Q2 2025 Exco Technologies Ltd Earnings Call
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Speaker Change: Please be advised that today's conference is being recorded I would now like to turn the conference over to Darin Kirk Chief Executive Officer. Please go ahead.
Speaker Change: Thank you Lisa and good morning to all participants welcome to ESCO technologies fiscal 2025 second quarter conference call I'll begin with an overview of operations followed by our CFO Matthew Boss know, who will review the financial details for the quarter.
Speaker Change: Afterwards, I'll address our outlook before we open the call for questions.
Speaker Change: Before we begin I'd like to remind everyone of the cautionary notes included in yesterday's news release and on page two of the presentation, we posted to our website.
Speaker Change: These notes are applicable to today's discussion.
Speaker Change: Firstly I'm very pleased with our performance this quarter, which featured record consolidated revenues record revenues for our cast and extrusion segment and consolidated EBITDA, excluding restructuring charges among the highest in <unk> history.
Speaker Change: We achieved these results despite challenging market conditions, including sharply reduced automotive production volumes in both North America, and Europe as well as ongoing tariff uncertainties.
Speaker Change: Throughout the quarter, we continued investing in our future by enhancing operational efficiency driving innovation and leveraging our recent strategic investments to capitalize on favorable market opportunities.
Operator: At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one again.
The presentation, we posted to our website. These notes are applicable to today's discussion.
Speaker Change: And our automotive solutions segment, the modest sales declined significantly outperformed broader reduction in vehicle production volumes. This resilience was helped by exceptionally strong U S. Saar figures as consumers accelerated purchases ahead of impending U S. U S tariffs.
Firstly I'm very pleased with our performance this quarter, which featured record consolidated revenues record revenues for our cast and extrusion segment and consolidated EBITDA, excluding restructuring charges among the highest in <unk> history.
Operator: Please be advised that today's conference is being recorded.
Lisa: I would now like to turn the conference over to Darren Kirk, Chief Executive Officer. Please go ahead. Thank you, Lisa, and good morning to all participants.
We achieved these results despite challenging market conditions, including sharply reduced automotive production volumes in both North America, and Europe as well as ongoing tariff uncertainties.
Speaker Change: New program launches favourable exchange rate movements, and the restocking of accessories inventories that had reduced in prior quarter also helped.
Darren Kirk: Welcome to Exco Technologies Fiscal 2025 second quarter conference call.
Darren Kirk: I'll begin with an overview of operations, followed by our CFO, Matthew Posno, who will review the financial details for the quarter. Afterwards, I'll address our outlook before we open the call for questions.
Throughout the quarter, we continued investing in our future by enhancing operational efficiency driving innovation and leveraging recent strategic investments to capitalize on favorable market opportunities.
Speaker Change: Helped our results.
Speaker Change: These factors coupled with a favorable product mix helped maintain segment EBITDA margins around 12% despite increased pressure in Europe, and restructuring charges, which largely reflect proactive head count reductions as we further streamline operations and emphasized automation.
Darren Kirk: Before we begin, I'd like to remind everyone of the cautionary notes included in yesterday's news release and on page 2 of the presentation we posted to our website. These notes are applicable to today's discussion. Firstly, I'm very pleased with our performance this quarter, which featured record consolidated revenues, record revenues for our cast and extrusion segment, and consolidated EBITDA excluding restructuring charges among the highest in Exco's history. We achieved these results despite challenging market conditions, including sharply reduced automotive production volumes in both North America and Europe, as well as ongoing tariff uncertainty. Throughout the quarter, we continued investing in our future by enhancing operational efficiency, driving innovation, and leveraging recent strategic investments to capitalize on favorable market opportunities.
And our automotive solutions segment, the modest sales declined significantly outperformed broader reduction in vehicle production volumes. This resilience was helped by exceptionally strong U S. Saar figures as consumers accelerated purchases ahead of impending U S. U S tariffs.
Speaker Change: And our casting and extrusion segment, we saw strong sales for new high pressure die cast molds rebuilds and adequate we printed inserts, although order intake for these products was softer.
New program launches favourable exchange rate movements, and the restocking of accessories inventories that had reduced in prior quarter also helped.
Speaker Change: Demand for consumable dicast components, and extrusion related products rebounded from the previous quarter two levels broadly consistent with the prior year.
Helped our results.
Speaker Change: Capital equipment sales also remained relatively stable as our customers continue to focus on productivity and efficiency improvements a core strength of our cash flow operations.
These factors coupled with a favorable product mix helped maintain segment EBITDA margins around 12% despite increased pressure in Europe, and restructuring charges, which largely reflect proactive head count reductions as we further streamline operations and emphasized automation.
Speaker Change: Margins in the casting extrusion segment were lower year over year. Despite significant improvements at recent greenfield facilities, primarily due to restructuring charges. These charges negatively impacted results this quarter, but have positioned us for immediate cost structure improvements moving forward.
And our casting and extrusion segment, we saw strong sales for new high pressure die cast molds rebuilds and adequately printed inserts, although order intake for these products was softer.
Darren Kirk: In our Automotive Solutions segment, the modest sales decline significantly outperformed broader reduction in vehicle production volume. This resilience was helped by exceptionally strong U.S. SAR figures as consumers accelerated purchases ahead of impending U.S. tariffs. New program launches, favorable exchange rate movements, and the restocking of accessory inventories that had reduced in prior quarter also help the results. These factors, coupled with a favorable product mix, help maintain segment EBITDA margins around 12% despite increased pressure in Europe and restructuring charges, which largely reflect proactive headcount reductions as we further streamline operations and emphasize automation. In our casting and extrusion segment, we saw strong sales for new high-pressure die-cast molds, rebuilds, and additively printed inserts, although order intake for these products was soft.
Speaker Change: Sure.
Speaker Change: Additionally, we experienced higher cost and operational disruptions related to the outsourcing during the installation of new heat treatment equipment at our largest extrusion die facility located in Michigan.
Demand for consumable die cast components and extrusion related products rebounded from the previous quarter two levels broadly consistent with the prior year.
Capital equipment sales also remained relatively stable as our customers continue to focus on productivity and efficiency improvements a core strength of our cash fuel operations.
Speaker Change: We remain committed to achieving greater scale and efficiency from our recent capital investments and saw encouraging progress this quarter, notably cast tools facility in Mexico continues to ramp up effectively our heat treatment operations performed exceptionally well and our helix operations in Europe delivered profitability and.
Margins in the casting the extrusion segment were lower year over year. Despite significant improvements at recent greenfield facilities, primarily due to restructuring charges. These charges negatively impacted results this quarter, but have positioned us for immediate cost structure improvements moving forward.
