Q4 2024 Martinrea International Inc Earnings Call

Good evening, everyone. Thank you for joining US today, we always look forward to talking with our shareholders. We hope to inform you well and answer questions.

We also note that we have many other stakeholders, including many employees on the call and our remarks are addressed to them as well as we disseminate our results and commentary through our network.

With me. This evening are packed raimo, Martin ready to CEO or President Frederick telescope.

Peter: Our CFO Peter <unk>.

Peter: Today, we will be discussing Martin <unk> results for the year and quarter ended December 31 2024.

Peter: Lots to talk about.

Peter: I refer you to our usual disclaimer in our press release and filed documents.

Peter: As you probably know to avoid technical difficulties, we generally prerecorded our calls we'll start with that and then in our Q&A, we will address the immediate tariff issues in more detail as the situation is evolving sometimes by the hour.

Peter: On this call I will provide a brief overview of the current industry geopolitical and trade environment.

Speaker Change: And Pat will outline some key lights and highlights of our 2024 year and make some comments on the business and Fred on operations that Peter on the financials, and we will do Q&A.

Pat: 2024 was an eventful year for Martin ran many ways. We saw some major events take place on the world stage that are affecting our industry and our business, including a major slowdown in EV electrification growth, especially in North America and the European Union.

Pat: Geopolitical tensions in many areas, which affect trade and other relationships.

Pat: And in the United States election that is introduce increased focus on tariffs trade and the renegotiation of the U S. MCA.

Pat: Before we get to some company highlights, let's reflect briefly on the environment in which we operate.

Speaker Change: On this call I will provide a brief overview of the current industry geopolitical and trade environment.

Speaker Change: As you probably know.

Pat: Our company started his history as an auto parts company in 2001, Indeed, one of our first activities was to buy three stamping presses in September just.

To avoid technical difficulties, we generally prerecorded our calls we'll start with that and then in our Q&A, we will address the immediate tariff issues in more detail as the situation is evolving sometimes by the hour.

Speaker Change: And Pat will outline some key highlights of our 2024 year and make some comments on the business.

Pat: Just after signing a purchase order we had 911, we in our industry at a major challenge.

Peter: On operations that Peter on the financials, and we will do Q&A.

Pat: Our industry made it through very successfully as had we raising money to pay for the presses.

Speaker Change: On this call I will provide a brief overview of the current industry geopolitical and trade environment.

Peter: 2024 was an eventful year for Martin ran many ways. We saw some major events take place on the world stage that are affecting our industry and our business, including a major slowdown in EV electrification growth, especially in North America and the European Union.

Pat: We have seen many challenges since that time, including the financial crisis of 2008 942 of our customers went bankrupt.

Pat: And Pat will outline some key lives highlights of our 2024.

Fred: Year and make some comments on the business and Fred on operations that Peter on the financials.

Pat: Our renegotiation of NAFTA.

Endemic where industry shutdown completely a major semiconductor semiconductor chip shortage, which caused huge distress.

Peter: And we will do Q&A.

Geopolitical tensions in many areas, which affect trade and other relationships.

Speaker Change: 'twenty 'twenty four was an eventful year for Martin ran many ways. We saw some major events take place in the world stage that are affecting our industry and our business, including a major slowdown in EV electrification growth, especially in North America and the European Union.

Peter: In the United States election that is introduce increased focus on tariffs and trade and the renegotiation of the Usmc it.

Pat: And the move to electric vehicles that has not met expectations in terms of rollout.

Pat: A great many challenges and there will be more.

Peter: Before we get to some company highlights.

Pat: We will say this with confidence after every challenge we have emerged stronger as a company with better operations and with a strengthened corporate culture.

Peter: To reflect briefly on the environment in which we operate.

Peter: Geopolitical tensions in many areas, which affect trade and other relationships.

Peter: Our company started his history as an auto parts company in 2001, Indeed, one of our first activities was to buy three stamping presses in September.

Peter: In the United States election that is introduce increased focus on tariffs and trade and the renegotiation of the U S. MCA.

Pat: These situations have provided opportunities to get better at what we do and to grow over time.

Peter: After signing a purchase order we had 911, we in our industry at a major challenge.

Pat: We are still a relatively young company in our industry and we've grown from a startup to a $5 billion company in 24 years to over 50 locations and 18000 people in many countries and continents.

Before we get to some company highlights let's reflect briefly.

Peter: Our industry made it through very successfully as did we.

Peter: On the environment in which we operate.

Peter: So the money to pay for the presses.

Peter: Our company started as histories and auto parts company in 2001, Indeed, one of our first activities was to buy three stamping presses in September.

Peter: We have seen many challenges since that time, including the financial crisis of 2089 for two of our customers went bankrupt.

Pat: Challenges create opportunities.

Pat: We have bought assets are built new plants to satisfy and grow our customer base consistently over time and.

After signing a purchase order we had 911, we in our industry at a major challenge.

Peter: Our renegotiation of NAFTA.

Peter: Pandemic, where industry shut down completely or major semiconductor semiconductor chip shortage, which caused huge distress.

Pat: And we think this will occur over the second half of this decade also people need mobility, they need vehicles and they need parts for vehicles, our industry needs strong suppliers.

Peter: Our industry made it through very successfully as did we raise the money to pay for the presses.

Peter: We have seen many challenges since that time, including the financial crisis of 2008, nine where two of our customers went bankrupt.

Peter: The move to electric vehicles, there has not met expectations in terms of rollout.

Pat: We'll be there.

Peter: A great many challenges and there will be more.

Pat: On a shorter term basis, the EV revolution as some call. It has not rolled out as quickly as many believed EV.

Peter: Our renegotiation of NAFTA.

Peter: We will say this with confidence after every challenge we have emerged stronger as a company with better operations or the strength in corporate culture.

Peter: Endemic where industry shut down completely a major semiconductor semiconductor chip shortage, which caused huge distress.

Pat: <unk> take up by consumers is difficult for many given the cost of Evs and the lack of infrastructure.

Peter: These situations have provided opportunities to get better at what we do and to grow over time.

Peter: And the move to electric vehicles is not met expectations in terms of rollout.

Pat: I think consumers do not want an EV, but would prefer to drive an ice or internal combustion engine vehicle or a hybrid.

Peter: We are still a relatively young company in our industry and we have grown from a startup to a $5 billion company in 24 years to over 50 locations and 18000 people in many countries and continents.

Peter: And any challenges and there will be more.

Peter: We will say this with confidence after every challenge we have emerged stronger as a company with better operations and where the strength in corporate culture.

Pat: The reality is that EV mandates don't really work.

Pat: You cannot force people to make what consumers do not wish to buy and eventually the market speaks.

Peter: These situations have provided opportunities to get better at what we do and to grow over time.

Peter: Challenges create opportunities.

Pat: The consumer is indeed king.

Peter: We bought assets are built new plants to satisfy and grow our customer base consistently over time.

Pat: And in democracies every consumer is also a voter.

Peter: We are still a relatively young company in our industry and we've grown from a startup to a $5 billion company in 24 years to over 50 locations and 18000 people in many countries and continents.

Pat: And elected officials will listen to their voters.

Peter: And we think this will occur over the second half of this decade also.

Pat: So we are seeing EV mandates pulled back in sales and production of Evs have flattened.

Peter: We'll need mobility.

Peter: <unk> vehicles.

Peter: Parts for vehicles, our industry needs strong suppliers will.

Pat: This is a structural challenge for our industry and has created huge overcapacity in the automotive industry.

Peter: Challenges create opportunities.

Peter: We have bought assets are built new plants to satisfy and grow our customer base consistently over time and.

Peter: We will be there.

On a shorter term basis, the EV revolution as some call it as.

Pat: We and many others, even those of US who are conservative in our forecast have underutilized capacity on EV related lines.

Peter: And we think this will occur over the second half of this decade also people need mobility.

Peter: It's not rolled out as quickly as many believed.

Peter: EV take up by consumers is difficult for many given the cost of Evs and a lack of infrastructure.

Pat: The geopolitics of the day is also very relevant for our company and industry.

Peter: They need vehicles and they need parts for vehicles, our industry needs strong suppliers.

Peter: Consumers do not want an EV would prefer to drive an ice or internal combustion engine vehicle or a hybrid.

Pat: Seems fairly obvious to us that there is a security and economic divide in our world headed by the United States on the one hand in China on the other.

Peter: We'll be there.

Peter: On a shorter term basis, the E V where evolution as some call. It is.

Peter: The reality is that EV mandates don't really work.

Peter: It's not rolled out as quickly as many believed.

Pat: This affects our company and industry as policies adopted by the United States and others are dealing with the growth of Chinese companies, either exporting parts and vehicles that are attempting to establish assembly our parts plants in North America or Europe.

Peter: You cannot force people to make what consumers do not wish to buy eventually the market speaks.

Peter: E V take up by consumers is difficult for many of you given the cost of Evs and a lack of infrastructure.

Peter: I think consumers do not want an EV, but would prefer to drive an ice or internal combustion engine vehicle or a hybrid.

Peter: The consumers indeed king.

Peter: And in democracies every consumer is also a voter.

And elected officials will listen to their voters.

Peter: The reality is that E V mandates don't really work.

Peter: We are seeing EV mandates pulled back.

Pat: We are increasingly seeing tariff and trade policies to address that.

Peter: Sales and production of Evs and have flattened.

Peter: You cannot force people to make what consumers do not wish to buy and eventually the market speaks.

Pat: In this context, given our strong footprint in North America, there are opportunities for us to grow.

Peter: This is a structural challenge for our industry and has created huge overcapacity in the automotive industry, we and many others, even those of US who were conservative in our forecast.

Peter: The consumer is indeed king.

Peter: And in democracies every consumer is also a voter.

Pat: Also higher local rules of origin requirements are good for companies like ours.

Peter: And elected officials will listen to their voters.

Peter: They're utilized capacity on EV related lines.

Pat: We have always believed in our fortress North American approach in the sense that the North American auto industry is very strong with our production footprint utilizing the strength of the United States, Canada and Mexico.

Peter: So we are seeing E V mandates pulled back in sales and production of Evs have flattened.

Peter: The geopolitics of the day is also very relevant for our company and industry.

Peter: This is a structural challenge for our industry and has created huge overcapacity in the automotive industry.

Peter: It seems fairly obvious to us that there is a security and economic divide in our world added by the United States on the one hand in China on the other.

Pat: Given the geopolitics. We're also focused on intra regional footprints and so we are limiting our footprint in China.

We and many others, even those of US who are conservative in our forecast have underutilized capacity on EV related lines.

Pat: As Pat and Fred will discuss.

Peter: This affects our company and industry as policies adopted by the United States and others are dealing with the growth of Chinese companies, either exporting parts and vehicles are attempting to establish assembly for our parts plants in North America or Europe.

Pat: The third challenge, we face as a company and an industry relates to tariffs.

Peter: The geopolitics of the day is also very relevant for our company and industry.

Peter: It seems fairly obvious to us that there is a security and economic divide in our world headed by the United States on the one hand in China on the other.

Pat: We are very close to the negotiations of the new NAFTA several years ago and.

Pat: And we believe that the resulting U S. MCA was very good for the industry and our company.

Peter: We've increasingly seen tariff and trade policies to address that.

This affects our company and industry.

Pat: The U S. MCA was a nice update and upgrade in many ways and the higher local content rules for North American suppliers were positive for us.

Peter: In this context.

Its policies adopted by the United States and others are dealing with the growth of Chinese companies either exports parts and vehicles that are attempting to establish assembly our parts plants in North America or Europe.

Peter: Our strong footprint in North America, there are opportunities for us to grow.

Peter: Also higher local rules of origin requirements are good for companies like ours.

Pat: <unk> signed we knew that a renewal of the U S. MCA was due by mid 2026, and frankly, we have spent the last two years as an industry.

Peter: We have always believed in our fortress North American approach in the sense of the North American auto industry is very strong with a production footprint utilizes the strength of the United States, Canada and Mexico.

Peter: We have increasingly seen tariff and trade policies to address that.

Pat: Considering what that means.

Peter: In this context, given our strong footprint in North America, there are opportunities for us to grow.

Pat: It now appears that we are effectively into the negotiation process.

Peter: Given the geopolitics, we're also focused on intra regional foot.

Pat: Each participating country is reviewing the agreement and we believe there will be intense negotiation of several aspects of the agreement.

Peter: Also higher local rules of origin requirements are good for companies like ours we.

Peter: And so we are eliminating our footprint in China.

Peter: We have always believed in our fortress North American approach in the sense that the North American auto industry is very strong with our production footprint utilizing the strength of the United States, Canada and Mexico.

Speaker Change: As Pat and Fred will discuss.

