsoumas: We ended the quarter with $161.5 million in cash, up $4.5 million from the end of last fiscal year and up $38.6 million from the third quarter. The sale of the company's aircraft was a notable driver of the sequential... Net debt, a non-GAAP financial measure, increased by $19.6 million from the prior year end to $169.4 million but was down $39 million from the third quarter and was at its lowest level since the end of fiscal 23. We were in compliance with all of our debt covenants at the end of the fourth quarter.

Ronald L.G. Tsoumas: We ended the quarter with 161.5 million in cash, up 4.5 million from the end of last fiscal year, and up 38.6 million from the third quarter. The sale of the company aircraft was a notable driver of the sequential increase.

Ronald L.G. Tsoumas: Net debt, a non-GAAP financial measure, increased by $19.6 million from the prior year end to $169.4 million, but was down $39 million from the third quarter and was at its lowest level since the end of fiscal 23.

Ron Sumis: From the third quarter, and was at its lowest level since the end of fiscal 23. We were in compliance with all of our debt covenants at the end of the fourth quarter. However, at the end of the quarter, we proactively entered into an amendment with our credit facility agreement with our lenders. The amendment lower the size of the credit facility from 750 million to 500 million, raised certain covenant ratios and added additional terms. The cementment gives us further confidence that we remain compliant with our debt covenants over the next 12 months.

Ronald L.G. Tsoumas: We were in compliance with all of our debt covenants at the end of the fourth quarter. However, at the end of the quarter, we proactively entered into an amendment with our credit facility agreement with our lenders.

Ronald L.G. Tsoumas: However, at the end of the quarter, we proactively entered into an amendment to our credit facility agreement with our lenders. The amendment lowered the size of the credit facility from $750 million to $500 million, raised certain covenant ratios, and added additional terms. This amendment gives us further confidence that we will remain compliant with our debt covenants over the next 12 months. For further information, please see our 10-K file.

Ronald L.G. Tsoumas: The amendment lowered the size of the credit facility from $750 million to $500 million, raised certain covenant ratios, and added additional terms.

Ronald L.G. Tsoumas: This amendment gives us further confidence that we will remain compliant with our debt covenants over the next 12 months.

Ron Sumis: For further information, please see our 10-K filing.

Ron Sumis: Please turn to slide 11. Fourth quarter net cash from operating activities was 24.9 million, as compared to 49 million in fiscal 23. The decrease of 24.1 million was primarily due to lower net income in the quarter. Fourth quarter capital expenditure was 9.1 million, as compared to 11.2 million in fiscal 23, a decrease of 2.1 million. Fourth quarter free cash flow, another non-GAAP financial measure, was 15.8 million, as compared to 37.8 million in fiscal 23. A decrease of 22 million. This decrease, again, was primarily due to reduce net income. After having negative free cash flow, the first two quarters of the year, we returned to positive free cash flow in the third and fourth quarters.

Ronald L.G. Tsoumas: For further information, please see our 10-K filing.

Ronald L.G. Tsoumas: Please turn to slide 11. Fourth quarter's net cash from operating activities was $24.9 million as compared to $49 million in fiscal 23. The decrease of $24.1 million was primarily due to lower net income in the quarter. Fourth quarter capital expenditure was $9.1 million as compared to $11.2 million in fiscal 23, a decrease of $2.1 million.

Ronald L.G. Tsoumas: Please turn to slide 11.

Ronald L.G. Tsoumas: Fourth quarter's net cash from operating activities was $24.9 million as compared to $49 million in fiscal 23.

Ronald L.G. Tsoumas: The decrease of $24.1 million was primarily due to lower net income in the quarter.

Ronald L.G. Tsoumas: Fourth quarter capital expenditure was $9.1 million as compared to $11.2 million in fiscal 23, a decrease of $2.1 million.

Ronald L.G. Tsoumas: Fourth-quarter free cash flow, another non-GAAP financial measure, was $15.8 million as compared to $37.8 million in fiscal 23, a decrease of $22 million. This decrease, again, was primarily due to reduced net income. After having negative free cash flow the first two quarters of the year, we return to positive free cash flow in the third and fourth quarters. Please turn to slide 12.

Ronald L.G. Tsoumas: Fourth quarter free cash flow, another non-GAAP financial measure, was $15.8 million as compared to $37.8 million in fiscal 23, a decrease of $22 million.

Ronald L.G. Tsoumas: This decrease, again, was primarily due to reduced net income.

Ronald L.G. Tsoumas: After having negative free cash flow the first two quarters of the year, we return to positive free cash flow in the third and fourth quarters.

Ron Sumis: Please turn to slide 12. Moving to the full year results, fiscal 24 net sales were 1,114.5 million, a decrease of 6% from fiscal 23. Excluding Nordic life and foreign currency, sales decreased by 13%. This year was impacted by the roll-off of two key automotive programs in the automotive segment regions, weakness in all three regions. Fiscal 24 diluted earnings per share decreased to a negative $3.48 from a positive $2.10 of fiscal 23. The EPS was negatively impacted by the goodwill impairments, operational inefficiencies, higher interest expense, and lower sales life. Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustment, and gain on the sale of assets, our non-GAAP adjusted diluted EPS decrease to a negative $43.

Ronald L.G. Tsoumas: Moving to the full year results, fiscal 24 net sales were $1,114,500,000, a decrease of 6% from fiscal 23. Excluding Nordic lights and foreign currency, sales decreased by 13%. This year was impacted by the roll-off of two key automotive programs and the overall automotive segment weakness in all three regions.

Ronald L.G. Tsoumas: Please turn to slide 12.

Ronald L.G. Tsoumas: Moving to the full year results, fiscal 24 net sales were $1,114,500,000, a decrease of 6% from fiscal 23.

Ronald L.G. Tsoumas: Excluding Nordic lights and foreign currency, sales decreased by 13 percent.

Ronald L.G. Tsoumas: This year was impacted by the roll off of two key automotive programs and the overall automotive segment weakness in all three regions.