Speaker Change: <unk> that outpaced local market conditions.
Speaker Change: Matthew will now provide an overview of the financials.
Matthew Boss: Thank you Darren.
Speaker Change: Ladies and gentlemen, consolidated sales for the second quarter ended March 31, 2025, or $166 1 million compared to $163 8 million in the same quarter last year.
Sure.
Additionally, we experienced higher costs and operational disruptions related to the outsourcing during the installation of new heat treatment equipment at our largest extrusion die facility located in Michigan.
Speaker Change: An increase of $2 $3 million or 1% the impact of foreign exchange rate changes increased consolidated sales were $8 8 million in the quarter.
Darren Kirk: Demand for consumable die-cast components and extrusion-related products rebounded from the previous quarter to levels broadly consistent with the prior year. Capital Equipment Sales also remained relatively stable as our customers continue to focus on productivity and efficiency improvements, a core strength of our Catskills operation. Margin in the casting extrusion segment were lower year over year, despite significant improvements at recent greenfield facilities, primarily due to restructuring charges. These charges negatively impacted results this quarter, but have positioned us for immediate cost structure improvements moving forward. Additionally, we experience higher cost and operational disruptions related to the outsourcing during the installation of new heat treatment equipment at our largest extrusion diet facility located in Michigan.
We remain committed to achieving greater scale and efficiency from our recent capital investments and saw encouraging progress this quarter, notably capitals facility in Mexico continued to ramp up effectively our heat treatment operations performed exceptionally well and our helix operations in Europe delivered profitability and.
Speaker Change: <unk> net income in the second quarter was $6 4 million or basic.
Speaker Change: And diluted earnings of <unk> 17 per share compared to $8 1 million or 21 per share the same quarter last year, a decrease of net income of $1 7 million or 21% net.
<unk> that outpaced local market conditions.
Speaker Change: Net income this quarter included $2 million or 5% on an EPS basis of after tax restructuring charges.
Matthew will now provide an overview of the financials.
Matthew: Thank you Darrin and good morning, ladies and gentlemen, consolidated sales for the second quarter ended March 31, 2025, or $166 1 million compared to $163 8 million for the same quarter last year.
Speaker Change: Third to less of around 1% EPS in the prior year. The consolidated effective income tax rate was 33, 7% in the quarter compared to $22 eight in the prior year quarter. The change in income tax rate in the quarter was impacted by geographic distribution foreign tax rate differentials and losses that cannot be effected for tax planning purposes.
Matthew: An increase of $2 3 million or 1% the impact of foreign exchange rate changes increased consolidated sales were $8 8 million in the quarter.
Matthew: <unk> net income in the second quarter was $6 4 million or basic and.
Speaker Change: The automotive solutions segment reported sales of $82 9 million in the second quarter, a decrease of $2 9 million or 3% from the prior year quarter.
Darren Kirk: We remain committed to achieving greater scale and efficiency from our recent capital investments and saw encouraging progress this quarter.
Matthew: Diluted earnings of <unk> 17 per share compared to $8 1 million or 21 per share the same quarter last year, a decrease of net income of $1 7 million or 21% net.
Speaker Change: Foreign exchange rate changes increased segment sales in the quarter $4 8 million.
Darren Kirk: Notably, Castle's facility in Mexico continued to ramp up effectively, our heat treatment operations performed exceptionally well, and our HALEX operations in Europe delivered profitability improvements that outpaced local market conditions.
Speaker Change: Second quarter sales were modestly below the prior year level, but increased 15% sequentially results in the quarter were favorably impacted by strong seasonally adjusted annual rates.
Matthew: Net income this quarter included $2 million or 5% on an EPS basis of after tax restructuring charges.
Matthew: Third to less than around 1% EPS in the prior year. The consolidated effective income tax rate was 33, 7% in the quarter compared to 22 eight in the prior year quarter.
Speaker Change: In North America, reaching $17 7 million units in March as well as Limitary restocking of accessory products driven by the strong Saar performance.
Matthew Posno: Matthew will now provide an overview of the financial.
Matthew Posno: Thank you, Darren. Good morning, ladies and gentlemen. Consolidated sales for the second quarter ended March 31, 2025 were $166.1 million compared to $163.8 million in the same quarter last year. an increase of $2.3 million or 1%. The impact of foreign exchange rate changes increased consolidated sales $8.8 million in the quarter. Consolidated net income in the second quarter was $6.4 million, or basic. and diluted earnings of $0.17 per share compared to $8.1 million or $0.21 per share the same quarter last year, a decrease of net income of $1.7 million or 21%. Net income this quarter included $2 million or 5% on an EPS basis of after-tax restructuring charges compared to less than or around 1% EPS the prior year.
Matthew: Change in income tax rate in the quarter was impacted by geographic distribution foreign tax rate differentials and lawsuit that cannot be effected for tax planning purposes.
However, despite the favorable performance of the global automotive risks market continues to be negatively affected by global tariff uncertainty recessionary risks environmental regulatory changes that may affect future production and reduced consumer confidence. Nonetheless supportive factors include the potential for lower interest rates continued resilience in vehicle sales.
Matthew: The automotive solutions segment reported sales of $82 9 million in the second quarter, a decrease of $2 9 million or 3% from the prior year quarter.
Matthew: Foreign exchange rate changes increased segment sales in the quarter $4 8 million second quarter sales were modestly below the prior year level, but increased 15% sequentially results in the quarter were favorably impacted by strong seasonally adjusted annual rates.
Speaker Change: An aging vehicle fleet and higher OEM incentives.
Speaker Change: I don't want a solution segment reported pre tax profit of $7 8 million in the second quarter, a decrease of $5 million.
Speaker Change: In the prior year quarter.
Speaker Change: Second quarter segment pre tax profit increased sequentially, 65% over the first quarter variances in the period profitability were due to lower sales volume and product mix shifts and rising labor costs in all jurisdictions labor cost in Mexico have been particularly challenging in recent years.
Matthew: In North America, reaching $17 7 million units in March as well as inventory restocking of accessory products driven by the strong <unk> performance.
Matthew: However, despite the favorable performance of the global automotive risks market continues to be negatively affected by global tariff uncertainty recessionary risks environmental regulatory changes that may affect future production and reduced consumer confidence. Nonetheless supportive factors include the potential for lower interest rates continued resilience in vehicle sales.