Pat: Regarding automotive it will be a push for higher rules of origin by the United States, which could benefit suppliers such as ourselves.

Speaker Change: The third challenge, we face as a company and an industry relates to tariffs.

Speaker Change: We're very close to the negotiations of the new NAFTA several years ago.

Pat: <unk> much public speculation, we see a path to a modernization of the agreement to preserve and enhance the development of North America's largest manufacturing industry.

Peter: Given the geopolitics. We're also focused on intra regional footprints and so we are eliminating our footprint in China.

Speaker Change: And we believe that the resulting U S. MCA was very good for the industry and our company.

Peter: As Pat and Fred will discuss.

Speaker Change: The U S. MCA was a nice update and upgrade in many ways and the higher local content rules for North American suppliers were positive for us.

Pat: Tariffs on autos and parts within North America hurt the industry and ultimately increased cost to consumers and.

The third challenge, we face as a company and an industry relates to tariffs.

Pat: And are not in the interests of the United States, Canada, or Mexico, we need to align we will need to negotiate a new agreement, but there is opportunity.

Speaker Change: We were very close to the negotiations of the new NAFTA several years ago and.

Speaker Change: <unk> signed we knew that a renewal of the U S. MCA was due by mid 2026, and frankly, we have spent the last two years as an industry.

Speaker Change: And we believe that the resulting U S. MCA was very good for the industry and our company.

Pat: In the meantime, we will adjust appropriately to any tariffs as we did for steel and aluminum tariffs several years ago.

Speaker Change: The U S. MCA was a nice update and upgrade in many ways and the higher local content rules for North American suppliers were positive for us.

Considering what that means.

Speaker Change: Oh It now appears that we are heavily into the negotiation.

Pat: Our public and private posture is and will be to encourage free trade in the automotive industry within North America.

Speaker Change: Each participating countries doing the agreement.

Speaker Change: When signed we knew that a renewal of the U S. MCA was due by mid 2026, and frankly, we have spent the last two years as an industry.

Speaker Change: Believe there will be intense negotiation of several aspects of the agreement.

Pat: Benefits consumers and producers and all three North American countries.

Speaker Change: Regarding automotive <unk>.

Pat: We're going to have to work through these issues over the next while.

Speaker Change: It'll be a push for higher rules of origin by state.

Speaker Change: Considering what that means.

Speaker Change: Which could benefit suppliers such.

Pat: Turning to the year just passed with some comments on 2025 as well Pat will outline a few highlights noted we have much detail and our year end filings.

Speaker Change: It now appears that we are effectively into the negotiation process.

Speaker Change: Despite much public speculation you see a path to a modernization of the agreement to preserve and enhance the development of North America's largest manufacturing industry.

Each participating country is reviewing the agreement.

Speaker Change: We believe there will be intense negotiation of several aspects of the agreement.

Pat: Included in our annual information form and our sustainability report as well as our financial filings.

Speaker Change: Regarding automotive it will be a push for higher rules of origin by the United States, which could benefit suppliers such as ourselves.

Speaker Change: Tariffs on autos and parts in North America.

Speaker Change: The industry and ultimately increased cost to consumers.

Pat: Companies do not live by our calendars, we all know we have to report results over a finite time period.

Speaker Change: And are not in the interest of the United States, Canada, or Mexico, we need to align.

Speaker Change: Despite much public speculation, we see a path to a modernization of the agreement to preserve and enhance the development of North America's largest manufacturing industry.

Pat: But our long term view is that sustainable companies are those that look to the future embracing.

Speaker Change: We will need to negotiate a new agreement, but there is opportunity.

Pat: And capitalize on the opportunities presented by it.

Speaker Change: The meantime.

Speaker Change: We will adjust appropriately to any tariffs as we did for steel and aluminum tariffs several years ago.

Speaker Change: Tariffs on autos and parts within North America hurt the industry and ultimately increased cost to consumers.

Pat: That's what we do.

Pat: We look forward to 2025 and beyond with great confidence we are stronger today than we were a year ago, our people support us in that view and we thank them for their service our strength is in our people.

Speaker Change: Our public and private posture is and will be to encourage free trade in the automotive industry within North America.

Speaker Change: Not in the interests of the United States, Canada, or Mexico, we need to align we will need to negotiate a new agreement, but there is opportunity.

Speaker Change: And if its consumers and producers and all three in North America.

Pat: Look forward to sharing the future with you.

Speaker Change: In the meantime, we will adjust appropriately to any tariffs as we did for steel and aluminum tariffs several years ago.

Pat: Now here's Pat.

Speaker Change: Finally, I have to work through these.

Pat: Thanks, Rob and evening, everyone let.

Speaker Change: Over the next while.

Pat: Let me start with a few highlights from this past year, our safety results continue to trend in the right direction.

Speaker Change: Turning to the year just passed with some comments on 2025 as well that will outline a few highlights noted we have much detail and our year end filings.

Speaker Change: Our public and private posture is and will be to encourage free trade in the automotive industry within North America had benefits consumers and producers and all three north American countries.

Pat: Our total recordable injury rate or trip was <unk> 99 in.

Pat: In 2024, among the very best in our industry, There's no better way to show your people you care in that regard 2024 was a great year.

Speaker Change: Our annual information form and our sustainability report.

Speaker Change: We're going to have to work through these issues over the next while.

Speaker Change: Well as our financial filings.

Speaker Change: Companies do not live by our calendars, we all know we have to report results over a finite time period.

Pat: Our employee survey results continued to come in strong we've worked to make People's lives better with our Golden rule approach.

Speaker Change: Turning to the year just passed with some comments on 2025 as well.

Speaker Change: But our long term view is this sustainable companies are those that look to the future.

Speaker Change: I'll outline a few highlights.

Pat: It's a living thing not just a slogan when you visit our locations, it's clear and we're proud of our people and our progress meeting the challenges of this business.

Speaker Change: We have much detail and our year end filings.

Speaker Change: Racing.

Speaker Change: And capitalize on the opportunities presented by it.

Pat: There were some sales headwinds in the fourth quarter, hence revenues were down slightly in 2020 or just over $5 billion.

Pat: The same time, our adjusted EBITDA came in at roughly the same place as it did in 2023 and our EBITDA margin percentage actually increased as we continued to drive improvement into our facilities.

Confidence we are stronger today than we were a year ago, our people support us in that view and we thank them for their service our strength is in our people we look forward to sharing the future with you.

Pat: A year ago, when we announced our 2020 outlook, we indicated that our adjusted operating income margin will likely be higher in the first half of the year in the second half and that's exactly what happened in.

Pat: In the fourth quarter, many of our customers slowed or halted production across multiple platforms to adjust inventory levels.

And now here's Pat.

Thanks, Rob and evening, everyone let.

Let me start with a few highlights from this past year, our safety results continue to trend in the right direction.

Pat: Get that our adjusted operating income margin came in at five 3% for the year in the top third of our peer group.

Our total recordable injury rate or trip was <unk> 99 in.

Pat: This will continue to decline.

In 2024, among the very best in our industry. There is no better way to show your people you care in that regard 2024 was a great year.

We maintained a strong balance sheet with a net debt to adjusted EBITDA ratio under our target of one five times or better.

Our employee survey results continued to come in strong we work to make People's lives better with our Golden rule approach.

Pat: At the same time, we returned significant capital to our shareholders in 2024, we maintained our dividend and repurchased over 5 million shares under our normal course issuer bid.

It's a living thing not just a slogan when you visit our locations, it's clear and we're proud of our people and our progress meeting the challenges of this business.

Pat: Our share count bodes well for the shareholders as we see improvements in the future financial results.

There were some sales headwinds in the fourth quarter, hence revenues were down slightly in 2024 at just over $5 billion.

Pat: We won multiple quality awards in a variety of customers in 2024, a strong base for new business Awards and replacement work.

At the same time, our adjusted EBITDA came in at roughly the same place as it did in 2023 and our EBITDA margin percentage actually increased as we continue to drive improvement into our facilities.

Pat: We invested in our business with approximately $275 million in capital expenditures in 2024.

Pat: We made good progress, reducing carbon emissions, reducing them by 17% since 2019 toward our goal of 35% in 2035 without the use of carbon credits.

Year ago, when we announced our 2024 outlook, we indicated that our adjusted operating income margin would likely be higher in the first half of the year in the second half and that's exactly what happened in.

Pat: As we became more energy efficient, reducing our energy intensity that is our energy consumption relative to sales by 23%.

In the fourth quarter, many of our customers slowed or halted production across multiple platforms, mostly to adjust inventory levels. Despite that our adjusted operating income margin came in at five 3% for the year in the top third of our peer group. We're confident this will continue to decline.

Pat: In 2019.

Pat: We have also reduced the amount of waste into landfills by 54% since 2000 1980.

Pat: 83% of our locations now the burnt more than 90% of their waste away from landfills. Good progress on our journey towards zero landfill initiatives.

We maintain a strong balance sheet with a net debt to adjusted EBITDA ratio under our target of one five times or better.

Pat: We are embracing technology in both our operations and in our strategic investments are advanced manufacturing team is moving forward with machine learning installations across the plant network to improve the performance of our line and heavy assets as discussed on our last call. We expect these efforts to produce significant benefits in terms of safety.

Misty: At the same time, we returned significant capital to our shareholders in 2024, we maintained our dividend and repurchased over 5 million shares under our normal course issuer bid.

Misty: Your share count bodes well for the shareholders as we see improvements in the future financial results.

We won multiple quality awards in a variety of customers in 2024, a strong base for new business Awards and replacement work there.

Pat: And quality.

Pat: Our <unk> software subsidiary is increasing its book of business with new customers.

Misty: Invested in our business with approximately $275 million in capital expenditures in 2024.

Pat: Our Martin Ranch innovation development portfolio includes companies that are leading edge and graphene aluminum powder for additive manufacturing aluminum air batteries and ultra capacitor technology there.

Misty: Made good progress, reducing carbon emissions, reducing them by 17% since 2019 toward our goal of 35% in 2035 without the use of carbon credits with this we became more energy efficient, reducing our energy intensity.

Pat: We are helping our strategic partners incubated these innovative technologies with many benefits for our company, both strategic and financial.

Misty: That is our energy consumption relative to sales by 23% since 2019.

Turning to business on the last call we pointed out the production sales will likely drop in the fourth quarter at Atlantis and other OEM customers adjusted their vehicle inventories.

Misty: We have also reduced the amount of waste destined for landfill by 54% since 2019, 83% of our locations now divert more than 90% of their waste away from landfills. Good progress on our journey towards our zero landfill initiatives.

Pat: Packet our results in the fourth quarter with sales and margins falling below normal levels.

Pat: While this correction continues to some extent in the first quarter. We believe we will see better production volumes in the coming quarters.

Misty: We are embracing technology in both our operations and in our strategic investments are advanced manufacturing team is moving forward with machine learning installations across the plant network to improve the performance of our aligned and heavy asset.

We continue to establish ourselves as a consistent generator of strong free cash flow for.

Pat: For 2020 for full year free cash flow coming in at just a bit below last year's record high.

Pat: Our continuous drive to find efficiencies by reusing flexible capital as well as some program extensions, which require less capital contributed to the strong performance.

Misty: As discussed on our last call. We expect these efforts to produce significant benefits in terms of safety speed and quality.

Misty: Our mine can software subsidiary is increasing its book of business with new customers.

Pat: Another solid free cash flow year in 2025, Peter will elaborate on this.

Misty: Our Martin Ranch innovation development portfolio includes companies that are leading edge and graphene aluminum powder for additive manufacturing aluminum they are batteries and ultra capacitor technology.

Pat: As previously discussed E volumes have been weak both in Europe, and North America, our European operations had more exposure of the evs as a percentage of sales.

Pat: Since we believe <unk> volumes would be slower to ramp up and many other industry observers expected, we protected ourselves by negotiating what we call complex contracts and we are paid upfront capital depending on the platforms. However, we continue to see volumes lower than <unk> expected.

Speaker Change: We are helping our strategic partners incubated these innovative technologies with many benefits for our company, both strategic and financial.

Speaker Change: Turning to business on our last call, we pointed out the production sales would likely drop in the fourth quarter at Atlantis and other OEM customers adjusted their vehicle inventories. This impacted our results in the fourth quarter with sales and margins falling below normal levels.

Pat: In fact, so many programs are running at less than 20% of the volumes that we look forward. It when we won that program and invested the capital.

Misty: While this correction continues to some extent in the first quarter. We believe we will see better production volumes in the coming quarters.

Pat: Given this dynamic like others in our space, we wrote down some assets during the fourth quarter of spread will elaborate radar.

Misty: We continue to establish ourselves as a consistent generator of strong free cash flow for.

Pat: Additionally, we will further restructure our operations in Germany in 2025, and look at consolidation opportunities at some of the other facilities, which are underneath utilized due to the low <unk> sales.