Ronald L.G. Tsoumas: Fiscal 24 diluted earnings per share decreased to a negative $3.48 from a positive $2.10 in Fiscal 23. The EPS was negatively impacted by goodwill impairments, operational inefficiencies, higher interest expense, and lower sales. Please turn to slide 13. Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustment, and gain on net sale of assets, our non-GAAP adjusted diluted EPS decreased to a negative 43%.

Ronald L.G. Tsoumas: Fiscal 24 diluted earnings per share decreased to a negative $3.48 from a positive $2.10 in Fiscal 23.

Ronald L.G. Tsoumas: The EPS was negatively impacted by the goodwill impairments, operational inefficiencies, higher interest expense, and lower sales volume.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustment, and gain on net sale of assets are non-GAAP adjusted diluted EPS decreased to a negative 43 cents.

Ron Sumis: Please turn slide 13. Shifting to EBITDA, a non-GAAP financial measure, fiscal 24, EBITDA was a negative 53.5 million versus a positive 142.3 million in fiscal 23. EBITDA was negatively impacted by lower gross profit, lower sales, and higher SG&A expenses. Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustments, and gain on the sale of assets, adjusted EBITDA decreased 64% to 55.3 million.

Ronald L.G. Tsoumas: Lower Gross Profit, Lower Sales, and Higher SG&A Expenses.

Ronald L.G. Tsoumas: Shifting to EBITDA, a non-GAAP financial measure, fiscal 24 EBITDA was a negative 53.5 million versus a positive 142.3 million in fiscal 23, even though it was negatively impacted by lower gross profit, lower sales, and higher SG&A expenses. However, adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustments, and gain on net sale of assets, our adjusted EBITDA decreased 64% Please turn to slide 14.

Ronald L.G. Tsoumas: Adjusting for the goodwill impairments, restructuring costs, acquisition costs, purchase accounting adjustments, and gain on net sale of assets, our adjusted EBITDA decreased 64% to $55.3 million.

Speaker Change: Please turn to slide 14.

Speaker Change: Fiscal 24 net cash from operating activities was $47.5 million as compared to $132.8 million in fiscal 23.

Speaker Change: The decrease of $85.3 million was primarily due to lower net income.

Ron Sumis: Please turn to slide 14. Fiscal 24 net cash from operating activities was 47.5 million, as compared to 132.8 million in fiscal 23. The decrease of 85.3 million was primarily due to lower net income. Fiscal Year 24 cap tax was 50.2 million as compared to 42 million in Fiscal 23, an increase of 8.2 million. The increase was driven by investments required to support new program launches. Fiscal 24 free cash flow, a non-GAAP financial measure, was a negative 2.7 million as compared to a positive 90.8 million in fiscal 23. A decrease of 93.5 million. This decrease was primarily due to reduce net income.

Ronald L.G. Tsoumas: Fiscal 24 net cash from operating activities was $47.5 million as compared to $132.8 million in fiscal 23. The decrease of $85.3 million was primarily due to lower net... Fiscal Year 24 cap fax was $50.2 million as compared to $42 million in fiscal 23, an increase of $8.2 million. The increase was driven by investments required to support new program launch.

Speaker Change: Fiscal Year 24 capex was $50.2 million as compared to $42 million in Fiscal 23, an increase of $8.2 million. The increase was driven by investments required to support new program launches.

Speaker Change: Fiscal 24 free cash flow, a non-GAAP financial measure, was a negative $2.7 million as compared to a positive $90.8 million in Fiscal 23, a decrease of $93.5 million.

Speaker Change: This decrease was primarily due to reduced net income.

Ronald L.G. Tsoumas: Fiscal 24 free cash flow, a non-GAAP financial measure, was a negative $2.7 million as compared to a positive $90.8 million in Fiscal 23, a decrease of $93.5 million. This decrease was primarily due to reduced net income. After having negative free cash flow in the first half of the year, we returned to positive cash flow in the second half of the year. Please turn to slide 15.

Speaker Change: After having negative free cash flow in the first half of the year, we returned to positive cash flow in the second half.

Speaker Change: Please turn to slide 15.

Speaker Change: Regarding forward-looking guidance, it is based on management's best estimates and is subject to change due to a variety of factors as noted at the bottom of the slide.

Ron Sumis: After having negative free cash flow in the first half of the year, we returned to positive cash flow in the second half.

Ron Sumis: Please turn to slide 15. Regarding forward-looking guidance, it is based on management's best estimates and is subject to change due to a variety of factors, as noted at the bottom of the slide. For fiscal 25, we expect net sales to be similar to fiscal 24 and adjusted pre-tax income to be approaching break even. We adjusted pre-text income for the second half of fiscal 25 is expected to be significantly stronger than the first half, with the first quarter of fiscal 25 being similarly negative to the fourth quarter of fiscal 24. The fiscal year 25 guidance assumes depreciation and amortization of between 60 and 65 million.

Speaker Change: For Fiscal 25, we expect net sales to be similar to Fiscal 24 and adjusted pre-tax income to be approaching break-even.

Ronald L.G. Tsoumas: Regarding forward-looking guidance, it is based on management's best estimates and is subject to change due to a variety of factors, as noted at the bottom of the slide. For Fiscal 25, we expect net sales to be similar to Fiscal 24, and adjusted pre-tax income to be approaching breakeven. The adjusted pre-tax income for the second half of Fiscal 25 is expected to be significantly stronger than the first half, with the first quarter of Fiscal 25 being similarly negative to the fourth quarter of Fiscal 24.

Speaker Change: The adjusted pre-tax income for the second half of Fiscal 25 is expected to be significantly stronger than the first half, with the first quarter of Fiscal 25 being similarly negative to the fourth quarter of Fiscal 24.

Speaker Change: The fiscal year 25 guidance assumes depreciation and amortization of between 60 and 65 million.

Speaker Change: Looking further ahead to Fiscal 26, we expect net sales to be greater than Fiscal 25 and pre-tax income to be positive and notably greater than Fiscal 25.