Matthew Posno: The consolidated effective income tax rate was 33.7% in the quarter compared to 22.8% in the prior year quarter. The change in income tax rate in the quarter was impacted by geographic distribution, foreign tax rate differentials and losses that cannot be affected for tax purposes. The automotive solutions segment reported sales of $82.9 million in the second quarter, a decrease of $2.9 million, or 3% from the prior year quarter. foreign exchange rate changes increased segment sales in the quarter 4.8 million dollars. Second quarter sales were modestly below the prior year level but increased 15 percent sequentially. Results in the quarter were favorably impacted by strong seasonally adjusted annual rates in North America reaching 17.7 million units in March as well as limitary restocking of accessory products driven by the strong SAR performance.
Speaker Change: And are seeing added pressure in fiscal 2025, given the significant rise in wage levels.
Speaker Change: In reaction to these challenges the company incurred incremental restructuring cost of $5 million in the quarter. These restructuring actions will help the segment deal with current production levels more efficiently and provide a strong base for future profitability when the market improves.
Matthew: An aging vehicle fleet and higher OEM incentives.
Matthew: The automotive solutions segment reported pre tax profit of $7 8 million in the second quarter, a decrease of half a million dollars.
Speaker Change: The casting and extrusion segment reported sales of $83 2 million in the second quarter, an increase of $5 2 million or 7% from the same period last year Foreign exchange range rate movements increased segment sales by $4 million in the quarter demand for our cash unit extrusion products recovered in the second quarter, our sales increased 17% from.
Matthew: In the prior year quarter.
Matthew: Second quarter segment pre tax profit increased sequentially, 65% over the first quarter variances in the period profitability were due to lower sales volume and product mix shifts and rising labor costs in all jurisdictions labor cost in Mexico have been particularly challenging in recent years.
Speaker Change: Conditions in the first quarter primarily.
Matthew: And are seeing added pressure in fiscal 2025, given the significant rise in wage levels and.
Speaker Change: Due primarily to December holiday shutdowns at our customers.
Matthew Posno: However, despite the favorable performance, the global automotive risks market continues to be negatively affected by global tariff uncertainty, recessionary risks, environmental regulatory changes that may affect future production, and reduced consumer confidence. Nonetheless, supportive factors include the potential for lower interest rates, continued resilience in vehicle sales, an aging vehicle fleet, and higher OEM incentives. The Ottawa Solution segment reported a pre-tax profit of $7.8 million in the second quarter, a decrease of half a million dollars in the prior quarter. Second quarter segment pre-tax profit increased sequentially 65% over the first quarter. Variances in the period of profitability were due to lower sales volume, product mix shifts and rising labor costs in all jurisdictions.
Speaker Change: Extrusion tooling sales were stable in the second quarter, reflecting the diverse end markets. This group ultimately supports which include building and construction activity automotive sustainable energy transportation recreational vehicles and electrical components.
Matthew: In reaction to these challenges the company incurred incremental restructuring cost of $5 million in the quarter. These restructuring actions will help the segment deal with current production levels more efficiently and provide a strong base for future profitability when the market improves.
Speaker Change: And the die cast market, which primarily serves the automotive industry order flow for new malls and associated consumable tooling has.
Matthew: The casting and extrusion segment reported sales of $83 2 million in the second quarter, an increase of $5 2 million or 7% from the same period last year Foreign exchange range rate movements increased segment sales by $4 million in the quarter demand for our cashing in extrusion products recovered in the second quarter, our sales increased 17% from.
Speaker Change: <unk> has declined as automotive manufacturers continue to put new product development and production Anhalt and part due to the political current political risks that being said sales for large malls were very strong in the quarter as a high number of dies for shipped while overall quoting activity remains decent sales of die cast products in the short term we will be impacted.
Matthew: Conditions in the first quarter primarily.
Matthew: Due primarily to December holiday shutdowns at our customers.
Speaker Change: As the automotive industry reacts to global tariffs economic uncertainty and lengthening vehicle refresh cycles.
Matthew: Extrusion tooling sales were stable in the second quarter, reflecting the diverse end markets. This group ultimately supports which include building and construction activity automotive sustainable energy transportation recreational vehicles and electrical components.
Matthew Posno: Labor Costume Exco have been particularly challenging in recent years. and are seeing added pressure in fiscal 2025 given the significant rise in wage levels. In reaction to these challenges, the company incurred incremental restructuring costs of half a million dollars in the quarter. These restructuring actions will help the segment deal with current production levels more efficiently and provide a strong base for future profitability when the market improves. The casting and extrusion segment reported sales of $83.2 million in the second quarter, an increase of 5.2 million, or 7%, from the same period last year. Fornix sheet rate movements increased segment sales by $4 million in the quarter.
Speaker Change: Demand for Exco is additive <unk> printed tooling continues a steady contribution as customers focus on greater efficiency with the size and complexity of die cast tooling continuing to increase with the rising adoption of Giga presses management is developing the benefits of its Castro greenfield locations in Morocco in Mexico, which provide the opportunity.
Matthew: And the die cast market, which primarily serves the automotive industry order flow for new malls and associated consumable tooling as.
Matthew: As declined as automotive manufacturers continue to put new product development and production on halt in part due to the political current political risks that being said sales for large malls were very strong in the quarter as a high number of dies for shipped while overall quoting activity remains decent sales of die cast products in the short term will be impacted.
Speaker Change: The gain market share in Europe, and Latin America through better proximity to local customers.
Speaker Change: The casting and extrusion segment reported $4 5 million of.
Speaker Change: Pre tax profit in the second quarter, a decrease of $1 million from the same quarter last year and an increase of $800000 from the first quarter fiscal 'twenty five pre tax profit reduction is primarily due to incremental restructuring costs of $1 6 million incurred during the second quarter, mainly related to head count reduction activity excluding the.
Matthew Posno: Demand for casting and extrusion products recovered in the second quarter, as sales increased 17% from weak conditions in the first quarter, primarily. due primarily to December holiday shutdowns at our customers. Extrusion tooling sales were stable in the second quarter, reflecting the diverse end markets this group ultimately supports, which include building and construction activity, automotive, sustainable energy, transportation, recreational vehicles, and electrical components. In the die cast market, which primarily serves the automotive industry, order flow for new molds and associated consumable tooling have declined as automotive manufacturers continue to put new product development and production on hold in part due to the current political risks.
Matthew: The automotive industry reacts to global tariffs economic uncertainty and lengthening vehicle refresh cycles.
Matthew: And for Exco is additives <unk> printed tooling continues a steady contribution as customers focus on greater efficiency with the size and complexity of die cast tooling continuing to increase with the rising adoption of Giga presses.
Speaker Change: Pact of restructuring charges segment pretax profits improved marginally.