Misty: For 2020 for full year free cash flow coming in at just a bit below last year's record high.

Misty: Our continuous drive to find efficiencies by reusing flexible capital as well as some program extensions, which require less capital contributed to the strong performance.

Pat: It continues to be important to have a presence in Europe to support the customers and the global programs plus it's a hub of engineering and innovation.

Misty: Another solid free cash flow year in 2025, Peter will elaborate on this.

Pat: Withstanding given the high cost nature of the region, specifically in Germany.

Speaker Change: As previously discussed <unk> volumes have been weak both in Europe, and North America, our European operations had more exposure to evs as a percentage of sales.

Pat: Our focus will be less about growth and more about maintaining our footprint and making the operations leaner and stronger.

Pat: The Chinese market in general is focused on <unk> growth and has a lot of excess capacity are very small in China, and we are negotiating with local partners to minimize our footprint and exposure.

Misty: Since we believe <unk> volumes would be slower to ramp up and many other industry observers expected, we protected ourselves by negotiating what we call complex contracts and we were paid upfront capital depending on the platforms. However, we continue to see volumes lower than even we expected.

Pat: We believe partnerships are the best Avenue for growth in Asia.

Pat: While maintaining our presence in Europe and pursuing growth opportunities in the Americas and continued emphasis on localizing production in North America, primarily from Asia.

Misty: In fact, so many programs are running at less than 20% of the volumes that we reported when we won the program and invested the capital.

Pat: See a lot of opportunity for our largest footprint.

Misty: Given this dynamic like others in our space, we wrote down some assets during the fourth quarter of spread will elaborate radar. Additionally, we will further restructure our operations in Germany in 2025 and look at consolidation opportunities at some of the other facilities, which are under utilized.

Pat: We are also announcing an enterprise wide project to reduce our annual SG&A expenses by approximately $2 million.

Will take 12 to 18 months to implement.

Pat: But the savings coming from a combination of reduced corporate overhead costs as well as expense reduction at the plant level.

Speaker Change: Due to the low EV sales.

Pat: We already see new ways of operating as a business.

Speaker Change: It continues to be important to have a presence in Europe support the customers and their global programs plus it's a hub for engineering and innovation outwith standing given the high cost nature of the region specifically in Germany.

Pat: Our focus on optimizing processes and eliminating redundancy, we expect to generate significant results from this activity.

Pat: While the ramp up of DB volumes slow youre seeing more ice extensions filling the gap. This is a bit of a silver lining, particularly since.

Speaker Change: Our focus will be less about growth and more about maintaining our footprint and making the operations leaner and stronger.

Pat: Most of these programs were capitalized years ago.

Speaker Change: The Chinese market in general is focused on <unk> growth and has a lot of excess capacity for very small in China, and we are negotiating with local partners to minimize our footprint and exposure.

Pat: So from a pure volume standpoint, we are protected as fewer EDI sales means more ice vehicles are being sold.

Pat: All things being equal.

Pat: We will be underutilized on certain assets.

Speaker Change: We believe partnerships are the best Avenue for growth in Asia.

Pat: Some drag on margins until the volumes improve our current programs rollover and we can reset economics.

Speaker Change: While maintaining our presence in Europe and pursuing growth opportunities in the Americas and continued emphasis on localizing production in North America, primarily from Asia.

Pat: There is some stagnation in new programs as Oems revamped their new vehicle portfolios.

Speaker Change: See a lot of opportunity for our largest footprint.

We will take this time to focus on more cost reduction improved profits and what will likely be a relatively flat market over the next few years.

Speaker Change: We are also announcing an enterprise wide project to reduce our annual SG&A expenses by approximately $2 million.

Pat: Despite a flat market, we see margins improving with our continued focused on operations and the various cost saving projects I discussed.

Speaker Change: Will take 12 to 18 months to implement.

Speaker Change: But the savings coming from a combination of reduced corporate overhead costs as well as expense reduction at the plant level.

Pat: With that said I'd like to thank the entire Martin Ray a team I appreciate all our People's hard work and now I'll turn it over to Fred to discuss operations in more detail.

Speaker Change: We already see new ways of operating as a business.

Speaker Change: Focus on optimizing processes and eliminating redundancy, we expect to generate significant results from this activity.

Thanks, Pat good.

Pat: Evening everyone.

Pat: Looking at our operations, we continue to execute well notwithstanding the volume headwinds we are facing due to the OEM inventory correction.

Speaker Change: While the ramp up of Dv volumes to slow we are seeing more ice extensions filling the gap. This is a bit of a silver lining, particularly since <unk>.

Pat: EV related headwinds that Pat talked about.

Speaker Change: Most of these programs were capitalized years ago.

Pat: We are driving operational improvements through our monitoring operating system.

Speaker Change: So from a pure volume standpoint, we are protected as fewer EV sales means more ice vehicles are being sold.

Pat: Turning to receive recoveries for volume shortfalls, and lingering inflationary cost increases through commercial negotiations with our OEM customers.

Speaker Change: All things being equal.

Speaker Change: We will be underutilized on certain assets. So we expect some drag on margins until the volumes improve our current programs rollover and we can reset economics.

Pat: Both initiatives are yielding positive results and will ultimately set us up nicely for when the market turns.

Pat: Thus.

In North America Q4, adjusted operating income was down quarter over quarter, reflecting decremental margins on lower production sales again due to the OEM inventory correction, which is primarily a north American issue.

Speaker Change: There is some stagnation in new programs as Oems revamped their new vehicle portfolios.

Speaker Change: We will take this time to focus on more cost reduction to improve profits and what will likely be a relatively flat market over the next few years.

Pat: Still margins were solidly positive in this segment.

Speaker Change: Despite a flat market, we see margins improving with our continued focus on operations and the various cost saving projects I discussed.

Pat: North America is by far the largest portion of our business representing over 75% of our total sales and the key driver to our margin profile.

Pat: We are happy with their operating performance in the region and have been for quite some time.

Speaker Change: With that said I'd like to thank the entire Martin Red team I appreciate all our People's hard work and now I'll turn it over to Fred to discuss operations in more detail.

Pat: North America will continue to be the profit center of our business.

Pat: Conversely, we lost money in Europe during the quarter, despite the region being in relatively good shape operationally.

Fred: Thanks, Pat good.

Evening everyone.

Fred: Looking at our operations, we continue to execute well notwithstanding the volume headwinds we are facing due to the OEM inventory correction and EV related headwinds that Pat talked about.

Pat: Due largely to volume and mix headwinds.

Pat: As Pat noted, we will be executing on some further restructuring in our German operations, which will start in the first quarter of 2005 and expect to complete in Q2.

Fred: We are driving operational improvements through a minor operating system.

Fred: Turning to receive recoveries for volume shortfalls, and lingering inflationary cost increases through commercial negotiations with our OEM customers.

Pat: In conjunction with our strategy of maintaining our presence in the region. We will continue to drive a continuous improvement mindset in the operations there.

Fred: Both initiatives are yielding positive results will ultimately set us up nicely for when the market turns as it always does.

Pat: Europe for us.

Pat: Remain an important part of our business for various reasons.

Pat: We visit our operations in Germany recently is clear they are embracing the principles of our monitoring operating system.

Fred: In North America Q4, adjusted operating income was down quarter over quarter, reflecting decremental margins on lower production sales again due to the OEM inventory correction, which is primarily a north American issue.

Pat: Which will inherently yield results as we move forward into 2025 and beyond.

Pat: We have a strong capable people and teams in Europe.

Fred: So margins were solidly positive in this segment.

Pat: Notwithstanding the margin profile is not expected to be run North America for us given the high cost nature of the region, particularly in Germany.

Fred: North America is by far the largest portion of our business representing over 75% of our total sales and the key driver to our margin profile.

Fred: We are happy with their operating performance in the region and have been for quite some time.

Pat: Although a small piece of the pie. We're also lost some money in our rest of World segment in the fourth quarter with our two plants in China, representing the majority of the segment.

Fred: North America will continue to be the profit center of our business.

Fred: Conversely, we lost money in Europe during the quarter, despite the region being in relatively good shape operationally.

Pat: Pat talked about how we view the Chinese market.

Pat: The positive news here is that we were originally very cautious in our strategy for China and ultimately I think we were right.

Fred: The larger through volume and mix headwinds.

Fred: As Pat noted, we will be executing on some further restructuring in our German operations, which was started in the first quarter of 2005 and expect to complete in Q2.

Pat: On a relative basis, we don't have a lot of capital in the ground in China.

Pat: Unlike others.

Pat: And when you look at our overall book of business, we are not relying on sales from the Chinese market to drive our profitability.

Speaker Change: In conjunction with our strategy of maintaining our presence in the region.

Pat: China has become a tough market for foreign companies to operate in and make money at the appropriate hurdle rates given the risk profile, especially recently.

Speaker Change: We will continue to drive a continuous improvement mindset in the operations there.

Speaker Change: Europe for Us will remain an important part of our business for various reasons.

Pat: The future does not bode well for foreign companies with too high an exposure in China as many in our industry have acknowledged.

Pat: We visit our operations in Germany recently, and it is clear they are embracing the principles of our monitoring operating system.

Pat: Given the dynamics, we are facing in both Europe, and China, our strategy for those regions moving forward.

Fred: Which will inherently yield results as we move forward into 2025 and beyond.

Peter: We have a strong capable people and teams in Europe.

Pat: And an impairment tests required by <unk> standards based on certain triggers.

Peter: Notwithstanding the margin profile of unexpected with vivo in North America for us.

Pat: We concluded that the carrying value of certain assets in Europe, and our rest of world segment were impaired and needed to be written down.

Peter: The high cost nature of the region, particularly in Germany.

Pat: We also recognize the minor impairment charge in our North American segment.

Peter: Although a small piece of the pie. We're also lost some money in our rest of World segment in the fourth quarter with our two plants in China, representing a majority of the segment.

Pat: Which look Europe is largely <unk> related.

Pat: Altogether, we recorded a noncash impairment charge of $129 million in the fourth quarter.

Peter: <unk> talked about how we view the Chinese market.

Peter: But positive news here is that we were originally very cautious in our strategy for China and ultimately I think we were right.

Pat: The figures are derived using a discounted cash flow evaluation of all of our cash generating units.

Based on board approved budgets consistent with <unk> accounting standards.

Peter: On a relative basis, we don't have a lot of capital in the ground in China.

Pat: Despite the record impairments, which has to be done on a cash generating unit level under IRS.

Peter: Unlike others when you.

Peter: You look at our overall book of business, we are not relying on sales from the Chinese market to drive our profitability.

Pat: Going through this exercise reaffirmed our view that our stock is undervalued.

Peter: China has become a tough market for foreign companies to operate and make money at the appropriate hurdle rates given the risk profile, especially recently.

Pat: The other thing to keep in mind that we also have assets on our balance sheet with market borrowers that are well in excess of their book values, which are based on historical cost.

Peter: The future does not bode well for foreign companies with too high an exposure in China as many in our industry have acknowledged.

Pat: The Best example is our real estate portfolio, which is being carried on the books at approximately $200 million.

Peter: Given the dynamics, we are facing in both Europe, and China, our strategy for those regions moving forward.

But it has a market value is more than double that according to our real estate consultants.

Pat: Common standards and I'll offer such as assets to be written up but the volume is there and not reflected on our balance sheet.

And an impairment tests required by <unk> standards based on certain triggers.

Peter: We concluded that the carrying value of certain assets in Europe, and our rest of world segment were impaired I needed to be written down.

Pat: Peter will elaborate on our outlook in a few moments.

Speaker Change: Moving on I am pleased to announce we had been awarded new business worth $40 million in annualized sales of mature volumes.

Peter: We also recognize the minor impairment charge in our North American segment.

Peter: Which look Europe is largely <unk> related.

Speaker Change: Which includes $35 million of structural components with Toyota on our lightweight structures commercial group and.

Peter: Altogether, we recorded a noncash impairment charge of $129 million in the fourth quarter.

Speaker Change: And finally on all of them are.

Speaker Change: Fluids business with general Motors in our propulsion systems group.

Peter: These figures are derived using a discounted cash flow evaluation of all of our cash generating units.

Speaker Change: We continue to make good progress building our book of business thorough a focus for us as we continue to diversify our customer base.

Peter: Based on board approved budget consistent.

Peter: Consistent with <unk> accounting standards.

Peter: Okay.

Peter: Despite the record impairments, which has to be done at a cash generating unit level under IR for us.

Speaker Change: We fear of book of business with further continuing to grow as we grow them. This recent momentum with them.

Speaker Change: New business awards in the last four quarters totaled $230 million.

Peter: Going through this exercise reaffirmed our view that our stock is undervalued.