Speaker Change: That concludes my comments and we can open it up for questions.

Ron Sumis: Looking further ahead to fiscal 26, we expect net sales to be greater than fiscal 25 and pre-tax income to be positive and notably greater than fiscal 25.

Ronald L.G. Tsoumas: The fiscal year 25 guidance assumes depreciation and amortization of between $60 and $65 million. Looking further ahead to Fiscal 26, we expect net sales to be greater than in Fiscal 25, and pre-tax income to be positive and notably greater than in Fiscal 25. That concludes my comments, and we can open it up for questions.

Speaker Change: Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we pull for questions.

Ron Sumis: That concludes my comments, and we can open it up for questions.

Operator: Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while asking your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we pull for questions. Your first question is coming from Luke Junk with Baird. Please post your question. Your line is live.

Operator: Certainly, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, please pick up your handset if listening on a speaker phone to provide an optimal sound quality. Please hold just the moment while we pull for questions.

Speaker Change: Your first question is coming from Luke Junk with Baird. Please post your question, your line is live.

Luke L. Junk: Good morning. Thanks for taking the questions. First, maybe just a point of clarification on the Fiscal 25 expectation for pre-tax income to be approaching break-even. Should we be thinking about that for Fiscal 25 in the aggregate and just basically trying to square the full year review versus the first quarter coming out of the gates, kind of similar to where you were in the fourth quarter? Thank you.

Luke Youngc: Your first question is coming from Luke Youngc with Baird. Please pose your question, your minus life. Good morning. Thanks for taking the questions. First, maybe just a point of clarification on the fiscal 25 expectation for pre-text income to be approaching break even. Should we be thinking about that for fiscal 25 in aggregate and just basically trying to square the full review versus the first quarter coming out of the gates kind of similar to where you were in the fourth quarter. Thank you.

Luke L. Junk: Good morning. Thanks for taking the questions. First, maybe just a point of clarification on the Fiscal 25 expectation for pre-tax income to be approaching break-even. Should we be thinking about that for Fiscal 25 as a whole and just basically trying to square the full year review versus the first quarter coming out of the gates, kind of similar to where you were in the fourth quarter? Thank you.

Speaker Change: Yeah, so, Luke...

Luke L. Junk: We do expect to approach breakeven for the year, but the first...

Speaker Change: This quarter will be much like this.

Speaker Change: as we experienced in the fourth quarter of fiscal 24 with gradual improvement and then stronger in the second half, especially in the fourth quarter where we have launches that are expected to be in full launch at that time.

Kevin Nystrom: So, Luke, we do expect to approach break-even for the year, but the first quarter will be much like this, as we experienced in the fourth quarter of fiscal 24, with gradual improvement and then stronger in the second half, especially in the fourth quarter, where we have launches that are expected to be in full launch at that time.

Kevin Nystrom: Yeah, so Luke, we do expect approach break even for the year, but the first quarter will be much like this, this as we experienced in the fourth quarter of fiscal 24 with gradual improvement and then stronger in the second half, especially in the fourth quarter, where we have launches that are expected to be in full launch at that time. Got it. Okay, that's helpful. Thank you. And then, yeah, just relative to the flat outlook for sales, roughly in fiscal 25, you know, that would imply that you're going to be able to get over the top of the remaining products and touch with launches, like you said, those launches, especially stepping up in the fourth quarter.

Speaker Change: Okay, that's helpful. Thank you. And then, yeah, just relative to the flat outlook for sales, roughly in fiscal 25, you know, that would imply that you're going to be able to get over the top of the remaining product sunsets with launches, like you said, those launches, especially stepping up in the fourth quarter. Can you just talk about

Kevin Nystrom: And then, yeah, just relative to the flat outlook for sales, roughly in fiscal 25, that would imply that you're gonna be able to get over the top of the remaining product sunsets with launches, like you said, those launches, especially stepping up in the fourth quarter. Can you just talk about guardrails that you have in place internally from an operational standpoint to make sure that those launches go smoothly from Methode's end, and then just what you're hearing from customers in terms of timing, volumes, risk to take rates, or just risk of any pushouts in that regard?

Speaker Change: ...guardrails that you have in place internally from an operational standpoint to make sure that those launches go smoothly from Methode's end, and then just what you're hearing from customers in terms of timing, volumes, risk-to-take rates, or just risk of any pushouts in that view.

Kevin Nystrom: Can you just talk about guardrails that you have in place internally from an operational standpoint to make sure that those launches go smoothly from methods and then just what you're hearing from costs in terms of timing, volumes, risk to take rates, or just risk of any pushouts in that view? So, so Luke, why don't we start with the roll-offs first? We had, you know, approximately, there are two major programs that we describe approximately 90 million rolled off in fiscal 24, and we expect the final roll offs of those programs in the 100 million dollar range for fiscal 25.

Speaker Change: So Luke, why don't we start with the roll-offs first. We had, you know, approximately, there are two major programs that we described. Approximately 90 million rolled off in fiscal 24 and we expect

Kevin Nystrom: So, Luke, why don't we start with the roll-offs first. We had approximately two major programs that we described. Approximately 90 million rolled off in fiscal 24. And we expect the final roll-offs of those programs in the $100 million range for Fiscal 25. So those, all these new launches will basically fill the pipeline of the void. And it's important to know that these two largest programs that we have will be pretty much fully rolled off at the end of 25, providing, you know, a nice path into Fiscal 26 as we get through the year, in there. So in terms of, you know, the operational perspective, the

Speaker Change: the final roll-offs of those programs.

Speaker Change: and the $100 million range for Fiscal 25. So all these new launches will basically fill the pipeline of the void. And it's important to know that these two largest programs that we have will be pretty much fully rolled off at the end of 25, providing...

Kevin Nystrom: So, all these new launches will basically fill the pipeline or the void. And it's important to know that these two largest programs that we have will be pretty much fully rolled off at the end of 25, providing, you know, a nice path into fiscal 26 as we get in there. So, in terms of, you know, the operational perspective, the right, we're seeing some slowdown in particular in EV demand, but we're working with our customers to make sure that we can maximize our pricing adjustments to account for those lower, lower end customer volumes. The other thing I want to add is we're initiating several cost reduction programs, in particular with sourcing costs and logistic costs.