Speaker Change: The underlying pretax profit improvement was due to program pricing improvements favorable product mix and efficiency initiatives across the segment, including the ongoing use of lean manufacturing and automation to improve productivity through standardization and waste elimination.
Matthew: Management is developing the benefits of its cash flow greenfield locations in Morocco in Mexico, which provide the opportunity to gain market share in Europe, and Latin America through better proximity to local customers.
Speaker Change: In addition volume to Castro's heat treat operation continue to increase providing savings and improved production quality, while efficiency initiatives at helix are progressing.
Matthew: The casting and extrusion segment reported $4 $5 million pre.
Matthew: Pre tax profit in the second quarter, a decrease of $1 million from the same quarter last year and an increase of $800000 from the first quarter fiscal 'twenty five pre tax profit reduction is primarily due to incremental restructuring costs of $1 6 million incurred during the second quarter, mainly related to head count reduction activity excluding the.
Matthew Posno: That being said, sales for large molds were very strong in the quarter as a high number of dies were shipped. While overall coating activity remains decent, sales of die-cast products in the short term will be impacted as the automotive industry reacts to global tariffs, economic uncertainty, and lengthening vehicle refresh cycles. Demand for Exco's additive 3D printed tooling continues a steady contribution as customers focus on greater efficiency with the size and complexity of die-cast tooling continuing to increase with the rising adoption of gigapresses. Management is developing the benefits of its cast tool greenfield locations in Morocco and Mexico, which provide the opportunity to gain market share in Europe and Latin America through better proximity to local customers.
Speaker Change: These cost improvements were ongoing losses at customers Greenfield operations, albeit with good improvement demonstrates.
Speaker Change: We remain focused on standardizing manufacturing processes, enhancing engineering depth and centralizing critical support functions across our various plants. These initiatives have reduced lead times enhanced product quality expanded product breadth and increased capacity, which will contribute to profit improvements.
Matthew: Pact of restructuring charges segment pre tax profit improved marginally.
Matthew: The underlying pretax profit improvement was due to program pricing improvements favorable product mix and efficiency initiatives across the segment, including the ongoing use of lean manufacturing and automation to improve productivity through standardization and waste elimination.
Speaker Change: Exco generated cash from cash from operating activities was $8 7 million during the quarter and three $3 $1 million of free cash flow after $4 4 million in maintenance fixed asset expenditures. This free cash flow together with the Companys balance cash balances was used to fund fixed assets for growth initiatives of $4.
Matthew: In addition volumes of Castro's heat treat operation continued to increase providing savings and improved production quality, while efficiency initiatives at <unk> are progressing.
Matthew Posno: The casting and extrusion segment reported $4.5 million of pre-tax profit in the second quarter, a decrease of $1 million from the same quarter last year, and an increase of $800,000 from the first quarter, fiscal 25. Pre-tax profit reduction is primarily due to incremental restructuring costs of $1.6 million incurred during the second quarter, mainly related to headcount reduction activity. Excluding the impact of the restructuring charges, segment pre-tax profits improved The underlying pre-tax profit improvement was due to program pricing improvements, favorable product mix, and efficiency initiatives across the segment, including the ongoing use of lean manufacturing and automation to improve productivity through standardization and waste elimination.
Speaker Change: $1 million $4 million of dividends and $900 to repurchase shares on a normal course issuer bid exco.
Matthew: These cost improvements were ongoing losses at customers Greenfield operations, albeit with good improvement demonstrates.
Matthew: We remain focused on standardizing manufacturing processes, enhancing engineering depth and centralizing critical support functions across our various plants. These initiatives have reduced lead times enhanced product quality expanded product breadth and increased capacity, which will contribute to profit improvements.
Speaker Change: <unk> ended the quarter with $18 million in cash $100 million in bank in long term debt and $51 million availability and its credit facility.
Speaker Change: Excellent financial position remains strong as such the company's balance sheet and availability on the existing credit facility provides continued support for our strategic initiatives, our strong financial position combined with our free cash flow creates a foundation for management to pursue high value growth capital expenditures dividends and other opportunities that may arise that concludes <unk>.
Matthew: Exco generated cash cash from operating activities of $8 $7 million during the quarter and three $3 1 million of free cash flow after $4 4 million in maintenance and fixed asset expenditures. This free cash flow together with the Companys balance sheet cash balances was used to fund fixed assets for growth initiatives of $4.
Darren: My comments, we can now transition back to Darren to discuss the company's outlook.
Darren: Thanks, Matthew so turning to our outlook from a macro perspective industry analyst forecasts vehicle production declines of roughly 9% in North America at approximately 5% in Europe in calendar 2025, driven by the tariff impacts. Additionally.
Matthew Posno: In addition, volumes of Castile's heat treat operation continue to increase, providing savings and improved production quality, while efficiency initiatives at Halix are progressing. I'll stay in these cost improvements where ongoing losses at Custis Greenfield operations, albeit with good improvement, demonstrate. We remain focused on standardizing manufacturing processes, enhancing engineering depth, and centralizing critical support functions across our various plants. These initiatives have reduced lead times, enhanced product quality, expanded product breadth, and increased capacity, which will contribute to profit improvement. Exco generated cash from operating activities of $8.7 million during the quarter and $3.1 million of free cash flow after $4.4 million in maintenance fixed asset expenditures.
Matthew: $1 million.
Matthew: $4 million of dividends and $900 to repurchase shares under our normal course issuer bid exco.
Matthew: <unk> ended the quarter with $18 million in cash $100 million in bank in long term debt and $51 million availability and its credit facility.
Darren: U S. Saar is expected to decline to around 15 million units in 2025.
Matthew: Excellent financial position remains strong as such the company's balance sheet and availability on the existing credit facility provides continued support for our strategic initiatives, our strong financial position combined with our free cash flow creates a foundation for management to pursue high value of growth capital expenditures dividends and other opportunities that may arise that concludes <unk>.
Darren: Given the growing uncertainty surrounding global trade policy, particularly around tariffs, we withdrew our fiscal 2026 financial targets this quarter.
Darren: Though we made significant progress towards achieving these goals since their initial announcement in fiscal 2021, the unpredictability of tariff implementation and scope, particularly regarding the United States makes it impractical to reaffirm our previous financial objectives at this time.
Darren: My comments, we can now transition back to Darren to discuss the company's outlook.
Darren: Thanks, Matthew so turning to our outlook from a macro perspective industry analysts forecast vehicle production declines of roughly 9% in North America and approximately 5% in Europe in calendar 2025, driven by the tariff impacts. Additionally, U S. Saar is expected to decline to.