Speaker Change: We continue to have a relatively healthy pipeline of new business quotes they were working on with a higher than normal level of program as mentioned extensions in front of us as Pat talked about.

Peter: The other thing to keep in mind is that we also have assets on our balance sheet with market borrowers that are well in excess of their book values, which are based on historical cost.

Peter: The Best example is our real estate portfolio, which is being carried on the books at approximately $200 million.

Speaker Change: Program expansion generally provide us with an opportunity to reprice product, which is a good thing.

So there is a market value is more than double that according to our real estate consultants.

Speaker Change: As that evolves and as next generation vehicle programs that are kicking in over the next few years.

Peter: Accounting standards and I'll offer such as assets to be written up but the volume is there and not reflected on our balance sheet.

Speaker Change: We will inherently be able to fully built in the higher inflationary cost that we've had to absorb in the last few years and so the economics of the new programs.

Peter: Peter will elaborate on our outlook in a few moments.

Speaker Change: This will ultimately help our margin profile over time since we have not been able to recover all of the higher material and labor costs through a mid cycle commercial negotiations with our customers.

Peter: Moving on I am pleased to announce we've been awarded new business worth $40 million in annualized sales of mature volumes.

Peter: Which includes $35 million of structural components with Toyota.

Speaker Change: With that said I'd like to thank our people for their commitment to the long term success of the company.

Peter: <unk> structures commercial group.

Peter: $5 million.

Peter: Our fluids business with <unk> and our propulsion systems group.

Speaker Change: We truly value your contribution.

Peter: Now here's Peter.

Speaker Change: Thanks, Brett.

Peter: We continue to make good progress building our book of business, a thorough a focus for us as we continue to diversify our customer base.

Speaker Change: Looking at the results quarter over quarter, we generated adjusted EBITDA of $131 7 million in the fourth quarter down from $154 $1 million in quarter, three and adjusted operating income was $40 1 million down from the $65 9 million that we have generated in quarter three on production sales that were down.

Peter: We see our book of business with further continuing to grow as we build on this recent momentum with them.

Peter: New business awards in the last four quarters have totaled $230 million.

We continue to have a relatively healthy pipeline of new business quotes they were working on.

Speaker Change: 10%.

Speaker Change: Adjusted operating income margin came in at $3. Five this reflects a 22% decremental margin on the lower quarter over quarter production sales driven by the OEM inventory correction that patent credit discussed.

Peter: With a higher than normal level of program expansions and extensions in front of us as Pat talked about.

Peter: Program expansions generally provide us with an opportunity to reprice product, which is a good thing.

Peter: As that evolves and as next generation vehicle programs that are kicking in over the next few years.

Speaker Change: There is also some impact from higher tooling sales, which generally carry low or no margins.

Peter: We will inherently be able to fully build into higher inflationary cost that we've had to absorb in the last few years into the economics of the new programs.

Speaker Change: Moving on free cash flow before <unk> 16 lease payments came in at $76 $4 million a strong result in higher than the $57 million, we have generated in quarter three driven by positive working capital flows and lower interest costs.

Peter: This will ultimately help our margin profile over time since we have not been able to recover all of the higher material and labor costs through a mid cycle commercial negotiations with our customers.

Speaker Change: Including lease payments under <unk> 16, accounting free cash flow was $63 million compared to $43 9 million in quarter three.

Peter: With that said I'd like to thank our people for their commitment to the long term success of the company.

Speaker Change: As Pat alluded to free cash flow was $183 8 million, excluding lease payments on a full year basis in 2024, just below the all time high number we had set in 2023 and well above our guidance range of $100 million to $150 million. We are harvesting a lot of free cash flow from the business and we expect this to.

Peter: We truly value your contribution.

Peter: Now here's Peter.

Peter: Thanks, Brett.

Peter: Looking at the results quarter over quarter, we generated adjusted EBITDA of $131 7 million in the fourth quarter down from $154 $1 million in quarter, three and adjusted operating income was $40 1 million down from the $65 $9 million that we had generated in quarter three on production sales that were down.

Continue.

I will elaborate on this when discussing our outlook in a few moments, but it's worth highlighting that we are generating historically high levels of free cash flow at a time when margins remain below their longer term potential.

Peter: 10%.

Peter: Adjusted operating income margin came in at $3. Five this reflects a 22% decremental margin on the lower quarter over quarter production sales driven by the OEM inventory correction that patent credit discussed.

We have the ability to generate higher free cash flow over time, which is something that we're very focused on.

Speaker Change: Adjusted net earnings per share would have come in at <unk> 19.

Speaker Change: There is also some impact from higher tooling sales, which generally carry low or no margins.

Speaker Change: Had it not them for the unusually high effective tax rate during the quarter driven by the rapid depreciation of the Mexican peso against the US dollar which is the functional currency for our Mexico operations.

Speaker Change: Moving on free cash flow before <unk> 16 lease payments came in at $76 $4 million a strong result in higher than the $57 million, we have generated in quarter three driven by positive working capital flows and lower interest costs.

Speaker Change: As you May recall, we solve this issue in the third quarter and we mentioned it on the last call that quarter four could also be impacted as the peso has continued to depreciate against the U S dollar.

Speaker Change: Including lease payments under <unk> 16, accounting free cash flow was $63 million compared to $43 9 million in quarter three.

Speaker Change: As a result of this issue we reported an adjusted EPS loss for 'twenty one.

Speaker Change: Importantly, and as we have talked about on the last call. This tax treatment of foreign currency fluctuations is noncash. So it does not impact cash taxes or cash earnings.

Speaker Change: As Pat alluded to free cash flow was $183 8 million, excluding lease payments on a full year basis in 2024, just below the all time high number we had set in 2023 and well above our guidance range of $100 million to $150 million.

Speaker Change: These foreign exchange movements tend to balance out over time, so the impact will likely disappear as the peso stabilizes and could even reverse at some point if the peso appreciates.

Speaker Change: We are harvesting a lot of free cash flow from the business and we expect this to continue.

Speaker Change: The issue only exist under Ifr RF accounting something to keep in mind when comparing our results to those of our peers, who report under U S GAAP or other non <unk> accounting standards.

Speaker Change: I will elaborate on this when discussing our outlook in a few moments.

Speaker Change: It's worth highlighting that we are generating historically high levels of free cash flow at a time when margins remain below their longer term potential.

Speaker Change: I'll refer you to our 2024 MD&A for further clarification.

Speaker Change: We have the ability to generate higher free cash flow over time, which is something that we're very focused on.

Speaker Change: Looking now at our performance on a year over year basis fourth quarter, adjusted EBITDA of $131 7 million was down 6% from $140, one and quarter four of last year, while adjusted operating income of $40 1 million was down from $56 $6 million of quarter four of last year on production sales that were <unk>.

Speaker Change: Adjusted net earnings per share would have come in at <unk> 19.

Speaker Change: Then for the unusually high effective tax rate during the quarter driven by the rapid depreciation of the Mexican peso against the US dollar which is the functional currency for our Mexico operations.

Speaker Change: Down about 10%.

Speaker Change: As you May recall, we saw this issue in the third quarter and we mentioned it on the last call that quarter four could also be impacted as the peso has continued to depreciate against the us dollar.

Speaker Change: Our operating income margin of three 5% was approximately 90 basis points lower year over year, reflecting the decremental impact of loss production sales due to the OEM inventory correction with production call outs from our customers often coming on short notice.

Speaker Change: As a result of this issue we reported an adjusted EPS loss of 21.

Speaker Change: Importantly, and as we've talked about on the last call. This tax treatment of foreign currency fluctuations of noncash. So it does not impact cash taxes or cash earnings.

Speaker Change: On a positive note our adjusted EBITDA margin was up year over year, Despite lower sales a testament to our strong operating performance.

Speaker Change: I refer you to our MD&A for further commentary on year over year variances.

Speaker Change: These foreign exchange movements tend to balance out over time, so the impact will likely disappear as the peso stabilizes and could even reverse at some point if the peso appreciates.

Speaker Change: Turning now to our balance sheet net debt, excluding <unk> 16 lease liabilities decreased by approximately 7 million quarter over quarter to $813 million.

Speaker Change: The issue only exist under Ifr us accounting something to keep in mind when comparing our results to those of our peers, who report under U S. GAAP for other non <unk> accounting standards.

Speaker Change: This reflects the free cash flow profile quarter to quarter as previously outlined partially offset by noncash foreign exchange translation driven by the weakening of the Canadian dollar against the U S dollar and roughly $12 million spent repurchasing one 2 million shares for cancellation through our normal course issuer bid.

Speaker Change: I'll refer you to our 2024 MD&A for further clarification.

Speaker Change: Looking now at our performance on a year over year basis fourth quarter, adjusted EBITDA of $131 7 million was down 6% from $140, one and quarter four of last year, while adjusted operating income of $40 1 million was down from $56 6 million of quarter four of last year on production.

Speaker Change: Our net debt to adjusted EBITDA ratio ended the period at a strong one for seven consistent with where we were at the end of the quarter three at 146.

Speaker Change: Bills that were down about 10%.

Speaker Change: Our target leverage ratio is one five or better. So we are in our target range, we are comfortable at or below this level as it allows us to execute on our capital allocation priorities, while maintaining the strong balance sheet at the same time.

Speaker Change: Our operating income margin of three 5% was approximately 90 basis points lower year over year, reflecting the decremental impact of loss production sales due to the OEM inventory correction with production call outs from our customers often coming on short notice.

Speaker Change: Turning to our 2025 outlook as Pat noted, we expect our results to improve in the coming quarters as the OEM inventory correction runs its course.

Speaker Change: On a positive note our adjusted EBITDA margin was up year over year, Despite lower sales a testament to our strong operating performance.

Having said that most industry forecasters are calling for slightly lower production volumes in both North America and Europe in 2025.

Speaker Change: I refer you to our MD&A for further commentary on year over year variances.

Speaker Change: Turning now to our balance sheet net debt, excluding <unk> 16 lease liabilities decreased by approximately 7 million quarter over quarter to $813 million.

Speaker Change: Part of this reflects a continuation of the inventory correction in the quarter, one as well as a continued uncertainty of the EV adoption rate.

Speaker Change: With this in mind, we expect total sales to be between $4 eight and $5 1 billion for the year.

Speaker Change: This reflects the free cash flow profile for the quarter as previously outlined partially offset by noncash foreign exchange translation driven by the weakening of the Canadian dollar against the U S dollar and roughly $12 million spent repurchasing one 2 million shares for cancellation to our normal course issuer bid.

Speaker Change: Turning to our margin profile, we expect adjusted operating income margin to fall within a range of five 3% to five 8%, which represents an increase year over year. Despite the expected flat volume environment.

Speaker Change: Our net debt to adjusted EBITDA ratio ended the period at a strong one for seven consistent with where we were at at the end of the quarter three at 146.

Speaker Change: Positively we expect another strong year of free cash flow in the range of $125 million to $175 million or $75 million to $125 million, excluding lease payments under <unk> 16 accounting.

Speaker Change: Our target leverage ratio is one five or better. So we are in our target range, we are comfortable at or below this level as it allows us to execute on our capital allocation priorities, while maintaining a strong balance sheet at the same time.

Speaker Change: This implies cash capex of approximately 300 million.

Speaker Change: Please note that our free cash flow outlook excludes any expected cash restructuring cost, resulting from the planned restructuring that both patents spreads spoke about earlier.

Speaker Change: Turning to our 2025 outlook as Pat noted, we expect our results to improve in the coming quarters as the OEM inventory correction runs its course.

Speaker Change: As Pat noted, we continue to establish ourselves as a consistent generator of strong free cash flow, we have a strong organizational focus on free cash flow and prudent management of our capital spending.

Speaker Change: Having said that most industry forecasters are calling for slightly lower production volumes in both North America and Europe in 2025.

Speaker Change: As Pat discussed the delayed ramp up of EV programs and related program extension on ice vehicles is also contributing to a reduction of capital required in our business.

Speaker Change: This reflects a continuation of the inventory correction in the quarter, one as well as a continued uncertainty of EV adoption rate.

Speaker Change: Please note that our 2025 outlook does not reflect any impact from the potential implementation of tariffs or government policy changes in the U S or any other region.

Speaker Change: With this in mind, we expect total sales to be between $4 eight and $5 1 billion for the year.

Speaker Change: Turning to our margin profile, we expect adjusted operating income margin to fall within a range of five 3% to five 8%, which represents an increase year over year. Despite the expected flat volume environment.

Speaker Change: Looking further out we expect margins to improve in 2026 and beyond despite what is currently a relatively muted vehicle production outlook from IHS and other forecasters as we deliver benefits from our SG&A reduction project restructuring actions Nevertheless initiatives.