Speaker Change: you know a nice path into fiscal 26 as we get

Speaker Change: in there. So in terms of, you know, the operational perspective, the

Speaker Change: You're right, we're seeing some slowdown in particular in EV demand but we're working with our customers to make sure that we can maximize our pricing adjustments to account for those.

Kevin Nystrom: You're right, we're seeing some slowdown, in particular in EV demand, but we're working with our customers to make sure that we can maximize our pricing adjustments to account for those lower end customer volumes. The other thing I want to add is that we're initiating several cost reduction programs, in particular with sourcing costs and logistics costs. We're doing our legwork now, but those things take time, and we probably won't see real, meaningful benefits until the second half of the year.

Speaker Change: lower end customer volumes. The other thing I want to add is we're initiating

Speaker Change: several cost reduction programs in particular with sourcing costs and logistic costs. We're doing our legwork now but those things take time and we probably won't see real meaningful benefits until the second half of the year.

Speaker Change: If I could ask on just balance sheet related items, or I guess more cash flow really, just any high level expectations you can share for cash flow in the coming year, and then CapEx, we saw that come down quite a bit sequentially in the fourth quarter, just guardrails for CapEx in the coming year as well.

Kevin Nystrom: We're doing our legwork now, but those things take time, and we probably won't see real meaningful benefits until the second half of the year. Got it.

Luke L. Junk: Got it. If I could ask on just balance sheet-related items, or I guess more cash flow, really, just any high-level expectations you can share for cash flow in the coming year and then CapEx, we saw that come down quite a bit sequentially in the fourth quarter, just guardrails for CapEx in the coming year as well.

Luke Youngc: If I could ask on just balance sheet related items, or I guess more cash flow really, just any high level expectations you can share for cash flow in the coming year and then catbacks or so that come down, you know, quite a bit sequentially in the fourth quarter just guard rules for catbacks in the coming year as well. I think we will see fiscal 25 catbacks to be in the same range or higher than in fiscal 24 as we continue to all these awards that we won. We expect to continue to have significant catbacks in fiscal 25.

Speaker Change: I think we will see Fiscal 25 CapEx to be in the same range or higher.

Speaker Change: then in fiscal 24. As we continue to, all these awards that we won, we expect to continue to have significant capex in fiscal 25.

Ronald L.G. Tsoumas: I think we will see Fiscal 25 CapEx be in the same range or higher. As we continue to win all these awards that we won, we expect to continue to have significant, Thereafter is a little bit different.

Speaker Change: thereafter is a little bit different. In terms of, you know, the cash flow as we...

Speaker Change: You know, as we approach break-even relative to Fiscal 24, we'll get some...

Speaker Change: Net income would be, or reduced loss would be better, and then from the, we have a lot of working capital initiatives that we started on and saw some progress in Fiscal 24 that we expect to carry on into Fiscal 25.

Ronald L.G. Tsoumas: In terms of, you know, the cash flow as we, you know, as we approach breakeven relative to fiscal 24, we'll get some net income, or a reduced loss would be better. And then from the, we have a lot of working capital initiatives that we started on and saw some progress in fiscal 24 that we expect to carry on into fiscal 25. And we have additional items, such as we talked about; we had some success in non-core asset sales in the fourth quarter of fiscal 24. We will continue to look at those opportunities as well. So the sum of all of those items, you know, should impact our cash flow and fiscal.

Kevin Nystrom: Thereafter is a little bit different. In terms of, you know, the cash flow as we approach break even relative to fiscal 24, we'll get some net income; reduce loss would be better. And then from the, we have a lot of working capital initiatives that we started on and saw some progress in fiscal 24 that we expect to carry on into fiscal 25. And we have additional items such as, we talked about, we had some success in non-core asset sales in the fourth quarter of fiscal 24. We will continue to look at those opportunities as well, so the sum of all of those items, you know, should impact our cash flow in fiscal 25.

Speaker Change: and we have additional items such as we talked about we we had some success in non-core asset sales in the fourth quarter fiscal 24 we will continue to look at those opportunities as well so the

Speaker Change: So the sum of all of those items.

Speaker Change: You know, you should impact our, the cash flow in Fiscal 25.

Speaker Change: And then just lastly, if I can ask on cap allocation and new return priorities beyond, you know, the CapEx, obviously, that's required for the business, thinking, you know, especially just prioritization of debt pay down relative to share repurchase, which I guess maybe was a little surprising that there was some repurchase in the quarter, and then just maintaining the dividend on a go-forward basis as well.

Luke L. Junk: And then just lastly, if I can ask about cap allocation and new return priorities beyond, you know, the CapEx obviously that's required for the business, thinking, you know, especially just prioritization of debt paydown relative to share repurchase, which I guess maybe was a little surprising that there was some repurchase in the quarter, and then just maintaining the dividend on a go forward basis as well.

Luke Youngc: And then just lastly, if I can ask on cap allocation and new term priorities beyond, you know, the capex obviously that's required for the business, thinking, you know, especially just prioritization of debt pay down relative to share repurchase, which I guess, maybe was a little surprising that there is some repurchase in the quarter and then just maintaining the dividend on a go forward basis as well. Well, the share repurchase was part of a pre-existing program, and I think we've run up almost the entirety of that program. With regard to the dividend, that's a decision the board makes quarter by quarter.

Speaker Change: Well, the share repurchase was part of a pre-existing program, and I think we've pretty, we've

Speaker Change: We've run up almost the entirety of that program.

Speaker Change: With regard to the dividend, that's a decision the board makes quarter by quarter, so it's hard for us to predict quarterly dividend payments going forward.

Ronald L.G. Tsoumas: Well, the share repurchase was part of a pre-existing program, and I think we've pretty much run up almost the entirety of that program. With regard to the dividend, that's a decision the board makes quarter by quarter, so it's hard for us to predict quarterly dividend payments going forward.