Matthew Posno: This free cash flow, together with the company's cash balances, was used to fund fixed assets for growth initiatives of $4.1 million, $4 million of dividends, and $900,000 to repurchase shares under normal course issuer pay. Exco entered the quarter with $18 million in cash, $100 million in bank and long-term debt, and $51 million availability in its credit facility. Exco's financial position remains strong. As such, the company's balance sheet and availability on the existing credit facility provides continued support for our strategic initiatives. Our strong financial position, combined with our free cashflow, creates a foundation for management to pursue high-value growth capital expenditures, dividends, and other opportunities that may arise.
Nonetheless, we believe the strategic initiatives underpinning these targets remained solid and achievable over the longer term, our greenfield investments new program launches organic market growth and consistent track record of market share gains should all contribute to meaningful growth and margin expansion as market conditions stabilize.
Darren: 115 million units in 2025.
Darren: Given the growing uncertainty surrounding global trade policy, particularly around tariffs, we withdrew our fiscal 2026 financial targets this quarter.
Darren: Importantly, we anticipate that product complying with United States, Mexico, Canada agreement U S. MCA rules of origin will remain tariff expense over the long term.
Darren: Although we made significant progress towards achieving these goals since their initial announcement in fiscal 2021, the unpredictability of tariff implementation and scope, particularly regarding the United States makes it impractical to reaffirm our previous financial objectives at this time.
Darren: Nearly all of <unk>, North American sold products meet U S. MCA compliance standards positioning us favorably amidst ongoing trade policy shifts.
Matthew Posno: That concludes my comments. We can now transition back to Darren to discuss the company's outlook.
Darren: Furthermore, our substantial manufacturing presence in the U S for extrusion dies, and large mol and ensure that we remain well positioned should tera.
Darren: Nonetheless, we believe the strategic initiatives underpinning these targets remained solid and achievable over the longer term, our greenfield investments new program launches organic market growth and consistent track record of market share gains should all contribute to meaningful growth and margin expansion as market conditions stabilize.
Darren Kirk: Thanks, Matthew.
Darren Kirk: So turning to our outlook, from a macro perspective, industry analysts forecast vehicle production declines of roughly 9% in North America and approximately 5% in Europe in calendar 2025, driven by the tariff impacts. Additionally, U.S. SAR is expected to decline to around 15 million units in 2025.
Darren: <unk> broadened beyond our current expectations.
Darren: And should tariff elevated tariffs persist, particularly against Noncompliant jurisdictions like China, <unk> stands to benefit competitively relative to global peers.
Importantly, we anticipate that product complying with United States, Mexico, Canada agreement U S. MCA rules of Oregon will remain tariff expense over the long term.
Darren Kirk: Given the growing uncertainty surrounding global trade policy, particularly around tariffs, we withdrew our fiscal 2026 financial targets this quarter. Although we made significant progress toward achieving these goals since their initial announcement in fiscal 2021, the unpredictability of tariff implementation and scope, particularly regarding the United States, makes it impractical to reaffirm our previous financial objectives at this time. Nonetheless, we believe that strategic initiatives underpinning these targets remain solid and achievable over the longer term. Our greenfield investments, new program launches, organic market growth, and consistent track record of market share gains should all contribute to meaningful growth and margin expansion as market conditions stabilize.
Darren: We are also encouraged by broader north American macro trends, particularly industrial re shoring initiatives.
Darren: Nearly all of <unk>, North American sold products meet U S. MCA compliance standards positioning us favorably amidst ongoing trade policy shifts.
Darren: These trends should bolster demand for both extrusion and high pressure die cast tooling core competency of exco.
Darren: The alignment of policy, driven reassuring efforts structural automotive industry shifts and exco strong market positioning give us confidence in our long term outlook despite near term challenges.
More are substantial manufacturing presence in the U S for extrusion dies and large mol and ensure that we remain well positioned should tera applications broadened beyond our current expectations.
Speaker Change: That concludes my prepared remarks, I'd like to sincerely. Thank all of my Exco colleagues for their hard work innovation and unwavering commitment to maintaining a safe work environment I'll now turn the call back to Lisa for Q&A.
Darren: And should tariff elevated tariffs persist, particularly against Noncompliant jurisdictions like China Exco stands to benefit competitively relative to global peers.
Darren: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone.
Darren: We are also encouraged by broader north American macro trends, particularly industrial re shoring initiatives. These trends should bolster demand for both extrusion and high pressure die cast tooling core competencies of exco the alignment of policy driven reassuring efforts structural automotive industry shifts and exco strong March.
Speaker Change: So I hate that automated message advising her hand. This range also please wait for your name and company to be announced before you proceed with your question one moment for the first question.
Darren Kirk: Importantly, we anticipate that products complying with United States-Mexico-Canada Agreement USMCA rules of origin will remain tariff exempt over the long term. Nearly all of Exco's North American sold products meet USMCA compliance standards, positioning us favorably amid ongoing trade policy shifts. Furthermore, our substantial manufacturing presence in the US for extrusion dyes and large mold ensure that we remain well positioned should tariff application broaden beyond our current expectations. And should tariff, elevated tariffs persist, particularly against non-compliant jurisdictions like China, Exco stands to benefit competitively relative to global peers. We are also encouraged by broader North American macro trends, particularly industrial reshoring initiatives.
Speaker Change: And our first question will come from the line of Dave Ocampo of.
Speaker Change: Calmark Securities Your line is open.
Darren: <unk> positioning give us confidence in our long term outlook, despite near term challenges that.
Speaker Change: Thanks, Operator, Darren Matt Good morning.
Speaker Change: Just first question here just completely understand the pulling of the 26 guidance just given the uncertainty, but I am curious when you do speak to your customers here.
That concludes my prepared remarks, I'd like to sincerely. Thank all my exco colleagues for their hard work innovation and unwavering commitment to maintaining a safe work environment I'll now turn the call back to Lisa for Q&A.
Speaker Change: Sure about their order schedules.
Speaker Change: How much visibility do you guys have into the next quarter or is it status quo right now until we get a change either for the good or the worse railroad relating to tariffs.
Darren: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone.
Speaker Change: Yes, good morning, David I'm going to say at this point, there's not a lot that has changed.
Speaker Change: So I hate that automated message advising your hand is range also please wait for your name and company to be announced before you proceed with your question one moment for the first question.
Speaker Change: From a visibility perspective.
Speaker Change: Things continue to be relatively normal for now.
Speaker Change: And our first question will come from the line of Dave Ocampo of Hallmark Securities. Your line is open.