Speaker Change: Positively we expect another strong year of free cash flow in the range of $125 million to $175 million or $75 million to $125 million, excluding lease payments under <unk> 16 accounting.

Speaker Change: We believe there is upside to the industry volume forecast with the U S economy remains strong.

Speaker Change: Overall absent any impacts to the market from a potential trade war, we expect to deliver strong financial performance in 2025, especially as it relates to free cash flow notwithstanding continued industry challenges and uncertainties that we're all aware of the results should improve beyond that.

Speaker Change: This implies cash capex of approximately $300 million.

Speaker Change: Please note that our free cash flow outlook excludes any expected cash restructuring costs, resulting from the planned restructuring that both patents spreads spoke about earlier.

Speaker Change: As Pat noted, we continue to establish ourselves as a consistent generator of strong free cash flow, we have a strong organizational focus on free cash flow and prudent management of our capital spending.

Speaker Change: We continue to perform at a high level our balance sheet is in great shape, and we are delivering on our free cash flow promises and executing on our capital allocation priorities.

Speaker Change: With that said I'd like to thank our people for their hard work and perseverance and what are certainly interesting and dynamic times in our industry.

Speaker Change: As Pat discussed the delayed ramp up of EV programs and related program extension on ice vehicles is also contributing to a reduction of capital required in our business.

Speaker Change: Now it's time for questions, we have shareholders analysts employees and even some competitors on the phone so.

Speaker Change: Please note that our 2025 outlook does not reflect any impact from the potential implementation of tariffs or government policy changes in the U S or any other region.

Speaker Change: So we may need to be a little bit careful, but we will answer what we can and thank you for calling in.

Speaker Change: Looking further out we expect margins to improve in 2026 and beyond despite what is currently a relatively muted vehicle production outlook from IHS and other forecasters as we deliver benefits from our SG&A reduction project restructuring actions and MLS initiatives.

Speaker Change: Before we actually get to the Q&A a.

Speaker Change: A few further words on tariffs.

Speaker Change: We know that we issued today as I noted earlier these are indeed terrifying guidance.

Speaker Change: Where we sit today as there are no virtually no tariffs on our products Tonight.

Speaker Change: We believe there is upside to the industry volume forecast with the U S economy remains strong.

Speaker Change: Our view on North American tariffs as simple and I mentioned it earlier.

Speaker Change: Overall absent any impacts to the market from a potential trade war, we expect to deliver strong financial performance in 2025, especially as it relates to free cash flow notwithstanding the continued industry challenges and uncertainty that we're all aware of the results should improve beyond that.

Speaker Change: Tariffs for auto or auto parts made in North America that comply with local content rules.

Speaker Change: We will get there ultimately.

Speaker Change: If there would be tariffs a few points most of our parks deliver the customer in truck country. So no tariff will be paid on those shipments.

We continue to perform at a high level our balance sheet is in great shape, and we are delivering on our free cash flow promises and executing on our capital allocation priorities.

Speaker Change: Parts across the border to a customer that would have a tariff would be paid for by the customer is importer of record.

Speaker Change: Parts across the borders and in truck company transfer, where we are the employer of record that would give rise to a tariff.

Speaker Change: With that said I'd like to thank our people for their hard work and perseverance and what are certainly interesting and dynamic times in our industry.

Speaker Change: Well, we would be talking to the customer about passing it much as we did with inflation during the pandemic.

Now it's time for questions.

Speaker Change: We have shareholders analysts employees and even some competitors on the phone.

Speaker Change: As for parts that we buy from suppliers.

Speaker Change: Our contracts with our suppliers have been paying any tariff.

So we may need to be a little bit careful, but we will answer what we can and thank you for calling in.

Speaker Change: So tariffs with cost as some but most of the cost will not be directly borne by us at the end of the day. The bigger issue is the effect on the industry.

Speaker Change: Before we actually get to the Q&A a.

Speaker Change: A few further words on tariffs.

Speaker Change: We know that issue of the day as I noted earlier these are indeed terrifying guidance.

Speaker Change: Tariffs with cost of the Oems are fortunate they absorb them.

Speaker Change: But tariffs passed onto the consumer would cost the industry, if consumers bought materially fewer vehicles and that will happen.

Speaker Change: Where we sit today as there are no virtually no tariffs on our products Tonight.

Speaker Change: Our view on North American tariffs are simple and I mentioned it earlier.

Speaker Change: A bad result for the auto industry.

Speaker Change: I believe that tariffs are fully implemented and notwithstanding.

Speaker Change: Tariffs for auto or auto parts made in North America that comply with local content rules.

Speaker Change: The industry has shut down in a very short time.

Speaker Change: Some don't seem to grasp this.

Speaker Change: Thank you, we'll get there ultimately.

Speaker Change: With tier two or tier three suppliers don't ship product for Canada for tariffs to get product the supply chain breaks down and people don't make cars.

Speaker Change: If there would be tariffs a few points most of our parks go to the customer in truck country. So no tariff would be paid on those shipments.

Speaker Change: Parks across the border to a customer that would have a tariff would be paid for by the customer is importer of record.

Speaker Change: Some of our industry frankly wanted to see this half.

Speaker Change: Let the tariff be implemented have the industry shutdown and demonstrate the real cost of tariffs.

Speaker Change: Parts across the borders and in truck company transfer, where we are the importer of record that would give rise to a tariff.

Speaker Change: Then we will see some sanity restored.

Speaker Change: To support the U S MCA and indeed, improving.

Speaker Change: While we would be talking to the customer about passing it much as we did with inflation during the pandemic.

Speaker Change: We are working already.

Speaker Change: Already on our solution.

Speaker Change: Indeed, we have been in discussions with USTR and others in the U S.

Speaker Change: As for parts that we buy from suppliers.

Speaker Change: So on to questions.

Speaker Change: Our contracts with our suppliers have been paying on a tariff.

Speaker Change: Thank you we will now take questions from the telephone line with your other question. Please press star one.

Speaker Change: So tariffs with costs as some but most of the cost will not be directly born brighthouse at the end of the day. The bigger issue is the effect on the industry.

Speaker Change: Kim for your questions at any time by pressing star queue. Please press.

Speaker Change: Tariffs with costs, the Oems a fortune if they absorb them.

Mr. <unk> at this time, if you have a question that would be a brief pause while participants register we thank you for your patience.

Speaker Change: But tariffs passed onto the consumer would cost the industry, if consumers bought materially fewer vehicles and that will happen.

Speaker Change: First question is from David Ocampo from Cormack Securities. Please go ahead.

Speaker Change: A bad result for the auto industry.

Speaker Change: Thanks for taking my questions.

Speaker Change: I believe that tariffs are fully implemented and notwithstanding would cause the industry to shut down in a very short time.

Speaker Change: Yes.

Speaker Change: To start on tariffs I know many of your peers have already answered a number of questions over the last few days or so but I was wondering if you guys have seen any erratic changes pit production schedules from your customers just given the ongoing data change in tariff policy and then.

Speaker Change: Some don't seem to grasp this.

Speaker Change: With tier two or tier three suppliers don't ship product for Canada for tariffs to get product the supply chain breaks down and people don't make cars.

Speaker Change: Some of our industry frankly wanted to see this half.

Speaker Change: As a follow up to that.

Speaker Change: Like how quickly can you adjust your labor force. So we just look at the pandemic is kind of a guidepost on what could happen.

Speaker Change: Let the tariff be implemented at the industry shutdown and demonstrate the real cost of tariffs.

Speaker Change: And we will see some sanity restored.

Speaker Change: 25% tenants didn't come to fruition.

Speaker Change: To support the U S MCA and indeed, improving it.

Speaker Change: So.

Speaker Change: Go ahead Sir.

Speaker Change: So if I understood. Your first question right did anything change yesterday the answer is no we ship.

Speaker Change: We are working already on our solution.

Speaker Change: Indeed, we have been in discussions with USTR and others in the U S.

Speaker Change: Received just like we always do.

Speaker Change: So onto questions.

Speaker Change: So we didn't see any slowdowns at the border.

Speaker Change: Thank you we will now take questions from the telephone line. If you have a question. Please press star one.

Speaker Change: Or anything of that nature.

Speaker Change: But it was only as you know one day.

Speaker Change: What I would anticipate as Rob referred to if the tariffs did come in place.

Speaker Change: You may cancel your question at any time by pressing Star two please press star one at this time if you have a question there will be a brief pause while participants register we thank you for your patience.

Speaker Change: The supply chain would start to look like it did during the pandemic.

Speaker Change: First question is from David Ocampo from Cormack Securities. Please go ahead.

Speaker Change: I would say more so during the chip shortage aware you would probably have different plans going up and down continuously based on supply chain disruptions.

Thanks for taking my questions.

Speaker Change: Thanks.

Speaker Change: Yes, it is going to start.

On tariffs I know many of your peers have already answered a number of questions over the last two days or so but I was wondering if you guys have seen any erratic changes to production schedules from your customers just given the ongoing daily changes in tariff policy and then.

Speaker Change: Due to the fact that especially the smaller tier suppliers, who can't afford to pay tariffs don't pay tariffs.

Speaker Change: You can't pass along.

Speaker Change: And you start to see the supply chain disrupt planned shutdown and I think it would look very similar.

A follow up to that.

Speaker Change: Others might say, okay, well the incentive as well why don't you localize.

Speaker Change: Like how quickly can you guys. Adjusted your Labor Force should we just look at the pandemic is kind of a guidepost.

Speaker Change: I would give that answer.

Speaker Change: What could happen if the.

Speaker Change: Two ways, one is theres no capacity in the United States localized to at least nothing significant.

Speaker Change: 25% tenants do come to fruition.

Speaker Change: Yes sure.

Speaker Change: And if you did have some capacity and localized to the U S.

Speaker Change: So if I understood. Your first question right did anything change yesterday the answer is no we ship.

Speaker Change: The employment rate would not support.

Speaker Change: <unk> just like we always do.

Speaker Change: That capacity in other words 30 at 4% in the U S probably not going to get a hell of a lot better no matter how much work you put there.

Speaker Change: So we didn't see any slowdowns at the border.

Speaker Change: Or anything of that nature.

Speaker Change: But it was only as you know one day.

Speaker Change: Finally, there just isn't enough people.

Speaker Change: What I would anticipate is as Rob referred to if the tariffs did come in place.

Speaker Change: With the right skill sets to take on much more capacity so.

Speaker Change: At the end of the day.

The supply chain would start to look like it did during the pandemic.

Speaker Change: I don't see how thats going to benefit.

Speaker Change: The industry or the U S directly as it stands.

Speaker Change: So I would say more so during the chip shortage aware you would probably have different plans going up and down continuously based on supply chain disruptions.

Speaker Change: I don't think it will last changes will take a long time, yes, yes, if we were going to move that we're going to move anything around it doesn't happen overnight as any supplier or OEM would tell you.

Speaker Change: Due to the fact that especially the smaller tier suppliers, who can't afford to pay tariffs don't pay tariffs.

Speaker Change: One of the things that are a category by category I guess, a corollary I would add we have.

Speaker Change: You can't pass them on.

Speaker Change: We have lots of plants in the states.

Speaker Change: And you're starting to see the supply chain disrupt plant shut down and I think it would look very similar.

Speaker Change: Probably we've got twice as many people in the U S. As we do in Canada.

Speaker Change: We've got plants from Michigan, all the way out there Tupelo, Mississippi.

Speaker Change: Others might say, okay, well incentive as well why don't you localize lowered I would give that answer.

Speaker Change: Some have extra capacity. So if there are awards of product and so forth in United States will be operated footprint.

Speaker Change: Two ways, one is theres no capacity in the United States localized to at least nothing significant.

Speaker Change: We've definitely been growing our U S footprint overtime comparator, Canada.

Speaker Change: And if you did have some capacity and localized to the U S.

Speaker Change: I should've been more specific and referring to supplier capacity absolutely supplier capacity not our capacity, we do have some local capacity is true.

Speaker Change: The employment rate would not support.

Speaker Change: That capacity in other words, 34% in the U S probably not going to get a hell of a lot better no matter how much work you put there.

Speaker Change: Yes.

Speaker Change: Totally makes sense and hopefully logic that's prevail there.

Speaker Change: There just isn't enough people.

Speaker Change: But just.

Speaker Change: With the right skill sets to take on much more capacity so.

Speaker Change: Just wondering on the second line of questioning.

Speaker Change: Talking about the impairment charge that you took in the quarter.

Speaker Change: At the end of the day.

Speaker Change: That seemed like it is large are mostly responsible to the lower adoption of EV vehicles.

Speaker Change: I don't see how thats going to benefit.

Speaker Change: The industry or the U S directly as it stands.