Kevin Nystrom: In loop, the number one priority, as Kevin mentioned, we had a 10-5-1 type of an arrangement, but we'll be on the balance sheet, deleveraging and things of that nature and protecting the balance sheet. That will be far more than share repurchases or anything along those lines.

Kevin Nystrom: So it's hard for us to predict quarterly dividend payments going forward. Yeah, I mean, in loop date, the number one priority, as Kevin mentioned, we had a 10 to 5 one type of an arrangement, but we'll be on the balance sheet and de-leveraging and things of that nature in protecting the balance sheet that will be far more than sharing purchases or anything along those lines. Got it. Okay. Thank you.

Ronald L.G. Tsoumas: In the loop, the number one priority, as Kevin mentioned, we had a 10 to 5, one type of an arrangement, but we'll be on the balance sheet, deleveraging and things of that nature, and protecting the balance sheet, which will be far more than share repurchases or anything along those lines.

Speaker Change: Got it. Okay, thank you. I'll leave it there for now.

Speaker Change: Your next question is coming from Saree Brodsky with Jeffries. Please close your question, your line is live.

Saree Brodsky: Good morning, thanks for taking my questions. So I really appreciate the two year guidance. I just want to understand as we think about returning to growth in 2026, you know, how are you, what's the underlying assumption for EV adoption and how will that be impacted if we do see a slower curve than expected?

Luke L. Junk: Got it. Okay, thank you. I'll leave it there for now.

Luke Youngc: I'll leave it there for now.

Operator: Your next question is coming from Saree Brodsky with Jeffries. Please close your question; your line is live.

Sri Vrotsky: Your next question is coming from Sri Vrotsky with Jeffries. Please pose your question. Your mind is live.

Saree Brodsky: Good morning, thanks for taking my questions. So, I really appreciate the two-year guidance. I just want to understand, as we think about returning to growth in 2026, what's the underlying assumption for EV adoption and how will that be impacted if we do see a slower curve than expected?

Sri Vrotsky: Good morning. Thanks for taking my questions. So I really appreciate the two-year guidance. I just want to understand: do you think about returning to growth in 2026?

Speaker Change: There's definitely 26. A lot of the projected growth is in the EV space.

Kevin Nystrom: How are you, what's the underlying assumption for EV adoption and how will that be impacted if we do see a slower curve than expected? There's definitely 26. A lot of the projected growth is in the EV space. There is certainly some sensitization that is definitely going on in the projections and what the outlooks are going to be, but having said that, we still expect the growth that we outlined. Understood.

Speaker Change: There is certainly some sensitization that is that is definitely going on in the projections and what the outlooks are going to be, but having said that we still expect the growth that that we outlined.

Kevin Nystrom: There is definitely 26. A lot of the projected growth is in the EV space. There is certainly some sensitization that is definitely going on in the projections and what the outlooks are going to be. But having said that, we still expect the growth that we are.

Speaker Change: Understood. You know, obviously you talked about the guidance implying a step up in the second half of fiscal 2025. Could you just talk about the key drivers underlying this increase, and then how much is market-related versus what's in your control?

Kevin Nystrom: You know, obviously, you talked about the guidance implying a step up in the second half of fiscal 2025. Could you just talk about the key drivers underlying this increase and then how much is market-related versus what's in your control?

Kevin Nystrom: Obviously, you talked about the guidance implying a step up in the second half of fiscal 2025. You could just talk about the key drivers underlying this increase and then how much is market related versus what's in your control? A lot of that is, as we talked about, some of the new programs being launched, and by the end of the year, we're starting to see some growth from those new programs. Your question of is it under our control? Yes, and we're doing our best to make sure those launches go efficient. and as Ron implied, we are putting some haircuts or adjustments into our projections for the currently soft EV market into those numbers.

Speaker Change: A lot of that is...

Speaker Change: We talked about some of the new programs being launched and we're, by the end of the year, we're starting to see some growth from those new programs.

Speaker Change: Your question of it is, is it under our control? Yes, and we're doing our best to make sure those launches go efficiently.

Kevin Nystrom: A lot of that is We talked about some of the new programs being launched, and by the end of the year, we're starting to see some growth from those new programs. Your question is, is it under our control? Yes, and we're doing our best to make sure those launches go efficiently. And, as Ron implied, we are putting some... haircuts or adjustments into our projections for the currently soft EV market into those numbers?

Speaker Change: And as Ron implied, we are putting some.

Speaker Change: [inaudible]

Speaker Change: the currently soft EV market into those numbers.

Speaker Change: Okay, the only thing I'll add to the cadence...

Speaker Change: of the fiscal 25 by quarter is that, you know, a lot of it's sales-driven and launch-driven, but also

Speaker Change: The cost reductions that are going on, they take, some of them take time when we think about procurement and other opportunities for us. They may not, well we've initiated those, but sometimes it'll go into the third and fourth quarters, it takes time. So the cost savings cadence also is weighted more towards the third and fourth quarter as opposed to the first and second quarters.

Kevin Nystrom: The only thing I'll add to the cadence of fiscal 25 by quarter is that a lot of a sales driven and launch driven, but also the cost reductions that are going on, they take some of them take time. When we think about procurement and other opportunities for us, they may not, we've initiated those, but sometimes we'll go into the third and fourth quarters. It takes time, so the cost savings cadence also is weighted more towards a third and fourth quarter as opposed to the first and second quarters.

Ronald L.G. Tsoumas: The only thing I'd add to the cadence of Fiscal 25 by quarter is that, you know, a lot of it's sales-driven and launch-driven, but also the cost reductions that are going on, they take time when we think about procurement and other opportunities for us. They may not, well, we've initiated those, but sometimes they'll go into the third and fourth quarters. So the cost savings cadence is also weighted more towards the third and fourth quarters as opposed to the first and second quarters.

Speaker Change: I appreciate that commentary. That's sort of what I was getting at.