Darren Kirk: These trends should bolster demand for both extrusion and high-pressure die-cast tooling, core competencies of Exco.
Speaker Change: Do expect though that.
Speaker Change: The longer that the tariffs stay in place that the more likely things to shift its just that we haven't seen it to a material degree yet now I will say that on the large mold side of the business. We have seen a slowdown on order intake that will that will impact the next couple of quarters.
Speaker Change: Thanks, Operator, Darren Matt Good morning.
Darren Kirk: The alignment of policy-driven reshoring efforts, structural automotive industry shifts, and Exco's strong market positioning give us confidence in our long-term outlook, despite near-term challenges.
Speaker Change: Just first question here just completely understand the pulling of the 26 guidance given the uncertainty, but I am curious when you do speak to your customers.
Speaker Change: Hear about their order schedules.
Darren Kirk: That concludes my prepared remarks.
Speaker Change: How much visibility do you guys have into the next quarter or is it status quo right now until we get a change either for the good or the worse railroad relating to tariffs.
Darren Kirk: I'd like to sincerely thank all my Exco colleagues for their hard work, innovation, and unwavering commitment to maintaining a safe work environment.
Speaker Change: But.
Speaker Change: That.
Speaker Change: To say is not entirely driven by tariffs there is some cyclicality of their debt.
Speaker Change: Yes, good morning, David I'm going to say at this point, there's not a lot that has changed.
Lisa: I'll now turn the call back to Lisa for Q&A. Thank you. As a reminder, if you would like to ask a question, please press star one one on your. You will also hear that automated message advising your hand is raised. Also, please wait for your name and company to be announced before you proceed with your question. One moment for the first question.
Speaker Change: Is going to bite longer term, we still remain extremely bullish on high pressure die cast.
Speaker Change: The visibility perspective.
Speaker Change: And we are seeing a lot of acts are growing activity on the on the quoting side of things. So this is one of these things.
Speaker Change: Things continue to be relatively normal for that we.
Speaker Change: We do expect though that.
Speaker Change: It will play out through the next quarter.
Speaker Change: The longer that the tariffs stay in place that the more likely things are to shift its just that we haven't seen it to a material degree yet now I will say that on the large mold side of the business. We have seen a slowdown on order intake that will that will impact the next couple of quarters.
Speaker Change: But things could change rapidly depending on what happens with tariffs.
David Ocampo: And our first question will come from the line of Dave Ocampo of Comark Securities. Your line is open. Thanks, operator. Darren, Matt, good morning. Just first question here, just completely understand the pulling of the 26 guidance, just given the uncertainty. But I am curious, when you do speak to your customers and hear about their order schedules, how much visibility do you guys have into the next quarter? Is it status quo right now until we get a change, either for the good or the worse, relating to tariffs? Yeah, good morning, David. I'm going to say at this point, there's not a lot that has changed from a visibility perspective.
Speaker Change: World perspective.
Speaker Change: Yes that makes sense and you called out China and how they are.
Speaker Change: Certainly being targeted by the U S but.
Speaker Change: One of your competitors for the large multinational division are from China are you starting to see.
Speaker Change: But.
Speaker Change: More of your customers starting to have more conversations with you as we look to kind of shift their supply chains to more western world suppliers like yourself.
Speaker Change: I'm going to say is not entirely driven by tariffs there is some cyclicality of their debt.
Speaker Change: Is going to bite longer term, we still remain extremely bullish on high pressure die cast.
David: That's exactly right David.
David: We are seeing a lot more conversations and.
Speaker Change: And we are seeing a lot of acts are growing activity on the on the quoting side of things. So this was one of those things that.
Speaker Change: What we can do in North America.
Speaker Change: It'll play out through the next quarter.
Speaker Change: To reduce the dependence on China for the whole industry and we really feel that this is kind of going to demonstrate the value of the investments that we've made in particularly our high pressure die cast operations.
Darren Kirk: You know, things continue to be relatively normal for now. We do expect, though, that, you know, the longer that the tariffs stay in place, that the more likely things are to shift. It's just that, you know, we haven't seen it to a material degree yet.
Speaker Change: But things could change rapidly depending on what happens with tariffs.
Speaker Change: World perspective.
Speaker Change: Yes that makes sense and you called out China and how they are.
Speaker Change: Certainly being targeted by the U S but.
Speaker Change: One of your competitors for the large multinational division are from China are you starting to see.
Speaker Change: Across our whole tooling group, where.
Darren Kirk: Now, I will say that on the large mold side of the business, we have seen a slowdown on order intake that will impact the next couple of quarters. But, you know, that, I'm going to say, is not entirely driven by tariffs. There's some cyclicality there that is going to bite. Longer term, you know, we still remain extremely bullish on high-pressure diecast. And we are seeing a lot of growing activity on the quoting side of things. So, you know, this is one of these things that it'll play out through the next quarter, you know, but, you know, things could change rapidly depending on what happens to tariffs on an overall.
Speaker Change: Sure.
Speaker Change: <unk> built the capabilities up to.
Speaker Change: More of your customers starting to have more conversations with you as they look to <unk>.
Speaker Change: To handle kind of game types molds and increased volume and so to the extent that we ended up in a situation where China has.
Speaker Change: Ship their supply chains to more western world suppliers like yourself.
David: That's exactly right David.
David: We are seeing a lot more conversations and about what we can do in North America.
Speaker Change: Tariffs not even at the 145.
Speaker Change: Ascent level, but you.
Speaker Change: <unk> been something lower that our competitive position should improve dramatically.
David: To reduce the dependence on China for the whole industry and we really feel that this is kind of going to demonstrate the value of the investments that we've made in particularly our high pressure die cast operations.
Speaker Change: Dramatically.
Matthew Boss: Okay, and then just two quick ones just for Matt a couple of million dollars of restructuring. This quarter is there any more of that gets leaked into future quarters, and how should we be thinking about the payback on those actions that you've made so far I think our payback is going to be.
David: Across our whole tooling group.
David Ocampo: Yeah, makes sense. And you called out China and how they're certainly being targeted by the US. But, you know, a lot of your competitors for the large mold division are from China.
Speaker Change: Less than 12 months I think from a lot of what we've seen.
David: We've built the capabilities up to.
Matthew Boss: And.
David: To handle kind of data type molds and increased volume and so to the extent that we ended up in a situation where where China has.
Matthew Boss: Im going to say well.
Darren Kirk: Are you starting to see more of your customers starting to have more conversations with you as they look to kind of shift their supply chains to more Western mold suppliers like yourself? That's exactly right, David. We are seeing a lot more conversation. and about, you know, what we can do in North America to reduce the dependence on China for the whole industry. And we really feel that this is kind of going to demonstrate the value of the investments that we've made in particularly our high-pressure die-cast operations, but across our whole where, you know, we've built the capabilities up to handle kind of giga-type molds and increase volume.