Speaker Change: But when we think about your commercial settlements that you guys are negotiating or have negotiated.

Speaker Change: I don't think it'll last changes will take a long time, yes, yes, if we were going to move if we're going to move anything around it doesn't happen overnight as any supplier.

Speaker Change: Negotiated are they offsetting a majority of this write down or is there still quite a bit.

Speaker Change: GAAP between the write down in Lake Charles and legacy within the Oems.

Speaker Change: I would tell you.

Speaker Change: One of the things that are a cabinet.

Speaker Change: I guess a corollary.

Speaker Change: Therefore, the question David.

Speaker Change: We have.

Speaker Change: We kind of think about that moving from all over the microphone here.

Speaker Change: We have lots of plants in the states.

Speaker Change: No problem, we've got twice as many people in the US as we're doing in Canada, and we've got plants from Michigan, all the way down to their Tupelo, Mississippi.

Speaker Change: When we think about that.

Speaker Change: In terms of the commercial settlements, but I would say that for the most part the write down of the portion of the write down.

Speaker Change: Some have extra capacity. So if there are awards of product and so forth in United States, We've got greater footprint.

Speaker Change: Be more or less offset with lot of the commercial settlements of course that depends on the timing of the settlement and not all of the settlements R. R.

Speaker Change: And we've definitely been growing our U S footprint overtime compared to Canada.

Speaker Change: I should've been more specific and referring to supplier capacity.

Speaker Change: Even if you will over the over the timeframe that we negotiate.

Speaker Change: Higher capacity.

Speaker Change: So I would say for the most part of the <unk> related piece of the write down yes.

Speaker Change: Actually we do have some open capacity.

Speaker Change: Yes.

Speaker Change: And then maybe I'll just elaborate a little bit so I mean, the write down.

Totally makes sense and hopefully logic those prevail there.

Speaker Change: Is it a reflection of the future cash flows expected for.

Speaker Change: But just.

Speaker Change: Just wondering on the second line of questioning.

Speaker Change: Talking about the impairment charge that you took in the quarter.

Speaker Change: Those assets, referring to EV related assets.

Speaker Change: Does seem like it is largely are mostly responsible to the lower adoption of EV vehicles.

Speaker Change: So when we did that exercise at the end of the day there was a shortfall and that shortfall included in the commercial settlements I think part of the challenge is as Oems.

Speaker Change: But when we think about your commercial settlements that you guys are negotiating or have negotiated.

Speaker Change: Our open to compensating you for capital.

Speaker Change: Negotiated are they offsetting a majority of the write down or is there still quite a bit.

Speaker Change: But the fixed costs.

Speaker Change: Element of the commercial crane tends to be a lot more difficult and thats, where were probably falling more short to some extent.

Speaker Change: GAAP between the write down in Lake Charles legacy within the Oems.

Speaker Change: Therefore, the question David So when we kind of think about that.

Speaker Change: So we are yielding benefits from the commercial activity, but as we've said in the past, including on the effect and inflationary cost increases were not getting everything that were looking to get in.

Speaker Change: Moving to more of a microphone here.

Speaker Change: When we think about that.

Speaker Change: In terms of the commercial settlements, but I would say that for the most part the write down of the EV portion of the write down.

Speaker Change: In some respects, we're sharing in the pain, if you will.

Speaker Change: I'll put it this way I think we're being conservative I think we're recognizing what's happening in Evs and I think that probably probably a lot of people should be looking at things our way.

Speaker Change: More or less offset with lot of the commercial settlements of course that depends on the timing of the settlement and not all of the settlements R. R.

Speaker Change: Okay.

Speaker Change: And then just as a clarification question I don't think I heard it on the call but.

Speaker Change: Even if you will over the over the timeframe that we negotiate that.

Speaker Change: So I would say for the most part of the <unk> related piece of the write down yes.

Speaker Change: The SG&A cost savings of $50 million whats the potential cash charge to that and is that $50 million of savings and exit 25 run rate something that we could expect to flow through in 2006.

Speaker Change: And then maybe I'll just elaborate a little bit so I mean, the write down.

Speaker Change: Is it a reflection of the future cash flows expected for.

Speaker Change: Those assets, referring to EV related assets.

Speaker Change: Characterize that a little bit more for you so the $50 million.

Speaker Change: So when we did that exercise at the end of the day there was a shortfall and that shortfall included in the commercial settlements I think part of the.

Speaker Change: Total package that will take us Pat mentioned somewhere between 12, and 18 months to fully realize right. So that's the.

Speaker Change: The run rate number as far as the charges to realize that some of those are built in already as part of our European restructuring for the most part. So there are some some costs there that we pointed out in the.

Speaker Change: And Jason as Oems are.

Speaker Change: We are open to compensating you for capital.

Speaker Change: But the fixed costs.

Speaker Change: <unk> of the commercial claims tend to be a lot more difficult and that's where we're probably calling more short to some extent.

Speaker Change: So we are yielding benefits from the commercial activity, but as I've said in the past, including on the effect and inflationary cost increases were not getting everything that were looking to get.

Speaker Change: In the guidance slide.

Speaker Change: In terms of all restructuring not just SG&A.

Speaker Change: But the footprint restructuring and so forth.

Speaker Change: In some respects, we're sharing the pain if you will.

Speaker Change: About $55 million of what we think.

Speaker Change: The cost or the charge would be in terms of cash.

Speaker Change: And I'll put it this way I think we're being conservative, but I think we're recognizing what's happening in evs and I think that probably probably a lot of people should be looking at things.

Speaker Change: Okay, that's perfect I'll handle alright, thanks for answering all my questions.

Speaker Change: Very much.

Speaker Change: Okay.

Speaker Change: Thank you. The next question is from Michael Glen from Raymond James. Please go ahead.

Speaker Change: Okay.

Speaker Change: And then just as a clarification question I don't think I heard it on the call but.

Michael Glen: Hey, good evening. So I guess my first question is I'm looking at the actions you're taking.

Speaker Change: SG&A cost savings of $50 million whats the potential cash charge to that and is that $50 million of savings and exit 2590, something that we could expect to flow through in 2006.

Speaker Change: With Europe.

Speaker Change: As well in China so.

Speaker Change: Like should we think about you've completely exiting those markets at some point in the future.

Speaker Change: Victor is that a little bit more for you. So the $50 million is the total package that will take Pat mentioned somewhere between 12 and 18 months to fully realize right. So that's called.

I would just say not Europe Europe to us is very important.

Speaker Change: And as I said.

Speaker Change: The technical hub spud of innovation, our customers are there that we'd be global work for <unk>.

Speaker Change: The run rate number as.

Speaker Change: As far as the charges to realize that some of those are.

Speaker Change: This is one of the reasons we went there in the first place. So we don't have any intention to exit Europe at all.

Speaker Change: Our built in already as part of our call it European restructuring for the most part so there are some some costs there that we pointed out in the.

Speaker Change: But we don't see a lot of growth.

Speaker Change: In the short term so we're going to focus very heavily on that.

Speaker Change: In the guidance slide.

Speaker Change: <unk> operations continue to make them more profitable as we go forward, but no intention to close anything at this point.

Speaker Change: In terms of all restructuring not just SG&A.

Speaker Change: But footprint restructuring and so forth.

Speaker Change: As far as Asia goes.

Speaker Change: About $55 million of what we think.

Speaker Change: Especially China.

Speaker Change: The cost or the charge would be in terms of cash.

Status for Japan, and Korea, as well, we don't see growth opportunity as far as having plants there because as you know China is way over capacity as it is.

Speaker Change: Okay, that's perfect I'll hand off line, but thanks for answering all my questions.

Speaker Change: Very much.

Operator: Thank you. The next question is from Michael Glen from Raymond James. Please go ahead.

Speaker Change: And as a lot of.

Speaker Change: Korea and Japan so.

Speaker Change: Now there are still a lot of global platform, there's still a lot of opportunities.

Michael Glen: Hey, good evening. So I guess my first question is I'm looking at the actions you're taking.

Speaker Change: Partnering with.

Speaker Change: Asian partners.

Operator: With Europe.

Michael Glen: As well with China so.

Speaker Change: New growth opportunities for North America, or Europe, certainly is a strategy.

Speaker Change: Like should we think about you've completely exiting those markets at some point in the future.

Speaker Change: And thats been our strategy for four years or so.

Speaker Change: I would just say not Europe Europe to us is very important.

Speaker Change: Our original.

Speaker Change: Our relationship with China is to have manufacturing relationship with the Chinese stamper, while we did work in North America to service our clients.

Speaker Change: And as I said.

Speaker Change: It's a technical hub spud of innovation, our customers are there that we do global workforce.

Speaker Change: We went in with our fluids plant when our customers were looking at worldwide platforms, and we secured business for North America and Europe by also being in China. That's less true now given the fact that our north American customers are less busy in China and with respect to our aluminum operation.

Speaker Change: Which is one of the reasons. We went there in the first place. So we don't have any intention to exit Europe at all.

Speaker Change: But we don't see a lot of growth.

Speaker Change: In the short term so we're going to focus very heavily on that.

Speaker Change: <unk>, leading the operations out to continue to make them more profitable as we go forward.

Speaker Change: We were servicing customers in China for China.

Speaker Change: But no intention to close anything at this point.

Speaker Change: As far as Asia goes.

Speaker Change: We're working on partnership opportunities so in that context, we've always had a relationship and.

Especially China.

Speaker Change: Status for Japan, and Korea, as well, we don't see growth opportunity as far as having plants there because as you know China is way over capacity as it is.

Speaker Change: The product that we've made there we've made really good money on over the years, but the way. We're looking at is how does the future shape up what's the best way to do the future and from a risk reward perspective, we think it's better to partner JV worked together with <unk>.

Speaker Change: And as a lot of.

Speaker Change: Korea and Japan so.

Speaker Change: Now there are still a lot of global platform, there's still a lot of opportunities.

Speaker Change: Yes.

Speaker Change: So partnering with.

Speaker Change: Good folks in China.

Speaker Change: Asian partners.

Speaker Change: Okay and then.

Speaker Change: New growth opportunities for North America, or Europe, certainly is a strategy.

Speaker Change: The commentary you gave on the real estate assets.

Speaker Change: And thats been our strategy for 20 years, so the truth.

Speaker Change: Being worth.

Speaker Change: More than double what book value goes up.

Speaker Change: Our original.

Speaker Change: Our relationship with China is to have manufacturing relationship with the Chinese stamper, while we did work in North America to service our clients.

Speaker Change: Assets are.

Can you just try and give a little bit more information on the potential is there an opportunity for you to monetize those assets I'm just trying to understand what you could do with those real estate assets.

Speaker Change: We went in with our fluids plant when our customers were looking at worldwide platforms, and we secured business for North America and Europe are also big in in China, That's less true now given the fact that our north American customers are less busy in China and with respect to our aluminum operation.

Speaker Change: While we use them so.

Speaker Change: And there's a point was more when youre looking at balance sheet write downs.

Speaker Change: My thought on accounting is whenever you can write something down they ask you to do it whenever this opportunity to write something up you don't do it.

Speaker Change: We were servicing customers in China for China.

Speaker Change: We're working on partnership opportunities so in that context, we've always had a relationship.

Speaker Change: That tends to be the bias, but.

Speaker Change: We've got we've got a good real estate portfolio or if thats something thats valuable when you were talking about things like credit looking at lenders. We've got very good credit lines and the real estate, even though we have unsecured credit lines because of the strength of our balance sheet.

Speaker Change: The product that we've made there we've made really good money on over the years, but the way. We're looking at is how does the future shape up what's the best way to do the future and from a risk reward perspective, we think it's better to partner JV work together with <unk>.

Speaker Change: It's something that in essence utilized.

Speaker Change: In the context of your borrowing capacity and so forth. So we're not we're not talking about spinning it all off in a REIT or something like that but there is value there and that's something that we're just selling <unk>.

Speaker Change: Good folks in China.

Speaker Change: Okay and then.

Speaker Change: The commentary you gave on the real estate assets.

Speaker Change: Being worth.

Speaker Change: Or on the ground so to speak.

Speaker Change: More than double what book value of those assets are.

Speaker Change: The key point that volume is not on our balance sheet.

Speaker Change: Can you just try and give a little bit more information on the potential is there an opportunity for you to monetize those assets I'm just trying to understand what you could do with those real estate assets.

Speaker Change: And then one year.

Speaker Change: General Motors has made some commentary suggesting that.

Speaker Change: They could.

Speaker Change: Move some production to or they have some production capacity available that they could transfer into.

Speaker Change: While we use so.

Speaker Change: Two.

Speaker Change: And the point was more when youre looking at balance sheet write downs.

Speaker Change: Try to circumvent some of the tariffs in Mexico I believe.