Kevin Nystrom: I appreciate that commentary; that's sort of what I was getting at. Obviously, the focus is on proven profitability, and maybe just building on that for my last question: what is that opportunity, as you can use size at cost, saving the opportunity to go into fiscal 26, maybe sourcing, logistics, and this from a sale that I'm going to create a perspective. You know we're really just starting these programs, so it's a little bit dangerous to put ranges around it. We do think it will be significant, and we do think that its impact will be more towards the second half of the year.

Saree Brodsky: I appreciate that commentary. That's sort of what I was getting at, you know, obviously the focus is on improving profitability. And maybe just building on that for my last question, you know, what is that opportunity as you can resize that cost savings opportunity to go into fiscal 2026? Maybe sourcing, logistics, and this from a sales and administrative perspective?

Speaker Change: You know, we're really just starting these programs, so it's a little bit dangerous to put ranges around it. We do think it will be significant, and we do think that its impact will be more towards the second half of the year.

Kevin Nystrom: You know, we're really just starting these programs, so it's a little bit dangerous to put ranges around them. We do think that it will be significant, and we do think that its impact will be more in the second half of the year.

Speaker Change: Appreciate the questions. Thank you, guys.

Speaker Change: Once again, if you do have any remaining questions or comments, please press star 1 on your phone at this time.

Speaker Change: Please hold the moment while we pull for any additional questions.

Saree Brodsky: I appreciate the questions; thank you, guys.

Operator: I appreciate the questions. Thank you, guys. Once again, if you do have any remaining questions or comments, please press star one on your phone at this time. Please hold a moment while we pull for any additional questions.

Speaker Change: Your next question is coming from Gary Prestopino with Barrington Research. Please pose your question. Your line is live.

Operator: Once again, if you do have any remaining questions or comments, please press star 1 on your phone at this time. Please hold a moment while we pull for any additional questions. Your next question is coming from Gary Prestopino with Barrington Research. Please pose your question. Your line is live.

Gary Frank Prestopino: Yeah, good morning all.

Gary Frank Prestopino: Several questions here. First of all, Kevin, in what you're talking about with

Gary Prestopino: Your next question is coming from Gary Presipino with Parenting Research. Please pose your question. Your line is live. Yeah, good morning all. Several questions here. First of all, Kevin, in what you're talking about with getting your cloth under control and trying to fix the problems that are coming out of North American auto, I mean I would assume that you are working in conjunction with John DeGainer at this point in terms of at least some of these initial thrusts at what you're trying to do to rectify some of the problems that you're having, is that a correct assumption?

Gary Frank Prestopino: You know, getting your costs under control and trying to fix the problems that are coming out of North American Auto. I mean, are you, I would assume that you are working in conjunction with John Degainer at this point in terms of...

Gary Frank Prestopino: Yeah, good morning all. I have several questions here. First of all, Kevin, in what you're talking about with, you know, getting your costs under control and trying to fix the problems that are coming out of North American Auto, I mean, are you, I would assume that you are working in conjunction with John Degainer at this point in terms of at least some of these initial thrusts at what you're trying to do to rectify some of the problems that you're having. Is that a correct assumption

Gary Frank Prestopino: at least some of these initial thrusts at what you're trying to do to rectify some of the problems that you're having. Is that a correct assumption?

Gary Frank Prestopino: More than correct. I'm working shoulder-to-shoulder with John on these initiatives.

Gary Frank Prestopino: OK.

Gary Frank Prestopino: All right.

Speaker Change: So, maybe for all of us, because I still have a hard time understanding this.

Speaker Change: You're having the problems in Mexico, correct?

Kevin Nystrom: More than correct. I'm working shoulder-to-shoulder with John on these initiatives. OK.

Kevin Nystrom: More than correct, I'm working shoulder to shoulder with John on these initiatives.

Speaker Change: That's where your problems are with North America, and you have rolled out programs before in the past.

Gary Frank Prestopino: Okay. All right.

Kevin Nystrom: Okay, all right, so maybe for all of us because I still have a hard time understanding this, you're having the problems in Mexico, correct? That's where your problems are with North America, and you have rolled out programs before in the past. What has changed so much that you're getting a lot of these operational efficiencies in Mexico at this point that is causing the decline in the operating income generated by the automotive segment. I think I can say that we've made significant improvements in the discipline around launches in Mexico, and some of the launches that are in the process right now, they're just beginning to deliver products; they've gone much better than launches in the past.

Gary Frank Prestopino: So maybe for all of us, because I still have a hard time understanding this, you're having problems in Mexico, correct? That's where your problems are in North America. And you have rolled out programs before in the past. What has changed so much that you're getting a lot of these operational efficiencies in Mexico at this point that is causing the decline in the operating income generated by the automotive sector?

Speaker Change: What has changed so much that you're getting a lot of these operational efficiencies in Mexico at this point that is causing the decline in the operating income generated by the automotive segment?

Speaker Change: I think I can say that...

Speaker Change: We've made significant improvements in the discipline around launches in Mexico, and some of the launches that are in process right now that are just beginning to deliver products, they've gone much better than launches in the past.

Kevin Nystrom: I think I can say that... We've made significant improvements in the discipline around launches in Mexico, and some of the launches that are in process right now that are just beginning to deliver products there have gone much better than launches in the past. So, I think it's just, you know, experiencing what we experienced early this past year and learning from our experience and improving our launch process.

Speaker Change: So I think it's just, you know, experiencing what we experienced in early this past year and learning from our experience in improving our launch process.

Kevin Nystrom: last. So I think it's just, you know, experiencing what we experienced in early this past year and learning from our experience and improving our launch process. The only I can answer that, Gary, is we are also at the same time experiencing the roll-off of our largest program, which we have been running in various iterations for over a decade, and we're really, you know, really good at it and really efficient and all of that. And replacing that, as we've demonstrated with all these booking awards, with launches that a lot more launches than are significant but nowhere near the value of that.

Speaker Change: The only thing I can add to that, Gary, is we are also at the same time experiencing the roll-off of our largest program.