Matthew Boss: We are considering other things it really depends on where the market is in.
Matthew Boss: Operationally, how things are reacting.
David: Tariffs not even at the 145.
Speaker Change: Okay, and then just last one here it may have come up in your prepared remarks, but just thoughts on capex given the uncertainty I know there was a bit of growth capex in the quarter, but you guys plan on pulling back some of your capital plans just given all the uncertainty.
David: Sent level, but.
David: Even something lower that our competitive position should improve dramatically.
David: Dramatically.
David: Okay, and then just two quick ones just for Matt a couple of million dollars of restructuring. This quarter is there any more of that gets leaked into future quarters, and how should we be thinking about the payback on those actions that you've made so far I think our payback is going to be.
Speaker Change: Yes, we have certain capital that is committed I think last quarter, we kind of said, we think of capex should be around.
Speaker Change: $40 million I.
Speaker Change: I don't anticipate hitting that level it could be 35 to 40 could be less than 35, I do know that we're already in the midst of discussions for future Capex and as we've talked about even last year and heading into this year, we do see our capex.
David: Less than 12 months I think from a lot of what we've seen.
David: And.
David: I got to say well.
David: We're considering other things it really depends on where the market is in.
David: Operationally, how things are reacting.
Speaker Change: Much lower I mean, some of the stuff we have right now it's committed so we have to kind of completed but we are looking at anything discretionary and next year for sure.
David: Okay, and then just last one here it may have come up in your prepared remarks, but just thoughts on capex given the uncertainty I know there was a bit of growth capex in the quarter, but you guys.
Darren Kirk: And so to the extent that we end up in a situation where China has tariffs, not even at the $145 percent level but even something lower that our competitive position should improve dramatically.
Speaker Change: Because we spent so much money.
Speaker Change: I won't say, we're at maintenance mode, but we are we're getting close.
David: And pulling back some of your capital plans just given all the uncertainty.
Speaker Change: Sorry, what is the maintenance capex for for your operations on an annual basis, it could be 20, plus or minus 10%.
David: Yes, we have certain capital that is committed I think last quarter, we kind of said, we think of capex should be around <unk>.
Matthew Posno: Okay, and then just two quick ones just for Matt, a couple million dollars of restructuring this quarter. Is there any more that gets leaked into future quarters and how should we be thinking about the payback on those actions that you've made so far? I think our payback is going to be less than 12 months, I think, from a lot of what we've seen.
Speaker Change: Okay. That's perfect. Thanks, Thanks, a lot everyone. Thanks, David talk to you later.
$40 million.
David: I don't anticipate hitting that level it could be 35 to 40 could be less than 35, I do know that we're already in the midst of discussions for future Capex and as we talked about even last year and heading into this year, we do see our capex.
Speaker Change: Thank you.
Speaker Change: One moment for the next question.
Speaker Change: And our next question will be coming from the line of Nicole Carmen.
With acumen capital partners. Your line is open.
Matthew Posno: And I'm going to say we're considering other things. It really depends on where the market is and, you know, operationally, how things are reacting.
David: Much lower I mean, some of the stuff we have right now it is committed so we have to kind of complete it but we are looking at anything discretionary and next year for sure.
Speaker Change: Good morning. This is the reason I'm, calling on a like for Nick Corcoran from Heikkinen capital a few questions from me.
Speaker Change: Have you seen Oems change their production schedules in response to tariffs.
David: Because we spent so much.
David: Let's say, we're at maintenance mode, but we're getting close.
Speaker Change: Good morning.
Matthew Posno: Okay, and then just a last one here. It may have come up in your prepared remarks, but just thoughts on CapEx given the uncertainty. I know there's a bit of growth CapEx in the quarter, but do you guys plan on pulling back some of your capital plans just given all the uncertainty? Yes, we have certain capital that is committed. I think last quarter we kind of said we think a CapEx would be around, you know, $40 million. I don't anticipate it hitting that level. It could be $35 million, $40 million, it could be less than $35 million.
Speaker Change: Not materially at this point I mean, theres certainly been some shifts for sure but.
Speaker Change: Sorry, what is the maintenance capex for for your operations on an annual basis, it could be 20, plus or minus 10%.
Speaker Change: <unk> terms of.
Speaker Change: Those shifts and the impact on on our products and demand is.
David: Okay. That's perfect. Thanks, Thanks, a lot everyone. Thanks, David talk to you later.
Speaker Change: There has not been material at this point, but kind of going back to my previous answer I would expect that to change.
Speaker Change: Thank you.
Speaker Change: One moment for the next question.
Speaker Change: If there's no further adjustments to the tariffs for the quarter.
Speaker Change: And our next question will be coming from the line of Nicole Carmen.
Speaker Change: Great. Thank you and then this kind of touches on the other question too.
Speaker Change: Of acumen capital partners. Your line is open.
Matthew Posno: I do know that, you know, we're already in the midst of discussions for future CapEx. And as we talked about even last year and heading into this year, we do see our CapEx being much lower. I mean, some of the stuff we it's committed, so we have to kind of complete it.
Speaker Change: Just to confirm with U S government imposing higher tariffs on China.
Speaker Change: Good morning, listen to reason, calling on a like for Nick Corcoran from Heikkinen capital a few questions from me.
Speaker Change: This major extrusion products more competitive or do you believe they walk so with regard to extrusion, we don't actually get are having a lot of competition from China. The nature of the extrusion business is such that lead times are so short kind of 7% to nine days typically.
Speaker Change: Have you seen Oems change their production schedules in response to tariffs.
Speaker Change: Good morning.
Matthew Posno: But we are looking at anything discretionary and next year for sure. Because we spent so much, I don't want to say we're at maintenance mode, but we're getting close.
Speaker Change: Not materially at this point I mean, theres certainly been some shifts for sure but.
Speaker Change: In terms of.
Speaker Change: Those shifts and the impact on on our products and demand.
Matthew Posno: Sorry, what is the maintenance capex for your operations on an annual basis? It could be 20, plus or minus, you know, 10%. That's perfect.
Speaker Change: China is not able to compete effectively in that market anyway, but with respect to high pressure die casting molds in particular lead times are much longer kind of in the six month timeframe.
Speaker Change: Has not been material at this point, but kind of going back to my previous answer I would expect that to change.
Speaker Change: If there's no further adjustments to the tariffs for the quarter.