Speaker Change: I thought on accounting is whenever you can write something down they ask you to do it whenever theres opportunity to write something up you don't do it.

Speaker Change: And you're indicating that you have some capacity available in the U S.

Speaker Change: I'm just trying to understand with some of the moves that your suppliers are talking about would you have capacity aligned to supply them in those markets. It will be much more complicated than that.

Speaker Change: That tends to be the bias, but.

Speaker Change: We've got we've got a good real estate portfolio and Thats something Thats valuable when you were talking about things like credit looking at lenders. We've got very good credit lines and the real estate, even though we have unsecured credit lines because of the strength of our balance sheet.

Speaker Change: So okay, let's make an assumption that.

Speaker Change: Using your example, G analysts to move work into one of their buildings, where they have opened capacity like.

Speaker Change: It's something that in essence utilized.

Speaker Change: In the context of your borrowing capacity and so forth. So we're not we're not talking about spinning it all off in a REIT or something like that but there is value there and that's something that we're just now others.

Speaker Change: Maybe like Kansas City, where they had been running the vehicles and have since.

Speaker Change: Yes.

Speaker Change: While it is not closed it but its idle until the new bolt.

Speaker Change: Or in the ground so to speak.

Speaker Change: It's there.

Speaker Change: That was the key point is valid which is not on our balance sheet.

Speaker Change: So.

Speaker Change: Obviously, we were supplying them there from one of our plants and that plant is an industrial plant and it was also a plant that supply.

Speaker Change: And then one year.

Speaker Change: General Motors has made some commentary suggesting that.

Speaker Change: For the automotive side, while obviously that capacity is now available so that would be one example in plants that are highly EV.

Speaker Change: They could.

Speaker Change: Move some production to or they have some production capacity available that they could transfer into.

Speaker Change: Capacity wise there is open space are opened and potential for using some of that equipment on other products because the sales are so low.

Speaker Change: Two.

Speaker Change: Try to circumvent some of the tariffs.

Speaker Change: Mexico I believe when do you and you're indicating that you have some capacity available in the U S.

Speaker Change: So from where we fit that would be the open capacity that we have space and possibly some equipment based on frankly lower sales of changes what the Oems have done.

Speaker Change: I'm just trying to understand what some of the moves that your suppliers are talking about would you have capacity aligned to supply them in those markets. It will be much more complicated than that.

Speaker Change: But our supply base.

Speaker Change: Tier two tier three.

Speaker Change: We are very stretched so my concern would be trying to move those supply chains.

Speaker Change: So okay, well, let's make an assumption that.

Speaker Change: Because of tariffs I would focus more on what we might do if our customers do it but.

Speaker Change: Using your example, GE analysts to move work into one of their buildings, where they have open capacity like.

Speaker Change: As you know we've said this many times were kind of driven from where the assembly plants are so if we see a shift obviously, we can adjust to it.

Speaker Change: Maybe like Kansas City, where they had been running the.

Speaker Change: The vehicles and have since.

Speaker Change: While it is not closed it but its idle until the new bolt carbides there.

Speaker Change: Now if that answers your question.

Speaker Change: Let me put a little bit of flesh on the commentary just in terms of.

Speaker Change: So.

Speaker Change: Obviously, we were supplying them there from one of our plants and that plant is an industrial plant and it was also a plant that supply.

Speaker Change: Production in location and that type of stuff in North America, which is the north American footprint and developed over decades, it's hard it's hard to move.

Speaker Change: For the automotive side, while obviously that capacity is now available so that would be one example in plants that are highly EV.

Speaker Change: In Canada, we made one 5 million vehicles, we buy $185 million or so.

Speaker Change: <unk>. There is open space are opened and potential for using some of that equipment on other products because of the sales that are so low.

Speaker Change: Mexico makes about three to $3 5 million in the United States.

Speaker Change: Mix makes the rest.

From a which is 11 to 12 million capacity.

Speaker Change: So from where we said that would be the open capacity that we have space and possibly some equipment based on frankly lower sales of changes what the Oems have done.

Speaker Change: With the nature of our product, which tends to be large we tend to locate fairly closely to where our customers set up their plants and that's actually one of the strength, we have as a company and you say.

Speaker Change: But our supply base.

Speaker Change: Tier two tier three.

Speaker Change: Worthy of need has to be because we're probably fairly close by especially on metallics in fluids. Our aluminum group has is in Mexico, and so those decisions are made or.

Speaker Change: There are very stretched so my concern would be trying to move those supply chains.

Speaker Change: Because of tariffs I would focus more on what we might do if our customers do it but.

Speaker Change: Long periods of time, and very very hard to move I think that and I've seen some discussion about where production goes and so forth, it's very difficult to do and the reason that you've seen.

As you know we've said this many times and we're kind of driven from where the assembly plants are so if we see a shift obviously, we can adjust to it.

Speaker Change: Now if that answers your question.

Speaker Change: Growth in for example to sell in the United States and Mexico as the Oems are making determinations on the two things that I'll refer holders like that which is all in costs and risks and one of the biggest risks in United States in many places getting people to work in the plants and the supply base around where they are where they are producing.

Speaker Change: Let me put a little bit of flesh on that.

Speaker Change: The commentary just in terms of.

Production in location and that type of stuff in North America, which is the north American footprint and developed over decades, it's hard it's hard to move.

Speaker Change: In Canada, we make one 5 million vehicles grew by 185 million or so.

Speaker Change: So I know this discussion that we're going to encourage certain things in certain places, but it's very difficult to do but one thing that I will say that I think is likely to happen over the tariff negotiations within the U S MCA and internationally.

Speaker Change: Mexico makes about three to $3 5 million in the United States.

Speaker Change: Mix makes the rest.

Speaker Change: From a which is 11 to 12 million capacity.

Speaker Change: We're likely to see tariffs on other countries like Europe and in Asia.

Speaker Change: With the nature of our product, which tends to be large we tend to locate fairly closely to where our customers set up their plants and that's actually one of the strengths that we have as a company we say.

Speaker Change: Which is going to make it more likely that the.

Speaker Change: Oems set up more production capacity in North America than we did before.

Speaker Change: Worthy of need has to be because they're probably fairly close by especially on metallics in fluids. Our aluminum group has is in Mexico, and so those decisions are made or.

Speaker Change: That's particularly true for example, some of the Japanese companies. It is speculate it and we'll see but.

Speaker Change: Long periods of time, and very very hard to move I think that and I've seen some discussion about where production goes and so forth.

Speaker Change: To a certain extent one of the issues in terms of capacity utilization. The space is there is four to 5 million vehicles imported into North America from non North American jurisdictions, and so if you want to increase production in North America, one way that would benefit all jurisdictions is effectively dealing batteries.

Speaker Change: Very difficult to do and they are the reason that you've seen.

Speaker Change: And for example to sell in the United States and Mexico is the Oems are making determinations on the two things that all the shareholders look at which is all in costs and risks and one of the biggest risks in United States in many places getting people to work in the plants and the supply base around where they are where they are producing.

Speaker Change: And I think its alot com.

Speaker Change: I agree with that and moving a plant from <unk>.

Speaker Change: Mexico to the U S. Our candidates in the U S.

Speaker Change: It takes a long time and be very disruptive is not we're not going to happen overnight.

Speaker Change: So I know this discussion that we're going to incur certain things in certain places, but it's very difficult to do but one thing that I.

Speaker Change: Vehicles.

Speaker Change: Some exception with trucks aren't duplicate tool.

Speaker Change: We will say that I think is likely to happen over the tariff negotiations within the U S MCA and internationally.

Speaker Change: So it's a it's a huge physical undertaken in.

Speaker Change: As you may recall that until the WTO ruled against Canada back eventually 90 days that the Canadian message to the Oems or CSL here, you've built here and.

Speaker Change: We're likely to see tariffs on other countries like Europe and in Asia.

Speaker Change: Which is going to make it more likely that those Oems set up more production capacity in North America than they did before.

Speaker Change: <unk> didn't like it but doesn't seem like a lot of countries that following the WTO. These days, but there are there are incentives to produce here for example, in our disincentives to not producing here.

Speaker Change: That's particularly true for example in some of the Japanese companies. It is speculate it and we will see but.

Speaker Change: And it's also a part of the tools and the actual box different jurisdictions have.

Speaker Change: To a certain extent one of the issues in terms of capacity utilization. The states as there is four to 5 million vehicles imported into North America from non North American jurisdictions, and so if you want to increase production in North America, one way that would benefit all jurisdictions is effectively dealing batteries.

Speaker Change: And at the Analyst day, and talk about tariffs in the U S. MCA the three countries negotiating here and they all have they all.

Speaker Change: Have arrows in our quiver.

Speaker Change: Yes, thanks for the information.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from Donovan from CIBC. Please state your last name and proceed with your question.

Speaker Change: And I think its alot com.

Speaker Change: I agree with that and moving a plant from.

Speaker Change: Mexico to the U S. Our candidates in the U S.

Donovan: Hi, <unk> hi, good evening can.

Speaker Change: It takes a long time and be very disruptive is not going to happen overnight.

Donovan: Can you give a bit more detail on your enterprise wide project to reduce annual SG&A expenses, what specifically are you trying to do to achieve this reduction.

Speaker Change: Most vehicles.

Speaker Change: Some exception with trucks aren't duplicate tool.

Donovan: Yes.

Speaker Change: So it's a it's a huge physical undertaking.

Speaker Change: Thank you. Thank you Don and then so as far as the SG&A project is concerned what we're taking a look at is bringing our MLS activities that we've been successful with on the shop floor really taking them into the administrative areas.

Speaker Change: May recall that until the WTO ruled against Canada back imminently.

Speaker Change: That the Canadian message to the Oems once you sell here you've built here.

Speaker Change: Utilizing the same let's say expert MLS resources.

Speaker Change: W took teo didn't like it but doesn't seem like a lot of countries that following the WTO These days, but.

Speaker Change: Using the lean principles in our administrative functions, so kind of the back office elements.

Speaker Change: There are there are incentives to produce here for example in our disincentives to not producing here.

Speaker Change: Starting with obviously groups of professionals in finance supply chain that are in the different regions of the world that could be.

Speaker Change: And those are part of the tools and looks a little box that different jurisdictions have.

Speaker Change: <unk> overlaps between let's say our regions are really looking at the regionalized and certain things that are at plant level regionalized regionalized in them or let's say between the redundant functions between the plants and corporate functions. If you will as you know Martin area as a highly decentralized.

Speaker Change: And at the end of the day and talk about tariffs in the U S. MCA. The three countries negotiating here and they all have they all have the arrows in our quiver.

Speaker Change: Okay. Thanks for the information.

Speaker Change: I do.

Speaker Change: Thank you. Our next question from Donovan from CIBC. Please state your last name and proceed with your question.

Speaker Change: Organization, so looking to.

Speaker Change: Leap some benefits there in terms of the rationalization, if you will of some of those processes.

Marcia: Marcia again, hi, good evening can.

Speaker Change: Can you give a bit more detail on your enterprise wide project to reduce your annual SG&A expenses, what specifically are you planning to do to achieve this reduction.

Speaker Change: Thank you and can you comment on your capital allocation priorities in 2025, we will share buybacks continue to be as much of a priority this year as last year.

Speaker Change: Yes. So thank you. Thank you Don and then so as far as the SG&A project is concerned what we're taking a look at is bringing our MLS activities that we've been successful with on the shop floor really taking them into the administrative areas. So.

Speaker Change: Al.

Speaker Change: I think I think we're probably not going to do too much buying back shares in April.

Speaker Change: I do think that R. R.

Speaker Change: Utilizing the same let's say expert MLS resources.

Speaker Change: Capital allocation strategy remains as it is first we invest in the business.

Speaker Change: Using those lean principles in our administrative functions, so kind of the back office elements.

Speaker Change: Two for US again this year that includes some technology.

Speaker Change: Starting with obviously groups of professionals in finance supply chain that are in the different regions of the world that could be reducing overlaps between let's say our regions are really looking at a regionalized and certain things that are at plant level regionalized regionalized in them.

Speaker Change: We also allocate.

Speaker Change: Money to debt reduction, which I think is important to have a strong balance sheet.

Speaker Change: And I think over the last couple of years, we've probably for about every dollar that we bought back in shares.

Speaker Change: That one five to $2 in terms of debt reduction.

Speaker Change: Or let's say between the redundant function between the plant and corporate functions. If you will as you know Martin.

Speaker Change: As a pattern that we kind of light, but I do think that next quarter, we're going to hold off on on buybacks and see where we go.

Speaker Change: We decentralized organization, so looking too.

Speaker Change: There's going to be a lot of noise.

Speaker Change: You all know that because youre right it probably on a daily basis for the next little while I actually think what were looking to see here is an accelerated renegotiation of the U S. MCA.