Speaker Change: which we have been running in various iterations for over a decade and we're really, you know, really good at it and really efficient and all of that. And replacing that, as we've demonstrated with all these booking awards, with launches that, a lot more launches

Kevin Nystrom: The only thing I can add to that, Gary, is that we are also, at the same time, experiencing the roll-off of our largest program, which we have been running in various iterations for over a decade. And we're really good at it and really efficient and all of that. And replacing that, as we've demonstrated with all these booking awards, with launches that are significant but nowhere near the value of that.

Speaker Change: that are significant, but nowhere near the value of that. So when you combine that with the expansion of capacity and getting ready for these launches and all of those things going in at one time, it is a fertile ground for

Speaker Change: experiencing temporarily some of the things that we're experiencing.

Kevin Nystrom: So when you combine that with the expansion of capacity and getting ready for these launches and all of those things going on at one time, it is a fertile ground for experiencing temporarily some of the things that we're experiencing.

Kevin Nystrom: So when you combine that with the expansion of capacity and getting ready for these launches and all of those things going in at one time, it is a fertile ground for experiencing temporarily some of the things that we're experiencing. Okay.

Speaker Change: Okay, and um...

Speaker Change: I was just going through...

Speaker Change: some of the past slides, but in aggregate,

Speaker Change: business awards were in fiscal 24 in total and what how much of that dealt with electric vehicles

Gary Frank Prestopino: Okay, and um... I was just going through some of the past slides, but in aggregate, do you have what the total number of business awards were in fiscal 24 in total and how much of that dealt with electric vehicles?

Kevin Nystrom: And I was just going through some of the past slides, but in aggregate, do you have what the business awards were in fiscal 24 and total, and how much of that dealt with electric vehicles? I believe in the last four years, we have been in the 800, 750 range, and most of it is in a lot of those products or any like the vehicle. For fiscal 24, it's in the 200 to 250 million dollar range for bookings, which the bulk of that is in the EV space. Okay.

Speaker Change: I believe in the last four years we have been in the

Speaker Change: 800,000,750

Speaker Change: and most of it is in a lot of those products or any electric vehicle. For FISCO 24, it's in the $200 to $250 million range for bookings, which the bulk of that is in the EV space.

Kevin Nystrom: I believe in the last four years, we have been in the 800 million to 750 million range, and most of it is in a lot of those products or any electric vehicle for fiscal 24. It's in the 200 to $250 million range for bookings, the bulk of that is in the EV space.

Speaker Change: Okay, and in what you're doing with EVs, are you doing any programs for European manufacturers at this point, for manufacturers that are producing in Europe and selling in Europe ?

Gary Frank Prestopino: Okay, and in what you're doing with EVs, are you doing any programs for European manufacturers at this point? That are for manufacturers that are producing in Europe and selling in Europe.

Kevin Nystrom: And in what you're doing with EVs, are you doing any programs for European manufacturers at this point that perform manufacturers that are producing in Europe and selling in Europe? Yes, absolutely. And that's one thing we really like as we spread our seed amongst a lot of the OEMs on three continents. So we're getting diversification from customers and programs, which is really good. And we're in a good position with a lot of it, and we've done somewhat the startups in that as well. So, from a portfolio diversification and geographic diversification, we're sitting in a good spot with our EV opportunities.

Speaker Change: Yes, absolutely and that's one thing we really like is we spread our seed amongst a lot of the OEMs on three continents.

Speaker Change: So we're getting diversification from customers and programs.

Kevin Nystrom: Yes, absolutely. And that's one thing we really like is that we've spread our seed amongst a lot of the OEMs on three continents. So we're getting diversification from customers and programs, which is really good, and we're in a good position with a lot of it. And we've done some with the startups in that as well. So from a portfolio diversification and geographic diversification perspective, we're sitting in a good spot with our EV opportunities.

Speaker Change: which is really good.

Speaker Change: And we're in a good position with a lot of, and we've done some with the startups and that as well. So, from a portfolio diversification and geographic diversification, we're sitting in a good spot with our EV opportunities.

Speaker Change: What about the Chinese manufacturers?

Speaker Change: We do not as much, we're certainly we do more in Europe and now with these launches in North America. We have a presence in China but it is not as significant on a go-forward basis and it's it's a challenging market for sure.

Gary Frank Prestopino: What about the Chinese manufacturer?

Kevin Nystrom: What about the Chinese manufacturers? We do not as much. We're certainly we do more in Europe, and now with these launches in North America. We have a presence in China, but it is not as significant on a go-forward basis. And it's a challenging market for sure. Okay.

Kevin Nystrom: We do not do as much We certainly do more in Europe and now with these launches in North America. We have a presence in China, but it is not as significant on a go-forward basis. And it's it's a challenging market for sure. Okay.

Speaker Change: Okay, and then just the last question.

Speaker Change: I'm just looking at some historical numbers here. I mean, you're adjusted EBITDA margin was in the high teens in 2019, 2020, started to see a drip in 21, 22. I mean, given the composition of the company now, do you think that

Gary Frank Prestopino: Okay, and then just the last question. I'm just looking at some historical numbers here. I mean, your adjusted EBITDA margin was in the high teens in 2019, 2020, and started to see a drip in 21, 22. I mean, given the composition of the company now, do you think that once all of these issues are rectified, this becomes a mid to high teens adjusted EBITDA margin business? Or is there something that has structurally changed here that is causing the adjusted EBITDA margin to step down from where you were four or five years ago?

Kevin Nystrom: And then just the last question. I'm just looking at some historical numbers here. I mean, you're just that even though margin was in the high teens in 2019, 2020, start a seed trip in 2021, 22. I mean, given the composition of the company now, do you think that, once all of these issues are rectified, this becomes a mid-to-high-teens-marge and adjusted EBITOM-Arge in business, or is there something that is structurally changed here that is causing the adjusted EBITOM-Arge in to step down from where you were four or five years ago? I think so, let me start with this. Four or five years ago, the business has definitely changed, especially the automotive side with the bulk roll-offs and a couple of things else have impacted our EBITOM-Arge and margins over the last couple of years, especially the last two years.