David Ocampo: Thanks a lot, everyone. No problem. Thanks, David.
David Ocampo: Talk to you later. Thank you.
Speaker Change: Typically and so China has been a significant competitor there for a number of years.
Speaker Change: Great. Thank you and then just kind of touches on the other question too.
Operator: One moment for the next question.
Speaker Change: Just to confirm what the U S government imposing higher tariffs on China.
Reese McCauley: And our next question will be coming from the line of Nick Corcoran of Acumen Capital Partners. Your line is open. Good morning.
Speaker Change: The.
Speaker Change: Had this major extrusion products more competitive or do you believe they won't.
Speaker Change: The broader perspective on trade policy, which I think the U S is really addressing this and thats. The subsidized nature of all of these Chinese products that are making their way to the U S is really being demonstrated here.
Speaker Change: So with regard to extrusion, we don't actually get or have a lot of competition from China. The nature of the extrusion business is such that.
Reese McCauley: This is Reese McCauley on the line for Nick Corcoran from Acumen Capital. A few questions from me. Have you seen OEMs change their production schedules in response to tariffs? Good morning. Not materially at this point. I mean, there's certainly been some shifts, for sure. But in terms of those shifts and the impact on our products and demand, it has not been material at this point. But kind of going back to my previous answer, I would expect that to change if there's no further adjustments to the tariffs through the quarter. Great, thank you. And then this kind of touches on the other question too, just to confirm, with the U.S.
Speaker Change: <unk> times are so short kind of 7% to nine days typically that China is not able to compete effectively in that market anyway, but with respect to high pressure die cast.
Speaker Change: <unk>.
Speaker Change: To the extent that that plays out anywhere near where.
Speaker Change: The tariffs are positioned today that'll be that'll be very helpful to our high pressure die cast operations for <unk>.
Speaker Change: In particular lead times are much longer kind of in the six month timeframe.
Speaker Change: For a long period of time.
Speaker Change: Great. Thanks, and just last one from me.
Speaker Change: Typically and so China has been a significant competitor there for a number of years.
Speaker Change: Touching on the M&A pipeline has it changed at all since.
Speaker Change: Q1 release.
Speaker Change: Our M&A pipeline.
Speaker Change: The broader perspective on trade policy, which I think the U S is really addressing this and thats. The subsidized nature of all of these Chinese products that are making their way to the U S is really being demonstrated here.
Speaker Change: I think we've said before exco is not a.
Speaker Change: And M&A company, but we're always looking for the right strategic fit that meets our vertical integration or our current.
Darren Kirk: government imposing higher tariffs on China, have this made your extrusion products more competitive, or do you believe they will? So with regard to extrusion, we don't actually get or have a lot of competition from China. The nature of the extrusion business is such that lead times are so short, kind of seven to nine days, typically, that China is not able to compete effectively in that market anyway, but with respect to high-pressure die-cast molds in particular, lead times are much longer, kind of in the six-month timeframe, typically. And so China has been a significant competitor there for a number of years.
Speaker Change: And.
Speaker Change: Skill sets, so I'm going to say no I don't think we've changed our philosophy.
Speaker Change: To the extent that that plays out anywhere near where.
Speaker Change: The tariffs are positioned today that'll be that'll be very helpful to our high pressure die cast operations for.
Speaker Change: Just very selective and we want to continue to be so I mean now might be a good time to find some.
Speaker Change: Some gems, but we're.
Speaker Change: For a long period of time.
Speaker Change: Not changing our philosophy.
Speaker Change: Being more bullish or less.
Speaker Change: Great. Thanks, and just last one from me.
Speaker Change: Great. Thank you that's all for me I'll pass the line okay. Thanks.
Speaker Change: To touch on M&A pipeline has it changed at all since.
Speaker Change: Q1 release.
Speaker Change: Thank you. This concludes today's Q&A session I would like to turn the call back over to Darin for closing remarks. Please go ahead.
Speaker Change: Our M&A pipeline.
Speaker Change: I think we've said before exco is not a.
Speaker Change: Well, thanks, everyone for joining us on the call today, we look forward to speaking to you again next quarter. When hopefully we will have a lot more clarity and certainty over the.
Speaker Change: And M&A company, but we're always looking for the right strategic fit that meets our vertical integration or our current.
Darren Kirk: You know, the broader perspective on trade policy, which I think the U.S. is really addressing this, and that's the subsidized nature of all of these Chinese products that are making their way to the U.S., is really being demonstrated here. And, you know, to the extent that that plays out anywhere near where... you know, the tariffs are positioned today. That'll be very helpful to our high-pressure die-cast operations for a long period of time. Great, thanks.
Speaker Change: Tariff policies in direction, So we'll talk to them.
Speaker Change: Skill sets so.
Speaker Change: To say no I don't think we've changed our philosophy.
Speaker Change: Thank you all for participating you may now disconnect.
Speaker Change: We're just very selective and we want to continue to be so I mean now might be a good time to find some.
Speaker Change: Some gems, but we're.
Speaker Change: We're not changing our philosophy.
Speaker Change: Being more bullish or less.
Speaker Change: Great. Thank you that's all for me I'll pass the line okay. Thanks.
Speaker Change: Thank you. This concludes today's Q&A session I would like to turn the call back over to Darin for closing remarks. Please go ahead.
Darren Kirk: And this last one from me, to touch on the M&A pipeline, has it changed at all since your Q1 release? Our M&A pipeline? You know, I think we've said before, Exco is not an M&A company, but we're always looking for the right strategic fit that meets our vertical integration or our current skill sets. So I'm going to say no, I don't think we've changed our philosophy. We're just very selective and we want to continue to be so. I mean, now might be a good time to find some gems, but you know, we're not changing our philosophy, being more bullish or less.
Darin: Well, thanks, everyone for joining us on the call today, we look forward to speaking to you again next quarter when hopefully we'll have a lot more clarity and certainty over the.
Darin: Tariff policies in direction, So we'll talk to them.
Darin: Thank you all for participating you may now disconnect.
Darin: [music].
Reese McCauley: Great, thank you. That's all for me. I'll pass the line. Okay, thank you. Thank you.
Darin: Okay.
Darin: [music].
Operator: This concludes today's Q&A session.
Darren Kirk: I would like to turn the call back over to Darren for closing remarks. Please go ahead. Well, thanks everyone for joining us on the call today.
Darren Kirk: We look forward to speaking to you again next quarter when hopefully we'll have a lot more clarity and certainty over the tariff policies and directions. and we'll talk. Thank you all for participating.
Operator: You may now disconnect.
Darin: Yes.
Darin: Yes.