Speaker Change: Leap some benefits there in terms of the rationalization, if you will of some of those processes.

Speaker Change: Okay.

Speaker Change: Thank you and can you comment on your capital allocation priorities in 2025, we will share buybacks continue to be as much of a priority this year as last year.

Speaker Change: Which was supposed to be reviewed in 2026, we've been advocating in a number of people in our industry have been advocating.

Speaker Change: I'll make a comment I think I think we're probably not going to do too much buying back shares in April.

Speaker Change: Get it done.

Speaker Change: And understand that the U S has some concerns on rules of origin. They wanted it to be higher or more strictly interpreted we agree with that.

Speaker Change: I do think that R. R.

Speaker Change: Capital allocation strategy remains as it is first we invest in the business and we're going to invest again. This year that includes some technology.

Speaker Change: Or some other aspects of <unk> did not really Chicago business, let's deal with that unless just also deal with the fact that there is concerns about automotive overall and by the way and the one underlying thing that I think people got to realize is in the context of the auto.

Speaker Change: We we all.

Speaker Change: Also allocate.

Speaker Change: Money to debt reduction, which I think is important to have a strong balance sheet and I think over the last couple of years.

Speaker Change: The real.

Speaker Change: For about every dollar that we bought back in shares.

Speaker Change: Threats to the U S auto industry, it's not Canada and Mexico.

Speaker Change: The one five to $2 in terms of debt reduction.

Speaker Change: And part of the.

Pattern that we kind of like but I do think that.

Speaker Change: Vibrancy.

Speaker Change: Next quarter, we're going to hold off on on buybacks and see where we go there.

The North American auto market requires all three jurisdictions working together, including.

Speaker Change: There is going to be a lot of noise.

Speaker Change: You all know that because you're right.

Speaker Change: Included in fact that Mexico has talented people is to have some cost advantages and labor intensive.

Speaker Change: On a daily basis for the next little while I actually think what were looking to see here is an accelerated renegotiation of the U S. MCA.

Speaker Change: Industry, but it's a very good place to do stuff, Mexico and in effect replace a lot of the Chinese products that the industry has taken from China over time in Canada has got a very good and robust auto and auto parts industry also and together we've made really good competitive vehicles that should be the focus and I think.

Speaker Change: Which was supposed to be reviewed in 2026, we've been advocating in a number of people in our industry have been advocating let's just get it done.

Speaker Change: Understand that the U S has some concerns on rules of origin. They wanted it to be higher or more strictly interpreted we agree with that.

Speaker Change: That's where we're going to end up.

Speaker Change: Thank you that's all for me.

Speaker Change: Thank you. Please press star one at this time if you have a question next question is from Brian Morrison from TD. Please go ahead.

Speaker Change: With some other aspects. So you associate that do not relate to the auto business, let's deal with that and less just also deal with the fact that there is concerns about automotive overall and by the way and no one underlying thing, but I think people got to realize is in the context of the auto.

Brian Morrison: So rod and Youre always going to be giving opinions here and I want you to follow on what you are talking about protecting the Chinese from coming into North America.

Brian Morrison: Cash unsustainable can disrupt the industry too capital intensive to move.

Speaker Change: The real.

Speaker Change: Threats to the U S auto industry, it's not Canada and Mexico.

Brian Morrison: Yes.

Brian Morrison: And they take a long timeframe to do so so I asked this question last night on your peers, what's it take to get to the end being like is it moving some of the U S pickup trucks Assembly from Mexico to the U S is it future manufacturing commitments to the U S. What do you think the end game is to get this issue behind us.

Speaker Change: China and part of the.

Speaker Change: Vibrancy.

Speaker Change: The North American auto market requires all three jurisdictions working together and serving.

Speaker Change: Including the fact that Mexico has talented people is to have some cost advantage and labor intensive.

Well.

Speaker Change: Industry, but it's a very good place to do so Mexico and in effect replace a lot of the Chinese products that the industry has taken from China over time in Canada has got a very good and robust auto and auto parts industry also and together we've made really good competitive vehicles that should be the focus.

Brian Morrison: Nate that there was a turtle.

Brian Morrison: Yes, I mean.

Brian Morrison: Fair question I mean, we're all having the discussions.

Brian Morrison: What I find in a lot of discussions in <unk>.

Brian Morrison: Canada, Washington, and in Mexico, as Theres violent agreement that we need fortress North America for this industry and other industries like this violent agreement if you talk to the.

Speaker Change: That's where we're going to end up.

Speaker Change: Thank you that's all for me.

Speaker Change: Thank you. Please press star one at this time, if you have a question.

Brian Morrison: Trade folks in Washington.

Speaker Change: Next question is from Brian Morrison from TD. Please go ahead.

Brian Morrison: They would be saying, we shouldnt be having tariffs in this industry is a tax on the people in the United States and.

Speaker Change: So rod and Youre always going to be giving opinions here and I want you to follow on what you were talking about protecting the Chinese from coming into North America.

Brian Morrison: One interesting argument, but a lot of people are saying and it makes a lot of sense just do math.

Speaker Change: Cash unsustainable as can disrupt the industry, it's too capital intensive to move.

Brian Morrison: At the Paris Cohen, the people is going to hurt our people in the U S variable 4000 of them.

Voted for.

Lower prices more jobs stronger economy, more job security and theyre going to get higher prices less jobs less job security weaker economy.

Speaker Change: And youre seeing a crescendo of that type of discussion happening in the U S. And then just wait it out waste for the mid terms, which are coming and there are a lot of people that are very concerned about higher fertilizer prices energy prices and everything else in that context.

Speaker Change: My my best scenario for where we get through over the next period of months with the New U S. MCA is one where you have free trade goods in.

Speaker Change: Auto between the three countries number one number two more strictly applied rules of origin, which the U S. Once don't forget there was <unk>.

Speaker Change: <unk>, we're at Canada and Mexico.

Speaker Change: <unk> argued for a looser interpretation and one that drives the US has basically said thats not thats not what we believe should happen and we're going to get it because we're going to get it when we renegotiate in 2026, so I would like that from earlier I think that what you have to do and what the U S wants to see is high.

Speaker Change: Here at least for not complying with the U S. MCA right now is two 5%, which means some people don't follow the local content rules income.

Speaker Change: Increased to 25% you have a different.

Speaker Change: We have a different issue and then what you've got to do is recognize that there are certain places that are making lots of vehicles and shipping them into North America and is sufficient for them because of the exchange rate and the fact that there is a high enough tariff on them and so you put all that together.

Speaker Change: And the Aragon as you want a stronger.

Speaker Change: North American industry, you want a stronger U S. Industry. This is how you get there if you have the tariffs and the stuff that we're talking about you will have a weaker U S. Industry, you will have the three Detroit, the Detroit three or wherever you want to call them based on their head offices, they will be weaker.

Speaker Change: <unk>.

Speaker Change: Higher cost structure, they will have to charge more for their vehicles, including pickup trucks, which are blocked by people in the Midwest that are reporting base of this president and his party and and I think that at the end of the day. It lives, which is going to we're not.

Speaker Change: The other thing is that the way the tariffs are being imposed as a negotiating aspect as opposed to.

Speaker Change: I'm not sure that anyone believes we're going to have tariffs on the auto industry for two years, it's just not going to happen. It doesn't work and so in that context I think their method of negotiation, we will have to see don't forget I'm actually surprised in the auto industry that we had tariffs earlier this week.

Speaker Change: And im.

Speaker Change: Im starting to think that we really have tariffs because they were in for so shorter time I think it was more of a similar signal than anything else and when it comes to April we'll see but it's.

Speaker Change: It's not in the interest of the states or as Oems that have tariffs and their supply chain.

Speaker Change: One of the few American.

Speaker Change: This is one of the few Americans in this room I can test of the United States can do this alone. It definitely has to have a combination of the three countries to recover.

Speaker Change: Or this industry will be in big trouble.

Speaker Change: Yes, I'm just trying to figure out what makes an administration thinks that they have a win so that we can get beyond the test.

Speaker Change: But I think I think you got it I think you've got to think about it like this.

Speaker Change: You've got an administration wants to get a lot done very fast.

Speaker Change: And when they go into the tool shed to see what tools. They are they are they can be used really quickly.

Speaker Change: One of the very few.

And I agree with Rob a 100% its not.

Speaker Change: I don't think we're going to see it in auto it makes no sense in that shuts everything down.

Speaker Change: Eagle had on them just venture an opinion tariffs under the U S MCA or illegal.

Speaker Change: We have a three party agreement tariffs are the purview of Congress about the president and at the end of the day the use of an emergency power to stay at Sentinel.

Speaker Change: To justify the tariffs, but at the end of the day almost on a daily basis Youre seeing in the U S. Supreme Court said that you do not have legal authority to do that and there's a history of statute. That's being used there are a number of lawsuits ready to go and closing on the tariffs on this issue, but ultimately.

Speaker Change: The U S. MCA was ratified by Congress to change there's got to be ratified by the Congress and I think youre going to see that more and more.

Speaker Change: What's happened in Washington, I was in Washington few weeks ago actually even made it to the White house.

Speaker Change: West Lang, where people do work around just like they're doing that in a TV show and.

Speaker Change: Yes, it seems to be a lot of walking around.

And just have a discussion and.

Speaker Change: There is a.

Speaker Change: There is there is almost shock at all which is get all locked down in a short period of time and that was the message from there and then the.

Speaker Change: The house and the Senate, which is basically we have a short kind of get a whole bunch of things Pavel I'll skip moving and by the way a number of those have been very successful according to people and trying to do it and some perhaps less so the other thing that's interesting is until the last week I would.

Speaker Change: Say that tariffs in Washington or at all.

Speaker Change: Barely making the top five certainly maybe making the top 10, but they were not product line. They are front of mind now and I think a lot of people are very thoughtful and saying what the heck is going on here This hurts Americas.

Speaker Change: Right.

Speaker Change: I appreciate that can I ask a couple quick questions as well so and this small on the financial side.

Speaker Change: Free cash flow of $150 million, maybe $5 $50 million cash restructuring charges 55 dividend.

Speaker Change: The dividend Nicosia about $30 million of free cash flow this year.

Speaker Change: I understand you want to keep the cash cushion I respect that but then you have this glass manual spot pardon me. It now makes up 17% incredibly 17% of your market cap.

Speaker Change: Yes, I know.

Speaker Change: You have a long term supply agreement.

Speaker Change: Yes.

Speaker Change: Best use of capital at this time, I mean, you could probably about 20% of your company and the proceeds from that I'm just curious as to what your thoughts are on that.

Speaker Change: I think a certain some of it relates to <unk>.

Speaker Change: This way and I think I've asked this on a number of occasions, there is a price at which.

Speaker Change: Which would sell but.

Speaker Change: We are big believers in graphene you see it in so at the end of the day and if you're following and I don't know if im sure Youre doing here really smart guys. So.

Speaker Change: In that context, the trigger point for nano is basically adoption in orders and.

Speaker Change: They say this but every time, we look at it people are getting closer to adopting.

Speaker Change: In in a bigger way and so in that context.

Speaker Change: We will look at all our capital allocation, we're not saying that we are a permanent holder of that.

Speaker Change: And so at some point, we would we would.

Speaker Change: Certainly consider lowering our interest in that.

Speaker Change: I mean.

Speaker Change: Meanwhile.

Speaker Change: Other thing I'll, just throw it out there I said it on different things.

Speaker Change: There is an open issue as to whether you can use graphene in aluminum.

Speaker Change: And if you do that the world changing Iraq and there are people studying it and some people say it isn't ever going to happen and some people say we can do it.

Speaker Change: We're kind of believers.

Speaker Change: Every now and then you look at something that can be a game changer, if that would be if that would be possible work for that that would be an absolute wonderful things, including for our company and that we have over $1 billion in revenues using aluminum.

Speaker Change: And it mixes more conductive, which is which is really really good. So a lot of people are spending time on that if that happens we're in a pretty good position to benefit from.

Speaker Change: Okay. Thank you Tom.

Thank you.

Speaker Change: Thank you there are no further questions registered at this time so Mr will before we turn the meeting back over to you for closing remarks.

Speaker Change: Okay, well. Thank you very much for spending part of your evening with us.

Speaker Change: We know you're all busy.

Speaker Change: You're talking about tariffs that are in our industry.

Speaker Change: A lot of really good analysis from you on what's happening we can.

Speaker Change: Do you have any questions on our company or if you have any questions all what's going on in the industry and what's coming up coming April two or so forth feel free to call us or R.

Are you have our names.

Speaker Change: Information to contact us.

Speaker Change: So have a great day.

Speaker Change: Thank you. Your conference has now ended please disconnect your lines at this time and we thank you for your participation.