Speaker Change: Once all of these issues are rectified that this becomes a mid to high teens EBITDA margin, adjusted EBITDA margin business or is there something that has structurally changed here that is causing the adjusted EBITDA margin to step down from where you were four or five years ago?

Speaker Change: I think, so, let me start with this. Four or five years ago,

Speaker Change: The business has definitely changed, especially the automotive side, with the roll-offs and a couple of things else have impacted our EBITDA margins over the last couple of years, especially the last two years.

Kevin Nystrom: I think, so let me start with this, four or five years ago. The business has definitely changed, especially on the automotive side, with the roll-offs and a couple of things else that have impacted our EBITDA margins over the last couple of years, especially the last two years. And first of all, there is the slowdown in the e-bike market; that is, the maximum elastic torque sensing technology that we have, and arguably the best in the world at, is one of our most highly differentiated products, and that business has basically been cut in half.

Speaker Change: And first of all, there's the smoke in the e-bike market that is, that, that, that, that maximum elastic torque sensing technology that we have.

Speaker Change: arguably the best in the world at, is one of our most highly differentiated products and that business has basically been cut in half. So that clearly has...

Kevin Nystrom: And first of all, in the EBITOM-Arge market, that is, that makes the last of two licensing technology that we have, arguably the best in the world, that is one of our most highly differentiated products and that business has basically been cut in half. So this clearly has a margin drag on the business, the roll-off of these programs and then all of the upfront costs and capital that we're expending for 26 and 27 and 28 deliveries has also negatively affected our EBITOM-Arge. So it's going to be a journey as we go through this to stair-step our margins back to where they might have been a couple of years ago, but it's a journey.

Speaker Change: a margin drag on the business, the roll off of these programs, and then all of the upfront cost and capital that we're expending.

Speaker Change: for 26 and 27 and 28 deliveries has also negatively affected our EBITDA margins. So, it's going to be a journey as we go through this to...

Kevin Nystrom: So that clearly has a margin drag on the business. The roll-off of these programs and then all of the upfront cost and capital that we're expending for 26 and 27 and 28 deliveries has also negatively affected our EBITDA margins. So it's going to be a journey as we go, as we go through this. StairStep is the margins back to where they might have been a couple of years ago. But it's a journey. It is absolutely going to be a journey, and until we get to full launch on a lot of these programs that we've funded up front, it will take a little bit of time.

Speaker Change: stair-step our margins back to, you know, where they might have been a couple of years ago.

Speaker Change: But it's a journey. It is absolutely going to be a journey.

Speaker Change: Until we get to full launch on a lot of these programs that we've funded up front, it will take a little bit of time.

Speaker Change: Okay, and then, you know, I realize you guys have had a lot on your plate over the last couple of months here, and Ron, congratulations on retiring. I hope you enjoy yourself.

Kevin Nystrom: It is absolutely going to be a journey until we get to full launch on a lot of these programs that we've funded up front. It will make a little bit of time. Okay.

Speaker Change: Where are you, I know you just filled the CEO search, but where are you on the CFO search side and what are some of the qualities you're looking for in a new CFO ?

Gary Frank Prestopino: Okay, and then, you know, I realize you guys have had a lot on your plate over the last couple of months here, and Ron, congratulations on retiring. I hope you enjoy yourself.

Kevin Nystrom: And then, you know, I realize you guys have had a lot on your plate over the last couple of months here, and Ron, congratulations on retiring. You enjoy yourself. Where are you? I know you just filled the CEO search, but where are you on the CFO search side, and what are some of the qualities you're looking for in a new CFO? We're interviewing candidates. It's still probably some time before we find the right fit. We're looking for somebody that has experience in this kind of change or this transition. We're going to be going through a lot of cost reductions, a lot of efficiencies, looking at our portfolio, making sure we're getting the most of all of the regions around the world that we operate in.

Speaker Change: We're interviewing candidates. It's still probably some time before we find the right fit. We're looking for somebody that has experience in

Gary Frank Prestopino: Where are you? I know you just filled the CEO search, but where are you on the CFO search side? And what are some of the qualities you're looking for in a new CFO?

Kevin Nystrom: We're interviewing candidates, and there's still probably time before we find the right fit. We're looking for somebody that has experience in, in This kind of change or this transition, we're going to be going through a lot of cost reductions, a lot of efficiencies, looking at our portfolio, making sure we're getting the most out of all of the regions around the world that we operate in. So it's going to require a special skill set, and we're taking our time to make sure we find the right person. Okay, thank you very much. I appreciate it.

Speaker Change: This kind of change or this transition, we're going to be going through a lot of cost reductions, a lot of efficiencies, looking at our portfolio, making sure we're getting the most of all the regions around the world that we operate in.

Speaker Change: So it's going to require special skill set and we're taking our time to make sure we find the right person.

Speaker Change: Okay, thank you very much. Appreciate it.

Speaker Change: There appear to be no further questions in queue at this time. I would now like to turn the floor back over to Kevin Nystrom for any closing remarks.

Kevin Nystrom: So it's going to require a special skill set, and we're taking our time to make sure we find the right person. Okay, thank you very much. Appreciate it.

Kevin Nystrom: Thank you. I want to thank everybody for your participation in the call, all of your questions, and most of all, appreciate your support of Methode Electronics.

Operator: There appear to be no further questions in queue at this time.

Operator: There appear to be no further questions in queue at this time. I would now like to turn the floor back over to Kevin Nystrom for any closing remarks.

Kevin Nystrom: I would now like to turn the floor back over to Kevin and I, Jim, for any closing remarks. Thank you. I want to thank everybody for your participation in the call, all of your questions, and most of all, appreciate your support for Method Electronics. Thank you, and have a good day. Thank you, everyone.

Kevin Nystrom: Thank you and have a good day.

Kevin Nystrom: Thank you. I want to thank you

Operator: This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your.